Good evening and thank you for holding. Welcome to Dyadic International’s First Quarter 2021 Financial Results Conference Call. Currently, all participants are in a listen-only mode. As a reminder, this conference call is being recorded today, May 13, 2021. I’d now like to turn the call over to Ms. Ping Rawson, Dyadic’s Chief Financial Officer. Please go ahead.

Thank you, Operator. Good evening, and welcome to Dyadic International’s first quarter 2021 financial results conference call. Earlier today, Dyadic issued a press release, announcing financial results for the first quarter ended March 31, 2021 and the recent company highlights. You may access our press release and Form 10-Q under the Investors section of the company’s website at dyadic.com. On today’s call, our President and CEO, Mark Emalfarb, will give a review of our business and corporate accomplishments for the first quarter of 2021, including a brief summary of our research and business development efforts. I will follow with a review of our financial results in more detail. We will then hold a brief Q&A session. Our senior management team, Matthew Jones and Ronen Tchelet will join Mark and I for the Q&A session. At this time, I’d like to inform you that certain commentary made on this conference call may be considered forward-looking statements, which involve risks and uncertainties, that and other factors that could cause Dyadic’s actual results, performance, scientific or otherwise, or achievements to be materially different from those expressed or implied by these forward-looking statements. Dyadic expressly disclaims any duty to provide updates to these forward-looking statements, whether as a result of new information, future events, or otherwise. Participants are directed to the Risk Factors set forth in Dyadic’s reports filed with the SEC. It is now my pleasure to pass the call to our CEO, Mark Emalfarb. Mark?

Thank you, Ping. Welcome, everyone, and thank you for joining us. We have ushered in a New Year with substantial progress on R&D initiatives. I’d like to highlight first some of the exciting progress we’ve made on developing new COVID-19 vaccine candidates. We’re entering into nearly a year and a half since the start of the COVID-19 pandemic, yet the Coronavirus continues to cause worldwide disruptions and suffering. Although many countries, including the U.S. have been able to ramp up their vaccination efforts, it is clear that there’s still significant global vaccine inequality. It’s becoming increasingly apparent that there are critical bottlenecks in the manufacturing and supply chains of these vaccine products that are hindering the efforts to get populations vaccinated and save lives. If global efforts to stop the spread of COVID-19 are to be successful, it is clear that there need to be more efficient, affordable, and flexible ways to develop and manufacture vaccines and drugs globally. We believe, as do a growing number of scientists, our hyper-productive C1 protein production platform technology is ideally suited to help meet this global demand for health equity. As such, we’ve been working tirelessly on applying our C1 technology to speed up the development of new COVID-19 vaccines that have the potential to be more affordable and accessible. We are pleased to partner with leading scientists, government agencies, and pharma companies worldwide to expedite the application of our C1 technology and multiple COVID-19 programs. We believe our COVID-19 partnerships stem from our success in several animal studies to demonstrate that human cells reengineered can efficiently and rapidly produce large quantities of safe and effective protein-based products. Our SARS-CoV-2-S-RBD as a vaccine candidate, DYAI-100, has been evaluated in 10 animal studies by academic, industrial, and governmental R&D groups globally, including the Israel Institute for Biological Research and scientists from ZAPI. Based on compelling preclinical data, we are now moving towards an anticipated first-in-human Phase 1 clinical trial to evaluate safety and preliminary efficacy. We’ve engaged the contract research organization CR2O to manage and support its preclinical and clinical development. Moving DYAI-100 into the clinical stage represents a major milestone for the program. First, it’s critical to emphasize that the fight against COVID-19 is not over. With the risk that COVID-19 may become an endemic disease and issues with vaccine distribution and potency, there’s still a significant need for next-generation vaccines that can bridge this gap for protecting the global population. Our clinical trial with DYAI-100 may serve as an important proof of concept for the next generation of COVID-19 vaccine candidates for emerging variants. Furthermore, we believe DYAI-100 has the potential to be a more affordable and highly potent solution to meet this global need. Second, although this will be a clinical trial for a COVID-19 vaccine candidate, it’s valuable for beyond that. Demonstrating that DYAI-100 can be produced under cGMP conditions and is safe and well-tolerated in humans serves as proof of principle for the C1 platform itself. We anticipate that by de-risking our C1 technology and demonstrating that the C1 platform has strong potential to safely produce protein for use in humans, we can accelerate its adoption, use, and commercialization by the biotech and pharmaceutical industries globally, for a number of biologic drug and vaccine opportunities. As such, we look forward to bringing DYAI-100 into Phase 1 by the end of the year, following the completion of our ongoing animal GLP toxicology study. SARS-CoV-2 continues to mutate into different variants. We are engineering additional C1 cell lines to produce SARS-CoV-2 variant antigens for monovalent and multivalent vaccine candidates. We have already successfully expressed the South African, Brazilian, and UK variant antigens at highly productive lead levels and stability, and we will continue to work towards developing both RBD antigens and potentially full spike proteins for additional variants. Importantly, it is becoming increasingly clear that emerging variants are here to stay. It is expected that new variants may appear annually, similar to seasonal flu, which may require annual or even semi-annual booster shots. Multivalent vaccines, which have the potential to confer broader efficacy against SARS-CoV-2 variants, may be an important approach for future efforts to manage COVID-19 and future pandemics. Towards this end, we’ve expanded our fully funded vaccine development partnership with Medytox to accelerate the development of multivalent COVID-19 vaccine candidates and our boosters to immunize people against multiple existing or future SARS-CoV-2 variants. We are pleased to partner with Medytox to understand firsthand if C1 may be the most realistic technology to develop and manufacture affordable multivalent vaccines rapidly and in lower costs in larger volumes. The transformative potential of C1 to solve key challenges related to manufacturing productivity, speed, and cost was highlighted in our recent KOL fireside chat. We are grateful for the support of such key thought leaders who are testing the remarkable potential of C1 to provide game-changing advanced and global access to vaccines and drugs for major health challenges, such as COVID-19 and beyond. I strongly encourage you all to listen in on this panel discussion by watching the replay webinar, which is available on our website. In parallel to our COVID-19 initiatives, we remain focused on advancing C1 for a number of other human and animal health applications. During the first quarter, we were pleased to enter into a fully funded collaboration with TurtleTree Scientific to develop several recombinant protein growth factors, which may play a critical role in tissue development and healing, including regenerative therapies. Manufacturing human growth factors at large scale and at an affordable cost has been an industry challenge. As such, we are excited to apply our C1 technology to help overcome this hurdle and seize this significant new commercial opportunity. Our C1 technology continues to be sought out by many other pharma and biotech companies looking for a better manufacturing solution. These ongoing collaborations, such as with Jiangsu Hengrui Medicine, the largest pharmaceutical company in China by market cap, continue to report promising results for biologic drugs of commercial interest. We’re particularly excited about the promising potential of several candidates for bispecific antibodies that offer significant benefits over conventional monoclonal antibody therapeutics. For these bispecific antibodies and other biologic drugs, C1 has consistently achieved high productivity levels to support advancing several of these programs towards clinical development. As for our efforts in animal health, we are pleased with the positive results from animal studies evaluating the safety, efficacy, and protection of C1 produced antigens, which were highlighted in ZAPI’s Final Stakeholders Meeting in February. The C1 platform was selected by ZAPI to produce recombinant antigens after demonstrating far greater antigen productivity than C1 cells, insect cells, and other cell lines, making it a leading expression platform for both Schmallenberg virus (SBV) and Rift Valley Fever Virus (RVFV). Notably, C1 produced SBV antigen has demonstrated evident hyper productivity and strong protection of cattle, sheep, and mice from the SBV virus. During the first quarter, ZAPI expanded its program with Dyadic by providing additional funding to C1 research and development efforts, as well as to conduct potential additional animal studies using SBV and RVFV antigens produced from C1. These ongoing animal studies are intended to demonstrate further commercial scale viability of C1 produced SBV and RVFV antigens. As part of the expanded program, ZAPI is conducting additional studies to further optimize the use of C1 to produce recombinant protein subunit nanoparticle vaccines by producing larger quantities at lower cost. Preliminary results have been very encouraging and support C1's potential to improve the productivity of nanoparticle vaccines. Additional collaboration with a top animal health company has demonstrated successful production of two different antigens produced from C1 for a potential vaccine for an acute respiratory disease in birds. We expect an animal challenge study to evaluate the protection provided by these vaccine candidates will initiate in June of 2021. Our global co-development partnerships such as ZAPI, TurtleTree, Medytox, and others highlighted today drive access to broad commercial opportunities in large and growing human and animal health markets. Furthermore, these partnerships provide robust scientific data that complements our internal development efforts. As our current R&D efforts continue to demonstrate that C1 has the versatility to efficiently and rapidly produce large quantities of more affordable protein-based products, we expect a growing number of companies to seek our C1 platform to address manufacturing challenges for cost-effective and flexible scale commercial production. We believe these clear advantages, coupled with the support of a growing number of partners, key opinion leaders, and subject matter experts, will position our C1 protein production platform as the leading solution for more affordable and accessible therapeutics and vaccines worldwide. Lastly, during the first quarter, we added Patrick Lucy to our Board of Directors. We look forward to benefiting from his wealth of experience in developing, adoption, and commercialization of cell lines in the biopharmaceutical industry as we work towards commercializing our C1 technology. Looking ahead to the remainder of 2021, we expect to achieve a number of milestones, notably our first vaccine candidate DYAI-100. We have initiated our animal GLP toxicology study recently, and we look forward to progressing to our first-in-human Phase 1 trial by the end of this year. After generating the Phase 1 data, we expect to submit an IND. We also expect that our extensive number of collaborations will continue to generate robust scientific data that highlights the broad potential impact of our C1 platform in diverse animal and human health applications. We look forward to updating you on these accomplishments as we continue to work tirelessly to advance our C1 platform to meet the global need for rapid, safe, effective, and scalable therapeutics and vaccines. As always, I want to extend my thanks to our employees and our partners for their commitment and dedication during these challenging times. I would also like to thank our shareholders and our board members for their continued confidence and support as we work towards bringing more affordable healthcare solutions to the global population. With that, I will turn the call over to Ping for a financial update.

Thank you, Mark. In addition to the financial results I will discuss now, you can find additional information in our Form 10-Q, which we filed earlier today. Our cash, cash equivalents and the carrying value of investment grade securities, including accrued interest, were approximately $27.4 million at March 31, 2021, compared to $29.2 million at December 31, 2020. Research and development revenue for the quarter ended March 31, 2021 increased to approximately $461,000 compared to $315,000 for the same period a year ago. The cost of the research and development revenue for the quarter ended March 31, 2021 increased to approximately $391,000 compared to $278,000 for the same period a year ago. The increase in revenue and costs of research and development revenue for the three months ended March 31, 2021 reflected an increase in the number of ongoing research collaborations to eight compared to five collaborations for the same period a year ago. R&D expenses for the three months ended March 31, 2021, increased to approximately $1,808,000 compared to $755,000 for the same period a year ago. The increase primarily reflected Phase 1 clinical trial costs of DYAI-100 or COVID-19 vaccine in the amount of $882,000 and additional costs of $159,000 related to our other internal research projects. G&A expenses for the three months ended March 31, 2021 decreased 6% to approximately $1,554,000 compared to $1,653,000 for the same period a year ago. The decrease principally reflected reductions in travel and rent expenses of $65,000, and insurance and other outside services of $47,000, offset by an increase in legal expenses of $43,000. Interest income for the three months ended March 31, 2021 was approximately $26,000 compared to $168,000 for the same period a year ago. The decrease was primarily due to the lower balance of held-to-maturity investment securities and the less reinvestment as a result of the decrease in interest rates. Net loss for the three months ended March 31, 2021 was approximately $3.3 million or $0.12 per share, compared to $2.2 million or $0.08 per share for the same period a year ago. Looking forward, we maintained our guidance for our total cash burn for 2021, which we expect to be in the range of $10 million to $12 million inclusive of the Phase 1 clinical trial and our other ongoing internal research projects. We believe we have sufficient funds to provide the working capital needed for our research and operations for the next couple of years. With that, I will now ask the operator to begin our Q&A session. Dr. Ronen Tchelet and Matthew Jones will be joining Mark and me to answer your questions. Each caller will be allowed one question and one follow-up question to provide all callers an opportunity to participate. If time permits, the operator will allow additional questions from those who have already spoken. Operator, back to you.

Thank you. Your first question comes from John Vandermosten with Zacks Investment Research. Please go ahead.

All right. Good evening. And let me just start off with a question about vaccines. Serum Institute is one of the organizations you’re working with. And I’m wondering, with the crisis in India has there been any further discussions with them to perhaps work on something to help out with that? I mean, I know there’s a very long timeline, but given the severity of the crisis and the need for a lot of vaccine, perhaps that’s a way to advance the conversation.

Yes, thanks, John. Serum, I think is a handful, I’m just trying to make the AstraZeneca vaccine, but we are in discussions with other parties in India and other parts of the world to help out, and we’re having those discussions. We hope one or more of those will turn into something fruitful, to help this horrific situation that we’re all facing on a global scale.

Okay. And I noticed that you guys had expanded the agreement with IDBiologics. Will that include more equity as part of that? And maybe you can provide a little more detail on how that will expand as well, from what was?

That’s a great idea. And I’m a great example of how we take initial proof of concept collaborations and turn them into money and into opportunity, because that's not a fee for stock. That’s a fully funded program. It is an antibody, it has the potential for infectious disease and different diseases in COVID-19. I think people are starting to recognize that this C1 technology platform, in addition to obviously, potentially helping on COVID, can help prepare for a variety of almost unlimited infectious diseases and treatments. So hopefully, that answers your question; it's a fully funded project, and one that we’re excited to expand the breadth and scope of applying C1 for these infectious disease treatments that are going to be needed.

Your next question comes from David Snyder with Private Investor.

Hi, thanks for taking my question. I have two; the vaccine for birds is for some disease that affects some pets that people have, like parrots or is it for some birds in the wild?

Hi, David, no, it’s for animal health. It’s for a huge unmet need. And it’s a vaccine that people have tried to make in the past but couldn’t make it at an affordable price for chickens – there’s a lot of these things out there in the world. Yes, sorry.

Yes, I think there’s a lot more chickens around than pet parrots. So that’s very encouraging.

Well, I think there’s a lot more chickens, a lot more cows, and a lot more other animals compared to people.

That’s true. In regarding the COVID vaccine, the U.S. taxpayer has paid for, how I view it most of the fixed costs of Moderna's COVID vaccine, we should have all been given shares of Moderna stock, because we basically, it came out of our checking accounts. But because this is a little bit sarcastic, as you can tell, but because their fixed costs have already been paid by the U.S. taxpayer. The economic argument for using C1 as the platform for COVID vaccines is a little bit hurt by that because we already paid for the fixed costs, so they can crank up billions of doses as well as the other players that are already out there. So can you just maybe talk about that?

Yes, first of all, hopefully, that pandemic will be the last one we ever see. But it’s not likely. Some experts think that in the next couple of years, we’re going to be in an even worse shape. I think there was an article out or comment made by Scott Caudalie that mRNA vaccines work this time around, but they’re not going to work for all these different types of infectious diseases. So, second of all, there is an ongoing discussion about the possibility of a hydrologist boost, a DNA prime, and a protein boost, where you take someone’s initial vaccine and boost it with a different vaccine. I think that plays into our hands because we have a recombinant protein vaccine that can be either a subunit vaccine or a nanoparticle potential vaccine. It’s more concentrated for the receptor binding domain or neutralizing antibodies. Yes, of course, they received subsidized funding – they’ve got a lot of money in the bank. In the end, I believe we can produce far more for far less cost. But we’re really not aiming at the moment for the U.S. as potential boosters on an annual basis. The rest of the world has a crying need for something that doesn't cost $20 to $30 a dose; that's not affordable and not sustainable in America, let alone in Africa, Bangladesh, India, or various other countries in South America.

Your next question comes from John Vandermosten with Zacks Investment Research. Please go ahead.

All right, thank you again. So in the press release, you mentioned the University of Oslo Influenza study, and I was looking at that comparison that was in the slide deck. What was behind I guess the better performance of C1 versus baculovirus? I mean, is it better purity? Is it more consistent output? Or is it maybe glycosylation or some other characteristic? What’s the driver there for the better efficacy?

Well, we don’t know exactly what the driver is; we think it might be the glycosylation, which provides unique advantages. The more human-like structure that the glyco can produce from C1 may be contributing to immunogenicity benefits. However, we don’t know that; we just know this is the second time around. As we already proved that we can make hemagglutinin at very low cost that produced even better results. So it looks like a potential producer of a flu vaccine. Again, like all other vaccines that we’ve seen so far, they have been safe and protective. So the good news is it works, and we can make a lot of it.

Yes, I mean, it’s in that test that it did better, obviously. Another question on kind of a bigger picture question on vaccine production; I mean, I think I’ve heard anecdotally, I can’t find any sources, but that it’s kind of squeezed out other production of other things. Although, we have enough vaccines here in the U.S., is there any evidence of that you’ve seen where production of COVID vaccines has taken up so many resources that we’re not getting other things that we need?

Yes, I think during the KOL, one of the scientists mentioned that’s one of the problems. People are focusing on producing COVID-19 vaccines at the expense of potentially other vaccines that could actually impact human health for decades to come. So again, in the end, what we really need is a more efficient way to produce proteins, whether that’s a recombinant vaccine for infectious diseases or other treatments. We believe that C1 offers more horsepower, is more productive, grows fast, can be scaled quickly, and can be grown using single-use or stainless steel bioreactors. The raw materials used for this are not bottlenecks as they’re readily available locally, cheap, and abundant. When we designed the DYAI-100 vaccine, we had a goal to ensure safety, efficacy, and the ability to produce billions of doses of vaccines. We chose the raw materials very carefully. We could have chosen different adjuvants, but we selected those that have been around for decades, are proven, and safe. The first time we go into human beings, we wanted to ensure that we had safety and preliminary efficacy, because that’s what the goal of the Phase 1 trial was always about. This is our primary goal. We hope to be able to provide COVID vaccines that are much more affordable for other populations with that critical need, and of course, for the booster shots. The main goal here is to demonstrate the safety and efficacy of this platform, which we believe will open up even wider doors. We are currently inundated with opportunities, and it’s going to open the floodgates even further once we show safety and efficacy in this first Phase 1 clinical trial or potentially even in the middle of it when we start getting preliminary data.

Okay, great. That’s all for me. Thanks.

Your next question comes from Lee Alper with Hammock Investors. Please go ahead.

Yes, Mark, what happened to the program with Frederick Lab? Then I have a follow up.

Yes, again, which we’ve mentioned in the past, we made a product. We were successful expressing with C1. We sampled it to them, and they put it in a freezer while they concentrated it and other things. What happened to it? We don’t know. It’s like a black box. Unfortunately, we have no idea what they’ve done with it. We are actually trying to find out what they’ve done with it. But I think they’re more focused on getting out more vaccines of the ones that exist today rather than those that could be developed in the future. But the good news is they’ve seen the power of C1 firsthand.

Okay, and also, have you applied to BARDA or Warp Speed for any funding?

We have obviously spoken to BARDA and Warp Speed. I can’t get into those intimate discussions. But of course, they’re fully aware. In fact, we’ve actually been told by them in the past that they understand the power, speed, and cost advantages. But we’re a small biotech company, and politically, they choose to fund the big players. I think they opted to give the money to the larger companies and have to think about what we’re going to do in the future. One of the programs we talked about, the one with IDBiologics, is actually being sponsored by the U.S. government. We’re seeing more interest from the U.S. government whether it be the NIH, DoD, DARPA, or HHS, and potentially even BARDA. Hopefully, more funding will come, but we don’t know.

Your next question comes from Dick Williams with Williams Resource Group. Please go ahead.

Hi, Mark.

Hey, Dick.

Obviously, looking at the landscape of all the things that you’re doing and everything connected to C1, there’s a myriad of significant opportunities, assuming efficacy and safety. You have a pretty good sense of this at some point, maybe even through the middle of the Phase 1 trial or even sooner. Can we be unrealistic in thinking that we could have a licensing agreement with a big pharma or a biotech by the end of this year?

The answer to that is yes. Whether it be COVID-19 related, animal health related, pharmaceutical related, growth factor related, or all of the above. Any of those things could happen by the end of the year. Whether they will, we’ll find out and see, but they’re all possibilities, of course. And the one thing you’ve got to realize is, if this disease sticks around and people need boosters, we’re there. Once we prove safety and efficacy, you've got to remember we have ran over a dozen animal studies, cattle, sheep, mice, and all the other animal studies last year, with the COVID RBD C1 produced vaccine candidate. We’re in the middle of our toxicology study today; it was reported that three shots for the males and two shots for the females have already been given. In the next two to three weeks, we should have a good indication, but so far, it looks expectedly safe. We don’t expect any issues with safety. In the majority of animal studies we did, we elicited significant neutralizing antibodies. We expect to see high levels of neutralizing antibodies, and we expect to see safety. Fingers crossed that what we saw in the animals will be the same in humans.

Okay, that’s all I had. Thank you.

There are no further questions. I will now turn the call over to Dyadic CEO, Mr. Emalfarb.

Let’s see, there are no further questions. So, I want to thank everybody again for joining us on the call. We are pleased you could join us to hear our progress over the first quarter. We’re excited about where we are. We’re excited even more about where we’re going. We look forward to keeping you updated on our progress along the way.

This conference has now concluded. Thank you for attending today’s presentation. You may disconnect your lines at this time.