research and development revenue, and $837,000 of grant revenue, primarily associated with our ongoing externally funded programs. For the first six months of 2026, total revenue increased approximately 52% to $2.1 million compared to approximately $1.4 million for the same period in 2025. Total cost of revenue for the quarter was approximately $984,000, an increase of 60% compared to approximately $614,000 for the second quarter of 2025. The increase was primarily related to higher activity levels associated with our grant-funded programs. Internal research and development expenses decreased 47% year-over-year to approximately $333,000 compared to approximately $629,000 in the second quarter of 2025. The decrease reflects our continuous focus on advancing programs through externally funded collaborations and maintaining disciplined internal R&D expanding. For the six months, internal research and development expenses were approximately $809,000 down 28% from approximately $1.1 million a year ago. DNA expenses increased by $253,000 or 18% year-over-year to approximately $1.7 million compared to approximately $1.4 million in the second quarter of 2025. The increase was primarily driven by higher rebranding and business development expenses of $323,000 and the higher legal and accounting expenses of $116,000, partially offset by lower share-based compensation expenses of $196,000 and the lower incentive compensation of $32,000. For the six months, G&A expenses were approximately $3.4 million and an increase of 14% year-over-year. Loss from operations for the quarter was approximately $2.1 million compared to approximately $1.7 million in the prior year period. Net loss for the quarter was approximately $2.1 million or $0.06 per share compared to approximately $1.8 million or $0.06 per share for the second quarter of 2025. For the six months ended June 30, 2026, net loss was approximately $4.1 million, or $0.11 per share, compared to approximately $3.8 million, or $0.13 per share, for the first six months of 2025. Turning to our balance sheet and liquidity, we ended the second quarter with approximately $4.8 million in cash, cash equivalents, restricted cash, and investment-grade securities, including accrued interest. As disclosed in our Form 10Q, based on our current liquidity position and the accounting requirements for evaluating liquidity over the 12 months following the issuance of our financial statement, we concluded that there are substantial doubts about our ability to continue as a going concern under the applicable accounting standard AIC 205-40. I want to briefly put that disclosure into context and be clear about what that means and what it does not mean. Going concern is a required accounting assessment based on whether our current resources together with financing and other actions that are considered probable are sufficient to fund our obligations over the required assessment period. This is a required accounting determination regarding the 12 months look forward period from the financial statement issuing state. It does not mean that the company is seizing operations and it does not reflect any default under our convertible notes or any other obligations of the company. We were in compliance with all our covenants under our convertible notes and those notes do not mature until December 31st, 2027. Rather, the conclusion reflects our need to obtain additional capital as we continue executing our commercialization and development strategy. We are actively evaluating a range of financing alternatives and other opportunities to strengthen our balance sheet. Importantly, those opportunities are not limited to traditional equity financing. We are also pursuing potential non-diluted and strategic source of capital, including new and expanded licensing arrangements, upfront and milestone payments, royalties, funded development programs, products and technology partnerships, and other strategic transactions that could provide capital while also accelerating commercialization and the broader adoption of our technology. At the same time, we remain focused on disciplined in cash management, expanding commercial revenues, and maximizing the use of third-party funding and strategic collaborations to support development activities. Our objective is to increasingly fund product development through a combination of commercial revenues, partner-funded programs, and other non-diluted sources, thereby reducing the amount of capital dyadic must deploy internally as the business extends. As Joe and Mark discussed, we are beginning to see increasing commercial activity across our life sciences, food and nutrition, and bio-industrial programs alongside continued external funding and validation of our biopharmaceutical programs. While these activities remain at a relatively early stage, we believe they are creating a growing number of opportunities to generate recurring product revenues, licensing income, royalties, milestones, and other partnership revenues. Our broader objective is not simply to increase revenue, but to build a business model in which a growing portion of product development and commercialization can be supported by customers, licensees, strategic partners, and external funding sources. If successful, we believe this approach can help extend our financial resources, reduce our reliance on diluted capital, and allow us to continue advancing a broader portfolio of commercial and strategic opportunities while carefully managing operating expenses and capital requirements. With that, I will now ask the operator to begin our Q&A session. each caller will be allowed one question and one follow-up question to provide all callers with an opportunity to participate. If time permits, the operator will allow additional questions from those who have already spoken. I will now ask the operator to begin our Q&A session, after which Joe Hazelton will provide closing remarks. Operator?

Thank you. Ladies and gentlemen, if you would like to ask a question, please press star 1 on your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. Participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. And the first question comes from the line of Matt Hewitt with Craig Hallam Capital Group. Please proceed.

Good afternoon. Thanks for taking the questions. Maybe first up, I think both in your queue as well as in your prepared remarks, you noted fairly significant ordering activity post-closing the Q2 books. I'm just curious, should we anticipate that we're going to see product revenues here in the third quarter? And if so, what does that ramp kind of look like, or do you anticipate it will be lumpy here over the first few quarters?

And Craig, it's a great question. And yes, lumping would probably be the best way to describe it. What we did in the second quarter, we were starting to fill the channels. We obviously ship products to our first global distributor, IBT. We also have direct product sales or initial pilot sales going into cultured meat and a couple into the research segment as well. But it's too early until we have some recurring orders to really figure out what that ramp is going to look like. Obviously, we're having discussions every day. So, again, we're always trying to push the ramp as quickly as possible. But I think it's just right now it's a little too early. But the good news is we also have our partners in the market like ProLiant, who's not only launched Albu3DX, but now they're looking to launch two additional products into the market. We have Enzymes and Firmbox as well. So our hope is obviously between our product sales as well as our partners that will continue to build that ramp as quickly as possible.

Got it. And then maybe my follow-up. You know, you have a lot of irons in the fire, several different products that you're working on, different partnerships that you've inked and others that are coming. How are you prioritizing all of those? or is it just basically moving down the list and knocking them all off at the same time? Thank you.

That one's a lot easier, revenue. It's all prioritized based on the amount of revenue that we can generate in the shortest amount of time. So when we're looking at whether it's a potential direct sale, whether it's a licensing opportunity, it's based on the size of the potential opportunity, and we're going to continue to execute that way.

And the next question comes from the line of John Vandermosten with Zacks. Please proceed.

And good evening, Joe, Ping, and Mark. It seems like you mentioned a lot of product shipments in the press release. And I'm hoping you can share with me what the intermediate steps are between shipment and then dyadic top line.

It first depends on what the shipment is. So we had some shipments to direct customers, which is obviously a direct sale. We also had shipments to distributors. So that is, again, shipped to the distributor, gets into the channel, sell process, and then you also have people like ProLiant. When ProLiant sells, obviously we get money, but that's on the back end as well. So the main thing is we need to get product into the channels. We're able to get six different product opportunities into commercial distribution with IBT in addition to some of our direct sales. So now we need to ramp that up. We're also exploring, obviously, other distribution opportunities. And I think that's – to me, that's the important point is in order for us to grow, we need to get that product into the market. And we also have our customers that are doing the same thing. Enzymes already has commercial sales. So our hope, obviously, is that as those start to ramp as well, we'll start to see those come in.

And I wanted to get a sense of, you know, I know you guys aren't providing guidance, but you did mention in the queue about the enzymes milestone that's expected. What other cash flows, I guess, could we expect in the second half to get a sense of, you know, kind of where cash might stand at the end of the year? Is there any help you could give me on that?

Yeah, I think, you know, on both the industrial biotech side to biochemicals, there's some new things going on where we're engaging with some people that are very interested in using the DAPOBIS platform, not only to develop enzymes, but for bio-based chemicals. And we've got some work that we've actually done in there that we'll be talking about maybe in Q3. But also on the pharmaceutical side, you know, the data is coming in very well, as we talked about. The Gates Foundation and the MABS, both RSV and malaria, are advancing, and the data that we're seeing from the human glycosylation, the yields, the quality, as we head into these non-animal, or the animal preclinical studies, potentially will actually continue to drive interest there, along with CEPI. You know, that 15-day plasmid to protein is applicable not only in pharma, but also, as Joe pointed out, it's going to help accelerate the development and commercialization of some of our, you know, food and nutrition, life science, and industrial applications. And then we're in discussions with a couple of major, you know, suppliers and pharmaceutical companies where we're hoping to land one of those big chunks of cash to bring us like non-dilutive capital that could last us, you know, from, you know, several months to several years, depending on what comes out. I mean, if you keep in mind, John, we did bring in $30 million of non-dilutive capital on the industrial side and non-exclusive licenses in the past. And so between what Joe's got going on on that side and some of the new opportunities there and on the pharmaceutical side, you know, one of those checks could really, really make a huge difference. And as Joe said, those are things we're focused on, getting that done.

Okay. All right. Thanks, Mark.

Thank you. As a reminder, if you'd like to ask a question, please press star 1 on your telephone keypad. We'll pause another couple moments. There are no further questions at this time, and this will conclude the question and answer session. I will now turn the call over to Dyadix President and COO, Joe Hazleton.

Thank you. As we close, I want to bring together what Mark and I discussed today. We believe Q2 represents another important step in dyadic's evolution from primarily developing technology platforms to building a commercially driven business around those platforms. Across life sciences, food nutrition, and bioindustrial markets, products are progressing through qualification and distribution into initial and commercial sales. At the same time, we continue to improve our C1 and DAPBIS platforms, manufacturing, productivity, and economics, while applying relevant technology advances and learnings across both platforms. This shared technology foundation is helping us expand applications, accelerate product development, and work with strategic partners to broaden our commercial reach. On the biopharmaceutical side, externally funded programs are generating important data around complex proteins, including monoclonal antibodies and vaccine antigens, that we believe can strengthen C1's value proposition and support future licensing and strategic opportunities. What connects these activities is our ability to turn technical performance into commercial opportunity. Better productivity and economics can drive product adoption, while customer traction and external validation can strengthen the opportunity for broader strategic relationships. We still have significant execution ahead of us, but we believe VATIC has more ways to create value today than it did a year ago. We have commercial products expanding distribution, improving manufacturing economics, partner-funded programs, and a growing body of external validation. Our focus for the remainder of 2026 is to continue converting that progress into product sales, recurring revenue, and larger strategic and licensing opportunities while scaling the business efficiently. We appreciate the continued support of our shareholders, partners, and employees. We look forward to updating you on our progress, and thank you for joining the call today.

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