Dyadic(DYAI) - 2024 Q3 - Quarterly Report

Revenue and Financial Performance - Total revenue for Q3 2024 was $1.96 million, a significant increase from$397,060 in Q3 2023[10] - Research and development revenue for Q3 2024 was $532,500, up from$352,942 in Q3 2023[10] - License revenue for Q3 2024 was $1.43 million, compared to$44,118 in Q3 2023[10] - Total revenue for the nine months ended September 30, 2024, was $2.68 million, up from$2.21 million in the same period in 2023[10] - Revenue for the nine months ended September 30, 2024, was generated from 16 customers, with two significant customers accounting for 54.1% of revenue[31] - Revenue from European customers for the nine months ended September 30, 2024, was $854,000, representing 31.9$1.0 million in license revenue from the Proliant Agreement for the three and nine months ended September 30, 2024[66] - Under the Amended Inzymes Agreement, the company received an upfront payment of $0.6 million and recognized$425,000 in license revenue from success fees for the three months ended September 30, 2024[68][69] - The company recorded research and development revenues of $0 and$25,000 for the three and nine months ended September 30, 2024, respectively, under the Inzymes Agreement[69] - The company recognized $44,000 and$132,000 of license revenue for the three and nine months ended September 30, 2023, respectively, under the Janssen Agreement[74] - The company recorded research and development revenues of approximately $0 and$565,000 for the three and nine months ended September 30, 2023, respectively, under the JDA with GFIC[72] Net Loss and Earnings Per Share - Net loss for Q3 2024 was $203,460, an improvement from a net loss of$1.61 million in Q3 2023[10] - Basic and diluted net loss per common share for Q3 2024 was $0.01, compared to$0.06 in Q3 2023[10] - Net loss for the nine months ended September 30, 2024, was $4.26 million, compared to$4.72 million in the same period in 2023[10] - Basic and diluted net loss per common share for the nine months ended September 30, 2024, was $0.15, compared to$0.16 in the same period in 2023[10] - Net loss for the nine months ended September 30, 2024, was $4.26 million, compared to$4.72 million in the same period in 2023[14] Cash Flow and Liquidity - Net cash used in operating activities for the nine months ended September 30, 2024, was $3.28 million, compared to$5.80 million in the same period in 2023[14] - Net cash provided by financing activities for the nine months ended September 30, 2024, was $5.82 million, primarily from the issuance of convertible notes[14] - The company issued$6.0 million of 8.0% Senior Secured Convertible Promissory Notes on March 8, 2024, with net proceeds of $5.82 million[20] - The company expects its existing cash and cash equivalents, along with proceeds from the Convertible Notes, to meet liquidity requirements for at least the next 12 months[24] - Cash and cash equivalents totaled$5,921,614 as of September 30, 2024, with money market funds accounting for $4,825,756 of that total[62] - Cash and cash equivalents totaled$6,515,028 as of September 30, 2024, with money market funds accounting for $6,489,253[64] - The company received discounts of$70,495 and $33,982 to purchase held-to-maturity investment securities for the nine months ended September 30, 2024 and 2023, respectively[64] Research and Development - The company is focused on developing its C1-cell protein production platform for biologic products, including vaccines and drugs for human and animal health[17] - Two CROs accounted for$690,000 or 94.6% of total research services purchased for the three months ended September 30, 2024, compared to three CROs accounting for $977,000 or 93.4$1,647,000 or 92.0% of total research services purchased, compared to three CROs accounting for $3,639,000 or 96.4$376,608 as of September 30, 2024, from $575,436 as of December 31, 2023[46] - Research and development costs for the three months ended September 30, 2024, were$460,241, compared to $716,351 for the same period in 2023[50] - VTT Research Contract extended to January 31, 2025, with a total payment of EUR €186,000, of which EUR €93,000 was paid as of September 30, 2024[92] Convertible Notes and Financing - As of September 30, 2024,$600,000 of the Convertible Notes were converted into 335,195 shares of Common Stock[23] - The company issued senior secured convertible promissory notes with an aggregate principal amount of $6.0 million on March 8, 2024[80] - Interest paid on the Convertible Notes was$114,933 for the three months ended September 30, 2024, and $149,778 for the nine months ended September 30, 2024[87] -$600,000 of Convertible Notes were converted into 335,195 shares of common stock as of September 30, 2024[88] - Total outstanding convertible notes payable as of September 30, 2024: $1,400,000 (related party) and$4,000,000 (third party)[88] - Accrued interest as of September 30, 2024: $20,000 (Francisco Trust),$2,000 (Bradley Emalfarb), $4,200 (Bradley Scott Emalfarb Irrevocable Trust), and$1,800 (Descendant Trust)[89] Stock-Based Compensation and Equity - Stock-based compensation expense for the nine months ended September 30, 2024, was $306,478[12] - As of September 30, 2024, the company had 5,845,035 stock options outstanding and 117,925 unvested restricted stock units[94] - Stock options granted in 2024: 837,600 shares with a weighted-average exercise price of$1.31[100] - Restricted stock units outstanding as of December 31, 2023: 213,044 shares with a weighted-average grant date fair value of $1.43[101] - The company's 2021 Equity Incentive Award Plan increased the number of shares available for grant by 3,000,000 as of April 16, 2021[93] - The company granted 212,709 RSUs with immediate vesting to executives and key personnel in lieu of cash bonuses for the year ended 2023, and 141,510 RSUs to the Board of Directors, vesting upon the one-year anniversary of the grant[102] - Total non-cash share-based compensation expense for the three months ended September 30, 2024, was$247,390, with $235,024 allocated to general and administrative expenses and$12,366 to research and development expenses[105] - For the nine months ended September 30, 2024, the company issued 778,310 shares of common stock with a weighted average issue price of $1.63 per share, including 335,195 shares from the conversion of Convertible Notes and 437,546 shares from the vesting of restricted stock units[107] - As of September 30, 2024, the company held 12,253,502 shares of common stock in treasury at a cost of$18.9 million[108] - The company recognized $9,000 and$50,000 in forfeitures for the three and nine months ended September 30, 2024, respectively[104] - Share-based compensation expense for stock options was $200,387 for the three months ended September 30, 2024, and$634,194 for the nine months ended September 30, 2024[106] - Share-based compensation expense for restricted stock units was $47,003 for the three months ended September 30, 2024, and$217,277 for the nine months ended September 30, 2024[106] Accounts Receivable and Payable - Accounts receivable as of September 30, 2024, was $262,000 from four customers, representing 74.1$341,000 or 60.8% of accounts payable, compared to three CROs accounting for $620,000 or 94.4$212,939 as of September 30, 2024, from $410,617 as of December 31, 2023, while unbilled receivables increased to$139,995 from $55,542 over the same period[45] - Accrued expenses for employee wages and benefits decreased to$442,604 as of September 30, 2024, from $561,720 as of December 31, 2023[47] Deferred Tax Assets and Investments - Deferred tax assets increased to$17.7 million as of September 30, 2024, from $16.4 million as of December 31, 2023[54] - Short-term investment securities in corporate bonds had an adjusted cost of$4,000,832 as of September 30, 2024, with gross unrealized holding losses of $1,202[62] Legal and Compliance - The company is not currently involved in any material litigation as of September 30, 2024[91] - The company's disclosure controls and procedures were deemed effective as of the end of the period covered by the report[110] - No changes in internal control over financial reporting were identified during the three months ended September 30, 2024, that materially affected the company's internal control[174] Accumulated Deficit and Equity Transactions - Accumulated deficit as of September 30, 2024, was$84.54 million, compared to $78.21 million as of September 30, 2023[12] - The company received a total cash payment of$1.3 million from the sale of its equity interest in Alphazyme, LLC for the year ended December 31, 2023, and an additional $60,977 in the first quarter of 2024[79]