Dyadic International, Inc. Q3 Investor Summit Group Virtual Conference 2026

Hi, everyone, and thanks for joining today. My name's Joe Hazelton. I'm the President and Chief Operating Officer for Dyadic Applied BioSolutions. I spent the last 30 years in biopharmaceutical commercialization and development, and I joined Dyadic about 3 years ago to help them with commercialization of our gene expression technology. Today, we're now engineering proteins that power progress, and we've reached commercial stage with multiple products across multiple products using our expression platform technology, which I'll explain a little today. Obviously, we'll be making some forward-looking statements today. Please refer to our SEC statements on our website for further information on risks. We do try to run a very lean commercial structure. We're a very small but disciplined organization, and we'd like to focus our capital deployment on supporting scalable commercialization.

What we've done over the last 3 years is essentially transitioned from an R&D stage organization to a truly commercial one. We've been able to do that while diversifying our revenue model in terms of being able to now have product sales as well as licensing and profit-sharing opportunities, while focusing on making sure that our capital deployment is on near-term commercial revenue-generating opportunities. What's happening today is that the demand for protein is exploding, and that's across all 3 of our core segments, which is life sciences, food nutrition, and bioindustrial. As you look, the need for alternative expression technologies is going to be obviously more important as we move forward. Animal-derived and plant-derived sources are always going to have sustainability as well as potentially safety issues. There's viruses, pathogens, as well as some contaminants that can be in the process for plant-derived materials.

As you look at currently available technologies for producing non-animal proteins, they were traditionally built as lab systems. They're very good at expressing complex proteins, but not necessarily good at scaling. The difference with Dyadic is that we have engineered our platforms for industrial capability. In 2015, or from the early '90s to about 2015, we developed 35 products, sold in 100 different countries, that ultimately we exited to DuPont, where we sold our bioindustrial business for around $75 million. Now what we've done is we've taken that industrial workhorse, the ability to be able to produce non-animal proteins and enzymes, and now we're applying that, and we've re-engineered these platforms to produce more high-value and more complex targets. So now we're able to essentially produce targets across multiple segments of the business and multiple opportunities as we move forward.

Now, where we fit in the protein production ecosystem is we're kind of like the picks and shovels. So anytime you have an idea for a protein, so you have a DNA sequence, you need to figure out how you're going to produce that. Obviously, you can use animal or plant-derived sources to try to produce those proteins. But again, there's always potential supply chain issues, safety issues, and the need for efficient, effective, and high productivity is going to increase as we move forward, and that's really where Dyadic fits in. We are the expression mechanism. We're able to use our gene expression technology, which is a filamentous fungal-based system, to produce non-animal proteins and enzymes. So we take a DNA sequence, we insert it into the cell lines, and then essentially, we're able to purify and then sell proteins into the market.

We can do that and enable protein solutions across many major markets. That is really what Dyadic is today, and one of the reasons that last year we ultimately changed our name and rebranded the company to Dyadic Applied BioSolutions. We are supplying solutions across things like therapeutic proteins or vaccines and other human and animal biologics, or in life sciences, like with cell culture or food nutrition, such as non-animal dairy. We are also in the industrial segment again with biomass and biofuel enzymes and proteins that can be used for processing biomass. Again, we are powering progress across all of these major markets, and we are using a proven technology to do that. Why now? What makes Dyadic different than in the past? We are at an inflection point.

We have now taken the platform, and we have now been able to demonstrate commercialization across all three of our core segments. We have multiple products that are launching into the market, both from ourselves as well as our partners. We have a global distribution agreement that we signed earlier this year with Integrated Biotherapeutics, and they will now serve as the initial distribution model for our products to get into the research grade and diagnostic segments. We have multiple profit-sharing partnerships in place, like with Proliant Health & Biologicals, which I will talk a little bit more about that later. We also have partnerships in the food and nutrition space with enzymes and in the bioindustrial space with Fermbox Bio. We have initial orders, so we are able to sell products directly to customers across multiple segments. Our recurring revenue engine is in motion. We now have these products on the market.

They are starting to generate initial revenues. Again, they are building, and it is going to be a little bumpy along the way. But we have been able to demonstrate that we are able to commercialize using our gene expression technology. We have two complementary platforms that we use to do that. Even though I am going to talk about life sciences, food and nutrition, bioindustrial, and even sub-markets within each of those segments, what we do remains the same. We engineer the strains that produce these materials, and then we commercialize them in multiple different ways. Our end-to-end capabilities really are strain development and engineering, and then the production, purification, and supply of these proteins to the market. We are using our gene expression technology, which is a filamentous fungal-based system that has specific advantages versus other platforms that are currently available.

Our C1 platform is the one that has been optimized for the more high-value proteins that are more complex. So it is ideal for life sciences. While it retains the high productivity and low-cost production, it has greater capability to express human therapeutics. We have even done a phase I study. So we have now proven that a protein produced in the C1 platform is safe for administration to human beings. We have also commercialized in our Dapibus platform, which is, again, is the same native fungal species, but used for more low margin or more cost-efficient use, such as food and nutrition or bioindustrial, where you need high yields, but you obviously need to hit the unit economics for these types of applications.

That's really what makes our platform different than what's currently available for non-animal protein production, is that we're taking an industrialized platform, now we're able to apply it to these more high-value segments such as food and nutrition or even life sciences. That gives us differentiation in the market. Our commercial model has shifted as well. From 2015 to about 2022, we really relied on R&D revenues as well as grant revenues. Now we've been able to diversify our revenue model. We're currently starting to sell products directly to third parties. We're also doing that through our distribution network through IBT. We have licensing opportunities, as I mentioned earlier, we have Proliant Health & Biologicals as one of our premier partners. In 2024, we licensed recombinant human albumin to Proliant Health & Biologicals.

We received about $1.5 million up front, now we actually are going to receive a share of the profits now that they have launched AlbuFree DX, which is their first non-animal protein that they're launching into the market. Proliant is a great partner because they're one of the largest suppliers of bovine-derived albumin in the world, they have a global distribution network, a global customer base made up of pharmaceutical companies, distributors, manufacturers. They're selling to the people that use albumin on a consistent basis. Those customers are asking for non-animal solutions because in certain regulatory environments, non-animal solutions are a little more predictable, they're easier to scale, obviously they can come at higher purities than you can get from animal or plant-derived sources.

That's one of the reasons we chose Proliant, because this gives them the opportunity to provide their customers with a new product that they're looking for and expand their capability. Then we have partners like Inzymes ApS that's now launched in the food and nutrition space. Earlier this year, they launched a bovine chymosin, which is used in the cheese-making process. We licensed them the Dapibus platform for making these enzymes. We've received about $1 million for in upfront and milestones, now we're going to be able to get royalties on the back end from product sales. They've launched and have commercial sales of chymosin now in the market. Then we have partners like Fermbox Bio.

Not only are they a manufacturing partner for us, but they're also supplying a lot of the product that we're currently producing for IBT and some of our other partners, they're also developing their own enzymes. They've launched EN3ZYME in the bioindustrial space for biomass conversion. So we've got three different ways that we can maximize the value of not just our technology, but of the strains we can build with our technology. I mentioned before, our focus is on three core segments, life sciences, food nutrition, and bioindustrial. We're a small company, so even within these very large segments, we're focusing in on areas where we believe that our technology has a specific advantage. In the life sciences space, that market is cell culture media. Those are input proteins that are used in a manufacturing process. They're used in diagnostics. They're used in a lot of different cell and gene therapy applications, things like albumin, transferrin, and growth factors.

Then we have other products like DNase I that are used in cell and gene therapy. They're used in mRNA, and it manipulates DNA. So we have molecular biology reagents and cell culture media, and that's our first entry into the life sciences segment. In addition to that, we make custom proteins for our partners as well. In the food and nutrition space, our focus is on non-animal dairy proteins. The reason is that's an extremely attractive market in terms of growth opportunity and customers' desires. You can see consumer demand increasing for non-animal proteins, both from an ethical standpoint, but also from a sustainability standpoint. It's also an area where, again, you're competing with animal-derived sources, which are usually obviously lower margin.

You need a platform that can produce at the unit economics that the customers are going to be able to commercialize. In the bioindustrial segment, our initial focus is on the biofuels as well as the biomass processing, so cellulosic enzymes. EN3ZYME through Fermbox is our first foray. They've already started to generate initial sales with that. We're also looking at other specialty enzymes like hyaluronidase for cosmetics, markets where we think we can have a niche for a highly productive strain that we're able to produce using our technology. We're not trying to boil the ocean, and even though we're in a lot of different segments, we can make a lot of different things, what we are is a solutions organization.