JUPITER, Fla., Nov. 10, 2016 (GLOBE NEWSWIRE) -- Dyadic International, Inc. (“Dyadic”) (OTCQX:DYAI), a global biotechnology company focused on further improving and leveraging the patented and proprietary C1 expression system to help speed up the development and production of biologic vaccines and drugs at flexible commercial scales, today announced its financial results for the quarter ended September 30, 2016.
BUSINESS HIGHLIGHTS AND RECENT DEVELOPMENTS
- Executed a multi-year agreement with a new contract research organization to further advance C1 expression system for biopharmaceutical development and production
- Special shareholder meeting to be held on Wednesday, December 7, 2016 to seek shareholders' approval for a reverse stock split
- Professional liability litigation trial date remains on track for January 6, 2017
- Cash, cash equivalents and investment grade securities at September 30, 2016 was $55.9 million, excluding escrowed funds from the sale of the Company's industrial business to DuPont on December 31, 2015 of approximately $7.4 million which is expected to be received on July 1, 2017
- Net loss for the third quarter 2016 was approximately $1.2 million with EPS of $(0.03)
- Repurchased approximately 2.5 million shares of common stock at an average $1.50 per share during the third quarter
FINANCIAL RESULTS QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2016
At September 30, 2016, cash and cash equivalents were approximately $5.8 million compared to $68.6 million at December 31, 2015. The carrying value of investment grade securities, including accrued interest as of September 30, 2016 was $50.1 million compared to $0 at December 31, 2015.
Cash and cash equivalents do not include the $7.4 million of cash held in escrow in connection with the DuPont Transaction, which we anticipate will be released on July 1, 2017. Although none are anticipated, such amount is subject to reduction should there be any claims from DuPont.
Cash used in the nine months ended September 30, 2016 of approximately $62.8 million primarily reflects stock repurchases net of stock issuances of approximately $9.5 million, purchase of investment grade securities at face value, net of repayments and maturities of approximately $48.7 million, and cash used in operating activities of approximately $4.6 million which includes cash used in operations of approximately $3.6 million, payment of DuPont Transaction related liabilities of approximately $2.0 million, and premiums and interest paid for investment grade securities of approximately $1.1 million, offset by cash received from the litigation settlement of approximately $2.1 million.
The Company repurchased approximately 2.5 million shares of its common stock at an average of $1.50 per share during the third quarter, and an aggregate of approximately 6.5 million shares of its common stock in both open market and private transactions at an average price of $1.49 per share for the nine months ended September 30, 2016. Subsequent to September 30, 2016, the Company repurchased approximately 1 million additional shares at an average price of $1.64 per share through November 10, 2016.
Net loss from continuing operations for the quarter ended September 30, 2016 was approximately $1.2 million, or $(0.03) per basic and diluted share, compared to a net income of $1.4 million, or $0.04 per basic and diluted share, for the same period a year ago.
Net loss from continuing operations for the nine months ended September 30, 2016 was approximately $1.6 million, or $(0.04) per basic and diluted share, compared to a net loss of $1.0 million, or $(0.02) per basic and diluted share, for the same period a year ago.
Research and development revenue for the nine months ended September 30, 2016 decreased 64% to approximately $101,800 compared to $285,700 for the same period a year ago. The decrease in research and development revenue was due to the Company’s termination of the R&D agreement with Sanofi Pasteur S.A. in August 2016.
General and administrative expenses for the nine months ended September 30, 2016 decreased 9% to approximately $2,923,100 compared to $3,217,800 for the same period a year ago. The decrease primarily reflects lower employee related costs due to the organizational downsizing in connection with the DuPont Transaction of $721,000, cost reimbursement received from DuPont for services rendered in the transition services agreement of $195,600, litigation and professional service costs of $97,400, and bad debt expense of $66,000, partially offset by an increase in cost related to new employment agreements for executives of $309,700, non-cash stock compensation in connection with the Special Committee of the Board and board compensation of $239,300, as well as increase in the biopharmaceutical business development costs of $138,300 and finance department compensation costs of $106,900.
Research and development expenses from continuing operations for the three and nine months ended September 30, 2016 was approximately $369,400 and $963,700, respectively. The spending reflects an R&D agreement with DuPont, the initiation of our multi-year new research and development agreement entered into on September 15, 2016 and employee related costs to support our ongoing biopharmaceutical and internally funded projects, and other governmental and commercial projects.
CONFERENCE CALL INFORMATION
Dyadic management will host a conference call today, Thursday November 10, 2016 at 5:00 p.m. to discuss the financial results for the third quarter of 2016. In order to participate in the conference call, please dial 877-795-3648 for U.S./Canada callers and +719-325-4748 for International callers, using access code 5036677.
A replay of the conference call will be available on Dyadic’s website ( www.dyadic.com ) within 24 hours after the live event.
About Dyadic International, Inc.
Dyadic International, Inc. is a global biotechnology company which is developing what it believes will be a potentially significant biopharmaceutical protein production system based on the fungus Myceliopthora thermophila , nicknamed C1. The C1 microorganism, which enables the development and large scale manufacture of low cost proteins, has the potential to be further developed into a safe and efficient expression system that may help speed up the development, production and performance of biologic vaccines and drugs at flexible commercial scales. Dyadic is using the C1 technology and other technologies to conduct research, development and commercial activities for the development and manufacturing of human and animal vaccines, monoclonal antibodies, biosimilars and/or biobetters, and other therapeutic proteins. Dyadic pursues research and development collaborations, licensing arrangements and other commercial opportunities with its partners and collaborators to leverage the value and benefits of these technologies in developing and manufacturing biopharmaceuticals which these technologies help produce. In particular, as the aging population grows in developed and undeveloped countries, Dyadic believes the C1 technology may help bring biologic drugs to market faster, in greater volumes, at lower cost, and with new properties to drug developers and manufacturers and, hopefully, improve access and cost to patients and the healthcare system, but most importantly saving lives.
Please visit Dyadic’s website at www.dyadic.com for additional information, including details regarding Dyadic’s plans for its biopharmaceutical business.
Dyadic trades on the OTCQX tier of the OTC marketplace. Investors can find real-time quotes, market information and financial reports for Dyadic, as well as additional information related to its professional liability lawsuit, in the company’s annual and quarterly reports which are filed with the OTC markets. Please visit the OTC markets website at www.otcmarkets.com/stock/DYAI/quote .
Safe Harbor Regarding Forward-Looking Statements
Certain statements contained in this press release are forward-looking statements within the meaning of the federal securities laws. These forward-looking statements involve risks, uncertainties and other factors that could cause Dyadic’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Investors are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. Any forward-looking statements speak only as of the date of this press release and, except as required by law, Dyadic expressly disclaims any intent or obligation to update or revise any forward-looking statements to reflect actual results, any changes in expectations or any change in events. Factors that could cause results to differ materially include, but are not limited to: (1) general economic, political and market conditions; (2) our ability to carry out and implement our biopharmaceutical research and business plans and strategic initiatives; (3) Dyadic’s ability to retain and attract employees, consultants, directors and advisors; (4) our ability to implement and successfully carry out Dyadic’s and third parties research and development efforts; (5) our ability to obtain new license and research agreements; (6) our ability to maintain our existing access to, and/or expand access to third party contract research organizations in order to carry out our research projects for ourselves and third parties; (7) competitive pressures and reliance on key customers and collaborators; (8) the outcome of the current litigation by Dyadic against its former counsel and; (9) other factors discussed in Dyadic’s publicly available filings, including information set forth under the caption “Risk Factors” in our September 30, 2016 Quarterly Report filed with the OTC Markets on November 10, 2016 and our December 31, 2015 Annual Report filed with OTC Markets on March 29, 2016. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us.
Important Information about the Reverse Stock Split Proposal
This communication may be deemed to be solicitation material in connection with the proposal to be submitted to Dyadic's shareholders at its special meeting seeking approval to authorize a reverse stock split (the "Reverse Stock Split Proposal").
A notice of the special meeting and a proxy statement to solicit the votes of Dyadic stockholders to approve the Reverse Split Proposal (the “Proxy Statement”) was posted to Dyadic’s website ( www.dyadic.com ) and the OTC Marketplace Portal ( http://www.otcmarkets.com/stock/DYAI/filings ) on October 26, 2016 and subsequently mailed to Dyadic stockholders. Shareholders of Dyadic are urged to read the proxy statement and all other relevant documents filed with the OTC Markets, because they may contain important information about the Reverse Stock Split Proposal and Dyadic.
Dyadic and its Board of Directors and executive officers may be deemed to be participants in the solicitation of proxies from the holders of Dyadic common stock in respect of the Reverse Stock Split Proposal. Information about the directors and executive officers of Dyadic is set forth in Dyadic's proxy statement for its 2016 annual meeting of shareholders, which was filed with the OTC Markets on March 29, 2016. Investors may obtain additional information regarding the interest of Dyadic and its directors and executive officers in the Reverse Stock Split Proposal by reading the proxy statement relating to the special meeting.
| DYADIC INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||
| REVENUES: | |||||||||||||||
| Research and Development Revenue | $ | — | $ | 213,485 | $ | 101,836 | $ | 285,721 | |||||||
| COSTS AND EXPENSES (INCOME): | |||||||||||||||
| Costs of Goods Sold | — | 34,993 | 98,822 | 92,145 | |||||||||||
| General and Administrative | 939,195 | 1,000,641 | 2,923,127 | 3,217,837 | |||||||||||
| Research and Development | 369,359 | — | 963,673 | — | |||||||||||
| Foreign Currency Transaction (Gain) Loss, Net | (46,897 | ) | (23,136 | ) | (78,568 | ) | 105,521 | ||||||||
| Total Expenses | 1,261,657 | 1,012,498 | 3,907,054 | 3,415,503 | |||||||||||
| LOSS FROM CONTINUING OPERATIONS BEFORE OTHER INCOME (EXPENSE) | (1,261,657 | ) | (799,013 | ) | (3,805,218 | ) | (3,129,782 | ) | |||||||
| Other Income (Expense): | |||||||||||||||
| Settlement of Litigation, Net | — | 2,170,000 | 2,100,000 | 2,170,000 | |||||||||||
| Interest Income | 146,930 | 2,638 | 344,012 | 8,725 | |||||||||||
| Interest Expense | — | — | (909 | ) | — | ||||||||||
| Total Other Income | 146,930 | 2,172,638 | 2,443,103 | 2,178,725 | |||||||||||
| INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | (1,114,727 | ) | 1,373,625 | (1,362,115 | ) | (951,057 | ) | ||||||||
| Income Tax Expense from Continuing Operations | (50,694 | ) | — | (184,439 | ) | — | |||||||||
| NET INCOME (LOSS) FROM CONTINUING OPERATIONS | (1,165,421 | ) | 1,373,625 | (1,546,554 | ) | (951,057 | ) | ||||||||
| NET INCOME FROM DISCONTINUED OPERATIONS, NET OF TAXES | — | 536,601 | — | 2,057,410 | |||||||||||
| NET INCOME (LOSS) | $ | (1,165,421 | ) | $ | 1,910,226 | $ | (1,546,554 | ) | $ | 1,106,353 | |||||
| BASIC NET INCOME (LOSS) PER SHARE: | |||||||||||||||
| Basic Net Income (Loss) from Continuing Operations per Share | $ | (0.03 | ) | $ | 0.04 | $ | (0.04 | ) | $ | (0.02 | ) | ||||
| Basic Net Income from Discontinued Operations per Share | — | 0.02 | — | 0.05 | |||||||||||
| Basic Net Income (Loss) per Share | $ | (0.03 | ) | $ | 0.06 | $ | (0.04 | ) | $ | 0.03 | |||||
| DILUTED NET INCOME (LOSS) PER SHARE: | |||||||||||||||
| Diluted Net Income (Loss) from Continuing Operations per Share | $ | (0.03 | ) | $ | 0.04 | $ | (0.04 | ) | $ | (0.02 | ) | ||||
| Diluted Net Income from Discontinued Operations per Share | — | 0.02 | — | 0.05 | |||||||||||
| Diluted Net Income (Loss) per Share | $ | (0.03 | ) | $ | 0.06 | $ | (0.04 | ) | $ | 0.03 | |||||
| Weighted-Average Number of Shares: | |||||||||||||||
| Basic | 36,185,164 | 34,247,456 | 37,514,315 | 34,219,493 | |||||||||||
| Diluted | 36,185,164 | 34,418,151 | 37,514,315 | 34,410,770 | |||||||||||
| Balance Sheet Information: | September 30, 2016 | December 31, 2015* | |||||
| (Unaudited) | (Audited) | ||||||
| Cash and Cash Equivalents | $ | 5,827,998 | $ | 68,601,138 | |||
| Investment Securities, Short-term and Long-term | 50,074,381 | — | |||||
| Escrowed Funds from Sale of Assets | 7,363,977 | 7,361,182 | |||||
| Total Assets | 63,850,085 | 76,667,425 | |||||
| Accumulated Deficit | (20,259,650 | ) | (18,713,096 | ) | |||
| Stockholders' Equity | 63,254,078 | 73,794,505 | |||||
| *Condensed from audited financial statements | |||||||
| INCOME FROM DISCONTINUED OPERATIONS (Unaudited) | |||||||
| Three Months Ended September 30, 2015 | Nine Months Ended September 30, 2015 | ||||||
| REVENUES: | |||||||
| Product Related Revenue, Net | $ | 3,272,497 | $ | 9,507,207 | |||
| License Fee Revenue | 567 | 800,567 | |||||
| Research and Development Revenue | 471,322 | 1,230,233 | |||||
| Total Revenue | 3,744,386 | 11,538,007 | |||||
| COSTS AND EXPENSES (INCOME): | |||||||
| Cost of Goods Sold | 2,264,790 | 6,856,869 | |||||
| General and Administrative | 82,733 | (21,472 | ) | ||||
| Sales and Marketing | 139,263 | 681,727 | |||||
| Research and Development | 453,208 | 1,261,783 | |||||
| Foreign Currency Transaction Loss, Net | 14,475 | 49,233 | |||||
| Total Expenses | 2,954,469 | 8,828,140 | |||||
| INCOME FROM DISCONTINUED OPERATIONS BEFORE OTHER EXPENSE | 789,917 | 2,709,867 | |||||
| OTHER EXPENSE: | |||||||
| Interest Expense | (221,116 | ) | (620,257 | ) | |||
| NET INCOME FROM DISCONTINUED OPERATIONS BEFORE INCOME TAXES | 568,801 | 2,089,610 | |||||
| Provision for Income Taxes | (32,200 | ) | (32,200 | ) | |||
| NET INCOME FROM DISCONTINUED OPERATIONS | $ | 536,601 | $ | 2,057,410 | |||
Contact: Dyadic International, Inc. Thomas L. Dubinski Chief Financial Officer Phone: 561-743-8333 Email: tdubinski@dyadic.com
