Thomas Dubinski - VP and CFO Mark Emalfarb - President and CEO

Walter Schenker - MAZ Partners Robert Hoffman - Princeton Opportunity Partners

Good afternoon, ladies and gentlemen and thank you for holding. Welcome to the Dyadic International's 2015 Financial Results Conference Call. At this time, all participants are in a listen-only mode. My name is Noah and I will be your conference coordinator today. As a reminder, please note that this call is being recorded. At this time, I would like to introduce your host for today's call, Tom Dubinski, Dyadic's Vice President and Chief Financial Officer.

Thank you, Noah. Good afternoon and thank you for joining today's conference call to discuss Dyadic's financial and operating results for the year ended December 31, 2015, which was reported in the press release issued earlier today. The press release and Dyadic’s annual report have been posted to both the Dyadic and the OTC Markets' Web sites. I'm joined today by Dyadic's President and Chief Executive Officer, Mark Emalfarb. On today’s call, Mark will cover operating highlights, further details on the DuPont transaction and post transaction corporate strategy, provide an update on our professional liability lawsuit against former professionals and I will review our financial results in more detail. We will then give you an opportunity to ask questions. Each caller will be allowed one question and one follow up question in order to provide all callers an opportunity to participate. If time permits the operator will allow additional questions from those who have already spoken. Before we begin, we would like to remind you that certain statements made in this conference call maybe forward-looking statements, which involve risks and uncertainties 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 these forward-looking statements. Dyadic expressly disclaims any intent or obligation to update any forward-looking statements except as required by law. I will now turn the call over to our President and CEO, Mark Emalfarb.

Thank you, Tom. 2015 has truly been a transformational year for Dyadic. As we enter 2016, we are debt free; we have a strong cash position with sufficient cash reserves to fund our previously announced $15 million share repurchase program and to execute on our business and scientific objectives for the foreseeable future. We recognize that in order to maximize values for shareholders, we need to uplift to NASDAQ or another major exchange. Now that we are able to meet many of the listing requirements, this is now a priority the management is focussing on. Tom Dubinski our CFO will provide further details on this matter later in this call. I am extremely pleased with Dyadic’s accomplishments in the past year with our highly regarded C1 technology and our strong financial position, we are uniquely positioned to provide additional shareholder value as we execute our near and longer term business plans. As we previously reported on December 31, 2015 we closed on the sales substantially all the assets of our industrial technology business to DuPont’s industrial Biosciences business for $75 million in cash. Approximately $7.4 million net of a certain contractual working capital adjustments of the sales price is being held in escrow until July 2017 to satisfy potential reps and warranties included in the purchase and sale agreement. In connection with the closing of the DuPont transaction, all of Dyadic’s outstanding debt had been paid off or converted into shares of Dyadic’s common stock. Additionally, total of $8.1 million convertible debt was exchanged with 6.1 million shares of Dyadic’s stock common stock for which I personally converted $1 million of debt owed to me for 690,000 shares at $1.48 per share. I have a strong belief that Dyadic’s future is very promising, therefore I decided to increase my already substantial sizeable position in the company, provide additional cash resources to fund our business plans. Our rational to sell a portion of our business was anchored in the belief the remaining Dyadic is more highly attractive enterprise for atleast the following four key reasons. One, as part of the DuPont transaction, Dyadic received co-exclusive rights to the C1 technology for use in human and animal pharmaceutical applications, with the exclusive ability to entering to sub-license agreements in that field. DuPont will have a co-exclusive right to the C1 technology for use in human and animal pharmaceutical applications. If DuPont utilizes the C1 technology for development and production of pharmaceutical products, they will make a royalty payment to Dyadic, upon commercialization. Two, as part of our pharmaceutical license with DuPont, we negotiated what we believe is a significant benefit to carryout portions of our pharmaceutical research at our former research center with the same scientist, who have been successfully working with C1 for Dyadic all these years as well as gaining access to DuPont scientific expertise and experience in the field of filamentous fungi during this research services period. This benefit is expected to provide operational flexibility along with additional R&D capabilities and expertise to help us further develop our pharmaceutical business initially without the typical cash burn rate associated with biotech companies. We expect that Dyadic’s focus on the pharmaceutical industry along with the negotiated support from DuPont will enable the company to potentially achieve research goal sooner and more effectively than otherwise possible. In addition, the unique attribute to C1 may create attractive licensing opportunities to providing our partners with research, development and operational efficiencies and reduced requirements for licensed capital expenditures. Three, as part of the transaction we retained all of the potential rights and obligations associated with our ongoing professional services liability litigation against the law firms Greenberg, Traurig, LLP, and Greenberg Traurig, P.A. and Bilzin, Sumberg Baena Price and Axelrod, LLP. We believe that our post closing cash position will strengthen our negotiating position and settlement discussions with those firms, as we expect to have a necessary cash on hand to see this litigation to trial and if necessary any potential appeals. We also believed completion of the DuPont transaction strengthens our legal position further, supporting the damage analysis that is part of the litigation. We continue to make progress with the lawsuits. On July 31, 2015, the company reached a settlement and litigation with another defendant law firm and on August 12, 2015 the company received full payment of $2,170,000 which is net of fees and expenses. I will provide more details on our ongoing professional services liability litigation later in this call. Fourth, finally the DuPont transaction will enable us to return capital to our shareholders in the form of a share buyback, which as previously reported was initiated on February 16th of this year. Till March 28, we purchased 688,655 shares of our common stock through our stock repurchase program and that’s an addition to the January 12, 2016 where we repurchased 2,136,752 shares of our common stock from Abengoa. We are well positioned to build shareholder value. We are debt free, have several years of cash on our balance sheet and are off to a very good start and are beginning to leverage a C1 technology in a pharmaceutical sector which the company has long believed to be one of the most attractive opportunities in which to apply the C1 technology. We believe that the C1 technology platform has the potential to be a safe and efficient expression system that may help to speed up the development and product of biologics at flexible commercial scales. In particular as the ageing population grows in developed and undeveloped countries, the company believes C1 has the potential to help bring Biologic drugs to market faster, in greater volumes, and a lower cost to drug developers and manufacturers and hopefully to patients in the healthcare system. The combinations of a portion of the proceeds from the DuPont transaction and additional industry and government funding that will be sort [ph] are expected to provide Dyadic with the ability to focus on and accelerate to further development and optimization of the C1 technology in the area of biopharmaceuticals. In addition, unique attribute to C1 may create attractive licensing opportunities to operational efficiencies and reduced requirements for license capital expenditures. Now, I would like to talk about our renewed focus on the pharmaceutical industry. The C1 technology platform has proven itself in its use in developing for manufacturing enzymes for industrial applications. It is now being used by two of the largest companies in the world, BSF and DuPont. In addition to the encouraging data we have reported in the past related to our vaccine research program with Sanofi Pasteur there are a lot of discussions going on with various pharmaceutical and biotech companies including preliminary discussions with two major pharmaceutical companies in addition to Sanofi which we expect will be lead one or more a third party funded research projects this year targeting the use of C1 for developing, producing additional animal and human vaccines and antibodies. Currently we intend to continue our existing programs with Sanofi Pasteur and our EU funded ZAPI vaccination program. The Company has initiated internally funded research and development pharmaceutical programs and is revealing its options regarding its future internal and external pharmaceutical research initiatives. As to Sanofi Pasteur, as previously reported, we’ve been working with Sanofi Pasteur using the C1 expression system to attempt to express specific antigens of interest to Sanofi. In a collaborative partially funded research project, we’ve been jointly working to develop or produce an R&D phase vaccine using the C1 expression system. In addition to prior funded R&D, we have the additional potential for additional R&D funding, other payments and potentially other additional opportunities to the research project with Sanofi Pasteur we continued. Should the companies decide to continue working together, we have the possibility of the potential C1 technology transfer to Sanofi which was contemplated in the agreement. As announced in the company’s press release in October 7, 2015 the data generated by Sanofi Pasteur indicates that the C1 produced antigen generated an equal or better immune response in mice trials and industry antigen chosen for comparison by Sanofi Pasteur. It should be noted that this data is very preliminary and additional research and data generation is ongoing and needed for the company and Sanofi Pasteur license agreement for any other type of collaboration for this class of vaccines. We are working on expressing and producing sufficient quantities of additional vaccine variance in the Sanofi research project for further evaluation by Sanofi. If the company is successful in delivering sufficient quantities of remaining vaccine variance to Sanofi by the middle of the second quarter, the company anticipates a decision on this research project by the end of 2016. As to ZAPI, ZAPI is a research and development program sponsored by the EU with the goal of developing a platform suitable for the rapid development and production of vaccines and protocols to fast track registration of developed products to combat epidemic, infectious diseases that have the potential to effect the human population. Our Dutch subsidiary, Dyadic Nederland's, BV is one of many industry and academic participants in its EU 22 million EU vaccine R&D program. The company has started it initial research and development to work on cloning and expressing different antigens which are of interest to the ZAPI consortium. If the company is successful in expressing sufficient quantities of desired antigens using the C1 expression system, we anticipate one or more of these antigens to be further characterised within the consortium. If the characterisation is positive then we anticipate that such antigens will likely be an integral part for the ZAPI research and development and regulatory programs. We anticipate that any preliminary results on the ongoing gene expression research we are conducting the ZAPI program sometime in the second half of this year. Further, pharmaceutical business development update is regarding our internal research and development goals. Additionally the Company has started an exploratory research program to evaluate the use of the current C1 technology to develop, imperative, non- glycosylated therapeutic protein products such as insulin and Ranibizumab which is a biosimilar version of Lucentis. The global human insulin market is estimated to reach $42 billion by 2019 at a compound annual growth rate of 12.5% from 2014 to 2019. The insulin market is being driven by a rising prevalence of diabetes worldwide, spiralling ageing population it increases the incidence of diabetes, growing obese population due to change in lifestyle, favourable government initiatives and a deduction of ten [ph] and innovation devices to deliver human insulin efficiently and effectively. We believe that the production of low cost insulin by C1 maybe potential solution for the growing demand in a multibillion dollar insulin market. Among the other monoclonal antibodies based biosimilars, Lucentis is used for the treatment of retinal diseases achieved approximately 4.5 billion in 2014 global sales for the IMS Health Study. Since the ageing population continues to grow in developed and undeveloped countries, there is a growing need to improve access to medicines and therapies to more people around the world, faster and greater volumes in a lower cost. Producing non-glycosylated borrower biosimilars such as Ranibizumab, a biosimilar version of Lucentis by using the C1 technology we can create a differentiated platform approaching an effective alternative in the emerging Biosimilar/ Biobetter global market as because more competitive. The company’s longer term objective which will require substantially more time to achieve is to leverage its human expression host system for the even larger therapeutic glycoprotein market. The C1 system has a potential to become a significant platform for the development and production of therapeutic, glycoproteins with human compatible or even potentially superior glycan structures. We believe that with a rapid advantage already available today and those being made in accelerated pace in genomics and synthetic biology, the hyper productive and novel C1 fungal cell line is a superior option to further engineer glycosylation pathways. First, to create improved immunogenicity in the case of vaccines, and second to eliminate immunogenicity in the case of glyoproteins as therapeutic drugs. The company is currently evaluating the best strategy to carry out these critical research and development paths. We are in discussions with various leading experts in laboratories in the field of glyco engineering to identify the best path forward, glycol engineer and C1 cell lines. We believe in the saying that expression system is not everything, but everything is nothing without a good expression system. Based on our academic and commercial collaborations, we believe experts in academia and the industry regard Dyadic C 1 expression system among the foremost expression systems in the world. We have licensed on a non exclusive basis our C1 expression systems to some of the world’s largest and most renowned industrial biotech companies such as [Indiscernible] BSF, Kodaksis [ph] among others in addition to the sale to DuPont of the industrial biotech business. We believe that utilizing the C1 expression system maybe the critical differentiator in allowing Dyadic, our collaborators and licensees to compete in these technologies driven markets. Now, I’d like to give you an update on the professional liability lawsuit. The lawsuit has been going on for seven years. It will be nearly a decade before the jury will decide on the allegations of negligent actions emissions by the defendants. The remaining defendants in the lawsuits had law firms in Greenberg, Traurig, LLP, Greenberg Traurig, P.A. and Bilzin, Sumberg Baena Price and Axelrod, LLP and the state of former Greenberg Traurig attorney Robert Schwimmer. The parties attended both quarter remediation and non-binding arbitration. Free trial motion practise is now potentially completed. The court’s ruling on pre-trial motions for such summary judgement were largely in favour of Dyadic. Likewise, a court rulings on motions in [Indiscernible] have also been favourable to Dyadic. The rulings have allowed this action to proceed to a trial. While Dyadic intended to improve both the negligence and breaches the fiduciary duties by the defendant law firms. The court has issued an order dated March 3, 2016 setting a six week jury trial commencing on Friday January 6, 2017. Our business and research plans are continuing to revolve and are being further refined as we evaluate our cash position. Personnel needs, R&D and other resources required to execute our business plans. At the moment, our 2016 budget calls for a total burn including R&D of $4 million to $5 million. As the year unfolds, we will have a better handle on our research needs for 2017 and beyond. I am very optimistic about the prospects that lie ahead for Dyadic. I will now turn the call over to Tom Dubinski, our Chief Financial Officer to discuss the financial results.

Thank you, Mark. In our annual report as a result of the completion of the DuPont transaction we have reclassified the revenues and expenses of our former industrial technology business to income loss from discontinued operations. And the related assets and liabilities to assets held for sale and liabilities related to assets held for sale, for the years ended December 31, 2015 and 2014. As of December 31, 2015 cash and cash equivalents were approximately $68.6 million compared to $2.5 million at December 31, 2014. Cash and cash equivalents does not include the $7.4 million of cash held in escrow in connection with the DuPont transaction which we anticipate will be released in July of 2017. On December 31, 2015, we had approximately 40.3 million shares of common stock outstanding. Net loss for the year ended December 31, 2015 was approximately $1.5 million or $0.04 per basic and diluted share compared to a net loss of $2.5 million or $0.04 per basic and diluted share for the same period a year ago. Revenue and gross profit for 2015 and 2014 respectively reflect two ongoing R&D biopharmaceutical projects Sanofi and ZAPI. General and administrative expenses for the year are 27% lower than 2014, principally due to lower litigation costs. R&D expenses for the year ended December 31, 2015 decreased to zero from approximately 71,000 in 2014 as a result of the closure of our North Carolina lab in April of 2014. Other income for the quarter reflects the company's receipt of previously disclosed litigation settlement of $2,170,000 million net of fees and expenses. Net Income from discontinued operations for the year ended December 31, 2015 was approximately $67.3 million, or $1.95 per basic and diluted share, compared to a net loss of approximately 576,000 or $0.2 per basic and diluted share for the same period a year ago. As Mark indicated, uplifting our stock to the NASDAQ to another major exchange is a priority that management is focussed on. Prior to the completion of the DuPont transaction, there were a variety of listing requirements that we did not meet, many not within our control. While there are listing requirements that we have little control over, we are now in much better position to begin dealing with them. One of the things we can’t control is the SEC registration and reporting requirements. We need some time to put in place the resources and process to enable compliance with the reporting requirements of a full reporting company. These requirements include among other things additional manpower requirements in our finance function and greatly expanded reporting disclosures particularly with regard to executive compensation. These additional costs among other things are included in the operating estimate Mark provided earlier. As for things we don’t control, despite meeting a majority of the NASDAQ financial and liquidity listing requirements, we currently do not meet the minimum bid price or closing price requirements for the NASDAQ of $4 and $2 respectively. We now have a strong capital base to execute our business plans. We expect that if we can achieve even some of our business objectives we can generate enough investor interest to comfortably meet the listing requirements and at that point we expect to be ready to comply with all of their requirements. We understand the importance of what uplifting the stock may have on the shareholder value and liquidity, and we will keep you informed as to our progress. Now, I'd like to turn the call back to our operator to take your questions. Noah.

Thank you. [Operator Instructions]. And we'll take our first question from Walter Schenker with MAZ Partners.

Hi, Mark. Realizing that we are in an interim period of March quarters I understand that -- in what terms, because you already announced one major repurchase from Abengoa, can you give us a rough estimate as to how many shares you might have repurchased to-date?

Yes. We've already done that in today's conversation and in the press release, I mean, just its 655,000.

688.

655,688 shares in addition to the shares apart from Abengoa.

No. It’s for the Abengoa. I apologize. Okay. Thank you.

We'll take our next question from Robert Hoffman with Princeton Opportunity Partners.

Hi, I just on the -- 688,655 correct.

Yes, that's correct.

Okay, Tom. Thank you. Tom, I was wondering if you could just walk us through the cash major uses of cash from the September balance sheet through the December balance sheet, and what – we had about 6 million in cash on the balance sheet and it looked like payables and receivables were somewhat in line with each other. So I'm just trying to reconcile obviously some of the cash was used to repurchase the debt. So is there big – is there anyway you can easily characterize the movement to cash in Q4?

Yes. Robert that's a fair question that I'm not prepared to answer. I can summarize that and we can talk later potentially. I don't have that prepared at this point.

Okay. All right. And so, I apologize, I guess this is in your annual report; I just pulled it up just now. But you said, you started the year or end of the year I guess started the year 40.3 million shares outstanding, so that's the fully diluted all of the converts can converted, correct?

Yes. We ended the year with 40.3 million shares outstanding.

Okay. And then, obviously you've repurchased 2.8 million.

Okay, correct. That includes what Mark covered on the share purchase in the Abengoa repurchase.

Right. And so if my math is correct, you’re somewhere north of a $1.91 a share in cash to-date, is that sort about right, if you include the ASCO cash?

Yes. I don't have the number in front of me, but if you just take that 70, was it 68, what's the number, 68 million, right in front of you. Just take the two numbers we gave you which is like 68.

It’s a dollar, roughly a dollar or two. Well, anyway you got this 68 million and the 7.4 million, it’s an escrow and divided by 40.3 and you come with your number as of 12/31, 2015.

Right. I'm just…

It’s not as of today. You said as of today.

Well, because I'm backing out that 2.8 million she spent on Abengoa and 1.06 that you spent on the open market and reduced the share count to get to the increased cash per share, because effectively you’ve been buying back shares for a discount to $1, which is a good thing, but you'll have to wait to the queue, first queue because we've also had cost and other things associated with severance and others things and other ongoing expenses.

Okay. Fair enough. Okay. Thank you.

We'll take our next question from [Indiscernible]

Yes. Hi, guys. So the question I have -- I got two questions. The first one is on the buyback. What are the rules of the buyback right now as far as how many shares could you buyback per day and how does that work. Can you drive a price or not drive a price, explain to me how you're buying it back?

We don't have any influence over price and we cannot offer a price on any particular day above an independent price that was offered in the marketplace. We're allowed to purchase upto 25% of the [Indiscernible] of the trailing four weeks, and once we hit that cap we're cut off unless we execute a one-time buy we're allowed one item large lot purchase once a week and that were precluded from using the 25% of role on a large block purchase.

So, in regards to the large block purchase can that be at market or above market or does it have to be at market or below market, once you fulfill the 25% that you can buy?

Again, I think as Tom pointed out we've turn this over to a firm and brokerage company Canaccord Adams. And they are running this program. And I believe that the trade markets were below, but it has to be based on a check by somebody else, not on our own.

Correct.

So we can't just arbitrarily pick a number. And we're not picking a number anyway, we've given the….

Okay. So, that's the question, so it has to be by a check, by a seller at or below market, is that the way you understand it?

Yes. Okay. Or it could be at a discount rate which is remarkably…

Right. At or below.

Right. Yes.

All right. So the next question is you mention that you're going to be spending $4 million to $5 million of burn this year. In 2016 I'm assuming that excludes any stock buyback that just overhead. Can you explain some of the kind of where you see that going because that seems like a lot of money and tell me what kind of overhead you have and what that pertains to as far as staff and so forth if you could, your projection?

I think there's a lot of detail on the financial statement, so you have to go to and read and getting the details. But just in general it includes research and development funding and that would be for the ZAPI program. Our contribution o what we're doing to Sanofi's program, as you can see from the financial statement and discussions we had – we're now explore to our restarting research program on insulin and in a biosimilar, biogeneric of Lucentis feel that that they are indeed included in that. Of course there's an uplifting as we're going to have to get higher additional resources like a Director of Financial Reporting for example, potentially a licensing person so that we can actually put the infrastructure in place do this internal controls and all the things we have to from a financial reporting to get ready for the uplifting. And then as the operating expenses of few that we have left in the company at the moment and the few people we're going to hire.

How many – what the few people you have left in the company and where is that company, is it only in Jupiter or is there other places?

Well, we have a subsidiary in the Netherlands and there's one employee over there is actually not employee but a consultant, let's say development and research individual that Dr. Ronan Nisqually [ph]. You have Tom and I here with three girls in the office and there's still a variety of other people here doing the transition to DuPont of the industrial enzyme business which sometime over the next few months, it will be down to currently five people here, one overseas, but we're going to be hiring a Director of Financial reporting, a licensing person and I think somebody else, I can’t remember what at the moment, but we're also looking to evaluate a new board member that can help us in our pharmaceutical business as well.

Okay. So those are the three areas of where 4 million to 5 million is going. Could you gave a projection o the cost to the uplift, out of that 4 million to 5 million, is that a third of it or they're about?

I can't give you the projection and a specific number, no.

Okay. And when do you see this uplift, based on what you know, when do you see this happening?

We haven't set a timeline so we're not – we not prepare to provide a timeline at this point because we still as I said in the conference script that we do not meet the NASDAQ requirements today. And when we're closer to that point then we'll be providing you an update.

But I can tell you that it’s a priority that we're focusing and now that we have the financial statement strength that we do because that allows us to meet many of the things we could not in the past. We had tempted as you know to do it when we got in the 6 million from BSF and 5.5 million from Abengoa, but because of the infrastructure and the cost and all the expenses at the time including the lawsuit, and all the things that money dwindled the way. And so now we have a much lower overhead and significantly better balance sheet. We're in much better position now to make that happen, so, its one of our priority.

In addition -- last question, in addition to the companies that you said that you plan on partner with, I think was four different companies, you talked about lot of different things but I think there were four. Are you talking with any other companies about your technology and the possibility of partnering out?

The obvious answer to that is yes.

That's my question. Thank you.

We'll take our next question from Anthony Marchese [ph]. He is a Private Investor.

Hey, Mark, first of all congratulations, you guys have done an excellent job. I have two questions. First of all, could you just please discuss why you choose to do a buyback in this fashion that you did. I mean, it would seems to me that a Dutch Auction which many companies use would get you the results you want a lot faster. And also provide the opportunity for all investors who wish to sell back stock to the company. It such seems that Dutch Auctions had been shown to be far more effective in purchasing large amounts of stock over short period of time. So, I guess number one, can you just give me the reason why you choose that that as oppose to a Dutch Auction tender?

First of all, we had numerous advisors that we interviewed for we chose that when we use. In addition to the advisors we have bankers and other people we have discussion with almost to 80 including most of our investors that we speak with it that call us up, did not want us to do a Dutch Auction. First and foremost, they want to a Dutch Auction and if we're not listed yet on the NASDAQ your liquidity just evaporates. So now you have liquidity and you have ability and the stockholders today have the same ability they had at the time, anybody at any given moment can make a block trade if you have a large amount of shares. You can just contact your broker. That broker can contact the marker maker that's handling this account for us. So it can accomplish the same goal but it provides liquidity over much longer period of time. What Dutch Auction just does it one time deal and you're done, somebody picks in arbitrary number. And everybody be happy or not happy, in this case it’s the market setting the price and everybody has the opportunity to sell or to buy. And so that was really almost unanimously the decision and the advice we got, because in fact we originally looked at doing a Dutch Auction.

I see. Okay. And the second question is in term of realizing shareholder value, shareholder potential, I think one of the keys in my opinion would be for you guys to get out and start telling the story. So I guess the question is what are your investor relations plans over the next – I guess over the balance 2016 in terms of going out and telling the story, because I think would be probably one of the most effective ways in order to generate more interesting stock?

And it’s a good point and quite frankly we have had those discussions with the board and we've evaluate the potentially different IR group. We have not had the lot of great experience with IR groups in the past, but we're trying to find the right people to put it in front of the right audiences, they can actually buy our shares until we get up listed on the NASDAQ or another major exchange, and we understand our concerns and we're address those concerns.

Okay. Finally last question, any prospect, I think I know the answer to this, but I should ask, any prospects or any type of research coverage. And I realized it's played a -- play for the most part and the fact that you have lots of cash, and obviously for most firms they want to see you spend some money, but is there prospects or any type of true independent research?

Well, I met with a variety of analysts and bankers and advisors at JPMorgan Conference in January which is really only two and half months ago, and lot of them are interested in the company. And obviously they are just getting their arms around we're doing. And that's one of the thing that IR firm, but the right IR firm could help us do as well as you pointed out, there were some events that these companies can see forward, but it’s a very difficult situation because we don't really need to raise capital for many, many, many years as far as we're concern, we in fact feel we have enough capital actually in business plan and buyback up to 50 million in shares in addition to the Abengoa shares. But clearly that's on our radar screen is to find a way to get more and more analyst, but the right analyst to understand what are these we're to understand the benefits of the technology, the opportunities that we're addressing which astronomical if we can actually achieve fraction of what we're trying to attempt to do. And so, we're also obviously we're trying to get this lawsuit behind us, good, better, and different. We feel extremely confident that we'll be successful against those lawyers and the actions that they took. So, there's a lot of things that are there that need to put away, get addressed and we're all over everything.

Great. Anyway great job. Thanks. I appreciate the candor.

Thanks.

Our next question comes from Paul Christopherson, Private Investor.

Hi. Actually I have no questions at all, just Mark congratulations on great progress.

And Paul, good to hear your voice, because I know that I think you're somewhere else where you use to be and we appreciate your support and time.

I am happily retired.

Okay.

So I'm pondering on you to make a retirement a happy one.

All right. We're working our best to make you and all the shareholders including my children and everyone else happy.

Much appreciate.

Thanks.

[Operator Instructions] We'll take our next question from Robert Hoffman, Princeton Opportunity Partners.

Yes. Thanks. I just want to clarify this, the 4 million to 5 million that is not assuming that you're going to get reimbursed by any of your partners, correct?

I don't understand what you mean reimburse by any of our partners.

Well, in other words, here if Sanofi wants to do something, ask you to do or any company ask you to do something in addition to what you have plan, they're going to reimburse or pay for that added research. Are they not the plan, the business plan?

Yes. So the business plan we have unique opportunity that I would say is most biotech companies don't have. We are very, very cash bridged and we have many, many opportunities. So we're actually evaluating as part of that $4 million to $5 million not only doing the research and development we're doing with Sanofi and with ZAPI, the beginning exploratory research and development on that Lucentis Biosimilar and insulin, but there's a few other vaccines and antibodies that we may actually tempt to move along as well as to expense money on reengineering to see one -- line, but to your point its possible by the end of 2016 that Sanofi could come up and become some kind of a major collaborator or partner or license and in fact that $4 million to $5 million may actually turn the other direction. And so, we don't know that. We anticipated getting this done by the end of the year. And if we do its going to be go know decisions which is what we talked about is it go or no-go. And of course that's probably would wipe up the entire $4 million to $5 million make us positive for the year.

Right. That's what I was clarifying it.

I know I think we just getting and that's what I'm trying to answer for you.

Another words it’s not – you're not going to burn 10 and anticipate getting five this year. You're going to burn 4 to 5, and if you get money in that's to be good?

Yes. And by the way when we get that money in its potential that we may decide as we have in the past to accelerate R&D to bring the technology faster and further with part of it and other part of it is to reduce the burn that we don't know. We'll see where we at when that happen.

Normally, not a big fan of reverse stock splits, but it sounds like what you were saying before is that the only real hurdle for uplisting is your stock price, is that -- did I hear that correctly, Tom?

Yes.

And like I said not a big fan of reverse stock splits because a lot of times those were done by companies that are weak. And all they do is get the price up and then it proceeds to go back down. But given that you have a very solid cash per share flow, what are your thoughts on reverse stock, a reverse stock split?

I think as Tom pointed out if we just do a certain amount of successful things this year we should be more than adequately above the $2 share price that we have to be at for so many days. But we’d prefer not to do a reverse split if possible. It’s not out of the realm of possibilities, but we’ll evaluate that when we have all the other infrastructure in place to pull that trigger. And hopefully we won’t need to do that. We should not need to do that.

I would much prefer not to be that way either, but I do think that uplisting is an important, it’s a little bit of a chicken and egg without the uplisting you may not get some of the investors that you need. So you know, I’m not saying that you do a reverse split tomorrow, but if we’re sitting here on the second quarter conference call and we [Indiscernible] $2 I hope you would consider it.

We’ve considered in the past and we will consider in the future.

All right. Great, thank you.

The next question comes from William Bane [ph] Private Investor.

Hey guys, congratulations on a great year. I have a quick question for you Mark. Thinking about the antigen work you are doing with Sanofi, have you guys been able to think about or quantify how much it costs Sanofi rate now to make that antigen versus how much it might cost Dyadic to make it using C1, I mean what sort of cost improvement percent can people start to think about?

Yes, you can think about whatever you like because one of the confidentiality and we can’t share that with you. But I think that the bottom line here it isn’t just the cost savings in this particular case, it’s that the initial results show the even a potentially better immune response as well. So there’s a double opportunity and it’s a CapEx, it’s an OpEx, it’s all the things we have talked about. If you go to the slide presentation we have on our website you know that might give you a good idea.

Good idea in terms of what?

In terms of the possibility of reducing CapEx and OpEx and where we think we should be, but in particular to that specific antigen, we can’t give you that information obviously.

Right. But like broadly speaking forget about that antigen in particular. If you are talking like just very very broadly, I mean are you talking about a 10% reduction in the cost to produce these things or 20% or a range of you know it’s a range you can give us?

Let me just give you some parameters and some thoughts about how to look at this, okay.

That will be great, that will be great.

All right. So, I’m going to compare it to a Chinese Hamster Ovary, which you call is Cho cell which is one way that they use it, a lot of these glycoproteins, okay. Just as an example.

Sure.

It takes 12 to 15 days typically to run that process. So in the case of C1, we say it can be five to seven days. So it’s basically half to a third to time. So even if we got just a same productivity levels we can do it in half the time that it’s a big savings, right.

Right.

Now in addition to just the same productivity level, we expect to get significantly higher productivity levels and then you get for Chinese Hamster Ovaries versus C1. Now I can’t use the example of 80 grams per liter, which is what we’ve achieved on a fumble gene because I don’t expect that we are ever going to get those kind of levels in an antibody for example, however we don’t need that because typical Cho cells are between 1 and 4 grams per liter, so we don’t have to get much higher to produce something in half the time and maybe twice the yield and then of course we can scale to you know twenty times the size if that need into, but you won’t need to because in the human therapeutic side obviously we can produce higher levels at lower cost in less time with cheaper media. And then there is a whole advantage of downstream recovery in some of these proteins where, when you use Chinese Hamster Ovary, there is the pry ons that you have to separate and filter out out which you don’t have to do with C1 because the pry ons don’t exist in fungi. So there is a variety of ways. It’s more the safety, the regulatory hurdles and the comfort and its going to be yields in cost to the pharmaceutical institute we have to overcome. So I think everybody can envision using C1 to make larger volumes in a short amount of time with lower media cost. It’s going to be improving the efficiency and the safety and effectiveness in gaining that comfort. And there is a lot of proteins that are out there, if somebody’s’ pharmaceutical company can make any material sell anyway because when you over express them at a Chinese Hamster Ovary, it’s too toxic and it kills itself. And so there is a possibility that we can take C1 and bring some new drug to the market that otherwise may never get there, and it has nothing to do with cost, that’s just an opportunity gain. So there is so many different reasons in places that C1 may bring value to the pharmaceutical industry that we have to just uncover those gems [ph] and opportunities by having two way communication with those clients, and the potential clients.

That’s fantastic color, I really appreciate it.

Okay, thanks.

[Operator Instructions] I’m showing no further questions at this time. And we’ll now turn the call back to Mr. Emalfarb for closing comments.

I want to take this opportunity to thank all of our stakeholders for the support during this past year and to each of you who have taken the time to participate on today’s conference call.

This concludes our program for today. You may all disconnect.