Thomas Dubinski – Vice President & Chief Financial Officer Mark Emalfarb – President & Chief Executive Officer Ronen Tchelet – Vice President, R&D & Business Development

Walter Schenker – MAZ Partners

Good afternoon, ladies and gentlemen. Thank you for holding. Welcome to Dyadic International Third Quarter 2016 Financial Results Conference Call. At this time, all participants are in a listen-only mode. My name is Tracey 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, Tracey. Good afternoon and thank you for joining today's conference call to discuss Dyadic's financial and operating results for the third quarter ending June 30, 2016, which were reported in the press release issued earlier today. The press release and Dyadic's quarterly report had been posted to both the Dyadic and the OTC Markets websites. I'm joined today by Dyadic's President and Chief Executive, Mark Emalfarb, and Dr. Ronen Tchelet, VP of Research & Business Development. On today's call Mark will cover operating highlights, further details on our corporate strategy, provide an update on our professional liability lawsuit against our former professional service providers, and our special shareholder meeting to be held in December of 2016. Dr. Tchelet will highlight some of our research and scientific goals and objectives and progress to date with some of these programs, and I will close with the review of 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 commentary made in this conference call may be 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. Good evening, everyone. I am pleased to report that we are continuing to make positive progress, shifting our efforts in focus as we transition our business in research and development program from our historical industrial biotech markets to the biopharmaceutical sectors. We do so by further developing and optimizing the C1 technology to become a safe and efficient expression system that has the potential to help speed up the development, production and performance of biologic vaccines and drugs in flexible commercial scale. In August 2016, we elected an additional board member, Dr. Arin Bose. With an extensive scientific background, as well as more than two decades of biopharmaceutical experience while working at Pfizer in the development and commercialization of biologic products. We are very excited about Dr. Bose joining Dyadic's team and are already benefiting from his strong scientific background and biopharmaceutical industry experience and knowledge. Dr. Bose is excited to join the Dyadic board because he views the C1 technology platform as a leap in technology that has the potential to change the way in which both animal health, and human biotech and pharmaceutical companies bring the biologic vaccines and drug to market. We are continuing to pursue research and development collaborations, licensing arrangements and other commercial opportunities in which will leverage the C1 technology. Over the last two months, Matthew Jones, a consultant and serving as a managing director of business development and licensing, Dr. Tchelet and I combined, attended four biopharmaceutical industry conferences that would fall over 100 attendees and made three presentations on the potential benefits of using the C1 technology to develop and product biologic vaccines and drugs over the past two months. Our efforts are creating a greater awareness of Dyadic and the potential applications of the C1 technology to developing and manufacturing low-cost, better-performing biologic vaccines and drugs at flexible commercial scale. We are currently working on multiple business development fronts and have executed many NDAs and MTAs with various commercial advisers, research organizations, governmental agencies and large and small biotech and biopharmaceutical companies seeking research and development collaborations that we anticipate will lead to research funding, scientific data, intellectual property, potential licensees and other benefits. As mentioned in our conference call last quarter, we are in discussions with intense research proposals to a number of large and small pharmaceutical and biotech companies who have expressed interest in evaluating our C1 technology for their potential need. One of these proposals is progressed into a definitive agreement with one of the largest global pharmaceutical companies that we anticipate will be executed in the next few weeks. The purpose of this feasibility study is to use C1 to express two to three genes of interest [ph]. We anticipate that the research under this agreement will start later this quarter or nearly Q1 2017 and that we will start to see preliminary research in this research in the second half of 2017. As previously announced in the third quarter of 2016, we entered into a research and development agreement with a third-party research organization to further advance our proprietary C1 technology platform produced in biopharmaceutical development and production. This research collaboration is targeting the development of highly productive C1 strains and fermentation process and the accompanying associated molecular tools to produce a number of targeted therapeutic proteins for Dyadic, as well as for potential third party biotech and pharmaceutical companies. We are excited to be further advancing C1's capabilities for use in helping to develop and produce lower cost vaccines in therapeutic proteins. Our research and development programs are expected to encompass a broad spectrum of C1 strain development strain development in fermentation optimization, applying scientific genetic techniques and principles. This will be executed by some of the most skilled filamentous fungal researchers who will re-engineer a highly productive industrially-proven C1 expression system for its use in helping both animal health and human biotech and pharmaceutical companies bring their biologic vaccines and drugs to market faster and great volume at lower cost with newer beneficial properties. Ronen will provide additional details in some of our research and development efforts later in this call. We are extremely optimistic about our future and our ability to create value for our shareholders. Driving our own research and development programs and by signing collaborative relationship deals with big and small biotech and biopharmaceutical companies. As we recently announced on October 26, 2016, the company has scheduled a meeting of shareholders on Wednesday, December 7, 2016 to seek approval for a potential reverse stock split of Dyadic's common stock. As highlighted in our proxy which can be found on our website, the affirmative vote of the majority of the shares of our common stock outstanding on the record date will be required to prove the reverse stock split proposal. We believe that having the flexibility but not the obligation for uplifting our common stock to the NASDAQ stock market or on other national stock exchange, provides the company and its shareholders a number of potential benefits which have been online in the proxy. Impact of the potential reverse stocks split if approved by our shareholders is expected to enable us to meet certain minimum trading press requirements, needed for uplifting to the NASDAQ stock market or on other national stock exchange. As discussed in our proxy, Dyadic's Board of Directors preserve the right even after shareholder approval to elect not to proceed for the reverse stock split if it determines that implementing the reverse stock split is not in the best interest of Dyadic and its shareholders. Next, I want to provide you with an update on the status of our professional liability litigation. We continued vigorously to pursue our claims in this litigation against a primary defendants Greenberg Taurig LLP, Greenberg Taurig PA, collectively Greenberg Taurig. On October 17, 2016, Greenberg Taurig filed a motion to continue the trial. On October 18, 2016, Greenberg Taurig filed another motion to bifurcate the liability and damages to determination by the jury in the separate trials. October 27, 2016, the court heard oral argument on both motions. Both motions were denied and the trial currently remains set to commence on January 6, 2017 with jury selection. We anticipate that the proceedings will run approximately six weeks and our management team and a special committee of our board has been and will continue to be working closely with consul to prepare for trial. At this point, I would like to turn the call over to Dr. Ronen Tchelet, our Vice President of Research and Business Development to discuss some of our ongoing programs and discuss a few of our internal research and development goals.

Thank you, Mark. During the many years of developing the C1 technology, Dyadic scientists achieved two main breakthroughs. The first, developing a high-yield low viscosity production capabilities with C1 strains and the second, developing what we call the C1 white strain that can express and produce high levels of proteins from genes derived from different organisms with high purity. We believe that by continuing our ongoing research efforts, we may achieve additional scientific and commercially relevant breakthroughs. With C1, which we anticipate will be a lift forward in gene expression technology, prepares the potential to change the way in which both animal health and human biotech and pharmaceutical companies bring their biologic vaccines and drugs to markets faster, in greater volumes, at lower cost and it's with newer beneficial properties. This quarter, we started to bear the fruits of our R&D activities to reach these goals and to create a cost-effective platform for developing and manufacturing biologic vaccines and therapeutic proteins using the C1 technology. As we announced on September 7 and as Mark discussed earlier, we have entered a new research and development agreement with one of the most skilled filamentous fungal research institute to further engineer our proprietary C1 fungus strain for use in helping in the development and production of biopharmaceutical products. The goal of the collaboration is to develop a highly productive C1 strain and fermentation processes, accompanying associated molecular tools to produce a number of targeted therapeutic proteins for Dyadic as well as those specified by third party biotech and pharmaceutical companies that are in close reconciliation stage with us. In addition, we are founding the glyco engineering of C1 strain using advanced molecular tools that will allow for the production of proteins that will resemble the human glyco structure. This approach is a need to create the right platform that can be applied to diverse biopharmaceutical product types such as biosimilar that include one, protein, for which specific glyco structure are not needed for their mode of action; and two, proteins including monoclonal antibodies that are agonists that require specific glycosylation pattern for the mode of action. We are making excellent progress with this research collaboration. We have successfully completed the technology transfer of C1 and the institute R&D team has ambitiously started the research and development road to which our goals, objectives and milestones. This new collaboration is an addition to our ongoing R&D collaboration with DuPont, our former Dyadic Netherland Lab [ph]. Again, we believe that increasing our investment in developing the C1 technology platform and the timing of our internal product portfolio will accelerate our timeline to penetrate into both animal health and human biotech and pharmaceutical companies. In order to leverage this effort, we are in discussions with and in certain cases in negotiations with other biotech groups to develop additional biopharmaceutical product. I will now provide you with the brief overview of some of our ongoing projects. ZAPI -- ZAPI is a research and development program that is sponsored by the EU which aims to develop a platform suitable for the rapid development and production of vaccines and protocols to fast track registration of developed products to combat epidemic, zoonotic diseases that have the potential to affect the human population. Our Dutch subsidiary -- Dyadic legal entity is participating in the ZAPI project by using DuPont labs as a CRO. We are following the project time line to express sufficient quantities of desired antigens using the C1 expression system. We have already sent our first samples of antigens out to other ZAPI participants for further characterization of the C1 antigens and for conducting new genecity tests. In addition, with the ZAPI program, we have continued our effort to develop better expressing strain and more efficient improved still-fermentation processes so that one will know of the ZAPI antigens will be able to be produced at relatively high productivity yields. The veterinary vaccine research program -- we started a development collaboration with an Israeli company which is a part of a bigger project that they have with a veterinary vaccine company to develop a veterinary vaccine to protect poultry. The purpose of the project is to reach expression levels using C1 that will enable those companies to evaluate expressed protein by an in vivo challenge test in chicks. If the collaboration is successful, we anticipate being able to find a commercial partner for this vaccine who may be able to penetrate the market of poultry veterinary vaccines. The best answer would be C1 technology is ongoing and we anticipate that very soon, we should be able to move into the actual development phase. Lucentis -- as discussed in an earlier call, the company has started a research program to evaluate the use of the current C1 technology to develop imperative therapeutic proteins for which specific glyco structures are not needed for their mode affection. In this call, I would like to provide you with a brief update about our results in expressing Ranibizumab, a biosimilar version of Lucentis. Lucentis' use for the treatment of retinal diseases, achieved approximately $4.5 billion in 2014 global sales per IMS sale. Since the aging population continues to grow in developed and undeveloped countries, there is a growing need to improve access to these important medicines and therapies to more people around the world faster, in greater volumes and at lower cost. We believe that producing biosimilars such as Ranibizumab by using the C1 technology can potentially create a differentiated platform approach of an effective alternative in the emerging biosimilar global market as it becomes increasingly competitive. We are very encouraged by the fact that we already have managed to reach nice expression of Lucentis using different constructs in C1 strains. In addition, the structure of Lucentis was identified by MS analysis and the biological activity was evaluated by ELISA tests. We are now evaluating the expression level by optimizing a still-fermentation process that we hope will enable us to confirm high production yield of Ranibizumab. Since as we have previously reported that we have successfully expressed [indiscernible] using C1, this recent Ranibizumab result provides additional data that supports our belief that C1 could serve as a very powerful platform for the development and production of intact and active monoclonal antibodies protein with the correct structure. Insulin -- we are continuing to carry out a research in trying to express insulin using C1. However, at this time unlike Lucentis, we haven't achieved the results that we would have expected at this point and we are evaluating how best to move this project forward. This summarizes our current activity and as mark pointed our earlier, we are in various stages of discussions and negotiations with a variety of other large and small animal health and human biotech and pharmaceutical companies who seems interested in exploring the potential of how C1 may be able to help bring the biologic vaccines and drugs to market faster, in greater volumes, with lower cost and with newer beneficial properties. We are clearly building momentum. We have assembled a superb research team to deliver on the program class and a clear sight on our goals on what to do and how to do it. I am excited by the opportunity we have and this is further supported by work we receive back from the biotech and pharmaceutical companies with C1. I look forward to sharing all -- next quarter. I will now turn it over to Thomas Dubinski our chief financial officer to discuss the financial results.

Thank you, Ronen. At September 30, 2016, cash and cash equivalents in investment grade securities totaled approximately, $55.9 million compared to $68.6 million 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. Cash and cash equivalents in investment grade securities used in the third quarter of approximately $6.9 million primarily reflex stock repurchases a $3.7 million. Repayment of cash collected on DuPont's behalf during the transition service agreement period of $1.7 million. And cash used in operations of $1.5 million. Cash, cash equivalents in investment grade securities used in the nine-month period ended September 30, 2016 were approximately $12.7 million primarily reflect stock repurchases net of stock issuances, of $9.5 million. Payment of DuPont transaction related liabilities of $2 million. Cash used in operations of $3.5 million offset by cash received from a litigation settlement of $2.1 million and other items of $200,000. Our expected operating cash burn in the fourth quarter of 2016 was approximately $1.3 million to $1.5 million. If we happen to identify additional opportunities, which we wish to pursue this could possibly change, and if so, we walked a you accordingly on our future conference call. For the full year we expect to use approximately $60 million of cash, cash equivalents in investment grade securities for the year which includes stock repurchases net of stock issuance of $11.3 million to $11.7 million, operating activities $4.6 million to $5 million. And payment of DuPont [ph] transaction liabilities $2 million offset by the litigation settlement up $2.1 million. The company repurchased approximately $2.5 million shares of common stock at the average price of $1.50 per share during the third quarter, an aggregate of approximately $6.5 million shares of its common stock at an average of a $1.49 per share for the nine months period and need September 30. Subsequent to September 30, 2016 the company repurchased approximately $ million additional shares and average price with $1.64 through November 10, 2016. On September 30, 2016 in November 10 of 2016, we have approximately 34.5 million and 33.5 million shares respectively of common stock outstanding. Net loss from continuing operations for the third quarter ended September 30, 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 month period ended September 30, was approximately $1.5 million or $0.04 per diluted basic and diluted share compared to a loss of $1 million or $0.02 per basic and diluted share for the same period a year ago. R&D revenue for the nine months ended September 30, and declined 64% during the termination of the companies R&D agreement was Sanofi Pasteur in August of 2016. General and administrative expenses for the nine-month period sentences September 30 decreased 9% to approximately $2.9 million compared to $3.2 million 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 7,000. Cost reimbursement receive from DuPont for services rendered in the transition services agreement of $200,000. Lower litigation professional service fees of approximately $100,000 and paid debt expense $66,000. Partially offset by an increase in executive compensation related to new employee agreements a $300,000 non-cash compensation in connection with a special committee of the board and board compensation of $200,000. Bio-pharmaceutical business development of the $38,000 and finance department compensation costs of $100,000. R&A expenses for the three months and nine months ended September 30, 2016 reflect our R&D agreement with DuPont. The initiation of our new multiyear research and development agreement entered into on September 15, 2016 and employee related costs to support our ongoing bio pharmaceutical projects. Now I would like to turn the call back to our operator to take your questions, Tracy.

[Operator Instructions] We'll go first with Walter Schenker with MAZ Partners.

Thank you. I noticed that the fourth quarter expenses were up slightly from the third quarter slowly by decline of a 100,000. The question therefore is as we go into the litigation the first week in January assuming that is the trial date. Can you give us some sense of how much of those expenses are going to be borne by the company. And how much of it's being born as part of the contingency with the lawyers.

Well I also feel that question, we get our primary attorneys are on contingency so we will not incur any costs associated with the trial in that connection, we will call incur costs for expert witnesses of preparation and participation in this trial and we will also -- we've engaged jury consultants that we will be utilizing for other service providers for the litigation.

Therefore, the expenses relating to that will largely occur in the first quarter with very little in the fourth quarter. Assuming the trial takes place starting in January.

No most of the preparation leading up to the trial will occur in December. Because the trial begins January 6. So I believe their balance, they will be balanced between December and January, February.

Okay. So what I'm going to keep pushing on a string therefore, all other things being equal you would not expect the first quarter of next year and you don't know this yet, now when trials come last etcetera, to -- I'm picking a number out of my head, to be in balance more in January, February and December.

Walter. I'm not quite sure of what you are asking. As we mentioned in the past in the last conference call. That we're going to leave subject to obviously we see other opportunities. You know we don't know what the litigation well and won't bring obviously we have expected it to come very positive but we are going to aggressively pursue that as we have for the last eight years. Glad that it's coming to an end one way or the other, so we really can't give you a projection, going forward at the moment because we really don't know all facts the details of the litigation but other than the litigation, we don't expect other than potential opportunity which we are evaluating, to spend more than $5 to $6 million and then they researching and development overhead. But potentially we're looking at other opportunities to put that cash to work and to bring up higher and greater return to our shareholders and whether we will or won’t do some of those things. The board is evaluating on an ongoing basis.

Okay. And then just one more question, you have indicated today and announced a new research collaboration with a large Pharmaceutical company. The research is being funded by them, you or in partnership that under that announcement you made today.

By the way you're entitled to one question and you give me 16 but I'm going to answer it anyway. But anyways the but the bottom line is what we said is that we have a definitive agreement, that we've all agreed to in fact we've actually signed it waiting for them to bring and sign it back to us. So we expect that the next few weeks to have that. Partially funded by both parties, but they're contributing to that. I'm now contributing the partial times but they're also going to be contributing to the analysis of a successful in a protein that we deliver to them. And the goal here really is and it is one of the global largest pharmaceutical companies, and so if we educate some is that the power and potential of what we're dealing with here, because if we can achieve the goals and objectives we set out, this is a game changer the pharmaceutical industry in the long term.

Okay, thank you Mark.

My next question comes from Skitz [ph], a private investor.

Hey, guys how are you doing. I have one question I want to follow up with you and but there's a couple things I didn't understand so. I see you brought back about $1 million shares the first 10 days of November and about 2.5 million shares in the third quarter.

Can I comment with you -- we bought 1 million shares in October in the first 10 days of November.

So 4.5 million shares in the third in the third quarter and the first six weeks.

No, what we said is in the third quarter we brought back 2.5 million shares. And then subsequent to the first third quarter in the month of October in the first 10 days of November we bought an additional 1 million shares. That's 3.5 million between June 30, July 1, and November 10.

Okay. And so how many shares are out there and you said 3.45 and then you said 3.35 I don't which one is.

Correct, so it's 3.45 on June 30 -- I mean September 30.

And I got you, okay. So right now it's 3.35 as of [indiscernible].

Yes sir.

Okay, that answers the question. How much money do you have left over to buy shares on the buyback program?

$6.5 million.

$6.5 million.

As of November 10, $6.5 million available.

Okay that's clarified that.

If you remember we mentioned that at least $15 million at the time we mention this. So subject to change up or down, so we're not restricted to whether we buy $6.5 million more or less but that's what we have right now based on the $15 million, over and above what we paid for [indiscernible].

That that was my question. Okay, so the question that I have now that we've clarified that. Is we talk with -- you talked about an uplift in the in the fourth quarter of this year. Now I'm assuming that you going to wait after trial up list. But that's not a question, my question is and you are going to answer the question after I ask this. My question is after trial do you have all the documents prepared and ready to submit or will you have all the documents ready to prepare and submit by the end of the fourth quarter this year, and orders to up list. Is there going to be anything that's going to restraining -- that will restrain us from up listing as soon as the trial is over is my question.

I think to better answer your question is that when we are finished with the trail and we have a clear understanding of how the outcome of the trial is; we will then me making a decision on what to do and how to move forward, in addition to it a scientist at the time and the Board is going to -- which they continuously do, evaluate what's the best direction to create value for shareholders at that point, not just related to trial but related to science, and the business and the environment and all kinds of other conditions.

But that would that have to do with the uplisting. My question is, the documents I would think you hired somebody that has done this before and we've gone down this path over the last three years about uplisting and then it's always -- we don't have, we didn't get this done, we didn't get that done, we needed more money to do this; so the question is -- the simple question is, are all the documents ready to be filed if you want to uplift or is it going to be more -- a lot more time to uplift because you have to do all these things. So is it done or do you have to do a lot of things is the question.

There are things that will have to do at that point and wait depending on what we do with the uplifting or the reverse merger how diverse -- not by reverse stock plan because you have to trade at over $2 this year for 90 days; that's number one. And if we didn't do that -- 90 trading days, sorry. So we're going to have to wait 90 trading days when we apply to NASDAQ and make sure that that stock is over $2 a share. And we hope and expect to obviously have a very positive outcome in the trial, we might not have to do the reverse stocks put to get over $2 a share.

Yes, I get that. So basically what you're saying is, the trial is going to be done in February and then at that point, let's say the trial comes out -- whatever it comes out to be, then at that point you got 90 trading days -- if you've got the reverse stock split approved and you decided -- that's what you wanted to do, to get over the two; that's the hurdle to get over the two I'm assuming; maybe you want to use it, maybe you don't -- but the point is there would be 90 more trading days after the trial is over at that time. Again, my question is what all the documents by that time be none other than those two hurdles?

Yes, the documents will be ready to be prepared and filed if the Board chooses to do that at that point.

That's my question. So you could theoretically see this happening, the uplifting; so if you want to do it, no excuses by the end of the second quarter of '17?

Yes, or at the beginning of the third quarter, sometimes depending on the 90 trading days and how long the trial goes and the jury decision, and how long that lasts in clarity but yes, somewhere in that timeframe.

Okay, that's the answer that I wanted to hear. Okay, thank you.

We'll take our next question from [indiscernible].

Thank you. So adding on to the question, the uplifting; is it a question of money being uplifting because if you were up listed to the NASDAQ, you would actually be providing a much more benefit for the shareholders moving forward because this opens it up to a lot more retail in a lot more firms that can actually buy into this company. So the question is, is it a money issue that you don't want to spend the money to go uplifting or is it just because in hearing your answer from the previous question -- you don't know if you're going to uplift or not because you're saying we will look at it when the court is over or on anything that the Board decides. I understand you probably try to follow before to uplift but never went through with it; and then getting your stock up to $2 with your share buyback -- should it be a difficulty, especially if the trials come up positive and the court case comes up positive, you should be able to do that expeditiously, right, after the 90 trading days?

Yes, so to answer your question; it's not about the money because obviously we have the money. We have a very strong balance sheet and we're going to get another $7.4 million on July 1 next year from the escrow account who define transaction. It's going to be a decision at that point that the Board is going to look at science, the technology, all the things you talked about having more brokers, having analysts, all the things we've put in our proxy is the reason and some of the many benefits of potentially doing that. So the Board will look at all factors and circumstances and decide what's in the best interest of all shareholders at that point to create the most amount of value.

So you can in a sense stay and still remain on the policy board if that's what the Board decides to. Okay, thank you very much and I wish you all the best in success and we look forward to getting up listed to add more shareholder value.

Thank you.

Okay, next question from George [ph], a private investor.

Good afternoon, gentlemen. There are a couple quick questions. The R&D arrangement that you they got going now is that also overseas. Or is that the domestic company.

It in overseeing research institute.

This is also in in the Netherlands.

I'm not free to mention that but it's in Europe, in Western Europe.

Okay. Is there anything in our in this arrangement where they're being compensated, late around perhaps a successful development in this. Are there any two parts to it I guess or -- are there any -- should I say -- announcement -- Because of their DuPont arrangement do you have to split any of this requests later to them associated with this.

Yes, the first of all there are milestones if they succeed in hitting certain targets which happened goals and objectives, so we'll be very happy to write those checks. Because obviously that will demonstrate and given the data to hopefully accelerate the spread and adoption of this. And also there are certain things in right of DuPont Might have. If in fact we create things but if they do they'll have to pay additional royalties to have access to that.

Okay. Thank you, Mark.

Our next question from Richard [ph] with National Securities.

Mark, this one is for you, just following up on Walter's question, a little bit on -- on this research project that you have already signed and we are talking about here, could you just tell us what the goal is because it is somewhat fuzzy, just tell us what is its vision in terms of what you are trying to achieve.

Okay. So what we're trying to achieve is taking industrial proven Piper productive cell line C1. And modify technologies so that it can be applied for both, vaccines and biologic drugs like antibiotics, in order to do that there are some scientific challenges that we believe through literature and other people demonstrating its possibility, that we can modify the genetic structure of the C1 fungus. So it can produce high level of proteins in any bodies that can completely replace at some point in the future. The way drug developed and produced verses the existing technology, that's been years today because we think we can do it quicker. And much higher yield a much lower cost that much lower CapEx. The big challenge is going to be once we can accomplish. And if we can modify and see when they do that is changing a very conservative pharmaceutical industry over to a new platform, that is different than some in news for the last several decades if not comparable with and safe. But we believe that once one or more of them do that, it opened up the floodgates because the rest of them to compete on price.

Okay. So you're not trying to express some genes that they want you to express, you're actually trying to further genetically modified C1. So it becomes more productive than it has been up until now, is that a fair characterization?

That a partial characterization, what we're actually doing are several things; number one, we are taking when we send [indiscernible] on our own, and trying to demonstrate that we can produce both of those proteins at high yields at low cost. And if we can do that that data we expect will help us in price, more people became more interest in what we're doing in C1. But both of those Proteins are not like isolated proteins. That's something C1 can do today potentially, allow genetically changing its structure. In terms of glycol engineering which is the next part we are doing. Things like [indiscernible] and etcetera there's a variety of antibodies has grown and pointed out that part of function is associated with glycosylation coating of the ways those proteins are produced. And they're currently produced using Chinese hamster ovary or CHO cells typically. And CHO cell put on a different glycol patterns and fungus, two genetic engineering synthetic biology no the advances in genomics. We believe there's scientific evidence pointing to this. So you can modify C1 genetically to mimic very similarly the glycol-engineering pattern of that CHO cell pattern. If we can do that, we believe that the game changing potential was there to apply the technology, to the development and production of antibodies, and the pharmaceutical space. And so we're pursuing our own molecules for data. And if it's a potential partnering and we sent as potentially some others. We're working with pharmaceutical and biotech companies on genes they have if they want to explore potential and the benefit of C1 for those genes coming those proteins whether a glycoprotein or not. And then we’re also as you pointed out, improving C1 making it more robust and versatile even more powerful. And easier to genetically modified to go faster and potentially even higher yields, with even greater variance. We're doing all that in those research programs.

Okay thanks, Mark. Finally just a quickie. ZAPI has certain of funding that runs out in certain milestones that they need to achieve, and certain reports that they release. I was thinking that maybe by the end of this year, we would hit one of those disclosure points which could be a go or no go relating to what your participation. Is there a date that you can tell us that we can expect to hear an outcome from the ZAPI project.

Well I think Ronen, is better equipped to probably answer that but in the end Ronen, mentioned today, that we've started to deliver antigens to those partners so, we actually been able to produce antigens or at least a couple of the antigens. And quantities that they can do what they need to do right now with them. And where working on improving yields of those antigens and others. So. I don't believe that we're going to get a go no go decision is 2017 because we already delivered protein and is taking longer than between now and the end of the year. The biological activity in the immunogenicity of those. But sometime in 2017 which you get a much better picture and sometime by the end of 2017 I believe funding for that and our part in that is going to be reduced and then those proteins will be carried on -- septa two to use those which we hope and anticipate that they will, through regulatory and through other tests and evaluations to move those forward. And we'll be off and on to other projects hopefully that point but funding from a variety of other people including potentially our own.

Then we'll go next to Paul [ph], a private investor.

My question have been answered, thank Mark.

Thanks, Paul nice to hear from you.

And we'll go next to [indiscernible] with South Well.

Yes, Mark my question is do it cash burn, it looks like you basically announced two things in this conference call, one is you're new partnership with Pharma in which you're going to spend money on R&D, and secondly you hired a CRO. So going forward X. legal expenses, what kind of cash burn can we look forward to on a quarterly basis?

I don't think we want to give quarterly basis. Quarterly bases fluctuate but I think what we mentioned is somewhere between $5 million to $6 million, that we expect to spend in 2017. However, that's subject to change up or down, depending on certain things that go on, of course. We might get some funding from third party, whether is a big pharma, small pharma, of biotech etcetera like the one that we think will have signed up in the next few weeks. We've got a variety of discussions going on with big and small pharma biotech company. So we were trying to get funding from them to carry on research and development which by the way well hopefully switch to something they want to make verses the one we might be working with. So we can actually maybe reduce some of our costs and expenses. But then there's other opportunities that present themselves for evaluating that could increase that burn.

I understand that there's you can't predict that before you stand right now with your CRO arrangement; and your potential arrangement here with this large pharma; you're saying those two cost incurred in here with equate to $5 million to $6 million cash burn in calendar 2017. Is that right.

Yes.

That's what I want to know, thank you Mike.

I am showing no further questions at this time, and will now turn the call back to Mr. Emalfarb for closing comments.

Some of you have expressed some concerns over our planned R&D spend over the next several years, just like Wilson just expressed. And I like to speak to you as significant shareholder of Dyadic and that is Dyadic CEO. As many as you know, Francisco Trust and [indiscernible] Trust currently own a combined interest in Dyadic common stock in excess of 20%. I fully support the current business in research plans of the company, which have the potential to create additional value for all shareholders. I view the company's continued investment and further developing its C1 platform is a safe and efficient expression system for use in the development and manufacturing biologic vaccines and drugs. It's a potentially significant return on our investment. Speaking again as Dyadic CEO the board of management are acutely aware of our responsibility to maximize shareholder value, while evaluating the risk and proposition relating to every decision we make. Both management and the board are perfectly aligned our belief that our current business plans to monetize our C1 technology, not only prudent put compelling. I want to take this opportunity to thank our very hard working employees, consultants, a dedicated Board of Directors our research partners and our shareholders for their support. Thank you all who taking place on today's conference call.

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