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

Robert Hoffman - Princeton Opportunity Management

Good afternoon, ladies and gentlemen, and thank you for holding. Welcome to Dyadic International's Second Quarter 2017 Financial Results Conference Call. At this time, all participants are in a listen-only mode. My name is Dana and I'll 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, Dana. Good afternoon and thank you for joining today's conference call to discuss Dyadic's results for the quarter ended June 30, 2017 which were reported in the press release issued earlier today. The press release and Dyadic's quarterly report have been posted to both, the Dyadic and the OTC Markets websites. 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 our corporate strategy, and a summary of our research and development efforts. I will close with a review of our financial results in more detail. We will then provide you an opportunity to ask questions. Dr. Ronen Tchelet, our VP of Research & Development will join Mark and I during the Q&A to answer questions directed to him. 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, scientific or otherwise 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. We've been extremely busy over the past six months focusing on among other things strengthening our R&D capability, making good progress in improving our C1 technology, entering into two proof-of-concept research program with two of the world's largest pharmaceutical companies, raising Tier-1 profile to numerous presentations to the biopharmaceutical industry, as well as only business development in scientific collaboration meetings with interested parties including on-site, meeting with our CRO facility, to present both the CROs and C1's capability to potential collaborators fulfilling our remaining obligations relating to the transaction resulting in the release of approximately $7.4 million of sale proceeds which was previously held in escrow. The PDI pharmaceutical transaction which adds additional research and development capability and the potential for internal biologic vaccine and our more math products. I would like to briefly add some additional color on each of these items and update you on the Company's position regarding reverse split and other few [ph] considerations. We're making good progress in our research programs, as we continue to develop what we strongly believe as a potential to be disruptive next-generation protein expression and production systems based upon the proprietary C1 technology. In less than a year our research has resulted in our ability to shorten the timeframe in which we can foresee the interest and produce the correct genes such as monoclonal antibody at higher levels but better stability by using C1 strain. We've recently developed new generation C1 strains that have already proven to provide a higher yield in one example, mid-single digit gram related expression level of mat, a lower 48 background by [indiscernible] of several protégés that generate more stable math, a faster growing C1 strain to enable rapid development timeline and a shorter fermentation process. We continue to further develop the C1 technology from full performance and robustness with different types of therapeutic proteins. This can be achieved as we have improved our molecular tools and improve the identification of the human genome to enable our research, to apply methodologies that are based on system biology. We transited our research and development areas and with collaborative research partners and we believe it will fit our business strategies and scientific objectives. As a result we have made some changes in regard to our country research organization service providers that I would like to share with you. On June 30, 2017 the Company entered into a strategic research services agreement, the RSA with biotechnology development for industry in pharmaceuticals, PDI Pharma. This service framework agreement, the SFA was VLC [ph] exact company, both companies are subsidiary to biotechnology development or Industry SL, a Spanish biotechnology company, PDI Holdings. The R&D agreement provide these framework under which the parties that are engaged in research collaboration encompassing a number of different projects of approximately two year period but they focus on advancing the C1 technology with the development of next-generation biological vaccine and drugs. Dyadic expects to leverage the PDI team previous C1 industrial fermentation scale up, the commercialization experience with yeast and filamentous fungi processes to further advance Dyadic proprietary C1 technology with the potential to commercialize certain biopharmaceutical products. All of the intellectual property, data on any product development and the funded research project will be owned by Dyadic. We anticipate that PDI will conduct CBMC [ph] media development coupled with fermentation optimization work where we grow the C1 technology production process or manufacturing vaccine, antibody and other therapeutic proteins. On closing of the PDI transaction, the Company traded €1 million in upfront cash to engage PDI to develop designated C1 based product candidates; in consideration of which Dyadic also a 16.1% equity into PDI Holdings and a 3.3% equity into NBLC Bio [ph]. PDI obligated with spending minimum of €936,000 on the research and development project under the RSA. Any advances to research and development activity produced a product that is selected for additional developments and commercialization Dyadic read [ph] the shares a certain percentage of income generated from future product commercialization with PDI. In addition, under the service framework agreement, Dyadic agreed upon $1 million in contract research services over the next two years. Primary rationale for this collaboration agreement has a potentially acceleration of certain proof-of-concept research and data generation which we believe could be utilized to support our business development and licensing efforts, as well as the potential to identify and begin to develop internal biologic as a key in our med product candidates. On August 4, 2017 the company announced a preclusion with pharma collaborative research agreement with [indiscernible], a unit of DuPont industrial biosciences. The research collaboration was part of the previously announced DuPont sales transaction and will conclude on September 30, 2017. We are grateful for the opportunity to work with DuPont scientific organization to further explore and develop C1's capabilities for use in biopharmaceutical applications. This collaboration provided Dyadic with valuable insights and data coupled with better understand the potential and direction we would like to take with C1 technology. And the research service agreement with DuPont was particularly [indiscernible] to Dyadic going to post DuPont sale transaction or transition period as it provided CRO continuity for existing research programs such as the project to avoid service disruptions which is no longer needed. With employees in DuPont research agreement was also removed an emerging headwinds as the company continues on with the next phase of C1 research and development. Dyadic's research partners have expressed their desire that Dyadic utilize independent CROs to conduct a confidential research. Due to DuPont you need the situation at potential position at the competitor, it can't switch some interest may arise between DuPont and our collaboration research partners who go on the research and are potential collaborators in their licensee the Dyadic. As a result using a CRO is not only technically qualified but also the financial independent impressive to our business. Our prime CRO which is now working on modifying improving the C1 Technology since 2016 has made a significant progress and has already developed better C1 strength that demonstrate higher yield but an example of mid-single digit grandpa later expressions of monoclonal antibodies, more stable protein such as MAT by deletion of identified proteases and faster growing C1 strains that enables rapid development timeline, shorter fermentation process. We are already starting to utilize the new C1 strains in our collaboration research projects with the two pharmaceutical companies, and in our own programs in order to produce faster C1 cell lines with better purity and higher yield. In addition, we're continuing our ambitious development work, creating better human strains by using the CROs expertise, improved genetic tools getting through C1 genome annotation. These efforts include beginning the glycan work [ph] as they need to be produce protein that resembled human glycan structure by C1. In summary, BDI agreement provides the company with a second qualified zero facility with hands-on C1 technology experience previous to any future collaboration projects. Additionally, with our equity interest in BDI, we hope to benefit from BDI success in the vaccine and biotech business units. As we discussed in our Q1 call, the company has entered in two proof-of-concept research program with two of the world's largest pharmaceutical companies. Let me briefly describe a fueling issue of research projects; one is fully funded and the other is partially funded which helps for some of our research expenses as we continue to develop and demonstrate potential of our C1 technology for use in developing and manufacturing biologics. Through these projects we also hope that we will be able to develop a more meaningful relationship with each pharmaceutical companies and successfully introduce C1 as a potential next-generation protein expression in production system and what we believe will be a superior platform to existing expression systems such as CHO, bacteria and yeast. It is not uncommon for these companies to insist that these range do not be made public, we intend to announce any program collaboration we enter into; however, we're most likely prohibitive from disclosing the specific term date agreement as well as the name of the company. We will all respect these terms and conditions as we continue to develop a strategic relationships. We can use to continue to push every relevant door in our development efforts. We are pursuing research and development collaboration, licensing arrangements and other commercial opportunity to further leverage and position the adoption of the human technology in the biopharmaceutical industry. We are rating C1 profile by attending, speaking and making presentations to the biopharmaceutical industry as well holding business development and scientific collaboration meetings with interested parties including on-site scientific meetings at our CRO facility to present both, the CROs and C1's capability to potential collaborators. We continue to highlight that vast potential to further develop our C1 technology including strange manufacturing process development into a safe and efficient expression system that may help speed up the development, production and performance of biologic vaccine and drugs. The company has updated it's website in marketing materials and presentations to appropriately message promote in details C1s attributes, capabilities and fit for biopharmaceutical applications. These efforts have resulted in the company securing 35 confidential disclosure agreements, CDAs, to-date which has led to the two signed research agreements in a variety of other potential collaboration and research discussions that are ongoing with a number of top global pharmaceutical biotech companies. We anticipate entering into a one or more third-party funded research program, collaborations with at least one additional leading biopharmaceutical company by the end of the year. I'm pleased to report that we're receiving a very favorable responses from our targeted business development efforts with Tier-1 a 2 biopharma companies, we're now more aware of and in many cases have shown an interest in learning more about how the C1 technology may help them in their development and manufacturing programs. In reference to the ZTE [ph] program, we currently plan on continuing our efforts to work on developing and expressing to fishing point of desired antigens using the C1 expression system that made the adjective of the ZTE [ph] project, including the preparation of antigen sample for further characterization of antigen produced early C1. As was previously reported, one of the company's C1 expressed antigens was tested in a very small molecular study within the ZTE project and the data indicated human technology produced antigen, generated immune response to Mike [ph] that protected and shown no negative effects on the health of them [ph]. We anticipate that more tested will be conducted within the Japanese projects in the months and years to have. In addition, we're starting to express three of the ZAPI antigen in our improved C1 strain, we expect to achieve higher productivity and better stability and we demonstrated we can do so quicker. Another collaboration project is with University of Biocatalysis and Bioprocessing, one of the goals of this collaboration is we demonstrated new improved C1 fermentation method with continued file process monitoring. These efforts are focusing on increasing protein yield and assessing ability to maximize protein production yield to glucose control enabled by real-time monitoring using RTP bioprocess monitor from ASL analytical each. We anticipate that our improved C1 production strain should be an important gene expression platform that has a potential to producing different types of biologic such as monoclonal antibodies, i-spices antibodies, antigens, hormones, recombinant vaccine and other neutralizing agents. The big advantage C1 [indiscernible] to these biologic verities comes from the fact that with decreased development time and production costs of target proteins and thus makes them more accessible and affordable to patients and reduce the financial burden for governments. The CRO arrangements and research collaboration provide the company with additional research and development capability, the competency including direct and random genetic manipulation, all mix and fermentation optimization so as we believe that the data generated within these partnerships on-hands Dyadic's stability to develop C1 and disruptive next generation protein expression in production system for use in developing and manufacturing various types of biologic vaccines, antibodies and other therapeutic proteins. We're extremely optimistic about our future and our ability to create value for our shareholders driving our own research and development programs, and collaboration agreements with big and small biotech and biopharmaceutical companies. The bottom line is that the research programs we're targeting and we have embarked on are being carried out in order to further develop and demonstrate the activity of the C1 technology platform for use in the biopharmaceutical industry. The message is reaching the market and the market appears to recognize the need for replacement as we assign cumulative agreement and we have a pipeline of other advancing discussions with other Top Tier pharmaceutical companies. Our position with the potential reverse document [indiscernible] remains the same as we discussed in Q1. In our view it's all about driving the value of C1 technology which is based in our current share price, the market has not described any value to it. If the science develops that we expect, we will reassess our strategic alternatives which could include continuing to build the business organically and turning the licenses of the C1 technology, collaborations and M&A transaction for the average sales of business. We are in an enviable position as we do not need any additional capital to fund our planned R&D efforts enabling us to avoid a significant costs in the direction of fee which otherwise be required to raise funding for our scientific programs. We are laser focused on obtaining the necessary data in research and our licensing in collaboration which we anticipate will create significant value for our shareholders. As I previously reported, we expect to make a decision whether or not it's in the best interest of shareholders to affect reverse stock split and its parameters before December 6, 2017, one year expiration date of shareholder approval. Management and our board truly believes that the investments we're making in our C1 technology are dollars well spent, we believe our upside potential far outweighs the risks. As we previously reported, our efforts to monetize our technology will not be open-ended, we anticipate by mid-year 2019 if not sooner, we could be in a position to determine how successful our research and business development efforts are, and be in a position to evaluate our alternatives are at that point. So I will now turn the call over to Tom Dubinski, our Chief Financial Officer, to discuss the financial results.

Thank you, Mark. At June 30, 2017, cash and cash equivalents were approximately $4.6 million, compared to $6.9 million at December 31, 2016. The carrying value of investment grade securities including interest receivable was approximately $41 million compared to $43.6 million at December 31, 20176. Subsequent to the quarter end, on July 6, 2017, the Company received the cash held in escrow for from the DuPont transaction of approximately $7.4 million. This cash is in addition to the cash and cash equivalent balance as of June 30, 2017. The net decrease in cash and cash equivalents for the six months ended June 30, 2017 of $2.3 million principally reflect cash used for the repurchase of common stock $5.7 million, the upfront payment of the BDI R&D agreement, $1.1 million, other business operations, $2.2 million; offsetting this cash outflow was cash provided by the litigation settlement net of related costs, $3.7 million; proceeds from maturities and investment grade securities in interest payments net of purchases and premium paid, $2.8 million; and the favorable effective exchange rates on cash, $200,000. The net loss for the quarter ended June 30, 2017 was approximately $1.3 million or $0.05 per basic and diluted share compared to a net gain of $600,000 or $0.01 per basic and diluted share in 2016. Please keep in mind that 2016's net gain inclusive of net proceeds from a litigation settlement of $2.1 million. Net income for the six months ended June 30, 2017 was approximately $700,000 or $0.03 per basic and diluted share, compared to a net loss of $400,000 or $0.01 per basic and diluted share in 2016. Please keep in mind that both 2017 and 2016 include the net proceeds of litigation settlements of approximately $4.4 million and $2.1 million respectively. R&D revenue and cost revenue for the six months ended June 30, 2017 was $329,000 and $321,000 respectively. The revenue and cost reflect the activities of ZAPI project and the two confidential biopharmaceutical collaborative research projects. The provision for contract losses for the six month period ended June 30, 2017 was approximately $221,000 which reflects the projected cost of the company's extended involvement in the ZAPI program. R&D expenses for the six months ended June 30, 2017 increased 24.4% to approximately $739,000 compared to $594,000 in 2016. The increase principally reflects the cost of biopharmaceutical contract research initiatives and personnel related costs. General and administrative expenses for the six months period ended June 30, 2017 increased 52.4% to approximately $3,024,000 compared to $1,984,000 in 2016. The increase principally reflects litigation costs for the trial $468,000; compensation cost, $253,000; biopharmaceutical business development costs of $198,000; financial reporting costs of $143,000; and these increases were partially offset by a reduction in all other costs of $22,000. Foreign currency exchange gains of $206,000 for the six months period ended June 30, 2017 reflect the strengthening of the euro in comparison to the U.S. dollar. Interest income for the six months ended June 30, 2017 increased 25.5% to approximately $246,000 compared to $196,000 in 2016; the increase reflects returns earned on the company's investment grade debt securities. We anticipate that our cash burn for the balance of 2017 will approximate $4.2 million and we expect to end the year and the cash per share in the range of approximately $1.68 to $1.72. Now I'd like to turn the call back to our operators take your questions. Dana?

[Operator Instructions] And we'll take our first question from Richard Deut [ph] with National Securities.

Hi Mark, this is for you. Can you give us a little more information on where your principal CRO operation is located?

Well, it's located in Europe.

Spain? Where in Europe?

I'm not really at liberty to disclose that right now but of course PDI is in Spain, and that's the new CRO, the second one that we've talked about.

Okay. So the physical location of the lab is confidential, right?

Well, at the moment it is because obviously when we tell specifically in areas that we've got - in the industry we know exactly where it is and at the moment we want to make sure that we have complete control and access and obviously we're getting directly [indiscernible] and that people are going to and utilize additional finance that we may need as we grow and put more partners on. So we don't think it's in our benefit yet to disclose that.

Okay, thank you. That's all I have.

And we'll go next to [indiscernible].

Hi everyone, couple of things. You said that you're going to be burning for the remainder of the year $4.2 million through 30/12/2017, and that the cash share price is going to be at the end of - at 31/12/2017 expected to be $1.68 to $1.72; if you take those numbers that means the current share price would be about $1.85 a share today and it's trading at $1.30 - whatever, $1.32 today; that's means it's $0.50 a share under cash value, not counting any - not counting anything for the technology.

That's correct.

So my question to you is, you guys talked about uplifting; the - you guys could be doing the best things in the world and if nobody knows about it nobody can buy it, what good is that? That's the first point, that's any product; whether it's your product or anybody else's, if nobody knows about a great product then nobody is going to buy that great product. Obviously, people in the industry, these technology companies that you're talking to, the pharmaceutical companies, they are aware of the product as you're doing presentations; but as far as the Street goes and as far as shareholder value, nobody knows about it. I know multiple hedge funds that I would like to buy the stock, they can't buy the stock because there is just no volume on the stock, and as a result the shareholders are suffering for a people that want to be able to sell because we're basically $0.50 a share under present value today of cash, not counting anything for technology. With that being said, doesn't it make sense to do the reverse stock split, go through the uplifting process, so when you do create and expand your technology and when it is perceived and through these projects and when you've reached a couple of hurdles through a couple of projects, the day that happens; those hurdles happen, people can buy and sell the stock and that stock could jump up a $1, $2, $3, whatever depending on what hurdles are being made but the point is, if you did that now the costs to uplift the stock is beneficial for both, Dyadic, the Company, so that people can buy it the day that you guys announce these hurdles and the benefit of the C1; that's number one. And number two, it gives you more flexibility and gets the word out for the hedge funds or anybody else that wants to buy a lot of shares which is impossible to buy today; so I would definitely encourage you for the shareholders top list this stock right away because the cost is nothing, it's nothing but upside and there is no downside other than a little bit of cost and reported for the uplifting and I think - and it takes time to do that so why not put that time behind us now, be in position, have it uplifted so the day that you guys do bring this technology to the next level, people can start buying and the stock can move instead of waiting after you make that announcement of whatever it is, saying how good this is and how beneficial it is but nobody can buy it or sell it if it's not uplifted.

So first of all, I can assure you that we are preparing to financials and the internal controls and all the things we need to do to be able to uplift and Tom and his team, Chaco [ph] is the Chairman of the Audit Committee, they are doing that on a daily basis and have been doing that to get ready for that if and when that occasion and if words says it's time to go. But the main reason Company is uplifting NASDAQ is to gain access to capital. Now we're at the enviable position of not needing cash to executive our strategic plans since the sale to point, our main focus is to advance our technology; at the point we can create enough good data to generate new investment interest and analyst coverage. In order to conserve our resources where we're seeking funded research collaborations in the addition to making our own strategic R&D investments with regards to whether or not to uplift, we will spend many hours considering the fact that we don't need any of this money, the fact that our float will be very low depending on the conversion ratio needed to establish and maintain a NASDAQ minimum slide per share, the belief it will be difficult to attract meaningful and analysts coverage without sufficient data and better collaborations. The fact that although we've made good progress to-date, we do not currently have sufficient data to attract enough attention. The one-time cost of what first thing is approximately $500,000 to $750,000 which does not include the ongoing cost for legal, investor relations and a reporter accounting additional controls, NASDAQ listing fees, etcetera. Since the ability to attract new investor interest and meaningful analysts coverage is questionable, we must consider whether spending that money now is truly beneficial; but we are taking steps to expand our finance department and its resources. We need to consider the distraction associated with the non-listing project. We consider the decision on a reverse split and it seems to be two separate decisions; often a reverse split is done by companies at a weakness, this is not our situation. Our main concern is the conversion ratio which is too high and will result in very limited market flow. It is possible, we will do a reverse split but conclude that an uplifting did not [indiscernible] company or shareholders at this time. While the decision to reverse split will be made before December 6, 2017, which is the one year Anniversary day from when we received shareholder's approval to do so, the decision uplift will be based on our ongoing assessment of how far we've been able to advance our technology and whether other possibilities create value for our shareholders may be available to the company such as partnerships, collaborations and research funding deals they were working on. I can assure you that the decision to uplift or not is in the top of the mind of our management and our board, and is considered on an ongoing basis. And in fact, this week I and couple of our board members were in New York meeting with [indiscernible], having those discussions about the positives and negatives in revaluating, looking at this seriously and we constantly do so. So I hope this is responsive to your question and we are certainly not ignoring it, we're all over it, we're paying attention to it, we're getting the throw that we can [ph], we see the benefits but we also see the pitfall and we know at the right time it's the right thing to do and we're working on getting the things in place, not just from financial control but from the data and the business and the ability so that as you mentioned; when we're ready to go prior to hopefully making major announcements than more eyeballs on this and they have more opportunity. But if we do a three to one reverse split or four to one reverse split, we're going to end up with very few shares and reporting volume for the problem. So I can get more details and I can get it more than enough for now but…

I have a follow-up. Okay, so when you sold for $75 million to DuPont, one of the things that you announced is that you were going to do a uplifting, that was almost two years ago; maybe it was more than two years ago, I think it was January of '15, is that right when you sold or was it January of…

September '16.

Okay, so it's been a year and a half. And this uplift still hasn't happened, that was one of the things you were going to buy - you want to do the share buyback program which you did but you never did the uplifting. So again, I'm going to reiterate what I just said, so you just said that it's going to cost $750,000 upfront cost plus some other costs; so you've got - let's say it's $1 million. If it's $1 million dollars and you've got $50 million, I understand you're working real hard on the technology end but you can do more than one thing at a time, you can also uplift with $1 million and you've got $50 million in cash, it puts you in position of nothing but upside and only the downside of that $1 million; that's the way the shareholders see it. And you say that with the reverse stock split that it would decrease the volume because it would - if you want four to one, and up have 28 million shares, that would be the 4*28 million, 6 million to 7 million shares on the flow but it's still going to be a lot more than what you've got being traded right now, there is nothing being traded right now and the reason is nothing being traded is because nobody can buy it.

I just want to clarify few points; so we have 7 million shares and 30% to 40% of it is controlled by insiders, you really down look out through; 4 million shares that can trade under one. But the main reason is not with $1 million because that's part of the reason; if we need the data in the partnership and to have the business in a position to have analysts want to cover it because without analysts covering it, in addition, because we don't need money, [indiscernible] in order to generate fees, obviously they want to sell stock, so we're sort of in this counting foundry and believe me, we hear your message loud and clear and we're evaluating all these things, we didn't say we're not going to it, we said we're in constant discussions about it, we don't just have a discussion of a family board meeting, we have these discussions on an ongoing basis including Wednesday this week where three board members were in New York having discussions with bankers specifically about this. So we hear you loud and clear and we're all over it, and we're considering it and we're evaluating the pluses and minuses and the timing, and we recognize that at some point we need to do this and we report that love to do it sooner than later but we have to have the foundation which is by the way where we spent the last year doing is putting the business in shape, transitioning the technology from our old lab in DuPont to new CROs that can now genetically engineer C1 equal is better than we were doing this fast, so it created better, faster, quicker, more possible streams have better capabilities. We have generated the detail to be, we have two of the Top 10 pharmaceutical companies in the world that are involved, we wish we could give you their names but quite frankly, you just take a look at the Top 10, pick any of them, it's truly irrelevant if any of those Top 10 are phenomenally successful from our business development efforts and we have several more in discussions with and as I mentioned, we hope to have at least one more than this year and then early next year and we hope it will be bigger, we hope the success from our research programs gets broader the relationships we have and at the right time at the right place, we will try to put as many eyeballs on this as possible and as many ways as possible.

Well, I think from the business side there is no question that you guys are making strides; the only point that I'm making from a shareholders point of view and I guarantee it, if you put it out to folks, the shareholders would say the uplift and that's why they approved the reverse stock split because that's what they wanted and that's what you said that you were going to do a year and a half ago and you haven't moved and that's the reason that this stock is at $1.30 a share and not a $1.80 or $2 or even $3 a share at this point right now. And that's all I'm going to end with that, that's how I feel and I think most of the shareholders would feel the same way.

We thank you for sharing your view with us and we are respecting them.

And we'll take our next question from [indiscernible].

Hi, I won't get into a debate with the prior person but I am strongly in support of your view which is we have a small or liquid stock and uplifting at this point doesn't accomplish a heck of a lot of spending some money but we're not getting into that, it's just back and forth and it's a matter of opinion. The real question is a two-fold, one - and I don't want to - but the first one is pretty quick, are we losing about a $0.25 every conference call for the end date as to when you're going to reevaluate or evaluate where we are with the technology? I believe at one point 6 to 9 months ago we ended '18 and now we're at the middle of '19, it seems that we are losing ground which means you're committing to spend more cash to get us there. And the second question which is my standard question is, why don't you give me the speech again on why would you're stock $0.50 under cash value more than $0.50, a buyback which is extraordinarily accretive to cash per share and asset value per share doesn't make any sense. Thank you.

All right, first of all if you go back to the early part of the conference call, I've said mid 2019 or sooner, and I emphasize over sooner. I can assure you that we don't want to spend money on something that's we're looking forward. We actually are getting very good data on certain of our projects and seem to looking very good but we don't know how good they will end up and I will certain hurdle still to those to come. So we're just sort of giving you what we think is a realistic timeframe and something could happen sooner than that because one of these two partners or one of the future partners may come in and decide they want to take a non-exclusive license or some type of a bigger collaboration or potentially take it all out, who knows. We may find there is one or more of the programs that we're working on with BDI and otherwise products that we developed, we can get to a certain point and then license those out. So we're very aware of the cash position, in fact, I think we probably expect less cash than we said we're all in the year. So that answers that question and I'm trying to get - the last question was, why we're - when we're $0.50 under cash, why aren't we buying more of our shares back. And I will tell you that I've had a discussion with variety of shareholders including this week, I've had the discussions with the Board, and to be honest with you, if we wanted to today put a shareholder program in place and I think I talked about this last time on the call, we've met and talked with two different law firms and because of the micro-cap size we are and the impact on some of the deals that we are potentially negotiating and we sort of lockout or blackout periods. Number one is, we couldn't put plan in place if we have some transaction that were working on, it will be materially important to the stockholders because then we're taking advantage of the knowledge that we have and that happens all the time and is going, but that may or may not be the case right now. And second of all, before the plan is in place, we put a plan in place to buy shares back, typically to the point they we're going to end up with in December of 2018 if nothing good happens with $1.40 or $1.42 or $1.38 a share, we certainly would want to buy shares at that or less. I think we're going to end up with when we not make our decision point. And I don't believe if we put a share program in the place today that we would be able to buyback a lot of shares at that amount and we have to put a plan in place and we can't change it. If you remember the last thing we've put a plan in place and it went for a year, and we've got to put a defined set parameter when we don't have something material going on in that, and we then can't change it if because were too small and something is going on, we're not allowed to decide and win while it could go up or down and the share price and the volume. So it's problematic, if small micro-cash Company to do what we did and last year we based, we were able to do it. And again, just like uplifting this was a constant discussion with the board is, if we have the window open to do such a thing and if we do it how will it actually be implemented and what's the value of it to save in our case if we brought shares back at $1.35 or $1.30 or $1.20, whatever the number would be that we'd put a plan in place for them the use strong balance sheet which I can assure you when we're in discussion with these big pharma companies, they look at $50 million different than a lot different than they look at $25 million, and you can burn money over a year and a half or two years to get to where you want to go. And so the decision and the discussion that I'm having with these pharma companies is we can do this on our own, we'd like to do it with you but we want to do it with you with the appropriate terms to provide benefits to both companies, and not just one site and of course as you know, for 8 years we wanted to rest [ph] and had to make deals under pressure and we don't want to ever go back to that door. So those are all the different reasons and there is prepared remarks more I haven't mentioned but this board is actively - continuously considering uplifting and whether we do a stock buyback because of course, all of us would love to take big advantage of that $0.50 for share price difference but I'm sure that we want the marketplace with a set plan, get around blackout, we're not going to pick up the kind of shares we did in the past. As we mentioned, we would have brought lots of shares if people want to and are happy to consider that. So that said, there was an option to keep them or to sell the shares that could approach the company directly and block for the moment and we will keep considering it. So I hope I answered the questions.

Thank you, Mark.

And we'll take our next question from Robert Hoffman with Princeton Opportunity Management.

Mark, could you give us whatever details you can on the fully funded research program? So does that mean that you guys are doing the research or is the company that you're involved with? Well, why don't you answer that first before I do a follow-on questions about that.

So that means that the company is giving us money, equivalent amount of money and/or maybe a little more by putting much - or maybe a little overhead to cover the overhead. You were conducting the research because we have the experience as a CRO to work with them and get better results. Now in this particular case, the company is also doing some of their own work in addition to the money we're getting and evaluating things that they want to see on their own in addition to what we're doing.

Okay. So is there kind of signpost timelines, mile markers that are pre-established? I mean in other words, in six months are you going to be able to report to us that you've passed hurdles one, two and three; or in six months you haven't. And what are the terms of the - is there a timeline, an end date to this so that if it doesn't work we know that it's not working; I'm just trying to figure out granted that you can't tell us who the company is or the details of the financial situation but it would be helpful if we knew measures of success or like thereof.

Yes, so I can tell you that as far as we're concerned, we're actually succeeding in these programs, the two funded programs and we actually are kind of excited about some of the data that we've actually seen and I think that at least the one that's being going on since January, obviously we have data, we're sharing that data with them or producing antibodies. In some cases we're actually providing those antibodies after them for them to characterize. On the other program, we just started a month or two ago, and so we're starting to see some preliminary data and encourage what that first data - even though it's encouraging and exciting and the potential is there, we still think that we'll need to be carried on going forward to take this platform across the goal line. With these lines, the proof-of-concept programmed, put in place, [indiscernible] will test drive the car and see that actually we're heading in a direction that we said we'll keep people going, and that we're ultimately going to get to. But we hope that if more and more of these companies step up, and we believe they will, and it may not even be one to two, maybe one on one we're talking to that's just going to jump and leapfrog in because we're doing our own data on our own products; and so we believe that these programs, one or more of them will hopefully be broaden bringing more capital whether fully funding the bigger effort to speed up the timeline to get this to the marketplace but they are respective, at $50 million, approximately cash that we have given us the opportunity without really worrying about cash of doing it on our own and advancing the program so that every time we move, and we move a hurdle, we're going to get a higher value in end for what we're going to license and/or sell. And as long as we continue to see the progress that we're seeing, we're going to keep pushing the envelope. And so once we start seeing that progress, we hit a wall or have a concern, then we have to reevaluate where we're at, obviously - and to be framed, we have the people that are smart enough from the business side and the science side to do that and evaluative those things and if you know one of the board members we have is Aaron [ph] who has been in biologics for 30 years at Pfizer, he just a year or plus ago, and Aaron [ph] was with me and Ronen in Europe and has meet with the research team, we've got updated this summer. So we're actually very happy with what the prime CRO is doing and we're very happy to have been made the investments in PDI, it was only the former people would have add experience from Angola [ph] that are working on C1 and have been him working for nearly a decade on C1. I think we're using now in the pharmaceutical applications and actually trying to produce potentially some of our own products that we would then partner off, we don't know how can I get these forward on our entity that we want to produce one or more products till we think we can maybe license off and move forward now. So as long as we see the positive and the value creation, we'll continue and so - but with same positive news, that's why you're seeing a stretch towards the next 6 months because we think that at least we've got some very positive results in that timeframe that may get us to a significantly extra value, not because we're delaying it, because we're seeing delays, we might even see more positive results that are more promising.

I think everybody who's on this call understands the upside which is why we're all here but what I guess what I was trying to get a handle on is, with the May 4, the fully funded research program that you started in May 4; is there a finite dollar amount? They say that they are going to take it and give you X dollars to get to a certain point. Is it…

Yes, the answer is there they finite dollar in these programs, [indiscernible] but they are also talking about extending and dramatically feeing up and putting more resources and potentially creating technology and sooner based on the results of that data. The data that we drew in the finite number because there is a finite number, hope the we gather enough interest to create a multiplier.

I understand that we all hope for that. What I guess I'm saying is that if you get to that finite dollar amount and they don't want to do anything, is that the end of the relationship and will you announce it as such?

I don't know if it will be the end of the relationship, based on things that we're seeing today, I wouldn't think anybody would end the relationship but I don't know that because everybody does think with different reasons.

Well, but they're going to have to - once you've gone through dollar X that you've I would initially agree on, they have to agree to spend dollar Y, right?

Yes, but they do that immediately, they might do that already considering it as the progress is going on, right and talking about we need abundance [ph], number one. Or they made just - not they listed all or anywhere in between.

Well no, that's not what I understand, and that's what I'm trying to ask is, are we going to know about any of those decisions? Will you be able to share yet - you know, we've spent 75% or they've spent; we've created 75% of the initial research and they want to re-up.

Yes, they re-up, of course we will obviously [indiscernible] and then as much as we can that they allow us to do, depending on the size of the re-up, when we have no alternative but to come on up and share the main, nothing else because it becomes material, right. So we'll let you know that. If they decide to walk away like we did at Sanofi and that agreed with because quite frankly, they re-up [ph] time where they did it through a level but timely when we got to $75 million, we basically said look, either we're up in a significant way or we're taking it back in. So I don't know how to answer your question other than that we would keep you informed and educated the best we can, good and bad. We wanted the agreements that we have but somebody made the slide, hey, the data is yours, I got to go back to some senior person somewhere and get my budget decreased for me to get revenue discussions.

Got it. And I would agree that a re-up doesn't do anything for. I mean an uplift doesn't do anything for us in the short-term. Thanks.

And at the time I would like to turn the call back to Mr. Emalfarb for closing comments.

Thank you. We are very excited about our potential research and development opportunities in the pipeline, and we believe 2017 will continue to be an important year in the development of the C1 technology and for Dyadic growing the pharmaceutical sector. I want to take this opportunity to thank our very hard working employees, CROs, consultants and our dedicated Board of Directors, research partners and shareholders for their support. Thank you all for taking the time to participate on today's conference call.

Thank you. And this concludes our program for today. You may all disconnect.