Ping Rawson - Chief Accounting Officer Mark Emalfarb - President and Chief Executive Officer Matthew Jones - Managing Director of Business Development and Licensing

Barry Kitt - Pinnacle Fund Walter Schenker - MAZ Partners. Richard Deutsch - National Securities

Good afternoon, ladies and gentlemen. Thank you for holding. Welcome to Dyadic International’s 2017 Year-End Financial Results Conference Call. At this time all participants are in a listen-only mode. My name is Catherine, I will be your conference coordinator for today. As a reminder, please note that this call is being recorded. At this time, I would like to turn the call over to Ping Rawson, Dyadic’s newly appointed Chief Accounting Officer.

Thank you, Catherine. Good evening everyone. A press release with Dyadic International’s 2017 year-end financial results were issued earlier today. The press release and the Dyadic’s annual report have been posted to both the Dyadic and the OTC Markets websites. At this point, I would like to inform you that certain commentary made in this conference call may be considered 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. Now I would like to introduce Mark Emalfarb, Dyadic’s President and CEO. Mark, please go ahead.

Thank you, Ping. Good evening, everyone. On March 15, 2018, we announced that our Chief Financial Officer, Tom Dubinski was on medical leave of absence and he will not be returning to Dyadic. I want to thank Tom for his many contributions over the past several years and we wish him a quick and full recovery. Management to decide not to fill that position at least in the near-term. Other executives will assume many of his duties while remaining on their current position. Ping Rawson, the Company’s Director of Finance Reporting since June 2016 has been promoted has been promoted as Chief Accounting Officer and is serving as a Company’s Principal Financial Officer assuming responsibility for finance, tax and treasury. We have every confidence that Ping has demonstrated and has the background and experience to manage those functions well. Prior to joining Dyadic Ping held multiple management positions in Fortune 500 Companies, where she was responsible for SEC reporting and technical accounting for acquisition, integration and restructuring. Prior to that Ping was a Manager at Deloitte to New York City, where she was a subject matter specialist for derivative, financial instruments and valuation providing audit and capital market consulting services to large banking and multi-national public companies in the financial service industry. Ping is a CPA. We accomplished a great deal over the past year on both the business development and more importantly to scientific front. A bit later in this call, I will highlight some of the scientific progress we have made in further developing our C1 gene expression platform. We continue to gain momentum and awareness with the pharma and biotech industry regarding the potential for our C1 gene expression platform to disrupt to status quo in bio-manufacturing, biologic vaccine and drugs, we are winning. Since selling our industrial enzyme business to DuPont for $75 million two years ago. We developed a strategy to focus on applying our C1 gene expression platform for use in the biopharmaceutical industry. Our 2017 accomplishments and the accelerating traction we are experiencing this year highlights that we are making solid progress in our transformational journey applying the power of industrial biotech to biological vaccine and drug development and bio-manufacturing. We and others within the industry believe that we will be successful in developing our C1 cell line into a next generation protein expression and production system, which has the potential to help speed up development, lower production costs and improve the performance of biologic vaccine and drugs in flexible commercial scales. On the business development front, 2017 was a good year and moved us forward. 2018 is already off to an excellent start with our previously announced new research collaborations including Mitsubishi Tanabe Pharma and Israeli Institute of Biological Research. In addition to the three new research collaboration agreements we entered into ready this year, we are holding many other conversations meetings, presentations and are on various stages of negotiations with large and small pharmaceutical and biotech companies who like ourselves are very encouraged by the data and progress we have made with C1 in a relatively short period of time. Dr. Ronen Tchelet, Matthew Jones and I have been attending, presenting and showcasing the scientific progress we continue to make with C1 in industry conferences and meetings with various pharma, biotech and governmental agencies. As you know, we have both the U.S. and European presence. So far this year, we attendant the JP Morgan Conference, BIO CEO Conference, The Leerink Healthcare Conference and BIO Europe Conference and the BIO Processing West Conference among others. In addition to attending these conferences, we also in certain cases made presentation and held a large number of one-on-one meetings. We also continue to follow-up these meetings by holding conference calls with leading biotech and pharmaceutical companies to update them on how and where the C1 technology maybe used to help them overcome gene expression challenges they may be facing today or in the future. These efforts have resulted in the Company’s securing 90 plus confidential disclosure agreements, CDAs to-date which has led to the previously announced research agreements with Mitsubishi, the IIBR along with a recent and challenging gene expression project with a publicly traded biotech company and a variety of other potential collaboration and research discussions with several of the top global biopharmaceutical companies. We expect that these activities will lead to additional funded collaborations and expansion with some of our exiting research programs. We believe at the previously announced collaborations including the two Top-10 pharma companies, Mitsubishi Tanabe and the Israeli Institute for Biologic Research clearly demonstrates that are science and business development efforts are working. To-date, our research which is been conducted with our prime CRO has delivered new and improved C1 strains. We believe that the encouraging results would further help us establish additional pharmaceutical and biotech collaborations, which we expect will ultimately drive shareholder value. In July 2017, we have fulfilled our remaining obligations required under the DuPont transaction and received the escrowed funds of $7.4 million. We also concluded our formal research services agreement with DuPont and successfully transitioned our C1 platform research programs to our two contract research organizations. As we previous report in the June of 2017, we entered into a multi-year strategic research and developments arrangement including a potential commercialization agreement with biotechnology development for industry PDI, a Spanish Biotech Company to further advance Dyadic’s proprietary C1 technology in the development of next generation biological vaccines and drugs. Our relations with BDI has much needed additional research and development capabilities and provides us retention development of internal biologic vaccine and/or monoclonal antibody product from designated C1 generated product candidates. In addition, this R&D capability is as expected already starting to bear fruit as BDI has begun to work on media and fermentation process optimization already leading to higher reported monoclonal antibody productivity. Additionally, this collaboration is expected to accelerate 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 to further develop our own research and development capabilities such as providing Dyadic and its collaborators with additional C1 gene expression capabilities and C1 fermentation optimization capacity. Now, I would like to briefly summarize some of our accomplishments, objectives and the anticipated outcomes and the research and development at our prime CRO and at PDI. We have been able to demonstrate expression levels of up to 1 milligram per 4 milliliter in microtiter wells. We believe that the yields of protein expressed that C1 offers in microtiter wells will provide pharma and biotech companies with sufficient quantities of protein to identifying and characterize promising new vaccine and drug candidates. To make efficient use of the C1 platform and discovery, we will need to make further investments to improve among other properties, transformation rates and shorten cycle times. We are in discussions with third-parties to explore their participation in the potential funding of this project. So far, we could demonstrate a high production level of monoclonal antibody MAB where 1.7 grams per liter per day was reached in a 30 liter fermenter using a fed batch process that is based on glucose and defined low-cost media. This level of C1 MAB expression appears to already far exceed that of CHO cell and grams per liter per day and is catching the attention of pharmaceutical and biotech companies. As an example, if CHO productivity is 4 grams per liter in 14 days that equates to slightly less than 0.3 grams per liter per day that is fivefold lower and the productivity we reach with C1. Despite already reaching such high expression levels in less than one and half, we are continuing to invest in further improving media, growth conditions and fermentation process parameters to further increase C1 expression yields. The potential productivity expression levels of monoclonal antibodies using C1 leaves us and others to believe C1 truly holds great promise in disrupting the bio-manufacturing of vaccines and drugs. Two of the other issues we are focused on are increasing the stability of expressed protein and expressing C1 proteins with human-like glycosylation. In addressing protein stability we have already made substantial progress in reducing the background protease activity in our newer generation C1 strains. To-date, we have not seen any negative effect on the health and our growth of the C1 cells. In fact, by deleting protease genes with C1 cells grow faster now than they did previously, showing increased doubling time. We are continuing to further identify additional proteases that negatively affect protein stability and once identified we intend to knocking them out to further reduce background protease activity. Our objective with glycosylation is to modify the glycosylation structures of antibody expressed from C1 if we have the correct performance without causing additional immunogenicity to MABs expressed from CHO. Our glycol-engineering work has begun. The first steps have begun successful and further work is ongoing. We and others within the pharmaceutical and biotech industry believe that the glycol-engineering of C1 is a most important aspect of our ongoing research programs. Therefore, we have recently committed additional resources to speed up this glycol-engineering research and to increase the probability of successfully achieving the required quality glycosylated monoclonal antibodies expressed from C1. I'm pleased to report that the pharmaceutical industry appears to be recognizing the significant productivity advantages of C1 versus CHO, from the monoclonal antibodies and FC fusion data we have generated to-date. And from our prior licensees and our own previous commercial success using C1 industrial biotechnology to produce large volumes of low-cost enzymes at very large-scale. They are also encouraged by our continued progress on both the protein stability and glycol-engineering research that is ongoing. In January, we announced that Dr. Barry Buckland joined our Board of Directors, his extensive background and experience in biological process development and commercialization, especially for vaccine complement existing Board member, Dr. Aaron Ambrose expertise and externalize novel biopharmaceutical and biosimilar development, thereby providing the Company with invaluable expertise, insight and guidance for our research and our commercial initiatives. I’m confident that Barry will be a powerful addition to our team. In our recent board meeting on March 14th, we formed a Scientific and Technology Committee which will be Chaired by Dr. Bose includes Dr. Buckland. The committee shall periodically examine management’s strategic direction and investment in the Company biopharmaceutical research and development and technology initiatives. As previously reported, our Board of Directors authorized a new one year stock repurchase program under which the Company may repurchase up to $5 million outstanding common. The objectives of this program was the same as our prior successfully completed $15 million of stock repurchase program, which are the opportunistic use of the Company's cash and to provide liquidity for its shareholders. At a meeting held on March 14, 2018 our board voted to begin to take a steps necessary to become an SEC registered reporting Company we expect to accomplish by the end of this year. We believe this voluntary action will enable the Company to gain more visibility in the market. Lastly, as you will see in our upcoming proxy, we will ask our shareholders to approve a proposal to amend Dyadic’s restated certificate of incorporation to effect a reverse tax split of the Company's issued and outstanding shares of common stock up to a one for four stock split and effective upon a date to return by the Company's Board of Directors. Our shareholders have previously approved that request; however, our Board did not believe that it was in the best interest of Company to affect the reverse split by the time such approval previously expired. We would like to keep that option open as we continue to evaluate the best path forward as we continue to develop our technology and advance our business. Of course, the board may abandon the reverse stock split and sold discretion if it determines that the reverse stock split is not in the best interest of the Company's shareholders and/or is not necessary. I will now turn the call over to Ping Rawson our Chief Accounting Officer to discuss our financial results.

Thank you, Mark. It's my pleasure to communicate with you as Dyadic's Chief Accounting Officer. At December 31, 2017, the Company's cash and cash equivalents and the restricted cash were approximately $5.8 million, compared to $14.3 million at December 31, 2016. The carrying value of investments grade securities including accrued interest as of December 31, 2017 was $43.3 million compared to $43.6 million at December 31, 2016. In total the Company has $49.1 million in cash and investment grade securities and 28.3 million shares of common stock outstanding as of December 31, 2017, which equated to approximately $1.73 per share. In April of 2017, the Company settled its professional liability litigation with the last remaining defendant law firm Greenberg Traurig and received a settlement payments of $4.4 million which is net of legal fees and other expenses. In July 2017, the Company received approximately $7.4 million of cash held in escrow in connection with the previously announced DuPont transaction. In February 2017, the Company successfully completed its 2016 stock repurchase program. In August of 2017, the board of directors authorized a new 2017 stock repurchase program to repurchase up to $5 million of Dyadic's outstanding common stock. As of December 31, 2017, the Company had 28.3 million shares of common stock outstanding, after purchasing approximately 382,000 share of stock at a weighted average price of $1.41 per share in open market transactions under this new stock repurchase program. Subsequent to December 31, 2017, the Company purchased 267,000 additional shares of common stock at a weighted average price of $1.40 per share. Net loss for the year-ended December 31, 2017 was $2.1 million or $0.07 per basic and diluted share, compared to a net loss of $3.6 million or $0.10 per basic and diluted share for the prior year. Research and development revenue for the year-ended December 31, 2017 increased to $758,000 compared to $593,000 for the prior year. The cost of research and development revenue for the year ended December 31, 2017 increased to $680,000 compared to $516,000 for the prior year. The increase in research and development revenue and the cost of research and development revenue reflect the activities of the ZAPI project and two confidential biopharmaceutical research collaborations started in December of 2016, and June 2017, respectively. For the year ended December 31, 2017, the Company recorded $221,000 provision for contract losses compared to $437,000 for the prior year. The additional loss recorded in 2017 reflects the increase in total estimated research costs due to the Company’s extended involvement in the ZAPI program. The reported loss will be charged to the statement of operations and offset the cost of research revenue over the term of the contract. Research and development expenses for the year ended December 31, 2017, increased to approximately $1,765,000 compared to $886,000 for the year ended December 31, 2016. The increase principally reflects the costs associated with ongoing internally funded research and previously announced research projects with third-party contract research organizations. Research and development expenses to related party for the year ended December 31, 2017, increased to $438,000 compared to zero for the year ended December 31, 2016. The increase reflects the research and development costs related to Company’s R&D agreements with BDI. G&A expenses for the year ended December 31, 2017 increased to approximately $5 million compared to $4.6 million for the prior year. The change principally reflects increase in new employment agreements for executives of $312,000, business development costs of $228,000, and a financial reporting costs of $93,000, offset by a reduction in legal and litigation costs of $118,000 and board compensation costs of $55,000. The Company’s foreign currency exchange gain, for the year ended December 31, 2017 was $249,000 compared to a loss of $147,000 for the prior year. The change represents the strengthening of the euro in comparison to U.S. dollar. Interest income for the year ended December 31, 2017 increased to $566,000 compared to $485,000 for the prior year. The increase in interest income reflects returns earned on the Company’s investment grade debt securities, which are classified as held-to-maturity. Now, we will provide you with an opportunity to ask questions. Each caller will be allowed one question and one follow-up question to provide all callers an opportunity to participate. If time permits, the operator will allow additional questions from those who have already spoken. Now, I would like to turn the call back to our operator to take your questions. Catherine.

Thank you. [Operator Instructions] Our first question comes from Barry Kitt with Pinnacle Fund.

Hello.

Hi Barry.

Yes, hi Barry, we can hear you.

Okay thank you. Well first of all, I want to thank you your team and your Board for all your hard work to putting in. Also congratulations on getting the three collaborations done so far in 2018, it’s good to see you are getting some traction, but the stock is still selling for $0.27.5 per share or 16% less than net cash. Looks like it’s selling for around where your net cash will be at the end of the second quarter of 2019, so apparently the message of your progress in advancing the platform still hasn't gotten out not yet, but I'm happy to hear on this call, you mentioned that your possibly looking to do a reverse split and up list later this year, so that's a good news. Two questions for you, first question, what gives you confidence that Big Pharma or other interested parties will be willing to switch from CHO cells to using the C1 platform.

Okay Barry two things, one is I will give you my thoughts and then I believe that Matt Jones our commercial business development officer who is based in London is actually on the phone is well. So Matt, do you want to chime in on that first.

Sure, pleasure to. Can you hear me okay?

Yes.

Yes.

Great, Hi Barry. I think there is two things to say, one is of course without any name dropping as you would respect. We are having that conversation, we have had a tremendously busy year, that’s not just from Big Pharma that’s also from the midsized pharma and large biotech who themselves are addressing the limitations that the CHO platform presents. So we are going head-to-head with a number of opportunities, we are also looking to replace and I think that does take time, what the announcements related to this year and we have more to come we believe is the time it takes in the cells process, if you want to call it that. I think what we are seeing now is some of the return on investment and we believe that there are number of collaborations which we are very close to, which not only address the fact that CHO have limitations, we know that that’s being well documented, but we also are now seeing the opportunity to C1 to actually emerge as one of the most obvious and strongest competitor to CHO. Now we need Big Pharma and we are getting Big Pharma , and we are getting Big Pharma and they would champion the regulatory and the opportunities going forward with us. And I think what we have announced and what we have been discussing today is how those collaboration are starting to take shape. So we were excited about what we are seeing and I think your question is a good one, it just takes some time and I think we are showing good results based on that.

Thanks, that’s a great explanation. I just have one follow-up question. Mark, how confident are you that you are generating more incremental value in the C1 platform than the money you are spending to make that progress?

I’m very confident. I believe that we are getting exponential increase in value, I think if you are in the pharmaceutical industry and you understood a yield already getting at 1.71 one grams per liter per day and as I mention that around five times to yield on a grams per liter per day which is an industry average of four grams per liter out of CHO cells and we are just getting going. We have actually had pharmaceutical company, collaborators, and people we are talking to virtually tell us that we really should focus on the glycosylation and the stability issues because the yields are already high enough. We of course come from industrial biotech and since BDI is doing media fermentation process, optimization work separate from the tool development and the platform development going on with the prime CRO, we can continue to increase those yields, but are negatively affecting or impacting the research of advancing the technology in the glycol-engineering and protease stability work. So, it sounds like what we are seeing, we are actually being told that the numbers that we are hitting in a short period of time are nothing short of remarkable. So I hope that helps you and makes us feel more comfortable. By the end, it’s all going to come down to science and how far and how fast we can get the glycol-engineering work to mimic as close as possible to human glycosylation put into human body without having immunogenicity and provide the performance characteristics that they are seeing coming out of CHO in a stable form. So that's where our focus is, but we do continue and are continuing on pushing the yields. So we are very confident that we have come a long way and the money we spent was very well spent and targeted and the people that we have involved with Dr. Bose and Dr. Buckland that are guiding the science. These aren’t just typical Board Members, all our Board Members are all actively involved. This is a group of people that are trying to make a difference, we are trying to change the game and we biologics or develop, speed it up, they get a lower costs and improved performance and everybody is committed in working 24X7 to that effect.

Mark, it seems like you have the right people in place, the right product, pharma is finally starting to pay attention to you, you have a lot of exciting things going on. I think it sounds like a great time to up-list and reverse split your stock later this year, so we can finally get some research, coverage and get people to be able to look at your stocks. So any ways, thank you all for your hard work. I appreciate it.

Thank you Barry.

Our next question comes from Walter Schenker with MAZ Partners.

I was close enough. Hi Mark.

Hey Walt.

Two questions. First, you have previously discussed on all of the prior conference calls. The fact that this is not an open ended forever effort. That the effort is going to be limited in time and money to a finite amount. Could you review with us what your current thoughts are on those two metrics going forward?

Yes. So I think those metrics are accurate. I don’t what you want me to define in specific, because it’s a moving target. But our objective is by mid-2019 to have multiple either non-exclusive deals, where we are getting access fees, which means cash and a significant number of front from pharmaceutical and biotech, governmental agencies to where we can reduce or eliminate the burn. And if that’s not the case, then we will monetize the value in the best way forward either on non-exclusive licensees, selling the platform to somebody on an exclusive basis depending on fields maybe for vaccine one field, antibodies that are other field. But we feel pretty confident that the same plan we said in motion a year ago is executing in fact maybe in some way scientifically faster than we thought and even on the business development front, I think it’s moving faster than we thought possible with the right parties, because we have two Top-10 pharma companies we have got Mitsubishi Tanabe pharma company already involved. We have got a variety of other Top-10 companies, we are talking to Top-20 companies. So 2018 is going to be defining year to let us seek with better clarity where we are go in the future, but we don’t intend on burning through all of that cash and as we said before, somewhere in the neighborhood of $1.40 if nothing good happens is the cash we should have somewhere around June 2019. And we expect a lot more of good things to happen before that.

Good, thank you that was what I was hoping you would say. Second question. By definition all expenditures, all researches funded, there is no funds, there is no research. You have announced a number of both identified and not identified collaborations, identified meaning the specific name we are working with over the last year. Could you give you some sense who is funding each of those collaborations, whether it’s a joint venture, their funding and you are funding, if possible, who is funding the majority of it without a lot of specificity, but general sense as to who is paying for this?

I think in general term, we are developing the platform with our funds, making it quicker, better, faster improving it producing the protease background in the glycol-engineering. The partners are targeting specific antibodies or FC Fusion or in the case of the new fully funded of Phase I, which means, we are actually not using any of our money on the metabolite agreement, the last agreement, I think we mentioned, maybe with the last one, the one on the premium metabolites. So two of them are fully funded, one is partially funded and then another one is partially funded and then we are spending our own money obviously on improving the technology, but the beautiful thing is, it’s all sort of going into the same path, because as we improve the technology for ourselves we are getting better proof-of-concept data for our pharma partners. And then what we are doing for them is providing further data and support for them to take hopefully instead of just putting their toes in the water, put their feet in the water and hopefully by the end of the year or sooner jump in with both feet and join us in the journey in a much bigger way, in much broader way. And so that hopefully give you a good answer of what is going on here.

And therefore - just a semantical question. If you make an announcements and say it’s fully funded that typically means it’s funded by your partner?

Yes. If we are making announcement to say its fully funded that means at least breakeven and we might actually generate a little bit revenue on that.

Good. Thank you very much Mark.

Thank you. We will now hear from [Steven Afail] (Ph) with Private Investor.

Hi Mark.

Hi Steven.

I didn’t think, I would be able to make it, but plans changed. Mark, we were betting that C1 is better than CHO and what I would likely you to do if you can is to quantify what kind of capital investment and return on investment a typical Big Pharma company will generate using C1 versus CHO. In other words, what in general, in a generic sense, what is the cost using CHO as a percent of the pharmaceutical company’s revenues and what with that percent be using C1. Is it possible for you to answer that question, just generically?

How about this. I will try to answer it as best as I can. So, our view is that the cost today of a brand product, patented product not off-patented is somewhere between 8% to 12% as the manufacturing costs

That’s for CHO.

Yes. Just the total costs for CHO yes 8% to 12%. The cost of making that product isn’t just the operational costs, it’s the CapEx of building the facilities and plants to be able to make those products. And I think you have seen in our slide deck that are on our media center presentation. Samsung built to $735 million plant in Korea, which is I think their second, and they are intend to building a third, because the yields are so low of a CHO cell, you need bigger tanks, bigger facilities, bigger CapEx, more money. So the CapEx expense should go down, the OpEx expense should go down.

By how much roughly?

Well, it’s difficult to mentioned and because honestly that’s a study that we are working with, trying to get put together by how much, so I can’t give you a number, but it will be substantial. The industry is also trying to move to what is called single-use reactors and we are going to be testing C1 later this year in a single-use reactor and that supplied by companies like GE, PAL, Helmut Fischer, et cetera. And the goal here is as you have seen in our slide deck again in our presentation, which the pharma companies are looking at. If we could provide in the 2,000 liter single-use reactor, which is disposable, the same volume that they would need 10,000 or 12,000 or 24,000 liters of capacity that’s a huge savings to them and gives them the ability to produce same output of drugs with a much smaller footprint. I can’t give you a number, but to be honest with you, it’s quite substantial.

Okay. So let’s say the costs of as percent of revenues for CHO and all the infrastructure involved in it is 10%. What would see one be half of that 5%, 2%?

It won’t be half, because the downstream recovery still going to be needed. You put the same amount of materials to the same filters and purification later. So I can’t really give you and I don’t want to throw something off the top of my head, but it’s meaningful and its significant and for a company our size, it should be monumental and the savings and the way that we can hopefully share in that savings with pharmaceutical company.

Understood. I’m just trying to relate it to the pharmaceutical company, because Big Pharma has a way of being slow and lazy.

I know, but let me finish. What is happening in the biosimilar space and I will give you my viewpoint on that is that biosimilars are finally being adopted in the U.S, they have been adopted for 10 or 15 years in Europe. Those cost of goods have gone from 8% to 12% to now 25% to 30% going to 50% going to 65%. So this is going to become more and more important as time goes on and competition comes. And that's where the difference between traditional pharmaceutical products through synthetic chemistry and biological product that have to go to cells and that's why we are bringing the power of industrial biotech with hyper producing cells and genetically modifying them to synthetic biology is because the trend is the cost of goods, they are going to become much, much more important to them than it has in the past as these biosimilars come in. And the other problem you have or they have, the pharmaceuticals is running into issues and I can give you a specific example, I can't tell you who, what or where, but we actually now have an example of a antibody sort of a [bio-specific] (Ph) which is sort of newer type antibodies that are coming out that in some cases are more difficult to produce. In CHO cells and in many cases are fine and they can get enough productivity, but in some cases they are just not producing at levels that makes these things commercially relevant and they are preventing certain pharmaceutical or biotech companies from even getting those products into the clinic, because they can’t produce sufficient quantities of them. And we have an example that we hope in the next two to three months to be able to show one of our partners, collaborators that we have made their bio-specific type antibody at a multiple times the level they were able to do and hopefully this will allow them to get it in the clinic and now it helps from a value proposition, because that’s a brand-new drug that couldn’t otherwise go into the clinic, they may save lives in the future that we should be able to garnish a higher percentage in just cost to good savings. So those are the prime targets for us, but we have a variety of different targets, so I don't know if that answer your question, but I can't give you specific numbers.

I didn’t want specific numbers. I just wanted to just to get a feel as to how important this would be to a large pharmaceutical company in terms of their cost structure, C1 versus CHO.

I think Steven more important to that in our opinion is that we can enable just one multibillion-dollar drug that’s not going to come to market otherwise, that’s a huge value proposition in addition to the cost savings.

Sure, last question. Second question. How much you have left on the buyback?

I think Ping mentioned that in how many shares we bought back, and how many dollars actually dollar wise.

Yes. Last year we, dollar wise about - we bought 267,000 shares after that year-end, so that’s what I have been telling.

At $1.40, that 267,000 at $1.40 is where about [$400,000] (Ph) on that, they are looking up the numbers. In the mean time Matt, do you want to add anything to this, while you are on the phone?

I think it’s a great question to have, I think that the bio-manufacturing sector have two hats on, I think one hat is the IP license holder, it’s the product owner, so a Big Pharma. They have systematically asset transferred and outsourced and completed outsource CARG year-over-year between 8% and 10% more, toward a big CTMO model, so we have seen the big CTMOs grow. Mark, mentioned Samsung as a case in point, they off course have grown with the safety net or record tree, wholesale as the standard which we have described. And I think while Joe has an established pathway of a good expression in handling, it isn't cost-effective. I don’t believe that I’m throwing a number although I have in my opinion would be helpful, what I would say is that a number of biopharmaceutical companies have asked us that they would be interested themselves in that number and we are having conversations to give them the support and collaborative partnership, so they can also go head-to-head. They are themselves thinking of cost of goods, they are also thinking of the advance tiers in terms of the cycle time, but most importantly they are looking to try and work with parts of their patient base where they can supply biologics cost-effectively and as Mark describes that’s not going to be mature in the future. What is true is the industry itself has over invested heavily in stainless steel and what you are seeing in the quarterly report that would suggest from big CTMOs is they are now starting to think about how that business base heavily on royalties and based on large overhead, fixed costs overhead is moving now more towards as Mark mentioned, models like GE, PAL, Helmut Fischer have been developing which are the single-use bioreactor bags and all the path maybe that goes around those disposal units. This was an inflection point of the partners, on one side the technologies and the barriers to entry for cheaper bio-manufacturing, lab bench equipment, molecular biology tool kits, all those good things that are in front of us and they are improving all the [indiscernible], what has been missing has been the actual cell host itself, that’s a workhorse. And now we have other platforms which you can research, we don’t believe they are anyway near as developed or as strong as ours, a Big Pharma have a duty of [indiscernible] to look at a number of platforms, but we are pretty confident, we are pretty excited by the announcements we have made, there is more to come.

And I think Steven there is new drugs that’s coming on, that are in the pipeline, so that they get improved that the capacity that they are going to need, because the dosages are much higher that are required for some of these new antibodies, that they would have to have tremendous CapEx costs that we can eliminate by being able to use C1 in these single-use reactors, which would be modular as the business grows versus putting in these massive plants that require massive amounts of capital upfront. So, we are gaining traction, it’s accelerating and it’s exciting and we are feeling pretty good about where we are going, but we are not going to be able to do it alone, we need partners, it’s a huge opportunity and we are addressing of what we think with the most productive cell line, the most robust versatile way to go after it and we are seeing traction from the pharmaceutical companies and excitement from them as well.

Sounds good. I hope Tom is going to be okay, he is a good guy.

Yes, we hope so too.

Steven to answer your question about the share buyback as of today we roughly have about $4.1 million left in the 2017 buyback plan.

Right okay. And as far as the reverse split is concerned, let me ask a third question, I’m going to break the rule, is it okay? You were thinking about doing this two years ago and nothing happened and now you are thinking about doing it again and the stock is trading around the same price, what has changed?

Well, first of all, what we are asking the shareholders is to get us up to 4.1 to give us the flexibility that there is a variety of things for example, if we chose to go on NASDAQ, and it would be about was $2 for 90 days.

I understand that.

No, well let me finish. Okay? So, what we said to you was we wanted to advance the science and be comfortable with that. We wanted to advance business development efforts and be comfortable with that and so we are feeling obviously more comfortable on both fronts. And as we move into 2018 we are going to be prepared to be an SEC reporting Company so that we are in a position to file a Form-10 in up-list at any moment after that's done. And so we are gaining confidence in science as we advance the technology, as more interest is gaining and the traction is gaining from biotech and pharmaceutical companies, as our programs have been successfully evolving both scientifically and from business development front. So we haven't changed anything, we are just feeling better about where we are going and who we may get there with and whom we join the journey.

So, you are saying you are feeling a lot better about the business today than you were a couple of years ago, but the stock is still at the same price?

We can’t help what the stock does.

No, no, I’m not saying - it’s a rhetorical question that I’m putting out.

Steven of course we would like the stock to be at higher price, but to be honest with you, we are focused on making a world-class protein expression system that can be used to speed up the development of drugs, lower the cost and potentially improve their properties and if we can do that there will be plenty of takers on the other side of non-exclusive or exclusive that we will all be rewarded for our efforts. And so that's where our focus is on both on a science, business development. And of course we do put some attention on trying to keep investors educated, but our primary goal here is to get across the goal line and to score the goal and to make the science work to the point that the pharma companies can't play without it or one or more of them are in a bidding process, because I think either one they want to lose on the opportunity or two they want to take the opportunity and see it for themselves. So that's what we are working on.

Thanks Mark.

Thank you. Our next question will come from [Skip Gozzo with CliniRo Rental] (Ph).

Yes hey Mark. How are you doing?

Hi Skip, how are you?

Good. Sounds like you got a lot of good things happening. So a couple of things I want to go over, just on the points that you mentioned and I just want to reiterate. First of all, the buyback share program, you bought $382,000 worth and then another 267,000 to-date. You should have a total of 649,000 shares that you bought back since you announced that I believe it was August from 5 million that would be - the spend would be the difference. I think they are little bit off at 3.1 but anyway that's not a big point. Second thing is

Mike 4.1 million left, not 3.1.

Right yes, it's really about 4.3 and 5. but whatever that's okay. You bought 382,000 shares and 267,000 shares. 382,000 shares last quarter, that's what you announced. But anyway that's couple of hundred thousand difference. So that's just one thing I want to mention. The second thing you mentioned as far as cash burn, you mentioned that in the middle of June of 2019 you thought the share would be somewhere about a $1.40. meaning that you are going to the burn rate between 2018 and half of 2019 would be roughly about $8 million or so. That would bring you to about a $1.40 a share by June of 2019 is that about what is expected?

Yes but it's not point of share, it's a cash value per share. Hopefully the share price will be substantially higher when people start recognizing the value of what we are creating here and we announced hopefully more and more deals and hopefully some of these partners, there will be deals where we can announce a names of some of the people including the one or more of the Top-10 pharmaceutical companies we are dealing with.

Yes I'm sorry, I meant about the cash share price not about what the…

Yes I know what you meant, I just wanted to clarify it, so that everybody understood that. But yes that's our expectation. Currently, if nothing phenomenally great happens we will have that neighborhood or around $1.40 by mid-2019. We of course hope and expect to have more than that at time.

Right. Yes, I'm just saying that's based on what has been happened in the last year and half or so.

It's based on the projection going forward as well what has happened.

Okay. You have been talking a lot about how much C1 save the biopharmaceuticals. You didn’t talk anything about making it faster or making it better. What is the benefit of that for C1. You talked a lot about the savings, where you haven't said anything about making getting their patents quicker, because of C1 or making it with better quality because of C1. Can you go into that a little bit?

Yes, but just you know there is different qualities and properties between vaccines and say antibodies. So I will just stain both of those around separately okay? So first of all, it takes CHO cells longer if you gave me a gene sequence, we said within 15 weeks of you giving us a sequence C1 line. Where we take the gene, give it out, get it gene fragment, clone and express it, produce it in small fermenters and give you back samples after we purify it with protease all within 15 weeks. Typically a CHO cell time would be somewhere in the neighborhood of 150% to double that time. So we would save some time which to your point gets them to the end goal faster, which of course then brings down or allows them to have a longer patent life and to get things to the market quicker. One the things that I did talk about earlier is that we are looking at - there seem to be somewhat of a bottleneck at some points with some pharma companies of being able to produce sufficient quantities of protein to enable them the even get into the clinic. So in that case, an example of the case that we are talking about now that we are working with a company, they gave us a gene sequence and we have now made proteins at small scale and will be putting those in fermenters soon and we hope to be able to hit the yield that allow them finally, after two year delay okay to go into the clinic where they would use C1 that’s two-year jump, that’s huge, huge number an advantage for them. So that replicates over multiple molecules for Big Pharma, small biotech, we cannot only speed up by the way, we create cell lines quicker, but allowed them to take challenging proteins that they are having expression problems with and get them to the clinic where before they can’t even get them there. And not only can they get them there, when they can make them, they are going to make them cheaper. So hopefully that sort of gives you that sort of background that answers your question without getting into too much details.

With that being said, what you just said, do you expect to meet any hurdles this year with any of these companies.

Yes of course we do. We are meeting hurdles by the way with all these companies and we expect to continue to meet more hurdles and overcome more milestones and create more value, but we wouldn’t be doing this.

Okay. Thank you.

Skip just to respond to your buyback question the number are [382,000] (Ph) and 267,000 those are number of shares and not dollars and that's where your off by that about 200, because those are the number of share at the time to price.

So I go with my Ping versus skipping the numbers, because that's why she is here.

Okay I wrote it down wrong sorry.

Well that’s okay.

You didn’t write it down wrong, just share is - multiplying at times $1.40 to whatever price per share we pay.

Right. I can make same mistake sometimes too.

Right. We are all good. I think we have one more person that wants to chime in.

And w will go to Richard Deutsch with National Securities.

Yes. Hi Mark, usually you have been very busy, so we appreciate the effort you are putting forth overall these years and the previous callers really covered a couple points, I just wanted to put a little bit of clarity on just two of them. Number one on the buyback program where there is 4.1 million shares left, when does the authority for that program end, can you tell me that.

Yes. First of all, its $4.1 million, not 4.1 million shares and it ends a year from the date that we put in place and if I go by memory its August. I don’t know it was August 17th. I can’t remember the exact date, but let's say by July 30th there about that program ends at that point. And we will need to decided at that point to renew it, not renew it or we may, see us doing it earlier than that or we may extend it.

Okay, but it's available until the end of July or the middle of August, at which point you need to let us know what you are going to do in the future. All right than the other point…

But Rick, I want to clarify which we made a point when we put in place, we can continue it, extend it, seize it and at any given moment depending on our needs in our views and our outlooks and where we see it as the best use of our money is as buying shares back or creating expediential value with that money. Currently, we feel we have more than sufficient cash so that we end up by the middle of 2019, which we are around a $1.40 a share in cash. So currently we feel more than comfortable with keeping that in place, but that could change.

Right I understand you don't have to do it. It's just available under your current legal framework. The other question is, you know we assume that you are going to have success, but if you don't and we get one in a quarter years from now to the middle of the next year. What do you propose to do?

Look Rick, we propose to create shareholder value in a variety of different ways and one of those ways of course could be potentially to sell off the technology, they are in multiple licenses to a variety of parties, sell off and exclusive license for let's say vaccines, sell off an exclusive license for MABs, combination thereof, fields of use. There are so many different things we could sell it off for screening, we could sell it off for expression. So the point is generate cash and then obviously distribute that cash to the existing shareholders. And if its non-exclusive licenses there will be coupons where in the future more money would be potentially coming in as they move things into the clinic or further on if there are milestones and royalties attached not just upfront cash. So that's a very difficult question to answer and I can't give you specific answers, because of the fluid situation. So we got a lot of time to go between now and then, our eyeballs are constantly on those things where we have more success on the business and scientific front in this last year. Things are moving at a good pace, we will continue at that pace, we will find out. We expect new deals, we expect some of the people we are doing business to re-up and stay and expand what they are doing, we have new partners looking to do even more things and sometime between now and then maybe we will all be surprised and somebody comes in and want to take this thing out for the right reasons. So we will see. I can't give you an answer.

Yes. Thanks for answering my questions. Thank you very much good luck.

Okay. Alright great. Thanks.

Thank you. I'm showing no further questions at this time. I would like to turn the call back over to Mr. Emalfarb for additional or closing remarks.

Thank you, Catherine. We are very pleased about what we have accomplished in 2017. Looking ahead, we believe our ability to generate meaningful scientific results coupled with increasing interest in using our C1 technology in various areas of the biopharma industry for both human and animal health will position us for continued growth in 2018 and beyond. I want to take this opportunity to thank our very hard working employees and consultants and our dedicated Board of Directors, our research partners and our shareholders for their support. I thank all of you who have taken part to participate in today's conference call.

Thank you. Ladies and gentlemen, again that does conclude today's conference. Thank you all again for your participation. You may now disconnect.