Good afternoon, ladies and gentlemen and thank you for holding. Welcome to the Dyadic International’s First Quarter 2015 Financial Results Conference Call. At this time, all participants are in a listen-only mode. My name is Aaron and I will be your conference coordinator today. As a reminder, please note that this call is being recorded. And 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, Irane. Good afternoon and thank you for joining today’s conference call to discuss Dyadic’s financial and operating results for the first quarter of 2015, which were reported in a press release issued earlier this afternoon. The press release and Dyadic’s quarterly financial statements 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; and our Executive Vice President and Chief Operating Officer, Danai Brooks. On today’s call, Mark and Danai will cover operating highlights, business development and corporate strategy, and I’ll review our financial results in more detail. We will then give you an opportunity to ask questions. Each caller will be allowed one question and one follow-up question in order to provide all callers an opportunity to participate. If time permits, the operator will allow additional questions for those who have already spoken. Before we begin, we would like to remind you that certain statements in this conference call maybe forward-looking statements, which involve risks and uncertainties that could cause Dyadic’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Dyadic expressly disclaims any intent or obligation to update any forward-looking statements except as required by law. I will now turn the call over to our President and CEO, Mark Emalfarb.

Thank you, Tom. From our business and financial performance to the continued advancement of our patented and proprietary C1 Expression System, we had an excellent quarter on many fronts. Our business experienced revenue growth of 35%, improved gross profit by 70% and gross margins from 31% to 40% year-over-year during the quarter. These improvements in our financial performance indicate that we are making further progress and executing our business plan to profitably grow our business and control costs. As a result we believe that the company is on track to meet our objective of attaining in 2016. I’m extremely pleased that our patented and proprietary C1 technology platform continues to achieve higher levels of enzyme purity, productivity, and performance. This has been validated by our ability to achieve two milestones sooner than anticipated with BASF resulting in the payments totally $800,000 which we received last month. This achievements continue to demonstrate the power of applying our C1 Expression technology in the development of enzyme and other protein products from a virtually unlimited number of genes being discovered at an accelerated pace due to the plummeting costs of gene sequencing. C1-based products can be manufactured in very large quantities, with greater purity, resulting in more specific performance and increased profitability. Additionally, Dyadic Netherlands has been awarded four EU-funded research programs starting in 2015, with aggregate funding approximately over €200 million to be received principally over the next three years. We are seeing a growing level of interest from the industry, as a global scientific and business community learns about the many benefits of working with our next generation C1 White Strain 2.0. We anticipate that this will lead to additional research and license revenue across expanded markets. The investment made in the expansion of laboratory and scientific staff has contributed to…

Thank you Mark. I will focus today on the industrial lines on business, our research projects, new product development and new business opportunity. Product sales were up 41% year-over-year with across-the-board growth in Asia, North America and Europe. Sales were driven by growth in our core animal feed and food market, as well as key new customer in biogas. Every one of our top ten accounts grew and progress was also observed with key customers in starch, dietary supplements and textile. The growing market was soft for us but we believe that the demand will return to normalized levels for the summer brewing season. Our gross margins are holding from the strong 2014 level. And recent production of our C1 based Fibrezyme G4 appears to have higher yield and lower cost and fermentation of that product last year. Biogas is a new market for Dyadic. Fibrezyme G4 works by helping to increase methane yield, while reducing viscosity in bio glass plant. We believe our product is differentiated due its inherent ability to the effective of across neutral PH range. Our initial success here is encouraging. I would like to next briefly touch on a few of our commercial collaborations in research program. Sanofi has reported that the vaccine we produced using C1 has shown positive preliminary lab test results and we expect it will be injected in some isolator this month. We anticipate that the preclinical trials will produced the first results in Q3 2015. The project with our confidential animal feed licensee was recently put on hold. While we were successful in reducing the constant use, our partner has decided to pause and reevaluate, if and how they might like to move forward with this project. However, because of the scientific advancement we have made over the past 18…

Thank you, Danai. As Mark and Danai have discussed, total revenue for the quarter ended March 31, 2015 increased 35% to approximately $4 million, compared to $3 million for the same period a year ago. Total product related revenue for the period increased 42% to $3.5 million, compared to $2.5 million for the same period. The increase in revenue for the period was driven by growth in the animal nutrition, biogas and food markets. License fee revenue for the period increased $200,000 due to the company achieving a second research milestone with BASF. Research and Development revenue for the period decreased 32% to $400,000, compared to $0.5 million for the same period a year ago. The decrease I’m referring for the period was due to mix and timing of project activity and commercial and government programs. Gross profit for the quarter ended March 31, 2015 increased 70% to approximately $1.6 million, compared to $900,000 for the same period a year ago. The $700,000 increases in gross profit is attributable to product related revenue growth of approximately $300,000, cost improvements and manufacturing fermentation and downstream processing of $400,000, the BASF research milestone of $200,000, partially offset by lower research and development margin due to mix and timing. General administrative expenses for the three month period ended March 31, 2015decline 44% to approximately $1 million compared to $1.7 million for the same period a year ago. The decrease primarily reflects lower litigation cost of approximately $600,000 and lower professional services cost stock based compensation and project related spend of $100,000. Sales and marketing expenses and research and development for the quarter ended March 31, 2015 were flat year-over-year respectively. Foreign currency exchange net of the three months period ended March 31, 2015 was a loss of approximately $189,000 compared to a gain…

Thank you. [Operator Instructions] And our first question comes from Tim Quinlisk from Mayo Capital.

Hi, guys. A question for you on the underlying business here. Looking at the P&L for the quarter. It looks like you’ve got, you made a lot of progress on the sort of getting close to break-even on a business excluding kind of the one-off royalty fee you get in. Can you talk to me about what the outlook is for continued top line growth in terms of projects are staying excluding this specialty – we’ve just basically your industrial enzyme business and if there is anything else can do on the corner [ph] side of the equitation to profitability here. And then the other question I had is just [indiscernible], is it correct in that you’re ended the quarter with almost $3.7 million and you’re saying another $1.7 million when looking at the cash statement now, you’re somewhere in the little $5 million range as we speak.

Yes Tim it’s $1.3 million we took in subsequent event not $1.7 million, and yes we had $3.7 million, so it’s combined its roughly $5 million.

Yes, so you’re correct about that. Yes, we’re seeing growing in the enzyme business, we’re seeing obviously not only growth in that top line revenue, but we’ve improved the yield and the productivity and we’ve reduced our cost of good dramatically over the last year. And if we talked about that trend and that trend continues and that’s driving the profitability up of that business. We obviously have the ability to reduce cost and the certain other, few other places, but when look for us reducing much more at the moment because we have a lot of great things going on both in research and development and we obviously need to be out there pushing not only our enzyme sales, but also licensing as you can tell from the milestones, if not just about the upfront licensing, it’s about the milestones and eventual royalties from products that come in. So we were at the door steps with the whole bunch of people that are interested in licensing opportunities in a variety different markets and applications.

Okay, all right. Just one question here. Use of cash in the quarter was about $800,000, it came that about half of that to be to working capital uses. In this kind of – if we can sustain this kind of revenue environment, what would you anticipate to be cash burn in the subsequent quarters?

Well, Tim, we don’t typically provide guidance, but April sales came in very strong consistent with the underlying trend. And we anticipating a strong second quarter because May, through the middle of May things are looking to continue that trend line. Margins overall look holding as Danai previously guided. So I think that we’re going to be fine from a cash standpoint, clearly things are trending in the direction that we are very pleased with and cost control is going to be important.

Okay. And then just finally one last question from me, BASF, you done research for them, I mean actually they’ve done research you delivered or produced an enzyme that’s satisfactory to them presumably. Well ahead of schedule at the milestone. Can you give me a sense of the roadmap from where we go from here with respect to just that one enzyme, is there? What’s the commercialization roadmap looks for you such that we can start to see that flow through on a sustainable royalty basis?

Yes we’re trying to get our hands around that from BASF it’s very difficult because they don’t really want to share that information with us. So it’s difficult, so we can’t really answer that. So right now, I don’t think we can give you guidance to when that’s going to come in, but I can tell you that they, from all the conversations that we’ve had from both Dyadic Netherlands side and our side with BASF, that they were extremely excited about the productivity levels that enzyme came, but more importantly as to where the technology is and where can it be applied within BASF for long more than just one product. But I wish I could give you a timeline, but it’s not our product. It is theirs and if and when they launch it, they haven’t shared with us.

Okay, thank you. I’ll get back in the queue.

Okay.

And our next question comes from Ed Jones [indiscernible].

First of all thanks, you know for the great job you guys do. My question is, as a retail investor and the group of my [indiscernible], we are extremely frustrated with what is the sluggish stock price. And in every call there seems to be similar issues around, for example, what Mark, you just talk about BASF. For example, they are not willing to share with you. You therefore can’t share with us. And the result is across the board, a sluggishness which regard to the stock price due. Have you folks given any thought to this and also I would certainly wonder if there is some example explanation you have for this. And number two whether there is anything proactively you think you could do to begin to move this stock price ahead.

Well, I mean obviously, we were centered to the stock price, but there is a key, is to move the business ahead and profitability, and license agreement, and milestones, and royalties. There is a lot of things that going on that we think it can be divers for this stock. If some of those things happen, I think everybody will be pleased. And it’s unfortunate that we can’t get the inside from the Abengoa to BASF, but there is certain things that could happen and any given moment you wake up and we’re working on Sanofi with vaccine in that program we look forward its looks very promising to the announcement good, better and different you don’t know, but if it’s a good announcement that can move to stock obviously. But, really honestly we’re just trying to build the business, grow the business, grow the revenues, grow the profits, bring in more customers, more licensees and we’re doing the best we can with the limited budget we have trying to do it in a responsible way. So one of things we need to do is of course get back up listed on to our national exchange and that is in the horizon. We need to get the financing in place in the company. So we’re comfortable that when we do that we can deliver on that and go on obviously tell the story and more people, and put more people see if they can buy the stock, by being on a NASDAQ or national exchange. And so we’re working towards getting the profitability, we’re working towards getting a business plan and executing on that plan on a variety of front. So we are going to accomplish exactly that goal. So it’s not lost on us we see it every day and we’re working towards achieving not only obviously growing the business but obviously getting better value for our shareholders.

Thank you.

And we will go next to George Gribble [ph] a Private Investor.

Hi, Mark. Sounds like you had a pretty good quarter here but a couple of question about improvements in C1 as I was excited is it written into most of the agreements like with Abengoa, for example, that they get the benefit of that improvement in yields on C1 without royalty increase or how does that work? Does it vary by customer?

Well, it’s pretty consistent but there is some variation from customer-to-customer but Abengoa has a group of [indiscernible] like 40 people working on their own and they are getting high improvements, high yields that they have reported if you follow their news and the statements being made by them they are getting record levels of productivity on their biofuel program and their enzymes there. Obviously BSF working with us in terms of research and development program that they funded again the benefit of their knowledge and expertise and as I mentioned earlier in the call they are very excited about what they have seen, they are impressed at how fast and how quick we got there. And they know it’s not the end of the road. And so they are going to be working on internally. We’re in discussions with them about going forward with additional research and development to make the platform quicker faster, better and cheaper. But the thing they’ve got today is if productive enough, that if we can hit these production levels that we hit in that project, we don’t need to get any cheaper. We just need to know which gene people want to make and the products and we’ve got an incredible opportunity to do cash in on it for everybody’s benefit.

Associated with that I did not know whether or not if the customer comes up with the some magic ingredient add-on or processing change whether or not Dyadic, you are not the beneficiary of that and I am thinking it might work the other way, none of our yields go up. Your costs, because it’s not associated with how much C1 is being consumed, your profit will suffer. I use that word, perhaps loosely here, but will suffer accordingly.

I think that George, number one, we can’t tell you what the conditions are of all these licensees are confidential.

Yes.

But if somebody gets a lower cost of goods, because they have improved the productivity of C1 and they are able to produce that enzyme or that enzyme mixture for less, they are going to grab more market share.

Okay.

So royalty rate is going to be the same, but it is going to be the same where we hope is growing and expanding sales. So we are going to benefit either way.

Okay.

And obviously with these licensees the relationship we have is very close, we work with them and hopefully in a most constructive manner that in the best interest of both companies with and foremost within the best interests of Dyadic and its shareholders and lot of time , if we have an improvement that we think will benefit fee licensees, one we can get and expand a license, two we could potentially do research and development project to help them get their product produced for less. And it’s sort of a co-operative back and forth situation, because in the end the more they sell, the better it is better it is for us.

Okay. And just second item if I could, bounce back over to the litigation status that the previous accounting firm and a fiasco with Equine what is the gut feeling. I don’t want to guess ask it that way, but you’re so close here to trial date and do you – does the does the Dyadic see this as protracted event or cannot be sort of fuel at this point based on. It seems to me that this thing run has on for so long, there must be some pretty strong inklings indications on way the thing is going to develop, any comments on that?

Well, I mean just in general George the only comment I can give you is we are on the calendar court call, October 16. My understanding is our lawyers going in the 16 of October, and they find out whether we’re going to be at trial at some period between October 26 and December 15 which are the judge's calendar call for trial. And if we are not on that particular calendar call we will be in the early 2016, specially assigned a trial date. So when you show up on that calendar call maybe five, ten, three, I don’t know how many people are on that calendar call.

Yes.

Some of them might have settled. Maybe we would have settled with one, two or three with the lawyers, not the accountants we are suing here. And we obviously believe that we have a very strong case, we believe that as to our lawyers that we should pursue is and if we get a good settlement number we will consider it and we will evaluate versus the alternatives.

So here contingent arrangement there with the attorneys on it which is keeping your cash outflow, what should I say, more in control at that point?

Well, I think is we mentioned in the previous calls and you are seeing and actually coming live that our – the only really expense that we have going forward at this point, is if we do go to trial, obviously putting those expert witnesses on that we paid all this money to, that are very skilled, very talented, we think that they have the facts and the circumstances. We believe we have the stronger hand and we believe a jury because this is going to be in front of a jury, will obviously will in our favor, hold the lawyers liable for damages that incurred and a lost opportunity in terms of hundreds and millions of potential dollars. And it’s going to get over with one way or another. And we will see what happens, I mean we can’t predict.

Okay.

But we want to go all the way if we have to. And if they don’t offer enough to settle, we definitely will just like we did with the accountants. And I think they know that.

Okay, thank you.

[Operator Instructions] And at this time I’m showing no further questions in the queue. And I would like to turn it back over to Mr. Emalfarb for closing remarks.

I want to thank all of you for being shareholders and supportive to Dyadic, and for participating in today’s conference call. We will forward to reporting our progress to you during our annual shareholder meeting on June 24. Thank you very much.

And this does conclude today’s conference call. We thank you all for your participation.