DYADIC INTERNATIONAL INC 10-K

Item 9A. Controls and procedures   Evaluation of Disclosure Controls and Procedures   Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2021. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms. Based on the evaluation of our disclosure controls and procedures as of December 31, 2021, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective.   Management’s Report on Internal Control Over Financial Reporting   Our management is responsible for establishing and maintaining adequate “internal control over financial reporting,” as defined in Rule 13a-15(f) under the Exchange Act. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2021 based on the criteria set forth in the Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the assessment, our management has concluded that our internal control over financial reporting was effective as of December 31, 2021. This Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our independent registered public accounting firm pursuant to the rules of the SEC that permit us to provide only management’s report in this Report because we are a “smaller reporting company.”   Changes in Internal Controls Over Financial Reporting   There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d- 15(d) of the Exchange Act that occurred during the year ended December 31, 2021 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. We have not experienced any material impact to our internal controls over financial reporting despite the fact that most of our employees are working remotely due to the COVID-19 pandemic. We are continually monitoring and assessing the COVID-19 situation on our internal controls to minimize the impact on their design and operating effectiveness.   Inherent Limitation on Effectiveness of Controls   A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.       Item 9B. Other Information   None.       Item 9C.   Disclosure regarding foreign jurisdictions that prevent inspections   Not applicable   34       PART III     Item 10. Directors, Executive Officers and Corporate Governance   The information required by this item is incorporated by reference to the Company’s definitive proxy statement relating to the 2022 annual meeting of shareholders. The definitive proxy statement will be filed with the Securities and Exchange Commission within 120 days after the end of the 2021 fiscal year.   Item 11. Executive Compensation   The information required by this item is incorporated by reference to the Company’s definitive proxy statement relating to the 2022 annual meeting of shareholders. The definitive proxy statement will be filed with the Securities and Exchange Commission within 120 days after the end of the 2021 fiscal year.     Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters   The information required by this item is incorporated by reference to the Company’s definitive proxy statement relating to the 2022 annual meeting of shareholders. The definitive proxy statement will be filed with the Securities and Exchange Commission within 120 days after the end of the 2021 fiscal year.     Item 13. Certain Relationships and Related Transactions, and Director Independence   The information required by this item is incorporated by reference to the Company’s definitive proxy statement relating to the 2022 annual meeting of shareholders. The definitive proxy statement will be filed with the Securities and Exchange Commission within 120 days after the end of the 2021 fiscal year.     Item 14. Principal Accounting Fees and Services   The information required by this item is incorporated by reference to the Company’s definitive proxy statement relating to the 2022 annual meeting of shareholders. The definitive proxy statement will be filed with the Securities and Exchange Commission within 120 days after the end of the 2021 fiscal year.   35         PART IV     Item 15. Financial Statement and Exhibits   (a)     Financial Statement   Our financial statements and related notes thereto are listed and included in this Annual Report on Form 10-K beginning on page F-1.   (b)     Exhibits           Incorporated by Reference Exhibit No.   Description of Exhibit   Form   Original No.   Date Filed   Filed Herewith 2.1*#   Investment Shareholders Agreement with respect to Biotechnology Developments for Industry, S.L, and VLP The Vaccines Company, S.L.U. dated June 30, 2017   10-12G   2.1   January 14, 2019     2.2#   S ale and Purchase of Shares Agreement of Biotechnology Developments for Industry, S.L. dated July 26, 2021   8-K   10.1   July 27, 2021     2.3#   Sale and Purchase of Shares Agreement of VLP The Vaccine Company, S.L.U. dated July 26, 2021   8-K   10.2   July 27, 2021     2.4#   Amendment No. 1 dated July 26, 2021 to the Service Framework Agreement   dated June 30, 2017   8-K   10.3   July 27, 2021     3.1#   Restated Certificate of Incorporation dated November 1, 2004   10-12G   3.1   January 14, 2019     3.2#   Second Amended and Restated Bylaws dated December 13, 2018   10-12G   3.2   January 14, 2019     4.1#   Specimen Stock Certificate Evidencing Shares of Common Stock   10-12G   4.1   January 14, 2019     4.2#   Description of Securities   S-3       August 13, 2020     10.1**#   Dyadic International, Inc. 2011 Equity Incentive Plan   10-12G   10.2   January 14, 2019     10.2**#   Dyadic International, Inc. 2021 Equity Incentive Plan   S-8   4.3   August 12, 2021     10.3**#   POST-EFFECTIVE AMENDMENT NO. 1 TO FORM S-8 for Dyadic International, Inc. 2006 Stock Option Plan, Dyadic International, Inc. 2011 Equity Incentive Plan, and Dyadic International, Inc. 2021 Equity Incentive Plan   S-8 POS       August 12, 2021     10.4**#   Form of Restricted Stock Unit Agreement Pursuant to the Dyadic International, Inc. 2011 Equity Incentive Plan   10-12G   10.3   January 14, 2019     10.5**#   Form of Stock Option Agreement Pursuant to the Dyadic International, Inc. 2011 Equity Incentive Plan   10-12G   10.4   January 14, 2019     10.6**#   Employment Agreement, dated June 16, 2016, and First Amendment dated January 23, 2017, by and between Dyadic International, Inc. and Mark A. Emalfarb   10-12G   10.5   January 14, 2019     10.6.1**#   Second Amendment to Employment Agreement between Dyadic International, Inc. and Mark A. Emalfarb, dated as of November 12, 2019   8-K   10.1   November 13, 2019     10.7**#   Consulting Agreement, dated January 1, 2016, by and between Dyadic Netherlands B.V. and Sky Blue Biotech kft on behalf of Ronen Tchelet   10-12G   10.7   January 14, 2019     10.8**#   Consulting Agreement, dated March 13, 2017, by and between Dyadic International, Inc. and Novaro Ltd. on behalf of Matthew Jones   10-12G   10.8   January 14, 2019     10.9**#   Compensation Letter, dated March 26, 2018, by and between Dyadic International, Inc. and Ping W. Rawson   10-12G   10.9   January 14, 2019     10.10**#   Employment Agreement between Dyadic International Inc. and Joseph Hazelton dated November 9, 2021   8-K   10.1   November 9, 2021     10.11#   Form of Director and Officer Indemnification Agreement   10-12G   10.10   January 14, 2019     10.12#   Intracoastal Pointe Office Building Lease Agreement by and between Dyadic International, Inc. and Quentin Partners Co. dated December 30, 2010 and Renewal of Lease dated June 8, 2018   10-K   10.11   March 30, 2020     10.12.1   Intracoastal Pointe Office Building Lease Agreement by and between Dyadic International, Inc. and Quentin Partners Co. dated December 30, 2010 and Renewal of Lease dated August 13, 2021               X 10.13†#   Pharma License Agreement with Danisco US, Inc. dated December 31, 2015   10-12G   10.12   January 14, 2019     10.14†#   Commission Contract with VTT Technical Research Centre of Finland Ltd dated September 2, 2016   10-12G   10.13   January 14, 2019     10.14.1†#   Commission Contract with VTT Technical Research Centre of Finland Ltd dated June 28, 2019   8-K   10.1   July 5, 2019     10.15†#   Research Services Agreement with Biotechnology Developments for Industry in Pharmaceuticals, S.L.U. dated June 30, 2017   10-12G   10.14   January 14, 2019     10.16†#   Service Framework Agreement with Biotechnology Developments for Industry in Pharmaceuticals, S.L.U. dated June 30, 2017   10-12G   10.15   January 14, 2019     10.17†#   Feasibility Study Agreement with Sanofi-Aventis Deutschland GmbH dated September 7, 2018   10-12G   10.16   January 14, 2019     10.18†#   License Agreement with VTT Technical Research Centre of Finland Ltd dated July 17, 2017   10-12G   10.17   January 14, 2019       36     10.19†#   Research and Commercialization Collaboration Agreement with Serum Institute of India Pvt. Ltd., dated May 7, 2019   8-K   10.1   May 8, 2019     10.20†#   Non-Exclusive Sublicense Agreement among Dyadic International, Inc., Alphazyme, LLC, dated May 5, 2019   8-K   10.1   May 8, 2019     10.20.1†#   Amended and Restated Non-Exclusive Sublicense Agreement among Dyadic International, Inc., Alphazyme, LLC, dated June 24, 2020   8-K   10.1   June 29, 2020     10.21†#   Sub-License Agreement among Dyadic International (USA), Inc., Luina Bio Pty Ltd. and Novovet Pty Ltd, dated April 26, 2019   8-K   10.1   May 2, 2019     10.21.1†#   Shareholders Agreement among Dyadic International (USA), Inc., JCL Biologics Pty Ltd and Novovet Pty Ltd, dated April 26, 2019   8-K   10.2   May 2, 2019     10.22#   Open Market Sale Agreement by and between the Company and Jefferies LLC, dated August 13, 2020   S-3   1.2   August 13, 2020     10.23#   Master Services Agreement and Work Order, between Dyadic International (USA), Inc. and CR2O B.V., Dated May 28, 2021   8-K   10.1   June 3, 2021     10.24#   Term Sheet for Intellectual Property License Agreement dated August 10, 2021   8-K   10.1   August 11, 2021     10.25†#   Research, License, and Collaboration Agreement with Janssen dated December 16, 2021   8-K   10.1   December 16, 2021     14   Code of Ethics (1)               (1) 21.1#   Subsidiaries of the Registrant   10-12G   21.1   January 14, 2019     23.1   Consent   of Independent Registered Public Accounting Firm               x 31.1   Certification of Chief Executive Officer of Dyadic Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002               x 31.2   Certification of Chief Financial Officer of Dyadic Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002               x 32.1   Certification of Chief Executive Officer of Dyadic Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002               x 32.2   Certification of Chief Financial Officer of Dyadic Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002               x     Exhibit No.   Description 101.INS   Inline XBRL Instance Document 101.SCH   Inline XBRL Taxonomy Extension Schema Document 101.CAL   Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB   Inline XBRL Taxonomy Extension Labels Linkbase Document 101.PRE   Inline XBRL Taxonomy Extension Presentation Linkbase Document 104   Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)   Notes: *    This filing excludes schedules and similar attachments pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule will be furnished supplementary to the SEC upon request; provided, however, that the parties may request confidential treatment pursuant to Rule 24b-2 of the Exchange Act for any document so furnished. **   Identifies each management contract or compensatory plan or arrangement. †     Portions of the exhibits have been omitted pursuant to a request for confidential treatment. #     Previously filed with the SEC. (1)    The Company elect to satisfy Regulation S-K §229.406(c) by posting its Code of Ethics on its website at www.dyadic.com.   Item 16. Form 10-K Summary   Not applicable.   37     SIGNATURES   Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.     DYADIC INTERNATIONAL, INC.       March 29, 2022 By: /s/ Mark A. Emalfarb     Mark A. Emalfarb     President and Chief Executive Officer     (Principal Executive Officer)       March 29, 2022 By: /s/ Ping W. Rawson     Ping W. Rawson     Chief Financial Officer     (Principal Financial Officer and Principal Accounting Officer)   Pursuant to the requirements of Securities Exchange Act of 1934, as amended, this Annual Report has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated.   Signature Title Date       /s/ Mark A. Emalfarb Chief Executive Officer, Director March 29, 2022 Mark A. Emalfarb (Principal Executive Officer)         /s/ Ping W. Rawson Chief Financial Officer March 29, 2022 Ping W. Rawson (Principal Financial Officer and Principal Accounting Officer)         /s/ Michael P. Tarnok Chairman, Director March 29, 2022 Michael P. Tarnok           /s/ Jack L. Kaye Director March 29, 2022 Jack L. Kaye           /s/ Seth J. Herbst Director March 29, 2022 Seth J. Herbst, MD           /s/Arindam Bose Director March 29, 2022 Arindam Bose, Ph.D.           /s/Barry C. Buckland Director March 29, 2022 Barry C. Buckland, Ph.D.           /s/ Patrick Lucy Director March 29, 2022 Patrick Lucy           38         Index to Consolidated Financial Statements     Page Financial Statements:   Report of Independent Registered Public Accounting Firm (PCAOB ID 199 ) F-2 Consolidated Balance Sheets as of December 31, 2021 and 2020 F-3 Consolidated Statements of Operations for the Years Ended December 31, 2021 and 2020 F-4 Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2021 and 2020 F-5 Consolidated Statements of Cash Flows for the Years Ended December 31, 2021 and 2020 F-6 Notes to Consolidated Financial Statements F-7   F-1       Mayer Hoffman McCann P.C . 140 Fountain Parkway North, Suite 410 ■   St. Petersburg, FL 33716 Main: 727.572.1400 ■  Fax: 727.571.1933 ■  www.mhmcpa.com          Report of Independent Registered Public Accounting Firm   To the Board of Directors and Stockholders of Dyadic International, Inc.:     To the Board of Directors and Stockholders of Dyadic International, Inc.:     Opinion on the Financial Statements   We have audited the accompanying consolidated balance sheets of Dyadic International, Inc. and Subsidiaries (the “Company”) as of December 31, 2021 and 2020, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the two years in the period ended December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.   Basis for Opinion   These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.   We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, we express no such opinion.   Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.   Critical Audit Matters   Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.     We have served as the Company’s auditor since 2008. St. Peterburg, Florida March 29, 2022     Member of Kreston International - a global network of independent accounting firms     F-2       DYADIC INTERNATIONAL, INC. AND SUBSIDIARIES   CONSOLIDATED BALANCE SHEETS       December 31,       2021     2020   Assets                 Current assets:                 Cash and cash equivalents   $ 15,748,480     $ 20,637,045   Short-term investment securities     4,511,780       8,457,452   Interest receivable     94,375       112,247   Accounts receivable     277,831       294,199   Prepaid expenses and other current assets     375,830       280,555   Total current assets     21,008,296       29,781,498                     Non-current assets:                 Investment in Alphazyme     284,709       284,709   Other assets     6,117       6,225   Total assets   $ 21,299,122     $ 30,072,432                     Liabilities and stockholders’ equity                 Current liabilities:                 Accounts payable   $ 1,547,953     $ 1,013,099   Accrued expenses     709,560       489,756   Deferred research and development obligations     151,147       123,016   Deferred license revenue, current portion     147,059       —   Total current liabilities     2,555,719       1,625,871                     Deferred license revenue, net of current portion     352,941       —   Total liabilities     2,908,660       1,625,871                     Commitments and contingencies (Note 5)                                       Stockholders’ equity:                 Preferred stock, $.0001 par value:                 Authorized shares - 5,000,000 ; none issued and outstanding     —       —   Common stock, $.001 par value:                 Authorized shares - 100,000,000 ; issued shares - 40,482,659 and 39,747,659 , outstanding shares - 28,229,157 and 27,494,157 as of December 31, 2021 and 2020, respectively     40,483       39,748   Additional paid-in capital     101,026,496       98,013,079   Treasury stock, shares held at cost - 12,253,502     ( 18,929,915 )     ( 18,929,915 ) Accumulated deficit     ( 63,746,602 )     ( 50,676,351 ) Total stockholders’ equity     18,390,462       28,446,561   Total liabilities and stockholders’ equity   $ 21,299,122     $ 30,072,432     The accompanying notes are an integral part of these audited consolidated financial statements   F-3       DYADIC INTERNATIONAL, INC. AND SUBSIDIARIES   CONSOLIDATED STATEMENTS OF OPERATIONS       Years Ended December 31,       2021     2020   Revenues:                 Research and development revenue   $ 2,403,831     $ 1,601,921                     Costs and expenses:                 Costs of research and development revenue     1,944,438       1,424,931   Provision for contract losses     —       187,388   Research and development     8,392,370       3,868,121   General and administrative     6,697,617       6,084,799   Foreign currency exchange loss     96,893       62,345   Total costs and expenses     17,131,318       11,627,584                     Loss from operations     ( 14,727,487 )     ( 10,025,663 )                   Other income:                 Interest income     51,704       446,999   Gain from the sale of investments in BDI     1,605,532       —   Unrealized gain from investment in Alphazyme     —       284,709   Total other income     1,657,236       731,708                     Loss before income taxes     ( 13,070,251 )     ( 9,293,955 )                   Provision for income taxes     —       31,318                     Net loss   $ ( 13,070,251 )   $ ( 9,325,273 )                   Basic and diluted net loss per common share   $ ( 0.47 )   $ ( 0.34 )                   Basic and diluted weighted-average common shares outstanding     27,838,047       27,471,587     The accompanying notes are an integral part of these audited consolidated financial statements   F-4       DYADIC INTERNATIONAL, INC. AND SUBSIDIARIES   CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY       Common Stock     Treasury Stock     Additional     Accumulated               Shares     Amount     Shares     Amount     paid-in capital     deficit     Total                                                             Balance at December 31, 2019     39,612,659     $ 39,613       ( 12,253,502 )   $ ( 18,929,915 )   $ 96,105,851     $ ( 41,351,078 )   $ 35,864,471                                                             Stock-based compensation expenses     —       —       —       —       1,651,893       —       1,651,893                                                             Issuance of common stock upon exercise of stock options     135,000       135       —       —       255,335       —       255,470                                                             Net loss     —       —       —       —       —       ( 9,325,273 )     ( 9,325,273 )                                                           Balance at December 31, 2020     39,747,659     $ 39,748       ( 12,253,502 )   $ ( 18,929,915 )   $ 98,013,079     $ ( 50,676,351 )   $ 28,446,561                                                             Stock-based compensation expenses     —       —       —       —       1,784,102       —       1,784,102                                                             Issuance of common stock upon exercise of stock options     735,000       735       —       —       1,229,315       —       1,230,050                                                             Net loss     —       —       —       —       —       ( 13,070,251 )     ( 13,070,251 )                                                           Balance at December 31, 2021     40,482,659     $ 40,483       ( 12,253,502 )   $ ( 18,929,915 )   $ 101,026,496     $ ( 63,746,602 )   $ 18,390,462     The accompanying notes are an integral part of these audited consolidated financial statements   F-5       DYADIC INTERNATIONAL, INC. AND SUBSIDIARIES   CONSOLIDATED STATEMENTS OF CASH FLOWS       Years Ended December 31,       2021     2020   Cash flows from operating activities                 Net loss   $ ( 13,070,251 )   $ ( 9,325,273 ) Adjustments to reconcile net loss to net cash used in operating activities:                 Stock-based compensation expense     1,784,102       1,651,893   Amortization of held-to-maturity securities, net     329,612       331,277   Unrealized gain from investment in Alphazyme     —       ( 284,709 ) Gain from the sale of investment in BDI     ( 1,605,532 )     —   Foreign currency exchange loss     96,893       62,345   Changes in operating assets and liabilities:                 Interest receivable     17,872       217,464   Accounts receivable     ( 31,792 )     363,365   Income tax receivable     —       500,616   Prepaid expenses and other current assets     ( 95,366 )     ( 2,410 ) Accounts payable     549,562       ( 53,200 ) Accrued expenses     219,824       ( 80,132 ) Deferred license revenue     500,000       —   Deferred research and development obligations     28,131       44,372   Net cash used in operating activities     ( 11,276,945 )     ( 6,574,392 )                   Cash flows from investing activities                 Purchases of held-to-maturity investment securities     ( 11,283,940 )     ( 17,638,947 ) Proceeds from maturities of investment securities     14,900,000       39,761,000   Proceeds from the sale of investment in BDI     1,605,532       —   Net cash provided by investing activities     5,221,592       22,122,053                     Cash flows from financing activities                 Proceeds from exercise of options     1,230,050       255,470   Net cash provided by financing activities     1,230,050       255,470   Effect of exchange rate changes on cash     ( 63,262 )     10,370   Net (decrease) increase in cash and cash equivalents     ( 4,888,565 )     15,813,501   Cash and cash equivalents at beginning of period     20,637,045       4,823,544   Cash and cash equivalents at end of period   $ 15,748,480     $ 20,637,045                     Supplemental cash flow information                 Cash received from income tax refund     —     $ 500,616     The accompanying notes are an integral part of these audited consolidated financial statements   F-6     Notes to Consolidated Financial Statements     Note 1:      Organization and Summary of Significant Accounting Policies   Description of Business   Dyadic International, Inc. (“Dyadic”, “we”, “us”, “our”, or the “Company”) is a global biotechnology platform company based in Jupiter, Florida with operations in the United States and a satellite office in the Netherlands, and it utilizes a number of third -party consultants and research organizations to carry out the Company’s activities. Over the past two plus decades, the Company has developed a gene expression platform for producing commercial quantities of industrial enzymes and other proteins, and has previously licensed this technology to third parties, such as Abengoa Bioenergy, BASF, Codexis and others, for use in industrial (non-pharmaceutical) applications. This technology is based on the Thermothelomyces heterothallica (formerly known as  Myceliophthora thermophila ) fungus, which the Company named C1. The C1 -cell protein production platform is a robust and versatile thermophilic filamentous fungal expression system for the development and production of biologic products including enzymes and other proteins.   On December 31, 2015, the Company sold its industrial technology business to Danisco USA (“Danisco”), the industrial biosciences business of DuPont (NYSE: DD) (the “DuPont Transaction”). As part of the DuPont Transaction, Dyadic retained co-exclusive rights to the C1 -cell protein production platform for use in all human and animal pharmaceutical applications, and currently the Company has the exclusive ability to enter into sub-license agreements (subject to the terms of the license and to certain exceptions) for use in all human and animal pharmaceutical applications. Danisco retained certain rights to utilize the C1 -cell protein production platform in pharmaceutical applications, including the development and production of pharmaceutical products, for which it will be required to make royalty payments to Dyadic upon commercialization. In certain circumstances, Dyadic may owe a royalty to either Danisco or certain licensors of Danisco, depending upon whether Dyadic elects to utilize certain patents either owned by Danisco or licensed in by Danisco.   After the DuPont Transaction, the Company has primarily been focused on the animal and human biopharmaceutical industries, specifically in further improving and applying the proprietary C1 -cell protein production platform into a safe and efficient protein production platform to help speed up the development, lower production costs and improve the performance of biologic vaccines and drugs and other biological products at flexible commercial scales. Some examples of human and animal vaccines and drugs which have the potential to be produced from C1 -cells are protein antigens, virus-like particles (“VLPs”), monoclonal antibodies (“mAbs”), Bi/Tri-specific antibodies, Fab antibody fragments, Fc-fusion proteins, as well as other therapeutic enzymes and proteins. The Company is involved in multiple funded research collaborations with animal and human pharmaceutical companies which are designed to leverage its C1 -cell protein production platform to develop innovative vaccines and drugs, biosimilars and/or biobetters. Additionally, the Company has begun to develop other technologies that have potential applications in non-pharmaceutical markets.     Impact of COVID- 19   The outbreak of COVID- 19 has led to adverse impacts on the U.S. and global economies and created uncertainty regarding the potential impact to the Company’s employees, operations, and research projects.   The extent to which the COVID- 19 pandemic will directly or indirectly impact our business will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning the severe acute respiratory syndrome coronavirus 2 (SARS-CoV- 2 ) and its variants and the actions taken and the level of success to contain or treat the SARS-CoV- 2 virus and its variants, the economic impact on local, regional, national and international business partners and markets, delays or disruptions in our on-going research projects, and unavailability of the employees of the Company or third -party contract research organizations with whom we conduct business, due to illness or quarantines, all of which are highly uncertain and cannot be predicted at this time. Management is actively monitoring this situation and the possible effects on its financial condition, liquidity, operations, vendors, industry, and workforce. Even after the COVID- 19 pandemic has subsided, the Company may continue to experience adverse impacts to its business because of economic recession or depression that has occurred or may occur in the future. Given the daily evolution of the COVID- 19 outbreak and the ongoing response to curb its spread (including government travel and meeting restrictions), currently we are not able to accurately estimate the effects of the COVID- 19 outbreak to our results of operations, financial condition, or liquidity.   Liquidity and Capital Resources   We rely on our existing cash and cash equivalents, investments in debt securities, and operating cash flow to provide the working capital needs for our operations. We believe that our existing cash position and investment in investment grade securities will be adequate to meet our operational, business, and other liquidity requirements for at least the next twelve ( 12 ) months. However, in the event our financing needs for the foreseeable future are not able to be met by our existing cash, cash equivalents and investments, we would seek to raise funds through public or private equity offerings, and through other means to meet our financing requirements. Additionally, the Company may decide to fund all of a Phase I clinical trial to demonstrate the safety in humans of a protein produced from the C1 -cell protein production platform i n humans. There is no assurance that external funding will be available at acceptable terms, if at all, and the Company may, therefore, self-fund these vital projects.   Summary of Significant Accounting Policies   Basis of Presentation   The accompanying audited consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Dyadic consolidates entities in which we have a controlling financial interest. We consolidate subsidiaries in which we hold and/or control, directly or indirectly, more than 50% of the voting rights. All significant intra-entity transactions and balances have been eliminated in consolidation. These consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”).   Since concluding the DuPont Transaction, the Company has conducted business in one operating segment, which is identified by the Company based on how resources are allocated, and operating decisions are made. Management evaluates performance and allocates resources based on the Company as a whole.   F- 7     Use of Estimates   The preparation of these consolidated financial statements in accordance with GAAP requires management to make estimates and judgments that affect the reported amount of assets and liabilities and related disclosure of contingent assets and liabilities at the date of our consolidated financial statements and the reported amounts of revenues and expenses during the applicable period. Actual results may differ from these estimates under different assumptions or conditions. Such differences could be material to the consolidated financial statements.   Concentrations and Credit Risk   The Company’s financial instruments that are potentially subject to concentrations of credit risk consist primarily of cash and cash equivalents, investment securities, and accounts receivable. At times, the Company has cash, cash equivalents, and investment securities at financial institutions exceeding the Federal Depository Insurance Company (“FDIC”) and the Securities Investor Protection Corporation (“SIPC”) insured limit on domestic currency and the Netherlands FDIC counterpart for foreign currency. The Company only deals with reputable financial institutions and has not experienced any losses in such accounts.   For each of the years ended December 31, 2021 and 2020 , the Company’s revenue was generated from fourteen  customers. As of  December 31, 2021 and 2020 , the Company’s accounts receivable was from  eight and nine  customers, respectively. The loss of business from one or a combination of the Company’s customers could adversely affect its operations.   The Company conducts operations in the Netherlands through its foreign subsidiary and generates a portion of its revenues from customers that are located outside of the United States. For the years ended December 31, 2021 and 2020 , the Company had  eight  and seven  customers outside of the United Sates (i.e. European and Asian customers) that accounted for approximately $ 1,716,000  or  71.3 % and $ 796,000  or  49.7 % of total revenue, respectively. As of  December 31, 2021 and 2020 , the Company had four  and seven  customers outside of the United Sates (i.e. European and Asian customers) that accounted for approximately $ 157,000  or 56.4 % and $ 123,000  or 41.6 % of accounts receivable, respectively.   The Company uses several contract research organizations (“CROs”) to conduct its research projects. For the years ended December 31, 2021 and 2020 , three  and  one CRO(s) accounted for approximately $ 9,061,000  or  95.1 % and $ 4,576,000  or  91.6 % of total research services we purchased, respectively. As of  December 31, 2021 , two CROs accounted for approximately $ 1,312,000  or 84.8 % of accounts payable. As of  December 31, 2020 , one CRO accounted for approximately $ 690,000  or 68.1 % of accounts payable. The loss of business from this CRO or a combination of the Company’s CROs could adversely affect its operations.   Cash and Cash Equivalents   We treat highly liquid investments with original maturities of three months or less when purchased as cash equivalents, including money market funds, which are unrestricted for withdrawal or use.   Investment Securities   The Company invests excess cash balances in short-term and long-term investment grade securities. Short-term investment securities mature within twelve ( 12 ) months or less, and long-term investment securities mature over twelve ( 12 ) months from the applicable reporting date. Management determines the appropriate classification of its investments at the time of purchase and reevaluates the classifications at each balance sheet date. The Company’s investments in debt securities have been classified and accounted for as held-to-maturity. Held-to-maturity securities are those securities that the Company has the ability and intent to hold until maturity. Held-to-maturity securities are recorded at amortized cost, adjusted for the amortization or accretion of premiums or discounts. Premiums and discounts are amortized over the life of the related held-to-maturity security. When a debt security is purchased at a premium, both the face value of the debt and premium amount are reflected as investing outflow. Other-than-temporary impairment charges, if incurred, will be included in other income (expense).   As of December 31, 2021 and 2020 , all of our money market funds were invested in U.S. Government money market funds. The Company did not have any investment securities classified as trading as of December 31, 2021 and 2020 .   Accounts Receivable   Accounts receivable consist of billed receivables currently due from customers and unbilled receivables. Unbilled receivables represent the excess of contract revenue (or amounts reimbursable under contracts) over billings to date. Such amounts become billable in accordance with the contract terms, which usually consider the passage of time, achievement of certain milestones or completion of the project.   Outstanding account balances are reviewed individually for collectability. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. Substantially all of our accounts receivable were current and include unbilled amounts that will be billed and collected over the next twelve ( 12 ) months. There was no allowance for doubtful accounts as of December 31, 2021 and 2020 .   F- 8     Accounts receivable consist of the following:       December 31,       2021     2020   Billed receivable   $ 101,175     $ 130,532   Unbilled receivable     176,656       163,667       $ 277,831     $ 294,199     Prepaid Expenses and Other Current Assets   Prepaid expenses and other current assets consist of the following:       December 31,       2021     2020   Prepaid insurance   $ 326,712     $ 204,988   Prepaid expenses - various     45,839       72,403   Prepaid taxes     3,279       3,164       $ 375,830     $ 280,555     Accounts Payable   Accounts payable consist of the following:       December 31,       2021     2020   Research and development expenses   $ 1,363,889     $ 904,572   Legal expenses     27,675       24,496   Other     156,389       84,031       $ 1,547,953     $ 1,013,099     Accrued Expenses   Accrued expenses consist of the following:       December 31,       2021     2020   Employee wages and benefits   $ 405,758     $ 447,881   Research and development expenses     194,250       28,508   Other     109,552       13,367       $ 709,560     $ 489,756     Revenue Recognition   The Company has no products approved for sale at this point. All of our revenue to date has been research revenue from third -party collaborations and government grants, as well as revenue from sublicensing agreements and collaborative arrangements, which may include upfront payments, options to obtain a license, payment for research and development services, milestone payments and royalties, in the form of cash or non-cash considerations (e.g., minority equity interest).   F- 9     Revenue related to research collaborations and agreements: The Company typically performs research and development services as specified in each respective agreement on a best efforts basis, and recognizes revenue from research funding under collaboration agreements in accordance with the 5 -step process outlined in ASC Topic 606 (“Topic 606” ): (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. We recognize revenue when we satisfy a performance obligation by transferring control of the service to a customer in an amount that reflects the consideration that we expect to receive. Depending on how the performance obligation under our license and collaboration agreements is satisfied, we elected to recognize the revenue either at a point in time or over time by using the input method under Topic 606 to measure the progress toward complete satisfaction of a performance obligation.   Under the input method, revenue will be recognized based on the entity’s efforts or inputs to the satisfaction of a performance obligation (e.g., resources consumed, labor hours expended, costs incurred, or time elapsed) relative to the total expected inputs to the satisfaction of that performance obligation. The Company believes that the cost-based input method is the best measure of progress to reflect how the Company transfers its performance obligation to a customer. In applying the cost-based input method of revenue recognition, the Company uses actual costs incurred relative to budgeted costs to fulfill the performance obligation. These costs consist primarily of full-time equivalent effort and third -party contract costs. Revenue will be recognized based on actual costs incurred as a percentage of total budgeted costs as the Company completes its performance obligations.   A cost-based input method of revenue recognition requires management to make estimates of costs to complete the Company’s performance obligations. In making such estimates, significant judgment is required to evaluate assumptions related to cost estimates. The cumulative effect of revisions to estimated costs to complete the Company’s performance obligations will be recorded in the period in which changes are identified and amounts can be reasonably estimated. A significant change in these assumptions and estimates could have a material impact on the timing and amount of revenue recognized in future periods.   Revenue related to grants: The Company may receive grants from governments, agencies, and other private and not -for-profit organizations. These grants are intended to be used to partially or fully fund the Company’s research collaborations, including opportunities arising in connection with COVID- 19 that the Company is pursuing with certain collaborators. However, most, if not all, of such potential grant revenues, if received, is expected to be earmarked for third parties to advance the research required, including preclinical and clinical trials for SARS-CoV- 2 vaccines and/or antibodies candidates.   Revenue related to sublicensing agreements: If the sublicense to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenue allocated to the license when technology is transferred to the customer and the customer is able to use and benefit from the license.   Customer options: If the sublicensing agreement includes customer options to purchase additional goods or services, the Company will evaluate if such options are considered material rights to be deemed as separate performance obligations at the inception of each arrangement.    Milestone payments: At the inception of each arrangement that includes development, commercialization, and regulatory milestone payments, the Company evaluates whether the achievement of the milestones is considered probable and estimates the amount to be included in the transaction price. If the milestone payment is in exchange for a sublicense and is based on the sublicensee’s subsequent sale of product, the Company recognizes milestone payment by applying the accounting guidance for royalties. To date, the Company has not recognized any milestone payment revenue resulting from any of its sublicensing arrangements.   Royalties: With respect to licenses deemed to be the predominant item to which the sales-based royalties relate, including milestone payments based on the level of sales, the Company recognizes revenue at the later of (i) when the related sales occur or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any royalty revenue resulting from any of its sublicensing arrangements.   We invoice customers based on our contractual arrangements with each customer, which may not be consistent with the period that revenues are recognized. When there is a timing difference between when we invoice customers and when revenues are recognized, we record either a contract asset (unbilled accounts receivable) or a contract liability (deferred research and development obligations), as appropriate. If upfront fees or considerations related to sublicensing agreement are received prior to the technology transfer, the Company will record the amount received as deferred revenue from licensing agreement.   We are not required to disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed.   The Company adopted a practical expedient to expense sales commissions when incurred because the amortization period would be one year or less.   F- 10     Research and Development Costs   Research and development (“R&D”) costs are expensed as incurred. R&D costs are related to the Company’s internally funded pharmaceutical programs and other governmental and commercial projects.   Research and development costs consist of personnel-related costs, facilities, research-related overhead, services from independent contract research organizations, and other external costs. Research and development costs, during the years ended December 31, 2021 and 2020 were as follows:       Years Ended December 31,       2021     2020   Outside contracted services   $ 7,607,035     $ 3,302,034   Personnel related costs     669,328       531,405   Facilities, overhead and other     116,007       34,682       $ 8,392,370     $ 3,868,121         Provision for Contract Losses   The Company assesses the profitability of our collaboration agreements to provide research services to our contracted business partners and identifies those contracts where current operating results or forecasts indicate probable future losses. If an anticipated contract cost exceeds anticipated contract revenue, a provision for the entire estimated loss on the contract is recorded and then accreted into the statement of operations over the remaining term of the contract. The provision for contract losses is based on judgment and estimates, including revenues and costs, where applicable, the consideration of our business partners’ reimbursement, and when such loss is deemed probable to occur and is reasonable to estimate.   Foreign Currency Transaction Gain or Loss   The Company and its foreign subsidiary use the U.S. dollar as its functional currency, and initially measure the foreign currency denominated assets and liabilities at the transaction date. Monetary assets and liabilities are then re-measured at exchange rates in effect at the end of each period, and property and non-monetary assets and liabilities are converted at historical rates.   Fair Value Measurements   The Company applies fair value accounting for certain financial instruments that are recognized or disclosed at fair value in the financial statements. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:     • Level 1 – Quoted prices in active markets for identical assets or liabilities.   • Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.   • Level 3 – Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.   The Company’s financial instruments included cash and cash equivalents, investment in debt securities, accounts receivable, accounts payable and accrued expenses, accrued payroll and related liabilities, deferred research and development obligations and deposits. The carrying amount of these financial instruments, except for investment in debt securities, approximates fair value due to the short-term maturities of these instruments. The Company’s short-term and long-term investments in debt securities are recorded at amortized cost, and their estimated fair value amounts are provided by the third -party broker service for disclosure purposes.   Non-Marketable Investments   The Company also holds investments in non-marketable equity securities of privately-held companies, which usually do not have a readily determinable fair value. Our policy is to measure these investments at cost less impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer such observable price changes may include instances where the investee issues equity securities to new investors, thus creating a new indicator of fair value, as an example. On a quarterly basis, we perform a qualitative assessment considering impairment indicators to evaluate whether these investments are impaired and also monitor for any observable price changes. If indicators of impairment exist, we will prepare a quantitative assessment of the fair value of our equity investments, which may include using both the market and income approaches which require judgment and the use of estimates, including discount rates, investee revenues and costs, and available comparable market data of private and public companies, among others. Valuations of such privately-held companies are inherently complex and uncertain due to the lack of liquid market for the company’s securities. In addition, such investments are inherently risky in that such companies are typically at an early stage of development, may have no or limited revenues, may not be or may never become profitable, may not be able to secure additional funding or their technologies, services or products may not be successfully developed or introduced into the market.   For the year ended December 31, 2021, the Company recorded a gain from the sale of its investment in BDI in other income in the amount of approximately $ 1.6  million, net of transaction and legal expenses.    For the year ended December 31, 2020, the Company recorded an unrealized gain from its investment in Alphazyme resulting from a third -party capital contribution in the amount of $ 284,709 , which represented the fair market value of the Company’s investment in Alphazyme at that time. As of December 31, 2021, the Company does not consider its investment in Alphazyme to be impaired.     F- 11     Income Taxes   The Company accounts for income taxes under the asset and liability method in accordance with ASC Topic 740, “Income Taxes”. Under this method, income tax expense /(benefit) is recognized for: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all the deferred tax assets will not be realized.   In determining taxable income for the Company’s consolidated financial statements, we are required to estimate income taxes in each of the jurisdictions in which we operate. This process requires the Company to make certain estimates of our actual current tax exposure and assessment of temporary differences between the tax and financial statement recognition of revenue and expense. In evaluating the Company’s ability to recover its deferred tax assets, the Company must consider all available positive and negative evidence including its past operating results, the existence of cumulative losses in the most recent years and its forecast of future taxable income. Significant management judgment is required in determining our provision for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against our net deferred tax assets.   The Company is required to evaluate the provisions of ASC 740 related to the accounting for uncertainty in income taxes recognized in a company’s financial statements. ASC 740 prescribes a comprehensive model for how a company should recognize, present, and disclose uncertain positions that the company has taken or expects to take in its tax return. For those benefits to be recognized, a tax position must be more-likely-than- not to be sustained upon examination by taxing authorities. Differences between tax positions taken or expected to be taken in a tax return and the net benefit recognized and measured pursuant to the interpretation are referred to as “unrecognized benefits.” A liability should be recognized (or amount of net operating loss carry forward or amount of tax refundable is reduced) for unrecognized tax benefits, because it represents a company’s potential future obligation to the taxing authority for a tax position that was not recognized as a result of applying the provision of ASC 740.   Comprehensive Income (Loss)   Comprehensive income (loss) includes net income (loss) and other revenue, expenses, gains and losses that are recorded as an element of shareholders’ equity but are excluded from net income (loss) under U.S. GAAP. The Company does not have any significant transactions that are required to be reported in other comprehensive income (loss), and therefore, does not separately present a statement of comprehensive income (loss) in its consolidated financial statements.   Stock-Based Compensation   We recognize all share-based payments to employees, consultants, and our Board of Directors (the “Board”), as non-cash compensation expense, in research and development expenses or general and administrative expenses in the consolidated statement of operations based on the grant date fair values of such payments. Stock-based compensation expense recognized each period is based on the value of the portion of share-based payment awards that is ultimately expected to vest during the period. Forfeitures are recorded as they occur.   For performance-based awards, the Company recognizes related stock-based compensation expense based upon its determination of the potential likelihood of achievement of the specified performance conditions at each reporting date.   Net Loss Per Share   Basic net loss per share is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding during the reporting period. Diluted net loss per share adjusts the weighted average number of common shares outstanding for the potential dilution that could occur if common stock equivalents, such as stock options, warrants, restricted stock and convertible debt, were exercised and converted into common stock, calculated by applying the treasury stock method.   For the years ended December 31, 2021 and 2020 , the effect of the potential exercise of options to purchase  4,774,215  and 4,638,390  shares of common stock, respectively, were excluded from the computation of diluted net loss per share as their effect would have been anti-dilutive.   Recently Accounting Pronouncements   In  June 2016,  the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)  2016 - 13,   Financial Instruments - Credit Losses (Topic   326 ): Measurement of Credit Losses on Financial Instruments , which modifies the measurement of expected credit losses of certain financial instruments. ASU  2016 - 13  will be effective for the Company beginning in the  first  quarter of  2023.  The Company does  not  expect ASU  2016 - 13  to have a material impact on our consolidated financial positions, results of operations, and cash flows.    In  December 2019 ,  the FASB issued ASU  No.   2019 - 12,   Income Taxes (Topic   740 ): Simplifying the Accounting for Income Taxes . The amendments of this update simplify the accounting for income taxes by removing certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The Company adopted ASU  2019 - 12  on  January 1, 2021,  and the adoption of ASU  2019 - 12  did  not  have any material impact on our consolidated financial positions, results of operations, cash flows and related disclosures.   Other pronouncements issued by the FASB or other authoritative accounting standards group with future effective dates are either not applicable or not significant to our consolidated financial statements.   F- 12       Note 2:      Cash, Cash Equivalent, and Investments   The Company’s investments in debt securities are classified as held-to-maturity and are recorded at amortized cost, and its investments in money market funds are classified as cash equivalents. The following table shows the Company’s cash, available-for-sale securities, and short-term and long-term investment securities by major security type as of December 31, 2021 and 2020 :       December 31, 2021                     Gross     Gross               Level             Unrealized     Unrealized               (1)     Fair Value     Holding Gains     Holding Losses     Adjusted Cost   Cash and Cash Equivalents                                       Cash         $ 1,377,094     $ —     $ —     $ 1,377,094   Money Market Funds   1       14,371,386       —       —     $ 14,371,386   Subtotal           15,748,480       —       —       15,748,480   Short-Term Investment Securities (2)                                       Corporate Bonds (3)   2       4,509,285       —       ( 2,495 )   $ 4,511,780   Total         $ 20,257,765     $ —     $ ( 2,495 )   $ 20,260,260           December 31, 2020                     Gross     Gross               Level             Unrealized     Unrealized                 (1)     Fair Value     Holding Gains     Holding Losses     Adjusted Cost   Cash and Cash Equivalents                                       Cash         $ 149,015     $ —     $ —     $ 149,015   Money Market Funds   1       20,488,030       —       —     $ 20,488,030   Subtotal           20,637,045       —       —       20,637,045   Short-Term Investment Securities (2)                                       Corporate Bonds (3)   2       8,473,461       22,473       ( 6,463 )   $ 8,457,451   Total         $ 29,110,506     $ 22,473     $ ( 6,463 )   $ 29,094,496     Notes: ( 1 ) Definition of the three -level fair value hierarchy:   • Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities   • Level 2 - Other inputs that are directly or indirectly observable in the markets   • Level 3 - Inputs that are generally unobservable ( 2 ) Short-term investment securities will mature within 12 months or less, from the applicable reporting date. ( 3 ) The premium paid to purchase held-to-maturity investment securities was $ 283,940   and $ 282,946 for the years ended December 31, 2021 and 2020 , respectively.   The Company considers declines in market value of its investment portfolio to be temporary in nature. The Company’s investment policy requires investment securities to be investment grade and held to maturity with the primary objective to maintain a high degree of liquidity while maximizing yield. When evaluating an investment for other-than-temporary impairment, the Company reviews factors such as the length of time and extent to which fair value has been below its cost basis, the financial condition of the issuer and any changes thereto, changes in market interest rates, and whether it is more likely than not the Company will be required to sell the investment before recovery of the investment’s cost basis. As of December 31, 2021 , the Company does not consider any of its investments to be other-than-temporarily impaired.   Note 3:      Research and Collaboration Agreements, Sublicense Agreements, and Investments in Privately-Held Companies   Janssen On December 16, 2021, the Company entered into a Research, License, and Collaboration Agreement (the “Janssen Agreement”) for the manufacture of therapeutic protein candidates using its C1 -cell protein production platform with Janssen Biotech, Inc., one of the Janssen Pharmaceutical Companies of Johnson & Johnson (“Janssen”). Pursuant to the terms of the Janssen Agreement: (i) Janssen will pay Dyadic an upfront payment of $ 500,000 for a non-exclusive license to utilize the C1 -cell protein production platform to develop C1 production cell lines for the manufacturing of Janssen’s therapeutic protein candidates against several biologic targets, (ii) Janssen will provide R&D funding up to €1.6 million to develop and assess C1 production cell lines for its product candidates, (iii) Janssen will have an option to pay a mid- seven figure payment for an exclusive license from Dyadic to use the C1 -cell protein production platform for the manufacturing of therapeutic proteins directed to one specific target, and upon exercise, Janssen would have the right to add additional non-exclusive targets to the collaboration and Dyadic would complete the technology transfer of the C1 -cell protein production platform, fully enabling Janssen to internally develop C1 cell lines against licensed targets, and upon successful completion of the technology transfer, Dyadic is eligible to receive a milestone payment in the low seven figures, (iv) for each product candidate, Dyadic could receive development and regulatory milestones in the mid- seven figures, and (v) Dyadic could receive aggregate commercial milestone payments in the low nine figures per product, subject to a limit on the number of such products, with the amount depending on the cumulative amount of active pharmaceutical ingredient produced by Janssen for each product manufactured with Dyadic’s C1 -cell protein production platform.   Janssen may terminate the Janssen Agreement in its entirety, or on a country-by-country or other jurisdiction-by-other jurisdiction basis, for any or no reason, upon 90 days’ prior written notice to Dyadic.   F- 13     Accounting Treatment   The Company applied ASC 808, Collaborative Arrangements (ASC 808 ) and determined the Janssen Agreement is not applicable to such guidance. The Company concluded that Janssen represented a customer and applied relevant guidance from ASC 606, Revenue from Contracts with Customers (ASC  606 ) to evaluate the appropriate accounting for the Janssen Agreement.    The Company identified the following promises under the Janssen Agreement: ( 1 ) A right to access the C1 -cell protein production platform; ( 2 ) our obligation to provide agreed upon research and development services under the R&D Funding; ( 3 ) participation in the joint steering committee; ( 4 ) the reservation of targets; ( 5 ) the grant of option to obtain a research license of intellectual property and know-how rights of its C1 -cell protein production platform to produce target proteins; ( 6 ) our obligation to complete tech transfer activities upon the exercise of a research license; and ( 7 ) the options to obtain a commercial license and an exclusive license on specific targets.   The Company concluded that the research and development services under the R&D Funding represents a separate unit of account, because it is a prerequisite to the license agreement and a third -party contract research organization will be used to conduct the research. The Company also concluded that, while participation on the joint steering committee was capable of being distinct, participation is part of the research and development services and does not constitute the transfer of a good or service to Janssen within the context of the contract.   Other promises including the reservation of targets and tech transfer are not capable of being distinct from the licenses within the context of the contract and should therefore not be treated as a separate performance obligation. Additionally, at contract inception, the Company evaluated Janssen’s options for a research license, commercial license and to exercise exclusive rights on certain targets in order to determine whether these options to purchase additional license rights at their standalone selling prices provide a material right (i.e., an optional good or service offered for free or at a discount) to the customer. The Company concluded that these options in the Janssen Agreement are not material rights and do not give rise to a separate performance obligation. Instead, these options are deemed as marketing offers, and additional option fee payments are recognized or being recognized as revenue when Janssen exercises the option. The exercise of an option that does not represent a material right is treated as a separate contract for accounting purposes.   Based on management’s assessment, the Company concluded two performance obligations should be accounted for separately: ( 1 ) the agreed-upon research and development services, and ( 2 ) the right to access C1 -cell protein production platform under the research plan. Accordingly, the Company will record the €1.6 million of R&D Funding as research and development revenue using the cost-based input method in accordance with the Company’s policy (See Note 1 ).   As noted above, the Company received a non-refundable upfront payment of $ 0.5  million to reserve the initial protein targets until Janssen decides to exercise an option to license in the future, which represents a right to access the C1 -cell protein production platform prior to using it. The Company will recognize the upfront payment of $ 0.5 million over the target reservation period, during which Janssen can obtain a research and/or commercial license and/or an exclusive license on specific targets, or recognize in full when the contract is terminated.    The Company also excluded option exercise fees and future milestone payments that the Company was eligible to receive under the Janssen Agreement, from the initial transaction price. The Company will not recognize revenue related to option exercise payments and future milestone payments until the associated event occurs, or relevant thresholds are met. The Company will re-evaluate the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur.   At December 31, 2021, the Company recorded the upfront payment of $ 0.5  million as deferred license revenue, current and non-current portion.    IDBiologics, Inc.  On July 8, 2020, the Company entered into a Common Stock Purchase Agreement (the “IDBiologics Agreement”) with IDBiologics, Inc (“IDBiologics”). IDBiologics is a private biotechnology company focused on the development of human monoclonal antibodies for the treatment and prevention of serious infectious diseases. The Company was founded in 2017 and seeded by Vanderbilt University Medical Center in response to the repeated threats of epidemics around the world including Ebola in West Africa and Zika in the Americas. IDBiologics is developing a portfolio of monoclonal antibodies against SARS-CoV- 2, influenza and Zika viruses. Pursuant to the term of the IDBiologics Agreement, on July 8, 2021,  Dyadic received 129,661 shares of IDBiologics’ common stock, which represent 0.37 % of IDBiologics’ outstanding equity, in exchange of a feasibility study performed by Dyadic. Dyadic provided services including the use of Dyadic’s C1 -cell technology to express a SARS-CoV- 2 monoclonal antibody which IDBiologics licensed from the Vanderbilt Vaccine Center. The Company determined not to record the basis for its equity interest in IDBiologics because the fair value amount of the service provided is considered immaterial. The Company evaluated the nature of its equity interest in IDBiologics and determined that IDBiologics is a VIE due to the capital structure of the entity. However, the Company is not the primary beneficiary of IDBiologics as Dyadic does not have the power to control or direct the activities of IDBiologics that most significantly impact the VIE. As a result, the Company does not consolidate its investment in IDBiologics.  On April 25, 2021, the Company entered into a project agreement (the “Project Agreement”) to provide additional research services to IDBiologics. For the year ended December 31, 2021, approximatel y $ 194,000 of r esearch and development revenue and approximately $ 27,000 of unbilled accounts receivable were related to the Project Agreement.  F- 14     Alphazyme On May 5, 2019, the Company entered into a sub-license agreement (the “Alphazyme Sub-License Agreement”) with Alphazyme, LLC (“Alphazyme”). Under the terms of the Alphazyme Sub-License Agreement, the Company has granted to Alphazyme, subject to the terms of the license agreement entered into between the Company and Danisco US, Inc. on December 31, 2015, a sub-license to certain patent rights and know-how related to Dyadic’s proprie tary C1 -cell protein production platform for the purpose of commercializing certain pharmaceutical products that are used as reagents to catalyze a chemical reaction to detect, measure, or be used as a process intermediate to produce a nucleic acid as a therapeutic or diagnostic agent. On June 24, 2020, the Company entered into an Amended and Restated Non-Exclusive Sub-License A greement (the “Amended Sub-License Agreement”) with Alphazyme to amend and restate the Alphazyme Sub-License Agreement. Pursuant to the Amended Sub-License Agreement and in consideration of Dyadic’s transfer of its C1 -cell protein production platform, Alphazyme issued  2.50 % of the Class A shares of Alphazyme to Dyadic, and Dyadic became a party to the Alphazyme Limited Liability Company Agreement pursuant to which the Company will agree to certain customary rights, covenants and obligations. In addition, and subject to achieving certain milestones, Alphazyme is obligated to pay a potential milestone payment and royalties on net sales, if any, which incorporate Dyadic’s proprietary C1 -cell protein production platform.  On December 1, 2020, an Amended and Restated Limited Liability Company Agreement with Alphazyme (the “Amended Alphazyme LLC Agreement”) was entered into. Under the Amended Alphazyme LLC Agreement, Alphazyme obtained additional capital contribution and Dyadic’s ownership was diluted to 1.99 %. The Company evaluated the nature of its equity interest investment in Alphazyme and determined that Alphazyme is a VIE due to the capital structure of the entity. However, the Company is not the primary beneficiary of Alphazyme as Dyadic does not have the power to control or direct the activities of Alphazyme that most significantly impact the VIE. As a result, the Company does not consolidate its investment in Alphazyme. The Company reports its investment in Alphazyme under the cost method of accounting, given that it does not have the ability to exercise significant influence or control over Alphazyme.  For the year ended December 31, 2020,  the Company recorded a gain of $284,709 from  its investment in Alphazyme resulting from a third -party capital contribution obtained by Alphazyme. As of December 31, 2021, the Company does not consider its investment in Alphazyme to be impaired, as there was no event or transaction that would change the value of this investment. BDI    On June 30, 2017, the Company entered into a strategic Research Services Agreement (the “RSA”) with Biotechnology Developments for Industry in Pharmaceuticals, S.L.U. (“BDI Pharma”), and with VLP The Vaccines Company, S.L.U. (“VLPbio”), both of which are subsidiaries of Biotechnology Developments for Industry, S.L., a Spanish biotechnology company (“BDI Holdings” and together with BDI Pharma and VLPbio, “BDI”).   The Company paid EUR €1.0  million (the “RSA Initial Payment”) in cash to engage BDI to develop designated C1 based product candidates and further improve the C1 manufacturing process, in consideration of which Dyadic also received a 16.1 % equity interest in BDI Holdings and a 3.3 % equity interest in VLPbio. Under the RSA, BDI is obligated to spend a minimum amount of EUR €936,000 over two years for the research and development project.    The Company concluded that BDI is not a Variable Interest Entity (“VIE”), because BDI has sufficient equity to finance its activities without additional subordinated financial support and its at-risk equity holders have the characteristics of a controlling financial interest. Additionally, Dyadic is not the primary beneficiary of BDI as Dyadic does not have the power to control or direct the activities of BDI or its operations. As a result, the Company does not consolidate its investments in BDI, and the financial results of BDI are not included in the Company’s consolidated financial results.    The Company performed a valuation analysis of the components of the transaction and concluded that the fair value of BDI equity interest was considered immaterial, the RSA Initial Payment of approximately USD $ 1.1 million (EUR €1.0 million) was accounted for as a prepaid research and development collaboration payment on our consolidated balance sheet, and the collaboration payment under the RSA paid by Dyadic were expensed as the related research services were performed by BDI.   On July 26, 2021, the Company entered (i) a Sale and Purchase of Shares Agreement under which the Company agreed to sell its 16.1 % equity interest in BDI Holdings, and (ii) a Sale and Purchase of Shares Agreement under which the Company agreed to sell its 3.3 % equity interest in VLPBio (together the “BDI Sale”). In connection with the closing of the BDI Sale, the Company received approximately $ 1.6  m illion, net of transaction and legal expenses in August 2021. The gain generated from the BDI Sale was recorded in other income.   In connection with the BDI Sale, the Company also entered into an amendment to the Service Framework Agreement (the “Amended SFA”) with BDI Pharma. Under the Amended SFA, the Company maintains the right to engage in research and development projects at BDI Pharma until June 30, 2025, with the non-compete term extending to June 30, 2030, without any other material terms and conditions changed.     Novovet and Luina Bio    On April 26, 2019, the Company entered into a sub-license agreement (the “Luina Bio Sub-License Agreement”) with Luina Bio Pty Ltd. (“Luina Bio”) and Novovet Pty Ltd (“Novovet”). Under the terms of the Luina Bio Sub-License Agreement, the Company granted to Novovet, subject to the terms of the license agreement entered into between the Company and Danisco US, Inc. on December 31, 2015, a worldwide sub-license to certain patent rights and know-how related to Dyadic’s proprietary C1 -cell protein production platform for the exclusive and sole purpose of commercializing certain targeted antigen and biological products for the prevention and treatment of various ailments for companion animals.   F- 15     In consideration of the license granted pursuant to the Luina Bio Sub-License Agreement, Dyadic received a 20 % equity interest in Novovet (“Novovet Up-Front Consideration”) in accordance with the terms of Novovet’s Shareholder Agreement (“Shareholders Agreement”) and will receive a percentage of royalties on future net sales and non-sales revenue, if any, which incorporates Dyadic’s proprietary C1 -cell protein production platform.   The Company evaluated the nature of its equity interest investment in Novovet and determined that Novovet is a VIE, because Novovet does not have sufficient equity to finance its activities without additional financial support from third party investors or lenders. However, the Company is not the primary beneficiary of Novovet as Dyadic does not have the power to control or direct the activities of Novovet that most significantly impact the VIE. As a result, the Company will not consolidate its investment in Novovet, but account for under the equity method investment, given that it has the ability to exercise significant influence, but not control, over Novovet.   To date Novovet has not raised the capital required to move this opportunity forward, and therefore, the Company has not transferred its C1 -cell protein production platform to Novovet. Therefore, the Novovet Up-Front Consideration received under the Luina Bio Sub-License Agreement, in the form of a 20 % equity interest in Novovet, does not yet meet the revenue recognition criteria under ASC 606.   On February 15, 2022, the Company sent a letter to Luina Bio Pty Ltd and Novovet Pty Ltd, indicating its intention to terminate the Luina Bio Sub-License Agreement.     Note 4:      Income Taxes   The Tax Cuts and Jobs Act (“TCJA”) was enacted on December 22, 2017 and became effective January 1, 2018. The TCJA contains several key provisions, including a reduction in the U.S. federal corporate income tax rate from 35% to 21% and repeal of the corporate alternative minimum tax (“AMT”). The TCJA’s reduction in the U.S. statutory tax rate had no additional impact on the consolidated financial statement for the year ended December 31, 2019.   The TCJA repealed the corporate AMT but permitted unused AMT credit carryforwards to be used to reduce the regular tax obligation in future years. Any AMT credit carryforwards that do not reduce regular taxes are eligible for a 50% refund in 2018 through 2020, and a 100% refund in 2021. Subsequently, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), which was signed into law in March 2020, accelerated the full refund of any unused AMT credits from 2021 (as provided for in the TCJA) to 2018 or 2019, at the taxpayer’s election.   Accordingly, we reclassified the balance of the AMT credit from the deferred tax asset to an income tax receivable in 2018. The corresponding balance in the valuation allowance has been reversed into income tax benefit in the amount of $ 1,001,233 . In 2019, we have received 50% or approximately $ 0.5 million AMT refund for tax year 2018. In 2020, we received the remaining 50% or approximately $ 0.5 million AMT refund for the tax year 2019.   For the year ended December 31, 2021, there was  no provision for income taxes or unrecognized tax benefits recorded.   The significant components of gain (loss) before income taxes are as follows:       Years Ended December 31,       2021     2020   U.S. operations   $ ( 13,115,869 )   $ ( 9,246,122 ) Foreign operations     45,618       ( 47,833 ) Total loss before provision for income taxes   $ ( 13,070,251 )   $ ( 9,293,955 )   The Company has no current or deferred income tax for the years ended December 31, 2021 and 2020 .   The income tax provision differs from the expense amount that would result from applying the federal statutory rates to income before income taxes due to permanent differences, state income taxes and a change in the deferred tax valuation allowance.   The reconciliation between the statutory tax rate and the Company’s actual effective tax rate is as follows:       Years Ended December 31,       2021     2020   Tax at U.S. statutory rate     ( 21.00 )%     ( 21.00 )% State taxes, net of federal benefit     ( 4.52 )     ( 3.60 ) Non-deductible items     ( 0.84 )     ( 0.45 ) Change in valuation allowance     28.09       24.19   True-up adjustment     0.06       1.33   Foreign operations     0.09       ( 0.13 ) Change in tax rate     ( 1.88 )     —   Other     —       ( 0.34 ) Effective income tax rate     — %     — %   F- 16     The significant components of the Company’s net deferred income tax assets are as follows:       December 31,       2021     2020   Stock option expense   $ 947,400     $ 689,600   NOL carryforward     10,509,900       7,080,600   Research and development credits     1,656,500       1,656,500   Unrealized gain from investment in Alphazyme     ( 72,100 )     ( 69,800 ) Other     ( 6,100 )     7,900   Deferred tax asset, net of deferred tax liabilities     13,035,600       9,364,800   Valuation allowance     ( 13,035,600 )     ( 9,364,800 ) Net deferred tax asset   $ —     $ —     Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. In assessing the realizability of deferred tax assets, Management evaluates whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on Management’s evaluation, the net deferred tax asset, was offset by a full valuation allowance as of December 31, 2021 and 2020.     The Company had net operating loss (“NOL”) carryforwards available as of December 31, 2021  and 2020, in the amount of approximately $ 39.9  million and $ 27.3 million, respectively. Approximately $ 37.1  million of the net operating loss carryforwards will be carried forward indefinitely and will be available to offset 80 % of taxable income. The remaining amount of the net operating loss carryforwards will expire at varying dates through 2040.   Indian Tax   Income generated in India is subject to Tax Deducted at Source (“TDS”), which is a means of collecting income tax at the source when income is generated rather than at later by the Indian government. The TDS amount paid can be used as foreign tax credit for US tax purposes. However, we do not expect to use the credit due to our loss from operation. As a result, the Company recorded a provision for income taxes of approximately $ 31,000  as a result of TDS for the year ended December 31, 2020. There was no provision for income taxes related to TDS for the year ended December 31, 2021.     Note 5:      Commitments and Contingencies   Leases   Jupiter, Florida Headquarters   The Company’s corporate headquarters are located in Jupiter, Florida. The Company occupies approximately 2,000 square feet with a monthly rental rate and common area maintenance charges of approximately $ 4,400 . The lease will expire on September 1, 2022. The Company will reconsider the square footage of the leased space to align with the staffing requirements of the future operations of the Company.    The Netherlands Office   The Company maintains a small satellite office in Wageningen, The Netherlands. The Company occupies a flexible office space for an annual rental rate of approximately $ 4,000 . The lease expires on January 31, 2023, and thereafter, the Company will reconsider the leased space to align with the future operations of the Company.   VTT Research Contract Extension   On June 28, 2019, the Company extended its research contract (“Contract”) through June 2022 with VTT Technical Research Centre of Finland Ltd. (“VTT”). Under the terms of this Contract, Dyadic will pay VTT a total of EUR €2.52 million over  three years to continue developing Dyadic’s C1 fungal expression system for therapeutic protein production, including C1 host system improvement, glycoengineering, and management of third -party target protein projects. VTT is subject to an additional success bonus up to EUR €350,000 based on the technical targets stipulated in the Contract. Dyadic and its sublicensees will also have the right to use synthetic promoters developed by VTT with an access fee. On November 9, 2021, the Company further expanded the Contract to pay an additional EUR €191,700 over the next 6  months to conduct the glycoengineering strategy with the best protease deletion strains and other platform development work. Dyadic retains the right to terminate the Contract with 90 days’ notice.   Purchase Obligations   The following table provides a schedule of commitments related to agreements to purchase certain services in the ordinary course of business, as of December 31, 2021 :   2022   $ 2,617,601   2023     374,689   2024     327,041   Total   $ 3,319,331     The purchase obligations in the table above are primarily related to our contracts with the Company’s contract research organizations to provide certain research services. The contracts set forth the Company’s minimum purchase requirements that are subject to adjustments based on certain performance conditions. All contracts expire in or prior to 2024.   F- 17     Legal Proceedings   We are not currently involved in any litigation that we believe could have a materially adverse effect in our financial condition or results of operations. From time to time, the Company is subject to legal proceedings, asserted claims and investigations in the ordinary course of business, including commercial claims, employment and other matters, which management considers immaterial, individually and in the aggregate. The Company makes a provision for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The requirement for these provisions is reviewed at least quarterly and adjusted to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular case. Litigation is inherently unpredictable and costly. Protracted litigation and/or an unfavorable resolution of one or more of proceedings, claims or investigations against the Company could have a material adverse effect on the Company’s consolidated financial position, cash flows or results of operations.     Note 6:      Share-Based Compensation   Description of Equity Plans   The 2021 Equity Incentive Award Plan (the “2021 Plan”) was adopted by the Company's Board of Directors on April 9, 2021, and approved by the Company’s Annual Meeting of Shareholders (the “Annual Meeting”) on June 11, 2021. The 2021 Plan serves as a successor to the Company’s 2011 Equity Incentive Plan (the “2011 Plan”). Since the effective date of the 2021 Plan, all equity awards were made from the 2021 Plan, and no additional awards will be granted under the 2011 Plan. The 2021 Plan increased the number of shares available for the grant of stock options, restricted stock awards and other awards by  3,000,000  in addition to the number of shares remaining available for the grant of new awards under the 2011  Plan as of April 16, 2021.    As of December 31, 2021 , the Company had 4,774,215  stock options outstanding and an additio nal  4,263,386 share s of common stock available for grant under the 2021 Plan. As of December 31, 2020 , there were 4,638,390 stock options outstanding and an additional 2,134,211  shares of common stock available for grant under the 2011 Plan.   Stock Options   Options are granted to purchase common stock at prices that are equal to the fair value of the common stock on the date the option is granted. Vesting is determined by the Board of Directors at the time of grant. The term of any stock option awards under the Company’s 2011 Plan and 2021 Plan is ten years, except for certain options granted to the contractors which are either one or three years.   The grant-date fair value of each option grant is estimated using the Black-Scholes option pricing model and amortized on a straight-line basis over the requisite service period, which is generally the vesting period, for each separately vesting portion of the award as if the award was, in substance, multiple awards. Use of a valuation model requires management to make certain assumptions with respect to selected model inputs, including the following:   Risk-free interest rate . The risk-free interest rate is based on U.S. Treasury rates with securities approximating the expected lives of options at the date of grant.   Expected dividend yield . The expected dividend yield is zero, as the Company has never paid dividends to common shareholders and does not currently anticipate paying any in the foreseeable future.   Expected stock price volatility. The expected stock price volatility was calculated based on the Company’s own volatility since the DuPont Transaction. The Company reviews its volatility assumption on an annual basis and has used the Company’s historical volatilities since 2016, as the DuPont Transaction resulted in significant changes in the Company’s business and capital structure.    Expected life of option. The expected life of option was based on the contractual term of the option and expected employee exercise and post-vesting employment termination behavior. The Company uses the weighted average vesting period and contractual term of the option as the best estimate of the expected life of a new option, except for the options granted to the CEO (i.e., 5 or 10 years) and certain contractors (i.e., 1  or 3 years).   The assumptions used in the Black-Scholes option pricing model for stock options granted for the years ended  December 31, 2021 and 2020  are as follows:       Years Ended December 31,       2021     2020   Risk-free interest rate     0.05 % - 1.24 %       0.25 % - 1.72 %   Expected dividend yield     —%       —%   Expected stock price volatility     54.52 % - 60.80 %       39.94 % - 51.22 %   Expected life of options   0.5 - 6.25 Years     1.75 - 6.25 Years     F- 18     The following table summarizes the combined stock option activity under the Company’s Equity Compensation Plans:                       Weighted-                               Average                       Weighted-     Remaining     Aggregate               Average     Contractual     Intrinsic       Shares     Exercise Price     Term (Years)     Value   Outstanding at December 31, 2019     3,860,390     $ 1.76       5.69     $ 13,287,932   Granted     913,000       5.24                   Exercised     ( 135,000 )     1.89                   Expired     —       —                   Canceled     —       —                   Outstanding at December 31, 2020     4,638,390     $ 2.44       5.64     $ 13,701,610   Granted (1)     870,825       5.11                   Exercised (2)     ( 735,000 )     1.67                   Expired     —       —                   Canceled     —       —                   Outstanding at December 31, 2021     4,774,215     $ 3.04       6.14     $ 8,413,444                                     Exercisable at December 31, 2021     3,384,516     $ 2.45       5.21     $ 7,674,636     Notes: ( 1 ) Represents the following stock options granted:   • Annual share-based compensation awards on January 4,  2021, including: (a) 417,500 stock options with an exercise price of $ 5.16 per share granted to executives and key personnel, upon one year anniversary, or vesting annually in equal installments over four years, (b) 227,500 stock options with an exercise price of $ 5.16 per share granted to members of the Board of Directors, vesting upon one year anniversary, (c) 23,325 stock options with an exercise price of $ 5.16 per share granted to employees, vesting annually in equal installments over four years and (d) 5,000 stock options with an exercise price of $ 5.16 per share granted to a consultant, vesting upon one year anniversary.   • One-time award on January 8, 2021, 35,000 stock options with an exercise price of $ 5.50 per share granted to a new member of the Board of Directors, vesting in one year from the grant date.   • One-time award on January 21, 2021, 7,500 stock options with an exercise price of $ 5.65 per share granted to a consultant, vesting in one year from the grant date.   • One-time award on March 22, 2021, 30,000 stock options with an exercise price of $ 6.87 per share granted to a consultant, vesting in one year from the grant date.   • One-time award on August 24, 2021, 25,000 stock options with an exercise price of $ 4.96 per share granted to a consultant, vesting in one year from the grant date.   • One-time award on November 1, 2021, 25,000 stock options with an exercise price of $ 4.14 per share granted to a consultant, vesting in one year from the grant date.   • One-time award on November 9, 2021, 75,000 performance-based stock options with an exercise price of $ 4.10 per share granted to a new executive, vesting upon the achievement of specific performance conditions. As of December 31, 2021. the Company believes that the achievement of the requisite performance conditions is not probable and, as a result, no compensation cost has been recognized for these awards. ( 2 ) Represents the following stock options exercised:   • 500,000 stock options exercised at $ 1.67 , 150,000 stock options exercised at $ 1.63 , 60,000 stock options exercised at $ 1.93 , and 25,000 stock options exercised at $ 1.39 .   The weighted average grant-date fair market value of stock options granted for the years ended December 31, 2021 and 2020 was $ 2.49  and $ 2.09  respectively, based on the Black-Scholes option pricing model. The intrinsic value of options exercised for the years ended December 31, 2021 and 2020 was $ 1,729,850  and $ 481,139 , respectively.   As of December 31, 2021 and 2020 , total unrecognized compensation cost related to non-vested stock options granted under the Company’s equity compensation plans was $ 856,982  and $ 477,232 , respectively, which is expected to be recognized over a weighted average period of 3.07  years and 2.84  years, respectively. The Company will adjust unrecognized compensation cost for actual forfeitures as they occur.   Compensation Expenses   We recognize all share-based payments to employees, consultants, and our Board, as non-cash compensation expense, in research and development expenses or general and administrative expenses in the consolidated statement of operations, and these charges had no impact on the Company’s reported cash flows. Stock-based compensation expense is calculated on the grant date fair values of such awards, and recognized each period based on the value of the portion of share-based payment awards that is ultimately expected to vest during the period. Forfeitures are recorded as they occur.   F- 19     For performance-based awards, the Company recognizes related stock-based compensation expenses based upon its determination of the potential likelihood of achievement of the specified performance conditions at each reporting date. There was no performance-based award recognized during the years ended  December 31, 2021 and 2020 .   Total non-cash stock option compensation expense was allocated among the following expense categories:       Years Ended December 31,       2021     2020   General and administrative   $ 1,571,328     $ 1,466,461   Research and development     212,774       185,432   Total   $ 1,784,102     $ 1,651,893       Note 7:      Shareholders’ Equity   Issuances of Common Stock   For the years ended December 31, 2021 and 2020  there were  735,000 and 135,000  shares of the Company's common stock issued, as a result of the exercise of stock option, with a weighted average issue price per share of $ 1.67  and $ 1.89 , respectively.   Treasury Stock   As of December 31, 2021 , and 2020 , there were 12,253,502  shares of common stock held in treasury, at a cost of approximately $ 18.9 million, representing the purchase price on the date the shares were surrendered to the Company.   Open Market Sale Agreement℠   On August 13, 2020, we entered into an Open Market Sale Agreement℠ with Jefferies LLC (“Jefferies”), with respect to an at the market offering program under which we may offer and sell, from time to time at our sole discretion, shares of our common stock, par value $ 0.001  per share, having an aggregate offering price of up to $ 50.0  million through Jefferies as our sales agent or principal.   We have not and are not obligated to sell any shares under the sale agreement. Subject to the terms and conditions of the sale agreement, Jefferies will use commercially reasonable efforts, consistent with its normal trading and sales practices and applicable laws and regulations, to sell shares of our common stock from time to time based upon our instructions, including any price, time or size limits or other customary parameters or conditions we specify, subject to certain limitations. Under the sale agreement, Jefferies may sell shares of our common stock by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415 (a)( 4 ) under the Securities Act of 1933, as amended.   We will pay Jefferies a commission equal to  3.0 % of the gross proceeds from each sale of shares of our common stock sold through Jefferies under the sale agreement and will provide Jefferies with customary indemnification and contribution rights. In addition, we agreed to reimburse certain legal expenses and fees by Jefferies in connection with the offering up to a maximum of $ 50,000 , in addition to certain ongoing disbursements of Jefferies’ counsel, if required. The sale agreement will terminate upon the sale of all $ 50.0  million of shares under the sale agreement, unless earlier terminated by either party as permitted therein.   The issuance and sale, if any, of shares of our common stock by us under the sale agreement will be made pursuant to a registration statement on Form S- 3 filed with the SEC on August 13, 2020 and declared effective by the SEC on August 25, 2020 and the accompanying Prospectus, as supplemented by a Prospectus Supplement. As of the date of this filing, there have been no sales made under the Open Market Sale Agreement℠, and we have no immediate plans to sell any securities under this program to fund our near-term business plan.   F- 20         Note 8:      Subsequent Events   For purpose of disclosure in the consolidated financial statements, the Company has evaluated subsequent events through March 29, 2022 , the date the consolidated financial statements were available to be issued. Except as discussed below, management is not aware of any material events that have occurred subsequent to the balance sheet date that would require adjustment to, or disclosure in the accompanying financial statements.   Stock Option Grant   On January 3, 2022, the Company granted to executives and key personnel an aggregate of 325,000 stock options with an exercise price of $ 4.81 . The options will vest in one year from the date of grant or annually in equal installments over four years.   On January 3, 2022, the Company granted 75,000  performance-based stock options to a key personnel with an exercise price of $ 4.81 . The options will vest upon the achievement of specified performance conditions.   On January 3, 2022, the Company granted to members of the Board an aggregate of  277,500 stock options with an exercise price of $ 4.81 . The options will vest in one year from the date of grant.   On January 3, 2022, the Company granted to non-executive employees an aggregate of 23,325  stock options with an exercise price of $ 4.81 . The options will vest annually in equal installments over four years.   On January 3, 2022, the Company granted 15,000 stock options to a consultant with an exercise price of $ 4.81 . The options will vest in one year from the date of grant.   Termination of a Material Definitive Agreement   On March 17, 2022, the Company and Sorrento Therapeutics, Inc., have mutually agreed to terminate the August 11, 2021 term sheet, due to a disagreement between the parties concerning the timing, and terms and conditions, for the entry into the license agreement. Dyadic has not incurred any early termination penalties.   F-21