Dyadic International (DYAI) risk factors, FY2025 10-K

Risks Related to Our Business and Financial Condition

1. 01We may not succeed in implementing our business strategy58% rewritten
2. 02A significant portion of our revenue is derived from a small number of customers41% rewritten
3. 03We have a history of net losses, and we may not achieve or maintain profitability
4. 04We may expend our resources to pursue particular product candidates and fail to capitalize on product candidates that may be more profitable or for which there is a greater likelihood of success58% rewritten
5. 05We will need to take the following steps, among others, to manage our growth. If we fail to achieve one or more of these, it could have a material adverse effect on our business, financial condition and results of operationsNew
6. 06Our revenue growth depends in part on market and regulatory acceptance of our microbial protein production platforms and other technologies to develop and manufacture animal and/or human biopharmaceutical and non-pharmaceutical products
7. 07We have not yet completed the necessary safety, efficacy, cost and regulatory studies, or the commercialization of any therapeutic proteins, antibodies and vaccines, and metabolites or other non-pharmaceutical biologic products based on C1 or Dapibus™
8. 08If our competitors develop technologies and products more quickly and market more effectively than our product candidates, our commercial opportunity will be reduced or eliminated
9. 09Alternative technologies may not require microbial or other cell produced proteins, such as our proprietary C1 cells
10. 10The results of nonclinical studies and early-stage clinical trials may not be predictive of future results21% rewritten
11. 11We may need substantial additional capital in the future to fund our business
12. 12Changes in global economic and financial markets may have a negative effect on our business86% rewritten
13. 13Changes in global financial, pharmaceutical, biotechnology, and broader economic markets may make it difficult to accurately forecast our operating results and may adversely affect our business, results of operations, or financial conditionNew
14. 14Our sales and operations are subject to the risks of doing business internationally
15. 15Any violations of international laws and regulations may result in substantial civil and criminal fines and penalties, imprisonment, the loss of export or import privileges, debarment, tax reassessments, breach of contract and fraud litigation, reputational harm and other consequences
16. 16Our product candidates may cause undesirable and unforeseen side effects or have other properties impacting safety that could halt their clinical development, delay or prevent their regulatory approval, limit their commercial potential or result in significant negative consequences
17. 17We may be sued for product liability44% rewritten
18. 18Foreign currency fluctuations could adversely affect our results
19. 19Our ability to use our net operating loss carryforwards ( “ NOLs ” ) to offset future taxable income may be subject to certain limitations
20. 20We may make acquisitions, investments and strategic alliances that may use significant resources, result in disruptions to our business or distractions of our management, may not proceed as planned, and could expose us to unforeseen liabilities
21. 21We rely significantly on information technology and any failure, inadequacy, interruption or security lapse of that technology, including any cybersecurity incidents, could harm our ability to operate our business effectively
22. 22The use of new and evolving technologies, such as artificial intelligence ( “ AI ” ), in our business may result in reputational harm, competitive harm or legal liability31% rewritten
23. 23Changes to our outsourced software or infrastructure vendors as well as any sudden loss, breach of security, disruption or unexpected data or vendor loss associated with our information technology systems could have a material adverse effect on our business

Risks Related to Dependence on Third Parties

1. 24We are dependent on collaborations with third parties, and if we fail to maintain or successfully manage existing, or enter into new, strategic collaborations, we may not be able to develop and commercialize many of our technologies and products and achieve profitability
2. 25We have limited or no control over the resources that any collaborator or licensee may devote to our programs, and reductions in collaborators ’ R&D budgets may affect our businesses80% rewritten
3. 26Conflicts with the CROs, other service providers, collaborators and/or licensees could harm our business
4. 27We rely on our collaborators and other third parties to deliver timely and accurate information in order to accurately report our financial results as required by law

Risks Related to Government Regulations and Sustainability Issues

1. 28Potential future regulations limiting our ability to sell genetically engineered products could harm our business
2. 29Our employees and independent contractors, including principal investigators, CROs, CDMOs, consultants, vendors, and other service providers, may engage in misconduct or other improper activities, including noncompliance with applicable laws, regulations, and our internal policies and procedures96% rewritten
3. 30Public views on ethical and social issues may limit use of our technologies
4. 31Our results of operations may be adversely affected by environmental, health and safety laws, regulations and liabilities
5. 32Increasing scrutiny and changing expectations from customers, regulators, investors, and other stakeholders with respect to our sustainability practices may impose additional costs on us or expose us to new or additional risks23% rewritten
6. 33We have no experience submitting applications to the FDA or similar regulatory authorities in the past and may not be able to obtain regulatory approval or may be subject to lengthy and/or unfavorable regulatory proceedings
7. 34Our business is subject to extensive regulation; failure to comply with these regulations could adversely affect our business and financial resultsNew

Risks Relating to Intellectual Property

1. 35Failure to protect our intellectual property and the intellectual property of certain third parties could harm our competitive position
2. 36Litigation or other proceedings or third-party claims of intellectual property infringement could require us to spend significant time and resources and could prevent us and our collaborators from commercializing our or their technologies and products or negatively impact our stock price
3. 37Confidentiality agreements with employees and others may not adequately prevent disclosures of trade secrets and other proprietary information

Risks Related to Our Common Stock

1. 38The price of our shares of common stock is likely to be volatile, and you could lose all or part of your investment64% rewritten
2. 39Our quarterly and annual operating results may be volatile29% rewritten
3. 40We do not expect to pay cash dividends in the future
4. 41Our anti-takeover defense provisions may deter potential acquirers and depress our stock price51% rewritten
5. 42Our executive officers, directors and principal stockholders (5% stockholders) together control approximately 24.2% of our 36,187,798 shares of outstanding common stock as of December 31, 2025
6. 43Future resales of shares of our common stock may negatively affect our stock price
7. 44As of December 31, 2025, there were 36,187,798 shares of our common stock outstanding. Approximately 24.2% of these outstanding common shares are beneficially owned or controlled by our executive officers, directors and principal stockholders
8. 45The Company is exposed to credit risk and fluctuations in the values of its investment portfolio
9. 46We are a smaller reporting company, and the reduced disclosure requirements applicable to smaller reporting companies may make our common stock less attractive to investors
10. 47If securities or industry analysts do not publish research or reports about our business, or if they issue adverse or misleading research or reports regarding us, our business or our market, our stock price and trading volume could decline80% rewritten