Check the appropriate box:
☐ | Preliminary Proxy Statement |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
☒ | Definitive Proxy Statement |
☐ | Definitive Additional Materials |
☐ | Soliciting Material Pursuant to Rule 14a-12 |
DYADIC INTERNATIONAL, INC.
(Name of Registrant as Specified in itsIn Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box)all boxes that apply):
☒ | No fee required. |
☐ | Fee paid previously with preliminary materials. |
☐ | Fee computed on table in exhibit as required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. |
DYADIC INTERNATIONAL, INC.
140 Intracoastal Pointe Drive, Suite 404
Jupiter,
(561) 743-8333
Dear Stockholder:
You are cordially invited to attend the 2006 annual meeting2023 Annual Meeting of stockholdersShareholders (“Annual Meeting”) of Dyadic International, Inc. (“Dyadic”), which we will holdbe held on Monday,Friday, June 12, 20069, 2023, at 10:0010 a.m., local time, at Eastern Daylight Savings Time. The Annual Meeting will be conducted in virtual format only. You will not be able to attend the Doubletree Hotel located at 4431 PGA Boulevard, Palm Beach Gardens, Florida 33410.
At the Annual Meeting, you will be asked to be presented atconsider and vote on the meeting areproposals described in the Notice of 20062023 Annual Meeting of StockholdersShareholders and Proxy Statement, which accompany this letter.
We hope that you will be able to attend the meeting,Annual Meeting, but whatever your plans,in any event, we ask that you please complete, sign and datevote your shares using the enclosedinternet or, if you received paper copies of the proxy materials, by calling the toll-free telephone number specified in the proxy card or completing and return itmailing the proxy card in the postage-paid envelope provided soto ensure that your shares will be represented at the meeting.
On behalf of the board of directors, I would like to express our appreciation for your continued support and interest in Dyadic. We look forward to seeing youyour participation at the meeting.
Sincerely, | |
/s/ Mark Emalfarb | |
Mark Emalfarb |
Jupiter, Florida
April 26, 2023
NOTICE OF 2006 2023ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MONDAY,FRIDAY, JUNE 12, 2006
VIRTUAL MEETING ONLY - NO PHYSICAL MEETING LOCATION
To the stockholdersShareholders of Dyadic International, Inc.:
NOTICE IS HEREBY GIVEN that the 2023 Annual Meeting of stockholdersShareholders (“Annual Meeting”) of Dyadic International, Inc., a Delaware corporation (“Dyadic,” “we,” “us”, “our”, or the “Company”), will be held on Monday,Friday, June 12, 2006,9, 2023 at 10:0010 a.m., local time, Eastern Daylight Savings Time, via live webcast at the Doubletree Hotel located at 4431 PGA Boulevard, Palm Beach Gardens, Florida 33410,www.virtualshareholdermeeting.com/DYAI2023 for the following purposes:
1. To elect two Class I directors to our Board of Directors to serve until the Company’s 2026 Annual Meeting of Shareholders or until their successors are duly elected and qualified;
2. To ratify the appointment of Crowe LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2023;
3. To cast an advisory vote to approve the compensation of the Company’s Named Executive Officers; and
4. To transact such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof.
All shareholders are cordially invited to virtually attend the Annual Meeting. To participate in the accompanying proxy statement. This notice, together withAnnual Meeting, you will need your 16-digit control number included on your Notice Regarding the accompanying proxy statement and enclosedAvailability of Proxy Materials or on your proxy card and annual report to stockholders, will be mailed to stockholders on or about May 5, 2006.
Only shareholders of record at the close of business on April 26, 200614, 2023 are entitled to notice of, and to vote at, the annual meetingAnnual Meeting and any adjournment or postponement thereof. The stock transfer books of the annual meeting. Each shareCompany will remain open between the record date and the date of common stock is entitled to one vote.
We encourage shareholders to vote in person.
• | Vote by Internet: www.proxyvote.com |
Use the internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m., Eastern Daylight Savings Time, on Thursday, June 8, 2023. Have the 16-digit control number included in your Notice Regarding the Availability of Proxy Materials, proxy card or voting instruction form, as applicable, in hand when you access the above website and follow the instructions to obtain your records and to create an electronic voting instruction form. |
• | Vote by Telephone: 1-800-690-6903 |
Use any touch-tone telephone to transmit your voting instruction. Vote by 11:59 p.m., Eastern Daylight Savings Time, on Thursday, June 8, 2023. Have your proxy card in hand when you call and follow the instructions. |
• | Vote by Mail. |
If you received paper copies of the proxy materials, please mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
• | Vote During the Annual Meeting. |
You can vote your shares during the Annual Meeting at www.virtualshareholdermeeting.com/DYAI2023. To participate in the Annual Meeting, you will need the 16-digit control number included in your Notice Regarding the Availability of Proxy Materials, proxy card or voting instruction form, as applicable. |
You need only vote in one way (so that, if you vote by internet or telephone, you need not return the proxy card).
If you hold your shares through a broker, bank, or other nominee, you should receive separate voting instructions from the firm holding your shares describing the procedure for voting those shares. You may complete and mail a voting instruction form to your broker or nominee or, in most cases, submit voting instructions by telephone or the internet to your broker or nominee. If you provide specific voting instructions by mail, telephone or the internet, your broker or nominee will vote your shares as you have directed.
Should you receive more than one proxy because your shares are heldregistered in different names and addresses, each proxy should be signed and returned to ensure that all your shares will be voted. Your proxy is revocable in accordance with the procedures set forth in the attached Proxy Statement.
BY ORDER OF THE BOARD OF DIRECTORS | |
/s/ Mark Emalfarb | |
Mark Emalfarb |
Jupiter, Florida
April 26, 2023
INTERNET AVAILABILITY OF PROXY MATERIALS
*****IMPORTANT NOTICE*****
This Notice of 2023 Annual Meeting of Shareholders, Proxy Statement and our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, are available online at a brokerage firm or bank, you must provide them with instructions on how to vote your shares.
TABLE OF CONTENTS
| 19 | |
Proposal 2: Ratification of Selection of Independent Registered Public Accounting Firm | 22 |
Proposal 3: Advisory Vote on Compensation of the Company’s Named Executive Officers | 25 |
| 26 | |
| 27 | |
| 27 |
DYADIC INTERNATIONAL, INC.
140 Intracoastal Pointe Drive, Suite 404
Jupiter, FLFlorida 33477
(561) 743-8333
PROXY STATEMENT
2023VIRTUAL ANNUAL MEETING OF STOCKHOLDERS
JUNE 12, 2006
VIRTUAL MEETING ONLY - NO PHYSICAL MEETING LOCATION
The Board of Directors of the Company (the “Board”) is soliciting proxies for the 2023 Virtual Annual Meeting of Shareholders of Dyadic International, Inc. (“Annual Meeting”). This proxy statementProxy Statement contains important information for you to consider when deciding how to vote on the matters brought before the Annual Meeting. Please read it carefully.
This Proxy Statement contains information related to our 2006 annual meeting of stockholdersthe Annual Meeting to be held on Monday,Friday, June 12, 2006,9, 2023 at 10:0010 a.m., local time, at the Doubletree Hotel located at 4431 PGA Boulevard, Palm Beach Gardens, Florida 33410, Eastern Daylight Savings Time, and at any adjournments or postponements thereof. The approximateAnnual Meeting will be conducted in virtual format only. Shareholders will not be able to attend the Annual Meeting in person. Shareholders can access the Annual Meeting by visiting www.virtualshareholdermeeting.com/DYAI2023.
The Board set April 14, 2023 as the record date for the Annual Meeting. Shareholders who owned the Company’s common stock on that this proxy statement,date are entitled to vote at the accompanying noticeAnnual Meeting, with each share entitled to one vote. There were 28,811,061 shares of annual meeting and the enclosed formCompany’s common stock outstanding as of proxy and our 2005 annual report to stockholders are first being mailed to stockholders is May 5, 2006. the record date.
We are furnishing this proxy statementmaterials to stockholdersour shareholders primarily via the internet under the Securities and Exchange Commission’s (“SEC”) “Notice and Access” rules. On or about April 26, 2023, we expect to mail to our shareholders a Notice Regarding the Availability of Dyadic as partProxy Materials containing instructions on how to access our proxy materials, including our Notice of 2023 Annual Meeting of Shareholders, Proxy Statement and Annual Report for the solicitationfiscal year ended December 31, 2022 (“Annual Report”). The Notice Regarding the Availability of proxiesProxy Materials also will instruct you on how to access and submit your proxy through the internet.
We are providing internet distribution of our proxy materials to expedite receipt by Dyadic’s boardshareholders, reduce costs and conserve paper. However, if you would like to receive printed proxy materials, please follow the instructions on the Notice Regarding the Availability of directors for useProxy Materials. Additionally, the Notice of 2023 Annual Meeting of Shareholders, Proxy Statement and Annual Report are available at www.dyadic.com by clicking the annual meeting. You should review this information in conjunction with our 2005 annual report to stockholders which accompanies this proxy statement.
INTERNET AVAILABILITY OF PROXY MATERIALS
*****IMPORTANT NOTICE*****
The Notice of 2023 Annual Meeting of Shareholders, Proxy Statement and Annual Report are available at www.proxyvote.com.
ABOUTABOUT THE ANNUAL MEETING
What is the purpose of the annual meeting?
At the annual meeting,Annual Meeting, we are asking stockholders:shareholders:
To elect two Class I directors for a term ending in 2026;
To ratify the appointment of Crowe LLP (“Crowe”) as our independent registered public accounting firm for the year ending December 31, 2023;
To cast a non-binding, advisory vote to approve the 2022 compensation of the Company’s Named Executive Officers; and
To transact such other business properly brought before the Annual Meeting and any adjournment or postponement of the Annual Meeting.
Who is entitled to notice of and to vote at the annual meeting?
You are entitled to vote, in person or by proxy, at the annual meetingAnnual Meeting if you owned shares of our common stock as of the close of business (5:00 p.m. EST)Eastern Daylight Savings Time) on April 26, 2006,14, 2023, the record date of the annual meeting. On the record date, 23,140,467
Who can attend the meeting?
All stockholdersshareholders as of the record date, or their duly appointed proxies, may attend. Please note that if you hold shares in “street name” (that is, through a broker or other nominee), youShareholders will need a control number to bring a copyattend the Annual Meeting. For registered shareholders, the control number can be found on their Notice Regarding the Availability of a brokerage statement reflecting your stock ownership as of the record date.
What shares may I vote?
You may vote all shares you owned as of the record date. These includeinclude: (1) shares owned directly in your name as stockholderthe shareholder of record and (2) shares held for you as the beneficial owner through a stockbroker, bank, or otheranother nominee.
What is the difference
between holding shares as aMost of our stockholdersshareholders hold their shares through a stockbroker, bank or other nominee rather than directly in their own name. As summarized below, there are some differences between shares held of record and those beneficially owned.
If our shares are registered directly in your name with our transfer agent, Continental Stock Transfer & Trust Company, you are considered the stockholdershareholder of record with regard toregarding those shares. As the stockholdershareholder of record, you have the right to grant your proxy directly to us to vote your shares on your behalf at the meetingAnnual Meeting, using the control number on the Notice Regarding the Availability of Proxy Materials or the right to vote in person at the meeting. We have enclosed or sent a proxy card for you to use.
If you hold our shares in a stock brokerage account or bythrough a bank or other nominee, you are considered the beneficial owner“beneficial owner” of the shares held in “street name,”name”, and these proxy materials have been forwarded to you by your brokerstockbroker, bank, or nominee, which is considered the stockholder of record with respect to those shares.another nominee. As the beneficial owner, you have the right to direct your brokerstockbroker, bank, or other nominee how to vote and you are also invited to attend the annual meeting so long as you bringAnnual Meeting via the internet and vote during the meeting. Beneficial owners who do not have a copycontrol number may gain access to the Annual Meeting by logging into their brokerage firm’s website. Instructions should be provided on the voting instruction form provided by your stockbroker, bank, or another nominee.
How do I vote?
Shareholders at the close of a brokerage statement reflecting your ownership as ofbusiness on April 14, 2023 can vote at the record date. However, since you are notAnnual Meeting via proxy in the stockholder of record, you may not vote thesemanner described herein.
Any shareholder who holds shares in person at“street name” through a broker, bank or other nominee should receive separate instructions from the meeting unlessfirm holding his or her shares describing the procedure for voting those shares. You should follow the voting instructions provided by your broker, bank or other nominee when voting your shares. You may complete and mail a voting instruction form to your broker, bank, or another nominee or, in most cases, submit voting instructions by telephone or the internet to your broker or nominee. If you obtain
Shareholders of record may vote in the rightfollowing ways:
• | Vote by Internet: www.proxyvote.com |
Use the internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m., Eastern Daylight-Saving Time, on Thursday, June 8, 2023. Have the 16-digit control number included in your Notice Regarding the Availability of Proxy Materials or your proxy card in hand when you access the above website and follow the instructions to obtain your records and to create an electronic voting instruction form. |
• | Vote by Telephone: 1-800-690-6903 |
If you received paper copies of the proxy materials, use any touch-tone telephone to transmit your voting instruction. Vote by 11:59 p.m., Eastern Daylight Savings Time, on Thursday, June 8, 2023. Have your proxy card in hand when you call and follow the instruction. |
Vote by Mail.
If you received paper copies of the proxy materials, please mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
• | Vote During the Annual Meeting. |
You can vote your shares during the Annual Meeting at www.virtualshareholdermeeting.com/DYAI2023. To participate in the Annual Meeting, you will need the 16-digit control number included in your Notice Regarding the Availability of Proxy Materials or on your proxy card. |
You need only vote in one way (so that, if you vote by internet or telephone, you need not return the shares. Your broker or nominee has enclosed or provided a voting instruction card forproxy card).
If you to use to direct your broker or nomineehave any questions about how to vote these shares.
Can I submit questions at the annualAnnual Meeting?
Yes. During the live virtual meeting, a quorum will be present at the annual meeting. Shares held by persons attending the annual meeting but not voting, and shares represented in person or by proxy and for which the holder has abstained from voting, will be counted as present at the annual meeting for purposes of determining the presence or absence of a quorum.
Can I change my vote after I return my proxy card?
Yes. Even afterIf you have submittedvoted by mail, you may revoke your proxy card,at any time before it is exercised by executing and delivering a timely and valid later-dated proxy, by voting by ballot at the Annual Meeting or by giving written notice to the Secretary. If you voted via the internet or by phone, you may change your vote with a timely and valid later internet or telephone vote, or by voting by ballot at any timethe Annual Meeting. Attendance at the Annual Meeting will not have the effect of revoking a proxy unless (1) you give proper written notice of revocation to the Secretary before the proxy is exercised, or (2) you vote by filing with our Secretary either a notice of revocation or a duly executed proxy card bearing a later date. In such event, the later submitted vote will be recorded and the earlier vote revoked. The powers of the proxy holders will be suspended if you are a holder of record and attend the meeting in person and so request, although attendanceballot at the meeting will not by itself revoke a previously granted proxy.
If your shares are held in “streetstreet name,” you should contact the institution that holds your shares to change your vote.
Is my vote confidential?
Yes. All votes remain confidential unless you provide otherwise.
How are votes counted?
Before the Annual Meeting, our Board will appoint one or more inspectors of election for the Annual Meeting. The inspector(s) will determine the number of shares represented at the Annual Meeting, the existence of a quorum and the validity and effect of proxies. The inspector(s) will also receive, count, and tabulate ballots and votes and determine the results of the voting on each matter that comes before the Annual Meeting.
Abstentions and votes withheld, and shares represented by proxies reflecting abstentions or votes withheld, will be treated as present for purposes of determining the existence of a quorum at the Annual Meeting. They will not be considered as votes for or against any matter for which the shareholder has indicated their intention to abstain or withhold their vote. Broker or nominee non-votes, which occur when shares held in street name by brokers or nominees who indicate that they do not have discretionary authority to vote on a particular matter, will not be considered as votes for or against that particular matter. Broker and nominee non-votes will be treated as present for purposes of determining the existence of a quorum.
What percentage of our outstanding common stock do our directors and executive officers own?
As of April 14, 2023, our directors and executive officers owned, or have the right to acquire within 60 days through the exercise of options, approximately 27.3% of our outstanding common stock. See the discussion under the heading “Security Ownership of Certain Beneficial Owners and Management” below for more details.
What are the board’sBoard’s recommendations?
The boardBoard recommends a vote “FOR”:FOR:
Election of two Class I directors for a term ending in 2026;
Ratification of the appointment of Crowe LLP as our independent registered public accounting firm for the year ending December 31, 2023; and
Non-binding, advisory vote to approve the 2022 compensation of the Company’s Named Executive Officers.
Unless you give other instructions on your proxy card, the personsperson named as proxiesa proxy on the proxy card will vote “FOR” each ofFOR the nominees for Class II directors and the other proposals.
We do not expect that any other matters will be brought before the annual meeting.Annual Meeting. If, however, other matters are properly presented, the persons named as proxies will vote the shares represented by properly executed proxies in accordance with their judgment with respect to those matters, including any proposal to adjourn or postpone the annual meeting.Annual Meeting. No proxy that is voted against all of the proposals will be voted in favor of any adjournment or postponement of the annual meetingAnnual Meeting for the purpose of soliciting additional proxies.
What constitutes a quorum?
If a majority of the shares of our common stock outstanding on the record date is represented either in person or by proxy at the Annual Meeting, a quorum will be present at the Annual Meeting. Virtual attendance at the Annual Meeting constitutes presence in person for purposes of quorum at the Annual Meeting. Shares held by persons attending the Annual Meeting but not voting, and shares represented in person or by proxy and for which the holder has abstained from voting, will be counted as present at the Annual Meeting for purposes of determining the presence or absence of a quorum.
Applicable stock exchange rules determine whether a proposal presented at a shareholder meeting is routine or non-routine. If a proposal is routine, a broker or other entity holding shares for an owner in street name may vote on the proposal without receiving voting instructions from the beneficial owner. If a proposal is non-routine, the broker or other entity may vote on the proposal only if the beneficial owner has provided voting instructions. A broker non-vote occurs when a broker or other entity is unable to vote on a particular proposal and the broker or other entity has not received voting instructions from the beneficial owner. Therefore, if you do not give your broker or other entity specific instructions, your shares will not be voted on non-routine matters. However, the broker non-votes will be counted as present at the Annual Meeting for purposes of determining whether a quorum exists. The election of directors and the non-binding, advisory vote to approve the 2022 compensation of the Company’s Named Executive Officers are considered non-routine proposals. The proposal to ratify the appointment of Crowe LLP to serve as our independent auditor is considered a routine proposal.
What vote is required to approve the proposal?
Proposal 1: Election of Class II Directors
Proposal 2: Approval of Amended and Restated 2001 Equity Compensation Plan. The affirmative vote of the holders of a majority of all shares casting votes, either in person or by proxy, at the annual meeting is required to approve the Amended and Restated 2001 Equity Compensation Plan effective as of January 1, 2005. This approval is required (i) for purposes of compliance with certain exclusions from the limitations of Section 162(m) of the Internal Revenue Code of 1986, as amended, and (ii) by the applicable rules of the American Stock Exchange. A properly executed proxy marked “abstain” with respect to this proposal will not be voted, although it will be counted for purposes of determining whether there is a quorum. Abstentions and broker non-votes will have the same effect as a vote against this proposal.
Proposal 3: Non-Binding, Advisory Vote to Approve 2022 Named Executive Officers Compensation. The affirmative vote of a majority of the votes cast, either in person or by proxy, at the meeting will beAnnual Meeting is required to approve, on an advisory basis, the compensation of our Named Executive Officers. You may vote for, approval.against, or abstain with respect to approval of the compensation of the Company’s Named Executive Officers. A properly executed proxy marked “abstain”abstain with respect to any such matterthis proposal will not be voted for or against the proposal, although it will be counted for purposes of determining whether there is a quorum. Accordingly, an abstentionBroker non-votes will havenot be considered as votes cast for or against this proposal, although it will be counted for purposes of determining whether there is a quorum. Because your votes are advisory on Proposal 3, they will not be binding on the effectBoard or the Company. However, the Board and the Compensation Committee will review the voting results and take them into consideration when making future decisions regarding the Named Executive Officers’ compensation or regarding the frequency of the advisory vote on the Named Executive Officers’ compensation.
Other Items. In the event other items are properly brought before the Annual Meeting, the affirmative vote of a negative vote.
Who pays for the preparation of the proxy and soliciting proxies?
This solicitation is made by the Company. We will pay the cost of preparing, assembling and mailing the Notice Regarding the Availability of Proxy Materials and printed proxy statement and the accompanying notice of annual meeting, proxy card and annual report to stockholders.materials, as applicable. In addition to the use of mail, our directors, officers, and employees may solicit proxies by telephone or other electronic means or in person. These persons will not receive additional compensation for soliciting proxies. Arrangements also will be made with brokerage houses and other custodians, nominees, and fiduciaries for the forwarding of solicitation materials to the beneficial owners of stock held of record by these persons, and we will reimburse them for reasonable out-of-pocket expenses.
What should I have received to enable me to vote?
We are furnishing proxy materials to this proxy statement, you should have receivedour shareholders primarily via the accompanying notice of annual meeting, a proxy card,internet under the SEC’s “Notice and our 2005 annual report to stockholders. The mailing date of these materials is onAccess” rules. On or about May 5, 2006.
We are providing internet distribution of our proxy materials to expedite receipt by shareholders, reduce costs and conserve paper. However, if you would like to receive printed proxy materials, please follow the instructions on the Notice Regarding the Availability of Proxy Materials.
How can I obtain additional copies?
The Notice of 2023 Annual Meeting of Shareholders, Proxy Statement and our Annual Report are available online at https://dyadic-international-inc.ir.rdgfilings.com/all-sec-filings/ and may be accessed at https://materials.proxyvote.com/26745T.
For additional copies of any of this proxy statementProxy Statement and the enclosed proxy card, and annual report to stockholders, you shouldplease contact either our corporate office at 140 Intracoastal Pointe Drive, Suite 404, Jupiter, Florida 33477, Attention: Alexander (Sasha) Bondar,Heidi Zosiak, telephone: (561)743-8333 or Continental Stock Transfer & Trust Company, 17 Battery Place, New York,Broadridge Financial Solutions, Inc., 51 Mercedes Way, Edgewood, NY 10004,11717, telephone: (212) 509-4000.(631) 257-4339.
SECURITYSECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS DIRECTORS
The following table below sets forth certain information regarding the beneficial ownership of our common stock as of April 26, 2006,14, 2023 (except as noted below), by:
each person known by us to be the following individuals or groups:beneficial owner of more than 5% of the outstanding shares of our common stock;
each of our directors, director nominees and named executive officers; and
all our current directors and executive officers as a group.
The amounts and percentages of common stock beneficially owned are reported based on regulations of the SEC governing the determination of beneficial ownership is determined in accordance withof securities. Under the rules of the Securities and Exchange Commission (“SEC”) and generallySEC, a person is deemed to be a “beneficial owner” of a security if that person has or shares voting power, which includes the power to vote or direct the voting of a security, or investment power, with respectwhich includes the power to securities. Sharesdispose of our common stockor to direct the disposition of a security. A person is also deemed to be a beneficial owner of any securities of which that are subjectperson has a right to our options, warrants and convertible notes that are presently exercisable or exercisableacquire beneficial ownership within 60sixty (60) days of April 26, 200614, 2023. Securities that can be so acquired are deemed to be outstanding and beneficially owned by the person holding any of such convertible securities for the purposepurposes of computing thesuch person’s ownership percentage, of ownership of that person, but are not treated as outstanding for the purposepurposes of computing the percentage of any other person.
As of April 14, 2023, the Company had 28,811,061 shares of common stock beneficially owned by them. As of April 26, 2006, we had outstanding, 23,140,467 shares of our common stock.
Name and Address of Beneficial Owner | Number of Shares | Percentage Ownership | |||||
| Mark A. Emalfarb (1)(9)(10) | 7,098,559 | 28.9 | % | ||||
| The Francisco Trust U/A/D February 28, 1996 (2) | 4,769,578 | 20.5 | % | ||||
| The Pinnacle Fund, L.P. Barry M. Kitt (3) | 2,277,494 | 9.9 | % | ||||
| Stephen J. Warner (4)(11) | 461,050 | 2.0 | % | ||||
| Glenn E. Nedwin, Ph.D. (9) | 11,990 | * | |||||
| Robert B. Shapiro (5)(9) | 34,688 | * | |||||
| Richard J. Berman (5)(9) | 56,250 | * | |||||
| Harry Z. Rosengart (5)(11) | 34,167 | * | |||||
| Wayne Moor (5)(10) | 277,889 | 1.2 | % | ||||
| Ratnesh (Ray) Chandra (6)(10) | 103,716 | * | |||||
| Kent M. Sproat (7)(10) | 143,716 | * | |||||
| Alexander V. Bondar (8)(10) | 73,716 | * | |||||
| All directors, director nominees and executive officers as a group (10 persons) | 8,295,741 | 32.7 | % | ||||
Total | ||||||||||||||||
Number of | ||||||||||||||||
Common | ||||||||||||||||
Number of | Options | Share | Percentage of | |||||||||||||
Common | Exercisable | Beneficially | Class | |||||||||||||
Name and Address of Beneficial Owner (1) | Shares Held | within 60 Days | Owned | (2) | ||||||||||||
5% Shareholders: | ||||||||||||||||
Mark A. Emalfarb (3) | 4,532,493 | 675,000 | 5,207,493 | 17.7 | % | |||||||||||
The Francisco Trust U/A/D February 28, 1996 (4) | 3,548,528 | — | 3,548,528 | 12.3 | % | |||||||||||
Bandera Master Fund L.P. (5) | 1,566,908 | — | 1,566,908 | 5.4 | % | |||||||||||
Named Executive Officers and Directors: | ||||||||||||||||
Mark A. Emalfarb (3) | 4,532,493 | 675,000 | 5,207,493 | 17.7 | % | |||||||||||
Ping W. Rawson | 84,851 | 529,390 | 614,241 | 2.1 | % | |||||||||||
Joseph Hazelton | 57,488 | 3,125 | 30,573 | * | ||||||||||||
Michael P. Tarnok | 188,929 | 485,000 | 673,929 | 2.1 | % | |||||||||||
Jack L. Kaye | 6,407 | 485,000 | 491,407 | 1.7 | % | |||||||||||
Seth J, Herbst, M.D. | 105,000 | 395,000 | 500,000 | 1.7 | % | |||||||||||
Arindam Bose, Ph.D. | — | 485,000 | 485,000 | 1.7 | % | |||||||||||
Barry C. Buckland, Ph.D. | — | 230,000 | 230,000 | * | ||||||||||||
Patrick Lucy | — | 110,000 | 110,000 | * | ||||||||||||
All current executive officers and directors as a group (6) | 4,987,812 | 3,978,572 | 8,966,384 | 27.3 | % | |||||||||||
(10 persons) | ||||||||||||||||
Notes:
(*) | Less than 1%. |
(1) | Except as otherwise noted, the address for each shareholder is c/o Dyadic International, Inc., 140 Intracoastal Pointe Drive, Suite 404, Jupiter, FL 33477. |
(2) | Based on shares of common stock outstanding as of April 14, 2023. Shares of common stock subject to options that are exercisable within 60 days after such date are deemed outstanding for purposes of computing the percentage of the person holding such options but are not deemed outstanding for purposes of computing the percentage of any other person. |
(3) | Per a Schedule 13G filed by Mark A. Emalfarb on February 14, 2023, includes 5,207,493 shares held by Mr. Emalfarb beneficially through the MAE Trust U/A/D October 1, 1987 (the “MAE Trust”), of which Mr. Emalfarb is the sole beneficiary and serves as sole trustee. Per the Schedule 13G, Mr. Emalfarb has sole voting and dispositive power over all shares held through the MAE Trust. In addition, Mr. Emalfarb holds 675,000 shares of common stock underlying options that are presently exercisable. Based on the information available to us, the address of the MAE Trust is 193 Spyglass Court, Jupiter, FL 33477. |
(4) | Based on a Schedule 13G filed by the Francisco Trust U/A/D February 28, 1996 (the “Francisco Trust”) on March 14, 2023. Per the Schedule 13G, the Francisco Trust has sole voting and dispositive power over 3,548,528 shares of common stock. The trustee of the Francisco Trust is Adam Morgan, and the beneficiaries thereof are the spouse and descendants of Mark A. Emalfarb. The address of the Francisco Trust is 3128 San Michele Drive, Palm Beach Gardens, FL 33418. Mr. Emalfarb disclaims beneficial ownership of such shares. |
(5) | Based on a Schedule 13G filed by Bandera Partners LLC, a Delaware limited liability company (“Bandera Partners”), Gregory Bylinsky and Jefferson Gramm on February 13, 2023. Per the Schedule 13G, Bandera Partners has sole voting and dispositive power over 1,566,908 shares of common stock, and Messrs. Bylinsky and Gramm each have shared voting and dispositive power over 1,566,908 shares of common stock. The address for each of Bandera Partners, Mr. Bylinsky and Mr. Gramm is 50 Broad Street, Suite 1820, New York, NY 10004. |
(6) | Includes all current directors, all named executive officers and our remaining current executive officer, Ronen Tchelet, Ph.D. |
PROPOSAL 1
Our board is divided into three classes, each class consisting of one-third ofBoard has determined that the total number of directors constituting the entire board of directors. One class of each director is elected each year at our annual meeting of stockholders for a three-year term. The Class II directors’ terms expire at the 2006 annual meeting.
The Audit Committee will consider all the relevant facts and circumstances available to the Audit Committee, including (if applicable) but not limited to: (a) the benefits to the Company; (b) the availability of other sources for comparable products or services; (c) the terms of the transaction; and (d) the terms available to unrelated third parties or to employees generally. No member of the Audit Committee will participate in any review, consideration, or approval of any related person transaction if such member, or any of his or her immediate family members, is the related person. The Audit Committee or Audit Committee Chairman, as applicable, will convey the approval or disapproval of the transaction to the Chief Executive Officer or Secretary, who will convey the decision to the appropriate persons within the Company. The Audit Committee Chairman will report to the Audit Committee at the next Audit Committee meeting any approval under this policy made by the chairperson pursuant to delegated authority.
In the event we become aware of a related person transaction covered by our policy that has not been previously approved or previously ratified under this procedure, and such transaction is pending or ongoing, it will be submitted to the Audit Committee or Audit Committee Chairman, as applicable, promptly, and the board has nominated,Audit Committee or Audit Committee Chairman will consider all the relevant facts and circumstances available to the Audit Committee or Audit Committee Chairman as provided above. Based on the conclusions reached, the Audit Committee or Audit Committee Chairman, as applicable, will evaluate all options, including but not limited to, ratification, amendment, or termination of the related person transaction.
The Company was not a participant to any related person transactions reportable under Item 404 of Regulation S-K during its last fiscal year, the previous fiscal year or the subsequent stub period through the date of this proxy statement, and no such transaction is currently proposed.
CORPORATE GOVERNANCE AND RELATED MATTERS
General
The following discussion summarizes certain corporate governance matters relating to the Company, including information about director independence, Board and Committee structure, function and composition, charters, policies, and procedures. For additional information on the Company’s corporate governance, including copies of the charters approved by the Board for the Audit Committee, the Compensation Committee of the Board (“Compensation Committee”), the Nominating Committee of the Board (“Nominating Committee”), the Sciences and Technology Committee of the Board (“Science and Technology Committee”), and the Company’s Code of Conduct and Ethics, please visit the “Investors” section of the Company’s web site at https://dyadic-international-inc.ir.rdgfilings.com/ under Corporate Governance.
Board of Directors and Committees
Board of Directors and Leadership Structure
The Board is responsible for directing and overseeing the business and affairs of the Company. The Board represents the Company’s shareholders, and its primary purpose is to build long-term shareholder value. The Board meets on a regularly scheduled basis during the year to review significant developments affecting the Company and to act on matters that, in accordance with good corporate governance, require Board approval. It also holds annual meetings and acts by unanimous written consent when an important matter requires Board action between scheduled meetings. The Board held nine (9) meetings during 2022 and each of Stephen J. Warner and Harry Z. Rosengart to stand for re-election as a Class II director, each for a three-year term expiring in 2009.
We have a classified Board currently fixed at the annual meeting by the holders of shares of our common stock entitled to vote at the annual meeting is required for the election of these nomineesseven members. The Board has four committees: Audit Committee, Compensation Committee, Nominating Committee, and Science and Technology Committee. Currently, Mr. Michael Tarnok serves as Class II directors.
We separate the roles of Merrill Lynch & Co. Inc. in New York and served as its PresidentChairman of the Board and Chief Executive Officer from 1981Officer. We believe that having an independent Chairman promotes a greater role for the independent directors in the oversight of the Company, including oversight of material risks facing the Company, encourages active participation by the independent directors in the work of our Board, enhances our Board’s role of representing shareholders’ interests and improves our Board’s ability to 1990. Under his leadership, Merrill Lynch Venture Capital managed over $250 millionsupervise and made over 50 venture capital investments. In 1999, Mr. Warner co-founded, and became Chairman and CEO, of Crossbow Ventures Inc., a private equity fund that invests in early and expansion stage technology companies primarily located in Florida and the Southeast, with over 20 venture capital investments in Florida. Mr. Warner earned a B.S. degree from the Massachusetts Institute of Technology and an MBA from the Wharton School of Business, University of Pennsylvania.
Name | Age | Class | Term Expiring |
| Richard J. Berman | 63 | I | 2008 |
| Robert B. Shapiro | 67 | I | 2008 |
| Mark A. Emalfarb | 51 | III | 2007 |
| Glenn E. Nedwin, Ph.D. | 50 | III | 2007 |
The Board’s Role in Risk Oversight
Our Board, as a whole and at the committee level, has beenan active role in overseeing management of the President, Chief Executive OfficerCompany’s risks. The Board regularly reviews information regarding the Company’s business and Chairmanoperations, including with respect to liquidity, financial reporting, governance and compliance, information technology and data security, as well as the risks associated with these activities.
Independence of Directors
In evaluating the independence of its members and the composition of the committees of the Board, the Board utilizes the definition of Directorsindependence as that term is defined under the published listing requirements of our wholly-owned subsidiary Dyadic International (USA), Inc.,NASDAQ. The NASDAQ independence definition includes a Florida corporation (“Dyadic-Florida”), since its inception. Since founding Dyadic-Floridaseries of objective tests. For example, an independent director may not be employed by us and may not engage in 1979, Mr. Emalfarbcertain types of business dealings with the Company. In addition, as further required by NASDAQ rules, the Board has successfully led and managedmade a subjective determination as to each independent director that no relation exists which, in the evolution of Dyadic-Florida—from its origins as a pioneer and leader in providing ingredients used in stone-washing of blue jeans—to the discovery, development, manufacturing and commercialization of specialty enzymes used in various
Committees of the Board
The boardBoard has established an Audit Committee, a Compensation Committee, a Nominating Committee and a Science and Technology Committee to devote attention to specific subjects and to assist the Board in the discharge of directors held eleven (11) meetings during 2005,its responsibilities. The following table provides membership and meeting information for each of the directors attended at least seventy-five percent (75%) of the total number of meetings of the board of directors and committee (if any) on which he served. The board of directors has a standing audit committee, compensation committee and nominating committee. Each of the committees has a written charter which can be found on our website at
Name | Audit | Compensation | Nominating | Science and Technology | ||||||||
Michael P. Tarnok | X | X* | X | — | ||||||||
Seth J. Herbst, M.D. | — | X | X* | — | ||||||||
Arindam Bose, Ph.D. | X | — | — | X* | ||||||||
Jack L. Kaye | X* | X | — | — | ||||||||
Barry C. Buckland, Ph.D. | — | — | X | X | ||||||||
Patrick Lucy | — | — | — | X | ||||||||
Mark A. Emalfarb | — | — | — | X |
* Committee Chairman
Audit Committee.
TheThe SEC and NASDAQ have established rules and regulations regarding the composition of audit committees and the qualifications of audit committee members. Our Board has examined the composition of our Audit Committee and the qualification of our Audit Committee members in considering the current rules and regulations governing audit committees. Based upon this examination, our Board has determined that each member of our Audit Committee is independent and is otherwise qualified to be a member of our Audit Committee in accordance with the rules of the SEC and NASDAQ.
Additionally, the SEC requires that at least one member of the audit committee have a heightened level of financial and accounting sophistication. Such a person is known as the “audit committee financial expert” under the SEC’s rules. Our Board has responsibilities and authority necessary to comply with Rule 10A-3(b) (2)determined that Mr. Kaye is an “audit committee financial expert”, (3), (4), and as defined in Item 407(d)(5) of Regulation S-K, and is an independent member of our Board and our Audit Committee. Please see Mr. Kaye’s biography included in this Proxy Statement for a description of his relevant experience.
Compensation Committee. The Compensation Committee held one (1) meeting during the Exchange Act, concerningyear ended December 31, 2022. The duties and responsibilities of the Compensation Committee are set forth in the Charter of the Compensation Committee. A copy of the Charter of the Compensation Committee is available on our website, located at www.dyadic.com. As discussed in its charter, among other things, the duties and responsibilities relating to: (a) registered public accounting, (b) complaintsof the Compensation Committee include evaluating the performance of the Chief Executive Officer, Chief Financial Officer, and other key personnel of the Company, including, but not limited to, our incentive and equity-based plans. The Compensation Committee evaluates the performance of the Chief Executive Officer, Chief Financial Officer, and other key personnel of the Company on an annual basis and reviews and approves on an annual basis all compensation programs and awards relating to accounting, internal accounting controls or auditing matters, (c) authoritysuch officers and key personnel. From time to engage advisorstime, the Company engages compensation consultants to evaluate compensation of all Company officers and (d) funding. These andBoard members. The Compensation Committee then uses discretion in applying these ranges to the individual executive compensation packages to ensure compliance with the Company’s compensation philosophy. The Chief Executive Officer makes recommendations to the Compensation Committee with respect to the compensation packages for officers other
Nominating Committee.
The nominating committeeNominating Committee does not currently have any formal minimum qualification requirements that must be met by a nominee to serve as a member of the board of directors.Board. The nominating committeeNominating Committee will take into accountconsider all factors they considerit considers appropriate, which may include experience, accomplishments, education, understanding of the business and the industries in which we operate, specific skills, general business acumen and the highest personal and professional integrity.
The Nominating Committee currently has no fixed process for identifying new nominees for election as a director, thereby retaining the flexibility to adapt its process to the circumstances. The nominating committeeNominating Committee has the ability, if it deems it necessary or appropriate, to retain the services of an independent search firm to identify new director candidates. The nominating committeeNominating Committee has determined that it will give consideration toconsider any potential candidate proposed by a member of our boardBoard or senior management. Any director candidate so proposed will be personally interviewed by at least one member of the nominating committeeNominating Committee and our chief executive officerChief Executive Officer and their assessment of his or her qualifications will be provided to the full nominating committee. For this annual stockholders’ meeting, the nominating committee received no proposals for new director candidates, and considered only and nominated the incumbent Class II directors to serve as nominees for re-election.
Our policy and procedures regarding director candidates recommended by stockholdershareholders are contained in the nominating committee’sNominating Committee’s charter. The nominating committee may consider for inclusion in its nominations for new directors any candidates recommended by stockholders, but must consider any candidate for director recommended by (i) any stockholder beneficially owning more than 5% of our outstanding common stock for at least one year as of the date the recommendation was made or (ii) a group of stockholders that beneficially owned, in the aggregate, more than 5% of our outstanding common stock, with each of the shares used to calculate that ownership held for at least one year as of the date the recommendation was made. The nominating committeeNominating Committee will consider the candidate based on the same criteria established for selection of director nominees generally. The nominating committeeNominating Committee reserves the right to reject any candidate in its discretion, including, without limitation, rejection of a candidate who has a special interest agenda other than the best interests of usthe Company and our stockholders,the shareholders, generally. Any stockholdershareholder who wishes to recommend for the nominating committee’sNominating Committee’s consideration a director candidate should follow the following procedures:
Science and discussions referred to above, the audit committee recommended to the board of directors (and the board has approved) that the audited financial statements for 2005 be included in our annual report on Form 10-KSB forTechnology Committee. The Science and Technology Committee held five (5) meetings during the year ended December 31, 2005,2022. The duties and responsibilities of the Science and Technology Committee are set forth in the Charter of the Science and Technology Committee. A copy of the Charter of the Science and Technology Committee is available on our website located at www.dyadic.com. As discussed in its charter, among other things, the duties and responsibilities of the Science and Technology Committee are following:
1) | Review, evaluate and report to the Board regarding the performance of the Vice-President, Research and Development (and his or her team), the contract research organizations being considered or working on behalf of the Company in achieving the strategic goals and objectives and the quality and direction of the Company’s biopharmaceutical research and development programs. |
2) | Identify and discuss significant emerging science and technology issues and trends. |
3) | Review the Company’s approaches to acquiring and maintaining a range of distinct technology positions (including but not limited to contracts, grants, collaborative efforts, alliances, and capital investments). |
4) | Evaluate the soundness/risks associated with the technologies in which the Company is investing its research and development efforts. |
5) | Periodically review the Company’s overall patent strategies. |
Shareholder Communications
Our Board believes that it is important for our shareholders to have a process to send communications to the Board. Accordingly, shareholders desiring to send a communication to the Board, or to a specific director, may do so by delivering a letter to the Secretary of the Company at 140 Intracoastal Pointe Drive, Suite 404, Jupiter, Florida 33477. The mailing envelope must contain a clear notation indicating that the enclosed letter is a “shareholder-director communication.” All such letters must identify the author as filedthe shareholder and clearly state whether the intended recipients of the letter are all the members of our Board or certain specified individual directors. The Secretary will circulate these communications to the applicable director or directors, as appropriate.
Human Capital
The Company believes that its success depends on the ability to attract, develop, retain, and incentivize our existing and new employees, consultants, and key personnel. It also believes that the skills, experience, and industry knowledge of its key personnel significantly benefits its operations and performance. The principal purposes of equity and cash incentive plans are to attract, retain and reward personnel through the granting of stock-based and cash-based compensation awards, to increase shareholder value and the success of our company by motivating such individuals to perform to the best of their abilities and achieve our objectives.
Employee levels are managed to align with the Securitiespace of business, and Exchange Commission.management believes it has sufficient human capital, along with the third-party research organizations with who we have collaboration agreements, to operate its business successfully.
Policy Concerning Director Attendance at Annual Meetings of Shareholders
While we encourage all members of our Board to attend the annual meetings of our shareholders, there is no formal policy as to their attendance at such meetings. All members of the Board attended the 2022 Annual Meeting of Shareholders.
Director Attendance at Board Meetings
During 2022, no member of the Board attended fewer than 75% of the aggregate of the total number of meetings of the Board (held during the period for which he or she was a director) and the total number of meetings held by all committees of the Board on which such director served (held during the period that such director served).
Code of Conduct and Ethics
We have adopted a Code of Conduct and Ethics, as amended, that applies to all employees, key consultants, officers, and directors of our company, including our principal executive officer, principal financial officer and principal accounting officer, or persons performing similar functions. Our Code of Conduct and Ethics is available on the “Corporate Governance” page of the “Investors” section of our website at www.dyadic.com. A copy of our Code of Conduct and Ethics can also be obtained free of charge by contacting our Secretary, c/o Dyadic International, Inc, 140 Intracoastal Pointe Drive, Suite 404, Jupiter, FL 33477. We intend to satisfy the SEC disclosure requirement regarding any amendment to, or waiver from, a provision of our Code of Conduct and Ethics by posting such information on our website.
Hedging
We have not adopted any practices or policies regarding the ability of our employees (including officers) or directors, or any of their designees, to purchase financial instruments (including prepaid variable forward contracts, equity swaps, collars, and exchange funds), or otherwise engage in transactions, that hedge or offset, or are designed to hedge or offset, any decrease in the market value of our equity securities.
Compensation of April 26, 2006.
The following table sets forth the total compensation earned, accrued or paid tofor our Chief Executive Officer and each of our four most highly compensated executive officers who served in such capacities as of December 31, 2005, collectively referred to below and throughout this proxy statement as the “named executive officers,”non-employee directors for the years ended December 31, 2005, 2004 and 2003.
Annual Compensation (1) | Long-Term Compensation Awards | ||||
Name and Principal Position | Year | Salary ($) | Bonus ($) | Restricted Stock Awards | Securities Underlying Option Awards |
Mark A. Emalfarb(2) Chairman, President and Chief Executive Officer | 2005 | 300,000 | - | - | - |
| 2004 | 300,000 | 75,000 | - | - | |
| 2003 | 300,000 | 35,970 | - | - | |
Wayne Moor(3) Chief Financial Officer and Vice President | 2005 | 207,120 | - | - | 307,889 |
Ratnesh (Ray) Chandra (4) Senior Vice President, Marketing - Biotechnology Systems | 2005 | 165,517 | - | - | 30,000 |
| 2004 | 149,856 | 30,000 | - | 60,000 | |
| 2003 | 144,004 | 23,250 | - | 15,000 | |
Kent M. Sproat (5) Executive Vice President, Enzyme Business | 2005 | 179,154 | - | - | 30,000 |
| 2004 | 145,206 | 30,000 | - | 80,000 | |
| 2003 | 139,505 | 23,250 | - | 10,000 | |
Alexander (Sasha) Bondar (6) Vice President, Strategy & Corporate Development | 2005 | 139,755 | - | - | 20,000 |
| 2004 | 138,105 | 25,000 | - | 45,000 | |
| 2003 | 74,157 | 23,250 | - | 25,000 | |
Non-equity | Nonqualified | |||||||||||||||||||||||||||
Fees earned | Options | incentive plan | deferred | All other | ||||||||||||||||||||||||
or paid in | Stock awards | awards | compensation | compensation | compensation | |||||||||||||||||||||||
Name (4) | cash (1) | ($) | ($) (1)(2)(3) | ($) | earnings ($) | ($) | Total ($) | |||||||||||||||||||||
Michael P. Tarnok | $ | 45,000 | $ | — | $ | 174,975 | $ | — | $ | — | $ | — | $ | 219,975 | ||||||||||||||
Jack L. Kaye | $ | 45,000 | $ | — | $ | 174,975 | $ | — | $ | — | $ | — | $ | 219,975 | ||||||||||||||
Arindam Bose, Ph.D. | $ | 45,000 | $ | — | $ | 174,975 | $ | — | $ | — | $ | — | $ | 219,975 | ||||||||||||||
Seth J. Herbst, MD | $ | 30,000 | $ | — | $ | 129,027 | $ | — | $ | — | $ | — | $ | 159,027 | ||||||||||||||
Barry C. Buckland, Ph.D. | $ | 30,000 | $ | — | $ | 129,027 | $ | — | $ | — | $ | — | $ | 159,027 | ||||||||||||||
Patrick Lucy | $ | 30,000 | $ | — | $ | 168,411 | $ | — | $ | — | $ | — | $ | 198,411 | ||||||||||||||
Notes:
(1) | Directors who are also employees or officers of the Company or any of its subsidiaries do not receive any separate compensation as a director. For fiscal year 2022, non-employee directors received a retainer for board service of $30,000 cash and 25,000 options. The annual stock option award for non-employee directors is 35,000 options per year. In addition, a director who serves as Chairman of the Board, Chair of the Audit Committee, or Chair of the Science and Technology Committee receives an additional annual retainer of $15,000 cash and 17,500 options per year. In January 2022, Mr. Lucy received an additional 15,000 options due to his special contributions to the board, including his service on the Science and Technology Committee. All options granted to directors vest upon the one-year anniversary after the grant date. |
(2) | The stock option awards represent the grant date fair market value of each option granted in 2022, computed in accordance with FASB ASC Topic 718. These amounts do not correspond to the actual value that will be recognized by the named directors. The assumptions used in the valuation of these awards are consistent with the valuation methodologies specified in Note 6 to our audited consolidated financial statements for the year ended December 31, 2022. |
(3) | Options to purchase 485,000 shares (Mr. Tarnok), 485,000 shares (Mr. Kaye), 485,000 shares (Dr. Bose), 420,000 shares (Mr. Herbst), 230,000 shares (Dr. Buckland) and 110,000 shares (Mr. Lucy) were outstanding at December 31, 2022. |
Board Diversity Matrix
The table below provides certain highlights of the namedcomposition of our Board members and nominees. Each of the categories listed in the table has the meaning as it is used in NASDAQ Rule 5605(f).
Board Diversity Matrix for Dyadic International, Inc. | ||||
Total Number of Directors | 7 | |||
Part I: Gender Identity | Female | Male | Non-Binary | Did Not Disclose Gender |
Directors | 0 | 7 | 0 | 0 |
Part II: Demographic Background | ||||
African American or Black | 0 | 0 | 0 | 0 |
Alaskan Native or American Indian | 0 | 0 | 0 | 0 |
Asian | 0 | 1 | 0 | 0 |
Hispanic or Latinx | 0 | 0 | 0 | 0 |
Native Hawaiian or Pacific Islander | 0 | 0 | 0 | 0 |
White | 0 | 6 | 0 | 0 |
Two or More Races or Ethnicities | 0 | 0 | 0 | 0 |
LGBTQ+ | 0 | |||
Did Not Disclose Demographic Background | 0 | |||
Our executive officers. No stock appreciation rights were granted to these individuals during that year.
Name | Number of Securities Underlying Options Granted (#) | % of Total Options Granted to Employees in Fiscal Year | Exercise or Base Price ($/SH) | Expiration Date |
Mark A. Emalfarb | - | - | - | - |
Wayne Moor | 277,889 | 28% | 3.68 | 01/31/10 |
Ratnesh (Ray) Chandra | 50,000 | 5% | 3.025 | 03/30/10 |
Kent M. Sproat | 70,000 | 7% | 3.025 | 03/30/10 |
Alexander (Sasha) Bondar | 35,000 | 4% | 3.025 | 03/30/10 |
Name | Age | Current Position(s) | ||
Mark A. Emalfarb | 68 | President, Chief Executive Officer, Director | ||
Ping Rawson | 47 | Chief Financial Officer | ||
Joseph Hazelton | 47 | Chief Business Officer | ||
Ronen Tchelet, Ph.D. | 65 | |||
Vice President of Research and Business Development |
Mark A. Emalfarb, President, Chief Executive Officer and Director
Mark A. Emalfarb is the founder of Dyadic, International, Inc. 2001 Equity Compensation Plan was adopted by Dyadic-Florida’sand currently serves as the Chief Executive Officer and a member of the Board of Directors of the Company. He has been a member of Dyadic’s board of directors and stockholdershas previously served as its Chairman from October 2004 until April 2007 and assumed by usfrom June 2008 until January 2015. Since founding the predecessor to Dyadic in 1979, Mr. Emalfarb has served as a Director, President and Chief Executive Officer for substantially all of that time and has successfully led and managed the evolution of Dyadic from its origins as a pioneer and leader in providing ingredients used in the stone-washing of blue jeans to the discovery, development, manufacturing and commercialization of specialty enzymes used in various industrial applications and the development of an integrated technology platform based on October 29, 2004 upon consummationDyadic’s patented and proprietary C1 fungal microorganism. Mr. Emalfarb is an inventor of over 25 U.S. and foreign biotechnology patents and patent applications resulting from discoveries related to the patented and proprietary C1 fungus and has been the architect behind its formation of several strategic research and development, manufacturing and marketing relationships with U.S. and international partners. Mr. Emalfarb earned his B.A. degree from the University of Iowa in 1977.
Ping Rawson, MBA, Chief Financial Officer
Ping Rawson has been our Chief Financial Officer since June 2019, and she previously served as the Company's Chief Accounting Officer and Director of Financial Reporting. She is currently responsible for all aspects of the merger between usCompany's finance, tax and Dyadic-Florida. The purposetreasury. Prior to joining Dyadic in June 2016, Ms. Rawson served as a technical accounting management position for ADT Security Services, where she led accounting and financial reporting workstream for acquisition, integration and restructuring. Prior to that, Ms. Rawson was an accounting research principal for NextEra Energy, Inc. (Florida Power & Light Company), where she was responsible for accounting research and new standards implementation. Previously, Ms. Rawson was a manager at Deloitte in New York City, where she was a subject matter specialist for derivatives, financial instruments and valuation, providing audit, SEC reporting, and capital markets consulting services to large banking and multinational public companies. Ms. Rawson holds both a M.B.A. in Finance, and a M.S. in Accounting from the State University of New York at Buffalo, and a B.S. in Economics from Guangdong University of Foreign Studies.
Joseph Hazelton, Chief Business Officer
Joseph Hazelton joined the Company in November 2021, as its Chief Business Officer. Mr. Hazelton brings over 20 years of pharmaceutical industry experience to Dyadic in key growth areas of product and business development, licensing, and commercialization. He joins Dyadic from Charleston Laboratories, Inc. (“Charleston”), where he has served as Chief Operating Officer and Chief Commercial Officer, responsible for the strategic management of Charleston’s product and portfolio management, alliance management, regulatory oversight, and global commercialization activities. Prior to Charleston, Mr. Hazelton began his career at Novartis Pharmaceuticals Corporation (“Novartis”), where over 15 years, he ascended to roles of increasing responsibility based on his leadership, innovation, and results. While at Novartis, Mr. Hazelton held leadership positions within the core functions of sales, marketing, market access, pricing, contracting, and strategic alliances for various retail and specialty pharmaceuticals across a broad spectrum of therapeutic areas and several blockbuster products. Neither Charleston nor Novartis is a parent, subsidiary or other affiliate of Dyadic. Mr. Hazelton earned his B.A. from the College of the 2001 Equity Compensation PlanHoly Cross in Worcester, MA.
Ronen Tchelet, Ph.D., Vice President of Research and Business Development
Ronen Tchelet, Ph.D. joined Dyadic in May 2014, and has been our Vice President of Research and Business Development since January 2016. Since joining Dyadic, Dr. Tchelet has been a key contributor to Dyadic’s transformation into a pharmaceutical biotech company. Prior to joining Dyadic, Dr. Tchelet was the founder and Managing Director of Codexis Laboratories Hungary kft. (“CLH”) and a Vice President of Codexis Inc. from 2007 through 2014. While at CLH, Dr. Tchelet established a state-of-the-art laboratory for strain engineering and all aspects of fermentation including process optimization and scale up. During this time period, Dr. Tchelet also led a collaboration that successfully developed C1 technology for the Biofuel and the Bio-Industrial enzymes applications. Dr. Tchelet’s experience in the pharmaceutical industry includes prior employment at TEVA Pharmaceutical Industries LTD (“TEVA”), API Division during the late 2000’s to 2006. While at TEVA, he served as a Chief Technology Officer of Biotechnology and head of TEVA’s Biotechnology Research and Development fermentation plant in Hungary. Also, during the period of 2000 through 2005, Dr. Tchelet was the Director of Quality Assurance for TEVA’s flag ship innovative drug, COPAXONE®. Throughout his career, Dr. Tchelet has led several Biotechnology projects that have encompassed all aspects of research and development, operations management, and manufacturing of API’s and biologics. Dr. Tchelet received his Ph.D. in Molecular Microbiology and Biotechnology from Tel Aviv University in 1993 and did his postdoctoral work as an EERO fellow at the Institute of Environmental Science and Technology (EAWAG) in Switzerland.
COMPENSATION OF OUR EXECUTIVE OFFICERS
Philosophy and Objectives
The philosophy underlying our executive compensation program is to provide an attractive, flexible, and market-based total compensation program tied to performance and aligned with the interests of our shareholders. Our objective is to recruit and retain the caliber of executive officers and attractother key management, employees nonemployee directorsnecessary to deliver sustained high performance to our shareholders, customers, and consultantscommunities where we have a strong presence. Our executive compensation program is an important component of these overall human resources policies. Equally important, we view compensation practices as a means for communicating our goals and standards of conduct and performance and for motivating and rewarding employees in relation to their achievements. The organization’s executive compensation program is designed to:
Encourage the attraction and retention of high-caliber executives.
Provide a competitive total compensation package, including benefits.
Reinforce the goals of the organization by providing those personssupporting teamwork and collaboration.
Ensure that pay is perceived to be fair and equitable.
Be flexible to potentially reward individual accomplishments as well as organizational success.
Ensure that the program is easy to explain, understand, and administer.
Balance the needs of both the Company and employees to be competitive with the limits of available financial resources.
Ensure that the program complies with state and federal legislation.
From time to time, the Company will consult with a proprietary interestcompensation specialist to determine whether its overall compensation practices and policies are appropriate for the specific market conditions for the Company and the industries in us. which it operates.
Summary Compensation Table
The following table summarizes the compensation committee administerspaid or accrued to our “named executive officers” (as defined by the EquitySEC’s disclosure requirements) during fiscal years 2022 and 2021:
Salary | Bonus | Stock Awards | Option Awards | Nonequity incentive plan compensation | Nonqualified deferred compensation earnings | All other payments | ||||||||||||||||||||||||||||
Name and Principal Position | Year | ($) | ($)(1) | ($) (2) | ($)(3) | ($) | ($) | ($) (4) | Total ($) | |||||||||||||||||||||||||
Mark A. Emalfarb (*) | 2022 | $ | 546,000 | $ | 65,520 | $ | 191,100 | $ | 544,425 | $ | — | $ | — | $ | 25,091 | $ | 1,372,136 | |||||||||||||||||
President, CEO and Director | 2021 | $ | 525,000 | $ | 210,000 | $ | — | $ | 531,168 | $ | — | $ | — | $ | 24,491 | $ | 1,290,659 | |||||||||||||||||
Ping W. Rawson | 2022 | $ | 248,251 | $ | 18,619 | $ | 54,305 | $ | 207,909 | $ | — | $ | — | $ | 12,200 | $ | 541,284 | |||||||||||||||||
Chief Financial Officer | 2021 | $ | 238,703 | $ | 59,676 | $ | — | $ | 199,188 | $ | — | $ | — | $ | 11,600 | $ | 509,167 | |||||||||||||||||
Joseph Hazelton | 2022 | $ | 241,608 | $ | 27,181 | $ | 79,278 | $ | 34,652 | $ | — | $ | — | $ | 8,065 | $ | 390,784 | |||||||||||||||||
Chief Business Officer | 2021 | $ | 34,545 | $ | 12,000 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 46,545 | |||||||||||||||||
Notes:
(*) | Mr. Emalfarb also serves on the Board, for which he receives no direct, indirect, or incremental compensation. |
(1) | All 2022 bonuses were accrued as of December 31, 2022, and paid in January 2023. |
(2) | The Stock Awards reported in this column represent Restricted Share Units (“RSUs”) granted in lieu of the Company’s key employee annual cash bonuses, earned for the year ended December 31, 2022 and awarded on January 3, 2023, on which date they vested in full. Such RSUs were in the following amounts: for Mr. Emalfarb, 138,478; for Ms. Rawson, 39,351; and for Mr. Hazelton, 57,558. The amounts reported represent the grant date fair market value of each RSU in accordance with FASB ASC Topic 718. |
(3) | The Option Awards reported in this column represent stock options granted on January 3, 2022, vesting annually in equal installments over four years on each anniversary of the grant date. The amount reported represents the grant date fair market value of each option granted, computed in accordance with FASB ASC Topic 718. These amounts do not correspond to the actual value that will be recognized by the named executive officers. The assumptions used in the valuation of these awards are consistent with the valuation methodologies specified in Note 6 to our consolidated financial statements for the year ended December 31, 2022. |
(4) | All other compensation includes the following: |
• • • | for Mr. Emalfarb, $12,891 for a car allowance for 2022 and $12,200 for the Company’s contribution to his 401(k) for 2022. for Ms. Rawson, $12,200 for the Company’s contribution to her 401(k) retirement plan in 2022; and for Mr. Hazelton, $8,065 for the Company’s contribution to his 401(k) retirement plan in 2022. |
Narrative Disclosure to the Summary Compensation PlanTable
Employment Agreements
Mark A. Emalfarb
On June 21, 2016, the Company entered into an employment agreement (the “Emalfarb Agreement”) with Mr. Emalfarb. The Emalfarb Agreement has an initial term of three years and may grant stock options, which mayautomatic renewals of two years at the end of each term, unless either party provides a notice of nonrenewal, and provides that Mr. Emalfarb be incentive stock options or nonqualified stock optionsemployed as our President and Chief Executive Officer and that do not comply with Section 422we will cause Mr. Emalfarb to be elected as a member of the Internal Revenue Code,Board. The material terms of the Emalfarb Agreement are summarized below.
Base Salary and Bonus. The Emalfarb Agreement provides for an annual base salary of $375,000, which was increased periodically, eventually to $525,000 in January 2022 and to $569,000 in January 2023. The Emalfarb Agreement also provides for an annual bonus award, with the timing and amount of any such bonus determined in the sole discretion of the Compensation Committee of the Board.
Licensing/Collaboration Transaction Stock Options. A stock awards and performance unitsoption grant to eligible persons with such terms and conditions as are determined by the committee. The committee may grant one or more types of awards in any combinationpurchase up to an eligible person in a particular year, subject to certain limitations. The Equity Compensation Plan was recently amended and restated by our board of directors effective as of January 1, 2005 to (a) reduce the number ofsix hundred thousand (600,000) shares of common stock reservedwill be proportionally awarded, vest and become exercisable when each of three (3) Bona Fide Licensing / Collaboration Transactions are entered into with the Company. A “Bona Fide Licensing / Collaboration Transaction” is defined as (i) a license, joint venture, or other collaboration for issuancea specific biologic with the intent to commercialize and/or a license agreement (namely, a licensing agreement or other form of collaboration with Sanofi or another biotech/pharmaceutical company approved by the Board providing for the Company's grant of a license or other form of collaboration to such party to the Company's C1 technology for use in developing or manufacturing vaccines, antibodies or other biologics) that generates a cumulative $5 million dollars in non-refundable cash, or (ii) the sale of either the vaccine or biologics pharmaceutical business categories. On November 12, 2019, the Company entered an amendment (the “Emalfarb Agreement Amendment”) to the Emalfarb Agreement. Pursuant to the Emalfarb Agreement Amendment, the first and second stock options to be granted to Mr. Emalfarb upon the Company entering into a first or second licensing and/or collaboration transaction, respectively, will each be granted and vest on the date of such applicable licensing and/or collaboration transaction, and will each expire (and automatically be exercised with no action by Mr. Emalfarb) on the tenth anniversary of the respective date of grant. Pursuant to the Emalfarb Agreement Amendment, the third stock option will be granted to Mr. Emalfarb on the same date that the second stock option is granted, will vest upon the Company entering into a third licensing and/or collaboration transaction, and will expire on the fifth anniversary of the date of grant. The exercise price of the first and second stock options will be set at the trading price of the Company’s common stock on June 3, 2016, and the exercise price of the third stock option will be set at the trading price of the Company’s common stock on the grant date of the second stock option. Although they will be granted based on certain parameters relating to past performance, each of these options is not considered outstanding performance-vesting stock option, because the details of the performance conditions are not yet fully established.
Severance Terms. Mr. Emalfarb will be eligible for severance benefits comparable to other executives at his level. In addition, if Mr. Emalfarb’s employment is terminated by the Company without cause, by Mr. Emalfarb for good reason, or due to Mr. Emalfarb’s death or disability, subject to Mr. Emalfarb’s execution of a release, then all of Mr. Emalfarb’s Stock Exchange Stock Options and Licensing/Collaboration Transaction Stock Options that are unvested or have not been awarded will immediately be awarded and vest in the event milestones for which the options would have been awarded are achieved within one year from the date of termination or upon a change of control.
Change of Control. In the sole discretion of the Compensation Committee, Mr. Emalfarb may be awarded an additional bonus on or before the occurrence of a change of control.
Ping W. Rawson
Base Salary, Bonus and Equity. In connection with Ping Rawson’s appointment as the Company’s Chief Financial Officer in June 2019, the Board approved her base salary at $225,000 per year, which was increased periodically, eventually to $258,677 in January 2023, which increases were consistent with annual increases for the majority of the Company’s employees. Ms. Rawson will also receive discretionary annual cash bonuses and other equity compensation as determined by the Compensation Committee.
Severance Terms. Ms. Rawson will be eligible for severance benefits equal to twelve (12) months of continued salary, if her services are no longer required due to a change of control or she is terminated by the Company for any reason other than for cause.
Joseph Hazelton
On November 9, 2021, the Company appointed Joseph Hazelton as Chief Business Officer. On November 1, 2021, the Company entered into an employment agreement with Mr. Hazelton (the “Hazelton Agreement”). The material terms of the Hazelton Agreement are summarized below.
Base Salary and Bonus. Pursuant to the Hazelton Agreement, Mr. Hazelton will receive an annual base salary in the amount of $240,000 and, in the discretion of the Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”), will be eligible to receive an annual cash bonus up to 30 percent of Mr. Hazelton's annual base salary for the calendar year. The Board approved the increase in his salary at $254,292 in January 2023. His bonus will be determined based 50 percent on results of operations and 50 percent on individual and corporate goals and objectives. Mr. Hazelton may also receive an additional discretionary bonus as and if the Company may determine from time to time.
Performing-Vesting Stock Option. Pursuant to the Hazelton Agreement, Mr. Hazelton received a stock option grant to purchase 75,000 shares of the common stock of the Company at an exercise price of $4.10. The options will vest upon the Company receiving cash from approved defined transactions which Mr. Hazelton initiated for development of the Company’s technology with the intent to commercialize and/or a license agreement that generates a cumulative $10 million in non-refundable cash within three years of November 9, 2021.
Severance Terms. In the event Mr. Hazelton is terminated by the Company without cause or he resigns for good reason, subject to the execution of a release and compliance with the covenants in the Hazelton Agreement, he will be entitled to receive, in the reasonable discretion of the Company’s Compensation Committee, a prorated annual bonus and continued payment of salary and participation in the Company’s welfare plans for six months. In the event Mr. Hazelton’s employment terminated due to disability or death, he will be entitled to receive, in the reasonable discretion of the Company’s Compensation Committee, a prorated annual bonus and continued participation in the Company’s welfare plans solely to the extent permitted under the Plan to 4,478,475 shares from 5,152,447 shares , (b) to conform certain provisionsterms of the Plan to the requirements of Section 409A of the Internal Revenue Code of 1986, as amended, and (c) increase the maximum limitation of shares that may be subject to awards granted under the Plan to any one individual for any fiscal year during the term of the Plan to 1,200,000 shares from 100,000 shares. For a description of the 2001 Equity Compensation Plan as amended and restated for which we are seeking stockholder approval at the annual meeting, see “Proposal 2: Approval of Amended and Restated 2001 Equity Compensation Plan” on page 25.
All Other Compensation
The Company has in place a tax qualified employee savings and retirement plan, or 401(k) defined contribution plan in(the “401(k) Plan”), under which all employees are eligible to participate. Participantsparticipants may elect to defer up to 80%100% of their compensation up to a maximum amount determined annually pursuant to Internal Revenue Service regulations. Employee contributions may begin on90 days after the date of hire and are immediately vested. The 401(k) Plan provides a safe harbor basic match contribution for all eligible employees who make salary deferrals. The match contribution is equal to 100% of the employee’s salary deferral up to 4% of such employee’s annual deferred compensation. This match contribution is credited to the employee’s account and is 100% vested at the time of contribution.
Outstanding Equity Awards at Fiscal Year-End
The following table summarizes the outstanding equity award holdings held by our “named executive officers” (as defined by the SEC’s disclosure requirements) as of December 31, 2022.
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||
Equity | ||||||||||||||||||||||||||||||||||
Equity | Incentive | |||||||||||||||||||||||||||||||||
Incentive | Plan | |||||||||||||||||||||||||||||||||
Market | Plan | Awards: | ||||||||||||||||||||||||||||||||
Value | Awards: | Market | ||||||||||||||||||||||||||||||||
Number | of | Number | or Payout | |||||||||||||||||||||||||||||||
Equity | of | Shares | of | Value of | ||||||||||||||||||||||||||||||
Incentive | Shares | or | Unearned | Unearned | ||||||||||||||||||||||||||||||
Plan | or Units | Units | Shares, | Shares, | ||||||||||||||||||||||||||||||
Number of | Number of | Awards: | of | of | Units or | Units or | ||||||||||||||||||||||||||||
Securities | Securities | Number of | Stock | Stock | Other | Other | ||||||||||||||||||||||||||||
Underlying | Underlying | Securities | That | That | Rights | Rights | ||||||||||||||||||||||||||||
Unexercised | Unexercised | Underlying | Option | Have | Have | That | That | |||||||||||||||||||||||||||
Options | Options | Unexercised | Exercise | Option | Not | Not | Have Not | Have Not | ||||||||||||||||||||||||||
(#) | (#) | Unearned Options | Price | Expiration | Vested | Vested | Vested | Vested | ||||||||||||||||||||||||||
Name | exercisable | unexercisable | (#) | ($) | Date | (#) | ($) | (#) | ($) | |||||||||||||||||||||||||
Mark A. Emalfarb | 270,000 | — | — | 1.39 | 1/2/2023 | — | — | — | — | |||||||||||||||||||||||||
| 300,000 | — | — | 1.87 | 1/2/2024 | — | — | — | — | ||||||||||||||||||||||||||
| (1) | 150,000 | 150,000 | — | 5.27 | 1/2/2030 | — | — | — | — | |||||||||||||||||||||||||
| (1) | 50,000 | 150,000 | — | 5.16 | 1/4/2031 | — | — | — | — | |||||||||||||||||||||||||
| (1) | — | 200,000 | — | 4.81 | 1/2/2032 | — | — | — | — | |||||||||||||||||||||||||
Ping W. Rawson | 25,000 | — | — | 1.62 | 6/26/2026 | — | — | — | — | |||||||||||||||||||||||||
| 11,890 | — | — | 1.63 | 1/3/2027 | — | — | — | — | ||||||||||||||||||||||||||
| 30,000 | — | — | 1.39 | 1/2/2028 | — | — | — | — | ||||||||||||||||||||||||||
| (1) | 100,000 | — | — | 1.44 | 3/19/2028 | — | — | — | — | |||||||||||||||||||||||||
| (1) | 125,000 | — | — | 1.76 | 11/16/2028 | — | — | — | — | |||||||||||||||||||||||||
| (1) | 75,000 | 25,000 | — | 1.87 | 1/2/2029 | — | — | — | — | |||||||||||||||||||||||||
| 25,000 | — | — | 6.26 | 6/28/2029 | — | — | — | — | ||||||||||||||||||||||||||
| (1) | 37,500 | 37,500 | — | 5.27 | 1/2/2030 | — | — | — | — | |||||||||||||||||||||||||
| (1) | 18,750 | 56,250 | — | 5.16 | 1/4/2031 | — | — | — | — | |||||||||||||||||||||||||
| (1) | 75,000 | — | — | 4.81 | 1/2/2032 | — | — | — | — | |||||||||||||||||||||||||
Joseph Hazelton | (2) | — | — | 75,000 | 4.10 | 11/9/2031 | — | — | — | — | ||||||||||||||||||||||||
| (1) | — | 12,500 | — | 4.81 | 1/2/2032 | — | — | — | — | |||||||||||||||||||||||||
Notes:
(1) | The options vest annually in equal installments over four years on each anniversary of the grant date. |
| (2) | The performance-vesting stock options will vest upon the achievement of specific performance conditions as described under the heading “Narrative Disclosure to Summary Compensation Table—Employment Agreements--Joseph Hazelton” above. In accordance with SEC rules, this table shows the number of shares underlying the outstanding stock option award, assuming a payout at the full amount (as this is the only possible payout other than zero). |
EQUITY COMPENSATION PLAN INFORMATION
The following table summarizes information about our equity compensation plans as of December 31, 2022:
Number of | ||||||||||||
Securities | ||||||||||||
Remaining | ||||||||||||
Number of | Available for | |||||||||||
Securities | Future Issuance | |||||||||||
to be Issued Upon | Under Equity | |||||||||||
Exercise of | Weighted-Average | Compensation | ||||||||||
Outstanding | Exercise Price of | Plans (Excluding | ||||||||||
Options, | Outstanding | Securities | ||||||||||
Warrants and | Options, Warrants | Reflected in | ||||||||||
Plan Category | Rights(a) | and Rights (b) | Column (a)) (c) | |||||||||
Equity compensation plans approved by security holders | 5,031,097 | (1) | $ | 3.25 | 3,672,561 | (2) | ||||||
Equity compensation plans not approved by security holders | — | — | — | |||||||||
(1) | Represents 878,325 shares of Common Stock issuable under the Dyadic International, Inc. 2021 Equity Incentive Plan (including 75,000 shares underlying performance-vesting stock options, as described in “Narrative Disclosure to Summary Compensation Table—Employment Agreements—Joseph Hazelton”) and 4,152,772 shares of Common Stock issuable under the Dyadic International, Inc. 2011 Equity Incentive Plan. |
(2) | Represents 3,672,561 shares of Common Stock for future issuance under the Dyadic International, Inc. 2021 Equity Incentive Plan. |
PAY VERSUS PERFORMANCE
The following table provides information required by Item 402(v) of Regulation S-K. The Compensation Committee does not in practice use “compensation actually paid” as the basis for making compensation decisions. The below disclosure is provided only to comply with applicable SEC rules. For information regarding the Company’s pay-for-performance philosophy and how the Company aligns executive compensation with the Company’s performance, refer to “Compensation of our Executive Officers.”
Year | Summary Compensation Table Total for PEO(1) | Compensation Actually Paid to PEO(3) | Average Summary Compensation Table Total for non-PEO Named Executive Officers(2) | Average Compensation Actually Paid to non-PEO Named Executive Officers(2)(3) | Value of Initial Fixed $100 Investment Based On Total Shareholder Return (4) | Net Loss |
2022 | $1,372,136 | $(435,858) | $466,034 | $60,130 | $22.86 | $9,735,258 |
2021 | $1,290,659 | $2,579,815 | $466,434 | $1,352,752 | $81.78 | $13,070,251 |
Notes:
(1) | For each of the years presented, the principal executive officer (“PEO”) is Mark Emalfarb, President and Chief Executive Officer. |
(2) | During 2022, our non-PEO named executive officers (“NEOs”) consisted of Ping Rawson, Chief Financial Officer and Joseph Hazelton, Chief Business Officer. During 2021, our non-PEO NEOs consisted of Ping Rawson, Chief Financial Officer and Ronen Tchelet, Vice President of Research and Business Development. |
(3) | Compensation “actually paid” is calculated in accordance with Item 402(v) of Regulation S-K. The tables below set forth each adjustment made during each year presented in the table to calculate the compensation “actually paid” to our NEOs during each year in the table: |
2022 | 2021 | |||||||||||||||
PEO | Average for Non-PEO NEOs | PEO | Average for Non-PEO NEOs | |||||||||||||
Deduction for amounts reported under the “Stock Awards” column in the Summary Compensation Table | $ | (191,000 | ) | $ | (66,792 | ) | $ | - | $ | - | ||||||
Deduction for amounts reported under the “Option Awards” column in the Summary Compensation Table | (544,425 | ) | (121,281 | ) | (531,168 | ) | (183,823 | ) | ||||||||
Increase for fair value of awards granted during covered year that remain outstanding and unvested as of covered year end | 63,392 | 13,867 | 456,247 | 160,584 | ||||||||||||
Increase for fair value of awards granted during covered year that vested during covered year | 191,000 | 66,792 | - | - | ||||||||||||
Increase/deduction for change in fair value from prior year-end to covered year-end of awards granted prior to covered year that were outstanding and unvested as of year-end | (666,478 | ) | (182,180 | ) | (31,327 | ) | 87,612 | |||||||||
Increase/deduction for change in fair value from prior year-end to vesting date of awards granted prior to covered year that vested during covered year | (660,483 | ) | (116,310 | ) | 1,395,404 | 821,945 | ||||||||||
Deduction of fair value of awards granted prior to covered year that were forfeited during covered year | - | - | - | - | ||||||||||||
Increase based upon incremental fair value of awards modified during year | - | - | - | - | ||||||||||||
Total Adjustments | (1,807,994 | ) | (405,904 | ) | 1,289,156 | 886,318 | ||||||||||
Total Compensation | 1,372,136 | 466,034 | 1,290,659 | 466,434 | ||||||||||||
Compensation Actually Paid | $ | (435,858 | ) | $ | 60,130 | $ | 2,579,815 | $ | 1,352,752 | |||||||
(4) | Assumes $100 invested in our shares of common stock on December 31, 2020. |
Relationship Between “Compensation Actually Paid” and Total Shareholder Return
The following chart below addresses the relationship between compensation “actually paid” as disclosed in the Pay vs. Performance Table and the Company’s cumulative total shareholder return (“TSR”).
Relationship Between “Compensation Actually Paid” and Net Loss
As an early-stage growth company that has only generated net losses, we do not view our net income (loss) as a meaningful measure of our performance that is relevant to our executive compensation program. Dyadic’s net loss was approximately $13.1 million in 2021 and $9.7 million in 2022, a 26.0% decrease over the period. Mr. Emalfarb’s “compensation actually paid” was $2,579,815 and $(435,858) in the corresponding years and the average “compensation actually paid” to Dyadic’s non-PEO NEO’s was $1,352,752 and $60,130 in each of those years, a 116.9% and 95.6% decrease over the period, respectively.
MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
PROPOSAL 1:ELECTION OF CLASS I DIRECTORS
General
We have the discretion to make matching contributions to this retirement plan, but have not done so ever.
Our Nominating Committee is charged with identifying, evaluating, and recommending director nominees to the Board. There are no minimum qualifications for nomination of directors. The purposeNominating Committee generally seeks individuals with broad experience at the policy-making level in business, or with industry expertise. While we do not have a formal diversity policy for board membership, we look for potential candidates that help ensure that the Board has the benefit of a wide range of attributes. We believe that all our directors should be committed to enhancing shareholder value and should have sufficient time to carry out their duties and to provide insight and practical wisdom based on experience. Each director must also represent the interests of all shareholders.
The Board has nominated Seth J. Herbst and Arindam Bose to stand for re-election as Class I directors. If elected, Messrs. Herbst and Bose will serve for a term expiring in 2026.
We expect each such nominee for election as a Class I director to be able to serve, if elected. If either is unable to serve, proxies may be voted for a substitute nominee so designated by the present Board.
Vote Required
The affirmative vote of a plurality of the Stock Option Plan is to retain and attract key management, employees, nonemployee directors and consultantsvotes cast, by providing those persons with a proprietary interest in us. The compensation committee will administerproxy, at the Stock Option Plan
Plan Category | Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights (a) | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights (b) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a) (c) | |||
| Equity compensation plans approved by security holders (1) (3) | 1,597,639 | $3.62 | 3,536,184 (2) | |||
| Equity compensation plans not approved by security holders | N/A | N/A | N/A | |||
| Total | 1,597,639 | $3.62 | 3,536,184 (2) |
Recommendation of the Board
The Board recommends ashareholders vote “
Nominees for Election as Directors
The board deems it advisable to conform certain provisions of the Plan to the requirements of Section 409A of the Code to avoid certain tax penalties that could be imposed by Section 409A upon plan participants.
Seth J. Herbst, M.D., Director, 65, has been on or before that datethe Board since June 2008, and (ii) was not subject to substantial risk of forfeiture on that date. However, because a special rule applies to certain equity-based compensation, including stock options, options that were immediately
Arindam Bose, Ph.D., Director, 70, joined the 2006 Stock Option PlanBoard on August 15, 2016, and currently serves as is permitted by applicable income tax laws.
Directors Continuing in Office
The following information is provided with respect to this proposal willthe directors who are not be voted, although it will be countednominees for purposes of determining whether there is a quorum. Abstentionselection as directors at the Annual Meeting:
Name | Age | Class | Term Expiring | Date of Appointment | ||||
Jack L. Kays | 79 | II | 2024 | May 2015 | ||||
Barry C. Buckland, Ph.D. | 75 | II | 2024 | January 2018 | ||||
Patrick Lucy | 55 | II | 2024 | January 2021 | ||||
Michael P. Tarnok | 68 | III | 2025 | June 2014 | ||||
Mark A. Emalfarb | 68 | III | 2025 | October 2004 |
Jack L. Kaye., Director
Jack L. Kaye joined the Board in May 2015, and broker non-votes will have the same effectcurrently serves as a vote against this proposal.
Barry C. Buckland, Ph.D., Director
Barry C. Buckland, Ph.D., joined the Board in January 2018. Dr. Buckland retired from Merck Research Laboratories in 2009 after 28 years of contributions to the Bioprocess R&D group including more than 12 years as leader in the position of Vice President. Since leaving the Merck Research Laboratories, Dr. Buckland has headed up his own consulting company (BiologicB, LLC). He also is President of Engineering Conferences International (ECI), a not-for-profit organization which organizes prestigious conferences with an engineering focus. Dr. Buckland has chaired successful conference such as Microbial Engineering I and Vaccine Technology Conferences I to IV. He is also a visiting professor at University College London in the Biochemical Engineering Department and is the author or co-author of more than 70 publications. His previous board experience includes Enumeral Biomedical and Mucosis. Dr. Buckland was a Senior Advisor to Protein Sciences until they were purchased by delivering sharesSanofi in 2017. Dr. Buckland became Executive Director of our common stock ownedNIIMBL (National Institute for Innovation for Manufacturing Biopharmaceuticals) in 2017. Dr. Buckland was elected to the USA National Academy of Engineering in 1997. In 2008, Dr. Buckland was awarded the ACS Marvin Johnson award for Biotechnology. In 2009, Dr. Buckland was awarded the Discoverers Award by the optionee (including sharesPharmaceutical Research and Manufacturers of America (PhRMA) for his role in the discovery and development of GARDASIL, an effective vaccine against HPV. He was one of three recipients.
Patrick Lucy, Director
Patrick Lucy joined the Board on January 8, 2021. Mr. Lucy serves as a member of the Board’s Science and Technology Committee. Mr. Lucy is currently President and Chief Executive Officer of Lykan Bioscience (“Lykan”), a privately held cell therapy contract manufacturing organization based in Hopkinton, MA. Mr. Lucy served as President and Chief Operating Officer of Lykan from January 4, 2021 until March 31, 2021, prior to his promotion to President and Chief Executive Officer on April 1, 2021. Prior to Lykan, Mr. Lucy was a founder of Pfenex Inc. within The Dow Chemical Company (“Dow”) in 2001. He was a member of the leadership team and led the commercial launch of the Pfenex platform in 2005 through the spin out of the business from Dow in 2009. Mr. Lucy was subsequently a member of the team that successfully completed Pfenex’s initial public offering in 2014 and continued to lead business/corporate development and portfolio strategy as Chief Business Officer. During his tenure at Pfenex, Mr. Lucy completed over $1.5 billion dollars of partnership transactions. Pfenex was acquired by Ligand Pharmaceuticals in connection withOctober 2020. Prior to joining Dow in 2000, via Dow’s acquisition of Collaborative BioAlliance, Patrick served as Collaborative’s Director of Business Development. From 1995 to 1999, he held multiple operational roles at Lonza Biologics (“Lonza”) spanning quality control, validation, and capital project management. In his final role at Lonza, Patrick led the exercisemechanical completion, start up and validation of a large-scale biologics manufacturing facility. He began his career in biotechnology at Repligen Corporation in 1991 serving in a variety of laboratory-based roles following his graduation from Villanova University.
Mark A. Emalfarb, President, Chief Executive Officer and Director
Mark A Emalfarb is the founder of Dyadic, and currently serves as the Chief Executive Officer and a member of the Board and Science and Technology Committee. He has been a member of the Board from October 2004 until April 2007 and then since June 2008. He previously served as its Chairman from June 2008 until January 2015. Since founding the predecessor to Dyadic in 1979, Mr. Emalfarb has served as a Director, President and Chief Executive Officer for substantially all of that time and has successfully led and managed the evolution of Dyadic from its origins as a pioneer and leader in providing ingredients used in the stone-washing of blue jeans to the discovery, development, manufacturing and commercialization of specialty enzymes used in various industrial applications and the development of an option)integrated technology platform based on Dyadic’s patented and having a fair market valueproprietary C1 fungal microorganism. Mr. Emalfarb is an inventor of over 25 U.S. and foreign biotechnology patents and patent applications resulting from discoveries related to the patented and proprietary C1 fungus and has been the architect behind its formation of several strategic research and development, manufacturing and marketing relationships with U.S. and international partners. Mr. Emalfarb earned his B.A. degree from the University of Iowa in 1977.
Michael P. Tarnok, Chairman, Director
Michael P. Tarnok joined the Board on June 12, 2014, and currently serves as Chairman of the Board and Chairman of the Company’s Compensation Committee. He also serves on the date of exercise equal to the exercise price or to the ownership of shares have a fair market value on the date of exercise equal to the exercise price (c) payment through a broker in accordance with procedures permitted by Regulation TCompany’s Audit and Nominating Committees. On January 12, 2015, Mr. Tarnok was appointed Dyadic’s Chairman of the Federal Reserve, or (d) by such other method as the compensation committee may approve.
The audit committeeAudit Committee has appointed Ernst & YoungCrowe LLP (“Crowe”) to serve as our independent registered public accounting firm for the year ending December 31, 2006.
We expect one or more representatives of Ernst & Young LLPCrowe and MHM to be present at the annual meeting.Annual Meeting. They will have the opportunity to make a statement if they desire to do so, and we expect them to be available to respond to appropriate questions.
The following table presents fees billed by MHM for services rendered.
Years Ended December 31, | ||||||||
2022 | 2021 | |||||||
Audit fees (1) | $ | 168,000 | $ | 174,000 | ||||
Audit-related fees (2) | 6,000 | 39,000 | ||||||
Tax fees (3) | 14,000 | 11,000 | ||||||
Total fees | $ | 188,000 | $ | 224,000 | ||||
Notes:
(1) | Audit fees consist of fees billed for services rendered by MHM for audit of annual financial statements and quarterly review of financial statements, or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements. |
(2) | Audit-related fees consist of fees billed for procedures performed by MHM in connection with the filing of a registration statement on Form S-8. |
(3) | Tax fees consist of fees billed for tax professional services by an affiliate of MHM for the Netherlands subsidiary. |
Change in Accountant
On February 16, 2023, MHM informed the Company of its decision to resign from its role as the Company’s independent registered public accounting firm effective upon the filing of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (the “2022 Form 10-K”). MHM stated that it was resigning due to its own resource constraints. Neither the Audit Committee nor the Board took part in MHM’s decision to resign.
MHM’s reports on the Company’s financial statements for the years ended December 31, 2022 and December 31, 2021, respectively, did not contain an adverse opinion or a disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or auditing principles.
During the Company’s fiscal years ended December 31, 2022 and 2021, and subsequent interim period through February 16, 2023, there were (i) no disagreements with MHM on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of MHM, would have caused it to make a reference to the subject matter of the disagreements in connection with its report, and (ii) no reportable events, as defined in Item 304(a)(1)(v) of Regulation S-K.
On April 10, 2023, the Board approved the engagement of Crowe as the principal accountant to audit the Company’s financial statements. During the Company’s fiscal years ended December 31, 2021 and 2020, and subsequent interim period through April 10, 2023, the Company (or someone on its behalf) did not consult Crowe regarding (i) either (x) the application of accounting principles to a specified transaction, either complete or proposed, or (y) the type of audit opinion that might be rendered on the Company’s financial statements, or (ii) any matter that was either the subject of a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions to that Item) or a reportable event (as described in Item 304(a)(1)(v) of Regulation S-K).
Pre-Approval of Services
Our Audit Committee’s policy is to pre-approve all audit and permissible non-audit services provided by our independent auditors. These services may include audit services, audit-related services, tax services and other services. Pre-approval is generally provided for up to one year and any pre-approval is detailed as to the service or category of services. The independent auditor and management are required to periodically report to the Audit Committee regarding the extent of services provided by the independent auditor in accordance with this pre-approval. Any proposed services not included within the list of pre-approved services or any proposed services that will cause the Company to exceed the pre-approved aggregate amount requires specific pre-approval by the Audit Committee. All audit fees, audit-related fees, tax fees, and other fees listed in the table above were approved by the Audit Committee pursuant to its pre-approval policies and procedures.
Audit Committee Report
The Audit Committee reports as follows:
The Company’s independent registered public accounting firm for the year ended December 31, 2022 was Mayer Hoffman McCann P.C., (“MHM”). The Company’s management has the primary responsibility for the Company’s financial statements and the reporting process, including disclosure controls and the system of internal control over financial reporting. The Audit Committee, in its oversight role, has:
Reviewed and discussed the annual audited financial statements as of and for the fiscal year ended December 31, 2022, with management;
Discussed with the Company’s independent registered public accountants the overall scope of, and plans for, their respective audits and has met with the independent registered public accountants, with and without management present, to discuss the Company’s financial reporting process and internal accounting controls in addition to other matters required to be discussed by Auditing Standard No. 1301, Communications with Audit Committees, as adopted by the Public Company Accounting Oversight Board (“PCAOB”), as may be modified or supplemented; and
Received from the independent registered public accountants written disclosures and the letter regarding the independence of the independent registered public accountants required by the PCAOB, and has discussed with the independent registered accountants their independence from the Company and its management.
Based on the Audit Committee’s review and discussions with management and the Company’s independent registered public accountants as described in this report, the Audit Committee recommended to the Board of Directors that the audited Consolidated Financial Statements as of and for the fiscal year ended December 31, 2022, be included in the 2022 Annual Report on Form 10-K.
| Audit Committee of the Board of Directors | |
| Jack L. Kaye, Chairman | |
| Michael P. Tarnok | |
| Arindam Bose |
Vote Required
The affirmative vote of the holders of a majority of all shares casting votes, either in person or by proxy, at the annual meetingAnnual Meeting is required to ratify the appointment of Ernst & Young LLPCrowe as our independent registered public accounting firm for the year ending December 31, 2006.
We are not required to submit the appointment of Crowe for ratification by our shareholders. However, we are doing so as a matter of good corporate practice. If the shareholders do not ratify the appointment of Crowe, the Audit Committee may reconsider its decision. In recognition of this responsibility, the audit committee has establishedany case, our Audit Committee may, in its discretion, appoint a policy to pre-approve all audit and permissible non-audit services provided by the independent registered public accounting firm.
Recommendation of the Board
Before appointing Crowe and making its recommendation to the audit committee for approvalBoard that it ratify the appointment of Crowe, the Audit Committee carefully considered the firm’s qualifications as an aggregate of services expected to be rendered during that year for each of the four categories of services. Prior to engagement, the audit committee pre-approves these services by category of service. The fees are budgeted, and the audit committee requires the independent registered public accounting firmfirm. This included a review of its reputation for integrity and management to report actual fees versus the budget periodically throughout the year by category of service. During the year, circumstances may arise when it may become necessary to engage the independent registered public accounting firm for additional services not contemplatedcompetence in the original pre-approval. In those instances,fields of accounting and auditing. The Audit Committee’s review included inquiry concerning any litigation involving Crowe and any proceedings by the audit committee requires specific pre-approval before engagingSEC against the independent registered public accounting firm.
The Company’s Board recommends a vote FOR this proposal.
PROPOSAL 3: NON-BINDING, ADVISORY VOTE ON 2022 COMPENSATION OF
NAMED EXECUTIVE OFFICERS
As required by Regulation 14A under the Exchange Act, Proposal 3 seeks a non-binding, advisory vote on the 2022 compensation of the Company’s Named Executive Officers. Shareholders are urged to read the “Compensation and Other Information Concerning Officers” section of this Proxy Statement, which discusses the Company’s executive compensation policies and procedures and contains tabular information and narrative discussion about the compensation of the Named Executive Officers.
As an advisory vote, this proposal is not binding upon the Company. However, the Compensation Committee, which is responsible for determining and setting the Named Executive Officers’ executive compensation, values the opinions expressed by shareholders in their vote on this proposal, and will consider the outcome of the vote when making future compensation decisions for the Named Executive Officers.
Vote Required
The audit committeeaffirmative vote of the holders of a majority of all shares casting votes, by proxy, at the Annual Meeting is required to approve the non-binding, advisory vote on 2022 compensation of our Named Executive Officers. You may delegate pre-approval authorityvote FOR, AGAINST, of ABSTAIN with respect to onethis proposal. A properly executed proxy marked ABSTAIN with respect to this proposal will not be considered as a vote cast FOR or moreAGAINST this proposal. Broker non-votes will not be considered as votes cast FOR or AGAINST this proposal, although they are counted for purposes of its members. determining whether there is a quorum.
Recommendation of the Board
The member to whom such authority is delegated must report, for informational purposes only, any pre-approval decisionsBoard recommends that you consider and vote FOR the following resolution: “Resolved, that the shareholders approve, on a non-binding, advisory basis, the 2022 compensation of the Company’s Named Executive Officers, as disclosed in the Company’s Proxy Statement pursuant to the audit committee at its next scheduled meeting.
Because your vote is advisory on Proposal 3, it will not be binding on the Board or the Company. However, the Board and the Compensation Committee will review the voting results and take them into consideration when making future decisions regarding the Named Executive Officers’ compensation.
We have determined to us and representations that no other reports were required, we believe that all Section 16 filing requirements applicable to our officers, directors and 10 percent beneficial owners were complied with duringinclude a shareholder vote on the year ended December 31, 2005, other than a late filing for Form 4 in December 2005 by director Stephen J. Warner for salescompensation of our common stockNamed Executive Officers (commonly known as a “say on pay” vote) in November and December 2005.our Proxy Statement annually until the next required vote on the frequency of say on pay votes. The next say on pay vote accordingly will be held at the 2024 Annual Meeting of Shareholders.
SHAREHOLDER PROPOSALS FOR THE 2024ANNUAL MEETING
Shareholders of the record date. We will provide without charge,Company wishing to each holderinclude proposals in the proxy material relating to the 2024 Annual Meeting of shares of common stock asShareholders must submit the same in writing to be received at the executive offices of the record date, a copyCompany on or before December 28, 2023. Such proposals must also meet the other requirements of our Annual Report on Form 10-KSB for the year ended December 31, 2005, as filed withrules of the SEC upon the written request of any such holderrelating to shareholder proposals. Proposals should be addressed to the Secretary of Dyadicthe Company at its offices, at 140 Intracoastal Pointe Drive, Suite 404, Jupiter, Florida 33477. We will provide copies of
For any exhibit to the Annual Report on Form 10-KSB upon written request and upon reimbursement of any reasonable expenses incurred by us in furnishing the exhibit.
This Proxy Statement contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they do not fully materialize or prove incorrect, could cause our business, results or condition to differ materially from those expressed or implied by the forward-looking statements. All statements other than statements of historical fact included in this proxydocument are forward-looking statements. You can identify these and other forward-looking statements using words such as “will,” “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “intends,” “potential,” “continue,” or the negative of those terms, or other comparable terminology.
Risks and uncertainties that may affect our business, results or condition include, but are not limited to, factors discussed in our publicly available filings, including information set forth under the caption “Risk Factors” in our Annual Report. Any forward-looking statement our boardmade in this Proxy Statement speaks only as of directors doesthe date on which we make it. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. We have no duty to, and do not intend to, update, or revise the forward-looking statements in this Proxy Statement, except as may be required by law.
We know of anyno other matters that will be presented for consideration at the annual meeting other than as described in this proxy statement.Annual Meeting. If however, any other matters are properly broughtcome before the annual meeting, it is intended thatAnnual Meeting, the persons named as proxies willshall vote the shares they represent in accordance with their best judgmentjudgment. Discretionary authority with respect to such matters.other matters is granted by the execution of the enclosed proxy. It is important that you return your proxy promptly and that your shares be represented. You are urged to vote either by internet, phone or, if you received paper copies of the proxy materials, by mail. If by mail, please mark, date, and sign and return the proxy in the accompanying reply envelope, per the instructions on the proxy card.
BY ORDER OF THE BOARD OF DIRECTORS | |
/s/ Mark Emalfarb | |
Mark Emalfarb President and Chief Executive Officer |
Jupiter, Florida
April 26, 2023
