UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant ☒
Filed by a party other than the Registrant ☐
Check the appropriate box:
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to Rule 14a-12 |
DYADIC INTERNATIONAL, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check all boxes that apply):
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No fee required. |
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Fee paid previously with preliminary materials. |
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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.
1044 North U.S. Highway One, Suite 201
Jupiter, Florida 33477
(561) 743-8333
Dear Shareholder:
You are cordially invited to attend the 2024Annual Meeting of Shareholders (“Annual Meeting”) of Dyadic International, Inc. (“Dyadic”), which will be held onTuesday, June 11, 2024, at 10 a.m. Eastern Daylight Savings Time. The Annual Meeting will be conducted in virtual format only. You will not be able to attend the Annual Meeting in person. Shareholders can access the Annual Meeting by visitingwww.virtualshareholdermeeting.com/DYAI2024.
At the Annual Meeting, you will be asked to consider and vote on the proposals described in the Notice of 2024Annual Meeting of Shareholders and Proxy Statement, which accompany this letter. We urge you to read these materials carefully. During the Annual Meeting, you will be able to submit questions real-time through the meeting portal.
We hope that you will be able to attend the Annual Meeting, but in any event, we ask that you please vote your shares using the internet 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 mailing the proxy card in the postage-paid envelope provided to ensure that your shares will be represented at the Annual Meeting. Instructions on using each of these voting methods are outlined in the Proxy Statement. If you hold shares through a broker or other nominee, you should follow the procedures provided by your broker or nominee.
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 your participation at the Annual Meeting.
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Sincerely, |
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/s/ Mark Emalfarb |
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Mark Emalfarb
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Vote by Internet: www.proxyvote.com |
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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 Monday, June 10, 2024. 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. |
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Vote by Telephone: 1-800-690-6903 |
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Use any touch-tone telephone to transmit your voting instruction. Vote by 11:59 p.m., Eastern Daylight Savings Time, on Monday, June 10, 2024. Have your proxy card in hand when you call and follow the instructions. |
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Vote by Mail. |
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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. |
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Vote During the Annual Meeting. |
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You can vote your shares during the Annual Meeting at www.virtualshareholdermeeting.com/DYAI2024.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 registered 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.
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BY ORDER OF THE BOARD OF DIRECTORS |
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/s/ Mark Emalfarb |
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Mark Emalfarb
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Proposal 2: Ratification of Selection of Independent Registered Public Accounting Firm |
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Proposal 3: Advisory Vote on Compensation of the Company’s Named Executive Officers |
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DYADIC INTERNATIONAL, INC.
1044 North U.S. Highway One, Suite 201
Jupiter, Florida 33477
(561) 743-8333
PROXY STATEMENT
2024 VIRTUAL ANNUAL MEETING OF SHAREHOLDERS
JUNE 11, 2024
VIRTUAL MEETING ONLY - NO PHYSICAL MEETING LOCATION
The Board of Directors of the Company (the “Board”) is soliciting proxies for the 2024Virtual Annual Meeting of Shareholders of Dyadic International, Inc. (“Annual Meeting”). This Proxy 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 the Annual Meeting to be held onTuesday, June 11, 2024 at 10 a.m. Eastern Daylight Savings Time, and at any adjournments or postponements thereof. The Annual 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 visiti ng www.virtualshareholdermeeting.com/DYAI2024.
The Board setApril 17, 2024 as the record date for the Annual Meeting. Shareholders who owned the Company’s common stock on that date are entitled to vote at the Annual Meeting, with each share entitled to one vote. There were 29,236,814 shares of the Company’s common stock outstanding as of the record date.
We are furnishing proxy materials to our shareholders primarily via the internet under the Securities and Exchange Commission’s (“SEC”)“Notice and Access” rules. On or aboutApril 24, 2024, we expect to mail to our shareholders a Not ice Regarding the Availability of Proxy Materials containing instructions on how to access our proxy materials, including our Notice of 2024Annual Meeting of Shareholders, Proxy Statement and Annual Report for the fiscal year ended December 31, 2023(“Annual Report”). The Notice Regarding the Availability of Proxy 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 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. Additionally, the Notice of 2024Annual Meeting of Shareholders, Proxy Statement and Annual Report are available at www.dyadic.com by clicking the “Investors” link.
INTERNET AVAILABILITY OF PROXY MATERIALS
*****IMPORTANT NOTICE*****
The Notice of 2024Annual Meeting of Shareholders, Proxy Statement and Annual Report are available at www.proxyvote.com.
What is the purpose of the Annual Meeting?
At the Annual Meeting, we are asking shareholders:
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To elect two Class IIdirectors for a term ending in 2027; |
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To ratify the appointment of Crowe LLP (“Crowe”) as our independent registered public accounting firm for the year ending December 31, 2024; |
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To cast a non-binding, advisory vote to approve the 2023compensation of the Company’s Named Executive Officers;and |
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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, by proxy, at the Annual Meeting if you owned shares of our common stock as of the close of business (5:00 p.m. Eastern Daylight Savings Time) on April 17, 2024, the record date of the Annual Meeting. Holders of record of our common stock on the record date are entitled to one vote per share at the Annual Meeting.
Who can attend the Annual Meeting?
All shareholders as of the record date, or their duly appointed proxies, may attend. Shareholders will need a control number to attend the Annual Meeting. For registered shareholders, the control number can be found on their Notice Regarding the Availability of Proxy Materials or proxy card.
What shares may I vote?
You may vote all shares you owned as of the record date. These include: (1) shares owned directly in your name as the shareholder of record and (2) shares held for you as the beneficial owner through a stockbroker, bank, or another nominee.
What is the difference between holding shares as a shareholder of record and as a beneficial owner?
Most of our shareholders 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 shareholder of record regardingthose shares. As the shareholder of record, you have the right to grant your proxy directly to us to vote your shares at the Annual Meeting, using the control number on the Notice Regarding the Availability of Proxy Materials or proxy card to log into www.virtualshareholdermeeting.com/DYAI2024 .
If you hold our shares in a stock brokerage account or through a bank or other nominee, you are considered the “beneficial owner” of the shares held in “street name”, and these proxy materials have been forwarded to you by your stockbroker, bank, or another nominee. As the beneficial owner, you have the right to direct your stockbroker, bank, or other nominee how to vote and you are also invited to attend the Annual Meeting via the internet and vote during the meeting. Beneficial owners who do not have a control 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 business o n April 17, 2024can v ote at the Annual Meeting via proxy in the manner described herein.
Any shareholder who holds shares in “street name” through a broker, bank or other nominee should receive separate instructions from the firm 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 provide specific voting instructions by mail, telephone or the internet, your broker or nominee will vote your shares as you have directed.
Shareholders of record may vote in the following ways:
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Vote by Internet: www.proxyvote.com |
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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 Monday, June 10, 2024. 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. |
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Vote by Telephone : 1-800-690-6903 |
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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 Sa vings Time, on Monday, June 10, 2024. Have your proxy card in hand when you call and follow the instruction. |
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Vote by Mail. |
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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. |
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Vote During the Annual Meeting. |
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You can vote your shares during the Annual Meeting at www.virtualshareholdermeeting.com/DYAI2024. 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 proxy card).
If you have any questions about how to vote or direct a vote in respect of your Dyadic common stock, you may contact either our corporate office at 1044 North U.S. Highway One, Suite 201, Jupiter, Florida 33477, Attention: Heidi Zosiak, telephone: (561) 743-8333 or Broadridge Financial Solutions, Inc., 51 Mercedes Way, Edgewood, NY 11717, telephone: (631) 257-4339.
Can I submit questions at the Annual Meeting?
Yes. During the live virtual meeting, you will be able to submit questions real-time through the meeting portal.
Can I change my vote after I return my proxy card?
Yes. If you voted by mail, you may revoke your proxy 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 the 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 ballot at the Annual Meeting.
If your shares are held in street name, you should contact the institution that holds your shares to change your vote.
Is my vote confidential?
Yes. All votes remain confidentialunless 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 17, 2024, our directors and executive officers owned, or hadthe right to acquire within 60 days through the exercise of options, approximately 28.8% 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 ’ s recommendations?
The Board recommends a vote FOR:
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Election of two Class II directors for a term ending in 2027; |
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Ratification of the appointment of Crowe LLP as our independent registered public accounting firm for the year ending December 31, 2024; and |
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Non-binding, advisory vote to approve the 2023compensation of the Company’s Named Executive Officers. |
Unless you give other instructions on your proxy card, the person named as a proxy on the proxy card will vote FOR the proposals set forth above.
We do not expect that any other matters will be brought before the 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. No proxy that is voted against all the proposals will be voted in favor of any adjournment or postponement of the Annual 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 2023compensation of the Company’s Named Executive Officers are considered non-routine proposals. The proposal to ratify the appointment of Crowe LLPto serve as our independent auditor is considered a routine proposal.
What vote is required to approve the proposals?
Proposal 1: Election of Class II Directors. The affirmative vote of a plurality of the shares present in person or representedby proxy, at the Annual Meeting and entitled to vote thereat is required for the election of the Class II director nominees. You may vote FORor WITHHOLDwith respect to the election of each director. Only votes FOR are counted in determining whether a plurality has been cast in favor of a director. Votes WITHHELD and broker non-votes are not counted for purposes of the election of directors, although they are counted for purposes of determining whether there is a quorum. Shareholders do not have the right to cumulate their votes for directors.
Proposal 2: Ratification of Appointment of Crowe LLP as our Independent Registered Public Accounting Firm. The affirmative vote of a majority of all shares present in person or represented by proxy at the Annual Meeting and entitled to vote thereat is required to ratify the appointment of Crowe LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2024. We are not required to submit this matter to a vote of shareholders for ratification; however, our Board is doing so, based upon the recommendation of its audit committee, as a matter of good corporate practice. You may vote FOR, AGAINST, or ABSTAIN with respect to the ratification of the appointment of Crowe LLP as our independent registered public accounting firm. A properly executed proxy marked ABSTAIN with respect to this proposal will be considered as a vote AGAINST the proposal. Brokers have discretion to vote shares with respect to this proposal unless a shareholder directs their broker otherwise.
Proposal 3: Non-Binding, Advisory Vote to Approve 2023 Named Executive Officers Compensation . The affirmative vote of a majority of all shares present in person or represented by proxy at the Annual Meeting and entitled to vote thereat is required to approve, on an advisory basis, the compensation of our Named Executive Officers. You may vote FOR, AGAINST, or ABSTAIN with respect to approval of the compensation of the Company’s Named Executive Officers. A properly executed proxy marked ABSTAIN with respect to this proposal will be considered as a voteAGAINST the proposal. Broker non-votes will not be considered as votes 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 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 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 majority of all shares present in person or represented by proxy at the Annual Meeting and entitled to vote thereat will be required for approval. A properly executed proxy marked ABSTAIN with respect to any such matter will be considered as a vote AGAINST the proposal.
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 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 our shareholders primarily via the internet under the SEC’s “Notice and Access” rules. On or about April 24, 2024, we expect to mail to our shareholders a Notice Regarding the Availability of Proxy Materials containing instructions on how to access our proxy materials, including the Notice of 2024Annual Meeting of Shareholders, Proxy Statement and Annual Report. The Notice Regarding the Availability of Proxy Materials also will instruct you on how to access and submit your proxy thr ough the internet.
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 2024Annual Meeting of Shareholders, Proxy Statement and our Annual Report are available online athttps://dyadic.com/investors/annual-meeting-and-proxy/ and may be accessed at https://materials.proxyvote.com/26745T .
For copies of this Proxy Statement and the enclosed proxy card, plea se contact either our corporate office at1044 North U.S. Highway One, Suite 201,Jupiter, Florida 33477, Attention: Heidi Zosiak, telephone: (561) 743-8333 or Broadridge Financial Solutions, Inc., 51 Mercedes Way, Edgewood, NY 11717, telephone: (631) 257-4339.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial ownership of our common stock as of April 17, 2024(except as noted below), by:
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each person known by us to be the beneficial owner of more than 5% of the outstanding shares of our common stock; |
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each of our directors, director nominees and named executive officers; and |
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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 of securities. Under the rules of the SEC, 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, which includes the power to dispose of or to direct the disposition of a security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within sixty (60) days of April 17, 2024. Securities that can be so acquired are deemed to be outstanding for purposes of computing such person’s ownership percentage, but not for purposes of computing any other person’s percentage. Under these rules, more than one person may be deemed a beneficial owner of the same securities and a person may be deemed to be a beneficial owner of securities as to which such person has no economic interest. Except as otherwise indicated in these footnotes, each of the beneficial owners listed has, to our knowledge, sole voting and investment power with respect to the indicated shares of common stock.
As of April 17, 2024, the Company had29,236,814 sh ares of common stock outstanding, with an additional 12,253,502shares held in treasury. The beneficial ownership table below includes those shares of common stock underlying options that are exercisable within sixty (60) days of April 17, 2024, but excludes those shares issued or repurchased afterApril 17, 2024.
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Common |
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| Number of | Exercisable | Share | Share | |||||||||||||
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Shares of |
andConversion |
Equivalents |
Equivalents |
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Common |
Rights |
Beneficially |
Beneficially |
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Name and Address of Beneficial Owner (1) |
Stock Held |
Within 60 Days |
Owned |
Owned (%) (2) |
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5% Shareholders: |
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Mark A. Emalfarb (3) |
4,656,947 | 600,000 | 5,256,947 | 17.6 | % | |||||||||||
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The Francisco Trust U/A/D February 28, 1996 (4) |
3,548,528 | 558,659 | 4,107,187 | 13.8 | % | |||||||||||
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Bandera Master Fund L.P. (5) |
1,566,908 | — | 1,566,908 | 5.4 | % | |||||||||||
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Named Executive Officers and Directors: |
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Mark A. Emalfarb (3) |
4,656,947 | 600,000 | 5,256,947 | 17.6 | % | |||||||||||
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Michael P. Tarnok |
216,103 | 537,500 | 753,603 | 2.5 | % | |||||||||||
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Jack L. Kaye |
33,581 | 537,500 | 571,081 | 1.9 | % | |||||||||||
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Seth J, Herbst, M.D. |
132,174 | 405,000 | 537,174 | 1.8 | % | |||||||||||
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Arindam Bose, Ph.D. |
27,174 | 537,500 | 564,674 | 1.9 | % | |||||||||||
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Barry C. Buckland, Ph.D. |
27,174 | 265,000 | 292,174 | 1.0 | % | |||||||||||
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Patrick Lucy |
27,174 | 145,000 | 172,174 | * | ||||||||||||
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Ping W. Rawson |
120,217 | 604,390 | 724,607 | 2.4 | % | |||||||||||
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Joseph Hazelton |
99,168 | 29,688 | 128,856 | * | ||||||||||||
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All current executive officers and directors as a group |
5,363,565 | 4,280,135 | 9,643,700 | 28.8 | % | |||||||||||
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(10 persons) (6) |
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Notes:
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Less than 1%. |
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Except as otherwise noted, the address for each shareholder is c/o Dyadic International, Inc., 1044 North U.S. Highway One, Suite 201, Jupiter, FL 33477. |
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(2) |
Based onshares of common stock outstanding as of April 17, 2024. Shares of common stock subject to options that are exercisable and notes that are convertible 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. |
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Inclu des 4,656,947shares 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. Mr. Emalfarb has sole voting and dispositive power over all shares held through the MAE Trust. In addition, Mr. Emalfarb holds 600,000shares of common stock underlying options that are presently exercisable. The address of the MAE Trust is 193 Spyglass Court, Jupiter, FL 33477. |
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Based on a Schedule 13G/A filed by the Francisco Trust U/A/D February 28, 1996 (the “Francisco Trust”) on February 1, 2024. Per the Schedule 13G/A, the Francisco Trust has sole voting and dispositive power over 3,548,528 shares of common stock. The Francisco Trust also owns $1,000,000 convertible note that can be converted into 558,659 shares of common stock. The trustee of the Francisco Trust is Thomas Emalfarb, and the beneficiaries thereof are the spouse and descendants of Mark A. Emalfarb. The address of the Francisco Trust is 606 Dauphine Avenue, Northbrook, IL60062. Mr. Emalfarb disclaims beneficial ownership of such shares. |
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Based ona Schedule 13G/A filed by Bandera Partners LLC, a Delaware limited liability company (“Bandera Partners”), Gregory Bylinsky and Jefferson Gramm on February 13, 2024. Per the Schedule 13G/A, 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 is50 Broad Street, Suite 1820, New York, NY 10004. |
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Includes all current directors, all named executive officers and our remaining current executive officer, Ronen Tchelet, Ph.D. |
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Our Board has determined that the audit committee of the Board (the “Audit Committee”) is best suited to review and approve transactions with related persons, to the extent reportable under Item 404 of Regulation S-K. Prior to entering into such a transaction with a related person, (a) the director, executive officer, nominee or significant holder who has a material interest (or whose immediate family member has a material interest) in the transaction or (b) the business unit or function/department leader responsible for the potential transaction with a related person is required to provide notice to the Chairman of the Audit Committee(“Audit Committee Chairman”) of the material facts and circumstances of the potential transaction with a related person and such information concerning the transaction as the Audit Committee Chairman may reasonably request. If the Audit Committee Chairman determines that the proposed transaction is a related person transaction, the proposed related person transaction must be submitted to the Audit Committee for consideration at the next Audit Committee meeting or, in those instances in which the Audit Committee Chairman determines that it is not practicable or desirable for the Company to wait until the next Audit Committee meeting, the Audit Committee Chairman possesses delegated authority to act between Committee meetings.
The Audit Committee will consider allthe 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 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 fourteen(14) meetings during2023and each of our directors attended all those meetings in person or by teleconference.
We have a classified Board currently fixed at seven members. In light of the previously announced decision of Dr. Barry C. Buckland to retire as a director effective at the Annual Meeting, the Board has resolved to reduce the size of the Board to six members effective at the Annual Meeting.We believe the current composition of our Board—including the diversity of experience, skills and background of our current directors—is well suited to serving the unique needs of our business, and the best interests of our shareholders. Given our current size, industry and strategic position, we believe a smaller Board will foster deeper collaboration, greater efficiency and effective oversight, while producing stronger returns.
Effective March 26, 2024, the Board appointed Patrick Lucy as its Chairman, succeeding the former Chairman Michael Tarnok. We separate the roles of Chairman of the Board and Chief Executive Officer. 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 supervise and evaluate our Chief Executive Officer and other executive officers. Further, separation of the Chairman and Chief Executive Officer roles allows our Chief Executive Officer to focus on operating and managing the Company while leveraging our independent Chairman’s experience and perspectives.
The Board ’ s Role in Risk Oversight
Our Board, as a whole and at the committee level, has an active role in overseeing management of the Company’s risks. The Board regularly reviews information regarding the Company’s business and operations, 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 independence as that term is defined under the published listing requirements of NASDAQ. The NASDAQ independence definition includes a series of objective tests. For example, an independent director may not be employed by us and may not engage in certain types of business dealings with the Company. In addition, as further required by NASDAQ rules, the Board has made a subjective determination as to each independent director that no relation exists which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, the Board reviewed and discussed information provided by the directors and by the Company each director’s business and personal activities as they may relate to the Company and the Company’s management. We believe that Drs. Herbst,Bose and Buckland, as well as Messrs. Kaye, Lucy and Tarnok qualify as independent directors. In addition, our Board has determined that each member of our Audit Committee and Compensation Committee is independent and is otherwise qualified to be a member of the Audit Committee or Compensation Committee, as applicable, in accordance with the rules of the SEC and NASDAQ.
Committees of the Board
The Board 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 its responsibilities. The following table provides membership and meeting information for each of the Board committees:
|
Name |
Audit |
Compensation |
Nominating |
Science and Technology |
||||||||||||
|
Patrick Lucy |
— | X* |
X |
X | ||||||||||||
|
Seth J. Herbst, M.D. |
— | X | X* | — | ||||||||||||
|
Arindam Bose, Ph.D. |
X | — | — |
X* |
||||||||||||
|
Jack L. Kaye |
X* | X | — | — | ||||||||||||
|
Michael P. Tarnok |
X | X | — | |||||||||||||
|
Mark A. Emalfarb |
— | — | — | X | ||||||||||||
|
Barry C. Buckland, Ph.D. (1) |
— | — | — | X | ||||||||||||
* Committee Chairman
(1) Mr. Buckland will retire effective on the date of the Annual Meeting.
Audit Committee. The Audit Committee hel d four (4) meetings during the year ended December 31, 2023. The Audit Committee has oversight responsibility for the quality and integrity of our consolidated financial statements. A copy of the Charter of the Audit Committee is available on our website, located at www.dyadic.com . The Audit Committee meets privately with members of our independent registered public accounting firm, has the sole authority to retain and dismiss the independent registered public accounting firm and reviews its performance and independence from management. The independent registered public accounting firm has unrestricted access and reports directly to the Audit Committee. The primary functions of the Audit Committee are to oversee (i) the audit of our consolidated financial statements and (ii) our internal financial and accounting processes.
The 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 determined that Mr. Kaye is an “audit committee financial expert”, as defined in Item 407(d)(5) of Regulation S-K. Please see Mr. Kaye’s biography included in this Proxy Statement for a description of his relevant experience.
Compensation Committee. The Compensation Committee held two(2) meetings during the year ended December 31, 2023. 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 of 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 such officers and key personnel.From time to time, the Company engages compensation consultants to evaluate compensation of all Company officers and Board 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 than himself.
Nominating Committee. The Nominating Committee he ld two (2) m eetings during the year ended December 31, 2023. The Nominating Committee’s functions include: establishing criteria for the selection of new directors to serve on the Board; identifying individuals believed to be qualified as candidates to serve on the Board; recommending candidates for all directorships to be filled by the Board or by the shareholders at an annual or special meeting; reviewing the Board’s committee structure and recommending to the Board the directors to serve on the committees of the Board; recommending members of the Board to serve as the respective chairs of the committees of the Board; developing and recommending to the Board, for its approval, a periodic self-evaluation process of the Board and its committees and, based on those results, making recommendations to the Board regarding those board processes; and performing any other activities consistent with the committee’s charter, our bylaws and applicable law as the committee or the Board deems appropriate. A copy of the Charter of the Nominating Committee is available on our website, located at www.dyadic.com .
The Nominating 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. The Nominating Committee will consider all factors it 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 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 allour 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 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 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 Committee has determined that it will consider any potential candidate proposed by a member of our Board or senior management. Any director candidate so proposed will be personally interviewed by at least one member of the Nominating Committee and our Chief Executive Officer and their assessment of his or her qualifications will be provided to the full Nominating Committee.
Our policy and procedures regarding director candidates recommended by shareholders are contained in the Nominating Committee’s charter. The Nominating Committee will consider the candidate based on the same criteria established for selection of director nominees generally. The Nominating 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 the Company and the shareholders, generally. Any shareholder who wishes to recommend for the Nominating Committee’s consideration a director candidate should abide by the procedures under ‘Shareholder Proposals for the 2025Annual Meeting’.
Science and Technology Committee. The Science and Technology Committee held four(4) meetings during the year ended December 31, 2023. 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 (andhis 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 at1044 North U.S. Highway One, Suite 201, 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 the 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 incentivizeour existing and new employees, consultants, and key personnel. It also believes that the skills,experience, and industry knowledge of its key personnelsignificantly 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 pace of business, and management believes it has sufficient human capital, along with the third-party research organizations with who we have collaboration agreements,to operate its businesssuccessfully.
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 2023Annual Meeting of Shareholders.
Director Attendance at Board Meetings
During 2023, 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, 1044 North U.S. Highway One, Suite 201, 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 Directors
The following table sets forth the total compensation for our non-employee directors for the year ended December 31, 2023:
|
Fees earned |
Options |
|||||||||||||||
|
or paid in |
Stock awards |
awards |
||||||||||||||
|
Name |
cash ($) |
($) |
($) |
Total ($) (1)(2)(3) |
||||||||||||
|
Michael P. Tarnok |
45,000 | 37,500 | 42,311 | 124,811 | ||||||||||||
|
Jack L. Kaye |
45,000 | 37,500 | 42,311 | 124,811 | ||||||||||||
|
Arindam Bose, Ph.D. |
45,000 | 37,500 | 42,311 | 124,811 | ||||||||||||
| Seth J. Herbst, MD | 30,000 | 37,500 | 28,207 | 95,707 | ||||||||||||
|
Barry C. Buckland, Ph.D. |
30,000 | 37,500 | 28,207 | 95,707 | ||||||||||||
|
Patrick Lucy |
30,000 | 37,500 | 28,207 | 95,707 | ||||||||||||
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 2023, non-employee directors received a retainer for board service of $30,000 cash, 27,174 Restricted Share Units (“RSUs”) and 35,000 stock options. In addition, each non-employee director who served as Chairman of the Board, Chair of the Audit Committee, or Chair of the Science and Technology Committee received an additional retainer of $15,000 cash and 17,500 stock options. All RSUs and stock options granted vest upon the one-year anniversary of the grant date, subject to continued service. |
|
(2) |
The RSU and stock option awards represent the grant date fair market value of each option granted in 2023, 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, 2023. |
|
(3) |
The following equity awards were outstanding at December 31, 2023: options to purchase 537,500 shares (Mr. Tarnok), 537,500 shares (Mr. Kaye), 537,500 shares (Dr. Bose), 430,000 shares (Mr. Herbst), 265,000 shares (Dr. Buckland) and 145,000 shares (Mr. Lucy); and 27,174 RSUs (each of Messrs. Tarnok, Kaye, Herbst and Lucy and Drs. Bose and Buckland). |
Board Diversity Matrix
The table below provides certain highlights of the composition 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).
