Dyadic International hopes to use proprietary gene discovery to revolutionize cellulosic biofuel and pharmaceuticals. Investors should stay away.
Dyadic International (DYAI.PK) says they are applying their "proprietary enabling biotechnologies for multi-billion dollar markets in industrial enzymes, biofuels and biotherapeutics." A very exciting prospect, and just the sort of thing I’ve long warned investors to avoid. In short, they are a company with gigantic claims and not a lot of track record to back them up.
Why I Care (I don’t, really)
In our survey of readers, one respondent asked that I write more about stocks to avoid. Dyadic added me to their press list a couple months ago, probably in response to my popular article on investing in advanced and cellulosic biofuels. If so, it’s ironic. If anyone at Dyadic had read the article and thought about it a little, they would have known that I would not recommend anyone buy the stock, just based on their business plan, let alone the disturbing information I found in their press releases (see below.)
Recently, Dyadic sent me an email starting with the line "As you have shown a prior interest in Dyadic International…" (I didn’t.) I decided to take a look at the company. Here is what I found:
Out of Date Filings, Possible Previous Securities Laws Violations
- The company has not filed an annual or quarterly report since 2006, at which time they were losing money. Lacking more recent information, we can only assume that the financial situation has worsened. Because of this, Dyadic does not even meet the minimal requirements to be on our stock list.
- The company has recently reached an agreement with the SEC in which they agreed to cease and desist from violating certain securities laws.
- They recently hired an auditor and they "plan" to begin filing financial reports on PinkSheets. This would be good news, to someone who believes those plans are credible.
At this point, I stopped looking. Why would anyone buy stock in a company that is not providing current information, and whose promises sound too good to be true? Given limited cash, why not invest it in a company that provides current information and promises to do something useful but believable? Here are 39 green companies which do just that.
UPDATE: Dyadic has now published audited financial statements for 2007 and 2008.
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Thanks a lot for the alert. It would be great to know what other stocks you feel we should avoid.
There are so many… generally, I don’t make a decision to “Avoid” a stock as decide that it’s not interesting enough to research further. Here are a few I’ve mentioned in the past, however:
GlobalResource Corp and Mobilstream oil
US Sustainable Energy USSE
You’ll also find a bunch of stocks I’ve sold here.
Thanks for sharing this valuable information. Kind of strange that the company didn’t provide any financial info since 2006. Are those reports supposed to be mandatory? Seems like not.
Such reports are mandatory for exchange listed companies. This one is listed on the pink sheets, so they don’t have to. Caveat Emptor.