Dyadic International, Inc. (Pink Sheets: DYAI) (“Dyadic”) today announced financial results for the first and second quarters of 2009 as well as for the years ended December 31, 2008 and 2007. The financial information contained in this press release should be read in conjunction with the financial statements, footnotes and independent auditors’ report which have been posted on the Pink Sheets website at www.pinksheets.com and on Dyadic’s website at www.dyadic.com.

Dyadic’s Chief Executive Officer, Mark Emalfarb, stated, “Today marks a significant milestone for Dyadic in becoming current with its financial reporting and being able to share its recent efforts to build the long-term viability of the company. We are committed to providing financial information on a timely basis going forward. As of today, Dyadic has a current cash position of approximately $9.6 million which is sufficient to conduct its operations. We are aggressively pursuing a variety of research and business collaborations to leverage our patented and proprietary technologies and to grow our industrial enzyme business including additional technology licensing deals, co-development of products and processes and enhancing our manufacturing capabilities.”

Highlights and Achievements

June 2008

• Newly elected Board of Directors re-appointed Dyadic founder, Mark Emalfarb, as Chief Executive Officer and Chairman of the Board.
• Restructured our business to better align Dyadic with market needs by streamlining operations, reducing inventory and overhead, and shifting manufacturing from Poland to Mexico for greater flexibility.

September 2008

• Promoted Brian E. Murdoch to Director of Sales & Marketing. Brian has been with Dyadic for five years and has ten years of domestic and international enzyme sales and marketing experience.
• Promoted Richard H. Jundzil to Director of Development & Quality. Rich has been with Dyadic for more than six years and has over 16 years of quality and operations experience within the biotechnology industry including, most recently, at Genzyme Corporation.

November 2008

• Entered into a non-exclusive license agreement with Codexis, Inc. (“Codexis”) for the right to use Dyadic’s patented and proprietary C1 fungus (the “C1 Platform Technology”) for the development and large-scale production of enzymes in certain fields including biofuels and chemical and pharmaceutical intermediate production. Dyadic received an upfront payment of $10 million from Codexis in the first half of 2009 and is entitled to receive other undisclosed remuneration upon commercialization of these enzymes.

January 2009

• Reduced our debt from approximately $2.4 million to approximately $1.4 million.
• Strengthened our executive management team by hiring Adam J. Morgan as our Vice President General Counsel & Business Development who brings significant legal, business development, licensing and operational experience to Dyadic.

March – April 2009

• Filed a lawsuit against Dyadic’s former auditors and financial and transactional consultants and advisors, its former outside corporate and securities counsel as well as the law firm and its partners previously retained to conduct a corporate internal investigation, for professional negligence/malpractice, breach of fiduciary duty, constructive fraud and civil conspiracy.

May 2009

• Settled pending litigation with Abengoa Bioenergy New Technologies, Inc. (“Abengoa”).
• Entered into a non-exclusive license agreement with Abengoa, one of the world’s largest ethanol producers and alternative energy companies, for the right to use Dyadic’s patent rights and know-how relating to the C1 Platform Technology, for the development and large-scale production of enzymes for use in manufacturing biofuels (including cellulosic ethanol and butanol), power and/or chemicals. Dyadic is entitled to receive facility fees and royalties upon commercialization of these enzymes.

June 2009

• Settled an informal inquiry with the U.S. Securities and Exchange Commission.
• Appointed Goldstein Lewin & Co. (“Goldstein Lewin”) as Dyadic’s new independent auditors.

October 2009

• Received acknowledgement (GRAS Notice No. GRN 000292) from the U.S. Food and Drug Administration (“FDA”) that it has no questions that a cellulase enzyme preparation derived from Dyadic’s C1 Platform Technology is Generally Recognized As Safe (“GRAS”) under the intended conditions of use as concluded by Dyadic.
• Goldstein Lewin completed audits of Dyadic’s financial statements for the years ended December 31, 2008 and 2007 as well as the reviews of the first and second quarters of 2009.

In addition to these and other accomplishments, Dyadic has continued its efforts to improve its technologies as a means to discovering and developing new products and processes which we anticipate will expand our potential for research and business opportunities for the benefit of Dyadic and its partners. These improvements include, without limitation, the annotation and re-sequencing of the C1 genome in collaboration with Scripps Florida, a division of The Scripps Research Institute headquartered in La Jolla, California.

Second Quarter 2009 Financial Results

Total revenue for the quarter ended June 30, 2009 increased to approximately $11.9 million, as compared to approximately $3.2 million for the quarter ended June 30, 2008.

As previously reported, Dyadic received the remaining $5 million of a total $10 million upfront license fee from Codexis and recognized related revenues of approximately $9.8 million during this quarter.

Net product related revenue for the quarter ended June 30, 2009 decreased to approximately $1.8 million, as compared to approximately $2.2 million for the quarter ended June 30, 2008. This was due, in part, to Dyadic’s restructuring of its industrial enzyme business to focus on higher margin products for growing segments of the industry, such as animal feed, while streamlining product lines and discontinuing some lower margin products in declining segments of the industry, such as textiles, as well as global economic conditions.

Net income for the quarter ended June 30, 2009 increased to approximately $8.6 million or $0.29 per basic share and $0.26 per diluted share, as compared to a net loss of approximately $4.2 million, or $(0.14) per basic and diluted share, for the quarter ended June 30, 2008.

At June 30, 2009, cash and cash equivalents were approximately $9.9 million. Inventory at the end of this year's second quarter was approximately $3.1 million. Working capital at June 30, 2009 amounted to approximately $11.2 million, and stockholders' equity was approximately $12.4 million.

First Quarter 2009 Financial Results

Total revenue for the quarter ended March 31, 2009 increased to approximately $5 million, as compared to approximately $3.4 million for the quarter ended March 31, 2008.

Dyadic recognized approximately $3.3 million in research and development revenue during the first quarter from the unrecognized portion of a total of $10 million in proceeds received from Abengoa pursuant to a Securities Purchase Agreement (the “Abengoa Securities Purchase Agreement”) entered into between Dyadic and Abengoa in October 2006.

Net product related revenue for the quarter ended March 31, 2009 decreased to approximately $1.5 million, as compared to approximately $2.5 million for the quarter ended March 31, 2008. This was due, in part, to Dyadic’s restructuring of its industrial enzyme business to focus on higher margin products for growing segments of the industry, such as animal feed, while streamlining product lines and discontinuing some lower margin products in declining segments of the industry, such as textiles, as well as global economic conditions.

Net income for the quarter ended March 31, 2009 increased to approximately $2.3 million, or $0.08 per basic share and $0.07 per diluted share, as compared to a net loss of approximately $3.9 million, or $(0.13) per basic and diluted share, for the quarter ended March 31, 2008.

At March 31, 2009, cash and cash equivalents were approximately $6.1 million. Inventory at the end of this year's first quarter was approximately $3.5 million. Working capital at March 31, 2009 amounted to approximately $2.5 million, and stockholders' equity was approximately $3.8 million.

Fiscal 2008 Financial Results

Total revenue for the twelve months ended December 31, 2008 was approximately $13.1 million as compared to approximately $13.3 million for fiscal 2007.

Dyadic recognized approximately $3.3 million in research and development revenue during fiscal 2008 from a total of $10 million in proceeds received from Abengoa pursuant to the Abengoa Securities Purchase Agreement entered into between Dyadic and Abengoa in October 2006.

Net product related revenue for the year ended December 31, 2008 decreased to approximately $9.2 million, as compared to approximately $9.7 million for the year ended December 31, 2007. This was due primarily to Dyadic’s restructuring of its industrial enzyme business beginning in the second half of 2008 to focus on higher margin products for growing segments of the industry, such as animal feed, while streamlining product lines and discontinuing some lower margin products in declining segments of the industry, such as textiles, as well as global economic conditions.

Net loss for 2008 was approximately $12.4 million, or $(0.41) per basic and diluted share, as compared to a net loss of approximately $15.5 million, or $(0.52) per basic and diluted share, for fiscal 2007.

Fiscal 2007 Financial Results

Total revenue for the twelve months ended December 31, 2007 was approximately $13.3 million as compared to approximately $15.4 million for fiscal 2006. The decline in sales was attributable in large part to Dyadic’s abandonment of its Asian operations and pricing pressure on enzymes in the textile industry.

Dyadic recognized approximately $3.3 million in research and development revenue during fiscal 2007 from a total of $10 million in proceeds received from Abengoa pursuant to the Abengoa Securities Purchase Agreement entered into between Dyadic and Abengoa in October 2006.

Net product related revenue for the year ended December 31, 2007 increased to approximately $9.7 million, as compared to approximately $9.3 million for the year ended December 31, 2006.

Net loss for 2007 was approximately $15.5 million, or $(0.52) per basic and diluted share, as compared to a net loss of approximately $10.9 million, or $(0.45) per basic and diluted share for fiscal 2006.

Chief Executive Officer, Mark Emalfarb, added, “Since returning to Dyadic in June 2008, we have made substantial progress in re-positioning Dyadic to grow both our licensing and industrial enzymes businesses. We are focused on leveraging our patented and proprietary technologies by continuing to invest in their improvement and finding suitable partners and collaborators to maximize the many benefits that these technologies can offer for diverse markets such as biofuels, industrial enzymes and biopharmaceuticals.”

Mr. Emalfarb continued, “In particular, Dyadic is working with its partners to apply and improve its technologies to produce the maximum quantity of fermentable sugars from biomass at the lowest cost for use as an alternative to oil or other petroleum-based products such as plastics, polymers and chemicals. In addition to our license deals with Abengoa and Codexis, we are actively pursuing transactions with other potential licensees in the biofuels industry and seeking government funding, both in the U.S. and Europe, in this growing area. We believe that Dyadic’s success in biofuel enzyme discovery and production is evidence of the C1 Platform Technology’s applicability across diverse biotechnology fields including protein discovery, protein production and biogenerics. For biopharma and other industries where Dyadic lacks the necessary knowledge and expertise, Dyadic will rely more heavily on the resources of our potential partners to realize the full potential of our technologies. Finally, the completion earlier this month of our FDA GRAS notification process shows our ability to produce C1-derived enzymes for the food and animal feed industries which provides Dyadic with the ability to work with potential collaborators where the lack of GRAS status previously presented a barrier to entry for these types of products in these and other markets.”

About Dyadic

Dyadic International, Inc. is an early-stage biotechnology company that uses its patented and proprietary technologies to conduct research, development and commercial activities for the discovery, development, manufacture and sale of products and solutions for the bioenergy, industrial enzyme and biopharmaceutical industries. Please visit Dyadic’s website at www.dyadic.com.

Dyadic has begun making financial disclosures through the Pink OTC Markets Disclosure and News Service which offers free information on the Pink Sheets website (www.pinksheets.com) concerning issuers listed on the Pink Sheets over-the-counter market. Investors can access and download Dyadic’s financial reports and other announcements that Dyadic makes through the Pink Sheets website. Dyadic will also continue providing updates through regular press releases as appropriate.

Cautionary Statement for Forward-Looking Statements

Certain statements contained in this press release are forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause Dyadic’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Except as required by law, Dyadic expressly disclaims any intent or obligation to update any forward-looking statements.

Contact:

Dyadic International, Inc.
Adam J. Morgan
Vice President General Counsel & Business Development
Phone: 561-743-8333
Email: amorgan@dyadic.com

Contacts
Dyadic International, Inc.
Adam J. Morgan, 561-743-8333
Vice President General Counsel & Business Development
amorgan@dyadic.com