Press Releases

JUPITER, Fla., May 14, 2010 – Dyadic International, Inc. (“Dyadic”) (Pink Sheets: DYAI), a leading-edge biotechnology company focused on the discovery, development, manufacture and sale of specialty enzyme products and solutions for the bioenergy, industrial enzyme and biopharmaceutical industries, today announced financial results for the quarter ended March 31, 2010. The financial information contained in this press release should be read in conjunction with the financial statements and related footnotes which have been posted on the Pink Sheets website at www.pinksheets.comand on Dyadic’s website atwww.dyadic.com.

Dyadic’s President and Chief Executive Officer, Mark Emalfarb, stated, “We are pleased with our first quarter results as we continue to build our infrastructure to meet the increasing demands for our enzyme products and further the advancement and monetization of our technologies. We are particularly encouraged by the 30% increase in our product sales from the same period last year.”

First Quarter Highlights and Recent Events

  1. Achieved approximately 30% growth in first quarter product revenues over the same period last year

  1. Improved product margins

  1. Increased production capacity to meet current and anticipated demand

  1. Resolved the securities class action stockholder lawsuit

  1. Strengthened Dyadic’s leadership team through the appointment of an Executive Director Strategic Alliances and a Vice President Sales & Marketing

  1. Dedicated a greater portion of Dyadic’s research and development capabilities to profit generating collaborations

FINANCIAL RESULTS

Total revenue for the three months ended March 31, 2010 decreased to approximately $2.0 million, as compared to approximately $5.0 million for the three months ended March 31, 2009. The decrease was primarily attributable to Dyadic’s recognition in the first quarter of 2009 of approximately $3.3 million from Abengoa Bioenergy R&D, Inc. (“Abengoa”) pursuant to an agreement between Abengoa and Dyadic. Excluding this agreement from 2009, total revenue for the first quarter of 2010 increased 21% over the same period last year, highlighted by an approximate 30% increase in net product related revenue, from approximately $1.5 million for the three months ended March 31, 2009 to approximately $1.9 million for the three months ended March 31, 2010.

Product related gross margins as a percentage of revenues increased approximately 10% which was largely due to the continued focus on the sale of higher margin products to growing segments of the industrial enzyme market as well as an increase in operational efficiencies.

Research and development expenses decreased approximately 25% from the same period last year, to $286,000, as Dyadic dedicated a greater portion of its research and development resources to profit generating collaborations.

Other income for the first quarter of 2010 increased by approximately $440,000, of which $410,000 represented the gain from the reduction of the stockholder litigation accrual.

Net loss for the quarter ended March 31, 2010 was approximately $1.1 million, or $(0.04) per basic and diluted share, as compared to net income of approximately $2.3 million, or $0.08 per basic and $0.07 per diluted share for the quarter ended March 31, 2009. This decrease is due to the recognition of approximately $3.3 million of Abengoa research and development revenue in the first quarter of 2009 as described above.

General and administrative costs increased approximately 65% from approximately $823,000 for the three months ended March 31, 2009 to approximately $1.4 million for the three months ended March 31, 2010, due primarily to additional legal, consulting and accounting fees as well as stock based compensation. Some of these legal fees were attributable to the class action stockholder lawsuit which has subsequently been resolved.

At March 31, 2010, cash and cash equivalents were approximately $7.5 million and working capital was approximately $5.1 million.

Mr. Emalfarb further stated, “The growth of our industrial enzyme revenue validates the continued demand for our products and the improving confidence of our customers in the global economic recovery. Our recent addition of key sales and strategic positions reflects our deep commitment to aggressively leveraging our technologies in the primary areas of biofuels and biopharmaceuticals while also continuing to grow our core industrial enzyme business. We intend to achieve this growth by capitalizing on the GRAS acknowledgement we received from the FDA last year and by continuing to offer high quality products for the animal feed, pulp and paper, starch and alcohol, food and brewing, textiles and alternative fuels markets.”

ABOUT DYADIC

Dyadic International, Inc. is a leading-edge 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 makes 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.

DYADIC INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended March 31,

2010

2009

Revenue:

(Unaudited)

(Unaudited)

Product Related Revenue, Net

$

1,879,145

$

1,456,199

License Fee Revenue

32,000

Research and Development Revenue

88,235

3,524,413

Total Revenue

1,999,380

4,980,612

Cost of Goods Sold

1,605,329

1,155,997

Gross Profit

394,051

3,824,615

Expenses:

General and Administrative

1,359,667

823,257

Sales and Marketing

226,605

271,017

Research and Development

286,167

383,202

Foreign Currency Exchange Losses, Net

33,293

31,482

Total Expenses

1,905,732

1,508,958

Income (Loss) from Operations

(1,511,681)

2,315,657

Other Income (Expense)

Interest Income

21,270

22,879

Interest Expense

(33,379)

(66,550)

Gain on Reduction of Accrued Stockholder Litigation

410,000

Other

1,198

Total Other Income (Expense)

397,891

(42,473)

Net Income (Loss)

$

(1,113,790)

$

2,273,184

Net Income (Loss) per Common Share

Basic

$

(0.04)

$

0.08

Diluted

$

(0.04)

$

0.07

Weighted Average Common Shares Used in Calculating

Net Income (Loss) Per Share:

Basic

30,832,621

29,990,675

Diluted

30,832,621

32,223,645

DYADIC INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS

March 31,

December 31,

2010

2009

Assets

(Unaudited)

Current Assets:

Cash and Cash Equivalents

$

7,545,537

$

8,419,934

Restricted Cash

317,558

316,129

Accounts Receivable, Net

1,370,985

1,376,034

Inventory, Net

2,467,109

2,820,381

Prepaid Expenses and Other Current Assets

386,150

420,654

Total Current Assets

12,087,339

13,353,132

Fixed Assets, Net

872,548

839,639

Intangible Assets, Net

144,652

148,167

Other Assets

29,518

16,930

$

13,134,057

$

14,357,868

Liabilities and Stockholders’ Equity

Current Liabilities:

Accounts Payable

$

1,996,122

$

1,949,038

Accrued Expenses

611,600

713,163

Accrued Stockholder Litigation

2,840,000

3,250,000

Accrued Interest Payable to Stockholder

33,379

59,838

Deferred Research and Development Obligation

90,614

Note Payable to Stockholder

1,424,941

1,424,941

Income Taxes Payable

767

Total Current Liabilities

6,996,656

7,397,747

Commitments and Contingencies

Stockholders’ Equity:

Preferred Stock, $.0001 Par Value:

Authorized Shares – 5,000,000; None Issued

and Outstanding

Common stock, $.001 par value,

Authorized Shares – 100,000,000; Issued

and Outstanding – 30,986,370

30,986

30,614

Additional Paid-in Capital

76,327,484

76,075,899

Stock to be Issued

63,000

23,887

Accumulated Deficit

(70,284,069)

(69,170,279)

6,137,401

6,960,121

$

13,134,057

$

14,357,868

DYADIC INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

2010

2009

(Unaudited)

(Unaudited)

Operating Activities

Net Income (Loss)

$

(1,113,790)

$

2,273,184

Adjustments to Reconcile Net Income (Loss) to

Net Cash Provided By (Used In) Operating Activities:

Depreciation and Amortization of Fixed Assets

71,713

52,397

Amortization of Intangible and Other Assets

3,515

3,514

Recovery of Doubtful Accounts

(4,476)

Recovery of Inventory Reserve

(97,713)

Compensation Expense on Stock Option Grants

196,101

28,851

Stock to be Issued for Rent

5,000

Stock to be Issued for Financial Services

63,000

Gain on Reduction of Accrued Stockholder

Litigation

(410,000)

Changes in Operating Assets and Liabilities:

Accounts Receivable

5,049

53,823

Inventory

450,985

257,144

Prepaid Expenses and Other Current

Assets

34,504

(4,881,458)

Other Assets

(12,588)

16,717

Accounts Payable

47,084

42,301

Accrued Expenses

(101,563)

(25,952)

Accrued Interest Payable to

Stockholder

(26,459)

(194,260)

Deferred Research and Development

Obligation

90,614

6,667,137

Income Taxes Payable

(767)

(7,634)

Net Cash Provided By (Used In) Operating Activities

(800,315)

4,286,288

Investing Activities

Purchases of Fixed Assets

(104,622)

Restricted Cash Deposit

(1,429)

18,980

Net Cash Provided By (Used In) Investing Activities

(106,051)

18,980

Financing Activities

Proceeds from Stock Option Exercises

15,093

Proceeds from Warrant Exercises

16,876

Repayment of Note Payable to Stockholder

(1,000,000)

Net Cash Provided By (Used In) Financing Activities

31,969

(1,000,000)

Net Increase (Decrease) in Cash and Cash Equivalents

(874,397)

3,305,268

Cash and Cash Equivalents at Beginning of Period

8,419,934

2,826,542

Cash and Cash Equivalents at End of Period

$

7,545,537

$

6,131,810

Supplemental Cash Flow Information:

Cash Paid for Interest

$

59,838

$

260,810

CONTACT:

Dyadic International, Inc.

Michael J. Faby

Vice President Finance

Phone: 561-743-8333

Email: mfaby@dyadic.com