Press Releases

Jupiter, FL–(March 10, 2011—PR NEWSWIRE)—Dyadic International, Inc. (OTC Pink: DYAI), a global biotechnology company, today announced financial results for the year ended December 31, 2010. 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 OTC Markets website atwww.otcmarkets.com and on Dyadic’s website atwww.dyadic.com.

Dyadic’s President and Chief Executive Officer, Mark Emalfarb, stated, “In 2010, Dyadic made substantial progress toward the continued growth of our licensing, research and development, and industrial enzyme businesses. We commenced discussions and negotiations with a broad spectrum of potential new partners and continue to work towards successfully concluding these potential collaborations. Our non-exclusive licensees, Codexis and Abengoa Bioenergy, continue to report positive results in using Dyadic’s C1 platform technology to reduce the costs involved in the commercialization of cellulosic ethanol and the production of cellulosic sugars for a variety of applications. Dyadic Netherlands has continued to attract funded research projects which provide a fertile testing ground of our technologies for various industry applications and the potential for those projects to evolve into broader partnerships. Our industrial enzyme business grew revenues by nine percent with improved margins as we continue to achieve greater distribution of new and existing products to our global customers. The recent launch of our Fibrezyme® G200 pulp and paper product was developed from an improved variant of our C1 technologywhich produces purer forms of proteins and enzymes at higher yields demonstrating once again the versatility and robust nature of our C1 technology platform. Lastly, we continued to strengthen our intellectual property portfolio with the recent grants of two additional U.S. patents.”

2010 Highlights

  1. Achieved annual revenues of approximately $8.4 million for the year ended December 31, 2010 which included an approximately nine percent increase in product related revenue with improved margins.

  1. Raised $4 million in a private placement of convertible subordinated secured promissory notes.

  1. Furthered the application of Dyadic’s C1 platform technology in the field of biopharmaceuticals by collaborating with EnGen Bio as Dyadic’s prospective exclusive licensee for additional collaborations in this field.

  1. Achieved a final resolution and dismissal of the stockholder class action lawsuit.

  1. Engaged The Abraham Group led by former U.S. Secretary of Energy, Spencer Abraham, as a strategic advisor.

  1. Strengthened the management team in the areas of strategic alliances and sales and marketing.

  1. Completed the re-sequencing and, with Scripps Florida, a division of the Scripps Research Institute, the re-annotation of the C1 genome.

  2. Received an additional U.S. patent pertaining to expression and subsequent screening of DNA libraries in filamentous fungal hosts which may help speed up the discovery of novel genes and development of their corresponding enzymes and proteins.

FINANCIAL RESULTS

Total revenue for the year ended December 31, 2010 decreased to approximately $8.4 million as compared to approximately $21.4 million for the prior year.

Net product related revenue for the year ended December 31, 2010 increased nine percent to approximately $7.4 million as compared to approximately $6.8 million for the year ended December 31, 2009. Gross margins for the year ended December 31, 2010 continued to improve as a result of the restructuring of Dyadic’s industrial enzyme business to focus on higher margin products for growing segments of the industry such as animal feed, while streamlining and discontinuing lower margin products.

License fee revenue decreased to approximately $37,250 for the year ended December 31, 2010 as compared to $10.3 million for the prior year. This decrease was due largely to the fact that Dyadic recognized a $10 million upfront license fee from Codexis, Inc. in 2009 pursuant to a non-exclusive license agreement between Codexis and Dyadic and did not consummate any similar license agreements in 2010.

Research and development revenue decreased to approximately $1.0 million for the year ended December 31, 2010 as compared to approximately $4.3 million for the year ended December 31, 2009. This decrease was largely due to the recognition of approximately $3.3 million in research and development revenue in 2009 from Dyadic’s non-exclusive licensee, Abengoa Bioenergy.

Net loss for the year ended December 31, 2010 was approximately $5.5 million, or $(0.18) per basic and fully diluted share, as compared to net income of approximately $5.2 million, or $0.17 per basic and $0.16 per fully diluted share, for fiscal 2009.

At December 31, 2010, cash and cash equivalents totaled approximately $4.5 million as compared to approximately $8.4 million at December 31, 2009. This decrease was largely due to the net loss for the period and the resolution of the stockholder class action lawsuit which was partially offset by the private debt placement mentioned below.

At December 31, 2010, total debt was approximately $5.4 million as compared to approximately $1.4 million at December 31, 2009. This increase was due to Dyadic’s private placement in 2010 of $4.0 million of convertible subordinated debt.

ABOUT DYADIC

Dyadic International, Inc. is a global biotechnology company that uses its patented and proprietary technologies to conduct research, development and commercial activities for the discovery, development, manufacture and sale of enzyme and protein products for the bioenergy, industrial enzyme and biopharmaceutical industries. Please visit Dyadic’s website atwww.dyadic.com.

Dyadic makes financial disclosures through the OTC Disclosure and News Service which offers free information on the OTC Markets website (www.otcmarkets.com) concerning companies traded on the OTC Markets. Investors can access and download Dyadic’s financial reports and other announcements that Dyadic makes through the OTC Markets 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 CONSOLIDATED STATEMENTS OF OPERATIONS

Year Ended December 31,

2010

2009

Revenue:

Product Related Revenue, Net

$

7,389,793

$

6,800,071

License Fee Revenue

37,250

10,300,000

Research and Development Revenue

1,010,559

4,321,258

Total Revenue

8,437,602

21,421,329

Cost of Goods Sold

6,497,935

6,292,411

Gross Profit

1,939,667

15,128,918

Expenses:

General and Administrative

5,157,755

4,334,190

Sales and Marketing

988,453

958,143

Research and Development

1,240,510

1,211,035

Foreign Currency Exchange Losses, Net

148,423

56,455

Total Expenses

7,535,141

6,559,823

Income (Loss) from Operations

(5,595,474)

8,569,095

Other Income (Expense)

Interest Income

61,573

141,811

Interest Expense

(248,319)

(219,892)

Loss on Stockholder Litigation

(3,250,000)

Gain on Reduction of Accrued Stockholder

Litigation

410,000

Other

(155,712)

Total Other Income (Expense)

67,542

(3,328,081)

Net Income (Loss)

$

(5,527,932)

$

5,241,014

Net Income (Loss) per Common Share:

Basic

$

(0.18)

$

0.17

Diluted

$

$

(0.18)

0.16

Weighted Average Common Shares Used in

Calculating Net Income (Loss) per Share:

Basic

31,011,137

30,121,396

Diluted

31,011,137

33,231,170

DYADIC INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

December 31,

2010

2009

ASSETS

Current Assets:

Cash and Cash Equivalents

$

4,535,279

$

8,419,934

Restricted Cash

247,082

316,129

Accounts Receivable, Net

1,276,574

1,376,034

Inventory, Net

2,782,433

2,820,381

Prepaid Expenses and Other Current Assets

336,638

420,654

Total Current Assets

9,178,006

13,353,132

Fixed Assets, Net

719,161

839,639

Intangible Assets, Net

310,978

148,167

Other Assets

16,930

16,930

$

10,225,075

$

14,357,868

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:

Accounts Payable

$

1,801,123

$

1,949,038

Accrued Expenses

417,996

713,163

Accrued Stockholder Litigation

3,250,000

Accrued Interest Payable

146,230

59,838

Note Payable to Stockholder

1,424,941

1,424,941

Income Taxes Payable

168

767

Total Current Liabilities

3,790,458

7,397,747

Convertible Subordinated Debt

4,000,000

7,790,458

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 – 31,138,120

and 30,613,995, Respectively

31,138

30,614

Additional Paid-In Capital

77,101,690

76,075,899

Stock to be Issued

23,887

Accumulated Deficit

(74,698,211)

(69,170,279)

Total Stockholders’ Equity

2,434,617

6,960,121

$ 10,225,075

$

14,357,868

DYADIC INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

Year Ended December 31,

2010

2009

Operating Activities

Net Income (Loss)

$

(5,527,932)

$

5,241,014

Adjustments to Reconcile Net Income (Loss) to Net Cash

Provided by (Used In) Operating Activities:

Depreciation and Amortization of Fixed Assets

309,162

294,194

Amortization of Intangible and Other Assets

18,142

14,253

Reduction of Allowance for Doubtful

(55,818)

(55,550)

Accounts

Reduction of Inventory Reserve

(418,406)

(842,587)

Compensation Expense on Stock Option Grants

888,147

118,103

Stock Issued for Consulting Services

63,000

31,521

Loss on Stockholder Litigation

3,250,000

Gain on Reduction of Accrued Stockholder Litigation

(410,000)

Changes in Operating Assets and Liabilities:

Accounts Receivable

155,278

183,716

Inventory

456,354

1,797,956

Prepaid Expenses and Other Current Assets

84,016

216,548

Other Assets

120,573

Accounts Payable

(147,915)

(729,756)

Accrued Expenses

(295,167)

387,529

Accrued Interest Payable

86,392

(134,422)

Accrued Stockholder Litigation

(2,840,000)

Deferred Research and Development Obligation

(3,332,863)

Income Taxes Payable

(599)

(7,892)

Net Cash Provided by (Used In) Operating Activities

(7,635,346)

6,552,337

Investing Activities

Purchases of Fixed Assets

(188,684)

(94,376)

Patent Costs

(180,953)

Restricted Cash

69,047

28,227

Net Cash (Used In) Investing Activities

(300,590)

(66,149)

Financing Activities

Repayment of Note Payable to Stockholder

(1,000,000)

Proceeds from Issuance of Convertible Subordinated Debt

4,000,000

Proceeds from Stock Warrant Exercises

16,642

86,654

Proceeds from Stock Option Exercises

34,639

20,550

Net Cash (Used In) Provided by Financing Activities

4,051,281

(892,796)

Net Increase (Decrease) in Cash and Cash Equivalents

(3,884,655)

5,593,392

Cash and Cash Equivalents at Beginning of Year

8,419,934

2,826,542

Cash and Cash Equivalents at End of Year

$

4,535,279

$

8,419,934

Supplemental Cash Flow Information:

Cash Paid for Interest

$

161,927

$

354,314

CONTACT:

Dyadic International, Inc.

Michael J. Faby

Vice President Finance

Phone: 561-743-8333

Email: mfaby@dyadic.com