Press Releases

Jupiter, Fla., March 27, 2012/PR Newswire/ — Dyadic International, Inc. (OTC Pink: DYAI), a global biotechnology company focused on the discovery, development, manufacture and sale of enzyme and protein products for the bioenergy, industrial enzyme and biopharmaceutical industries, today announced financial results for the year ended December 31, 2011. The financial information contained in this press release should be read in conjunction with the audited financial statements, footnotes and independent auditors’ report which have been posted on the OTC market website atwww.otcmarkets.com/stock/DYAI/financials and on Dyadic’s website at www.dyadic.com/wt/dyad/investors.

Dyadic’s President and Chief Executive Officer, Mark Emalfarb, stated, “In 2011, Dyadic made substantial progress across all areas of its business in continuing to lay a foundation for long-term growth through the consummation of opportunities in a diverse group of markets. Foremost among these were our first major collaborations with leading companies in the biopharmaceutical and animal nutrition industries to use Dyadic’s versatile and robust C1 technology to express genes for the production of key enzymes and proteins. These and other transactions contributed to the large increase in research and license revenue which resulted from Dyadic’s continuous process of identifying and securing revenue-generating opportunities with major companies in a variety of industries. Our two non-exclusive biofuels licensees also continued to make significant progress in 2011 toward the development and improvement of highly productive cellulase enzymes. These enzymes have been produced by both licensees at commercial scale in preparation for their commercialization of cellulosic ethanol, biochemicals and other products derived from cellulosic sugars which will generate additional payments to Dyadic.”

2011 Highlights

  1. Total revenue increased 21%

  1. Gross profit increased 86%

  1. Research and development revenue increased 81%

  1. Entered into research and licensing agreement with major player in the animal nutrition industry to use Dyadic’s C1 platform technology to produce certain animal feed enzymes

  2. Entered into biopharmaceutical research collaboration with Sanofi Pasteur and EnGen Bio to use Dyadic’s C1 platform technology to produce certain vaccines

  3. Improved product mix and margins in the sale of our industrial enzyme products

  1. Introduced two new enzyme products, FibreZyme® G200 for pulp & paper applications and AlternaFuel® CMAX™ for biofuels applications

  2. Raised $3 million in a private placement of convertible debt

  1. Received four new U.S. and 14 foreign patents

FINANCIAL RESULTS

Total revenue for the year ended December 31, 2011 increased 21% to $10.3 million as compared to $8.4 million for the prior year.

Net product related revenue for the year ended December 31, 2011 remained in line with 2010 at approximately $7.4 million. Gross profit increased 86% for the year ended December 31, 2011 due to increased license fee revenue, increased research and development revenue and improved product margins.

License fee revenue increased to $1.0 million for the year ended December 31, 2011 as compared to $37,000 for the prior year. This increase was due largely to the upfront license payment from a non-exclusive license agreement with a leading global animal nutrition company.

Research and development revenue increased 81% to $1.8 million for the year ended December 31, 2011 as compared to $ 1.0 million for the year ended December 31, 2010. This increase was largely due to a greater number of research and development projects funded by third parties.

Net loss for the year ended December 31, 2011 was $4.7 million, or $(0.15) per basic and fully diluted share, as compared to a net loss of $5.5 million, or $(0.18) per basic and fully diluted share, for fiscal 2010.

At December 31, 2011, cash and cash equivalents totaled $3.7 million as compared to $4.5 million at December 31, 2010. This decrease was largely due to the net loss for the period and arbitration costs which were partially offset by the private debt placement mentioned below.

At December 31, 2011, total debt was $8.4 million as compared to $5.4 million at December 31, 2010. This increase was due to Dyadic’s private placement in 2011 of $3.0 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 trades on the OTC Pink tier of the OTC market. Investors can find real-time quotes, market information and financial reports for Dyadic on the OTC market website (www.otcmarkets.com/stock/DYAI/quote).

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,

Revenue:

2011

2010

Product Related Revenue, Net

$

7,407,908

$

7,389,793

License Fee Revenue

1,017,000

37,250

Research and Development Revenue

1,825,304

1,010,559

Total Revenue

10,250,212

8,437,602

Cost of Goods Sold

6,641,666

6,497,935

Gross Profit

3,608,546

1,939,667

Expenses:

General and Administrative

5,649,028

5,157,755

Sales and Marketing

1,112,213

988,453

Research and Development

1,047,478

1,240,510

Foreign Currency Exchange Losses, Net

38,144

148,423

Total Expenses

7,846,863

7,535,141

(Loss) from Operations

(4,238,317)

(5,595,474)

Other Income (Expense)

Interest Income

10,789

61,573

Interest Expense

(517,742)

(248,319)

Gain on Reduction of Accrued Stockholder Litigation

410,000

Other

1,709

(155,712)

Total Other Income (Expense)

(505,244)

67,542

Net Loss

$

(4,743,561)

$

(5,527,932)

Net (Loss) per Common Share:

Basic

$

(0.15)

$

(0.18)

Diluted

$

$

(0.15)

(0.18)

Weighted Average Common Shares Used in

Calculating Net (Loss) per Share:

Basic

31,349,980

31,011,137

Diluted

31,349,980

31,011,137

DYADIC INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

December 31,

ASSETS

2011

2010

Current Assets:

Cash and Cash Equivalents

$

3,691,755

$

4,535,279

Restricted Cash

214,376

247,082

Accounts Receivable, Net

1,774,773

1,276,574

Inventory, Net

3,276,382

2,782,433

Prepaid Expenses and Other Current Assets

280,812

336,638

Total Current Assets

9,238,098

9,178,006

Fixed Assets, Net

552,221

719,161

Intangible Assets, Net

497,385

310,978

Other Assets

16,173

16,930

$

10,303,877

$

10,225,075

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current Liabilities:

Accounts Payable

$

2,065,708

$

1,801,123

Accrued Expenses

437,719

417,996

Accrued Interest Payable

173,496

146,230

Note Payable to Stockholder

1,424,941

1,424,941

Income Taxes Payable

168

Total Current Liabilities

4,101,864

3,790,458

Convertible Subordinated Debt

7,000,000

4,000,000

Total Liabilities

11,101,864

7,790,458

COMMITMENTS AND CONTINGENCIES

Stockholders’ Equity (Deficit):

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 – 31,448,745 and

31,138,120, Respectively

31,449

31,138

Additional Paid-In Capital

78,608,586

77,101,690

Stock to be Issued

3,750

Accumulated Deficit

(79,441,772)

(74,698,211)

Total Stockholders’ Equity (Deficit)

$

(797,987)

$

2,434,617

10,303,877

10,225,075

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

Year Ended December 31,

Operating Activities

2011

2010

Net (Loss)

$

(4,743,561)

$

(5,527,932)

Adjustments to Reconcile Net (Loss) to Net Cash (Used In)

Operating Activities:

Depreciation and Amortization of Fixed Assets

247,350

309,162

Amortization of Intangible and Other Assets

37,773

18,142

Reduction of Allowance for Doubtful Accounts

(61,968)

(55,818)

Reduction of Inventory Reserve

(75,389)

(418,406)

Compensation Expense on Stock Option Grants

1,454,214

888,147

Stock Issued for Consulting Services

63,000

Gain on Reduction of Accrued Stockholder Litigation

(410,000)

Change in Operating Assets and Liabilities

Accounts Receivable

(436,231)

155,278

Inventory

(418,560)

456,354

Prepaid Expenses and Other Current Assets

55,826

84,016

Other Assets

757

Accounts Payable

264,585

(147,915)

Accrued Expenses

19,723

(295,167)

Accrued Interest Payable

27,266

86,392

Accrued Stockholder Litigation

(2,840,000)

Income Taxes Payable

(168)

(599)

Net Cash (Used In) Operating Activities

(3,628,383)

(7,635,346)

Investing Activities

Purchases of Fixed Assets

(80,410)

(188,684)

Patent Costs

(224,180)

(180,953)

Restricted Cash

32,706

69,047

Net Cash (Used In) Investing Activities

(271,884)

(300,590)

Financing Activities

Proceeds from Issuance of Convertible Subordinated Debt

3,000,000

4,000,000

Proceeds from Stock Warrant Exercises

15,000

16,642

Proceeds from Stock Option Exercises

41,743

34,639

Net Cash Provided by Financing Activities

3,056,743

4,051,281

Net Decrease in Cash and Cash Equivalent

(843,524)

(3,884,655)

Cash and Cash Equivalents at Beginning of Year

4,535,279

8,419,934

Cash and Cash Equivalents at End of Year

$

3,691,755

$

4,535,279

Supplement Cash Flow Information:

Cash Paid for Interest

$

490,477

$

161,927

CONTACT:

Dyadic International, Inc.

Michael J. Faby

Chief Financial Officer

Phone: 561-743-8333

Email: mfaby@dyadic.com