JUPITER, Fla., Aug. 13 /PRNewswire-FirstCall/ -- Dyadic International, Inc. ("Dyadic") (Pink Sheets: DYAI), a global 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 second quarter ended June 30, 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.com and on Dyadic's website at www.dyadic.com.

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Dyadic's President and Chief Executive Officer, Mark Emalfarb, stated, "During the second quarter, we made significant progress in positioning Dyadic for future long-term growth by continuing to enhance our C1 technology and hiring key personnel and advisors to unlock the value of that technology primarily in the areas of biofuels and chemicals. We also laid the foundation to apply our C1 technology to the development and commercialization of biopharmaceuticals. All of this is now being pursued without the overhanging risk, cost and distraction of protracted stockholder litigation which we have put behind us."

Recent Company Highlights

In 2010, Dyadic has made significant progress in the following areas:

General

• Achieved final resolution of the stockholder class action lawsuit.

Research & Development

• Continued to improve the efficiency and performance of our enzymes for use in creating new industrial enzyme products and enhancing our current product offerings in the areas of animal feed, pulp and paper, starch and alcohol, food and brewing, textiles and alternative fuels.
• Continued to enhance our C1 technology in collaboration with Scripps Florida, a division of the Scripps Research Institute, and Dyadic Netherlands, for greater applicability in producing higher enzyme yields at lower cost for the benefit of our licensing and research partners.
• Initiated several provisional patent applications on genes and the enzymes they encode which resulted from ongoing research programs.
• Dedicated a greater portion of Dyadic's research and development capabilities to revenue generating collaborations including the use of our C1 technology for expressing proteins and enzymes in higher quantities from the genes provided by third parties.

Biofuels

• Engaged the Abraham Group LLC and former U.S. Energy Secretary, Spencer Abraham, as a strategic advisor to implement an international initiative designed to identify potential licensees and strategic partners for Dyadic among major international companies who have demonstrated strong interest in alternative energy and to assist in consummating those transactions.
• Initiated and continued ongoing discussions with several major companies for the potential license of Dyadic's C1 technology for the development and commercialization of biofuels and biochemicals.

Biopharmaceuticals

• Entered into a term sheet for a potential exclusive outlicense of C1 technology for biopharmaceutical applications to EnGen Bio, Inc.
• Continued discussions with numerous companies and investors regarding the potential funding of EnGen Bio as well as ongoing negotiations with a third party to conduct proof-of-concept scientific studies to validate the C1 technology's ability to meet certain protein expression levels as a condition of such funding.

Industrial Enzymes

• Improved product margins from 20% to 33% for the year to date.
• Continued discussions and negotiations with several companies for the potential license of Dyadic's C1 technology for animal feed and food applications.
• Strengthened Dyadic's leadership team through the hiring of a Vice President Sales & Marketing.
• Introduced and launched two new enzymes for the textiles market.
• Increased production capacity.

Financial Results

Total revenue for the second quarter ended June 30, 2010 decreased to approximately $2.2 million compared to approximately $11.9 million for the second quarter ended June 30, 2009. Total revenue for the six months ended June 30, 2010 decreased to approximately $4.2 million compared to approximately $16.9 million for the six months ended June 30, 2009. The decrease in total revenue for the three month period ended June 30, 2010 as compared to the three month period ended June 30, 2009 was due to a decrease in licensing revenue. The decrease in total revenue for the six month period ended June 30, 2010 as compared to the six month period ended June 30, 2009 was due to a decrease in research and development revenue and licensing revenue as described below.

Net product related revenue for the second quarter remained essentially flat at approximately $1.7 million. Net product related revenue for the six months ended June 30, 2010 increased to approximately $3.6 million from approximately $3.2 million for the same period a year ago.

Research and development revenue for the second quarter ended June 30, 2010 increased to approximately $465,000 compared to approximately $396,000 for the second quarter ended June 30, 2009. Research and development revenue for the six months ended June 30, 2010 decreased to approximately $554,000 compared to approximately $3.9 million for the six months ended June 30, 2009. The decrease in research and development revenue for the six months ended June 30, 2010 compared to the six months ended June 30, 2009 was due to research and development revenue recognized in the first quarter of 2009 of $3.3 million received from Abengoa Bioenergy R&D, Inc. pursuant to a securities purchase agreement between Dyadic and Abengoa.

There was no license fee revenue for the second quarter ended June 30, 2010 compared to license fee revenue of approximately $9.8 million for the second quarter ended June 30, 2009. License fee revenue for the six months ended June 30, 2010 decreased to approximately $32,000 compared to approximately $9.8 million for the six months ended June 30, 2009. The decrease in license fee revenue for the three and six month periods ended June 30, 2010 compared to the three and six month periods ended June 30, 2009 was due to licensee fee revenue recognized in the second quarter of 2009 of approximately $9.8 million related to license fees received from Codexis, Inc. pursuant to the non-exclusive license agreement between Codexis and Dyadic.

Gross margins for net product related revenue, exclusive of shipping and other costs, increased to 33% for the six months ended June 30, 2010 compared to 20% for the six months ended June 30, 2009 as a result of the continued focus on more profitable product lines and improvements to inventory management and overall operating efficiencies.

Net loss for the second quarter ended June 30, 2010 was approximately $1.4 million, or $(0.05) per basic and diluted share, compared to net income of approximately $8.6 million, or $0.29 per basic and $0.26 per diluted share for the second quarter ended June 30, 2009. Net loss for the six months ended June 30, 2010 was approximately $2.5 million, or $(0.08) per basic and diluted share, respectively, compared to net income of approximately $10.9 million, or $0.36 per basic and $0.33 per diluted share, for the six months ended June 30, 2009.

At June 30, 2010, cash and cash equivalents were approximately $4.0 million compared to approximately $8.4 million at December 31, 2009. A significant portion of the decrease in cash and cash equivalents since the end of last year was due to costs incurred and payments by Dyadic to resolve the stockholder class action lawsuit.

Conference Call

A conference call to discuss Dyadic's 2010 second quarter financial results is scheduled for 11:00 a.m. Eastern Time on Friday, August 13, 2010. The conference call may be accessed by dialing 888-724-9504 (domestic) or 913-312-0951 (international) five to ten minutes prior to start time and providing the passcode 4931751.

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 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


                    Six Months Ended June 30,  Three Months Ended June 30,
                     ---------------------         ------------------
                        2010           2009         2010            2009
                         ---            ---          ---             ---
                   (Unaudited)    (Unaudited)  (Unaudited)  (Unaudited)
    Revenue:
     Product Related
      Revenue, Net  $3,618,937     $3,210,964   $1,739,792    $1,754,765
     License Fee
      Revenue           32,000      9,750,000            -     9,750,000
     Research and
      Development
      Revenue          553,575      3,920,801      465,340       396,388
         Total
          Revenue    4,204,512     16,881,765    2,205,132    11,901,153

    Cost of Goods
     Sold:           3,090,979      2,975,786    1,485,650     1,819,789
    Gross Profit     1,113,533     13,905,979      719,482    10,081,364
                     ---------     ----------      -------    ----------

    Expenses:
     General and
      Administrative 2,634,142      1,845,313    1,274,476     1,022,056
     Sales and
      Marketing        472,596        455,457      245,863       184,440
     Research and
      Development      648,634        624,502      362,595       241,300
     Foreign Currency
      Exchange Losses,
      Net              260,543         50,252      227,246        18,770
         Total
          Expenses   4,015,915      2,975,524    2,110,180     1,466,566
                     ---------      ---------    ---------     ---------

    Income (Loss)
     from Operations (2,902,382)    10,930,455   (1,390,698)   8,614,798
                     ----------     ----------   ----------    ---------

    Other Income
     (Expense)
      Interest
       Income            36,012         70,995       14,741       48,116
      Interest
       Expense         (65,066)      (109,866)     (31,687)     (43,316)
      Gain on
       Reduction
       of Accrued
       Stockholder
       Litigation       410,000              -            -            -
      Other                 243              -          243      (1,198)
                            ---            ---          ---          ---
         Total Other
          Income
          (Expense)     381,189        (38,871)     (16,703)       3,602
                        -------        -------      -------         ----


    Net Income
     (Loss)         $(2,521,193)    $10,891,584  $(1,407,401) $8,618,400
                    ===========    ===========  ===========   ==========

    Net Income (Loss)
     per Common Share
        Basic            $(0.08)          $0.36       $(0.05)      $0.29
                         ======          =====       ======        =====
        Diluted          $(0.08)          $0.33       $(0.05)      $0.26
                         ======          =====       ======        =====

    Weighted Average
     Common Shares Used
     in Calculating
     Net Income (Loss)
     Per Share:
        Basic         30,906,706     30,027,962   30,985,745  30,002,830
                      ==========     ==========   ==========  ==========
        Diluted       30,906,706     32,936,567   30,985,745  33,218,934
                      ==========     ==========   ==========  ==========

                DYADIC INTERNATIONAL, INC. AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED BALANCE SHEETS

                                                                December
                                                   June 30,        31,
                                                         2010         2009
                                                         ----         ----
                       ASSETS                    (Unaudited)
        Current Assets:
         Cash and Cash Equivalents                 $3,964,486   $8,419,934
         Restricted Cash                              270,540      316,129
         Accounts Receivable, Net                   1,626,781    1,376,034
         Inventory, Net                             2,754,425    2,820,381
         Prepaid Expenses and Other Current
          Assets                                      302,867      420,654
                                                      -------      -------
                       Total Current Assets         8,919,099   13,353,132

        Fixed Assets, Net                             845,858      839,639
        Intangible Assets, Net                        147,383      148,167
        Other Assets                                   16,930       16,930
                                                   $9,929,270  $14,357,868
                                                   ==========  ===========

        LIABILITIES AND STOCKHOLDERS' EQUITY
        Current Liabilities:
         Accounts Payable                          $1,882,804   $1,949,038
         Accrued Expenses                             279,133      713,163
         Accrued Stockholder Litigation             1,340,000    3,250,000
         Accrued Interest Payable to
          Stockholder                                  33,750       59,838
         Note Payable to Stockholder                1,424,941    1,424,941
         Income Taxes Payable                           2,005          767
                       Total Current Liabilities    4,962,633    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                                      31,007       30,614
                   Outstanding - 31,006,995 and
                    30,613,995, Respectively
         Additional Paid-In Capital                76,617,987   76,075,899
         Stock to Be Issued                             9,117       23,887
         Accumulated Deficit                      (71,691,474) (69,170,279)
                                                    4,966,637    6,960,121
                                                    ---------    ---------
                                                   $9,929,270  $14,357,868
                                                   ==========  ===========

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

                                             Six Months Ended June
                                                         30,
                                               ---------------------
                                               2010                 2009
                                                ---                  ---
                                        (Unaudited)          (Unaudited)
     Operating Activities
     Net Income (Loss)                  $(2,521,193)         $10,891,584
      Adjustments to Reconcile
       Net Income (Loss) to Net
       Cash
                Provided By (Used In)
                 Operating Activities:
          Depreciation and
           Amortization of Fixed
           Assets                           151,096               87,682
          Amortization of
           Intangible and Other
           Assets                             7,068                7,067
          Reduction of Allowance
           for Doubtful Accounts           (132,030)                   -
          Reduction of Inventory
           Reserve                         (333,795)            (490,414)
          Compensation Expense on
           Stock Option Grants              425,032               58,025
          Stock Issued for
           Financial Services                63,000                    -
          Stock Issued for Rent                   -                5,000
          Gain on Reduction of
           Accrued Stockholder
           Litigation                      (410,000)                   -
          Changes in Operating
           Assets and Liabilities:
               Accounts Receivable         (118,717)              (9,247)
               Inventory                    399,751            1,125,490
               Prepaid Expenses and
                Other Current Assets        117,787               22,105
               Other Assets                       -               27,604
               Accounts Payable             (66,234)            (319,621)
               Accrued Expenses            (434,030)             (74,011)
               Accrued Interest Payable
                to Stockholder              (26,088)            (167,154)
               Accrued Stockholder
                Litigation               (1,500,000)                   -
               Deferred Research and
                Development Obligations           -           (3,082,863)
               Income Taxes Payable           1,238               (5,584)
     Net Cash Provided By
      (Used In) Operating
      Activities                         (4,377,115)           8,075,663
                                         ----------            ---------

     Investing Activities
     Purchases of Fixed Assets             (157,315)             (12,402)
     Patent Costs                            (6,284)                   -
     Restricted Cash                         45,589                1,197
     Net Cash (Used In)
      Investing Activities                 (118,010)             (11,205)
                                           --------              -------

     Financing Activities
     Repayment of Note Payable
      to Stockholder                              -           (1,000,000)
     Proceeds from Stock
      Warrant Exercises                      16,876                    -
     Proceeds from Stock
      Option Exercises                       22,801                    -
     Net Cash Provided By
      (Used In) Financing
      Activities                             39,677           (1,000,000)
                                             ------           ----------

     Net Increase (Decrease)
      in Cash and Cash
      Equivalents                        (4,455,448)           7,064,458
     Cash and Cash Equivalents
      at Beginning of Period              8,419,934            2,826,542
                                          ---------            ---------
     Cash and Cash Equivalents
      at End of Period                   $3,964,486           $9,891,000
                                         ==========           ==========

     Supplemental Cash Flow
      Information:
     Cash Paid for Interest                 $91,154             $277,020
                                            =======             ========

SOURCE Dyadic International, Inc.