Dyadic Restructures Agreement With TNO Quality of Life.

JUPITER, Fla. -- Dyadic International, Inc. (AMEX:DIL), announced a restructuring of one of its agreements with its long-term research partner, TNO Quality of Life (formerly known as TNO Nutrition and Food Research Institute). The restructuring effectively eliminates a profit sharing and royalty rights arrangement with TNO, entered into in August 2003, related to Dyadic's fungal high throughput screening system. It also settles an outstanding indebtedness of a Dyadic subsidiary, Dyadic Nederland. B.V., to TNO, consisting of a trade payable of approximately $377,000, for total consideration of 161,560 shares of Dyadic's common stock.

According to Mark A. Emalfarb, Chairman and CEO of Dyadic, "TNO's equity investment in Dyadic further aligns both companies' interests for Dyadic's future growth. This, we believe, will further strengthen our relationship with one of the world renowned institutes, with expertise in fungal biology."

Dyadic and TNO continue to remain focused on their joint research and development program to develop the ability to express antibodies and other high value therapeutic proteins using Dyadic's C1 Expression System. Although still in the development stage for Dyadic's Biosciences Business, the C1 Expression System is currently being utilized in Dyadic's Enzyme Business to aid in the development and production of commercial quantities of enzymes for sale to textile, pulp and paper, animal feed, chemical, agricultural, and other industries.

"This transaction is in the best interest of the company, its shareholders and TNO," said Emalfarb. "The restructuring allows us to preserve our cash resources today while increasing our flexibility regarding strategies for completing development of our C1 Host Technology, and other biological systems, for internal use to develop new products such as our pulp and paper enzymes, and potentially for use by drug companies, energy companies and others."

About Dyadic

Dyadic International, Inc., is engaged in the development, manufacture and sale of biological products (proteins, enzymes, peptides and other bio-molecules), and the licensing of its enabling proprietary technology for the discovery, development and manufacture of biological products from genes. Dyadic markets its products and services for applications in the textile, chemical, agricultural, pulp & paper, pharmaceutical, biotechnology and other industries, using its proprietary C1 Host Technology and C1 Expression and Screening Systems for the discovery, development and production of biological products.

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 our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. For a discussion of these risks and uncertainties, please see our filings from time to time with the Securities and Exchange Commission, which are available free of charge on the SEC's web site at http://www.sec.gov, including our Annual Report on Form 10-KSB for the year ended December 31, 2004, and our Quarterly Report for the quarter ended September 30, 2005 on Form 10-QSB. Except as required by law, we expressly disclaim any intent or obligation to update any forward-looking statements.