Dyadic Updates its Progress in Development of Enzymes for Conversion of Biomass to Cellulosic Ethanol at Third Annual BIO Conference.

JUPITER, Fla. -- Dyadic International, Inc. (AMEX:DIL), a biotechnology company, will report today at the Third Annual World Congress on Industrial Biotechnology and Bioprocessing in Toronto, Canada, that it has identified and tested highly effective enzyme mixtures for the efficient conversion of renewable cellulosic biomass to ethanol. "We are making meaningful strides toward the production of low-cost ethanol from biomass," said Dr. Glenn Nedwin, Chief Science Officer of Dyadic.

Dyadic scientist Marco Baez, Ph.D. will present results of an internal study on Dyadic's proprietary cellulase and hemicellulase mixes with strong saccharifying activity on a number of different lignocellulosic feedstocks, including Douglas fir and cotton. In addition, Dr. Baez will present data showing the results of an internal study of two new highly active cellobiohydrolases isolated from Dyadic's patented Chrysosporium lucknowense fungal strain (known as C1), as well as a mixture of pure monocomponent enzymes, all of which demonstrated an extremely high ability to convert different cellulosic substrates to glucose, the critical raw material for the production of ethanol.

"The key hurdles that must be overcome for the large-scale commercial production of low-cost ethanol from renewable biomass are to reduce the cost and increase the efficiency of the enzymes used to extract glucose and other sugars from the cellulolytic feedstocks," Dr. Nedwin explained. "Dyadic has been a leader in the saccharification of cellulosic substrates for more than a decade. The results to be presented today show that we are making rapid progress in the development of potent enzyme mixtures that work well in the cellulosic ethanol application. Dyadic has filed a patent application with the U.S. Patent Office for these new enzymes and mixtures containing these enzymes. This is in addition to the Company's many other patents already issued or pending which protect our technology in this area."

Separately, Dyadic noted that in a recent publication (BC Saha and M.A. Cotta, Biotech. Prog. 22:449-453, 2006), researchers at the U.S. Department of Agriculture measured the efficiency of various commercially available enzyme preparations (including Dyadic's Viscostar 150L) on wheat straw pretreated with alkaline peroxide for the extraction of glucose and other sugars. The authors of this study stated that "unlike corn fiber hemicellulose, which is very resistant to hydrolysis using commercial enzymes, wheat straw hemicellulose can be easily hydrolyzed enzymatically by using a single xylanase preparation (Viscostar) after alkaline peroxide treatment."

The Third Annual World Congress on Industrial Biotechnology and Bioprocessing, taking place from July 11 to July 14, 2006 in Toronto, Canada, hosted by the Biotechnology Industry Organization (BIO), American Chemical Society, the National Agriculture Biotechnology Council, the Agri-Food Innovation Forum, the Chemical Institute of Canada, BIOTECanada and EuropaBIO, is the premiere gathering of thought leaders, investors, researchers and business executives in industrial biotechnology, bioenergy and bioprocessing.

About Dyadic

Dyadic International, Inc. is engaged in the development, manufacture and sale of biological products using a number of proprietary fungal strains to produce enzymes and other biomaterials, principally focused on a system for protein production based on the patented Chrysosporium lucknowense fungus, known as C1. Dyadic is applying its technologies to produce enzymes for use in converting various agricultural products (e.g. corn) and waste products (e.g. switch grass, wheat straw, sugar cane bagasse, etc.) into fermentable sugars, which can then be used in the production of traditional and cellulosic ethanol as well as other products currently derived from petroleum. Dyadic's C1 technology also is being developed to facilitate the discovery, development and large-scale production of human antibodies and other high-value therapeutic proteins. Dyadic currently sells more than 45 liquid and dry enzyme products to more than 200 industrial customers in approximately 50 countries for the textile, pulp & paper and animal feed industries.

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, 2005, and our Quarterly Report on Form 10-QSB for the quarter ended March 31, 2006. Except as required by law, we expressly disclaim any intent or obligation to update any forward-looking statements.