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<SEC-DOCUMENT>0001213809-06-000049.txt : 20061101
<SEC-HEADER>0001213809-06-000049.hdr.sgml : 20061101
<ACCEPTANCE-DATETIME>20061101165204
ACCESSION NUMBER:		0001213809-06-000049
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20061026
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Unregistered Sales of Equity Securities
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20061101
DATE AS OF CHANGE:		20061101

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			DYADIC INTERNATIONAL INC
		CENTRAL INDEX KEY:			0001213809
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-COMMERCIAL PHYSICAL & BIOLOGICAL RESEARCH [8731]
		IRS NUMBER:				450486747
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-32513
		FILM NUMBER:		061179501

	BUSINESS ADDRESS:	
		STREET 1:		140 INTRACOASTAL POINTE DRIVE
		STREET 2:		SUITE 404
		CITY:			JUPITER
		STATE:			FL
		ZIP:			33477
		BUSINESS PHONE:		561-743-8333

	MAIL ADDRESS:	
		STREET 1:		140 INTRACOASTAL POINTE DRIVE
		STREET 2:		SUITE 404
		CITY:			JUPITER
		STATE:			FL
		ZIP:			33477

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	CCP WORLDWIDE INC
		DATE OF NAME CHANGE:	20030110
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>dyadicform8_k102606.htm
<DESCRIPTION>DYADIC INTERNATIONAL, INC. FORM 8-K 10.26.06
<TEXT>
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  <head>
    <title>
      Dyadic International, Inc. Form 8-K 10.26.06
</title>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
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        <hr style="COLOR: black" align="left" noshade size="3" width="100%">
      </div>UNITED STATES

      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 17pt; FONT-FAMILY: Times New Roman">SECURITIES
        AND EXCHANGE COMMISSION</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">WASHINGTON
        D.C. 20549</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
        <div>
          <hr style="COLOR: #000000" align="center" noshade size="1" width="25%">
        </div><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 17pt; FONT-FAMILY: Times New Roman">FORM
        8-K</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 13pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 14pt; FONT-FAMILY: Times New Roman">Pursuant
        to SECTION 13 or 15(d) of the Securities Exchange Act of
        1934</font></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><strong>Date
          of Report (Date of earliest event
          reported):&#160;<u>October 26, 2006</u></strong></div>
      </div>
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    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><img src="dyadiclogo11.jpg" alt="Dyadic Logo 10.26"></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
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        International, Inc.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Exact
        name of small business issuer as specified in its charter)</font></div>
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                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;<strong><font size="4"><u>Delaware&#160;</u>&#160;&#160;&#160;&#160;&#160;&#160;</font></strong></div>
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                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;<strong><font size="4"><u>45-0486747</u></font></strong></div>
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                  or other jurisdiction&#160;of
                  incorporation)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</font></div>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">(Commission
                  File Number)</div>
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                  Employer Identification No.)</font></div>
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        <div>&#160;</div>
        <div align="center">
          <table bgcolor="white" cellpadding="0" cellspacing="0" width="57%">

              <tr bgcolor="white">
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                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong><u>140
                    Intracoastal Pointe Drive, Suite 404, Jupiter,
                    Florida</u></strong>&#160;</font></div>
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                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;&#160;<font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">&#160;(Address
                    of principal executive offices)</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u><strong>(561)
        743-8333</strong></u></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Registrant's
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        the
        appropriate box below if the Form 8-K filing is intended to simultaneously
        satisfy the filing obligation of the registrant under any of the following
        provisions (</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>see
        </em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">General
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                  communications pursuant to Rule 425 under the Securities Act (17
                  CFR
                  230.425)</font></div>
              </td>
            </tr>

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            <tr valign="top" style="line-height: 1.25;">
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                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings">o</font></div>
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                  material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
                  240.14a-12)</font></div>
              </td>
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            <tr valign="top" style="line-height: 1.25;">
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                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings">o</font></div>
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                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pre-commencement
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                  (17 CFR
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        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 18pt;">&#160;</td>
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                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings">o</font></div>
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                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pre-commencement
                  communications pursuant to Rule 13e-4(c) under the Exchange Act
                  (17 CFR
                  240.13e-4(c))</font></div>
              </td>
            </tr>

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    <div>&#160;</div>
    <div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Item
        1.01 Entry Into a Material Definitive Agreement</u></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        October 26, 2006, Dyadic International, Inc. and its wholly-owned subsidiary
        Dyadic International (USA), Inc. (together referred to as the &#8220;Company&#8221; or
&#8220;Dyadic&#8221;), entered into</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        a
        Securities Purchase Agreement (the &#8220;Securities Purchase Agreement&#8221;) with Abengoa
        Bioenergy R&amp;D, Inc. (&#8220; Abengoa&#8221;), a subsidiary of Abengoa Bioenergy Company.
        The Company also entered into a non-exclusive Research and Development Agreement
        with Abengoa </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">pertaining
        to the conduct of a</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        research
        and development</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        (&#8220;R&amp;D&#8221;) program to be completed over a period of up to three and one-half
        years, under which the Company will seek to apply its proprietary technologies
        to the development of cost-effective <font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">enzyme
        mixtures and related processing and manufacturing&#160;technologies</font> for
        commercial application in Abengoa&#8217;s bioethanol (cellulosic ethanol) production
        process</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        (the
&#8220;R&amp;D Agreement&#8221;). </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Under
        the
        terms of the Securities Purchase Agreement,</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        Abengoa
        has agreed to invest $10 million in the Company, for which it will be issued
        2,136,752 shares of Dyadic Common Stock at $4.68 per share ( the closing
        share
        price on October 25, 2006, as reported on the American Stock Exchange (&#8220;AMEX&#8221;)).
        The closing of the sale of the common shares is subject to approval of the
        listing of the shares by the AMEX and other customary closing conditions.
        After
        the closing, under certain circumstances, additional securities may be issuable
        to Abengoa. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Company will use the proceeds from this private sale to fund the performance
        of
        its R&amp;D obligations under the R&amp;D Agreement over a three and a half year
        period, under which it will seek to apply its proprietary technologies to
        the
        development of one or more <font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">enzyme
        mixtures and related processing and manufacturing&#160;technologies</font>
        customized to Abengoa&#8217;s proprietary biomass substrates. The R&amp;D Agreement
        contemplates that the Company will perform both (i) research of general
        application to the cellulosic ethanol field furthering the Company&#8217;s extensive
        research &amp; development and large-scale manufacturing technologies for
        producing large volumes of low cost cellulases, xylanases and other
        hemicellulases and (ii) research of specific applications for the achievement
        of
        the goals of the Abengoa R&amp;D Program to develop an economically viable
        commercial process for the production of large volumes of effective, low
        cost
        enzyme mixtures for the proprietary biomass substrates of specific interest
        to
        Abengoa. In general, the Company is granted exclusive ownership of all
        intellectual property it develops in connection with its performance obligation
        under the R&amp;D Agreement. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Under
          the
          terms of the R&amp;D Agreement, if the Company successfully develops one or more
          enzyme mixtures and related processing and manufacturing&#160;technologies for
          Abengoa and Abengoa&#160;exercises an option to&#160;license on a non-exclusive
          basis such technologies, the Company will be entitled to receive license
          fees,
          technology transfer fees and royalties on ethanol production by Abengoa
          affiliates.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
        within
        six months following the date of closing the Company has not entered into
        a
        specified type of transaction involving the sale of its securities totaling
        at
        least $20 million in gross proceeds, then Abengoa is entitled to receive
        three-year warrants to purchase 427,351 shares at an exercise price of $5.85.
        If
        the sale of securities totaling at least $20 million is at a price lower
        than
        $4.68 per share, Abengoa is entitled to have additional shares issued to
        them so
        that their investment is at the same price. If the sale of securities includes
        warrants, Abengoa&#8217;s pro rata warrant coverage and other warrant terms are to be
        the same as those in the securities transaction rather than the warrant terms
        discussed above.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2</strong></font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Following
        is a more detailed description of both the R&amp;D Agreement and the Securities
        Purchase Agreement.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>(A)</em></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>R&amp;D
        Agreement</em></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        R&amp;D Agreement between the Company and Abengoa contemplates the Company&#8217;s
        conduct of R&amp;D activities pertaining to the field of cellulosic ethanol (&#8220;CE
        R&amp;D Activities&#8221;) for Abengoa and the Company (the &#8220;Abengoa R&amp;D
        Program&#8221;)</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">,
        as well
        as other collaboration partners, as part of a much broader R&amp;D effort of the
        Company in the field of cellulosic ethanol (collectively, the &#8220;Master R&amp;D
        Program&#8221;). These CE R&amp;D Activities are of two types: &#8220;Foundational R&amp;D&#8221;
and &#8220;Applications R&amp;D,&#8221; and an essential component of the R&amp;D Agreement
        is the Company&#8217;s entitlement to use Foundational R&amp;D performed in the Master
        R&amp;D Program, for other collaboration partners, in the Abengoa R&amp;D
        Program, and vice versa, as well as Applications R&amp;D performed by the
        Company for Abengoa. &#8220;Foundational R&amp;D&#8221; broadly means all technology
        developed by the Company out of its conduct of CE R&amp;D Activities, in either
        R&amp;D program, except to the extent same constitute &#8220;Applications R&amp;D,&#8221;
while &#8220;Applications R&amp;D&#8221; is defined to mean technology developed by the
        Company out of its conduct of CE R&amp;D Activities in which the Dyadic
        technology is used or applied to specific treated or untreated biomass for
        any
        customer of Dyadic. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        objective of Abengoa&#8217;s R&amp;D Program is the development of a cost-effective
        enzyme production system for commercial application in Abengoa&#8217;s bioethanol
        (cellulosic ethanol) production process. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Under
        the
        R&amp;D Agreement, Abengoa will furnish to the Company certain treated
&#8220;Substrates&#8221; (biomass which has been pre-treated by Abengoa&#8217;s use of certain
        technologies which are proprietary to Abengoa). The Company&#8217;s objective under
        the Abengoa R&amp;D Program will be to conduct certain Foundational R&amp;D and
        Applications R&amp;D with the objective of developing for Abengoa for each of
        those Substrates an Enzyme Mixture and related Processing Technology and
        Manufacturing Technology (to the extent accomplished, as to each such Substrate,
        referred to as the &#8220;Custom Enzyme Mixture,&#8221; &#8220;Custom Processing Technology&#8221; and
&#8220;Custom Manufacturing Technology,&#8221; respectively). </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Company&#8217;s CE R&amp;D Activities under the Abengoa R&amp;D Program are to be
        regulated by a &#8220;Steering Committee&#8221; comprised of key employees of each of Dyadic
        and Abengoa, as mandated by (i) the R&amp;D Agreement, (ii) an &#8220;R&amp;D Plan&#8221;
appended to the R&amp;D Agreement as an exhibit thereto, and (iii) &#8220;Statements
        of Work&#8221; to be approved annually by the Steering Committee consistent with the
        R&amp;D Plan. These CE R&amp;D Activities are to be conducted over an &#8220;R&amp;D
        Spend Measurement Period&#8221; beginning with the October 26, 2006 date of the
        R&amp;D Agreement (the &#8220;Agreement Date&#8221;) and ending 3 years
        following</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        the
        Steering Committee&#8217;s approval of the initial Statement of Work for the balance
        of calendar year 2007, which is required to occur within 180 days following
        the
        Agreement Date. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 45pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        general, the Company is granted exclusive ownership of all intellectual property
        it develops in connection with its performance of Foundational R&amp;D and
        Applications R&amp;D. Further, consistent with Dyadic&#8217;s &#8220;Corporate Partnering
        Open Access Policy,&#8221; in conducting its CE R&amp;D Activities, the Company is
        assured of being entitled to a license to any intellectual property of Abengoa
        that it might furnish to Dyadic in connection with its conduct of the Abengoa
        R&amp;D Program and which the Company reasonably elects to incorporate into any
        of it&#8217;s intellectual property, in order that it may be freely licensed to others
        by Dyadic. </font></div>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>3</strong></font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
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        <div>&#160;</div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 45pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
        Dyadic
        is able to successfully develop for Abengoa any Custom Enzyme Mixture and
        related Custom Processing Technology and Custom Manufacturing Technology
        for any
        Substrate furnished to Dyadic by Abengoa under the Abengoa R&amp;D Program
        (collectively, as to each Substrate, the &#8220;Applications Technology&#8221;), then
        Abengoa is granted an option to acquire a non-exclusive license to that
        Applications Technology from Dyadic for a period of ninety (90) days following
        the completion by Abengoa of verification testing to be concluded by Abengoa
        within a thirty (30) day period following the date Dyadic furnishes Abengoa
        a
        completed Custom Enzyme Mixture and related Processing Technology and
        Manufacturing Technology for the applicable Substrate. These non-exclusive
        license option terms provide for Abengoa&#8217;s payment to Dyadic of certain license
        fees, technology transfer fees and royalties. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Subject
        to regulatory oversight by the Steering Committee, as set forth in the
        description of the Securities Purchase Agreement, Dyadic has assumed the
        R&amp;D
        Spending Obligation to spend (or be deemed, under the R&amp;D Agreement, to have
        spent) not less than $10.0 million over the course of the R&amp;D Spend
        Measurement Period in the performance of CE R&amp;D Activities (&#8220;Applicable
        R&amp;D Spend&#8221;) which is divided into two categories: </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 25.3pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Foundational
        R&amp;D for Dyadic, Abengoa and\or any other persons (but not Applications
        R&amp;D for Dyadic or any person other than Abengoa), either under the Abengoa
        R&amp;D Program or in conjunction with activities conducted by Dyadic under the
        Master R&amp;D Program; and </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 25.3pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Applications
        R&amp;D for the benefit of Abengoa under the R&amp;D Agreement. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        determining the amount of the Company&#8217;s</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Applicable
        R&amp;D Spend, all funds expended by the Company</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">in
        connection with Foundational R&amp;D, whether same is conducted as part of the
        Abengoa R&amp;D Program or whether same is being conducted for Dyadic or under
        the Master R&amp;D Program, are included in the Applicable R&amp;D Spend,
        subject only to the requirement that such Foundational R&amp;D was approved by
        the Steering Committee. Further, in calculating the Applicable R&amp;D Spend,
        the Company</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">is
        credited with spending a fixed per &#8220;full time equivalent&#8221; (&#8220;FTE&#8221;) scientist
        dollar rate for all FTE&#8217;s performing CE R&amp;D Activities which is materially
        greater than </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Dyadic&#8217;s</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        anticipated actual out-of-pocket costs of employing those FTE&#8217;s. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>(B)
        Securities Purchase Agreement</em></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Company entered into a Securities Purchase Agreement with Abengoa on the
        Agreement Date concurrently with the parties&#8217; entry into the R&amp;D Agreement
        described above. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Under
        the
        Securities Purchase Agreement, Abengoa has agreed to invest $10 million in
        the
        Company, for which it will be issued 2,136,752 shares of the Company&#8217;s common
        stock at $4.68 per share </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(the
        closing sales price on October 25, 2006, as reported on the AMEX).</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        C</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">losing
        of
        the sale of the shares is subject to approval of the listing of the shares
        by
        the AMEX and other customary closing conditions, and must occur </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">on
        or
        before November 9, 2006. </font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Under
        the
        Securities Purchase Agreement, Abengoa was also granted certain rights to
        be
        issued additional securities of the Company (&#8220;Additional Securities&#8221;),
        conditioned upon the occurrence or non-occurrence of various events over
        the six
        (6) month period following the closing date. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
        the
        Company enters into a &#8220;Qualified Transaction&#8221; (as defined below) pertaining to
        the sale of its securities to certain purchasers at any time during the
        Applicable 6 Month Period, and either (i) the per share price paid by such
        purchasers is less than $4.68 per share (a &#8220;Discount Sale&#8221; and the price paid
        therefore being the &#8220;Discount Sale Price&#8221;), or (ii) exclusive of warrants to
        purchase shares (&#8220;Warrants&#8221;), convertible securities of the Company
        (&#8220;Convertible Securities&#8221;) are issued, or (iii) Warrants are issued, then
        Abengoa is entitled to an issuance of Additional Securities. A &#8220;Qualified
        Transaction&#8221; is any sale of shares or Convertible Securities to any person(s)
        occurring during the Applicable 6 Month Period other than issuances in
        connection with (I) employee benefit plans or other plans approved by the
        Board
        of Directors of the Company, (II) any stock dividends, stock splits or other
        distributions on any class of securities of the Company payable in shares,
        (III)
        the Securities Purchase Agreement, or (IV) Corporate Partnering Transactions.
        The term &#8220;Corporate Partnering Transaction&#8221; refers to </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">any
        issuance of securities of the Company to a person in connection with a
        transaction in which, companion thereto, and as a condition of such issuance,
        the Company (either directly or indirectly through any of its affiliates)
        and
        such person enter into any material commercial agreement pertaining to the
        purchase or sale of the products or services of either the Company or of
        such
        person.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 81pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(i)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 24.75pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
        the
        Qualified Transaction involves a Discount Sale, the Company will issue to
        Abengoa Additional Securities in the form of Shares (&#8220;Additional Shares&#8221;), in an
        amount equal to the number of Additional Shares Abengoa would have been entitled
        to on the closing date </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">if
        the
        per share price paid at the closing had been the Discount Sale Price.
</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 81pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(ii)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 24.75pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
        the
        Qualified Transaction involves the Company&#8217;s issuance of Convertible Securities,
        then Abengoa has the right to exchange a percentage of the shares it purchased
        (in an amount equal to the ratio of Convertible Securities issued to the
        total
        number of shares and Convertible Securities issued in the Qualified Transaction
        (calculated on an as-if-converted into shares basis) for a like number of
        the
        same type of Convertible Securities issued in the Qualified Transaction.
        </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 81pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(iii)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 24.75pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
        the
        Qualified Transaction involves the issuance of Warrants in addition to shares
        and\or Convertible Securities, then the Additional Securities which the Company
        shall issue to Abengoa shall be in the form of a Warrant having terms identical
        to the terms of the Warrants issued in that Qualified Transaction, in a number
        equal to the product of (x) the ratio of the number of shares purchasable
        upon
        the exercise of Warrants issued in that Qualified Offering to the aggregate
        sum
        of the shares and shares issuable upon the conversion of the Convertible
        Securities issued in that Qualified Transaction, multiplied by (y) the aggregate
        sum of the shares and shares issuable upon the conversion of</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
        Convertible Securities issued to Abengoa (increased</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        by the
        number of Additional Shares, if any). </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 81pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: -7.6pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
        the
        Company fails to close a Qualified Transaction on or before the expiration
        of
        the Applicable 6 Month Period involving gross proceeds to the Company of
        not
        less than $20.0 million, then the Company shall issue to Abengoa additional
        Securities in the form of a Warrant, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">exercisable
        for a period of three (3) years following the date of issuance of the
        Warrant,</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        to
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</font></div>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>5</strong></font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
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        under the Securities Purchase Agreement, the Company has agreed to use the
        $10
        million to fund its performance of certain foundational and applications
        research in the cellulosic ethanol field and to spend not less than $10.0
        million (the &#8220;R&amp;D Spending Obligation&#8221;) over the course of the &#8220;R&amp;D
        Spend Measurement Period&#8221; </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(the
        period commencing on the Agreement Date and ending three years following
        Steering Committee approval of the initial Statement of Work for calendar
        year
        2007),</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">during
        which Dyadic is to perform such research as more fully described in Section
        (A)
        above (the amount so expended by Dyadic being referred to as the &#8220;Applicable
        R&amp;D Spend&#8221;). If the Company breaches its R&amp;D Spending Obligation, in
        addition to certain royalty-free, non-exclusive licensing rights which would
        be
        granted to Abengoa, the Company is obligated, at Abengoa&#8217;s election, to either
        (x) issue Additional Shares or (y) remit to Abengoa a cash sum, in either
        instance having a dollar value equal to the amount by which $10.0 million
        exceeds the dollar value of the Applicable R&amp;D Spend, and if shares are
        used, they are valued at the greater of (x) $4.68 per share or (y) the closing
        selling price of the shares on the AMEX on the last trading day in the R&amp;D
        Spend Measurement Period. The Company has agreed to guarantee Dyadic&#8217;s punctual
        payment and performance of its obligations to Abengoa under the R&amp;D
        Agreement. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        shares to be issued to Abengoa at closing will not be registered under the
        Securities Act of 1933 (the &#8220;Securities Act&#8221;). Pursuant to the Securities
        Purchase Agreement, the Company has agreed to file a registration statement
        with
        the Securities and Exchange Commission (&#8220;SEC&#8221;) covering the resale of the shares
        issued at closing, as well as additional shares, if any, issuable after closing.
        The Company is required to file such registration statement with the SEC
        within
        45 days following the closing date and cause it to become effective with
        the SEC
        within 210 days following the closing date. The Company is required to keep
        the
        registration statement effective until the earlier of the date on which the
        shares have been sold or can be sold publicly under Rule 144(k) of the
        Securities Act. The Company may suspend the use of the registration statement
        for a 20-day trading period for as many as two times in any 12-month period.
        In
        the event the registration statement is not filed timely, or does not become
        effective timely or ceases to be effective during the registration period
        due to
        certain events, the Company has agreed to pay to Abengoa cash, as liquidated
        damages, equal to 1% of (x) the number of shares held by Abengoa at time
        of such
        event and (y) the purchase price paid by Abengoa for such shares then held,
        provided that the total amount of all of these payments is not permitted
        to
        exceed 10% of the aggregate purchase price paid by Abengoa. Abengoa shall
        not be
        entitled to liquidated damages if an event causes the registration statement
        to
        cease being effective before the first anniversary of the closing
        date.</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Under
        the
        Securities Purchase Agreement, Abengoa has agreed for a period of one year
        following the closing date to maintain exclusive beneficial ownership of,
        as
        well as an exclusive pecuniary interest in, all of the shares and other
        securities, if any, issuable to it pursuant to the Securities Purchase
        Agreement. Furthermore, Abengoa has agreed for a period of two years following
        the closing date to refrain from directly or indirectly increasing its
        beneficial ownership, or pecuniary interest, in more than 15% of the Company&#8217;s
        shares. </font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 45pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Company has issued a press release reporting these events, which is attached
        hereto as Exhibit 99.1.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Item
        3.02 Unregistered Sale of Securities</u></strong></font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 45pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Reference
        is made to Section (B) of Item 1.01 above for a description of the Company&#8217;s
        pending sale of unregistered shares to Abengoa in reliance upon the exemption
        from the registration requirements of the Securities Act afforded by Section
        4(2) thereof. </font></div>
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    <div>&#160;</div>
    <div>&#160;</div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>6</strong></font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SECTION
        9
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        following exhibit is furnished in accordance with the provisions of Item
        601 of
        Regulation S-B:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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            <tr>
              <td align="left" valign="top" width="13%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Exhibit</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Number</strong></font></div>
              </td>
              <td align="justify" valign="top" width="59%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Description
                    of Exhibit</strong></font></div>
                </div>
              </td>
            </tr>
            <tr>
              <td align="justify" valign="top" width="13%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;99.1</font></div>
              </td>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Press
                    Release of Dyadic International, Inc. dated October 27, 200</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">6</font></font></div>
                </div>
              </td>
            </tr>

        </table>
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      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
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        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>7</strong></font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SIGNATURES</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
        to the requirements of the Securities Exchange Act of 1934, the registrant
        has
        duly caused this report to be signed on its behalf by the undersigned hereunto
        duly authorized.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 207pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>DYADIC
        INTERNATIONAL, INC.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Date:&#160;November
        1, 2006</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">By:
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        Mark A. Emalfarb___</u></font></div>
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                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Title:</font></div>
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                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">President
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      <div style="DISPLAY: block; MARGIN-LEFT: 216pt; TEXT-INDENT: -216pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong><u>Index
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Number</strong></font></div>
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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>3
<FILENAME>exhibit99_1102606.htm
<DESCRIPTION>DYADIC EXHIBIT 99.1 ABENGOA PRESS RELEASE
<TEXT>
<html>
  <head>
    <title>
      Dyadic Exhibit 99.1 Abengoa Press Release
</title>
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  <body bgcolor="#ffffff"><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>DYADIC
      ENTERS INTO RESEARCH AND DEVELOPMENT AGREEMENT WITH ABENGOA BIOENERGY IN THE
      AREA OF CELLULOSIC ETHANOL PRODUCTION </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>ABENGOA
      BIOENERGY TO PURCHASE $10 MILLION OF DYADIC COMMON STOCK</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Jupiter,
      Florida, October 27, 2006. Dyadic International, Inc. (</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>AMEX:
      DIL</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">),
      a
      biotechnology company, today announced that it has signed a three-year research
      and development (R&amp;D) agreement and a stock purchase agreement with Abengoa
      Bioenergy R&amp;D, Inc. (ABRD), an Abengoa Bioenergy Company focusing on
      research and development. Under the terms of the purchase agreement, Abengoa
      Bioenergy has agreed to invest $10 million in Dyadic, for which it will be
      issued 2,136,752 shares of Dyadic Common Stock at $4.68 per share (based on
      the
      closing sales price on October 25, 2006, as reported on the American Stock
      Exchange). The closing of the sale of the common shares is subject to approval
      of the listing of the shares by the American Stock Exchange and other customary
      closing conditions. After the closing, under certain circumstances, additional
      securities may be issuable to ABRD. Cowen and Company, LLC, acted as an advisor
      to Dyadic.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Dyadic
      will use the proceeds from this private sale to fund its R&amp;D obligations
      under the R&amp;D agreement, which has as its objective the development of a
      cost-effective enzyme production system for commercial application in Abengoa
      Bioenergy&#8217;s bioethanol (cellulosic ethanol) production process. The R&amp;D
      agreement, which does not become effective until the private sale closes, calls
      upon Dyadic to use its proprietary technologies to develop one or more enzyme
      mixture manufacturing systems customized to ABRD&#8217;s proprietary biomass
      substrates. The R&amp;D agreement contemplates that Dyadic will perform both
      foundational research of general application to the cellulosic ethanol field
      and
      specific applications research for the achievement of the goals of ABRD&#8217;s
      program. Under the terms of the R&amp;D agreement, if Dyadic successfully
      develops one or more enzyme manufacturing systems for Abengoa Bioenergy, Dyadic
      may be entitled to receive license fees, technology transfer fees and royalties
      on ethanol sales. Other financial terms were not disclosed.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Abengoa
      Bioenergy is considered to be the second largest ethanol producer in the world
      and a leader in the fields of both corn-derived and cellulose-derived ethanol
      production. We are extremely pleased to partner with Abengoa Bioenergy to
      leverage Dyadic&#8217;s patented C1 platform enzyme technology to enable commercial
      development of biomass derived ethanol,&#8221; said Glenn E. Nedwin, Ph.D., Chief
      Science Officer for Dyadic. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;We
      recognized that Dyadic&#8217;s enzyme technology, especially in the field of
      cellulosic ethanol, is state-of-the-art,&#8221; said Gerson Santos-Leon, R&amp;D
      Director of Abengoa Bioenergy. &#8220;Abengoa Bioenergy is looking forward to working
      with Dyadic in the development of large-scale enzyme production systems and
      manufacturing processes for use in the production of abundant low cost
      fermentable sugars from biomass, with initial focus on cellulosic ethanol
      production.&#8221; </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;We
      are
      very excited to enter into this partnership with Abengoa Bioenergy, a recognized
      leader in the field of cellulosic ethanol, and are also pleased to welcome
      ABRD
      as a strategic investor, research collaborator and Dyadic shareholder,&#8221;
commented Dyadic&#8217;s President and CEO, Mark Emalfarb. &#8220;Abengoa Bioenergy is a
      visionary company and an important first partner for Dyadic for its
      Biorefineries Business. Additional partners will stand to benefit not only
      from
      access to Dyadic&#8217;s technologies specific to their area of interest but also from
      the core technology development program that is fundamental to efficient
      production of ethanol, other biofuels, polymers and other chemicals from
      biomass, thereby reducing our dependence on foreign oil.&#8221;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Javier
      Salgado,</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Abengoa
      Bioenergy&#180;s President &amp; CEO, added: &#8220;Dyadic is recognized as a leader in
      innovation and technology in the enzymes production field. This investment
      and
      the R&amp;D collaboration with Dyadic represent a key building block in the
      Abengoa Bioenergy Biomass Program, particularly in the area of specialized
      enzymes.&#8221; </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
      to the parties&#8217; purchase agreement, the Company has agreed to file a
      registration statement with the U.S. Securities and Exchange Commission covering
      the resale of the shares issued at closing, as well as the additional shares,
      if
      any, issuable after the closing. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      securities offered in the private sale were not registered under the Securities
      Act of 1933, as amended (the "Act") or any state securities laws, and may not
      be
      offered or sold in the United States absent registration, or an applicable
      exemption from registration, under the Act and applicable state securities
      laws.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>About
      Dyadic</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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 &amp; paper and
      animal feed industries. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>About
      Abengoa Bioenergy</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Abengoa
      Bioenergy is considered to be the second largest ethanol producer in the world
      with production facilities located in Europe and the USA. Abengoa Bioenergy
      is
      one of the five business units of Abengoa, S.A. (</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>ABG:MC</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">),
      a
      technology company that applies innovative solutions for sustainable development
      in the infrastructures, environment and energy sectors. Abengoa, S.A. is a
      listed company on the Madrid Stock Exchange with 2005 revenues of approximately
      two billion euros, and is present in more that seventy countries where it
      operates with its five business units; Solar, Bioenergy, Environmental Services,
      Information Technologies, and Industrial Engineering and Construction.
      (</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>www.abengoa.com</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Cautionary
      Statement for Forward-Looking Statements</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>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 subsequent filings with the SEC.. Except as
      required by law, we expressly disclaim any intent or obligation to update any
      forward-looking statements.<br></em></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Contact:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Dyadic
      International, Inc.&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;&#160;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Alexander
      (Sasha) Bondar, 561-743-8333&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>sbondar@dyadic.com</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;
</font><br></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>http://www.dyadic.com</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><br></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">or</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div><font size="2">Abengoa
    Bioenergy R&amp;D, Inc.</font><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font size="2">Gerson
      Santos, 636-728-0508</font><br><font size="2">gerson.santos@bioenergy.abengoa.com</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font size="2">http://www.abengoabioenergy.com</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">or
      </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Berkman
      Associates Abengoa Bioenergy</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Investor
      Relations Counsel Christopher Standlee, 636-728-0508</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Neil
      Berkman, 310-826-5051 abengoabioenergy@abengoa.com<br></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>info@berkmanassociates.com</u></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">or</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Avalanche
      Strategic Communications</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Media
      Relations</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Laura
      Finlayson, 201-488-0049<br></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>laura@avalanchepr.com</u></font></div><br></body>
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