What changed in DYADIC INTERNATIONAL INC's 10-K — 2024 vs 2025

Over the past two plus decades, the Company developed a gene expression platform for producing commercial quantities of industrial enzymes and other proteins, and previously licensed this technology to third parties, such as Abengoa Bioenergy SA, BASF SE, Codexis, Inc. and others, for use in industrial (non-pharmaceutical) applications.

For the past nine years since the Company sold its industrial technology business to Danisco USA (“Danisco”), the industrial biosciences business of DuPont (NYSE: DD) (the “DuPont Transaction”), the Company has been focused on building innovative microbial protein production platforms to address the growing demand for global protein bioproduction and unmet clinical needs for effective, affordable, and accessible biopharmaceutical products for human and animal health and for other biologic products for use in non-pharmaceutical applications.

In certain circumstances, Dyadic may owe a royalty to either Danisco or certain licensors of Danisco, depending upon whether Dyadic elects to utilize certain patents either owned by Danisco or in licensed by Danisco.

After the DuPont Transaction, the Company has directed its efforts toward advancing the C1 platform to address the increasing global demand for the development and manufacturing of prophylactic and therapeutic biopharmaceuticals for human and animal health.

In addition to improving the quality and productivity of the C1 platform, the Company has sought to validate its platform for human use through a series of fully funded biopharmaceutical projects, extensive animal studies utilizing C1-produced proteins, and in 2024, the successful completion of a Phase 1 first-in-human study for a vaccine antigen produced using C1, which demonstrated its safety for human applications.

Given the reduced developmental costs, shorter timelines, and fewer regulatory requirements associated with alternative proteins, Dapibus™ has enabled the Company to generate near-term recurring revenue while continuing to build long-term value through C1 for pharmaceutical applications. The Company anticipates achieving commercialization of certain alternative protein products in 2025 through a combination of existing collaborations and internal manufacturing efforts.

Dyadic Protein Production Technology The Company is focused on utilizing its proprietary, highly productive, and scalable microbial fungal protein production platforms C1 and Dapibus™ to address the increasing global demand for non-animal-derived proteins in both pharmaceutical and non-pharmaceutical applications.

By applying its industrially validated, efficient, and cost-effective bioproduction technology to high-value markets such as human therapeutics and alternative food and nutrition, the Company aims to facilitate the rapid development and large-scale manufacturing of proteins, enzymes, and other biologic products.

Through targeting key products within its core business segments, the Company seeks to address global health and nutrition challenges by providing innovative, accessible, and economically viable solutions. 7 C1 is a versatile thermophilic filamentous fungal expression system customized for the development and production of biologic products including enzymes and other proteins for human and animal health that may offer potential competitive advantages compared to certain other legacy biopharmaceutical expression systems in the discovery, development, and cost-effective manufacturing of biologic medicines and vaccines.

Potential applications to be produced from C1 include protein antigens, ferritin nanoparticles, virus-like particles (“VLPs”), monoclonal antibodies (“mAbs”), Bi/Tri-specific antibodies, Fab antibody fragments, Fc-fusion proteins, as well as other therapeutic enzymes and proteins. The Company participates in multiple funded research collaborations with certain leading animal and human pharmaceutical companies.

These partnerships are strategically engaged to leverage the potential of C1 in the development of innovative vaccines and drugs, as well as biosimilars and/or biobetters, which we believe will contribute to advancements in medical science and healthcare. The Company believes C1 possesses unique characteristics that distinguish it from conventional filamentous fungal cells.

C1 offers potential competitive advantages in the discovery, development, and manufacturing of biologic medicines and vaccines compared to certain legacy biopharmaceutical expression systems. It allows for streamlined purification processes, retaining target secreted proteins efficiently through downstream processing without the need for viral (e.g., CHO (Chinese Hamster Ovary) and Baculovirus) or endotoxin (e.g., E. coli) removal.

The platform also demonstrates high productivity, thriving under robust and versatile growth conditions while yielding large amounts of secreted protein with low viscosity due to C1’s unique morphology. Its robustness has been proven across scales, from laboratory microtiter plates and shaker flasks to single-use and stainless-steel microbial fermenters, producing stable, correctly folded mAbs with properties comparable to CHO-produced mAbs.

Dapibus™ holds similar promise for cost-effective production of traditionally costly recombinant and animal derived proteins and enzymes such as serum albumin and dairy proteins. Dapibus™ is designed to enable the rapid development and large-scale manufacture of cost-effective enzymes, proteins, metabolites, and other biologic products for non-pharmaceutical applications, including food, nutrition, and wellness.

This platform enables streamlined purification processes, ensuring strong retention of the target secreted protein through downstream processing, with no requirement for endotoxin (e.g., E. coli) removal. It also boasts high productivity, supporting robust and versatile growth conditions that yield large amounts of secreted protein, while its unique morphology maintains low viscosity at large scales.

Additionally, Dapibus™ demonstrates exceptional robustness, with proven scalability from laboratory microtiter plates and shaker flasks to single-use and industrial-scale stainless-steel microbial bioreactors. Furthermore, it enables the production of glycosylated proteins, expanding its versatility for various biologic applications.

The Company believes that C1 and Dapibus™, have significant potential to become an alternative to several traditional production technologies currently used in pharmaceutical and non-pharmaceutical applications to produce antigens for use in vaccines, monoclonal antibodies, therapeutic proteins, reagents, food, and nutritional proteins The Company’s platforms have some inherent benefits and potential competitive advantages compared to CHO cells, E. coli , Pichia pastoris , and Insect Cells (i.e., Baculovirus) as discussed below: • Mammalian cells: Currently the preferred production host for most complex protein therapeutics due mainly to their ability to produce proteins with human-like glycosylation and regulatory acceptance.

Disadvantages include the longer duration required for cell line development, fermentation, and increased costs associated with production media and longer and more costly downstream processing steps. 8 • Bacterial: Bacteria such as E. coli are currently an easy, inexpensive, and rapid method for recombinant protein expression often used in laboratory settings as well as commercial production of certain non-glycosylated proteins.

However, bacterial platforms produce toxic and pyrogenic cell wall components that may make them less suitable for the production of biopharmaceuticals or other alternative proteins.

Moreover, insoluble expression, a frequent outcome in bacterial expression, is challenging with regard to cost of goods due to the need for refolding and its direct impact on reduced overall yields and resultant waste streams. • Yeast: In contrast to bacteria, yeast, such as Pichia pastoris , do not produce potentially toxic and pyrogenic cell wall components.

Moreover, the genetic tools for yeast production are advanced and enable continued engineering of new strains that may become more suitable than CHO cell lines.

Disadvantages include lower protein production of select targets and traditional yeast cells have a greater number of higher N and O glycosylation structures. • Insect cells: Insect cells (i.e., Baculovirus) offer protein expression with post-translational modifications like mammalian cells, ease of scale-up, and simplified cell growth readily adapted to high-density suspension culture for large-scale expression.

Baculovirus expression systems are used for producing recombinant protein, especially for vaccine antigens. Disadvantages include lower protein titers when compared to other platforms and the need for an additional viral inactivation step. • Trichoderma: One of the leading filamentous fungal platforms for bioindustrial and food protein production.

Disadvantages may include a high level of extracellular proteases, which can degrade recombinant proteins and lower expression levels for heterologous proteins compared to other systems. Competition The biotechnology industry is intensely competitive.

The continuous demand for innovation, efficiency, and speed creates opportunities for the advantages of Dyadic’s C1 and Dapibus™ platforms, however, as the Company’s target markets evolve, there is always the risk that a competitor may be able to develop other technologies that are able to achieve similar or better results.

Currently, we are not aware of other companies pursuing a business model similar to what we are developing with our protein production platforms. However, our competitors using other protein production platforms who are significantly larger and better capitalized, could potentially adopt similar strategies and implement them at a faster pace.

These potential competitors include multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical companies, universities, governmental agencies, and other research institutions that are in the operating pharmaceutical sector. Moreover, smaller or early-stage companies may emerge as significant competitors, particularly through collaborative arrangements with large, established companies.

In non-pharmaceutical applications, several other companies have and are actively engaged in utilizing filamentous fungal microorganisms for the development and manufacture of low-cost proteins, metabolites, and other biological products for use in food, nutrition, and wellness.

Our Industry and Potential Markets Non-Pharmaceutical Applications The demand for non-animal-derived enzymes and proteins is rapidly increasing across various industries, driven by advancements in biotechnology, sustainability initiatives, and evolving consumer preferences. In the reagents sector, non-animal derived proteins are being utilized in diagnostic applications, research tools, and industrial processes, offering a sustainable and ethically responsible alternative to traditional animal-derived proteins.

Within the food industry, the shift toward plant-based and fermentation-derived proteins is accelerating as consumers seek sustainable, allergen-free, and ethically sourced protein alternatives. Additionally, the alternative protein market—including cell-cultured, microbial, and precision fermentation-derived proteins—is experiencing significant growth as companies strive to meet the rising demand for environmentally friendly scalable, and sustainable protein solutions.

The Company believes that Dapibus™ is well-positioned to address these expanding markets by providing cost-effective, scalable, and high-quality non-animal proteins for use in reagents, food, and other alternative protein applications.

Dapibus™ has begun to generate revenue within non-pharmaceutical applications and the Company has selectively focused on these rapidly growing markets and prioritized our commercial focus accordingly. ● Cell culture media products: A nutrient-rich solution designed to support the growth, maintenance, and proliferation of cells tailored to specific cell types within alternative protein, research or biopharmaceutical applications. ● DNA/RNA manipulation products: Reagents used in the modification, amplification, sequencing, and analysis of DNA and RNA for gene editing, MRNA, and other synthetic biology applications, serving research, diagnostics, biopharmaceutical, and agricultural biotechnology sectors. ● Non-Animal dairy protein and enzyme products: Proteins and enzymes produced through fermentation, precision fermentation, or plant-based processes to replicate the functional and nutritional properties of traditional dairy components catering to the sustainable and animal-free dairy alternatives market ● Bioindustrial protein and enzyme products: Proteins and enzymes used to enhance process efficiency, sustainability, product performance and reduce reliance on harsh chemicals for applications like food/feed additives, biomass conversion, fiber modification, and eco-friendly textile processing.

As demand for more sustainable products in the alternative proteins segment grows, we believe recombinant protein and enzyme products offer clear advantages in overcoming cost, purity, and consistency challenges. By enabling scalable and controlled production, recombinant technologies reduce reliance on animal-derived or chemically synthesized alternatives while improving efficiency and performance.