NASDAQ: DYAI

Following
the Company’s sale of certain industrial technology assets to Danisco USA, the industrial biosciences business of DuPont,
Dyadic retained important rights to its proprietary and patented C1 protein production platform for pharmaceutical applications. Under
the terms of the transaction, Dyadic maintains rights to sublicense the C1 platform for use in human and animal pharmaceutical applications,
subject to certain exceptions, and may receive royalty payments upon commercialization of products developed using the platform.

After
the DuPont transaction, the Company directed significant efforts toward advancing the C1 platform for pharmaceutical applications, including
vaccines and monoclonal antibodies. These efforts focused on improving the platform’s ability to eventually produce stable, properly folded,
and functional proteins suitable for pharmaceutical use. The Company has supported this work through multiple fully funded development
programs and research collaborations designed to validate the C1 platform for potential pharmaceutical protein production.

Recognizing
the longer development timelines and regulatory requirements associated with pharmaceutical products, Dyadic has expanded its business
strategy to include the commercialization of recombinant proteins and enzymes for non-pharmaceutical markets, including research, diagnostics,
food and nutrition, and industrial biotechnology. To address these markets, the Company developed the Dapibus™ Protein Production
Platform, which enables production of alternative proteins and enzymes for applications in Life Sciences, Food & Nutrition, and Bio-industrial
markets.

Given
the reduced development timelines and regulatory requirements associated with many non-pharmaceutical applications, we believe these
markets provide opportunities to generate near-term recurring revenue while simultaneously continuing to advance the C1 platform for
pharmaceutical applications. The Company has recently achieved commercialization of certain recombinant protein products through a
combination of partner collaborations and internal production activities, including the launch of AlbuFree™ DX recombinant
human albumin by Proliant Health and Biologicals and recombinant DNase I through Dyadic’s collaboration with Fermbox Bio (“Fermbox”),
which is now available for research and molecular biology applications

Effective
August 1, 2025, the Company began doing business as Dyadic Applied BioSolutions. This rebranding reflects the Company’s strategic
transition toward a commercially focused biotechnology company delivering applied protein and enzyme solutions through its patented and
proprietary Dapibus™ and C1 gene expression platforms.

Platform
Capabilities

Dyadic’s
Dapibus™ and C1 production platforms are engineered microbial expression systems designed to produce recombinant proteins
optimized for high-yield, low-cost, and scalable protein production. These platforms combine advanced strain engineering,
fermentation optimization, and downstream processing capabilities, including the use of modern genome editing technologies such as
CRISPR/Cas9, to support efficient production of proteins across multiple markets. Building on Dyadic’s prior experience in
large-scale microbial fermentation, these platforms support applications in:

●
Cell culture
media (e.g., albumin, transferrin, fibroblast growth factor (“FGF”))

●
Diagnostics and research
reagents (e.g., DNase1)

●
Functional food ingredients
(e.g., alpha-lactalbumin, caseins, lactoferrin)

●
Sustainable industrial
enzymes (e.g., biomass and pulp/paper enzymes)

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By
targeting high-value proteins in expanding non-pharmaceutical markets, Dyadic is building a commercial pipeline that aligns with global
trends in sustainability, animal-free manufacturing, and bio-based innovation. Simultaneously, we continue to explore partnering opportunities
for the use of our platforms in pharmaceutical development where appropriate.

In
2025, Dyadic entered into a non-exclusive license agreement with ERS Genomics for the use of CRISPR/Cas9 gene editing technology to support
strain engineering and production optimization across its microbial expression platforms. Access to CRISPR-based genome editing tools
enables the Company to more efficiently modify host strains used in its protein production systems and may support improvements in strain
productivity, product quality, and development timelines for recombinant proteins and enzymes developed internally or with partners.

Dapibus™
Protein Production Platform

To
accelerate commercialization across its core sectors, Dyadic developed the Dapibus™ platform—a proprietary expression
system designed to produce high-value, non-animal proteins and enzymes for non-pharmaceutical markets including life sciences, food
and nutrition, and bio-industrial sectors.

Dapibus™
is expected to enable faster development, lower production costs, and simplified regulatory pathways compared to therapeutic biologics,
which Dyadic believes will allow it to address growing demand for sustainable, functional ingredients across a range of industries. The
Dapibus™ platform supports applications in life sciences, food and nutrition, and bio-industrial sectors.

Dyadic
was able to commercialize multiple Dapibus™-enabled products starting in early 2026 through a combination of strategic
partnerships and internal manufacturing initiatives.

C1
Protein Production Platform

Dyadic’s
proprietary C1 expression system is a patented, thermophilic fungal platform (Thermothelomyces heterothallica fungus) developed
for the cost-effective, large-scale production of proteins. Originally used to manufacture industrial enzymes, Dyadic has engineered
C1 into a high-yield, scalable platform for biopharmaceutical applications.

Following
the 2015 sale of its industrial enzyme business to Danisco USA (a DuPont subsidiary), Dyadic retained co-exclusive rights to the C1 platform
for human and animal pharmaceutical use, including the exclusive ability to sub-license C1 for human and animal pharmaceutical use (subject
to specific conditions). Danisco holds certain retained rights but is obligated to pay Dyadic royalties on any future pharmaceutical
commercialization. Dyadic may owe downstream royalties to Danisco or its licensors depending on specific patent usage.

Strategic
Advantages and Applications

C1
is designed to address key bottlenecks in biologics manufacturing, offering potential advantages over legacy systems (e.g., CHO, E. coli,
and baculovirus), including:

●
High-yield expression of
secreted proteins with minimal viscosity and simplified downstream purification.

●
Avoidance of viral and
endotoxin removal processes required by mammalian or bacterial systems.

●
Proven scalability across
lab and industrial fermenters, with demonstrated success producing correctly folded monoclonal antibodies (“mAbs”) comparable
to CHO-derived equivalents.

C1
is being applied to develop a range of therapeutic and Life Science proteins, including:

●
Therapeutics: Vaccines, monoclonal and multi-specific
antibodies.

●
Life Sciences: Recombinant
transferrin, albumin, fibroblast growth factor (FGF), DNase I, RNase inhibitors, reagents, and enzymes for diagnostics, cell culture,
and biopharmaceutical manufacturing.

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Dyadic
is engaged in multiple funded collaborations with pharmaceutical and biotech partners exploring C1’s use in innovative diagnostic,
vaccine and therapeutic development.

Dyadic
believes the C1 platform’s combination of scalability, speed, and efficiency makes it a compelling alternative for global bioproduction—supporting
near- and long-term opportunities in both commercial and strategic licensing partnerships.

Pipeline
Overview

Dyadic
is targeting high-growth, non-pharmaceutical markets with a focus on sustainable, animal-free proteins and enzymes. The Company’s
Dapibus™ platform is engineered to deliver cost-effective, scalable production of high-quality proteins for use in life sciences,
food and nutrition, and bio-industrial sectors. These markets are experiencing rapid growth driven by the demand for ethical, allergen-free,
and environmentally sustainable alternatives to animal-derived ingredients.

Dapibus™
is generating revenue from non-pharma applications and continues to advance through a focused pipeline of commercial-stage and development-stage
programs.

Life
Sciences

Dyadic
is developing and commercializing a portfolio of recombinant proteins and enzymes for life sciences applications, including cell culture
media, diagnostics, molecular biology reagents, and bioprocessing inputs. Using its C1 and Dapibus™ protein production platforms,
the Company is focused on producing animal-free alternatives to commonly used proteins and enzymes that support research, diagnostics,
and biomanufacturing. Several of these products have recently entered commercial launch or early market introduction through partner
collaborations and direct product offerings.

Cell
Culture Media and Reagent Proteins

Dyadic
is leveraging its microbial production platforms to produce high-value, animal-free growth media components used in biopharmaceutical
manufacturing, diagnostics, and emerging biotechnology applications.

Key
programs include:

●
Recombinant Serum Albumin: In partnership with Proliant Health and Biologicals, Dyadic supported development of AlbuFree™ DX, a
recombinant human albumin product produced using Dyadic’s proprietary expression technology. Proliant announced the commercial
launch of AlbuFree™ DX in 2026 for research and diagnostic applications. Under the terms of the agreement, Dyadic receives a share
of profits from Proliant’s commercial sales of recombinant human albumin products and has received development and milestone payments
associated with the program.

●
Recombinant Transferrin: Dyadic has developed an animal-free transferrin designed for use in cell culture media, diagnostics, and research
applications. Early testing has demonstrated performance comparable to commercially available recombinant reference standards. Dyadic
is pursuing commercialization through direct sales and distribution partnerships.

●
Recombinant Fibroblast Growth Factor (FGF): Dyadic has developed recombinant bovine FGF proteins used to support cell proliferation in
cell culture systems. Initial evaluation and sampling activities are underway, with early commercial sales initiated in certain research
applications.

DNA
and RNA Enzymes

Dyadic
is expanding its existing product portfolio to include additional enzymes used in molecular biology, diagnostics, and nucleic acid
processing applications.

Key
programs include:

●
DNase I (RNase-free): Dyadic completed development and production validation of recombinant DNase I used for molecular biology and bioprocessing
applications. In March 2026, Dyadic and Fermbox announced the launch of animal-origin-free recombinant DNase I (RNase-free), representing
the first commercialized product under the companies’ expanded collaboration.

●
RNA/DNA Enzyme Portfolio: Dyadic continues development of additional enzymes used for nucleic acid processing, including RNase inhibitors,
T7 RNA polymerase, DNA ligase, and polymerases, with ongoing optimization and evaluation for research and diagnostic applications.

Food
and Nutrition Applications

Dyadic
is developing and supporting commercialization of animal-free dairy proteins and food enzymes through a combination of internal development
programs and partner collaborations. Using its Dapibus™ protein production platform, the Company is pursuing opportunities in dairy
alternatives, functional nutrition ingredients, and food processing enzymes.

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Key
programs include:

●
Non-Animal Dairy Enzyme Program: Under a development and exclusive license agreement signed in 2023 with Inzymes ApS, Dyadic has received
upfront payment and milestone payments totaling approximately $1.45 million related to development and commercialization achievements.
Development activities have been completed, and Inzymes has announced plans to commercialize recombinant non-animal bovine chymosin,
a key enzyme used in cheese production and dairy processing, in 2026. Dyadic remains eligible to receive royalties on future commercial
sales.

●
Recombinant Bovine Alpha-Lactalbumin: Dyadic developed an improved first-generation production strain in 2024. The protein has demonstrated
comparability to commercial benchmarks and continues to undergo characterization and evaluation for potential applications in dairy alternatives
and nutritional products.

●
Recombinant Human Alpha-Lactalbumin: Development was initiated in 2024 for potential applications in infant formula, medical nutrition,
nutraceuticals, and related nutritional products.

●
Recombinant Human Lactoferrin: Dyadic developed a production cell line in 2024 for potential use in nutritional, antimicrobial, and immune-support
applications. Additional optimization and characterization activities are ongoing.

●
Casein Proteins: Dyadic has produced four recombinant casein variants and continues discussions with potential partners regarding development
and commercialization opportunities.

In
December 2025, Dyadic entered into a Development and Commercialization Agreement with The Protein Collective B.V. (“BRIG BIO”), a Netherlands-based
developer of recombinant dairy ingredients, to jointly develop and commercialize recombinant bovine alpha-lactalbumin. Under the agreement,
BRIG BIO will fund development activities and receive a global commercial license to production strains developed using Dyadic’s
Dapibus™ expression system. Dyadic is eligible to receive development funding, milestone payments, and revenue participation tied
to future commercial sales.

Also
in December 2025, Dyadic announced the expansion of its strategic collaboration with Fermbox to support the development, manufacturing,
and commercialization of animal-free proteins and enzymes across life sciences, food and nutrition, and bio-industrial markets.

Bio-Industrial
Applications

Dyadic
is developing and supporting commercialization of industrial enzymes and proteins used in biomass processing, biofuels, and other industrial
biotechnology applications. Using its proprietary microbial production platforms, including Dapibus™, the Company collaborates
with partners to develop and manufacture enzymes designed to improve process efficiency, reduce costs, and support sustainable industrial
production.

A
key focus of Dyadic’s bio-industrial efforts is the development and commercialization of enzyme products used to convert agricultural
residues and other biomass feedstocks into fermentable sugars for downstream fermentation and bio-based production.

In
collaboration with Fermbox, Dyadic developed EN3ZYME™, an enzyme cocktail produced using the Dapibus™ protein production
platform that enables the conversion of agricultural residue into fermentable cellulosic sugars. Initial enzyme deliveries have been
completed under Fermbox’s purchase orders, and Dyadic participates in commercial sales through a profit-sharing arrangement with
Fermbox.

In
December 2025, Dyadic and Fermbox announced an expanded strategic collaboration to support the development, manufacturing, and commercialization
of additional animal-free proteins and enzymes across life sciences, food and nutrition, and bio-industrial markets. Under the expanded
collaboration, the companies intend to leverage Dyadic’s microbial protein production technologies and Fermbox’s fermentation
and scale-up capabilities to accelerate commercialization of new products.

Dyadic
continues to evaluate additional opportunities for industrial enzymes and related applications, including biomass processing, biofuels,
and other industrial biotechnology markets.

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Biopharmaceutical
Programs and Strategic Platform Validation

While
Dyadic is primarily focused on non-therapeutic markets, its C1 platform remains a validated and differentiated solution for biopharmaceutical
manufacturing, addressing key industry bottlenecks by reducing costs, shortening development timelines, and enabling high-yield production.
The platform continues to attract interest from pharmaceutical companies, contract development and manufacturing organizations (“CDMOs,”), academic institutions, and government agencies for applications
including recombinant vaccines and therapeutics (human and animal), biobetters and biosimilars, diagnostic reagents, and difficult-to-express
proteins.

Dyadic
advances selected biopharmaceutical programs through fully funded collaborations with global health organizations, government agencies,
and research institutions. These programs provide non-dilutive funding while validating C1’s capabilities in vaccine and antibody
production and supporting broader platform adoption.

Key
programs include:

●
The Gates
Foundation (2024 award, ~$3.1 million): Development of C1-produced monoclonal antibodies targeting RSV and malaria for low- and middle-income
countries. Dyadic has generated stable production strains, with third-party validation demonstrating binding and neutralization comparable
to mammalian-expressed antibodies.

●
Coalition for Epidemic Preparedness Innovations (CEPI) / Fondazione
Biotecnopolo di Siena (FBS) – FAST Program (2025, up to ~$2.4 million to Dyadic): Pandemic preparedness initiative focused
on rapid development of recombinant protein vaccine antigens, including influenza candidates aligned with CEPI’s 100 Days Mission.

●
European
Vaccine Hub (EVH): Participation in a multi-country initiative to strengthen pandemic preparedness and vaccine development infrastructure.

●
NIAID/NIH
(LMIV): Successful tech transfer of the C1 platform enabling development of malaria vaccine candidates advancing toward potential
clinical selection, with joint engagement with BARDA supporting broader U.S. government adoption.

●
The Scripps
Research Institute: Demonstrated expression of structurally correct prefusion RSV antigens with observed immunogenicity in preclinical
studies, supporting development of multivalent respiratory vaccine candidates (including RSV, hMPV, and PIV3).

●
Avian Influenza
Programs: Successful expression of Clade 2.3.4.4b H5 trimeric antigen under the CEPI/FBS program, currently in preclinical evaluation
as a pandemic influenza vaccine candidate, and development of a broad ELISA diagnostic for anti-H5 detection across multiple avian species.

Additional
collaborations further expand evaluation of the C1 platform:

●
Uvax Bio:
Participation in a CEPI-supported Middle East Respiratory Syndrome coronavirus vaccine program.

●
AdaptVac:
Participation in a $12.4 million CEPI-supported filovirus vaccine program.

●
Rabian (EUROSTARS
RABIVA consortium): Development of a recombinant rabies vaccine candidate with partners Idevax and Artemis Bioservices; Dyadic holds
a minority equity interest and may receive future milestones and royalties.

Through
these programs, Dyadic continues to evaluate licensing, collaboration, and commercialization opportunities, positioning the C1 platform
as a competitive alternative to traditional expression systems such as CHO, yeast, and insect cells for biologics manufacturing.

Prior
Clinical and Platform Validation

Dyadic
previously advanced DYAI-100, a C1-produced COVID-19 vaccine candidate, through a Phase 1 clinical trial, which demonstrated favorable
safety and immunogenicity results. While further development of the candidate has been paused, the study provided important clinical
validation of the C1 platform for the production of recombinant vaccine antigens.

In
addition, multiple peer-reviewed publications and collaborative studies have demonstrated the ability of the C1 platform to produce complex
glycoproteins, monoclonal antibodies, and viral antigens with structural and functional properties comparable to proteins produced using
mammalian and insect expression systems.

While
Dyadic’s near-term commercialization efforts are focused on life sciences, food and nutrition, and bio-industrial markets, these
biopharmaceutical collaborations provide continued validation of the C1 platform and may support future pharmaceutical licensing opportunities.

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Licensing
and Strategic Collaborations

Rubic
One Health (South Africa)

In
April 2023, Dyadic expanded its license agreement with Rubic to include vaccines and therapeutic proteins for both human and animal health
in underserved African markets. The C1 platform tech transfer is complete. Dyadic is eligible to receive milestone payments, royalties,
and marketing rights under the agreement. In 2024, Rubic initiated development of several livestock vaccines.

Phibro
Animal Health / Abic Biological Laboratories

Dyadic
entered an exclusive sublicense agreement with Abic, an affiliate of Phibro Animal Health Corporation, in February 2022. The agreement
was expanded in March 2024 to include additional vaccines and treatments for livestock diseases.

Research
and Development

Dyadic
conducts internal and collaborative R&D to advance its microbial platforms across both pharmaceutical and non-pharmaceutical applications.

VTT
Technical Research Centre of Finland

Since
2016, Dyadic has partnered with VTT Technical Research Centre of Finland (“VTT”), a leading European research institute, to enhance C1’s safety, productivity, and
efficiency. VTT supports critical initiatives including glycoengineering, protease deletion, and therapeutic protein expression.
Many projects at VTT are co-funded by Dyadic’s third-party collaborators.

Other
CRO and CDMO Partnerships

Dyadic
works with a global network of research providers and manufacturers, including 53Biologics (Spain), Fermbox (India), and Eleszto
Genetika (Hungary). These partners support the Company’s R&D and scale-up activities across its platforms. While typically
structured as work-for-hire engagements, disruptions to these collaborations could impact timelines or development outcomes.

Advancing
the Dapibus™ Platform for Scalable Commercial Applications

Dyadic
continues to enhance the Dapibus™ platform to meet growing demand for cost-effective, scalable protein production across non-pharmaceutical
markets—including dairy, biofuels, biogas, biorefining, and alternative proteins. In collaboration with Eleszto Genetika and leading
contract research organizations, key initiatives include:

●
Engineering new Dapibus™
strains tailored to specific industrial applications.

●
Improving genetic tools
to accelerate development and boost protein expression.

●
Reducing background protease
activity to increase stability, yields and product quality.

●
Optimizing fermentation
and purification processes to lower cost of goods sold.

●
Developing high-expression
cell lines to support large-scale commercial production.

Demonstrating
C1’s Biopharmaceutical Capabilities

In
parallel, Dyadic continues to validate the C1 platform for biopharmaceutical applications with key partners such as VTT. Notable advancements
include:

●
The development of high-yield
production strains of human and bovine serum albumin, vaccine antigens (i.e., SARS CoV-2, Spike HA, NA, Mpox), and a number of complex
biologics (ferritin nanoparticle antigens, scFvs, mAbs, Fc-fusions).

●
VTT developed the initial
C1 cell line used in the successfully completed DYAI-100 SARS-CoV-2 vaccine Phase 1 clinical study.

●
mAbs produced in C1 showing
comparable binding kinetics and glycosylation profiles to CHO cell-derived antibodies.

●
Third-party validation
of neutralizing and binding activities for C1-expressed antibodies and multi-specific biologics.

These
efforts position Dyadic’s platforms as versatile, low-cost solutions for both industrial and therapeutic protein markets, expanding
commercial potential across multiple verticals.

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Our
Market Opportunity

Given
the versatility of our robust portfolio of recombinant proteins that we expect to launch in the next two years, we believe that we
are well-positioned to pursue a combined total addressable market of approximately over $25 billion across life sciences, food and
nutrition, and bio industrial segments. The estimated total addressable market for our current recombinant solutions portfolio is
comprised of opportunities in the following areas:

Life
Sciences

Our
products are being commercialized through a combination of direct product sales, distribution agreements, and manufacturing
collaborations with companies that have established market access and distribution capabilities.

Cell
Culture Media: Approximately $5 billion global market. We define total addressable market as approximately $2 billion global
revenue opportunity for our recombinant solutions within the albumin, transferrin and growth factors markets. This was calculated
using publicly available third-party data to estimate the recombinant protein shares for these products within the global cell
culture media market. We will seek to serve the Cell Culture Media market, direct sales and OEM supply agreements for our
recombinant cell culture media solutions, such as transferrin and growth factors to third-party manufacturers, distributors,
repackagers and strain/platform licensing agreements key strategic partnerships with companies operating within the cell culture
media space such as our commercial agreement with Proliant Health and Biologics to produce and commercialize recombinant human
albumin.

Molecular
Biology Reagents: Approximately $2 billion. We define total addressable market as the global revenue opportunity for our
molecular biology reagents and recombinant DNase solutions in life science research. This was calculated using publicly available
third-party data to estimate the recombinant protein shares for these products within the molecular biology reagent market. We will
seek to serve the molecular biology reagent market through strain/platform licensing agreements, direct sales and OEM supply
agreements for our recombinant molecular biology reagent solutions, such as DNASE-1 and others to third-party manufacturers,
distributors, and repackagers.

Food
and Nutrition:

The Company is pursuing opportunities
in proteins used in infant nutrition, dairy alternatives, and other nutritional applications, as well as enzymes used in dairy processing,
baking, brewing, and other food manufacturing processes.

Certain
collaborations may include development funding, milestone payments, annual licensing fees, and potential revenue participation from commercial
product sales.

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We
define total addressable market of approximately $11 billion as the global revenue opportunity for our recombinant solutions within the
dairy protein, alpha-lactalbumin and functional proteins and dairy enzymes markets. This was calculated using publicly available third-party
data to estimate the recombinant protein shares for these products within the Food and Nutritional market. We will seek to serve the
Food and Nutrition market through direct sales and OEM supply agreements for our non-animal dairy, research products and other solutions
to third-party manufacturers, distributors, repackagers and key strain/platform licensing agreements with strategic companies operating
within the Food and Nutrition segment, such as our commercialization agreement with Inzymes to produce non-animal dairy enzymes markets.

Bio-Industrial:

Dyadic
collaborates with partners to develop and commercialize industrial enzymes used in applications such as biomass processing, biofuels
production, and other industrial biotechnology markets. These collaborations may include manufacturing agreements, supply arrangements,
or revenue-sharing structures for enzymes produced using Dyadic’s microbial production platforms. We define total addressable market
of approximately $6 billion as the global revenue opportunity for our recombinant bio-industrial protein and enzyme solutions within,
biofuels pulp, paper, textiles, cosmetics solutions and other applications. This was calculated using publicly available third-party
data to estimate the recombinant protein shares for these products within the cellulosic Bio Industrial market. We will seek to serve
the Bio-Industrial market through direct sales and OEM supply agreements for our biomass processing and other solutions to third-party
manufacturers, distributors, repackagers and key strain/platform licensing agreements, with strategic companies operating within the
Bio-Industrial markets, such as our commercialization agreement with Fermbox to produce cellulosic enzyme solutions for biomass processing.
We believe we can leverage our proprietary microbial platforms, C1 and Dapibus™, as well as our growing portfolio of high-value
input proteins to target these markets. For additional information, see “—Our Pipeline.”

Platform
Strengths and Competitive Positioning

Dyadic’s
proprietary C1 and Dapibus™ platforms are designed to offer a scalable, cost-effective alternative to traditional protein production
systems across pharmaceutical and non-pharmaceutical applications. These platforms are engineered to produce vaccines, antibodies, enzymes,
and nutritional proteins with greater efficiency, shorter development timelines, and lower cost of goods.

Compared
to legacy expression systems, Dyadic’s platforms offer the following potential advantages:

●
CHO Cells (Mammalian):
Industry standard for complex biologics but limited by long development cycles, high production costs, and complex purification requirements.

●
E. coli (Bacterial): Fast
and inexpensive, but often produces insoluble proteins requiring refolding and generates pyrogenic contaminants, limiting use in
biologics and precision food applications.

●
Yeast (e.g., Pichia pastoris):
Lacks pyrogenic components and offers advanced genetic tools but can exhibit undesirable glycosylation and lower expression for certain
targets .

●
Insect Cells (Baculovirus):
Used for vaccines and post-translational modifications but generally produce lower protein titers and require viral inactivation
steps, adding time and cost.

●
Filamentous Fungi:
Aspergillus, Trichoderma which are commonly used in industrial enzyme production, less advanced for pharmaceutical
proteins.

Dyadic
believes C1 and Dapibus™ combine the scalability of microbial systems with the productivity and versatility needed to serve diverse
end markets—positioning the Company as a next-generation platform provider in the global protein production landscape.

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Competition

We
operate in highly competitive and rapidly evolving sectors that include biotechnology, life sciences, food and nutrition, and industrial
bioprocessing. Our proprietary C1 and Dapibus™ microbial expression platforms are designed to offer cost-effective, scalable alternatives
to traditional protein production systems. While we believe our platforms provide certain unique advantages in terms of yield, speed,
and versatility, we face competition from both established and emerging players across our target markets.

In
life sciences applications such as cell culture media components (e.g., albumin, transferrin, and growth factors) and molecular biology
reagents (e.g., DNase, RNase inhibitors, and polymerases), we compete with many companies using mammalian (CHO), bacterial (E. coli),
yeast, and insect cell expression systems. These technologies are well established and supported by large, well-capitalized organizations,
which may enable them to commercialize competing products more rapidly or at greater scale than we can achieve initially.

In
food and nutrition markets—including functional dairy proteins and non-animal enzymes—competition is intensifying due to
the rise of precision fermentation and synthetic biology platforms. Several companies are actively developing recombinant proteins such
as caseins, whey components, and bioactive peptides for use in dairy alternatives, infant nutrition, and wellness applications. While
these markets present significant growth opportunities, many participants benefit from strong funding, strategic partnerships, and first-mover
advantages.

In
the bio-industrial segment, we face competition from multinational enzyme producers and microbial fermentation companies developing enzymes
for applications such as biomass conversion, pulp and paper, and biofuels. Our strategy to collaborate with commercial partners, such
as Fermbox, is intended to accelerate market entry and reduce capital intensity, but competitors may leverage larger sales networks
and existing customer relationships.

There
are a number of companies commercializing a diversified portfolio of non-animal recombinant proteins using yeast (i.e., Pichia
and Saccharomyces) and to a lesser extent filamentous fungal (i.e., Aspergillus & Trichoderma) platforms. Given
the pace of innovation and increasing interest in sustainable bioproduction, it is likely that existing or new competitors could develop
similar capabilities or adopt comparable strategies in the future.

Additionally,
academic institutions, contract development and manufacturing organizations (CDMOs), and government-funded initiatives may contribute
to increased competition by advancing alternative production technologies or partnering with industry participants to bring new solutions
to market.

Despite
the competitive landscape, we believe our platforms offer certain compelling differentiation due to their scalability, productivity,
cost efficiency and glycan profiles. However, there can be no assurance that we will be able to compete successfully against current
or future competitors, or that advancements by others will not render our technologies or product candidates obsolete or non-competitive.

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Government
Regulation and Product Approval

As
a small biotech company that operates in the United States, we are subject to extensive regulation. Government authorities in the United
States (at the federal, state and local level) and in other countries extensively regulate, among other things, the research, development,
testing, manufacturing, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution,
post-approval monitoring and reporting, marketing and export and import of drug products such as those we are developing. Product candidates
that we develop must be approved by the FDA, before they may be legally marketed in the United States and by the appropriate foreign
regulatory agency before they may be legally marketed in foreign countries. Generally, our activities in other countries will be subject
to regulation that is similar in nature and scope as that imposed in the United States, although there can be important differences.
For additional discussion on the effect of existing or probable governmental regulations on our business, see “