DYADIC INTERNATIONAL INC

Except as set forth below, there have been no changes to our risk factors from those disclosed in our Annual Report.

We have concluded that there is substantial doubt as to our ability to continue as a going concern.

As discussed in Note 1 to the Consolidated Financial Statements and “Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” as of June 30, 2026, our management has concluded that there is substantial doubt about our ability to continue as a going concern. For more information regarding our management’s evaluation and mitigation plan, see Note 1 to the Consolidated Financial Statements. This mitigation could carry risks. Any capital raise could be highly dilutive to existing investors, we may not be able to raise funds on terms that are favorable to us, and there is no assurance we will remain listed on Nasdaq and maintain the access to liquidity needed to carry out a raise. While the Company has historically received significant grant funding, there is no guarantee its grant applications will be approved. There is also no assurance that Noteholders will agree to modify, exchange, or extend the maturity of their Convertible Notes. If we are unable to implement sufficient mitigation efforts, we may be forced to limit our business activities or be unable to continue as a going concern, which would have a material adverse effect on our results of operations and financial condition. If we become insolvent, investors in our securities may lose the entire value of their investment in our business.

If we fail to comply with listing standards of Nasdaq, our common stock may be delisted, adversely affecting the liquidity and market price of our common stock, as well as our ability to obtain sufficient additional capital to continue funding our operations.

Our common stock is currently listed on the Nasdaq Capital Market, which has minimum requirements that a company must meet in order to remain listed. As previously disclosed, we were previously not in compliance with various of these requirements, including the requirement that our common stock maintain a minimum bid price per share of $1.00 (such that the share price of the common stock close not below $1.00 for 30 consecutive business days) (the “Minimum Bid Price Rule”), and we did not meet any of the following conditions: $2.5 million in shareholders’ equity; $35 million in market value of listed securities; or $500,000 of net income from continuing operations (the “Continued Listing Standards”). We have since regained compliance with these rules. However, if we fail again to comply with the Minimum Bid Price Requirement, the Continued Listing Standards or any other requirement for continued listing on Nasdaq, our common stock could be delisted, subject to a possible appeal within Nasdaq. With respect to the Minimum Bid Price Rule, in May 2026, we received shareholder approval at our annual meeting for authorization for our Board to effect a reverse stock split on specific terms, and if we again lose compliance with the rule, our Board may determine to effect the split as a possible way to cure the deficiency (to the extent deemed by Board as in the best interests of us and our shareholders). In any event, if delisting of our common stock became final, it would then be traded in the over-the-counter market established for unlisted securities such as the OTCQX, the OTCQB, the OTCID Basic Market or the Pink Limited Market, but there can be no assurance that our common stock will be eligible for trading on any such alternative market. Additionally, the liquidity of our common stock would be adversely affected, the market price of our common stock could decrease, our ability to obtain sufficient additional capital to fund our operations and to continue to operate as a going concern would be substantially impaired and transactions in our common stock could lose federal preemption of state securities laws. Furthermore, there could be a reduction in our coverage by securities analysts, and broker-dealers may be deterred from making a market in or otherwise seeking or generating interest in our common stock, which could cause the price of our common stock to decline further. Moreover, delisting may also negatively affect our collaborators’, vendors’, suppliers’ and employees’ confidence in us and employee morale. If we effected a reverse stock split (assuming such split is approved by our shareholders), the liquidity of our common stock could be harmed, given the reduced number of shares of common stock that would be outstanding afterward, particularly if the share price does not increase as a result thereof.