Dyadic (AMEX:DIL)
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Dyadic International, Inc. (AMEX:DIL) announced today that on January 2,
2008, Dyadic International (USA), Inc. ("Dyadic Florida"), a
wholly-owned subsidiary of Dyadic International, Inc. (the "Company"),
received a purported declaration of default (the "2008 Default Notice")
from the Mark A. Emalfarb Trust under agreement dated October 1, 1987
("Emalfarb Trust") relating to Dyadic Florida's Revolving Note in favor
of the Emalfarb Trust dated as of May 29, 2003 with a maturity date of
January 1, 2009 (as amended to date, the "Note"). Principal under the
Note bears interest at the rate of 8% per annum (14% following a default
under the Note); the Note has a principal balance of approximately $2.4
million and is secured by certain of Dyadic Florida’s
assets. The Emalfarb Trust has as its trustee and beneficiary Mark A.
Emalfarb, a director of the Company and the former Chief Executive
Officer and President of the Company. According to a Schedule 13D filing
(filed on November 13, 2007) (the "13D Filing"), Mark Emalfarb, through
the Emalfarb Trust, owned 5,822,125 shares (or approximately 19.4%) of
the Company's outstanding shares of common stock as of November 9, 2007.
In addition, according to the 13D filing, the Francisco Trust under
agreement dated February 28, 1996, whose beneficiaries are the spouse
and descendants of Mark Emalfarb, owned 4,844,578 shares (or
approximately 15.9%) of the Company's outstanding shares of common stock
as of November 9, 2007.
As previously disclosed in the Company's Current Report on Form 8-K
(filed on October 24, 2007) (the "October 24 8-K"), on October 3, 2007,
Dyadic Florida received a purported written notice of default (the "2007
Default Notice") from the Emalfarb Trust pursuant to the Note and the
Security Agreement dated as of May 29, 2003, as amended by the first
amendment thereto dated as of August 19, 2004 (the "Security
Agreement"). The 2007 Default Notice alleged that, with reference to
certain events identified in the 2007 Default Notice and reported in the
Company's Current Reports on Form 8-K filed prior to the date of the
2007 Default Notice (the "Events"), Dyadic Florida may be in default
under the Note and Security Agreement. The 2008 Default Notice asserts
that the Events (as referred to in the 2007 Default Notice, with no new
or different events identified) have continued for more than 90 days and
purports to declare Dyadic Florida in Default (as defined in the Note)
under the Note and that all amounts evidenced under the Note are
immediately due and payable to the Emalfarb Trust. The 2008 Default
Notice demands payment of all unpaid principal and accrued interest due
on the Note, plus approximately $11,000 in legal fees.
As the Company previously reported in the October 24 8-K (with regard to
the 2007 Default Notice) and reaffirms here, the Company does not
believe that it is in default under the Note. The Company does not
believe that any of the Events constitutes a default under the Note. The
Company has made all payments required by the terms of the Note.
Although no assurances can be given as to the ultimate outcome of this
matter, the Company disagrees with the claims in the 2007 Default Notice
and the 2008 Default Notice that a default has occurred under the Note
and intends to vigorously contest these claims.
As previously disclosed in the Company's Current Report on Form 8-K
(filed on December 28, 2007), the six putative class action lawsuits
filed against the Company and certain current and former officers and
directors of the Company in the United States District Court for the
Southern District of Florida were consolidated, and the Court selected a
lead plaintiff who is tasked with litigating the claims against the
Company on behalf of all putative class members. On December 28, 2007,
the Court ordered that the lead plaintiff must file an amended and
consolidated complaint by February 25, 2008, and that the Company must
respond to such complaint by March 28, 2008. The Company intends to
vigorously contest and defend the allegations under the amended and
consolidated putative class action complaint, but no assurance can be
given as to the timing, costs to defend or the ultimate outcome of this
matter.
On January 8, 2008, the Company filed with the Securities and Exchange
Commission a Current Report on Form 8-K, which includes discussion of
the above-mentioned items.
About Dyadic
Dyadic International, Inc. is a biotechnology company that uses its
patented and proprietary technologies to conduct research and
development activities for the discovery, development, and manufacture
of products and enabling solutions to the bioenergy, industrial enzyme
and pharmaceutical industries.
Cautionary Statement for Forward-Looking Statements
Certain statements made in this press release may be considered
"forward-looking statements." These forward-looking statements are based
upon current expectations and involve a number of assumptions, risks and
uncertainties that could cause our actual results, performance or
achievements to be materially different from such forward-looking
statements. In view of such risks and uncertainties, investors
and stockholders should not place undue reliance on our forward-looking
statements. Such statements speak only as of the date of this
release, and we undertake no obligation to update any forward looking
statements made herein. For a discussion of assumptions, risks
and uncertainties identified by the Company, 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, 2006, and our subsequent filings with the SEC.