As
previously disclosed in the Company's Current Reports on Form 8-K (filed
on
October 24, 2007, November 19, 2007 and December 3, 2007), the Company
has
engaged Gordian Group, LLC ("
Gordian
Group
") to
serve as the Company’s investment banker and financial adviser to assist the
Company in evaluating, exploring and, if deemed appropriate, pursuing
and
implementing certain strategic and financial options that may be available
to
the Company, including a possible sale, merger, restructuring, recapitalization,
reorganization or other strategic or financial transaction. On
December 7, 2007, the Company commenced implementing a process (the
"
Strategic
Process
")
designed to maximize the realizable value of the Company's business and
assets for all Dyadic stockholders, by soliciting indications of interest
from
identified third parties concerning the possible sale of the Company
(or the
Company's outstanding stock or assets). The Company's Strategic
Process is being administered by Gordian Group under the direction
of the
Executive Committee of the Board of Directors. No person is authorized to
speak for the Company in connection with the Strategic Process other
than
Gordian Group and other persons authorized by the Executive
Committee. Although implementation of the Strategic Process has
commenced, no conclusion as to any specific option or transaction has
been
reached, nor has any specific timetable been fixed for accomplishing
this
effort, and there can be no assurance that any strategic, financial
or other
option or transaction will be p
resented, implemented
or
consummated.
On
December 10, 2007, the Company filed
an answer to the petition previously filed by Mark A. Emalfarb, in
his capacity
as trustee of the Mark A. Emalfarb Trust, a stockholder
of
the
Company, in the Court of Chancery of
the State of Delaware pursuant to Section 211 of the General Corporation
Law of
the State of Delaware (the “
211
Action
”). By
way of background, as previously disclosed in the
Company's Current
Report
on Form 8-K (filed
on November 19,
2007), Mr. Emalfarb's petition in the 211 Action seeks an order of
the
C
ourt
directing the Company to call and
hold an annual meeting of its stockholders for the election of
directors.
As
noted above (in the disclosure under
Item
3.01
), t
he
Company has been unable to call,
notice and hold an annual stockholders' meeting for the election of
directors in
2007 because of its inability to comply with the SEC's proxy rules
in connection
with any such meeting (which proxy rules require that the
Company's
related
proxy or information statement
be accompanied or preceded by an annual report to stockholders that
includes
audited financial statements and meets the other applicable requirements
of the
proxy rules). However, the Company desires to notice, convene and
hold an annual meeting of stockholders if legally permitted to do
so. In response to Mr. Emalfarb’s petition, the Company joined in
the
request
that the
C
ourt
enter an order requiring it to hold
an annual meeting and, in particular,
requested that
the C
ourt enter an
order: (1)
directing the Company to hold an annual meeting of stockholders for
the election
of two directors; (2)
designating
a
date, time and place for such meeting
and the record date for the determination of stockholders of the Company
entitled to vote at
such
meeting,
and approving the form of
notice of the annual meeting; and (3) directing the Company
to
make
prompt application to the SEC for
any necessary exemptive relief, waiver, order or “no action letter” to ensure
that the Company will be permitted to provide notice of the annual
meeting, to
make recommendations, to solicit proxies and to make public disclosures
about
the annual meeting in order to provide information
that
the
Company's
Board
of Directors believes to be
material to stockholders in connection with such annual meeting. The
Company intends to vigorously pursue its interests in connection with
the 211
Action, but no assurance can be given as to the timing, costs to defend
or the
ultimate outcome of this matter.
Mr.
Emalfarb's petition and the
Company's answer
in the 211
Action
are attached
hereto
as Exhibits 99.1 and 99.2 respectively and are incorporated by reference
herein. The foregoing description of the 211 Action is a summary
only, does not purport to be complete and is qualified in its entirety
by
reference to the full text of Mr. Ema
l
farb's
petition and the Company's
answer.
On
December 12, 2007,
the
six
putative class action lawsuits filed
in the
United States
District Court for the
Southern District
of Florida were
consolidated
,
and
the
C
ourt
selected a lead plaintiff who is
tasked with litigating the claims against the Company on behalf of
all putative
class members.
By way of background, as previously disclosed
in the Company's Current Reports on Form 8-K (filed on October 24,
2007,
November 19, 2007 and December 3, 2007), each
individual putative
class action
complaint
name
s
the Company and certain current and
former officers and directors of the Company as defendants. The
putative
class
action lawsuits
allege
that the defendants, among other
things, violated federal securities laws by issuing various materially
false and
misleading statements that had the effect of artificially inflating
the market
price of the Company’s securities and causing putative class members to overpay
for securities purchased during the period from March 30, 2006 through
April 23,
2007. The complaints seek, among other things, unspecified monetary
damages and the costs and expenses incurred in prosecuting the
action. The Company
and lead plaintiff’s counsel have
filed
a proposed schedule with the Court that would require, subject to the
Court's
approval, the lead plaintiff to file an
amended and consolidated
complaint
by February 25,
2008 and
the Company to respond to that complaint by April 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 ul
timate outcome
of this
matter.
On
December
28
, 2007, the Company
issued a press
release regarding the matters described in this Current Report on Form
8-K. The complete text of the press release is attached hereto as
Exhibit 99.
3.
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