Full Press Release Details
LaSalle Street, Suite 3200
Overnight Courier and Regular Mail
International (USA), Inc.
known as Dyadic International, Inc.
Intracoastal Pointe Drive, Suite 404
Wayne Moor, Chief Executive Officer
under Revolving Note ($3,000,000.00)
advised that we are counsel to the Mark A. Emalfarb Trust under agreement dated
October 1, 1987 ("Lender").
International (USA), Inc., Formerly known as Dyadic International, Inc.,
("Borrower") executed and delivered to Lender a certain Revolving Note dated
of May 29, 2003 ("Bridge Note"). Lender is the payee and legal holder of the
Bridge Note. The balance due under the Bridge Note is the principal sum of
$2,378,832.00 plus interest accrued from and after October 1, 2007, and
previously unpaid interest. Contemporaneously with the execution and delivery
the Bridge Note, Borrower, as "Debtor", executed and delivered to Lender, as
"Secured Party", a Security Agreement. This letter is Lender's notice of default
to Borrower pursuant to Section 5 of the Bridge Note.
Borrower, as "Registrant" or "Company" has reported the following events in
various press releases and/or filings with the U.S. Securities and Exchange
Registrant has discovered potentially material operational and financial
improprieties at its Hong Kong and mainland China operations following the
recent death of the managing director of its Hong Kong operations. The
Registrant's audit committee, upon the advice of counsel, has initiated an
independent investigation of the facts surrounding these
Registrant is in discussions with the American Stock Exchange regarding the
continued listing of its shares; however, it anticipates that the Exchange
in accordance with its rules, initiate delisting proceedings against the
Registrant. Furthermore, the Registrant has been notified by the Exchange that
the trading in its shares will continue to be halted until such time as
additional information regarding these matters is publicly
International (USA), Inc.
known as Dyadic International, Inc.
23, 2007, the Registrant's board of directors, upon the recommendation of the
audit committee, determined that the Registrant's previously filed financial
statements, including those contained in its Annual Reports on Form 10-KSB
Quarterly Reports on Form 10-QSB, as filed with the Securities and Exchange
Commission (the "SEC"), should no longer be relied upon."
17, 2007, the Registrant received a notice from the American Stock Exchange
"Exchange") indicating that the Registrant is currently in violation of the
Exchange's continuing listing standards specified in Sections 134 and 1101
the Exchange's Company Guide because the Registrant has yet to file with the
its quarterly report on Form 10-QSB for the quarter ended March 31, 2007. The
Exchange's notice further indicates that the Registrant must submit a plan
the Exchange by June 18, 2007, advising the Exchange of action it has taken,
will take, that will enable the Registrant to regain compliance with these
continuing listing standards by no later than November 16, 2007."
2, 2007, the Registrant received a notice from the American Stock Exchange
"Exchange") indicating that the Registrant continues to be in violation of
Exchange's continuing listing standards specified in Sections 134 and 1.101
the Exchange's Company Guide because the Registrant has yet to file with the
its quarterly report on Form 10-QSB for the quarter ended March 31, 2007. The
Exchange's notice further indicates that it has received and evaluated a plan
compliance (the "Plan") dated June 18, 2007 provided by the Registrant, advising
the Exchange of action the Registrant has taken, or will take, that will enable
the Registrant to regain compliance with these continuing listing standards
no later than November 16, 2007 (the "Plan Period")."
on trading in the Registrant's shares that went into effect, at the request
the Registrant, on April 23, 2007, has been and, at the direction of the
Exchange, will continue to be in effect until such time as the Registrant has
filed with the SEC its quarterly report on Form 10- QSB for the quarter ended
September 20, 2007, a special committee (the "Special
board of directors (the "Board")
Dyadic International, Inc. (the "Company"),
acting upon the recommendation of the audit committee (the "Audit
Board, authorized the termination for cause by the Company of the employment
Mark A. Emalfarb as the Company's Chief Executive Officer and President under
his employment agreement dated as of
International (USA), Inc.
known as Dyadic International, Inc.
2001, as amended by the first amendment to employment agreement dated as of
March 16, 2006. This termination was effectuated on September 24, 2007. Mr.
Emalfarb previously terminated his voluntary leave of absence from the Board
September 5, 2007, and remains a director of the Company, although the Company
now has requested that Mr. Emalfarb voluntarily resign from the Board
result of the completion of the Investigation into the operations of the
Company's Asian subsidiaries, it has been concluded that the Asian subsidiaries'
largest purported customer was secretly controlled by the Asian subsidiaries'
management, including the deceased managing director. It was determined, among
other things, that this purported customer purchased products from the Company's
Asian subsidiaries which the purported customer subsequently re-sold on a cash
basis to businesses in mainland China, apparently allowing certain of these
businesses to avoid Chinese reporting and VAT requirements. The Investigation
revealed that former management of the Company and the management of the Asian
subsidiaries had willfully concealed facts relating to these material
operational and financial improprieties by the Company's Asian subsidiaries.
Company has abandoned its Asian operations because of its concerns over these
material operational and financial improprieties."
previously reported, the Company's financial statements, including those
contained in its Annual Report on Form 10-KSB, as previously filed with the
Securities and Exchange Commission (the "SEC"), should not be relied upon.
Company is currently in the process of determining the proper accounting
treatment to record the effect of abandoning the Asian operations and to be
to issue its Quarterly Reports on Form 10-QSB for the quarters ended March
June 30 and September 30, 2007, although there can be no assurances in this
regard as to the timing of or the Company's ability to achieve
result of such events, Lender deems itself insecure.
the foregoing is an event described under one or more subsections of Section
of the Bridge Note (entitled "Default"), including but not limited to
subsections (a), (b), (d), (g), (h), (i) and/or (k), and an event described