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Diatect Announces MOU to Acquire The Event Source
HEBER, Utah, March 16, 2005 /PRNewswire-FirstCall via COMTEX/ -- Diatect International Corporation (OTC Bulletin Board: DTCT) WKN: 913540 Symbol: DI8.FSE (Frankfurt) DI8.BER (Berlin) announced today its exploration of major structural changes and the signing of a memorandum of understanding (MOU) to acquire The Event Source, a sizable military contractor operating in Iraq.
Under the terms of the MOU, the company contemplates acquiring the assets of The Event Source, a division of Paul Morrell, Inc., for $80 million. As currently envisioned, Diatect would issue a promissory note for the purchase price secured by the assets of The Event Source. Following the acquisition, the company would operate The Event Source's business in addition to its current insect control business.
Prior to the completion of the acquisition, shareholders will be asked to approve a change of domicile of the company from California to Nevada and a recapitalization of the company in which the approximate 92 million shares of issued and outstanding common stock will be reverse split 6-to-1 without any consolidation of approximately 7.4 million additional shares that will not be subject to consolidation, subject to complying with regulatory requirements. The company would retain its 100 million share authorized capitalization. The company anticipates that it will change its name to Morrell International, Inc.
Dave Andrus, president, CEO and chairman, said, "This is a watershed event for Diatect and the company's shareholders. The Morrell organization will be an outstanding partner if we are able to complete the transaction contemplated by the MOU. We are excited about working with Phil Morrell, who has built an outstanding collection of companies."
In related events, Diatect sold its 20,254-square-foot office and warehouse building in Heber City for $900,000 in cash. The company is currently negotiating a lease agreement for the property with Morrell & Associates, LLC.
The company also agreed to issue to Philip Morrell 1.4 million shares of restricted common stock for an aggregate of $402,000.
In other actions, the company's board of directors has concluded that the company's financial statements for the year ended Dec. 31, 2003 and all interim periods thereafter should be placed under review and should no longer be relied on. The board has concluded that the company's recording of a $12 million note receivable from a related party is likely a misstatement and that the company will likely record either no value or only a substantially reduced value for that note receivable. The company has retained an accounting professional to assist in a comprehensive internal review of its financial statements to determine the extent of future corrections.
About The Event Source
The Event Source is a United States-based company incorporated in Utah with more than 300 employees. The company's primary business in Iraq is constructing and operating dining facilities and completing construction projects for the U.S. military.
Established by Phil and Paul Morrell to support U.S. military operations throughout the world, The Event Source was the primary military contractor for the 2002 Olympic Winter Games in Salt Lake City. During the Olympics, the company provisioned all of the life support areas, including barracks, laundries and recreation facilities, and supported dining facilities for thousands of military, private security and transportation personnel.
About Diatect
Diatect International Corporation is an insect control and natural resource company headquartered in Heber near Salt Lake City. Diatect products are an EPA-labeled new generation of non-toxic insect control products marketed for sustainable and organic food production. The company's Diatect(TM) and Results products are sold into the multi-billion dollar agriculture, industrial, home and garden industry worldwide. The Results line for fire ant, tomato and garden, pet powder and indoor markets is packaged for the over-the-counter market and consumer use.
An investment profile on Diatect may be found at http://www.hawkassociates.com/diatect/profile.htm For further information, contact Diatect International Shareholder Services at (435) 654-4370, e-mail: shareholderservices@diatect.com, or Frank Hawkins or Julie Marshall, Hawk Associates, (305) 852-2383, e-mail: info@hawkassociates.com Detailed information about Diatect International Corporation can be found at http://www.diatect.com Copies of Diatect press releases, SEC filings, current price quotes, stock charts and other valuable information may be found at http://www.hawkassociates.com/diatect This announcement includes forward-looking statements that involve risks and uncertainties. While these statements are made to convey to the public Diatect's progress, business potential and growth prospects, readers are cautioned that such forward-looking statements represent management's opinion. Such statements are made based upon current expectations that are subject to risk and uncertainty. In particular, management's estimates of future revenue amounts and timing are based upon product delivery schedules, which may be subject to unforeseen delays. Diatect does not undertake to update forward- looking statements in this news release to reflect actual results of its marketing plan and changes in assumptions or changes in other factors affecting such forward-looking information.
SOURCE Diatect International Corporation
CONTACT: Diatect International Shareholder Services, +1-435-654-4370, or
shareholderservices@diatect.com; or Frank Hawkins or Julie Marshall, both of Hawk
Associates, +1-305-852-2383, or info@hawkassociates.com, for Diatect International
Corporation
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KEYWORD: Utah
INDUSTRY KEYWORD: CHM
OTC
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