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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
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
www.diatect.com Copies of Diatect press releases, SEC filings, current
price quotes, stock charts and other valuable information may be found at
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
SUBJECT CODE: TNM
