Second Circuit Affirms Dismissal of Complaint Against Vystar In the Case Of EMA Financial LLC v. Vystar Corp.
Vystar (OTCQB: VYST) has secured a significant legal victory as the Second Circuit Court affirmed the dismissal of a $4.2 million claim by EMA Financial LLC related to a toxic convertible note issue. The original November 2024 district court ruling not only dismissed EMA's complaint but also awarded Vystar legal fees.
While the Second Circuit's July 17, 2025 decision upholds the dismissal, it did not reverse the district court's denial of Vystar's counterclaims. The case now returns to district court for determination of legal fees, with Vystar having accrued approximately $1 million from 2018 to date. This marks a historic victory as the first successful defense by a micro-cap issuer against EMA Financial's breach of contract claims on convertible notes.
Vystar (OTCQB: VYST) ha ottenuto una vittoria legale significativa con la conferma da parte della Corte d'Appello del Secondo Circuito della decisione di rigettare un ricorso da 4,2 milioni di dollari presentato da EMA Financial LLC relativo a un problema con note convertibili tossiche. La sentenza originale del tribunale distrettuale di novembre 2024 non solo aveva respinto la denuncia di EMA, ma aveva anche assegnato a Vystar le spese legali.
La decisione del Secondo Circuito del 17 luglio 2025 conferma il rigetto, ma non ha annullato il diniego da parte del tribunale distrettuale delle controdenunce di Vystar. Il caso torna ora al tribunale distrettuale per la determinazione delle spese legali, con Vystar che ha accumulato circa 1 milione di dollari dal 2018 a oggi. Si tratta di una vittoria storica, essendo la prima difesa riuscita da parte di un emittente micro-cap contro le accuse di violazione contrattuale di EMA Financial sulle note convertibili.
Vystar (OTCQB: VYST) ha logrado una importante victoria legal tras la confirmación por parte del Tribunal de Apelaciones del Segundo Circuito del desestimamiento de una demanda por 4,2 millones de dólares presentada por EMA Financial LLC relacionada con un problema de notas convertibles tóxicas. La sentencia original del tribunal de distrito en noviembre de 2024 no solo desestimó la demanda de EMA, sino que también otorgó a Vystar el pago de honorarios legales.
La decisión del Segundo Circuito del 17 de julio de 2025 mantiene el desestimamiento, pero no revocó la negativa del tribunal de distrito a las contrademandas de Vystar. El caso ahora regresa al tribunal de distrito para determinar los honorarios legales, con Vystar acumulando aproximadamente 1 millón de dólares desde 2018 hasta la fecha. Esto representa una victoria histórica al ser la primera defensa exitosa de un emisor micro-cap contra las reclamaciones por incumplimiento de contrato de EMA Financial sobre notas convertibles.
Vystar (OTCQB: VYST)가 EMA Financial LLC가 제기한 독성 전환사채 문제와 관련된 420만 달러 청구를 기각한 2순회 법원의 판결을 확정하며 중요한 법적 승리를 거두었습니다. 2024년 11월 지방법원의 원래 판결은 EMA의 소송을 기각했을 뿐만 아니라 Vystar에게 법률 비용도 지급하도록 명령했습니다.
2025년 7월 17일 2순회 법원의 결정은 기각을 유지했으나 Vystar의 반소 기각 결정은 뒤집지 않았습니다. 사건은 현재 법률 비용 산정을 위해 다시 지방법원으로 돌아갔으며, Vystar는 2018년부터 현재까지 약 100만 달러의 법률 비용을 누적했습니다. 이는 마이크로캡 발행인이 EMA Financial의 전환사채 계약 위반 청구에 대해 성공적으로 방어한 최초의 역사적인 승리입니다.
Vystar (OTCQB : VYST) a obtenu une victoire juridique importante, la Cour d'appel du deuxième circuit ayant confirmé le rejet d'une réclamation de 4,2 millions de dollars déposée par EMA Financial LLC concernant un problème de note convertible toxique. La décision initiale du tribunal de district en novembre 2024 avait non seulement rejeté la plainte d'EMA, mais aussi accordé à Vystar le remboursement des frais juridiques.
La décision du deuxième circuit du 17 juillet 2025 confirme ce rejet, mais n'a pas infirmé le refus du tribunal de district concernant les demandes reconventionnelles de Vystar. L'affaire retourne désormais au tribunal de district pour la détermination des frais juridiques, Vystar ayant accumulé environ 1 million de dollars depuis 2018. Il s'agit d'une victoire historique, la première défense réussie d'un émetteur micro-cap contre les accusations de violation de contrat d'EMA Financial sur les notes convertibles.
Vystar (OTCQB: VYST) hat einen bedeutenden rechtlichen Sieg errungen, da das Berufungsgericht des Zweiten Bezirks die Abweisung einer 4,2-Millionen-Dollar-Klage von EMA Financial LLC im Zusammenhang mit einer problematischen Wandelanleihe bestätigte. Das ursprüngliche Urteil des Bezirksgerichts im November 2024 wies nicht nur die Klage von EMA ab, sondern sprach Vystar auch Anwaltskosten zu.
Die Entscheidung des Zweiten Bezirksgerichts vom 17. Juli 2025 bestätigt die Abweisung, hob jedoch die Ablehnung der Gegenklagen von Vystar durch das Bezirksgericht nicht auf. Der Fall wird nun zur Festsetzung der Anwaltskosten an das Bezirksgericht zurückverwiesen, wobei Vystar seit 2018 etwa 1 Million Dollar an Kosten angesammelt hat. Dies markiert einen historischen Sieg als erste erfolgreiche Verteidigung eines Micro-Cap-Emittenten gegen Vertragsverletzungsklagen von EMA Financial bezüglich Wandelanleihen.
- None.
- Court denied Vystar's counterclaims for damages
- Company has accrued approximately $1 million in legal expenses since 2018
Boston, MA, July 21, 2025 (GLOBE NEWSWIRE) -- Vystar® Corporation (OTCQB: VYST)
On November 27, 2024, the New York federal district court in the case EMA Financial LLC v. Vystar Corp., 19-cv-1545 (GWG) issued a first of its kind court victory for a micro-cap issuer, Vystar, denying EMA Financial’s
Both parties appealed the decision to the United States Court of Appeals for the Second Circuit. EMA Financial sought to have the appellate court reverse the district court's dismissal of the complaint. Vystar opposed the appeal and further cross-appealed seeking to have the appellate court reverse that portion of the decision denying Vystar’s counterclaims for damages associated with EMA Financial’s breach of the terms of the convertible note You can click on this link to see Vystar's appeal..
On July 17, 2025, the Second Circuit issued its decision, affirming the district court’s decision. You can click on the link to read the brief. While Vystar was disappointed that the Second Circuit did not reverse that portion of the district court’s decision denying Vystar’s counterclaim, the result of this decision sends the case back to the district court for a determination of legal fees to be awarded to Vystar. Vystar has accrued on its books approximately one million dollars from 2018 to date.
Vystar wishes to take a moment to thank all of those involved in the work associated with this litigation. No issuer had previously succeeded in fighting back against EMA Financial’s breach of contract claims on these convertible notes. Leading this charge for Vystar was its litigation counsel, Barry Bordetsky of The Law Offices of Barry M. Bordetsky. Barry’s work was strategic and methodical, nothing short of a full-fledged fight for Vystar in this David versus Goliath battle. It's rare to find a litigator so dedicated and talented that is willing to work with a small company, going above and beyond what was required in the fight for Vystar. Without such counsel protecting Vystar, the company very well may have fallen into similar circumstances of the other the micro-cap issuers sued by EMA Financial - - having judgments issued against them.
About Vystar Corporation:
Based in Worcester, Mass., Vystar® Corp. (OTCQB: VYST) is the owner of RxAir® UV light air purification products that destroy harmful airborne viruses and pathogens, Vytex® Natural Rubber Latex (NRL), and Fluid Energy Solutions. Vytex is a multi-patented, all-natural, raw material that contains significantly reduced levels of the proteins found in natural rubber latex for a stronger, more durable, yet environmentally safe, "green" and fully biodegradable product that can be used in a broad range of consumer and medical products. For more information, visit www.vystarcorp.com.
Forward-looking Statements: Investors are cautioned that certain statements contained in this document as well as some statements in periodic press releases and some oral statements of VYST officials are "Forward-Looking Statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). Forward-looking statements include statements which are predictive in nature, which depend upon or refer to future events or conditions, which include words such as "believes," "anticipates," "intends," "plans," "expects," and similar expressions. In addition, any statements concerning future financial performance (including future revenues, earnings or growth rates), ongoing business strategies or prospects, and possible future VYST actions, product development and delivery, which may be provided by management, are also forward-looking statements as defined by the Act. Forward-looking statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements of the Company to materially differ from any future results, performance, or achievements expressed or implied by such forward-looking statements and to vary significantly from reporting period to reporting period. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual future results will not be different from the expectations expressed in this report. These statements are not guarantees of future performance and VYST has no specific intention to update these statements.
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