SOURCE: Aradyme Corporation

March 19, 2007 08:02 ET

Aradyme Corporation Suspends Operations and Signs Agreement With White Box Technologies, Inc. Due to Ongoing Cash Shortages

OREM, UT -- (MARKET WIRE) -- March 19, 2007 -- Aradyme Corporation, (OTCBB: ADYE) will suspend its operations today in the face of continuing severe shortages of working capital. The Orem, Utah provider of specialized data management solutions and services based on its unique database management system had experienced declining sales following the conclusion of its 2004-06 work under the Help America Vote Act. As a result of these declining sales, Aradyme had implemented successive rounds of cost-cutting measures as it attempted to reposition its products and address new markets, but sales did not rebound as hoped. Efforts to infuse substantial amounts of equity from external sources have not been successful.

In 2003, Aradyme had agreed with Merwin D. Rasmussen, a principal source of funding for Aradyme, that he could acquire a non-exclusive license to a copy of the current version of the software in cancellation of a warrant held by him to purchase 1,000,000 shares of common stock of Aradyme. In connection with Aradyme's suspension of operations, Rasmussen resigned as an officer and director and exercised his right to acquire a copy of Aradyme's intellectual properties. Rasmussen and his affiliates remain Aradyme's largest unsecured creditor.

Rasmussen has assigned his license of the Aradyme intellectual properties to his new company, White Box Technologies, Inc., which has also agreed to assume Aradyme's future obligations to its existing customers by servicing its current and pending contracts. As consideration, White Box will pay Aradyme a guaranteed monthly amount or an amount equal to 10% of the gross revenues received, which ever is greater, until Aradyme receives $1,800,000, subject to reduction in an amount equal to 80% of negotiated reductions in the liabilities of Aradyme, or March 30, 2017, whichever occurs first. Aradyme has released its employees, all of whom are owed past due wages by Aradyme, from non-compete/confidentiality covenants with Aradyme so such employees may work for White Box to fulfill Aradyme's contractual obligations to its customers. Aradyme may also lease certain of its equipment to White Box. A transition period is expected during which and all former Aradyme contact information will remain in effect.

Aradyme retains the original copy of its proprietary database management software on which it may base new products and services when its finances permit. As of December 31, 2006, Aradyme had a working capital deficit of $1,648,028, with past due current liabilities of $1,754,856, including $709,305 in other accrued expenses which includes amounts due the IRS for delinquent payroll withholding taxes and penalties, $370,894 for past due employee salaries, $263,897 due on short term borrowings, $269,494 due on various trade accounts payable, and $436,568 due Rasmussen and his affiliates. These totals are cited from Aradyme's latest quarterly filing and are only cited as rough estimates of actual amounts owed today. White Box is not assuming any of these liabilities or obligations. Aradyme will either apply proceeds from payments anticipated from White Box toward paying these obligations or will attempt to seek compromises or other resolutions with its creditors.

This release contains forward-looking statements. Forward-looking statements are not guarantees of future revenues, sales, agreements, events, or results. Forward-looking statements are subject to risks and uncertainties outside Aradyme's control. Actual events or results may differ materially from the forward-looking statements.

Contact Information

  • Contacts:
    Jeffrey Bennion
    Aradyme Corporation
    (801) 705-5000