U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): December 12, 2005
ARADYME CORPORATION
----------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 000-50038 33-0619254
- ------------------------------- ------------------------ -------------------
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation or organization) Identification No.)
1255 North Research Way,
Building Q3500
Orem, Utah 84097
---------------------------------------- ---------
(Address of principal executive offices) (Zip code)
801-705-5000
---------------------------------------------------
(Registrant's telephone number, including area code)
N/A
-----------------------------------------------------------
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01--ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On December 12, 2005, Aradyme Corporation entered into an investment
agreement with Eagle Rock Capital, LLC, an affiliate of Merwin D. Rasmussen, a
director and corporate secretary of Aradyme. On the date of the agreement, the
closing sales price of Aradyme's common stock was $0.37 per share.
Under the agreement, Aradyme has agreed to sell to Eagle Rock Capital,
in a series of tranches over the succeeding 15 months, up to 15,000,000 shares
of common stock at $0.20 per share and warrants to purchase up to an additional
15,000,000 shares of common stock with exercise prices escalating from $0.50 per
share to $1.00 per share. All of the warrants expire on December 12, 2010. If
all of the tranches are fully funded, Aradyme will receive $3,000,000 without
regard to any additional amounts that would be received if any of the warrants
are exercised.
In the initial tranche, which was funded upon the execution of the
agreement on December 12, 2005, Eagle Rock Capital paid Aradyme $1,000,000 for
5,000,000 shares of common stock and warrants to purchase an additional
5,000,000 shares of common stock at an exercise price of $0.50 per share. The
number of warrants issuable on any funding tranche will be increased or
decreased if actual funding of the tranches is accelerated or delayed,
respectively.
The agreement obligates Aradyme to file a registration statement with
the Securities and Exchange Commission on or before February 10, 2006,
registering the resale of both the shares of common stock and the shares of
common stock issuable upon the exercise of the warrants acquired under the
agreement as well as certain other shares designated by Eagle Rock Capital.
Eagle Rock Capital required Aradyme to complete certain actions as
conditions of the agreement, including:
o converting $200,000 of convertible debt to an unrelated third
party due November 15, 2005, into common stock of the Company
at $0.40 per share;
o restructuring its employment agreements with its executive
officers to make them "at will" employees, subject to six
months' termination benefits if they are terminated other than
for cause; and
o seeking stockholder approval of an amendment to the
certificate of incorporation that would increase Aradyme's
authorized common stock from 50,000,000 shares to 100,000,000
shares to allow the issuance of all shares required on full
funding of the agreement.
The agreement also provides Eagle Rock Capital with a right of first
refusal to provide additional equity financing for a period of 18 months or
until the funding of all tranches under the agreement is complete.
ITEM 3.02--UNREGISTERED SALES OF EQUITY SECURITIES.
The information provided in Item 1.01 above is incorporated herein by
reference.
On December 12, 2005, Aradyme agreed to issue up to 15,000,000 shares
of common stock and warrants to purchase an additional 15,000,000 shares of
common stock (subject to certain adjustments) to one accredited investor. The
purchaser was an affiliate of one of Aradyme's directors and negotiated the
terms of the transaction directly with Aradyme's executive officers. No general
solicitation was used, no commission or other remuneration was paid in
connection with such transaction, and no underwriter participated. The purchaser
acknowledged, in writing, the receipt of restricted securities and consented to
a legend on the certificate issued and stop-transfer instructions with the
transfer agent. This transaction was effected in reliance on the exemption from
registration provided in Section 4(2) of the Securities Act of 1933, as amended,
for transactions not involving any public offering.
On December 12, 2005, Aradyme agreed to issue 500,000 shares of common
stock upon the conversion of unpaid convertible debt in the principal amount of
$200,000, at a conversion price of $0.40 per share. The purchaser was an
accredited investor. No general solicitation was used, no commission or other
remuneration was paid in connection with such transaction, and no underwriter
participated. The purchaser acknowledged, in writing, the receipt of restricted
securities and consented to a legend on the certificate issued and stop-transfer
instructions with the transfer agent. This transaction was effected in reliance
on the exemption from registration provided in Section 4(2) of the Securities
Act of 1933, as amended, for transactions not involving any public offering.
ITEM 7.01--REGULATION FD DISCLOSURE
On December 16, 2005, Aradyme Corporation issued a press release, a
copy of which is attached as Exhibit 99.01.
The information in this Item 7.01, including the exhibit, is being
furnished pursuant to Item 7.01 of Form 8-K and General Instruction B.2
thereunder. Such information shall not be deemed "filed" for purposes of Section
18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to
the liabilities of that section, nor shall it be deemed incorporated by
reference in any filing under the Securities Exchange Act of 1933, as amended.
ITEM 9.01--FINANCIAL STATEMENTS AND EXHIBITS
The following are exhibits to this report:
Exhibit
Number Title of Document Location
10 Material Contracts
- -------------- ----------------------------------------------- ---------------
10.22 Stock Purchase Agreement between Aradyme To be filed
Corporation and Eagle Rock Capital, LLC,
dated December 12, 2005
10.23 Registration Rights Agreement between Aradyme To be filed
Corporation and Eagle Rock Capital, LLC, dated
December 12, 2005
10.24 Form of Warrant to be Issued Pursuant to Stock To be filed
Purchase Agreement between Aradyme Corporation
and Eagle Rock Capital, LLC, dated
December 12, 2005
10.25 Employment Agreement between Aradyme Corporation To be filed
and James R. Spencer, dated December 12, 2005
10.26 Employment Agreement between Aradyme Corporation To be filed
and Scott A. Mayfield, dated December 12, 2005
10.27 Employment Agreement between Aradyme Corporation To be filed
and Merwin D. Rasmussen, dated December 12, 2005
10.28 Conversion Agreement between Aradyme Corporation To be filed
and Shan Lassig, dated December 12, 2005
99 Miscellaneous
- -------------- ----------------------------------------------- ---------------
99.01 Press release dated December 16, 2005 Attached
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ARADYME CORPORATION
Registrant
Dated: December 16, 2005 By: /s/ James R. Spencer
---------------------------
James R. Spencer,
Chief Executive Officer