On Wednesday, Avatech Solutions announced the winners of their 4th annual rendering contest. The next day, the company quietly filed a form with the American Securities and Exchange Commission, revealing that it had dropped its relationship with Dassault Systemes.
Two years ago, Avatech became a Dassault SmartTeam dealer, with Dassault giving Avatech a loan of US$1.5 million. Yesterday, the two companies agreed to discontinue the relationship:
- Avatech agrees to help move its SmartTeam customers to Dassault.
- Avatech accelerates repayment of the loan, now at $1,455,882 plus interest, by 2007.
(In two years, Avatech had paid off just $44,118, but now plans to pay off over $1.5 million in two more years?)
Just my speculation here, but I think this is happening because:
(1) Dassault wants to eliminate distributors -- it is also has been buying out parts of RAND.
(2) Avatech wasn't selling many copies of SmartTeam -- I am guessing repayment of the loan was tied to SmartTeam sales. This is partially confimed by the statement "...K Bank, the [Avatech] Subsidiary's principal lender pursuant to an accounts receivable-based credit facility...".
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