UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
Initio, Inc.
(Name of Issuer)
Common Stock, $.01 Par Value
(Title of Class of Securities)
457203-10-7
(CUSIP Number)
Robert A. Lerman
(Reporting Person)
Arnold N. Bressler, Esq.
One Pennsylvania Plaza, 49th Floor, New York, New York 10119-
0165 - (212) 594-5300
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
December 23, 1998
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box _.
Check the following box if a fee is being paid with the statement _. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such
class.)(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are
to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior coverage page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section
of the Act but shall be subject to all other provisions of the Act (however,
see the Notes).
I:\INIT\80039IM.007
CUSIP NO. 457203-10-7 PAGE 1
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
ROBERT A. LERMAN
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* a. o
b. o
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
PF, OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e):
o
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
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NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7 SOLE VOTING POWER
17,165
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8 SHARED VOTING POWER
1,327,405
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9 SOLE DISPOSITIVE POWER
17,165
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10 SHARED DISPOSITIVE POWER
1,327,405
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,344,570
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
o
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
22.6%
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14 TYPE OF REPORTING PERSON*
IN
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Item 1.
This Schedule 13D relates to the Debenture described below and the
shares of common stock, par value $.01 per share, to be issued upon
conversion of the Debenture (the "Common Stock"), of Initio, Inc., a Nevada
corporation (the "Company"). The address of the principal executive office
of the Company is 2500 Arrowhead Drive, Carson City, Nevada 89706.
Item 2. Identity and Background.
1. (a) Robert A. Lerman
(b) Mr. Lerman's business address is 651 Day Hill Road,
Windsor, Connecticut 06095.
(c) Mr. Lerman is a director of the Company.
(d-e) During the last five years, Mr. Lerman has not been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) and was not a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to,
Federal or state securities laws or finding any violations with respect to
such laws.
(f) Mr. Lerman is a citizen of the United States.
Item 5. Interest in Securities of the Issuer.
(a)-(b) Mr. Lerman is the beneficial owner of 1,019,895 shares plus
324,675 shares of the Company's common stock, assuming conversion of the
First Debenture and the Second Debenture, each issued in the name "Pioneer
Ventures Associates Limited Partnership" in addition to his other holdings.
This represents 22.6% of the Company's issued and outstanding shares. Mr.
Lerman's beneficial ownership is comprised of (i) 1,000,000 shares and the
right to convert a the First Debenture into 1,000,000 shares and the Second
Debenture into 324,675 shares (the 1,000,000 shares and the 324,675 shares
are collectively referred to as the "Conversion Shares"); the Conversion
shares may be acquired by PVALP upon conversion of the First Debenture and
the Second Debenture (as more fully described below) over which Mr. Lerman
would have shared voting and dispositive power, if converted; (ii) 4,400
shares held by Robert and Ellen Lerman over which he has shared voting and
dispositive power; (iii) 1,960 and 3,500 shares held by Texas Enterprises,
Inc. and Pioneer Capital Corp.; respectively, which Mr. Lerman, as the owner
of 50% of the issued shares of such corporations has shared voting and
dispositive power; (iv) 9,935 shares held by the Robert A. Lerman Money
Pension Plan & Trust, over which Mr. Lerman, as Trustee of the trust has sole
voting and dispositive power; and (v) 100 shares held by Ellen Lerman, his
wife.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
Robert A. Lerman, a director of the Company, is the President and a
director of Pioneer Ventures Corp., the managing member of Ventures
Management Partners LLC, the General Partner of Pioneer Ventures Associates
Limited Partnership ("PVALP"); said general partner holds a 1% pecuniary
interest in the Debentures and underlying securities. Further, Mr. John F.
Ferraro, also an officer and director of Pioneer Ventures Corp., along with
Mr. Lerman, serve as the sole two members of the Investment Committee of
PVALP having the sole dispositive and voting authority over the subject
securities.
On February 25, 1998, the Company entered into the Debenture Commitment
Agreement with PVALP pursuant to which PVALP has agreed to make certain loans
to the Company to be repaid by the Company in accordance with the terms of
convertible subordinated debentures (the "Debentures"). On February 25, 1998
PVALP loaned $3,000,000 to the Company and the Company has issued the First
Subordinated Debenture due May 1, 2003 (the "First Debenture"). On December
23, 1998 PVALP loaned $500,000 to the Company and the Company has issued the
Second Subordinated Debenture due December 23, 2003 (the "Second Debenture").
The First Debenture is convertible in whole or in part at any time into
that number of shares of Common Stock obtained by dividing the principal
amount of the Debenture surrendered for conversion by the conversion price of
$3.00 per share.
The Second Debenture is convertible in whole or in part at any time
into that number of shares of Common Stock obtained by dividing the principal
amount of the Debenture surrendered for conversion by the conversion price of
$1.54 per share.
The First Debenture required the principal stockholders of the Company
(the "Principal Stockholders") to enter into a Voting Agreement with PVALP.
The Voting Agreement provides that so long as there is any unpaid
principal amount or interest outstanding under the Debentures or for so long
as PVALP owns the Conversion Shares, the Principal Stockholders will vote all
of their Common Stock for the election of PVALP's designee as a director of
the Company. Such designee is Mr. Lerman who has been elected by the
Company's Board of Directors. In addition, in the event of a default under
the Debenture Commitment Agreement, the Principal Shareholders agree to elect
that number of nominees to the Board of Directors designated by PVALP such
that the Board of Directors becomes comprised of a majority of nominees of
PVALP. The Principal Shareholders also agree to vote in favor of the PVALP
nominees so long as any interest or principal remains unpaid, or for so long
as PVALP owns the Conversion Shares.
The Voting Agreement also provides that the Principal Shareholders may
not transfer any Common Stock to any affiliate without PVALP's prior written
consent. "Affiliate" is defined in the Voting Agreement as (a) any spouse,
parent, parent-in-law, grandparent, grandchild, sibling, uncle, aunt, niece,
nephew or first cousin of the transferor or (b) any person which the
transferor directly or indirectly controls or (c) any transfer to a person if
the transferor remains a beneficial owner, as that term is used in Section
13(d) of the Securities Exchange Act of 1934, as amended, of the transferred
shares.
Reporting Person disclaims any beneficial ownership in the Debentures
or underlying common stock and this filing is not an admission of any claim
of beneficial ownership or of any pecuniary interest in such securities
except for 1% pecuniary interest held by the general partner.
Item 7. Material to be Filed as Exhibits.
The following are attached as exhibits hereto:
Exhibit 1. Debenture Commitment Agreement, dated as of February
25, 1998, by and between the Company and PVALP incorporated by reference to
Schedule 13D dated February 25, 1998 of Martin Fox.
Exhibit 2. Second Convertible Subordinated Debenture due
December 23, 2003 incorporated by reference to Schedule 13D dated as of
December 23, 1998 of Martin Fox.
Exhibit 3. Voting Agreement, dated as of February 25, 1998, by
and between PVALP and the Principal Stockholders incorporated by reference to
Schedule 13D dated February 25, 1998 of Martin Fox.
SIGNATURES
After reasonable inquiry, and to the best of the knowledge and belief
of the undersigned, the undersigned hereby certifies that the information set
forth in this statement is true, complete and correct.
/s/ Robert A. Lerman
Dated as of: December 23, 1998 Robert A. Lerman
Intentional misstatements or omissions of fact constitute Federal criminal
violations (see 18 U.S.C. 1001)
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Schedule 13D
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