SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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): June 15, 1998
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1MAGE SOFTWARE, INC.
(Exact name of registrant as specified in its charter)
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Colorado 0-12535 84-0866294
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification No.)
incorporation)
6486 South Quebec Street
Englewood, Colorado 80111
(Address of principal executive offices)
Registrant's telephone number, including area code: (303) 694-9180
ITEM 5 - OTHER EVENTS
See the Registrant's press release, labeled Attachment A, and the
Letter of Intent, between the Registrant and SupraLife International,
Inc., labeled Attachment B, attached hereto and incorporated by reference
to this report.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Englewood, State of
Colorado, on June 30, 1998.
1MAGE SOFTWARE, INC.
By:/s/David R. DeYoung
David R. DeYoung
President
ATTACHMENT A
1MAGE
Software, Inc.
News Release Contact: 1MAGE Software, Inc.
303.773.1424
[email protected]
FOR IMMEDIATE RELEASE
1mage Signs Letter of Intent to Acquire SupraLife International
ENGLEWOOD, Colorado - (June 15, 1998) -- 1MAGE Software, Inc.
(NASDAQ:ISOL) announced today that it has signed a non-binding letter of
intent to acquire SupraLife International, a privately held company based
in San Diego, California, in exchange for shares of 1MAGE Software common
stock. The transaction is subject to due diligence review by both
parties, negotiation of a definitive agreement and shareholder approval by
both parties.
SupraLife International has a strong presence in the direct sales
industry, develops, manufactures, and distributes health, personal care,
sports & fitness and weight management products in all 50 states, as well
as in the United Kingdom and the Netherlands. SupraLife International has
an independent sales force comprised of nearly 50,000 distributors and
preferred customers. SupraLife's gross revenues have grown from $10.5
million in 1995 to $29.1 million in 1997.
"We are very excited about combining with a corporate partner that has
extensive knowledge in establishing and managing a world-wide distributor
network," said David DeYoung, President of 1MAGE Software. "We face
similar challenges and opportunities and should benefit tremendously from
SupraLife's marketing expertise as we grow our domestic and international
sales network," added DeYoung.
John Wilson, President of SupraLife International, said "This powerful
combination has the potential to provide SupraLife access to the financial
markets which will help to fund increased growth and facilitate expansion
of sales and product distribution in the United States, Europe, and the
Asian Pacific markets. This business transaction should also result in
long-term value and liquidity for our existing shareholders and give
independent distributors their first opportunity to acquire an equity
interest in the company that they are building through their marketing,
sales and distribution efforts."
1MAGE Software, Inc. is the leading provider of electronic imaging systems
to end users of Ardent Software, Inc. 1MAGE(R) is marketed through a
direct sales force and through an international network of Value Added
Resellers. For additional information, contact 1MAGE at 303.773.1424 or
visit our web site at www.1mage.com or SupraLife's web site at
www.toddy.com.
Statements expressing beliefs and expectations regarding future
performance are forward-looking and involve risks and uncertainties,
including, but not limited to the successful completion of the proposed
transaction, competitive pressures, quarterly flucuations in results and
other risks. These risks are detailed from time to time in the Company's
periodic filings with the Securities and Exchange Commission. Actual
results may differ materially from management's expectations.
ATTACHMENT B
June 5, 1998
Mr. David R. DeYoung
President
1mage Software, Inc.
6486 South Quebec Street
Englewood, CO 80111
RE: SupraLife International/1mage Software
Letter of Intent
Dear David:
The purpose of this letter is to express our mutual interest and
intention to enter into a business arrangement pursuant to which 1mage
Software, Inc., a Colorado corporation ("1mage"), will acquire all of the
shares of SupraLife International, Inc. ("SupraLife").
1. STRUCTURE. The transaction would be structured as a statutory
merger whereby 1mage would acquire all of the stock of SupraLife
International, Inc., in return for a number of newly issued shares of
common stock of 1mage sufficient to give the current shareholders of
SupraLife eighty percent (80%) of the outstanding shares of the combined
company ("Supra1mage"). All existing options, warrants and convertible
securities of 1mage and SupraLife would continue to be effective on the
same terms and conditions as were in existence prior to the merger, with
the SupraLife instruments adjusted to reflect the exchange ratio utilized
in the transaction. The transaction would be structured, if possible, to
qualify for "pooling of interest" treatment under SEC accounting rules.
2. DUE DILIGENCE. In reliance on our mutual agreement to and
acceptance of this letter of intent, each party will commence a due
diligence investigation of the other. Each party shall afford the other
and its agents and representatives reasonable access to all information
concerning their respective businesses and assets, business plans,
financial condition, litigation, and material contracts for the purpose of
making such due diligence investigation or examination as deemed necessary
by the other party. Neither party will communicate with any employee of
the other party without prior written consent.
3. CHANGE OF NAME. Following the Closing, the corporate name of
1mage shall be changed to another name selected by the newly constituted
Supra1mage Board of Directors.
4. EMPLOYMENT AGREEMENTS. As a condition of the Closing and
effective as of Closing, Supra1mage shall enter into five-year employment
agreements with David DeYoung, Mary Anne DeYoung, and John Wilson (the
"Executive Officers"). The DeYoung agreements shall provide for a
continuation of their current base salaries ($125,000 and $90,000,
respectively), with increases based on increases in compensation for
executives in the software industry generally or based on increases in the
cost of living, whichever are greater, and a minimum annual cash bonus
equal to ten percent (10%) of such base salary for the term of the
employment agreement. Salary, benefits and bonuses will be payable for
the lesser of the remaining term of the employment agreement or a period
of four years after any involuntary termination (defined to include
voluntary resignation after a significant change in duties,
responsibilities, benefits or place of work). The Executive Officers
shall be included in all employee benefit programs of Supra1mage, which
may not be less than the benefits currently provided to any of them. The
Wilson agreement shall be structured as an extension of Wilson's current
employment agreement so that the remaining term is five years, with the
existing incentive bonus provisions based on the operations of Supra1mage.
5. SALES COMMISSION. David DeYoung shall be entitled to a sales
commission of 20% of the net proceeds of any sale by Supra1mage of all or
a substantial portion of the assets currently held by 1mage. Mr. DeYoung
shall also have the right of first refusal to purchase those assets on the
same terms and conditions as offered by a third party. In the event
Supra1mage receives consideration other than cash, any sales commission
which may be payable to David also shall be payable in the form of the
same non-cash consideration in the same proportion that the non-cash
consideration bears to the entire sale price.
6. EXISTING OPTIONS AND WARRANTS. While all specifically
enumerated options and warrants to purchase shares of stock in 1mage shall
survive the Closing, unless it is prohibited by "pooling of interest"
accounting rules, Mr. DeYoung shall waive his existing right to a
proportionate match, via the mandatory grant of additional stock options
to him, of any third party acquisition of 1mage stock. It is acknowledged
that the stock options and warrants currently held by the DeYoungs were
repriced on January 15, 1998 to fair market value as of that date.
7. REVERSE STOCK SPLIT. While it is the intent of the parties to
avoid a reverse stock split to preserve the public float of and the
shareholder value in Supra1mage stock, the shareholders of 1mage and
SupraLife will be asked to grant the Supra1mage Board of Directors the
authority to effect a reverse stock split if, in their judgment, such
action is necessary to satisfy Nasdaq listing standards.
8. CLOSING. The parties shall agree on a closing date ("Closing")
which they anticipate will be on or before August 15, 1998.
9. BUSINESS OPERATIONS. The parties anticipate that key employees
and existing facilities of SupraLife and 1mage will be retained for an
indefinite period following the Closing.
10. DEFINITIVE AGREEMENT. Upon execution of this letter by both
parties, the parties will promptly begin to negotiate, in good faith, the
terms of a definitive agreement ("Definitive Agreement"). The Definitive
Agreement will be in a form customary for transactions of this type and
will include, in addition to those matters specifically set forth in this
letter, customary representations, warranties, covenants and agreements,
conditions of closing and other provisions.
11. CONTINGENCIES. SupraLife and 1mage recognize that the
consummation of this transaction is contingent upon the occurrence of a
number of future events, including, but not limited to, the following:
1) the satisfactory completion of a "due diligence" review by each
party;
2) the preparation and execution by the parties of a Definitive
Agreement, including terms and conditions, such as representations,
warranties, covenants, and indemnities, which are mutually acceptable to
the parties.
12. TERMINATION. The parties intend to use their best efforts to
execute the Definitive Agreement on or prior to July 17, 1998. If the
Definitive Agreement is not signed by that date, this letter will
terminate (except with respect to sections 13, 14 and 17.)
13. NONDISCLOSURE. Neither SupraLife nor 1mage will, without the
other party's prior written consent, disclose to any person or entity
(other than their respective employees or agents who are actively and
directly participating in evaluating the proposed transaction) any
information about the proposed transaction or the terms, conditions, or
other facts relating thereto, including the fact that discussions are
taking place or the status thereof. If either party determines that it
does not wish to proceed with the proposed transaction, that party will
promptly advise the other party of that decision. In such a case, or if
the Definitive Agreement is not executed by July 17, 1998, each party
shall promptly deliver to the other party or destroy all documentation
furnished by the other party, and copies and summaries thereof, and
certify that all such materials have been returned or destroyed.
14. PUBLIC ANNOUNCEMENTS. Subject to applicable law, any public
announcement relating to this transaction shall be mutually agreed upon
and jointly made by the parties.
15. FILING AND APPLICATION. Each party shall cooperate fully with
the other party in furnishing any necessary information required in
connection with (i) the preparation, distribution and filing with the
Securities and Exchange Commission ("SEC"), in each case, if necessary, of
a Form 8-K, a proxy statement and any other filing or document required by
the SEC, and (ii) the preparation, distribution and filing of any filings,
applications and motions which may be required by other federal, state and
local government or regulatory agencies or stock exchanges in any
jurisdiction, including the United States and Europe.
16. CONDUCT OF BUSINESS BY 1MAGE. Pending execution of the
Definitive Agreement, SupraLife and 1mage (i) will conduct their
respective businesses in the ordinary course and use their best efforts to
maintain their businesses and assets and retain their key employees, (ii)
will not issue or agree to issue any additional shares of common stock or
any other voting security or any rights to acquire any such additional
common stock or voting security, except for shares issuable upon the
exercise of previously granted employee stock options, if any, and (iii)
will not authorize or consummate any dividend or distributions of assets
to their respective shareholders, effect any consolidation, merger or sale
of assets other than in the ordinary course of business, purchase all or
substantially all of the assets of any entity, or engage in any other
extraordinary corporate transaction.
17. FEES AND EXPENSES. All fees, costs and expenses relating to the
preparation of this letter, the Definitive Agreement and all other matters
in connection with the acquisition, including but not limited to legal,
accounting, and filing fees, will be borne by the party incurring the
same; provided, however, that in the event of a dispute between the
parties arising out of this letter or the Definitive Agreement, the
prevailing party shall be entitled to recover its legal fees and all
reasonable costs and expenses.
18. NO BINDING EFFECT. This letter constitutes an expression of
intent only and, other than the obligations and allocations of
responsibility provided by sections 13, 14 and 17 hereof, does not create
a legally binding or enforceable contract between the parties. The
statements of intent in this letter of intent shall not be deemed to
constitute an offer or solicitation of an offer and do not create any
rights or obligations for or on the part of any party to this letter of
intent. The parties further acknowledge that it would be imprudent and
unreasonable for either party to rely upon the expectation of entering
into a binding agreement regarding the subject matter of this letter.
Efforts by either party to complete due diligence, negotiate, obtain
financing or prepare a Definitive Agreement shall not be considered as
evidence of intent by either party to be bound by this letter except as
expressly provided herein. The performance by either party prior to
execution of a Definitive Agreement of any of the obligations which may be
included in a Definitive Agreement between the parties when negotiations
are completed shall not be considered as evidence of intent by either
party to be bound by this letter.
19. COUNTERPARTS. This letter of intent may be executed in two or
more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same document. The parties
may execute a copy of this letter of intent, which shall have the same
force and effect as if the parties executed the original document.
20. ENTIRE AGREEMENT. This letter of intent supersedes all prior
letters, discussions, representations, and understandings between the
parties relating to the subject matter hereof. No alteration,
modification, interpretation or amendment hereto shall be valid unless
signed by each of the parties.
21. GOVERNING LAW. This letter of intent will be governed by laws
of the State of California without giving effect to the principles of
conflicts of laws.
If the foregoing accurately reflects your understanding of the
proposed transaction under discussion and the intent of the parties as
provided by the provisions of section 18 hereof, please sign and date the
enclosed copy of this letter where indicated below, and return the copy to
me.
This letter of intent shall have no effect unless fully executed on
or before June 5, 1998.
We look forward to working with you to successfully close this
transaction.
Sincerely yours,
SUPRALIFE INTERNATIONAL
By:/s/John F. Wilson II
John F. Wilson II
President
ACCEPTED AND AGREED:
1MAGE SOFTWARE, INC.
By:/s/David R. DeYoung
David R. DeYoung
President
Dated: June 5, 1998
