UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
(Amendment No. 2)
1mage Software, Inc.
(Name of Issuer)
Common Stock, $.004 par value)
(Title of Class of Securities)
45244 M 102
(CUSIP Number)
S. Lee Terry, Jr.
Gorsuch Kirgis LLP
Tower I, Suite 1000
1515 Arapahoe Street
Denver, Colorado 80202
(303) 376-5000
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
March 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 Sections 240.13d-1(e), 240.13d-1(f), or
240.13d-1(g), check the following box [ ].
Check the following box if a fee is being paid with this statement
[ ].
CUSIP No. 45244 M 102
1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Spencer D. Lehman
2) Check the Appropriate Box if a Member of a Group*
(a)
(b)
3) SEC USE ONLY
4) Source of Funds
PF
5) Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
6) Citizenship or Place of Organization
U.S.
Number of Shares 7) Sole Voting Power 238,436
Beneficially Owned 8) Shared Voting Power 0
By Each Reporting 9) Sole Dispositive Power 238,436
Person With 10) Shares Dispositive
Power 0
11) Aggregate Amount Beneficially Owned by Each Reporting Person
238,436
12) Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
13) Percent of Class Represented by Amount in Row (11)
10.4%
14) Type of Reporting Person
IN
SCHEDULE 13D/A
AMENDMENT NO. 2
SPENCER D. LEHMAN
Item 1 Security and Issuer
$.004 par value Common Stock ("the Shares") of 1mage Software,
Inc. (the "Company"), 6486 S. Quebec, Englewood, Colorado 80111
Item 2 Identity and Background
(a) Name: Spencer D. Lehman
(b) Business 1250 Fourth Street
Address: Santa Monica, California 90401
(c) Principal
Occupation: Registered Representative
Drake Capital
1250 Fourth Street
Santa Monica, California 90401
(d) Criminal Proceedings: None
(e) Civil Proceedings: None
(f) Citizenship: U.S.
Item 3. Source and Amount of Funds or Other Consideration
As of March 23, 1998, with four sales for an aggregate of 25,000
Shares and three purchases for an aggregate of 19,000 Shares
with personal funds by Mr. Lehman, and interest earned on two
promissory notes from the Company convertible into 138,867
Shares (See Item 4), there was a cumulative increase in the
number of beneficial Shares owned.
Item 4. Purpose of Transaction
The Shares were acquired for investment purposes.
(a) Mr. Lehman has two convertible promissory notes issued by
the Company, one with a face value of $50,000 convertible
as of March 23, 1998 into 80,000 Shares at $0.625 per
Share, and another with a face value of $25,000 convertible
as of March 23, 1998 into 40,000 Shares at $0.625 per
Share, plus interest on both notes convertible as of March
23, 1998 into 18,867 Shares at $0.625 per Share.
(b) None.
(c) None.
(d) None.
(e) None.
(f) None.
(g) None.
(h) None.
(i) None.
(j) None.
Item 5. Interest in Securities of the Issuer
(a) 238,436 Shares of Common Stock (10.4%) beneficially owned
(based on the 2,142,845 Shares reported to be outstanding on
November 7, 1997 in the Company's Quarterly Report on Form 10-Q
for the fiscal quarter ended September 30, 1997), which includes
two convertible promissory notes convertible into 138,867 Shares
as of March 23, 1998.
(b) Number of Shares as to which there is sole power to vote -
238,436; shared power to direct the vote - 0; sole power to
direct the disposition - 238,436; shared power to direct the
disposition - 0.
(c) Mr. Lehman sold 7,500 Shares at $1.06 per Share on July 17,
1997, 15,000 Shares at $1.29 per Share on July 18, 1997, 1,500
Shares at $1.57 per Share on August 21, 1997 and 1,000 Shares at
$1.71 per Share on August 26, 1997, and purchased 2,000 Shares
at $0.50 per Share on January 30, 1998, 7,000 Shares at $0.375
per Share on February 18, 1998, and 10,000 Shares at $0.4375 per
Share on March 23, 1998, all of which transactions were in the
open market.
(d) None.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With
Respect to Securities of the Issuer
See Item 4.
Item 7. Material to be filed as Exhibits
First Allonge to $25,000 Convertible Note is attached
hereto as Exhibit A.
Second Allonge to $50,000 Convertible Note is attached
hereto as Exhibit B.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true,
complete and correct.
Date: March 25, 1998 /s/Spencer D. Lehman
Spencer D. Lehman
EXHIBIT A
ALLONGE
THIS ALLONGE, effective as of July 31, 1997, amends that certain
Convertible Promissory Note (the "Note") dated August 18, 1995 in the
principal amount of $25,000 payable to Paine Webber for the benefit of
Spencer D. Lehman, IRA ("Holder") by 1mage Software, Inc., a Colorado
corporation ("Maker").
RECITALS
WHEREAS, Maker and Holder wish to amend the Note to extend the term
of the Note and require Holder to give Maker 90 days' notice prior to
conversion of the Note.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Maker and Holder hereby agree
as follows:
The first, second and third paragraphs of the Note are hereby amended
to read as follows:
FOR VALUE RECEIVED, 1MAGE SOFTWARE, INC., a Colorado corporation (the
"Maker"), hereby promises to pay to the order of PAINEWEBBER FOR THE
BENEFIT OF SPENCER D. LEHMAN, IRA (the "Holder") on or before February 18,
2000, the principal sum of TWENTY-FIVE THOUSAND DOLLARS ($25,000),
together with interest on the unpaid balance accruing at a rate equal to
10% per annum to be paid on maturity.
At any time before this Note becomes due pursuant to the terms
hereof, the outstanding unpaid principal amount of this Note, and accrued
and unpaid interest thereon, in accordance with, and subject to, the terms
and conditions of this Note and the Agreement (as hereinafter defined),
may be converted, at the election of the Holder upon ninety (90) days'
prior written notice to Maker, into the number of shares of the Company's
common stock ("Common Stock") equal to the quotient of (x) the unpaid
principal amount of the Holder's Note plus any interest then accrued
divided by (y) $.625 per share.
No fractional share of Common Stock will be issued upon conversion of
this Note. In lieu of any fractional share of Common Stock to which the
Holder would otherwise be entitled, the Maker will pay the cash value of
such fraction, based on the rate specified above. In order to effect
conversion of the Note into shares of Common Stock, the Holder of the Note
shall surrender the Note, duly endorsed, together with a written request
to convert the Note to Common Stock at the principal offices of the Maker
or any transfer agent for the Maker's securities (as the case may be). At
its expense, the Maker shall, ninety (90) days after receipt of such
written notice from the Holder, issue and deliver to the Holder, an
instrument (bearing such legends as may be required, in the opinion of
legal counsel of the Company, by applicable state and federal securities
laws) evidencing the issuance of such Common Stock to which the Holder is
entitled upon conversion of this Note, together with any cash amounts
payable in lieu of the issuance of a fraction of a share of Common Stock
as described in this paragraph. Conversion shall be deemed to have been
made ninety (90) days after the duly endorsed Note and written request to
convert are received at the principal office of the Maker or an
appropriate transfer agent, and the Holder of the Note entitled to receive
the Common Stock issuable upon such conversion shall be treated for all
purposes as the record holder of such securities on such date. All Common
Stock issued upon conversion of this Note shall be duly authorized, fully-
paid and non-assessable.
Except as expressly amended herein, the Note shall remain the same.
In the event of a conflict between the terms of the Note and this
Allonge, the terms of this Allonge shall control.
This Allonge (a) may not be amended except by a writing signed by the
Maker and the Holder; and (b) shall be governed by Colorado law.
IN WITNESS WHEREOF, the parties hereto have caused this Allonge to be
executed as of the date first written above.
HOLDER: MAKER:
PAINEWEBBER FOR THE BENEFIT OF 1MAGE SOFTWARE, INC.
SPENCER D. LEHMAN
BY:/s/Spencer D. Lehman BY:/s/David R. DeYoung
Spencer D. Lehman David R. DeYoung, President
EXHIBIT B
SECOND ALLONGE
THIS SECOND ALLONGE, effective as of July 31, 1997, amends that
certain Convertible Promissory Note (the "Note") dated January 15, 1995 in
the principal amount of $50,000 payable to PaineWebber for the benefit of
Spencer D. Lehman, IRA ("Holder") by 1mage Software, Inc., a Colorado
corporation ("Maker"), as amended by that certain Allonge, dated and
effective as of January 7, 1997.
RECITALS
WHEREAS, Maker and Holder wish to amend the Note to extend the term
of the Note and require Holder to give Maker 90 days' notice prior to
conversion of the Note.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Maker and Holder hereby agree
as follows:
The first, second and third paragraphs of the Note are hereby amended
to read as follows:
FOR VALUE RECEIVED, 1MAGE SOFTWARE, INC., a Colorado corporation (the
"Maker"), hereby promises to pay to the order of PAINEWEBBER FOR THE
BENEFIT OF SPENCER D. LEHMAN, IRA (the "Holder") on or before February 18,
2000, the principal sum of FIFTY THOUSAND DOLLARS ($50,000), together with
interest on the unpaid balance accruing at a rate equal to 10% per annum
to be paid on maturity.
At any time before this Note becomes due pursuant to the terms
hereof, the outstanding unpaid principal amount of this Note, and accrued
and unpaid interest thereon, in accordance with, and subject to, the terms
and conditions of this Note and the Agreement (as hereinafter defined),
may be converted, at the election of the Holder upon ninety (90) days'
prior written notice to Maker, into the number of shares of the Company's
common stock ("Common Stock") equal to the quotient of (x) the unpaid
principal amount of the Holder's Note plus any interest then accrued
divided by (y) $.625 per share.
No fractional share of Common Stock will be issued upon conversion of
this Note. In lieu of any fractional share of Common Stock to which the
Holder would otherwise be entitled, the Maker will pay the cash value of
such fraction, based on the rate specified above. In order to effect
conversion of the Note into shares of Common Stock, the Holder of the Note
shall surrender the Note, duly endorsed, together with a written request
to convert the Note to Common Stock at the principal offices of the Maker
or any transfer agent for the Maker's securities (as the case may be). At
its expense, the Maker shall, ninety (90) days after receipt of such
written notice from the Holder, issue and deliver to the Holder, an
instrument (bearing such legends as may be required, in the opinion of
legal counsel of the Company, by applicable state and federal securities
laws) evidencing the issuance of such Common Stock to which the Holder is
entitled upon conversion of this Note, together with any cash amounts
payable in lieu of the issuance of a fraction of a share of Common Stock
as described in this paragraph. Conversion shall be deemed to have been
made ninety (90) days after the duly endorsed Note and written request to
convert are received at the principal office of the Maker or an
appropriate transfer agent, and the Holder of the Note entitled to receive
the Common Stock issuable upon such conversion shall be treated for all
purposes as the record holder of such securities on such date. All Common
Stock issued upon conversion of this Note shall be duly authorized, fully-
paid and non-assessable.
Except as expressly amended herein, the Note shall remain the same.
In the event of a conflict between the terms of the Note and this
Second Allonge, the terms of this Second Allonge shall control.
This Second Allonge (a) may not be amended except by a writing signed
by the Maker and the Holder; and (b) shall be governed by Colorado law.
IN WITNESS WHEREOF, the parties hereto have caused this Second
Allonge to be executed as of the date first written above.
HOLDER: MAKER:
PAINEWEBBER FOR THE BENEFIT OF 1MAGE SOFTWARE, INC.
SPENCER D. LEHMAN
BY:/s/Spencer D. Lehman BY:/s/David R. DeYoung
Spencer D. Lehman David R. DeYoung, President
