Infinite Group, Inc.
(Exact
name of registrant as specified in its charter)
Delaware
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000-21816
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52-1490422
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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175 Sully’s Trail, Suite 202, Pittsford, New
York
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14534
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code:
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(585) 385-0610
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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))
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class
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Trading
Symbol(s)
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Name of
each exchange on which registered
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N/A
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N/A
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N/A
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Indicate
by check mark whether the registrant is an emerging growth company
as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange
Act of 1934 (§240.12b-2 of this
chapter).
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Emerging
growth company ☐
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If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange
Act. ☐
Item
1.01
Entry into a Material Definitive Agreement.
Mast Hill Loan
On November 3, 2021, Infinite Group, Inc. (the
“Company”), as borrower, entered into a financing
arrangement (the “Loan”) with Mast Hill Fund, L.P. (the
“Lender”), a Delaware limited partnership.
In exchange for a promissory note,
Lender agreed to lend the Company $448,000.00, which bears
interest at a rate of eight percent (8%) per annum, less $44,800
original issue discount. Under the terms of the Loan, amortization
payments are due beginning March 3, 2022, and each month thereafter
with the final payment due on November 3, 2022. Additionally, in
the event of a default under the Loan or if the Company elects to
pre-pay the Loan, the Lender has the right to convert any portion
or all of the outstanding and unpaid principal and interest into
fully paid and non-assessable shares of the Company’s common
stock at a conversion price of $0.10 per share. The conversion
price is subject to adjustment under certain circumstances,
including issuances of Company common stock below the conversion
price. The Company is not required to
issue additional shares to Lender in the event an adjustment to the
conversion price occurs. Except for the option to convert the
note in the event of a pre-payment, there is no pre-payment penalty
associated with the promissory note. The Loan is subject to
customary events of default, including cross-defaults on the Loan
agreements and on other indebtedness of the Company, violations of
securities laws (including Regulation FD), and failure to issue
shares upon a conversion of the note. Amounts due under the Loan
are subject to a 15% penalty in the event of a default. As
additional consideration for the financing, the Company issued
Lender a 5-year warrant to purchase 1,400,000 shares of Company
common stock at a fixed price of $0.16 per share, subject to price
adjustments for certain actions, including dilutive issuances,
representing 50% warrant coverage on the principal amount of the
Loan. The Company has granted the Lender customary
“piggy-back” registration rights with respect to the
shares issuable upon conversion of the promissory note and exercise
of the warrant. No material relationship exists between the Company
or its affiliates and Lender, other than in respect of the
Loan.
J.H.
Darbie & Co., Inc. ( “Finder”), a registered
broker-dealer, acted as a finder in connection with the Loan, and
was paid a cash fee of $20,160 (5% of the gross proceeds of the
Loan) and issued a 5-year warrant to purchase 160,125 shares of
Company common stock at a fixed price of $0.192 per share (120% of
the exercise price of the warrant issued in connection with the
Loan), subject to price adjustments for certain actions, including
dilutive issuances, representing 7% warrant coverage on the gross
proceeds of the Loan. The Company has granted the Finder customary
“piggy-back” registration rights with respect to the
shares issuable upon exercise of the warrant.
Popper Subscription Agreement
On November 2, 2021, the Company entered into a
subscription agreement (the “Subscription Agreement”)
with its Vice President of Business Development, Richard Popper.
Pursuant to the Subscription Agreement, Mr. Popper agreed to
purchase an aggregate amount of 1,000,000 shares of the
Company’s common stock, par value $0.001 per share, at $0.10
per share, in exchange for the conversion and cancellation
of an aggregate of $100,000 principal amount of an existing
promissory note held by Mr. Popper.
The closing of the Subscription Agreement occurred concurrently
with the execution of the Subscription
Agreement.
Item 2.03
Creation of a Direct Financial Obligation or an Obligation under an
Off-balance Sheet Arrangement of a Registrant.
The
information set forth above under Item 1.01 relating to the Loan is
incorporated by reference into this Item 2.03.
Item
3.02
Unregistered
Sales of Equity Securities.
The information set forth above under Item 1.01
relating to the Subscription Agreement is incorporated by reference
into this Item 2.03. The shares of Common
Stock issued pursuant to the Subscription Agreement were not
registered under the Securities Act of 1933, as amended (the
“Securities Act”), and were issued in reliance on the
exemption from registration requirements thereof provided by
Section 4(a)(2) of the Securities Act.
Item
9.01
Financial
Statements and Exhibits.
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.
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Infinite Group, Inc.
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Date: November
8, 2021
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By:
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/s/
James Villa
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James
Villa
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Chief
Executive Officer
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Infinite (CE) (USOTC:IMCI)
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