INFINITE GROUP INC: Entering into a Material Definitive Agreement, Creating a Direct Financial Obligation or Obligation Under an Off-Balance Sheet Arrangement of a Registrant, Unregistered Sale of Equity Securities, Financial Statements and Exhibits (Form 8-K)

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Section 1.01 Entering into a Material Definitive Agreement.


Mast Hill Loan


At February 15, 2022, Infinite Group, Inc. (the “Company”), as borrower, has entered into a financing agreement (the “Loan”) with Mast Hill Fund, LP (the “Lender”), a Delaware limited partnership from February 11, 2022. The loan was then funded and, February 18, 2022the loan documents have been amended to make the loan effective as of February 15, 2022. The following loan description gives effect to this change. In exchange for a promissory note, the lender agreed to lend to the company $370,000.00which bears interest at the rate of eight percent (8%) per annum, less $37,000.00 Discount on the original edition. Under the terms of the loan, amortization payments are due from June 15, 2022and monthly thereafter with final payment due on
February 15, 2023. In addition, in the event of default under the Loan or if the Company elects to prepay the Loan, the Lender has the right to convert all or part of the unpaid and unpaid principal and interest into fully paid and tax-free shares. . ordinary shares of the Company at a conversion price of $0.10 per share. The conversion price is subject to adjustment in certain circumstances, including issues of ordinary shares of the Company below the conversion price. The Company is not required to issue additional shares to the lender in the event of an adjustment to the conversion price. With the exception of the option to convert the note in the event of prepayment, there is no prepayment penalty associated with the promissory note. The loan is subject to customary events of default, including cross-defaults on loan agreements and other indebtedness of the Company, violations of securities laws (including the FD Regulation) and default of issue of shares upon conversion of the note. Amounts due under the Loan are subject to a 15% penalty in the event of default. In consideration for the financing, the Company issued to the lender a 5-year warrant to purchase 925,000 common shares of the Company at a fixed price of $0.16 per share, subject to price adjustments for certain shares, including dilutive issues, representing a 40% warrant cover on the principal amount of the loan. The Company has granted the lender customary “stack” registration rights in respect of 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 the Lender, other than with respect to the Loan and a similar loan between the Company and the Lender entered into on November 2, 2021.

JH Darbie & Co., Inc. (“Finder”), a registered dealer, acted as intermediary in connection with the loan and received cash compensation from $14,650.00 (4.39% of the gross proceeds of the Loan) and issued a 5-year warrant to purchase 121,407 common shares of the Company at a fixed price of $0.192 per share (120% of the exercise price of the warrant issued under the Loan), subject to price adjustments for certain shares, including dilutive issues, representing a coverage of 7% of the warrant on the gross proceeds of the Loan. The Company has granted to the Intermediary customary “stack” registration rights in respect of the Shares issuable upon exercise of the Warrant.

Section 2.03. Creation of a direct financial obligation or an obligation under an off-balance sheet arrangement of a registrant.

The information set out above in Section 1.01 relating to the Loan is incorporated by reference in this Section 2.03.

Item 3.02 Unrecorded Sales of Equity securities.

The information set out above in point 1.01 relating to the Subscription Agreement is incorporated by reference in this Point 2.03. The ordinary shares issued pursuant to the subscription agreement have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and have been issued on the basis of the exemption from the registration requirements thereof provided by Section 4(a)(2) of the Securities Act.

Item 9.01 Financial statements and supporting documents.


Exhibit No.   Description
  10.1          Stock Purchase Agreement, dated February 11, 2022, by and between
              Infinite Group, Inc. and Mast Hill Fund, L.P.
  10.2          Promissory Note, issued February 11, 2022, by Infinite Group, Inc.
              to Mast Hill Fund, L.P.
  10.3          Warrant, issued February 11, 2022, by Infinite Group, Inc. to Mast
              Hill Fund, L.P.
  10.4          Warrant, issued February 11, 2022, by Infinite Group, Inc. to J.H.
              Darbie & Co., Inc.
  10.5          Amendment No. 1, dated February 18, 2022, by and between Infinite
              Group, Inc. and Mast Hill Fund, L.P.
104           Cover Page Interactive Data File (embedded within the Inline XBRL
              document)





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