INFINITE GROUP INC (Form: 8-K, Received: 07/21/2017 11:34:43)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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): July 18, 2017

Infinite Group, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware		0-21816		52-1490422
(State or Incorporation)		(Commission File Number)		(I.R.S. Employer Identification Number)

175 Sully's Trail, Suite 202

Pittsford, NY 14534

Registrant's telephone number, including area code: 585-385-0610

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))

Section 1 – Registrant’s Business and Operations

Item 1.01. Entry into a Material Definitive Agreement

The information required by this item is stated in Item 2.03 which is incorporated herein by reference.

Section 2 – Financial Information

Item 2.03. Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of Registrant

On July 18, 2017, Infinite Group, Inc. (“IGI” or "the Company") entered into an unsecured line of credit financing agreement (the “Agreement”) with Andrew Hoyen, its Chief Operating Officer. The Agreement was approved by the Board of Directors (the “Board”). The Agreement provides for working capital to IGI of up to $100,000 through July 31, 2022. Borrowings bear interest at 6%. The interest rate is adjusted annually, on January 1st of each year, to a rate equal to the prime rate in effect on December 31st of the immediately preceding year, plus one and one quarter percent, and in no event, shall the interest rate be less than 6% per annum. Interes t is payable quarterly.

The outstanding principal amount is due and payable July 31, 2022, subject to acceleration by the lender upon (i) failure of IGI to pay any amount within 20 business days following the lender’s written notice of default and demand; (ii) IGI’s dissolution or liquidation; (iii) the voluntary or involuntary bankruptcy of IGI or the appointment of a receiver for it or for any of its property or similar events; or (iv) the entry against IGI of a judgment, which is not paid in accordance with its terms, satisfied, discharged, stayed or bonded within 90 days.

As payment of an origination fee under the Agreement, IGI granted Mr. Hoyen a stock option to purchase 400,000 shares of IGI's common stock, par value $.001 per share, at an exercise price of $.04 (four cents) per share. Such option becomes fully vested and exercisable on July 31, 2017.

On July 18, 2017, IGI borrowed $30,000 under the Agreement with proceeds to be used for working capital.

The foregoing summary of the Agreement is qualified in its entirety by reference to the Line of Credit and Note Agreement which is attached as Exhibit 10.1 hereto.

Section 3 – Securities and Trading Markets

Item 3.02. Unregistered Sales of Equity Securities

The information required by this item is stated in Items 2.03 and 5.02 which are incorporated herein by reference.

The securities were acquired for investment purposes only and not with a view to, or for sale in connection with, any distribution thereof, and contain customary restrictions on transfer. The issuances of the securities are exempt from registration under the Securities Act of 1933, as amended, by virtue of Section 4(a)(2) thereunder, as a transaction by an issuer not involving any public offering.

Section 5 – Corporate Governance and Management

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(d) On July 18, 2017, the Board appointed Andrew Hoyen, its Chief Operating Officer, to the Board, filling an existing vacancy on the Board. There is no existing family relationship between Mr. Hoyen and any director or other executive officer of IGI.

In connection with this appointment, on July 18, 2017, the Board granted Mr. Hoyen an option to purchase 100,000 shares of IGI common stock , par value $.001 per share, at an exercise price of at $.04 (four cents) per share which was immediately vested.

Exhibit No.		Description

10.1		Line of Credit and Note Agreement between the Company and Andrew Hoyen dated July 18, 2017
10.2		Stock option agreement between the Company and Andrew Hoyen dated July 18, 2017 for 400,000 common shares
10.3		Stock option agreement between the Company and Andrew Hoyen dated July 18, 2017 for 100,000 common shares

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



July 21, 2017	By:	/ s/ James Villa
		James Villa
		President and Chief Executive Officer

Exhibit 10.1

LINE OF CREDIT NOTE AND AGREEMENT

Between Infinite Group, Inc. and Andrew Hoyen.

Dated July 18, 2017

Whereas : Infinite Group, Inc., (“Company”) a Delaware corporation whose address is 175 Sully’s Trail, Suite 202, Pittsford, NY 14534, ("Borrower") desires to borrow One Hundred Thousand dollars ($100,000.00).

Whereas: Andrew Hoyen whose address is 3 Blandford Lane, Fairport, NY 14450 ("Lender"), desires to lend the Com pany the principal sum of One Hundred Thousand Dollars ($100,000.00).

Wherefore: The Borrower and Lender hereunder create this Note and Agreement between Borrower and Lender to memorialize the terms, conditions and consideration to effectuate the foregoing:

Origination Schedule	Date	Amount

Initial Loan	July 18, 2017	$30,000.00
Second Origination	To Be Determined	To Be Determined
Third Origination	To Be Determined	To Be Determined

PAYMENT TERMS: Borrower shall pay lender quarterly interest only payments during the term of the loan. Interest payments shall be due to the Lender within ten calendar days from each calendar quarter end. Each quarterly payment of interest shall be adjusted based on the principal outstanding for the actual number of number of days in each period and applying the interest rate.

INTEREST: Interest is calculated at the annual rate of 6% (six percent). The interest rate is adjusted annually, on January 1st of each year, to a rate equal to the prime rate in effect on December 31st of the immediately preceding year, plus one and one quarter percent, and in no event, shall the interest rate be less than 6% per annum. Interest shall be calculated based on the principal balance as may be adjusted from time to time to reflect additional advances and payments of principal made hereunder. Interest on the unpaid balance of this Note shall accrue daily.

DUE DATE: The outstanding principal balance of this Note shall be due and payable July 31, 2022. Borrower shall have the right, at its option and without prior notice to Lender, and without penalty, to prepay all or any part of the outstanding principal amount and accrued interest of this Note at any time.

FEE: In consideration for providing this financing, Borrower shall grant to Lender a stock option to purchase a total of 400,000 shares of the Company's Common Stock, par value $.001 per share at $.04 (four cents) per share. Such option shall become fully vested and exercisable on July 31, 2017. This option shall expire five years from the date hereof.

SHARES OFFERED FOR SALE: During the term of this note if the Lender or Lender’s successor offers the Company’s common shares for sale to a third party (not to include shares sold in open market transactions) Lender agrees to provide the Company with the right of first refusal to purchase the common shares on the same terms and conditions.

REGISTRATION RIGHTS: If the Borrower proposes to register any of its $.001 par value common stock (other than pursuant to a Registration on Form S-4 or S-8 or any successor form), it will give prompt written notice to the Lender of its intention to affect such Registration (the “Incidental Registration”). Within ten business days of receiving such written notice of an Incidental Registration, the Lender may make a written request (the “Piggy-Back Request”) that the Borrower include in the proposed Incidental Registration all, or a portion, of the Registrable Securities owned by the Lender (which Piggy-Back Request shall set forth the Registrable Securities intended to be disposed of by the Lender and the intended method of disposition thereof).

DEFAULT: The Borrower shall be in default of this Note on the occurrence of any of the following events:

(i)

failure of the Borrower to pay the principal amount of this Note together with accrued interest within twenty (20) business days following the Lender’s written notice of default and demand;

(ii)

the Borrower shall be dissolved or liquidated;

(iii)

the bankruptcy of Borrower or the filing by Borrower of a voluntary petition under any provision of the bankruptcy laws; the institution of bankruptcy proceedings in any form against Borrower which shall be consented to or permitted to remain undismissed or unstayed for ninety days; or the making by Borrower of an assignment for the benefit of creditors;

(iv)

the Borrower shall commence any case, proceeding, or other action under any existing or future law of any jurisdiction relating to bankruptcy, insolvency, reorganization or relief of debtors, or any such action shall be commenced against the undersigned;

(v)

the Borrower shall suffer a receiver to be appointed for it or for any of its property or shall suffer a material garnishment, attachment, levy or execution; or

(vi)

the taking of any judgment against Borrower, which judgment is not paid in accordance with its terms, satisfied, discharged, stayed or bonded within ninety (90) days from the entry thereof.

Upon the occurrence of any such Default event (Breach) Lender may demand the entirety of the outstanding amount due from Borrower to Lender.

No failure on the part of Lender to exercise, and no delay in exercising, any of the rights provided for in this Note and Agreement shall operate as a waiver thereof, nor shall any single or partial exercise by Lender of any right preclude any other or future exercise thereof or the exercise of any other right.

Borrower agrees to pay all costs and expenses incurred by Lender in enforcing this Note, including without limitation all reasonable attorney’s fees and expenses incurred by Lender.

This Note and Agreement shall be interpreted and construed according to, and governed by, the laws of the State of New York, excluding any such laws that might direct the application of the laws of another jurisdiction. All actions or suits in law or equity arising out of or related to this Note and Agreement shall be litigated in Supreme Court Monroe County, New York.

This Agreement and Note and any exhibits attached hereto constitutes the entire agreement between the parties concerning the subject matter hereof. All prior agreements, discussions, warranties and covenants are merged herein. This Agreement and Note may only be amended in writing and duly executed by all parties.

REMEDIES: Upon default of this Note, Lender may declare the entire amount due and owing hereunder to be immediately due and payable. Lender may also use all remedies in law and in equity to enforce and collect the amount owed under this Note.

Borrower hereby waives demand, presentment, notice of dishonor, diligence in collecting, grace and notice of protest.

RECORDS: Borrower shall maintain records in compliance with generally accepted accounting principles that provide sufficient details of each borrowing, payments of principal and interest, and computations of each periodic payment. Upon Lender’s request, Borrower shall reconcile such records to those of Lender to assure each party is in agreement of the principal amount outstanding, principal paid, interest paid, and interest accrued under the terms of this Note.

This Agreement has been duly and validly authorized, executed and delivered by the Company and this Agreement is the valid and binding agreement of the Company enforceable in accordance with its terms.

IN WITNESS WHEREOF , Borrower and Lender have caused this Note to be executed and delivered as set forth above.

Infinite Group, Inc.

By: __ /s/James Villa __________________

James Villa, President

Date: July 18, 2017

Andrew Hoyen

By: ___ /s/ Andrew Hoyen _______________

Date: July 18, 2017

Exhibit 10.2

INFINITE GROUP, INC.

Incentive Stock Option Agreement

Date: July 18, 2017

WHEREAS , Infinite Group, Inc., a Delaware corporation (the “ Company ”) hereby desires to compensate Andrew Hoyen (the “ Optionee ”) with an origination fee pursuant to the Company’s and the Optionee’s $100,000 line of credit and note agreement which extends through July 31, 2022 (“ Financing ”); and

WHEREAS , the Optionee desires to provide the Financing to the Company; and

WHEREAS, the Company and the Optionee desire that the Optionee be compensated for originating the Financing by the vesting of the options granted hereby.

NOW THEREFORE, the Company and the Optionee hereby agree as follows:

The Company pursuant to its 2009 Stock Option Plan (“the Plan”), hereby grants Andrew Hoyen (the “Optionee”) an incentive stock option to purchase a total of 400,000 shares of the Company’s Common Stock, par value $.001 per share, at the price of $.04 per share on the terms and conditions set forth herein and in the Plan. As used herein, the term “Company” includes any affiliates of the Company.

Duration.

(a)

This option shall become effective on the date of grant and shall be exercisable as for 400,000 shares on July 31, 2017.

(b) This option shall expire on July 31, 2022 (the “Termination Date”).

Written Notice of Exercise.

This option may be exercised only by the delivery to the Secretary or Treasurer of the Company at its principal office within the time specified in Paragraph 1, of a written notice of exercise substantially in the form described in Paragraph 8.

Anti-Dilution Provisions.

(a) If there is any stock dividend, stock split, or combination of shares of Common Stock of the Company, the number and amount of shares then subject to this option shall be proportionately and appropriately adjusted; no change shall be made in the aggregate purchase price to be paid for all shares subject to this option, but the aggregate purchase price shall be allocated among all shares subject to this option after giving effect to the adjustment.

(b)

If there is any other change in the Common Stock of the Company, including recapitalization, reorganization, sale of exchange of assets, exchange of shares, offering of subscription rights, or a merger or consolidation in which the Company is the surviving corporation, an adjustment, if any, shall be made in the shares then subject to this option as the Board of Directors may deem equitable. Failure of the Board of Directors to provide for an adjustment pursuant to this subparagraph prior to the effective date of any Company action referred to herein shall be conclusive evidence that no adjustment is required in consequence of such action.

(c)

If the Company is merged into or consolidated with any other corporation, or if it sells all or substantially all of its assets to any other corporation, then either (i) the Company shall cause provisions to be made for the continuance of this option after such event, or for the substitution for this option of an option covering the number and class of securities which the Optionee would have been entitled to receive in such merger or consolidation by virtue of such sale if the Optionee had been the holder of record of a number of shares of Common Stock of the Company equal to the number of shares covered by the unexercised portion of this option, or (ii) the Company shall give to the Optionee written notice of its election not to cause such provision to be made and this option shall become exercisable in full (or, at the election of the optionee, in part) at any time during a period of 20 days, to be designated by the Company, ending not more than 10 days prior to the effective date of the merger, consolidation or sale, in which case this option shall not be exercisable to any extent after the expiration of such 20 -day period. In no event, however, shall this option be exercisable after the Termination Date.

Investment Representation; Legend on Certificates; Special Restriction on Resale.

The Optionee agrees that until such time as a registration statement under the Securities Act of 1933 becomes effective with respect to the option and/or the stock underlying the option, the Optionee is taking this option and will take the stock underlying the option, for investment and not for resale or distribution. The Company shall have the right to place upon the face of any stock certificate or certificates evidencing shares issuable upon the exercise of this option such legend as the Board of Directors may prescribe for the purpose of preventing disposition of such shares in violation of the Securities Act of 1933, as now or hereafter provided.

Non-Transferability.

This option shall not be transferable by the Optionee other than by will or by laws of descent or distribution, and is exercisable during the lifetime of the Optionee only by the Optionee.

Certain Rights Not Conferred by Option.

The Optionee shall not, by virtue of holding this option, be entitled to any rights of a stockholder in the Company.

Expenses.

The Company shall pay all original issue and transfer taxes with respect to the issuance and transfer of shares of Common Stock of the Company pursuant hereto and all other fees and expenses necessarily incurred by the Company in connection therewith.

Exercise of Options.

(a)

An option shall be exercisable by written notice of such exercise, in the form prescribed by the Board of Directors to the Secretary or Treasurer of the Company, at its principal office. The notice shall specify the number of shares for which the option is being exercised (which number, if less than all of the shares then subject to exercise, shall be at least 100,000 or a multiple thereof) and shall be accompanied by payment in full of the purchase price of such shares. No shares shall be delivered upon exercise of any option until all laws, rules and regulations, which the Board of Directors may deem applicable, have been complied with. If a registration statement under the Securities Act of 1933, as amended (the “Act”) is not then in effect with respect to the shares issuable upon such exercise, it shall be a condition precedent that the person exercising the option give to the Company a written representation and undertaking, satisfactory in form and substance to the Board of Directors, that he is acquiring the shares for his own account for investment and not with a view to the distribution thereof.

(b) The person exercising an option shall not be considered a record holder of the stock so purchased for any purpose until the date on which he is actually recorded as the holder of such stock in the records of the Company.

(c) If the Optionee ceases to serve as an employee of the Company, he may, but only within thirty (30) days after the date he ceases to be an employee of the Company, exercise this option to the extent that he was entitled to exercise it as of the date of such termination. If the Optionee shall have been an employee of the Company at the time of his death or permanent disability, then this option shall be exercisable by his personal representative or him, as the case may be, for a period ending on the earlier of (i) one year from the date of the death or permanent disability or (ii) the date on which the option expires in accordance with its terms. Notwithstanding the provisions of this Section 8(c), in the event that the Employee’s employment is terminated “for cause,” as such term is defined and interpreted by the courts of the State of New York, the Employee’s right to exercise this Option shall expire on the date of his termination.

Covenant not to Compete or Otherwise Injure the Company; Work Product.

The acceptance by the Optionee of this option shall constitute the acceptance of and agreement to all of the terms and conditions contained herein and in the Plan, and shall further constitute a covenant and agreement on the part of the Optionee to the effect that, without any additional compensation:

(a)

The Optionee shall, so long as he is affiliated with the Company, and for a period of 12 months after the termination of his affiliation with the Company, he will not engage in any competitive activities as herein defined:

(i)

Hiring, offering to hire, enticing away or in any other manner persuading or attempting to persuade any officer, employee or agent of the Company to discontinue his relationship with the Company without the written permission of the Company unless the Optionee clearly establishes that the relationship was initiated by the other party thereto;

(ii)

Directly or indirectly soliciting, diverting, taking away or attempting to solicit, divert, or take away any business of the Company of which the Optionee has any knowledge during the term of his employment, unless the Optionee clearly establishes that the relationship was initiated by the other party thereto. The term “business” shall mean actual or proposed contracts or arrangements for products or services of the Company and any reasonable extension or continuation of the business of the Company as constituted upon the termination of Optionee’s employment.

(b)

The Optionee shall not make or permit to be made, except in pursuance of his duties and for the sole use and account of the Company or its nominees, any copies, abstracts or summaries of any Company reports, papers, documents or programs, whether made by him or by others.

(c)

The Optionee shall keep confidential and not disclose to others, except as required by his service as an employee or by law, any matter or thing ascertained by him through his association with the Company, not otherwise publicly known, the disclosure of which might possibly be contrary to the best interest of any person, firm, or corporation doing business with the Company, or of the Company.

10. Governing Plan.

This Agreement is subject to the terms and conditions of the Plan, a copy of which is available upon request from the Secretary of the Company.

INFINITE GROUP, INC.

By the Company: ___ /s/James Villa ___________________________

James Villa, President

Regarding: Option agreement dated July 18, 2017 for 400,000 shares of the Company’s Common Stock, par value $.001 per share, at the Exercise Price of $.04 per share, I accept the terms of this agreement.

___ /s/ Andrew Hoyen _____________

Andrew Hoyen, Optionee

Date: ____ 7/18 /2017 ______________

Exhibit 10.3

INFINITE GROUP, INC.

Incentive Stock Option Agreement

Date: July 18, 2017

WHEREAS , Infinite Group, Inc., a Delaware corporation (the “ Company ”), hereby desires to retain the services of Andrew Hoyen (the “ Optionee ”) as a member of the board (“Board”) of directors of the Company; and

WHEREAS , the Optionee desires to provide services to the Company as a member of the Board; and

WHEREAS, the Company and the Optionee desire that the Optionee be compensated for these services to the Company by the vesting of the options granted hereby.

NOW THEREFORE, the Company and the Optionee hereby agree as follows:

The Company pursuant to its 2009 Stock Option Plan (“the Plan”), hereby grants Andrew Hoyen (the “Optionee”) an incentive stock option to purchase a total of 100,000 shares of the Company’s Common Stock, par value $.001 per share, at the price of $.04 per share on the terms and conditions set forth herein and in the Plan. As used herein, the term “Company” includes any affiliates of the Company.

Duration.

(a)

This option shall become effective on the date of grant and shall be exercisable as for 100,000 shares on July 18, 2017.

(b) This option shall expire on July 17, 2022 (the “Termination Date”).

Written Notice of Exercise.

Anti-Dilution Provisions.

(b)

(c)

Investment Representation; Legend on Certificates; Special Restriction on Resale.

Non-Transferability.

This option shall not be transferable by the Optionee other than by will or by laws of descent or distribution, and is exercisable during the lifetime of the Optionee only by the Optionee.

Certain Rights Not Conferred by Option.

The Optionee shall not, by virtue of holding this option, be entitled to any rights of a stockholder in the Company.

Expenses.

Exercise of Options.

(a)

(b)

If the Optionee ceases to serve as an employee of the Company, he may, but only within thirty (30) days after the date he ceases to be an employee of the Company, exercise this option to the extent that he was entitled to exercise it as of the date of such termination. If the Optionee shall have been an employee of the Company at the time of his death or permanent disability, then this option shall be exercisable by his personal representative or him, as the case may be, for a period ending on the earlier of (i) one year from the date of the death or permanent disability or (ii) the date on which the option expires in accordance with its terms. Notwithstanding the provisions of this Section 8(c), in the event that the Employee’s employment is terminated “for cause,” as such term is defined and interpreted by the courts of the State of New York, the Employee’s right to exercise this Option shall expire on the date of his termination.

Covenant not to Compete or Otherwise Injure the Company; Work Product.

(a)

(i)

(ii)

(b)

(c)

10. Governing Plan.

This Agreement is subject to the terms and conditions of the Plan, a copy of which is available upon request from the Secretary of the Company.

INFINITE GROUP, INC.

By the Company: __ /s/ James Villa ___________

James Villa, President

Regarding: Option agreement dated July 18, 2017 for 100,000 shares of the Company’s Common Stock, par value $.001 per share, at the Exercise Price of $.04 per share, I accept the terms of this agreement.

___ /s/ Andrew Hoyen _______________________

Andrew Hoyen, Optionee

Date: _____ 7/18/2017 _______________________