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): April 10,
2020
INFINITE GROUP, INC.
(Exact
name of Registrant as specified in its charter)
|
Delaware
|
|
0-21816
|
|
52-1490422
|
|
(State
or other jurisdictionof incorporation)
|
|
(Commission
File Number)
|
|
(I.R.S.
EmployerIdentification No.)
|
175
Sully’s Trail, Suite 202
Pittsford, New York 14534
(Address
of principal executive offices and Zip Code)
Registrant's
telephone number, including area code:
(585) 385-0610
|
|
|
(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:
o Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to
Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o 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
April 10, 2020, Infinite Group, Inc. (“IGI” or the
“Company”) entered into a U. S. Small Business
Administration (“SBA”) Note Payable agreement (the
“Note”) with Upstate National Bank
(“Lender”). The signed Note was provided to IGI on
April 10, 2020. The Note was approved by a majority of the Board of
Directors (the “Board”). The Note provides for working
capital to IGI in the amount of $957,372.50. The Note will mature
in two years from the date of the Note. The interest rate on the
Note is fixed at 1.00% and the payments of principal and interest
shall be deferred for six months from the date of the Note.
Interest shall continue to accrue.
The
Loan evidenced by the Note was made under the Paycheck Protection
Plan (15 U.S.C. § 636(a)(36)) enacted by Congress under the
Coronavirus Aid, Relief and Economic Security Act (the
“Act”). The
Act (including the guidance issued by SBA and U.S. Department of
the Treasury related thereto) provides that all or a portion of
this Loan may be forgiven upon request from Borrower to Lender,
subject to requirements in the Note and Act.
All
remaining principal and accrued interest is due and payable two (2)
years from date of Note.
The
foregoing summary of the Note is qualified in its entirety by
reference to the SBA Note Agreement which is attached as Exhibit
10.1 hereto.
Section 9 – Financial
Statements and Exhibits
Item
9.01.
Financial
Statements and Exhibits
(d)
Exhibits
|
Exhibit
Number
|
Description
|
|
|
|
|
10.1
|
SBA
Note Payable Agreement between the Company and Upstate National
Bank dated April 10, 2020
|
|
|
|
* * * *
* *
SIGNATURE
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 thereunto duly authorized.
|
Date: April 16, 2020
|
|
|
|
INFINITE GROUP, INC.
|
|
|
|
By:
|
|
/s/ James Villa
James
Villa, President and Chief Executive
Officer
|
U.S. Small Business Administration
NOTE
|
SBA
Loan #
|
748520070-05
|
|
SBA
Loan Name
|
INFINITE
GROUP, INC
|
|
Date
|
APRIL
_10_, 2020
|
|
Loan
Amount
|
$957,372.50
|
|
Interest
Rate
|
1.00%
|
|
Borrower
|
INFINITE
GROUP, INC
|
|
Lender
|
UPSTATE
NATIONAL BANK
|
In
return for the Loan, Borrower promises to pay to the order of
Lender the amount of NINE HUNDRED FIFTY-SEVEN THOUSAND THREE
HUNDRED SEVENTY-TWO and 50/100
Dollars, interest on the unpaid
principal balance, and all other amounts required by this
Note.
“Act”
means the Coronavirus Aid, Security and Economic Relief Act (Public
Law 116-136), enacted March 27, 2020.
“Loan” means
the loan evidenced by this Note.
“Loan
Documents” means the documents related to this Loan signed by
Borrower.
“SBA” means
the Small Business Administration, an Agency of the United States
of America.
Borrower must make all
payments at the place Lender designates. The payment terms for this
Note are:
Maturity: This Note will mature in two (2) years from date
of Note.
Repayment Terms:
The interest rate on this Note is
fixed at 1.00% per annum.
Payments
of principal and interest shall be deferred for six (6) months from
date of Note, during which interest shall continue to accrue.
Commencing on NOVEMBER_10__, 2020 Borrower must pay principal and
interest payments of $39,890.52 every month; payments must be made
on the _10th_ calendar day in the months they are
due.
Lender
will apply each installment payment first to pay interest accrued
to the day Lender receives the payment, then to bring principal
current, then to pay any late fees, and will apply any remaining
balance to reduce principal.
If
the Loan is forgiven in part, but not in full, in accordance with
the terms of the Note, Lender must adjust the payment amount as
needed to amortize the unforgiven principal over the remaining term
of the Note.
Loan
Prepayment: Notwithstanding any
provision in this Note to the contrary, Borrower may prepay this
Note. Borrower may prepay 20
percent or less of the unpaid principal balance at any time without
notice. If Borrower prepays more than 20 percent and the Loan has
been sold on the secondary market, Borrower
must:
(a)
Give
Lender written notice;
(b)
Pay
all accrued interest; and
(c)
If
the prepayment is received less than 21 days from the date Lender
receives the notice, pay an amount equal to 21 days interest from
the date Lender receives the notice, less any interest accrued
during the 21 days and paid under subparagraph (b)
above.
If
Borrower does not prepay within 30 days from the date Lender
receives the notice, Borrower must give Lender a new
notice.
All remaining principal
and accrued interest is due and payable two (2) years from date of
Note.
Conditional
Loan Forgiveness: The Loan
evidenced by this Note was made by Lender to Borrower under the
Paycheck Protection Program (15 U.S.C. §
636(a)(36)) enacted by Congress
under the Coronavirus
Aid,
Relief and Economic Security Act (the “Act”). The Act
(including the guidance issued by SBA and U.S. Department of the
Treasury related thereto) provides that all or a portion of this
Loan may be forgiven upon request from Borrower to Lender, provided
the Loan proceeds are used in accordance with the terms of the Act,
Borrower is not in default under the Loan or any of the Loan
Documents, and Borrower has provided documentation to Lender
supporting such request for forgiveness that includes verifiable
information on Borrower’s use of the Loan proceeds, to
Lender’s satisfaction, in its sole discretion. Lender shall
determine the amount to be forgiven within sixty (60) days of
receiving all necessary information from Borrower related to such
request.
The
amount of the Loan eligible for forgiveness shall be equal to the
sum of the following expenditures made by Borrower during the eight
(8) week period commencing on the date of Note:
(a)
Payroll
costs (as defined in the Act);
(b)
Interest
payments on any mortgage in effect prior to February 15, 2020
(excluding any prepayment or any payment on principal);
and
(c)
Rent
payments (including any payments due under a lease agreement) under
an agreement in effect prior to February 15, 2020;
(d)
Utility
payments under any utility contracts in effect prior to February
15, 2020.
No
less than seventy-five percent (75%) of the amount eligible for
forgiveness shall be used by Borrower for payroll
costs.
The
amount eligible for forgiveness shall be reduced in accordance with
the Act based upon (i) Borrower’s use of loan proceeds, (ii)
if Borrower reduces its number of employees below the average
number of fulltime equivalent employees employed by Borrower prior
to February 15, 2020, or (iii) if Borrower reduces its
employees’ wages. Any foregoing reduction of forgiveness
shall be made in accordance with the terms of the
Act.
All remaining principal
and accrued interest is due and payable two (2) years from date of
Note.
EACH OF THE UNDERSIGNED HEREBY UNCONDITIONALLY WAIVES ITS RIGHTS TO
A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF,
DIRECTLY OR INDIRECTLY, THIS NOTE, ANY OF THE RELATED DOCUMENTS,
ANY DEALINGS AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED
HEREBY. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING
OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT, INCLUDING,
WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW AND/OR STATUTORY CLAIMS. THIS
WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS NOTE, ANY RELATED
DOCUMENTS OR ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS
TRANSACTION OR ANY RELATED TRANSACTION. IN THE EVENT OF LITIGATION,
THIS NOTE MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.
Borrower
is in default under this Note if Borrower does not make a payment
when due under this Note, or if Borrower:
A.
Fails
to do anything required by this Note and other Loan
Documents;
B.
Defaults
on any other loan with Lender;
C.
Does
not preserve or account, to Lender’s satisfaction, the use of
the Loan proceeds;
D.
Does
not disclose, or anyone acting on their behalf does not disclose,
any material fact to Lender or SBA;
E.
Makes,
or anyone acting on their behalf makes, a materially false or
misleading representation to Lender or SBA;
F.
Defaults
on any loan or agreement with another creditor, if Lender believes
the default may materially affect Borrower’s ability to pay
this Note;
G.
Fails
to pay any taxes when due;
H.
Becomes
the subject of a proceeding under any bankruptcy or insolvency
law;
I.
Has
a receiver or liquidator appointed for any part of their business
or property;
J.
Makes
an assignment for the benefit of creditors;
K.
Has
any adverse change in financial condition or business operation
that Lender believes may materially affect Borrower’s ability
to pay this Note;
L.
Reorganizes,
merges, consolidates, or otherwise changes ownership or business
structure without Lender’s prior written consent;
or
M.
Becomes
the subject of a civil or criminal action that Lender believes may
materially affect Borrower’s ability to pay this
Note.
5.
LENDER’S
RIGHTS IF THERE IS A DEFAULT:
Without notice or demand
and without giving up any of its rights, Lender
may:
A.
Require
immediate payment of all amounts owing under this
Note;
B.
Collect
all amounts owing from Borrower; or
C.
File
suit and obtain judgment.
6.
LENDER’S
GENERAL POWERS:
Without notice and
without Borrower’s consent, Lender may:
A.
Incur
expenses to collect amounts due under this Note and enforce the
terms of this Note or any other Loan Document. Among other things,
the expenses may include payments for property taxes, prior liens,
insurance, appraisals, environmental remediation costs, and
reasonable attorney’s fees and costs. If Lender incurs such
expenses, it may demand immediate repayment from Borrower or add
the expenses to the principal balance;
B.
Release
anyone obligated to pay this Note;
C.
Assign
this Note for good and valuable consideration in the future and
such assignment shall not hinder or impair the enforceability of
this Note; and
D.
Take
any action necessary to collect amounts owing on this
Note.
Lender
reserves the right to require, and Borrower agrees, that Borrower
will sign and deliver a Replacement Promissory Note if a new
template Note is issued and required by SBA under the Act for
Paycheck Protection Program loans.
8.
WHEN
FEDERAL LAW APPLIES:
When
SBA is the holder, this Note will be interpreted and enforced under
federal law, including SBA regulations. Lender or SBA may use state
or local procedures for filing papers, recording documents, giving
notice, foreclosing liens, and other purposes. By using such
procedures, SBA does not waive any federal immunity from state or
local control, penalty, tax, or liability. As to this Note,
Borrower may not claim or assert against SBA any local or state law
to deny any obligation, defeat any claim of SBA, or preempt federal
law.
9.
SUCCESSORS
AND ASSIGNS:
Under this Note, Borrower
includes its successors, and Lender includes its successors and
assigns.
A.
All
individuals and entities signing this Note are jointly and
severally liable.
B.
Borrower
waives all suretyship defenses.
C.
Borrower
must sign all documents necessary at any time to comply with the
Loan Documents and to enable Lender to comply with the
Act.
D.
Lender
may exercise any of its rights separately or together, as many
times and in any order it chooses. Lender may delay or forgo
enforcing any of its rights without giving up any of
them.
E.
Borrower
may not use an oral statement of Lender or SBA to contradict or
alter the written terms of this Note.
F.
If
any part of this Note is unenforceable, all other parts remain in
effect.
G.
To
the extent allowed by law, Borrower waives all demands and notices
in connection with this Note, including presentment, demand,
protest, and notice of dishonor. Borrower also waives any defenses
based upon any claim that Lender did not obtain any guarantee or
did not obtain the fair market value of any collateral at a
sale.
11.
STATE-SPECIFIC
PROVISIONS:
[Insert State-Specific
Provisions Here]
OR
NONE
12.
ELECTRONIC
SIGNATURES:
Borrower
agrees that the electronic signature(s), whether digital or
encrypted, of Borrower included in this Note, if any, are intended
to authenticate this writing and to have the same force and effect
as manual signatures. The term “electronic signature”
means any electronic sound, symbol, or process attached to or
logically associated with a record and executed and adopted by a
party with the intent to sign such record, including facsimile or
email electronic signatures pursuant to the New York Electronic
Signatures and Records Act (N.Y. State Tech. §§ 301-309)
as amended from time to time. Without limiting the generality of
the foregoing, delivery of an executed counterpart's signature page
of this Note, by facsimile, electronic mail in portable document
format (.pdf) or by any other electronic means intended to preserve
the original graphic and pictorial appearance of a document, has
the same effect as delivery of an executed original of this
Note.
13.
BORROWER’S
NAME(S) AND SIGNATURE(S):
By signing below, each
individual or entity becomes obligated under this Note as
Borrower.
INFINITE GROUP, INC
By:
/s/ James A. Villa
NAME:
James A. Villa
ITS:
President
Witnessed: By: Andrew
Hoyen
Modeled From:
SBA Form 147 (06/03/02) Version 4.1 Page [Insert Page
Number]/1