Item 1.01 Entry into a Material Definitive Agreement.





Mast Hill Loan

On February 3, 2023, 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 $118,000.00, which bears interest at a rate of eight percent (8%) per annum, less $11,800.00 original issue discount. Under the terms of the Loan, amortization payments are due beginning June 3, 2023, and each month thereafter with the final payment due on February 3, 2024. 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 $2.00 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 59,000 shares of Company common stock at a fixed price of $2.00 per share, subject to price adjustments for certain actions, including dilutive issuances, representing 100% 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 and similar loans between the Company and Lender entered into on November 3, 2021, February 11, 2022, May 31, 2022, and November 23, 2022, respectively.

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 $3,100.00 (2.92% of the gross proceeds of the Loan) and issued a 5-year warrant to purchase 3,098 shares of Company common stock at a fixed price of $2.40 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.





Amendments to Previous Loans

The Company and the Lender are parties to promissory notes dated November 3, 2021, February 11, 2022, May 27, 2022, and November 23, 2022. On February 3, 2023, the Company and the Lender entered into an amendment with respect to the February 11, 2022 Note (the "Note") waiving any Event of Default (as defined in the Note) under Section 4.17 of the Note that occurred prior to February 3, 2023. In addition, the amendment extended the maturity date of the Note to May 30, 2023. The Company shall pay $200,000 of the existing balance of the Note on or before March 31, 2023, to reduce the balance of the note by $200,000. If the company fails to make the payment, then the (i) the principal of the Note shall be increased by $30,000 (the "Increased Principal Portion") as of April 1, 2023, and (ii) the Company shall repay the Increased Principal Portion on or before April 16,2023. Except as set forth above, the terms of the Notes remain the same.

The foregoing summary of the Loan and Amendment is qualified in its entirety by reference to the Loan Documents and Amendments, which are attached as Exhibit 10.1 and Exhibit 10.5 hereto.






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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 and the Amendments 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 Loan is incorporated by reference into this Item 3.02. The shares of Common Stock issued pursuant to the Loan 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.





Exhibit No.   Description
  10.1          Securities Purchase Agreement, dated February 3, 2023, by and
              between Infinite Group, Inc. and Mast Hill Fund, L.P.
  10.2          Promissory Note, issued February 3, 2023, by Infinite Group, Inc.
              to Mast Hill Fund, L.P.
  10.3          Warrant, issued February 3, 2023, by Infinite Group, Inc. to Mast
              Hill Fund, L.P.
  10.4          Warrant, issued February 3, 2023, by Infinite Group, Inc. to J.H.
              Darbie & Co., Inc.
  10.5          Amendment, dated February 3, 2023, to Promissory Note issued
              February 11, 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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