UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
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| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||
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Securities registered pursuant to Section 12(b) of the Act:
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Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.001 par value
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).
Emerging
growth company
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.
On March 13, 2024, Intellinetics, Inc. (the “Company”) entered into an Amendment to all of its 12% Subordinated Promissory Notes, dated April 1, 2022 (the “Notes”) with certain accredited investors. The Amendment allows individual Note holders to elect to extend the Maturity Dates of their respective Notes from March 30, 2025 to December 31, 2025.
Item 5.02 Departure of Directors or Certain Officers; Election of Officers; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Effective as of April 2, 2024, Intellinetics, Inc. (the “Company”) shall award the following grants of restricted stock awards to certain executive officers of the Company:
| Name | Title | Restricted Stock Award | ||
| James F. DeSocio | President and Chief Executive Officer | 30,000 | ||
| Matthew L. Chretien | Secretary and Chief Strategy Officer | 25,000 | ||
| Joseph D. Spain | Treasurer and Chief Financial Officer | 25,000 |
The restricted stock was issued in accordance with the terms and conditions of the 2015 Intellinetics Inc. Equity Incentive Plan. One-third of the restricted stock shall vest upon grant; one-third upon the first anniversary of grant; and the remainder upon the second anniversary of grant.
On March 19, 2024, the Company’s Board Compensation Committee approved a base salary merit increase for James F. DeSocio to $355,000; Joseph D. Spain, to $240,000; and Matthew Chretien to $212,000, retroactive to January 1, 2024. Finally, severance terms were extended for James F. DeSocio and Joseph D. Spain to the following: 1) one year’s base salary upon a change of control, and 2) six months’ base salary upon any other termination by the Company without cause or by the employee for good reason.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
| Exhibit No. | Name of Exhibit | |
| 10.1 | Amendment to 12% Subordinated Promissory Notes | |
| 10.2 | Restricted Stock Award Agreement pursuant to the 2015 Intellinetics Inc. Equity Incentive Plan | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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.
| INTELLINETICS, INC. | ||
| By: | /s/ James F. DeSocio | |
| James F. DeSocio | ||
| President and Chief Executive Officer | ||
| Dated: March 19, 2024 | ||
Exhibit 10.1
AMENDMENT
to
12% SUBORDINATED PROMISSORY NOTE
DUE MARCH 30, 2025
This Amendment (“Amendment”) to the 12% Subordinated Promissory Notes due March 30, 2025, dated April 1, 2022 (the “Notes”) is entered into and effective as of the last date indicated below, by and between Intellinetics, Inc., a Nevada corporation (the “Company”) and the holders of the Notes (the “Holders”).
WHEREAS, Company and the Holders entered into the Notes, effective April 1, 2022;
WHEREAS, the Notes permit prepayment in accordance with Section 2.c of the Notes, so long as any prepayment is done on a pro rata basis on all Notes then outstanding;
WHEREAS, the Notes may be amended in accordance with Section 6.e of the Notes by a written instrument signed by the Company and the holders of at least 51% in principal amount of the then outstanding Notes (the “Required Holders”);
WHEREAS, the Company and the Required Holders desire to amend the Notes to permit the Company to allow Holders to elect to extend the Maturity Date for individual Notes.
NOW THEREFORE, the parties agree as follows:
1. The following is added to the Preamble of the Note.
Individual Holders may elect to extend the Maturity Dates of their respective Notes to December 31, 2025 (any Notes so extended, the “Extended Notes”). The Company shall continue to make quarterly interest payments on all Extended Notes until December 31, 2025 at the rate of 12.0% per annum.
2. The following amends and replaces in its entirety Section 2.c., Prepayment:
The Company may prepay any portion of the principal amount of this Note without the prior written consent of the Holder, provided, however, that any prepayment is done on a pro rata basis on all Notes then outstanding. Notwithstanding the foregoing, individual Holders may elect to extend the Maturity Date of their Notes, and any payment or prepayment on the remaining Notes with original Maturity Dates shall not be deemed a non-pro rata payment pursuant to this paragraph.
3. Except as set forth herein, the terms of the Notes shall remain in full force and effect. Capitalized terms not otherwise defined herein shall have the meanings set forth in the Notes. This Amendment may be signed in multiple counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date of the last signature of a Required Holder hereto.
REQUIRED HOLDER
Required Holder Name: __________________________________________________
Signature: ____________________________________________________________
Name of Authorized Signatory, if Entity: ______________________________________________
Title of Authorized Signatory, if Entity: _______________________________________________
Name, if Joint: ________________________________________________________
Signature, if Joint Individuals: ____________________________________________
Date: ____________________
EXTENSION ELECTION:
By signing below, you indicate that you are electing to extend the Maturity Date of your Note from March 30, 2025 to December 31, 2025, with quarterly interest payments continuing at 12% until the new Maturity Date.
Signature: ___________________________________________________________
Signature, if Joint Individuals: ____________________________________________
Signature Page to Amendment to 12% Subordinated Note
| INTELLINETICS, INC. | ||
| By: | /s/ James DeSocio | |
| Name: | James DeSocio | |
| Title: | President and CEO | |
Signature Page to Amendment to 10% Subordinated Note
Exhibit 10.2
Restricted Stock Award Agreement
This Restricted Stock Award Agreement (this “Agreement”) is made and entered into as of [DATE] (the “Grant Date”) by and between Intellinetics, Inc., a Nevada corporation (the “Company”) and [EMPLOYEE NAME] (the “Grantee”).
WHEREAS, the Company has adopted the 2015 Intellinetics, Inc. Equity Incentive Plan (the “Plan”) pursuant to which awards of Restricted Stock may be granted; and
WHEREAS, the Committee has determined that it is in the best interests of the Company and its shareholders to grant the award of Restricted Stock provided for herein.
NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows:
1. Grant of Restricted Stock. Pursuant to Section 7 of the Plan, the Company hereby issues to the Grantee on the Grant Date a Restricted Stock Award consisting of, in the aggregate, [NUMBER] shares of Common Stock of the Company (the “Restricted Stock”), on the terms and conditions and subject to the restrictions set forth in this Agreement and the Plan. Capitalized terms that are used but not defined herein have the meanings ascribed to them in the Plan.
2. Consideration. The grant of the Restricted Stock is made in consideration of the services to be rendered by the Grantee to the Company.
3. Restricted Period; Vesting.
3.1 Except as otherwise provided herein, provided that the Grantee remains in Continuous Service through the applicable vesting date, the Restricted Stock will vest in accordance with the following schedule:
| Vesting Date | Shares of Common Stock | |
| [VESTING DATE] | [NUMBER OR PERCENTAGE OF SHARES THAT VEST ON THE VESTING DATE] | |
| [VESTING DATE] | [NUMBER OR PERCENTAGE OF SHARES THAT VEST ON THE VESTING DATE] |
The period over which the Restricted Stock vests is referred to as the “Restricted Period”.
3.2 The foregoing vesting schedule notwithstanding, upon the occurrence of a Change in Control, 100% of the unvested Restricted Stock shall vest as of the date of the Change in Control.
3.3 The foregoing vesting schedule notwithstanding, outside of a Change in Control, if the Grantee’s Continuous Service is terminated by the Company or an Affiliate without Cause or by the Grantee for Good Reason, the unvested Restricted Stock due to vest within six (6) months of the termination date shall vest as of the date of termination.
4. Restrictions. Subject to any exceptions set forth in this Agreement or the Plan, during the Restricted Period, the Restricted Stock or the rights relating thereto may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Grantee. Any attempt to assign, alienate, pledge, attach, sell or otherwise transfer or encumber the Restricted Stock or the rights relating thereto during the Restricted Period shall be wholly ineffective and, if any such attempt is made, the Restricted Stock will be forfeited by the Grantee and all of the Grantee’s rights to such shares shall immediately terminate without any payment or consideration by the Company.
5. Rights as Shareholder; Dividends.
5.1 The Grantee shall be the record owner of the Restricted Stock until the shares of Common Stock are sold or otherwise disposed of, and shall be entitled to all of the rights of a shareholder of the Company including, without limitation, the right to vote such shares and receive all dividends or other distributions paid with respect to such shares. Notwithstanding the foregoing, any dividends or other distributions shall be subject to the same restrictions on transferability as the shares of Restricted Stock with respect to which they were paid.
5.2 The Company may issue stock certificates or evidence the Grantee’s interest by using a restricted book entry account with the Company’s transfer agent. Physical possession or custody of any stock certificates that are issued shall be retained by the Company until such time as the Restricted Stock vests.
5.3 If the Grantee forfeits any rights the Grantee has under this Agreement in accordance with Section 3, the Grantee shall, on the date of such forfeiture, no longer have any rights as a shareholder with respect to the Restricted Stock and shall no longer be entitled to vote or receive dividends on such shares.
6. No Right to Continued Service. Neither the Plan nor this Agreement shall confer upon the Grantee any right to be retained in any position, as an Employee, Consultant or Director of the Company. Further, nothing in the Plan or this Agreement shall be construed to limit the discretion of the Company to terminate the Grantee’s Continuous Service at any time, with or without Cause.
7. Adjustments. If any change is made to the outstanding Common Stock or the capital structure of the Company, if required, the shares of Common Stock shall be adjusted or terminated in any manner as contemplated by Section 11 of the Plan.
8. Tax Liability and Withholding.
8.1 The Grantee shall be required to pay to the Company, and the Company shall have the right to deduct from any compensation paid to the Grantee pursuant to the Plan, the amount of any required withholding taxes in respect of the Restricted Stock and to take all such other action as the Committee deems necessary to satisfy all obligations for the payment of such withholding taxes. The Committee may permit the Grantee to satisfy any federal, state or local tax withholding obligation by any of the following means, or by a combination of such means:
(a) tendering a cash payment.
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(b) authorizing the Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable or deliverable to the Grantee as a result of the vesting of the Restricted Stock; provided, however, that no shares of Common Stock shall be withheld with a value exceeding the [minimum/maximum] amount of tax required to be withheld by law.
(c) delivering to the Company previously owned and unencumbered shares of Common Stock.
8.2 Notwithstanding any action the Company takes with respect to any or all income tax, social insurance, payroll tax, or other tax-related withholding (“Tax-Related Items”), the ultimate liability for all Tax-Related Items is and remains the Grantee’s responsibility and the Company (a) makes no representation or undertakings regarding the treatment of any Tax-Related Items in connection with the grant or vesting of the Restricted Stock or the subsequent sale of any shares; and (b) does not commit to structure the Restricted Stock to reduce or eliminate the Grantee’s liability for Tax-Related Items.
9. Section 83(b) Election. The Grantee may make an election under Code Section 83(b) (a “Section 83(b) Election”) with respect to the Restricted Stock. Any such election must be made within thirty (30) days after the Grant Date. If the Grantee elects to make a Section 83(b) Election, the Grantee shall provide the Company with a copy of an executed version and satisfactory evidence of the filing of the executed Section 83(b) Election with the US Internal Revenue Service. The Grantee agrees to assume full responsibility for ensuring that the Section 83(b) Election is actually and timely filed with the US Internal Revenue Service and for all tax consequences resulting from the Section 83(b) Election.
10. Compliance with Law. The issuance and transfer of shares of Common Stock shall be subject to compliance by the Company and the Grantee with all applicable requirements of federal and state securities laws and with all applicable requirements of any stock exchange on which the Company’s shares of Common Stock may be listed. No shares of Common Stock shall be issued or transferred unless and until any then applicable requirements of state and federal laws and regulatory agencies have been fully complied with to the satisfaction of the Company and its counsel. The Grantee understands that the Company is under no obligation to register the shares of Common Stock with the Securities and Exchange Commission, any state securities commission or any stock exchange to effect such compliance.
11. Legends. A legend may be placed on any certificate(s) or other document(s) delivered to the Grantee indicating restrictions on transferability of the shares of Restricted Stock pursuant to this Agreement or any other restrictions that the Committee may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any applicable federal or state securities laws or any stock exchange on which the shares of Common Stock are then listed or quoted.
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12. Notices. Any notice required to be delivered to the Company under this Agreement shall be in writing and addressed to the CFO/Treasurer of the Company at the Company’s principal corporate offices. Any notice required to be delivered to the Grantee under this Agreement shall be in writing and addressed to the Grantee at the Grantee’s address as shown in the records of the Company. Either party may designate another address in writing (or by such other method approved by the Company) from time to time.
13. Governing Law. This Agreement will be construed and interpreted in accordance with the laws of the State of Ohio without regard to conflict of law principles.
14. Interpretation. Any dispute regarding the interpretation of this Agreement shall be submitted by the Grantee or the Company to the Committee for review. The resolution of such dispute by the Committee shall be final and binding on the Grantee and the Company.
15. Restricted Stock Subject to Plan. This Agreement is subject to the Plan as approved by the Company’s shareholders. The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.
16. Successors and Assigns. The Company may assign any of its rights under this Agreement. This Agreement will be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement will be binding upon the Grantee and the Grantee’s beneficiaries, executors, administrators and the person(s) to whom the Restricted Stock may be transferred by will or the laws of descent or distribution.
17. Severability. The invalidity or unenforceability of any provision of the Plan or this Agreement shall not affect the validity or enforceability of any other provision of the Plan or this Agreement, and each provision of the Plan and this Agreement shall be severable and enforceable to the extent permitted by law.
18. Discretionary Nature of Plan. The Plan is discretionary and may be amended, cancelled or terminated by the Company at any time, in its discretion. The grant of the Restricted Stock in this Agreement does not create any contractual right or other right to receive any Restricted Stock or other Awards in the future. Future Awards, if any, will be at the sole discretion of the Company. Any amendment, modification, or termination of the Plan shall not constitute a change or impairment of the terms and conditions of the Grantee’s employment with the Company.
19. Amendment. The Committee has the right to amend, alter, suspend, discontinue or cancel the Restricted Stock, prospectively or retroactively; provided, that, no such amendment shall adversely affect the Grantee’s material rights under this Agreement without the Grantee’s consent.
20. No Impact on Other Benefits. The value of the Grantee’s Restricted Stock is not part of their normal or expected compensation for purposes of calculating any severance, retirement, welfare, insurance or similar employee benefit.
21. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. Counterpart signature pages to this Agreement transmitted by facsimile transmission, by 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, will have the same effect as physical delivery of the paper document bearing an original signature.
22. Acceptance. The Grantee hereby acknowledges receipt of a copy of the Plan and this Agreement. The Grantee has read and understands the terms and provisions thereof, and accepts the Restricted Stock subject to all of the terms and conditions of the Plan and this Agreement. The Grantee acknowledges that there may be adverse tax consequences upon the grant or vesting of the Restricted Stock or disposition of the underlying shares and that the Grantee has been advised to consult a tax advisor prior to such grant, vesting or disposition.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
| Intellinetics, Inc. | ||
| By: | ||
| Name: | ||
| Title: | ||
| [EMPLOYEE NAME] | ||
| By: | ||
| Name: | ||
| 5 |
Cover |
Mar. 13, 2024 |
|---|---|
| Cover [Abstract] | |
| Document Type | 8-K |
| Amendment Flag | false |
| Document Period End Date | Mar. 13, 2024 |
| Entity File Number | 001-41495 |
| Entity Registrant Name | INTELLINETICS, INC. |
| Entity Central Index Key | 0001081745 |
| Entity Tax Identification Number | 87-0613716 |
| Entity Incorporation, State or Country Code | NV |
| Entity Address, Address Line One | 2190 Dividend Dr. |
| Entity Address, City or Town | Columbus |
| Entity Address, State or Province | OH |
| Entity Address, Postal Zip Code | 43228 |
| City Area Code | (614) |
| Local Phone Number | 388-8908 |
| Written Communications | false |
| Soliciting Material | false |
| Pre-commencement Tender Offer | false |
| Pre-commencement Issuer Tender Offer | false |
| Title of 12(b) Security | Common Stock, $0.001 par value |
| Trading Symbol | INLX |
| Security Exchange Name | NYSEAMER |
| Entity Emerging Growth Company | false |
| Entity Information, Former Legal or Registered Name | Intellinetics, Inc. |