As filed with the Securities and Exchange Commission on April 30, 2002
Registration No. 333-55718
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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INFINITE GROUP, INC.
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(Exact name of Registrant as specified in its charter)
Delaware 3674 52-1490422
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(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
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2364 Post Road
Warwick, RI 02886
(401) 738-5777
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(Address, including zip code, and telephone number,
including area code, of Registrant's executive offices)
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Clifford G. Brockmyre II, CEO
2364 Post Road
Warwick, RI 02886
(401) 738-5777
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(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies to:
Kenneth S. Rose, Esq.
Morse, Zelnick, Rose & Lander, LLP
450 Park Avenue
New York, New York 10022
(212) 838-5030
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Approximate date of commencement of proposed sale to the public: As soon
as practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are to be offered
pursuant to dividend or reinvestment plans, please check the following box. |_|
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, as amended (the "Securities Act") other than securities offered only in
connection with dividend or reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
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CALCULATION OF REGISTRATION FEE
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Proposed
Maximum Proposed Maximum
Title of Each Class of Amount to be Offering Aggregate Offering Amount of
Securities to be Registered Registered Price(1) Price(1) Registration Fee
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Common stock, $0.001 par
value per share............ 1,814,615(2) $1.93 (3) $3,502,207 $322.20(4)
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(1) The proposed maximum offering price is estimated solely for the purposes
of calculating the registration fee pursuant to Rule 457(c) of the
Securities Act of 1933.
(2) Includes 323,400 shares of common stock to be issued upon exercise of
common stock purchase warrants and 444,444 shares of common stock issuable
upon conversion of an outstanding note.
(3) The last reported sales price of the registrant's common stock as reported
on the Nasdaq SmallCap Market System on April 29, 2002.
(4) $489.64 was previously paid.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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The information in this prospectus is not complete and may be changed.
These securities may not be sold until the registration statement of which this
prospectus is a part filed with the Securities and Exchange Commission is
declared effective. This prospectus is not an offer to sell these securities and
it is not soliciting an offer to buy these securities in any state where the
offer or sale is not permitted.
PROSPECTUS
SUBJECT TO COMPLETION
DATED April 30, 2002
1,814,615 Shares
Common Stock
INFINITE GROUP, INC.
The selling stockholders identified in this prospectus are offering to
sell up to 1,868,615 shares of our common stock. Of this amount, 323,400 shares
are covered by warrants held by selling stockholders that have not yet been
exercised and 444,444 shares are issuable upon conversion of an outstanding
note.
Except for the proceeds from the exercise of the warrants, we will not
receive any of the proceeds from the sale of these shares. The shares are being
registered for resale by the selling stockholders.
Our common stock is quoted on the Nasdaq SmallCap Market under the symbol
"IMCI." The last reported sale price of our common stock on the Nasdaq SmallCap
Market on April 29, 2002 was $1.95 per share.
Investing in our common stock involves a high degree of risk. See "Risk
Factors" beginning on page 3.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is accurate or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is _________________, 2002
TABLE OF CONTENTS
Page
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Risk Factors...................................................................3
Where You Can Find More Information............................................9
Reports to Security Holders....................................................9
Incorporation of Certain Documents by Reference................................9
Special Note Regarding Forward-Looking Statements.............................10
The Company...................................................................11
Use of Proceeds...............................................................14
Selling Stockholders..........................................................15
Plan of Distribution..........................................................16
Legal Matters.................................................................17
Experts.......................................................................17
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You should rely only on the information contained or incorporated by
reference in this prospectus. We have not authorized anyone to provide you with
any other information. We are not making an offer of these securities in any
state where the offer is not permitted. You should not assume that the
information in this prospectus is accurate as of any date other than the date on
the front cover.
References in this prospectus, and the documents incorporated by reference
in this prospectus, to "Infinite," "we," "our," and "us" refer to Infinite
Group, Inc., a Delaware corporation. We maintain web sites at
www.infinite-group.com, www.laserfare. com and www.infinitephotonics.com. None
of the information contained in any of our web sites constitute part of this
prospectus.
We own various intellectual property rights to our name and the names of
our subsidiaries, as well as the Infinite Group logo. This prospectus also
contains trademarks and tradenames belonging to other persons.
RISK FACTORS
A purchase of our common stock is speculative and involves a high degree
of risk. You should carefully consider the risks described below together with
all of the other information included or incorporated by reference in this
prospectus before making an investment decision. Additional risks and
uncertainties not presently known to us, that we currently deem immaterial or
that are similar to those faced by other companies in our industry or business
in general, such as competitive conditions, may also impair our business
operations. If any of the following risks actually occur, our business,
financial condition or operating results could be harmed. In such case, the
trading price of our common stock could decline and you could lose all or part
of your investment.
We have experienced losses in the current and prior years and we anticipate that
we will continue to generate operating losses for at least the first quarter of
2002.
Our operations to date have not been profitable. As of December 31, 2001 we had
an accumulated deficit of approximately $23.5 million. We expect to continue
operating at a loss during the first quarter of 2002. The majority of the
operating losses during 2001 were primarily attributable to discontinued
injection molding operations at our former Osley & Whitney, Inc. subsidiary and
start up costs at our Infinite Photonics, Inc. subsidiary. Other factors that
could adversely affect our operating results in the future include:
o the cost of manufacturing scale-up and production at our Photonics
Group;
o introduction of new products and product enhancements by us or our
competitors;
o changes in applied photonics technologies; and
o changes in general economic conditions.
We cannot assure you that our revenues will increase sufficiently to offset our
operating costs or that, even if they do, that our operations will ever be
profitable.
We are highly leveraged, which increases our operating deficit and makes it
difficult for us to grow.
At December 31, 2001 we had current liabilities, including trade payables, of
$6.2 million, and long-term liabilities of $2.6 million and a working capital
deficit of $1.7 million. We continue to experience working capital shortages
that impair our business operations and growth strategy. If we continue to incur
operating losses and experience working capital limitations, our business,
operations and financial condition will be materially adversely affected.
We may require additional financing in the future, which may not be available on
acceptable terms.
Depending on the amount of money we raise under our existing credit facilities,
we may require additional funds to expand our production capability, continue to
develop new applications for our diode technology and for working capital and
general corporate purposes. At this time, we cannot assure you that cash flow
from product sales will reach the level required to sustain our operations and
growth plans in the near term. Further, we cannot assure you that adequate
additional financing will be available or, if available, will be offered on
acceptable terms. Our existing credit facilities limit our ability to raise
capital through the sale of our securities. Accordingly, if we need additional
capital but are unable to access it under our existing facilities, our access to
capital may be limited. In addition, any additional equity financing may be
dilutive to stockholders, and debt financings, if available, may involve
restrictive covenants that further limit our ability to make decisions that we
believe will be in our best interests. In
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the event we cannot obtain additional financing on terms acceptable to us when
required, our operations will be materially adversely affected and we may have
to cease or substantially reduce operations.
Some of our products and services are at an early stage of development and may
not achieve market acceptance.
Our primary focus is to develop new commercial applications for our diode laser
and laser-driven technologies. Many of the benefits of our diode laser and laser
technologies are not widely known. Therefore, we anticipate that we will need to
educate our target markets to generate demand for our products and services and,
as a result of market feedback, we may be required to further refine these
services. In order to persuade potential customers to purchase our services, we
will need to overcome industry resistance to, and suspicion of, new
technologies. In addition, developing new applications for these technologies
and other new technologies may require significant further research,
development, testing and marketing prior to commercialization. We cannot assure
you that commercial applications of these technologies can be successfully
developed, marketed or produced.
Some of our current products and services have not been commercially successful.
Our laser materials processing services have not generated a significant amount
of revenue, even though they have been available for some time. In addition,
since the number of jet engine, aerospace and medical device manufacturers is
relatively small, most of our revenue from these businesses is generated from a
limited number of customers. We cannot assure you that these customers will
continue to purchase these products and services or that we will be able to
expand the market for these products and services. Therefore, any material
delay, retooling, cancellation or reduction in orders from the customers who
purchase these products and services could have a material adverse affect on our
business, operations and financial condition.
We have limited marketing and sales capabilities and must make sales in
fragmented markets.
Our future success depends, to a great extent, on our ability to successfully
market our products and services. We currently have limited sales and marketing
capabilities and experience at our Photonics Group (generally limited to
technical trade conferences, technical publications, and direct customer
inquiry) and we will need to hire qualified sales and marketing personnel,
develop additional sales and marketing programs and establish sales distribution
channels in order to achieve and sustain commercial sales of our products. In
addition, our ability to successfully market our products and services is
further complicated by the fact that our principal markets, laser photonics,
telecommunications, aerospace and medical components, are highly fragmented.
Consequently, we will need to identify and successfully target particular market
segments in which we believe we will have the most success. These efforts will
require a substantial amount of effort and resources. We cannot assure you that
any marketing and sales efforts undertaken by us will be successful or will
result in any significant product sales.
We depend on the aerospace, laser photonic, telecommunications and medical
device industries, which continually produce technologically advanced products.
A majority of our sales in our Laser Group are to companies in the aerospace,
laser photonic, telecommunications and medical device industries, which are
subject to rapid technological change and product obsolescence. If our customers
are unable to create products that keep pace with the changing technological
environment and market demand, their products could become obsolete and the
demand for our services could decline significantly. If we are unable to offer
cost-effective, quick-response
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manufacturing services to customers, demand for our services will also decline.
This would have a material adverse affect on our business, operations and
financial condition.
We depend on government research and development contracts to support our
Photonics Group.
Substantially all of our Photonics Group revenue has been derived from
governmental research programs. Any reduction in spending on these programs
would have a material adverse affect on our business, operations and financial
condition.
Our industry is intensely competitive, which may adversely affect our operations
and financial results.
All our markets are intensely competitive and numerous companies offer
conventional and laser driven products and services that compete with our
products and services. We anticipate that competition for our products and
services will continue to increase. Most of our competitors have substantially
greater capital resources, research and development staffs, manufacturing
capabilities, sales and marketing resources, facilities and experience. These
companies, or others, could undertake extensive research and development in
laser technology and related fields that could result in technological changes.
Many of these companies also are primary customers for various components, and
therefore have significant control over certain markets that we have targeted.
In addition, we may not be able to offer prices as low as some of our
competitors because those competitors may have lower cost structures. Our
inability to provide comparable or better products and services at a lower cost
than our competitors could adversely effect demand for our products and
services. We cannot assure you that our competitors will not succeed in
developing technologies in these fields which will enable them to offer laser
services more advanced and less costly than those we offer or which could render
our technologies obsolete.
Our products and services are subject to industry standards, which increases
their cost and could delay or bar their commercial acceptance.
Since some of our products and services in development are used in the
telecommunications industry, they must comply with the Bellcore Testing
standards for traditional equipment. These standards govern the design,
manufacture and marketing of these items. If we fail to comply with these
standards, we will not be able to sell our products. We may encounter
significant delays or incur additional costs in our efforts to comply with these
industry standards.
We depend on our relationship with third parties to develop and commercialize
new products.
Our strategy for research and development and for the commercialization of our
products contemplates a continuing relationship with various publicly and
privately funded consortia and our existing relationships will continue with
strategic partners, original equipment manufacturers (OEMs), potential licensees
and others. We depend on these associations and relationships not only to
underwrite our research and development efforts, but also for product testing
and to create markets for our products and services. The majority of our product
research has been funded by customers or potential customers. We cannot assure
you that our existing relationships will continue or the extent to which the
parties to such arrangements will continue to allocate time of resources to
these strategic alliances. Similarly, we cannot assure you that we will be able
to enter into new arrangements in the future. In addition, we cannot assure you
that any agreement will progress to a production phase or, if production
commences, that we will receive significant revenues as a result of these
relationships. The majority of our relationships for product development or
contract research is for one to two years in duration, and is generally
cancelable based on attaining or not attaining the customers' milestones.
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We have only limited manufacturing capabilities and our inability to
continuously manufacture products on a cost-effective basis would harm our
business.
We have limited production facilities and limited experience in manufacturing
our product offerings. To the extent any of our existing or future products must
be produced in commercially reasonable quantities, we will have to either
develop that expertise quickly or outsource that function. Developing
manufacturing capability is an expensive and time-consuming endeavor and we do
not have the resources that are required for a full-scale manufacturing
capability. Therefore, in all likelihood we will have to engage a third party to
manufacture our products for us. In that event, we will depend on the
manufacturer to produce high-quality products based on our specifications, on
time and within budget. If we are unable to manufacture products in sufficient
quantities and in a timely manner to meet customer demand ourselves or by
others, our business, financial condition and results of operations will be
materially adversely affected.
We depend on our intellectual property rights to provide us with a competitive
advantage.
Our ability to compete successfully depends, in part, on our ability to protect
our products and technologies under United States and foreign patent laws, to
preserve trade secrets and other proprietary information and technologies, and
to operate without infringing the proprietary rights of others. We cannot assure
you that patent applications relating to our products or potential products will
result in patents being issued, that any issued patents will afford adequate
protection or not be challenged, invalidated, infringed or circumvented, or that
any rights granted will give us a competitive advantage. Furthermore, we cannot
assure you that others have not independently developed, or will not
independently develop, similar products and/or technologies, duplicate any of
our product or technologies, or, if patents are issued to, or licensed by, us,
design around those patents. We cannot assure you that patents owned or licensed
and issued in one jurisdiction will also be issued in any other jurisdiction. In
addition, we cannot assure you that we can adequately protect our proprietary
technology and processes that we maintain as trade secrets. If we are unable to
develop and adequately protect our proprietary technology and other assets, our
business, financial condition and results of operations will be materially
adversely affected.
We depend on the continued services of our key personnel.
Our future success depends, in part, on the continuing efforts of our senior
executive officers, Clifford G. Brockmyre II, Thomas Mueller, Bruce J. Garreau,
and Jeff Bullington who conceived our strategic plan and who are responsible for
executing that plan. The loss of any of these key employees may adversely affect
our business. At this time we do not have any term "key man" insurance on any of
these executives other than a $1.7 million policy on Clifford G. Brockmyre II.
If we lose the services of any of these senior executives, our business,
operations and financial condition could be materially adversely affected.
We may have difficulties in managing our growth.
Our future growth depends, in part, on our ability to implement and expand our
financial control systems and to expand, train and manage our employee base and
provide support to an expanded customer base. If we cannot manage growth
effectively, it could have material adverse effect on our results of operations,
business and financial condition. Acquisitions and expansion involve substantial
infrastructure and working capital costs. We cannot assure you that we will be
able to integrate our acquisitions and expansions efficiently. Similarly, we
cannot assure you that we will continue to expand or that any expansion will
enhance our profitability. If we do not achieve sufficient revenue growth to
offset increased expenses associated with our expansion, our results will be
adversely affected.
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We must attract, hire and retain qualified personnel.
As we continue to develop new products and as our business grows, significant
demands will be placed on our managerial, technical, financial and other
resources. One of the keys to our future success will be our ability to attract,
hire and retain highly qualified scientific, engineering, marketing, sales and
administrative personnel. Competition for qualified personnel in these areas is
intense and we will be competing for their services with companies that have
substantially greater resources than we do. We cannot assure you that we will be
able to identify, attract and retain employees with skills and experience
necessary and relevant to the future operations of our business. Our inability
to retain or attract qualified personnel in these areas could have a material
adverse effect on our business and results of operations.
We face potential product liability claims.
The sale of our telecommunications, aerospace and medical products and services
will involve the inherent risk of product liability claims by others. We
maintain product liability insurance coverage. However, we cannot assure that
the amount and scope of our existing coverage is adequate to protect us in the
event that a product liability claim is successfully asserted. Moreover, we
cannot assure you that we will continue to maintain the coverage we currently
have. Product liability insurance is expensive, subject to various coverage
exclusions and may not always be obtainable on terms acceptable to us.
Our stock price is volatile and could be further affected by events not within
our control.
The trading price of our common stock has been volatile and will continue to be
subject to:
o volatility in the trading markets generally;
o significant fluctuations in our quarterly operating results;
o announcements regarding our business or the business of our
competitors;
o changes in prices of our or our competitors' products and services;
o changes in product mix; and
o changes in revenue and revenue growth rates for us as a whole or for
geographic areas, and other events or factors.
Statements or changes in opinions, ratings or earnings estimates made by
brokerage firms or industry analysts relating to the markets in which we operate
or expect to operate could also have an adverse effect on the market price of
our common stock. In addition, the stock market as a whole has from time to time
experienced extreme price and volume fluctuations which have particularly
affected the market price for the securities of many small cap companies and
which often have been unrelated to the operating performance of these companies.
The price of our common stock may be adversely affected by the possible issuance
of shares under our credit facilities and as a result of the exercise of
outstanding warrants and options.
In addition to the 2,978,263 shares that may be issuable under our credit
facilities at a 12.5% discount to the twenty-day volume weighted price of our
common stock, as of April 15, 2002 we had granted options covering 1,157,251
shares of our common stock under our stock option plans. In addition, we had
issued warrants covering 1,333,375 shares of common stock and had a note
outstanding convertible into 444,444 shares of common stock. The shares of
common stock issuable in satisfaction of these obligations represents
approximately 106% of our outstanding shares at April 15, 2002. As a result of
the actual or potential sale of these shares into the market, our common stock
price may decrease.
7
Concentration of ownership
As of April 15, 2002, our chief executive officer, Clifford G. Brockmyre II, is
our largest stockholder, owning approximately 24% of the issued and outstanding
shares of our common stock. Mr. Brockmyre, as a result, effectively controls all
our affairs, including the election of directors and any proposals regarding a
sale of the Company or its assets or a merger.
Some provisions in our charter documents and bylaws may have anti-takeover
effects.
Our certificate of incorporation and bylaws contain provisions that may make it
more difficult for a third party to acquire us, with the result that it may
deter potential suitors. For example, our board of directors is authorized,
without action of the stockholders, to issue authorized but unissued common
stock and preferred stock. The existence of undesignated preferred stock and
authorized but unissued common stock enables us to discourage or to make it more
difficult to obtain control of us by means of a merger, tender offer, proxy
contest or otherwise.
Absence of dividends to shareholders.
We have never declared a dividend on our common stock. We do not anticipate
paying dividends on the common stock in the foreseeable future. We anticipate
that earnings, if any, will be reinvested in the expansion of our business and
debt reduction.
We have agreed to limitations on the potential liability of our directors.
Our certificate of incorporation provides that, in general, directors will not
be personally liable for monetary damages to the company or our stockholders for
a breach of fiduciary duty. Although this limitation of liability does not
affect the availability of equitable remedies such as injunctive relief or
rescission, the presence of these provisions in the certificate of incorporation
could prevent us from recovering monetary damages.
We must maintain compliance with certain criteria in order to maintain listing
of our shares on the Nasdaq market.
Our common stock is traded on the Nasdaq SmallCap Market. In order to maintain
this listing, we are required to meet certain requirements relating to our stock
price and net tangible assets of $2.0 million (stockholders' equity, less
unamortized goodwill). If we fail to meet these requirements, our stock could be
delisted. If our stock is delisted, it will trade on the OTC Bulletin Board or
in the "pink sheets" maintained by the National Quotation Bureau Incorporated.
As a consequence of such delisting, an investor could find it more difficult to
dispose of or to obtain accurate quotations as to the market value of our
securities. Among other consequences, delisting from Nasdaq may cause a decline
in our stock price and difficulty in obtaining future financing.
The liquidity of our stock could be severely reduced if it becomes classified as
"penny stock".
The Securities and Exchange Commission has adopted regulations which generally
define a "penny stock" to be any non-Nasdaq equity security that has a market
price (as therein defined) of less than $5.00 per share or with an exercise
price of less than $5.00 per share. If our securities were subject to the
existing rules on penny stocks, the market liquidity for our securities could be
severely adversely affected. For any transaction involving a penny stock, unless
exempt, the rules require substantial additional disclosure obligations and
sales practice obligations on broker-dealers where the sale is to persons other
8
than established customers and accredited investors (generally, those persons
with assets in excess of $1,000,000 or annual income exceeding $200,000, or
$300,000 together with their spouse). For transactions covered by these rules,
the broker-dealer must make a special suitability determination for the purchase
of the common stock and have received the purchaser's written consent to the
transaction prior to the purchase. Additionally, for any transaction involving a
penny stock, unless exempt, the rules require the delivery, prior to the
transaction, of a risk disclosure document mandated by the Commission relating
to the penny stock market. The broker-dealer also must disclose the commissions
payable to both the broker-dealer and the registered representative, current
quotations for the securities and, if the broker-dealer is the sole market
maker, the broker-dealer must disclose this fact and the broker-dealer's
presumed control over the market. Finally, monthly statements must be sent
disclosing recent price information for the penny stock held in the account and
information on the limited market in penny stocks. Consequently, the "penny
stock" rules may restrict the ability of broker-dealers to sell the common stock
and accordingly the market for our common stock.
WHERE YOU CAN FIND MORE INFORMATION
We are required to comply with the informational and reporting
requirements of the Securities Exchange Act of 1934, as amended. As required by
that statute, we have filed various reports, proxy statements and other
information with the Securities and Exchange Commission. You may inspect these
reports, proxy statements and other information at the public reference
facilities of the Securities and Exchange Commission at its principal offices at
Judiciary Plaza, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and
at its regional offices located at 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. You can get copies of these reports, proxy statements and
other information from these offices by paying the required fees. Please call
the Securities and Exchange Commission at (800) SEC-0330 for further information
regarding the operation of its public reference room. These reports, proxy
statements and other information can also be accessed over the Internet at the
web site maintained by the Securities and Exchange Commission at
http://www.sec.gov.
We have filed a registration statement on Form S-3 with the Securities and
Exchange Commission under the Securities Act regarding the shares of our common
stock covered by this prospectus. This prospectus, which forms a part of that
registration statement, does not contain all of the information included in that
registration statement and its accompanying exhibits. Statements contained in
this prospectus regarding the contents of any document are not necessarily
complete and are qualified in their entirety by that reference. You should refer
to the actual document as filed with the Securities and Exchange Commission.
REPORTS TO SECURITY HOLDERS
We furnish our stockholders with annual reports containing audited
financial statements. In addition, we are required to file reports on Forms 8-K,
10-QSB and 10-KSB with the Securities and Exchange Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by us with the Securities and Exchange
Commission are incorporated in this prospectus by reference:
(1) Annual Report on Form 10-KSB for the fiscal year ended December 31,
2001.
Each document filed after the date of this prospectus under Section 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act but before this offering
terminates is incorporated in this prospectus by
9
reference and is to be treated as part of this prospectus as of the date it is
filed. Any statement contained in a document incorporated or deemed to be
incorporated in this prospectus by reference is modified or superseded to the
extent that a statement contained in this prospectus or in any other
subsequently filed document that is incorporated in this prospectus by reference
modifies or supersedes that statement.
We will provide, without charge, each person to whom a copy of this
prospectus is delivered, a copy of any document incorporated by reference in
this prospectus (other than exhibits, unless those exhibits are specifically
incorporated by reference in those documents) if it is requested. Requests
should be directed to Infinite Group, Inc., 2364 Post Road, Warwick, Rhode
Island 02886, Attention: Clifford G. Brockmyre II, President and Chief Executive
Officer.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION AND
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY US. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE OF SHARES OF OUR COMMON STOCK
COVERED BY THIS PROSPECTUS SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN OUR AFFAIRS SINCE THE DATE OF THIS
PROSPECTUS OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO ITS DATE. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR
A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE REGISTERED
SECURITIES TO WHICH IT RELATES. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES IN ANY CIRCUMSTANCES IN
WHICH THE OFFER OR SOLICITATION IS UNLAWFUL.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference in this
prospectus contain forward-looking statements that involve substantial risks and
uncertainties. You can identify these statements by forward-looking words such
as "anticipate," "believe," "could," "estimate," "expect," "intend," "may,"
"should," "will" and "would" or similar words. You should read statements that
contain these words carefully because they discuss our future expectations,
contain projections of our future results of operations or of our financial
position or state other "forward-looking" information. We believe that it is
important to communicate our future expectations to our stockholders. However,
there may be events in the future that we are not able to accurately predict or
control. The factors listed above in the section captioned "Risk Factors," as
well as any cautionary language in this prospectus, provide examples of risks,
uncertainties and events that may cause our actual results to differ materially
from the expectations we describe in our forward-looking statements. Before you
invest in our common stock, you should be aware that the occurrence of the
events described in these risk factors and elsewhere in this prospectus could
have a material adverse effect on our business, results of operations, financial
position and the price of our common stock.
10
THE COMPANY
BUSINESS
We operate through two business segments, our Laser Group and our
Photonics Group. Our Laser Group provides comprehensive laser-based materials
and processing services. Our Photonics Group develops and markets diodes for
source and pump lasers and semiconductor optical amplifiers.
During 2001 and the first quarter of 2002, we also had a Plastics Group,
which consisted of two subsidiaries, Express Pattern, Inc. (EP) and Osley &
Whitney, Inc. (O&W). Our Plastics Group provided rapid prototyping services and
proprietary mold building services. In November 2001 and December 2001, our
board of directors determined to dispose of O&W and EP. Our plan consisted of
shutting down the operations of O&W and selling the assets of EP. The sale of EP
was consummated on March 14, 2002 and we are in the process of selling off the
remaining assets of O&W.
The Laser Group
Our Laser Group provides laser-based manufacturing services (cutting,
welding, drilling and assembly) to industrial customers. It uses 26 multi-axis
laser workstations to process parts ranging in size from very large (jet engine
or gas turbine parts) to very small medical products, such as stents (stents are
medical implants used to open veins for better blood flow). We use lasers to
fabricate components for customers in the aerospace, defense, medical,
telecommunications and sensing industries. We have developed proprietary
manufacturing techniques that, we believe, have established us as a valued
supplier of engineered components.
Substantially all of our laser workstations employ multi-axis lasers,
commonly used for industrial component fabrication. One of our laser
workstations uses a new system developed with and licensed from Sandia National
Laboratories (Sandia). This workstation uses a process called Laser Engineered
Net Shaping (LENS(R)), which was developed cooperatively at Sandia by Sandia and
a consortium that included our Laser Group, Ford, Motorola, Lockheed Martin and
others. The LENS(R) workstation is used to make parts or resurface parts
directly in metal by introducing powdered metals through a feeder system,
melting the airborne powdered metals as they pass through a small tube with a
laser beam, and depositing the metal on to a surface. This process is computer
controlled and the systems deposit metals based on information provided from
three-dimensional engineering files, such as AutoCad(R). LENS(R) workstations
are useful for the overhaul and repair of expensive aerospace parts that would
otherwise be discarded, and for depositing rare metals, such as titanium, in
complex structures used in medical devices. Lockheed Martin, Barnes Aerospace,
United States Government military overhaul depots and Triton Systems are our
primary customers to date for these services.
The United States Federal Aviation Administration (FAA) has licensed us to
perform overhaul and repair of jet engine and aerospace parts and the United
States Food and Drug Administration (FDA) has licensed us as a contract
manufacturer of medical devices. Our customers are responsible for obtaining all
regulatory approvals of their products or components; we solely manufacture
these components to our customers' specifications. We cut, weld, drill and / or
assemble parts for over 100 industrial companies, including: General Electric
Jet Engine and Gas Turbine divisions; United Technologies' Jet and Aerospace;
Barnes Aerospace; Johnson & Johnson; Mitek, Smith & Nephew; Dey Laboratories;
and Stryker Medical.
Our Laser Group also provides laser-related contract research and
development. We are both a prime contractor and subcontractor on several
projects sponsored by the Defense Advanced Research Projects Agency (DARPA). We
are a subcontractor on all four of DARPA's Mesoscopic Integrated
11
Conformal Electronics (or MICE) programs. Mesoscopic refers to "handheld", and
MICE programs are aimed at providing a series of sophisticated handheld devices
for military, industrial and consumer use based on very small electronic
components, many of which may be manufactured using lasers. Other research and
development projects include acoustic bandgap research for the United States
Naval Underwater Warfare Center and the Electric Boat division of General
Dynamics, as well as photonic bandgap and high temperature superconductor
research for the United States Air Force Research Laboratory (AFRL).
The Laser Group employs 68 full-time technical and engineering personnel
in Smithfield and Narragansett, RI in 16,800 square feet of facilities that we
own and 8,326 square feet of facilities that we lease.
The Photonics Group
Photonics is the science of generating and harnessing light to do useful
work. Lasers and fiber optics are the best-known expressions of photonics
technology. We believe photonics technology will be as important to the 21st
century as electronics was to the 20th century.
The basic unit of light is the photon, while in electronics it is the
electron. Because photons are massless and travel faster than electrons,
photonic devices can be smaller and significantly faster than electronic
devices. For example, replacing electronics (copper wire) with photonics (fiber
optic cable) boosts the capacity of telecommunications transmission lines by a
factor of 10,000.
Photonic components are the "enabling technology" in many familiar
consumer products including CD-ROM players, digital cameras, displays on laptop
computers and calculators, fiber optic cable for telephones, cable television
and networked computer systems. In industry, photonic "eyes" enable robots to
"see." Photonics is also found in semiconductor manufacturing as well as
analytical and process-monitoring applications. In medicine, photonics is at the
core of diagnostic instrumentation, laser microsurgery, and filmless real-time
imaging.
In April 2001, we organized Infinite Photonics, Inc. to develop and market
laser diodes based on our proprietary, patented and patent pending grating
coupled surface emitting lasers (GCSEL) diode technology platform developed by
our Laser Group's research and development unit over the last four years. In
addition to our staff researchers, we also engaged researchers at the Photonics
Research Center at the University of Connecticut, the Ioffe Institute in St.
Petersburg, Russia and the Center for Research and Education in Optics and
Lasers at the University of Central Florida in Orlando to develop applications
of our GCSEL's. To date we have obtained one patent (expiring in 2018), have ten
patents pending and an additional ten patents are under development for GCSEL
and related technologies. We own the intellectual property, which in addition to
patents and patent applications, includes the trade secrets and processing
techniques used to manufacture these diodes.
Our diode lasers are produced from two to four inch semiconductor wafer
material, usually indium phosphide (InP), gallium arsenide (GaAs), or gallium
nitride (GaN). The semiconductor wafer material chosen determines the wavelength
of the laser beam, such as 980 nanometers for GaAs, 1550 nanometers for InP, and
1480 nanometers for GaN. A nanometer is one billionth of a meter. The
semiconductor diode wafers we currently use in the manufacture of GCSEL's are
processed at Industrial Microphotonics Company (a TRW subsidiary). We are
currently qualifying a second wafer-manufacturing source, as required by most
larger telecommunications equipment manufacturers.
A three-inch semiconductor wafer has the potential to produce
substantially more than 2,000 individual diode lasers as small as a millimeter
by one and one-half millimeters. Each diode can emit
12
laser energy (lase) with continuous power of greater than one watt. Each
individual diode has two sections, active and passive. The passive area of each
diode on the wafer is etched with one of a variety of grating patterns. It is
through this grating on the surface of the diode that the laser beam emits,
hence the name, Grating Coupled Surface Emitting Laser. At the opposite end of
the diode from the grating, a contact is placed on the diode to provide
electrical power, and a thermo-electric cooler or heat sink may be used to cool
the diode during operation. When electrical power is applied to the contact,
lasing begins in the semiconductor material, and laser energy is emitted through
the grating. The device is packaged to protect the diode, along with a very
small focusing lens, and that lens is used to focus the laser beam into the end
of the fiber optic cable.
Our competitors produce diode lasers that can either emit from the edge of
the wafer material, such as processes known as Fabry-Perot or Distributed
Feedback diode lasers, or through the surface, such as through a surface
emitting technology different from ours, known as Vertically Coupled Surface
Emitting Lasers. Each technology has different characteristics in terms of cost,
power output and laser beam quality. We believe that our GCSEL diodes produce
the best overall combination of cost, power and beam quality of emitted light.
Because the beam comes out of the grating in a cylindrical shape (low beam
spreading), our diodes require lower cost focusing optics. Emitting the beam
from the wide surface of the wafer (as opposed to the narrow edge of the wafer)
allows our diodes to be tested on the wafer, which provides lower test, burn-in
and packaging costs. Finally, the very narrow line width of the beam allows for
tunability over a greater number of available channels. The qualities of our
diode lasers in comparison to competitive diodes include:
o Power of up to eight watts compared to currently commercially
available power of under one watt;
o Beam spreading of less than one degree as compared to 12 to 30
degrees for edge emitted laser energy (which reduces the cost and
complexity of the optics needed to focus to the fiber); and
o Relatively narrow line width of emitted laser energy (which allows
for more than 50 communication channels on a single fiber optic
cable).
We have many of the same disadvantages of most emerging technology
start-ups, which includes among others: market acceptance of a new technology;
customer commitment to engineer or re-engineer their products to incorporate our
technology; the need to expand rapidly and attract talented personnel; and the
need to raise capital to fund that expansion.
On January 23, 2002, Infinite Photonics, Inc. signed and commenced a $12.0
million research and development contract with DARPA, which is scheduled to
conclude by the end of 2003. Payments under this contract will be received as
services are rendered and billed for. The contract is terminable if we fail to
provide the specified services. The purpose of the contract is to provide DARPA
with pump and source laser diodes and grating coupled semiconductor optical
amplifiers with powers much higher than the current industry standard of about
0.3 watts (more than one watt with a goal as high as ten watts), high repetition
rates (up to 20,000 laser pulses per second), and high beam quality (minimum
beam spreading of the laser). We will own the intellectual property developed
under the contract.
In March 2002, we signed a one-year lease with the Central Florida
Research Park in Orlando, Florida for a 6,750 square foot laboratory and
manufacturing facility. This facility replaces laboratory and office space we
were leasing on a short-term basis from the University of Central Florida.
Depending on market acceptance of our products once we achieve full production,
we may require more space in the foreseeable future.
13
Our Photonics Group employs 12 full-time personnel. We expect to grow our
Photonics Group staff to approximately 30 to 40 full-time employees by the end
of 2002. We currently have subcontractors producing raw material (semiconductor
wafers), electrical drivers, power supplies and devices to control the heat
produced by our diodes (thermal management). The proprietary grating patterns
etched into the semiconductor wafers for different applications are accomplished
at our current facilities in Orlando, FL and in St. Petersburg, Russia at the
Ioffe Institute.
We expect to acquire a minimum of approximately $1.2 million in capital
equipment over the next year through equipment operating leases that will be
negotiated under terms available at the time of acquisition. Additionally, we
currently have semiconductor steppers and other relatively high cost equipment
available to us on a per hour basis from the University of Central Florida, as
well as from other commercial facilities. We estimate that this equipment will
support up to $10.0 million in annual revenue capacity. Our Florida facility is
certified for exemption by the Governor's Office from sales and use taxes under
Florida's Semiconductor, Defense and Space Technology Facilities Program.
We intend to continue to use a combination of direct sales to customers,
contract research and development for new and existing customer applications and
early stage prototype assistance to foster our Photonics Group's growth.
We were incorporated under the laws of the state of Delaware on October
14, 1986. On January 7, 1998, we changed our name from Infinite Machines Corp.
to Infinite Group, Inc. Our principal executive offices are located at 2364 Post
Road, Warwick, RI 02886 and our facsimile number is (401) 738-6180. Our
subsidiaries are located in Rhode Island and Florida. We maintain sites on the
World Wide Web at www.infinite-group.com, www.laserfare.com, and
www.infinitephotonics.com. Information contained on any of our websites do not
constitute a part of this Report on Form 10-KSB.
USE OF PROCEEDS
All of the shares of our common stock offered by this prospectus are being
registered for the account of the selling stockholders. We will not receive any
of the proceeds from the sale of these shares. However, we will receive the
proceeds from the exercise of the warrants covering the 317,150 shares of common
stock covered by this prospectus to the extent those warrants are exercised.
These proceeds would be approximately $958,100 if all the warrants and options
are exercised. We expect to use substantially all the net proceeds from the
exercise of the warrants and the sale of the shares for general corporate
purposes, including research and development, expansion of sales and marketing
activities and working capital. We will retain broad discretion in the
allocation of those net proceeds.
14
SELLING STOCKHOLDERS
The following table sets forth the name and the number of shares of our
common stock beneficially owned by each selling stockholder as of April 15, 2002
and as adjusted to reflect the sale of the shares offered by this prospectus, by
each selling stockholder. Except as otherwise indicated, the persons listed
below have sole voting and investment power with respect to all shares of common
stock owned by them including those shares not yet issued. In addition, unless
otherwise indicated, none of the selling stockholders has had a material
relationship with us or any of our affiliates within the past three years. All
information with respect to beneficial ownership has been furnished to us by the
respective selling stockholder.
Shares Beneficially Owned Shares Beneficially
Prior to Offering(1) Owned After the Offering
------------------------- ---------------------------
Shares
Name of Beneficial Owner Number Percent Offered Number Percent
------------------------------------- ----------- ----------- ----------- ---------- -----------
Roger P. Moore (2) 13,750 * 13,750 -- --
Gulati Family, LP (Ramesh Gulati) (2) 13,750 * 13,750 -- --
Douglas J. Rademacher (2) 13,750 * 13,750 -- --
David R. Johnson Living Trust (2)
(David R. Johnson) 27,250 * 13,750 13,500 *
Delivery From Heaven Foundation
(Michael Casey) (3) 54,500 * 27,500 27,000 *
David P. Pilotte 75,000 1.3% 75,000 -- --
Christopher DiNapoli (3) 41,000 * 27,500 13,500 *
John J. Perkins (4) 82,500 1.5% 82,500 -- --
Dana A. Marshall (5) 55,000 * 55,000 -- --
Daniel Cohen 100,000 1.8% 100,000 -- --
Larry Dosser 16,268 * 16,268 -- --
Allan Ligi 117,500 2.1% 117,500 -- --
Idea Capital, Inc. (Sean McEllin) (6) 15,400 * 15,400 -- --
Rhino Capital (Michael Johnson) (7) 34,000 * 34,000 -- --
Christopher Murney (8) 16,500 * 16,500 -- --
John F. Corridan III 3,750 * 3,750 -- --
William M. Johnson 35,000 * 35,000
Richard G. Heidt 50,000 * 50,000
IHC, Inc. (Brian Bussanich) 30,000 * 30,000 -- --
The Estate of Ralph P. Lazzara (9)
(Executrix Genevieve M. Lazzara) 379,253 6.4% 379,253 -- --
Laurus Master Fund, LTD (10)
(David Grin - Partner) 494,444 8.1% 494,444 -- --
Rosecrest Venture Management (11)
(Chris DiNapoli & Dave Johnson) 200,000 3.5% 200,000 -- --
----------
* Less than 1%.
15
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. In computing the number of shares
beneficially owned by a person and the percentage ownership of that
person, shares of common stock underlying options and warrants held by
that person that are currently exercisable or exercisable within 60 days
of April 15, 2002 are deemed outstanding. These shares, however, are not
deemed outstanding for the purpose of computing the percentage ownership
of any other person.
(2) Includes 1,250 shares subject to currently exercisable warrants
(exercisable at $4.00 per share through June 15, 2004).
(3) Includes 2,500 shares subject to currently exercisable warrants
(exercisable at $4.00 per share through June 15, 2004).
(4) Includes 7,500 shares subject to currently exercisable warrants
(exercisable at $3.00 per share through June 15, 2004).
(5) Includes 5,000 shares subject to currently exercisable warrants
(exercisable at $4.00 per share through June 15, 2004).
(6) Includes 15,400 shares subject to currently exercisable warrants
(exercisable at $4.00 per share through June 15, 2004).
(7) Includes 34,000 shares subject to currently exercisable warrants
(exercisable at $3.00 per share through November 6, 2004.
(8) Includes 1,500 shares subject to currently exercisable warrants
(exercisable at $3.00 per share through November 30, 2004.
(9) The address of the holder is c/o Gary E. Martinelli, Esq., Suite 912,
Tower Square, P.O. Box 15407, 1500 Main Street, Springfield, MA 01115.
(10) Includes 50,000 shares subject to currently exercisable warrants
(exercisable at $2.65 per share through February 5, 2004) and 444,444
shares issuable upon conversion of an outstanding note. The address of the
holder is c/o Onshore Corporate Services Ltd., PO Box 1234 G.T.,
Queensgate House, South Church Street, Grand Cayman, Cayman Islands.
(11) Includes 200,000 shares subject to currently exercisable warrants
(exercisable at $3.00 per share through April 15, 2005) in full payment of
debt outstanding.
PLAN OF DISTRIBUTION
The selling stockholders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of common stock covered by this prospectus on any stock exchange, market or
trading facility on which the shares are traded or in private transactions.
These sales may be at fixed or negotiated prices. The selling stockholders may
use any one or more of the following methods when selling shares:
o ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
o block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block
as principal to facilitate the transaction;
o purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
o an exchange distribution in accordance with the rules of the
applicable exchange;
o privately negotiated transactions;
o short sales;
o broker-dealers may agree with the selling stockholders to sell a
specified number of such shares at a stipulated price per share;
16
o a combination of any such methods of sale; and
o any other method permitted pursuant to applicable law.
The selling stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.
The selling stockholders may also engage in short sales against the box,
puts and calls and other transactions in our securities or derivatives of our
securities and may sell or deliver shares in connection with these trades. The
selling stockholders may pledge their shares to their brokers under the margin
provisions of customer agreements. If a selling stockholder defaults on a margin
loan, the broker may, from time to time, offer and sell the pledged shares.
Broker-dealers engaged by the selling stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the selling stockholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The selling stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.
The selling stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.
We will pay all of the expenses relating to the registration of the shares
covered by this prospectus except for selling and brokerage commissions. These
expenses are estimated at $35,000.00.
LEGAL MATTERS
The validity of the common stock offered hereby will be passed upon by
Morse, Zelnick, Rose & Lander, LLP. Members of Morse, Zelnick, Rose & Lander,
LLP own options to purchase 65,000 shares of our common stock.
EXPERTS
The financial statements of Infinite Group, Inc. as of December 31, 2001
and 2000, and for the years then ended, are incorporated by reference in this
prospectus and in the registration statement in reliance upon the report of
Freed Maxick & Battaglia CPAs, P.C., independent certified public accountants,
incorporated by reference herein, upon the authority of said firm as experts in
accounting and auditing.
17
PROSPECTUS
INFINITE GROUP, INC.
1,814,615 Shares
Common Stock
Dated: ______________________, 2002
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The fees and expenses we incurred in connection with the offering are
payable by us and, other than registration, filing and listing fees, are
estimated as follows:
SEC registration fee.............................................. $ 490
Accounting fees and expenses...................................... *
Legal fees and expenses........................................... *
Printing costs.................................................... *
Miscellaneous expenses............................................ *
--------
Total....................................................... $ *
========
*To be provided by amendment.
Item 15. Indemnification of Officers and Directors
Our Certificate of Incorporation provides that the indemnification
provisions of Sections 102(b)(7) and 145 of the Delaware General Corporation Law
shall be utilized to the fullest extent possible. Further, the Certificate of
Incorporation contains provisions to eliminate the liability of our directors to
Infinite or its stockholders to the fullest extent permitted by Section
102(b)(7) of the Delaware General Corporation Law, as amended from time to time.
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify directors and officers as well as other employees and
individuals against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with any threatened, pending or completed actions, suits or
proceedings in which such person is made a party by reason of such person being
or having been a director, officer, employee or agent of the corporation. The
Delaware General Corporation Law provides that Section 145 is not exclusive of
other rights to which those seeking indemnification may be entitled under any
bylaw, agreement, vote of stockholders or disinterested directors or otherwise.
Section 102(b)(7) of the Delaware General Corporation Law permits a
corporation to provide in its certificate of incorporation that a director of
the corporation shall not be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) for
unlawful payments of dividends or unlawful stock repurchases, redemptions or
other distributions, or (iv) for any transaction from which the director derived
an improper personal benefit. Our Certificate of Incorporation provides for such
limitation of liability.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended, is permitted for our directors, officers or controlling
persons, pursuant to the above mentioned statutes or otherwise, we understand
that the Securities and Exchange Commission is of the opinion that such
indemnification may contravene federal public policy, as expressed in said Act,
and therefore, may be unenforceable. Accordingly, in the event that a claim for
such indemnification is asserted by any of our
II-1
directors, officers or controlling persons, and the Commission is still of the
same opinion, we (except insofar as such claim seeks reimbursement from us of
expenses paid or incurred by a director, officer of controlling person in
successful defense of any action, suit or proceeding) will, unless the matter
has theretofore been adjudicated by precedent deemed by our counsel to be
controlling, submit to a court of appropriate jurisdiction the question whether
or not indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
At present, there is no pending litigation or proceeding involving any of
our directors, officers or employees as to which indemnification is sought, nor
are we aware of any threatened litigation or proceeding that may result in
claims for indemnification.
Item 16. Exhibits
The following exhibits are filed with this Registration Statement:
Exhibit No. Description
----------- -----------
5.1 Opinion and consent of Morse, Zelnick, Rose & Lander, LLP*
23.1 Consent of Freed Maxick & Battaglia CPAs, PC*
23.2 Consent of Morse, Zelnick, Rose & Lander, LLP (included in
Exhibit 5.1)
24 Power of Attorney**
----------
* Filed herewith.
** Previously filed.
Item 17. Undertakings
The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price
represent no more than 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
II-2
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) above do not apply
if the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, that are incorporated by reference in this
Registration Statement.
(2) that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof; and
(3) to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of this offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Warwick, State of Rhode Island and Providence
Plantations on this 30th day of April, 2002.
INFINITE GROUP INC.
By: /s/ Clifford G. Brockmyre, II
------------------------------------
Clifford G. Brockmyre II,
President, Chief Executive Officer
And Chairman of the Board
POWER OF ATTORNEY
KNOW ALL MEN AND WOMEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Clifford G. Brockmyre II as his true and
lawful attorney-in-fact and agent, with full power of substitution, for him and
in his name, place and stead, in any and all capacities, to sign any or all
amendments or post-effective amendments to this Registration Statement, and to
file the same, with all exhibits thereto, which amendments may make such changes
in this Registration Statement as such agent deems appropriate, and to file any
new registration statement (and any post-effective amendment thereto) which
registers additional securities of the same class and for the same offering as
this Registration Statement in accordance with Rule 462(b) under the Securities
Act (each, a "462(b) Registration Statement"), and the Registrant and each such
person hereby appoints each such Agent as attorney-in-fact to execute in the
name and on behalf of the Registrant and each such person, individually and in
each capacity stated below, any such amendments to this registration statement
and any such 462(b) Registration Statements, and other documents in connection
therewith, with the Commission.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on April 30, 2002.
Signature Title
-----------------------------------
/s/ Clifford G. Brockmyre II President, Chief Executive Officer
----------------------------------- and Chairman of the Board
Clifford G. Brockmyre II (Principal Executive Officer)
/s/ Bruce J. Garreau* Chief Financial Officer
----------------------------------- (Principal Financial and
Bruce J. Garreau Accounting Officer)
/s/ J. Terence Feeley* Director
-----------------------------------
J. Terence Feeley
/s/ Brian Q. Corridan* Director
-----------------------------------
Brian Q. Corridan
/s/ Michael S. Smith* Director
-----------------------------------
Michael S. Smith
*By: /s/ Clifford G. Brockmyre, II
------------------------------
Clifford G. Brockmyre, II
Attorney-in-fact
II-4