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ISIG Insignia Systems

 
UNITED STATES
 
SECURITIES AND EXCHANGE COMMISSION
 
Washington D.C. 20549
 
FORM 8-K
 
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 
April 22, 2020
Date of Report (Date of Earliest Event Reported)
 
Insignia Systems, Inc.
(Exact Name of Registrant as Specified in its Charter)
 
Minnesota 001-13471 41-1656308
(State of Incorporation) (Commission File Number) (I.R.S. Employer Identification No.)
 
8799 Brooklyn Blvd.Minneapolis, Minnesota 55445
(Address of Principal Executive Offices) (Zip Code)
 
(763) 392-6200
(Registrant’s Telephone Number, Including Area Code)
 
 
(Former Name or Former Address, if Changed Since Last Report.)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2):
 
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered to Section 12(b) of the Act:
 
Title of each class Trading Symbol Name of each exchange on which registered
Common Stock, $0.01 par value ISIG The Nasdaq Stock Market LLC
 
 
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 2.03. 
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
 
On April 22, 2020, Insignia Systems, Inc. (the “Company”) entered into a promissory note (the “Note”) with Alerus Financial, N.A.. The Note evidences a loan to the Company in the amount of $1,054,200 pursuant to the Paycheck Protection Program (the “PPP”) of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) administered by the U.S. Small Business Administration (the “SBA”).
 
In accordance with the requirements of the CARES Act, the Company expects to use the proceeds from the loan exclusively for qualified expenses under the PPP, including payroll costs, rent and utility costs, as further detailed in the CARES Act and applicable guidance issued by the SBA. Interest will accrue on the outstanding balance of the Note at a rate of 1.00% per annum. However, the Company expects to apply for forgiveness of up to all amounts due under the Note, in an amount equal to the sum of qualified expenses under the PPP during the eight weeks following disbursement. Notwithstanding the Company’s eligibility to apply for forgiveness, no assurance can be given that the Company will obtain forgiveness of all or any portion of amounts due under the Note.
 
Subject to any forgiveness granted under the PPP, the Note is scheduled to mature on April 22, 2022 and requires 18 equal monthly payments of principal and interest beginning November 22, 2020. The Note may be prepaid at any time prior to maturity with no prepayment penalties. The Note provides for customary events of default, including, among others, those relating to failure to make payments, bankruptcy, breaches of representations, significant changes in ownership, and material adverse effects. The Company’s obligations under the Note are not secured by any collateral.
 
The foregoing description of the Note is qualified by reference to the complete text of the Note, which is provided as Exhibit 10.1 to this report and incorporated herein by reference.
 
 
Item 9.01. 
Financial Statements and Exhibits.
 
 
(d) 
Exhibits.
 
Exhibit No. Description Method of Filing
 
 
Promissory Note with Alerus Financial, N.A., dated April 22, 2020
 
 
Filed Electronically
 
 
 
 
 
 
 
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Current Report to be signed on its behalf by the undersigned hereunto duly authorized.
 
INSIGNIA SYSTEMS, INC.
 
Date: April 28, 2020 
By: /s/ Kristine A. Glancy
Kristine A. Glancy
                                                                                                            President and Chief Executive Officer