INTELLINETICS, INC. (OTCMKTS:INLX) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01

The information set forth under Item 3.02 of this current report
on Form 8-K is hereby incorporated by reference into this Item
1.01.

The information set forth under Item 3.02 of this current report
on Form 8-K is hereby incorporated by reference into this Item
2.03.

On December 30, 2016 and January 6, 2017, Intellinetics, Inc.
(the Company), entered into a note purchase agreement (the
Purchase Agreement) with certain accredited investors (the
Investors), to which it sold an aggregate principal amount of
$1,092,000 in 12% Subordinated Convertible Notes (Notes), for
$867,000 in cash and the exchange of $225,000 principal face
amount of promissory notes previously issued by the Company. The
Notes are convertible into shares of the Companys common stock,
par value $0.001 per share (Common Stock) at a conversion price
of $0.65 per share (the Offering). The Company intends to use the
net proceeds of the Offering for working capital and general
corporate purposes.

The Notes, together with any accrued and unpaid interest, become
due and payable on December 31, 2018 (the Maturity Date).
Interest on the Notes will accrue at the rate of 12% per annum,
of which (i) 6% shall be payable quarterly in cash in arrears on
the first day of each quarter, and (ii) 6% per annum (the
Deferred Interest Amount), which shall accrue and become due on
the Maturity Date. If any quarterly interest payment is not made
by its payment date, then the Deferred Interest Amount for such
quarterly interest payment shall increase from 6% to 8%. Any
amounts remaining outstanding after the Maturity Date will accrue
interest at the rate of 14% per annum. The Notes will be
convertible into Common Stock at a conversion price of $0.65 per
share at the discretion of the holder, with special provisions
applying to any holder whose conversion would result in the
holder beneficially owning more than 4.99% of the Companys Common
Stock. The Company will provide the Note holders with limited
piggyback registration rights with respect to the resale of the
Common Stock into which the Notes may be converted. The form of
the Notes is incorporated as Exhibit 10.2 to this Report, and the
summary description of the terms of the Notes contained herein is
qualified in its entirety by reference to Exhibit 10.2.

Of the Notes sold, a Note with a principal amount of $250,000 was
sold to Michael N. Taglich, a beneficial owner of more than 10%
of the Companys Common Stock. As payment for such Note, Mr.
Taglich (i) paid $150,000 in cash and (ii) cancelled an existing
convertible note issued by the Company with a principal amount of
$100,000, dated November 30, 2016.

Also among the Notes sold, a Note with a principal amount of
$100,000 was sold to Robert F. Taglich, a beneficial owner of
more than 10% of the Companys Common Stock. As payment for such
Note, Mr. Taglich cancelled an existing convertible note issued
by the Company with a principal amount of $100,000, dated
November 30, 2016.

Also among the Notes sold, a Note with a principal amount of
$25,000 was sold to Robert C. Schroeder, a director of the
Company. As payment for such Note, Mr. Schroeder cancelled an
existing convertible note issued by the Company with a principal
amount of $25,000, dated November 30, 2016.

The Company retained Taglich Brothers, Inc. (the Placement Agent)
as the exclusive placement agent for the Offering. In connection
with the Offering, the Company paid the Placement Agent a cash
payment of $100,000, which represented an 8% commission of the
gross proceeds. The Company has also committed to reimburse the
Placement Agent for reasonable out of pocket expenses, FINRA
filing fees and related legal fees in an amount of up to $30,000.
In addition, the Placement Agent earned warrants to purchase
134,400 shares of Common Stock, which represented 8% of the
shares of Common Stock into which the Notes sold in the Offering
are convertible (the Placement Agent Warrants), which have an
exercise price of $0.75 per share, will be exercisable for a
period of five years, contain customary cashless exercise and
anti-dilution protection and are entitled to registration rights.
The Placement Agent has certain material relationships with the
Company: Robert Schroeder is a Director of the Company and also
the Vice President of Investment Banking at the Placement Agent;
Michael Taglich is a beneficial owner of more than 10% of the
Companys Common Stock and also the Co-Founder, President Chairman
of the Placement Agent; and Robert Taglich is a beneficial owner
of more than 10% of the Companys Common Stock and also the
Co-Founder and Managing Director of the Placement Agent.

The Notes sold in the Offering were not registered under the
Securities Act of 1933, as amended (the Securities Act), or the
securities laws of any state, and were offered and sold in
reliance on the exemption from registration afforded by Section
4(a)(2) and Regulation D (Rule 506) under the Securities Act and
corresponding provisions of state securities laws, which exempt
transactions by an issuer not involving any public offering. The
Investors are accredited investors as such term is defined in
Regulation D promulgated under the Securities Act. This Current
Report shall not constitute an offer to sell or the solicitation
of an offer to buy, nor shall such securities be offered or sold
in the United States absent registration or an applicable
exemption from the registration requirements and certificates
evidencing such securities contain a legend stating the same.

The foregoing descriptions of the Purchase Agreement, Notes, and
Placement Agent Warrants are qualified in their entirety by
reference to the full text of the Purchase Agreement, Notes, and
Placement Agent Warrants, copies of each of which are attached as
exhibits 10.1-10.3, respectively, hereto.

The Company also issued an aggregate of 61,110 shares of Common
Stock on January 5, 2017, to its outside directors, as part of
its annual director compensation previously disclosed by the
Company in the Company’s Schedule 14A Definitive Proxy
Statement, filed on May 16, 2016.

INTELLINETICS, INC. (OTCMKTS:INLX) Recent Trading Information

INTELLINETICS, INC. (OTCMKTS:INLX) closed its last trading session 00.000 at 0.930 with shares trading hands.