DIGIMARC CORP : Termination of a Material Definitive Agreement (form 8-K)

Published: 2021-10-05 17:24:05 ET DMRC

Item 1.02. Termination of a Material Definitive Agreement

As previously disclosed, on April 16, 2020, Digimarc Corporation (the "Company") received loan proceeds of $5.0 million under the Paycheck Protection Program (the "PPP"). The PPP was established as part of the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act") and is administered by the U.S. Small Business Administration ("SBA"). The PPP loan was evidenced by a promissory note (the "Note"), dated April 16, 2020, between the Company, as Borrower, and Stearns Bank, N.A., as Lender. The Note was later transferred by Stearns Bank, N.A. to the Loan Source, Inc. The interest rate on the Note was 1.00% per annum.

Under the terms of the CARES Act, PPP loan recipients can apply for and the SBA can grant forgiveness of all or a portion of loans made pursuant to the PPP, plus any accrued interest thereon, if the recipients have used the PPP loan proceeds for eligible purposes. The Company applied for 100% forgiveness of its PPP loan on September 15, 2020.

On September 29, 2021, the Company received confirmation from The Loan Source, Inc. that the SBA approved the Company's PPP loan forgiveness application for the entire outstanding principal and accrued interest under the Company's PPP loan, equaling $5.1 million. The SBA reserves the right to audit any PPP loan. These audits may occur after forgiveness has been granted. Forgiveness of the PPP loan will be recognized in the Company's financial statements during the third quarter ending September 30, 2021.

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