Bimergen Energy Corp Debt Disclosure

NOTE 6. NOTES PAYABLE

Term Loan

On September 3, 2014, we entered into a $2,000,000 revolving line of credit agreement with Wells Fargo Bank, N.A. Outstanding principal on the line of credit bore interest at the thirty-day London Interbank Offered Rate (“LIBOR”) plus 2%. The line of credit agreement was amended at various dates until a final amendment on September 30, 2019 converted the line of credit into a one-year term loan precluding any additional draws but retaining all other terms. The line of credit and term loan were guaranteed by Peter L. Dalrymple, a member of our board of directors, and was secured by a first lien interest in certain of his assets.

On the August 31, 2020 maturity date of the term loan with Wells Fargo Bank, N.A., Mr. Dalrymple paid off in full the $610,000 remaining principal balance.

During the year ended December 31, 2020, the Company recorded $15,090 in interest expense related to the Wells Fargo term loan.

Notes payable

Upon Peter L. Dalrymple paying off the principal balance of the Wells Fargo term loan on our behalf on August 31, 2020, we issued Mr. Dalrymple a $610,000 one-year secured promissory note. The secured promissory note bears interest of 6% per year with monthly payments of interest only due until maturity, when all unpaid interest and principal is due. This note is collateralized by all our accounts receivable and a pledge of the stock of our wholly owned subsidiary, Quad Video Halo, Inc. In November 2021, the Company transferred certain accounts receivable to an entity owned by Mr. Dalrymple in exchange for a reduction in the outstanding balance of the note in the amount of $33,946 (see Note 4. Accounts Receivable for additional discussion). The secured promissory note balance was $395,000 at December 31, 2021. The maturity date of the note has been extended to June 30, 2022.

During the years ended December 31, 2021 and 2020, the Company recorded $26,859 and $11,058, respectively, in interest expense on the Dalrymple note, representing all interest due through that date.

Paycheck Protection Program – SBA Loan

On April 22, 2020 we received a $64,097 Small Business Administration (“SBA”) loan under the federal Paycheck Protection Program (“PPP”), a program designed to help businesses keep their workforce employed during the COVID 19 pandemic. The PPP was established under the Coronavirus Aid, Relief, and Economic Security ("CARES") Act signed into law in March of 2020. The PPP provides a direct incentive for small businesses to keep their workers on the payroll and loans granted under the program are forgivable if employment levels are maintained for specified periods and proceeds are used for payroll and other approved expenses (rent, mortgage interest, utilities, and certain other expenses) provided for under the program. Loans provided under the program are uncollateralized, include no guarantees, bear interest of 1% per year and mature two years from the date of receipt. For the reasons discussed throughout this report, we believe current economic uncertainty related to the COVID 19 pandemic and our inability to obtain financing through other means made the loan necessary to support our ongoing operations. We applied for forgiveness of our loan in 2020 and on December 31, 2020 the entire balance of the loan was forgiven and recognized in other income as a gain on forgiveness of debt in our consolidated statements of operations.