NOTES PAYABLE

12 Months Ended

Dec. 31, 2021

Notes Payable

NOTES PAYABLE

24. NOTES PAYABLE

Notes payable at December 31, 2021 and 2020, were comprised of the following.

	Interest Rate		Due Date		December 31, 2021			December 31, 2020
Esousa purchased notes					$	-		$	200,000
Short-term notes payable		12.0%		2022		118,000			1,148,000
10% original issue discount senior secured notes		8.0%		March 31, 2022		65,972,000			-
AGREE Madison secured construction loans		7.0%		January 1, 2025		55,055,000
Paycheck Protection Program Loans		1.0%				-			1,162,000
Short-term bank line of credit		3.9%		2021		960,000			1,421,000
Total notes payable					$	122,105,000		$	3,931,000
Less:
Unamortized debt discounts						(27,496,000	)		-
Total notes payable, net					$	94,609,000		$	3,931,000
Less: current portion						(39,554,000	)		(3,595,000	)
Other						-			336,000
Notes payable – long-term portion					$	55,055,000		$	336,000

During the years ended December 31, 2021 and 2020, the Company recorded amortization of debt discounts of $1.1 million and $7.3 million, respectively.

December 2021 Secured Promissory Notes

On December 30, 2021, the Company entered into a securities purchase agreement with certain sophisticated investors providing for the issuance of:

● secured promissory notes (the “Secured Promissory Notes”) that bear interest at 8% per annum with an aggregate principal face amount of approximately $66 million including a 10% original issue discount;

● five-year warrants to purchase an aggregate of 14,095,350 shares of the Company’s common stock at an exercise price of $2.50, subject to adjustment; and

● five-year warrants to purchase an aggregate of 1,942,508 shares of Common Stock (the “Class B Warrant Shares”) at an exercise price of $2.50 per share, subject to adjustment. The Class B Warrant Shares are deemed to be a derivative instrument.

The Secured Promissory Notes were repaid in March 2022 (see Note 33).

AGREE Madison Construction Loan Agreements

On December 22, 2021, AGREE Madison, through various wholly-owned subsidiaries, entered into construction loan agreements. The outstanding balances under the construction loans was $55.1 million as of December 31, 2021. The construction loans are due on January 1, 2025, but may be extended for two additional 12-month terms, subject to certain terms and conditions as set forth in the construction loan agreements. The loans accrue interest at a rate equal to the greater of (i) the LIBOR Rate plus 675 basis points or (ii) 7% per annum. The AGREE Madison subsidiaries will make monthly installment payments of interest only, starting January 1, 2022. Ault Alliance also provided a completion guaranty to the lenders for the completion of the property improvement plans.

Notes Payable Maturities

The contractual maturities of the Company’s notes payable, assuming the exercise of all extensions that are exercisable solely at the Company’s option, as of December 31, 2021 were:

Year
2022	$	67,504,000
2023		-
2024		-
2025		55,055,000
	$	122,559,000