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NOTES PAYABLE
 6 Months Ended
Jun. 30, 2022
Notes Payable  
NOTES PAYABLE

15. NOTES PAYABLE

 

Notes payable at June 30, 2022 and December 31, 2021, were comprised of the following.

                
   Interest
rate		  Due date 

June 30,

2022

   December 31,
2021		 
Short-term notes payable  12.0% 

Aug. – Nov. 2022

  $92,000   $118,000 
10% original issue discount senior secured notes         -    65,972,000 
AGREE Madison secured construction loans  7.0%  January 1, 2025   55,055,000    55,055,000 
SMC line of credit  15.5%  June 11, 2023   2,500,000    - 
SMC installment notes  7.6%  June 18, 2024   195,000    - 
SMC notes payable  6.0%  Sep. 2024 – Feb. 2025   353,000    - 
XBTO Trading note payable  12.5%  December 30, 2023   4,000,000    - 
Short-term bank line of credit  3.9%  Renews monthly   1,736,000    960,000 
Total notes payable        $63,931,000   $122,105,000 
Less:                
Unamortized debt discounts         (1,044,000)   (27,496,000)
Total notes payable, net        $62,887,000   $94,609,000 
Less: current portion         (7,340,000)   (39,554,000)
Notes payable – long-term portion        $55,547,000   $55,055,000 

 

SMC Debt Security Interest

 

The SMC debt is secured by a perfected security interest in all SMC assets including a first-priority security interest in SMC accounts receivable and inventory.

Amortization of Debt Discount of Secured Promissory Notes

 

On December 30, 2021, the Company entered into a securities purchase agreement with certain accredited 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.

 

As of December 31, 2021, unamortized debt discount on the Secured Promissory Notes related to the original issue discount and estimated fair value of the warrants totaled $26.3 million.

 

During the three months ended March 31, 2022, the Secured Promissory Notes were repaid and the Company fully amortized the related debt discount of $26.3 million, which is included within interest expense on the condensed consolidated statements of operations.