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NOTES PAYABLE

3 Months Ended

Mar. 31, 2023

16. NOTES PAYABLE

Notes payable at March 31, 2023 and December 31, 2022, were comprised of the following:

Schedule of notes payable
	Interest rate	Due date	March 31, 2023			December 31, 2022
Short-term notes payable – in default	5.0%	January 3, 2023	$	375,000		$	700,000
AGREE Madison secured construction loans	7.0%	January 1, 2025		64,893,000			62,395,000
SMC line of credit *	8.0%	October 14, 2025		-			1,761,000
SMC installment notes	7.6%	June 18, 2024		139,000			158,000
Circle 8 revolving credit facility	8.4%	December 16, 2025		13,903,000			14,724,000
Circle 8 equipment financing notes	7.2%	November 16, 2026		9,400,000			10,677,000
XBTO note payable	12.5%	December 30, 2023		2,093,000			2,749,000
16% senior secured promissory note	16.0%	May 31, 2023		10,456,000			17,456,000
3% secured promissory notes	3.0%	May 18, 2023		-			5,672,000
8.5% secured promissory notes	8.5%	May 7, 2024		17,191,000			17,389,000
10% secured promissory notes	10.0%	August 10, 2023		-			8,789,000
Short-term bank credit facilities	6.3%	Renews monthly		3,340,000			1,702,000
Total notes payable			$	121,790,000		$	144,172,000
Less: Unamortized debt discounts				(3,458,000	)		(13,087,000	)
Total notes payable, net			$	118,332,000		$	131,085,000
Less: current portion				(26,459,000	)		(39,621,000	)
Notes payable – long-term portion			$	91,873,000		$	91,464,000

*	As of March 31, 2023, SMC was in violation of a financial covenant on this line of credit. However, SMC subsequently obtained a waiver for this covenant violation in May 2023.

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 March 31, 2023 were:

Schedule Of maturities
Year
2023	$	25,508,000
2024		15,307,000
2025		66,630,000
2026		14,345,000
	$	121,790,000

Interest Expense

Schedule of interest expense
	For the Three Months Ended
	March 31,
	2023		2022
Contractual interest expense	$	2,727,000	$	921,000
Forbearance fees		603,000		1,203,000
Amortization of debt discount		10,400,000		27,700,000
Total interest expense	$	13,730,000	$	29,824,000

10% Secured Promissory Notes

The 10% secured promissory notes were retired in March 2023 and converted into the Preferred Shares, as described in Note 14 – Preferred Stock Liability.

Amendments to 16% Secured Promissory Notes

On April 6, 2023, the Company entered into an amendment agreement, effective as of March 16, 2023, with the initial investor related to the December 2022 16% secured promissory note extending the due date on the note to May 31, 2023, which will automatically extend to June 30, 2023 if the Company repays the balance outstanding on the note as of the extension date, which was $8.3 million, by May 31, 2023. The Company agreed to increase the principal amount of the note by approximately $2.0 million, reflecting a $1.7 million extension fee and $0.4 million of liquidated damages for failure to obtain an effective registration statement.

On May 4, 2023, the Company entered into an amendment agreement, effective as of March 16, 2023, with the subsequent investor related to the December 2022 16% secured promissory note extending the due date on the note to June 30, 2023. The Company agreed to increase the principal amount of the note by approximately $0.8 million, reflecting a $0.6 million extension fee and $0.2 million amendment fee.