Item 1.01. Entry into a Material Definitive Agreement.
The description of the Note under Item 2.03 of this Current Report on Form 8-K
is incorporated into this Item 1.01 by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
On September 8, 2022, Authentic Equity Acquisition Corp. (the "Company") issued
an unsecured promissory note (the "Note") in the principal amount of up to
$250,000.00 to Authentic Equity Sponsor, LLC, a Delaware limited liability
company (the "Sponsor"), which may be drawn down by the Company from time to
time prior to the consummation of the Company's initial business combination
(the "Business Combination") upon the Company's written notice to the Sponsor
and subject to the sole discretion of the Sponsor. Interest will accrue on the
unpaid and outstanding principal balance of the Note at the lowest short-term
Applicable Federal Rate (within the meaning of Internal Revenue Code Section
1274) beginning on the date of issuance. The Note is repayable in full upon the
date of the Business Combination (the "Maturity Date"). At the Sponsor's option,
at any time prior to the Maturity Date, any amounts outstanding under the Note
may be converted into warrants (the "Working Capital Warrants") to purchase one
Class A ordinary share, par value $0.0001 per share, of the Company equal to the
principal amount of the Note so converted divided by $1.00 per Working Capital
Warrant. The Working Capital Warrants will have the same terms as the existing
private placement warrants issued to the Sponsor in connection with the
Company's initial public offering, except that the Working Capital Warrants will
not be subject to forfeiture in connection with the Business Combination.
If the Company does not complete a business combination, the Note will not be
repaid, and all amounts owed under it will be forgiven except to the extent that
the Company has funds available to it outside of its trust account established
in connection with its initial public offering. The Note is subject to customary
events of default, the occurrence of which automatically triggers the unpaid
principal balance of the Note and all other sums payable with regard to the Note
becoming immediately due and payable.
The Note was issued pursuant to the exemption from registration contained in
Section 4(a)(2) of the Securities Act of 1933, as amended.
The foregoing description of the Note is qualified in its entirety by reference
to the full text of the Note, a copy of which is filed herewith as Exhibit 10.1
and incorporated herein by reference.
Item 9.01. Financial Statement and Exhibits.
(d) Exhibits
Exhibit Description
10.1 Promissory Note in favor of Authentic Equity Sponsor, LLC, dated
September 8, 2022.
104 Cover Page Interactive Data File (formatted as inline XBRL).
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