AEACU Authentic Equity Acquisition Corporation

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.