AAC Ares Acquisition Corporation

On April 15, 2016, AAC Holdings, Inc., a Nevada corporation (the “Company”), through one of its subsidiaries, acquired a 100-room hotel in Arlington, Texas that the Company expects to convert into sober living beds (the “Acquisition”). The cash portion of the Acquisition was funded from borrowings pursuant to the Company’s subordinated debt facility with affiliates of Deerfield Management Company, L.P., previously disclosed in the Company’s Current Report on Form 8-K that was filed with the Securities and Exchange Commission on October 7, 2015 (the “Facility Agreement”). On April 15, 2016, the Company issued to Deerfield Private Design Fund III, L.P., Deerfield International Master Fund, L.P., and Deerfield Partners, L.P., Senior Subordinated Notes in the principal amounts of $2,500,000, $1,400,000 and $1,100,000, respectively (the “Senior Subordinated Notes”). Pursuant to the terms and conditions of Facility Agreement, the Senior Subordinated Notes bear interest at an annual rate of 12.0% and mature on October 2, 2020. Additionally, certain of the Company’s operating subsidiaries (collectively, the “Guarantors”) previously entered into a Guaranty, dated as of October 2, 2015, whereby the Guarantors agreed to guarantee the obligations and liabilities of the Company under the Facility Agreement and the notes executed in connection therewith, including, without limitation, the Senior Subordinated Notes.

The foregoing description of the Senior Subordinated Notes does not purport to be complete and is qualified in its entirety by reference to the full text of the Senior Subordinated Notes. Copies of the Senior Subordinated Notes are filed herewith as Exhibits 10.1 , 10.2 and 10.3 and are incorporated herein by reference.