INLB Item 9 Labs Corporation (CE)

AZ Loan

On August 25, 2021, 938287AZ, LLC, an Arizona limited liability company, a wholly owned subsidiary of Item 9 Labs Corp. entered into a $13.5 million Construction Loan and Security Agreement (the “Loan Agreement”) with Pelorus Fund REIT, LLC, a Delaware limited liability company (the “Lender”).

Pursuant to the Loan Agreement, the Company may make multiple borrowings under the Loan Agreement in the total aggregate principal amount of up to $13.5 million (the “Loan”) for the purpose of completing development and construction on certain real property located in Coolidge, Arizona, owned by the Company. The Loan is a multiple advance credit facility. Interest payments in the amount of $180,000 will be remitted monthly. Interest is charged at a rate of 16% of the total amount borrowed under the Loan. The Loan has a term of eighteen months and may be extended for an additional six months subject to the satisfaction of certain conditions including forty-five days’ notice. The Loan is secured by a first priority interest in the Company’s real property located in Coolidge, Arizona, including improvements and personal property thereon (the “Property”) and includes an unconditional guarantee by Item 9 Labs Corp.

The Loan Agreement contains customary representations and warranties and also contains events of default customary for loan facilities of this type.

The Loan Agreement is qualified in their entirety by reference to the Loan Agreement, a copy of which is attached to this Current Report on Form 8-K as Exhibit 10.1, respectively, and incorporated by reference into this Item 1.01. Certain capitalized terms used herein but not otherwise defined shall have the meaning ascribed thereto.

NV Loan

On August 25, 2021, 750NV, LLC, an Arizona limited liability company, a wholly owned subsidiary of Item 9 Labs Corp. entered into a $5.5 million Construction Loan and Security Agreement (the “Loan Agreement”) with Pelorus Fund REIT, LLC, a Delaware limited liability company (the “Lender”).

Pursuant to the Loan Agreement, the Company may make multiple borrowings under the Loan Agreement in the total aggregate principal amount of up to $5.5 million (the “Loan”) for the purpose of completing development and construction on certain real property located in Pahrump, Nevada, owned by the Company. The Loan is a multiple advance credit facility. Interest payments in the amount of $73,333 will be remitted monthly. Interest is charged at a rate of 16% of the total amount borrowed under the Loan. The Loan has a term of eighteen months and may be extended for an additional six months subject to the satisfaction of certain conditions including forty-five days’ notice. The Loan is secured by a first priority interest in the Company’s real property located in Pahrump, Nevada, including improvements and personal property thereon (the “Property”) and includes an unconditional guarantee by Item 9 Labs Corp.

The Loan Agreement contains customary representations and warranties and also contains events of default customary for loan facilities of this type.

The Loan Agreement is qualified in their entirety by reference to the Loan Agreement, a copy of which is attached to this Current Report on Form 8-K as Exhibit 10.2, respectively, and incorporated by reference into this Item 1.01. Certain capitalized terms used herein but not otherwise defined shall have the meaning ascribed thereto.