INLB Item 9 Labs Corporation (CE)

As previously disclosed, on October 6, 2021, Item 9 Labs Corp., a Delaware corporation ("Company"), and Item 9 Labs Colorado LLC. ("Buyer"), entered into an Asset Purchase Agreement (the "Agreement") with Nebrina Adams County LLC, a Colorado limited liability company ("Seller"), pursuant to which Purchasing Sub is purchasing certain assets from the Seller. Effective upon the completion of the Sale, the licenses, lease and certain personal property to operate a licensed recreational marijuana dispensary will be delivered to the Buyer, free and clear of all liens or encumbrances. Each of the parties referred to above may be referred to herein as a "Party" and collectively as the "Parties".

On March 2, 2022, Item 9 Labs Colorado LLC, the Parties received the necessary regulatory approvals and completed the transaction. The Company, through its wholly owned subsidiary acquired the dispensary license and storefront located at 6101 N. Washington St. in Denver, CO. The consideration paid is as follows:

(a)            Purchase Price. The total purchase price for the Purchased Assets is Two Million US Dollars ($2,000,000.00 USD) (the "Purchase Price"), payable as follows:

(i)        One Million US Dollars ($1,000,000.00); and

(ii)       an unsecured promissory note with a principal amount of Two Hundred Thousand US Dollars ($200,000.00), with an interest rate of five percent (5%) per annum simple interest, for a term of eighteen (18) full months commencing on the Closing Date, and payable in six (6) installments commencing on the last day of each three (3) month period following the Closing Date (the "Note" or "Promissory Note") until paid in full; and (iii) Three Hundred Thousand (300,000) shares of the Company's restricted common shares of the Company. The Shares are subject to a leak out agreement.