Item 1.01 Entry into a Material Definitive Agreement.

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".







Consideration

(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) Upon conditional approvals of the change of ownership from state and local licensing authorities concerning the transfer of ownership of the Licenses from Seller to Buyer, Buyer shall deposit into an escrow account One Million US Dollars ($1,000,000.00) (the "Initial Deposit"), by wire transfer in immediately available funds to the bank account designated by the Escrow Agent; and

(ii) At the Closing, Buyer and Company shall execute and deliver to Seller 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) Buyer shall issue to the Seller Three Hundred Thousand (300,000) shares of PubCo's restricted common shares of the Company. The Shares shall be subject to a leak out agreement.

Conditions to the Acquisition

The closing of the acquisition is contingent upon approval of state and local licensing authorities.

The Company has made customary representations and warranties in the Agreement. The Agreement also contains customary covenants and agreements, including covenants and agreements relating to the conduct of the Company's business between the date of the signing of the Agreement and the closing of the transactions contemplated under the Agreement. The representations and warranties made by the Company are qualified by disclosures made in its disclosure schedules and Securities and Exchange Commission ("SEC") filings.

A copy of the Agreement is filed with this Current Report on Form 8-K as Exhibit 2.1 and is incorporated herein by reference, and the foregoing description of the Agreement is qualified in its entirety by reference thereto.

Item 7.01 Regulation FD Disclosure.

On October 7, 2021, the Company issued a press release, attached as Exhibit 99.1, announcing the Company entering into the Asset Purchase Agreement. A copy of the press release is furnished as Exhibit 99.1 hereto and is incorporated herein by reference.

The information set forth in the attached Exhibit 99.1 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.






  (d)   Exhibits






Exhibit No.    Description
2.1              Asset Purchase Agreement dated October 6, 2021
99.1             Press release dated October 7, 2021, announcing the Company
               entering into the Asset Purchase Agreement

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