NOTE 14 – SUBSEQUENT EVENTS

The Company has evaluated events and transaction occurring subsequent to September 30, 2022 up to the date of this filing of these condensed consolidated financial statements. These statements contain all necessary adjustments and disclosures resulting from that evaluation.

On October 10, 2022, the Company signed a binding term sheet to acquire substantially all of the operating assets of Dawson Van Orden, Inc. (“DVO”), an engineering firm with significant experience in indoor CEA, for a total purchase consideration of up to $7.3 million. The asset acquisition of DVO was completed on October 31, 2022 by urban-gro Engineering, Inc., d/b/a DVO, a wholly owned subsidiary of the Company. The Company funded the $7.3 million purchase price, which includes a contingent consideration of up to $1.1 million paid in cash or equity at the Company’s discretion, with $1.3 million in cash, a promissory note of $3.8 million to be paid out over four quarters, and $1.1 million of its common stock at a pre-set price of $4 per share.