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| Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement. |
As previously disclosed, October 1, 2024, urban-gro, Inc. (the "Company") entered into an asset based term Loan Agreement (the "Loan") with Grow Hill, LLC, a Washington limited liability company (the "Lender") pursuant to which the Lender extended to the Company a secured loan of $2,100,000 with an origination fee of $100,000, which was added to the amount of the Loan. The Loan is evidenced by a Secured Promissory Note issued by the Company to the Lender (the "Promissory Note"). The Lender received a security interest in certain of the Company's assets pursuant to a security agreement between the Company and the Lender (the "Security Agreement"), which does not include any assets of the Company's subsidiaries.
On October 14, 2025, the Company received service of process for a lawsuit filed by the Lender against the Company in the District Court for the City and County of Denver, Colorado (Case No. 2025CV33546) (the "Complaint") alleging breach of contract and fraud. Pursuant the Complaint, the Lender stated that the Company is in default under the Promissory Note due to a failure to timely make payments, and elected to accelerate all amounts due under the Promissory Note, including a default fee equal to 1% of the outstanding principal amount. The Company is currently investigating available options to resolve the Complaint and intends to vigorously defend the allegation of fraud.
Posted In: UGRO
