8. Business Combination - Yerba Buena, Oregon LLC On June 24, 2019, the Company completed the Asset Purchase Agreement (the APA) with Yerba Buena, Oregon LLC (Yerba Buena) and Preston Clarence Greene, Glenn R. McClish, Michael McClish, and Larry Heitman (collectively, the Sellers Members) to purchase certain assets and assume certain liabilities of Yerba Buena (the Net Assets). Yerba Buena operates a wholesale cannabis production and sales operation in the state of Oregon. Purchase Price Allocation The Company allocated the purchase consideration to the fair value of the assets acquired and liabilities assumed as summarized in the table below ( in thousands): Intangible assets $ 1,775 Goodwill 1,070 Accounts receivable 170 Inventory 372 Prepaid expenses and other current assets 25 Property and equipment 827 Accounts payable and accrued expenses - Purchase price $ 4,239 Upfront Consideration The upfront purchase price is paid as follows:  Cash of $350,000;  A promissory note in the principal amount of $400,000;  Shares of Stem whereby the number of shares issued is equal to $1,580,581 divided by the lesser of: (a) 85% of the average closing price of Stems shares for the 30 trading days before the Closing Date; and (b) $2.40. Stem issued 1,019,370 shares of its common stock to settle this purchase price consideration.  Shares of Stem whereby the number of shares issued is equal to $2,282,431.25 divided by the average closing price of Stems shares for the 30 trading days before June 30, 2019. On June 30, 2019, Stem issued 1,472,536 shares to settle the June 30, 2019 purchase price consideration. Contingent Consideration Contingent consideration in the form of additional shares are issuable if the actual earnings before income taxes, depreciation and amortization (EBITDA) for calendar year 2018 and 2019 exceeds $1,930,581 and $2,682,431, respectively. The Company assigned a zero probability to contingent consideration and as of September 30, 2019 and September 30, 2018, no contingent consideration was earned. Consideration Transferred Consideration transferred in a business combination is measured at fair value and is calculated as the sum of the acquisition-date fair values of the assets transferred by the acquirer, the liabilities incurred by the acquirer to the former owners of the acquire, and the equity interests issued by the acquirer. The following represents the consideration transferred in the acquisition of Yerba Buena (in thousands): Cash $ 350 Notes payable 400 Common stock 3,489 Total Purchase Price $ 4,239 Notes Payable  The note payable was issued on April 8, 2019 and is due on April 8, 2021. The note payable has a coupon interest rate of 8%. The Company determined that the principal balance approximates fair value on the acquisition date. The note payable requires twelve monthly interest only payments, followed by eleven monthly payments of $17,000 and a final payment for the entire unpaid principal balance together with accrued interest due on April 8, 2021. From April 8, 2019 to September 30, 2019, the Company has not made any principal payments and interest payments. Common Stock - The fair value of the common stock was based on Stems closing stock price on the acquisition date (i.e., June 24, 2019) of $1.40, and includes both the shares issued in the interim closing on April 8 and the shares issued on June 30, 2019, as follows (in thousands, except for share and per share amounts): Shares Issued Closing Stock Price - June 24 Fair Value Interim Closing Date 1,019,730 $ 1.40 $ 1,428 June 30, 2019 1,472,536 $ 1.40 $ 2,061 Total 2,492,266 $ 3,489 The supplemental unaudited pro forma information, as if the Yerba acquisition had occurred on October 1, 2018, is as follows (in thousands): 2019 Revenues $ 4,066 Net Loss Attributable to Stem $ (26,243 ) Net Loss per Common Share Attributable to Stem Common Stockholders - Basic and Diluted $ (0.93 ) The supplemental unaudited pro forma information above is based on estimates and assumptions that we believe are reasonable. The pro forma information presented is not necessarily indicative of the consolidated results of operations in future periods or the results that would have been realized had the acquisition occurred on October 1, 2018. The supplemental pro forma results above exclude any benefits that may result from the acquisition due to synergies that are expected to be derived from the elimination of any duplicative costs.