Note 3  Acquisition of Alternative Solutions On June 27, 2018, the Company closed on the purchase of all of the membership interests in Alternative Solutions and its three operating subsidiaries (collectively, the Oasis LLCs) from the members of such entities (other than Alternative Solutions). The Oasis LLCs operate a fully integrated cannabis business in Las Vegas, Nevada, including a grow; extraction, conversion and processing facility; and a retail dispensary. The closing occurred pursuant to a Membership Interest Purchase Agreement (the Acquisition Agreement) entered into between the Company and Alternative Solutions on December 4, 2017, as amended. Pursuant to the Acquisition Agreement, the Company initially contemplated acquiring all of the membership interests in the Oasis LLCs from Alternative Solutions. Just prior to closing, the parties agreed that the Company would instead acquire all of the membership interests in Alternative Solutions, the parent of the Oasis LLCs, from its members, and the membership interests in the Oasis LLCs owned by members other than Alternative Solutions. The revised structure of the transaction is referenced in the Oasis Note, which modified the Acquisition Agreement. Pursuant to the Acquisition Agreement, the Company paid a non-refundable deposit of $250,000 upon signing, which was followed by an additional payment of $1,800,000 paid in February 2018, for an initial 10% of each of the Oasis LLCs. At that time, the Company applied for regulatory approval to own an interest in the Oasis LLCs, which approval was received. On June 27, 2018, the Company made the payments to indirectly acquire the remaining 90% of the Oasis LLCs, which were equal to cash in the amount of $5,995,543, a $4.0 million promissory note due in December 2019 (see note 15), (the Oasis Note), and 22,058,823 shares of its common stock (see note 17), (the Purchase Price Shares) (collectively, the Closing Consideration). The cash payment of $5,995,543 was less than the $6,200,000 payment originally contemplated because the Company assumed an additional $204,457 of liabilities. The Company used the proceeds of a Canadian private securities offering to fund the cash portion of the Closing Consideration (see note 17). The Company then applied for regulatory approval to own the additional 90% in membership interests in the Oasis LLCs, which it received on December 12, 2018. On August 14, 2019, the Company made a prepayment in the amount of $2,500,000, which, along with certain legal fees and other costs in the aggregate amount of $138,784, was applied to the amount due under the $4.0 million promissory note. The number of Purchase Price Shares was equal to 80% of the offering price of the Companys common stock in its last equity offering, which price was $0.34 per share. The Oasis Note is secured by a first priority security interest over the membership interests in Alternative Solutions and the Oasis LLCs, as well as by the assets of the Oasis LLCs. The Company also delivered a confession of judgment to a representative of the sellers that will become effective, in general, if the Company defaults under the Oasis Note. A claim was been made that Oasis owed certain amounts to a consultant at the acquisition date; Oasis disputed this claim. This claim was accrued on the Companys balance sheet as of May 31, 2019, and was resolved during the six months ended November 30, 2019 (see note 16). The sellers are also entitled to a $1,000,000 payment from the Company on May 30, 2020 if the Oasis LLCs have maintained an average revenue of $20,000 per day during the 2019 calendar year. The fair value of this contingent consideration was $678,111 at the acquisition date as determined by the Companys outside valuation consultants. At May 31, 2019, the Company increased the value of this contingent consideration to $1,000,000, and charged the amount of $321,889 to operations during the year ended May 31, 2019. This amount is recorded as a contingent liability on the Companys balance sheet at November 30, 2019 and May 31, 2019. The acquisition date estimated fair value of the consideration transferred totaled $27,975,650, which consisted of the following: Initial purchase price $ 2,050,000 Cash paid in connection with transaction 5,995,543 Note payable 3,810,820 Contingent consideration 678,111 Common stock 15,441,176 Total purchase price $ 27,975,650 Net tangible assets $ 595,151 Intangible assets 1,637,600 Goodwill 25,742,899 Total purchase price $ 27,975,650 The above estimated fair value of the intangible assets is based on a preliminary purchase price allocation prepared by a third party valuation expert. During the preliminary purchase price allocation period, which may be up to one year from the business combination date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. After the preliminary purchase price allocation period, the Company may record adjustments to assets acquired or liabilities assumed subsequent to the purchase price allocation period in its operating results in the period in which the adjustments were determined. Pro forma results The following table sets forth the unaudited pro forma results of the Company as if the acquisition of the Oasis LLCs was effective on June 1, 2018. Three months ended November 30, 2018 (unaudited) Revenues $ 1,976,910 Net loss $ (10,771,264 ) Basic net income per share $ (0.12 ) Diluted net income per share $ (0.12 ) Weighted average shares - basic 90,338,339 Weighted average shares - diluted 90,338,339 Six Months ended November 30, 2018 (unaudited) Revenues $ 3,843,783 Net loss $ (19,353,778 ) Basic net income per share $ (0.24 ) Diluted net income per share $ (0.24 ) Weighted average shares - basic 80,765,385 Weighted average shares - diluted 80,765,385 These combined results are not necessarily indicative of the results that may have been achieved had the companies always been combined.