UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 11, 2019
Stem Holdings, Inc.
(Exact Name of Registrant as Specified in its Charter)
| Nevada | | 000-55751 | | 61-1794883 |
(State or Other Jurisdiction of Incorporation) | | (Commission File No.) | | (I.R.S. Employer Identification No.) |
| 7777 Glades Road, Suite 203, Boca Raton, FL | | 33434 |
| (Address of Principal Executive Offices) | | (Zip Code) |
Registrant’s telephone number, including area code: (561) 237-2931
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| [ ] | Writtencommunications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
TABLE OF CONTENTS
Item 1.01 Entry Into a Material Definitive Agreement.
On October 8, 2018, Stem Holdings Oregon, Inc., a wholly-owned subsidiary of Stem Holdings, Inc., a Nevada corporation (“Stem”) and Yerba Oregon, LLC, an Oregon limited liability company (“Yerba”) entered into an Asset Purchase Agreement (the “Agreement”) which provided for Stem to purchase certain assets and assume certain liabilities of Yerba for a total purchase price comprising (a) the greater of $1,930,581 and 90% of Yerba’s 2018 EBITDA multiplied by 5; plus (b) the greater of $2,862,431 and 75% of Yerba’s 2019 EBITDA multiplied by 2.5. Yerba is a wholesale producer of recreational marijuana flower, by-product and pre-roll product in the state of Oregon.
The transaction is subject to a number of conditions, including approval of the transfer of Yerba’s license by the Oregon Liquor Control Commission, which have yet to be satisfied. Notwithstanding, Stem believes that the consummation of the transaction is probable as defined in Regulation S-X Rule 3-05 and is treating the transaction accordingly. Financial Statements of Yerba and Pro Forma Financial Information related to the transaction are included under Item 9.01, below. A copy of the Asset Purchase Agreement is attached as Exhibit 2.1 hereto.
Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired
The financial statements required by this Item are attached to this Report as Exhibit 99.1
(b) Pro Forma Financial Information.
The pro forma financial information required by this Item is attached to this Report as Exhibit 99.2.
(d) Exhibits.
| Exhibit No. | | Description |
| | | |
| 2.1 | | Asset Purchase Agreement dated as of October 8, 2018 by and between Stem Holdings Oregon, Inc. and Yerba Oregon, LLC, an Oregon limited liability company |
| | | |
| 99.1 | | Audited financial statements of Yerba Oregon, LLC for the years ended December 31, 2017 and 2016 |
| | | |
| 99.2 | | Unaudited pro forma condensed combined financials statements of Yerba Oregon, LLC and Stem Holdings, Inc. as of September 30, 2018 and September 30, 2017 |
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Stem Holdings, Inc. | |
| | | |
| By: | /s/ Adam Berk | |
| Name: | Adam Berk | |
| Title: | President | |
| | | |
| Dated: February 12, 2019 | |
