Adastra closes sale of three subsidiaries for $4M

Mr. Jonathan Edwards reports ADASTRA HOLDINGS ANNOUNCES COMPLETION OF SALE OF SUBSIDIARIES Adastra Holdings Ltd. has completed the sale of all of the issued and outstanding shares of its wholly owned subsidiaries, Adastra Labs Holdings (2019) Ltd., 1178562 B.C. Ltd. and Adastra Brands Inc., to 1538634 B.C. Ltd. The aggregate consideration for all transactions was $4-million, including $495,000 for the sale of Adastra Labs, satisfied by a 12-per-cent interest-bearing promissory note, $3.5-million for the sale of 1178562, satisfied by the purchaser's assumption of the existing mortgage debt on the Langley, B.C., property owned by 1178562, and $5,000 cash for the sale of Adastra Brands. In connection with the closing of the transactions, 1178562 and the company's wholly owned subsidiary, Adastra Labs, entered into a lease agreement pursuant to which 1178562 agreed to lease 13,000 square feet of warehouse and office space located at the property to Adastra Labs in consideration for $35,000 per month. Additionally, Adastra Brands and the company entered into an intellectual property licensing agreement pursuant to which Adastra Brands agreed to license certain trademarks to the company for an annual licence fee. The completion of these transactions strengthens the company's balance sheet, reduces debt and streamlines operations. Through the related leaseback and intellectual property licensing agreements, the company will continue to operate from its existing facility, and retains the right to use its established brands and trademarks. About Adastra Holdings Ltd. Adastra has become one of Canada's leaders in the supply and manufacturing of ethnobotanical and cannabis products for lawful adult use. It serves medical markets and engages in forward-looking therapeutic applications. With cannabis concentrate products sold through retailers at more than 2,000 locations across Canada, Adastra has established the Phyto Extractions and Endgame Extracts brands with a growing distribution presence. As a Health Canada licensed facility, it specializes in extraction, distillation and manufacturing of a range of cannabis-derived products. Adastra partners with health care professionals and practitioners within the regulated environment to create products suitable for the medical cannabis market, with the ultimate aim of addressing the needs of patients. We seek Safe Harbor.