Adastra Holdings Announces Completion of Sale of Subsidiaries

Executive Summary

• Completed the sale of all issued and outstanding shares of three wholly‑owned subsidiaries for an aggregate consideration of $4 million.
• Transaction structure: $495k via a 12% interest‑bearing promissory note, $3.5 million satisfied by assumption of existing mortgage debt on a Langley, BC property, and $5k cash.
• Post‑sale leaseback and IP licensing agreements allow continued use of the facility and trademarks, strengthening the balance sheet, reducing debt, and streamlining operations.

Key Details

• Subsidiaries sold: Adastra Labs Holdings (2019) Ltd., 1178562 B.C. Ltd., and Adastra Brands Inc.
• Purchaser: 1538634 B.C. Ltd.
• Consideration breakdown:
• $495,000 for Adastra Labs – paid via a 12% interest‑bearing promissory note.
• $3,500,000 for 1178562 – satisfied by Purchaser’s assumption of existing mortgage debt on the Langley property.
• $5,000 cash for Adastra Brands.
• Lease agreement: 1178562 and Adastra Labs Inc. entered a lease for 13,000 sq ft warehouse/office space at the Property; rent is $35,000 per month.
• Intellectual property licensing: Adastra Brands licensed certain trademarks to the Company for an annual license fee (amount not disclosed).
• Strategic impact: Sale reduces overall debt, provides cash flow from lease payments, and retains operational continuity through leaseback and IP licensing.

Notable Quotes

(No direct quotes were provided in the release.)