Adastra to sell three subsidiaries for $4-million

Executive Summary

• Adastra Holdings Ltd. entered into definitive agreements to sell all shares of three wholly‑owned subsidiaries for an aggregate consideration of $4 million.
• The transaction mix includes a $495,000 interest‑bearing promissory note, a $3.5 million mortgage assumption on the Langley, B.C., property, and $5,000 cash.
• Related leaseback and IP licensing agreements allow Adastra to remain in its current facility and retain use of its brands, supporting its strategy to strengthen the balance sheet, reduce debt, and streamline operations.

Key Details

• Subsidiaries sold:
• Adastra Labs Holdings (2019) Ltd. – $495,000 payable via a 12 % interest‑bearing promissory note.
• 1178562 B.C. Ltd. – $3.5 million consideration satisfied by the purchaser’s assumption of existing mortgage debt on the Langley, B.C., property.

• Adastra Brands Inc. – $5,000 cash payment.

• Total aggregate consideration: $4 million (including note, mortgage assumption, and cash).

• Leaseback agreement:

• 1178562 will lease 13,000 sq ft of warehouse/office space to Adastra Labs for $35,000 per month.

• Intellectual property licensing:

• Adastra Brands will license certain trademarks back to the company for nominal consideration.

• Strategic rationale:

• Sale aligns with a balance‑sheet strengthening plan, debt reduction, and operational streamlining while preserving access to existing facilities and brand assets.

• Closing timeline: Transactions are expected to close “shortly,” subject to customary closing conditions.

Notable Quotes

(No direct quotes were provided in the release.)