Adastra Holdings Enters into Agreements to Sell Subsidiaries

Executive Summary

• Adastra Holdings Ltd. entered into agreements to sell all issued and outstanding shares of its three wholly‑owned subsidiaries for an aggregate consideration of $4,000,000.
• The transaction includes a $495,000 interest‑bearing promissory note, a $3.5 million mortgage assumption by the purchaser, 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 balance‑sheet strengthening and debt reduction.

Key Details

• Subsidiaries Sold:
• Adastra Labs Holdings (2019) Ltd. – sold for $495,000 payable via a 12 % interest‑bearing promissory note.
• 1178562 B.C. Ltd. – sold for $3,500,000; purchaser assumes existing mortgage debt on the Langley, BC property.

• Adastra Brands Inc. – sold for $5,000 cash.

• Total Consideration: $4,000,000 (combined value of all three transactions).

• Leaseback Agreement:

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

• Intellectual Property Licensing:

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

• Strategic Rationale:

• Strengthen balance sheet, reduce debt, and streamline operations while maintaining operational continuity at existing facilities and preserving brand usage.

• Closing Conditions: Transactions are expected to close shortly, subject to customary closing conditions.

Notable Quotes

(No direct quotes were provided in the release.)