Adastra Holdings Ltd 6-K, filed Feb 15, 2023
Adastra Holdings Ltd. (XTXXF)
About this 6-K
Adastra Holdings Ltd filed this 6-K on February 15, 2023.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the date of February 9, 2023
Commission File Number 000-56365
Adastra Holdings Ltd.
(Translation of registrant's name into English)
5451 - 275 Street, Langley, British Columbia Canada V4W 3X8
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F [X] Form 40-F [ ]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1) [ ]
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [ ]
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
SUBMITTED HEREWITH
| 99.1 | News Release dated February 9, 2023 |
| 99.2 | Material Change Report dated February 15, 2023 |
- 2 -
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Adastra Holdings Ltd.
/s/ Michael Forbes
________________________
Michael Forbes, Chief Executive Officer
Date: February 15, 2023
Adastra Completes Transaction to Terminate Legacy Supply Agreement,
Bringing Phyto Extractions Brand 100% In-House
LANGLEY, BC, February 9, 2023 - Adastra Holdings Ltd. (CSE: XTRX) (FRA: D2EP) ("Adastra" or the "Company") a leading cannabis company and producer of two top Canadian concentrate brands, with a focus on processing, adult-use and medical sales, organoleptic and analytical testing, announces the termination of a legacy supply agreement for the Company's Phyto Extractions Brand ("Phyto").
The household brand for legacy cannabis concentrates (vapes and shatter) was 100% acquired by Adastra in 2021 to drive revenue and leverage Adastra's capabilities for operational efficiency. A legacy license agreement remained in place following the acquisition, whereby Phyto utilized a third party's licensing status with Health Canada to exclusively package and sell its popular Phyto branded cannabis consumer packaged products on its behalf, in consideration for payment of royalties back to Phyto (the "Phyto License Agreement"). On August 30, 2022, Adastra announced it had entered into an agreement with the third party, whereby Adastra had the right and option to terminate the Phyto License Agreement subject to certain conditions which have now been met.
"Phyto has experienced incredible growth in revenue and profits over the past year and is a revered brand in the industry," said Michael Forbes, CEO of Adastra. "Having full control of the supply chain for Phyto allows us to streamline our business and retain 100% of Phyto's revenues for the benefit of Adastra's shareholders."
Sales for Phyto branded products totalled $6,690,618 in 2020 and reached $14,268,320 in 2021. To date, Phyto has 114 active SKUs, stocked in eight provinces and territories. Adastra bought back $2,232,137 worth of inventory from the third party and did not incur any debt.
About Adastra Holdings Ltd.
Adastra is a leading manufacturer and supplier of innovative ethnobotanical and cannabis science products designed for the adult-use, medical markets and forward-looking therapeutic applications. Adastra is recognized as a high-capacity processor and co-manufacturer throughout Canada. Adastra's Phyto Extractions brand is well-known for its cannabis concentrate products, available on shelves at over 1,400 adult-use retailers across Canada. The Company also operates Adastra Labs Inc., a 13,500 sq. ft. agricultural-scale Health Canada licensed facility located in Langley, British Columbia, focused on extraction, distillation, and manufacturing of cannabis-derived products. Adastra has successfully taken steps in becoming a licensed cultivator, tester, extractor, and seller of controlled substances, including Psilocybin and Psilocin, under its Controlled Substances Dealer's License. Adastra is poised to be a drug formulation and development leader in these emerging sectors. Adastra operates PerceiveMD, a multidisciplinary manufacturer for medical cannabis and psychedelic therapies, working alongside practitioners and healthcare professionals within the regulated environment to help create efficacious remedies that address the actual needs of patients. For more information, visit: www.adastraholdings.ca.
For additional information, please contact:
Michael Forbes, CEO
P: (778) 715 5011, E: michael@adastraholdings.ca
Alyssa Barry, Investor Relations
ir@adastraholdings.ca
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1. Name and Address of Company
Adastra Holdings Ltd. (the "Company")
5451 - 275 Street
Langley, BC V4W 3X8
Item 2. Date of Material Change
February 9, 2023
Item 3. News Release
The news release was issued and disseminated via Accesswire on February 9, 2023 and filed on SEDAR at www.sedar.com.
Item 4. Summary of Material Change
The Company announced the termination of a legacy supply agreement for the Company's Phyto Extractions Brand ("Phyto").
The household brand for legacy cannabis concentrates (vapes and shatter) was 100% acquired by the Company in 2021 to drive revenue and leverage the Company's capabilities for operational efficiency. A legacy license agreement remained in place following the acquisition, whereby Phyto utilized a third party's licensing status with Health Canada to exclusively package and sell its popular Phyto branded cannabis consumer packaged products on its behalf, in consideration for payment of royalties back to Phyto (the "Phyto License Agreement"). On August 30, 2022, the Company announced it had entered into an agreement with the third party, whereby the Company had the right and option to terminate the Phyto License Agreement subject to certain conditions which have now been met.
Sales for Phyto branded products totalled $6,690,618 in 2020 and reached $14,268,320 in 2021. To date, Phyto has 114 active SKUs, stocked in eight provinces and territories. The Company bought back $2,232,137 worth of inventory from the third party and did not incur any debt.
Item 5. Full Description of Material Change
5.1 Full Description of Material Change
The material change is fully described in Item 4 above and in the news release which has been filed on SEDAR.
5.2 Disclosure for Restructuring Transactions
Not applicable.
Item 6. Reliance on subsection 7.1(2) of National Instrument 51-102
Not applicable.
Item 7. Omitted Information
None.
Item 8. Executive Officer
Michael Forbes, CEO, Corporate Secretary and Director
Telephone: (778) 715-5011
Item 9. Date of Report
February 15, 2023