The sale is part of the company’s restructuring efforts.
YourWay Cannabis Brands Inc. (CSE: YOUR) (OTC: YOURF) agreed to sell its subsidiary, Labtronix Inc., for $3 million, in order to streamline operations and focus on its core cannabis business.
The sale of Labtronix is intended to relieve YourWay of various liabilities associated with the subsidiary. These include current and potential lawsuits, debts, and tax liabilities, which are primarily linked to Labtronix’s operations.
One such lawsuit involves Trulieve Arizona, who happens to be one of three plaintiffs suing YourWay and Labtronix over kickback schemes in the state, a more common occurrence these days.
The company, which operates out of Phoenix, Arizona, and Vancouver, British Columbia, announced the plan to divest Labtronix on Nov. 15.
“YourWay and Labtronix have been named in a lawsuit by Trulieve Cannabis Corp., the defense of which is consuming significant company resources,” it wrote in the announcement, adding “Labtronix has experienced a notable decline in sales over the past few months, aligning with the initiation of the aforementioned lawsuit.”
Under the terms of the agreement, YourWay will receive $3 million for the sale of Labtronix. The payment structure involves an initial $300,000 payment at the time of closing and the remaining amount to be paid over 60 months as a 5% secured note.
The sale is part of the company’s broader restructuring efforts and is pending shareholder approval at a Dec. 28 scheduled meeting. The arrangement is expected to provide a steady cash flow for YourWay as it continues the process.
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