Leading Psychedelic Wellness Company Delic Completes Acquisition of Ketamine Infusion Centers LLC, Adding Health Clinic Chain to Portfolio

Rhea-AI Summary

Delic Holdings (CSE: DELC, OTCQB: DELCF) has successfully completed the acquisition of Ketamine Infusion Centers (KIC), enhancing its ecosystem in psychedelic wellness. KIC operates two clinics in Arizona and California, generating over USD $1.5 million in revenue since 2019. The acquisition, valued at up to USD $3.05 million, will enable Delic to expand its clinic footprint to four locations and leverage its media platforms to drive patient acquisition. The management team from KIC, with extensive industry experience, is expected to position Delic as a national leader in legal psychedelic treatments.

Positive

• Acquisition expands Delic's footprint in psychedelic wellness with KIC, generating over USD $1.5 million in revenue since 2019.
• Plans to double KIC's clinic locations to four, enhancing market presence.
• Established management team at KIC with over 4,000 treatments administered, providing valuable expertise.
• Potential for revenue growth by leveraging Delic's media platforms for patient acquisition.

Negative

• Transaction valued at up to USD $3.05 million may exert financial strain if performance milestones for additional payments are not met.
• Dependence on achieving profitability at the Bakersfield clinic and additional new clinics could pose risks to financial projections.

Closing of Acquisition Expands Delic's Self-Sustaining Ecosystem with Existing Media/Education Platforms and Product Development Lab

VANCOUVER, BC, July 6, 2021 /PRNewswire/ - Delic Holdings, Inc. ("DELIC" or the "Company") (CSE: DELC) (OTCQB: DELCF), the leading psychedelic wellness platform has completed its acquisition (the "Acquisition") of Ketamine Infusion Centers LLC ("KIC"). KIC is a limited liability corporation formed under the laws of Arizona, which owns and operates two ketamine infusion treatment clinics, one in Phoenix, Arizona and the other in Bakersfield, California (the "Transaction"). Supported by clinical trials and peer reviewed studies, ketamine infusions have emerged as a promising treatment option for chronic diseases and pain disorders. The successful completion of the transaction brings a physical retail footprint of health clinics to the DELIC ecosystem where it can leverage its IP, product development and audience capture through its various leading media properties.

Acquisition Highlights

• The closing establishes DELIC as a diversified psychedelics organization. KIC has been growing steadily with revenues in ‎excess of USD$1.5 million since 2019
• KIC will be one of the largest ketamine clinics, pending upcoming expansion. KIC will double its footprint to four (4) physical locations in California and Arizona.
• KIC will be strategically positioned to leverage DELIC platform and brand: DELIC expects to drive patients to KIC through its media platform and become a national leader
• Established history of providing ketamine infusion services. The management team at KIC has administered more than 4,000 treatments, and over 3 years has expanded services throughout the United States
• Management expertise. The acquisition of KIC adds a team of 6 medical professionals and ‎employees bringing a wealth of industry ‎experience and knowledge to DELIC

"When we announced the KIC transaction it was to under the premise of adding cash-flowing, scalable companies to round out the rest of the ecosystem on our platform, and that is what this closing will realize," said Matt Stang, Founder and CEO of DELIC. "The DELIC team is committed to making psychedelic wellness accessible to the masses and with this chain of clinics we are making that vision possible."

"Today's closing ensures we can execute on our growth strategy of leveraging DELIC's media properties to drive patient acquisition," Sonny Diaz, Co-Founder of KIC stated. "This closed ecosystem of media properties, a lab to produce high-quality and innovative products, and a national chain of health clinics at the center is a game changer for scaling psychedelic wellness. KIC's history of profitability and our management team with decades of experience in the health sector and successful exits of over two dozen clinics and hospitals will enable DELIC to be the national leader in legal psychedelic treatment."

With the KIC closing, DELIC expands from its hub of psychedelic education, media, and information properties and licensed lab and IP company (DELIC Labs) to the ability to provide patients with psychedelic therapy. DELIC is uniquely positioned to bring digital awareness to its various holdings under the DELIC umbrella, and drive online users to brick and mortar clinics.

Over the last 3 years, the team at KIC has expanded from Arizona to California, while overseeing 4,000 treatments delivered to date, and generating over USD$1.5MM in revenue. KIC will operate under the DELIC umbrella, under the direction and guidance of Dr. Christopher Ray, Sonny Diaz, Rogelio Monzon, and Ganesh Acharya.  

Summary of Transaction

Delic acquired all of the issued and outstanding securities of KIC from its members in a reverse triangular merger for a purchase price of up to USD$3,050,000 (the "Purchase Price") paid as follows: (i) USD$2,250,000 in consideration shares issued on the closing date representing 89,130 multiple voting shares of Delic (or the equivalent of 8,913,000 subordinate voting shares) (the "Closing Date Payment"); and  (ii) USD$800,000 in consideration shares to be issued on the date KIC's Bakersfield, California clinic achieves a net profit in three consecutive months in the twelve months following the closing date, while achieving minimum revenues of USD$125,000 in the same three month period (the "Bakersfield Milestone Payment") plus certain amounts, ‎if any, to be earned by each of Sonny Diaz, Rogelio Monzon, and Ganesh Acharya, pursuant to a respective Milestone Agreement (as defined ‎below). The Closing ‎Date Payment was satisfied by DELIC through the issuance to KIC members of the ‎number of consideration shares equal in value to the Closing Date Payment amount, ‎issued at a price per share equal to the ten (10) trading day volume ‎weighted average price ("VWAP") of such consideration shares on the Canadian ‎Securities Exchange (the "Exchange") on the trading day immediately prior to the ‎closing date (representing a price of $0.3114 per share).‎

Each of Sonny Diaz, Rogelio Monzon, and Ganesh Acharya also entered into a milestone agreement (the "Milestone Agreement") ‎whereby they may each receive their pro rata proportion of an amount equal to USD$150,000 for each new clinic opened by KIC that is cash flow positive for three consecutive months after opening while achieving minimum revenues of USD$175,000 in those three consecutive months (each a "New Clinic Milestone") subject to certain conditions of continued employment or engagement with KIC. Such additional consideration is satisfied by DELIC's issuance of ‎additional consideration shares at a price per share equal to the ten (10) trading day ‎VWAP of the consideration shares on the Exchange on the trading day prior to the ‎date the Milestone is reached. ‎

About DELIC Corp.

DELIC is the leading psychedelic wellness platform, committed to bringing science-backed benefits to all and reframing the psychedelic conversation. The company owns and operates an umbrella of related businesses, including trusted media and e-commerce platforms like Reality Sandwich and DELIC Radio, DELIC Labs, the only licensed entity by Health Canada to exclusively focus on research and development of psilocybin vaporization technology, Meet DELIC the premiere psychedelic wellness event, and Ketamine Infusion Centers, one of the largest ketamine clinics in the country. DELIC is backed by a team of industry and cannabis veterans and a diverse network, whose mission is to provide education, research, high-quality products, and treatment options to the masses.

The Canadian Securities Exchange ‎has neither approved nor disapproved the contents of this news release and does not accept responsibility ‎for the adequacy or accuracy of this release.‎

This news release does not constitute an offer to sell, or a solicitation of an offer to buy, any securities ‎in the United States. The securities have not been and will not be registered ‎under the United States ‎Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state ‎securities laws and may not be offered or ‎sold within the United States unless registered under the U.S. ‎Securities Act and applicable state securities laws or an ‎exemption from such registration is available.‎

Forward-Looking Information and Statements

This press release contains certain "forward-looking information" within the meaning of applicable ‎Canadian securities ‎legislation and may also contain statements that may constitute "forward-looking ‎statements" within the meaning of ‎the safe harbor provisions of the United States Private Securities ‎Litigation Reform Act of 1995. Such forward-looking ‎information and forward-looking statements are not ‎representative of historical facts or information or current ‎condition, but instead represent only the ‎Company's beliefs regarding future events, plans or objectives, many of ‎which, by their nature, are ‎inherently uncertain and outside of DELIC's control. Generally, such forward-looking ‎information or ‎forward-looking statements can be identified by the use of forward-looking terminology such as ‎‎"plans", ‎‎"expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", ‎‎‎"anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or may ‎contain ‎statements that certain actions, events or results "may", "could", "would", "might" or "will be ‎taken", "will continue", ‎‎"will occur" or "will be achieved". The forward-looking information and forward-‎looking statements contained herein ‎may include, but are not limited to, information concerning listing on the Canadian Securities Exchange, anticipated continued growth in the health and wellness sector (and, in particular, related to psychedelics), the continued emergence of psychedelics from stigmas, the ability of the Company to maintain sensible messaging, the ability of the Company to avoid dogmatic practices and binary rhetoric‎, the ability of DELIC to successfully achieve business ‎objectives, ‎and expectations ‎for other economic, ‎business, and/or competitive factors.‎

By identifying such information and statements in this manner, DELIC is alerting the reader that ‎such ‎information and statements are subject to known and unknown risks, uncertainties and other factors ‎that may cause ‎the actual results, level of activity, performance or achievements of DELIC to be ‎materially different from those ‎expressed or implied by such information and statements. In addition, in connection with the forward-looking ‎information and forward-looking statements contained in this press ‎release, DELIC has made certain ‎assumptions. Among the key factors that could cause actual ‎results to differ materially from those projected in the ‎forward-looking information and statements are the ‎following: the ability to consummate the Transaction; ‎ the potential consummation of any milestone events and the completion of the Transaction on ‎relationships, ‎including with regulatory bodies, employees, suppliers, customers and competitors; ‎changes in general economic, ‎business and political conditions, including changes in the financial ‎markets; changes in applicable laws; compliance ‎with extensive government regulation; and the diversion ‎of management time on the Transaction.‎

Should one or more of these risks, uncertainties or other factors materialize, or should assumptions ‎underlying the ‎forward-looking information or statements prove incorrect, actual results may vary ‎materially from those described ‎herein as intended, planned, anticipated, believed, estimated or ‎expected.‎

Although DELIC believes that the assumptions and factors used in preparing, and the expectations ‎contained ‎in, the forward-looking information and statements are reasonable, undue reliance should not ‎be placed on such ‎information and statements, and no assurance or guarantee can be given that such ‎forward-looking information and ‎statements will prove to be accurate, as actual results and future events ‎could differ materially from those anticipated ‎in such information and statements. The forward-looking ‎information and forward-looking statements contained in this ‎press release are made as of the date of ‎this press release, and DELIC does not undertake to update any ‎forward-looking information ‎and/or forward-looking statements that are contained or referenced herein, except in ‎accordance with ‎applicable securities laws. All subsequent written and oral forward- looking information and ‎statements ‎attributable to DELIC or persons acting on its behalf is expressly qualified in its entirety by this ‎‎notice.‎

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SOURCE Delic Holdings Inc.

FAQ

What is the value of Delic's acquisition of Ketamine Infusion Centers?

The acquisition of Ketamine Infusion Centers is valued at up to USD $3.05 million.

How many clinics does Delic plan to operate after acquiring Ketamine Infusion Centers?

Delic plans to operate four clinics following the acquisition of Ketamine Infusion Centers.

What revenue has Ketamine Infusion Centers generated since 2019?

Ketamine Infusion Centers has generated over USD $1.5 million in revenue since 2019.

What will be the role of the management team from Ketamine Infusion Centers in Delic?

The management team from Ketamine Infusion Centers will contribute their expertise to help Delic achieve its goals in psychedelic wellness.

What is Delic's strategy for patient acquisition post-acquisition?

Delic intends to leverage its media platforms to drive patient acquisition for the Ketamine Infusion Centers.