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 M&A market for healthcare companies continues to strengthen in 2021 and ahead of the projected increases in US capital gains taxes. There is unprecedented capital in market, the lowest interest rates in US history and strong acquirer motivations for high quality healthcare companies. Across the continuum of care, buyers and investors are looking for well established, profitable businesses and offering strong valuations and options for management.
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