Delic Completes Acquisition of Ketamine Wellness Centers (KWC), Becomes Largest Psychedelic Wellness Chain in United States

National Presence Across 10 States Provides Millions with Access to New Medicines and Treatments for a Variety of Health Conditions

Twelve Operational Today,
15 Additional Clinics to Open within 18 Months

Kevin Nicholson, CEO of KWC,
Promoted to Chief Operating Officer for Delic Corp

VANCOUVER, BC, Nov. 9, 2021 /PRNewswire/ - Delic Holdings Corp. ("Delic" or the "Company") (CSE: DELC) (OTCQB: DELCF) (FRA: 6X0) (Original Source), a leader in new medicines and treatments for a modern world, today announced the official, completed acquisition of Ketamine Wellness Centers Arizona LLC ("KWC"), becoming the largest chain of wellness centers providing ketamine treatments in the U.S. KWC is a limited liability corporation formed under the laws of Arizona, which operates 10 ketamine infusion treatment clinics, across Arizona, Colorado, Florida, Illinois, Minnesota, Nevada, Texas, Utah, and Washington. Delic paid USD$3,293,933 and issued 241,258.50 multiple voting shares. With the close of this transaction, Delic's consolidated revenue run rate is $11MM.

Transaction Highlights:

• This acquisition establishes Delic as the largest ecosystem of mental health clinics in the United States.
• KWC has been operating profitably and expanding significantly with 2020 revenues in excess of USD$3.5MM, on track for USD$4.5MM in 2021. This brings Delic's pro forma annualized revenue to in excess of USD$8 million.
• Delic has been focused on opening locations in secondary cities with considerable demand, in an effort to provide access to the most patients.
• Delic expects to drive considerable patients to KWC through its media platform and build on the existing national leadership position already in place.
• Established history of providing FDA-approved ketamine infusion services: The management team at KWC has been in business for 6 years expanding services throughout the United States.
• Management expertise: The acquisition of KWC will add a team of 60+ medical professionals and ‎employees bringing a wealth of industry ‎experience and knowledge to Delic.

Over the last six years, the team at KWC has expanded across the country, from Arizona to Florida, while overseeing 60,000 treatments delivered to date and generating 2020 revenue of USD$3.5MM, trending toward USD$4.5MM in 2021. Prior to this Transaction, KWC has grown without taking outside capital. KWC will operate under the Delic umbrella, under the direction and guidance of Kevin Nicholson, CEO of KWC and the new Chief Operating Officer for Delic Corp. In this new role, Nicholson will focus on the growth and expansion of the psychedelic wellness clinics for the company.

KWC adds to Delic's existing portfolio of two clinics operated by Ketamine Infusion Centers LLC ("KIC") in California and Arizona, cementing its position as the leading and largest wellness provider in the country. Delic expects to open 15 additional clinics across the country over the coming 18 months, further expanding access to millions who can benefit from new medicines and treatments for a variety of mental health conditions and adds to their position as a central hub of education, media, and cultural conversations around these new medicines and treatments. With a recent successful private placement of $7MM, Delic is actively scouting new locations in cities with a growing patient base. 

Matt Stang, co-founder and CEO of Delic commented, "We are thrilled to officially welcome the KWC team to the Delic family and cement our place as the largest network of treatment clinics in the U.S. With the addition of KWC, we can now reach millions of people suffering from various mental health conditions who have lost hope of finding effective, affordable treatments. As more treatments, such as MDMA and psilocybin, become FDA-authorized for medical use, we have the potential to help millions more people through the clinics."

"On behalf of the entire KWC team, we are very excited about officially becoming a part of the Delic family," said Nicholson. "They are an industry leader and uphold the highest standards in developing new, science-backed medicines and treatments and making them more accessible to a wider group of people. With the full support of Delic behind us, KWC will be on an accelerated path to growing our network of clinics throughout the U.S. and bringing more effective, affordable treatments to communities. They will also help us increase awareness of the clinics significantly and drive up patient counts."

Delic is committed to addressing the mental health crisis by increasing access to science-backed benefits for all and reframing the psychedelic conversation. The company does this through an umbrella of related owned and operated businesses to support scaling the impact and reach of treatment, including 1) the largest and most accessible network of physical clinics to administer effective treatments, 2) a licensed lab to develop IP, R&D and innovative high quality and safe product lines, and 3) trusted media and e-commerce platforms and in-person events to market the services directly to patients and consumers and gain data.

Transaction Summary

Under the terms of the Merger Agreement, Delic acquired all of the membership interests of KWC through a reverse triangular merger between KWC and a wholly-owned subsidiary of Delic. (the "Transaction") for an aggregate purchase price of USD$10,000,000. Delic issued multiple voting shares in the capital of Delic ("Consideration Shares") to the members of KWC (the "Members"), having an aggregate value of USD$5,000,000, less a holdback equal to USD$1,000,000, at a price per Consideration Share of US $0.1658 (being the ten trading day volume weighed average trading price ("VWAP") of the Consideration Shares on the Canadian Securities Exchange (the "Exchange") as of November 3, 2021). Delic further satisfied the purchase price by paying to the Members, an amount equal to USD$5,000,000 in cash consideration with approximately US$3,293,933 paid on the closing date, US$296,541 to be paid on forgiveness of a loan to KWC from The Health Resources and Services Administration,   USD$750,000 to be paid on the date that is 12 months following the closing date, and the final USD$750,000 to be paid on the date that is 24 months following the closing date.  

In addition, the Members are eligible to receive additional Consideration Shares upon each new clinic opened by KWC that posts three consecutive months of profitability and minimum revenue of USD$135,000, during those three months, such additional Consideration Shares to have an aggregate value of USD$100,000 per clinic opening, based on a price per share equal to the 10 trading day VWAP of the Consideration Shares on the Exchange immediately prior to the date such milestone is achieved. The milestones are subject to an aggregate cap of 30 new clinic milestones or USD$3,000,000 in additional Consideration Shares.

The Members have agreed that any Consideration Shares issued will be ‎subject to a contractual hold ‎‎period, with 10% of the share consideration to be released on the date that is six months and one day following closing, ‎and 15% ‎released every six months thereafter over a period ‎of 36 months. In addition, Members have agreed to enter into voting support agreements with Delic having a term of two years, pursuant to which the Members will ‎vote as directed by the board of directors of ‎Delic, subject to customary carve-outs.

About Ketamine Wellness Centers

Ketamine Wellness Centers (KWC) is the largest ketamine therapy provider in the United States with 10 clinic locations serving communities across eight states. Since 2011 KWC has been a trusted leader in bringing IV ketamine therapy into mainstream health care. KWC has provided over 60,000 treatments to clinically eligible patients, from young adults to seniors, in addition to developing specialized programs for veterans and first responders. The KWC team, including a core group of physicians, psychologists, clinicians, and executives, is dedicated to providing value-based, personalized, clinically controlled ketamine infusion care for people suffering from treatment-resistant depression, anxiety, PTSD, OCD and chronic pain. KWC's scalable business and treatment model is designed for further rapid expansion along with breakthrough innovations in effective therapies and services.

About Delic Corp, Inc.

Delic is a leader in new medicines and treatments for a modern world, improving access to health benefits across the country and reframing the conversation on psychedelics. The company owns and operates an umbrella of related businesses, including the largest chain of psychedelic wellness clinics in the country, including Ketamine Infusion Centers and Ketamine Wellness Centers; the only licensed entity by Health Canada to exclusively focus on research and development of psilocybin vaporization technology, Delic Labs; the premier psychedelic wellness event, Meet Delic; and trusted media and e-commerce platforms Reality Sandwich and Delic Radio. 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 effective 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: potential benefits of the Transaction; anticipated continued growth in the health and wellness sector (and, in particular, related to psychedelics); the ability of Delic to successfully achieve business ‎objectives, including opening 15 additional clinics over 18 months, ‎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. Such risks and other factors may include, but are not limited to:  incorrect assessment of the value and potential benefits of the Transaction; direct and indirect material adverse effects from the COVID-19 pandemic; inability to obtain future financing on suitable terms; failure to obtain required regulatory and other approvals; risks inherent in the psychedelic treatment sector; changes in applicable laws and regulations; and failure to comply with applicable laws and regulations.

In addition, in connection with the forward-looking ‎information and forward-looking statements contained in this press ‎release, Delic has made certain ‎assumptions. These assumptions include, but are not limited to: the potential impact of the announcement or consummation of milestone payments 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.‎

SOURCE Delic Holdings Inc.

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