Mr. Matt Stang reports

PSYCHEDELIC WELLNESS-FOCUSED COMPANY DELIC TO ACQUIRE KETAMINE INFUSION CENTERS LLC

Delic Holdings Inc. has entered into a binding letter agreement to acquire Ketamine Infusion Centers LLC. KIC is a limited liability corporation formed under the laws of Arizona, which owns and operates two ketamine infusion treatment clinics, one in Phoenix, Ariz., and the other in Bakersfield, Calif. Supported by clinical trials and peer-reviewed studies, ketamine infusions has emerged as a promising treatment option for chronic diseases and pain disorders.

Transaction highlights

• The transaction establishes Delic as a diversified psychedelics organization. KIC has been growing steadily with revenues in excess of $1.5-million (U.S.) since 2019;
• 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 been in business for three years, expanding services throughout the United States; and
• Management expertise. The acquisition of KIC will add a team of six medical professionals and employees bringing a wealth of industry experience and knowledge to Delic.

Matt Stang, founder and chief executive officer of Delic, commented: "We publicly listed Delic with the intent of buying cash-flowing, scalable companies and that is exactly what KIC represents. KIC management has decades of experience in the health sector and has successfully scaled and exited over two dozen clinics and hospitals. KIC's extensive background in operating clinics and hospitals better enables Delic to be the leader in ketamine clinic rollouts, ensuring that our patients receive the best medical treatment and care. We intend to use this best-practices methodology, such as an insurance reimbursement program, to scale-out our clinic footprint throughout the country."

Sonny Diaz, co-founder of KIC, stated: "Our management team has been in the clinic and medical business for 15 years scaling and operating. We jumped on the opportunity to join Delic as we feel the patient acquisition strategy -- using Delic's media platform to drive patients -- is a potential game-changer. We think there is an opportunity to scale our SOPs and clinics over the next 18 month to be the national leader in the space."

This acquisition demonstrates Delic's evolution. By acquiring KIC, Delic expands from being a central hub of psychedelic education, media and information to being able to provide patients with psychedelic therapy. Delic is uniquely positioned to provide the ability to bring digital awareness to its various holdings under the Delic umbrella, and drive on-line users to its brick and mortar holdings, including KIC's physical psychedelic clinics.

Mr. Stang continues: "From my years at High Times helping build the household cannabis brands of today, we know that in a nascent industry whoever yells the loudest gets the attention. Our media exposure and expertise is second to none in the industry and we feel like we can give a tremendous amount of attention to KIC and all future companies that join the Delic ecosystem."

Over the past three years, the team at KIC has expanded from Arizona to California, while overseeing 4,000 treatments delivered to date, and generating over $1.5-million (U.S.) in revenue. KIC will operate under the Delic umbrella, under the direction and guidance of Dr. Christopher Ray, Mr. Diaz, Rogelio Monzon and Ganesh Acharya.

Under the terms of the letter agreement, Delic will acquire all of the membership interests of KIC through a reverse triangular merger between KIC and a wholly owned subsidiary of Delic to be organized prior to execution by the parties of a definitive agreement. Subject to customary adjustment terms, Delic has agreed, on closing of the transaction, to issue [subordinate voting shares] in the capital of Delic to the members of KIC, having an aggregate value of $2.25-million with the number of consideration shares to be issued determined based on a price per share equal to the 10-trading-day volume-weighed average trading price of the consideration shares on the Canadian Securities Exchange immediately prior to closing of the transaction. In addition, the members will be eligible to receive additional consideration shares upon KIC's Bakersfield, Calif., clinic posting three consecutive months of profitability and minimum revenue of $125,000 (U.S.), during the 12 months following the closing of the transaction, such additional consideration shares to have an aggregate value of $800,000 (U.S.), based on a price per share equal to the 10-trading-day VWAP of the consideration shares on the CSE immediately prior to the date such milestone is achieved.

The members have agreed that any consideration shares issued will be subject to a contractual hold period, with 10 per cent of the share consideration to be released on the date that is six months and one day following closing, and 15 per cent 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.

The parties entered into the letter agreement effective Dec. 7, 2020, and have begun due diligence. The parties intend to complete the transaction as soon as is practicable and, subject to satisfactory completion of customary closing conditions and due diligence, will use commercially reasonable efforts to enter into a definitive agreement by March, 2021.

About Delic Holdings Inc.

Delic is always expanding. In all ways.

Delic was formed in 2019 to address the growing interest in psychedelic wellness backed by science. Delic was the first psychedelic umbrella platform and is currently a trusted source for those interested in psychedelic culture, psychedelic clinics and more. Delic's offerings include Ketamine Infusion Center, a limited liability corporation formed under the laws of Arizona which runs two ketamine clinics in Arizona and California, "Reality Sandwich," a free public education platform providing psychedelic guides, news and culture, "Meet Delic," the first ever psychedelic wellness summit, and "The Delic," an e-commerce lifestyle brand.

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