Quick Take

  • Delic Holdings Inc. announced that it has acquired all of the issued and outstanding shares in the capital of Complex Biotech Discovery Ventures Ltd.
  • Following closing, CBDV will change its name to “DELIC Labs”  and will serve as the engine for the Delic platform.

Delic Holdings Inc. (“DELIC” or the “Company“) (CSE: DELC), a psychedelic wellness platform, is pleased to announce that it has acquired all of the issued and outstanding shares in the capital of Complex Biotech Discovery Ventures Ltd. (“CBDV“), a federally-authorized psilocybin and cannabis research laboratory focused on extraction, analytical testing, and chemical process development (the “Transaction“). Following closing, CBDV will change its name to “DELIC Labs”  and will serve as the engine for the Delic platform, conducting research and developing innovative product lines and intellectual property (IP), including psilocybin vaporization technology for future distribution across the company’s physical footprint.

“Delic Labs will be an integral pillar of the Delic ecosystem and will produce evidence-based psilocybin and cannabis treatments in innovative product forms, providing great benefits for those suffering from treatable illnesses,” “CBDV has a consistently profitable history, more than 50 blue chip clients, and an opportunity for tremendous growth as we commercialize the science.  As further legalization of psychedelic treatments progresses, we are well positioned to capitalize on new markets with significant opportunities. We officially welcome the CBDV family into Delic and look forward to their continued success and sharing their discoveries with millions in the near term.”

Matt Stang, Delic Co-Founder and CEO

Founded by award-winning chemist, Dr. Markus Roggen, and UBC Professor, Glenn Sammis, CBDV supports the psychedelic industry with high precision chemical analytics and metabolomic identification. CBDV is one of a handful of licensed research psilocybin labs in Canada and has an aggressive plan to build out a suite of novel compounds and delivery methods for the industry. The company is also a leading cannabis analytical and research company boasting clients that include some of the largest brands in the world. CBDV has applied for its dealer’s license, and intends to eventually commercialize its psilocybin research and associated intellectual property (IP).

Acquisition Highlights

  • The acquisition of CBDV further establishes DELIC as a diversified psychedelics organization: The addition of CBDV allows DELIC to add scientific-based research and analytics to its product offerings. CBDV recently received its Section 56 Exemption granted by Health Canada, enabling CBDV to focus on research and intellectual property development with psilocybin.
  • Building an IP portfolio: CBDV plans to use its analytical tools for psychedelic mushroom compounds that advance clinical ‎and end-user testing. Development of psilocybin analogs that could be used in future medical ‎treatments.
  • Enhanced exposure of CBDV to drive growth: DELIC expects to drive customers to CBDV for its cannabis related laboratory services through its media platform, allowing CBDV to expand its current customer base and potential product offerings.
  • History of profitability: CBDV has a history of profitability, with a focus on extraction optimization, analytical testing, and chemical process development to advance the cannabis and psilocybin industry. Current and past customers are well-established global enterprises who require the cutting-edge cannabis and soon, psilocybin research, which CBDV provides services to.
  • Management expertise. Dr. Roggen, who will remain an employee of CBDV, brings a wealth of knowledge and industry experience to DELIC, in a critically important and evolving space.

Transaction Terms

Delic acquired all of the issued and outstanding shares of CBDV from its shareholders for a purchase price of $7,000,000 (the “Closing Date Payment”) plus certain amounts, if any, to be earned by Dr. Roggen pursuant to an Earn-Out Agreement (as defined below) (together with the Closing Date Payment, the “Purchase Price”). The Closing Date Payment was  satisfied by Delic’s issuance to the CBDV shareholders of the number of consideration shares equal in value to the Closing Date Payment amount, issued at a price per share equal to the hire of (a) 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.

Dr. Roggen has also entered into an earn out agreement (the “Earn Out Agreement”) whereby he may receive additional consideration shares in an amount equal to up to $3,000,000 as follows: (a) $500,000 to be issued on the earlier of (i) the date CBDV’s Section 56 Exemption is renewed or a new authorization is issued by Health Canada or (ii) the date CBDV’s application for a dealer’s license from Health Canada is received; (b) $1,250,000 to be issued if CBDV achieves gross revenue equal to at least $1,200,000 in the first 12 months following closing of the transaction; and (c) $1,250,000 to be issued if CBDV achieves gross revenue equal to at least $3,600,000 in the first 24 months following closing of the transaction (each such event, a “Milestone”). Such additional consideration to 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.

In addition, Dr. Roggen has entered into an employment agreement with CBDV whereby he will serve as President and Chief Scientific Officer of CBDV.

Release of Proceeds From Subscription Receipt Financing

Prior to closing of the Transaction, CBDV completed a non-brokered private placement (the “Offering“) of 11,441,189 subscription receipts of CBDV (the “Subscription Receipts“) at a price of $0.30 per Subscription Receipt for gross proceeds of approximately $3,432,356. The proceeds from the Offering were placed into escrow on completion of the Offering.

CBDV has now satisfied the escrow release conditions, and immediately prior to closing of the Transaction: (i) each Subscription Receipt was converted into one common share of CBDV and one common share purchase warrant of CBDV (each, a “Warrant“), which, concurrent with the closing of the Transaction, were immediately exchanged for one subordinate voting share of DELIC and one subordinate voting share purchase warrant of DELIC having the same terms as the Warrants, respectively; and (ii) the gross proceeds of the Offering were released to CBDV.

In connection with the Offering, CBDV paid aggregate finders’ fees of $92,085.62 cash and issued finders an aggregate of 306,951 share purchase warrants of CBDV. In addition, DELIC paid a corporate finance fee of $63,000 cash and issued 200,000 subordinate voting share purchase warrants of DELIC.

The net proceeds from the Offering shall be used to increase DELIC’s cash position, to execute on DELIC’s business plan, for working capital and for general corporate expenses.

About Delic Labs (formerly known as CBDV)

Delic Labs, formerly known as Complex Biotech Discovery Ventures Ltd. (“CBDV”), based at the University of British Columbia in Vancouver, BC, is a licensed cannabis and psilocybin research laboratory focused on extraction optimization, analytical testing, and process development. Founded by award-winning chemists, Dr. Markus Roggen and UBC Professor Glenn Sammis, Delic Labs uses precision chemical analytics and metabolomics identification to advance the cannabis and psilocybin industries.

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 andDelic Radio, Delic Labs (under binding acquisition agreement) the only licensed entity by Health Canada to exclusively focus on research and development of psilocybin vaporization technology, MeetDelic the premiere psychedelic wellness event, and Ketamine Infusion Centers (under binding acquisition agreement) 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.