Delic Corp. and Molystar Resources Announce Letter of Intent to Complete Business Combination Transaction and Closing of Oversubscribed Subscription Receipt Private Placement
VANCOUVER, British Columbia, Aug. 31, 2020 (GLOBE NEWSWIRE) — Molystar Resources Inc. (“Molystar“), Delic Corp. (“Delic” or the “Company“) and Eception Ventures Ltd. (“Eception“) are pleased to announce that they have entered into a non-binding letter of intent outlining the terms and conditions of a proposed transaction (the “Proposed Transaction“) pursuant to which Molystar, Delic and Eception will complete a business combination which results in Molystar acquiring all of the issued and outstanding common shares of Delic and Eception in exchange for shares of Molystar. In addition, in connection with the Proposed Transaction, Delic completed an oversubscribed private placement for aggregate gross proceeds of $3,475,500 (the “Private Placement“).
The Proposed Transaction is subject to customary closing conditions, including the conditional approval of the Canadian Securities Exchange (“CSE“) and closing of the Private Placement (as described below). Molystar intends to provide updates as this matter progresses. The letter of intent is conditional on satisfactory due diligence, requisite corporate and regulatory approvals, negotiation of definitive documentation and other conditions. There can be no assurance that definitive agreements can be reached, or if such terms can be reached, as to the timing of the Proposed Transaction.New Directors and OfficersThe board of directors of the combined issuer upon closing of the Proposed Transaction (the “Resulting Issuer“) will include Jackee Stang, Martin Tobias, Shasko Despotovski, Kraig Fox, and Paul Rosen.Jackee Stang, Chief Executive Officer and DirectorMs. Stang is the Founder of Delic Corp. She also co-founded Quarter Brands in August 2018, a company offering ready-to-vape premium blend vape pens. Ms. Stang was formerly the Vice President of Content and Programming for High Times from November 2015 to October 2018, and prior thereto, she was the producer of Bulletproof Radio from August 2013 to September 2016. Mathew Lee, Chief Financial OfficerMr. Lee is a Chartered Accountant with a Bachelor of Commerce Degree from the University of British Columbia and is a member of the Chartered Professional Accountants of British Columbia. Mr. Lee brings a broad depth of financial experience in both public and private company operations across various sectors, including mineral resources and financial services. Mr. Lee’s prior experience includes appointments as CFO for Metallic Minerals Corp. and Group Ten Metals Corp. Prior to that he worked as the CFO for Chemesis International Inc., CFO for Mirasol Resources Ltd., controller for AP Capital, Manager of Operations for Raymond James Ltd. and Accounting Manager for Smythe LLP.Martin Tobias, Director Mr. Tobias is the co-founder of ReTree, a non-profit to enable e-commerce companies to add reforestation as a product to their offerings. He founded Element 8 Angels in January 2006, an angel group focused on clean tech and sustainability. Mr. Tobias also founded in January 1996, and is Manager of, MGT Investments LLC, an investment holding company. Formerly, he was the CEO and CFO of Upgrade Labs, Inc. from 2018 to 2020. Sashko Despotovski, DirectorMr. Despotovski has been the Managing Director at Hinna Park Capital, an open-end venture capital fund,since March 2017. His is also an Advisor for the Canadian Market for Everyday Human Alliance. Mr. Despotovski has also been an Investment Director at NV Capital since May 2018. Formerly, Mr. Despotovski was an External Advisor for PwC from March 2016 to February 2018, and prior thereto, Director, M&A for PwC from November 2013 to October 2016.Kraig Fox, Director Mr. Fox has been a Consultant at U-Bet Advisory since December 2018. Prior thereto, he was the Chief Executive Officer and President of High Times Holding Corporation from April 2019 through December 2019. Prior thereto, he was the Senior Managing Director of Entertainment and Media at Eldbridge Industries from January 2016 to December 2018 and Senior Managing Director of Entertainment and Media at Guggenheim Partners from July 2012 to January 2016. Paul Rosen, DirectorMr. Rosen has been the interim Chief Executive Officer of 1933 Industries Inc. since June 2020. Prior thereto, he was the Chief Executive Officer and Chairman of Tidal Royalty from April 2018 to February 2019 and the President, Chief Executive Officer and Director of PharmaCan Capital Corporation from November 2013 to May 2016. Private Placement FinancingAs part of the Proposed Transaction, Delic agreed to conduct a private placement offering of subscription receipts (the “Subscription Receipts“) at a price $0.20 per Subscription Receipt. Each Subscription Receipt will ultimately entitle its holder to receive, without further payment of any further consideration, one common share of the Resulting Issuer (a “Resulting Issuer Share“) upon completion of the Proposed Transaction.On the closing date of any tranche of the Private Placement, all of the proceeds (the “Escrowed Proceeds“) will be deposited in escrow and held by an escrow agent (the “Escrow Agent“). The Escrowed Proceeds shall be released from escrow to the Resulting Issuer upon completion of the Proposed Transaction. In the event that the Proposed Transaction is not completed on or before November 30, 2020 (the “Escrow Deadline“), the Escrowed Proceeds will be returned to the holders of the Subscription Receipts and the Subscription Receipts will be cancelled and of no further force or effect but for the right to be paid the Escrowed Proceeds on a pro rata basis. The net proceeds received by the Resulting Issuer from the Private Placement after the release from escrow will be used for marketing, operations, hiring, and working capital and general corporate purposes of the Resulting Issuer.Delic completed the last tranche of its Private Placement on August 28, 2020 and, due to investor demand, issued an aggregate of 17,377,500 Subscription Receipts for gross proceeds of $3,475,500. In connection with the closing, Delic agreed to pay a finders’ fee comprised of: (a) $54,600, payable in cash or Resulting Issuer Shares on closing of the Proposed Transaction, and (b) 273,000 broker warrants, with each broker warrant exercisable into one Resulting Issuer Share at an exercise price of $0.20 for 18 months from the closing date of the Proposed Transaction.In connection with the Proposed Transaction, and as a condition to closing, Molystar completed a forward stock split on August 14, 2020 (the “Forward Split“), which resulted in each common share of Molystar prior to the Forward Split becoming three common shares of Molystar following the Forward Split.Delic Corp.Delic was formed in 2019 to address the growing interest in psychedelic science. Delic was the first psychedelic umbrella media platform and is currently a trusted source for those interested in psychedelic science. Delic’s offerings include “The Delic”, an e-commerce lifestyle brand, “Reality Sandwich”, a free public education platform providing psychedelic guides, news and culture and “Meet Delic”, a proposed biannual psychedelic wellness summit.Eception Ventures Ltd.Eception’s principal business activity is the identification and evaluation of companies, assets or businesses with a view to completing a business combination transaction.Molystar Resources Inc.Molystar’s principal business activities have historically been the exploration of mineral resource properties. All of Molystar’s properties were sold or abandoned during 2010 and Molystar currently has no business operations nor generates any operating income or positive cash flow.Investors are cautioned that, except as disclosed in press releases issued by Molystar, information with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon.Forward-Looking StatementsThis release contains certain “forward looking statements” and certain “forward-looking information” as defined under applicable Canadian securities laws. Forward-looking statements and information can generally be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “continue”, “plans” or similar terminology. Forward-looking statements and information include, but are not limited to, statements with respect to the transactions contemplated under the Proposed Transaction, the Private Placement, the requisite regulatory and shareholder approvals in respect thereof, the completion of the Private Placement and the use of proceeds thereof, CSE approval to list the shares of the Resulting Issuer, satisfaction of the conditions to the completion of the Proposed Transaction. Forward-looking statements and information are based on forecasts of future results, estimates of amounts not yet determinable and assumptions that, while believed by management to be reasonable, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Forward-looking statements and information are subject to various known and unknown risks and uncertainties, many of which are beyond the ability of Delic, Molystar and Eception to control or predict, that may cause Delic, Molystar and Eception’s actual results, performance or achievements to be materially different from those expressed or implied thereby, and are developed based on assumptions about such risks, uncertainties and other factors set out here in, including but not limited to: the risk that the Proposed Transaction will not be approved by the CSE and that the Escrowed Proceeds raised under the Private Placement will not be released; that the actual use of proceeds may differ from those currently stated; risks and uncertainties related to the Proposed Transaction not being completed in the event that the conditions precedent thereto are not satisfied; the inherent risks involved in the general securities markets; uncertainties relating to the availability and costs of financing needed in the future; the inherent uncertainty of cost estimates and the potential for unexpected costs and expenses; currency fluctuations; regulatory restrictions; liability; competition; loss of key employees; and other related risks and uncertainties. Molystar undertakes no obligation to update forward-looking information except as required by applicable law. Such forward-looking information represents management’s best judgment based on information currently available. No forward-looking statement can be guaranteed and actual future results may vary materially. Accordingly, readers are advised not to place undue reliance on forward-looking statements.