Wayland Group (CSE:WAYL) (OTCQB:MRRCF) (“Wayland” or the “Company”)
is pleased to provide an update on its previously announced
potential strategic transactions and on its construction and
operational progress in Canada and internationally.
Transaction Update
The Company announced that it continues its
discussions with Cryptologic Corp. regarding the previously
announced plan to sell of Wayland’s Canadian business, including
its Langton, Ontario production facility, to Cryptologic in
exchange for common shares of Cryptologic. “We have been working
daily with the Cryptologic team, and believe that their
professional approach, experience and financial discipline provide
a platform for unlocking additional value in the Canadian
business. We look forward to continuing to work toward
completion of this transaction with them,” said Matt McLeod,
CEO.
Wayland also announced that it has agreed to
terminate the transactions relating to the sale of its
international portfolio of assets to ICC International Cannabis
Corp. Pursuant to this termination agreement, ICC will no longer
have any right to acquire any of Wayland’s portfolio of
international assets and Wayland will cease to hold the common
shares of ICC previously received by it. The termination agreement
also provides that Wayland will retain certain assets previously
transferred by Wayland to ICC, together with a mutual
release. The implementation of the transactions under the
termination agreement are subject to receipt of applicable
approvals as may be required under applicable law.
Wayland continues its work to identify
opportunities to unlock and create value for its shareholders and
other stakeholders from its portfolio of international assets,
though the Company can offer no assurance that any transactions
will be identified or completed on terms acceptable to Wayland or
at all in respect of these assets.
Langton Facility Update
Construction of Phase IA at Wayland’s fully
automated, purpose built, state-of-the-art cannabis production
facility in Langton, Ontario is near completion. Like many
companies in the cannabis industry, the Company experienced
unanticipated regulatory delays in obtaining amendments to its
licenses. The delays in respect of amendments relating to the
Langton facility contributed to additional financial challenges for
the Company. These factors were the primary cause of the
construction delays in completing the construction of this phase of
construction at the facility, which was previously expected to be
completed earlier this year. Wayland had initially
anticipated revenues of $37,900,000 for 2019, the Company now
anticipates that 2019 revenues will be 15-30% of that anticipated
revenue. However, as previously disclosed, the receipt of bridge
loan from Cryptologic has allowed the Company to continue to work
towards completion of this state-of-the-art EU-GMP certified
facility, but the Company can provide no assurances regarding the
availability of additional funds in this regard or that additional
construction work will proceed on the timelines anticipated by the
Company or at all.
Phase 1A (refer to Construction Map)Cannabis
plants are now growing in licensed rooms 801 to 808 using IAS New
York Inc.’s intellectual property and Rockwell Automation control
platforms developed with AI DATAGROW. Accordingly, the
Company expects 864 new plants to be planted using the perpetual
grow platform each week. The Company is expected to harvest
approximately 250 kg of dried flower each month from now until the
end of 2019.
Phases 1B, 1C, 1D (refer to Construction
Map)With Phase 1A nearly completed and licensed, the Company
expects to shift focus to complete Phase 1B, its Processing and
Packaging area. Currently, all processing and packaging is
completed at the Company’s previously existing facility at 150, 8th
Concession Road, Langton, Ontario, which is limited to
approximately 70 kg per week. Completion of Phase 1B will
help gain additional operational efficiencies in processing, drying
and packaging resulting in a dramatic increase in finished goods
production capacity. Phases 1C and 1D will then be completed
sequentially. Once Phase 1 (A, B, C, D) is completed, it is
estimated that annual production will be a minimum of 25,000
kg/year. No timeline for completion of these additional
phases is available at this time. The Company continues to
believe that this facility, once fully operational, will be an
ultra low cost facility and that, given its automated design, water
collection systems and on site power co-generation, it will be
capable of consistently producing premium quality cannabis.
The Company also plans to host an open house for
key customers, business partners and investors once Phase 1 is
completed, to showcase this world-class automated Cannabis
production facility.
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/ea3ecdcd-491f-45db-a6c5-db8a99f8b3a3
Germany
The Company has continued to support its
operations to support the significant medical cannabis opportunity
in Germany. All required licenses for dried cannabis import
from its Langton facility are in place. On May 21, 2019, the
Company announced that its joint venture DEMECAN GmbH (“DEMECAN”),
was awarded three lots of domestic cannabis production in Germany
by the Federal Institute for Drugs and Medical Devices
(“BfArM”). With the tender process complete, DEMECAN is
focusing on building and upgrading their respective operational
units within Wayland’s Ebersbach facility.
Wayland’s Langton, Ontario facility is one of a
select few EU-GMP licensed facilities globally. Using this
unique capability, the Company has shipped a total 131 kg of dried
cannabis to Cannamedical in 2019 from its Langton facility.
Shipments were made in a mix of 10 g bottles and bulk
shipments. The Company expects shipment volumes to during Q4
2019 to be greater than any previous quarter. “Cannamedical
has been a very supportive partner, and their support and
flexibility in developing this unique aspect of Wayland’s business
has been great,” said Veronica Lesch, Director of Supply. She
continued, “Cannamedical’s Quality Assurance team has been an
invaluable partner in ensuring both parties were meeting EU GMP
requirements for all of our exports.”
Italy
Wayland Italia, the Company’s Italian
subsidiary, has submitted a request to register two high CBD
strains with the Community Plant Variety Office (CVPO). The
CVPO is a European Union agency created to administer The Plant
Variety Rights System in Europe. This system, which is the largest
in the world of its kind, provides protection with an intellectual
property right for new plant varieties.
Wayland believes that Western Europe represents
a significant medical cannabis opportunity, and the Company
continues to execute its strategy in key markets throughout the
region. With these two new registered strains, SIBARI (14-16% CBD)
and DAMATO (6-8% CBD), the Company believes that it has strong
intellectual property to develop high CBD medical and wellness
markets. Through its partnership with Eastern Piedmont University,
Wayland is also positioned to be a leader in product and research
development in Italy and through Europe.
Provincial Supply
Agreements
The Company has also maintained constructive
working relationships with its provincial partners throughout 2019,
despite supply challenges. The Company shipped 344 kg of
dried cannabis and 26,352 bottles of cannabis oil to Canadian
provinces in 2019 and is planning on shipping a larger quantity in
Q4 than any previous quarter. The Company is confident in its
ability to compete against other brands in the industry, once
supply is normalized upon completion of Phase 1 in Langton.
“We are very appreciative of the collaboration with all of
our provincial partners” said Sanjay Patel, National Sales
Director. “Our sales team has worked to maintain complete
transparency with all of our provincial partners throughout 2019,
on both the challenges and progress in Langton. Our customers
have visited Langton throughout 2019 to see our continued progress,
and they are excited to see the facility, once Phase 1A is fully
operational.”
General Update
“Wayland has faced a number of obstacles in
2019. Several issues that arose in 2018, together with the delays
in filing the Company’s audited annual financial statements and the
Company’s previously disclosed management changes have presented
significant challenges for Wayland. However, we continue to
work with our business partners and believe that we have identified
a path forward for Wayland and its stakeholders, beginning with the
proposed transaction with Cryptologic.” said Matt McLeod. He
continued, “I would like to thank our customers, investors and
other business partners for sticking with Wayland through this
transitional period.”
About Wayland Group
Wayland is a vertically integrated cultivator
and processor of cannabis. The Company was founded in 2013 and is
based in Oakville, Ontario, Canada with production facilities in
Langton, Ontario where it operates a cannabis cultivation,
extraction, formulation, and distribution business under federal
licenses from the Government of Canada. The Company also has
production operations in Dresden, Saxony, Germany, Regensdorf,
Switzerland and, Allesandria, Piedmont, Italy. Wayland will
continue to pursue new opportunities globally, including in
Argentina and Colombia, in its effort to enhance lives through
cannabis.
About Cryptologic Corp.
Cryptologic Corp. is currently a cryptocurrency
mining company that is focused on divesting of its crypto mining
assets and exploring acquisition opportunities in sectors outside
of cryptocurrency mining.
Forward Looking Information
This news release includes forward-looking
information and statements, which may generally be identified by
the use of the words “will”, “expects”, “believes”, “estimated”,
“proposed” and variations or similar expressions and which include,
but are not limited to, information and statements regarding or
inferring the future business, operations, financial performance,
prospects, and other plans, intentions, expectations, estimates,
and beliefs of the Company. Such statements include those relating
to the negotiation and entering into by the Company of definitive
transaction documents with Cryptologic, the terms and completion or
non-completion of the proposed transaction with Cryptologic, the
expected financial and other benefits of the proposed transaction
with Cryptologic for Wayland and its shareholders and other
stakeholders, the satisfaction of the conditions to implementing
the termination agreement with ICC, the entering into by the
Company of agreements with ICC relating to cannabis processing,
asset conveyances and otherwise, the status and potential outcomes
of the Company’s strategic review with respect to its international
business, the value of Wayland’s remaining international business,
the consideration to be received by Wayland for a potential sale of
its remaining portfolio of international assets, the anticipated
timeline and results of the build-out of Wayland’s Langton
facility, the availability of additional financing to fund
Wayland’s ongoing operations and build-out of its Langton facility,
the exercise by Wayland of financial and operational discipline,
the achievement of Wayland’s anticipated revenue for 2019.
Forward-looking information and statements involve and are subject
to assumptions and known and unknown risks, uncertainties, and
other factors which may cause actual events, results, performance,
or achievements of the Company to be materially different from
future events, results, performance, and achievements expressed or
implied by forward-looking information and statements herein. Such
assumptions, risks, uncertainties and other factors include, but
are not limited to, that the proposed transactions with Cryptologic
and the transactions contemplated by the termination agreement with
ICC will be completed on the timelines or on the terms anticipated
by the Company or at all, that a definitive agreement with
Cryptologic will be successfully negotiated and entered into, that
all conditions to closing outlined in such definitive agreement
will be satisfied and/or waived on the terms and timelines
anticipated by Wayland or at all, that all necessary third party,
regulatory, stock exchange, securityholder and other consents and
approvals will be received in connection with the proposed
transactions with Cryptologic and ICC on the timelines anticipated
or at all, that all other conditions to closing will be received in
connection with the proposed transactions with Cryptologic and ICC
on the timelines anticipated or at all, that Wayland will be able
to distribute the Cryptologic common shares received under the
proposed transaction with Cryptologic to Wayland’s shareholders in
a cost-effective manner and on the timelines anticipated, that the
sale of Cryptologic’s existing business and its establishment as a
single-purpose cannabis company will proceed on the timelines and
terms anticipated or at all and that it will establish and maintain
the required minimum $25 million cash balance (less amounts
advanced to Wayland under the bridge loan agreement (excluding
interest)) on the timelines anticipated or at all, that the
conditions precedent to the funding of further facilities under the
bridge loan will be satisfied and that such facilities will be
advanced to Wayland on the timeline anticipated or at all, that
Wayland will be able to deploy the funds received pursuant to the
bridge loan in the manner, to the effect and on the timelines
anticipated and that Wayland’s financial, operational and capital
requirements can be met in the manner and on the timelines
anticipated or at all. Although the Company believes that any
forward-looking information and statements herein are reasonable,
in light of the use of assumptions and the significant risks and
uncertainties inherent in such information and statements, there
can be no assurance that any such forward-looking information and
statements will prove to be accurate, and accordingly readers are
advised to rely on their own evaluation of such risks and
uncertainties and should not place undue reliance upon such
forward-looking information and statements. In particular,
the completion of the proposed transaction with Cryptologic and the
transactions contemplated by the termination agreement with ICC are
subject to the satisfaction of a number of conditions and
uncertainties (including those noted above) and the Company can
offer no assurance that any of such transactions will be completed
on the terms, conditions and/or timelines anticipated by the
Company or at all, nor can any assurance be offered that any other
transaction in respect of the Company or its businesses will be
identified or successfully completed. Any forward-looking
information and statements herein are made as of the date hereof,
and except as required by applicable laws, the Company assumes no
obligation and disclaims any intention to update or revise any
forward-looking information and statements herein or to update the
reasons that actual events or results could or do differ from those
projected in any forward looking information and statements herein,
whether as a result of new information, future events or results,
or otherwise, except as required by applicable laws.
The Canadian Securities Exchange has not
reviewed, approved or disapproved the content of this news
release
For more information about Wayland, please visit
our website at www.waylandgroup.com
Contact Information: Investor
Relations IR@waylandgroup.com
Media
Inquiries: media@waylandgroup.com
Corporate Headquarters (Canada) Wayland Group
Corp. (Toronto) 2381 Bristol Circle Door D, Suite 102 Oakville,
Ontario Canada L6H 5S9 289-288-6274
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