Wayland Enters Non-Binding LOI to Promote Canadian Enterprise to Cryptologic Corp.
- Obtains Dedication for Cdn$5 million Bridge Mortgage From Cryptologic
- Negotiating Second Part of Switch of Worldwide Enterprise to
ICC Worldwide Hashish Corp.
- Intends to Distribute Cryptologic and ICC Shares to Wayland Shareholders on Closing; Mixture Possession Curiosity of Wayland Securityholders Anticipated to be 70% (Cryptologic) and 60% (ICC)
- Matthew McLeod Appointed as Wayland CEO By Closing of Transactions
- Ben Ward Resigns as Wayland CEO and Director
- Proclaims Auditor Change and Replace on Operational Issues
TORONTO, Aug. 02, 2019 (GLOBE NEWSWIRE) — Wayland Group (CSE:WAYL) (“Wayland” or the “Firm”) is happy to announce that it has signed a non-binding letter of intent referring to the proposed sale its Canadian enterprise, together with its Langton, Ontario manufacturing facility (the “Facility”), to Cryptologic Corp. for anticipated consideration of 57,500,00zero Cryptologic widespread shares at a deemed concern worth of $4.00 per share, which is predicted to characterize roughly 70% of the issued and excellent Cryptologic widespread shares excellent following closing, and the idea by Cryptologic of liabilities referring to Wayland’s Canadian enterprise. This transaction values Wayland’s Canadian enterprise at roughly Cdn$230 million plus assumed liabilities. It’s contemplated that, upon and topic to closing of the proposed transaction, Cryptologic will probably be a single-purpose cannabis firm with a money stability of a minimum of Cdn$25 million (much less quantities to be superior beneath the bridge mortgage mentioned under and some other quantities superior by Cryptologic to Wayland or its associates (excluding curiosity)) obtainable for funding in Wayland’s Canadian enterprise. Cryptologic has additionally dedicated to supply Wayland with a pre-signing $5 million subordinated bridge mortgage. Wayland has agreed to a binding exclusivity interval till September 15, 2019, or such later date as every of Wayland and Cryptologic mutual agree.
Wayland additionally introduced that it’s negotiating a possible evolution in its beforehand introduced transaction with ICC Worldwide Hashish Corp. involving the switch of Wayland’s remaining curiosity in its worldwide portfolio of property to ICC in trade for extra widespread shares of ICC. It’s anticipated that beneath this proposed transaction, Wayland will successfully distribute the Cryptologic and ICC shares to be acquired by it to its shareholders upon completion of the transactions. No definitive settlement has been signed with Cryptologic or ICC at the moment and Wayland can present no assurance that any transaction will happen on the timelines or on the phrases anticipated by Wayland or in any respect. Wayland doesn’t anticipate to supply an additional replace on these transactions till a definitive settlement has been signed or till in any other case required by relevant regulation.
Paul Pathak, Chair of the Board, commented, “The transactions with Cryptologic and ICC characterize the end result of our strategic assessment and our cautious consideration of a variety of things, alternatives and dangers, together with the Firm’s latest working efficiency and that of the trade as an entire and the views expressed by important shareholders and different stakeholders of the Firm. We need to take this chance to thank all of our shareholders and stakeholders for his or her persistence all through this course of, we’re very proud of the technique we’ve going ahead and imagine it should present the utmost worth obtainable for all concerned.
We imagine that these transactions present our shareholders and different stakeholders with thrilling alternatives for ongoing publicity to sturdy companies that will probably be geographically centered on the Canadian and worldwide markets, respectively. Wayland expects that this bifurcation will assist unlock the worth embedded in Wayland’s worldwide enterprise, which we imagine has not been correctly valued by the market in Wayland’s present configuration, and that it will profit Wayland’s present shareholders and different stakeholders, notably since Wayland’s shareholders are anticipated to carry important majority positions in each Cryptologic and ICC following closing of those transactions.
We’re additionally excited to have Matthew McLeod tackle the Chief Government Officer title following his appointment to the board final month – since becoming a member of the Firm, Matthew has taken on positions of accelerating accountability that replicate his key position in serving to Wayland navigate a troublesome interval in its growth, and he has been instrumental in main the event and negotiation of those transformative transactions for our Firm. We stay up for his continued sturdy management on this new place.”
Following its detailed consideration of a number of potential transactions for the Firm’s Canadian property, Wayland has decided that the potential transaction with Cryptologic represented the very best obtainable different for a variety of causes, together with its low degree of dilution to Wayland’s shareholders in respect of the Canadian enterprise, the provision of fast liquidity by way of the bridge mortgage and important future liquidity to deal with each Wayland’s present liabilities and the funding to gas its development sooner or later, and the anticipated sturdy management group together with Jordan Greenberg, Cryptologic’s present CFO and former CFO of Nuuvera Inc., Matthew McLeod, Wayland’s present Chief Government Officer, and different key members of Wayland’s administration group. It’s anticipated that John Kennedy FitzGerald will probably be resigning as CEO of Cryptologic at closing.
Cryptologic Transaction and Bridge Mortgage
The proposed Cryptologic transaction would end in Cryptologic buying property referring to Wayland’s present Canadian operations in trade for 57,500,00zero widespread shares of Cryptologic anticipated to characterize roughly 70% of the issued and excellent Cryptologic widespread shares following closing and the idea of liabilities related to that enterprise. It’s also anticipated that, following closing, Cryptologic will probably be led by a administration group together with Jordan Greenberg as Chief Government Officer (at the moment Chief Monetary Officer of Cryptologic) and Matthew McLeod as President of Cryptologic. Mr. Greenberg was the previous CFO of Nuuvera Inc., which raised over Cdn$100 million in fairness financing then accomplished a number of cannabis-related acquisitions, each in Canada and in worldwide markets. Nuuvera Inc. accomplished its go-public course of by way of the reverse takeover of a publicly traded shell, then achieved a profitable exit by way of a plan of association with Aphria Inc., valued in extra of Cdn$500 million. Mr. McLeod has served as Wayland’s President and latterly Chief Government Officer of Wayland. The administration group will even embody different senior members of the present administration groups of Cryptologic and Wayland. It’s proposed that John Kennedy FitzGerald will resign as Chief Government Officer of Cryptologic at closing.
In reference to the transaction, Cryptologic has agreed to supply a $5 million bridge mortgage to the Firm or one among its subsidiaries previous to signing a definitive settlement in respect of the proposed buy and sale transaction. This bridge mortgage will represent “Subordinated Debt” beneath of the Firm’s present secured convertible debenture indenture, until consent of the debentureholders is obtained pursuant to that indenture. These funds are anticipated for use fulfill sure of Wayland’s present liabilities and to proceed the construct out of Wayland’s state-of-the-art EU-GMP licensed facility in Langton, Ontario. Wayland intends to take care of a give attention to monetary and operational self-discipline in reference to its ongoing build-out of the Facility.
It’s anticipated that, previous to closing, Cryptologic will promote the enterprise and property comprising its present cryptocurrency mining and different operations and that, following closing it is going to be a single-purpose cannabis firm with a money stability of not lower than Cdn$25 million (much less quantities superior beneath the bridge mortgage and some other advances from Cryptologic to Wayland or its associates (excluding curiosity)) obtainable for funding within the Canadian enterprise and the Facility. Going ahead, it’s anticipated that the Facility would be the cornerstone of Cryptologic’s enterprise and this is able to permit Cryptologic to successfully provide the Canadian leisure and medical cannabis markets, and utilizing the Facility’s EU-GMP certification, the worldwide cannabis markets.
The proposed transaction with Cryptologic stays topic to plenty of circumstances, together with, with out limitation, the completion of passable due diligence by Cryptologic and Wayland, the negotiation and getting into into of a passable definitive settlement and transaction construction, receipt of relevant securityholder approvals by Cryptologic and Wayland in accordance with relevant securities legal guidelines and inventory trade guidelines and securityholder paperwork to which they’re get together, along with some other relevant third get together and regulatory consents and approvals, the completion of the sale by Cryptologic of its present companies and the provision of the minimal Cdn$25 million money stability, the potential completion of a reorganization of Wayland’s Canadian enterprise, the receipt by every of Wayland and Cryptologic of a equity opinion from their respective monetary advisors, and different customary circumstances to closing a transaction of this nature.
Replace on Administration and Board of Administrators
Wayland additionally introduced the appointment of Matthew McLeod, Wayland’s President, as Chief Government Officer of the Firm and that Ben Ward has resigned as Chief Government Officer and as a director of Wayland.
Auditor Change and Replace on Operational Issues
Wayland additionally introduced right now that it has appointed NVS Chartered Accountants (“NVS”) as auditors of the Firm and that MNP LLP (“MNP”) had resigned as auditors with the Firm’s assent, each efficient right now.
Wayland and NVS will work diligently to finish the Firm’s 2018 audited annual monetary statements and associated supplies and to make the mandatory filings with securities regulators as rapidly as doable. Wayland additionally intends to file its interim monetary statements for the quarter ended March 31, 2019, the associated administration’s dialogue and evaluation and certificates of its CEO and CFO concurrently with its submitting of the 2018 audited annual monetary statements, and to make any crucial utility to have the failure-to-file stop commerce order issued on Could 6, 2019 lifted on the related time.
In accordance with Nationwide Instrument 51-102 (“NI 51-102”), the Firm despatched a Change of Auditor Discover to every of NVS and MNP on August 2, 2019 and on that very same day acquired copies of the letters from NVS and MNP, respectively, addressed to the Ontario Securities Fee as required by NI 51-102. A duplicate of the Change of Auditor Discover along with a duplicate of those letters have now been filed beneath the Firm’s profile on SEDAR and delivered to every of NVS and MNP, all in compliance with NI 51-102.
As famous within the Firm’s Change of Auditor Discover, primarily based on the data obtainable to the Firm, it’s of the view there have been no reportable occasions (as outlined in NI 51-102) for the interval from Could 16, 2018 to August 2, 2019 (being the date of the Resignation). Nonetheless, MNP has suggested the Firm that it’s of the view that there’s an unresolved concern (as outlined in NI 51-102) referring to the conduct of the Firm’s former CEO in respect of the audit of the Firm’s 2018 annual monetary statements and that, regardless of the Firm’s cooperation in respect of the matter, MNP was unable to kind an opinion as as to whether that conduct may have a cloth affect on these monetary statements earlier than the date of the Resignation. MNP has due to this fact suggested that it’s of the view that there’s a reportable occasion (as outlined in NI 51-102). The Firm’s board of administrators mentioned the problem with MNP and MNP was licensed to reply absolutely to enquiries by any successor auditor (as outlined in NI 51-102) regarding the concern.
Wayland can also be happy to announce the closing of its beforehand introduced transactions for property in Argentina and Colombia. The Firm remains to be working to shut the beforehand introduced transaction with Theros Pharma Ltd. in the UK, however has decided that it’s going to not consummate its beforehand introduced transaction in Australia with Tropicann Pty Ltd. and Territory Hemp and Hashish Pty Ltd.
About Wayland Group
Wayland is a vertically built-in cultivator and processor of cannabis. The Firm was based in 2013 and relies in Oakville, Ontario, Canada and Munich, Germany, with manufacturing amenities in Langton, Ontario the place it operates a cannabis cultivation, extraction, formulation, and distribution enterprise beneath federal licenses from the Authorities of Canada. The Firm additionally has manufacturing operations in Dresden, Saxony, Germany, Regensdorf, Switzerland and, Allesandria, Piedmont, Italy. Wayland will proceed to pursue new alternatives globally, together with in Argentina and Colombia, in its effort to reinforce lives by way of cannabis.
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