Canadian licensed cannabis producer The Wayland Group (WAYL.C), formerly Maricann, currently halted for not being able to get their financials through three different audit teams, has succumbed.
Long halted at $0.74 in Canada, though still trading on the US OTC at C$0.26, Wayland announced late Friday night, when most people were either asleep or into their fourth negroni of the night, that they’re just fucking done.
Like, for real: They’re selling off their core assets for whatever paper they can get.
WAYLAND ENTERS NON-BINDING LOI TO SELL CANADIAN BUSINESS TO CRYPTOLOGIC CORP.
Wayland Group Corp. has signed a non-binding letter of intent relating to the proposed sale of its Canadian business, including its Langton, Ont., production facility, to Cryptologic Corp. [CRY.C – formerly Vogogo, VGO.C] for anticipated consideration of 57,500,000 Cryptologic common shares at a deemed issue price of $4.00 per share, which is expected to represent approximately 70% of the issued and outstanding Cryptologic common shares outstanding following closing, and the assumption by Cryptologic of liabilities relating to Wayland’s Canadian business. This transaction values Wayland’s Canadian business at approximately Cdn$230 million plus assumed liabilities.
Okay, a few things here. First: I FUCKING TOLD YOU SO. But we’ll get to that in a bit.
Second: This word salad you’re reading above is as much bullshit as any Wayland has spun in the last few years. $4 per share? Valuation at $230m?
[contextly_sidebar id=”pBS2QiCBQbxtYj8Wg7UJIKo2Nc6AKceP”]Crypotlogic has a $31m market cap and trades at $2.30 per share. It hasn’t hit $4 since June, and even then only for a hot minute. To get near that share price quoted you’d need to go back to January, shortly before the ass fell out of this stock.
If the price for Wayland’s Canadian assets is 57m CRY shares, that’s a take home of $131m, $100m less than they’re stating.
Currently, Crypotologic has 13m shares out, for a $31m market cap. To do this deal, they’d need to put out five times more shares than currently exist in the float, which will dilute the hell out of the existing share price, and they’re covering Wayland’s debts with a $5m bridge loan because, as we stated in our earlier report, Wayland is broke ass and trades at their Canadian facility are agitating to be paid what they’re owed.
So that $2.30 CRY is currently trading at? Say goodbye to that.
On the other end of the deal, Cryptologic has been largely illiquid for MONTHS, yet a big load of CRY stock was sold off the day before this deal was announced. WEIRD COINCIDENCE.
Wayland also announced that it is negotiating a potential evolution in its previously announced transaction with ICC International Cannabis Corp. involving the transfer of Wayland’s remaining interest in its international portfolio of assets to ICC in exchange for additional common shares of ICC. It is expected that under this proposed transaction, Wayland will effectively distribute the Cryptologic and ICC shares to be received by it to its shareholders upon completion of the transactions.
Amazing! Free shares to bagholders!
Only, they’ve already done one of these deals with ICC before, for half of WAYL’s foreign assets, and shareholders haven’t received a share from that deal yet.
In the time WAYL’s sad, sorry investors have been waiting for their shares, ICC stock has fallen from $0.43 per share, when the deal was announced, to $0.09 per share today, an 80% loss – so far. That didn’t stop WAYL from completing the deal because, as we’ve made clear, they broke.
Also, as much as WAYL is ‘negotiating’ with ICC to take everything else off their hands, there’s no assurance ICC will do such a deal. In fact, with how desperate WAYL is right now, ICC would be idiots to not drag out any deal until they get everything for next to nothing.
Which is what they did last time.
No definitive agreement has been signed with Cryptologic or ICC at this time and Wayland can provide no assurance that any transaction will occur on the timelines or on the terms anticipated by Wayland or at all.
This passage is also important because it means none of this might even happen.
To that [formatting edited by us for clarity]:
The proposed transaction with Cryptologic remains subject to a number of conditions, including, without limitation:
- the completion of satisfactory due diligence by Cryptologic and Wayland
- the negotiation and entering into of a satisfactory definitive agreement and transaction structure
- receipt of applicable securityholder approvals by Cryptologic and Wayland in accordance with applicable securities laws and stock exchange rules and securityholder documents to which they are party, together with any other applicable third party and regulatory consents and approvals
- the completion of the sale by Cryptologic of its existing businesses and the availability of the minimum Cdn$25 million cash balance
- the potential completion of a reorganization of Wayland’s Canadian business
- the receipt by each of Wayland and Cryptologic of a fairness opinion from their respective financial advisors
- and other customary conditions to closing a transaction of this nature.
That’s a whole load of things that have to happen in order for this to move ahead, and that’s before we even get to the fact that the CRY share price is around half of what the assumed valuation in this deal is.
What we do know is, WAYL is broke and desperately needed $5m to keep the wolves from the door, and this was the only way they had to get it.
Paul Pathak, Chair of the Board, commented, “The transactions with Cryptologic and ICC represent the culmination of our strategic review and our careful consideration of a range of factors, opportunities and risks, including the Company’s recent operating performance and that of the industry as a whole and the views expressed by significant shareholders and other stakeholders of the Company. We want to take this opportunity to thank all of our shareholders and stakeholders for their patience throughout this process, we are very happy with the strategy we have going forward and believe it will provide the maximum value available for all involved.
Translated: We know this isn’t great, but this was the best we could do.
Also worth noting, this little passage, slipped into the middle like a thief in the night:
We are also excited to have Matthew McLeod take on the Chief Executive Officer title following his appointment to the board last month. Since joining the Company, Matthew has taken on positions of increasing responsibility that reflect his key role in helping Wayland navigate a difficult period in its development, and he has been instrumental in leading the development and negotiation of these transformative transactions for our Company. We look forward to his continued strong leadership in this new position.”
Translated: CEO Ben Ward fired.
And why would they have fired him?
As noted in the Company’s Change of Auditor Notice, based on the information available to the Company, it is of the view there were no reportable events (as defined in NI 51-102) for the period from May 16, 2018 to August 2, 2019 (being the date of the Resignation). However, MNP has advised the Company that it is of the view that there is an unresolved issue (as defined in NI 51-102) relating to the conduct of the Company’s former CEO in respect of the audit of the Company’s 2018 annual financial statements and that, despite the Company’s cooperation in respect of the matter, MNP was unable to form an opinion as to whether that conduct could have a material impact on those financial statements before the date of the Resignation.
Translated: You wanna know why those financials are over six months late? You wanna know why three auditors have been through them and they’re still not done?
Because BEN WARD WAS DOING THINGS THE AUDITORS COULD NOT SIGN OFF ON.
We don’t know yet what those things are, but being as Ward sold his personal assets to the company in the past (and paid himself a finder’s fee), and being as the company that provided WAYL with death spiral financing told us they pay a commission whenever someone feeds them a new victim – sorry, client, it wouldn’t be a totally outrageous thing to surmise that maybe Ben Ward earned a commission he really shouldn’t have for something that hurt his company.
Or that he was buying assets he knew had little to no value, in an effort to prop up his share price.
The Company is still working to close the previously announced transaction with Theros Pharma Ltd. in the United Kingdom, but has determined that it will not consummate its previously announced transaction in Australia with Tropicann Pty Ltd. and Territory Hemp and Cannabis Pty Ltd.
What a surprise.
My predictions: This deal doesn’t go definitive. It’s a bullshit deal that would require multiple planets to align to even move forward from here, the valuation is vapourware, all companies involved are being heavily sold and, even if they wanted to close it out, those financials are not getting out any time soon. The auditing process restarted last Friday and will take some time.
Wayland shareholders: I’m sorry you’re stuck in the middle of this mess, but we tried to warn you – we REALLY tried to warn you and, frankly, a lot of you chose to sling insults on social media rather than listen.
We wrote a 52 page report on Wayland that broke down the whole thing, all the places it was lying, all the pieces that were fraudulent, all the terrible deals designed for short term relief but with long term agony attached. We pointed out exactly what Ben Ward is, what he does, and why you should care. We predicted the stock collapse on the back of the death spiral financing, we reported accurately that work had all but stopped on site over finances, that the Australian deal (now canceled) was bullshit, that the other foreign deals were likewise, that WAYL had no money to move them forward, etc etc etc.
We fucking told you, guys. And you called us shorters and bashers and liars.
PS: Wayland Group execs – we have an outstanding legal dispute with you. It’s not going away.
— Chris Parry
FULL DISCLOSURE: No commercial interest in any of the companies mentioned, however, Ward accused us of extortion previously and never properly apologized, so we have a serious hate on for the company as a result.