As part of an ongoing process to deal with its bankruptcy, Wayland Group (WAYL.C) is dispensing with several foreign assets that were once touted as being amazing international opportunities, and it’s doing so at prices you can afford.
The courts have granted approval for WAYL to get rid of its Colombian subsidiary, Colmed Pharmaceuticals, which was purchased in an all paper deal for 11 million shares a little over a year ago.
Who’s buying it?
It turns out, one of the companies that originally sold it to them, RG5 Investments.
The approval and vesting order approves the sale transaction contemplated by the share purchase agreement (SPA) entered into on Feb. 2, 2020, among Wayland, and RG5 Investments Inc. and Albert Sheeler (the Colombia purchasers), and the vesting in the Colombia purchasers all of Wayland’s right, title and interest in and to the shares of its Colombian subsidiary, Colmed Pharmaceuticals SAS
A collection of brokers, Colombian locals, and middlemen spotting an opportunity sold the assets to WAYL a bit over a year ago for $22 million, of which $2 million went to RG5.
From what we could tell at the time, the Colombian asset was one of the more real that Wayland Group was picking up, mostly in all paper deals, mostly from companies that mysteriously grew in size and value in the weeks before WAYL purchased them. But they were also radically overpaying.
Here’s how we described Colmed in our 52-page WAYL expose a year back:
When we dig into who owned the company being rolled into Wayland, we find a Colombian entrepreneur took home $3.5 million on the deal, a branding company called Lirios De Los Valles Corp enjoyed a bit over $2 million, another $2 million went to a company called RG5 Investments, which is owned by a dispensary operator out of Illinois named Gorgi Naumovski, and lastly there’s a million bucks going to a guy named Robert Kennedy, who I’m not even going to bother trying to track down because his namesake has the first million pages of search results on Google […] But you know who made most of the money on the deal, pulling in a whopping $12 million+? That’s a company called Viriditas Capital Ltd, which is run by a Toronto lawyer now based in the UAE named Craig Bridgman.
Today, RG5 is now getting the asset back for $300,000, which is both a bargain for them, and a 98.6% loss for Wayland Group, and presumably a strong indicator that $300k is all the thing was worth to begin with.
A few weeks after the announcement of the original Colmed deal, when WAYL’s stock price wasn’t growing from the news and their cash levels were shrinking, ICC International Cannabis (WRLD.U) announced it would take over 50% of WAYL’s international assets in another all-share deal, this one valued in the hundreds of millions of dollars.
As suspicions were aired questioning the worth of those assets (by us – #humblebrag), the share prices of both companies began to shred, and the value of all of those deals – with ICC and the original asset holders – dropped accordingly. In the weeks following, we heard from one ‘prefers to remain anonymous’ individual involved in the Colombia deal, claiming he hadn’t been paid anything out of the agreement, that the original deal never closed, and the ICC deal hadn’t either.
Soon afterward, WAYL was trade halted for not filing financials. It hasn’t filed any since and remains halted to this day, locking investors in a downward spiral.
UNDOING FAKE DEALS
The same day the courts approved the fire sale of Colmed, they also terminated the agreement between Wayland Group and ICC International Cannabis.
This had effectively been done before it even began. When the original deal was announced, the two companies valued the arrangement at over $200m but, today, both companies are of negligible value, are both trade halted, and both look likely to never be brought back to life in any meaningful way.
ICC touted a variety of international assets to its investors that were coming from WAYL, including an Australian ‘asset’ that was so worthless it has since been cancelled.
None of these appear to have advanced in any meaningful way.
The one WAYL asset that even the baggiest of bagholders defended to the end was its 100% interest in Haxxon AG, a Swiss cultivator.
Wayland CEO Ben Ward purchased this in May 2018 for $9.4 million, of which $8.7 million was supposedly goodwill. The courts have allowed the Swiss asset to be sold for “nominal cash consideration” and the assumption of Haxxon debt to a company called RMR Gartenbau GmbH, which lists itself as a landscaping company in European corporate registers and has shared directors with Haxxon in the past.
So, like, everything is awful and all of it was for nothing.
Good luck WAYL longs.
— Chris Parry
FULL DISCLOSURE: No dog in the fight, though Ben Ward once wrongly publicly accused us of blackmail, refused to apologize for it or pay a settlement, so we gave him a ‘free market awareness program’, which we used to go through every single thing he’s ever done for a year. He’s now on the run for regulators. Weird.
Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.