TORONTO, Feb. 20, 2019 (GLOBE NEWSWIRE) -- Wayland Group (CSE:WAYL) (FRANKFURT: 75M) (OTCQB:MRRCF) (“Wayland” or
the “Company”) is pleased to announce a corporate update on its operational progress in Canada and internationally.
Langton Production Facilities
The Company is now completing a third harvest at its new facility in Langton, ON, Canada, with licenses for cultivation and
business to business sales received in April 2018 and December 2018 respectively. The Company, in partnership with Industrial
Automation Solutions (IAS New York Inc.), of Rochester NY, and their partner Rockwell Automation, have completed a proof of concept
(“POC”) for both the facility and automation platform. Average yields from such POCs, among three different strains are 50 grams
per plant. The cultivation concept has been modified to a Screen of Green where greater plant density and thereby greater yield is
achievable per square foot at the facilities. Throughout these POCs, each cultivation period totaled 17 weeks from start to finish
(the “Periods”). These Periods consist of ten (10) days for clones to root, 5 weeks for vegetation to complete and 11 weeks for the
flower cycle prior to harvesting. All stages of cultivation were completed in the same rooms, demonstrating the facility’s
versatility to conduct every stage of cultivation in each room. As the plants on average produced 50 grams per plant, with 9,000
plants in 8,800 sq. ft rooms annual production average for flowering areas is now 286 grams per sq. ft. per year. The POCs have
demonstrated that on an annualized basis, the Company’s Langton facility, once fully licensed for Phase 1-A through Phase 1-D
(set out in Graphic 1 below), will be able to produce 23,731 kg of dry cannabis flowers to be used in the production and sale of
packaged dry flower and cannabis oil. It is expected that with further phenotyping of genetics, in addition to nutrient
optimization, such yields will continue to increase.
The Company is currently harvesting 8,200 plants, with product from these plants anticipated to be ready for the market no
earlier than April. In addition to the current harvest, the Company has planted an additional 21,700 plants and will re-fill the
current harvested room with 8,300 plants in mid-March in order to fill the balance of the currently licensed area. The Company
expects to request inspection for readiness by Health Canada of the Phase 1-A area in March of this year. As the timeline for the
required amendments to such licenses has ranged from 30-45 days to approximately 120 days for the Company’s last request for an
amendment, the Company has updated its timing expectations for amendments to its licenses. Due to this potential for
significant delay, the Company has made necessary changes to its internal processes.
Revenues
In Q4 of 2018 the Company generated revenues of $1,305,033 net of discounts and returns. Full financials for the quarter will be
released during the first week of April. Looking forward into 2019, the Company anticipates revenues of $2,700,000 in the
1st quarter, $6,900,000 in the 2nd quarter, $7,700,000 in the 3rd quarter, and growing to
$20,600,000 in the 4th quarter of 2019. The Company also anticipates that its revenues will increase substantially
quarter over quarter as more of the facility is filled with plants, and consecutive harvests are completed. The Company maintains
supply agreements with four Canadian Provinces, and a German importer of cannabis. As noted in the Company’s press release of
February 7, 2019, Wayland was awarded their second Good Manufacturing and Good Distribution Practices certified facility from the
State of Saxony, in Germany. These certifications provide Wayland with the foundation to start selling product into the lucrative
German and other developing European markets with drastically shorter lead times and greater margins.
Financing
Wayland has also entered into an agreement to obtain additional funds to support the expansion of the Company’s
global footprint and fund development of its flagship Langton facility. This agreement is with certain investment funds managed by
Alpha Blue Ocean Inc. (“Alpha Blue”) a money manager based in London, United Kingdom with a strong track record of partnering with
public companies and delivering meaningful value to their shareholders.
Alpha Blue has agreed to subscribe for up to $20,000,000 aggregate principal amount of senior unsecured
convertible debentures across up to five facilities. The first facility for C$4,000,000 principal amount of debentures has closed.
Wayland expects to draw on additional facilities in the coming weeks.
Pierre Vannineuse, Founder & CEO of Alpha Blue Ocean declared, “ABO could not be prouder to have selected
Wayland as a long-term investment to our portfolio. We are particularly convinced by their European endeavors to replicate their
successes in Canada and capture meaningful market share as they are first movers in the world’s most exciting medical cannabis
market. We will work tirelessly to provide Wayland the support they need, both financially and commercially, to capitalize on their
leading position in Europe.”
The debentures under each of these facilities will be non-interest bearing, have a maturity date of one year
from issuance and will be convertible by Alpha Blue into common shares of Wayland until maturity at a conversion price determined
based on the market price of Wayland’s common shares from time to time. The debentures may also be reimbursed in cash prior to the
maturity (i) upon certain events of default and (ii) subject to a 10% premium at the option of Wayland, and, at maturity at the
election of Wayland. Pursuant to its agreement with Alpha Blue, in connection with the first closing Wayland issued 1,851,851
warrants to Alpha Blue having a three-year term and 740,740 warrants having a five-year term. Each of these warrants is exercisable
for one whole common share at an exercise price of C$1.35. In connection with the closing of each subsequent facility, Wayland will
issue warrants to Alpha Blue having a five-year term and entitling Alpha Blue to acquire C$1 million of common shares, with the
number of warrants to be determined based on the market price of Wayland’s common shares at the relevant time. The subscription
price for each debenture under the facilities is 95% of its face amount. Wayland has paid a commitment fee of 2.5% of the full
aggregate principal amount of the debentures and a facility fee of 2.5% of the aggregate principal amount of debentures issuable
under the first facility. A 2.5% facility fee for the subsequent facilities will be payable on that facility’s closing date.
The funds under these facilities may be used for capital expenditures and for general corporate purposes. Further information
regarding the financing can be found in the subscription agreement posted on SEDAR.
This financing ensures the Company has adequate financing through to cash flow from its operations, including
what is received as a result of cultivation from its Langton facilities.
International Spin-Out and Strategic Review
Although the previously announced exclusivity period with International Cannabis Corp. (“ICC”) has come to an
end, the Company continues to pursue a transaction with ICC. The Company’s previously announced strategic review continues to
assess this opportunity while exploring other strategic alternatives.
About Wayland Group
Wayland is a vertically integrated cultivator and processor of cannabis. The Company was founded in 2013 and
is based in Burlington, Ontario, Canada and Munich, Germany, 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 the consummation of its previously announced transactions in
the United Kingdom, Australia, Colombia, and Argentina, in its effort to enhance lives through cannabis.
Forward Looking Information
This news release includes forward-looking information and statements, which may 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 but are not limited
to statements regarding the expected higher than anticipated yields at the Company’s Langton facility, the expected level of
production at the Langton facility, the timelines for completing the flowering, drying and processing areas at the Langton facility
and for calling for an inspection, the timeline for further buildout at the Langton facility, the anticipated uses of cash by the
Company, the Company's abilities to store and service the German market, its ability to package products at certain speeds, the
Company’s anticipated improved margins, the expected draw of additional facilities under the Company’s agreement with Alpha Blue
and the setting of conversion and exercise prices and the anticipated payment of fees in connection with that agreement, the
Company’s ability to achieve the projected revenues for each of the quarters in 2019 or at all, and its effect on the Company’s
global platform. 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 financing transaction with Alpha Blue will be completed on the terms and timelines anticipated by the Company or at all,
the effect that the proposed financing transaction, when completed, will have on the Company’s global platform, and that all other
conditions precedent to the draw of additional facilities under the agreement will be satisfied in the manner and on the timelines
anticipated and that the Company will be able to shorten its lead times and improve its margins and packaging speeds as
anticipated, and the Company’s ability to achieve the projected revenues for each of the quarters in 2019, 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. 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
Graham Farrell
VP, Communications
Graham.Farrell@waylandgroup.com
647-643-7665
Media Inquiries: media@waylandgroup.com
Corporate Headquarters (Canada)
Wayland Group Corp. (Toronto)
845 Harrington Court, Unit 3
Burlington Ontario L7N 3P3
Canada
289-288-6274
European Headquarters (Germany)
MaricannGmbH
c/o Wayland
Max Joseph Str. 7
80333 Munich
A photo accompanying this announcement is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/b1b765bf-496e-44ae-bb24-332c63d4724d.
Graphic 1
Phase I of Wayland’s Langton, Ontario Facility