Westphalia Dev. Corp. Reports Third Quarter 2021 Fiscal Results

CALGARY, Alberta--(BUSINESS WIRE)--Westphalia Dev. Corp. (the “Corporation”) announced today its results for the third quarter ended September 30, 2021. Launched in March 2012, the Corporation acquired for development the 310-acre Westphalia Property (the “Property or the “Project”) located in Prince George’s County, Maryland, United States.

Review of Operations

The Corporation continues to actively seek purchasers and developers for the remaining lands associated with Phases 2 and 3 as well as other more immediate opportunities associated with the Phase 1 retail. The Corporation intends to renegotiate or refinance its senior debt with its lender, WWMN, LLC, and a potential new senior lender. The key activities undertaken by the Corporation during the three-months ended September 30, 2021, were as follows:

Construction Activities

• Continued construction on the Woodyard Road Interchange project. Construction is on schedule and expected to be completed in June 2022.
• Continued construction on the Presidential Parkway West project, which is expected to be completed by Q3 2022.

Sales Activities & Financing

• The Corporation amended the purchase and sale agreement to increase the purchase price for the commercial / industrial land in Phases 2 and 3 of the Project.

The single-family market in the Washington, D.C. metropolitan statistical area, and specifically in the Prince George’s County submarket, continues to show strength which has led to increased builders’ interest in purchasing raw land for the development and construction of their own lots.

Management remains focused on strategies to maximize the returns of the Project, which include, but are not limited to:

• The Corporation has been seeking and has collaborated with an additional potential lead senior lender for the project. The potential senior lender continues to conduct its ordinary course due diligence and documentation process, which must be completed prior to any closing. As a result, an extension of the maturity date for the existing financing with WWMN, LLC, the senior secured lender, has been negotiated and executed, extending the maturity date to December 31, 2021.
• There are three additional sites in which a vertical strategy is being pursued to work with national or regional retail commercial and senior living builders. The Corporation is evaluating options for consultants to be engaged for this strategy and is seeking partners to build and lease out the two commercial sites and the senior living site.
• The Corporation continues to work with the local community, County leadership, and internal staff to re-plan additional development within the Westphalia Town Center. The Corporation also continues to work with the various consultants to implement a shift in the project’s scope after having received input from those detailed above by reducing the significant retail and office space that had been previously planned and adding residential and other uses.

Third Quarter Financial Results

During the three months ended September 30, 2021, the Corporation recognized revenue on contracts of $nil (September 30, 2020 - $855,038). The cost of sales relating to the lot sales was $nil (September 30, 2020 - $950,584), including selling costs and commissions.

For the three months ended September 30, 2021, the total comprehensive loss was $885,861. When compared to the three months ended September 30, 2020, total comprehensive loss of $1,098,416, there is a variance of $212,555 between the respective period ends. The variance is due to the items discussed in detail in the Management Discussion & Analysis.

Additional Information

The Corporation is managed by Walton Global Investments Ltd. and the development of the project is managed by Walton Development & Management (USA), Inc., both of which are members of Walton.

Walton is a privately owned, leading global real estate investment, land asset management and administration group that has focused on strategically located land in major growth corridors for more than 42 years. Walton manages and administers US$3.4 billion of real estate assets in North America on behalf of its investors and business partners. Walton has more than 98,000 acres of land under ownership, management and administration in the United States and Canada. Key entities in Walton include Walton Global Holdings, LLC, Walton International Group and Walton Development & Management (USA), Inc. For more information visit Walton.com.

This news release, required by Canadian laws, does not constitute an offer of securities, and is not for distribution or dissemination outside Canada. This news release contains forward looking information, and actual future results may differ from what is disclosed in this news release. Forward-looking information is based on the current expectations, estimates and projections of the Corporation at the time the statements are made. They involve a number of known and unknown risks and uncertainties which would cause actual results or events to differ materially from those presently anticipated. The risks, uncertainties and other factors that could cause the Corporation's actual results and performance in future periods to differ materially from the forward looking information contained in this news release include, among other things, the development of Westphalia Town Center, general economic and market factors, including interest rates, a decline in the real estate market, changes in government policies and regulations or in tax laws, changes in municipal planning strategies and whether certain development approvals are obtained and changes in the Canadian/U.S. dollar exchange rate, in addition to those factors discussed or referenced in documents filed with Canadian securities regulatory authorities and available online at www.sedar.com.

Except as otherwise noted, all amounts are in Canadian dollars, and are based on unaudited condensed interim consolidated financial statements for the three months ended September 30, 2021 and related notes, prepared in accordance with International Financial Reporting Standards.