All figures in Canadian dollars ($) unless otherwise specified

Toronto, Ontario and Rionegro, Colombia–(Newsfile Corp. – August 29, 2023) – PharmaCielo Ltd. (TSXV: PCLO) (OTCQX: PCLOF) (“PharmaCielo” or the “Company“), the Canadian parent of Colombia’s premier cultivator and producer of dried flower and medicinal-grade cannabis extracts, PharmaCielo Colombia Holdings S.A.S., today announced financial results for the second quarter ended June 30, 2023.

Management Commentary

Marc Lustig, Chairman and CEO of PharmaCielo commented, “Our sales and finance teams have made measurable progress and I expect these efforts to continue to pay off over the next several quarters. From a sales perspective, we are getting more opportunities with large global customers than ever before, as weaker players exit the marketplace or fail to deliver on the quality and consistency required by these institutional-caliber entities. Alongside these steady initiatives to drive the top line, our finance team has delivered on our targeted 25% reduction in ongoing overhead expenses ahead of budget and with no meaningful impact to our ability to execute on existing contracts and go out and win new ones. As one of the largest single investors in this company, I strongly believe that the initiatives we have underway will result in meaningful growth in the top line, and with all material capex behind us, will translate into cash flow and growth in shareholder value.”

Summary Financials

• For further detailed information and analysis, please see the financial statements and management’s discussion and analysis for the period ending June 30, 2023, as posted at sedarplus.ca and pharmacielo.com

Summary of Recent Developments

• On July 11, 2023, PharmaCielo announced that Marc Lustig had been appointed Chairman and CEO of the Company. Mr. Lustig has a proven history of value creation across the cannabis, capital markets and health sciences sectors.
• As announced in the Company’s August 10, 2023 news release, PharmaCielo’s sales team continues to make progress with new and existing customers. Notable upcoming catalysts include: The Company’s first shipment to its third Brazilian customer, expected to take place during Q4 2023, and ongoing shipments of THC-dominant dried flower to a customer in Germany.
• The Company is on track to achieve its objective of operating efficiently with a specific goal of lowering overhead expenses by 25% compared to 2022 levels. In Q1 2023, overhead expenses were 20% below the prior year period and in Q2 2023, overhead expenses were 25% below the prior year period. As a result of the efforts of the management to right-size the company the number of employees is now 132 from a high of 450 in 2021, and 331 at the end of 2022, with no meaningful impact on PharmaCielo’s ability to execute on existing and new contracts.

The Company defines “overhead expenses” as: consulting fees, office & general expenses, professional fees, salaries and wages, and travel and accommodation expenses.

Non-Brokered Private Placement of Debenture Units:

In 2023, Year-to-date, the Company raised $3,280,000, as part of its previously announced non-brokered private placements (the “Offering” and “New Offering”), consisting of an aggregate of 3,280 debenture units (each a “Unit”). The Units were issued at a price of $1,000 per Unit for aggregate proceeds of $3,280,000. To date, since its announcement of the Offering, the Company has raised $14,075,000 principal amount of Units. As disclosed in the Company’s news release dated June 29, 2023, the Company intends to use the proceeds from the sale of the units for operations, working capital, and the build-out of its international sales program.

About PharmaCielo

PharmaCielo Ltd. (TSXV: PCLO) (OTCQX: PCLOF) is a global company, headquartered in Canada, with a focus on ethical and sustainable cultivating, processing and supply of all natural, pharmaceutical-grade medical dried cannabis flower and cannabis products to large channel distributors. PharmaCielo’s principal (and wholly owned) subsidiary is PharmaCielo Colombia Holdings S.A.S., headquartered at its cultivation and processing center located in Rionegro, Colombia.

The board of directors and executive team of PharmaCielo are comprised of a diversely talented group of international business executives and specialists with relevant and varied expertise. PharmaCielo recognized the significant role that Colombia’s ideal location plays in building a sustainable business in the medical cannabis industry, and the Company, together with its directors and executives, is executing on a business plan focused on supplying the international marketplace.

For further information

Ian Atacan, Chief Financial Officer
+1 416-562-3220
i.atacan@pharmacielo.com

Media and Investor Inquires:
investors@pharmacielo.com

Forward-Looking Statements

This news release contains forward-looking statements. Forward-looking statements can be identified by the use of words such as “expects”, “is expected”, “intends”, “anticipates”, “believes”, or variations of such words and phrases or state that certain actions, events or results “may” or “will” be taken, occur or be completed or achieved. Forward-looking statements in this news release include, without limitation, statements regarding the issuance of the debenture units, including the timing and completion of any future issuances thereof.

The forward-looking statements in this news release are necessarily based on assumptions, including assumptions with respect to PharmaCielo’s ability to obtain necessary approvals for the issuance of the debenture units.

Forward-looking statements can be affected by known and unknown risks, uncertainties and other factors, including changes to PharmaCielo’s development plans, the failure to obtain and maintain all necessary regulatory approvals relating to the export of cannabinoid products and the import of these products into other countries, TSX Venture Exchange approval, the inability to export or distribute commercial products through sales channels as anticipated due to economic or operational circumstances, risks associated with operating in Colombia, fluctuation of the market price for the Company’s products, risks associated with global economic instability relating to COVID-19 or other developments, risks related to retention of key Company personnel, currency exchange risk, competition in PharmaCielo’s market and other risks discussed or referred to under the heading “Risk Factors” in PharmaCielo’s Annual Information Form for the financial year ended December 31, 2019, which is available at www.sedar.com. Accordingly, readers should not place undue reliance on forward-looking statements. Except as required by law, PharmaCielo undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.

• PharmaCielo is actively working with, and has recently shipped product to, established companies in Argentina, Brazil, Colombia and Paraguay.
• The Company’s sales and technical teams are providing support to these customers as they conduct testing and advance product registrations using PharmaCielo APIsⁱ, to market.

TORONTO and RIONEGRO, Colombia, Feb. 4, 2022 /CNW/ – PharmaCielo Ltd. (“PharmaCielo” or the “Company”) (TSXV: PCLO) (OTCQX: PCLOF), the Canadian parent of Colombia’s premier cultivator and producer of medicinal-grade cannabis extracts, PharmaCielo Colombia Holdings S.A.S. (“Holdings”), today provided investors with an update on its Latin American sales progress and its non-brokered private placement of debenture units.

Management Commentary

Bill Petron, CEO of PharmaCielo, commented, “The pharmaceutical industry represents one of the largest long-term opportunities for APIⁱ suppliers, as the sophisticated players in this global industry begin to develop cannabinoid-based products over the next several years. At the same time, there are very few organizations worldwide with the professionalism, scale and product development expertise to meet the needs of this sector, and even fewer in Latin America. PharmaCielo has all the necessary capabilities in place to become a valued long-term partner to these organizations, and, we have made Latin America’s vibrant pharmaceutical and wellness sector a core area for investment.”

Mr. Petron continued, “The pharmaceutical sales cycle is long-tail by nature. Over the long-term, as new products come online, they also tend to exhibit highly profitable, recurring revenue streams. It is our strong belief that suppliers who are involved in the product development and registration process early, will be winners as this massive market develops. We expect revenue from these initial relationships to add to PharmaCielo’s top line in the short-term, to augment other focus areas of our business such as high THC dried flower and THC distillates. However the real benefit will be longer term, as PharmaCielo maintains a poll position as this industry continues to develop.”

Argentina

PharmaCielo is currently working with a pharmaceutical company in Argentina that has over 80 years of history in the country (the “Argentina Customer”). This Argentina Customer is currently in the process of introducing two products in the domestic market: one is an antiepileptic agent indicated for the treatment of seizures associated with Lennox-Gastaut syndrome (“LGS”) or Dravet syndrome (“DS”) in patients over two years old. This would be the first medicinal cannabis product produced in Argentina. The second product is a topical cream with cannabidiol. The Company has already shipped a commercial quantity of CBD isolate to this customer and will continue shipping product through the remainder of the year, to assist with product development. Ahead of the Argentina Customer’s product launch, PharmaCielo is in the process of negotiating a multi-year sales agreement to support expected volumes.

Brazil

PharmaCielo is actively working with an established Phytotherapeutic company in the Brazilian market (the “Brazilian Customer”). The Brazilian Customer is working toward the registration of a product with the Brazilian Health Regulatory Agency (“ANVISA”) for sale in the domestic market. PharmaCielo has sent multiple shipments of APIs to the Brazilian Customer, to support this process and expects to formalize a sales agreement once the product is approved and launched.

Brazil is becoming one of the fastest growing cannabis markets in the region, with approximately 20,000 patients (up from approximately 5,000 patients two years ago). Currently there are more than 10 ANVISA-approved products in various stages of commercialization.

Colombia

PharmaCielo has been actively working with a Colombia-based global technology and healthcare company (the “Colombian Customer”), to utilize the Company’s APIs in one well-established, registered product, and in the development of others. The Colombian Customer is also one of the largest pharmaceutical contract development and manufacturing organizations in Latin America.

Paraguay

In Paraguay, the Company is working with a pharmaceutical company that actively performs contract research & development for some of the largest pharmaceutical players globally. The Company has shipped small initial quantities of high THC product to this customer, to support its R&D efforts.

Issuance of Debenture Units

As announced on December 31, 2021, the Company has completed the issuance of $5,000,000 principal amount of its debenture units (“Units”) via a non-brokered private placement. The Company is in ongoing discussions with specific parties and expects to close the issuance of up to an additional $10,000,000 principal amount of Units on or before March 4, 2022.

Each Unit consists of $1,000 principal amount of 11% secured debentures (“Debentures”) and 250 non-transferable common share purchase warrants (“Debenture Warrants”). Each Debenture Warrant entitles the holder to acquire one common share of the Company (each a “Common Share”) at an exercise price of $1.44 per Common Share until December 24, 2024 (subject to customary anti-dilution adjustments). The Debentures bear interest at a rate of 11% per annum, mature on December 24, 2024, and are guaranteed by the Holdings. The Holdings’ guarantee of the Debentures will be secured by mortgages on the real property of the Company and its subsidiaries. Interest payable on the Debentures may be paid by the Company in Common Shares at the Company’s option, subject to approval of the TSX Venture Exchange.

About PharmaCielo

PharmaCielo Ltd. (TSXV: PCLO, OTCQX: PCLOF) is a global company, headquartered in Canada, with a focus on ethical and sustainable processing and supplying of all natural, medicinal-grade cannabis oil extracts and related products to large channel distributors. PharmaCielo’s principal (and wholly owned) subsidiary is PharmaCielo Colombia Holdings S.A.S., headquartered at its cultivation and processing center located in Rionegro, Colombia.

The board of directors and executive team of PharmaCielo are comprised of a diversely talented group of international business executives and specialists with relevant and varied expertise. PharmaCielo recognized the significant role that Colombia’s ideal location plays in building a sustainable business in the medical cannabis industry, and the Company, together with its directors and executives, is executing on a business plan focused on supplying the international marketplace.

Forward-Looking Statements

This news release contains forward-looking statements. Forward-looking statements can be identified by the use of words such as “expects”, “is expected”, “intends”, “anticipates”, “believes”, or variations of such words and phrases or state that certain actions, events or results “may” or “will” be taken, occur or be completed or achieved. Forward-looking statements in this news release include, without limitation, statements regarding the issuance of the Units, including the terms thereof and the closing date therefor.

The forward-looking statements in this news release are necessarily based on assumptions, including assumptions with respect to PharmaCielo’s ability to obtain necessary approvals for the issuance of the Units.

Forward-looking statements can be affected by known and unknown risks, uncertainties and other factors, including changes to PharmaCielo’s development plans, the failure to obtain and maintain all necessary regulatory approvals relating to the export of cannabinoid products and the import of these products into other countries, TSX Venture Exchange approval, the inability to export or distribute commercial products through sales channels as anticipated due to economic or operational circumstances, risks associated with operating in Colombia, fluctuation of the market price for the Company’s products, risks associated with global economic instability relating to COVID-19 or other developments, risks related to retention of key Company personnel, currency exchange risk, competition in PharmaCielo’s market and other risks discussed or referred to under the heading “Risk Factors” in PharmaCielo’s Annual Information Form for the financial year ended December 31, 2019, which is available at www.sedar.com. Accordingly, readers should not place undue reliance on forward-looking statements. Except as required by law, PharmaCielo undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.

SOURCE PharmaCielo Ltd.

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.