PharmaCielo Announces Closing of $10M Private Placement

TORONTO, Nov. 23, 2020 /CNW/ - PharmaCielo Ltd. ("PharmaCielo" or the "Company") PCLO PCLOF is pleased to announce the closing of its previously announced private placement of units ("Units") of the Company for gross proceeds of $10.0 million.

"The closing of this offering further strengthens the Company's balance sheet as our team focuses on translating our expanded product portfolio and growing sales pipeline into commercial revenue growth during the remainder of Q4 and through fiscal 2021," said David Attard, CEO of PharmaCielo Ltd. "2021 is going to be a very exciting year for the Company. With the majority of our capital expenditures behind us and near-term sales opportunities multiplying, we expect to be in a position to fully demonstrate the strength and value of this platform for shareholders over the next 12 months."  

Mr. Attard added, "I would also like to personally welcome Marc Lustig to our Board of Directors. Marc is a proven capital markets and global cannabis executive with a successful track record. I know I speak on behalf of the entire team when I say we look forward to his involvement and contributions to our efforts as we move into what we expect will be a period of significant growth for our organization." Mr. Lustig was appointed to the Board as Lead Director concurrent with closing of the Offering. He is also Chairman of Trichome Financial Corp, Chairman of IM Cannabis Corp and Director of Cresco Labs Inc.

Each Unit was issued at a price of $0.50 (the "Issue Price") and was comprised of (i) one common share (a "Common Share") of the Company; and (ii) one half of one Common Share purchase warrant (each whole warrant, a "Warrant") of the Company (the "Offering"). Each Warrant entitles the holder thereof to purchase one Common Share (a "Warrant Share") at a price of $0.65 until November 20, 2022. The Common Shares, the Warrants, and the Warrant Shares are subject to a hold period in Canada expiring March 21, 2021. The Company intends to make an application to list the Warrants for trading on the TSX Venture Exchange (the "TSXV") upon the expiry of the hold period applicable to the Warrants under Canadian securities laws.

The Company intends to use the net proceeds from the Offering to finance working capital and general corporate purposes. 

The Offering constituted a related party transaction within the meaning of Multilateral Instrument 61-101 as one insider of the Company subscribed for an aggregate of 50,000 Units. The participants in the Offering and the extent of their participation were not finalized until shortly prior to the completion of the Offering. Accordingly, it was not possible to publicly disclose details of the nature and extent of related party participation in the Offering pursuant to a material change report filed at least 21 days prior to the completion of the Offering.

In connection with the Offering, the Company paid Cormark Securities Inc. a corporate advisory fee consisting of $200,000 cash and 1,000,000 non-transferable broker warrants of the Company, each such broker warrant exercisable at the Issue Price to purchase one (1) Unit for two years following closing of the Offering.  Additionally, the Company has paid or, subject to the approval of the TSXV, will pay commissions and/or finder's fees to eligible persons who introduced subscribers to the Offering as follows:

• $106,000 to BMO Nesbitt Burns;
• $90,000 to CIBC Wood Gundy;
• $82,000 to Canaccord Genuity Corp.;
• $40,000 to K-Lo Consulting and Contracting Limited, a corporation controlled by Michael Kenneth Lord;
• $14,000 to Cormark Securities Inc.;
• $10,800 to Haywood Securities Inc.;
• $6,000 to Echelon Wealth Partners Inc.;
• $1,000 to Mackie Research Capital; and
• $1,000 to PI Financial Corp.

In addition, the Company's Stock Option plan and RSU Plan were amended to address certain typographical errors and clarify certain existing provisions of the respective plans. Given the corrective nature of these amendments, Company shareholder approval is not required.

The Units, the Common Shares and Warrants comprising Units, and the Warrant Shares issuable upon exercise of the  Warrants, have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or under the securities laws of any state of the United States, and may not be offered, sold or delivered, directly or indirectly, to, or for the account or benefit of, persons in the United States or U.S. persons, except in transactions exempt from the registration requirements of the U.S. Securities Act and applicable state securities laws. This press release does not constitute an offer of such securities for sale, nor a solicitation for offers to buy such securities. "United States" and "U.S. person" are as defined in Regulation S under the U.S. Securities Act.

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

ABOUT PHARMACIELO

PharmaCielo Ltd. PCLOPCLOF 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, headquartered at its nursery and propagation centre located in Rionegro, Colombia.

The boards of directors and executive teams of both PharmaCielo and PharmaCielo Colombia 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 will play 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 press release contains "forward-looking statements" within the meaning of applicable securities laws, such as statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Use of words such as "may", "will", "expect", "believe", "intends", "likely", or other words of similar effect may indicate a "forward looking" statement.  These statements are not guarantees of future performance and are subject to numerous risks and uncertainties, including those described in the Company's publicly filed documents (available on SEDAR at www.sedar.com). Forward looking statements in this press release include those relating to the hold period on the Common Shares, the Warrants, and the Warrant Shares, significant growth of the Company, the use of proceeds and to the approval of the Offering by the TSXV and payment of Finder's fees to finders relating to the Offering. Forward-looking information is subject to a variety of risks and uncertainties and other factors that could cause plans, estimates and actual results to vary materially from those projected in such forward-looking information. Factors that could cause the forward-looking information in this news release to change or to be inaccurate include, but are not limited to, that necessary regulatory approvals, including the approval of the TSXV, may not be obtained in a timely manner or at all in relation to the Offering, that the market for the Company's products may be subject to volatility, that there may be less than anticipated demand for the Company's products, risks associated with the Company operating in Colombia, risks associated with global economic instability relating to COVID 19 and the potential for it to disrupt global markets as well as the other risks and uncertainties applicable to cannabis producing companies, the Company's ability to obtain the necessary permits and licenses it requires in order to export its products from Colombia and into other countries, risks associated with the regulation of cannabis and cannabinoid derivatives, risks associated with operating in Colombia, currency exchange risk and additional risks described in the Company's Annual Information Form for the year ended December 31, 2019 filed with the Canadian securities regulatory authorities under the Company's SEDAR profile at www.sedar.com. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. All forward looking statements in this press release are qualified by these cautionary statements. These statements are made as of the date of this news release and, except as required by applicable law, the Company undertakes no obligation to publicly update or revise any forward looking statement, whether as a result of new information, future events or otherwise. Additionally, the Company undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of the Company, its financial or operating results or its securities.

SOURCE PharmaCielo Ltd.