All amounts expressed in Canadian dollars unless otherwise
noted
TORONTO
and RIONEGRO, Colombia, Dec. 31,
2021 /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"), is pleased to announce that it has
closed the first tranches of its previously announced non-brokered
private placement (the "Offering"), consisting of an aggregate of
5,000 debenture units (each a "Unit"). The Units were issued at a
price of $1,000 per Unit for
aggregate proceeds of $5,000,000.
The Company closed an initial tranche of the Offering consisting
of $4,000,000 principal amount of
Units on December 24, 2021 and a
further tranche consisting of $1,000,000 principal amount of Units on
December 31, 2021. Insiders
participated in this initial tranche of financing. The Company
expects to close the issuance of up to an additional $10,000,000 principal amount of Units in one or
more tranches on or about January 14,
2022.
The Company intends to use the proceeds from the Offering for
operations, working capital and the build-out of its international
psychoactive dry flower sales program.
Debenture Units
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
Holdings. 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.
The Company has the right to redeem any or all of the Debentures
from time to time at the following percentages of face value: (i)
105% at any time prior to December 24,
2022; (ii) 103% at any time on or after December 24, 2022 and prior to December 24, 2023; and (iii) 101% on or after
December 24, 2023, in each case
together with accrued and unpaid interest to, but not including,
the date of redemption.
Upon a change of control of the Company, holders have the right
to have their Debentures repurchased at 105% of face value plus
accrued and unpaid interest to, but not including, the date of
repurchase.
The Debentures, Debenture Warrants and any Common Shares
issuable upon exercise of the Debenture Warrants are subject to a
statutory hold period under applicable Canadian securities laws,
expiring on April 25, 2022 with
respect to Units issued on December 24,
2021 and May 1, 2022 with
respect to Units issued on December 31,
2021. Debentures, Debenture Warrants and Common Shares
corresponding to subsequent tranches of Units will be subject to a
four-month hold period starting from the date of issuance of the
applicable Units.
Certain directors and senior officers of the Company have
subscribed for Units in the Offering, in an aggregate principal
amount totaling $490,000. Each
subscription by a director or senior officer of the Company is
considered to be a "related party transaction" for purposes of
Multilateral Instrument 61-101 – Protection of Minority Security
Holders in Special Transactions ("MI 61-101"). The Company did
not file a material change report more than 21 days before the
expected closing date of the Offering as the details of the
Offering and the participation therein by each "related party" of
the Company were not settled until shortly prior to the closing of
the Offering, and the Company wished to close the Offering on an
expedited basis for sound business reasons. The Company is relying
on exemptions from the formal valuation and minority shareholder
approval requirements available under MI 61-101. The Company is
exempt from the formal valuation requirement in section 5.4 of MI
61-101 and the minority shareholder approval requirement in section
5.6 of MI 61-101 in reliance on section 5.5(a) and section
5.7(1)(a), respectively, of MI 61-101, as the fair market value of
the transaction, insofar as it involves interested parties, is not
more than the 25% of the Company's market capitalization.
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
proposed use of proceeds of the Offering and the closing of any
future tranches of the Offering.
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.