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PharmaCielo Receives Approximately CDN$3M Non-Dilutive Funding from Colombian State-Owned Banco Agrario

  • Loan of COP$8.5 billion (approximately CDN$3.0 million1) has an 84-month term, 10.14% coupon and revolving component with no equity dilution
  • This loan together with the proceeds of the recent CDN$10mm equity financing put the company in a well-capitalized position to execute on its growing sales pipeline.

TORONTO, Canada and RIONEGRO, Colombia (December 7, 2020) – 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. (“PharmaCielo Colombia”), today announced that PharmaCielo Colombia has received a COP$8.5 billion (approximately CDN$3.0 million) loan (the “Loan”), with term and revolving components from Banco Agrario de Colombia S.A. (“Banco Agrario”). Banco Agrario is a Colombian state-owned entity focused on providing funding to support specific sectors and projects across the country, with one of its primary focuses being the agro-industrial sector.

“We are proud to have this banking relationship with Banco Agrario. To our knowledge this loan is the first case of a more traditional form of non-dilutive funding being provided to an operator in the Colombian cannabis industry. It is based on favourable terms and is reflective not only of the strength of PharmaCielo Colombia’s production infrastructure but also an inflection point where the country’s banking and financial sector is ready to provide non-dilutive financing mechanisms to assist the sector’s growth,” Henning von Koss, Chief Executive Officer (CEO) of PharmaCielo Ltd.,commented. “From the business perspective, our installed capacity, operational efficiency and this healthy financial structure give us the needed resources to concentrate on reaching positive cash flow as we expand our commercial efforts and grow our revenue line over the next several quarters.”

Loan Terms

The Loan has a term of 84 months (the “Term”). The Loan will bear interest at a rate of 10.14% per annum, subject to a capital amortization grace period of up to 24 months.  The Loan is secured against part of the Company’s La Margarita property, which comprises less than 25% of the Company’s total assets.

1Converted COP $8.5 Billion principal amount to CDN using average Nov 2020 rate of 2813 COP for 1 CDN

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

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., based at its cultivation and processing complex 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 press release contains forward-looking statements. Forward-looking statements can be identified by the use of words such as, “expects”, “is expected”, “intends”, “believes”, or variations of such words and phrases or state that certain actions, events or results “may” or “will” be taken, occur or be achieved. Forward-looking statements in this news release include, without limitation, statements with respect to: PharmaCielo’s ability to attain positive cash flow; PharmaCielo’s ability to grow revenues; the ability of PharmaCielo to execute on its sales pipeline as currently expected and expectations regarding PharmaCielo’s ability to repay the Loan in accordance with its terms. The forward-looking statements in this news release are necessarily based on assumptions, including, without limitation, assumptions with respect to: PharmaCielo’s ability to execute its business plan as currently contemplated; PharmaCielo’s ability to maintain its distribution contracts in good standing; and PharmaCielo’s ability to obtain and maintain all licenses and approvals required to export its products from Colombia into international markets. Though management believes that its assumptions are reasonable in the circumstances, the actual results, performance or achievements of PharmaCielo’s business may be materially different from any future results, performance or achievements expressed or implied by any forward-looking statements herein. Forward-looking statements can be affected by known and unknown risks, uncertainties and other factors, including, but not limited to: changes to PharmaCielo’s development plans; the failure to obtain and maintain all necessary regulatory approvals relating to the export of cannabinoid products, including approval of the TSX Venture Exchange (the “TSXV”); 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; risks associated with global economic instability relating to COVID-19; 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 Accordingly, readers should not place undue reliance on forward-looking statements. Forward-looking statements in this press release are made as of the date of this press release. 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.