PharmaCielo Announces Termination of Scheme Implementation Agreement with Creso Pharma
TORONTO, Canada (November 5, 2019) – PharmaCielo Ltd. (“PharmaCielo” or the “Company”) (TSXV:PCLO, OTC:PHCEF) announces that earlier today it was advised by Creso Pharma Limited (“Creso Pharma”) that due to BDO Corporate Finance (WA) Pty Ltd. changing its independent expert report to conclude that the PharmaCielo Share Scheme is neither fair nor reasonable and is not in the best interests of shareholders of Creso Pharma, it is impossible for the Board of Directors of Creso Pharma to support the Share and Option Schemes (the “Schemes”) in their current form. As a result of the Creso Pharma Board of Directors changing its recommendation in respect of the Schemes, PharmaCielo has terminated the Scheme Implementation Agreement (the “Scheme Implementation Agreement”), originally announced on June 6, 2019, in accordance with its terms. No break or expense reimbursement fees are payable by either PharmaCielo or Creso Pharma in connection with the termination of the Scheme Implementation Agreement. The AUD$3.8 million (approximately CAD$3.57 million) secured bridge loan (the “Bridge Loan”) previously advanced by PharmaCielo to Creso Pharma on June 6, 2019, will now mature on November 30, 2019. The Bridge Loan, which bears interest at a rate of 15% per annum, is secured by a general security agreement over the assets of Creso Pharma and a pledge of the shares of Mernova Medicinal Inc., a subsidiary of Creso Pharma, in favour of PharmaCielo.
“While we are disappointed by this outcome, we have appreciated the interactions between our teams over the past several months and wish them much success in their future endeavours,” said David Attard, Chief Executive Officer of PharmaCielo. “Our team has made significant strides over the past several months on an organic basis, expanding cultivation and production with a best in class cost structure, as well as growing international sales. As we near completion of Phase I of our processing centre, which will be capable of producing over 24 metric tonnes of refined cannabis oil capacity per year, we are ramping up sales efforts. We are well-positioned to grow our business and the progress made over the past several months has set the Company up for a strong close to 2019 and solid growth in 2020.”
For further information:
David Gordon, Chief Corporate Officer
LodeRock Advisors Inc., PharmaCielo Investor Relations
International: Gal Wilder, Cohn & Wolfe
PharmaCielo Ltd. (TSXV:PCLO, OTC:PHCEF) is a global company, headquartered in Canada, with a focus on ethically and sustainably processing and supplying 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 nursery and propagation centre located in Rionegro, Colombia.
The boards of directors and executive teams of both PharmaCielo and PharmaCielo Colombia Holdings 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.
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 include the production capacity of PharmaCielo’s processing centre, the ability to grow our business and our anticipated results for the balance of 2019 and into 2020. Forward-looking statements are not a guarantee of future performance and are based upon a number of estimates and assumptions of management in light of management’s experience and perception of trends, current conditions and expected developments, including assumptions in respect of current and future trends with respect to the cannabis industry.
Although PharmaCielo has attempted to identify important factors that could cause actual results, performance or achievements to differ materially from those contained in the forward looking statements, there can be other factors that cause results, performance or achievements not to be as anticipated, estimated or intended, including, but not limited to those arising from changes in laws, the Company’s limited operating history, the Company’s reliance on management, requirements for additional financing, competition, and changes in the perception of the medical-use and adult-use marijuana industry and regulatory or political change. There can be no assurance that such information will prove to be accurate or that PharmaCielo’s management’s expectations or estimates of future developments, circumstances or results will materialize. As a result of these risks and uncertainties, the results or events predicted in these forward-looking statements may differ materially from actual results or events. 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 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.