Pharmacielo cease trade order revoked by OSC

Executive Summary

• Pharmacielo Ltd. has successfully had its Failure to File Cease Trade Order (FFCTO) revoked by the Ontario Securities Commission, effective October 27, 2025, allowing trading to resume on the TSX Venture Exchange.
• The revocation follows the late filing of the company's audited annual consolidated financial statements for the 15 months ended March 31, 2025, along with required MD&A and certifications.
• The release details significant financial remediation efforts, including the repayment of approximately $4 million in debentures and the full repayment of the Banco Agrario loan, funded by the sale of the La Margarita property.

Key Details

• Regulatory Status: The FFCTO issued on August 5, 2025, has been revoked by the Ontario Securities Commission (OSC). Trading resumes on the TSX Venture Exchange following the dissemination of this release.
• Filing Compliance: The company has filed the required audited annual consolidated financial statements for the 15 months ended March 31, 2025, the related Management’s Discussion and Analysis (MD&A), and CEO/CFO certifications on SEDAR+.
• Working Capital Deficiency: As of September 30, 2025, the company reported a working capital deficiency of $20,026,086.
• Current Liabilities Breakdown (Sept 30, 2025):
  • Accounts payable and accrued liabilities: $5.73 million.
  • Current portion of debt: $2.39 million.
  • Current portion of debentures: $15.43 million.
• Debt Repayment & Asset Sale:
  • Proceeds from the sale of the La Margarita property were applied to reduce key current liabilities, including payables to banks, suppliers, and employees.
  • The company fully repaid the Banco Agrario loan.
  • Approximately $4 million of outstanding debentures were repaid in September and October 2025.
  • Remaining debentures (maturing June 2026) are expected to be addressed through potential equity transactions currently under review.
• Related Party Bridge Loans:
  • Aggregate principal balance: $2.15 million, bearing interest at 11% per annum, secured by company assets.
  • $1.95 million advanced by CEO Marc Lustig (installments between Feb 13, 2024, and July 11, 2025).
  • $200,000 advanced by Douglas Bache (two installments of $100,000 on July 12, 2024, and Dec 10, 2024).
  • Loans were originally prepayments for equity financing, later classified as secured loans.
  • Filed with TSX Venture Exchange Listed Issuer Services (LIS) under MI 61-101 exemptions.
• Debenture Unit Issuance:
  • Between January and May 2024, the company issued 985 debenture units for gross proceeds of $985,000.
  • Each unit priced at $1,000, consisting of an 11% secured debenture (not convertible) and 1,000 non-transferable common share purchase warrants.
  • Warrants allow acquisition of one common share at $0.22 per share for 60 months.
  • Units mature on June 30, 2026.
• Annual General Meeting (AGM):
  • The most recent AGM was held on February 20, 2024.
  • The company intends to hold its next AGM in the next several months to address transactions requiring shareholder approval.
  • The TSX Venture Exchange has placed the company on a 90-day notice to rectify the AGM deficiency per Policy 3.2 Section 4.1.

Notable Quotes

• Marc Lustig, Chairman and CEO: "With the filing of our financial statements and the lifting of the cease trade order, Pharmacielo is ready to move forward. Over the past year, our team has worked with focus and discipline to strengthen the balance sheet, streamline operations in Colombia and align our commercial efforts with the growing demand for high-quality, ethically produced cannabis ingredients."
• Marc Lustig, Chairman and CEO: "As we look ahead, our priorities are clear: build consistent export volumes, deepen relationships with our international partners and selectively expand into markets where we can sustain profitability."