Pharmacielo closes sale of La Margarita property

Mr. Marc Lustig reports PHARMACIELO COMPLETES LA MARGARITA LAND SALE, REPAYS BANCO AGRARIO LOAN, STRENGTHENS BALANCE SHEET, COMPLETES AUDIT Pharmacielo Ltd. has closed the sale of its La Margarita property in Carmen de Viboral, Antioquia, Colombia, to Flores El Capiro S.A. and filed its audited financial statements for the 15 months ended March 31, 2025. La Margarita land sale transaction highlights: Transaction details: The preliminary sale agreement was signed on June 5, 2025. Pharmacielo and Flores El Capiro are arm's-length parties. No finders' fees were paid in connection with the transaction. Gross sale price: The gross sale price was 26 billion Colombian pesos (approximately $8.6-million (Canadian)). Loan repayment: Proceeds were used to fully repay the outstanding Banco Agrario de Colombia loan, totalling 6,129,153,444 Colombian pesos ($2.1-million (Canadian)), including principal, interest and legal costs. Importantly, accrued interest of approximately 900 million Colombian pesos (approximately $300,000 (Canadian)) was successfully negotiated and forgiven. Proceeds allocation: Following repayment of the Banco Agrario loan and other outstanding commitments in Colombia, approximately $4.0-million of the proceeds are being transferred to Canada for partial payment of matured debentures and other mandatory corporate payments. Strategic rationale: The sale of La Margarita aligns with Pharmacielo's strategic initiative to optimize its asset portfolio and strengthen its financial position, allowing the company to concentrate resources on core growth opportunities in priority markets. Marc Lustig, chairman and chief executive officer of Pharmacielo, commented: "This transaction is a positive step forward for Pharmacielo. By divesting a non-core asset and eliminating the Banco Agrario loan, we have strengthened our balance sheet and reduced our interest burden. Our team can now focus on our highest-value opportunities: expanding our sales pipeline and advancing key strategic partnerships to achieve profitability." Business outlook: Pharmacielo continues to improve its cost structure, eliminating non-essential expenditures, right-sizing its cultivation capacity and operations. With increasing and more diversified sales during the past 15 months, Pharmacielo is primed to be a profitable company in 2026. The company is now well established in Latin America with a focus on Brazil, and has continued to make inroads to additional jurisdictions such as South Africa, Australia and the European Union (EU) with its CBD (cannabidiol) isolate, THC (tetrahydrocannabinol) distillate and GACP-certified (good agricultural and collection practice) dried cannabis flower. Pharmacielo has three major initiatives to remain agile in the nascent and continuously changing international cannabis markets: A clear focus on business opportunities across Latin America, Australia, South Africa and strategic European markets: The company has transitioned from a narrow pursuit of EU-GMP (good manufacturing practice) certification to a broader, client-oriented quality approach. By maintaining EU-GMP compliance and reinforcing a robust quality management system to meet customer audit requirements, Pharmacielo continues to deliver world-class products while optimizing operational costs and capital investments. Positioning a full portfolio of CBD isolate, CBD extracts, THC extracts and formulations from an EU-GMP compliant facility, providing excellent quality at competitive prices that safeguard strong client margins: This strategy allows differentiation in international markets, cultivation of long-term partnerships and reinforcement of a position as a trusted supplier. Increasing exports of its GACP-certified dried cannabis flower, positioning it as a reliable raw material that clients transform and commercialize as GMP: By consolidating consistent supply and aligning with partners in key markets such as Australia, Germany, Poland and the United Kingdom, the company ensures flexibility to meet varying regulatory and commercial requirements while building a scalable pathway from GACP to GMP. For further detailed information and analysis, please see the financial statements and management's discussion and analysis for the period ending March 31, 2025, as posted on SEDAR+ and the company's website. About Pharmacielo Ltd. Pharmacielo is a global company, headquartered in Canada, with a focus on ethical and sustainable processing and supplying of all natural, pharmaceutical-grade medical cannabis 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 centre located in Rionegro, Colombia. About Flores El Capiro S.A. Flores El Capiro is a leading Colombian flower grower and exporter with long-standing operations in Carmen de Viboral, Antioquia. We seek Safe Harbor.