PharmaCielo Announces the Issuance of Interest Shares and Update on Insider Bridge Financing
Rhea-AI Summary
PharmaCielo (OTC Pink: PCLOF) issued 11,145,999 common shares at an effective price of $0.08 to satisfy $891,681.85 of semi-annual interest on its 11% secured debentures. TSXV approved the shares-for-debt transaction, which is a related party transaction under MI 61-101.
Since February 2024, working capital has been funded mainly through an 11% secured insider bridge loan facility of $3.0 million, of which approximately $2.5 million has been drawn. The company indicates the financing has supported ongoing operations and cost-reduction efforts.
Positive
- Interest of $891,681.85 settled in shares, preserving cash resources
- TSXV approval obtained for issuing 11,145,999 interest shares
- $3.0 million insider bridge loan facility, with $2.5 million drawn
- Insiders providing secured financing at 11% since February 2024
Negative
- Issuance of 11,145,999 new shares likely dilutes existing shareholders
- Company relying primarily on insider bridge financing for working capital
- Bridge loan and debentures bear relatively high 11% annual interest costs
News Market Reaction – PCLOF
In the May 19 session, PCLOF gained 17.47%, reflecting a significant positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
AI-generated analysis. How Rhea-AI works. Not financial advice.
All figures in Canadian dollars ($) unless otherwise specified
Toronto, Ontario and Rionegro, Colombia--(Newsfile Corp. - May 19, 2026) - PharmaCielo Ltd. (TSXV: PCLO) (OTC Pink: PCLOF) ("PharmaCielo" or the "Company"), the Canadian parent of Colombia's premier cultivator and producer of dried flower and medicinal-grade cannabis extracts, PharmaCielo Colombia Holdings S.A.S., today announced that, as approved by the TSX Venture Exchange (the "TSXV"), it has issued 11,145,999 common shares of PharmaCielo ("Interest Shares"), at an effective price of
The effective price of the Interest Shares was determined by dividing the cash interest otherwise payable by the number of shares issuable under each Debenture, in accordance with the terms of the Debentures and TSXV Policy 4.3, section 3.3. The Interest Shares are subject to the balance, if any, of the 4-month statutory hold period.
The issuance of Interest Shares to L5 Capital Inc., Marc Lustig, William Petron and Ian Atacan constitutes a "related party transaction" within the meaning of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Company is relying on exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 pursuant to sections 5.5(a) and 5.7(1)(a) of MI 61-101, as the fair market value of the transaction does not exceed
Insider Bridge Financing
Since February 2024, the Company's working capital requirements have been supported primarily through a secured insider bridge loan facility provided by Marc Lustig and certain insiders of the Company, bearing interest at
The Company believes this continued financial support reflects insider confidence in PharmaCielo's long term strategy and ongoing operations. The bridge financing has assisted the Company in maintaining operations while continuing to focus on cost reductions, operational efficiencies, and commercial development initiatives.
About PharmaCielo
PharmaCielo Ltd. (TSXV: PCLO) (OTC Pink: PCLOF) is a global company, headquartered in Canada, with a focus on ethical and sustainable cultivating, processing and supply of all natural, pharmaceutical-grade medicinal and commercial dried cannabis flower and 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 center located in Rionegro, Colombia.
For further information
Ian Atacan, Chief Financial Officer
i.atacan@pharmacielo.com
Media and Investor Inquiries:
investors@pharmacielo.com
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 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 and political instability 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.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/297650