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PharmaCielo Ltd. Expands Board Depth and Expertise with Appointment of Marc Lustig as Lead Director and Strengthens Capital Position with Private Placement Offering

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TORONTO, Nov. 2, 2020 /CNW/ - PharmaCielo Ltd. ("PharmaCielo" or the "Company") (TSXV: PCLO) (OTCQX: PCLOF) is pleased to announce that Marc Lustig, the highly successful cannabis industry leader with expertise in both capital markets and health sciences, has agreed to join the Company's board of directors (the "Board") as Lead Director, subject to gross proceeds of $5.0 million being raised under the Offering (as defined below).

PharmaCielo Logo (CNW Group/PharmaCielo Ltd.)
PharmaCielo Logo (CNW Group/PharmaCielo Ltd.)

"Mr. Lustig will bring a unique compilation of successful experiences in the global cannabis industry spanning across North America, Europe and Israel that substantially expand the capacity of the Board to work with management in the growth of PharmaCielo," said Simon Langelier, Chairman of the Board. "Acting as Lead Director will allow Mr. Lustig to apply his seasoned knowledge in a direct manner in support of the overall corporate and shareholder agenda."

Mr. Lustig remains the Chairman of IM Cannabis Corp. and Trichome Financial Corp. and a director of Cresco Labs Inc.

Subject to all necessary regulatory approvals, the Company is also undertaking a private placement of units of the Company ("Units") at a price of $0.50 per Unit (the "Offering Price"). Each Unit will be comprised of (i) one common share (a "Common Share") of the Company; and (ii) one half of one Common Share purchase warrant (each whole warrant, a "Warrant") of the Company (the "Offering"), for gross proceeds of $5.0 million, subject to the option of the Company to increase the size of the Offering to $10.0 million. Each Warrant entitles the holder thereof to purchase one Common Share (a "Warrant Share") at a price of $0.65 for a period of 24 months. Mr. Lustig has committed to acting as a lead investor in the Offering. Closing of the Offering is expected to occur on or about November 20, 2020 (the "Closing Date").

"Mr. Lustig's agreement to join the Board, combined with the private placement capital raise, demonstrates a very real commitment to the future of PharmaCielo as a leader in the global marketplace," said David Attard, CEO. "Given his experience in a number of different corporate environments, I have every confidence this will be a key contribution to the continued transition of the Company."

The Company intends to use the net proceeds from the Offering to finance working capital and general corporate purposes. Closing of the Offering is subject to regulatory approval including that of the TSX Venture Exchange (the "TSXV").

Concurrent with Mr. Lustig's appointment to the Board as Lead Director, the Company has agreed to grant Mr. Lustig 3,000,000 stock options ("Stock Options") exercisable for Common Shares at $0.63 and 2,000,000 restricted share units ("RSUs", and together with the Stock Options, the "Incentive Securities"). The Incentive Securities shall vest on the earlier of (i) a Change of Control Event (as defined in the Stock Option and RSU plans); and (ii) in equal amounts on each of the grant date, the date that is six months from the grant date and the date that is twelve months from the grant date. The grant of the Incentive Securities to Mr. Lustig is subject to compliance with the Stock Option and RSU plans of the Company.

In connection with the Offering, the Company has agreed to pay Cormark Securities Inc. ("Cormark") a corporate advisory fee equal to 2.0% of the gross proceeds of the Offering and to issue broker warrants to purchase that number of Units equal to 5.0% of the number of Units issued under the Offering at the Offering Price. In addition, the Company may pay a commission or finder's fee to eligible persons from the gross proceeds raised under the Offering.

The Units will be offered by way of private placement in Ontario and such other provinces and territories of Canada and may be offered in the United States on a private placement basis pursuant to an exemption from the registration requirements of the United States Securities Act of 1933, as amended (the "US Securities Act"), and applicable state securities laws, and certain other jurisdictions outside of Canada and the United States. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Units in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The Units, Common Shares, Warrants and Warrant Shares issuable thereunder have not been, nor will they be, registered under the US Securities Act and such securities may not be offered or sold within the United States, or to or for the account or benefit of U.S. persons, absent registration under U.S. federal and state securities laws or an applicable exemption from such U.S. registration requirements. This press release does not constitute an offer of Units, Common Shares and Warrants for sale, nor a solicitation for offers to buy such securities.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this 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, headquartered at its nursery and propagation centre located in Rionegro, Colombia.

The boards of directors and executive teams of both PharmaCielo and PharmaCielo Colombia 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.

FORWARD-LOOKING STATEMENTS

This press release contains "forward-looking statements" within the meaning of applicable securities laws, such as statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Use of words such as "may", "will", "expect", "believe", "intends", "likely", or other words of similar effect may indicate a "forward looking" statement. These statements are not guarantees of future performance and are subject to numerous risks and uncertainties, including those described in the Company's publicly filed documents (available on SEDAR at www.sedar.com). Forward looking statements in this press release include those relating to the size of the Offering, Mr. Lustig acting as lead investor under the Offering, the appointment of Mr. Lustig to the Board as Lead Director, the grant of the Incentive Securities by the Company to Mr. Lustig and related TSXV and regulatory approvals, the use of proceeds of the Offering, the payment of the corporate advisory fee to Cormark, the payment by the Company of potential commission or finder's fee to eligible persons, the timing of the Closing Date and approval of the Offering by the TSXV. Forward-looking information is subject to a variety of risks and uncertainties and other factors that could cause plans, estimates and actual results to vary materially from those projected in such forward-looking information. Factors that could cause the forward-looking information in this news release to change or to be inaccurate include, but are not limited to, that the size of the Offering may change given current market uncertainties related to COVID 19 and other related factors, that necessary regulatory approvals including the approval of the TSXV may not be obtained in relation to the Offering, that the Closing Date may be later than anticipated due to unforeseen market events, that the market for the Company's products may be subject to volatility, that there may be less than anticipated demand for the Company's products, risks associated with the Company operating in Colombia, risks associated with global economic instability relating to COVID 19 and the potential for it to disrupt global markets as well as the other risks and uncertainties applicable to cannabis producing companies, the Company's ability to obtain the necessary permits and licenses it requires in order to export its products from Colombia and into other countries, risks associated with the regulation of cannabis and cannabinoid derivatives, risks associated with operating in Colombia, currency exchange risk, and additional risks described in the Company's Annual Information Form for the year ended December 31, 2019 filed with the Canadian securities regulatory authorities under the Company's SEDAR profile at www.sedar.com. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. All forward looking statements in this press release are qualified by these cautionary statements. These statements are made as of the date of this news release and, except as required by applicable law, the Company undertakes no obligation to publicly update or revise any forward looking statement, whether as a result of new information, future events or otherwise. Additionally, the Company undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of the Company, its financial or operating results or its securities.

SOURCE PharmaCielo Ltd.

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