Mr. Ian Atacan reports

PHARMACIELO ANNOUNCES REVOCATION OF FFCTO AND RELATED CORPORATE MATTERS

Pharmacielo Ltd.'s FFCTO (failure to file cease trade order) has been revoked.

Reinstatement to trading

Effective Oct. 27, 2025, Pharmacielo's principal regulator, the Ontario Securities Commission (OSC), has revoked the failure to file cease trade order that was issued on Aug. 5, 2025. The FFCTO resulted from a delay in filing the company's audited annual consolidated financial statements for the 15 months ended March 31, 2025, along with the related management's discussion and analysis and CEO/CFO (chief executive officer/chief financial officer) certifications as required under National Instrument 52-109 -- Certification of Disclosure in Issuers' Annual and Interim Filings.

The required documents have now been filed on SEDAR+, and trading of Pharmacielo shares will resume on the TSX Venture Exchange following the dissemination of this news release.

Management commentary Marc Lustig, chairman and chief executive officer of Pharmacielo, commented: "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.

"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."

For further detailed information and analysis, please see the financial statements and management's discussion and analysis for the period ending June 30, 2025, as posted at SEDAR+.

Related party bridge loans and outstanding balances

As of today, the company has an aggregate principal balance of $2.15-million in secured bridge loans from related parties, bearing interest at 11 per cent per annum and secured by company assets. This balance consists of $1.95-million advanced by Marc Lustig, in multiple instalments ranging from $5,000 to $150,000 over the period from Feb. 13, 2024, to July 11, 2025, and $200,000 advanced by Douglas Bache in two instalments of $100,000 made on July 12, 2024, and Dec. 10, 2024. These advances were originally provided as prepayments toward a potential equity financing and were subsequently classified as secured loans.

The bridge loans constitute related party transactions within the meaning of TSX Venture Exchange Policy 5.9 and Multilateral Instrument 61 101 -- Protection of Minority Security Holders in Special Transactions. The company has filed the required submission with the exchange's listed issuer services (the LIS), subject to the exchange's acceptance.

The company relied on the exemption from the minority approval requirements of MI 61-101 set out in Section 5.7(1)(f) -- Loan to Issuer, No Equity or Voting Component, as the loans were made on reasonable commercial terms, are not convertible into equity or voting securities, are not repayable in equity, and do not include any participating feature.

Issuance of 2024 debenture units

Between January and May, 2024, the company issued an aggregate of 985 debenture units for total gross proceeds of $985,000, as the final tranche of the debenture offering originally announced on June 29, 2023. The new units mature on June 30, 2026, and were issued on the same terms as previously disclosed. Each new unit was issued at a price of $1,000 and consists of a $1,000 principal amount of an 11-per-cent secured debenture, which is not convertible into common shares, and 1,000 non-transferable common share purchase warrants. Each warrant entitles the holder to acquire one common share of the company at an exercise price of 22 cents per share for a period of 60 months from the initial closing date. The company has filed the required submission with the LIS, subject to the exchange's acceptance.

Annual general meeting

The company's most recent annual general meeting was held on Feb. 20, 2024. Pharmacielo is currently working on several transactions, which will require a special and annual general meeting to be held; as a result, Pharmacielo intends to hold its next meeting in the next several months. In conjunction with reinstatement to trading, the exchange will place the company on a 90-day notice to rectify the annual general meeting deficiency, in accordance with exchange Policy 3.2 Section 4.1. The company will provide further details on meeting timing once confirmed.

Working capital deficiency and remedial plan

As at Sept. 30, 2025, Pharmacielo reported a working capital deficiency of $20,026,086. Pharmacielo has maintained adequate working capital and financial resources to support operations. Since becoming a public company in January, 2019, Pharmacielo has consistently financed its working capital requirements through equity issuances, debenture financings and, more recently, direct cash injections from the company's chairman and other insiders, as bridge loans in anticipation of an upcoming equity financing.

As at Sept. 30, 2025, current liabilities consisted of: (a) accounts payable and accrued liabilities of $5.73-million; (b) the current portion of debt of $2.39-million; and (c) the current portion of debentures of $15.43-million.

As announced on Oct. 6, 2025, proceeds from the sale of the La Margarita property have been applied to reduce key current liability items, including payables owed to banks, suppliers and employees, many of whom have supported the company through extended payment terms while Pharmacielo works toward positive cash flow. The company has fully repaid the Banco Agrario loan. In addition, Pharmacielo has repaid approximately $4-million of outstanding debentures in September and October, 2025. The remaining debentures, which mature in June, 2026, are expected to be addressed through several potential equity transactions currently under review, which would result in the conversion of these debentures into equity as part of broader strategic initiatives.

About Pharmacielo Ltd.

Pharmacielo is a global company, headquartered in Canada, with a focus on ethical and sustainable cultivating, processing and supply of all natural, pharmaceutical-grade medical dried cannabis flower and cannabis products to large channel distributors. Pharmacielo's principal (and wholly owned) subsidiary is Pharmacielo Colombia Holdings SAS, headquartered at its cultivation and processing centre located in Rionegro, Colombia.

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