All figures in Canadian dollars ($) unless otherwise specified

Toronto, Ontario and Rionegro, Colombia--(Newsfile Corp. - July 30, 2026) - PharmaCielo Ltd. (TSXV: PCLO) (OTC Pink: PCLOF) ("PharmaCielo" or the "Company"), the Canadian parent of PharmaCielo Colombia Holdings S.A.S., Colombia's premier cultivator and producer of dried flower and food and medicinal grade cannabis and extracts for the natural pharmaceuticals and consumer products market, today announced its audited financial results for the year ended March 31, 2026. The Company also announced that it intends, subject to the approval of the TSX Venture Exchange (the "TSXV"), to issue common shares in satisfaction of accrued interest on its 11% secured debentures.

Financial and Operating Highlights

• The Company reported revenue of $0.7 million for the fourth quarter, compared with $0.5 million in the corresponding quarter of 2025.
• Fourth-quarter gross profit was $0.3 million, compared with a gross loss of $0.3 million in the corresponding quarter of 2025.
• The fourth-quarter net loss narrowed to $1.3 million from $2.2 million in the corresponding quarter of 2025, an improvement of approximately $0.9 million.
• The fourth quarter Adjusted EBITDA loss narrowed to $0.6 million from $0.8 million in the corresponding quarter of 2025.
• Gross profit increased to $0.7 million for the year, compared with $0.5 million for the fifteen-month comparative period, reflecting lower production costs and the benefits of rightsizing operations.
• The full-year net loss narrowed to $3.6 million from $11.4 million, while the Adjusted EBITDA loss improved to $2.5 million from $3.5 million, despite the shorter twelve-month reporting period and lower revenue.
• PharmaCielo sold the unused La Margarita property for gross proceeds of approximately $10.0 million and recognized a gain of approximately $2.2 million on the sale of property, plant and equipment.
• The sale proceeds were used to fully repay the Banco Agrario loan, make approximately $3.6 million of debenture repayments and reduce other obligations.
• Following continued cost reductions, operational rightsizing and improved production efficiency, management reports that Q4, 2025 was the first quarter that the Company's Colombia subsidiaries were cash-flow positive, before Canadian corporate costs and financing costs.
• To date, the Company has received $2.8 million as a bridge loan comprising certain members of management and the Board of Directors, $2.6 million advanced by Marc Lustig and $0.2 million advanced by Doug Bache.
• The Company intends, subject to TSXV approval, to issue 9,721,443 common shares at an effective price of $0.08 per share in satisfaction of $777,717.33 of accrued semi-annual interest payable on its 11% secured debentures.

Management Commentary

Marc Lustig, Chairman and Chief Executive Officer of PharmaCielo, commented:

"Our operating results confirmed the Company continues to achieve measurable progress and is well-positioned to take full advantage of an improving cannabis market. The sale of La Margarita generated approximately $10.0 million in proceeds, with a significant gain and, more importantly, provided the liquidity to repay the Banco Agrario loan, reduce our debentures and address other obligations. At the same time, the improvement was not limited to the land sale. We continued to right-size the business, lower our cost base and improve production efficiency, resulting in stronger gross profit and a substantially reduced Adjusted EBITDA loss for the year."

"The fourth quarter showed continued improvement in the underlying business. Revenue grew and gross profit improved from a loss in the corresponding quarter last year. Our Colombia subsidiaries have now reached cash-flow positivity at the operating level, before Canadian corporate and financing costs. This is an important milestone and provides a more sustainable foundation as we work to build recurring export volumes and expand sales of higher-margin dried flower, extracts and distillates."

"With such positive momentum in our business and in light of other strategic opportunities we are exploring, I will continue to invest in the business and plan to complete the $3.0 million insider bridge financing in which to date I have invested $2.6 million and Director Doug Bache has invested $200,000. This financing has provided important working capital during the Company's operational restructuring and commercial development efforts."

Summary Consolidated Financials - Year Ended March 31, 2026

The comparative period ended March 31, 2025 covers fifteen months following the Company's change in fiscal year-end and is therefore not directly comparable with the twelve-month period ended March 31, 2026.

Summary Consolidated Financials - Fourth Quarter Ended March 31, 2026

*Adjusted EBITDA is a non-IFRS financial measure. It does not have a standardized meaning under IFRS Accounting Standards and may not be comparable to similar measures presented by other companies. Please refer to the Company's MD&A for the year ended March 31, 2026 for the reconciliation of net loss to Adjusted EBITDA.

Operational Progress and Outlook

PharmaCielo continues to focus on global markets where its Colombian cultivation platform, high-quality processing plant and systems, and low cost structure provide a substantial competitive advantage. The Company is developing opportunities across Latin America, Australia, South Africa and strategic European markets, with particular emphasis on GACP-certified dried cannabis flower, CBD isolate, CBD extracts, THC extracts and distillates.

Management's near-term priorities are to increase recurring export sales orders and volumes, deepen relationships with our international partners, secure repeat purchase arrangements and continue aligning production and inventory with customer demand. The Company has completed its major growth capital expenditures at its Production and Extraction Centre and does not expect to incur material capital expenditures in the near term.

The Company's ability to achieve sustained positive net operating cash flow remains dependent on increasing sales volumes, effective cost management, and securing sufficient working capital. PharmaCielo continues to evaluate financing and strategic opportunities to support its operations and reduce its remaining obligations.

Bridge Financing

Since February 2024, the Company's working capital requirements have been supported through an insider bridge loan commitment totalling $3.0 million and bearing interest at 11% per annum. The commitment has now been over 90% funded, comprising $2.6 million advanced by Marc Lustig and $0.2 million advanced by Doug Bache.

The bridge financing has supported the Company's working capital requirements, ongoing operations and commercial activities during its operational restructuring and balance-sheet improvement initiatives.

Intention to Issue Interest Shares

The Company also announces that it intends, subject to the approval of the TSXV, to issue 9,721,443 common shares of PharmaCielo (the "Interest Shares"), at an effective price of $0.08 per Interest Share, in satisfaction of an aggregate of $777,717.33 of accrued semi-annual interest payable to holders of the Company's 11% secured debentures (the "Debentures").

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.

Upon issuance, the Interest Shares will be subject to the balance, if any, of the applicable statutory hold period under Canadian securities laws.

The issuance of Interest Shares to L5 Capital Inc., Marc Lustig, William Petron and Ian Atacan will constitute 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 expects to rely on the exemptions from the formal valuation and minority shareholder approval requirements contained in Sections 5.5(a) and 5.7(1)(a) of MI 61-101, as the fair market value of the transaction will not exceed 25% of the Company's market capitalization.

For further detailed information and analysis, please see the audited consolidated financial statements and management's discussion and analysis for the year ended March 31, 2026, as filed on SEDAR+ and available at pharmacielo.com.

About PharmaCielo

PharmaCielo Ltd. (TSXV: PCLO) (OTC Pink: PCLOF) is a global company headquartered in Canada. The Company produces dried flower and food- and medicinal-grade cannabis and extracts for the global natural pharmaceuticals and consumer products market. Its principal and wholly owned subsidiary is PharmaCielo Colombia Holdings S.A.S., based at its cultivation and processing centre in Rionegro, Colombia.

Forward-Looking Statements

This news release contains forward-looking statements. Forward-looking statements can be identified by words such as "expects," "intends," "anticipates," "believes," "plans," "may" or "will," and similar expressions. Forward-looking statements include statements regarding recurring export volumes, expansion into international markets, repeat purchase arrangements, future sales, production and inventory levels, working-capital requirements, financing and strategic opportunities, sustained positive cash flow, the absence of material near-term growth capital expenditures, the proposed issuance of the Interest Shares, receipt of TSXV approval and completion of the proposed issuance.

Forward-looking statements are based on management's current expectations and assumptions, including assumptions regarding the Company's ability to obtain necessary approvals for the issuance of the Interest Shares, and are subject to known and unknown risks, uncertainties and other factors that may cause actual results to differ materially. These factors include the Company's ability to obtain adequate financing, generate sufficient sales and cash flow, maintain regulatory approvals, export and distribute products as anticipated, operate in Colombia, retain key personnel and manage product-price, currency, competitive, economic and political risks.

Readers should not place undue reliance on forward-looking statements. Except as required by law, PharmaCielo undertakes no obligation to update any forward-looking statement as a result of new information, future events or otherwise.

Neither the TSX Venture Exchange nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of this news release.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/307203