Pharmacielo Ltd (OTCMKTS:PCLOF) received $4.6 million by issuing 6.388 million shares, each at $0.72. The underwriters for this bought deal offering are Stifel GMP and Cormark Securities Inc. They also have an option to purchase additional 833,340 shares. The deal is subject to receipt of approvals from TSXV and other regulators.
The board of directors and senior management of Pharmacielo fixed a lockup period of 90 days for the shares issued through bought-deal agreement from the date of closing.
Proceeds of the bought-deal for corporate expenses
The proceeds will be used for general corporate expenses, capital needs, purchase of CO2 and ethanol for extraction, non-operational payroll taxes for its unit in Colombia, and non-operational payroll expenses.
Q1 2020 results
Pharmacielo posted better than expected revenues of $514,409 in Q1 2020 compared to $786,901 for the entire 2019. CEO of Pharmacielo, David Attard, said the company reported excellent revenues in Q1 2020 despite challenges posed by the COVID-19 pandemic. He said it is an exemplary performance compared to the whole of 2019.
President of Pharmacielo, Henning von Koss, said the company positioned the necessary equipment at its Rionegro facility to support the expansion of its product line mainly from its formulation line. It helps the company provide broad-spectrum and THC free cannabidiol oil to satisfy the partners’ robust demand. The company’s team in Colombia is putting in significant efforts to ship these products quickly. It is also on track to install the new equipment at its processing and extraction facility. The company will begin accepting the pre-orders for delivery in Q3 2020.
Pharmacielo is also finalizing the air conditioning and purification systems to apply for Good Manufacturing Practices certification in Q4 2020. The company focuses on Europe for the sale of its CBD isolate and other products.
Robbins LLP initiates an investigation
Robbins LLP, a law firm for shareholder rights, will investigate Pharmacielo for alleged violations related to the Securities Exchange Act 1934. It will also probe whether directors and officers of the company breached their duties to fulfill the duties of shareholders.
Pharmacielo signed a sales pact with General Extract LLC in September 2019. According to a report of Hindenburg Research, General Extract does not have any credible business. The former COO of Pharmacielo is running it. Also, the report says, Pharmacielo conducted misleading business transactions with Xphyto Therapeutics and General Extract. The company also delayed the development of the processing center and provided misleading information about its manufacturing facilities.