PharmaCielo Ltd. Announces Completion of Qualifying Transaction

/THIS NEWS RELEASE IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES/

TORONTO, Jan. 16, 2019 /CNW/ - PharmaCielo Ltd. (the "Company" or "PharmaCielo"), formerly AAJ Capital 1 Corp. ("AAJ") is pleased to announce that effective January 15, 2019, it completed its previously announced qualifying transaction (the "Qualifying Transaction") pursuant to the policies of the TSX Venture Exchange (the "TSXV"). The parties received final approval of the Qualifying Transaction from the TSXV and approval of a filing statement prepared in accordance with the requirements of the TSXV (the "Filing Statement") dated January 8, 2019 which is available at www.sedar.com.

Trading of the common shares of the Company (the "Resulting Issuer Shares") will commence trading on the TSXV under the symbol "PCLO" on Friday, January 18, 2019.

Pursuant to the Qualifying Transaction:

(a)	AAJ consolidated its then outstanding 4,640,000 common shares of AAJ (the "AAJ Common Shares") on a 1:11.94 basis;
(b)	pursuant to the terms of an agreement dated August 17, 2018 in respect of a plan of arrangement (the "Arrangement") between AAJ, 10949469 Canada Inc. ("AAJ Sub"), a private company incorporated under the Canada Business Corporations Act (the "CBCA") and a wholly owned subsidiary of AAJ created for the purposes of the Arrangement, and PharmaCielo Ltd. ("PharmaCielo Private Co"), a private corporation incorporated under the CBCA, AAJ acquired all of the issued and outstanding common shares (the "PharmaCielo Common Shares") of PharmaCielo Private Co and indirectly, PharmaCielo Holdings S.A.S. ("PharmaCielo Holdings"), PharmaCielo Private Co's wholly owned Colombian operating subsidiary from the holders of PharmaCielo Common Shares in exchange for an aggregate of 81,747,811 AAJ Common Shares. In addition, 11,815,416 subscription receipts of PharmaCielo Private Co were converted into PharmaCielo Common Shares and immediately into Resulting Issuer Shares on a one for one basis for gross proceeds of $39,581,643.60;
(c)	PharmaCielo Private Co and AAJ Sub amalgamated and continued as a wholly owned subsidiary of AAJ; and
(d)	AAJ changed its name to "PharmaCielo Ltd."

The board of directors and executive team of the Company now consists of: David Attard, Chief Executive Officer, President, and a Director; Scott Laitinen, Chief Financial Officer; David Gordon, Chief Corporate Officer; Simon Langelier, Chairman of the Board of Directors and a Director; Dr. Delon Human, Vice Chairman of the Board of Directors and a Director; Matteo Pellegrini, Director; Henning von Koss, Director; Federico Cock-Correa, Director; Carlos Manuel Uribe, Director; Doug Bache, Director; and Alex Bruvels Corporate Secretary.

As of the date hereof, the Company has issued and outstanding, a total of: (i) 93,976,962 Resulting Issuer Shares; (ii) 15,693,957 stock options exercisable to purchase Resulting Issuer Shares; and (iii) 802,660 brokers warrants exercisable to purchase Resulting Issuer Shares. The Company has a (i) stock option plan; (ii) restricted share unit plan (the "RSU Plan"); and (iii) deferred share unit plan (the "DSU Plan"). At this time, no deferred share units or restricted share units are outstanding under the DSU Plan and the RSU Plan respectively.

Certain of the Resulting Issuer Shares are subject to escrow restrictions including: (i) 179,229 Resulting Issuer Shares subject to an 18 month staged release under the CPC Escrow Agreement, with a first release of 10% today; (ii) 18,867,500 Resulting Issuer Shares and 10,755,000 stock options exercisable for Resulting Issuer Shares subject to an 18 month staged release under the QT Escrow Agreement, with a first release of 10% today; (iii) 3,963,700 Resulting Issuer Shares subject to an 18 month staged release with a first release of 25% today; and (iv) 535,610 Resulting Issuer Shares subject to a one year staged release pursuant to TSXV seed share restrictions, with a first release of 20% at the closing of the Qualifying Transaction. In addition, the Directors and Officers of PharmaCielo as well holders of 5% or more of the Resulting Issuer Shares are subject to the provisions of Lock-Up Agreements for a period of 120 days from the closing of the Qualifying Transaction (all as defined in the Filing Statement).

Early Warning Disclosure

In connection with the Qualifying Transaction, Jaque Capital Management Ltd., a private company controlled by Anthony Wile, the former Chief Executive Officer and a Director of PharmaCielo Private Co acquired 13,002,500 Resulting Issuer Shares in exchange for the same number of PharmaCielo Common Shares pursuant to the terms of the Arrangement, representing 11.86% of the issued and outstanding Resulting Issuer Shares on a fully diluted basis, thereby requiring disclosure pursuant to the early warning requirements of applicable securities laws. The Resulting Issuer Shares controlled indirectly by Mr. Wile are subject to certain escrow restrictions as set out in the Filing Statement.

Mr. Wile indirectly acquired the Resulting Issuer Shares in connection with the Qualifying Transaction for investment purposes. He does not have any current intentions to increase or decrease beneficial ownership or control or direction over any additional securities of the Company. Subject to applicable escrow restrictions described in the Filing Statement, Mr. Wile may, from time to time and depending on market and other conditions, acquire additional Resulting Issuer Shares through market transactions, private agreements, treasury issuances, dividend reinvestment programs, exercise of options, convertible securities or otherwise, may sell all or some portion of the Resulting Issuer Shares he owns or otherwise trade in or with respect to securities of the Company.

Copies of the early warning report may be obtained from David Gordon, by e-mail at [email protected] or in writing to the Company at 82 Richmond Street East, Toronto, Ontario M5C 1P1.

About PharmaCielo Ltd.

PharmaCielo Ltd. is headquartered in Canada, with a focus on processing and supplying all natural, medicinal-grade cannabis oil extracts and related products to large channel distributors. PharmaCielo's principal (and wholly owned) subsidiary is PharmaCielo Holdings, headquartered at its nursery and propagation centre located in Rionegro, Colombia.

The Boards of Directors and executive teams of both PharmaCielo and PharmaCielo Holdings 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, has built a compelling business plan focused on supplying the international marketplace.

Forward Looking Statements:

Certain statements contained in this news release, such as the anticipated trading day of the Resulting Issuer Shares on the TSXV, constitute "forward-looking information" as such term is used in applicable Canadian securities laws. Forward-looking information is based on plans, expectations and estimates of management at the date the information is provided and is subject to certain factors and assumptions, including that the Company's financial condition and development plans do not change as a result of unforeseen events. 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, the risk that any of the assumptions referred to prove not to be valid or reliable, that occurrences such as those referred to above are realized and result in delays, or cessation in planned work, that the Company's financial condition and development plans change, and delays in regulatory approval, as well as the other risks and uncertainties applicable to cannabis producing companies and to the Company as set forth in the Company's Filing Statement in respect of the Qualifying Transaction filed under the Company's profile at www.sedar.com. The Company undertakes no obligation to update these forward-looking statements, other than as required by applicable law. This press release is not an offer of the securities for sale in the United States. The securities have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an exemption from registration. 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 securities in any state in which such offer, solicitation or sale would be unlawful.

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this press release.

SOURCE PharmaCielo

Media (PharmaCielo): Gal Wilder, Cohn & Wolfe, Email: [email protected], 647-259-3261; Investors (PharmaCielo): Jonathan Ross, PharmaCielo investor relations, LodeRock Advisors Inc., Email: [email protected], 416.283.0178