NEW YORK, NY / ACCESSWIRE / April 29, 2020 / Pomerantz LLP announces that a class action lawsuit has been filed against PharmaCielo Ltd. ("PharmaCielo" or the "Company") (OTCQX:PCLOF) and certain of its officers. The class action, filed in United States District Court for the Central District of California, and indexed under 20-cv-03759, is on behalf of a class consisting of all persons and entities other than Defendants who purchased or otherwise acquired publicly traded PharmaCielo securities from June 21, 2019, and March 2, 2020, both dates inclusive (the "Class Period"). Plaintiff seeks to recover compensable damages caused by Defendants' violations of the federal securities laws under the Securities Exchange Act of 1934 (the "Exchange Act").
If you are a shareholder who purchased Pharmacelo securities during the class period, you have until May 5, 2020, to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at rswilloughby@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
[Click here for information about joining the class action]
PharmaCielo, through its subsidiary, PharmaCielo Colombia Holdings S.A.S., purports to cultivate, process, produce, and supply medicinal-grade cannabis oil extracts and related products in Colombia and internationally.
The complaint alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about PharamCielo's business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (i) PharmaCielo engaged in undisclosed related party transactions with General Extract LLC ("General Extract"); (ii) PharmaCielo engaged in misleading transactions and loans with General Extract; (iii) PharmaCielo had significantly overstated the efficacy and competitiveness of the Company's business and operations in South America, including Peru and Colombia; (iv) PharmaCielo's Research Technology and Processing Centre was never on-schedule and is delayed; (v) the Rionegro facility is located on a floodplain and contaminated with mold and pesticides from its previous tenants; (vi) PharmaCielo's Cauca Department land has never been utilized by the Company and is idle; and (vii) as a result, Defendants' public statements were materially false and/or misleading at all relevant times.
On January 9, 2020, Marijuana Business Daily ("MBD") published an article entitled "New medical cannabis sales opportunities in Peru face downward price pressure after winning company's very low bid" (the "MBD Article"). According to that article, "[t]he price offered by the winner of the first bidding process to supply medical cannabis in Peru came in well below that of other applicants," including PharmaCielo, which, "[t]o comply with the purity requirement . . . offered CBD isolate in powder form," and was disqualified "because the company didn't make an offer in ‘liquid' form as required."
On this news, shares of PharmaCielo fell $0.122 per share, or 4.80%, to close at $2.42 per share on January 10, 2020. However, PharmaCielo's shares continued to trade at artificially inflated prices as a result of the Defendants' continued misrepresentations and misstatements throughout the rest of the Class Period.
On March 2, 2020, Hindenburg Research published a report (the "Report") explaining that PharmaCielo had failed to disclose: (i) transactions with related parties; (ii) misleading business transactions and loans with General Extract and XPhyto Therapeutics Corp.; (iii) the delayed state of its Research Technology and Processing Centre's construction; and (iv) the poor state of its Rionegro Growing Facility.
On this news, shares of PharmaCielo fell $0.5132 per share over the next two trading days, or 36.14%, to close at $0.9068 per share on March 3, 2020, damaging investors.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com
SOURCE: Pomerantz LLP
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