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PharmaCielo Ltd. (TSXV: PCLO) (OTC Pink: PCLOF) more than tripled its sales in its latest quarter, compared with the same period a year ago, but filings show liquidity concerns that could threaten the company.

The Canada-based international cannabis company reported revenue of C$1.13 million in in the fourth quarter ending Dec. 31, 362% more than the C$244,000 reported in the same period a year earlier.

“Throughout 2024, PharmaCielo delivered robust revenue growth by strategically expanding into new international markets while maintaining rigorous cost discipline,” Marc Lustig, chairman and CEO of PharmaCielo, said in a statement. “These complementary initiatives have considerably strengthened our financial foundation.”

However, by the end of year, the firm’s liabilities exceeded its assets by C$18.8 million, with just C$147,939 in cash on hand. Most concerning is C$12.8 million in debentures that matured on Dec. 24, 2024, which the company is currently negotiating to extend to 2026.

For the full year, PharmaCielo reported revenue of C$3.48 million, a 126% rise from C$1.54 million in 2023. Annual net loss narrowed to C$9.14 million from C$16.3 million a year earlier. The better performance comes as the company expands its buyer base and diversifies to include dried flower and other cannabis extracts, management said.

“With a diversified product portfolio that now reaches beyond CBD isolate, we are well-positioned to meet the evolving needs of our global customer base and maintain strong revenue momentum,” Lustig said.

The company’s gross profit for the fourth quarter was C$483,000, versus a loss of C$217,000 in the year ago period. It also reduced its adjusted EBITDA loss to C$299,000 from C$1.4 million in the same period a year earlier.

The company’s been hacking away at expenses, according to filings. The includes reducing office expenses by C$591,000, salaries by C$1.19 million and marketing costs by C$428,000 versus 2023.

“Over the past four quarters, we have steadily advanced toward breakeven adjusted EBITDA,” Lustig noted. “We are entering 2025 from a position of strength, with no major capital investments required to achieve full commercial capacity.”

PharmaCielo runs greenhouses in Rionegro, Colombia, along with a processing center capable of handling 20 tons of cannabis biomass monthly. The company holds licenses for both psychoactive and nonpsychoactive cannabis cultivation and manufacturing.

Sales have expanded across the Americas, Australia, Africa and Europe, with particular strength in Latin America, especially Brazil, the company in its MD&A. Still, management noted a going concern.

The firm expects to achieve positive EBITDA and cash flow in 2025, with sales anticipated to increase in the back half of the year. PharmaCielo said that it will seek additional working capital through a private placement to fund the growth. It also plans to issue up to 5 million common shares to settle around C$500,000 in debt owed to service providers, former employees and directors.

The company changed its financial year-end from Dec. 31 to March 31 and will file audited financial statements for the fifteen-month period ending March 31.