Financing Includes U.S. and Asian
Investors
MJ Freeway Retains Cowen as
Post-Closing Strategic Advisor
NEW YORK, June 06, 2019 (GLOBE NEWSWIRE) -- MTech Acquisition Corp. (NASDAQ: MTEC, MTECU, MTECW) (“MTechâ€), the first US-listed Special Purpose Acquisition Company (SPAC) focused on acquiring a business ancillary to the cannabis industry, and MJ Freeway LLC (“MJ Freewayâ€), a leading seed-to-sale, regulatory compliance technology provider and developer of the cannabis industry’s first enterprise resource planning (ERP) platform, announced today that MTech has agreed to issue and sell 685,599 shares of Class A common stock at $10.21 per share in a private placement to investors for aggregate gross proceeds of approximately $7.0 million. MTech may issue up to an additional 799,907 shares of Class A Common Stock in the private placement on substantially the same terms and conditions prior to the shareholder vote to consider and approve the business combination with MJ Freeway. The closing of the private placement is conditioned on the closing of the business combination immediately thereafter.
In connection with the proposed business combination of MTech and MJ Freeway, as previously announced, the two companies will be combined under a new holding company, MTech Acquisition Holdings Inc. (“Pubcoâ€), which will be renamed Akerna Corp. following the closing of the business combination. The shares of Class A Common Stock issued in the private placement will convert into shares of Pubco common stock on a one-for-one basis upon the closing the business combination.
Included among the investors in the private placement was Khitan Capital, LLC (“Khitanâ€), which includes among its members Emery Huang, a current MJ Freeway board member, and Michael Di Hao Zhang, son of the former chairman of Guizhou Xinbang Pharmaceuticals, a China-based company listed on the Shenzhen Exchange. In addition, The London Fund participated in the private placement.
Concurrently with the private placement, the investors in the private placement will receive from MTech Sponsor LLC, the sponsor of MTech, an aggregate of 76,178 shares of previously-issued shares of Class B Common Stock, which shares will remain in escrow and continue to be subject to restrictions on transfer following the consummation of the business combination. For additional information, please see MTech’s Current Report on Form 8-K to be filed with the Securities and Exchange Commission today.
MJ Freeway also announced today that it has retained Cowen and Company, LLC as a strategic and financial advisor pending the consummation of the proposed business combination with MTech. Following the closing of the business combination, Cowen’s Information & Technology Services Investment Banking team will assist with MJ Freeway’s strategy of pursuing strategic, accretive acquisition opportunities.
About MJ Freeway:
Founded in 2010, MJ Freeway is a large and growing regulatory
compliance and inventory management technology company. MJ
Freeway’s proprietary software platform is adaptable for industries
in which interfacing with government regulatory agencies for
compliance purposes is required, or where the tracking of organic
materials from seed or plant to end products is desired. Nine years
ago, MJ Freeway identified a need for organic material tracking and
regulatory compliance SaaS solutions in the growing cannabis and
hemp industry. It developed products intended to assist states in
monitoring licensed businesses’ compliance with state regulations,
and to help state-licensed businesses operate in compliance with
such law. MJ Freeway provides its regulatory software platform,
Leaf Data Systems®, to state government regulatory
agencies, and its business software platform, MJ
Platform®, to state-licensed businesses. MJ Freeway
currently has clients in 29 of the 33 U.S. states that have
legalized cannabis in some form, as well as the District of
Columbia. MJF also serves clients in Australia, Canada, Chile,
Colombia, Denmark, New Zealand, South Africa, Spain, Switzerland
and Uruguay. The Leaf Data Systems® and MJ
Platform® have combined tracked more than $13 billion in
medicinal and recreational cannabis sales to date.
About MTech Acquisition
Corp.:
MTech Acquisition Corp. is a
blank check company formed for the purpose of entering into a
merger, share exchange, asset acquisition, stock purchase,
recapitalization, reorganization or other similar business
combination with one or more businesses or entities. MTech’s
efforts to identify a prospective target business will not be
limited to a particular industry or geographic region, although
MTech intends to focus its search on companies ancillary to the
cannabis industry, with a particular sector focus that includes
compliance, business intelligence, brand development and media.
MTech is led by Executive Chairman Steven Van Dyke and Chief Executive Officer Scott Sozio.
Forward Looking
Statements:
Certain statements made in this release are “forward looking
statements†within the meaning of the “safe harbor†provisions of
the United States Private Securities Litigation Reform Act of 1995.
When used in this press release, the words “estimates,â€
“projected,†“expects,†“anticipates,†“forecasts,†“plans,â€
“intends,†“believes,†“seeks,†“may,†“will,†“should,†“future,â€
“propose†and variations of these words or similar expressions (or
the negative versions of such words or expressions) are intended to
identify forward-looking statements. These forward-looking
statements are not guarantees of future performance, conditions or
results, and involve a number of known and unknown risks,
uncertainties, assumptions and other important factors, many of
which are outside MJ Freeway’s control, that could cause actual
results or outcomes to differ materially from those discussed in
the forward-looking statements. Important factors, among others,
that may affect actual results or outcomes include: the inability
to obtain MTech stockholder approval of the business combination
with MJ Freeway; the inability to complete the transaction
contemplated by the merger agreement governing such business
combination because of failure of closing conditions or other
reasons; the inability to recognize the anticipated benefits of the
proposed business combination, which may be affected by, among
other things, the amount of cash available following any
redemptions by MTech stockholders; the ability Pubco to meet the
listing standards of The Nasdaq Stock Market following the
consummation of the transactions contemplated by the merger
agreement; costs related to the proposed business combination; MJ
Freeway’s ability to manage growth; the reaction of MJ Freeway’s
customers and suppliers to the business combination; Pubco’s
ability to identify and integrate other future acquisitions; rising
costs adversely affecting MJ Freeway’s profitability; adverse
changes to the legal environment for the cannabis industry; and
general economic and market conditions impacting demand for MJ
Freeway’s products and services. See the risk factors that have
been disclosed in the proxy statement MTech has filed with the
Securities and Exchange Commission (“SECâ€) and the registration
statement on Form S-4 filed by with the SEC by Pubco, , for
additional risks associated with the business combination. None of
MTech, Pubco or MJ Freeway undertakes any obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by
law.
Important Information About the
Transaction and Where to Find Additional
Information:
This communication is being made in respect of the proposed
business combination between MTech and MJ Freeway. In connection
with the proposed business combination, MTech has filed with the
SEC a proxy statement and Pubco has filed a registration statement
on Form S-4, which includes a definitive proxy statement/final
prospectus, which registration statement was declared effective on
May 14, 2019 and mailed to stockholders of MTech on or about May
17, 2019. Before making any voting or investment decision,
shareholders of MTech are urged to carefully read the definitive
proxy statement/final prospectus and any other relevant documents
filed with the SEC, as well as any amendments or supplements to
these documents, because they will contain important information
about MTech, Pubco, MJ Freeway and the proposed business
combination. The documents filed by MTech and Pubco with the SEC
may be obtained free of charge at the SEC’s website at www.sec.gov,
or by directing a request to MTech Acquisition Corp., 10124
Foxhurst Court, Orlando, Florida 32836, Attention: Secretary.
Participants in the
Solicitation:
MTech, Pubco, MJ Freeway, and their
respective directors, executive officers and other members of their
management and employees, under SEC rules, may be deemed to be
participants in the solicitation of proxies of MTech stockholders
in connection with the proposed business combination. Investors and
security holders may obtain more detailed information regarding the
names, affiliations and interests of MTech’s directors in the
definitive proxy statement/final prospectus mailed to stockholders
on or about May 17, 2019. Additional information regarding the
participants in the proxy solicitation and a description of their
direct and indirect interests are contained in the definitive proxy
statement/final prospectus.
No Offer or
Solicitation:
This communication shall not constitute
an offer to sell or the solicitation of an offer to buy any
securities, nor shall there be any sale of securities in any
jurisdiction in which the offer, solicitation or sale would be
unlawful prior to the registration or qualification under the
securities laws of any such jurisdiction. No offering of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended (the “Actâ€) or an available exemption from the requirements
of the Act.
MJ Freeway Media Contact:
Jon Goldberg / McKenna Miller
KCSA Strategic Communications
[email protected] / [email protected]
(212) 896-1282 / (347) 487-6197