MTech Raises $9.2 Million Ahead of Closing MJ Freeway Acquisition

MTech Acquisition Corp. and MJ Freeway LLC Provide Private Placement Update

Participants Include Khitan Capital, Cresco Capital Partners II, LLC, and The London Fund

NEW YORK, June 12, 2019 (GLOBE NEWSWIRE) — MTech Acquisition Corp. (NASDAQ: MTEC, MTECU, MTECW) (“MTech”), the first US-listed Special Purpose Acquisition Company (SPAC) focused on acquiring a business ancillary to the cannabis industry, and MJ Freeway LLC (“MJ Freeway”), 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 an additional 215,475 shares of Class A common stock at $10.21 per share as part of its previously announced private placement.

Overall, MTech will issue and sell an aggregate of 901,074 shares of Class A common stock for aggregate gross proceeds of approximately $9.2 million. The Company does not expect to issue any additional shares in the private placement. 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. (“Pubco”), 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.

Cresco Capital Partners II, LLC (CCP II), an existing investor in MJ Freeway, joins previously reported Khitan Capital, LLC (Khitan) and The London Fund in the private placement.

“As an existing MJ Freeway investor, making this investment in Akerna was an easy choice considering the trend of global legalization we are seeing, especially in Asian markets. We believe Akerna is well-positioned to capitalize on this growth through their robust ERP offerings and tracking & compliance technology,” stated MJ Freeway Board Member and Khitan’s Emery Huang. “Further, we believe the value proposition with the pending merger and Nasdaq listing enhances Akerna’s financial position and opens the door to acquisition opportunities, which should drive further shareholder value.”

We have high confidence in the growth of the technology sector in cannabis, the strategic direction of Akerna, and the leadership at MJ Freeway. This additional stake in Akerna reflects that confidence.

Matt Hawkins, Managing Principal at CCP II, currently invested in MJ Freeway

The London Fund’s founder Ashesh C. Shah, who is expected to serve as a technology advisor to the Akerna Board of Directors, explained, “We are excited about this investment in Akerna and we believe my role as technology advisor will help accelerate organic and inorganic growth in the company.”

The significant investments of financing, expertise, and confidence from our private placement participants will be invaluable as we move into this monumental new chapter. I look forward to expanding our relationships with Mr. Huang and Mr. Shah, leveraging additional global market and tech insights for strategic growth, and I thank Mr. Hawkins for his continued support.

Jessica Billingsley, Co-Founder and Chief Executive Officer (CEO) of MJ Freeway

Scott Sozio, CEO of MTech, commented, “MJ Freeway has an established history of delivering technological innovation to the cannabis industry. Securing this investment provides additional capital to grow our proprietary ERP platform and further establish Akerna as a dominant force in cannabis technology.”

Concurrently with the closing of the private placement, the investors in the private placement will also receive from MTech Sponsor LLC, the sponsor of MTech, an aggregate of 100,119 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 that was filed with the Securities and Exchange Commission (SEC) on June 6, 2019, and MTech’s Current Report on Form 8-K to be filed with the SEC today.

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.

Original press release

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