MTech Acquisition Corp. and MJ Freeway LLC Announce Merger Agreement

Transaction Supported by MJ Freeway Owners, Including Prominent Tech Investor Roger McNamee

Implementing MTech’s Strategy to Provide Investors with Access to Cannabis Technology Sector

NEW YORK, Oct. 11, 2018 /PRNewswire/ — MTech Acquisition Corp. (NASDAQ: MTEC) (“MTech”), the first US-listed Special Purpose Acquisition Company focused on acquiring a business ancillary to the cannabis industry, and MJ Freeway LLC (“MJ Freeway”), a leading seed-to-sale technology provider and developer of the cannabis industry’s first enterprise resource planning platform, announced today they have entered into a definitive merger agreement. Following the consummation of the transaction, MTech and MJ Freeway will become subsidiaries of a newly-formed holding company (“Pubco”) to be listed on The Nasdaq Stock Market. Following the closing of the transaction, if there are no redemptions by MTech shareholders in connection with the MTech shareholder vote to approve the transaction, it is currently anticipated that the combined entity will be debt free and have over $60 million of balance sheet cash to take advantage of strategic growth opportunities.

MJ Freeway is a seed-to-sale technology provider, with more than 30% of the global cannabis technology market based on management’s estimates. MJ Freeway has tracked more than $10 billion in sales for its clients in Australia, Europe, South America, New Zealand, Africa, Canada, and the United States in 29 states and the District of Columbia. MJ Freeway’s software, MJ Platform®, includes compliance tracking of cannabis from seed-to-sale, as well as enterprise scale business management tools across the entire supply chain. In addition, its Leaf Data Systems® software solution enables governments to track cannabis plants from seed-to-sale to help ensure patient, public and product safety.

We built MJ Freeway to be the technology infrastructure for the cannabis industry.

Jessica Billingsley, Co-Founder & CEO of MJ Freeway

With access to public capital markets and additional balance sheet strength as a result of this transaction, MJ Freeway will accelerate its growth and broaden its product offering as we strive to meet the ever-expanding demands of a highly complex and heavily regulated industry.

Current MJ Freeway investor and Senior Strategic Advisor to the Board, Roger McNamee, added, “Cannabis companies that want to be leaders are adopting MJ Platform because I believe it is the only product with the technical foundation to support multi-line and multi-location operations. MJ Freeway prepares customers to manage high growth and complexity as the industry transitions from local to global scale. MJ Freeway’s merger with MTech will enable a smart growth strategy to capitalize on the industry’s continuing growth.”

Scott Sozio, Chief Executive Officer of MTech, commented, “We believe technology solutions that empower operators to efficiently and compliantly run their business, with tools that track the full vertical from cultivation to consumer, are critical to the industry’s long-term success. We believe MJ Freeway provides the most robust seed-to-sale software technology available today, positioning the company for enormous growth as the legalization of cannabis expands throughout the country and the world. We are excited for MTech to be able to invest in MJ Freeway at what we believe to be a very attractive valuation.”

“This merger will prove valuable over the long-term. Not only will it allow us to grow our current lines of business, it will accelerate our dominant market share in the cannabis SaaS space and also allow the company to make strategic acquisitions and expand its reach into related industries,” noted Emery Huang, Senior Partner of Batu Capital, a MJ Freeway investor, and a current board member of MJ Freeway.

Summary of Transaction

Under the terms of the merger agreement, each of MTech and MJ Freeway will merge with newly formed subsidiaries of Pubco, which itself is a newly formed subsidiary of MTech. As a result of such mergers, MJ Freeway equityholders will receive new shares of Pubco and MTech security holders will exchange their securities of MTech for securities of Pubco. The shares of Pubco common stock to be issued to the MJ Freeway equity holders will have an aggregate value equal to Seventy Million U.S. Dollars ($70,000,000), subject to adjustment for net working capital and indebtedness of MJ Freeway (as determined in accordance with the merger agreement), with each share of Pubco common stock valued at $10.16 per share. Cash proceeds released from MTech’s trust account, which trust account currently has approximately $58 million in cash, after any shareholder redemptions and payment of transaction expenses and other MTech liabilities, shall remain with the combined company. MJ Freeway equityholders are rolling 100% of their equity into the combined entity.

The transaction has been unanimously approved by the boards of both MTech and MJ Freeway. Completion of the transaction is subject to approval by equityholders of each company and certain other conditions. The transaction is currently anticipated to close by early 2019.

For additional information about the business combination, see MTech’s Current Report on Form 8-K (including the investor presentation included as an exhibit thereto), which will be filed promptly with the Securities and Exchange Commission and shall be available at the SEC’s website at www.sec.gov.

Ellenoff Grossman & Schole LLP is acting as legal advisors to MTech. EarlyBirdCapital, Inc. is acting as financial advisors to MTech. Graubard Miller is acting as legal advisors to MJ Freeway.

MTech and MJ Freeway intend to hold a conference call in the near future to discuss the transaction and will issue a separate release to announce when the call is scheduled.

About MJ Freeway

MJ Freeway® is the largest global cannabis technology company having tracked more than $10 billion in sales with clients in Australia, Europe, South America, New Zealand, Africa, Canada, and the United States in 29 states and the District of Columbia. Founded in 2010 by technologists creating tech specifically for cannabis businesses, MJ Freeway’s tracking software includes inventory control and grow management applications to streamline workflow and increase efficiency. MJ Freeway’s Leaf Data Systems software solution enables governments to track cannabis plants from seed-to-sale and ensure patient, public, and product safety. MJ Freeway also offers a complete suite of professional consulting services for cannabis businesses. For more information, visit mjfreeway.com.

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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