Akerna Corp. (KERN) research, news, and more from GeoInvesting

Company description

Wed, 19 Jun 2019 13:51:12 GMT

Akerna Corp. was created by the merger of MTech Acquisition Corp. and MJ Freeway LLC. Akerna is a regulatory compliance technology company in the cannabis space. The cornerstones of Akerna’s service offerings are MJ Platform® and Leaf Data Systems®, which are highly-versatile platforms that provide clients and government entities with a central data management system for tracking regulated cannabis products—from seed to product to shelf to customer—through the complete supply chain. Since establishment in 2010, the Company has tracked more than $15 billion in cannabis sales. As part of its business strategy, Akerna intends to grow through targeted, strategic acquisitions that are complementary to its current business and organically by accelerating its product development efforts. Akerna is based in Denver.

Research

Thu, 20 Jun 2019 16:47:26 GMT

Akerna Corp. (NASDAQ:KERN) ($49.80; $370.1M market cap) (old symbol MTEC) - We have covered the merger of MTEC and MJ Freeway LLC becoming the first compliance technology company in the cannabis space to trade on the NASDAQ. On Tuesday we highlighted the valuation gap between the warrants and trading price of the common stock suggesting they were trading well below fair value at that time.

While we believed shares of MTEC were richly valued, trading at a Price/Sales of roughly 15 and 9.8 on 2019 and 2020 revenues estimates, respectively, we certainly did not take into account that at times valuations mean nothing in today’s current market environment, especially when dealing with a SaaS cannabis stories. The common stock hit highs of near $80 (up from $10 when deal closed) with the warrants trading above $8 in the after hours session yesterday.

Investors should note that most SPAC warrants are callable, often when the underlying stock reaches $18 for a certain period of time.

We are now looking at Black Ridge Acquisition Corp. (NASDAQ:BRAC) (BRACW) as it nears the close of its business combination with Allied Esports International, a global eSports entertainment company. We are intrigued because of the hot sector and the limited number of shares the company will have post merger, which will be around 14 million.

We plan to focus some of our attention on the BRAC merger story this week.

Research

Tue, 18 Jun 2019 15:31:16 GMT

Research

Thu, 06 Jun 2019 16:18:49 GMT

Mtech Acquisition Corp. (NASDAQ:MTEC) ($10.28; $22.7M market cap) - As the vote for MTEC’s planned merger with MJ Freeway nears (June 17), we encourage any interested investors to listen to a recent presentation that MJ Freeway held at the Cannabis Virtual Investor conference. MTEC is a company that has been continuing to focus on entering a merger, share exchange or other business combination.

On the call, MJ Freeway’s CEO Jessica Billingsley stated that they have 50% of the votes already in, and of those votes, 99% are in favor of the merger closing. She implied that she is not concerned at all about the deal closing.

Mj Freeway is the largest global cannabis technology company. The Company provides the full cannabis supply chain in all the legal jurisdictions and has a strong recurring revenue angle.

The company operates two SaaS segments:

B to B platform, which serves the cannabis operators
B to G product, which is a regulatory oversight platform sold to governments to help with compliance

Below are snapshots from the presentation showing the huge market opportunity for the company, a summary of the Company's offerings and a look at its estimated growth projections, which shows strong growth in its software segment. (Fiscal 2019 ends at the end of June)

Research

Thu, 16 May 2019 15:36:12 GMT

Mtech Acquisition Corp. (NASDAQ:MTEC) ($10.20; $22.4M market cap) focuses on entering a merger, share exchange or other business combination. We have been watching for the closing of its planned merger with MJ Freeway, which describes itself as the largest global cannabis technology supply chain company.

In a proxy filing filed today, MTEC announced it will hold a shareholder meeting to vote on the planned merger on June 17, 2019. We will continue to track for the possible closing of this transaction.

Research

Wed, 13 Mar 2019 14:50:25 GMT

Mtech Acquisition Corp. (NASDAQ:MTEC) ($10.06; $21.7M market cap) focuses on entering a merger, share exchange or other business combination. We continue to watch for the closing of its planned merger with MJ Freeway, which describes itself as the largest global cannabis technology supply chain company. The stockholder holder meeting to approve the business combination took place yesterday morning. We would expect a press release at any moment to announce the results of the vote. You can see our original note and their investor presentation here.

Research

Tue, 22 Jan 2019 15:42:18 GMT

Mtech Acquisition Corp. (NASDAQ:MTEC) ($10.06; $21.7M market cap) focuses on entering a merger, share exchange or other business combination. We continue to watch for the closing of its planned merger with MJ Freeway, which describes itself as the largest global cannabis technology supply chain company. In October we highlighted its proposed business combination, our original note can be seen here. The deal is expected to close in early 2019.

Research

Wed, 17 Oct 2018 14:54:45 GMT

Mtech Acquisition Corp. (NASDAQ:MTEC) ($10.31; $22.0M market cap) focuses on entering a merger, share exchange or other business combination. Yesterday after the close the company held a conference call to discuss its planned merger with MJ Freeway, the largest global cannabis technology supply chain company. A transcript of the call can be read here. The call was mainly an overview of the investor presentation released on October 11, 2018. There was enough bullish commentary to warrant us to try and set up an interview with management. Some highlights from the call:

The transaction implies a $60 million enterprise value with approximately $10 million of cash on MJ Freeway's balance sheet. MJ Freeway currently has no debt outstanding. This price values MJ Freeway at 5.4 times fiscal 2019 estimated revenue and 3.5 times fiscal 2020 estimated revenue. We believe these multiples are very attractive compared to similarly focused publicly-traded companies and private market financings.
It is important to note that MJ Freeway equity holders are rolling 100% of their equity holdings into the combined company.
MJ Platform is projected to grow significantly from 2018 and '19, and more than 50% for each of the next two years.

We continue to tread the cannabis space very cautiously, as many companies fail to mention any bottom line growth objectives or disclosure of facts that are easily substantiated. We hope to learn more about MTEC’s earnings potential on our call with management.

The deal is expected to close in early 2019.