The Placement was well supported by a number of well-regarded institutional investors with the Company accepting over-subscriptions of A$2 million, which is a strong endorsement of MMJ's near-term development strategy, and underlying value. The funds raised will provide the Company with additional working capital, as it focuses on executing the spin out of its core cannabis subsidiaries, United Greeneries Holdings Ltd ("UG" or "United Greeneries") and Satipharm AG ("Satipharm") on the TSX-V.
MMJ recently announced (see ASX release 28 September 2016) that it had signed a binding Term Sheet with TSX-V listed company Top Strike Resources Limited (TSX-V: TSR) ("Top Strike"), for Top Strike to acquire 100% of the issued shares of UG and Satipharm respectively.
The proposed transaction with Top Strike remains subject to a number of conditions, including shareholder approval, however the Board advises that due diligence activities are progressing well and the Company remains on track to be trading on the TSX-V by no later than end of December 2016.
The better than expected result from the Placement may also mean that MMJ is able to reduce the cash component of the transaction with Top Strike enabling the Company to secure a greater equity interest in Top Strike.
MMJ PhytoTech Limited's Managing Director, Andreas Gedeon, commented: "The Company is pleased to have secured this additional funding, and support from a number of well-known institutional investors at this time. Their participation in this placement further validates our near-term strategy to fast-track the growth of our core cannabis brands on the TSX-V, and provides the requisite financial flexibility to execute this process.
The Board looks forward to updating our shareholders on further corporate and operational updates in the near-term, in what is a very exciting period in the Company's evolution as a leading cannabis production company."
About MMJ PhytoTech Ltd
In October 2017, MMJ PhytoTech Limited (ASX:MMJ) announced its strategy to become an incubator for strategic investments across regulated jurisdictions globally covering the entire cannabis value chain.
Following the successful listing of United Greeneries Holdings Ltd ("United Greeneries") and Satipharm AG ("Satipharm") on the TSX-V through Harvest One Cannabis Inc. (CVE:HVST), MMJ has focused on the identification of a number of independent strategic investment opportunities that have the potential to deliver significant value to the Company's shareholders.
MMJ is actively pursuing early stage opportunities with the ability to deliver significant future revenue and the opportunity to provide dramatic global synergistic value as regulatory frameworks in key international markets continue to evolve. MMJ is targeting the full range of emerging cannabis-related sectors including healthcare products, technology, infrastructure, logistics, processing, cultivation, equipment, R&D, hemp food products and retail.
MMJ currently holds an equity stake of 53,333,333 shares in Harvest One, 100% ownership of Israeli-based R&D division PhytoTech Therapeutics Limited ("PTL") and strategic holdings in e-Sense Lab Limited (ASX:ESE) and private Canadian-based company WeedMe Inc.
MMJ PhytoTech Ltd