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SITO Mobile to buy MediaJel in all-stock transaction

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SITO Mobile to buy MediaJel in all-stock transaction

SITO Mobile Ltd. agreed to acquire 100% of the equity interests of MediaJel Inc., a provider of advertising and marketing solutions for the cannabis industry.

Under the terms of the deal, MediaJel stockholders will exchange 100% of their shares of capital stock for newly issued shares of common stock of SITO and MediaJel will become a wholly owned subsidiary of SITO. At closing, the holders of capital stock of MediaJel will receive 20 million shares of SITO common stock. Accordingly, the current shareholders of MediaJel and current shareholders of SITO are expected to hold about 44% and 56%, respectively, of the issued and outstanding shares of the SITO following the closing of the transaction.

Additionally, upon the completion of the proposed transaction, MediaJel CEO Jake Litke and COO Jonathan Black will continue to run MediaJel and will be appointed as CEO and COO, respectively, of SITO. Furthermore, SITO CFO Gregg Saunders will continue in that role post-transaction, while Tom Pallack, SITO's current CEO, will transition to a consultant to the company.

At the closing, SITO and the current MediaJel stockholders expect to enter into a stockholders agreement pursuant to which the MediaJel stockholders will have the right to appoint up to three out of seven members of SITO's board upon the closing and to have such director designees nominated for reelection at the 2020 and 2021 annual meetings of SITO's stockholders.

The boards of both companies have unanimously approved the proposed transaction. Completion of the transaction, which is expected in the fourth quarter of 2019 or first quarter of 2020, is subject to approval by the stockholders of MediaJel and SITO and other customary closing conditions

Ladenburg Thalmann & Co. Inc., a subsidiary of Ladenburg Thalmann Financial Services Inc., acted as exclusive financial adviser to MediaJel. Pepper Hamilton LLP acted as legal adviser to SITO and Graubard Miller acted as legal adviser to MediaJel.