It appears that Ignite International Brands (CSE: BILZ), the cannabis firm backed by millionaire Dan Bilzerian, is one of the first cannabis operations to reveal that it has received a PPP loan from the Small Business Administration’s Paycheck Protection Program. The announcement was included at the bottom of documents filed last week by the Canadian issuer.
Specifically, the firm saw three loans in total from the Small Business Administration’s program, with the first loan occuring on April 28, 2020. The loan, for US$1,079,687, was received through the issuers “Ignite US” subsidiary, with monies received intended to be a direct incentive for businesses to keep workers on the payroll.
The loan, granted by an arm of the US Federal Government, will be forgiven by the feds if all employees are kept on the payroll for a period of eight weeks. Further, funds must be used for payroll, rent, mortgages, or utilities. It’s unclear how further loans of US$65,786 and US$30,111 granted under the program on May 20 and May 28 respectively will impact the loan forgiveness, however Ignite has indicated that it intends to apply for forgiveness in all three instances.
All employees have been kept on staff subsequent to the receipt of federal funds, however this is not believed to include all non-essential employees that the company relieved of work in the month of March. While a total count of staff that lost their jobs in March was not provided, the annualized impact is said to be approximately $1.3 million in savings.
Despite seeking loan forgiveness from public funds, the company subsequently raised $5.0 million in the form of convertible debentures on June 9, 2020. The debt bears interest at a rate of 10% per annum, and matures June 7, 2022. The debt is convertible prior to maturity at a price of $1.58 per share.
Ignite International last traded at $1.19 on the CSE.
Information for this briefing was found via Sedar and Ignite International Brands. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.