Ignite International Brands (CSE: BILZ) announced this morning that it is conducting a raise for C$50 million in unsecured convertible debentures, during a time in which many operators are struggling to raise any funds at all. The funding is said to be used towards working capital and general corporate purposes.
The convertible debentures are to be issued in series, however the size of each series was not defined. Each unit, which consists of $1,000 in debt, will carry an interest rate of 8.0% and have a maturity date of 36 months from the time of issue. 250 warrants will be attached to each unit, with a conversion price that is the greater of (i) a 50% premium to the 10 day volume weighted average price of the equity at the time of close, or (ii) the closing price on October 3, 2019.
The conversion of each debenture into common shares will occur at the greater of (i) a 20% premium to the 10 day volume weighted average price of the equity at the time of close, or (ii) the closing price on October 3, 2019. A forced conversion event may also occur after twelve months from the date of issue, should the VWAP of the equity exceed double the price of conversion for a period of ten days.
Given the current state of the cannabis market, the raise is odd – its rather undefined during a period in which strong firms such as iAnthus Capital struggle to find funding at reasonable terms. The fact that the debt is also unsecured is rather surprising.
However, Ignite International as been rather strong as of late relative to peers, and has been climbing steadily thanks in part to marketing efforts from Dan Bilzerian, the namesake of Ignite’s trading symbol and the firms brand ambassador. The controversial character has brought a number of followers to Ignite’s brand accounts, and has used a number of models to entice people to buy product.
The firm however, is more of a single brand than anything else. They primarily license the brand to third party manufacturers to get their product on store shelves across the globe, with the firm having a presence primarily in North America and the UK. The firm had $22.3 million in cash as of the last reporting period.
Ignite International closed yesterdays session at $2.25 on the Canadian Stock Exchange.
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.