Ignite Closes First Series of Private Placement for $10m

Ignite International Brands Ltd. has raised $10 million in closing the first series of a previously announced non-brokered private placement.

The firm announced earlier this month that it would seek to raise up to $50 million for working capital and other general corporate purposes. The first series is complete and it now has $10 million in working capital to boost its expansion efforts across the U.S., Canada, and Europe.

Each convertible debenture unit in the financing round consists of $1,000 in debt and carries an 8% interest rate, with a maturity date of 36 months from the time of issuance.

Beginning on Oct. 26, 2020, Ignite has the option of requiring the conversion of the then-outstanding principal amount of the convertible debentures – plus any accrued and unpaid interest – at the conversion price, if the daily volume-weighted average trading price is double the conversion price for any 10-consecutive trading day period.

Similar conditions are proposed for a second series, which will include the same amount of convertible debenture and warrant. The second series initial closing date is expected to occur on Nov. 29, 2019.

Some cannabis companies have found difficulty in raising funds at equitable terms recently, but Ignite has a trump card: social media superstar Dan Bilzerian, the brand’s founder and owner, who boasts more than 40 million followers online.

Bilzerian, a successful poker pro before becoming a social media influencer and entrepreneur, sparked a 10-fold increase on Ignite’s typical trading volumes when he discussed the stock across various social media posts on Sep. 24, 2019. His star power could be enough to drum up a lot more interest in the funding rounds.

Ignite is not a cultivator. It sources high-quality cannabis flower and derivatives from white-label providers and sells the products under its brand. It invests heavily in marketing this brand, and its lines include vape pens, CBD drops, and even CBD toothpicks.

Earlier this year it expanded into the UK market, and it signed a two-year licensing deal with WeedMD for THC and CBD products to sell on the Canadian market. BILZ opened at $1.35 on the CSE in June and its share price has now increased to $2.13 today.