IGNITE Announces Acquisition of Ignite Distribution, Inc., Announces Name of New CFO, Provides Update on Annual Filings and Confirms Date of Filing of its Q1 Financial Statements and MD&A
VAUGHAN, Ontario, May 29, 2020 (GLOBE NEWSWIRE) — IGNITE International Brands, Ltd. (CSE:BILZ, OTCQX: BILZF) (“IGNITE” or the “Company”), a global consumer packaged goods brand, is pleased to announce today that it has entered into a binding term sheet, pursuant to which, the Company will acquire (the “Acquisition”) the remaining 90% of the issued and outstanding equity securities of Ignite Distribution, Inc. (the “Target”) that it does not already own (IGNITE currently owns 10% of the issued and outstanding shares of the Target). “As previously communicated, we have hired a new CFO and we are pleased to announce that Paul Dowdall will be joining our executive team”, said IGNITE President, Curtis Heffernan. “Paul has a terrific financial background in consumer packaged goods and we look forward to his future contribution.” Mr. Dowdall will be joining the Company on June 8, 2020.
IGNITE will purchase 10% of the outstanding equity securities of the Target from ECVD/MMS Wholesale LLC (“MMS”) and 80% of the outstanding equity securities of the Target from International Investments, Ltd. (“II”) (a related party of IGNITE by virtue of being affiliated with Veritas Investments, Ltd. and Vulcan SKN, two entities that own approximately 16% of the issued and outstanding securities of the Company (assuming the conversion of all Proportionate Voting Shares to Subordinate Voting Shares)).The Acquisition is expected to close on or before June 15, 2020 (the “Closing Date”). The Acquisition is subject to the execution of a definitive share purchase agreement reflecting the terms of the binding term sheet and the approval of the Canadian Securities Exchange. As consideration for the purchase of the shares of the Target, IGNITE will (i) issue to II an unsecured convertible note (the “II Note”) in the amount of US$4.35 million, bearing an annual interest rate of 10%, maturing two years from the Closing Date; the II Note shall be repayable on the earlier of (x) the Company having consolidated annual EBITDA of at least US$10 million, as reported on its quarterly or annual financial statements and calculated in the ordinary course AND the Company having unencumbered cash of at least US$10 million during the same reporting period; and (y) two years from the Closing Date, with II being permitted to convert the II Note at any time prior to its maturity at a price per Subordinate Voting Share of 125% of the closing market price of the shares on the last trading date immediately prior to the Closing Date; (ii) issue to MMS an unsecured convertible note (the “MMS Note”) in the amount of US$500,000, bearing an annual interest rate of 10%, maturing 18 months following the Closing Date, with either the Company or MMS being permitted to convert the MMS Note at any time prior to its maturity at a price per Subordinate Voting Share equal to the greater of (x) CA$1.53, being the closing price on May 28, 2020; and (y) 110% of the closing market price of the shares on the last trading date immediately prior to the conversion of the MMS Note; and (iii) the issuance of US$480,000 of Subordinate Voting Shares to II and US$60,000 of Subordinate Voting Shares to MMS, in each case using the price per Subordinate Voting Share that is equal to the greater of (x) CA$1.68, being 110% of the closing price of the shares on May 28, 2020 and (y) 110% of the closing price of the shares on the last trading day immediately prior to the Closing Date.“This acquisition is a long-awaited opportunity for IGNITE to drive a centralized focus on our core initiatives,” stated Curtis Heffernan, IGNITE’s President, adding “it will provide a platform for efficiencies, speed to market, and marketing message optimization,” and noting that “with this acquisition, we are strategically positioned to meet the growing demand of our US customers in the CBD, performance beverages, alcohol, non-alcohol and apparel categories, optimizing both our direct to consumer e-commerce and brick & mortar go-to-market strategies.”The closing of the Acquisition is expected to occur less than 21 days after its announcement. The Company is expecting to be able to close the Acquisition by no later than June 15, 2020 as the Target has been an integral part of IGNITE’s operations giving its existing ownership interest, thereby allowing the Company to expedite the due diligence process. The Company prefers a short closing period so that the acquisition of the Target is fully completed as the world continues to recover from the COVID-19 pandemic, allowing it to be fully operational to take advantage of any opportunities as and when they present themselves.Update on Annual FilingsIGNITE also announces that, further to its news release dated April 29, 2020 (“Initial Press Release”), the Company is expected to file its audited financial statements, annual MD&A and accompanying certificates (collectively, the “Annual Filings”) by June 15, 2020 and the below provides an update on the material business developments since the date of the Initial Press Release.Q1 Filings IGNITE is also announcing today that it will postpone filing its interim financial statements and related documents for the financial period ended March 31, 2020 due to logistics and delays caused by the unprecedented COVID-19 pandemic. IGNITE is relying on the 45-day extension for filing the documents provided in BC Instrument 51-515: Temporary Exemption from Certain Corporate Finance Requirements, and equivalent instruments in Alberta and Ontario, thereby exempting the Company for 45 days from the following requirements:the requirement to file interim financial statements for the period ended March 31, 2020 (the “Financial Statements”) within 60 days of the Company’s period end as required by section 4.4(b) of National Instrument 51-102 – Continuous Disclosure Obligations (“NI 51-102”);the requirement to file management discussion and analysis (the “MD&A”) for the period covered by the Financial Statements within 60 days of the Company’s period end as required by section 5.1(2) of NI 51-102; andthe requirement to file certifications of the Financial Statements (the “Certificates” and together with the Financial Statements and MD&A, the “Interim Filings”) pursuant to section 5.1 of National Instrument 52-109 – Certification of Disclosure in Issuers’ Annual and Interim Filings.IGNITE currently expects to file the Interim Filings no later than July 15, 2020, after the close of markets.Until such time as the Annual Filings and Interim Filings have been filed, management and certain other insiders of IGNITE are subject to an insider trading blackout which reflects the principles in Section 9 of National Policy 11-207 – Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions.The following is a list of the Company’s material business developments since the Initial Press Release:On April 28, 2020, the Company announced the launch of COVID-19 response products, including masks, gloves, hand sanitizer and sanitizing surface spray, and its donation of COVID-19 prevention products in conjunction with its partnership with LCF Labs. Details of the expansion were disclosed in a news release issued on April 28, 2020.On May 13, 2020, the Company announced that it has hired a new Chief Financial Officer with a proposed start date of June 8, 2020, noting that the name of the new CFO would be disclosed at a later date. The Company also announced that its CFO, Edoardo (Eddie) Mattei, had resigned from the Company as of May 8, 2020 to pursue other opportunities. Details of the announcement were disclosed in a news release issued on May 13, 2020.The Company is announcing today that its new CFO is Paul Dowdall, a Chartered Professional Accountant with extensive experience across a diverse group of industries in privately held and publicly traded fortune 500 organizations, including Diamond Estates Wines & Spirits, Apple Canada and Blackberry. Most recently, Mr. Dowdall served as the chief financial officer at public and private consumer packaged goods companies focused on the North American beverage market, although he also brings extensive knowledge of international operations, including in Europe and Asia.
Linda K. Menzel, General Counsel
Email: [email protected]Cautionary Statement Regarding Forward-Looking InformationThis news release includes certain “forward-looking statements” under applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to IGNITE, its ability to file the Annual Filings by June 15, 2020 and its Interim Filings by July 15, 2020, the closing of the Acquisition, the ability of the Company to take advantage of any opportunities that present themselves as the world continues to recover from the COVID-19 pandemic, and the start date of Paul Dowdall. Forward-looking statements are necessarily based upon several estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; the effects and impacts of the coronavirus disease (COVID-19) pandemic, the extent and duration of which are uncertain at this time on IGNITE’s business and general economic and business conditions and markets; the ability of IGNITE to give effect to its business plan; reliance on the “IGNITE” brand which may not prove to be as successful as contemplated; the ability to and risks associated with unlocking future licensing opportunities with the “IGNITE” brand, and the ability of IGNITE to capture significant market share. There can be no assurance that any of the forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether because of new information, future events or otherwise, except as required by law.
“As previously communicated, we have hired a new CFO and we are pleased to announce that Paul Dowdall will be joining our executive team”, said IGNITE President, Curtis Heffernan. “Paul has a terrific financial background in consumer packaged goods and we look forward to his future contribution.” Mr. Dowdall will be joining the Company on June 8, 2020.The Company’s announcement today with respect to the acquisition of the Target.ABOUT IGNITEIGNITE is a global consumer brand, operating in the premium product segment of the market. Founded by Dan Bilzerian, the Company’s ‘quality-first’ approach is fundamental to the brand and its products. Originally operating in the cannabis and hemp-derived cannabidiol (CBD) wellness space, IGNITE was able to establish its brand awareness. IGNITE product categories now include a full line of CBD oil tinctures, CBD topicals, CBD pet products and CBD vape devices, produced by various partners and sold through select distributors, brick and mortar retailers, and online through the Company’s website, ignite.co. The IGNITE THC product line, which was launched subsequent to the CBD product line, incorporates quality, locally sourced, cannabis products.Since the launching of its THC and CBD products, the Company has expanded into the beverage space, launching a full line of functional performance enhancing drinks. The IGNITE beverage line currently consists of PH-alkaline balanced water, a line of premium performance drinks, named Z-RO as well as a gluten-free, seven-time distilled vodka. IGNITE beverages will be distributed nationally within the United States and available to purchase on the IGNITE beverages website, IgniteBeverages.co.IGNITE is a socially responsible company and is committed to using its marketing and brand power as a positive catalyst for a healthy lifestyle. The IGNITE management team believes that socially responsible oriented actions have a positive impact on the Company, its employees and its shareholders.Shares of IGNITE are listed on the Canadian Securities Exchange (CSE) under the symbol “BILZ” and quoted in the United States on the OTCQX under the symbol “BILZF”.Further information on IGNITE can be found on the Company’s website at ignite.coFor further information, please contact: