Ignite International Brands to acquire Ignite U.S.

Ignite International Brands, Ltd. has entered into a letter of agreement with Ignite International, Ltd. (Ignite U.S.) for the former to acquire, directly or indirectly, all the shares of the latter that it does not already hold.

There will be in exchange for “218,932,400 common or other equity securities of the company, which would result in Ignite U.S. becoming a wholly owned subsidiary of the company,” notes a statement from Ignite International Brands.

 

 

That means the existing Ignite U.S. shareholders would hold approximately 95.6 percent of the equity securities of the company, with company chairman Dan Bilzerian “holding not less than 62.5 percent of the issued and outstanding shares, excluding any shares issued pursuant to the financings,” the press release states.

“The transaction will constitute a change of business and a reverse take-over under the rules of the Canadian Securities Exchange (CSE),” Ignite International Brands reports. “The company’ shares will be halted from trading on the CSE until the company has made adequate filings with the CSE in regards to its change of business and completes the transaction,” it adds.

As per the previous trademark and copyright licence agreement between Ignite U.S. and Ignite International Brands, this would be “be amended such that Ignite U.S. will grant to the company or an affiliate thereof an exclusive right to use the “IGNITE” brand for nicotine, CBD and THC products everywhere in the world, except for the U.S.”

In addition, the statement notes, the parties have also agreed to pursue the following two financings: (i) the issuance of subscription receipts pursuant to a brokered private placement, to be led by broker(s) selected by Ignite U.S., for gross proceeds currently expected to be a minimum of $50 million and a maximum of $100 million at an issue price to be agreed upon and (ii) a non-brokered concurrent private placement of up to $50 million at the same issue price as under the brokered financing.

With regard to the change of business, “the transaction is in response to business realities and market demand to operate the businesses of Ignite U.S. and the company together and, as a result, the company will be required to change its business focus from being an investment company to a vertically integrated company operating in the cannabis industry.”

 

 

As such, it will “be seeking to leverage the ‘IGNITE’ brand and engage, directly and indirectly, in the business of cultivation, development, extraction and distribution of cannabis and cannabis-infused products, as well as the production and distribution of cannabis-related accessories and the licensing of the ‘IGNITE’ brand, which will result in a “change of business” under CSE policies,” the stamen explains.

This requires Ignite International Brands to obtain shareholders’ approval; prepare and file a new Listing Statement with respect to its new proposed business; meet the criteria for a new listing as a cannabis company on the CSE; and obtain the consent of the CSE to the company’s proposed change of business and listing as a cannabis company.

Jim McCormick, current president of Ignite U.S., will be appointed as the president of Ignite International Brands.

 

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