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    BILZ   CA45174Y1007

IGNITE INTERNATIONAL BRANDS, LTD.

(BILZ)
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Ignite International Brands : Q3 2021 - Managements Discussion and Analysis

11/29/2021 | 09:41am EST

.

Management's Discussion and Analysis

For the Three and Nine-Months ended September 30, 2021 and 2020

(This Management Discussion and Analysis, prepared by Management, has not been reviewed by the Company's external auditor)

TABLE OF CONTENTS

INTRODUCTION

2

OVERVIEW OF THE BUSINESS

3

RECENT EVENTS

4

HIGHLIGHTS FOR Q3 2021

5

FINANCIAL PERFORMANCE SUMMARY

6

WORKING CAPITAL

14

SUMMARY OF QUARTERLY RESULTS

14

LIQUIDITY AND CAPITAL RESOURCES

15

NON-IFRS FINANCIAL MEASURES

16

RELATED PARTY TRANSACTION

17

SECURITIES OUTSTANDING

19

RISKS AND UNCERTAINTIES

19

1

IGNITE INTERNATIONAL BRANDS, LTD.

MANAGEMENT DISCUSSION AND ANALYSIS

For the three and nine months ended September 30, 2021 and 2020

INTRODUCTION

This Management's Discussion and Analysis ("MD&A") prepared as at November 29, 2021, reviews the financial condition and results of operations of Ignite International Brands, Ltd. (the "Company" or "Ignite") for the three and nine months period ended September 30, 2021 and 2020 and all other material events up to the date of this report. The following discussion should be read in conjunction with a) the unaudited condensed interim consolidated financial statements and related notes for the three and nine months period ended September 30, 2021, and b) the annual audited financial statements and related notes of the Company for the year ended December 31, 2020. These statements can be found under the Company's profile on SEDAR at www.sedar.com.

This MD&A has been prepared in compliance with the requirements of section 2.2.1 of Form 51-102F1, in accordance with National Instrument 51-102 - Continuous Disclosure Obligations. The financial data included in the discussion provided in this report has been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and interpretations issued by the International Financial Reporting Interpretation Committee ("IFRIC").

The Company's certifying officers are responsible for ensuring that the unaudited condensed interim consolidated financial statements and MD&A do not contain any untrue statement of material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading considering the circumstances under which it was made. Information is considered material if: (i) such information results in, or would reasonably be expected to result in, a significant change in the market price or value of Ignite's Subordinate Voting Shares; (ii) there is a substantial likelihood that a reasonable investor would consider it important in making an investment decision; or (iii) it would significantly alter the total mix of information available to investors. Management, in conjunction with the Board of Directors, evaluates the materiality in this regard referencing all relevant circumstances, including potential market sensitivity.

Unless otherwise indicated, all financial information in this MD&A is reported in Canadian dollars. All references to the Company contained herein include references to its subsidiaries, as applicable, in the context. Additional information relating to the Company is available on SEDAR at www.sedar.com.

ACCOUNTING PERIODS

This MD&A is based on information in the unaudited condensed interim consolidated financial statements and accompanying notes thereto for the three and nine months periods ended September 30, 2021. Comparative amounts in the unaudited condensed interim consolidated financial statements and accompanying notes thereto are for the three and nine months period ended September 30, 2020, and the year-ended December 31, 2020.

2

IGNITE INTERNATIONAL BRANDS, LTD.

MANAGEMENT DISCUSSION AND ANALYSIS

For the three and nine months ended September 30, 2021 and 2020

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS

Except for statements of historical fact, information contained in this MD&A constitutes "forward-looking statements" within the meaning of Canadian securities legislation that involve inherent risks and uncertainties. Forward-looking statements include, but are not limited to, statements with respect to Ignite's intended business focus and growth strategy; projected financial performance of the Company; the expected development of the Company's business, projects, and joint ventures; completion of the Company's projects that are currently underway, in development or otherwise under consideration; and future liquidity, working capital and capital requirements. Forward-looking statements are necessarily based upon several estimates and assumptions that, while considered reasonable by management, 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, operational, competitive, political and social uncertainties; the effects and impacts of the coronavirus disease (COVID-19) pandemic; 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 the Company to capture significant market share. Readers are cautioned that the foregoing list of factors that may affect future growth, results and performance is not exhaustive, and undue reliance should not be placed on forward-looking statements. 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. Ignite 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.

OVERVIEW OF THE BUSINESS

Ignite is a CSE-listed and OTCQX traded company operating in permissible sectors trading under the symbol "BILZ" and "BILZF," respectively. The Company's head office is located at 11 Cidermill Avenue, Unit 200, Vaughan, Ontario, Canada L4K 4B6 and its registered and records office is located at 700 West Georgia Street, 25th Floor, Vancouver, British Columbia V7Y 1B3. The Company is a reporting issuer in British Columbia, Alberta, and Ontario.

Ignite is a consumer-packaged goods company, leveraging the IGNITE brand via multiple product platforms in the synthetic and tobacco derived nicotine e-liquid, spirits, apparel, beverage, cannabidiol ("CBD") and cannabis sectors. The Company is in the process of expanding its business operations which currently includes branding, marketing, licensing, sales, and distribution, across the United Kingdom, the United States, Canada, Mexico, China, South America, the Middle East, Australia, Malaysia, and other strategic global markets. The Company intends to affect its growth through brand leveraging, product development, targeted marketing, and strategic supply chain partnerships in each of these target jurisdictions.

3

IGNITE INTERNATIONAL BRANDS, LTD.

MANAGEMENT DISCUSSION AND ANALYSIS

For the three and nine months ended September 30, 2021 and 2020

The following table lists the Company's subsidiaries and percentage of holdings:

Name of Subsidiaries

Place of

Ownership

Functional

Activity

Incorporation

Interest

Currency

Ignite International Brands (Canada), Ltd.

Ontario, Canada

100%

CAD

Active

Ignite International Brands (U.K.) Ltd.

London, United Kingdom

100%

GBP

Active

Ignite International, Ltd.

Wyoming, United States

100%

USD

Active

Ignite Spirits, Inc.

Wyoming, United States

100%

USD

Active

Ignite International Brands (Luxembourg) S.A.

Luxembourg City, Luxembourg

100%

EUR

Active

Ignite International Brands SDN. BHD.

Kuala Lumpur, Malaysia

100%

MYR

Active

Ignite Beverages, Inc.

Delaware, United States

100%

USD

Inactive

Ignite Distribution, Inc.

Delaware, United States

100%

USD

Inactive

Ignite Internacional Marcas de Mexico, SA de CV

Guadalajara, Jalisco, Mexico

100%

MXN

Inactive

Ignite Distribution Company, Inc.

Wyoming, United States

50.1%

USD

Dissolved

Ignite International Brands (Ireland), Limited

Dublin, Ireland

100%

EUR

Dissolved

RECENT EVENTS

Subsequent to the period ended September 30, 2021, the Company had the following material events:

On October 1, 2021, the Company issued a short-term USD$1.7MM promissory note (the "II USD$1.7MM Note") to International Investments, Ltd., a company related to Ignite by way of a common member of the Board of Directors for each entity ("II"). The II USD$1.7MM Note matures on December 31, 2021 and bears an interest rate equal to ten percent (10%) per annum, for the term of the note. Principal and interest is due on maturity.

On October 13, 2021, the Company made a strategic decision to discontinue its cannabis operations in Canada to focus on introducing and promoting IGNITE branded vodka, tequila, seltzers, energy drinks, vapes, and apparel products to the Canadian market.

On October 14, 2021, the Company issued a short-term USD$1.9MM promissory note to II (the "II USD$1.8MM Note"). The II USD$1.8MM Note matures on December 31, 2021 and bears an interest rate equal to ten percent (10%) per annum, for the term of the note. Principal and interest is due on maturity.

On October 18, 2021, Ignite's Chief Executive Officer ("CEO") Dan Bilzerian purchased 50,000 Subordinate Voting Shares of the Company in the public market.

On November 1, 2021, the Company executed a five (5) year lease to establish its warehouse operations in Farmers' Branch, Texas. The new facility will allow the Company to cease certain 3PL relationships and engage in its own distribution and fulfillment of wholesale orders. The Company expects to see significant cost reductions, increased profit margins and improvements in operational efficiencies.

On November 3, 2021, the Company announced that sales in the month of October 2021 alone exceeded all of third quarter sales, a Company record for sales revenue. The performance in the month of October can be attributed to international expansion, with significant sales growth to US distributors with significant reach in South America.

4

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Ignite International Brands Ltd. published this content on 29 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 November 2021 14:40:03 UTC.


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Financials
Sales 2020 16,9 M 13,6 M 13,6 M
Net income 2020 -18,9 M -15,2 M -15,2 M
Net Debt 2020 5,86 M 4,69 M 4,69 M
P/E ratio 2020 -8,72x
Yield 2020 -
Capitalization 409 M 326 M 327 M
EV / Sales 2019 39,4x
EV / Sales 2020 11,6x
Nbr of Employees -
Free-Float 13,9%
Chart IGNITE INTERNATIONAL BRANDS, LTD.
Duration : Period :
Ignite International Brands, Ltd. Technical Analysis Chart | BILZ | CA45174Y1007 | MarketScreener
Income Statement Evolution
Managers and Directors
Dan Bilzerian Chairman & Chief Executive Officer
John Schaefer President & Chief Operating Officer
Greg Gilpin-Payne Independent Director
Vered Elkouby Nisim Independent Non-Executive Director
Pradeep Albert Independent Director
Sector and Competitors