Warrants |
The
following table summarizes the warrant activities for the years ended October 31, 2020 and October 31, 2019:
Schedule of warrant activities | |
| | | |
| | |
| |
Number | | |
Weighted
Average
Exercise Price | |
Balance
- November 1, 2018 | |
| 148,722 | | |
$ | 7.39 | |
Issued
in connection with the Transaction (Notes 17.4, 17.5, 17.9, 17.10) | |
| 11,288,149 | | |
| 0.55 | |
Issued
pursuant to subscription receipts (Notes 17.6, 17.7) | |
| 9,964,940 | | |
| 0.55 | |
Issued
in connection with convertible debentures (Notes 17.11) | |
| 3,409,091 | | |
| 0.55 | |
Issued
to brokers (Note 17.8) | |
| 757,125 | | |
| 0.44 | |
Issued
to terminate purchase agreement (Notes 17.12, 28) | |
| 2,148,117 | | |
| 0.44 | |
Expired | |
| (131,539 | ) | |
| (6.52 | ) |
Balance
- October 31, 2019 | |
| 27,584,605 | | |
$ | 0.53 | |
Issued
pursuant to private placement (Notes 16.1, 17.1) | |
| 5,000,000 | | |
| 0.13 | |
Issued
pursuant to private placement (Note 16.1, 17.1) | |
| 10,000,000 | | |
| 0.13 | |
Expired | |
| (17,183 | ) | |
| (14.05 | ) |
Cancellation
of prior warrants associated with convertible debt (Note 14.1) | |
| (6,818,182 | ) | |
| 0.55 | |
Issuance
of new warrants associated with convertible debt (Notes 14.1, 17.3) | |
| 6,818,182 | | |
| 0.16 | |
Consideration
warrants for convertible debt maturity extension (Notes 14, 17.3) | |
| 1,590,909 | | |
| 0.16 | |
Balance
- October 31, 2020 | |
| 44,158,331 | | |
$ | 0.33 | |
During
the year ended October 31, 2020, the Company:
| 17.1 | Issued
5,000,000 warrants in February 2020 to subscribers of the offering disclosed in Note
16.1. Each warrant entitles the holder to acquire one common share of the Company at an exercise
price of CAD$0.125 per unit for a period of 24 months. |
The
fair value of the warrants was $138,119 which was the residual value of the offering after the fair value of the shares on the transaction
date.
| 17.2 | Issued
10,000,000 warrants in May 2020 to subscribers of the offering disclosed in Note 16.1.
Each warrant entitles the holder to acquire one common share of the Company at an exercise
price of CAD$0.13 per unit for a period of 24 months. |
The
fair value of the warrants was $382,069, which was the residual value of the offering after the fair value of the shares on the transaction
date.
| 17.3 | Issued
6,818,182 replacement warrants and 1,590,909 warrants (totaling 8,409,091) to the creditors
of the July 10, 2020 debt agreement described at Note 14.1. Each warrant entitles the
holder to acquire one common share of the Company at an exercise price of CAD$0.16 with an
expiration date of November 1, 2021. |
The
fair value of the warrants of $424,645 was estimated at the grant date based on the Black-Scholes pricing model, using the following
assumptions:
| | |
Schedule of warrants assumption at grant date based |
| ○ | Expected
dividend yield |
Nil |
| ○ | Risk-free
interest rate |
0.30% |
| ○ | Expected
volatility |
131% |
During
the year ended October 31, 2019, the Company:
| 17.4 | Issued
839,790 warrants in exchange for the same amount of Novicius Subco Warrants as disclosed
in Note 16.8. Each Novicius Subco Warrant was exercisable into one common share at an exercise
price of CAD$0.55 per share for 24 months. |
The
fair value of the Novicius Subco Warrants of $79,237 was estimated at the grant date based on the Black-Scholes pricing model, using
the following assumptions:
| | |
Schedule of novicious subco warrants |
| ○ | Expected
dividend yield |
Nil |
| ○ | Risk-free
interest rate |
1.690% |
| ○ | Expected
life |
2.0
months |
| ○ | Expected
volatility |
100%* |
| * | Based
on the volatility of comparable publicly traded companies |
| 17.5 | Issued
1,675,979 warrants in exchange for the same amount of GR Unlimited warrants disclosed in
Note 19.2. Each warrant is exercisable into one common share at an exercise price of CAD$0.55
per share for twenty four months. |
The
fair value of the warrants of $152,798 was estimated at the grant date based on the Black-Scholes pricing model, using the following
assumptions:
| | |
Schedule of fair value of warrants at the grant date based |
| ○ | Expected
dividend yield |
Nil |
| ○ | Risk-free
interest rate |
1.690% |
| ○ | Expected
volatility |
100%* |
| * | Based
on the volatility of comparable publicly traded companies |
| 17.6 | Issued
3,771,023 warrants in exchange for the same amount of GR Unlimited warrants disclosed in
Note 15.9. Each warrant allows the holder to purchase one common share of the Company at
an exercise price of CAD$0.55 per unit for a period of 24 months. |
The
fair value of the warrants of $360,818 was estimated at the grant date based on the Black-Scholes pricing model, using the following
assumptions:
| | |
Schedule of fair value of warrants one at the grant date based |
| ○ | Expected
dividend yield |
Nil |
| ○ | Risk-free
interest rate |
1.690% |
| ○ | Expected
volatility |
100%* |
| * | Based
on the volatility of comparable publicly traded companies |
| 17.7 | Issued
6,193,917 warrants in exchange for the same amount of Grown Rogue Canada warrants disclosed
in Note 16.9. Each warrant allows the holder to purchase one common share of the Company
at an exercise price of CAD$0.55 per unit for a period of 24 months. |
The
fair value of the warrants of $584,430 was estimated at the grant date based on the Black-Scholes pricing model, using the following
assumptions:
| | |
Schedule of fair value of the GR broker warrants |
| ○ | Expected
dividend yield |
Nil |
| ○ | Risk-free
interest rate |
1.690% |
| ○ | Expected
volatility |
100%* |
| * | Based
on the volatility of comparable publicly traded companies |
| 17.8 | Issued
757,125 broker warrants in exchange for the same amount of Grown Rogue Canada broker warrants
disclosed in Note 16.9. Each warrant allows the holder to purchase one unit of the Company
at an exercise price of CAD$0.44 per unit for a period of 24 months. Each unit contains one
common share of the Company and one warrant entitling the holder to acquire one common share
of the Company at an exercise price of CAD$0.55 per unit for a period of 24 months. |
The
fair value of the GR Broker Warrants of $119,864 was estimated at the grant date based on the Black-Scholes pricing model, using
the following assumptions:
| | |
Schedule of fair value of warrants as transaction costs |
| ○ | Expected
dividend yield |
Nil |
| ○ | Risk-free
interest rate |
1.690% |
| ○ | Expected
volatility |
100%* |
| * | Based
on the volatility of comparable publicly traded companies |
| 17.9 | Issued
3,409,091 warrants in exchange for the same amount of Grown Rogue Canada warrants that were
issued to subscribers of the GR Unlimited convertible debenture offering disclosed in Note
14.3. Each warrant entitles the holder to acquire one common share of the Company at an exercise
price of CAD$0.55 per unit for a period of 24 months. |
The
fair value of the warrants of $321,654 was estimated at the grant date based on the Black-Scholes pricing model, using the following
assumptions:
| | |
Schedule of fair value of warrants two at grant date based |
| ○ | Expected
dividend yield |
Nil |
| ○ | Risk-free
interest rate |
1.690% |
| ○ | Expected
volatility |
100%* |
| * | Based
on the volatility of comparable publicly traded companies |
| 17.10 | Issued
5,364,089 warrants in exchange for the same amount of Grown Rogue Canada warrants that were
issued to certain investors prior to the acquisition of Grown Rogue Canada. Each warrant
entitles the holder to acquire one common share of the Company at an exercise price of CAD$0.55
per unit for a period of 24 months. |
The
fair value of the warrants of $893,646 was estimated at the grant date based on the Black-Scholes pricing model, using the following
assumptions:
| | |
Schedule of fair value of warrants three at grant date based |
| ○ | Expected
dividend yield |
Nil |
| ○ | Risk-free
interest rate |
1.690% |
| ○ | Expected
volatility |
100%* |
| * | Based
on the volatility of comparable publicly traded companies |
| 17.11 | Issued
3,409,091 warrants to subscribers of the convertible debenture offering disclosed in Note
14.2. Each warrant entitled the holder to acquire one common share of the Company at an exercise
price of CAD$0.55 per unit for a period of 24 months. |
The
fair value of the warrants of $376,594 was estimated at the grant date based on the Black-Scholes pricing model, using the following
assumptions:
| | |
Schedule of fair value of warrants four at grant date based |
| ○ | Expected
dividend yield |
Nil |
| ○ | Risk-free
interest rate |
1.710% |
| ○ | Expected
volatility |
101%* |
| * | Based
on the volatility of comparable publicly traded companies |
| 17.12 | Issued
2,148,117 warrants to finalize a termination agreement (Note 28). Each warrant entitles the
holder to acquire one common share of the Company at an exercise price of CAD$0.44 per unit
for a period of 48 months. Of these warrants, 859,247 vest immediately, and the remaining
1,288,870 vest upon future activities. |
The
fair value of the warrants of $193,438 was estimated at the grant date based on the Black-Scholes pricing model, using the following
assumptions:
| | |
Schedule of fair value of warrants five at grant date based |
| ○ | Expected
dividend yield |
Nil |
| ○ | Risk-free
interest rate |
1.640% |
| ○ | Expected
volatility |
101%* |
| * | Based
on the volatility of comparable publicly traded companies |
The
fair value of the warrants that vested of $77,014 have been expensed as an acquisition cost on the statement of loss and comprehensive
loss.
As
at October 31, 2020, the following warrants were issued and outstanding:
| Schedule of warrant issued and outstanding | | |
| | | |
| |
|
Exercise
price | | |
Warrants
outstanding | | |
Remaining
contractual
Life (years) | |
Expiry date |
$ | 0.55 | | |
| 18,601,123 | | |
0.1 | |
30-Nov-2020 |
| 0.44 | | |
| 757,125 | | |
0.1 | |
30-Nov-2020 |
| 0.16 | | |
| 8,409,091 | | |
1 | |
01-Nov-2021 |
| 0.13 | | |
| 5,000,000 | | |
1.3 | |
10-Feb-2022 |
| 0.13 | | |
| 10,000,000 | | |
1.5 | |
15-May-2022 |
| 0.44 | | |
| 2,148,117 | | |
2.7 | |
28-Jun-2023 |
$ | 0.33 | | |
| 44,158,331 | | |
0.8 | |
|
As
at October 31, 2019, the following warrants were issued and outstanding:
Exercise
Price | | |
Warrants
Outstanding | | |
Remaining
Contractual
Life (Years) | |
Expiry Date |
$ | 14.00 | | |
| 17,183 | | |
0.08 | |
30-Nov-2019 |
$ | 0.44 | | |
| 757,125 | | |
1.04 | |
15-Nov-2020 |
$ | 0.55 | | |
| 21,253,089 | | |
1.04 | |
15-Nov-2020 |
$ | 0.55 | | |
| 3,409,091 | | |
1.5 | |
01-May-2021 |
$ | 0.44 | | |
| 2,148,177 | | |
3.66 | |
28-Jun-23 |
$ | 0.53 | | |
| 27,584,665 | | |
1.13 | |
|
|