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Convertible debentures
 12 Months Ended
Oct. 31, 2020
Borrowings [Abstract]  
Convertible debentures [Text Block]

11. Convertible debentures

The Company issues three types of convertible debentures: USD denominated convertible debentures with an equity component, Canadian dollar ("CDN") denominated convertible debentures with an embedded derivative due to variable consideration payable upon conversion caused by foreign exchange, and USD denominated convertible debentures with an embedded derivative caused by variable conversion prices.

    
  Convertible debentures  Derivative liabilities  Equity component of
convertible debentures		 
  2020  2019  2020  2019  2020  2019 
(a)$2,881,719 $2,511,514 $197,270 $204,366 $23,952 $50,147 
(b) 199,799  87,560  336,292  561,059  —  — 
 $3,081,518 $2,599,074 $533,562 $765,425 $23,952 $50,147 

 

(a) USD denominated debentures with equity components and CDN denominated debentures with embedded derivatives

All loan principal amounts are expressed in original currency and all remaining dollar amounts expressed in USD. Convertible debentures outstanding as at October 31:

     CDN 
  USD (equity component)  CDN (embedded derivative) 
  2020  2019  2020  2019 
Loan principal            
Opening balance$931,000 $931,000 $2,271,017 $2,234,294 
Issuance during the year 185,200  —  17,052  165,266 
Repayment or conversion (20,000) —  (158,364) (128,543)
Outstanding at year-end$1,096,200 $931,000 $2,129,705 $2,271,017 
             
Terms of loan            
Annual interest rate 12% - 24%  12% -  24%  12% - 24%  12% -  24% 
Effective annual interest rate 24%  24% - 36%  12% - 1270%  13% - 645% 
Conversion price to common shares$0.03 - $0.07 $0.04 - $0.07 $0.05 - $0.14 $0.05 - $0.15 
Remaining life (in months) 1 - 9  1 - 6  0 - 6  0 - 12 
             
Consolidated Statement of Financial Position            
Carrying value of loan principal$1,083,375 $906,993 $1,403,787 $1,464,416 
Interest payable 151,387  18,661  243,170  121,444 
Convertible debentures$1,234,762 $925,654 $1,646,957 $1,585,860 
             
Derivative liabilities$— $— $197,270 $204,366 
Equity component of convertible debentures$23,952 $50,147 $— $— 
             
Consolidated Statement of Operations and Comprehensive Loss            
Accretion expense$37,934 $118,749 $723,641 $914,780 
Interest expense$194,091 $191,001 $215,923 $229,673 
Gain on revaluation of derivative liabilities$— $— $(590,625)$(846,401)
Loss on conversion of convertible debentures$— $— $— $— 
Loss (gain) on extinguishment of convertible debentures$— $— $(10,919)$(2,865)
             
Consolidated Statement of Changes in Equity            
Amount of principal converted to common shares$20,000 $— $35,000 $— 
Amount of interest converted to common shares$447 $— $1,168 $— 
             
Number of common shares issued on conversion of convertible debentures 511,175  —  731,440  — 
             
Consolidated Statement of Cash Flows            
Amount of principal repaid in cash$— $— $93,721 $96,598 
Amount of interest repaid in cash$60,918 $187,440 $93,005 $159,801 

 

(b)  USD denominated debentures with embedded derivatives

 

During the year ended October 31, 2020, the Company has incurred $35,500 (2019 - $72,476; 2018 - $40,414) in financing costs which primarily consist of early repayment premiums and administrative fees relating to the convertible debentures, of which $7,500 (2019 - $21,000; 2018 - $nil) was converted into common shares.

Convertible debentures outstanding as at October 31, 2020:

 

  (i)  (ii) 
  2020  2019  2020  2019 
             
Loan principal            
Opening balance$304,000 $213,600 $121,000 $101,250 
Issuance during the year 449,000  563,600  273,770  307,250 
Conversion (447,000) (397,600) (106,000) (287,500)
Repayment (80,000) (75,600) —  — 
Outstanding at year-end$226,000 $304,000 $288,770 $121,000 
             
Terms of loan            
Annual interest rate 4%  4%  2% - 10%  10% 
Effective annual interest rate 4070% -  139% -  2573% -  4338% - 
  5278%  5044%  20559%  5368% 
Conversion price to common shares (i)  (i)  (ii)  (ii) 
Remaining life (in months) 9 - 12  6 - 11  0 - 5  3 - 12 
Consolidated Statement of Financial Position            
Carrying value of loan principal$56 $39,993 $165,564 $23,429 
Interest payable 14,515  10,953  19,664  13,185 
Convertible debentures$14,571 $50,946 $185,228 $36,614 
             
Derivative liabilities$153,804 $370,759 $182,489 $190,300 
             
Consolidated Statement of Operations and Comprehensive Loss            
Accretion expense$136,533 $57,111 $201,711  165,753 
Interest expense$11,390 $27,053 $19,965  21,916 
Gain on revaluation of derivative liabilities$(73,082)$196,842 $(106,213) 294,673 
Loss on conversion of convertible debentures$54,436 $49,738 $42,048  281 
Loss (gain) on extinguishment of convertible debentures$(116,490)$2,219 $—  — 
             
Consolidated Statement of Changes in Equity            
Amount of principal converted to common shares$447,000 $397,600 $106,000 $287,500 
Amount of interest converted to common shares$6,060 $23,100 $20,986 $21,969 
Number of common shares issued on conversion of convertible debentures 29,409,479  29,106,847  13,585,550  33,421,726 
             
Consolidated Statement of Cash Flows            
Amount of principal repaid in cash$80,000 $75,600 $— $— 
Amount of interest repaid in cash$1,767 $5,973 $— $— 

 

(i)  Conversion price defined as 75% multiplied by the average of the lowest 3 closing stock prices for the 10 trading days prior to conversion date.

 

(ii)  Conversion price defined as 75% multiplied by the lowest stock price for the 20 trading days prior to conversion date.

(b)  USD denominated debentures with embedded derivatives

 

Convertible debentures outstanding as at October 31, 2020:

 
  (iii) 
  2020  2019 
Loan principal      
Opening balance$— $308,000 
Conversion —  (308,000)
Outstanding at year-end$— $— 
Terms of loan      
Annual interest rate n/a  5% 
Effective annual interest rate n/a  5234% 
Conversion price to common shares (iii)  (iii) 
Remaining life (in months) n/a  n/a 
Consolidated Statement of Operations and Comprehensive Loss      
Accretion expense$— $261,042 
Interest expense$— $22,443 
Gain on revaluation of derivative liabilities$— $11,451 
Consolidated Statement of Changes in Equity      
Amount of principal converted to common shares$— $308,000 
Amount of interest converted to common shares$— $18,339 
Number of common shares issued on conversion of convertible debentures —  19,510,390 

 

(iii)  Conversion price defined as 75% multiplied by lowest stock price for the 15 trading days prior to conversion date.

 

2020

 

2019

Share price

$0.02

 

$0.02

Exercise price

$0.01 - $0.11

  

$0.01 - $0.11

Volatility factor (based on historical volatility)

100% - 187%

 

173% - 321%

Risk free interest rate

0.10% - 0.19%

 

1.67% - 1.69%

Expected life of conversion features (in months)

0 - 12

 

0 - 12

Expected dividend yield

0%

 

0%

CDN to USD exchange rate (as applicable)

0.7567

 

0.7582

Call value

$0.00 - $0.02

 

$0.00 - $0.02

Volatility was estimated using the historical volatility of the Company's stock prices for common shares.