The following table sets forth the net carrying amount of the convertible debentures:

	November 30,		May 31,
	2021		2021
5.25% Convertible Notes ("APHA 24")	$	284,724	$	399,444
5.00% Convertible Notes ("TLRY 23")		270,130		268,180
Total	$	554,854	$	667,624

	November 30,			May 31,
	2021			2021
5.25% Contractual debenture	$	350,000		$	350,000
Debt settlement		(90,760	)		(90,760	)
Fair value adjustment		25,484			140,204
Net carrying amount of APHA 24	$	284,724		$	399,444

Holders of the APHA 24 may convert all or any portion of their Notes, in multiples of $1 principal amount, at their option at any time between December 1, 2023 to the maturity date. The initial conversion rate for the APHA 24 will be 89.31162364 shares of common stock, par value $0.0001 per share, of Tilray, Inc. per $1,000 principal amount of Notes, which will be settled in cash, common shares of Aphria or a combination thereof, at Tilray’s election. This is equivalent to an initial conversion price of approximately $11.20 per common share, subject to adjustments in certain events. In addition, holders of the APHA 24 may convert all or any portion of their Notes, in multiples of $1 principal amount, at their option at any time preceding December 1, 2023, if:

The Company may not redeem the APHA 24 prior to June 6, 2022, except upon the occurrence of certain changes in tax laws. On or after June 6, 2022, the Company may redeem for cash all or part of the Notes, at its option, if the last reported sale price of the Company’s common shares has been at least 130% of the conversion price then in effect for at least 20 trading days during any 30 consecutive trading day period ending on and including trading day immediately preceding the date on which the Company provides notice of redemption. The redemption of the APHA 24 will be equal to 100% of the principal amount plus accrued and unpaid interest to, but excluding, the redemption date.

The Company estimated the fair value of the APHA 24 convertible debenture at November 30, 2021 at $1,098 per convertible debenture using the Black-Scholes model (Level 3) with the following weighted-average assumptions:

Risk-free interest rate		1.43	%
Expected volatility		70	%
Expected term	2.5 years
Expected dividend yield		0.0	%

Expected volatility is based on the historical volatility of the Company's common stock.

	November 30,			May 31,
	2021			2021
5.00% Contractual debenture	$	277,856		$	277,856
Unamortized discount		(7,726	)		(9,676	)
Net carrying amount of TLRY 23	$	270,130		$	268,180

Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election (the “cash conversion option”). The initial conversion rate for the convertible notes is 5.9735 shares of common stock per one thousand dollar principal amount of notes, which is equivalent to an initial conversion price of approximately $167.41 per share of common stock, which represents approximately 1,659,737 shares of common stock, based on the $277,856 aggregate principal amount of convertible notes outstanding as of May 31, 2021 (2020 - $nil). Throughout the term of the TLRY 23, the conversion rate may be adjusted upon the occurrence of certain events.

Prior to the close of business on the business day immediately preceding April 1, 2023, the TLRY 23 will be convertible only under the specified circumstances. On or after April 1, 2023 until the close of business on the business day immediately preceding the maturity date, holders may convert all or any portion of their TLRY 23, in multiples of $1 principal amount, at the option of the holder regardless of the aforementioned circumstances.