Share Capital and Equity

6 Months Ended

Jun. 30, 2022

Stockholders' Equity Note [Abstract]

Share Capital and Equity

Note 10: SHARE CAPITAL AND EQUITY

The Company has authorized an unlimited number of Class A Subordinate Voting Shares (“SVS”) and Class C Multiple Voting Shares (“MVS”), all with no par value. In December 2020, the shareholders of the Company passed a resolution to permit the Company to convert all Class B Subordinate Voting Shares (“PVS”) shares into Class A shares and cancel the Class B PVS equity class, which occurred in 2020.

All share classes are included within share capital in the consolidated statements of stockholders’ equity on an as- converted basis. Each share class is entitled to notice of and to attend at any meeting of the shareholders, except a meeting of which only holders of another particular class of shares will have the right to vote. All share classes are entitled to receive dividends, as and when declared by the Company, on an as-converted basis, and no dividends will be declared by the Company on any individual class unless the Company simultaneously declares or pays dividends on all share classes. No subdivision or consolidation of any share class shall be made without simultaneously subdividing or consolidating all share classes in the same manner.

Voting shares activity for the periods presented is summarized as follows:

	Class A Subordinate Voting Shares		Class C Multiple Voting Shares		Total
Balance, December 31, 2020		537,575,044		1,276,208		538,851,252
Share capital issuances		55,330,352		—		55,330,352
Balance, December 31, 2021		592,905,396		1,276,208		594,181,604
Share capital issuances		43,731,290		—		43,731,290
Balance, June 30, 2022		636,636,686		1,276,208		637,912,894

Class A Subordinate Voting Shares

Holders of Class A Subordinate Voting Shares are entitled to one vote in respect of each SVS.

Class C Multiple Voting Shares

Holders of Class C Multiple Voting Shares are entitled to 800 votes in respect of each MVS. One MVS can convert to one SVS but are not convertible until the later of the date that (i) the aggregate number of PVS and MVS held by the Initial Holders (being the MVS holders on their initial issuance) are reduced to a number which is less than 50% of the aggregate number of PVS and MVS held by the Initial Holders on the date of completion of the Business Combination with Cannex, and (ii) 3 years following the date of the business combination with Cannex.

Series	Shares outstanding as of June 30, 2022		As converted to SVS Shares
Class A - Subordinate Voting Shares		636,636,686		636,636,686
Class C - Multiple Voting Shares		1,276,208		1,276,208
		637,912,894		637,912,894

On November 23, 2020, the Company closed a brokered private placement and issued 24,644,500 Units at a price of C$0.70 per Unit. Each Unit is comprised of one subordinate voting share of the Company and one-half of a subordinate voting share purchase warrant. Each whole warrant entitles the holder to purchase one subordinate voting share for a period of two years from the date of issuance at an exercise price of C$0.90 per subordinate voting share. Net proceeds from this transaction were $11,557 net of share issuance costs of $690.

Because of the Canadian dollar denominated exercise price, these warrants do not qualify to be classified within equity and are therefore classified as derivative liabilities at fair value with changes being reported through the statement of operations. On November 23, 2020, the warrants were valued using the Black Scholes option pricing model at $4,229 using the following assumptions: Share Price: C$0.94; Exercise Price: C$0.90; Expected Life: 2 years; Annualized Volatility: 87.73%; Dividend yield: 0.00%; Discount Rate: 0.16%; C$ Exchange Rate:1.31.

On June 30, 2022, the warrants were revalued using the Black Scholes option pricing model, using the following assumptions: Share Price: C$0.71; Expected Life: 0.4 years; Annualized Volatility: 61.40%; Dividend yield: 0.00%; Discount Rate: 2.51%; C$ Exchange Rate: 1.29. The decrease in the value of the derivative liability of $3,074 is reflected in the statement of operations as a $3,074 gain on the change in fair value of the derivative liability.