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Convertible notes receivable | 12 Months Ended
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May 31, 2022
Convertible Notes Receivable [Abstract] |
Convertible notes receivable |
11. | Convertible notes receivable
During the year ended May 31, 2022, the Company issued 9,817,061 shares valued at $117,804 in exchange for 68% in Superhero Acquisition LP ("SH Acquisition"), the non-controlling interest shareholders contributed cash for the remaining 32% interest in SH Acquisition. All proceeds were used to purchase convertible notes with a face value of $165,799 (2021 - $nil) of MedMen Enterprises Inc. (“MedMen”) The unrealized loss on convertible notes receivable recognized in other comprehensive income amounts to $71,428 and $3,824 for the years ended May 31, 2022 and 2021 respectively. During the year ended May 31, 2022, and 2021 the Company received total proceeds of $948 and $1,251 respectively from sales of available-for-sale securities and gain (loss) of $nil, and $5,277 respectively was reclassified out of accumulated other comprehensive income into earnings. The fair value of the MedMen note was determined using the Black-Scholes option pricing model using the following assumptions: the risk-free rate of 1.43%; expected life of the convertible note; volatility of 70% based on comparable companies; forfeiture rate of nil; dividend yield of nil; probability of legalization between 0% and 60%; and, the exercise price of the respective conversion feature. Convertible notes receivable is comprised of the following investments:
|  | May 31, 2022 |  |  | May 31, 2021 |
10330698 Canada Ltd. (d/b/a Starbuds) |  | $ | — |  |  | $ | 828 |
High Tide Inc. |  |  | — |  |  |  | 1,657 |
MedMen Enterprises Inc. |  |  | 111,200 |  |  |  | — |
Total convertible notes receivable |  |  | 111,200 |  |  |  | 2,485 |
Deduct - current portion |  |  | — |  |  |  | (2,485 | )
Total convertible notes receivable, non current portion |  |  | 111,200 |  |  |  | — |
10330698 Canada Ltd. (d/b/a Starbuds) On December 28, 2018, Aphria purchased C$5,000 in secured convertible debentures of Starbuds. The convertible debentures bear interest at 8.5% per annum accruing daily due until maturity on December 28, 2020. The debentures are secured against the assets of Starbuds. The debentures and any accrued and unpaid interest are convertible into common shares for C$0.50 per common share and matured on December 28, 2020. Starbuds is currently in default under the convertible debentures. As at May 31, 2022, the fair value of the Company’s secured convertible debentures was $nil (May 31, 2021 - $828 (C$1,000)), which includes $nil (May 31, 2021 - $385 (C$465)) of accrued interest. High Tide Inc. On April 10, 2019, Aphria purchased C$4,500 in unsecured convertible debentures of High Tide Inc. (“High Tide”). The convertible debentures bear interest at 10% per annum, payable annually up front in common shares of High Tide based on the 10-day volume weighted average price (the “Debentures”). The Debentures matured on April 10, 2021. In addition to the Debentures, the Company received 6,000,000 warrants in High Tide as part of the purchase of the unsecured convertible debentures. Upon maturity, the Company received C$2,500 and agreed to extend the maturity date on C$2,000 of the convertible notes, which were settled during the year. MedMen Enterprises Inc. (“MedMen”) On August 31, 2021, the Company issued 9,817,061 share to acquire 68% interest in Superhero Acquisition L.P. (“SH Acquisition”), which purchased senior secured convertible debentures together with certain associated warrants to acquire Class B subordinate voting shares of MedMen in the principal amount of $165,799. The convertible debentures bear interest at LIBOR plus 6%, with a LIBOR floor of 2.5% and, any accrued interest is added to the outstanding debenture amount, and is to be paid at maturity of the secured convertible debenture. SH Acquisition was also granted “top-up” rights enabling it (and its limited partners) to maintain its percentage ownership (on an “as-converted” basis) in the event that MedMen issues equity securities upon conversion of convertible securities that may be issued by MedMen. The Company’s ability to convert the Notes and exercise the Warrants is dependent upon U.S. federal legalization of cannabis (a “Triggering Event”) or Tilray’s waiver of such requirement as well as any additional regulatory approvals. The debentures mature on August 17, 2028.

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- Definition Convertible notes receivable. + References No definition available. + Details
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- Definition The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -URI https://asc.fasb.org/subtopic&trid=2196772 + Details
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