| Note 19. SENIOR SECURED CONVERTIBLE CREDIT FACILITY | 19. SENIOR SECURED
CONVERTIBLE CREDIT FACILITY As of June 26, 2021 and June 27, 2020, senior secured
convertible credit facility consists of the following:
Tranche 2021 2020
Senior secured convertible notes dated April 23, 2019, issued to accredited investors, which mature on April 23, 2022 and bear interest at LIBOR plus 6.0% per annum. 1A $ 21,112,530 $ 21,660,583
Senior secured convertible notes dated May 22, 2019, issued to accredited investors, which mature on April 23, 2022 and bear interest at LIBOR plus 6.0% per annum. 1B 91,185,378 86,053,316
Senior secured convertible notes dated July 12, 2019, issued to accredited investors, which mature on April 23, 2022 and bear interest at LIBOR plus 6.0% per annum. 2 29,580,445 26,570,948
Senior secured convertible notes dated November 27, 2019, issued to accredited investors, which mature on April 23, 2022 and bear interest at LIBOR plus 6.0% per annum. 3 11,454,144 10,288,815
Senior secured convertible notes dated March 27, 2020, issued to accredited investors, which mature on April 23, 2022 and bear interest at LIBOR plus 6.0% per annum. 4 13,496,906 12,500,000
Amendment fee converted to senior secured convertible notes dated October 29, 2019, which mature on April 23, 2022 and bear interest at LIBOR plus 6.0% per annum. - 21,623,561 19,423,593
Senior secured convertible notes dated April 24, 2020, issued to accredited investors, which mature on April 23, 2022 and bear interest at LIBOR plus 6.0% per annum. IA-1 3,027,003 2,734,282
Senior secured convertible notes dated September 14, 2020, issued to accredited investors, which mature on April 23, 2022 and bear interest at LIBOR plus 6.0% per annum. IA-2 5,847,933 -
Restatement fee issued in senior secured convertible notes dated March 27, 2020, which mature on April 23, 2022 and bear interest at LIBOR plus 6.0% per annum. - 9,104,665 8,199,863
Second restatement fee issued in senior secured convertible notes dated July 2, 2020, which mature on April 23, 2022 and bear interest at LIBOR plus 6.0% per annum. - 2,021,984 -
Third restatement fee issued in senior secured convertible notes dated January 11, 2021, which mature on April 23, 2022 and bear interest at LIBOR plus 6.0% per annum. - 11,372,828 -
Total Drawn on Senior Secured Convertible Credit Facility 219,827,377 187,431,400
Less Unamortized Debt Discount (49,005,984 ) (21,062,937 )
Senior Secured Convertible Credit Facility, Net $ 170,821,393 $ 166,368,463 A reconciliation of the beginning and ending balances
of senior secured convertible credit facility for the years ended June 26, 2021 and June 27, 2020 is as follows:
Tranche 1 Tranche 2 Tranche 3 Tranche 4 Incremental Advance - 1 Incremental Advance - 2 3rd Advance Amendment Restatement Fee Notes 2nd Restatement Fee Notes TOTAL
Balance as of June 29, 2019 $ 86,855,415 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 86,855,415
Cash Additions - 25,000,000 10,000,000 12,500,000 2,734,282 - - - - - 50,234,282
Fees Capitalized to Debt Related to Debt Modifications - - - - - - - 18,750,000 8,199,863 - 26,949,863
Paid-In-Kind Interest Capitalized 7,713,899 1,570,948 288,815 - - - - 673,593 - - 10,247,255
Equity Component of Debt - New and Amended 6,942,719 (1,137,637 ) (172,786 ) (11,552,806 ) (609,060 ) - - (511,900 ) (1,245,676 ) - (8,287,146 )
Cash Paid for Debt Issuance Costs - (482,998 ) (641,689 ) (673,435 ) - - - - - - (1,798,122 )
Amortization of Debt Discounts 1,321,414 402,374 206,093 12,932 43,318 - - 52,907 127,878 - 2,166,916
Balance as of June 27, 2020 $ 102,833,447 $ 25,352,687 $ 9,680,433 $ 286,691 $ 2,168,540 $ - $ - $ 18,964,600 $ 7,082,065 $ - $ 166,368,463
Cash Additions - - - - - 5,420,564 10,937,127 - - - 16,357,691
Repayments (8,000,000 ) - - - - - - - - - (8,000,000 )
Principal Reallocation 585,058 (3,276 ) (1,277 ) (404,451 ) (340 ) (589 ) - (2,395 ) (24,084 ) (148,646 ) -
Fees Capitalized to Debt Related to Debt Modifications - - - - - (468,564 ) (937,127 ) - - - (1,405,691 )
Paid-In-Kind Interest Capitalized 11,925,650 3,012,776 1,166,607 1,401,357 290,061 427,165 435,701 2,202,363 928,886 170,630 21,961,196
Net Effect on Debt from Extinguishment 4,812,996 962,750 497,175 2,167,870 (453,979 ) - - 455,792 630,758 2,000,000 11,073,362
Equity Component Debt - New and Amended (23,562,662 ) (6,147,968 ) (2,480,673 ) (2,839,499 ) (1,296,844 ) (3,239,507 ) (7,694,405 ) (4,337,438 ) (4,551,977 ) - (56,150,973 )
Cash Paid for Debt Issuance Costs - - - - - (175,000 ) (200,000 ) - - - (375,000 )
Amortization of Debt Discounts 9,306,004 2,089,165 854,194 1,794,998 684,720 1,231,345 1,539,902 1,690,108 1,800,653 1,256 20,992,345
Balance as of June 26, 2021 $ 97,900,493 $ 25,266,134 $ 9,716,459 $ 2,406,966 $ 1,392,158 $ 3,195,414 $ 4,081,198 $ 18,973,030 $ 5,866,301 $ 2,023,240 $ 170,821,393 On March 22, 2019, the Company signed a binding term
sheet for a senior secured convertible credit facility (the “Convertible Facility”) of up to $250,000,000 from funds managed
by Gotham Green Partners (“GGP”), an investor in the global cannabis industry. The Company subsequently entered into a definitive
agreement on April 23, 2019 and closed on a portion of the initial funding tranche. The Convertible Facility will be accessed through
issuances to the lenders of convertible senior secured notes (“Notes”) co-issued by the Company and MM CAN, in an aggregate
amount of up to $250,000,000. See “ Note 29 – Subsequent Events” All Notes will have a maturity date of 36 months from
the Closing Date (the “Maturity Date”), with a 12-month extension feature available to the Company on certain conditions,
including payment of an extension fee of 1.0% of the principal amount under the outstanding Notes. All Notes will bear interest from their
date of issue at LIBOR plus 6.0% per annum. During the first 12 months, interest may be paid-in-kind (“PIK”) at the Company’s
option such that any amount of PIK interest will be added to the outstanding principal of the Notes. The Company shall have the right
after the first year, to prepay the outstanding principal amount of the Notes prior to maturity, in whole or in part, upon payment of
105% of the principal amount in the second year and 103% of the principal amount thereafter. The Notes (including all accrued interest and fees
thereon) will be convertible, at the option of the holder, into Subordinate Voting Shares at any time prior to the close of business on
the last business day immediately preceding the Maturity Date. The conversion price for each tranche of Notes is determined based upon
a predefined formula as defined in the agreement immediately prior to funding of each tranche. The Company may force the conversion of up to 75%
of the then outstanding Notes if the volume weighted average price (“VWAP”) of the Subordinate Voting Shares (converted to
U.S. dollars) is at least $8.00 for any 20 consecutive trading day period, at a conversion price per Subordinate Voting Share equal to
$8.00. If 75% of the then outstanding Notes are converted by the Company, the term of the remaining 25% of the then outstanding Notes
will be extended by 12 months (if such extended period is longer than the maturity date of such Notes), subject to an outside date of
48 months from the Closing Date. Upon issuance of Notes pursuant to any tranche, the
lenders will be issued share purchase warrants of the Company (“Warrants”), each of which would be exercisable to purchase
one Subordinate Voting Share for 36 months from the date of issue. The number of Warrants to be issued will represent an approximate 50%
Warrant coverage for each tranche. The exercise prices for each tranche of Warrants are determined based upon a predefined formula as
defined in the agreement immediately prior to funding of each tranche. In connection with Tranche 1, the Company issued to
the lenders 10,086,066 Warrants with an exercise price per share equal to $3.72 and 42,913,752 Warrants with an exercise price per share
equal to $4.29. Under ASC 815, the conversion option and warrants were recorded as an equity instrument. As of June 29, 2019, the relative
fair value of the warrants with a value of $7,548,720 has been recorded to equity. In addition, the Company paid cash financing fees of
$2,276,757 and issued 1,748,251 Subordinate Voting Shares valued at an aggregate price of $3,979,119 using the trading share price of
the Company at the issuance date. The cash consideration and Subordinate Voting Shares issued were allocated between debt and equity. As additional consideration for the purchase of the
Notes, at the time of each Tranche closing, the lenders will be paid an advance fee of 1.5% of the principal amount of the Notes purchased
in such Tranche. While the Notes are outstanding, the lenders will be entitled to the collective rights (a) to nominate an individual
to the board of directors of the Company, and (b) to appoint a representative to attend all meetings of the board of directors in a non-voting
observer capacity. The Notes and the Warrants, and any Subordinate Voting Shares issuable as a result of a conversion of the Notes or
exercise of the Warrants, will be subject to a four-month hold period from the date of issuance of such Notes or such Warrants, as applicable,
in accordance with applicable Canadian securities laws. As of June 26, 2021 and June 27, 2020, the Company
has drawn down on a total of $165,000,000 and $150,000,000, respectively, on the Convertible Facility. Amendments to Senior Secured Convertible Credit
Facility On August 12, 2019, the Company amended certain provisions
of the Convertible Facility led by GGP (the “First Amendment”). The Company agreed to pay GGP 15% of the $125,000,000 drawn
down prior to entering into the amendment as an amendment fee, which was calculated at $18,750,000 and was subsequently converted into
convertible notes on October 29, 2019 at a conversion price of $1.28 per Class B Subordinate Voting Share (the “Amendment Fee Notes”).
The Amendment Fee Notes may be cancelled in the event that either: the obligations, excluding the amendment fee, are paid in full, whether
by prepayment or when due; or the lender elects to convert a portion of the obligations and the price per share is greater than $2.95.
Tranche 1 and Tranche 2 had been fully drawn down as of May 22, 2019 and July 12, 2019, respectively. The amount of funds available to
the Company in Tranche 3 and Tranche 4 was amended to $50,000,000 and $75,000,000, respectively. The aggregate amount available to be
borrowed remained the same. The new terms of the First Amendment were deemed to be substantial modifications under ASC Subtopic 470-50.
Accordingly, the Company recorded a loss on extinguishment of debt of $31,816,659. The loss was recorded as a component of loss on extinguishment
of debt in the Consolidated Statements of Operations for the fiscal year ended June 27, 2020. On October 29, 2019, the Company completed the second
amendment of the Convertible Facility with GGP (the “Second Amendment”) wherein certain reporting and financial covenants
were modified. The Amendment removed the senior debt to market capitalization ratio covenant. The conversion of any portion of the obligations
into shares is restricted until on or after October 29, 2020. As a result of the Second Amendment, the Company has the right to repay,
in whole or in part, the outstanding principal amount of the Note together with accrued and unpaid interest and fees, plus the applicable
premium which is five percent (5%) of the principal amount being repaid before the second anniversary of the date of issuance of each
convertible note, and three percent (3%) of the principal amount being repaid thereafter. The amount of available credit in the remaining
tranches was amended to $10,000,000 for Tranche 3 and $115,000,000 for Tranche 4, of which the full amount of Tranche 3 was funded on
November 27, 2019. The aggregate amount available to be borrowed remained the same. Further, the Second Amendment provided that the funding
of Tranche 4 will require the consent of both the Company and the lenders under the Convertible Facility. The new terms of the Second
Amendment do not qualify as a substantial modification under ASC Subtopic 470-50. On March 27, 2020, the Company amended and restated
the securities purchase agreement with GGP (the “Third Amendment”) wherein GGP committed to fund up to $150,000,000 through
Tranche 4 and subsequent tranches (each such subsequent tranche, an “Incremental Advance”) subject to the funding requirements
of the Company and certain other conditions. The maximum funding capacity under the Convertible Facility, as amended on March 27, 2020
is $285,000,000 of which $135,000,000 had been drawn down in prior tranches. The final $25,000,000 is subject to acceptance by the Company.
Certain financial covenants were also modified which include a reduction in the required go-forward minimum cash balance and the removal
of the fixed charge coverage ratio requirement that was to become effective in calendar 2021. The Third Amendment removed the accelerated
and forced conversion rights previously held by GGP under the agreement as amended on August 12, 2019. As part of the Third Amendment, the Company agreed
to pay GGP 10% of the existing Notes outstanding prior to Tranche 4, including paid-in-kind interest accrued
on such Notes (the “Existing Notes”), As additional consideration
for the purchase of the Tranche 4 Notes, the lenders participating in Tranche 4 Advance were paid an advance fee of 1.5% (the “Advance
Fee”) of the aggregate principal amount, or $187,500, which was withheld from the Tranche 4 funding amount. The 1.5% Advance Fee
will also be paid in respect of any Incremental Advances. Under the Amended and Restated SPA,
each Incremental Advance will be issued at a conversion price per Subordinate Voting Share equal to the five (5) day VWAP of the Subordinate
Voting Shares as of the trading day immediately preceding the date of completion of such Incremental Advance, subject to a minimum price
of $0.20 and maximum price of $0.40 (in respect of each Incremental Advance, a “Restatement Conversion Price”), provided that
the first Incremental Advance (the “Tranche 4 Advance”) will have a Restatement Conversion Price of $0.26. In addition, as
any Incremental Advances are funded, the conversion price of the relative portion of the Existing Notes will be amended to the Restatement
Conversion Price. In connection with each Incremental
Advance, the Company will also share purchase warrants of the Company (“Incremental Warrants”) representing 100% coverage
on the aggregate principal amount of such Incremental Advance, each of which will be exercisable to purchase one Subordinate Voting Share
for a period of five (5) years from the date of issuance, at an exercise price per Subordinate Voting Share equal to the Restatement Conversion
Price for such Incremental Advance. In addition, as any Incremental Advances are funded, the relative portion of the existing share purchase
warrants issued under the Convertible Facility and outstanding prior to Tranche 4 (the “Existing Warrants”) will be cancelled
and replaced by new share purchase warrants of the Company (the “ Replacement Warrants”), each of which will be exercisable
to purchase one Subordinate Voting Share for a period of five (5) years from the date of issuance at an exercise price equal to the Restatement
Conversion Price for such Incremental Advance. The Incremental Warrants, including the Tranche 4 Warrants, and the Replacement Warrants
will be exercisable on a cashless (net exercise) basis. In addition, if the Company’s retail operations achieve two (2) consecutive
three-month periods of positive after-tax free cash flow during any time prior to the expiry date for the Replacement Warrants, then all
outstanding Replacement Warrants will be automatically cancelled upon achieving the milestone. The principal amount
of the Existing Notes that will be repriced and the number of Existing Warrants that will be cancelled and replaced upon an Incremental
Advance will be based on the percentage that the amount of such Incremental Advance is of a total funding target of $100,000,000 (the
“Funding Target Percentage”). The applicable Existing Notes will be repriced to the Restatement Conversion Price for such
Incremental Advance. The Incremental Replacement Warrants issued as a part of such Incremental Advance will represent 50% coverage on
the amount determined by multiplying the Funding Target Percentage by $135,000,000. On July 2, 2020, the Company amended and restated
the securities purchase agreement with Gotham Green Partners (“GGP”) under the senior secured convertible credit facility
(the “Convertible Facility”) (the “Fourth Amendment”) wherein the minimum liquidity covenant was waived until
September 30, 2020 and resetting at $5,000,000 thereafter with incremental increases on March 31, 2021 and December 31, 2021. The payment-in-kind
feature on the Convertible Facility was also extended, such that 100% of the cash interest due prior to June 2021 will be paid-in-kind
and 50% of the cash interest due thereafter will be paid-in-kind. The Fourth Amendment released certain assets from its collateral to
allow greater flexibility to generate proceeds through the sale of non-core assets. The Fourth Amendment allows for immediate prepayment
of amounts under the Convertible Facility with a 5% prepayment penalty until 2nd anniversary of the Fourth Amendment and 3% prepayment
penalty thereafter. As part of the Fourth Amendment, holders of notes under the Convertible Facility were provided down-round protection
where issuances of equity interests (including securities that are convertible or exchangeable for equity interests) by the Company at
less than the higher of (i) lowest conversion price under the amended and restated notes of the Convertible Facility amendment dated March
27, 2020 and (ii) the highest conversion price determined for any incremental advances, will automatically adjust the conversion/exercise
price of the previous tranches and incremental tranche 4 warrants and the related replacement warrants to the price of the newly issued
equity interests. Certain issuances of equity interests are exempted such as issuances to existing lenders, equity interests in contemplation
at the time of Fourth Amendment and equity interests issued to employees, consultants, directors, advisors or other third parties, in
exchange for goods and services or compensation. Pursuant to ASU 2017-11, the down-round protection was not considered a derivative and
will be recognized when the down-round protection adjustments are triggered. As consideration for the amendment, the conversion
price for 52% of the tranches 1 through 3 and the first amendment fee notes outstanding under the Convertible Facility were amended to
$0.34 per share. An amendment fee of $2,000,000 was also paid through the issuance of additional notes at a conversion price of $0.28
per share. The Fourth Amendment to the Convertible Facility was deemed to be a substantial modification under ASC Subtopic 470-50 and
a loss on extinguishment of $10,129,655 was recorded in the Consolidated Statements of Operations for the year ended June 26, 2021. On September 14, 2020, the Company closed on an incremental
advance in the amount of $5,000,000 under its existing Convertible Facility with GGP at a conversion price of $0.20 per share. In connection
with the incremental advance, the Company issued 25,000,000 warrants with an exercise price of $0.20 per share. In addition, 1,080,255
existing warrants were cancelled and replaced with 16,875,001 warrants with an exercise price of $0.20 per share. Pursuant to the terms
of the Convertible Facility, the conversion price for 5.0% of the existing Notes outstanding prior to Tranche 4 and Incremental Advance
(including paid-in-kind interest accrued on such Notes), being 5.0% of an aggregate principal amount of $170,729,923, was amended to $0.20
per share. As consideration for the additional advance, the Company issued convertible notes as consideration for a $468,564 fee with
a conversion price of $0.20 per share. On September 16, 2020 and September 28, 2020, the
down round feature on the convertible notes and warrants issued in connection with Tranche 4, Incremental Advances and certain amendment
fees was triggered wherein the exercise price was adjusted to $0.17 and $0.15 per share, respectively. The value of the effect of the
down round feature on convertible notes and warrants was determined to be $32,744,770 and $6,723,954, respectively, for the year ended
June 26, 2021. The effect related to convertible notes was recognized as additional debt discount and an increase in additional paid-in-capital.
The effect related to warrants was recognized as a deemed distribution and an increase in additional paid-in capital. On November 1, 2020, the Company repaid $8,000,000
of borrowings under the Convertible Facility and recorded a loss $943,707 on the partial extinguishment of debt and is included in the
net effect on equity component of new and amended debt in the reconciliation of the beginning and ending balances of senior secured convertible
credit facility for the year ended June 26, 2021. On January 11, 2021, the Company amended and restated
the securities purchase agreement under the Convertible Facility (the “Fifth Amendment”) wherein the minimum liquidity covenant
was waived until June 30, 2021 and resetting at $7,500,000 effective on July 1, 2021 through December 31, 2021, and $15,000,000 thereafter,
and waiver of the minimum liquidity covenant if the Company is current on cash interest. Furthermore, covenants with regards to non-operating
leases, capital expenditures and corporate SG&A will now be tied to a board of directors approved budget. In conjunction with the
Fifth Amendment, the Company received an additional advance of $10,000,000 under its existing Convertible Facility with GGP with a conversion
price of $0.16 per share. The Company also issued 62,174,567 warrants exercisable for five years at a purchase price of $0.16 per share.
The notes, restatement fee notes and warrants are subject to down round adjustment provisions, with certain exceptions, if the Company
issues securities at a lower price. The Fifth Amendment to the Convertible Facility was not deemed to be a substantial modification under
ASC Subtopic 470-50 . As a result of the amendments during fiscal year ended
June 27, 2020, all convertible notes will have a maturity date of 36 months from April 23, 2019 (the “Maturity Date”), with
a twelve-month extension feature available to the Company on certain conditions, including payment of an extension fee of 1.0% of the
principal amount under the outstanding Convertible Facility, provided that if the Tranche 4 Notes and Funding Commitments reach at least
$100,000,000 in the aggregate, GGP will have certain options to extend the Maturity Date up to April 23, 2027. The Convertible Facility
will bear interest from their date of issue at LIBOR plus 6.0% per annum. During the first twelve months, interest may be paid-in-kind
(“PIK”) at the Company’s option such that any amount of PIK interest will be added to the outstanding principal of the
Convertible Facility. The Company shall have the right after the first year, to prepay the outstanding principal amount of the Convertible
Facility prior to maturity, in whole or in part, upon payment of 105% of the principal amount in the second year and 103% of the principal
amount thereafter. The Notes (including all accrued interest and fees thereon) will be convertible, at the option of the holder, into
Subordinate Voting Shares at any time prior to the close of business on the last business day immediately preceding the Maturity Date. On May 11, 2021, the Company entered into an agreement
letter (the “Letter”) with Gotham Green Partners (“GGP”). Pursuant to the Letter with GGP, the Company received
reprieve from certain potential non-compliance with certain covenants under the Fifth Amendment dated January 11, 2021, such as potential
non-compliance with certain reporting and notice requirements, pay certain liabilities when due, deliver control agreements for certain
bank accounts, obtain consent from the lenders prior to hiring certain executives, obtain consent from the lenders for certain matters
and related items. No amounts were paid by the Company for the Letter. The Company believes it will meet the amended covenants for the
following 12-month period and has classified the balance of the Convertible Facility as non-current in the Consolidated Balance Sheets.
Refer to “Note 2 – Summary of Significant Accounting Policies, Going Concern” “Note 29 – Subsequent Events”
Warrants Issued for the Senior Secured Convertible
Credit Facility Upon funding of Tranche 2 in the amount of $25,000,000
on July 12, 2019, the Company issued 2,967,708 and 857,336 warrants to the lenders at an exercise price of $3.16 and $3.65 per share,
respectively. Upon funding of Tranche 3 in the amount of $10,000,000 on November 27, 2019, the Company issued 3,708,772 and 1,071,421
warrants to the lenders at an exercise price of $1.01 and $1.17 per share, respectively. Upon funding of the Tranche 4 Advance in the amount
of $12,500,000 on March 27, 2020, the Company issued 48,076,923 Warrants with an exercise price of $0.26, representing 100% coverage of
the Tranche 4 Advance. Additionally, in accordance with the Third Amendment, the Company cancelled 2,700,628 of the 21,605,061 Existing
Warrants issued under Tranche 1, Tranche 2 and Tranche 3 and reissued 32,451,923 Replacement Warrants with an exercise price per share
equal to $0.26. Upon funding of the Tranche 4 Advance on March 27, 2020, the conversion price for $20,499,657 of the convertible notes,
representing 12.5% of each under Tranche 1, Tranche 2 and Tranche 3 was amended to $0.26 per Subordinate Voting Share. Upon funding of
the incremental advance in the amount of $2,500,000 on April 24, 2020, the Company issued 9,615,385 warrants with an exercise price of
$0.26. In addition, 540,128 Existing Warrants were cancelled and replaced with 6,490,385 warrants with an exercise price of $0.26 in accordance
with the Third Amendment. Pursuant to the terms of the Convertible Facility,
the conversion price of $47,100,000 of the existing Notes outstanding prior to Tranche 4 and Incremental Advance (including paid-in-kind
interest accrued on such Notes), of an aggregate principal amount of $168,100,000, was amended to $0.17 per share, of which $16,800,000
of the Notes outstanding will continue to be subject to down round adjustment provisions. In addition, the Company cancelled an aggregate
of 2,160,507 warrants that were issued with such notes and, in exchange, issued 41,967,832 warrants with an exercise price of $0.16 per
share. In connection with the Fifth Amendment, the Company issued convertible notes as consideration for a $937,127 fee with a conversion
price of $0.16 per share. On April 21, 2021, the Company cancelled existing
warrants issued to Gotham Green Partners pursuant to the Fifth Amendment of the Senior Secured Credit Facility. The following warrants
were immediately and automatically cancelled in the amounts of 32,451,923, 6,490,385, 16,875,000 and 41,967,832 which were exercisable
at $0.26, $0.26, $0.20 and $0.16, respectively. Warrants issued pursuant to the Third Amendment may
be exercised at the election of their holders on a cashless basis. All Existing and Replacement Warrants issued in connection with the
Convertible Facility met the scope exception under ASC 815 and classified as equity instruments. The warrants are measured at fair value
and recorded as a debt discount in connection with the Convertible Facility. See “Note 21 – Share-Based Compensation” While the Notes are outstanding, the lenders will
be entitled to the collective rights to (a) nominate an individual to the Board of Directors of the Company, and (b) appoint a representative
to attend all meetings of the Board of Directors in a non-voting observer capacity. Pursuant to the Side Letter executed on October 29,
2019 in conjunction with the Amendment, GGP has the right to nominate a majority of the Company’s Board of Directors while the aggregate
principal amount outstanding under the Notes being more than $25,000,000. The Notes are secured by substantially all assets of the Company. The Notes and the Warrants, and any Subordinate Voting
Shares issuable as a result of a conversion of the Notes or exercise of the Warrants, will be subject to a four-month hold period from
the date of issuance of such Notes or such Warrants, as applicable, in accordance with applicable Canadian securities laws. Closing of
any tranche of the Convertible Facility subsequent to Tranche 1 is subject to certain conditions being satisfied including, but not limited
to, there is no event of default, reconfirmation of representations and warranties and compliance with applicable covenants and agreements. |
