What changed in this filing

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Item 1. Business

2021-03-30 compared with 2020-04-14 · 296 added, 178 removed, 68 unchanged (87% of the section changed)

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(“Target Group”

or “the

Company”) was incorporated in the State of Delaware on July 2, 2013, under our original name of River Run Acquisition Corporation.

On May 5, 2014, we issued 500,000 shares of common stock to Rubin Schindermann and 500,000 shares of Common Stock to Alexander

With the issuance of these shares and the redemption of 19,500,000 shares of common stock issued to our original officers,

directors and shareholders, we effected a change of control.

or “the Company”) was incorporated in the State of Delaware on July 2, 2013, under our original name of River

Run Acquisition Corporation.

On May 5, 2014, we issued 500,000 shares of common stock to Rubin Schindermann and 500,000 shares

of Common Stock to Alexander Starr.

With the issuance of these shares and the redemption of 19,500,000 shares of common stock issued

to our original officers, directors and shareholders, we effected a change of control.

Schindermann and Mr.

Starr became our new officers and directors.

became our new officers and directors.

They accepted the resignations of our original founding officers and directors.

Effective May 13, 2014, the Company changed its

name to Chess Supersite Corporation.

On July 23, 2014, we acquired certain assets (“Acquisition”)

of Chess Supersite, Inc., a corporation existing under the laws of Ontario, Canada (“Chess Canada”).

The Acquisition

was consummated pursuant to the terms of the Asset Purchase Agreement and the issuance of 5,000,000 shares of our common stock

to Chess Canada.

In the Acquisition, we acquired all right, title and interest in and to the properties, assets, interests and

rights of Chess Canada, including the contracts and intellectual property which are related to the business of developing, operating

and maintaining a website focused on the game of chess.

May 13, 2014, the Company changed its name to Chess Supersite Corporation.

On July 23, 2014, we acquired certain

assets (“Acquisition”) of Chess Supersite, Inc., a corporation existing under the laws of Ontario, Canada (“Chess

Canada”).

The Acquisition was consummated pursuant to the terms of the Asset Purchase Agreement and the issuance of 5,000,000

shares of our common stock to Chess Canada.

In the Acquisition, we acquired all right, title and interest in and to the properties,

assets, interests and rights of Chess Canada, including the contracts and intellectual property which are related to the business

of developing, operating and maintaining a website focused on the game of chess.

Chess Supersite, Inc.

is under the common control of Rubin Schindermann

and Alexander Starr.

Our original business comprised the operation of an

extensive chess gaming website under the name ChessStars™.

is under the common

control of Rubin Schindermann and Alexander Starr.

Our original business comprised the operation

of an extensive chess gaming website under the name ChessStars™.

This comprehensive user-friendly web site www.chessstars.com ,

offered a state-of-the-art playing zone, broadcasts of the major tournaments, intuitive mega database, chess skilled contests and

On July 3, 2018, we filed an amendment in our Certificate

of Incorporation to change our name to Target Group Inc.

Effective October 18, 2018, our common stock became eligible for quotation

on the OTCQB platform operated by OTC Markets Group Inc, under the symbol “CBDY”.

Effective December 12, 2018, our Board of Directors

approved the termination of our ChessStars™

online chess playing platform effective December 31, 2018.

We will seek to sell

all of the assets that comprise the ChessStars™

to a third-party buyer at the best possible price.

On July 3, 2018, we filed an amendment

in our Certificate of Incorporation to change our name to Target Group Inc.

Effective October 18, 2018, our common stock became

eligible for quotation on the OTCQB platform operated by OTC Markets Group Inc, under the symbol “CBDY”.

Effective December 12, 2018, our

Board of Directors approved the termination of our ChessStars™

online chess playing platform effective

December 31, 2018.

Effective December 7, 2020, we sold the ChessStars™

business to a former director,

Alexander Starr in consideration of Starr’s cancellation of the $60,000 debt owing to him by us.

During the second quarter of 2020, the

global spread of Coronavirus (COVID-19) continued to have a significant impact on the Canadian and global economy and customer

purchasing behavior, while equity markets remained volatile.

However, these factors have not impacted the Company’s operations,

financial results for the year.

Cannabis Business-Canada

We are now engaged in the cultivation, processing and

distribution of curated cannabis products for the adult-use medical and recreational cannabis market in Canada and, where legalized

by state legislation, in the United States.

We believe that there is a shift in the public’s perception of cannabis from

a state of prohibition to a state of legalization.

In October 2018, Canada became the first major industrialized nation to legalize

adult-use cannabis at the national federal level.

We are now engaged in the cultivation,

processing and distribution of curated cannabis products for the adult-use medical and recreational cannabis market in Canada and,

where legalized by state legislation, in the United States.

We believe that there is a shift in the public’s perception of

cannabis from a state of prohibition to a state of legalization.

In October 2018, Canada became the first major industrialized

nation to legalize adult-use cannabis at the national federal level.

Cannabis is still heavily regulated.

However, the medical use of cannabis is

now permitted in up to 29 countries and many more countries have reformed, or are considering reforming, their cannabis uses laws

to include the recreational use of cannabis.

However, the medical

use of cannabis is now permitted in up to 29 countries and many more countries have reformed, or are considering reforming, their

cannabis uses laws to include the recreational use of cannabis.

In the 2016 publication by Deloitte, Insights

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Health Canada projects the Canadian cannabis market will reach CDN$1.3 billion in annual value by

We intend to position ourselves with a core emphasis

on co-packaging services to accommodate all consumer-packaged goods required for the sophisticated cannabis market in Canada and

internationally.

We intend to position ourselves with a

core emphasis on co-packaging services to accommodate all consumer-packaged goods required for the sophisticated cannabis market

in Canada and internationally.

This will integrate cannabinoid research, analytical testing, product development and manufacturing.

Our product manufacturing will include, but will not

be limited to the following:

Our product manufacturing will include,

but will not be limited to the following:

Cannabis flower pods for vaporizer use

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Infused topical products and CBD wellness products.

Recent Acquisitions

To take advantage of the opportunity resulting from

the legalization of adult-use cannabis in Canada, we completed several strategic acquisitions and entered into several significant

To take advantage of the opportunity resulting

from the legalization of adult-use cannabis in Canada, we completed several strategic acquisitions and entered into several significant

agreements as follows:

Visava Inc./Canary Rx Inc.

On June 27, 2018, the Company entered into an Agreement

and Plan of Share Exchange (“Exchange Agreement”) with Visava Inc., a private Ontario, Canada corporation (“Visava”).

Visava owns 100% of Canary Rx Inc , (“Canary”), a Canadian corporation that operates a 44,000 square foot facility

located in Ontario’s Garden Norfolk County for the production of cannabis.

Canary is a late stage Canadian licensed cannabis

producer under Health Canada’s Cannabis Act (“Bill C-45”).

Canary expects to produce at least 3,600,000 grams

of cannabis per year, beginning in the third quarter of 2020.

Pursuant to the Exchange Agreement, the Company issued

to the Visava shareholders an aggregate of 25,500,000 shares of the Company’s Common Stock in exchange for all of the issued

and outstanding common stock held by the Visava shareholders.

In addition of its Common Stock, the Company issued to the Visava

shareholders, prorata Common Stock Purchase Warrants to purchase an aggregate of 25,000,000 shares of the Company’s Common

Stock at a price per share of $0.10 for a period of two years following the issuance date of the Warrants.

The transactions contemplated

by the Exchange Agreement closed effective August 2, 2018.

Visava will continue its business operations as a first-tier wholly-owned

subsidiary of the Company with Canary operating as our second-tier subsidiary.

Effective December 6, 2018, the Company and Canary

entered into a Distribution, Collaboration and Licensing Agreement (“Agreement”) with Serious Seeds B.V.

(“Serious

Seeds”) , incorporated in the Netherlands, and Simon Smit (“Smit”) , President of Serious Seeds.

the Agreement, Canary was appointed the exclusive distributor in Canada and all other legal markets globally of Serious’

On June 27, 2018, the Company entered

into an Agreement and Plan of Share Exchange (“Exchange Agreement”) with Visava Inc., a private Ontario, Canada corporation

(“Visava”).

Visava owns 100% of Canary Rx Inc , (“Canary”), a Canadian corporation that operates

a 44,000 square foot facility located in Ontario’s Garden Norfolk County for the production of cannabis.

Canary is a Canadian

Licensed Producer under Health Canada’s Cannabis Act (“Bill C-45”).

Canary expects to grow up to 4.5 million

grams of cannabis annually out of its Simcoe facility once it is at full capacity.

The company is now growing premium cannabis

in 5 of its 8 indoor grow rooms with the intent of bringing the remaining 3 rooms online in short order.

Each 2,200 square feet.

room gets up to 5.4 turns annually.

Pursuant to the Exchange Agreement, the

Company issued to the Visava shareholders an aggregate of 25,500,000 shares of the Company’s Common Stock in exchange for

all of the issued and outstanding common stock held by the Visava shareholders.

In addition of its Common Stock, the Company issued

to the Visava shareholders, prorata Common Stock Purchase Warrants to purchase an aggregate of 25,000,000 shares of the Company’s

Common Stock at a price per share of $0.10 for a period of two years following the issuance date of the Warrants.

The transactions

contemplated by the Exchange Agreement closed effective August 2, 2018.

Visava will continue its business operations as a

first-tier wholly-owned subsidiary of the Company with Canary operating as our second-tier subsidiary.

During the quarter ended,

September 30, 2020, all of the warrants expired, none were exercised.

CannaKorp Inc.

Pursuant to the terms of an Agreement and

Plan of Share Exchange dated January 25, 2019 (“Exchange Agreement”) , on March 1, 2019 we completed

the acquisition of Massachusetts –based CannaKorp Inc., a Delaware corporation (“CannaKorp”).

has developed a single-use pre-measured pod and vaporizer system for consumers interested in vaporizing natural herbs, including

The patent-pending system is known as The Wisp™

and Wisp Pods™.

The Wisp™

vaporizer system extracts

the medically beneficial compounds more efficiently while simultaneously offering a much safer and enjoyable experience than other

alternatives.

Under the terms of the Exchange Agreement,

we issued 30,407,712 shares of our common stock to the exchanging CannaKorp shareholders in exchange for 99.8% of the outstanding

common stock held by the CannaKorp shareholders.

CannaKorp will continue to operate as our subsidiary.

Serious Seeds B.V.

Effective December 6, 2018, the Company

and Canary entered into a Distribution, Collaboration and Licensing Agreement (“Agreement”) with Serious Seeds B.V.

(“Serious Seeds”), incorporated in the Netherlands, and Simon Smit (“Smit”), President of Serious Seeds.

Under the Agreement, Canary was appointed the exclusive distributor in Canada and all other legal markets globally of Serious’

proprietary cannabis seed strains and Serious’

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property related to the Collaborative Products.

Under the Agreement, Smit has granted Canary an exclusive

license in Canada and all legal markets globally to Serious’

intellectual property including the right to use the service

mark of Serious Seeds and all of the names of Serious’

proprietary cannabis seed strains including but not limited to Chronic,

AK-47, White Russian, Bubble Gum, Kali Mist, Warlock, Double Dutch, Biddy, Early, Motavation and Strawberry-AKeil.

The initial term of the Agreement will be five (5) years and

will be automatically renewed for consecutive five (5) terms subject to rights of termination upon one hundred and eighty (180)

days prior notice.

In consideration of the intellectual property rights granted by Smit to Canary, the Company will issue to Smit

250,000 shares of the Company’s common stock.

In addition, beginning on the 13 th month following the effective

date of the Agreement and continuing through the sixtieth month of the initial term, the Company will issue to Smit each month

5,208 shares of common stock and warrants to purchase 200,000 shares of Target common stock at $0.15 per share.

In addition, Smit

will be issued warrants in each of the foregoing months to purchase 16,667 shares of Target common stock at varying exercise prices

ranging from $0.20 to $0.35 per share.

All of the warrants must be exercised on or before the two (2) year anniversary date of

each of the warrant issuance dates.

In consideration of Canary Rx’s

appointment as Serious’

exclusive distributor in Canada, Canary Rx will pay Serious certain royalties as follows:

Under the Agreement, Smit has granted Canary

an exclusive license in Canada and all legal markets globally to Serious’

intellectual property including the right to use

the service mark of Serious Seeds and all of the names of Serious’

proprietary cannabis seed strains including but not limited

to Chronic, AK-47, White Russian, Bubble Gum, Kali Mist, Warlock, Double Dutch, Biddy, Early, Motavation and Strawberry-AKeil.

The initial term of the Agreement will be five (5) years and will be automatically renewed for consecutive five (5) terms subject to rights

of termination upon one hundred and eighty (180) days prior notice.

In consideration of the intellectual property rights granted by Smit

to Canary, the Company will issue to Smit 250,000 shares of the Company’s common stock on the effective date of the Agreement.

addition, on the thirteenth (13) month following the effective date of the Agreement of the initial term, the Company will issue to Smit

5,208 shares of common stock and warrants to purchase 200,000 shares of Target common stock at an exercise price of $0.15 per share.

from the fourteenth (14) month following the effective date of the Agreement and continuing through the sixtieth (60) month of the initial

term, the Company will issue Smit 5,208 shares of common stock and warrants to purchase 16,667 shares of Target common stock, each month,

at varying exercise prices ranging from $0.20 to $0.35 per share.

All of the above warrants must be exercised on or before the two (2)

year anniversary date of each of the warrant issuance dates.

In consideration of Canary’s appointment

as Serious’

exclusive distributor in Canada, Canary will pay Serious certain royalties as follows:

2.00% of gross sales

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3.00% of gross sales

On October 8, 2019, Canary was granted licenses

to cultivate, process and sell cannabis pursuant to the Cannabis Act (Bill C-45).

These Standard Licenses enable Canary

to produce approximately 3,600kg of dried cannabis flower per year.

Canary has curated a bank of 3,500 seeds, comprised of more

than 125 strains, including the entire Serious Seeds collection.

The Company has the capacity to grow 8 different strains at a

time, within the facility’s 8 separate flower rooms.

On October 8, 2019, Canary was

granted licenses to cultivate, process and sell cannabis pursuant to the Cannabis Act (Bill C-45).

These Standard Licenses

enable Canary to produce approximately 3,600kg of dried cannabis flower per year.

Canary has curated a bank of 3,500 seeds, comprised

of more than 125 strains, including the entire Serious Seeds collection.

The Company has the capacity to grow 8 different strains

at a time, within the facility’s 8 indoor separate flower rooms.

Cannavolve Inc.

Sales Agency Agreement

Effective December 13, 2018, the Company appointed

Cannavolve Inc., an Ontario, Canada corporation based in Toronto (Cannavolve”) , under the terms of a Licensed

Producer/Licensed Processor Sales Agency Agreement (“Agency Agreement”) , as the Company’s exclusive agent

in Canada to market and sell the CannaKorp Wisp™

Effective December 13, 2018, the Company

appointed Cannavolve Inc., an Ontario, Canada corporation based in Toronto (“Cannavolve”) , under the

terms of a Licensed Producer/Licensed Processor Sales Agency Agreement (“Agency Agreement”) , as the Company’s

exclusive agent in Canada to market and sell the CannaKorp Wisp™

vaporizer, the Serious Seeds™

products and Canary branded cannabis

in the recreational cannabis markets ( collectively the “Products).

Cannavolve is an independent recreational

cannabis sales and marketing Company established to represent licensed producers and licensed processors in Canada of cannabis

and cannabis accessories.

products and Canary

branded cannabis in the recreational cannabis markets ( collectively the “Products”).

Cannavolve is an

independent recreational cannabis sales and marketing Company established to represent licensed producers and licensed processors

in Canada of cannabis and cannabis accessories.

Cannavolve operates in Canada with offices in Halifax, Montreal, Calgary and Vancouver.

Under the Agency Agreement, Cannavolve will be paid

a commission of 6% of net sales based on the wholesale prices of the Products.

The initial term of the Agency Agreement is two

(2) years from December 13, 2018 subject to a renewal term of two (2) additional years.

In addition to customary termination provisions

based upon the material default of either the Company or Cannavolve, we can terminate the Agency Agreement without cause upon ninety

(90) days prior written notice.

CannaKorp Inc.

Pursuant to the terms of an Agreement and Plan of Share

Exchange dated January 25, 2019 (“Exchange Agreement”) , on March 1, 2019 we completed the acquisition of Massachusetts

–based CannaKorp Inc., a Delaware corporation (“CannaKorp”).

CannaKorp has developed a single-use pre-measured

pod and vaporizer system for consumers interested in vaporizing natural herbs, including cannabis.

The patent-pending system is

known as The Wisp™

and Wisp Pods™.

The Wisp™

vaporizer system extracts the medically beneficial compounds more

efficiently while simultaneously offering a much safer and enjoyable experience than other alternatives.

Under the terms of the Exchange Agreement, we issued

30,407,712 shares of our common stock to the exchanging CannaKorp shareholders in exchange for 99.8% of the outstanding

common stock held by the CannaKorp shareholders.

CannaKorp will continue to operate as our subsidiary.

Exclusive License Agreement

Effective August 8, 2019, the Company entered into

an Exclusive License Agreement (“License Agreement”) with cGreen, Inc., a Delaware corporation (“cGreen”).

The License Agreement grants to the Company an exclusive license to manufacture, and distribute the patent-pending THC antidote

True Focus™

Under the Agency Agreement, Cannavolve will be paid a commission of

6% of net sales based on the wholesale prices of the Products.

The initial term of the Agency Agreement is two (2) years from December 13,

2018 subject to a renewal term of two (2) additional years.

In addition to customary termination provisions based upon the material

default of either the Company or Cannavolve, we can terminate the Agency Agreement without cause upon ninety (90) days prior written notice.

The agreement was renewed on December 13, 2020 for additional two (2) years.

Exclusive License

Effective August 8, 2019, the Company

entered into an Exclusive License Agreement (“License Agreement”) with cGreen, Inc., a Delaware corporation (“cGreen”).

The License Agreement granted the Company an exclusive license to manufacture and distribute the patent-pending THC antidote True

in the United States, Europe and the Caribbean.

The term of the license is ten (10) years and four (4) months

The term of the license was ten (10) years and four (4) months

from the effective date of August 8, 2019.

In consideration of the license, the Company will issue 10,000,000 shares of its common

stock as follows:

In consideration of the license, the Company had to issue 10,000,000 shares of

its common stock as follows:

(i) 3.500,000 within ten (10) days of the effective date;

(ii) 3,500,000 shares on January 10, 2020;

3,000,000 shares not later than June 10, 2020.

In addition, the Company will pay cGreen royalties of 7% of the net sales of the

licensed products and 7% of all sublicensing revenues collected by the Company.

The Company will pay cGreen an advance royalty

of $300,000.00 within ten (10) days of the effective date;

$300,000.00 on January 10, 2020;

and $400,000.00 on or before June 10,

2020 and $500,000 on or before November 10, 2020.

All advance royalty payments will be credited against the royalties owed by the

Company through December 31, 2020.

As of the date of the report, the initial

payment of royalty payable of $308,140 has been paid during the year ended December 31, 2019 while the remaining in the amount

of $1,191,860 is recorded as royalty payable.

No shares have been issued to date, however, the first tranche of 3,500,000 shares,

in the amount of $260,050, have been recorded in shares to be issued as equity while the remaining 6,500,000 shares, in the amount

of $482,950, are have been recorded in shares to be issued as liability.

Additionally, the Company is arbitration

with cGreen for the above breaches as per License Agreement.

(ii) 3,500,000 shares on

January 10, 2020;

and (iii) 3,000,000 shares not later than June 10, 2020.

In addition, the Company would have to

pay cGreen royalties of 7% of the net sales of the licensed products and 7% of all sublicensing revenues collected by the Company.

The Company would pay cGreen an advance royalty of $300,000.00 within ten (10) days of the effective date;

$300,000.00 on

January 10, 2020;

and $400,000.00 on or before June 10, 2020 and $500,000 on or before November 10, 2020.

royalty payments would be credited against the royalties owed by the Company through December 31, 2020.

During the quarter ended December 31,

2019, the intangible asset was written off based on management’s review and evaluation of its recoverability.

During the quarter ended June 30,

2020, the Company was in arbitration with cGreen for the breaches of the terms of the License Agreement, however, through an early

mediation, both companies reached to a settlement agreement to settle the breaches of the contract on July 27, 2020 (“Effective

Date”).

As per the settlement agreement, the License Agreement has been terminated and the Company does not have to issue

the 10 million shares nor pay the outstanding royalty payable in the amount of $1,191,860.

As consideration, the Company paid $130,000

within 30 days of the Effective Date and will pay $100,000 in monthly installments of $10,000 commencing in April 2021 to

Nabis Holding Sales Agreement

Effective September 17, 2019, the Company’s subsidiary,

CannaKorp Inc.

(“CannaKorp”), entered into a Purchase, Licensing and Distribution Agreement (“Agreement”)

with Nabis Arizona Property LLC of Scottsdale, Arizona (“Nabis”) concerning the distribution of CannaKorp’s

Effective September 17, 2019, CannaKorp

entered into a Purchase, Licensing and Distribution Agreement (“Agreement”) with Nabis Arizona Property LLC

of Scottsdale, Arizona (“Nabis”) concerning the distribution of CannaKorp’s Wisp ™

Vaporizer and Wisp™

Pods in Arizona.

The term of the Agreement is three (3) years with automatic

renewals for additional one-year periods unless the Agreement is terminated pursuant to its terms.

The term of the Agreement is three (3) years with automatic renewals

for additional one-year periods unless the Agreement is terminated pursuant to its terms.

Nabis is required to pay CannaKorp $45,000

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the effective date of the Agreement.

Under the Agreement, Nabis is licensed to manufacture

the WISP™

Under the Agreement, Nabis is licensed

to manufacture the WISP™

Pods and to sell the WISP™

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Vaporizers and five thousand

(5,000) WISP™

Pods cartridges .

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Vaporizer and the WISP™

to end users in Arizona, excluding Amazon, eBay, Walmart or other multistate/national brick and mortar or online sales.

has granted Nabis a right of first refusal to obtain an exclusive license in Michigan and in Washington for the same rights granted

to Nabis in Arizona.

As of the date of this report, the equipment

to Nabis has been shipped and the 180 days mark has not passed.

Once when it does, we will invoice Nabis.

Additionally, the first

quarter of the Nabis agreement minimums were shipped and invoiced (200 Wisp Units and 5000 Pod Assemblies to enable Nabis to manufacture

Pods to end users in Arizona, excluding Amazon, eBay, Walmart or other multistate/national brick and mortar or online sales.

CannaKorp has granted Nabis a right of first refusal to obtain an exclusive license in Michigan and in Washington for the same

rights granted to Nabis in Arizona.

During the year ended December 31,

2020, the equipment to Nabis has been shipped and the Company has provided Nabis an additional 360 days before invoicing Nabis

for the equipment.

Once when the additional period has passed, the Company will invoice Nabis.

Additionally, the first quarter

of the Nabis agreement minimums were shipped and invoiced (200 Wisp Units and 5000 Pod Assemblies to enable Nabis to manufacture

5000 complete Wisp Pods) for online and retail distribution in the Arizona Market.

Nabis has had delays in rolling out all the

products for which they have exclusive licenses with, and we expect their next order will likely be in the next 45 to 60 days.

Due to financial strain and difficulties

during the pandemic Nabis was forced to restructure their company in its entirety.

This has caused strain on the financial position

of Nabis and has affected their ability to fulfill their commitments in the agreement signed with CannaKorp.

At this time, the

partnership has since been terminated and all of CannaKorp’s CannaMatic machinery has now been sent back to CannaKorp.

As of the date of this report, the Company does not have any operations, employees or corporate offices based in United States.

Joint Venture Agreement

Effective May 14, 2020, Canary entered

into a Joint Venture Agreement (“Joint Venture”) with 9258159 Canada Inc., a corporation organized under the laws of

the Province of Ontario, Canada (referred to as “Thrive Cannabis”) and 2755757 Ontario Inc., a corporation organized

under the laws of the Province of Ontario, Canada (referred to as “JVCo”).

Canary and Thrive Cannabis each hold 50%

of the voting equity interest in JVC.

The term of the Joint Venture is five (5) years from its effective date of May 14,

Under the Joint Venture, JVCo is permitted

to use a portion, consisting of seven (7) rooms of Canary’s licensed cannabis cultivation facilities located in Simcoe,

Ontario, Canada ("Licensed Site Portion”) for the purpose of operating and managing the Licensed Site Portion for the

cultivation and process of cannabis pursuant to Canary’s license issued by Health Canada.

During the term of the Joint Venture,

JVCo will be responsible for the administration, operation and management of the Licensed Site Portion and all proceeds from the

sale of the cannabis and related cannabis products cultivated therein will be payable to the JVCo.

In addition, Canary, Thrive Cannabis, and

JVCo entered into a Unanimous Shareholder Agreement dated May 14, 2020 governing the management and administration of the

business of JVCo.

As per the Joint Venture, Canary will provide

the JVCo with a Hard Cost Loan with the maximum amount of $942,480 (CAD $1,200,000).

This loan bears an interest rate of 7% per

annum, matures in 12 months from effective date, and is be secured against the personal property of the JVCo and Thrive will guarantee

one-half (1/2) of the outstanding balance of the loan.

As at December 31, 2020, the loan advanced amounts to $263,109 (CAD

$335,000) and interest income charged for the year ended in amount of $8,074 (CAD $10,280) is included in other income on the consolidated

statement of operations and comprehensive loss and interest receivable in the amount of the same amount is included in receivable

from joint venture on the consolidated balance sheet.

The JVCo will reimburse Canary for certain

expenses incurred by Canary for the cultivation and processing of cannabis products.

As at December 31, 2020, the total eligible

recoverable expenses were $1,123,731 (CAD $1,430,776) leading to a recoverable amount of $1,091,834 (CAD $1,390,163).

recorded sales of $108,930 (CAD $138,694) during the quarter end of December 31, 2020.

The entire revenue was sold to one customer.

The JVCo shall make payments out of the revenues,

net of applicable taxes and expenses (“Net Income”), in accordance with the following order of priority:

First, the payment of recoverable expenses, explained below;

Second, to the repayment of the Hard Cost Loan until repaid in full;

Third, to the repayment of the Soft Costs (costs of services and materials provide by Thrive Cannabis) until repaid in full;

Finally, any remaining Net Income shall be distributed, on a monthly basis, as follows:

For the first two (2) years following execution of this Agreement, Canary shall receive 60% and Thrive Cannabis shall receive 40%;

For the three (3) years following such period, Canary shall receive 57.5% and Thrive shall receive 42.5%.

The net equity of the JVCo as at December 31,

2020 was negative $523,496 (CAD $666,534) resulting in a loss of equity for $261,748 (CAD $333,267).

The JV had liabilities of

$1,363,018 (CAD $1,735,444) and assets of $839,522 (CAD $1,068,910).

CL Investors Debt Purchase and Assignment

On June 15, 2020, the Company, its

first–tier subsidiaries Visava Inc.

(“Visava”) CannaKorp Inc.

(“CannaKorp”), and the Company’s

second-tier subsidiary, Canary Rx Inc.

(“Canary”), entered into a Debt Purchase and Assignment Agreement (“Agreement”)

with CL Investors Inc.

(“CLI”), a corporation organized under the laws of the Province of Ontario, Canada.

was preliminary date of the agreement and the agreement was not finalized until the later date as indicated below.

The CEO of the Company, is the Secretary

of CLI, a director of the Company, is a shareholder of CLI and the brother of CEO, is the President and sole director of CLI therefore

the below loan from CLI is classified under related party transactions.

Pursuant to the Agreement, CLI purchased

from the Company for the sum of $2,277,660, (CAD $2,900,000) a debt obligation owing from Canary to the Company in the principal

balance of $8,325,240 (CAD $10,600,000 (“Canary Debt”)).

Upon receipt of the consideration, the Company loaned the

full sum to Canary under terms of an unsecured, non-interest-bearing promissory note, subject to a covenant by the Company not

to take any collection action so long as the Canary Debt remains unpaid to CLI.

As a condition of the closing of the Agreement,

the terms of the Canary Debt were amended to provide for interest at 5% per annum with a maturity date of 60 months from the date

of the Agreement (“Term”).

The Canary Debt will be repaid according to the following schedule:

In the first year of the Term, Canary will pay CLI the greater of $887,502 (CAD $1,130,000) and fifty percent (50%) of the Net Revenue (hereinafter defined), provided that where the latter amount exceeds the former amount, Canary will, by the end of such first year, pay CLI no less than the former amount and Canary will, within thirty (30) days following the end of such first year, pay CLI the balance of such amount owing for such first year;

In the second year of the Term, Canary will pay CLI the greater of $1,649,340 (CAD $2,100,000) and fifty percent (50%) of the Net Revenue, by way of twelve (12) consecutive monthly installments payable on the 14th day of each month commencing on August 14, 2021, provided that where the latter amount exceeds the former amount, Canary will, within thirty (30) days following the end of such second year, pay CLI the balance of such amount owing for such second year;

In the third year of the Term, Canary will pay CLI the greater of $2,528,988 (CAD $3,220,000) and fifty percent (50%) of the Net Revenue, by way of twelve (12) consecutive monthly installments payable on the 14th day of each month commencing on August 14, 2022, provided that where the latter amount exceeds the former amount, Canary will, by the end of such third year, pay CLI no less than the former amount and Canary will, within thirty (30) days following the end of such third year, pay CLI the balance of the such payments owing for such third year;

In the fourth year of the Term, Canary will pay CLI the greater of $2,419,032 (CAD $3,080,000) and fifty percent (50%) of the Net Revenue, by way of twelve (12) consecutive monthly installments payable on the 14th day of each month commencing on August 14, 2023, provided that where the latter amount exceeds the former amount, Canary will Canary will, within thirty (30) days following the end of such fourth year, pay CLI the balance of such amount owing for such fourth year;

In the fifth year of the Term, Canary will pay CLI the balance owing under this Note, by way of twelve (12) consecutive monthly installments payable on the 14th day of each month commencing on August 14, 2024 for an amount calculated by dividing twelve (12) into the sum of all amounts owing under this Note at the beginning of the fifth year of the Term on account of Principal and Interest, provided that where there are further amounts owing under this Note at the end of such fifth year, Canary will pay CLI all such further amounts within five (5) days following the end of such fifth year.

For the purposes of this Note, “Net

Revenue”

will mean any and all revenue generated from Canary’s Licensed Facility (hereinafter defined) to which it

is entitled net of applicable taxes and third-party expenses.

The repayment of the Canary Debt, as amended,

is guaranteed by Visava and the Company’s wholly-owned subsidiary CannaKorp Inc.

and secured by (i) a general security

interest in the assets of the Company, Canary, Visava and CannaKorp Inc., respectively;

and (ii) a pledge by the Company of

all of the issued and outstanding common stock of Canary, Visava and CannaKorp Inc.

held by the Company.

In addition to the foregoing

guarantees, security interest and stock pledge, CLI has been granted an option, in lieu of repayment of the amended Canary Debt,

to demand, in its sole and absolute discretion the transfer, assignment and conveyance of 75% of the issued and outstanding capital

stock of Visava and Canary.

Furthermore, the President and sole director

of CLI has been granted an option to acquire the remaining 25% of the issued and outstanding capital stock of Visava and Canary.

Effective August 14, 2020, the Agreement

was amended (“Amendment”) to provide that CLI will purchase from Rubin Schindermann, a director of the Company, 500,000

shares of the Company’s Series A Preferred Stock in consideration of the payment by CLI to Rubin Schindermann of $78,540

(CAD $100,000) and the issuance to Schindermann of 10,000,000 shares of the Company’s common stock.

In consideration of the

foregoing, Mr., Schindermann resigned as a director of the Company and from any and all administrative and executive positions

with the Company’s subsidiaries Visava Inc., Canary Rx Inc.

and CannaKorp Inc., respectively.

In addition, the Company issued

Common Stock Purchase Warrant for 10,000,000 shares of Target common stock to CLI as consideration for the Agreement.

Note 14 for additional details on warrants.

The combined impact of both transactions resulted in debt issuance cost of $251,518.

This debt issuance cost will be amortized over the term of the debt on straight line basis.

The transactions contemplated by the Agreement

and the Amendment closed on August 14, 2020.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business