What changed in this filing

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Item 1. Business

2026-03-31 compared with 2025-03-27 · 6 added, 56 removed, 93 unchanged (40% of the section changed)

4 unchanged sentences

On July 3, 2018, the Company filed an amendment in its Certificate of Incorporation to change its name to Target Group Inc.

Effective October 18, 2018, the Company’s common stock became eligible for quotation on the OTCQB platform operated by OTC Markets Group Inc, under the OTC Bulletin Board symbol “CBDY” from the Financial Industry Regulatory Authority (FINRA).

Effective July 1, 2025, the Company’s common stock is quoted on the Pink Limited Market operated by OTC Markets Group Inc, under the symbol “CBDY”.

Cannabis Business-Canada

The Company is engaged in the cultivation, processing and distribution of curated cannabis products for the medical and adult-use recreational cannabis market in Canada and, where legalized by state legislation, in the United States.

The Company is engaged in the cultivation, processing and distribution of curated cannabis products for the medical and adult-use recreational cannabis market in Canada and continues to evaluate opportunities, where legalized by state legislation or related to rescheduling, in the United States.

There continues to be a shift in the public’s perception of cannabis from a state of prohibition to a state of legalization across North America.

3 unchanged sentences

In the 2018 publication by Deloitte, A Society in Transition, an Industry Ready to Boom, the projected size of the Canadian adult-use market in 2019 ranged from CDN$1.8 billion to CDN$4.3 billion.

According to a 2025 report published by the Ontario Cannabis Store (OCS) in collaboration with Deloitte Canada, the Canadian legal cannabis industry generated CDN$28.7 billion in cumulative nationwide sales from October 2018 through 2024, primarily driven by recreational products.

The Canadian medical cannabis industry experienced substantial growth since 2014.

13 unchanged sentences

On June 27, 2018, the Company entered into an Agreement and Plan of Share Exchange (“ Visava Exchange Agreement ”) with Visava Inc., a private Ontario, Canada corporation (“ Visava ”).

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

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

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

36 unchanged sentences

The Company has the capacity to grow 8 different strains at a time, within the facility’s eight (8) separate indoor flower rooms.

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 granted the Company an exclusive license to manufacture and distribute the patent-pending THC antidote True Focu(TM) in the United States, Europe and the Caribbean.

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 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;

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 within ten (10) days of the effective date;

$300,000 on January 10, 2020;

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

All advance 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 a settlement of their claims and counterclaims on July 27, 2020 (“Effective Date”).

As per the settlement agreement, the License Agreement was terminated, and the Company did 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 started paying $100,000 in monthly installments of $10,000 commencing in April 2021 to cGreen resulting in a gain on settlement in the amount of $1,704,860.

As at December 31, 2024, there was no outstanding balance, the balance was paid in full and the claim was closed during the quarter ended March 31, 2022.

Joint Venture Agreement

Historical information

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

Canary and Thrive each held 50% of the voting equity interest in JVCo.

The term of the Joint Venture was five (5) years from its effective date of May 14, 2020.

Under the Joint Venture, JVCo was permitted to use all eight (8) rooms, of Canary’s licensed cannabis cultivation facilities located in Simcoe, Ontario, Canada (“Licensed Site Portion”) to operate and manage 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 was 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.

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 $834,000 (CAD $1,200,000).

This loan bears an interest rate of 7% per annum, matures in 12 months from the effective date, and is secured against the personal property of the JVCo and Thrive will guarantee one-half (1/2) of the outstanding balance of the loan.

As of December 31, 2024, the loan advanced amounts to $232,825 (CAD $335,000) and interest income charged for the period in the amount of $5,630 (CAD $7,710) is included in other income on the unaudited condensed consolidated interim statement of operations and comprehensive loss and interest receivable in the amount of $45,099 (CAD $64,890) is included in receivable from the Joint Venture on the unaudited condensed consolidated interim balance sheet.

After April 27, 2023, as mentioned below, JVCo became a subsidiary of the company as result the above loan and interest receiveable were eliminated upon consolidation.

The JVCo will reimburse Canary for certain expenses incurred by Canary for the cultivation and processing of cannabis products.

Below is the table which summarizes the activity of the year:

January 1 to April 27, 2023

Cost of goods sold

Operation expenses

Eligible recoverable expenses

Recoverable amount

Income on equity

Termination of joint venture agreement during quarter ended June 30, 2023

On April 27, 2023, Canary and Thrive Cannabis entered into a Release and Settlement Agreement (“Settlement Agreement”) in which Thrive Cannabis has transferred its shares in the capital of JVCo and rights of assets held by JVCo.

Pursuant to the above Settlement Agreement, Thrive Cannabis paid Canary $1,051,000 to release Thrive Cannabis from any mortgages, charges, pledges, security interests, liens, encumbrances, writs of execution, actions, claims, demands and equities of any nature related to JVCo from their share of ownership of JVCo.

Following the completion of the Settlement Agreement, Canary’s equity interest in JVCo increased from 50% to 100%.

Effective April 28, 2023, the Company started consolidating results of operations of the JVCo and eliminated any intercompany transactions and balances between the Company (Target and Canary) and JVCo.

During the term of the Joint Venture, the Company accounted for the transactoins using the equity method under ASC 323 Investments — Equity Method and Joint Ventures.

As a consequence of the Settlement Agreement, as the JVCo becoming a wholly owned subsidiary of the company as of April 27, 2023, the Company now uses the acquisition method of accounting (using a step acquisition method) under ASC 805 Business Combination.

As a consequence of the above Settlement Agreement and after obtaining 100% shares of the JVCo, the Company acquired the following assets:

Assets acquired:

Accounts receivables

As of April 27, 2023, the Company had a carrying value of the investment in Joint Venture and receivable from Joint Venture on the consolidated balance sheets amounting to $1,023,608 and $706,598, respectively.

Pursuant to the above Settlement Agreement, the Company received $776,382 against these balances.

Accordingly, the remaining balance of $953,824 was compared to the fair value of the net assets acquired and this resulted in net recognition of $1,571,742 as a non-operating gain reported in the Consolidated Statement of Operations as net gain from termination of Joint Venture.

CL Investors Debt Purchase and Assignment Agreement

9 unchanged sentences

a) In the first year of the Term, Canary will pay CLI the greater of $824,448 (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;

b) In the second year of the Term, Canary will pay CLI the greater of $1,459,500 (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;

b) In the second year of the Term, Canary will pay CLI the greater of $1,532,160 (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;

c) In the third year of the Term, Canary will pay CLI the greater of $2,349,312 (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 such payments owing for such third year;

17 unchanged sentences

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