What changed in this filing

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Item 1. Business

2023-03-17 compared with 2022-03-18 · 22 added, 36 removed, 147 unchanged (28% of the section changed)

5 unchanged sentences

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.

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.

19 unchanged sentences

● Infused topical products and CBD wellness products.

As of the date of this report, the Company (i.e., Target Group Inc.

and its subsidiaries) does not have any operations, employees or corporate offices based in United States.

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:

27 unchanged sentences

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.

Thereafter, 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.

In 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.

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.

19 unchanged sentences

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

The agreement had not been renewed on December 13, 2022 and has expired on that date.

Exclusive License Agreement

12 unchanged sentences

During the quarter ended December 31, 2019, the intangible asset was written off based on management’s review and evaluation of its recoverability.

Additionally, 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 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 cGreen.

As of December 31, 2021, the outstanding balance is $10,000 of which $10,000 (December 31, 2020:

$90,000) is current and $nil (December 31, 2020:

$10,000) is non-current.

Nabis Holding Sales Agreement

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 was three (3) years with automatic renewals for additional one-year periods unless the Agreement was terminated pursuant to its terms.

Nabis was required to pay CannaKorp $45,000 for the equipment needed to manufacture the WISP™ Pods, of which $4,500 was be paid within three (3) calendar days of Nabis obtaining regulatory approval of its vertically integrated license and the balance of $40,500 within 180 days of the effective date of the Agreement.

Under the Agreement, Nabis was licensed to manufacture the WISP™ Pods and to sell the WISP™ Pods in conjunction with the sale of the WISP™ Vaporizer .

Nabis was required to meet minimum quarterly orders of two hundred (200) WISP™ Vaporizers and five thousand (5,000) WISP™ Pods cartridges .

Nabis was licensed to sell the WISP™ Vaporizer and the WISP™ Pods to end users in Arizona, excluding Amazon, eBay, Walmart or other multistate/national brick and mortar or online sales.

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

During the year ended December 31, 2020, the equipment to Nabis had been shipped and the Company had provided Nabis an additional 360 days before invoicing Nabis for the equipment.

Once the additional period had passed, the Company was going to invoice Nabis.

Additionally, in the first quarter of the Nabis agreement, minimum quantities 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.

Due to financial strain and difficulties during the pandemic, Nabis was forced to restructure its 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 (i.e.

Target Group Inc.

and its subsidiaries) does not have any operations, employees or corporate offices based in United States.

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 cGreen.

As of December 31, 2022, there was no outstanding balance, the balance has been paid in full and the claim is closed during the quarter ended March 31, 2022 (December 31, 2021:

Joint Venture Agreement

5 unchanged sentences

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.

During the year ended December 31, 2022, the joint venture partners, Canary and Thrive Cannabis entered into an agreement.

Pursuant to this agreement the Company received a total of $1,634,496 (CAD 2,125,482) of which $1,056,005 (CAD 1,373,218) were reduced from investment in joint venture as these represented recovery of investment and $578,491 (CAD 752,264) were classified as other income representing recovery of interest expense charged on shareholder loan, which was primarily provided to support joint venture operations.

Also refer to shareholder loan in Note 14.

As per the Joint Venture, Canary will provide the JVCo with a Hard Cost Loan with the maximum amount of $885,960 (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, 2020, the loan advanced amounts to $264,248 (CAD 335,000) and interest income charged for the year ended in the amount of $18,497 (CAD 23,450)

is included in other income on the consolidated statement of operations and comprehensive loss and interest receivable in the amount of $26,606 (CAD 33,730) is included in receivable from joint venture on the consolidated balance sheet.

As of December 31, 2022 the loan advanced amounts to $247,331 (CAD 335,000) and interest income charged for the year ended in the amount of $18,033 (CAD 23,450) is included in other income on the consolidated statement of operations and comprehensive loss and interest receivable in the amount of $42,216 (CAD 57,180) 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.

3 unchanged sentences

Operation expenses

Net income (loss)

Eligible recoverable expenses

Recoverable amount

Loss on equity

Due to reimbursement of an office and general expense during the current quarter ended which had been expensed in the books of Canary in the prior period, therefore, leading to a credit (negative) expense on the consolidated statement of operations and comprehensive loss.

During the year ended December 31, 2021, revenue was sold to ten customers (2020:

Income (loss) on equity

During the year ended December 31, 2022, revenue was sold to thirteen customers (2021:

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:

6 unchanged sentences

Below is the position of the JVCo as at:

As of December 31,

December 31, 2022

December 31,2021

CL Investors Debt Purchase and Assignment Agreement

5 unchanged sentences

June 15th was the 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, a shareholder of CLI and the brother of the 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 $2,287,520, (CAD 2,900,000) a debt obligation owing from Canary to the Company in the principal balance of $8,361,280 (CAD 10,600,000 (“Canary Debt”)).

The CEO (and also a director) of the Company is the secretary and a shareholder of CLI plus the CEO’s brother is the President and sole director of CLI therefore the loan from CLI is classified under related party transactions.

CLI purchased from the Company for the sum of $2,141,070, (CAD 2,900,000) a debt obligation owing from Canary to the Company in the principal balance of $7,825,980 (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.

23 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