What changed in this filing

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Item 1. Business

2024-03-20 compared with 2023-03-17 · 71 added, 89 removed, 80 unchanged (67% of the section changed)

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Target Group Inc.

(“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.

(“Target Group” or the “Company”) was incorporated in the State of Delaware on July 2, 2013, under its original name of River Run Acquisition Corporation.

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

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”.

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.

On July 3, 2018, we 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).

The global spread and lasting effects of Coronavirus (COVID-19) continued to have an impact on the Canadian and global economy and customer purchasing behavior, while equity markets remained volatile.

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

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.

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.

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.

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 related laws to permit the medical and/or recreational production, distribution, sale and use of cannabis.

In the 2016 publication by Deloitte, Insights and Opportunities Recreational Marijuana, the project size of the Canadian adult-use market ranged from CDN$4.9 billion to CDN$8.7 billion annually.

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Health Canada projects the Canadian cannabis market will reach CDN$1.3 billion in annual value by 2024.

We intend to position ourselves with a core emphasis on wholesale & 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:

The Company is positioning itself with a core emphasis on wholesale and co-packaging services to accommodate all consumer-packaged goods intended for the sophisticated cannabis market and consumer in Canada and internationally.

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

Target Group’s product manufacturing includes, 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.

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:

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

Capitalizing on the opportunity resulting from the legalization of adult-use cannabis in Canada, the Company completed the following strategic acquisitions and entered into the following 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.

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.

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

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The Company is now growing premium cannabis in indoor grow rooms and 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 to its Common Stock, the Company issued to the Visava shareholders, pro rata 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 year ended, December 31, 2020, all of the warrants expired, none were exercised.

Pursuant to the Exchange Agreement, the Company acquired 100% of the issued and outstanding shares of Visava in exchange for the issuance of 25,500,000 shares of the Company’s Common Stock and issued to the Visava shareholders, pro rata Common Stock Purchase Warrants (“ Visava Warrants ”) purchasing 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 Visava Warrants.

As a result of this transaction, Visava became a wholly-owned subsidiary of the Company and the former shareholders of Visava owned approximately 46.27% of the Company’s shares of Common Stock.

The transaction was closed effective August 2, 2018.

During the year ended, December 31, 2020, all of the Visava 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”).

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

Pursuant to the terms of an Agreement and Plan of Share Exchange dated January 25, 2019 (“Cannakorp Exchange Agreement”) , on March 1, 2019, we completed the acquisition of Massachusetts –based CannaKorp Inc., a Delaware corporation (“CannaKorp”).

CannaKorp 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 more 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.

Under the terms of the Cannakorp Exchange Agreement, we the Company issued 30,407,712 shares of its common stock to the exchanging CannaKorp stockholders in exchange for 99.8% of the outstanding common stock held by the CannaKorp stockholders.

CannaKorp will continue to operate as a subsidiary.

During the year ended, December 31, 2021, all of the warrants expired, none were exercised.

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.

Effective December 6, 2018, the Company and Canary entered into a Distribution, Collaboration and Licensing Agreement (“Serious 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’ cannabis cuttings, dried flowers, extracts and seeds.

In addition, under the Agreement Canary Rx and Serious will develop certain “Collaborative Products” defined as cannabis seed strains created collaboratively using Serious’ intellectual property.

During the term of the Agreement, Canary will own all of the intellectual 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.

Under the Agreement, Canary was appointed the exclusive distributor in Canada and all other legal markets globally of Serious Seeds’ proprietary cannabis seed strains and Serious Seeds’ cannabis cuttings, dried flowers, extracts and seeds.

In addition, under the Serious Agreement, Canary and Serious Seeds will develop certain “Collaborative Products” (defined in the Serious Agreement as cannabis seed strains created collaboratively using Serious Seeds’ intellectual property.

During the term of the Serious Agreement, Canary owns all of the intellectual property related to the Collaborative Products.

Under the Serious Agreement, Smit granted Canary an exclusive license in Canada and all legal markets globally to Serious Seeds’ intellectual property including the right to use the service mark of Serious Seeds and all of the names of Serious Seeds’ 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 Serious Agreement is 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.

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.

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.

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:

In consideration of Canary’s appointment as Serious Seeds’ exclusive distributor in Canada, Canary will pay Serious Seeds certain royalties as follows:

2.00% of gross sales

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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™ 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.

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.

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.

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 Focus™ in the United States, Europe and the Caribbean.

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.

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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, 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:

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, 2023, 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

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, 2020.

Under the Joint Venture, JVCo is permitted to use the 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 is 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 are 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.

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.

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 $907,320 (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, 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.

As of December 31, 2023, the loan advanced amounts to $253,294 (CAD $335,000) and interest income charged for the nine months ended in the amount of $17,376 (CAD $23,450) is included in other income on the unaudited condensed consolidated interim statement of operations and comprehensive loss and interest receivable in the amount of $60,965 (CAD $80,630) 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:

Year ended December 31,

January 1 to April 27, 2023

Cost of goods sold

Operation expenses

Net income (loss)

Eligible recoverable expenses

Recoverable amount

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:

a) First, the payment of recoverable expenses;

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

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

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

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

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

Below is the position of the JVCo as at:

December 31, 2022

December 31,2021

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

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.

On June 15, 2020, the Company, its first-tier subsidiaries Visava CannaKorp Inc, and the Company’s second-tier subsidiary, Canary, entered into a Debt Purchase and Assignment Agreement (“Debt Agreement”) with CL Investors Inc.

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

June 15th was the preliminary date of the agreement, and the agreement was not finalized until the later date as indicated below.

June 15, 2020 was the preliminary date of the Debt Agreement, and the Debt Agreement was not finalized until the later date as indicated below.

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.

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As of December 31, 2023, $3,781 (CAD 5,000) is still outstanding from CLI which is presented as other receivable on the consolidated balance sheet.

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”).

As a condition of the closing of the Debt 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 Debt Agreement (“Term”).

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

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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.

and secured by (i) a general security interest in the assets of the Company, Canary, Visava and CannaKorp, respectively;

and (ii) a pledge by the Company of all of the issued and outstanding common stock of Canary, Visava and CannaKorp.

held by the Company.

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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 $78,880 (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.

Effective August 14, 2020, the Debt 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 $75,610 (CAD 100,000) and the issuance to Schindermann of 10,000,000 shares of the Company’s common stock.

and CannaKorp, 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 Debt Agreement.

Refer to Note 18 for additional details on warrants.

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

The transactions contemplated by the Agreement and the Amendment closed on August 14, 2020.

The transactions contemplated by the Debt 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