10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE YEAR ENDED DECEMBER 31, 2018

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission file number 000-55066

TARGET GROUP INC.

(Exact name of registrant as specified in its charter)

Delaware	46-3621499
(State or Other Jurisdiction of Incorporation or Organization)	(IRS Employer Identification No.)

55 Administration Road, Unit 13 Vaughan, Ontario, Canada	L4K 4G9
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code +1 647-927-4644

Securities registered under Section 12(b) of the Act:

None

Securities registered under Section 12(g) of the Act:

Common Stock, Par Value $0.0001

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨  No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No x

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 90 days.

Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). 

Yes x No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer, non-accelerated filer, and smaller reporting company in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ¨

Accelerated filer  ¨ 

Non-accelerated filer  x

Smaller reporting company x 

Emerging growth company x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ¨ No x

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter was $3,274,268 as of June 30, 2018.

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: As of April 1, 2019, the registrant had 153,694,313 shares of Common Stock issued and outstanding.

TABLE OF CONTENTS

PART I
ITEM 1.	BUSINESS	4
ITEM 2.	PROPERTIES	10
ITEM 3.	LEGAL PROCEEDINGS	11
ITEM 4.	MINE SAFETY DISCLOSURES	11
PART II
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES	12
ITEM 6.	SELECTED FINANCIAL DATA	15
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	15
ITEM 8.	CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	F-1
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES	19
ITEM 9A.	CONTROLS AND PROCEDURES	19
ITEM 9B.	OTHER INFORMATION	19
PART III
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	20
ITEM 11.	EXECUTIVE COMPENSATION	22
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	22
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	24
ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	24
PART IV
ITEM 15.	EXHIBITS FINANCIAL STATEMENT SCHEDULES	25

2

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

This Annual Report on Form 10-K contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “anticipate,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.

We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Annual Report on Form 10-K and include information concerning possible or assumed future results of our operations, including statements about potential acquisition or merger targets; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts.

These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of the Annual Report on Form 10-K. All subsequent written and oral forward-looking statements concerning other matters addressed in this Annual Report on Form 10-K and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Annual Report on Form 10-K.

Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.

USE OF CERTAIN DEFINED TERMS

Except as otherwise indicated by the context, references in this report to “we,” “us,” “our,” the “Company,” or “Target” are to Target Group Inc.

In addition, unless the context otherwise requires and for the purposes of this report only:

· “Exchange Act” refers to the Securities Exchange Act of 1934, as amended;

· “SEC” refers to the United States Securities and Exchange Commission;

· “Securities Act” refers to the Securities Act of 1933, as amended;

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PART I

Item 1. Business

Historical background

Target Group Inc. (formerly known as Chess Supersite Corporation) (“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 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. Mr. Schindermann and Mr. Starr 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. 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™. 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 much more.

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

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. 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.

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. Ion 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. The Canadian medical cannabis industry experienced substantial growth since 2014. Health Canada projects the Canadian cannabis market will reach CDN$1.3 billion in annual value by 2024.

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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:

· Cannabis flower pods for vaporizer use

· Cannabis extract pods for vaporizer use

· Cannabis pre-rolls

· K-Cup infused coffee and tea pods

· Infused cannabis beverages

· Infused cannabis edibles

· 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 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 2019.

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. 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. 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 5,208.3333 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 16,666.6667 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.

5

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

1st year:	2.00% of gross sales
2nd year:	2.25% of gross sales
3rd year:	2.50% of gross sales
4th year:	2.75% of gross sales
5th and following years:	3.00% of gross sales

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.

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.

Item 1A Risk Factors.

In addition to all other information set out in this Report, including our consolidated financial statements and the related notes included elsewhere in this Report, our business is subject to a number of risks that are uniquely applicable to the cannabis business generally and specifically in the cannabis business in Canada. Other risks and uncertainties that we do not presently consider material, or of which we are not presently aware, may become important factors that affect our future financial condition and results of operations. If any of the risks discussed below actually occur, our business, financial condition, results of operations and prospects could be materially affected.

6

Risks Related to Our Cannabis Business and the Cannabis Industry in the United States

Our proposed business is dependent on laws pertaining to the marijuana industry

Continued development of the marijuana industry is dependent upon continued legislative authorization and/or voter approved referenda at the state level. Any number of factors could slow or halt progress in this area. In addition, progress for the industry, while encouraging, is not assured. While there may be ample public support for legislative action, numerous factors impact the legislative process, any one of which could slow or halt the use of marijuana, which could negatively impact our business.

Cannabis remains illegal under U.S. federal law.

The possession and use of marijuana is illegal under U.S. federal and certain states’ laws, which may negatively impact our business. Use of marijuana is regulated by both the U.S. federal government and state governments and state and U.S. federal laws regarding marijuana are often in conflict. Federal law criminalizing the use of marijuana pre-empts state laws that legalize the possession and use of marijuana for medical and recreational purposes. The Trump Administration has made statements indicating that the Trump Administration intends to take a harsher stance on federal marijuana laws. Any such changes in the federal government’s enforcement of current federal laws could adversely affect our ability to possess or cultivate marijuana. Marijuana is a Schedule 1 controlled substance under the Controlled Substance Act (“CSA”) meaning that it has a high potential for abuse, has no currently “accepted medical use” in the United States, lacks accepted safety for use under medical supervision, and may not be prescribed, marketed or sold in the United States. No drug product containing natural cannabis or naturally-derived cannabis extracts have been approved by the U.S. Food and Drug Administration for use in the U.S. or obtained registration from the United States Drug Enforcement Administration (“DEA”) for commercial production and the DEA may never issue the registrations required of the commercialization of such products. We will continue to assess potential strategic acquisitions of existing or new businesses in the cannabis industry, should we determine that such activities are in our best interests and in best interests of our stockholders. Any such pursuit would involve additional risks with respect to the regulation of cannabis, particularly, if the federal government determines to actively enforce all federal laws applicable to cannabis.

Laws and regulations affecting the cannabis industry are constantly changing, which could detrimentally effect are business.

Local, state and federal marijuana laws and regulations are broad in scope and subject to evolving interpretations, which require us to incur potentially substantial costs associated with compliance and could alter our business plans. In addition, violations of these laws or allegations of such violations could disrupt our business and materially affect our operations. In addition, it is possible that regulations may be enacted in the future that will be directly applicable to our business. We cannot predict the nature of any such future laws, regulations, interpretations or applications, nor can we determine what effect governmental regulations or administrative policies and procedures, when and if promulgated, could have on our business.

Any potential growth in the cannabis industry continues to be subject to new and changing state and local laws and regulations.

Continued development of the cannabis industry is dependent upon continue legalization of cannabis at the state level and a number of factors could curtail or halt progress in this area, even where there is public support for legislative action. Any delay or halt in the passing or implementation of legislation legalizing cannabis use, or its sale and distribution, or the re-criminalization or restrictions on cannabis use at the state level could negatively impact our business. We cannot predict the nature of any future laws and regulations or their interpretations or applications. It is possible that regulations may be enacted in the future that will be materially adverse to our business.

7

Our potential customers, clients and companies with which we may elect to invest directly may have difficulty accessing the services of U.S. banks which may make it difficult for them to operate.

On February 14, 2014, the U.S. Financial Crimes Enforcement Network (FinCen”) issued rules allowing banks to legally provide financial services to state-licensed cannabis businesses consistent with the Bank Secrecy Act obligations. A memorandum issued by the U.S. Justice Department to federal prosecutors reiterated the guidance previously given, this time to the financial industry that banks can do business with legal marijuana businesses and “may not” be prosecuted. However, the FinCen guidelines fall short of the explicit legal authorization that the banking industry had requested the government provide. To date, it is not clear if any banks have relied on the FinCen guidelines to take on legal cannabis companies as clients. Because the use, sale and distribution of cannabis remains illegal under U.S. federal law, many banks will not accept deposits from or provide other bank services to business involved with cannabis. The inability to open bank accounts may make it difficult for our existing and potential customers to operate.

Operational risks of the cannabis industry.

Companies involved in the cannabis industry face intense competition, may have limited access to services of banks, may have substantial burdens on company resources due to litigation, complaints or enforcement actions and are heavily dependent on receiving necessary permits and authorization to engage in the cultivation, possession or distribution of cannabis. Many of our current and potential competitors have longer operational histories, significantly greater financial, marketing and other resources and larger client bases than us and there can be no assurances that we will be able to successfully compete against these or other companies.

Risks Related to Our Cannabis Business and the Cannabis Industry in Canada

The effects of the legalization of recreational cannabis in Canada is unknown at this time.

The Government of Canada approved the Cannabis Act (Bill C-45) which went into effect on October 17, 2018. The Cannabis Act allows for regulated and restricted access to cannabis for recreational adult-use in Canada. Under the Cannabis Act, there are significant restrictions on the marketing, branding, product formats and distribution channels allowed under the law. Additional restrictions may be imposed at the provincial level. Any failure by us to comply with the applicable regulatory requirements at the federal and provincial level could require changes to our proposed operations; result in regulatory or agency proceedings or investigations, increase compliance costs, fines, penalties or restrictions on our operations or revocation of our licenses and other permits.

The recreational adult-use cannabis market in Canada may become over supplied following the implementation of the Cannabis Act.

As a result in the surge of demand for cannabis as a result of the implementation of the Cannabis Act, we and other cannabis producers in Canada may produce more cannabis that is needed to satisfy the market and we may not be able to export that oversupply into other markets where cannabis use is fully legal under all federal, state and provincial laws The available supply of cannabis could exceed demand, resulting in a decline in the market price for cannabis. If this were to occur, there is no assurance that we would be able to generate sufficient revenue to result in profitability.

We are required to comply with federal, state or provincial and local laws in each jurisdiction where we conduct our business

Various federal, state or provincial and local laws and regulations govern our business in the jurisdictions in which we operate and propose to operate. These laws and regulations include those relating to health and safety and the production, management, transportation and storage of cannabis. Compliance with these laws and regulations requires concurrent compliance with complex federal, state, provincial and local laws and regulations. Compliance with these laws and regulations requires significant financial and managerial resources. A determination that we are not in compliance with these laws and regulations could harm our business. It is impossible to predict the cost or effect of such laws and regulations on our current and future business.

8

We may seek to enter into strategic alliances or acquisitions with third parties that we believe will have a beneficial impact on our business and there are risks that such alliances or acquisitions will not enhance our business in the desired manner.

We may expand, or in the future enter into, alliances or acquisitions with third parties that we believe will complement or enhance our existing business. Our ability to take advantage of existing or new alliances or acquisitions is dependent upon a number of factors such as the availability of suitable candidates and working capital. Future strategic alliances or acquisitions could result in the incurrence of debt, costs and contingent liabilities. In addition, there can be no assurances that future alliances or acquisitions will achieve the expected benefits to our business or that we will be able to consummate future strategic alliances or acquisitions on satisfactory terms, or at all.

We may not be able to identify and execute future acquisitions or to successfully manage the impact of such transactions on our business.

Acquisitions and/or other strategic business combinations involve many risks including (i) disruption of our existing business; (ii) the distraction of management away from the ongoing oversight of our existing business operations; (iii) incurring additional indebtedness; and (iv) increasing the scope and complexity of our operations. A strategic transaction may result in unforeseen obstacles or costs in implementing the transaction or integrating any acquired business into our existing operations.

Our cannabis cultivation business is subject to risks associated with an agricultural business.

One of the major aspects of our business operations is cultivating cannabis which is an agricultural process. As such, that part of our business is subject to the risks associated with the agricultural business, including crop failure presented by weather, plant diseases, and similar agricultural risks. Although we will grow our cannabis products indoors under climate controlled conditions, there can be no assurances that natural elements, such as insects and plant diseases, will not disrupt our production activities or have an adverse effect on our business.

We may not be able to attract or retain key personnel with sufficient experience in the cannabis industry and we may not be able to attract, develop and retain additional employees required for our development and future success.

Our success is dependent to a great extent on the performance of our management team and certain key employees and our ability to attract, develop, motivate and retain highly qualified and skilled employees who are in high demand. The loss of the services of any key personnel, or an inability to attract other suitably qualified persons when needed, could prevent us from executing our business plan and we may not be able to find adequate replacements on a timely basis, if at all. Currently, we do not maintain any key-person insurance on the lives of any of our key personnel. Furthermore, each director and officer of a company that holds a license is subject to the requirement to obtain and maintain a security clearance from Canada Health under the Cannabis Act. A security clearance is valid for not more than five years and must be renewed before the expiration of a current security clearance. There is no assurance that any of our existing personnel who presently or may in the future require a security clearance will be able to obtain or renew such clearance or that new personnel who require a security clearance be able to obtain one. A failure by an individual in a key operational position to maintain or renew a security clearance could result in a reduction or complete suspension of our operations.

Employees

We currently have three employees, Rubin Schindermann, our CEO, Alexander Starr, our President and Saul Niddam, our CIO. We have contracted with a number of independent contractors and consultants to provide a range of information technology and marketing services who do not receive cash compensation but receive shares of our common stock as compensation. This mitigates any need for full or part-time employees for these services.

Intellectual Property Protection

Our subsidiary CannaKorp Inc. holds the following patents:

International Patent Application No. PCT/US20115/013778

Title: METHODS AND APPARATUS FOR PRODUCING HERBAL VAPO

Filing Date: January 30, 2015

Ref. No.: B1411.70000WO00

U.S. Provisional Application No.: 61/934.255

Title: CONTAINER POD AND DELIVERY SYSTEM

Filing Date: January 31, 2014

Ref. No.: B1411.70000US00

In addition, CannaKorp has proprietary rights to certain trade names, trademarks and service marks which include WISP POD™; cPOD™; CANNACUP™; and WISP™. CannaKorp also has certain proprietary formulas and processes involving herbal formulas and flavors, proprietary herbal production processes and an herbal base developed to suspend active ingredients for optimal vaporization.

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Corporate Facilities

We lease our administrative and executive offices at a monthly rent of $1,298 plus applicable taxes located at 55 Administration Road, Unit 13, Vaughan, Ontario, Canada.

Emerging Growth Company

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act 0f 2012 (“JOBS Act”) and may take advantage of certain exemptions from certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” included but not limited to, not being required to comply with auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act and exemptions from the requirements of holding a nonbinding advisory vote of shareholders on executive compensation and any golden parachute payments not previously approved.

We will remain an “emerging growth company” until the earliest of (i) the last day of the fiscal year during which our revenues exceed $1 billion; (ii) the date on which we issue more than $1 billion of non-convertible debt in a three year period; (iii) the last day of the fiscal year following the fifth anniversary of the date of our first sale of our common equity securities pursuant to an effective registration statement filed pursuant to the Securities Act of 1933,as amended; or (iv) when the market value of our common stock that is held by non-affiliated exceeds $700 million as of the last business day of our most recently completed second fiscal quarter.

To the extent we continue to qualify as a “smaller reporting company”, as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, after we cease to qualify as an “emerging growth company”, certain of the exemptions available to us as an “emerging growth company” may continue to be available to us as “smaller reporting company” including (i) not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act; and (ii) scaled executive compensation disclosures; and (iii) the requirement to provide only two years of audited consolidated financial statements instead of three.

Item 2. Properties

The Company does not own any properties at this time and has no agreements to acquire any properties. The Company leases a 44,000 square foot facility located in Norfolk County, Ontario to produce Medical and Recreational Cannabis. Total rent for the building is $1,833 (CAD $2,500) plus applicable taxes per month until the notification of the right to build under their application for approval as licensed producer under The Cannabis Act. Subject to the notification, as of January 1st 2019 the rent increased to $18,326 (CAD $25,000) plus applicable taxes per month.

Following the acquisition of CannaKorp, we have assumed CannaKorp’s lease on its offices located outside of Boston in Stoneham, MA. The monthly rent for those offices is $1,200 plus applicable taxes and utilities.

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Item 3. Legal Proceedings

There is no litigation pending or threatened by or against the Company.

Item 4. Mine Safety Disclosures.

Not applicable.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Our common stock is currently quoted on the OTCQB inter-dealer quotation service maintained by OTC Markets Group Inc. under the symbol “CBDY”. The following table sets forth the quarterly high and low sales prices of our common stock for the last two fiscal years, as adjusted for the 1 for 1,000 reverse effective October 31, 2017.  Such prices are inter-dealer quotations without retail mark-ups, mark-downs or commissions, and may not represent actual transactions.

Quarter ended	March 31		June 30		September 30		December 31		Fiscal year
Fiscal year 2018
High	$	0.060		0.290		0.159		0.300		0.300
Low	$	0.012		0.015		0.023		0.055		0.012
Fiscal year 2017
High	$	20.000		6.200		0.500		0.100		20.000
Low	$	2.000		0.400		0.100		0.005		0.005

Our common stock is subject to Rule 15g-9 of the Exchange Act, known as the Penny Stock Rule which imposes requirements on broker/dealers who sell securities subject to the rule to persons other than established customers and accredited investors. For transactions covered by the rule, brokers/dealers must make a special suitability determination for purchasers of the securities and receive the purchaser’s written agreement to the transaction prior to sale. The Securities and Exchange Commission (“SEC”) also has rules that regulate broker/dealer practices in connection with transactions in “penny stocks.” Penny stocks generally are equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in that security is provided by the exchange or system. The Penny Stock Rules requires a broker/dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document prepared by the SEC that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker/dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker/dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker/dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. These disclosure requirements have the effect of reducing the level of trading activity in the secondary market for our common stock. As a result of these rules, investors may find it difficult to sell their shares.

12

As of the date of this report, we have 153,694,313 shares of common stock issued and outstanding held by 194 stockholders of record.

Dividend Policy

To date, we have not declared or paid any dividends on our common stock. We currently do not anticipate paying any cash dividends in the foreseeable future on our common stock. It is anticipated that our future earnings will be retained to finance our continuing development. Although we intend to retain our earnings, if any, to finance the exploration and growth of our business, our Board of Directors has the discretion to declare and pay dividends in the future. Payment of dividends in the future will depend upon our earnings, capital requirements, and any other factors that our Board of Directors deems relevant.

Recent Sales of Unregistered Securities

During the prior three years, we sold the following securities without registration under the Securities Act of 1933, as amended. The shares amounts shown for 2016 and 2017 do not take into account our reverse stock split of 1-for-1,000, effective November 1, 2017.

2016

In February, we issued 50,000 (50 - post reverse split) shares of common stock at a price of $0.50 per shares in payment of $25,000 of consulting services to a third-party unaffiliated consultant.

In March, we issued two convertible promissory notes in the principal amount of $150,000 each to two private investors. The note permits the holders thereof to convert the outstanding principal and interest balances into our common stock at a conversion price equal to 45% of the lowest trading price of our common stock on the date of conversion.

In March, we issued 65,000 (65 - post reverse split) shares of common stock at a price of $0.50 per share to two private investors in consideration of $32,500.00.

In May, we issued our convertible promissory note in the principal amount of $75,000.00 to a private investor. The note permits the holder to convert the outstanding principal and interest balance into our common stock at a conversion price equal to 52% of the lowest trading price of our common stock on the date of conversion.

In July, we issued 140,000 (140 - post reverse split) shares of common stock pursuant to an invoice for consulting services in the amount of $49,140. (24/7 Marketing). We issued 5,000,000 ((5,000 - post reverse split) shares to each of our two officers and directors in lieu of the payment of $50,000 of unpaid compensation owed to each of them.

In September, we issued 80,000 (80 - post reverse split) shares of common stock at a price $0.50 per share in payment of $40,000 of consulting services.

2017

In January, we issued a convertible promissory note in the principal amount of $33,000 to a private investor. The not permits the holder to convert the principal and accrued interest into common stock at a price equal to 58% of the trading price of the common stock on the date of conversion.

In January, we issued 1,264,423 (1,264 - post reverse split) shares of common stock at a price per share of $0.0042 upon the partial conversion of an outstanding promissory note.

13

In February, we issued 5,690,072 (5,690 - post reverse split) shares of common stock at a price per share of $0.0029 upon the partial conversion of an outstanding promissory note.

In March, we issued 20,000,000 (20,000 - post reverse split) shares of common stock in payment of accrued and unpaid executive compensation in the aggregate amount of $100,000. We also issued 6,962,246 (6,962 - post reverse split) shares of common stock at a price per share of $0.0012 upon the partial conversion of an outstanding promissory note.

In April, we issued 40,000,000 (40,000 - post reverse split) shares of common stock to each of our officers and directors at a price per share of $0.0025 in lieu of the payment of executive compensation in the aggregate amount of $100,000. We also issued an aggregate of 46,361,595 (46,362 - post reverse split) shares of common stock to three holders of convertible promissory notes at a price per share of $0.002.

In May, we issued an aggregate of 127,947,300 (127,947 - post reverse split) shares of common stock to three holders of convertible promissory notes at a price per share of $0.0001.

In June, we issued an aggregate of 60,149,599 (60,150 – post reverse split) shares of common stock to three holders of convertible promissory notes at a price per share of $0.0002.

In September, we issued 1,400,000,000 (1,400,000 – post reverse split) shares of common stock to each of our officers and directors at a price per share of $0.0001 in lieu of the cash payment of accrued executive compensation in the aggregate amount of $280,000.

In July, we issued an aggregate of 250,501,846 (250,502 – post reverse split) shares of common stock to three holders of convertible promissory notes at a price per share of $0.0002.

In August, we issued an aggregate of 425,125,384 (425,125 – post reverse split) shares of common stock to three holders of convertible promissory notes at a price per share of $0.0001.

In November we issued we issued 10,000,000 shares of common stock to our officers and directors at a price per share of $0.01 in lieu of a cash payment of accrued executive compensation in the aggregate amount of $100,000. We also issued an aggregate of 1,555,784 shares of common stock to three holders of convertible promissory notes at a price per share of $0,008 per share.

2018

In January, we issued 750,000 shares at a price of $0.003 per share and 741,000 shares at $0.0054 per share, respectively, upon the partial conversion of outstanding convertible promissory notes held by two persons.

In February, we issued (a) 300,000 shares at a price of $0.0120 per shar pursuant to a consulting agreement; (b) 3,000,000 shares at a price of $0.0030 per share, 200,000 shares at a price of $0.0123 and 465,728 shares at a price of $0.00817 per share, respectively upon the conversion of an outstanding convertible promissory note.

In March, we issued an aggregate of 5,529,412 shares at a price of $0.017 per shares to our officers and directors in lieu of the payment of accrued and unpaid compensation in the aggregate amount of $84,000.

In April, we issued 500,000 shares of common stock at a price of $0.045 per shares in payment of $22,500 of consulting services to a third-party unaffiliated consultant.

In May, we issued 3,140,506 shares at a price of $0.0151 per share upon the partial conversion of two outstanding promissory notes.

In June, we issued 2,500,000 shares of common stock to the note holder for settlement of debt. Refer to Note 14 of the consolidated financial statements for further details.

In July, we issued 411,184 of common stock at a price of $0.00912 upon the conversion of an outstanding convertible promissory note. We also issued 750,000 shares of common stock at a price of $0.0621 per shares in payment of $46,575 of marketing services to a third-party unaffiliated consultant.

14

Effective in August, we issued 25,500,000 shares of common stock pursuant to the Agreement and Plan of Share Exchange dated June 27, 2018 with Visava Inc./Canary Rx Inc. As part of consideration for the above agreement, we also agreed to issue warrants to purchase 25,000,000 shares of common stock. In addition, we issued 2,740,806 shares at a price of $0.0292 per share upon the partial conversion of two outstanding promissory notes.

In September, we issued 19,365,807 shares of common stock at prices of $0.05; $0.07; and $0.10 per share and warrant to purchase up to an additional 19,365,807 shares of common stock for two years from the date of issuance at prices of $0.10 and $0.15 per share.

In October, we issued an aggregate of 4,677,164 and $1,250,000 shares of common stock at a price of $0.0151 and $0.20, respectively, per share upon the partial conversion of four convertible promissory notes. In addition, we issued an aggregate of 7,630,769 shares of common stock at prices of $0.05, $0.07 and $0.10 per share to sixteen (16) private investors plus warrants to purchase up to an additional 7,630,769 shares of common stock for two years from the date of issuance at prices of $0.10 and $0.15 per share.

In November, we issued an aggregate of 1,659,846 shares of common stock at prices of $0.05, $0.07 and $0.10 per share to seven (7) private investors plus warrants to purchase up to an additional 1,659,846 shares of common stock for two years from the date of issuance at prices of $0.10 and $0.15 per share. In addition, we issued 3,437,364 shares of common stock at a price of $0.151 per share upon the partial conversion of two convertible promissory note.

In December, we issued an aggregate of 34,438,212 shares to nine (9) private investors at a price of $0.02, $0.03, $0.06 and $0.07 per share plus warrants to purchase up to an additional 34,438,212 shares at a price of $0.15 per share.

The foregoing issuances of unregistered securities were undertaken in reliance on the exemption from registration at Section 4(a)(2) of the Securities Act of 1933, as amended, for transactions not involving a public offering and in some instances in reliance on Regulation S under the Securities Act of 1933, as amended, for transactions with non-US residents residing abroad.

Item 6. Selected Financial Data.

There is no selected financial data required to be filed for a smaller reporting company.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

As of December 31, 2018, the Company had not generated significant revenues and had no income or cash flows from operations since inception. At December 31, 2018, the Company had sustained net loss of $1,900,341, and had an accumulated deficit of $9,094,954.

The Company’s independent auditors have issued a report raising substantial doubt about the Company’s ability to continue as a going concern. At present, the Company has no operations and the continuation of the Company as a going concern is dependent upon financial support from its stockholders, its ability to obtain necessary equity financing to continue operations and/or to successfully locate and negotiate with a business entity for the combination of the target company with the Company.

Management will pay all expenses incurred by the Company and there is no expectation of repayment for such expenses.

15

Balance sheet as at December 31, 2018 and 2017

Cash

At December 31, 2018 we had cash of $303,438 compared to $56 as at December 31, 2017. The increase is primarily due to proceeds received from private placements and note issuances offset by payment of capital work in progress, software development, consulting expenses and professional and legal expenses during the year.

Prepaid asset

Prepaid asset amounting to $140,000 represented commitment fee owed by us to a certain investor in respect of a drawdown facility which is not yet active. The asset was written off in the statement of operations during the year ended December 31, 2017 because the benefit associated in form of the equity line of credit no longer exists.

At December 31, 2018 we had prepaid expenses of $35,145 compared to $nil as at December 31, 2017. The balance represents the retainer fees paid to our lawyer and security deposit for the leased land for the facility to produce Medical Marijuana.

Sales tax recoverable

At December 31, 2018, we had $294,033 of gross sales tax recoverable compared to $nil as at December 31, 2017. This is due to sales tax paid by the subsidiary on expenses incurred during the year which are recoverable from the government.

We recorded an allowance of 25% of the sales tax recoverable of $75,902 stemming from the potential uncollectible balances within the outstanding sales tax recoverable amount.

Intangible assets

Intangible assets represent the amount incurred by the Company related to the development of the online chess gaming website. During the year ended December 31, 2017, after the management’s review and evaluation of its recoverability, the intangible asset was written off.

Additionally, intangible assets represent goodwill acquired during the acquisition of our subsidiary.

Capital work in progress

Capital work in progress represents the ongoing construction work of our cannabis cultivation 44,000 square feet facility on the leased land which initiated during September 2017. Since then, extensive demolition and structural upgrades have been carried out at the site. Construction remains on schedule for completion by mid-April 2019.

Accounts payable and accrued liabilities

Accounts payable amounting to $1,739,765 as at December 31, 2018, primarily represents consulting and construction services related to capital work in progress amounting to $ 1,330,693, interest on promissory notes amounting to $133,082, advertising and promotion services amounting to $332, marketing services cost amounting to $13,650, valuation fee accrual of $3,500, accounting fee accrual of $2,500 and review fee accrual of $3,000, and outstanding professional fees of $54,391.

Accounts payable amounting to $109,741 as at December 31, 2017, represents account payable for advertising and promotion amounting to $14,214, accrual for marketing services amounting to $13,650, and other accruals for professional services.

Payable to related parties

At December 31, 2018 we had $403,620 of amount payable to related parties as compared to $123,697 as at December 31, 2017. The balance represents management services fee outstanding to our two shareholder/managers and non-interest bearing, unsecured loans from other related parties.

16

Shareholder advances

Shareholder advances represents expenses paid by the owners from their personal funds. The amount of advance as at December 31, 2018 and 2017 was $209,046 and $304,322, respectively. The amounts repaid during the years ended December 31, 2018 and 2017 were $281,927 and $48,236, respectively.

Convertible promissory notes payable

In January 2018, we entered into an agreement with an investor and issued them a convertible promissory note amounting to $28,000. The outstanding amount under the note was due on or before October 30, 2018. During the year ended December 31, 2018, we issued 2,990,806 shares of common stock upon the full conversion of the principal balance and the outstanding accrued interest of the promissory note.

Convertible Redeemable note issued on October 18, 2016, amounting to $140,000 (Note H), representing commitment fee owed by the Company pursuant to Securities Purchase Agreement entered into by the Company dated October 18, 2016. During the year ended December 31, 2017, the pending S1 registration statement was withdrawn, removing the benefit associated with the prepaid asset. The amount was therefore written off as commitment fee in the statement of operations. During the period ended March 31, 2018, the Company obtained forgiveness of the liability and the interest associated with the note payable and recorded a gain of $153,471 as forgiveness of debt in the condensed consolidated statement of operations.

During the quarter ended June 30, 2018, the Company entered into a Debt Exchange Agreement with the holder of the convertible note F and G. The outstanding principal amounts of the notes were extinguished and settled by issuance of 2,500,000 common shares of the Company. The Company recorded a loss of $267,522 as a result of this settlement.

During quarter ended September 30, 2018, we entered into an agreement with two investors and issued them a convertible promissory note (Note M & N) amounting to $65,000 and $103,000, respectively. The outstanding amount under the notes are due on or before September 9, 2019 and December 5, 2019, respectively.

During quarter ended December 31, 2018, we entered into an agreement with two investors and issued them a convertible promissory note (Note O & P) amounting to $75,000 and $83,000, respectively. The outstanding amount under the notes are due on or before November 28, 2019 and June 24, 2020, respectively.

We accrued net interest on promissory notes during the year ended December 31, 2018 amounting to $67,923.

Principal amount outstanding as at December 31, 2018 was $479,079.

Income statement for the years ended December 31, 2018 and 2017

Revenues for the years ended December 31, 2018 and 2017

Revenue of 263 during year ended December 31, 2018 which represents membership fee for the Company’s chess gaming website.

Revenue of $15,434 during the year ended December 31, 2017 comprises an amount of $13,882, which we invoiced as consideration for the revenue earned from ticket sales for 2017 Orlando Sunshine Open and $1,552 as membership fee for the Company’s chess gaming website.

17

Expenses for the years ended December 31, 2018 and 2017

Expenses amounting to $1,900,341 for the year ended December 31, 2018 are primarily comprised of advisory and consultancy fee of $77,159, management services fee of $362,500, salaries and wages of $332,337, legal and professional fee of $314,482, software development expense of $32,246, website development and marketing expenses of $91,852, rent of $36,072 and expenses related to office of $34,440 together with the fair valuation impact of convertible notes amounting to $323,946 of the convertible promissory notes.

Expenses amounting to $1,742,682 for the year ended December 31, 2017 are primarily comprised of a commitment fee of $140,000, advisory and consultancy fee of $36,000, management services fee of $300,000 to related parties, legal and professional fee of $109,739, software development expense of $86,088, impairment of intangible asset amounting to $124,357, website development and marketing expenses of $87,307 and rent of $14,849 together with the fair valuation impact of convertible notes amounting to $955,305 of the convertible promissory notes.

Liquidity and Capital Resources

At December 31, 2018, the Company had a working capital deficit of $2,877,445 and an accumulated deficit of $9,094,954 (2017: Working capital deficit of $2,062,258 and an accumulated deficit of $7,194,613). The Company is actively seeking various financing operations to meet the working capital requirements.

We have relied on equity financing and personal funds for our operations. The proceeds may not be sufficient to effectively develop our business to the fullest extent to allow us to maximize our revenue potential, in which case, we will need additional capital.

We will need capital to allow us to invest in development. The Company anticipates that its future operations will generate positive cash flows starting in 2020 provided that it is successful in obtaining additional financing in the foreseeable future.

18

Item 8. Consolidated Financial Statements and Supplementary Data

TARGET GROUP INC.

CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2018 and 2017

	Page
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	F2
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Balance Sheets	F3
Consolidated Statements of Operations and Comprehensive Loss	F4
Consolidated Statements of Stockholders’ Deficit	F5
Consolidated Statements of Cash Flows	F6
Notes to the Consolidated Financial Statements	F7 - F28

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Target Group Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Target Group, Inc. (“the Company”) as of December 31, 2018 and 2017, and the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2018, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2018, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has generated minimal revenue since inception and has significant recurring losses. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

We have served as the Company’s auditor since 2017.

Spokane, Washington

April 1, 2019

F-2

TARGET GROUP INC.

CONSOLIDATED BALANCE SHEETS

	December 31,			December 31,
	2018			2017
	$			$
ASSETS
Current assets
Cash		303,438			56
Prepaid asset [Note 6]		35,145			—
Sales tax recoverable, net of allowance [Note 7]		220,525			—
		559,108			56
Long term assets
Furniture and equipment		856			—
Capital work in progress [Note 9]		2,595,022			—
Goodwill [Note 10]		3,594,195			—
Other assets		31,496			—
Total long term assets		6,221,569			—
Total assets		6,780,677			56
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable and accrued liabilities [Note 11]		1,739,765			109,741
Payable to related parties [Note 12]		403,620			123,697
Shareholder advances [Note 13]		209,046			304,322
Convertible promissory notes, net [Note 14]		221,639			572,718
Derivative liability [Note 14]		862,483			951,836
Total current liabilities		3,436,553			2,062,314
Total liabilities		3,436,553			2,062,314
Contingencies and commitments		—			—
Stockholders' deficit
Preferred stock, $0.0001 par value, 20,000,000 shares authorized; 1,000,000 shares issued and outstanding as at December 31, 2018 (1,000,000 shares outstanding as at December 31, 2017) [Note 15]		100			100
Common stock, $0.0001 par value, 850,000,000 shares authorized, 93,624,289 common shares outstanding as at December 31, 2018 (14,973,819 common shares outstanding as at December 31, 2017) [Note 15]		9,362			1,497
Stock subscription receivable [Note 15]		(220,319	)		—
Shares to be issued [Note 15]		1,359,349			73,000
Additional paid-in capital		11,346,467			5,057,758
Accumulated deficit		(9,094,954	)		(7,194,613	)
Accumulated comprehensive income		(55,881	)		—
Total stockholders' deficit		3,344,124			(2,062,258	)
Total liabilities and stockholders' deficit		6,780,677			56

The accompanying notes are an integral part of these consolidated financial statements.

F-3

TARGET GROUP INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

	For the			For the
	year ended			year ended
	December 31, 2018			December 31, 2017
	$			$
REVENUE		263			15,434
OPERATING EXPENSES
Commitment fee [Note 6]		—			140,000
Advisory and consultancy fee		77,159			36,000
Management services fee		362,500			300,000
Salaries and wages		332,337			—
Legal and professional fees		314,428			109,739
Software development expense		32,246			86,088
Impairment of intangible asset [Note 8]		—			124,357
Website development and marketing expenses		91,852			87,307
Rent and utilities		36,072			14,849
Travel expenses		—			11,874
Amortization of intangibles		—			13,254
Office and general		34,440			1,273
Total operating expenses		1,281,034			924,741
OTHER INCOME AND EXPENSES
Change in fair value of derivative liability		323,946			955,305
Loss (Gain) on forgiveness/settlement of debt		39,118			(226,306	)
Interest and bank charges		81,847			104,372
Exchange loss		33,546			4
Day one interest expense		62,288			—
Accretion expense		2,923			—
Allowance for sales tax recoverable		75,902			—
Total other expenses		619,570			833,375
Net loss before income taxes		(1,900,341	)		(1,742,682	)
Income taxes [Note 17]		—			—
Net loss		(1,900,341	)		(1,742,682	)
Foreign currency translation adjustment		(55,881	)		—
Comprehensive loss		(1,956,222	)		(1,742,682	)
Loss per share, basic and diluted		(0.04	)		(0.72	)
Weighted average shares - basic and diluted		46,202,047			2,413,677

The accompanying notes are an integral part of these consolidated financial statements.

F-4

TARGET GROUP INC.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2018 and 2017

	Preferred stock				Common stock				Shares to be issued				Stock			Additional					Accumulated
													Subscription			paid-in		Accumulated			Comprehensive
	Shares		Amount		Shares		Amount		Shares		Amount		Receivable			capital		deficit			Income			Total
			$				$				$					$		$						$
As at December 31, 2016		1,000,000		100		35,645		4		80,000		52,000		—			3,580,120		(5,451,931	)		—			(1,819,707	)
Shares to be issued as settlement for website development services [Note 15]		—		—		—		—		35,000		21,000		—			—		—			—			21,000
Shares issued as consideration for management services [Note 12]		—		—		12,920,000		1,292		—		—		—			694,708		—			—			696,000
Shares issued as consideration for advisory and other services [Note 12]		—		—		96,079		8		—		—		—			42,992		—			—			43,000
Shares issued on conversion of convertible promissory notes [Note 15]		—		—		1,922,094		193		—		—		—			261,097		—			—			261,290
Change due to extinguishment of derivative liability on debt conversion		—		—		—		—		—		—		—			478,841		—			—			478,841
Net loss		—		—		—		—		—		—		—			—		(1,742,682	)		—			(1,742,682	)
As at December 31, 2017		1,000,000		100		14,973,818		1,497		115,000		73,000		—			5,057,758		(7,194,613	)		—			(2,062,258	)
Shares issued as consideration for management services [Note 12]		—		—		5,529,412		553		—		—		—			83,447		—			—			84,000
Shares issued on conversion of convertible promissory notes [Note 15]		—		—		20,813,957		2,081		—		—		—			279,340		—			—			281,421
Shares issued as consideration for consideration of the intellectual property rights [Note 15]		—		—		—		—		250,000		27,000		—			—		—			—			27,000
Shares issued as consideration for consulting services and marketing expenses [Note 15]		—		—		1,550,000		155		—		—		—			72,520		—			—			72,675
Change due to extinguishment of derivative liability on debt conversion		—		—		—		—		—		—		—			720,789		—			—			720,789
Shares issued on settlement of liability - Black Bridge [Note 15]		—		—		2,500,000		250		—		—		—			342,250		—			—			342,500
Shares issued as consideration for private placement [Note 15]		—		—		22,757,102		2,276		40,337,532		1,259,349		(220,319	)		1,474,068		—			—			2,515,374
Shares and warrants issued for acquisition of subsidiary [Note 10 and 15]		—		—		25,500,000		2,550		—		—		—			3,316,295		—			—			3,318,845
Net loss		—		—		—		—		—		—		—			—		(1,900,341	)		—			(1,900,341	)
Foreign currency translation		—		—		—		—		—		—		—			—		—			(55,881	)		(55,881	)
As at December 31, 2018		1,000,000		100		93,624,289		9,362		40,702,532		1,359,349		(220,319	)		11,346,467		(9,094,954	)		(55,881	)		3,344,124

The accompanying notes are an integral part of these consolidated financial statements.

F-5

TARGET GROUP INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2018 and 2017 

	For the			For the
	year ended			year ended
	December 31, 2018			December 31, 2017
	$			$
OPERATING ACTIVITIES
Net loss for the period		(1,900,341	)		(1,742,682	)
Adjustment for non-cash items
Loss (Gain) on forgiveness/settlement of debt		39,118			(226,306	)
Change in fair value of derivative		323,946			955,305
Day one interest expense		62,288			—
Accretion expense		2,923			—
Amortization of intangibles		—			13,254
Impairment of intangibles		—			124,357
Shares issued/to be issued for advisory and other services		174,675			739,000
Penalty charged on convertible promissory notes		25,781			—
Allowance for sales tax recoverable		75,902			—
Changes in operating assets and liabilities:
Change in prepaid asset		(20,536	)		140,000
Change in sales tax recoverable		(172,905	)		—
Change in other assets		(31,496	)		—
Change in accounts payable and accrued liabilities		721,179			(264,982	)
Net cash used in operating activities		(699,466	)		(262,054	)
INVESTING ACTIVITIES
Amount invested on capital work in progress		(1,804,063	)		—
Net cash used in investing activities		(1,804,063	)		—
FINANCING ACTIVITIES
(Repayment) and utilization of bank overdraft facility		(63,072	)		—
Repayment of shareholder advances		(286,473	)		(48,236	)
Shareholder advances		191,194			208,084
Proceeds from issuance of promissory notes		354,000			86,000
Proceeds from private placements		2,515,376			—
Net cash provided by financing activities		2,711,025			245,848
Net increase (decrease) in cash during the period		207,496			(16,206	)
Effect of foreign currency translation		95,886			—
Cash, beginning of period		56			16,262
Cash, end of period		303,438			56
NON CASH TRANSACTIONS
Shares issued on conversion of debt		310,052			—
Shares issued as consideration against liability		9,000			—
Shares issued as consideration for acquisition		3,318,842			—
Cash paid for interest		—			—
Cash paid for taxes		—			—

The accompanying notes are an integral part of these consolidated financial statements.

F-6

TARGET GROUP INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF AND FOR THE YEARS THEN ENDED DECEMBER 31, 2018 and 2017

1. NATURE OF OPERATIONS

Target Group Inc. (formerly known as Chess Supersite Corporation) (“Target Group” or “the Company”) was incorporated on July 2, 2013 under the laws of the state of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions.

Target Group Inc. is a diversified and vertically integrated, progressive company with focus on both national and international presence. The Company owns and operates Canary Rx Inc, a final-stage, Canadian licensed producer, regulated under The Cannabis Act. Canary Rx Inc, operates a 44,000 square foot facility located in Norfolk County, Ontario, and has partnered with Dutch breeder, Serious Seeds, to cultivate exclusive & world class proprietary genetics. The Company has begun structuring multiple international production and distribution platforms and intends to continue rapidly expanding its global footprint as it focuses on building an iconic brand portfolio whose focus aims at developing cutting edge Intellectual Property among the medical and recreational cannabis markets. Target Group is committed to building industry-leading companies that transform the perception of cannabis and responsibly elevate the overall consumer experience.

The Company’s current business is to produce, manufacture, distribute, and conduct sales of cannabis products. As of the current year end, the company has not produced, manufactured, distributed or sold any cannabis products.

In May, 2014, the Company effected a change in control by the redemption of the stock held by its original shareholders, the issuance of shares of its common stock to new shareholders, the resignation of its original officers and directors and the appointment of new officers and directors.

On July 6, 2015, the Company filed its form S-1/A, to amend its form S-1 previously filed on January 26, 2015 and December 11, 2014. The prospectus relates to the offer and sale of 1,500,000 shares of common stock (the “Shares”) of the Company, $0.0001 par value per share, offered by the holders thereof (the “Selling Shareholder Shares”), who are deemed to be statutory underwriters. The selling shareholders will offer their shares at a price of $0.50 per share, until the Company’s common stock is listed on a national securities exchange or is quoted on the OTC Bulletin Board (or a successor); after which, the selling shareholders may sell their shares at prevailing market or privately negotiated prices, including (without limitation) in one or more transactions that may take place by ordinary broker’s transactions, privately-negotiated transactions or through sales to one or more dealers for resale.

On July 13, 2015, the Company received a notice of effectiveness from the SEC for the registration of its shares.

On July 3, 2018, the Company filed an amendment in its Articles of association to change its name to Target Group Inc. The Company was able to secure an OTC Bulletin Board symbol CBDY from Financial Industry Regulatory Authority (FINRA).

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., a Canadian corporation that holds a leasehold interest in a parcel of property located in Ontario’s Garden Norfolk County for the production of cannabis.

The Exchange Agreement provides that, subject to its terms and conditions, 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 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 Warrants. Upon the closing of the Exchange Agreement, the Visava shareholders held approximately 46.27% of the issued and outstanding Common Stock of the Company and Visava will continue its business operations as a wholly-owned subsidiary of the Company. The transaction was closed effective August 2, 2018.

F-7

2. BASIS OF PRESENTATION AND CONSOLIDATION

The summary of significant accounting policies presented below is designed to assist in understanding the Company’s consolidated financial statements. Such consolidated financial statements and accompanying notes are the representations of the Company’s management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America (“GAAP”) in all material respects, and have been consistently applied in preparing the accompanying consolidated financial statements.

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. Significant intercompany accounts and transactions have been eliminated upon consolidation.

3. GOING CONCERN

The Company has minimal revenue since inception to date and has sustained operating losses during the year ended December 31, 2018. The Company had working capital deficit of $2,877,445 and an accumulated deficit of $9,094,954 as of December 31, 2018. The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations and/or obtaining additional financing from its members or other sources, as may be required.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern; however, the above condition raises substantial doubt about the Company’s ability to do so. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

In order to maintain its current level of operations, the Company will require additional working capital from either cash flow from operations, sale of its equity or issuance of debt. However, the Company currently has no commitments from any third parties for the purchase of its equity. If the Company is unable to acquire additional working capital, it will be required to significantly reduce its current level of operations.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

F-8

CASH

Cash and cash equivalents include cash on hand and on deposit at banking institutions as well as all highly liquid short-term investments with original maturities of 90 days or less. The Company did not have cash equivalents as of December 31, 2018 and 2017.

GOODWILL AND INTANGIBLE ASSETS

Goodwill and other identifiable intangible assets with indefinite lives that are not being amortized, such as trade names, are tested at least annually for impairment and are written down if impaired. Identifiable intangible assets with finite lives are amortized over their estimated useful lives and are reviewed for impairment whenever facts and circumstances indicate that their carrying values may not be fully recoverable. The intangible assets with definite lives are being amortized over its estimated useful lives of 5 years using the straight-line method.

The Company operated an online chess site featuring sophisticated playing zones, game broadcasts with software analyses and top analysts' commentaries, education and other chess oriented resources. Intangible assets represented the amount incurred by the Company related to the development of the online chess gaming website.

Under ASC 985-20, there are two main stages of software development. These stages are defined as:

(A) When the technological feasibility is established, and

(B) When the product is available for general release to customers.

Costs incurred by the Company up to stage A have been expensed while costs incurred to move from stage A to stage B have been capitalized.

The Company evaluates the recoverability of the infinite-lived intangible assets for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If such review indicates that the carrying amount of intangible assets is not recoverable, the carrying amount of such assets is reduced to fair value.

During the year ended December 31, 2017, the intangible asset was written off based on management’s review and evaluation of its recoverability.

With respect to goodwill, during the year ended December 31, 2018, the Company has identified no circumstances which would call for further evaluation of goodwill impairment.

REVENUE RECOGNITION

In accordance with ASC 605, revenue is recognized when persuasive evidence of an arrangement exists, services have been performed, the amount is fixed and determinable, and collection is reasonably assured.

During the year ended December 31, 2018, the Company earned revenue of $263 as membership fee for the Company’s chess gaming website.

During the year ended December 31, 2017, the Company earned revenue of $15,434 which comprises of an amount of $13,882, which we invoiced as consideration for the revenue earned from ticket sales for 2017 Orlando Sunshine Open and $1,552 as membership fee for the Company’s chess gaming website.

F-9

FOREIGN CURRENCY TRANSLATION

The functional currency of the Company’s Canadian-based subsidiary is the Canadian dollar and the US-based parent is the U.S. dollar. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities are translated using the historical rate on the date of the transaction. All exchange gains or losses arising from translation of these foreign currency transactions are included in net income (loss) for the year. In translating the consolidated financial statements of the Company’s Canadian subsidiaries from their functional currency into the Company’s reporting currency of United States dollars, balance sheet accounts are translated using the closing exchange rate in effect at the balance sheet date and income and expense accounts are translated using an average exchange rate prevailing during the reporting period. Adjustments resulting from the translation, if any, are included in cumulative other comprehensive income (loss) in stockholders’ equity. The Company has not, to the date of these consolidated financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

SOFTWARE DEVELOPMENT COSTS

The costs incurred in the preliminary stages of development are expensed as incurred. Once an application has reached the development stage, internal and external costs, if direct and incremental, are capitalized until the application is substantially complete and ready for its intended use. These costs are amortized using the straight-line method over the estimated economic useful life of 5 years starting from when the application is substantially complete and ready for its intended use.

CONCENTRATION OF RISK

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash. The Company places its cash with high quality banking institutions. The Company had cash balances in excess of the Federal Deposit Insurance Corporation limit as of December 31, 2018.

INCOME TAXES

Under ASC 740, “Income Taxes,” deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Valuation allowances are established when it is more likely than not that some or all of the deferred tax assets will not be realized. As of December 31, 2018, there were no deferred taxes due to the uncertainty of the realization of net operating loss or carry forward prior to expiration.

OPERATING LEASES

The Company leases office space and the production facility under operating lease agreements. The lease term begins on the date of initial possession of the leased property for purposes of recognizing lease expense on a straight-line basis over the term of the lease. Lease renewal periods are considered on a lease-by-lease basis and are generally not included in the initial lease term.

LOSS PER COMMON SHARE

Basic loss per common share excludes dilution and is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted loss per common share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the loss of the entity. Convertible promissory notes as at December 31, 2018 are likely to be converted into shares, however, due to losses, their effect would be antidilutive. As of December 31, 2018, convertible notes outstanding could be converted into 9,125,002 shares of common stock.

F-10

CONVERTIBLE NOTES PAYABLE AND DERIVATIVE INSTRUMENTS

The Company has adopted the provisions of ASU 2017-11 to account for the down round features of warrants issued with private placements effective as of January 1, 2017. In doing so, warrants with a down round feature previously treated as derivative liabilities in the consolidated balance sheet and measured at fair value are henceforth treated as equity, with no adjustment for changes in fair value at each reporting period. The Company accounted for conversion options embedded in convertible notes in accordance with ASC 815. ASC 815 generally requires companies to bifurcate conversion options embedded in convertible notes from their host instruments and to account for them as free-standing derivative financial instruments. ASC 815 provides for an exception to this rule when convertible notes, as host instruments, are deemed to be conventional, as defined by ASC 815-40. The Company accounts for convertible notes deemed conventional and conversion options embedded in non-conventional convertible notes which qualify as equity under ASC 815, in accordance with the provisions of ASC 470-20, which provides guidance on accounting for convertible securities with beneficial conversion features. Accordingly, the Company records, as a discount to convertible notes, the intrinsic value of such conversion options based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt.

STOCK BASED COMPENSATION

The Company accounts for stock based payments in accordance with the provision of ASC 718, which requires that all share-based payments issued to acquire goods or services, including grants of employee stock options, be recognized in the statement of operations based on their fair values, net of estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Compensation expense related to share-based awards is recognized over the requisite service period, which is generally the vesting period.

The Company accounts for stock based compensation awards issued to non-employees for services, as prescribed by ASC 718-10, at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the guidelines in ASC 505-50. The Company issues compensatory shares for services including, but not limited to, executive, management, accounting, operations, corporate communication, financial and administrative consulting services.

MARKETING EXPENSES

Marketing and advertising expenditures are expensed in the annual period in which the expenditure is incurred.

IMPAIRMENT OF LONG-LIVED ASSETS

In accordance with ASC 360-10, the Company, on a regular basis, reviews the carrying amount of long-lived assets for the existence of facts or circumstances, both internally and externally, that suggest impairment. The Company determines if the carrying amount of a long-lived asset is impaired based on anticipated undiscounted cash flows, before interest, from the use of the asset. In the event of impairment, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the asset. Fair value is determined based on appraised value of the assets or the anticipated cash flows from the use of the asset or asset group, discounted at a rate commensurate with the risk involved.

F-11

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company follows guidance for accounting for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis. Additionally, the Company adopted guidance for fair value measurement related to nonfinancial items that are recognized and disclosed at fair value in the consolidated financial statements on a nonrecurring basis. The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements).

The three levels of the fair value hierarchy are as follows:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 inputs are unobservable inputs for the asset or liability. The carrying amounts of financial assets such as cash approximate their fair values because of the short maturity of these instruments.

The estimated fair value of cash, accounts payable, and accrued liabilities approximate their carrying values due to the short-term maturity of these instruments. The derivative liabilities of the promissory convertible notes are valued Level 3, refer to Note 15 for further details.

5. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

The Company qualifies as an Emerging Growth Company (EGC) and has elected the deferral period for all new standards.

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) or other standard setting bodies that are adopted by the Company as of the specified effective date.

In November 2016, an accounting pronouncement was issued by the FASB to update the guidance related to the presentation of restricted cash. Under this Update, the amendments require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments in this Update do not provide a definition of restricted cash or restricted cash equivalents. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in this Update should be applied using a retrospective transition method to each period presented. The adoption of this pronouncement did not have a material impact on the balance sheet and/or statement of operations.

In May 2017, the FASB issued Accounting Standards Update (ASU) No. 2017-09, Compensation – Stock Compensation (Topic 718). The amendments in this ASU require that the company apply modification accounting when the company changes the terms or conditions of a share-based payment award. The amendments in this Update apply to all companies. They became effective for public business entities in the annual period ending after December 15, 2017, and interim periods within those fiscal years, with early application permitted. The adoption of this pronouncement did not have a material impact on the balance sheet and/or statement of operations.

In July 2017, the FASB issued Accounting Standards Update (ASU) No. 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815).

F-12

I. Accounting for Certain Financial Instruments with Down Round Features

II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception

The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments.

The amendments in Part II of this Update recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect.

The amendments in this Update apply to all companies. Part I becomes effective for public business entities in the annual period ending after December 15, 2018, and interim periods within those fiscal years, with early application permitted. Management does not expect to have a significant impact of this ASU on the Company’s financial statements. The amendments in Part II of this Update do not require any transition guidance because those amendments do not have an accounting effect.

In August 2018, the FASB issued ASU 2018-13, “Changes to Disclosure Requirements for Fair Value Measurements”, which will improve the effectiveness of disclosure requirements for recurring and nonrecurring fair value measurements. The standard removes, modifies, and adds certain disclosure requirements, and is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company will be evaluating the impact this standard will have on the Company’s consolidated financial statements.

In June 2018, the FASB issued an accounting pronouncement (FASB ASU 2018-07) to expand the scope of ASC Topic 718, Compensation - Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The Company is currently in the process of evaluating the effects of this pronouncement on the consolidated financial statements.

On January 1, 2018, the Company adopted the accounting pronouncement issued by the FASB to clarify existing guidance on revenue recognition. This guidance includes the required steps to achieve the core principle that a company should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The Company adopted this pronouncement on a modified retrospective basis.

On January 1, 2018, the Company adopted the accounting pronouncement issued by the FASB to clarify how entities should present restricted cash and restricted cash equivalents in the statement of cash flows. This guidance requires entities to show changes in the total of cash, cash equivalents and restricted cash in the combined statement of cash flows. This guidance was adopted on a retrospective basis, and such adoption did not have a material impact on consolidated balance sheet and/or statement of operations

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This guidance revises the accounting related to leases by requiring lessees to recognize a lease liability and a right-of-use asset for all leases. The new lease guidance also simplifies the accounting for sale and leaseback transactions. This ASU is effective for annual reporting periods beginning after December 15, 2018 and early adoption is permitted. The Company is currently in the process of evaluating the effects of this pronouncement on the consolidated financial statements.

F-13

6. PREPAID ASSET

At December 31, 2018, the Company had prepaid expenses of $35,145 compared to $nil as at December 31, 2017. The balance represents the retainer fees paid to the lawyer and security deposit for the leased land of the subsidiary’s facility.

While as at December 31, 2016 prepaid asset represents a commitment fee owed by the Company to a certain investor in respect of a Securities Purchase Agreement entered into by the Company dated October 18, 2016. The Company has issued a convertible promissory note in respect of the commitment fee. The asset was, however, written off in the statement of operations during the year ended December 31, 2017 because the benefit associated in form of the equity line of credit no longer existed.

7. SALES TAX RECOVERABLE

At December 31, 2018, the Company had $294,033 of gross sales tax recoverable compared to $nil as at December 31, 2017. This is due to sales tax paid by the subsidiary on expenses incurred during the year which are recoverable from the government.

The Company has recorded an allowance of 25% of the sales tax recoverable of $75,902 stemming from the potential uncollectible balances within the outstanding sales tax recoverable amount.

8. INTANGIBLE ASSETS

The Company is continuing software development and is recognizing costs related to these activities as expenses during the year in which they are incurred. Intangible assets amounting to $137,611 were capitalized during the year ended and as at December 31, 2016. The Company evaluates the recoverability of the infinite-lived intangible assets for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. During the year ended December 31, 2017, the intangible asset was written off based on management’s review and evaluation of its recoverability.

9. CAPITAL WORK IN PROGRESS

The Company initiated construction on its 44,000 square foot cannabis cultivation facility in September of 2017. Since then, extensive demolition and structural upgrades have been carried out at the site. Construction remains on schedule for completion by mid-April 2019. As at December 31, 2018, the Company has capitalized $2,595,022 in payments to multiple vendors for the construction of the facility.

Construction in progress is not depreciated until ready for service.

10. GOODWILL

ASC Topic 805, “Business Combinations” requires that all business combinations be accounted for using the acquisition method and that certain identifiable intangible assets acquired in a business combination be recognized as assets apart from goodwill. ASC Topic 350, “Intangibles-Goodwill and Other” (“ASC 350”) requires goodwill and other identifiable intangible assets with indefinite useful lives not be amortized, such as trade names, but instead tested at least annually for impairment (which the Company tests each year end, absent any impairment indicators) and be written down if impaired. ASC 350 requires that goodwill be allocated to its respective reporting unit and that identifiable intangible assets with finite lives be amortized over their useful lives.

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., a Canadian corporation that holds a leasehold interest in a parcel of property located in Ontario’s Garden Norfolk County for the production of cannabis.

Pursuant to the Agreement, the Company acquired 100% of the issued and outstanding shares of Visava Inc. in exchange for the issuance of 25,500,000 shares of the Company’s Common Stock and will issue to the Visava shareholders, prorata Common Stock Purchase 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 Warrants. As a result of this transaction, Visava Inc. became a wholly owned subsidiary of the Company and the former shareholders of Visava Inc. owned approximately 46.27% of the Company’s shares of Common Stock. The transaction was closed effective August 2, 2018.

F-14

This acquisition was accounted for using the acquisition method of accounting. The fair value of assets, liabilities and intangible assets and the purchase price allocation as of August 2, 2018 was as follows:

	Allocation of Purchase Price
	$
Prepaid and other receivables		15,368
Sales tax recoverable		133,614
Furniture and equipment		897
Capital work in progress		898,422
Total assets		1,048,301
Bank overdraft		(63,693	)
Accounts payable		(1,158,164	)
Payable to related parties		(101,797	)
Total liabilities		(1,323,654	)
Net liabilities		(275,353	)
Goodwill		3,594,195
Total net assets acquired		3,318,842

	$
Number of Common Stock		25,500,000
Market price on the date of issuance		0.067
Fair value of Common Stock		1,695,750

	$
Number of warrants		25,000,000
Fair value price per warrant		0.065
Fair value of warrant		1,623,092
Fair value of Common Stock		1,695,750
Fair value of warrant		1,623,092
Purchase consideration		3,318,842

The fair value of these warrants was measured at the date of acquisition using the Black-Scholes option pricing model using the following assumptions:

· Forfeiture rate of 0%;

· Stock price of $0.067 per share;

· Exercise price of $0.10 per share

· Volatility at 329%

· Risk free interest rate of 2.66%;

· Expected life of 2 years; and

· Expected dividend rate of 0%

F-15

As at December 31, 2018, there were 25,000,000 warrants outstanding, fully vested and with a remaining contractual life term of 1.59 years.

Goodwill

The Company tests for impairment of goodwill at the reporting unit level. In assessing whether goodwill is impaired, the Company utilize the two-step process as prescribed by ASC 350. The first step of this test compares the fair value of the reporting unit, determined based upon discounted estimated future cash flows, to the carrying amount, including goodwill. If the fair value exceeds the carrying amount, no further work is required and no impairment loss is recognized. If the carrying amount of the reporting unit exceeds the fair value, the goodwill of the reporting unit is potentially impaired and step two of the goodwill impairment test would need to be performed to measure the amount of an impairment loss, if any. In the second step, the impairment is computed by comparing the implied fair value of the reporting unit’s goodwill with the carrying amount of the goodwill. If the carrying amount of the reporting unit’s goodwill is greater than the implied fair value of its goodwill, an impairment loss in the amount of the excess is recognized and charged to statement of operations.

11. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable amounting to $1,739,765 as at December 31, 2018, primarily represents consulting and construction services related to capital work in progress amounting to $ 1,330,693, interest on promissory notes amounting to $133,082, advertising and promotion services amounting to $332, marketing services cost amounting to $13,650, valuation fee accrual of $3,500, accounting fee accrual of $2,500 and review fee accrual of $3,000, and outstanding professional fees of $54,391. (2017: account payable for advertising and promotion amounting to $14,214, accrual for marketing services amounting to $13,650, and other accruals for professional services).

12. RELATED PARTY TRANSACTIONS AND BALANCES

During the year ended December 31, 2018, $300,000 (December 31, 2017: $300,000) was recorded as management services fee payable to Rubin Schindermann and Alexander Starr, who are shareholders in the Company. The amount is included in the related party balance as at December 31, 2017. They were issued 5,529,412 shares (December 31, 2016: 12,920,000) for these services performed as of and for the year ended December 31, 2018. These were recorded at fair value.

Advisory and consultancy fee includes $nil (December 31, 2017: $36,000) for Rubin Schindermann and Alexander Starr, who are shareholders in the Company.

Amounts payable to Rubin Schindermann and Alexander Starr as at December 31, 2018 were $200,00 and $139,697, respectively (2017: $92,000 and $31,697, respectively).

During the year ended December 31, 2017, Eric Schindermann, who is the son of Rubin Schindermann, became a lender to the Company by way of assignment of an existing promissory note liability of the Company amounting to $18,000. 1,591,556 shares of the Company’s common stock were issued to Eric Schindermann during the year end December 31, 2018, on full conversion of the debt.

During the year ended December 31, 2018, a loan owed to one of the Company’s shareholders in the amount of $72,570 (CAD$99,000) was extinguished in exchange of 15,800,100 Class A common shares of the Company’s subsidiary Visava Inc. Thereby, a gain on loan settlement in the amount of $74,933 (CAD$99,000) was recorded.

During the year ended December 31, 2018, $60,000 (December 31, 2017: $nil) was paid as remuneration for management services as salaries to Randal MacLeod, who is shareholder in the Company and President of the subsidiary, Visava.

13. SHAREHOLDER ADVANCES

Shareholder advances represent expenses paid by the owners from personal funds. The amount is non-interest bearing, unsecured and due on demand. The amount of advance as at December 31, 2018 and 2017 was $209,046 and $304,322, respectively. The amounts repaid during the years ended December 31, 2018 and 2017 were $281,927 and $48,236, respectively.

F-16

14. CONVERTIBLE PROMISSORY NOTES

During the year ended December 31, 2018, the Company issued convertible promissory notes, details of which are as follows:

Convertible promissory note issued on December 24, 2018, amounting to $83,000 (Note P).

Consistent with previous accounting treatment of similar financial instruments, no derivative liability is recognized for Note P as at December 31, 2018 due to the six month conversion clause as explained below.

The key terms/features of the convertible note are as follows:

1. The maturity date of the Note is June 24, 2020.

2. Interest on the unpaid principal balance of this Note shall accrue at the rate of 12 % per annum.

3. In the event the Note holder exercises the right of conversion, the conversion price will be equal to 61% of the average of the three (3) lowest trading price of the Company’s common stock for the fifteen (15) trading days prior to the date of conversion.

4. The Company shall not be obligated to accept any conversion request before six months from the date of the note.

5. Conversion is limited to the holder beneficially holding not more than 4.99% of the Company’s then issued and outstanding common stock after the conversion.

Convertible promissory note issued on November 28, 2018, amounting to $75,000 (Note O).

The key terms/features of the convertible note are as follows:

1. The maturity date of the Note is November 28, 2019.

2. Interest on the unpaid principal balance of this Note shall accrue at the rate of 10 % per annum.

3. In the event the Note holder exercises the right of conversion, the conversion price will be equal to 52% of the lowest trading price of the Company’s common stock for the twenty (20) trading days prior to the date of conversion.

4. Conversion is limited to the holder beneficially holding not more than 4.99% of the Company’s then issued and outstanding common stock after the conversion.

Convertible promissory note issued on September 5, 2018, amounting to $103,000 (Note N).

Consistent with previous accounting treatment of similar financial instruments, no derivative liability is recognized for Note N as at December 31, 2018 due to the six month conversion clause as explained below.

The key terms/features of the convertible note are as follows:

1. The maturity date of the Note is December 5, 2019.

2. Interest on the unpaid principal balance of this Note shall accrue at the rate of 12 % per annum.

F-17

3. In the event the Note holder exercises the right of conversion, the conversion price will be equal to 61% of the average of the three (3) lowest trading price of the Company’s common stock for the fifteen (15) trading days prior to the date of conversion.

4. The Company shall not be obligated to accept any conversion request before six months from the date of the note.

5. Conversion is limited to the holder beneficially holding not more than 4.99% of the Company’s then issued and outstanding common stock after the conversion.

Convertible promissory note issued on August 9, 2018, amounting to $65,000 (Note M).

The key terms/features of the convertible note are as follows:

1. The maturity date of the Note is September 9, 2019.

2. Interest on the unpaid principal balance of this Note shall accrue at the rate of 10% per annum.

3. In the event the Note holder exercises the right of conversion, the conversion price will be equal to 52% of the lowest closing bid price of the Company’s common stock for the twenty (20) trading days prior to the date of conversion.

4. Conversion is limited to the holder beneficially holding not more than 4.99% of the Company’s then issued and outstanding common stock after the conversion.

Convertible promissory note issued on January 16, 2018, amounting to $28,000 (Note L).

The key terms/features of the convertible note are as follows:

1. The maturity date of the Note was October 30, 2018.

2. Interest on the unpaid principal balance of this Note accrues at the rate of 12 % per annum.

3. In the event the Note holder exercises the right of conversion, the conversion price will be equal to 58% of the lowest closing bid price of the Company’s common stock for the fifteen (15) trading days prior to the date of conversion.

4. As maturity date has passed, the Company is now obligated to accept all conversion requests on the note.

5. Conversion is limited to the holder beneficially holding not more than 4.99% of the Company’s then issued and outstanding common stock after the conversion.

During the year ended December 31, 2017, the Company issued convertible promissory notes, details of which are as follows:

Convertible Redeemable note issued on November 28, 2017, amounting to $33,000 (Note K).

The key terms/features of the convertible note are as follows:

1. The maturity date of the Note is March 10, 2019.

2. Interest on the unpaid principal balance of this Note shall accrue at the rate of 12 % per annum.

3. In the event the Note holder exercises the right of conversion, the conversion price will be equal to 58% of the lowest closing bid price of the Company’s common stock for the twenty (15) trading days prior to the date of conversion. During June 2018, an amendment to the note was executed where by the conversion price was fixed at $0.0151 per share.

4. The Company shall not be obligated to accept any conversion request before six months from the date of the note.

5. Conversion is limited to the holder beneficially holding not more than 4.99% of the Company’s then issued and outstanding common stock after the conversion.

Convertible promissory note issued on May 5, 2017 amounting to $23,000 (Note J).

F-18

The key terms/features of the convertible note are as follows:

1. The maturity date of the note was February 20, 2018

2. Interest on the unpaid principal balance of this note accrued at the rate of 12% per annum.

3. When the Note holder exercised the right of conversion, the conversion price was equal to 58% of the average of the three (3) lowest closing bid price of the Company’s common stock for the fifteen (15) trading days prior to the date of conversion.

4. The Company was not be obligated to accept any conversion request before six months from the date of the note.

5. Conversion was limited to the holder beneficially holding not more than 4.99% of the Company’s then issued and outstanding common stock after the conversion.

Note J’s full principal amount and its associated accrued interest was converted during the year ended December 31, 2018.

Convertible promissory note issued on January 31, 2017 amounting to $33,000 (Note I).

The key terms/features of the convertible note are as follows:

1. The maturity date of the note was November 5, 2017

2. Interest on the unpaid principal balance of this note accrues at the rate of 12% per annum.

3. In the event the Note holder exercises the right of conversion, the conversion price will be equal to 58% of the average of the three (3) lowest closing bid price of the Company’s common stock for the fifteen (15) trading days prior to the date of conversion.

4. As maturity date has passed, the Company is now obligated to accept all conversion requests on the note.

5. Conversion is limited to the holder beneficially holding not more than 4.99% of the Company’s then issued and outstanding common stock after the conversion.

During the year ended December 31, 2016, the Company issued convertible promissory notes, details of which are as follows:

Convertible Redeemable note issued on October 18, 2016, amounting to $140,000 (Note H), representing commitment fee owed by the Company pursuant to Securities Purchase Agreement entered into by the Company dated October 18, 2016. The commitment fee was considered a prepaid asset. During the three months ended September 30, 2017, the pending S1 registration statement was withdrawn, removing the benefit associated with the prepaid asset. The amount was therefore written off as commitment fee in the statement of operations.

During the quarter ended March 31, 2018, the Company obtained forgiveness of the liability and the interest associated with the note payable and recorded a gain of $153,471 as forgiveness of debt in the consolidated statement of operations.

F-19

The key terms/features of the convertible note are as follows:

1. The maturity date of the Note was July 18, 2017.

2. Interest on the unpaid principal balance of this Note accrues at the rate of 7 % per annum.

3. In the event the Note holder exercises the right of conversion, the conversion price will be equal to 80% of the lowest trading price of the Company’s common stock for the twenty (20) trading days prior to the date of conversion.

4. As maturity date has passed, the Company is now obligated to accept all conversion requests on the note.

5. Conversion is limited to the holder beneficially holding not more than 9.99% of the Company’s then issued and outstanding common stock after the conversion.

Convertible Redeemable notes issued on October 18, 2016, amounting to $100,000 and $25,000 (Notes F and G).

The key terms/features of the convertible note are as follows:

1. The maturity date of the Note was July 18, 2017.

2. Interest on the unpaid principal balance of this Note accrues at the rate of 7 % per annum.

3. In the event the Note holder exercises the right of conversion, the conversion price will be equal to 57.5% of the lowest trading price of the Company’s common stock for the twenty (20) trading days prior to the date of conversion.

4. As maturity dates has passed, the Company is now obligated to accept all conversion requests on the note.

5. Conversion is limited to the holder beneficially holding not more than 9.99% of the Company’s then issued and outstanding common stock after the conversion.

During the six months ended June 30, 2018, the Company entered into a Debt Exchange Agreement with the holder of the convertible note F and G. The outstanding principal amounts of the notes were extinguished and settled by issuance of 2,500,000 common shares of the Company. The Company recorded a loss of $267,522 as a result of this settlement.

F-20

Convertible promissory note issued on May 13, 2016, amounting to $75,000 (Note D).

The key terms/features of the convertible note are as follows:

1. The maturity date of the note was May 13, 2017.

2. Interest on the unpaid principal balance of this note accrues at the rate of 8 % per annum.

3. In the event the Note holder exercises the right of conversion, the conversion price will be equal to 52% of the lowest closing bid price of the Company’s common stock for the twenty (20) trading days prior to the date of conversion.

4. As maturity date has passed, the Company is now obligated to accept all conversion requests on the note.

5. Conversion is limited to the holder beneficially holding not more than 4.99% of the Company’s then issued and outstanding common stock after the conversion.

Convertible promissory notes issued on March 1, 2016 amounting to $150,000 each to two investors (Notes B and C).

The key terms/features of the convertible notes are as follows:

1. The Holders have the right from six months after the date of issuance, and until any time until the Notes are fully paid, to convert any outstanding and unpaid principal portion of the Notes, into fully paid and non–assessable shares of Common Stock (par value $.0001).

2. The Notes are convertible at a fixed conversion price of 45% of the lowest trading price of the Common Stock as reported on the OTC Pink maintained by the OTC Markets Group, Inc. upon which the Company’s shares are currently quoted, for the four (4) prior trading days including the day upon which a Notice of Conversion is received by the Company. During June 2018, an amendment to the note was executed where by the conversion price was fixed at $0.0151 per share.

3. Interest on the unpaid principal balance of this Note accrues at the rate of twenty-four (24 %) per annum.

4. Beneficial ownership is limited to 4.99%.

5. The Notes may be prepaid in whole or in part, at any time during the period beginning on the issue date and ending on the maturity date September 1, 2016, beginning at 100% of the outstanding principal, accrued interest and certain other amounts that may be due and owing under the Notes.

Interest amounting to $67,923 was accrued for the year ended December 31, 2018 (2016: $99,195).

All notes maturing prior to the date of this report are outstanding.

F-21

Derivative liability

During the year ended December 31, 2018, holders of convertible promissory notes converted principal and interest amounting to $318,494 and $5,281, respectively. The Company recorded and fair valued the derivative liability as follows:

	Derivative liability as at December 31, 2017		Conversions during the period			Fair value adjustment			Derivative liability as at September 30, 2018		Conversions during the period			Change due to Issuances		Fair value adjustment			Derivative liability as at December 31, 2018
Note A		—		—			—			—		—			—		—			—
Note B and C		534,214		(172,060	)		598,991			961,145		(13,905	)		—		(572,329	)		374,911
Note D		87,821		(111,205	)		134,372			110,988		(39,321	)		—		(67,637	)		4,030
Note F		98,276		(3,377	)		(35,206	)		59,693		—			—		(48,745	)		10,948
Note G		21,096		—			586			21,682		—			—		(17,706	)		3,976
Note H		143,985		—			(143,985	)		—		—			—		—			—
Note I		39,048		—			104,274			143,322		(3,841	)		—		(109,337	)		30,144
Note J		27,396		(103,881	)		76,485			—		—			—		—			—
Note K		—		(232,111	)		271,552			39,441		—			—		(23,762	)		15,679
Note L		—		(56,266	)		63,036			6,770		—			—		(6,770	)		—
Note M		—		—			554,366			554,366		—			—		(449,185	)		105,181
Note N		—		—			—			—		—			102,380		(4,444	)		97,936
Note O		—		—			—			—		—			121,361		729			122,090
Note P		—		—			—			—		—			98,927		(1,339	)		97,588
		951,836		(678,900	)		1,624,471			1,897,407		(57,067	)		322,668		(1,300,525	)		862,483

During the quarter ended December 31, 2018, the Company changed its valuation method from Black-Scholes Model to Multinomial Lattice Model. This is considered a change in the Company’s estimate and therefore, it has been accounted prospectively.

Key assumptions used for the valuation of convertible notes

Derivative element of the convertible notes was fair valued using multinomial lattice model.  Following assumptions were used to fair value these notes as at December 31, 2018:

· Stock price of $0.0844 to $0.1700;

· Projected annual volatility of 247.7% to 560.6%;

· Discount rate of 47.75% to 66.01%;

· Dividend yield of 0%;

· Exercise price of $0.0151 to $0.0519 and

· Liquidity term of 0.69 to 1.48 years;

During the quarter ended December 31, 2018, the Company issued three (3) new notes, resulting in the initial derivative liability recognized in the amount of $322,668. As a result, the Company recorded an initial discount in the amount of $260,380 and a loss on issuance of notes (day one derivative) in the amount of $62,288. During the quarter, $2,923 of the discount has been amortized and the remaining portion expected to be amortized over the life of the notes in year ended December 31, 2019.

F-22

15. STOCKHOLDERS’ DEFICIT

On July 3, 2017, the Company filed an amended Certificate of Incorporation in Delaware to increase its authorized common stock to 20,000,000,000 shares. The Company’s authorized preferred stock remained at 20,000,000 shares. 1,000,000 shares of Preferred Stock having a par value of $0.0001 per share shall be designated as Series A Preferred Stock (“Series A Stock”). Dividends shall be declared and set aside for any shares of Series A Stock in the same manner and amount as for the Common Stock. Series A Stock, as a class, shall have voting rights equal to a multiple of 2X the number of shares of Common Stock issued and outstanding that are entitled to vote on any matter requiring shareholder approval.

The Company, as authorized by its Board of Directors and stockholders, has approved a Reverse Split whereby record owners of the Company’s Common Stock as of the Effective Date, shall, after the Effective Date, own one share of Common Stock for every one thousand (1,000) held as of the Effective Date. As a result, an aggregate of $387,978 was reclassified from common stock to additional paid in capital. The Effective Date of this amendment was November 1, 2017.

Effective September 25, 2018, the Company filed an amended Certificate of Incorporation in Delaware to decrease its authorized common stock to 850,000,000 shares. The Company’s authorized preferred stock remained at 20,000,000 shares.

Capitalization

The Company is authorized to issue 850,000,000 shares of common stock, par value $0.0001, of which 93,624,289 shares are outstanding as at December 31, 2018 (at December 31, 2017: 14,973,819 shares of common stock issued and outstanding). The Company is also authorized to issue 20,000,000 shares of preferred stock, par value $0.0001, of which 1,000,000 shares were outstanding as at December 31, 2018 and 2017.

Common Stock

Holders of shares of common stock are entitled to one vote for each share on all matters to be voted on by the stockholders. Holders of common stock do not have cumulative voting rights.

Subject to preferences that may be applicable to any outstanding shares of preferred stock, the holders of common stock are entitled to share ratably in dividends, if any, as may be declared from time to time by the board of directors in its discretion from funds legally available therefor.

Holders of common stock have no pre-emptive rights to purchase the Company’s common stock. There are no conversion or redemption rights or sinking fund provisions with respect to the common stock. The Company may issue additional shares of common stock which could dilute its current shareholder's share value.

During the quarter ended March 31, 2017, the Company issued 4,000 shares of common stock to individuals as consideration for advisory and consultancy services amounting to $36,000 which were recorded at fair value.

During the quarter ended March 31, 2017, the Company issued 13,917 shares of common stock to individuals on conversion of convertible promissory notes amounting to $26,126, respectively.

During the quarter ended March 31, 2017, the Company issued 20,000 shares of common stock each to Rubin Schindermann and Alexander Starr as consideration to settle outstanding management fee in the amount of $50,000 each, which were recorded at fair value.

During the quarter ended June 30, 2017, the Company issued 234,458 shares of common stock to individuals on conversion of convertible promissory notes amounting to $181,530.

F-23

During the quarter ended June 30, 2017, the Company issued 40,000 shares of common stock each to Rubin Schindermann and Alexander Starr as consideration to settle outstanding management fee in the amount of $108,000 each, which were recorded at fair value.

During the quarter ended September 30, 2017, the Company issued 675,627 shares of common stock to individuals on conversion of convertible promissory notes amounting to $51,729. Of these shares, the Company issued 533,348,384 shares at $30,779 and as a result of the contractual conversion price adjustments, these shares were issued below par value, with the offsetting balance recorded as a reduction in additional paid-in capital in the amount of $22,556 during the three months ended September 30, 2017.

During the quarter ended September 30, 2017, the Company issued 1,400,000 shares of common stock each to Rubin Schindermann and Alexander Starr as consideration to settle outstanding management fee in the amount of $140,000 each, which were recorded at fair value.

During the quarter ended December 31, 2017, the Company issued 5,000,000 shares of common stock each to Rubin Schindermann and Alexander Starr as consideration to settle outstanding management fee in the amount of $50,000 each, which were recorded at fair value.

During the year ended December 31, 2017, 533,348 shares of common stock were issued at a fair value which was lower than the par value of the shares. This resulted in a reduction in additional paid in capital amounting to $22,556.

During the quarter ended March 31, 2018, the Company issued 5,529,412 shares of common stock to Rubin Schindermann and Alexander Starr as consideration to settle outstanding management fee recorded at fair value of $84,000, of which $9,000 had previously been recorded in Accounts Payable. Additionally, the Company issued 5,156,933 shares of common stock to individuals on conversion of convertible promissory notes amounting to $21,518 and 300,000 shares were issued as consideration for consulting services amounting to $3,600.

During the quarter ended June 30, 2018, the Company issued 3,140,506 shares of common stock to individuals on conversion of convertible promissory notes amounting to $47,826 and 500,000 shares were issued as consideration for consulting services amounting to $22,500. Furthermore, the Company issued 2,500,000 shares of common stock to the note holder for settlement of debt. See Note 14 for detail.

During the quarter ended September 30, 2018, the Company issued 4,551,990 shares of common stock to individuals on conversion of convertible promissory notes amounting to $85,695. In addition to that, the Company issued 25,500,000 shares of common stock to shareholders of Visava Inc. as per the Exchange Agreement mentioned in Note 10 and 750,000 shares were issued as consideration for marketing services amounting to $46,575.

During the quarter ended December 31, 2018, the Company issued 7,964,528 shares of common stock to individuals on conversion of convertible promissory notes amounting to $126,384..

During the year ended December 31, 2018, 63,094,634 shares of common stock to be issued as consideration for private placements. These were recorded at fair value of $2,735,545, based on the cash proceeds received by the Company. As part of consideration for the private placement, the Company also agreed to issue warrants to purchase 63,094,634 shares of common stock. Out of the total amount of shares to be issued, the Company issued 22,757,102 shares during quarter ended December 31, 2018. Refer below for additional details regarding the warrant issued under the subheading “Warrants”. 

F-24

Additionally, $215,680 were received as partial consideration for private placements and since signed agreements were executed during December 2018, the remaining balance of $220,319 has been classified as a Stock subscription receivable under equity.

Shares to be issued include the following:

80,000 shares of common stock to be issued as compensation to advisers and consultants. These were recorded at fair value of $52,000, based on the market price of the Company’s stock on the date of issue.

35,000 to be issued as settlement of amount due for website development services amounting to $247,306. The fair value of the shares on the date of settlement was $21,000, resulting in gain on settlement amounting to $226,306 during year ended December 31, 2017.

40,337,532 shares of common stock to be issued as consideration for private placements. Proper allocation between common stock and additional paid in capital of the amount received will be completed in the period when the shares are issued.

250,000 shares of common stock to be issued as consideration of the intellectual property rights granted by Smit to the Company’s subsidiary. These were recorded at fair value of $27,000, based on the market price of the Company’s stock on the date of issue.

Preferred Stock

Shares of preferred stock may be issued from time to time in one or more series as may be determined by the board of directors. The board of directors may fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations or restrictions thereof without any further vote or action by the stockholders of the Company, except that no holder of preferred stock shall have pre-emptive rights. Any shares of preferred stock so issued would typically have priority over the common stock with respect to dividend or liquidation rights. The board of directors does not at present intend to seek stockholder approval prior to any issuance of currently authorized stock, unless otherwise required by law or otherwise.

Warrants

The fair value of the warrants issued to private placement purchasers was measured at the date of acquisition using the Black-Scholes option pricing model using the following assumptions:

· Forfeiture rate of 0%;

· Stock price between the range of $0.060 to $0.210 per share;

· Exercise price between the range of $0.050 to $0.150 per share

· Volatility at 646%

· Risk free interest rate between the range of 2.52% to 2.96%;

· Expected life of 2 and 3 years; and

· Expected dividend rate of 0%.

The fair value of these warrants was determined at $6,417,010.

As at December 31, 2018, related to private placements, there were 63,094,634 warrants were outstanding, fully vested and with a remaining contractual life term of a range between 1.49 and 2.98 years.

As at December 31, 2018, related to the acquisition of the Company’s subsidiary, there were 25,000,000 warrants outstanding, fully vested and with a remaining contractual life term of 1.59 years.

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16. LEASE AGREEMENT

The Company is a party to a 10-year lease agreement (initiated on July 2014) with respect to its facility to produce Medical Marijuana. Total rent for the building is $1,833 (CAD $2,500) plus applicable taxes per month until the notification of the right to produce under their application for approval as licensed producer under the Marijuana for Medical Purpose Regulation. to the notification, as of January 1st 2019 the rent increased to $18,326 (CAD $25,000) plus applicable taxes per month.

The Company is also party to a five-year lease agreement dated August 29, 2018 for the lease of its office premises. Total rent for the premises is $1,298 plus applicable taxes per month.

Future minimum rent payments for both leases are as follows:

	$
2019		235,488
2020		235,488
2021		235,488
2022		235,488
2023 and onwards		340,252
		1,282,204

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17. INCOME TAXES

Income taxes

The Tax Cuts and Jobs Act (the “Act”) enacted on December 22, 2017 reduces the US federal corporate tax rate from 35% to 21% and requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. As of December 31, 2018, the Company has not completed the accounting for the tax effects of enactment of the Act; however, as described below, it has made a reasonable estimate of the effects on existing deferred tax balances. These amounts are provisional and subject to change.

The provision for income taxes is calculated at US corporate tax rate of approximately 21% (2017: 35%) as follows:

	2018			2017
Expected income tax recovery from net loss	$	399,072		$	365,963
Tax effect of expenses not deductible for income tax:
Annual effect of book/tax differences		(131,861	)		(303,870	)
Change in valuation allowance		(267,211	)		(62,093	)
		—			—

Deferred tax assets

Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Net deferred tax assets consist of the following components as of December 31:

	2018			2017
Tax effect of NOL Carryover	$	563,454		$	452,343
Cumulative change due to reduced rate					(156,117	)
Less valuation allowance		(563,454	)		(296,226	)
		—			—

At December 31, 2018, the Company performed a comprehensive analysis of its tax estimates and revised comparative figures accordingly, which had no net impact on deferred tax recorded. The Company had net operating loss carryforwards of approximately $2,683,112 (2017: $1,410,682) that may be offset against future taxable income from the year by 2038. No tax benefit has been reported in the December 31, 2018 consolidated financial statements since the potential tax benefit is offset by a valuation allowance of the same amount. The Company is taxed in the United States at the Federal level. All tax years since inception are open to examination because no tax returns have been filed.

F-27

18. SUBSEQUENT EVENTS

The Company’s management has evaluated subsequent events up to April 1, 2019, the date the consolidated financial statements were issued, pursuant to the requirements of ASC 855 and has determined the following material subsequent events:

 Effective January 25, 2019, the Company entered into an Agreement and Plan of Share Exchange (“Exchange Agreement”) with CannaKorp Inc., a Delaware corporation (“CannaKorp”). Company had previously entered into a Letter of Intent with CannaKorp dated November 30, 2018 which was disclosed in the Company’s report on Form 8-K filed December 4, 2018. The Exchange Agreement is the definitive agreement based on the general terms and conditions contained in the Letter of Intent.

The Exchange Agreement provides that, subject to its terms and conditions, the Company will issue to the CannaKorp shareholders an aggregate of 30,000,000 shares of the Company’s common stock, based on a price per share of $0.10, in exchange for 100% of the issued and outstanding common stock of CannaKorp held by the CannaKorp shareholders. In addition, the Company will issue Common Stock Purchase Warrants (“Warrants”) in exchange for all outstanding and promised CannaKorp stock options. The Warrants will grant the holders thereof the right to purchase up to approximately 7,200,000 shares of the Company’s common stock. The Company will also assume all outstanding liabilities of CannaKorp.

Under the terms of the Exchange Agreement, the Company is not obligated to consummate the share exchange unless the CannaKorp shareholders have tendered to the Company not less than 90% of the outstanding CannaKorp capital stock. Upon the closing of the Exchange Agreement, CannaKorp will continue its business operations as a subsidiary of the Company.

The transaction was closed effective February 5, 2019 and therefore no major operational activity relevant to the reporting period took place. Future filings however would include required information and disclosure on operational activity of CannaKorp.

During March 2019, the Company issued 30,407,712 shares pursuant to the Exchange Agreement explained above to the shareholder of CannaKorp.

During January 2019, the Company received the remaining funds of $220,319 pertaining to private placements for which partial funds were received during the quarter ended December 31, 2018.

As disclosed in Note 15, during March 2019, the Company issued 29,074,075 shares pursuant to private placement funds received during the year ended December 31, 2018.

During March 2019, the Company issued 588,237 shares of common stock pursuant to conversion notices received from one of the holders of the convertible promissory notes.

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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

There were no changes in or disagreements with accountants on accounting and financial disclosure for the period covered by this report.

Item 9A. Controls and Procedures

Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 COSO Framework or COSO). Based on this evaluation, management has concluded that our internal control over financial reporting was not effective as of December 31, 2018. Management identified segregation of duties & maintenance of current accounting records as material weaknesses in internal control over financial reporting.

Management is in the continuous process of improving the internal control over financial reporting by engaging a Certified Public Accountant as a consultant to mitigate some of the identified weaknesses. The Company is still in its development stage and intends on bringing in necessary resources to address the weaknesses once full operations have commenced. Management concludes that internal control over financial reporting is ineffective at December 31, 2018.

Management’s Report of Internal Control over Financial Reporting

Our management carried out an evaluation of the effectiveness of our “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 (the “Exchange Act”) Rules 13a-15(e) and 15-d-15(e)) as of the end of the period covered by this report (the “Evaluation Date”). Based upon that evaluation, our chief executive officer and chief financial officer each concluded that as of the Evaluation Date, our disclosure controls and procedures are ineffective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to our management, including our chief executive officer and our chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There have been no changes in the Company’s internal controls over financial reporting during its fourth fiscal quarter that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

Item 9B. Other information

Not applicable.

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PART III

Item 10. Directors, Executive Officers, and Corporate Governance;

The Directors and Officers of the Company are as follows:

NAME	AGE	POSITIONS AND OFFICES HELD
Rubin Schindermann	67	Chief Executive Officer, Chief Financial Officer and Director
Alexander Starr	67	President and Director

Management of Target Group Inc.

Set forth below are the names of the directors and officers of the Company, all positions and offices with the Company held, the period during which they have served as such, and the business experience during at least the last five years:

Rubin Schindermann

Rubin Schindermann serves as the Chief Executive Officer and a director of the Company. Mr. Schindermann has been in the business community for over 30 years. In 2002 he established Rubin and Associates Financial Services where he provided services to several private and public companies while providing corporate governance and management direction to ensure complete transparency for shareholders. Since 2011, Mr. Schindermann has served as president and director of Hard Asset Capital Corp. Mr. Schindermann holds a Bachelor of Arts degree in science. Mr. Schindermann holds a BA from the University Of Saratov USSR and a Degree in Accountancy from the University of Tel-Aviv.

Alexander Starr

Alexander (Sasha) Starr serves as President and a director of the Company. Mr. Starr has many years’ experience in the business community and brings an established record in business development, marketing and management. From 2009 to 2013, Mr. Starr was president of Oxford Capital Partners, a division of a 1520814 Ontario Inc. company, responsible for day-to-day operations of the company, consulting with client companies to establish and develop business ventures. From 2013 to the present, Mr. Starr has served as president of Chess Supersite Inc., overseeing the operations and development of the supersite and promoting chess issues. Mr. Starr is a Master of Chess and a voting member of the Canadian Federation of Chess. Mr. Starr received his BA from Gorki State University, Russia.

Term of Office

Our director is appointed for a one-year term to hold office until the next annual general meeting of our stockholders or until removed from office in accordance with our bylaws. Our officers, if any, are appointed by our board of directors and hold office until removed by the board. All officers and directors listed above will remain in office until the next annual meeting of our stockholders, and until their successors have been duly elected and qualified. There are no agreements with respect to the election of Directors. We have not compensated our Directors for service on our Board of Directors, any committee thereof, or reimbursed for expenses incurred for attendance at meetings of our Board of Directors and/or any committee of our Board of Directors. Officers are appointed annually by our Board of Directors and each Executive Officer serves at the discretion of our Board of Directors. We do not have any standing committees. Our Board of Directors may in the future determine to pay Directors’ fees and reimburse Directors for expenses related to their activities.

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None of our Officers and/or Directors have filed any bankruptcy petition, been convicted of or been the subject of any criminal proceedings or the subject of any order, judgment or decree involving the violation of any state or federal securities laws within the past five (5) years.

Audit Committee

At the present time, we do not have a standing audit committee of the Board of Directors. Management has determined not to establish an audit committee at present because of our limited resources and limited operating activities do not warrant the formation of an audit committee or the expense of doing so. We do not have a financial expert serving on the Board of Directors or employed as an officer based on management’s belief that the cost of obtaining the services of a person who meets the criteria for a financial expert under Item 401(e) of Regulation S-B is beyond its limited financial resources and the financial skills of such an expert are simply not required or necessary for us to maintain effective internal controls and procedures for financial reporting in light of the limited scope and simplicity of accounting issues raised in its consolidated financial statements at this stage of its development. We have not formed a Compensation Committee, Nominating and Corporate Governance Committee or any other Board Committee as of the filing of this Annual Report.

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Certain Legal Proceedings

No director, nominee for director, or executive officer of the Company has appeared as a party in any legal proceeding material to an evaluation of his ability or integrity during the past five years.

Compliance with Section 16(A) of the Exchange Act

Our common stock is registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended, (“Exchange Act”). Our officers, directors and persons who beneficially hold more than 10% of our issued and outstanding equity securities are required to file reports of ownership and changes in ownership with the Securities and Exchange Commission. As of the date of this report, all persons required to file report pursuant to Section 16 of the Exchange have filed the required reports.

Code of Ethics

We have adopted a Code of Business Conduct and Ethics (“Code”) that applies to our officers, directors and employees including our Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer. A copy of the Code will be provided to any person upon request, without charge. A request for a copy of the Code should be addressed in writing to the Company at 1131A Leslie Street, Suite 101, Toronto, Ontario, Canada M3C 3L8.

Item 11. Executive Compensation

The Company has not to date paid any compensation to any officer or director. The Company intends to pay annual salaries to all its officers and will pay an annual stipend to its directors when, and if, it completes a primary public offering for the sale of securities and/or the Company reaches profitability, experiences positive cash flow and/or obtains additional funding. At such time, the Company anticipates offering cash and non-cash compensation to officers and directors. In addition, although not presently offered, the Company anticipates that its officers and directors will be provided with a group health, vision and dental insurance program at subsidizes rates, or at the sole expense of the Company, as may be determined on a case-by-case basis by the Company in its sole discretion. In addition, the Company plans to offer 401(k) matching funds as a retirement benefit, paid vacation days and paid holidays.

Currently, the Company accrues management fee amounting to $150,000 each for its two executives. During the year ended December 31, 2018, the Company issued 5,529,412 shares of common stock each to Rubin Schindermann and Alexander Starr as consideration to settle outstanding management fee in the amount of $84,000 each.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth certain information as of April 1, 2019 regarding the beneficial ownership of our Common Stock by (i) our named executive officer, and (ii) each of our directors, (iii) each person we know to beneficially own more than 5% of our outstanding Common Stock. All shares of our Common Stock shown in the table reflect sole voting and investment power.

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Name and Address of Beneficial Owner	Position	Common shares beneficially owned			Percent of Common shares beneficially owned (1)
Rubin Schindermann Address: 55 Administration Road, Unit 13, Vaughan, Ontario, Canada	CEO, Director		9,238,706	(2)		6.01	%
Alexander Starr Address: 55 Administration Road, Unit 13, Vaughan, Ontario, Canada	President, Director		9,238,706	(2)		6.01	%
Melix Inc. PO Box 61 Harbour Centre, Grand Cayman KY 1-1102 Cayman Island			8,000,000			5.21	%
Oakland Family Trust 3448 Lakeshore Road Burlington, Ontario, Canada L7N 1B3			15,555,555			10.12	%
Weinstein Family Trust 2439 Lakeshore Road Burlington, Ontario, Canada L7R 1C1			19,257,288			12.53	%
Total owned by officers and directors			18,477,412			12.02	%

(1) Based on 153,694,313 shares outstanding as of the date of this Report.

(2) Includes 2,000 shares held by Chess Supersite, Inc., a corporation organized under the laws of Ontario, Canada. Mr. Schindermann and Mr. Starr are executives and directors of the entity, and they may be deemed the beneficial owners of the shares held by such entity.

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Item 13. Certain Relationships and Related Transactions and Director Independence

Mr. Schindermann and Mr. Starr, who are respectively the Chief Executive Officer and President of the Company, as well as directors, are also executives and directors of Chess Supersite, Inc. Mr. Schindermann was the Chief Executive Officer and Chief Financial Officer of Target Group Inc. from November 2011 to present. Mr. Starr was a founder and President of Target Group Inc. As of the date of this Report, Mr. Schindermann and Mr. Starr own directly and beneficially 9,238,706 and 9,238,706 shares respectively of the Company’s 153,694,313 outstanding shares of Common Stock.

Item 14. Principal Accounting Fees and Services.

Our auditor, Fruci & Associates II, PLLC, is the registered independent accounting firm.

Audit Fees

We were billed $17,000 and $17,000 for years ended December 31, 2018 and 2017 respectively for professional services rendered for the audit of our consolidated financial statements.

Audit Related Fees

Other audit related fee for years ended December 31, 2018 and 2017 was $2,500 and $2,500, respectively.

Tax Fees

There was no Tax Fees for years ended December 31, 2018 and 2017.

All Other Fees

There were no other fees for years ended December 31, 2018 and 2017.

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PART IV

Item 15. Exhibits, Financial Statement Schedules

The following documents are filed as part of this Annual Report on Form 10-K

(a) Consolidated Financial Statements

	Page
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Financial Statements for the years ended December 31, 2018 and 2017
Consolidated Balance Sheets	F-3
Consolidated Statements of Operations and Comprehensive Loss	F-4
Consolidated Statement of Stockholders’ Equity (Deficit)	F-5
Consolidated Statements of Cash Flows	F-6
Notes to Consolidated Financial Statements	F-7

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(b) Exhibits

EXHIBIT INDEX

		Incorporated by Reference
Exhibit No.	Description	Form	Exhibit	Filing Date
2.1	Asset Acquisition Agreement	8-K	2.1	12/11/14
2.1.1	Agreement and Plan of Share Exchange dated June 27, 2018 with Visava Inc.	8-K	2.1	07/03/18
2.1.2	Agreement and Plan of Share Exchange dated January 25, 2019 with CannaKorp Inc. and David Manly, as Stockholder Representative	8-K	2.1	01/29/19
3(i)(a)	Articles of Incorporation	10-12G	3.1	09/13/13
3(i)(a)	Amended Articles of Incorporation	8-K		05/13/14
3(i)(a)	Certificate of Amendment	8-K	3(i)	10/20/16
3.2	Bylaws	10-12G	3.2	09/13/13
10.1	Form of Securities Purchase Agreement-Blackbridge Capital Growth Fund, LLC	10-K	10.1	03/31/17
10.2	Form of Convertible Promissory Note	10-K	10.2	03/31/17
10.3	Form of Convertible Promissory Note	10-K	10.3	03/31/17
10.4	Form of Convertible Promissory Note	10-K	10.4	03/31/17
10.5	Form of Securities Purchase Agreement-Crown Bridge Partners, LLC	10-K	10.5	03/31/17
10.6	Form of Convertible Promissory Note	10-K	10.6	03/31/17
10.7	Form of Convertible Promissory Note	8-K		03/07/16
10.8	Non-Negotiable Promissory Note	8-K		03/07/16
10.9	Securities Purchase Agreement	8-K		03/07/16
10.10	Securities Purchase Agreement-Power Up Lending Group Ltd.	10-K	10.10	03/28/18
10.11	Convertible Promissory Note-Power-Up Lending Group Ltd.	10-K	10.11	03/28/18
10.12	Securities Purchase Agreement-Power Up Lending Group Ltd.	10-K	10.12	03/28/18
10.13	Convertible Promissory Note-Power-Up Lending Group Ltd.	10-K	10.13	03/28/18
10.14*	Securities Purchase Agreement-Power Up Lending Group Ltd. dated December 24, 2018
10.15*	Convertible Promissory Note-Power-Up Lending Group Ltd. dated December 24, 2018
10.16*	Distribution, Collaboration and Licensing Agreement dated December 6, 2018 between Target Group Inc, Canary Rx Inc., Serious Seeds B.V. and Simon Smit
10.17*	Licensed Producer/Licensed Processor Sales Agency Agreement dated December 13, 2018 with Cannavolve Inc.
31.1*	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document*
101.SCH	XBRL Taxonomy Extension Schema*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase*
101.DEF	XBRL Taxonomy Extension Definition Linkbase*
101.LAB	XBRL Taxonomy Extension Label Linkbase*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase*

* Filed herewith

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: April 1, 2019	TARGET GROUP INC.
	By:	/s/ Rubin Schindermann
		Rubin Schindermann
		Chief Executive Officer and Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Name	Title	Date
/s/ Rubin Schindermann	Director	April 1, 2019
Rubin Schindermann
/s/ Alexander Starr	Director	April 1, 2019
Alexander Starr

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EX-10.14

Exhibit 10.14

SECURITIES PURCHASE AGREEMENT

This SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of December 24, 2018, by and between Target Group Inc. fka Chess Supersite Corporation, a Delaware corporation, with its address at 55 Administration Road, Unit 8, Vaughan, Ontario, Canada L4K 4G9 (the “Company”), and POWER UP LENDING GROUP LTD., a Virginia corporation, with its address at 111 Great Neck Road, Suite 216, Great Neck, NY 11021 (the “Buyer”).

WHEREAS:

A.The Company and the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by the rules and regulations as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “1933 Act”); and

B.Buyer desires to purchase and the Company desires to issue and sell, upon the terms and conditions set forth in this Agreement a convertible note of the Company, in the form attached hereto as Exhibit A, in the aggregate principal amount of $83,000.00 (together with any note(s) issued in replacement thereof or as a dividend thereon or otherwise with respect thereto in accordance with the terms thereof, the “Note”), convertible into shares of common stock, $0.0001 par value per share, of the Company (the “Common Stock”), upon the terms and subject to the limitations and conditions set forth in such Note.

NOW THEREFORE, the Company and the Buyer severally (and not jointly) hereby agree as follows:

1. Purchase and Sale of Note.

a.Purchase of Note. On the Closing Date (as defined below), the Company shall issue and sell to the Buyer and the Buyer agrees to purchase from the Company such principal amount of Note as is set forth immediately below the Buyer’s name on the signature pages hereto.

b.Form of Payment. On the Closing Date (as defined below), (i) the Buyer shall pay the purchase price for the Note to be issued and sold to it at the Closing (as defined below) (the “Purchase Price”) by wire transfer of immediately available funds to the Company, in accordance with the Company’s written wiring instructions, against delivery of the Note in the principal amount equal to the Purchase Price as is set forth immediately below the Buyer’s name on the signature pages hereto, and

(ii)the Company shall deliver such duly executed Note on behalf of the Company, to the Buyer, against delivery of such Purchase Price.

c.Closing Date. Subject to the satisfaction (or written waiver) of the conditions thereto set forth in Section 6 and Section 7 below, the date and time of the issuance and sale of the Note pursuant to this Agreement (the “Closing Date”) shall be 12:00 noon, Eastern Standard Time on or about December 26, 2018, or such other mutually agreed upon time. The closing of the transactions contemplated by this Agreement (the “Closing”) shall occur on the Closing Date at such location as may be agreed to by the parties.

2.Buyer’s Representations and Warranties. The Buyer represents and warrants to the Company that:

a.Investment Purpose. As of the date hereof, the Buyer is purchasing the Note and the shares of Common Stock issuable upon conversion of or otherwise pursuant to the Note (such shares of Common Stock being collectively referred to herein as the “Conversion Shares” and, collectively with the Note, the “Securities”) for its own account and not with a present view towards the public sale or distribution thereof, except pursuant to sales registered or exempted from registration under the 1933 Act.

b.Accredited Investor Status. The Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D (an “Accredited Investor”).

c.Reliance on Exemptions. The Buyer understands that the Securities are being offered and sold to it in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and the Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of the Buyer to acquire the Securities.

d.Information. The Company has not disclosed to the Buyer any material nonpublic information and will not disclose such information unless such information is disclosed to the public prior to or promptly following such disclosure to the Buyer.

e.Legends. The Buyer understands that the Note and, until such time as the Conversion Shares have been registered under the 1933 Act; or may be sold pursuant to an applicable exemption from registration, the Conversion Shares may bear a restrictive legend in substantially the following form:

"THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY STATE SECURITIES LAWS, AND MAY NOT BE PLEDGED, SOLD, ASSIGNED, HYPOTHECATED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR (2) THE ISSUER OF SUCH SECURITIES RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE REASONABLY ACCEPTABLE TO THE ISSUER’S TRANSFER AGENT, THAT SUCH SECURITIES MAY BE PLEDGED, SOLD, ASSIGNED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS."

2

The legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of any Security upon which it is stamped, if, unless otherwise required by applicable state securities laws, (a) such Security is registered for sale under an effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to an exemption from registration without any restriction as to the number of securities as of a particular date that can then be immediately sold, or (b) such holder provides the Company with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Security may be made without registration under the 1933 Act, which opinion shall be accepted by the Company so that the sale or transfer is effected. The Buyer agrees to sell all Securities, including those represented by a certificate(s) from which the legend has been removed, in compliance with applicable prospectus delivery requirements, if any. In the event that the Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant to an exemption from registration, such as Rule 144, at the Deadline, it will be considered an Event of Default pursuant to Section 3.2 of the Note; provided such opinion complies with the Irrevocable Transfer Agent Instructions (as defined herein).

f.Authorization; Enforcement. This Agreement has been duly and validly authorized. This Agreement has been duly executed and delivered on behalf of the Buyer, and this Agreement constitutes a valid and binding agreement of the Buyer enforceable in accordance with its terms.

3.Representations and Warranties of the Company. The Company represents and warrants to the Buyer that:

a.Organization and Qualification. The Company and each of its Subsidiaries (as defined below), if any, is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, with full power and authority (corporate and other) to own, lease, use and operate its properties and to carry on its business as and where now owned, leased, used, operated and conducted. “Subsidiaries” means any corporation or other organization, whether incorporated or unincorporated, in which the Company owns, directly or indirectly, any equity or other ownership interest.

b.Authorization; Enforcement. (i) The Company has all requisite corporate power and authority to enter into and perform this Agreement, the Note and to consummate the transactions contemplated hereby and thereby and to issue the Securities, in accordance with the terms hereof and thereof, (ii) the execution and delivery of this Agreement, the Note by the Company and the consummation by it of the transactions contemplated hereby and thereby (including without limitation, the issuance of the Note and the issuance and reservation for issuance of the Conversion Shares issuable upon conversion or exercise thereof) have been duly authorized by the Company’s Board of Directors and

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no further consent or authorization of the Company, its Board of Directors, or its shareholders is required, (iii)this Agreement has been duly executed and delivered by the Company by its authorized representative, and such authorized representative is the true and official representative with authority to sign this Agreement and the other documents executed in connection herewith and bind the Company accordingly, and (iv) this Agreement constitutes, and upon execution and delivery by the Company of the Note, each of such instruments will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms.

c.Capitalization. As of the date hereof, the authorized common stock of the Company consists of 20,000,000,000 authorized shares of Common Stock, $0.0001 par value per share, of which 76,438,259 shares are issued and outstanding; and 12,958,626 shares are reserved for issuance upon conversion of the Note. All of such outstanding shares of capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and non-assessable. .

d.Issuance of Shares. The Conversion Shares are duly authorized and reserved for issuance and, upon conversion of the Note in accordance with its terms, will be validly issued, fully paid and non-assessable, and free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Company and will not impose personal liability upon the holder thereof.

e.No Conflicts. The execution, delivery and performance of this Agreement and the Note by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance and reservation for issuance of the Conversion Shares) will not (i) conflict with or result in a violation of any provision of the Certificate of Incorporation or By-laws, or (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default (or an event which with notice or lapse of time or both could become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture, patent, patent license or instrument to which the Company or any of its Subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations and regulations of any self-regulatory organizations to which the Company or its securities are subject) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected (except for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect). The businesses of the Company and its Subsidiaries, if any, are not being conducted, and shall not be conducted so long as the Buyer owns any of the Securities, in violation of any law, ordinance or regulation of any governmental entity. “Material Adverse Effect” means any material adverse effect on the business, operations, assets, financial condition or prospects of the Company or its Subsidiaries, if any, taken as a whole, or on the transactions contemplated hereby or by the agreements or instruments to be entered into in connection herewith.

f.SEC Documents; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “1934 Act”) (all of the

4

foregoing filed prior to the date hereof and all exhibits included therein and financial statements and schedules thereto and documents (other than exhibits to such documents) incorporated by reference therein, being hereinafter referred to herein as the “SEC Documents”). Upon written request the Company will deliver to the Buyer true and complete copies of the SEC Documents, except for such exhibits and incorporated documents. As of their respective dates or if amended, as of the dates of the amendments, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. None of the statements made in any such SEC Documents is, or has been, required to be amended or updated under applicable law (except for such statements as have been amended or updated in subsequent filings prior the date hereof). As of their respective dates or if amended, as of the dates of the amendments, the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with United States generally accepted accounting principles, consistently applied, during the periods involved and fairly present in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). The Company is subject to the reporting requirements of the 1934 Act.

g.Absence of Certain Changes. Since September 30, 2018, except as set forth in the SEC Documents, there has been no material adverse change and no material adverse development in the assets, liabilities, business, properties, operations, financial condition, results of operations, prospects or 1934 Act reporting status of the Company or any of its Subsidiaries.

h.Absence of Litigation. Except as set forth in the SEC Documents, there is no action, suit, claim, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company or any of its Subsidiaries, threatened against or affecting the Company or any of its Subsidiaries, or their officers or directors in their capacity as such, that could have a Material Adverse Effect. The Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing.

i.No Integrated Offering. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances that would require registration under the 1933 Act of the issuance of the Securities to the Buyer. The issuance of the Securities to the Buyer will not be integrated with any other issuance of the Company’s securities (past, current or future) for purposes of any shareholder approval provisions applicable to the Company or its securities.

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j.No Brokers. The Company has taken no action which would give rise to any claim by any person for brokerage commissions, transaction fees or similar payments relating to this Agreement or the transactions contemplated hereby.

k.No Investment Company. The Company is not, and upon the issuance and sale of the Securities as contemplated by this Agreement will not be an “investment company” required to be registered under the Investment Company Act of 1940 (an “Investment Company”). The Company is not controlled by an Investment Company.

l.Breach of Representations and Warranties by the Company. If the Company breaches any of the representations or warranties set forth in this Section 3, and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered an Event of default under Section 3.4 of the Note.

4. COVENANTS.

a.Best Efforts. The Company shall use its best efforts to satisfy timely each of the conditions described in Section 7 of this Agreement.

b.Form D; Blue Sky Laws. The Company agrees to timely make any filings required by federal and state laws as a result of the closing of the transactions contemplated by this Agreement.

c.Use of Proceeds. The Company shall use the proceeds for general working capital purposes.

d.Expenses. At the Closing, the Company’s obligation with respect to the transactions contemplated by this Agreement is to reimburse Buyer’ expenses shall be $3,000.00 for Buyer’s legal fees and due diligence fee.

e.Corporate Existence. So long as the Buyer beneficially owns any Note, the Company shall maintain its corporate existence and shall not sell all or substantially all of the Company’s assets, except with the prior written consent of the Buyer.

f.Breach of Covenants. If the Company breaches any of the covenants set forth in this Section 4, and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered an event of default under Section 3.4 of the Note.

g.Failure to Comply with the 1934 Act. So long as the Buyer beneficially owns the Note, the Company shall comply with the reporting requirements of the 1934 Act; and the Company shall continue to be subject to the reporting requirements of the 1934 Act.

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h.Trading Activities. Neither the Buyer nor its affiliates has an open short position in the common stock of the Company and the Buyer agrees that it shall not, and that it will cause its affiliates not to, engage in any short sales of or hedging transactions with respect to the common stock of the Company.

5.Transfer Agent Instructions. The Company shall issue irrevocable instructions to its transfer agent to issue certificates, registered in the name of the Buyer or its nominee, for the Conversion Shares in such amounts as specified from time to time by the Buyer to the Company upon conversion of the Note in accordance with the terms thereof (the “Irrevocable Transfer Agent Instructions”). In the event that the Company proposes to replace its transfer agent, the Company shall provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to this Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount as such term is defined in the Note) signed by the successor transfer agent to Company and the Company. Prior to registration of the Conversion Shares under the 1933 Act or the date on which the Conversion Shares may be sold pursuant to an exemption from registration, all such certificates shall bear the restrictive legend specified in Section 2(e) of this Agreement. The Company warrants that: (i) no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5, will be given by the Company to its transfer agent and that the Securities shall otherwise be freely transferable on the books and records of the Company as and to the extent provided in this Agreement and the Note; (ii) it will not direct its transfer agent not to transfer or delay, impair, and/or hinder its transfer agent in transferring (or issuing)(electronically or in certificated form) any certificate for Conversion Shares to be issued to the Buyer upon conversion of or otherwise pursuant to the Note as and when required by the Note and this Agreement; and (iii) it will not fail to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any Conversion Shares issued to the Buyer upon conversion of or otherwise pursuant to the Note as and when required by the Note and/or this Agreement. If the Buyer provides the Company and the Company’s transfer agent, at the cost of the Buyer, with an opinion of counsel in form, substance and scope customary for opinions in comparable transactions, to the effect that a public sale or transfer of such Securities may be made without registration under the 1933 Act, the Company shall permit the transfer, and, in the case of the Conversion Shares, promptly instruct its transfer agent to issue one or more certificates, free from restrictive legend, in such name and in such denominations as specified by the Buyer. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer, by vitiating the intent and purpose of the transactions contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section 5 may be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section, that the Buyer shall be entitled, in addition to all other available remedies, to an injunction restraining any breach and requiring immediate transfer, without the necessity of showing economic loss and without any bond or other security being required.

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6.Conditions to the Company’s Obligation to Sell. The obligation of the Company hereunder to issue and sell the Note to the Buyer at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions thereto, provided that these conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion:

a. The Buyer shall have executed this Agreement and delivered the same to

the Company.

b. The Buyer shall have delivered the Purchase Price in accordance with

Section 1(b) above.

c.The representations and warranties of the Buyer shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date), and the Buyer shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Buyer at or prior to the Closing Date.

d.No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.

7.Conditions to The Buyer’s Obligation to Purchase. The obligation of the Buyer hereunder to purchase the Note at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions, provided that these conditions are for the Buyer’s sole benefit and may be waived by the Buyer at any time in its sole discretion:

a. The Company shall have executed this Agreement and delivered the

same to the Buyer.

b.The Company shall have delivered to the Buyer the duly executed Note (in such denominations as the Buyer shall request) in accordance with Section 1(b) above.

c.The Irrevocable Transfer Agent Instructions, in form and substance satisfactory to the Buyer, shall have been delivered to and acknowledged in writing by the Company’s Transfer Agent.

d.The representations and warranties of the Company shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at such time (except for representations and warranties that speak as of a specific date) and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and

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conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing Date. The Buyer shall have received a certificate or certificates, executed by the chief executive officer of the Company, dated as of the Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested by the Buyer including, but not limited to certificates with respect to the Board of Directors’ resolutions relating to the transactions contemplated hereby.

e.No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.

f.No event shall have occurred which could reasonably be expected to have a Material Adverse Effect on the Company including but not limited to a change in the 1934 Act reporting status of the Company or the failure of the Company to be timely in its 1934 Act reporting obligations.

g.The Conversion Shares shall have been authorized for quotation on an exchange or electronic quotation system and trading in the Common Stock on such exchange or electronic quotation system shall not have been suspended by the SEC or an exchange or electronic quotation system.

h.The Buyer shall have received an officer’s certificate described in Section 3(d) above, dated as of the Closing Date.

i.The Company shall have executed an ACH Authorization Form (with respect to Section 1.8 of the Note) and delivered the same to the Buyer.

8. Governing Law; Miscellaneous.

a.Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Virginia without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts of New York or in the federal courts located in New York and the county of Nassau. The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Company and Buyer waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement, the Note or any related document or

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agreement by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

b.Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party.

c.Headings. The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of, this Agreement.

d.Severability. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision hereof.

e.Entire Agreement; Amendments. This Agreement and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by the majority in interest of the Buyer.

f.Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be as set forth in the heading of this Agreement with a copy by fax only to (which copy shall not constitute notice) to Naidich Wurman LLP, 111 Great Neck Road, Suite 214, Great Neck, NY 11021, Attn: Allison Naidich, facsimile: 516-466-3555, e-mail: allison@nwlaw.com. Each party shall provide notice to the other party of any change in address.

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g.Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns. Neither the Company nor the Buyer shall assign this Agreement or any rights or obligations hereunder without the prior written consent of the other. Notwithstanding the foregoing, the Buyer may assign its rights hereunder to any person that purchases Securities in a private transaction from the Buyer or to any of its “affiliates,” as that term is defined under the 1934 Act, without the consent of the Company.

h.Survival. The representations and warranties of the Company and the agreements and covenants set forth in this Agreement shall survive the closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of the Buyer. The Company agrees to indemnify and hold harmless the Buyer and all of its officers, directors, employees and agents for loss or damage arising as a result of or related to any breach or alleged breach by the Company of any of its representations, warranties and covenants set forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses as they are incurred.

i.Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

j.No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

k.Remedies. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Agreement will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Agreement, that the Buyer shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Agreement and to enforce specifically the terms and provisions hereof, without the necessity of showing economic loss and without any bond or other security being required.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the undersigned Buyer and the Company have caused this Agreement to be duly executed as of the date first above written.

Target Group Inc. fka Chess Supersite Corporation

By: __________________________

Rubin Schindermann

Chief Executive Officer

POWER UP LENDING GROUP LTD.
By: __________________________ Name: Curt Kramer Title: Chief Executive Officer 111 Great Neck Road, Suite 216 Great Neck, NY 11021
AGGREGATE SUBSCRIPTION AMOUNT:
Aggregate Principal Amount of Note:	$83,000.00
Aggregate Purchase Price:	$83,000.00

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EX-10.15

Exhibit 10.15

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

Principal Amount: $83,000.00 Purchase Price: $83,000.00 Issue Date: December 24, 2018

CONVERTIBLE PROMISSORY NOTE

FOR VALUE RECEIVED, Target Group Inc. fka Chess Supersite Corporation, a Delaware corporation (hereinafter called the “Borrower”), hereby promises to pay to the order of POWER UP LENDING GROUP LTD., a Virginia corporation, or registered assigns (the “Holder”) the sum of $83,000.00 together with any interest as set forth herein, on June 24, 2020 (the “Maturity Date”), and to pay interest on the unpaid principal balance hereof at the rate of twelve percent (12%)(the “Interest Rate”) per annum from the date hereof (the “Issue Date”) until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. This Note may not be prepaid in whole or in part except as otherwise explicitly set forth herein. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date thereof until the same is paid (“Default Interest”). Interest shall be computed on the basis of a 365 day year and the actual number of days elapsed. Interest shall commence accruing on the Issue Date but shall not be payable until the Note becomes payable (whether at Maturity Date or upon acceleration or by prepayment). All payments due hereunder (to the extent not converted into common stock, $0.0001 par value per share (the “Common Stock”) in accordance with the terms hereof) shall be made in lawful money of the United States of America. All payments shall be made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of this Note. Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in that certain Securities Purchase Agreement dated the date hereof, pursuant to which this Note was originally issued (the “Purchase Agreement”).

This Note is free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Borrower and will not impose personal liability upon the holder thereof.

The following terms shall apply to this Note:

ARTICLE I. CONVERSION RIGHTS

1.1Conversion Right. The Holder shall have the right from time to time, and at any time during the period beginning on the date which is one hundred eighty (180) days following the date of this Note and ending on the later of: (i) the Maturity Date and (ii) the date of payment of the Default

Amount (as defined in Article III), each in respect of the remaining outstanding principal amount of this Note to convert all or any part of the outstanding and unpaid principal amount of this Note into fully paid and non-assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified at the conversion price (the “Conversion Price”) determined as provided herein (a “Conversion”); provided, however, that in no event shall the Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Borrower subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock. For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such proviso. The beneficial ownership limitations on conversion as set forth in the section may NOT be waived by the Holder. The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the “Notice of Conversion”), delivered to the Borrower by the Holder in accordance with Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Borrower before 6:00 p.m., New York, New York time on such conversion date (the “Conversion Date”); however, if the Notice of Conversion is sent after 6:00pm, New York, New York time the Conversion Date shall be the next business day. The term “Conversion Amount” means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion plus (2) at the Holder’s option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note to the Conversion Date, plus (3) at the Holder’s option, Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2) plus (4) at the Holder’s option, any amounts owed to the Holder pursuant to Sections 1.4 hereof.

1.2Conversion Price. The conversion price (the “Conversion Price”) shall equal the Variable Conversion Price (as defined herein) (subject to equitable adjustments by the Borrower relating to the Borrower’s securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The "Variable Conversion Price" shall mean 61% multiplied by the Market Price (as defined herein) (representing a discount rate of 39%). “Market Price” means the average of the lowest three (3) Trading Prices (as defined below) for the Common Stock during the fifteen (15) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. “Trading Price” means, for any security as of any date, the closing bid price on the OTCQB, OTCQX, Pink Sheets electronic quotation system or applicable trading market (the “OTC”) as reported by a reliable reporting service (“Reporting Service”) designated by the Holder (i.e. Bloomberg) or, if the OTC is not the principal trading market for such security, the closing bid price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no closing bid price of such security is available in any of the foregoing manners, the average of the closing bid prices of any market makers for such security that are listed in the “pink sheets”. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as reasonably determined by the Borrower. “Trading Day” shall mean any day on which the Common Stock is tradable for any period on the OTC, or on the principal securities exchange or other securities market on which the Common Stock is then being traded.

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1.3Authorized Shares. The Borrower covenants that during the period the conversion right exists, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock upon the full conversion of this Note issued pursuant to the Purchase Agreement. The Borrower is required at all times to have authorized and reserved eight times the number of shares that would be issuable upon full conversion of the Note (assuming that the 4.99% limitation set forth in Section 1.1 is not in effect)(based on the respective Conversion Price of the Note (as defined in Section 1.2) in effect from time to time, initially 12,958,626)(the “Reserved Amount”). The Reserved Amount shall be increased (or decreased with the written consent of the Holder) from time to time in accordance with the Borrower’s obligations hereunder. The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. In addition, if the Borrower shall issue any securities or make any change to its capital structure which would change the number of shares of Common Stock into which the Notes shall be convertible at the then current Conversion Price, the Borrower shall at the same time make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Note. The Borrower (i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Common Stock issuable upon conversion of this Note, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance with the terms and conditions of this Note.

If, at any time the Borrower does not maintain the Reserved Amount it will be considered an Event of Default under Section 3.2 of the Note.

1.4 Method of Conversion.

(a)Mechanics of Conversion. As set forth in Section 1.1 hereof, from time to time, and at any time during the period beginning on the date which is one hundred eighty (180) days following the date of this Note and ending on the later of: (i) the Maturity Date and (ii) the date of payment of the Default Amount, this Note may be converted by the Holder in whole or in part at any time from time to time after the Issue Date, by (A) submitting to the Borrower a Notice of Conversion (by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior to 6:00 p.m., New York, New York time) and (B) subject to Section 1.4(b), surrendering this Note at the principal office of the Borrower (upon payment in full of any amounts owed hereunder).

(b)Surrender of Note Upon Conversion. Notwithstanding anything to the contrary set forth herein, upon conversion of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Borrower unless the entire unpaid principal amount of this Note is so converted. The Holder and the Borrower shall maintain records showing the principal amount so converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Borrower, so as not to require physical surrender of this Note upon each such conversion.

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(c)Delivery of Common Stock Upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission or e-mail (or other reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this

Section 1.4, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates for the Common Stock issuable upon such conversion within two (2) business days after such receipt (the “Deadline”) (and, solely in the case of conversion of the entire unpaid principal amount hereof, surrender of this Note) in accordance with the terms hereof and the Purchase Agreement. Upon receipt by the Borrower of a Notice of Conversion, the Holder shall be deemed to be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless the Borrower defaults on its obligations hereunder, all rights with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such conversion. If the Holder shall have given a Notice of Conversion as provided herein, the Borrower’s obligation to issue and deliver the certificates for Common Stock shall be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against any person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Borrower to the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder of any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower to the Holder in connection with such conversion.

(d)Delivery of Common Stock by Electronic Transfer. In lieu of delivering physical certificates representing the Common Stock issuable upon conversion, provided the Borrower is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”) program, upon request of the Holder and its compliance with the provisions set forth herein, the Borrower shall use its best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon conversion to the Holder by crediting the account of Holder’s Prime Broker with DTC through its Deposit and Withdrawal at Custodian (“DWAC”) system.

(e)Failure to Deliver Common Stock Prior to Deadline. Without in any way limiting the Holder’s right to pursue other remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion of this Note is not delivered by the Deadline due to action and/or inaction of the Borrower, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the Deadline that the Borrower fails to deliver such Common Stock (the “Fail to Deliver Fee”); provided; however that the Fail to Deliver Fee shall not be due if the failure is a result of a third party (i.e., transfer agent; and not the result of any failure to pay such transfer agent) despite the best efforts of the Borrower to effect delivery of such Common Stock. Such cash amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued or, at the option of the Holder (by written notice to the Borrower by the first day of the month following the month in which it has accrued), shall be added to the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall be convertible into Common Stock in accordance with the terms of this Note. The Borrower agrees that the right to convert is a valuable right to the Holder. The damages resulting from a failure, attempt to frustrate, interference with such conversion right are difficult if not impossible to qualify. Accordingly, the parties acknowledge that the liquidated damages provision contained in this Section 1.4(e) are justified.

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1.5Concerning the Shares. The shares of Common Stock issuable upon conversion of this Note may not be sold or transferred unless: (i) such shares are sold pursuant to an effective registration statement under the Act or (ii) the Borrower or its transfer agent shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions

of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration (such as Rule 144 or a successor rule) (“Rule 144”); or (iii) such shares are transferred to an “affiliate” (as defined in Rule 144) of the Borrower who agrees to sell or otherwise transfer the shares only in accordance with this Section 1.5 and who is an Accredited Investor (as defined in the Purchase Agreement).

Any restrictive legend on certificates representing shares of Common Stock issuable upon conversion of this Note shall be removed and the Borrower shall issue to the Holder a new certificate therefore free of any transfer legend if the Borrower or its transfer agent shall have received an opinion of counsel from Holder’s counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that (i) a public sale or transfer of such Common Stock may be made without registration under the Act, which opinion shall be accepted by the Company so that the sale or transfer is effected; or (ii) in the case of the Common Stock issuable upon conversion of this Note, such security is registered for sale by the Holder under an effective registration statement filed under the Act; or otherwise may be sold pursuant to an exemption from registration. In the event that the Company does not reasonably accept the opinion of counsel provided by the Holder with respect to the transfer of Securities pursuant to an exemption from registration (such as Rule 144), at the Deadline, it will be considered an Event of Default pursuant to Section 3.2 of the Note.

1.6 Effect of Certain Events.

(a)Effect of Merger, Consolidation, Etc. At the option of the Holder, the sale, conveyance or disposition of all or substantially all of the assets of the Borrower, the effectuation by the Borrower of a transaction or series of related transactions in which more than 50% of the voting power of the Borrower is disposed of, or the consolidation, merger or other business combination of the Borrower with or into any other Person (as defined below) or Persons when the Borrower is not the survivor shall be deemed to be an Event of Default (as defined in Article III) pursuant to which the Borrower shall be required to pay to the Holder upon the consummation of and as a condition to such transaction an amount equal to the Default Amount (as defined in Article III). “Person” shall mean any individual, corporation, limited liability company, partnership, association, trust or other entity or organization.

(b)Adjustment Due to Merger, Consolidation, Etc. If, at any time when this Note is issued and outstanding and prior to conversion of all of the Note, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization, or other similar event, as a result of which shares of Common Stock of the Borrower shall be changed into the same or a different number of shares of another class or classes of stock or securities of the Borrower or another entity, or in case of any sale or conveyance of all or substantially all of the assets of the Borrower other than in connection with a plan of complete liquidation of the Borrower, then the Holder of this Note shall thereafter have the right to receive upon conversion of this Note, upon the basis and upon the terms and conditions specified herein and in lieu of the shares of Common Stock immediately theretofore issuable upon conversion, such stock, securities or assets which the Holder would have been entitled to receive in such transaction had this Note been converted in full immediately prior to such transaction (without regard to any limitations on conversion set forth herein), and in any such case appropriate provisions shall be made with respect to the rights and interests of the Holder of this Note to the end that the provisions hereof (including, without limitation, provisions for adjustment of the Conversion Price and of the number of shares issuable upon conversion of the Note) shall thereafter be applicable, as nearly as may be practicable in relation to any securities or assets thereafter deliverable upon the conversion hereof. The Borrower shall not affect any transaction described in this Section 1.6(b) unless (a) it first gives, to the extent practicable, ten (10) days prior written notice (but in any event at least five (5) days prior written notice) of the record date of the special meeting of shareholders to approve, or if there is no such record date, the consummation of, such merger, consolidation, exchange of shares, recapitalization, reorganization or other similar event or sale of assets (during which time the Holder shall be entitled to convert this Note) and (b) the resulting successor or acquiring entity (if not the Borrower) assumes by written instrument the obligations of this Note. The above provisions shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.

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(c)Adjustment Due to Distribution. If the Borrower shall declare or make any distribution of its assets (or rights to acquire its assets) to holders of Common Stock as a dividend, stock repurchase, by way of return of capital or otherwise (including any dividend or distribution to the Borrower’s shareholders in cash or shares (or rights to acquire shares) of capital stock of a subsidiary (i.e., a spin-off)) (a “Distribution”), then the Holder of this Note shall be entitled, upon any conversion of this Note after the date of record for determining shareholders entitled to such Distribution, to receive the amount of such assets which would have been payable to the Holder with respect to the shares of Common Stock issuable upon such conversion had such Holder been the holder of such shares of Common Stock on the record date for the determination of shareholders entitled to such Distribution.

1.7Prepayment. Notwithstanding anything to the contrary contained in this Note, at any time during the periods set forth on the table immediately following this paragraph (the “Prepayment Periods”), the Borrower shall have the right, exercisable on not more than three (3) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note (principal and accrued interest), in full, in accordance with this Section 1.7. Any notice of prepayment hereunder (an “Optional Prepayment Notice”) shall be delivered to the Holder of the Note at its registered addresses and shall state: (1) that the Borrower is exercising its right to prepay the Note, and (2) the date of prepayment which shall be not more than three (3) Trading Days from the date of the Optional Prepayment Notice. On the date fixed for prepayment (the “Optional Prepayment Date”), the Borrower shall make payment of the Optional Prepayment Amount (as defined below) to Holder, or upon the direction of the Holder as specified by the Holder in a writing to the Borrower (which direction shall to be sent to Borrower by the Holder at least one (1) business day prior to the Optional Prepayment Date). If the Borrower exercises its right to prepay the Note, the Borrower shall make payment to the Holder of an amount in cash equal to the percentage (“Prepayment Percentage”) as set forth in the table immediately following this paragraph opposite the applicable Prepayment Period, multiplied by the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the Optional Prepayment Date plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and (x) plus (z) any amounts owed to the Holder pursuant to Section 1.4 hereof (the “Optional Prepayment Amount”). If the Borrower delivers an Optional Prepayment Notice and fails to pay the Optional Prepayment Amount due to the Holder of the Note within two (2) business days following the Optional Prepayment Date, the Borrower shall forever forfeit its right to prepay the Note pursuant to this Section 1.7.

Prepayment Period	Prepayment Percentage
1.       The period beginning on the Issue Date and ending on the date which is thirty (30) days following the Issue Date.	115%
2.       The period beginning on the date which is thirty-one (31) days following the Issue Date and ending on the date which is sixty (60) days following the Issue Date.	120%

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3.       The period beginning on the date which is sixty-one (61) days following the Issue Date and ending on the date which is ninety (90) days following the Issue Date.	125%
4.       The period beginning on the date that is ninety-one (91) day from the Issue Date and ending one hundred twenty (120) days following the Issue Date.	130%
5.       The period beginning on the date that is one hundred twenty-one (121) day from the Issue Date and ending one hundred fifty (150) days following the Issue Date.	133%
6.       The period beginning on the date that is one hundred fifty-one (151) day from the Issue Date and ending one hundred eighty (180) days following the Issue Date.	135%

After the expiration of one hundred eighty (180) days following the Issue Date, the Borrower shall have no right of prepayment.

ARTICLE II. CERTAIN COVENANTS

2.1 Sale of Assets. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent, sell, lease or otherwise dispose of any significant portion of its assets outside the ordinary course of business. Any consent to the disposition of any assets may be conditioned on a specified use of the proceeds of disposition.

ARTICLE III. EVENTS OF DEFAULT

If any of the following events of default (each, an “Event of Default”) shall occur:

3.1Failure to Pay Principal and Interest. The Borrower fails to pay the principal hereof or interest thereon when due on this Note, whether at maturity or upon acceleration and such breach continues for a period of five (5) days after written notice from the Holder.

3.2Conversion and the Shares. The Borrower fails to issue shares of Common Stock to the Holder (or announces or threatens in writing that it will not honor its obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in accordance with the terms of this Note, fails to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated form) any certificate for shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, the Borrower directs its transfer agent not to transfer or delays, impairs, and/or hinders its transfer agent in transferring (or issuing) (electronically or in certificated form) any certificate for shares of Common Stock to be issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, or fails to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note (or makes any written announcement, statement or threat that it does not intend to honor the obligations described in this paragraph) and any such failure shall continue uncured (or any written announcement, statement or threat not to honor its obligations shall not be rescinded in writing) for two (2) business days after the Holder shall have delivered a Notice of Conversion. It is an obligation of the Borrower to remain current in its obligations to its transfer agent. It shall be an event of default of this Note, if a conversion of this Note is delayed, hindered or frustrated due to a balance

owed by the Borrower to its transfer agent. If at the option of the Holder, the Holder advances any funds to the Borrower’s transfer agent in order to process a conversion, such advanced funds shall be paid by the Borrower to the Holder within forty-eight (48) hours of a demand from the Holder.

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3.3Breach of Covenants. The Borrower breaches any material covenant or other material term or condition contained in this Note and any collateral documents including but not limited to the Purchase Agreement and such breach continues for a period of twenty (20) days after written notice thereof to the Borrower from the Holder.

3.4Breach of Representations and Warranties. Any representation or warranty of the Borrower made herein or in any agreement, statement or certificate given in writing pursuant hereto or in connection herewith (including, without limitation, the Purchase Agreement), shall be false or misleading in any material respect when made and the breach of which has (or with the passage of time will have) a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.

3.5Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business, or such a receiver or trustee shall otherwise be appointed.

3.6Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any subsidiary of the Borrower.

3.7Delisting of Common Stock. The Borrower shall fail to maintain the listing of the Common Stock on at least one of the OTC (which specifically includes the quotation platforms maintained by the OTC Markets Group) or an equivalent replacement exchange, the Nasdaq National Market, the Nasdaq SmallCap Market, the New York Stock Exchange, or the American Stock Exchange.

3.8Failure to Comply with the Exchange Act. The Borrower shall fail to comply with the reporting requirements of the Exchange Act; and/or the Borrower shall cease to be subject to the reporting requirements of the Exchange Act.

3.9Liquidation. Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.

3.10Cessation of Operations. Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to pay its debts as such debts become due, provided, however, that any disclosure of the Borrower’s ability to continue as a “going concern” shall not be an admission that the Borrower cannot pay its debts as they become due.

3.11Financial Statement Restatement. The restatement of any financial statements filed by the Borrower with the SEC at any time after 180 days after the Issuance Date for any date or period until this Note is no longer outstanding, if the result of such restatement would, by comparison to the un-restated financial statement, have constituted a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.

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3.12Replacement of Transfer Agent. In the event that the Borrower proposes to replace its transfer agent, the Borrower fails to provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower.

3.13Cross-Default. Notwithstanding anything to the contrary contained in this Note or the other related or companion documents, a breach or default by the Borrower of any covenant or other term or condition contained in any of the Other Agreements, after the passage of all applicable notice and cure or grace periods, shall, at the option of the Holder, be considered a default under this Note and the Other Agreements, in which event the Holder shall be entitled (but in no event required) to apply all rights and remedies of the Holder under the terms of this Note and the Other Agreements by reason of a default under said Other Agreement or hereunder. “Other Agreements” means, collectively, all agreements and instruments between, among or by: (1) the Borrower, and, or for the benefit of, (2) the Holder and any affiliate of the Holder, including, without limitation, promissory notes; provided, however, the term “Other Agreements” shall not include the related or companion documents to this Note. Each of the loan transactions will be cross-defaulted with each other loan transaction and with all other existing and future debt of Borrower to the Holder.

Upon the occurrence and during the continuation of any Event of Default specified in Section 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due at the Maturity Date), the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the Default Amount (as defined herein). UPON THE OCCURRENCE AND DURING THE CONTINUATION OF ANY EVENT OF DEFAULT SPECIFIED IN SECTION 3.2, THE NOTE SHALL BECOME IMMEDIATELY DUE AND PAYABLE AND THE BORROWER SHALL PAY TO THE HOLDER, IN FULL SATISFACTION OF ITS OBLIGATIONS HEREUNDER, AN AMOUNT EQUAL TO: (Y) THE DEFAULT AMOUNT (AS DEFINED HEREIN); MULTIPLIED BY (Z) TWO (2). Upon the occurrence and during the continuation of any Event of Default specified in Sections 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due on this Note or upon acceleration), 3.3, 3.4, 3.7, 3.8, 3.10, 3.11, 3.12, 3.13, and/or 3.14 exercisable through the delivery of written notice to the Borrower by such Holders (the “Default Notice”), and upon the occurrence of an Event of Default specified the remaining sections of Articles III (other than failure to pay the principal hereof or interest thereon at the Maturity Date specified in Section 3,1 hereof), the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the greater of (i) 150% times the sum of (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the date of payment (the “Mandatory Prepayment Date”) plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to the Holder pursuant to Section 1.4(e) hereof (the then outstanding principal amount of this Note to the date of payment plus the amounts referred to in clauses (x), (y) and (z) shall collectively be known as the “Default Amount”) and all other amounts payable hereunder shall immediately become due and payable, all without demand, presentment or notice, all of which hereby are expressly waived, together with all costs, including, without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies available at law or in equity.

If the Borrower fails to pay the Default Amount within five (5) business days of written notice that such amount is due and payable, then the Holder shall have the right at any time, so long as the Borrower remains in default (and so long and to the extent that there are sufficient authorized shares), to require the Borrower, upon written notice, to immediately issue, in lieu of the Default Amount, the number of

shares of Common Stock of the Borrower equal to the Default Amount divided by the Conversion Price then in effect.

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ARTICLE IV. MISCELLANEOUS

4.1Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privileges. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

4.2Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:

If to the Borrower, to:

Target Group Inc. fka Chess Supersite Corporation

55 Administration Road, Unit 8

Vaughan, Ontario, Canada L4K 4G9

Attn: Rubin Schindermann, Chief Executive Officer Fax:

Email: rschinderman@rogers.com

If to the Holder:

POWER UP LENDING GROUP LTD.

111 Great Neck Road, Suite 214 Great Neck, NY 11021

Attn: Curt Kramer, Chief Executive Officer

e-mail: info@poweruplending.com

With a copy by fax only to (which copy shall not constitute notice):

Naidich Wurman LLP

111 Great Neck Road, Suite 216

Great Neck, NY 11021 Attn: Allison Naidich

facsimile: 516-466-3555 e-mail: allison@nwlaw.com

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4.3Amendments. This Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower and the Holder. The term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument (and the other Notes issued pursuant to the Purchase Agreement) as originally executed, or if later amended or supplemented, then as so amended or supplemented.

4.4Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit of the Holder and its successors and assigns. Each transferee of this Note must be an “accredited investor” (as defined in Rule 501(a) of the Securities and Exchange Commission). Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral in connection with a bona fide margin account or other lending arrangement; and may be assigned by the Holder without the consent of the Borrower.

4.5Cost of Collection. If default is made in the payment of this Note, the Borrower shall pay the Holder hereof costs of collection, including reasonable attorneys’ fees.

4.6Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of Virginia without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Note shall be brought only in the state courts of New York or in the federal courts located in the Eastern District of New York. The parties to this Note hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Borrower and Holder waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In the event that any provision of this Note or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Note, any agreement or any other document delivered in connection with this Note by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

4.7Purchase Agreement. By its acceptance of this Note, each party agrees to be bound by the applicable terms of the Purchase Agreement.

4.8Remedies. The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Borrower acknowledges that the remedy at law for a breach of its obligations under this Note will be inadequate and agrees, in the event of a breach or threatened breach by the Borrower of the provisions of this Note, that the Holder shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Note and to enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and without any bond or other security being required.

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IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer this on December 24, 2018

Target Group Inc. fka Chess Supersite Corporation

By:   _____________________

Rubin Schindermann

Chief Executive Officer

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EXHIBIT A -- NOTICE OF CONVERSION

The undersigned hereby elects to convert $_____________ principal amount of the Note (defined below) into that number of shares of Common Stock to be issued pursuant to the conversion of the Note (“Common Stock”) as set forth below, of Target Group Inc. fka Chess Supersite Corporation, a Delaware corporation (the “Borrower”) according to the conditions of the convertible note of the Borrower dated as of December 24, 2018 (the “Note”), as of the date written below. No fee will be charged to the Holder for any conversion, except for transfer taxes, if any.

Box Checked as to applicable instructions:

[  ] The Borrower shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the undersigned or its nominee with DTC through its Deposit Withdrawal Agent Commission system (“DWAC Transfer”).

Name of DTC Prime Broker:

Account Number:

[  ] The undersigned hereby requests that the Borrower issue a certificate or certificates for the number of shares of Common Stock set forth below (which numbers are based on the Holder’s calculation attached hereto) in the name(s) specified immediately below or, if additional space is necessary, on an attachment hereto:

POWER UP LENDING GROUP LTD.

111 Great Neck Road, Suite 214 Great Neck, NY 11021 Attention: Certificate Delivery

e-mail: info@poweruplendinggroup.com

Date of conversion:
Applicable Conversion Price:	$
Number of shares of common stock to be issued
pursuant to conversion of the Notes:
Amount of Principal Balance due remaining
under the Note after this conversion:

POWER UP LENDING GROUP LTD.

By:___________________________

Name: Curt Kramer

Title: Chief Executive Officer

Date: ______________

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EX-10.16

Exhibit 10.16

DISTRIBUTION, COLLABORATION AND LICENCING AGREEMENT

THIS AGREEMENT made this 6th day of December, 2018,

BETWEEN:

Serious Seeds B.V., incorporated under the laws of the Netherlands and having its registered office at •

(hereinafter referred to as the “Serious”)

– and –

Canary Rx Inc., incorporated under the laws of the Province of Ontario and having its registered office at 385 Second Avenue West, Simcoe, On, CANADA

(hereinafter referred to as the “Canary”)

Serious and Canary are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”

– and –

Target Group Inc., incorporated under the laws of the State of Delaware and having its registered office at •

(hereinafter referred to as the “Target”)

– and –

Simon Smit, an individual whose complete address for service is •

Recitals

WHEREAS Serious is in the business of developing, marketing, selling, and distributing the Products (as defined below);

AND WHEREAS Canary is in the business of growing, marketing, selling, and distributing Cannabis and Cannabis products;

AND WHEREAS Serious and Canary wish to collaborate to create the Collaborative Products (as defined below);

AND WHEREAS Serious desires to appoint Canary as its exclusive worldwide distributor of the Products, the Harvested Products and the Collaborative Products and Canary desires to accept such appointment in the Territory (all as defined below);

AND WHEREAS Serious is the holder of the intellectual property right to Serious’ IP, the Licenced Mark, the Notoriety, and Simon’s name (all as defined below);

AND WHERAS Canary wishes to commercialize the Products, the Collaborative Products using the Licenced Mark, the Notoriety, and Simon’s name (all as defined below);

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NOW THEREFORE, in consideration of these premises, the covenants and agreements hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto covenant and agree as follows:

ARTICLE 1 – INTERPRETATION

1.1 Definitions

In this Agreement, unless something in the subject matter or context is inconsistent therewith:

“Affiliate” - means any person that, directly or indirectly (through one or more intermediaries) controls, is controlled by, or is under common control with a Party. For purposes of this definition, “control” means (i) the direct or indirect ownership of more than fifty percent (50%) of the voting stock or other voting interests or interest in the profits of the Party, or (ii) the ability to otherwise control or direct the decisions of board of directors or equivalent governing body thereof;

“Applicable Law” - means any law, regulation, rule, guidance, order, judgment or decree having the force of law applicable to the Parties and their activities under this Agreement;

“Auditor” – has the meaning ascribed to it in Section 5.4;

“BCA” – means the Business Corporations Act (Ontario) as now enacted and, unless otherwise indicated, as the same may from time to time be amended, re enacted or replaced;

“Calendar Quarter” means the three (3) month periods ending on March 31, June 30, September 30 and December 31 in each Calendar Year;

“Calendar Year” means, in respect of any particular year, the one (1) year period beginning on January 1 and ending on December 31;

“Collaborative Products” – means products created collaboratively by Serious and Canary, including those products which are created using Serious' IP;

“Commercialize” - means any and all activities directed to the preparation for sale of, offering for sale of, or sale of the Products, Harvested Products and Collaborative Products, including activities related to marketing, distributing, Promoting, importing and exporting, offering for sale, and selling the Products and Collaborative Products and interacting with Regulatory Authorities regarding any of the foregoing;

“Confidential Information” – means proprietary Know-How (of whatever kind and in whatever form or medium, including copies thereof), tangible materials or other deliverables (a) disclosed by or on behalf of a Party in connection with this Agreement, whether prior to or during the Term and whether disclosed orally, electronically, by observation or in writing, or (b) created by, or on behalf of, either Party and provided to the other Party, or created jointly by the Parties, in the course of this Agreement. For the avoidance of doubt, “Confidential Information” includes (i) Know-How regarding such Party’s research, development plans, technology, products, business information or objectives and other information of the type that is customarily considered to be confidential information by entities engaged in activities that are substantially similar to the activities being engaged in by the Parties pursuant to this Agreement and (ii) any tangible materials or other deliverables provided by one Party to the other Party pursuant to this Agreement;

“CRA” – means Canada Revenue Agency;

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“Effective Date” – means October 15, 2018;

“Expense Amount” - has the meaning ascribed to it in Section 5.6;

“Expense Report” – has the meaning ascribed to it in Section 5.6;

“Final Period” – has the meaning ascribed to it in Section 5.2;

“Final True-Up Report” – has the meaning ascribed to it in Section 5.2;

“Governmental Authority” - means any domestic or foreign entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including any governmental authority, agency, department, board, commission, court, tribunal, judicial body or instrumentality of any union of nations, federation, nation, state, municipality, county, locality or other political subdivision thereof;

“Gross Profit” – means the total, not including any taxes, of all sales by Canary of Serious’ Products minus the total cost, including production costs and costs of obtaining Regulatory Approval, of Serious’ Products sold by Canary;

“Gross Sales” – means the total, not including any taxes, of all sales by Canary of Serious’ Harvested Products and Seriously Canary seeds and Seriously Canary Harvested Products;

“Harvested Products” – means cannabis cuttings, dried flowers, and extracts harvested by Canary in Canada;

“Indemnitee” – has the meaning ascribed to it in Section 7.2;

“Indemnitor” – has the meaning ascribed to it in Section 7.2;

“Initial Term” – has the meaning ascribed to it in Section 9.1;

“ITA” – means the Income Tax Act (Canada) as now enacted and, unless otherwise indicated, as the same may from time to time be amended, re enacted or replaced;

“Know-How” means all information, improvements, practices, formula, trade secrets, techniques, methods, procedures, knowledge, results, test data, analytical and quality control data, protocols, processes, models, designs, and other information regarding discovery, development, marketing, pricing, distribution, cost, sales and manufacturing;

“Licenced Mark” – means the service mark Serious Seeds, and such other names and marks which Serious, in its sole discretion, shall from time to time authorize Canary to use;

“Loss” or “Losses” – has the meaning ascribed to it in Section 7.1;

“Payments” – has the meaning ascribed to it in Section 5.1(c)(i);

“Permitted Expenses” – has the meaning ascribed to it in Section 5.6;

“Products” – means all proprietary Cannabis seed strains created and owned by Serious, including Seriously Limited, Seriously Medical, and Seriously Customized;

“Production Costs” - means all costs resulting from the cultivation, development, and processing of the Collaborative Products;

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“Regulatory Approval” means, with respect to a country or other jurisdiction in the Territory, any and all approvals or premarket notifications, licences, registrations, certificates, or authorizations of any Regulatory Authority necessary to Commercialize the Products, Harvested Products or Collaborative Products in such country or other jurisdiction, including, where applicable, pre- and post-approval marketing authorizations;

“Regulatory Authority” means any applicable supra-national, federal, national, regional, state, provincial, or local governmental or regulatory authority, agency, department, bureau, commission, council, or other entities (e.g., Health Canada, FDA) regulating or otherwise exercising authority with respect to activities contemplated in this Agreement, including the Commercialization of the Products, Harvested Products and Collaborative Products in the Territory;

“Renewal Term” – has the meaning ascribed to it in Section 9.1;

“Report” – has the meaning ascribed to it in Section 5.2;

“Resulting IP” – has the meaning ascribed to it in Section 3.2;

“Royalties” – has the meaning ascribed to it in Section 5.1(c)(ii);

“Serious’ IP” - means the Products’ genetics;

“Seriously Canary” – means the brand name of the Collaborative Products;

“Simon” – means Simon Smit, principal, operator and breeder of Serious Seeds;

“Term” – means the Initial Term and any Renewal Term;

“Territory” – means the entire world;

“Third Party” – means any entity other than Serious or Canary;

“Third Party Claims” – has the meaning ascribed to it in Section 7.1; and

“Travel Requirement” – has the meaning ascribed to it in Section 6.1(a)

1.2 Extended Meanings

In this Agreement, unless something in the subject matter or context is inconsistent therewith:

(a) words importing the singular number shall include the plural and vice versa;

(b) words importing a gender shall include the masculine, feminine and neuter genders;

(c) words importing persons shall include individuals, partnerships, corporations, unincorporated organizations, associations, trusts, trustees, government agencies and any other form of organization or entity whatsoever;

(d) any general terms followed by specific examples, whether using “includes”, “including”, “such as” or other similar terms, shall be interpreted broadly according to their full meaning and will not be limited to or by the examples listed; and

(e) all terms defined in the BCA and the ITA and not otherwise defined herein shall have the meanings herein ascribed thereto therein.

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1.3 Sections and Headings

The division of this Agreement into Articles, sections and paragraphs and the use of headings are for convenience of reference only and shall not affect the construction or interpretation hereof. The terms “this Agreement”, “hereof”, “hereunder” and similar expressions refer to this Agreement in its entirety and not to any particular Article, section, paragraph or other subdivision or portion hereof and include any Schedule, agreement or instrument attached, supplemental or ancillary hereto. Unless something in the subject matter or context is inconsistent therewith, references herein to Article, section and paragraph numbers are to Articles, sections and paragraphs of this Agreement.

1.4 Entire Agreement

This Agreement constitutes the entire agreement between the Parties hereto with respect to the subject matter hereof and cancels and supersedes any prior understandings and agreements between the parties hereto with respect thereto. There are no representations, warranties, terms, conditions, undertakings or collateral agreements, express, implied or statutory, between the Parties other than as expressly set forth in this Agreement.

1.5 Accounting Principles

Wherever in this Agreement reference is made to generally accepted accounting principles, such reference shall be deemed to be to the generally accepted accounting principles from time to time approved by the Canadian Institute of Chartered Accountants, or any successor institute, applicable as at the date in respect of which such reference is made or required to be made in accordance with generally accepted accounting principles.

1.6 Currency

All references to currency herein are to lawful money of Canada.

1.7 Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein. The United Nations Convention on Contracts for the International Sale of Goods shall not apply to the transactions contemplated by this Agreement.

ARTICLE 2 - Distribution

2.1 Appointment of Distributor

Serious hereby appoints Canary as the exclusive distributor of the Products, Harvested Products, and Collaborative Products in the Territory. In accordance with this appointment, Canary is granted the exclusive right to Commercialize the Products, the Harvested Products, and the Collaborative Products in the Territory. Notwithstanding the foregoing, Serious retains the right to distribute the Products on its website ( www.seriousseeds.com ).

2.2 Acceptance of Appointment

Subject to any limitations specifically provided herein, Canary accepts the appointment from Serious as the exclusive distributor of the Products, the Harvested Products, and Collaborative Products in the Territory. The Products, the Harvested Products, and Collaborative Products shall be Commercialized by Canary in the Territory in accordance with Canary's own terms and conditions, including the prices for the same.

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2.3 Regulatory

All Regulatory Approvals related to the Products, Harvested Products, and Collaborative Products in the Territory shall be held in the name of Canary. Canary will be responsible for applying for and obtaining Regulatory Approval in the Territory and for all costs associated with applying for and obtaining Regulatory Approvals in the Territory.

ARTICLE 3 – collaboration

3.1 Serious and Canary

Serious and Canary shall work together to create Collaborative Products. Simon shall assist Canary in creating Collaborative Products. Serious shall provide Canary with sufficient Products, which amount shall be determined solely by Canary, to commence creation of the Collaborative Products. Serious and Canary, together, shall determine how the Products shall be delivered to Canary. Canary shall be responsible for Commercializing all Collaborative Products.

3.2 Ownership of Intellectual Property

Canary will own all intellectual property related to all Collaborative Products in perpetuity, including the cannabis seed genetics created by crossing Serious’ IP with other strains of cannabis (the “Resulting IP”).

3.3 Decision-Making

Canary will have authority to make all decisions regarding Commercialization of the Collaborative Products and the Resulting IP, including deciding not to Commercialize any Resulting IP.

3.4 Brand Name

Unless mutually agreed by the Parties, all Collaborative Products will be branded Seriously Canary. Notwithstanding the foregoing, should the brand name Seriously Canary not be available in a particular country or political subdivision, the Parties shall mutually agree upon another mutually acceptable and available brand name for such country or political subdivision.

3.5 Production Costs

Canary will be responsible for all Production Costs related to all Collaborative Products.

ARTICLE 4 – intellectual property

4.1 Licence to Serious’ IP

Serious hereby grants to Canary and Canary hereby accepts, on the terms and conditions of this Agreement, an exclusive, irrevocable, sublicensable right and licence in the Territory for any lawful purpose, including:

(a) the right to copy Serious’ IP and create derivative cannabis strains using the Products; and

(b) the right to harvest and commercialize the Harvested Products and seeds from the Products and Collaborative Products.

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4.2 Licence to Use of Licenced Mark and Simon’s Name

Subject only to Serious’ own use of the Licensed Mark, Notoriety (as defined below), and Simon’s name on its website ( www.seriousseeds.com ) and on its packaging, Serious hereby grants to Canary and Canary hereby accepts an exclusive, irrevocable, fully paid, right and licence in the Territory to:

(a) use the Licenced Mark and Simon’s name;

(b) reference any awards and accolades associated with the Licenced Mark and Simon (“Notoriety”); and

(c) subject to section 11.1, reference the first name of Serious' principal, Simon, and to reference his position as the principal, operator and breeder of Serious;

all in connection with the Commercialization of the Products, Harvested Products and the Collaborative Products.

ARTICLE 5 – compensation

5.1 Compensation

In consideration of the rights granted by Serious in this Agreement:

(a) Upon execution of this Agreement Target shall grant 250,000 shares in the Common Stock of Target to Serious; and

(b) On each of the first five (5) anniversaries of the Effective Date in the Initial Term, Target shall issue a Warrant to Serious which will give Serious the right to purchase 100,000 shares of the Common Stock of Target. The exercise price per share will be as follows:

(i) Year 1 - $0.15 per share;

(ii) Year 2 - $0.20 per share;

(iii) Year 3 - $0.25 per share;

(iv) Year 4 - $0.30 per share; and

(v) Year 5 - $0.35 per share;

Each Warrant shall expire and shall no longer be exercisable as of 5:00 p.m, Eastern Time, on the two (2) year anniversary of the date of the issuance of the Warrant. Each Warrant is subject to all conditions provided for in each Warrant.

(c) during the Term, Canary will pay to Serious the following:

(i) payments (“Payments”) as to Canary’s sale of Serious’ Products, Canary will pay to Serious 50% of the Gross Profit; and

(ii) royalties (“Royalties”):

A. as to Serious’ Harvested Products:

I. 1st year – 2.00% of Gross Sales;

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II. 2nd year – 2.25% of Gross Sales;

III. 3rd year – 2.50% of Gross Sales;

IV. 4th year – 2.75% of Gross Sales; and

V. 5th and following years – 3.00% of Gross Sales;

B. As to Seriously Canary seeds and Harvested Products:

I. 1st year – 2.00% of Gross Sales;

II. 2nd year – 2.25% of Gross Sales;

III. 3rd year – 2.50% of Gross Sales;

IV. 4th year – 2.75% of Gross Sales; and

V. 5th and following years – 3.00% of Gross Sales.

5.2 Reports and Payments

(a) Within thirty (30) calendar days after the end of each Calendar Quarter, Canary shall furnish to Serious written reports (“Reports”) showing:

i. All Gross Sales and Gross Profit during (a) such Calendar Quarter, including a reconciliation to Gross Sales and Gross Profit, and (b) the Calendar Year to date through the end of such Calendar Quarter; and

ii. A calculation of Payments and Royalties for such Calendar Quarter; and

iii. If the actual Gross Sales or Gross Profits for a previous Calendar Quarter differ from the amounts previously reported to Serious, a reconciliation of such difference (increase or decrease), and a calculation of the adjustment to the Payments or Royalties, respectively, payable with respect to such preceding Calendar Quarter as a result of such review (a “True-Up”);

(b) Each such Report shall be accompanied by payment of the Payments and Royalties due under Section 5.7, plus or minus any adjustment of Payments or Royalties previously paid, calculated in accordance with the immediately preceding clause

(c) Within ninety (90) days after the Calendar Quarter during which this Agreement terminates or expires (the “Final Period”), Canary shall furnish to Serious final True-Up reports with respect to such Calendar Quarter (the “Final True-Up Reports”). If either of the Final True-Up Reports indicate that additional Payments or Royalties are payable with respect to the Final Period, such Final True-Up Reports shall be accompanied by payment of such additional Payments and/or Royalties. If the Final True-Up Report indicates that Payments and/or Royalties were overpaid with respect to the Final Period, Serious shall pay to Canary an amount equal to such overpayment within thirty (30) days following the delivery of the Final True-Up to Serious. If Serious disagrees with either of the Final True-Up Reports, Serious shall notify Canary within fifteen (15) days after receipt thereof and such disagreement shall be resolved pursuant to Section 6.5 below.

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(d) Canary shall keep complete and accurate records in connection with the purchase, use and/or sale by or for it of the Products, Harvested Products, and the Collaborative Products hereunder in sufficient detail to permit accurate determination of all amounts necessary for calculation and verification of all payment obligations set forth in this ARTICLE 5.

(e) Except as otherwise defined herein, all financial calculations by either Party under this Agreement shall be calculated in accordance with Section 1.5. In addition, all calculations herein shall give pro-rata effect to and shall proportionally adjust (by giving effect to the number of applicable days in such Calendar Quarter) for any Calendar Quarter that is shorter than a standard Calendar Quarter or any Calendar Year (or twelve-month period) that is shorter than four consecutive full Calendar Quarters or twelve consecutive months, as applicable.

5.3 Record Retention

Canary will maintain complete and accurate books, records, and accounts in sufficient detail to calculate all amounts payable hereunder and to verify compliance with its obligations under this Agreement and the Reports delivered under Section 5.2. Such books, records, and accounts will be retained until the later of (i) three (3) years after the end of the period to which such books, records, and accounts pertain, and (ii) the expiration of the applicable tax statute of limitations (or any extensions thereof), or for such longer period as may be required by applicable law.

5.4 Audits

(a) Procedures

At the request of Serious, Canary shall permit an independent auditor designated by Serious and reasonably acceptable to Canary, at reasonable times and upon reasonable notice, to audit the books and records maintained pursuant to Section 5.3 to ensure the accuracy of all reports and payments made hereunder.  Such examinations may not (i) be conducted for any Calendar Quarter more than fourteen (14) months after the end of such Calendar Quarter, (ii) be conducted more than once in any twelve-month period (unless a previous audit during such twelve-month period revealed an underpayment (or with respect to any reimbursement, an overpayment) with respect to such period) or (iii) be repeated for any Calendar Quarter.  Except as provided below, the cost of this audit shall be borne by Serious, unless the audit reveals a variance of more than five percent (5.0%) from the reported amounts, in which case Canary shall bear the cost of the audit.  Unless disputed pursuant to Section 5.4(b), if such audit concludes that (x) additional amounts were owed by Canary, Canary shall pay the additional amounts or (y) excess payments were made by Canary, Serious shall reimburse such excess payments, in either case ((x) or (y)), within sixty (60) days after the date on which such audit is completed by Serious.

(b) Audit Dispute

In the event of a dispute with respect to any audit under Section 5.4(a), the Parties shall work in good faith to resolve the dispute.  If the Parties are unable to reach a mutually acceptable resolution of any such dispute within ninety (90) days, the dispute shall be submitted for resolution to a certified public accounting firm jointly selected by each Party or to such other Person as the Parties shall mutually agree (the “Auditor”).  The decision of the Auditor shall be final and the costs of such arbitration as well as the initial audit shall be borne between the Parties in such manner as the Auditor shall determine.  Not later than fifteen (15) days after such decision and in accordance with such decision, the audited Party shall pay the additional amounts or the auditing Party shall reimburse the excess payments, as applicable.

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5.5 Confidentiality

The receiving Party shall treat all information subject to review under Section 5.4 in accordance with the confidentiality provisions of ARTICLE 10 and the Parties shall cause the Auditor to enter into a reasonably acceptable confidentiality agreement with the audited Party obligating such firm to retain all such financial information in confidence pursuant to such confidentiality agreement.

5.6 Travel Expenses

For the Travel Requirement, Canary will reimburse Serious up to C$5,000.00 per year (“Expense Amount”) for air travel plus all Canadian accommodation and transportation expenses (“Permitted Expenses”) incurred by Simon while he fulfills the Travel Requirement. – Serious shall provide Canary with a list of and receipts (the “Expense Report”), which may be provided in electronic format, for all Permitted Expenses. Canary will reimburse Serious for approved Permitted Expenses up to the Expense Amount within fifteen (15) business days of Canary’s receipt of the Expense Report.

5.7 No Other Compensation

Except as provided in Section 5.1, each Party hereby agrees that the terms of this Agreement fully define all consideration, compensation and benefits, monetary or otherwise, to be paid, granted or delivered by one Party to the other Party in connection with the transactions contemplated herein. Neither Party previously has paid or entered into any other commitment to pay, whether orally or in writing, any of the other Party’s employees, directly or indirectly, any consideration, compensation or benefits, monetary or otherwise, in connection with the transaction contemplated herein.

5.8 Taxes

Canary will make all payments to Serious under this Agreement without deduction or withholding for taxes except to the extent that any such deduction or withholding is required by Applicable Law in effect at the time of payment. Any tax required to be withheld on amounts payable by Canary under this Agreement will be timely paid by Canary on behalf of Serious to the appropriate Governmental Authority, and Canary will furnish Serious with the corresponding proof of payment of such tax, as may be required in order to enable Serious to request reimbursement or deduction of the withheld amount, or to otherwise comply with its duties. Canary and Serious agree to cooperate to legally minimize and reduce such withholding taxes and provide any information or documentation required by any taxing authority.

ARTICLE 6 – covenants

6.1 Serious & Simon Covenants

(a) Simon shall travel to Canada and work a minimum of ten (10) days per year at Canary's Simcoe, Ontario facility or at such other location as determined by Canary (the “Travel Requirement”). One (1) of the ten (10) days per year will be reserved for promotional activities to assist Canary in its Commercialization of the Products and/or Harvested Products and/or Collaborative Products. Such travel shall be at such dates and times as are mutually agreed by Simon and Canary, both acting reasonably.

(b) Serious shall not commit any act which endangers, destroys, or similarly affects, in any material respect, the value of the goodwill pertaining to the Licenced Mark or the Product.

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6.2 Canary Covenants

Canary shall not, and shall not permit its Affiliates to use the Licenced Mark or the name Simon or the Notoriety for any purpose other than as set forth in this Agreement.

ARTICLE 7 – indemnification

7.1 Indemnification

Subject to Section ‎7.2, each Party shall indemnify, defend and hold each of the other Party and their respective directors, officers, and employees and the successors and assigns of any of the foregoing harmless from and against any and all liabilities, damages, settlements, penalties, fines, costs or expenses (including, without limitation, reasonable attorneys' fees and other expenses of litigation) (collectively, “Loss” or “Losses”) arising, directly or indirectly out of or in connection with any Third Party claims, suits, actions, demands or judgments (“Third Party Claims”) relating to (a) the activities performed by or on behalf of such Party under this Agreement, (b) the activities performed by or on behalf of such Party in connection with the exercise of its licences and rights hereunder, or (c) breach by such Party of the representations and warranties under ‎ARTICLE 8, except, in each case, to the extent caused by the negligence or willful misconduct of the other Party.

7.2 Procedure

(a) If a Party intends to claim indemnification under this Agreement (the “Indemnitee”), it shall promptly notify the other Party (the “Indemnitor”) in writing of such alleged Loss. The Indemnitor shall have the right to control the defense thereof with counsel of its choice as long as such counsel is reasonably acceptable to Indemnitee. Any Indemnitee shall have the right to retain its own counsel at its own expense for any reason, provided, however, that if the Indemnitee shall have reasonably concluded, based upon a written opinion from outside legal counsel, that there is a conflict of interest between the Indemnitor and the Indemnitee in the defense of such action, in each of which cases the Indemnitor shall pay the fees and expenses of one law firm serving as counsel for the Indemnitee). The Indemnitee, its employees and agents, shall reasonably cooperate with the Indemnitor and its legal representatives in the investigation of any Third Party Claims covered by this Agreement. The obligations of this ‎ARTICLE 7 shall not apply to any settlement of any Third Party Claims if such settlement is effected without the consent of both Parties, which shall not be unreasonably withheld or delayed.

(b) The failure to deliver written notice to the Indemnitor within a reasonable time after the commencement of any such action, to the extent prejudicial to its ability to defend such action, shall relieve the Indemnitor of any obligation to the Indemnitee under this Section ‎7.2. It is understood that only Serious and Canary may claim indemnity under this Agreement (on its own behalf or on behalf of its Indemnitees), and other Indemnitees may not directly claim indemnity hereunder.

ARTICLE 8 - representations

8.1 Mutual Representations and Warranties

Each Party represents and warrants to the other Party that as of the Effective Date:

(a) It is validly organized under the laws of its jurisdiction of incorporation;

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(b) it has obtained all necessary consents, approvals and authorizations of all governmental authorities and other persons or entities that are board members or officers of a Party, in each case which are required to be obtained by it in connection with this Agreement;

(c) the execution, delivery, and performance of this Agreement have been duly authorized by all necessary corporate action on its part;

(d) it has the legal right and power to enter into this Agreement and to fully perform its obligations hereunder;

(e) the performance of its obligations will not conflict with such Party’s charter documents or any agreement, contract or other arrangement to which such Party is a party; and

(f) it follows reasonable commercial practices common in the industry to protect its proprietary and confidential information, including requiring its employees, consultants, and agents to be bound in writing by obligations of confidentiality and non-disclosure, and requiring its employees, consultants, and agents to assign to it any and all inventions and discoveries discovered by such employees, consultants, or agents made within the scope of, and during their employment, and only disclosing proprietary and confidential information to Third Parties pursuant to written confidentiality and non-disclosure agreements.

8.2 Serious’ Representations and Warranties

Serious represents and warrants that it has the sole right to grant the rights and licences provided for in this Agreement and has not assigned, licenced or otherwise conveyed the sole and exclusive rights and licences outlined in ARTICLE 4 to any other person or entity within the Territory.

ARTICLE 9 – term & termination

9.1 Term

The term of this Agreement shall commence on the Effective Date and shall continue for a period of five (5) years (the “Initial Term”), unless sooner terminated as provided in this ‎ARTICLE 9, and will thereafter renew automatically for consecutive five (5) year terms (each period considered a “Renewal Term”) on the same terms and conditions, except as otherwise specified herein and unless either Party provides written notice of non-renewal at least one hundred and twenty (120) days prior to the expiration of the then-current Term.

9.2 Termination by Either Party for Material Breach

Either Party may terminate this Agreement by written notice to the other Party for any material breach of this Agreement by the other Party, if, in the case of remediable breach, such material breach is not cured within ninety (90) days (thirty (30) days for payment defaults) after the breaching Party receives written notice of such breach from the non-breaching Party; provided, that if such breach is not capable of being cured within such 90-day (or 30-day) period, the cure period shall be extended for such amount of time that the Parties may agree in writing is reasonably necessary to cure such breach, so long as (1) the breaching Party is making diligent efforts to do so, and (2) the Parties agree on an extension within such 90-day (or 30-day) period. Notwithstanding anything to the contrary herein, if the allegedly breaching Party in good faith either disputes (i) whether a breach is material or has occurred or (ii) the alleged failure to cure or remedy such material breach, and provides written notice of that dispute to the other Party within the above time periods, then the matter will be addressed under the dispute resolution provisions in Section ‎15.2, and the notifying Party may not so terminate this Agreement until it has been determined under Section ‎15.2 that the allegedly breaching Party is in material breach of this Agreement and such breaching Party fails to cure such breach within ninety (90) days (or such longer period as determined by the arbiter of such dispute resolution) after the conclusion of such resolution.

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9.3 Termination by Either Party for Insolvency or Bankruptcy

Either Party may terminate this Agreement effective on written notice to the other Party upon the liquidation, dissolution, winding-up, insolvency, bankruptcy, or filing of any petition therefor, appointment of a receiver, custodian or trustee, or any other similar proceeding, by or of the other Party where such petition, appointment or similar proceeding is not dismissed or vacated within ninety (90) calendar days. Serious in its capacity as a licensor hereunder agrees that, in the event of the commencement of bankruptcy proceedings by or against Serious, (a) Canary, in its capacity as a licencee of rights under this Agreement, shall retain and may fully exercise all of such licenced rights under this Agreement (including as provided in this Section 9.3) and (b) Canary shall be entitled to a complete duplicate of all embodiments of such intellectual property, and such embodiments, if not already in its possession, shall be promptly delivered to the Canary (i) upon any such commencement of a bankruptcy proceeding, unless Serious elects to continue to perform all of its obligations under this Agreement, or (ii) if not delivered under (i), immediately upon the rejection of this Agreement by or on behalf of Serious.

9.4 Effects of Termination

(a) Accrued Rights and Obligations

Expiration or termination of this Agreement in its entirety, or with respect to a particular Exclusive Target, for any reason shall not release either Party hereto from any liability which, as of the effective date of such expiration or termination, had already accrued to the other Party or which is attributable to a period prior to such termination, nor preclude either Party from pursuing any rights and remedies it may have hereunder or at law or in equity which accrued or are based upon any event occurring prior to the effective date of such expiration or termination.

(b) Return of Confidential Information

It is understood and agreed, that each Party shall have a continuing right to use Confidential Information of the other Party under any surviving licences pursuant to ‎ARTICLE 4. Subject to the foregoing, following expiry or any early termination of this Agreement, the Party that has Confidential Information of the other Party shall destroy (at such Party’s written request) all such Confidential Information in its possession as of the effective date of expiration (with the exception of one copy of such Confidential Information, which may be retained by the legal department of the Party that received such Confidential Information to confirm compliance with the non-use and non-disclosure provisions of this Agreement), and any Confidential Information of the other Party contained in its laboratory notebooks or databases, provided that each Party may retain and continue to use such Confidential Information of the other Party to the extent necessary to exercise any surviving rights, licences or obligations under this Agreement.

(c) Inventory at Termination

Upon termination of this Agreement, Canary shall have the right to sell or otherwise dispose of all inventory of Products then in its stock, subject to the applicable payments due under this Agreement, and any other applicable provisions of this Agreement.

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ARTICLE 10 – confidentiality

10.1 Non-use and Non-disclosure of Confidential Information

During the Term, and for a period of ten (10) years thereafter, a Party shall (i) except to the extent permitted by this Agreement or otherwise agreed to in writing, keep confidential and not disclose to any Third Party any Confidential Information of the other Party; (ii) except in connection with activities contemplated by, the exercise of rights permitted by, in order to further the purposes of this Agreement or otherwise agreed to in writing, not use for any purpose any Confidential Information of the other Party; and (iii) take all reasonable precautions to protect the Confidential Information of the other Party (including all precautions a Party employs with respect to its own confidential information of a similar nature and taking reasonable precautions to assure that no unauthorized use or disclosure is made by others to whom access to the Confidential Information of the Party is granted).

10.2 Exclusions Regarding Confidential Information

Notwithstanding anything set forth in this ‎ARTICLE 10 to the contrary, the obligations of Section ‎10.1 shall not apply to the extent that the Party seeking the benefit of the exclusion can demonstrate that the Confidential Information of the other Party:

(a) was already known to the receiving Party, other than under an obligation of confidentiality, at the time of receipt by the receiving Party;

(b) was generally available to the public or otherwise part of the public domain at the time of its receipt by the receiving Party;

(c) became generally available to the public or otherwise part of the public domain after its receipt by the receiving Party other than through any act or omission of the receiving Party in breach of this Agreement;

(d) was received by the receiving Party without an obligation of confidentiality from a Third Party having the right to disclose such information without restriction;

(e) was independently developed by or for the receiving Party without use of or reference to the Confidential Information of the other Party; or

(f) was released from the restrictions set forth in this Agreement by express prior written consent of the Party.

10.3 Authorized Disclosures of Confidential Information

Notwithstanding the foregoing, a Party may use and disclose the Confidential Information of the other Party as follows:

(a) if required by law, rule or governmental regulation, including as may be required in connection with any filings made with, or by the disclosure policies of a major stock exchange; provided that the Party seeking to disclose the Confidential Information of the other Party (i) use all reasonable efforts to inform the other Party prior to making any such disclosures and cooperate with the other Party in seeking a protective order or other appropriate remedy (including redaction) and (ii) whenever possible, request confidential treatment of such information;

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(b) as reasonably necessary to obtain or maintain any Regulatory Approval for any Products, provided that the disclosing Party shall take all reasonable steps to limit disclosure of the Confidential Information outside such regulatory agency and to otherwise maintain the confidentiality of the Confidential Information;

(c) to take any lawful action that it deems necessary to protect its interest under, or to enforce compliance with the terms and conditions of, this Agreement; or

(d) to the extent necessary, to permitted sublicencees, licencees, collaborators, vendors, consultants, agents, attorneys, contractors, and clinicians under written agreements of confidentiality at least as restrictive on those set forth in this Agreement, who have a need to know such information in connection with such Party performing its obligations or exercising its rights under this Agreement. Further, the receiving Party may disclose Confidential Information to existing or potential acquirers, merger partners, permitted collaborators, licencees, and sources of financing or to professional advisors (e.g. attorneys, accountants and investment bankers) involved in such activities, for the limited purpose of evaluating such transaction, collaboration or licence and under appropriate conditions of confidentiality, only to the extent necessary and with the agreement by those permitted individuals to maintain such Confidential Information in strict confidence.

10.4 Terms of this Agreement

The Parties agree that this Agreement and the terms hereof will be considered Confidential Information of both Parties.

ARTICLE 11 – Publicity

11.1 Public Announcements

During the Term of this Agreement, Canary and Serious shall jointly approve, which approval shall not be unreasonably withheld, the text of any public announcements, including any public announcement concerning this Agreement and/or the Products, the Harvested Products, and the Collaborative Products. Either Party wishing to make such press release shall provide the other Party five (5) business days (in urgent cases, within two (2) business days) prior notice.

ARTICLE 12 - GENERAL MATTERS

12.1 Further Assurances

Each of the parties hereto shall promptly do, make, execute or deliver, or cause to be done, made, executed or delivered, all such further acts, documents and things as the other party hereto may reasonably require from time to time for the purpose of giving effect to this Agreement and shall use reasonable efforts and take all such steps as may be reasonably within its power to implement to their full extent the provisions of this Agreement.

12.2 Enurement

This Agreement shall enure to the benefit of and be binding upon the respective heirs, executors, administrators, successors, and permitted assigns of the parties hereto.

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12.3 Non-Solicitation

During the Term of this Agreement and for a period of two (2) years thereafter, each of Serious and Canary agrees that it shall not, directly or indirectly, recruit, solicit or attempt to solicit for employment any employee or contractor of the other Party or induce any employee or contractor of the other Party, provided, however, that this Section 12.3 will not prohibit the solicitation or hiring of any employee or contractor as a result of general media advertising or a general solicitation that is not targeted towards employees or contractors of the other Party.

12.4 Amendments and Waivers

No amendment or waiver of any provision of this Agreement shall be valid or binding unless executed in writing by the party to be bound thereby. No waiver of any provision of this Agreement shall constitute a waiver of any other provision hereof nor shall any waiver of any provision of this Agreement constitute a continuing waiver unless otherwise expressly provided.

12.5 Assignment

Canary and/or Target may assign this Agreement to (i) an Affiliate or (ii) any purchaser of all or substantially all of the assets or of all of the capital stock of Canary and/or Target, or to any successor corporation or entity resulting from any merger or consolidation of Canary and/or Target with or into such corporation or entity.

12.6 Relationship of the Parties

The Parties hereto are independent contractors and nothing contained in this Agreement shall be deemed or construed to create a partnership, joint venture, employment, franchise, agency or fiduciary relationship between the Parties.

12.7 Severability

If any provision of this Agreement is determined to be illegal, invalid or unenforceable in whole or in part, the same shall not in any respect affect the legality, validity or enforceability of the remainder of such provision or any other provision of this Agreement.

12.8 Notices

Any demand, notice or other communication to be given in connection with this Agreement shall be given in writing and may be given by personal delivery, by courier, by facsimile transmission, by electronic mail or by registered mail addressed to the recipient at the address shown on the first page hereof or to such other address or person as may be designated by notice by either party to the other. Any such communication so given will be conclusively deemed to have been given only when it is actually delivered by one of the methods aforesaid.

12.9 Electronic Transmission

The parties hereto agree that this Agreement, and any other documents required to be executed in connection herewith, may be transmitted electronically, by facsimile, e-mail or such similar device, and that the reproduction of signatures by any such device will be treated as binding as if originals and each of the parties hereto undertakes to provide each other with a copy of this Agreement, or such other documents, bearing original signatures forthwith on demand.

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12.10 Attornment

Each of the parties hereto hereby attorns to the non-exclusive jurisdiction of the courts of the Province of Ontario.

12.11 Survival

The provisions of Section 1.7, Section 3.2, Section 5.1, ARTICLE 7, Section 9.4, ARTICLE 10, and Section 12.3 shall survive termination of this Agreement.

12.12 Counterparts

This Agreement and any other documents required to be executed in connection herewith may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same document.

Serious Seeds B.V. Per: _____________________________________c/s Simon Smit, President		Canary Rx Inc. Per: _____________________________________c/s Randall S. MacLeod, President
		Target Group Inc. Per: _____________________________________c/s Rubin Schindermann, CEO
SIGNED, SEALED AND DELIVERED    in the presence of:
________________________________________ Witness	) ) ) )	________________________________________ Simon Smit

IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day, month and year first above written.

EX-10.17

Exhibit 10.17

 

CONFIDENTIAL - Licensed Producer / Licensed Processor Sales Agency Agreement

This SALES AGENCY AGREEMENT (“Agreement”) is made and entered into effect as of the December 12^th 2018, by and between Target Group Inc., a corporation existing under the laws of Delaware with its principal office and mailing address at 55 Administration Road, Unit 13, Concord, Ontario, L4K4G9,  (hereinafter “Brand Owner”), and  Cannavolve Inc (Corporation #1056814-7), organized and existing under the laws of the province of Ontario, with its principal office and mailing address at 293 Laird Avenue, Toronto, Ontario, M4G 3X6, (hereinafter called “The Agent”)

W I T N E S S E T H:

              WHEREAS, Brand Owner produces and markets non-medical cannabis, non-medical cannabis based products listed in Schedule A attached hereto as a part hereof (hereinafter called “Products”), and it desires to grant The Agent the exclusive right to sell the Products in all of Canada (hereinafter called the “Territory”), the whole in accordance with and subject to the terms herein set forth; and

              WHEREAS, The Agent is in the business of selling, and marketing non-medical cannabis, non-medical cannabis-based products or non-medical cannabis accessories in the Territory, and maintains all government licenses, permits, and authorizations required to act as a The Agent under this Agreement, and it is willing to accept such appointment by Brand Owner, all on the terms and conditions as hereinafter set forth. 

              NOW THEREFORE, in consideration of the premises and terms, conditions, covenants, and agreements hereinafter set forth, the parties agree as follows:

1.APPOINTMENT – Subject to all of the provisions of this Agreement, Brand Owner hereby appoints The Agent as its exclusive agent to market and sell the Products in the Territory, but not elsewhere, during the term of this Agreement, and The Agent accepts such appointment on the terms and conditions contained herein.  Throughout the term of this Agreement, The Agent shall use its best efforts to promote and sell the Products in the Territory. Remuneration for said service as outlined in Schedule B.

CANNAVOLVE INC. 293 Laird Drive Toronto Ontario Canada M4G 3X6 - East 416.875.1294 - West 778.995.9310 WWW.CANNAVOLVE.CA

  

Nothing herein contained shall be deemed to restrict or otherwise impair or impede the right or ability of Brand Owner and/or its affiliates to market sell, package, label, appoint additional persons as The Agents of the Products, or otherwise enter into any arrangements or agreements with respect to the Products anywhere else in the world other than the Territory.  The Agent or any of its affiliates shall not knowingly supply Products to any person within the territory for resale outside the territory.

2.PERIOD – The initial term of this Agreement shall commence on December 12^th, 2018 and shall continue for a period of two (2) years (the “Initial Term”) A “Contract Year” as the term is used in this Agreement shall consist of consecutive periods of twelve (12) calendar months.  The term of this Agreement may be extended for two (2) additional years (“Renewal Term”), the Renewal Term to commence after the Initial Term, provided that neither party is in default in the performance of this Agreement, or is not terminated by either party.

3.TERMS – Exclusive distribution rights to the Products in the Territory have been granted to the The Agent based on the following transactional terms:

a.       Brand Owner warrants that the Products sold to provincial regulatory boards and their designated retail customers, represented by The Agent are merchantable and have been produced in accordance with federally regulated non-medical cannabis industry standards.  Products’ specifications meet federal and provincial guidelines, and any guidelines, requirements, and/or regulations that govern non-medical cannabis production in the Products’ country of origin and that where it is distributed.  Brand Owner further warrants Products are free from defects in production or packaging and will be liable for any such defects.   

4.TERMINATION OF AGREEMENT 

a.       This agreement shall terminate forthwith without notice if:

[i]  either party shall become insolvent, liquidate, become the debtor in any bankruptcy or equivalent proceeding, whether voluntary or involuntary, enter into any arrangement with its creditors for payment of its debts by composition or otherwise, make assignment with its creditors or if a receiver shall be appointed for either party ceases to engage in the business contemplated by this Agreement for any reason; or 

[ii] the government of the country in which either party is located or where the Products are made or any branch thereof, enacts any laws or promulgates any codes or regulations whereby export, import, manufacture, sale, market or purchase non-medical cannabis products shall be prohibited or shall be reversed to such government or agency or instrumentality thereof.

CANNAVOLVE INC. 293 Laird Drive Toronto Ontario Canada M4G 3X6 - East 416.875.1294 - West 778.995.9310 WWW.CANNAVOLVE.CA

 

b.       In addition to other rights of termination under paragraph 5 hereof, this Agreement may be terminated by the aggrieved party on the occurrence of any of the following events (“Events of Default”)

[i]  either party is in material or repeated breach of any of the other terms and conditions of this Agreement, or otherwise fails to observe or becomes unable to perform any terms of this Agreement

[ii] either party fails to procure or to hold in good standing any governmental license, permit or other authority necessary and required to manufacture, export, import, purchase, sale the Products as contemplated by this Agreement.

c.        If as a result of an Event of Default the aggrieved party shall desire to terminate this Agreement, it shall give written notice of its intent to terminate to the other party, and if that party fails to cure or correct such Event of Default within thirty (30) days after giving such notice, then this Agreement shall terminate immediately thereafter.  Termination or expiration of the term of this Agreement shall not affect the rights of either party to receive payment or the performance of obligations accruing prior to such termination or expiration.

d.       Termination without cause by the Brand Owner requires ninety (90) days written notice, payment in lieu of service.

e.       In the event the Brand Owner makes the decision to cover the Territory and represent the Products through a direct sales force, termination notice to The Agent requires ninety (90) days written notice, payment in lieu of service.

f.         In the event the Brand Owner sells the company, sells all or some of the product or sell the rights to all or some of the products to a third party, which results in representation that is in conflict with the terms of this agreement, shall require ninety (90) days written notice to terminate, payment in lieu of service.

CANNAVOLVE INC. 293 Laird Drive Toronto Ontario Canada M4G 3X6 - East 416.875.1294 - West 778.995.9310 WWW.CANNAVOLVE.CA

  

g.       Average commission based on either agreed quantities in a supply agreement. As cannabis, cannabis derivatives and accessories become available for sale in market, a commission rate for each product can be negotiated between The Agent and the Brand Owner to a mutually agreeable outcome.

5.OBLIGATIONS OF AGENT – In addition to the other obligations of the The Agent as set forth in this Agreement, The Agent agrees to the following:

a.       The Agent will devote such time and resources as required to market and sell the Products in the Territory, and shall, at its expense, use its best efforts to maintain an adequate sales force, and use all other possible means, to promote the sale of the product in wholesale and retail channels throughout the Territory as provided for in the relevant federal and provincial legislation governing the distribution of non-medical cannabis and non-medical cannabis related products.  The Agent shall be responsible for all administrative activities associated with the representation of the Products in the Territory accept whereby it is mandated by the provincial regulatory body to do otherwise.  

b.       The Agent acknowledges and agrees that the Product and the brand names, goodwill, trademarks, formulas, label and packaging designs, patents, copyrighted material and like property and rights in connection therewith (hereinafter called “Intellectual Property”), are and shall remain the absolute property of Brand Owner, and The Agent shall immediately inform Brand Owner of any infringements on the rights to its Intellectual Property that come to The Agent’s attention, and if requested, The Agent will assist Brand Owner’s, at Brand Owner’s expense, in taking all reasonable steps as required to defend the rights to its Intellectual Property.

c.        The Agent will at its sole expense obtain such licenses and permits and do all other things that are legally required for it to lawfully act as an Agent of the Product as provided in this Agreement.

d.       The Agent shall comply with all applicable legislation in relation to the handling, storage (should there be such requirements), distribution and sale of the Products in the Territory.  In addition, The Agent shall not do anything which would adversely affect the reputation and goodwill of Brand Owner or adversely affect the reputation of the Products. 

e.       The Agent must receive approval in advance from the Brand Owner for marketing and promotional expenses required to sell the Products in the Territory.  This includes and is not limited to business expenses and promotional material.

CANNAVOLVE INC. 293 Laird Drive Toronto Ontario Canada M4G 3X6 - East 416.875.1294 - West 778.995.9310 WWW.CANNAVOLVE.CA

f.       The Agent will give first right of refusal of new accessories brands not already contracted or in negotiations to the Brand Owner as to avoid a product conflict in The Agent’s portfolio. 

6.           OBLIGATIONS OF BRAND OWNER:  In addition to the other obligations of Brand Owner as set forth in this Agreement, Brand Owner agrees as follows:

a.       Brand Owner shall not sell the Products or relative trademark rights or similar products to any party other than The Agent for sale and distribution within the Territory, or to any third party that Brand Owner knows or has reason to know may resell the Products within the Territory.  Should Brand Owner receive any inquiry regarding the sale of the Products in the Territory, Brand Owner shall pass such inquiry on to The Agent.

b.       Throughout the term of this Agreement, Brand Owner shall carry and keep in force a policy or policies of comprehensive and general liability insurance providing coverage or not less than five million dollars ($5,000,000.00) and fifteen million dollars ($15,000,000.00) general recall insurance, and, upon request, shall provide The Agent with a Certificate of Insurance reflecting such coverage. 

c.        Brand Owner shall participate and fund marketing, promotional, and approved business expenses for the Products in the Territory within the established guidelines of the prevailing federal and provincial legislation of the time.

7.           GRANT OF RIGHTS TO TRADEMARK, ETC:  Brand Owner hereby grants to The Agent within the Territory only a limited, exclusive license to use the trade names, trademarks and copyrighted materials relating to the Products and owned by Brand Owner during the existence of this Agreement solely in connection with the marketing, distribution and sale of the Products. The Agent acknowledges that it has no ownership interest in the trademarks, trade names and copyrights so licensed, or in any other Intellectual Property of Brand Owner, that such trademarks, trade names and copyrights are the sole property of Brand Owner, and that upon the termination of this Agreement, The Agent shall no longer be entitled to use such property and materials.  The Agent agrees that it will not adopt or utilize any trade names, trademarks or copyrighted materials which are confusingly similar to those licensed to The Agent hereunder or otherwise utilized by Brand Owner. 

CANNAVOLVE INC. 293 Laird Drive Toronto Ontario Canada M4G 3X6 - East 416.875.1294 - West 778.995.9310 WWW.CANNAVOLVE.CA

 

8.           ESTABLISHMENT OF MARKETING AND PROMOTIONAL PLANS:  Representatives of The Agent and Brand Owner will meet periodically each Contract Year, to review and establish marketing and promotional budgets, plans and concepts for the promotion and sales of the Products in the Territory. Both parties are to agree in writing to said plans at the least on an annual basis of either fiscal or calendar year. Any expenditure incurred by The Agent above the agreed plans is to be funded by The Agent unless negotiated and confirmed in writing by both parties prior to the expense being incurred. 

9.           CONFIDENTIALITY:  During the existence of this Agreement and for a period of one (1) years after its termination, the parties shall not disclose to any third party, or use for any purpose other than as required in the performance of this Agreement, any information obtained by them in the performance of this Agreement, including but not limited to, prices, costs, sales volumes, trademark information, product formulae, and any other information and trade secrets that might adversely affect either party's ability to compete in any market.

10.         RELATION OF PARTIES:  The relation of the parties hereto is that of contracting parties, and neither shall be or hold itself out as being the partner, joint venturer, agent, servant or employee of the other party, or as having any authority to act in such capacity for the other party.

11.         FORCE MAJEURE:  If either party becomes unable to perform any of its obligations under this Agreement, other than the obligation to pay money when due, because of any event which is unavoidable and beyond the control of the non-performing party (“Event of Force Majeure”), including but not limited to, a judicial or governmental decree, regulation or other direction not the fault of the party who has been so affected, inability to obtain materials or shipping space, labor stoppage, civil unrest, loss of or damage to goods in transit, war, fire, power failure, earthquake, flood or other natural disaster or act of God, or other circumstances of similar nature, the party that becomes aware of such event shall send the other party written notice thereof.  The non-performing party shall take all steps required to resume performance as soon as possible; shall keep the other party informed on a regular basis as to the status of the Event of Force Majeure, and shall not be considered a breach of any obligation hereunder because of failure to perform during the period that it is prevented from performing by such Event of Force Majeure.  Notwithstanding that an Event of Force Majeure shall not result in a breach of this Agreement, such event shall not excuse either party from its failure to perform brought about by its lack of reasonable effort to correct such Event of Force Majeure and to carry out the terms of this Agreement within a reasonable time.

CANNAVOLVE INC. 293 Laird Drive Toronto Ontario Canada M4G 3X6 - East 416.875.1294 - West 778.995.9310 WWW.CANNAVOLVE.CA

 

12.         NOTICES:  All notices required by this Agreement shall be in writing, and if to The Brand Owner, they shall be addressed to the attention of Rubin Schindermann, Saul Niddam, Adam Taub and if to The Agent, they shall be addressed to the attention of either Trace Hanlon, Kye Melchert, Scott Oliver, sole Directors of Cannavolve Inc.  All notices shall be sent by a recognized express mail service or governmental mail service addressed to the parties' respective addresses first hereinabove written.  Such notices shall be deemed given when received by the addressee.

13.  INDEMNIFICATION AND INSURANCE.  Each party shall indemnify and hold the other party harmless from and against any loss, liability or damages, including the indemnified party’s legal fees and other costs of litigation, resulting from claims arising out of either party’s non-performance of this Agreement, or out of the manufacture, packaging, storage, sale or use of the Product, provided (i) that the loss is actually sustained by the aggrieved party seeking indemnification and is not covered by insurance, and (ii) that a court of competent jurisdiction has by final unappealable judgment determined that the liability was attributable to the willful malfeasance or nonfeasance or negligence of the party against which indemnity is sought.

14.  BINDING EFFECT OF AGREEMENT AND ASSIGNABILITY:  This Agreement shall be binding upon and insure to the benefit of the parties hereto and their respective successors and assigns; provided, however, The Agent shall not assign or subcontract its rights and obligations hereunder to any third party without the prior written consent of Brand Owner, and in the event of such assignment or subcontract with such written consent, The Agent’s liability for its obligations to Brand Owner under the terms of this Agreement shall not be diminished.  The Agent shall not otherwise delegate its rights and obligations under this Agreement to another importer/The Agent for the performance of The Agent’s obligations to market and sell the Products in the Territory, or any part of it, without Brand Owner’s prior written consent.  Whereas the Products are sold by Brand Owner, this Agreement shall be binding upon the respective owner of the Product’s production, trademark and licensing rights.

15.  ENTIRE AGREEMENT:  This Agreement embodies the entire agreement between Brand Owner and The Agent, and supersedes all prior oral and written negotiations, understandings and agreements, and this Agreement shall not be amended, supplemented or modified except in writing signed by both parties hereto.

CANNAVOLVE INC. 293 Laird Drive Toronto Ontario Canada M4G 3X6 - East 416.875.1294 - West 778.995.9310 WWW.CANNAVOLVE.CA

 

16.  NON-WAIVER:  No delay or failure by either party to exercise any right under this Agreement, and no partial or single exercise of that right, shall constitute a waiver of that or any other right the party may have, and a waiver of any single incident shall not be deemed to be a waiver of any other subsequent incident.

17.  HEADINGS:  Headings to paragraphs in this Agreement are for convenience of reference, and shall not affect the meaning or construction of this Agreement.

18.  COUNTERPARTS:  This Agreement may be executed in counterparts, each of which when executed and delivered shall be deemed an original, but all of which taken together shall constitute one and the same instrument.

19.  SEVERABILITY:  If any provisions of this Agreement or part thereof is found by a court or other authority of competent jurisdiction to be illegal, unenforceable, ineffective or void, then such provision, or part thereof, shall be severed and be of no further effect.  If it is possible to accomplish the intent and business purposes of the parties pursuant to this Agreement without giving effect to any void provisions thereof, the remainder of the Agreement shall be and remain in full force and effect, and shall be construed to the fullest extent lawful to fulfill the intentions of the parties hereto as expressed by the entire Agreement such severed portions.

20.   GOVERNING LAW  -  This Agreement shall be governed by and interpreted in accordance with the laws of the province of Ontario.  Each party hereby irrevocably attorns to the jurisdiction of the courts of Ontario in connection with any disputes that (i) may result from, arise out of, or relate to this Agreement, and (ii) may be brought in such courts.  Each party hereby irrevocably waives (and irrevocably agrees not to raise) any objection that it may now or hereafter have to the laying of the venue of any proceedings in any such courts and any claim that any such proceedings have been brought in an inconvenient forum.  Judgment in any such proceedings in such court shall be conclusive and binding upon the parties and may be enforced with courts of any other jurisdiction.

CANNAVOLVE INC. 293 Laird Drive Toronto Ontario Canada M4G 3X6 - East 416.875.1294 - West 778.995.9310 WWW.CANNAVOLVE.CA

 

IN TESTIMONY WHEREOF, witness the signatures of the parties hereto, by their respective duly authorized officers or agents, effective as of the day and year first hereinabove written.

CANNAVOLVE INC.

Signature: _________________________________

Name :  _________________________________

Title:  ________________________________

Target Group Inc.

Signature: _________________________________

Name:  _________________________________

Title:  ________________________________

CANNAVOLVE INC. 293 Laird Drive Toronto Ontario Canada M4G 3X6 - East 416.875.1294 - West 778.995.9310 WWW.CANNAVOLVE.CA

 

SCHEDULE A

Products

Includes all products manufactured, all products represented, or all products offered for representation in the agreed territories by Target Group Inc., or related Companies, at present and future, during the term of the agreement and as listed below:

Canary/Serious Seeds Products

· Cannabis Pre Roll

· Cannabis Seeds

· Cannabis Flower

CannaKorp Inc. /Wisp Vaporizer

· Wisp Vaporizer (Complete Unit)

· Cannabis Wisp Pods

CANNAVOLVE INC. 293 Laird Drive Toronto Ontario Canada M4G 3X6 - East 416.875.1294 - West 778.995.9310 WWW.CANNAVOLVE.CA

 

SCHEDULE B

Canary RX Cannabis products including but not limited to Pre Roll, Seeds and Cannabis Flower – 6% of Net Sales.

Target Group and subsidiary companies accessories and supplemental products will have commission rate negotiated by The Agent and the Brand Owner to a mutually agreeable outcome.

Commission rate based on wholesale price

As per our commission schedule table based on Adult Non-Medicinal Non-medical cannabis product invoices to Control Boards and Licensed Retailers in the Territory.

1. Commissions due upon invoice, submission of completed documents, and payment to the Brand Owner by the Provincial Boards. Net 30 days of payment received by Brand Owner from the Board.

2. No deductions may be made by the Brand Owner when or after Provincial Boards make deductions from payments to Brand Owner.  The items may be for, but not limited to, damages, returns, out-dated stock, etc.

3. Should a separate supply agreement be entered into between the parties and duly signed as such, the dollar value agreed to in said supply agreement will determine the annual commission rate.

4. Should the Brand Owner default on the supply agreement The Agent retains the right to reconcile annually based on actual supply of product and invoice the commission charged as per schedule B rates.

5. Should The Agent fail to sell the dollar value considered under said supply agreement annually The Agent retains no right to alter the agreed commission rate contemplated in the supply agreement.

CANNAVOLVE INC. 293 Laird Drive Toronto Ontario Canada M4G 3X6 - East 416.875.1294 - West 778.995.9310 WWW.CANNAVOLVE.CA

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

AND PRINCIPAL FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Rubin Schindermann, certify that:

1. I have reviewed this form 10-K of Target Group Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods present in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financing reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 1, 2019	TARGET GROUP INC.
	By:	/s/ Rubin Schindermann
		Rubin Schindermann
		Chief Executive Officer and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF

PRINCIPAL EXECUTIVE OFFICER

AND PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

In connection with Annual Report of Target Group Inc. for the year ended December 31, 2018, I, Rubin Schindermann, Chief Executive Officer and Chief Financial Officer of the Company hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge and belief, that:

1. Such Annual Report on Form 10-K for the year ended December 31, 2018 fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in such Annual Report on Form 10-K for the year ended December 31, 2018 fairly presents, in all material respects, the consolidated financial condition and results of operations of the Company.

Date: April 1, 2019	TARGET GROUP INC.
	By:	/s/ Rubin Schindermann
		Rubin Schindermann
		Chief Executive Officer and Chief Financial Officer

XML

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2018	Apr. 01, 2019	Jun. 30, 2018
Document and Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY
Entity Registrant Name	Target Group Inc.
Entity Central Index Key	0001586554
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Public Float			$ 3,274,268
Trading Symbol	CBDY
Entity Common Stock, Shares Outstanding		153,694,313
Entity Shell Company	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Small Business	true

XML

CONSOLIDATED BALANCE SHEETS - USD ($)	Dec. 31, 2018	Dec. 31, 2017
Current assets
Cash	$ 303,438	$ 56
Prepaid asset [Note 6]	35,145	0
Sales tax recoverable, net of allowance [Note 7]	220,525	0
Total current assets	559,108	56
Long term assets
Furniture and equipment	856	0
Capital work in progress [Note 9]	2,595,022	0
Goodwill [Note 10]	3,594,195	0
Other assets	31,496	0
Total long term assets	6,221,569	0
Total assets	6,780,677	56
Current liabilities
Accounts payable and accrued liabilities [Note 11]	1,739,765	109,741
Payable to related parties [Note 12]	403,620	123,697
Shareholder advances [Note 13]	209,046	304,322
Convertible promissory notes, net [Note 14]	221,639	572,718
Derivative liability [Note 14]	862,483	951,836
Total current liabilities	3,436,553	2,062,314
Total liabilities	3,436,553	2,062,314
Contingencies and commitments
Stockholders' deficit
Preferred stock, $0.0001 par value, 20,000,000 shares authorized; 1,000,000 shares issued and outstanding as at December 31, 2018 (1,000,000 shares outstanding as at December 31, 2017) [Note 15]	100	100
Common stock, $0.0001 par value, 850,000,000 shares authorized, 93,624,289 common shares outstanding as at December 31, 2018 (14,973,819 common shares outstanding as at December 31, 2017) [Note 15]	9,362	1,497
Stock subscription receivable [Note 15]	(220,319)	0
Shares to be issued [Note 15]	1,359,349	73,000
Additional paid-in capital	11,346,467	5,057,758
Accumulated deficit	(9,094,954)	(7,194,613)
Accumulated comprehensive income	(55,881)	0
Total stockholders' deficit	3,344,124	(2,062,258)
Total liabilities and stockholders' deficit	$ 6,780,677	$ 56

XML

CONSOLIDATED BALANCE SHEETS [Parenthetical] - $ / shares	Dec. 31, 2018	Dec. 31, 2017
Preferred Stock, Par or Stated Value Per Share (in dollars per share)	$ 0.0001	$ 0.0001
Preferred Stock, Shares Authorized	20,000,000	20,000,000
Preferred Stock, Shares Issued	1,000,000	1,000,000
Preferred Stock, Shares Outstanding	1,000,000	1,000,000
Common Stock, Par or Stated Value Per Share (in dollars per share)	$ 0.0001	$ 0.0001
Common Stock, Shares Authorized	850,000,000	850,000,000
Common Stock, Shares, Outstanding	93,624,289	14,973,819

XML

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
REVENUE	$ 263	$ 15,434
OPERATING EXPENSES
Commitment fee [Note 6]	0	140,000
Advisory and consultancy fee	77,159	36,000
Management services fee	362,500	300,000
Salaries and wages	332,337	0
Legal and professional fees	314,428	109,739
Software development expense	32,246	86,088
Impairment of intangible asset [Note 8]	0	124,357
Website development and marketing expenses	91,852	87,307
Rent and utilities	36,072	14,849
Travel expenses	0	11,874
Amortization of intangibles	0	13,254
Office and general	34,440	1,273
Total operating expenses	1,281,034	924,741
OTHER INCOME AND EXPENSES
Change in fair value of derivative liability	323,946	955,305
Loss (Gain) on forgiveness/settlement of debt	39,118	(226,306)
Interest and bank charges	81,847	104,372
Exchange loss	33,546	4
Day one interest expense	62,288	0
Accretion expense	2,923	0
Allowance for sales tax recoverable	75,902	0
Total other expenses	619,570	833,375
Net loss before income taxes	(1,900,341)	(1,742,682)
Income taxes [Note 17]	0	0
Net loss	(1,900,341)	(1,742,682)
Foreign currency translation adjustment	(55,881)	0
Comprehensive loss	$ (1,956,222)	$ (1,742,682)
Loss per share, basic and diluted (in dollars per share)	$ (0.04)	$ (0.72)
Weighted average shares - basic and diluted (in shares)	46,202,047	2,413,677

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CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($)	Total	Preferred Stock [Member]	Common Stock [Member]	Shares To Be Issued [Member]	Stock Subscription Receivable [Member]	Additional Paid-in Capital [Member]	Accumulated deficit [Member]	Accumulated Comprehensive Income [Member}
Balance at Dec. 31, 2016	$ (1,819,707)	$ 100	$ 4	$ 52,000	$ 0	$ 3,580,120	$ (5,451,931)	$ 0
Balance (in shares) at Dec. 31, 2016		1,000,000	35,645	80,000
Shares to be issued as settlement for website development services [Note 15]	21,000	$ 0	$ 0	$ 21,000	0	0	0	0
Shares to be issued as settlement for website development services [Note 15] (in shares)		0	0	35,000
Shares issued as consideration for management services [Note 12]	696,000	$ 0	$ 1,292	$ 0	0	694,708	0	0
Shares issued as consideration for management services [Note 12] (in shares)		0	12,920,000	0
Shares issued as consideration for advisory and other services [Note 12]	43,000	$ 0	$ 8	$ 0	0	42,992	0	0
Shares issued as consideration for advisory and other services [Note 12] (in shares)		0	96,079	0
Shares issued on conversion of convertible promissory notes [Note 15]	261,290	$ 0	$ 193	$ 0	0	261,097	0	0
Shares issued on conversion of convertible promissory notes [Note 15] (in shares)		0	1,922,094	0
Change due to extinguishment of derivative liability on debt conversion	478,841	$ 0	$ 0	$ 0	0	478,841	0	0
Net loss	(1,742,682)	0	0	0	0	0	(1,742,682)	0
Foreign currency translation	0
Balance at Dec. 31, 2017	(2,062,258)	$ 100	$ 1,497	$ 73,000	0	5,057,758	(7,194,613)	0
Balance (in shares) at Dec. 31, 2017		1,000,000	14,973,818	115,000
Shares issued as consideration for management services [Note 12]	84,000	$ 0	$ 553	$ 0	0	83,447	0	0
Shares issued as consideration for management services [Note 12] (in shares)		0	5,529,412	0
Shares issued on conversion of convertible promissory notes [Note 15]	281,421	$ 0	$ 2,081	$ 0	0	279,340	0	0
Shares issued on conversion of convertible promissory notes [Note 15] (in shares)		0	20,813,957	0
Shares issued as consideration for consideration of the intellectual property rights [Note 15]	27,000	$ 0	$ 0	$ 27,000	0	0	0	0
Shares issued as consideration for consideration of the intellectual property rights [Note 15] (in shares)		0	0	250,000
Shares issued as consideration for consulting services and marketing expenses [Note 15]	72,675	$ 0	$ 155	$ 0	0	72,520	0	0
Shares issued as consideration for consulting services and marketing expenses [Note 15] (in shares)		0	1,550,000	0
Change due to extinguishment of derivative liability on debt conversion	720,789	$ 0	$ 0	$ 0	0	720,789	0	0
Shares issued on settlement of liability - Black Bridge [Note 15]	342,500	$ 0	$ 250	$ 0	0	342,250	0	0
Shares issued on settlement of liability - Black Bridge [Note 15] (in shares)		0	2,500,000	0
Shares issued as consideration for private placement [Note 15]	2,515,374	$ 0	$ 2,276	$ 1,259,349	(220,319)	1,474,068	0	0
Shares issued as consideration for private placement [Note 15] (in shares)		0	22,757,102	40,337,532
Shares and warrants issued for acquisition of subsidiary [Note 10 and 15]	3,318,845	$ 0	$ 2,550	$ 0	0	3,316,295	0	0
Shares and warrants issued for acquisition of subsidiary [Note 10 and 15] (in shares)		0	25,500,000	0
Net loss	(1,900,341)	$ 0	$ 0	$ 0	0	0	(1,900,341)	0
Foreign currency translation	(55,881)	0	0	0	0	0	0	(55,881)
Balance at Dec. 31, 2018	$ 3,344,124	$ 100	$ 9,362	$ 1,359,349	$ (220,319)	$ 11,346,467	$ (9,094,954)	$ (55,881)
Balance (in shares) at Dec. 31, 2018		1,000,000	93,624,289	40,702,532

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CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
OPERATING ACTIVITIES
Net loss for the period	$ (1,900,341)	$ (1,742,682)
Adjustment for non-cash items
Loss (Gain) on forgiveness/settlement of debt	39,118	(226,306)
Change in fair value of derivative	323,946	955,305
Day one interest expense	62,288	0
Accretion expense	2,923	0
Amortization of intangibles	0	13,254
Impairment of intangibles	0	124,357
Shares issued/to be issued for advisory and other services	174,675	739,000
Penalty Charged on Convertible Promissory Notes	25,781	0
Allowance for sales tax recoverable	75,902	0
Changes in operating assets and liabilities:
Change in prepaid asset	(20,536)	140,000
Change in sales tax recoverable	(172,905)	0
Change in other assets	(31,496)	0
Change in accounts payable and accrued liabilities	721,179	(264,982)
Net cash used in operating activities	(699,466)	(262,054)
INVESTING ACTIVITIES
Amount invested on capital work in progress	(1,804,063)	0
Net cash used in investing activities	(1,804,063)	0
FINANCING ACTIVITIES
(Repayment) and utilization of bank overdraft facility	(63,072)	0
Repayment of shareholder advances	(286,473)	(48,236)
Shareholder advances	191,194	208,084
Proceeds from issuance of promissory notes	354,000	86,000
Proceeds from private placements	2,515,376	0
Net cash provided by financing activities	2,711,025	245,848
Net increase (decrease) in cash during the period	207,496	(16,206)
Effect of foreign currency translation	95,886	0
Cash, beginning of period	56	16,262
Cash, end of period	303,438	56
NON CASH TRANSACTIONS
Shares issued on conversion of debt	310,052	0
Shares issued as consideration against liability	9,000	0
Shares issued as consideration for acquisition	3,318,842	0
Cash paid for interest	0	0
Cash paid for taxes	$ 0	$ 0

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NATURE OF OPERATIONS

12 Months Ended

Dec. 31, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

1. NATURE OF OPERATIONS

Target Group Inc. (formerly known as Chess Supersite Corporation) (“Target Group” or “the Company”) was incorporated on July 2, 2013 under the laws of the state of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions.

Target Group Inc. is a diversified and vertically integrated, progressive company with focus on both national and international presence. The Company owns and operates Canary Rx Inc, a final-stage, Canadian licensed producer, regulated under The Cannabis Act. Canary Rx Inc, operates a 44,000 square foot facility located in Norfolk County, Ontario, and has partnered with Dutch breeder, Serious Seeds, to cultivate exclusive & world class proprietary genetics. The Company has begun structuring multiple international production and distribution platforms and intends to continue rapidly expanding its global footprint as it focuses on building an iconic brand portfolio whose focus aims at developing cutting edge Intellectual Property among the medical and recreational cannabis markets. Target Group is committed to building industry-leading companies that transform the perception of cannabis and responsibly elevate the overall consumer experience.

The Company’s current business is to produce, manufacture, distribute, and conduct sales of cannabis products. As of the current year end, the company has not produced, manufactured, distributed or sold any cannabis products.

In May, 2014, the Company effected a change in control by the redemption of the stock held by its original shareholders, the issuance of shares of its common stock to new shareholders, the resignation of its original officers and directors and the appointment of new officers and directors.

On July 6, 2015, the Company filed its form S-1/A, to amend its form S-1 previously filed on January 26, 2015 and December 11, 2014. The prospectus relates to the offer and sale of 1,500,000 shares of common stock (the “Shares”) of the Company, $0.0001 par value per share, offered by the holders thereof (the “Selling Shareholder Shares”), who are deemed to be statutory underwriters. The selling shareholders will offer their shares at a price of $0.50 per share, until the Company’s common stock is listed on a national securities exchange or is quoted on the OTC Bulletin Board (or a successor); after which, the selling shareholders may sell their shares at prevailing market or privately negotiated prices, including (without limitation) in one or more transactions that may take place by ordinary broker’s transactions, privately-negotiated transactions or through sales to one or more dealers for resale.

On July 13, 2015, the Company received a notice of effectiveness from the SEC for the registration of its shares.

On July 3, 2018, the Company filed an amendment in its Articles of association to change its name to Target Group Inc. The Company was able to secure an OTC Bulletin Board symbol CBDY from Financial Industry Regulatory Authority (FINRA).

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., a Canadian corporation that holds a leasehold interest in a parcel of property located in Ontario’s Garden Norfolk County for the production of cannabis.

The Exchange Agreement provides that, subject to its terms and conditions, 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 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 Warrants. Upon the closing of the Exchange Agreement, the Visava shareholders held approximately 46.27% of the issued and outstanding Common Stock of the Company and Visava will continue its business operations as a wholly-owned subsidiary of the Company. The transaction was closed effective August 2, 2018.

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BASIS OF PRESENTATION AND CONSOLIDATION

12 Months Ended

Dec. 31, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation and Significant Accounting Policies [Text Block]

2. BASIS OF PRESENTATION AND CONSOLIDATION

The summary of significant accounting policies presented below is designed to assist in understanding the Company’s consolidated financial statements. Such consolidated financial statements and accompanying notes are the representations of the Company’s management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America (“GAAP”) in all material respects, and have been consistently applied in preparing the accompanying consolidated financial statements.

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. Significant intercompany accounts and transactions have been eliminated upon consolidation.

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GOING CONCERN

12 Months Ended

Dec. 31, 2018

Going Concern [Abstract]

Substantial Doubt about Going Concern [Text Block]

3. GOING CONCERN

The Company has minimal revenue since inception to date and has sustained operating losses during the year ended December 31, 2018. The Company had working capital deficit of $2,877,445 and an accumulated deficit of $9,094,954 as of December 31, 2018. The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations and/or obtaining additional financing from its members or other sources, as may be required.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern; however, the above condition raises substantial doubt about the Company’s ability to do so. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

In order to maintain its current level of operations, the Company will require additional working capital from either cash flow from operations, sale of its equity or issuance of debt. However, the Company currently has no commitments from any third parties for the purchase of its equity. If the Company is unable to acquire additional working capital, it will be required to significantly reduce its current level of operations.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

CASH

Cash and cash equivalents include cash on hand and on deposit at banking institutions as well as all highly liquid short-term investments with original maturities of 90 days or less. The Company did not have cash equivalents as of December 31, 2018 and 2017.

GOODWILL AND INTANGIBLE ASSETS

Goodwill and other identifiable intangible assets with indefinite lives that are not being amortized, such as trade names, are tested at least annually for impairment and are written down if impaired. Identifiable intangible assets with finite lives are amortized over their estimated useful lives and are reviewed for impairment whenever facts and circumstances indicate that their carrying values may not be fully recoverable. The intangible assets with definite lives are being amortized over its estimated useful lives of 5 years using the straight-line method.

The Company operated an online chess site featuring sophisticated playing zones, game broadcasts with software analyses and top analysts' commentaries, education and other chess oriented resources. Intangible assets represented the amount incurred by the Company related to the development of the online chess gaming website.

Under ASC 985-20, there are two main stages of software development. These stages are defined as:

(A) When the technological feasibility is established, and

(B) When the product is available for general release to customers.

Costs incurred by the Company up to stage A have been expensed while costs incurred to move from stage A to stage B have been capitalized.

The Company evaluates the recoverability of the infinite-lived intangible assets for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If such review indicates that the carrying amount of intangible assets is not recoverable, the carrying amount of such assets is reduced to fair value.

During the year ended December 31, 2017, the intangible asset was written off based on management’s review and evaluation of its recoverability.

With respect to goodwill, during the year ended December 31, 2018, the Company has identified no circumstances which would call for further evaluation of goodwill impairment.

REVENUE RECOGNITION

In accordance with ASC 605, revenue is recognized when persuasive evidence of an arrangement exists, services have been performed, the amount is fixed and determinable, and collection is reasonably assured.

During the year ended December 31, 2018, the Company earned revenue of $263 as membership fee for the Company’s chess gaming website.

During the year ended December 31, 2017, the Company earned revenue of $15,434 which comprises of an amount of $13,882, which we invoiced as consideration for the revenue earned from ticket sales for 2017 Orlando Sunshine Open and $1,552 as membership fee for the Company’s chess gaming website.

FOREIGN CURRENCY TRANSLATION

The functional currency of the Company’s Canadian-based subsidiary is the Canadian dollar and the US-based parent is the U.S. dollar. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities are translated using the historical rate on the date of the transaction. All exchange gains or losses arising from translation of these foreign currency transactions are included in net income (loss) for the year. In translating the consolidated financial statements of the Company’s Canadian subsidiaries from their functional currency into the Company’s reporting currency of United States dollars, balance sheet accounts are translated using the closing exchange rate in effect at the balance sheet date and income and expense accounts are translated using an average exchange rate prevailing during the reporting period. Adjustments resulting from the translation, if any, are included in cumulative other comprehensive income (loss) in stockholders’ equity. The Company has not, to the date of these consolidated financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

SOFTWARE DEVELOPMENT COSTS

The costs incurred in the preliminary stages of development are expensed as incurred. Once an application has reached the development stage, internal and external costs, if direct and incremental, are capitalized until the application is substantially complete and ready for its intended use. These costs are amortized using the straight-line method over the estimated economic useful life of 5 years starting from when the application is substantially complete and ready for its intended use.

CONCENTRATION OF RISK

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash. The Company places its cash with high quality banking institutions. The Company had cash balances in excess of the Federal Deposit Insurance Corporation limit as of December 31, 2018.

INCOME TAXES

Under ASC 740, “Income Taxes,” deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Valuation allowances are established when it is more likely than not that some or all of the deferred tax assets will not be realized. As of December 31, 2018, there were no deferred taxes due to the uncertainty of the realization of net operating loss or carry forward prior to expiration.

OPERATING LEASES

The Company leases office space and the production facility under operating lease agreements. The lease term begins on the date of initial possession of the leased property for purposes of recognizing lease expense on a straight-line basis over the term of the lease. Lease renewal periods are considered on a lease-by-lease basis and are generally not included in the initial lease term.

LOSS PER COMMON SHARE

Basic loss per common share excludes dilution and is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted loss per common share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the loss of the entity. Convertible promissory notes as at December 31, 2018 are likely to be converted into shares, however, due to losses, their effect would be antidilutive. As of December 31, 2018, convertible notes outstanding could be converted into 9,125,002 shares of common stock.

CONVERTIBLE NOTES PAYABLE AND DERIVATIVE INSTRUMENTS

The Company has adopted the provisions of ASU 2017-11 to account for the down round features of warrants issued with private placements effective as of January 1, 2017. In doing so, warrants with a down round feature previously treated as derivative liabilities in the consolidated balance sheet and measured at fair value are henceforth treated as equity, with no adjustment for changes in fair value at each reporting period. The Company accounted for conversion options embedded in convertible notes in accordance with ASC 815. ASC 815 generally requires companies to bifurcate conversion options embedded in convertible notes from their host instruments and to account for them as free-standing derivative financial instruments. ASC 815 provides for an exception to this rule when convertible notes, as host instruments, are deemed to be conventional, as defined by ASC 815-40. The Company accounts for convertible notes deemed conventional and conversion options embedded in non-conventional convertible notes which qualify as equity under ASC 815, in accordance with the provisions of ASC 470-20, which provides guidance on accounting for convertible securities with beneficial conversion features. Accordingly, the Company records, as a discount to convertible notes, the intrinsic value of such conversion options based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt.

STOCK BASED COMPENSATION

The Company accounts for stock based payments in accordance with the provision of ASC 718, which requires that all share-based payments issued to acquire goods or services, including grants of employee stock options, be recognized in the statement of operations based on their fair values, net of estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Compensation expense related to share-based awards is recognized over the requisite service period, which is generally the vesting period.

The Company accounts for stock based compensation awards issued to non-employees for services, as prescribed by ASC 718-10, at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the guidelines in ASC 505-50. The Company issues compensatory shares for services including, but not limited to, executive, management, accounting, operations, corporate communication, financial and administrative consulting services.

MARKETING EXPENSES

Marketing and advertising expenditures are expensed in the annual period in which the expenditure is incurred.

IMPAIRMENT OF LONG-LIVED ASSETS

In accordance with ASC 360-10, the Company, on a regular basis, reviews the carrying amount of long-lived assets for the existence of facts or circumstances, both internally and externally, that suggest impairment. The Company determines if the carrying amount of a long-lived asset is impaired based on anticipated undiscounted cash flows, before interest, from the use of the asset. In the event of impairment, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the asset. Fair value is determined based on appraised value of the assets or the anticipated cash flows from the use of the asset or asset group, discounted at a rate commensurate with the risk involved.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company follows guidance for accounting for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis. Additionally, the Company adopted guidance for fair value measurement related to nonfinancial items that are recognized and disclosed at fair value in the consolidated financial statements on a nonrecurring basis. The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements).

The three levels of the fair value hierarchy are as follows:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 inputs are unobservable inputs for the asset or liability. The carrying amounts of financial assets such as cash approximate their fair values because of the short maturity of these instruments.

The estimated fair value of cash, accounts payable, and accrued liabilities approximate their carrying values due to the short-term maturity of these instruments. The derivative liabilities of the promissory convertible notes are valued Level 3, refer to Note 15 for further details.

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RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

12 Months Ended

Dec. 31, 2018

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

New Accounting Pronouncements and Changes in Accounting Principles [Text Block]

5. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

The Company qualifies as an Emerging Growth Company (EGC) and has elected the deferral period for all new standards.

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) or other standard setting bodies that are adopted by the Company as of the specified effective date.

In November 2016, an accounting pronouncement was issued by the FASB to update the guidance related to the presentation of restricted cash. Under this Update, the amendments require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments in this Update do not provide a definition of restricted cash or restricted cash equivalents. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in this Update should be applied using a retrospective transition method to each period presented. The adoption of this pronouncement did not have a material impact on the balance sheet and/or statement of operations.

In May 2017, the FASB issued Accounting Standards Update (ASU) No. 2017-09, Compensation – Stock Compensation (Topic 718). The amendments in this ASU require that the company apply modification accounting when the company changes the terms or conditions of a share-based payment award. The amendments in this Update apply to all companies. They became effective for public business entities in the annual period ending after December 15, 2017, and interim periods within those fiscal years, with early application permitted. The adoption of this pronouncement did not have a material impact on the balance sheet and/or statement of operations.

In July 2017, the FASB issued Accounting Standards Update (ASU) No. 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815).

I. Accounting for Certain Financial Instruments with Down Round Features

II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception

The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments.

The amendments in Part II of this Update recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect.

The amendments in this Update apply to all companies. Part I becomes effective for public business entities in the annual period ending after December 15, 2018, and interim periods within those fiscal years, with early application permitted. Management does not expect to have a significant impact of this ASU on the Company’s financial statements. The amendments in Part II of this Update do not require any transition guidance because those amendments do not have an accounting effect.

In August 2018, the FASB issued ASU 2018-13, “Changes to Disclosure Requirements for Fair Value Measurements”, which will improve the effectiveness of disclosure requirements for recurring and nonrecurring fair value measurements. The standard removes, modifies, and adds certain disclosure requirements, and is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company will be evaluating the impact this standard will have on the Company’s consolidated financial statements.

In June 2018, the FASB issued an accounting pronouncement (FASB ASU 2018-07) to expand the scope of ASC Topic 718, Compensation - Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The Company is currently in the process of evaluating the effects of this pronouncement on the consolidated financial statements.

On January 1, 2018, the Company adopted the accounting pronouncement issued by the FASB to clarify existing guidance on revenue recognition. This guidance includes the required steps to achieve the core principle that a company should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The Company adopted this pronouncement on a modified retrospective basis.

On January 1, 2018, the Company adopted the accounting pronouncement issued by the FASB to clarify how entities should present restricted cash and restricted cash equivalents in the statement of cash flows. This guidance requires entities to show changes in the total of cash, cash equivalents and restricted cash in the combined statement of cash flows. This guidance was adopted on a retrospective basis, and such adoption did not have a material impact on consolidated balance sheet and/or statement of operations

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This guidance revises the accounting related to leases by requiring lessees to recognize a lease liability and a right-of-use asset for all leases. The new lease guidance also simplifies the accounting for sale and leaseback transactions. This ASU is effective for annual reporting periods beginning after December 15, 2018 and early adoption is permitted. The Company is currently in the process of evaluating the effects of this pronouncement on the consolidated financial statements.

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PREPAID ASSET

12 Months Ended

Dec. 31, 2018

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Prepaid Asset [Text Block]

6. PREPAID ASSET

At December 31, 2018, the Company had prepaid expenses of $35,145 compared to $nil as at December 31, 2017. The balance represents the retainer fees paid to the lawyer and security deposit for the leased land of the subsidiary’s facility.

While as at December 31, 2016 prepaid asset represents a commitment fee owed by the Company to a certain investor in respect of a Securities Purchase Agreement entered into by the Company dated October 18, 2016. The Company has issued a convertible promissory note in respect of the commitment fee. The asset was, however, written off in the statement of operations during the year ended December 31, 2017 because the benefit associated in form of the equity line of credit no longer existed.

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SALES TAX RECOVERABLE

12 Months Ended

Dec. 31, 2018

Sales Tax Recoverable [Abstract]

Sales Tax Recoverable [Text Block]

7. SALES TAX RECOVERABLE

At December 31, 2018, the Company had $294,033 of gross sales tax recoverable compared to $nil as at December 31, 2017. This is due to sales tax paid by the subsidiary on expenses incurred during the year which are recoverable from the government.

The Company has recorded an allowance of 25% of the sales tax recoverable of $75,902 stemming from the potential uncollectible balances within the outstanding sales tax recoverable amount.

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INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets Disclosure [Text Block]

8. INTANGIBLE ASSETS

The Company is continuing software development and is recognizing costs related to these activities as expenses during the year in which they are incurred. Intangible assets amounting to $137,611 were capitalized during the year ended and as at December 31, 2016. The Company evaluates the recoverability of the infinite-lived intangible assets for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. During the year ended December 31, 2017, the intangible asset was written off based on management’s review and evaluation of its recoverability.

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CAPITAL WORK IN PROGRESS

12 Months Ended

Dec. 31, 2018

Capital Work In Progress [Abstract]

Capital Work In Progress [Text Block]

9. CAPITAL WORK IN PROGRESS

The Company initiated construction on its 44,000 square foot cannabis cultivation facility in September of 2017. Since then, extensive demolition and structural upgrades have been carried out at the site. Construction remains on schedule for completion by mid-April 2019. As at December 31, 2018, the Company has capitalized $2,595,022 in payments to multiple vendors for the construction of the facility.

Construction in progress is not depreciated until ready for service.

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GOODWILL

12 Months Ended

Dec. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

10. GOODWILL

ASC Topic 805, “Business Combinations” requires that all business combinations be accounted for using the acquisition method and that certain identifiable intangible assets acquired in a business combination be recognized as assets apart from goodwill. ASC Topic 350, “Intangibles-Goodwill and Other” (“ASC 350”) requires goodwill and other identifiable intangible assets with indefinite useful lives not be amortized, such as trade names, but instead tested at least annually for impairment (which the Company tests each year end, absent any impairment indicators) and be written down if impaired. ASC 350 requires that goodwill be allocated to its respective reporting unit and that identifiable intangible assets with finite lives be amortized over their useful lives.

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., a Canadian corporation that holds a leasehold interest in a parcel of property located in Ontario’s Garden Norfolk County for the production of cannabis.

Pursuant to the Agreement, the Company acquired 100% of the issued and outstanding shares of Visava Inc. in exchange for the issuance of 25,500,000 shares of the Company’s Common Stock and will issue to the Visava shareholders, prorata Common Stock Purchase 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 Warrants. As a result of this transaction, Visava Inc. became a wholly owned subsidiary of the Company and the former shareholders of Visava Inc. owned approximately 46.27% of the Company’s shares of Common Stock. The transaction was closed effective August 2, 2018.

This acquisition was accounted for using the acquisition method of accounting. The fair value of assets, liabilities and intangible assets and the purchase price allocation as of August 2, 2018 was as follows:

	Allocation of Purchase Price
	$
Prepaid and other receivables		15,368
Sales tax recoverable		133,614
Furniture and equipment		897
Capital work in progress		898,422
Total assets		1,048,301
Bank overdraft		(63,693	)
Accounts payable		(1,158,164	)
Payable to related parties		(101,797	)
Total liabilities		(1,323,654	)
Net liabilities		(275,353	)
Goodwill		3,594,195
Total net assets acquired		3,318,842

	$
Number of Common Stock		25,500,000
Market price on the date of issuance		0.067
Fair value of Common Stock		1,695,750

	$
Number of warrants		25,000,000
Fair value price per warrant		0.065
Fair value of warrant		1,623,092
Fair value of Common Stock		1,695,750
Fair value of warrant		1,623,092
Purchase consideration		3,318,842

The fair value of these warrants was measured at the date of acquisition using the Black-Scholes option pricing model using the following assumptions:

 Forfeiture rate of 0%;

 Stock price of $0.067 per share;

 Exercise price of $0.10 per share

 Volatility at 329%

 Risk free interest rate of 2.66%;

 Expected life of 2 years; and

 Expected dividend rate of 0%

As at December 31, 2018, there were 25,000,000 warrants outstanding, fully vested and with a remaining contractual life term of 1.59 years.

Goodwill

The Company tests for impairment of goodwill at the reporting unit level. In assessing whether goodwill is impaired, the Company utilize the two-step process as prescribed by ASC 350. The first step of this test compares the fair value of the reporting unit, determined based upon discounted estimated future cash flows, to the carrying amount, including goodwill. If the fair value exceeds the carrying amount, no further work is required and no impairment loss is recognized. If the carrying amount of the reporting unit exceeds the fair value, the goodwill of the reporting unit is potentially impaired and step two of the goodwill impairment test would need to be performed to measure the amount of an impairment loss, if any. In the second step, the impairment is computed by comparing the implied fair value of the reporting unit’s goodwill with the carrying amount of the goodwill. If the carrying amount of the reporting unit’s goodwill is greater than the implied fair value of its goodwill, an impairment loss in the amount of the excess is recognized and charged to statement of operations.

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ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

12 Months Ended

Dec. 31, 2018

Payables and Accruals [Abstract]

Accounts Payable and Accrued Liabilities Disclosure [Text Block]

11. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable amounting to $1,739,765 as at December 31, 2018, primarily represents consulting and construction services related to capital work in progress amounting to $ 1,330,693, interest on promissory notes amounting to $133,082, advertising and promotion services amounting to $332, marketing services cost amounting to $13,650, valuation fee accrual of $3,500, accounting fee accrual of $2,500 and review fee accrual of $3,000, and outstanding professional fees of $54,391. (2017: account payable for advertising and promotion amounting to $14,214, accrual for marketing services amounting to $13,650, and other accruals for professional services).

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RELATED PARTY TRANSACTIONS AND BALANCES

12 Months Ended

Dec. 31, 2018

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

12. RELATED PARTY TRANSACTIONS AND BALANCES

During the year ended December 31, 2018, $300,000 (December 31, 2017: $300,000) was recorded as management services fee payable to Rubin Schindermann and Alexander Starr, who are shareholders in the Company. The amount is included in the related party balance as at December 31, 2017. They were issued 5,529,412 shares (December 31, 2016: 12,920,000) for these services performed as of and for the year ended December 31, 2018. These were recorded at fair value.

Advisory and consultancy fee includes $nil (December 31, 2017: $36,000) for Rubin Schindermann and Alexander Starr, who are shareholders in the Company.

Amounts payable to Rubin Schindermann and Alexander Starr as at December 31, 2018 were $200,00 and $139,697, respectively (2017: $92,000 and $31,697, respectively).

During the year ended December 31, 2017, Eric Schindermann, who is the son of Rubin Schindermann, became a lender to the Company by way of assignment of an existing promissory note liability of the Company amounting to $18,000. 1,591,556 shares of the Company’s common stock were issued to Eric Schindermann during the year end December 31, 2018, on full conversion of the debt.

During the year ended December 31, 2018, a loan owed to one of the Company’s shareholders in the amount of $72,570 (CAD$99,000) was extinguished in exchange of 15,800,100 Class A common shares of the Company’s subsidiary Visava Inc. Thereby, a gain on loan settlement in the amount of $74,933 (CAD$99,000) was recorded.

During the year ended December 31, 2018, $60,000 (December 31, 2017: $nil) was paid as remuneration for management services as salaries to Randal MacLeod, who is shareholder in the Company and President of the subsidiary, Visava.

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SHAREHOLDER ADVANCES

12 Months Ended

Dec. 31, 2018

Shareholder Advances [Abstract]

Shareholder Advances [Text Block]

13. SHAREHOLDER ADVANCES

Shareholder advances represent expenses paid by the owners from personal funds. The amount is non-interest bearing, unsecured and due on demand. The amount of advance as at December 31, 2018 and 2017 was $209,046 and $304,322, respectively. The amounts repaid during the years ended December 31, 2018 and 2017 were $281,927 and $48,236, respectively.

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CONVERTIBLE PROMISSORY NOTES

12 Months Ended

Dec. 31, 2018

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

14. CONVERTIBLE PROMISSORY NOTES

During the year ended December 31, 2018, the Company issued convertible promissory notes, details of which are as follows:

Convertible promissory note issued on December 24, 2018, amounting to $83,000 (Note P).

Consistent with previous accounting treatment of similar financial instruments, no derivative liability is recognized for Note P as at December 31, 2018 due to the six month conversion clause as explained below.

The key terms/features of the convertible note are as follows:

1. The maturity date of the Note is June 24, 2020.

2. Interest on the unpaid principal balance of this Note shall accrue at the rate of 12 % per annum.

3. In the event the Note holder exercises the right of conversion, the conversion price will be equal to 61% of the average of the three (3) lowest trading price of the Company’s common stock for the fifteen (15) trading days prior to the date of conversion.

4. The Company shall not be obligated to accept any conversion request before six months from the date of the note.

5. Conversion is limited to the holder beneficially holding not more than 4.99% of the Company’s then issued and outstanding common stock after the conversion.

Convertible promissory note issued on November 28, 2018, amounting to $75,000 (Note O).

The key terms/features of the convertible note are as follows:

1. The maturity date of the Note is November 28, 2019.

2. Interest on the unpaid principal balance of this Note shall accrue at the rate of 10 % per annum.

3. In the event the Note holder exercises the right of conversion, the conversion price will be equal to 52% of the lowest trading price of the Company’s common stock for the twenty (20) trading days prior to the date of conversion.

4. Conversion is limited to the holder beneficially holding not more than 4.99% of the Company’s then issued and outstanding common stock after the conversion.

Convertible promissory note issued on September 5, 2018, amounting to $103,000 (Note N).

Consistent with previous accounting treatment of similar financial instruments, no derivative liability is recognized for Note N as at December 31, 2018 due to the six month conversion clause as explained below.

The key terms/features of the convertible note are as follows:

1. The maturity date of the Note is December 5, 2019.

2. Interest on the unpaid principal balance of this Note shall accrue at the rate of 12 % per annum.

3. In the event the Note holder exercises the right of conversion, the conversion price will be equal to 61% of the average of the three (3) lowest trading price of the Company’s common stock for the fifteen (15) trading days prior to the date of conversion.

4. The Company shall not be obligated to accept any conversion request before six months from the date of the note.

5. Conversion is limited to the holder beneficially holding not more than 4.99% of the Company’s then issued and outstanding common stock after the conversion.

Convertible promissory note issued on August 9, 2018, amounting to $65,000 (Note M).

The key terms/features of the convertible note are as follows:

1. The maturity date of the Note is September 9, 2019.

2. Interest on the unpaid principal balance of this Note shall accrue at the rate of 10% per annum.

3. In the event the Note holder exercises the right of conversion, the conversion price will be equal to 52% of the lowest closing bid price of the Company’s common stock for the twenty (20) trading days prior to the date of conversion.

4. Conversion is limited to the holder beneficially holding not more than 4.99% of the Company’s then issued and outstanding common stock after the conversion.

Convertible promissory note issued on January 16, 2018, amounting to $28,000 (Note L).

The key terms/features of the convertible note are as follows:

1. The maturity date of the Note was October 30, 2018.

2. Interest on the unpaid principal balance of this Note accrues at the rate of 12 % per annum.

3. In the event the Note holder exercises the right of conversion, the conversion price will be equal to 58% of the lowest closing bid price of the Company’s common stock for the fifteen (15) trading days prior to the date of conversion.

4. As maturity date has passed, the Company is now obligated to accept all conversion requests on the note.

5. Conversion is limited to the holder beneficially holding not more than 4.99% of the Company’s then issued and outstanding common stock after the conversion.

During the year ended December 31, 2017, the Company issued convertible promissory notes, details of which are as follows:

Convertible Redeemable note issued on November 28, 2017, amounting to $33,000 (Note K).

The key terms/features of the convertible note are as follows:

1. The maturity date of the Note is March 10, 2019.

2. Interest on the unpaid principal balance of this Note shall accrue at the rate of 12 % per annum.

3. In the event the Note holder exercises the right of conversion, the conversion price will be equal to 58% of the lowest closing bid price of the Company’s common stock for the twenty (15) trading days prior to the date of conversion. During June 2018, an amendment to the note was executed where by the conversion price was fixed at $0.0151 per share.

4. The Company shall not be obligated to accept any conversion request before six months from the date of the note.

5. Conversion is limited to the holder beneficially holding not more than 4.99% of the Company’s then issued and outstanding common stock after the conversion.

Convertible promissory note issued on May 5, 2017 amounting to $23,000 (Note J).

The key terms/features of the convertible note are as follows:

1. The maturity date of the note was February 20, 2018

2. Interest on the unpaid principal balance of this note accrued at the rate of 12% per annum.

3. When the Note holder exercised the right of conversion, the conversion price was equal to 58% of the average of the three (3) lowest closing bid price of the Company’s common stock for the fifteen (15) trading days prior to the date of conversion.

4. The Company was not be obligated to accept any conversion request before six months from the date of the note.

5. Conversion was limited to the holder beneficially holding not more than 4.99% of the Company’s then issued and outstanding common stock after the conversion.

Note J’s full principal amount and its associated accrued interest was converted during the year ended December 31, 2018.

Convertible promissory note issued on January 31, 2017 amounting to $33,000 (Note I).

The key terms/features of the convertible note are as follows:

1. The maturity date of the note was November 5, 2017

2. Interest on the unpaid principal balance of this note accrues at the rate of 12% per annum.

3. In the event the Note holder exercises the right of conversion, the conversion price will be equal to 58% of the average of the three (3) lowest closing bid price of the Company’s common stock for the fifteen (15) trading days prior to the date of conversion.

4. As maturity date has passed, the Company is now obligated to accept all conversion requests on the note.

5. Conversion is limited to the holder beneficially holding not more than 4.99% of the Company’s then issued and outstanding common stock after the conversion.

During the year ended December 31, 2016, the Company issued convertible promissory notes, details of which are as follows:

Convertible Redeemable note issued on October 18, 2016, amounting to $140,000 (Note H), representing commitment fee owed by the Company pursuant to Securities Purchase Agreement entered into by the Company dated October 18, 2016. The commitment fee was considered a prepaid asset. During the three months ended September 30, 2017, the pending S1 registration statement was withdrawn, removing the benefit associated with the prepaid asset. The amount was therefore written off as commitment fee in the statement of operations.

During the quarter ended March 31, 2018, the Company obtained forgiveness of the liability and the interest associated with the note payable and recorded a gain of $153,471 as forgiveness of debt in the consolidated statement of operations.

The key terms/features of the convertible note are as follows:

1. The maturity date of the Note was July 18, 2017.

2. Interest on the unpaid principal balance of this Note accrues at the rate of 7 % per annum.

3. In the event the Note holder exercises the right of conversion, the conversion price will be equal to 80% of the lowest trading price of the Company’s common stock for the twenty (20) trading days prior to the date of conversion.

4. As maturity date has passed, the Company is now obligated to accept all conversion requests on the note.

5. Conversion is limited to the holder beneficially holding not more than 9.99% of the Company’s then issued and outstanding common stock after the conversion.

Convertible Redeemable notes issued on October 18, 2016, amounting to $100,000 and $25,000 (Notes F and G).

The key terms/features of the convertible note are as follows:

1. The maturity date of the Note was July 18, 2017.

2. Interest on the unpaid principal balance of this Note accrues at the rate of 7 % per annum.

3. In the event the Note holder exercises the right of conversion, the conversion price will be equal to 57.5% of the lowest trading price of the Company’s common stock for the twenty (20) trading days prior to the date of conversion.

4. As maturity dates has passed, the Company is now obligated to accept all conversion requests on the note.

5. Conversion is limited to the holder beneficially holding not more than 9.99% of the Company’s then issued and outstanding common stock after the conversion.

During the six months ended June 30, 2018, the Company entered into a Debt Exchange Agreement with the holder of the convertible note F and G. The outstanding principal amounts of the notes were extinguished and settled by issuance of 2,500,000 common shares of the Company. The Company recorded a loss of $267,522 as a result of this settlement.

Convertible promissory note issued on May 13, 2016, amounting to $75,000 (Note D).

The key terms/features of the convertible note are as follows:

1. The maturity date of the note was May 13, 2017.

2. Interest on the unpaid principal balance of this note accrues at the rate of 8 % per annum.

3. In the event the Note holder exercises the right of conversion, the conversion price will be equal to 52% of the lowest closing bid price of the Company’s common stock for the twenty (20) trading days prior to the date of conversion.

4. As maturity date has passed, the Company is now obligated to accept all conversion requests on the note.

5. Conversion is limited to the holder beneficially holding not more than 4.99% of the Company’s then issued and outstanding common stock after the conversion.

Convertible promissory notes issued on March 1, 2016 amounting to $150,000 each to two investors (Notes B and C).

The key terms/features of the convertible notes are as follows:

1. The Holders have the right from six months after the date of issuance, and until any time until the Notes are fully paid, to convert any outstanding and unpaid principal portion of the Notes, into fully paid and non–assessable shares of Common Stock (par value $.0001).

2. The Notes are convertible at a fixed conversion price of 45% of the lowest trading price of the Common Stock as reported on the OTC Pink maintained by the OTC Markets Group, Inc. upon which the Company’s shares are currently quoted, for the four (4) prior trading days including the day upon which a Notice of Conversion is received by the Company. During June 2018, an amendment to the note was executed where by the conversion price was fixed at $0.0151 per share.

3. Interest on the unpaid principal balance of this Note accrues at the rate of twenty-four (24 %) per annum.

4. Beneficial ownership is limited to 4.99%.

5. The Notes may be prepaid in whole or in part, at any time during the period beginning on the issue date and ending on the maturity date September 1, 2016, beginning at 100% of the outstanding principal, accrued interest and certain other amounts that may be due and owing under the Notes.

Interest amounting to $67,923 was accrued for the year ended December 31, 2018 (2016: $99,195).

All notes maturing prior to the date of this report are outstanding.

Derivative liability

During the year ended December 31, 2018, holders of convertible promissory notes converted principal and interest amounting to $318,494 and $5,281, respectively. The Company recorded and fair valued the derivative liability as follows:

	Derivative liability as at December 31, 2017		Conversions during the period			Fair value adjustment			Derivative liability as at September 30, 2018		Conversions during the period			Change due to Issuances		Fair value adjustment			Derivative liability as at December 31, 2018
Note A		—		—			—			—		—			—		—			—
Note B and C		534,214		(172,060	)		598,991			961,145		(13,905	)		—		(572,329	)		374,911
Note D		87,821		(111,205	)		134,372			110,988		(39,321	)		—		(67,637	)		4,030
Note F		98,276		(3,377	)		(35,206	)		59,693		—			—		(48,745	)		10,948
Note G		21,096		—			586			21,682		—			—		(17,706	)		3,976
Note H		143,985		—			(143,985	)		—		—			—		—			—
Note I		39,048		—			104,274			143,322		(3,841	)		—		(109,337	)		30,144
Note J		27,396		(103,881	)		76,485			—		—			—		—			—
Note K		—		(232,111	)		271,552			39,441		—			—		(23,762	)		15,679
Note L		—		(56,266	)		63,036			6,770		—			—		(6,770	)		—
Note M		—		—			554,366			554,366		—			—		(449,185	)		105,181
Note N		—		—			—			—		—			102,380		(4,444	)		97,936
Note O		—		—			—			—		—			121,361		729			122,090
Note P		—		—			—			—		—			98,927		(1,339	)		97,588
		951,836		(678,900	)		1,624,471			1,897,407		(57,067	)		322,668		(1,300,525	)		862,483

During the quarter ended December 31, 2018, the Company changed its valuation method from Black-Scholes Model to Multinomial Lattice Model. This is considered a change in the Company’s estimate and therefore, it has been accounted prospectively.

Key assumptions used for the valuation of convertible notes

Derivative element of the convertible notes was fair valued using multinomial lattice model.  Following assumptions were used to fair value these notes as at December 31, 2018:

· Stock price of $0.0844 to $0.1700;

· Projected annual volatility of 247.7% to 560.6%;

· Discount rate of 47.75% to 66.01%;

· Dividend yield of 0%;

· Exercise price of $0.0151 to $0.0519 and

· Liquidity term of 0.69 to 1.48 years;

During the quarter ended December 31, 2018, the Company issued three (3) new notes, resulting in the initial derivative liability recognized in the amount of $322,668. As a result, the Company recorded an initial discount in the amount of $260,380 and a loss on issuance of notes (day one derivative) in the amount of $62,288. During the quarter, $2,923 of the discount has been amortized and the remaining portion expected to be amortized over the life of the notes in year ended December 31, 2019.

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STOCKHOLDERS' DEFICIT

12 Months Ended

Dec. 31, 2018

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

15. STOCKHOLDERS’ DEFICIT

On July 3, 2017, the Company filed an amended Certificate of Incorporation in Delaware to increase its authorized common stock to 20,000,000,000 shares. The Company’s authorized preferred stock remained at 20,000,000 shares. 1,000,000 shares of Preferred Stock having a par value of $0.0001 per share shall be designated as Series A Preferred Stock (“Series A Stock”). Dividends shall be declared and set aside for any shares of Series A Stock in the same manner and amount as for the Common Stock. Series A Stock, as a class, shall have voting rights equal to a multiple of 2X the number of shares of Common Stock issued and outstanding that are entitled to vote on any matter requiring shareholder approval.

The Company, as authorized by its Board of Directors and stockholders, has approved a Reverse Split whereby record owners of the Company’s Common Stock as of the Effective Date, shall, after the Effective Date, own one share of Common Stock for every one thousand (1,000) held as of the Effective Date. As a result, an aggregate of $387,978 was reclassified from common stock to additional paid in capital. The Effective Date of this amendment was November 1, 2017.

Effective September 25, 2018, the Company filed an amended Certificate of Incorporation in Delaware to decrease its authorized common stock to 850,000,000 shares. The Company’s authorized preferred stock remained at 20,000,000 shares.

Capitalization

The Company is authorized to issue 850,000,000 shares of common stock, par value $0.0001, of which 93,624,289 shares are outstanding as at December 31, 2018 (at December 31, 2017: 14,973,819 shares of common stock issued and outstanding). The Company is also authorized to issue 20,000,000 shares of preferred stock, par value $0.0001, of which 1,000,000 shares were outstanding as at December 31, 2018 and 2017.

Common Stock

Holders of shares of common stock are entitled to one vote for each share on all matters to be voted on by the stockholders. Holders of common stock do not have cumulative voting rights.

Subject to preferences that may be applicable to any outstanding shares of preferred stock, the holders of common stock are entitled to share ratably in dividends, if any, as may be declared from time to time by the board of directors in its discretion from funds legally available therefor.

Holders of common stock have no pre-emptive rights to purchase the Company’s common stock. There are no conversion or redemption rights or sinking fund provisions with respect to the common stock. The Company may issue additional shares of common stock which could dilute its current shareholder's share value.

During the quarter ended March 31, 2017, the Company issued 4,000 shares of common stock to individuals as consideration for advisory and consultancy services amounting to $36,000 which were recorded at fair value.

During the quarter ended March 31, 2017, the Company issued 13,917 shares of common stock to individuals on conversion of convertible promissory notes amounting to $26,126, respectively.

During the quarter ended March 31, 2017, the Company issued 20,000 shares of common stock each to Rubin Schindermann and Alexander Starr as consideration to settle outstanding management fee in the amount of $50,000 each, which were recorded at fair value.

During the quarter ended June 30, 2017, the Company issued 234,458 shares of common stock to individuals on conversion of convertible promissory notes amounting to $181,530.

During the quarter ended June 30, 2017, the Company issued 40,000 shares of common stock each to Rubin Schindermann and Alexander Starr as consideration to settle outstanding management fee in the amount of $108,000 each, which were recorded at fair value.

During the quarter ended September 30, 2017, the Company issued 675,627 shares of common stock to individuals on conversion of convertible promissory notes amounting to $51,729. Of these shares, the Company issued 533,348,384 shares at $30,779 and as a result of the contractual conversion price adjustments, these shares were issued below par value, with the offsetting balance recorded as a reduction in additional paid-in capital in the amount of $22,556 during the three months ended September 30, 2017.

During the quarter ended September 30, 2017, the Company issued 1,400,000 shares of common stock each to Rubin Schindermann and Alexander Starr as consideration to settle outstanding management fee in the amount of $140,000 each, which were recorded at fair value.

During the quarter ended December 31, 2017, the Company issued 5,000,000 shares of common stock each to Rubin Schindermann and Alexander Starr as consideration to settle outstanding management fee in the amount of $50,000 each, which were recorded at fair value.

During the year ended December 31, 2017, 533,348 shares of common stock were issued at a fair value which was lower than the par value of the shares. This resulted in a reduction in additional paid in capital amounting to $22,556.

During the quarter ended March 31, 2018, the Company issued 5,529,412 shares of common stock to Rubin Schindermann and Alexander Starr as consideration to settle outstanding management fee recorded at fair value of $84,000, of which $9,000 had previously been recorded in Accounts Payable. Additionally, the Company issued 5,156,933 shares of common stock to individuals on conversion of convertible promissory notes amounting to $21,518 and 300,000 shares were issued as consideration for consulting services amounting to $3,600.

During the quarter ended June 30, 2018, the Company issued 3,140,506 shares of common stock to individuals on conversion of convertible promissory notes amounting to $47,826 and 500,000 shares were issued as consideration for consulting services amounting to $22,500. Furthermore, the Company issued 2,500,000 shares of common stock to the note holder for settlement of debt. See Note 14 for detail.

During the quarter ended September 30, 2018, the Company issued 4,551,990 shares of common stock to individuals on conversion of convertible promissory notes amounting to $85,695. In addition to that, the Company issued 25,500,000 shares of common stock to shareholders of Visava Inc. as per the Exchange Agreement mentioned in Note 10 and 750,000 shares were issued as consideration for marketing services amounting to $46,575.

During the quarter ended December 31, 2018, the Company issued 7,964,528 shares of common stock to individuals on conversion of convertible promissory notes amounting to $126,384.

During the year ended December 31, 2018, 63,094,634 shares of common stock to be issued as consideration for private placements. These were recorded at fair value of $2,735,545, based on the cash proceeds received by the Company. As part of consideration for the private placement, the Company also agreed to issue warrants to purchase 63,094,634 shares of common stock. Out of the total amount of shares to be issued, the Company issued 22,757,102 shares during quarter ended December 31, 2018. Refer below for additional details regarding the warrant issued under the subheading “Warrants”. 

Additionally, $215,680 were received as partial consideration for private placements and since signed agreements were executed during December 2018, the remaining balance of $220,319 has been classified as a Stock subscription receivable under equity.

Shares to be issued include the following:

80,000 shares of common stock to be issued as compensation to advisers and consultants. These were recorded at fair value of $52,000, based on the market price of the Company’s stock on the date of issue.

35,000 to be issued as settlement of amount due for website development services amounting to $247,306. The fair value of the shares on the date of settlement was $21,000, resulting in gain on settlement amounting to $226,306 during year ended December 31, 2017.

40,337,532 shares of common stock to be issued as consideration for private placements. Proper allocation between common stock and additional paid in capital of the amount received will be completed in the period when the shares are issued.

250,000 shares of common stock to be issued as consideration of the intellectual property rights granted by Smit to the Company’s subsidiary. These were recorded at fair value of $27,000, based on the market price of the Company’s stock on the date of issue.

Preferred Stock

Shares of preferred stock may be issued from time to time in one or more series as may be determined by the board of directors. The board of directors may fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations or restrictions thereof without any further vote or action by the stockholders of the Company, except that no holder of preferred stock shall have pre-emptive rights. Any shares of preferred stock so issued would typically have priority over the common stock with respect to dividend or liquidation rights. The board of directors does not at present intend to seek stockholder approval prior to any issuance of currently authorized stock, unless otherwise required by law or otherwise.

Warrants

The fair value of the warrants issued to private placement purchasers was measured at the date of acquisition using the Black-Scholes option pricing model using the following assumptions:

· Forfeiture rate of 0%;

· Stock price between the range of $0.060 to $0.210 per share;

· Exercise price between the range of $0.050 to $0.150 per share

· Volatility at 646%

· Risk free interest rate between the range of 2.52% to 2.96%;

· Expected life of 2 and 3 years; and

· Expected dividend rate of 0%.

The fair value of these warrants was determined at $6,417,010.

As at December 31, 2018, related to private placements, there were 63,094,634 warrants were outstanding, fully vested and with a remaining contractual life term of a range between 1.49 and 2.98 years.

As at December 31, 2018, related to the acquisition of the Company’s subsidiary, there were 25,000,000 warrants outstanding, fully vested and with a remaining contractual life term of 1.59 years.

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LEASE AGREEMENT

12 Months Ended

Dec. 31, 2018

Leases [Abstract]

Leases of Lessee Disclosure [Text Block]

16. LEASE AGREEMENT

The Company is a party to a 10-year lease agreement (initiated on July 2014) with respect to its facility to produce Medical Marijuana. Total rent for the building is $1,833 (CAD $2,500) plus applicable taxes per month until the notification of the right to produce under their application for approval as licensed producer under the Marijuana for Medical Purpose Regulation. to the notification, as of January 1st 2019 the rent increased to $18,326 (CAD $25,000) plus applicable taxes per month.

The Company is also party to a five-year lease agreement dated August 29, 2018 for the lease of its office premises. Total rent for the premises is $1,298 plus applicable taxes per month.

Future minimum rent payments for both leases are as follows:

	$
2019		235,488
2020		235,488
2021		235,488
2022		235,488
2023 and onwards		340,252
		1,282,204

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INCOME TAXES

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

17. INCOME TAXES

Income taxes

The Tax Cuts and Jobs Act (the “Act”) enacted on December 22, 2017 reduces the US federal corporate tax rate from 35% to 21% and requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. As of December 31, 2018, the Company has not completed the accounting for the tax effects of enactment of the Act; however, as described below, it has made a reasonable estimate of the effects on existing deferred tax balances. These amounts are provisional and subject to change.

The provision for income taxes is calculated at US corporate tax rate of approximately 21% (2017: 35%) as follows:

	2018			2017
Expected income tax recovery from net loss	$	399,072		$	365,963
Tax effect of expenses not deductible for income tax:
Annual effect of book/tax differences		(131,861	)		(303,870	)
Change in valuation allowance		(267,211	)		(62,093	)
		—			—

Deferred tax assets

Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Net deferred tax assets consist of the following components as of December 31:

	2018			2017
Tax effect of NOL Carryover	$	563,454		$	452,343
Cumulative change due to reduced rate					(156,117	)
Less valuation allowance		(563,454	)		(296,226	)
		—			—

At December 31, 2018, the Company performed a comprehensive analysis of its tax estimates and revised comparative figures accordingly, which had no net impact on deferred tax recorded. The Company had net operating loss carryforwards of approximately $2,683,112 (2017: $1,410,682) that may be offset against future taxable income from the year by 2038. No tax benefit has been reported in the December 31, 2018 consolidated financial statements since the potential tax benefit is offset by a valuation allowance of the same amount. The Company is taxed in the United States at the Federal level. All tax years since inception are open to examination because no tax returns have been filed.

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SUBSEQUENT EVENTS

12 Months Ended

Dec. 31, 2018

Subsequent Events [Abstract]

Subsequent Events [Text Block]

18. SUBSEQUENT EVENTS

The Company’s management has evaluated subsequent events up to April 1, 2019, the date the consolidated financial statements were issued, pursuant to the requirements of ASC 855 and has determined the following material subsequent events:

 Effective January 25, 2019, the Company entered into an Agreement and Plan of Share Exchange (“Exchange Agreement”) with CannaKorp Inc., a Delaware corporation (“CannaKorp”). Company had previously entered into a Letter of Intent with CannaKorp dated November 30, 2018 which was disclosed in the Company’s report on Form 8-K filed December 4, 2018. The Exchange Agreement is the definitive agreement based on the general terms and conditions contained in the Letter of Intent.

The Exchange Agreement provides that, subject to its terms and conditions, the Company will issue to the CannaKorp shareholders an aggregate of 30,000,000 shares of the Company’s common stock, based on a price per share of $0.10, in exchange for 100% of the issued and outstanding common stock of CannaKorp held by the CannaKorp shareholders. In addition, the Company will issue Common Stock Purchase Warrants (“Warrants”) in exchange for all outstanding and promised CannaKorp stock options. The Warrants will grant the holders thereof the right to purchase up to approximately 7,200,000 shares of the Company’s common stock. The Company will also assume all outstanding liabilities of CannaKorp.

Under the terms of the Exchange Agreement, the Company is not obligated to consummate the share exchange unless the CannaKorp shareholders have tendered to the Company not less than 90% of the outstanding CannaKorp capital stock. Upon the closing of the Exchange Agreement, CannaKorp will continue its business operations as a subsidiary of the Company.

The transaction was closed effective February 5, 2019 and therefore no major operational activity relevant to the reporting period took place. Future filings however would include required information and disclosure on operational activity of CannaKorp.

During March 2019, the Company issued 30,407,712 shares pursuant to the Exchange Agreement explained above to the shareholder of CannaKorp.

During January 2019, the Company received the remaining funds of $220,319 pertaining to private placements for which partial funds were received during the quarter ended December 31, 2018.

As disclosed in Note 15, during March 2019, the Company issued 29,074,075 shares pursuant to private placement funds received during the year ended December 31, 2018.

During March 2019, the Company issued 588,237 shares of common stock pursuant to conversion notices received from one of the holders of the convertible promissory notes.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Use of Estimates, Policy [Policy Text Block]

USE OF ESTIMATES

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Cash and Cash Equivalents, Policy [Policy Text Block]

CASH

Cash and cash equivalents include cash on hand and on deposit at banking institutions as well as all highly liquid short-term investments with original maturities of 90 days or less. The Company did not have cash equivalents as of December 31, 2018 and 2017.

Goodwill and Intangible Assets, Policy [Policy Text Block]

GOODWILL AND INTANGIBLE ASSETS

Goodwill and other identifiable intangible assets with indefinite lives that are not being amortized, such as trade names, are tested at least annually for impairment and are written down if impaired. Identifiable intangible assets with finite lives are amortized over their estimated useful lives and are reviewed for impairment whenever facts and circumstances indicate that their carrying values may not be fully recoverable. The intangible assets with definite lives are being amortized over its estimated useful lives of 5 years using the straight-line method.

The Company operated an online chess site featuring sophisticated playing zones, game broadcasts with software analyses and top analysts' commentaries, education and other chess oriented resources. Intangible assets represented the amount incurred by the Company related to the development of the online chess gaming website.

Under ASC 985-20, there are two main stages of software development. These stages are defined as:

(A) When the technological feasibility is established, and

(B) When the product is available for general release to customers.

Costs incurred by the Company up to stage A have been expensed while costs incurred to move from stage A to stage B have been capitalized.

The Company evaluates the recoverability of the infinite-lived intangible assets for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If such review indicates that the carrying amount of intangible assets is not recoverable, the carrying amount of such assets is reduced to fair value.

During the year ended December 31, 2017, the intangible asset was written off based on management’s review and evaluation of its recoverability.

With respect to goodwill, during the year ended December 31, 2018, the Company has identified no circumstances which would call for further evaluation of goodwill impairment.

Revenue Recognition, Policy [Policy Text Block]

REVENUE RECOGNITION

In accordance with ASC 605, revenue is recognized when persuasive evidence of an arrangement exists, services have been performed, the amount is fixed and determinable, and collection is reasonably assured.

During the year ended December 31, 2018, the Company earned revenue of $263 as membership fee for the Company’s chess gaming website.

During the year ended December 31, 2017, the Company earned revenue of $15,434 which comprises of an amount of $13,882, which we invoiced as consideration for the revenue earned from ticket sales for 2017 Orlando Sunshine Open and $1,552 as membership fee for the Company’s chess gaming website.

Foreign Currency Translation [Policy Text Block]

FOREIGN CURRENCY TRANSLATION

The functional currency of the Company’s Canadian-based subsidiary is the Canadian dollar and the US-based parent is the U.S. dollar. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities are translated using the historical rate on the date of the transaction. All exchange gains or losses arising from translation of these foreign currency transactions are included in net income (loss) for the year. In translating the consolidated financial statements of the Company’s Canadian subsidiaries from their functional currency into the Company’s reporting currency of United States dollars, balance sheet accounts are translated using the closing exchange rate in effect at the balance sheet date and income and expense accounts are translated using an average exchange rate prevailing during the reporting period. Adjustments resulting from the translation, if any, are included in cumulative other comprehensive income (loss) in stockholders’ equity. The Company has not, to the date of these consolidated financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

Research, Development, and Computer Software, Policy [Policy Text Block]

SOFTWARE DEVELOPMENT COSTS

The costs incurred in the preliminary stages of development are expensed as incurred. Once an application has reached the development stage, internal and external costs, if direct and incremental, are capitalized until the application is substantially complete and ready for its intended use. These costs are amortized using the straight-line method over the estimated economic useful life of 5 years starting from when the application is substantially complete and ready for its intended use.

Concentration Risk, Credit Risk, Policy [Policy Text Block]

CONCENTRATION OF RISK

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash. The Company places its cash with high quality banking institutions. The Company had cash balances in excess of the Federal Deposit Insurance Corporation limit as of December 31, 2018.

Income Tax, Policy [Policy Text Block]

INCOME TAXES

Under ASC 740, “Income Taxes,” deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Valuation allowances are established when it is more likely than not that some or all of the deferred tax assets will not be realized. As of December 31, 2018, there were no deferred taxes due to the uncertainty of the realization of net operating loss or carry forward prior to expiration.

Operating Leases [Policy Text Block]

OPERATING LEASES

The Company leases office space and the production facility under operating lease agreements. The lease term begins on the date of initial possession of the leased property for purposes of recognizing lease expense on a straight-line basis over the term of the lease. Lease renewal periods are considered on a lease-by-lease basis and are generally not included in the initial lease term.

Earnings Per Share, Policy [Policy Text Block]

LOSS PER COMMON SHARE

Basic loss per common share excludes dilution and is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted loss per common share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the loss of the entity. Convertible promissory notes as at December 31, 2018 are likely to be converted into shares, however, due to losses, their effect would be antidilutive. As of December 31, 2018, convertible notes outstanding could be converted into 9,125,002 shares of common stock.

Convertible Notes Payable and Derivative Instruments [Policy Text Block]

CONVERTIBLE NOTES PAYABLE AND DERIVATIVE INSTRUMENTS

The Company has adopted the provisions of ASU 2017-11 to account for the down round features of warrants issued with private placements effective as of January 1, 2017. In doing so, warrants with a down round feature previously treated as derivative liabilities in the consolidated balance sheet and measured at fair value are henceforth treated as equity, with no adjustment for changes in fair value at each reporting period. The Company accounted for conversion options embedded in convertible notes in accordance with ASC 815. ASC 815 generally requires companies to bifurcate conversion options embedded in convertible notes from their host instruments and to account for them as free-standing derivative financial instruments. ASC 815 provides for an exception to this rule when convertible notes, as host instruments, are deemed to be conventional, as defined by ASC 815-40. The Company accounts for convertible notes deemed conventional and conversion options embedded in non-conventional convertible notes which qualify as equity under ASC 815, in accordance with the provisions of ASC 470-20, which provides guidance on accounting for convertible securities with beneficial conversion features. Accordingly, the Company records, as a discount to convertible notes, the intrinsic value of such conversion options based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt.

Stock Based Compensation [Policy Text Block

STOCK BASED COMPENSATION

The Company accounts for stock based payments in accordance with the provision of ASC 718, which requires that all share-based payments issued to acquire goods or services, including grants of employee stock options, be recognized in the statement of operations based on their fair values, net of estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Compensation expense related to share-based awards is recognized over the requisite service period, which is generally the vesting period.

The Company accounts for stock based compensation awards issued to non-employees for services, as prescribed by ASC 718-10, at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the guidelines in ASC 505-50. The Company issues compensatory shares for services including, but not limited to, executive, management, accounting, operations, corporate communication, financial and administrative consulting services.

Marketing Expenses [Policy Text Block]

MARKETING EXPENSES

Marketing and advertising expenditures are expensed in the annual period in which the expenditure is incurred.

Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]

IMPAIRMENT OF LONG-LIVED ASSETS

In accordance with ASC 360-10, the Company, on a regular basis, reviews the carrying amount of long-lived assets for the existence of facts or circumstances, both internally and externally, that suggest impairment. The Company determines if the carrying amount of a long-lived asset is impaired based on anticipated undiscounted cash flows, before interest, from the use of the asset. In the event of impairment, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the asset. Fair value is determined based on appraised value of the assets or the anticipated cash flows from the use of the asset or asset group, discounted at a rate commensurate with the risk involved.

Fair Value of Financial Instruments, Policy [Policy Text Block]

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company follows guidance for accounting for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis. Additionally, the Company adopted guidance for fair value measurement related to nonfinancial items that are recognized and disclosed at fair value in the consolidated financial statements on a nonrecurring basis. The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements).

The three levels of the fair value hierarchy are as follows:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 inputs are unobservable inputs for the asset or liability. The carrying amounts of financial assets such as cash approximate their fair values because of the short maturity of these instruments.

The estimated fair value of cash, accounts payable, and accrued liabilities approximate their carrying values due to the short-term maturity of these instruments. The derivative liabilities of the promissory convertible notes are valued Level 3, refer to Note 15 for further details.

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GOODWILL (Tables)

12 Months Ended

Dec. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

This acquisition was accounted for using the acquisition method of accounting. The fair value of assets, liabilities and intangible assets and the purchase price allocation as of August 2, 2018 was as follows:

	Allocation of Purchase Price
	$
Prepaid and other receivables		15,368
Sales tax recoverable		133,614
Furniture and equipment		897
Capital work in progress		898,422
Total assets		1,048,301
Bank overdraft		(63,693	)
Accounts payable		(1,158,164	)
Payable to related parties		(101,797	)
Total liabilities		(1,323,654	)
Net liabilities		(275,353	)
Goodwill		3,594,195
Total net assets acquired		3,318,842

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

	$
Number of Common Stock		25,500,000
Market price on the date of issuance		0.067
Fair value of Common Stock		1,695,750

	$
Number of warrants		25,000,000
Fair value price per warrant		0.065
Fair value of warrant		1,623,092
Fair value of Common Stock		1,695,750
Fair value of warrant		1,623,092
Purchase consideration		3,318,842

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CONVERTIBLE PROMISSORY NOTES (Tables)

12 Months Ended

Dec. 31, 2018

Debt Disclosure [Abstract]

Schedule of Derivative Instruments [Table Text Block]

The Company recorded and fair valued the derivative liability as follows:

	Derivative liability as at December 31, 2017		Conversions during the period			Fair value adjustment			Derivative liability as at September 30, 2018		Conversions during the period			Change due to Issuances		Fair value adjustment			Derivative liability as at December 31, 2018
Note A		—		—			—			—		—			—		—			—
Note B and C		534,214		(172,060	)		598,991			961,145		(13,905	)		—		(572,329	)		374,911
Note D		87,821		(111,205	)		134,372			110,988		(39,321	)		—		(67,637	)		4,030
Note F		98,276		(3,377	)		(35,206	)		59,693		—			—		(48,745	)		10,948
Note G		21,096		—			586			21,682		—			—		(17,706	)		3,976
Note H		143,985		—			(143,985	)		—		—			—		—			—
Note I		39,048		—			104,274			143,322		(3,841	)		—		(109,337	)		30,144
Note J		27,396		(103,881	)		76,485			—		—			—		—			—
Note K		—		(232,111	)		271,552			39,441		—			—		(23,762	)		15,679
Note L		—		(56,266	)		63,036			6,770		—			—		(6,770	)		—
Note M		—		—			554,366			554,366		—			—		(449,185	)		105,181
Note N		—		—			—			—		—			102,380		(4,444	)		97,936
Note O		—		—			—			—		—			121,361		729			122,090
Note P		—		—			—			—		—			98,927		(1,339	)		97,588
		951,836		(678,900	)		1,624,471			1,897,407		(57,067	)		322,668		(1,300,525	)		862,483

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LEASE AGREEMENT (Tables)

12 Months Ended

Dec. 31, 2018

Leases [Abstract]

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

Future minimum rent payments for both leases are as follows:

	$
2019		235,488
2020		235,488
2021		235,488
2022		235,488
2023 and onwards		340,252
		1,282,204

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INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

The provision for income taxes is calculated at US corporate tax rate of approximately 21% (2017: 35%) as follows:

	2018			2017
Expected income tax recovery from net loss	$	399,072		$	365,963
Tax effect of expenses not deductible for income tax:
Annual effect of book/tax differences		(131,861	)		(303,870	)
Change in valuation allowance		(267,211	)		(62,093	)
		—			—

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

Net deferred tax assets consist of the following components as of December 31:

	2018			2017
Tax effect of NOL Carryover	$	563,454		$	452,343
Cumulative change due to reduced rate					(156,117	)
Less valuation allowance		(563,454	)		(296,226	)
		—			—

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NATURE OF OPERATIONS (Details Textual)	1 Months Ended
	Jun. 27, 2018 $ / shares shares	Dec. 31, 2018 ft² $ / shares shares	Dec. 31, 2017 $ / shares	Sep. 30, 2017 ft²	Jul. 06, 2015 $ / shares shares
Organization, Nature of Business, Going Concern and Management Plans [Line Items]
Common Stock Shares Offered | shares					1,500,000
Common Stock, Par or Stated Value Per Share (in dollars per share) | $ / shares		$ 0.0001	$ 0.0001		$ 0.0001
Share Price | $ / shares					$ 0.50
Area of Land | ft²		44,000		44,000
Stock Issued During Period, Shares, New Issues | shares	25,500,000
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares	25,000,000	63,094,634
Shares Issued, Price Per Share | $ / shares	$ 0.10
Visava Inc [Member]
Organization, Nature of Business, Going Concern and Management Plans [Line Items]
Equity Method Investment, Ownership Percentage	100.00%
Canary Rx Inc [Member]
Organization, Nature of Business, Going Concern and Management Plans [Line Items]
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners	46.27%

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GOING CONCERN (Details Textual) - USD ($)	Dec. 31, 2018	Dec. 31, 2017
Going Concern [Line Items]
Working Capital Deficit	$ 2,877,445
Retained Earnings (Accumulated Deficit)	$ (9,094,954)	$ (7,194,613)

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Finite-Lived Intangible Assets [Line Items]
Revenues	$ 263	$ 15,434
Incremental Common Shares Attributable to Dilutive Effect of Conversion of Debt Securities	9,125,002
Finite-Lived Intangible Asset, Useful Life	5 years
Finite-Lived Intangible Assets, Amortization Method	straight-line method.
Annual Membership Fees [Member]
Finite-Lived Intangible Assets [Line Items]
Revenues	$ 263	1,552
Ticket sales [Member]
Finite-Lived Intangible Assets [Line Items]
Revenues		$ 13,882

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SALES TAX RECOVERABLE (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Value Added Tax Receivable, Current	$ 220,525	$ 0
Percentage of Allowance on Value Added tax Recoverable	25.00%
Allowance for sales tax recoverable	$ 75,902	0
Gross Sales
Value Added Tax Receivable, Current	$ 294,033	$ 0

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PREPAID ASSET (Details Textual) - USD ($)	Dec. 31, 2018	Dec. 31, 2017
Prepaid Expense, Current	$ 35,145	$ 0

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INTANGIBLE ASSETS (Details Textual)	Dec. 31, 2016 USD ($)
Finite-Lived Intangible Assets [Line Items]
Capitalized Computer Software, Net	$ 137,611

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CAPITAL WORK IN PROGRESS (Details)	Dec. 31, 2018 USD ($) ft²	Sep. 30, 2017 ft²
Area of Land | ft²	44,000	44,000
Advances on Inventory Purchases | $	$ 2,595,022

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GOODWILL (Details) - USD ($)	Dec. 31, 2018	Aug. 02, 2018	Dec. 31, 2017
Prepaid and other receivables		$ 15,368
Sales tax recoverable		133,614
Furniture and equipment		897
Capital wor in progress		898,422
Total assets		1,048,301
Bank overdraft		(63,693)
Accounts payable		(1,158,164)
Payable to related parties		(101,797)
Total liabilities		(1,323,654)
Net liabilities		(275,353)
Goodwill	$ 3,594,195	3,594,195	$ 0
Total net assets acquired		$ 3,318,842

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GOODWILL (Details 1) - USD ($)	1 Months Ended	12 Months Ended
	Jun. 27, 2018	Dec. 31, 2018
Goodwill [Line Items]
Number of Shares	25,500,000
Purchase consideration		$ 3,318,842
Common Stock [Member]
Goodwill [Line Items]
Number of Shares		25,500,000
Share Price		$ 0.067
Fair value		$ 1,695,750
Fair value of stock and Warrant		$ 1,695,750
Warrant [Member]
Goodwill [Line Items]
Number of Shares		25,000,000
Share Price		$ 0.065
Fair value		$ 1,623,092
Fair value of stock and Warrant		$ 1,623,092

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GOODWILL (Detail textual) - $ / shares	1 Months Ended	12 Months Ended
	Jun. 27, 2018	Dec. 31, 2018
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares	25,500,000
Class of Warrant or Right, Outstanding		25,000,000
Warrant Term		1 year 7 months 2 days
Canary Rx Inc [Member]
Business Acquisition Equity Interest Issuable Percentage	46.27%
Canary Rx Inc [Member] | Common Stock Purchase Warrants [Member]
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares		25,000,000
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 0.10
Measurement Input Forfeiture Rate [Member]
Fair Value Assumptions Rate		0.00%
Measurement Input, Share Price [Member]
Fair Value Assumptions Price		0.067%
Measurement Input, Exercise Price [Member]
Fair Value Assumptions Price		0.10%
Measurement Input, Price Volatility [Member]
Fair Value Assumptions Rate		329.00%
Measurement Input, Risk Free Interest Rate [Member]
Fair Value Assumptions Rate		2.66%
Measurement Input, Expected Term [Member]
Fair Value Assumptions Term		2 years
Measurement Input, Expected Dividend Rate [Member]
Fair Value Assumptions Rate		0.00%
Visava Inc [Member]
Equity Method Investment, Ownership Percentage	100.00%

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ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Details Textual) - USD ($)	Dec. 31, 2018	Dec. 31, 2017
Accounts Payable And Accrued Liabilities [Line Items]
Accrued Marketing Costs, Current	$ 13,650	$ 13,650
Accrued Advertising, Current	332	$ 14,214
Accounts Payable and Accrued Liabilities	1,739,765
Accrued Consulting And Construction Services	1,330,693
Interest Payable, Current	133,082
Accrued Valuation Fee	3,500
Accrued Accounting Fee	2,500
Accrued Review Fee	3,000
Accrued Professional Fees, Current	$ 54,391

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RELATED PARTY TRANSACTIONS AND BALANCES (Details Textual)	1 Months Ended	3 Months Ended		12 Months Ended
	Jun. 27, 2018 shares	Dec. 31, 2018 USD ($) shares	Mar. 31, 2017 USD ($) shares	Dec. 31, 2018 USD ($) shares	Dec. 31, 2018 CAD ($) shares	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2018 CAD ($)
Related Party Transaction [Line Items]
Management Fee Expense				$ 362,500		$ 300,000
Stock Issued During Period, Value, Issued for Services		$ 126,384				43,000
Professional Fees				77,159		36,000
Accounts Payable, Related Parties, Current		$ 403,620		403,620		123,697
Notes Payable Current Transferred				$ 18,000
Debt Conversion, Converted Instrument, Shares Issued | shares		5,156,933		1,591,556	1,591,556
Stock Issued During Period, Shares, New Issues | shares	25,500,000
Gain (Loss) on Extinguishment of Debt				$ (39,118)		226,306
Visava Inc [Member]
Related Party Transaction [Line Items]
Due to Related Parties, Noncurrent		$ 72,570		72,570				$ 99,000
Gain (Loss) on Extinguishment of Debt				$ 74,933	$ 99,000
Common Class A [Member] | Visava Inc [Member]
Related Party Transaction [Line Items]
Stock Issued During Period, Shares, New Issues | shares				15,800,100	15,800,100
Management Services [Member]
Related Party Transaction [Line Items]
Stock Issued During Period, Shares, Issued for Services | shares			20,000	52,000	52,000
Stock Issued During Period, Value, Issued for Services			$ 50,000
Rubin Schindermann [Member]
Related Party Transaction [Line Items]
Accounts Payable, Related Parties, Current		20,000		$ 20,000		92,000
Alexander Starr [Member]
Related Party Transaction [Line Items]
Accounts Payable, Related Parties, Current		$ 139,697		139,697		31,697
Majority Shareholder [Member]
Related Party Transaction [Line Items]
Management Fee Expense				$ 300,000		300,000
Majority Shareholder [Member] | Management Services [Member]
Related Party Transaction [Line Items]
Stock Issued During Period, Shares, Issued for Services | shares				5,529,412	5,529,412
Stock Issued During Period, Value, Issued for Services							$ 12,920,000
Randal MacLeod [Member]
Related Party Transaction [Line Items]
Labor and Related Expense				$ 60,000		$ 0

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SHAREHOLDER ADVANCES (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Shareholder Advances [Line Items]
Due to Officers or Stockholders, Current	$ 209,046	$ 304,322
Shareholder [Member]
Shareholder Advances [Line Items]
Due to Officers or Stockholders, Current	209,046	304,322
Repayments of Related Party Debt	$ 281,927	$ 48,236

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CONVERTIBLE PROMISSORY NOTES (Details) - USD ($)	3 Months Ended	9 Months Ended
	Dec. 31, 2018	Sep. 30, 2018
Derivative liability	$ 1,897,407	$ 951,836
Conversions during the period	(57,067)	(678,900)
Change due to Issuances	322,668
Fair value adjustment	(1,300,525)	1,624,471
Derivative liability	862,483	1,897,407
Note A [Member]
Derivative liability	0	0
Conversions during the period	0	0
Change due to Issuances	0
Fair value adjustment	0	0
Derivative liability	0	0
Note B and C [Member]
Derivative liability	961,145	534,214
Conversions during the period	(13,905)	(172,060)
Change due to Issuances	0
Fair value adjustment	(572,329)	598,991
Derivative liability	374,911	961,145
Note D [Member]
Derivative liability	110,988	87,821
Conversions during the period	(39,321)	(111,205)
Change due to Issuances	0
Fair value adjustment	(67,637)	134,372
Derivative liability	4,030	110,988
Note F [Member]
Derivative liability	59,693	98,276
Conversions during the period	0	(3,377)
Change due to Issuances	0
Fair value adjustment	(48,745)	(35,206)
Derivative liability	10,948	59,693
Note G [Member]
Derivative liability	21,682	21,096
Conversions during the period	0	0
Change due to Issuances	0
Fair value adjustment	(17,706)	586
Derivative liability	3,976	21,682
Note H [Member]
Derivative liability	0	143,985
Conversions during the period	0	0
Change due to Issuances	0
Fair value adjustment	0	(143,985)
Derivative liability	0	0
Note I [Member]
Derivative liability	143,322	39,048
Conversions during the period	(3,841)	0
Change due to Issuances	0
Fair value adjustment	(109,337)	104,274
Derivative liability	30,144	143,322
Note J [Member]
Derivative liability	0	27,396
Conversions during the period	0	(103,881)
Change due to Issuances	0
Fair value adjustment	0	76,485
Derivative liability	0	0
Note K [Member]
Derivative liability	39,441	0
Conversions during the period	0	(232,111)
Change due to Issuances	0
Fair value adjustment	(23,762)	271,552
Derivative liability	15,679	39,441
Note L [Member]
Derivative liability	6,770	0
Conversions during the period	0	(56,266)
Change due to Issuances	0
Fair value adjustment	(6,770)	63,036
Derivative liability	0	6,770
Note M [Member]
Derivative liability	554,366	0
Conversions during the period	0	0
Change due to Issuances	0
Fair value adjustment	(449,185)	554,366
Derivative liability	105,181	554,366
Note N [Member]
Derivative liability	0	0
Conversions during the period	0	0
Change due to Issuances	102,380
Fair value adjustment	(4,444)	0
Derivative liability	97,936	0
Note O [Member]
Derivative liability	0	0
Conversions during the period	0	0
Change due to Issuances	121,361
Fair value adjustment	729	0
Derivative liability	122,090	0
Note P [Member]
Derivative liability	0	0
Conversions during the period	0	0
Change due to Issuances	98,927
Fair value adjustment	(1,339)	0
Derivative liability	$ 97,588	$ 0

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CONVERTIBLE PROMISSORY NOTES (Details Textual)							1 Months Ended					3 Months Ended					6 Months Ended	12 Months Ended
	Dec. 24, 2018 USD ($)	Sep. 05, 2018 USD ($)	Aug. 09, 2018 USD ($)	May 05, 2017 USD ($)	May 13, 2016 USD ($)	May 01, 2016 $ / shares	Nov. 28, 2018 USD ($)	Oct. 30, 2018 USD ($)	Nov. 30, 2017	Jan. 31, 2017 USD ($)	Oct. 18, 2016 USD ($)	Dec. 31, 2018 USD ($) $ / shares shares	Sep. 30, 2018 USD ($) shares	Jun. 30, 2018 USD ($) shares	Mar. 31, 2018 USD ($)	Sep. 30, 2017 USD ($)	Jun. 30, 2018 shares	Dec. 31, 2018 USD ($) $ / shares shares	Dec. 31, 2016 USD ($)	Dec. 31, 2017 USD ($) $ / shares	Nov. 28, 2017 USD ($) $ / shares	Mar. 01, 2016 USD ($)	Jul. 06, 2015 $ / shares
Common Stock, Par or Stated Value Per Share | $ / shares												$ 0.0001						$ 0.0001		$ 0.0001			$ 0.0001
Interest Expense, Debt																		$ 67,923	$ 99,195
Debt Conversion, Original Debt, Amount													$ 85,695	$ 47,826	$ 21,518	$ 51,729
Debt Conversion Beneficial Ownership Percentage	4.99%	4.99%	4.99%	4.99%	4.99%		4.99%	4.99%	4.99%	4.99%	9.99%				9.99%
Debt Conversion, Converted Instrument, Shares Issued | shares												5,156,933						1,591,556
Derivative Liability, Current												$ 862,483	$ 1,897,407					$ 862,483		$ 951,836
Measurement Input, Expected Dividend Rate [Member]
Derivative Liability, Measurement Input												0						0
Maximum [Member] | Measurement Input, Share Price [Member]
Derivative Liability, Measurement Input												0.1700						0.1700
Maximum [Member] | Measurement Input, Exercise Price [Member]
Derivative Liability, Measurement Input												0.0519						0.0519
Maximum [Member] | Measurement Input, Price Volatility [Member]
Derivative Liability, Measurement Input												560.6						560.6
Maximum [Member] | Measurement Input, Expected Term [Member]
Derivative Liability, Measurement Input												1.48						1.48
Maximum [Member] | Measurement Input, Discount Rate [Member]
Derivative Liability, Measurement Input												66.01						66.01
Minimum [Member] | Measurement Input, Share Price [Member]
Derivative Liability, Measurement Input												0.0844						0.0844
Minimum [Member] | Measurement Input, Exercise Price [Member]
Derivative Liability, Measurement Input												0.0151						0.0151
Minimum [Member] | Measurement Input, Price Volatility [Member]
Derivative Liability, Measurement Input												247.7						247.7
Minimum [Member] | Measurement Input, Expected Term [Member]
Derivative Liability, Measurement Input												0.69						0.69
Minimum [Member] | Measurement Input, Discount Rate [Member]
Derivative Liability, Measurement Input												47.75						47.75
Convertible Promissory Notes [Member]
Interest Expense, Debt																		$ 5,281
Debt Conversion, Original Debt, Amount																		318,494
Debt Conversion, Converted Instrument, Shares Issued | shares													4,551,990	2,500,000
Note B and C [Member]
Convertible Notes Payable																						$ 150,000
Debt Instrument, Interest Rate, Stated Percentage						24.00%
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger						100.00%
Common Stock, Par or Stated Value Per Share | $ / shares						$ 0.0001
Debt Instrument, Maturity Date						Sep. 01, 2016
Debt Instrument Convertible Threshold Percentage Of StockPrice Trigger Description						The Notes are convertible at a fixed conversion price of 45% of the lowest trading price of the Common Stock as reported on the OTC Pink maintained by the OTC Markets Group, Inc. upon which the Company’s shares are currently quoted, for the four (4) prior trading days including the day upon which a Notice of Conversion is received by the Company
Conversion Price Percentage						45
Debt Conversion Beneficial Ownership Percentage						4.99%
Derivative Liability, Current												$ 374,911	$ 961,145					374,911		534,214
Debt Instrument, Convertible, Conversion Price | $ / shares						$ 0.0151
Note D
Convertible Notes Payable					$ 75,000
Debt Instrument, Interest Rate, Stated Percentage					8.00%
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger					52.00%
Debt Instrument, Maturity Date					May 13, 2017
Note F [Member]
Convertible Notes Payable											$ 100,000
Derivative Liability, Current												10,948	59,693					10,948		98,276
Note F and G
Debt Instrument, Maturity Date											Jul. 18, 2017
Debt Conversion Beneficial Ownership Percentage																	267522.00%
Debt Conversion, Converted Instrument, Shares Issued | shares																	2,500,000
Note G [Member]
Convertible Notes Payable											$ 25,000
Debt Instrument, Interest Rate, Stated Percentage											7.00%
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger											57.50%
Derivative Liability, Current												3,976	21,682					3,976		21,096
Note H [Member]
Convertible Notes Payable															$ 140,000
Debt Instrument, Interest Rate, Stated Percentage															7.00%
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger															80.00%
Debt Instrument, Maturity Date											Jul. 18, 2017
Gain On Forgiveness Or Settlement Of Debt															$ 153,471
Derivative Liability, Current												0	$ 0					0		$ 143,985
Note I
Convertible Notes Payable										$ 33,000
Debt Instrument, Interest Rate, Stated Percentage										12.00%
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger										58.00%
Debt Instrument, Maturity Date										Nov. 05, 2017
Note J
Convertible Notes Payable				$ 23,000
Debt Instrument, Interest Rate, Stated Percentage				12.00%
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger				58.00%
Debt Instrument, Maturity Date				Feb. 20, 2018
Note K
Convertible Notes Payable																					$ 33,000
Debt Instrument, Interest Rate, Stated Percentage																					12.00%
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger									58.00%
Debt Instrument, Maturity Date									Mar. 10, 2019
Debt Instrument, Convertible, Conversion Price | $ / shares																					$ 0.0151
Note L
Convertible Notes Payable								$ 28,000
Debt Instrument, Interest Rate, Stated Percentage								12.00%
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger								58.00%
Debt Instrument, Maturity Date								Oct. 30, 2018
Note M
Convertible Notes Payable			$ 65,000
Debt Instrument, Interest Rate, Stated Percentage			10.00%
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger			52.00%
Debt Instrument, Maturity Date			Sep. 09, 2019
Note N
Convertible Notes Payable		$ 103,000
Debt Instrument, Interest Rate, Stated Percentage		12.00%
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger		61.00%
Debt Instrument, Maturity Date		Dec. 05, 2019
Note O
Convertible Notes Payable							$ 75,000
Debt Instrument, Interest Rate, Stated Percentage							10.00%
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger							52.00%
Debt Instrument, Maturity Date							Nov. 28, 2018
Note P
Convertible Notes Payable	$ 83,000
Debt Instrument, Interest Rate, Stated Percentage	12.00%
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger	61.00%
Debt Instrument, Maturity Date	Jun. 24, 2018
New Notes
Derivative Liability, Current												322,668						$ 322,668
Discount on Derivative Liability												260,380
Loss on Issuance of Derivative Liability												62,288
Amortized Discount on Derivative Liability												$ 2,923

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STOCKHOLDERS' DEFICIT (Details Textual) - USD ($)		1 Months Ended	3 Months Ended								12 Months Ended
	Nov. 01, 2017	Jun. 27, 2018	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Jul. 03, 2017	Jul. 06, 2015
Stockholders' Deficit [Line Items]
Common Stock, Shares Authorized			850,000,000				850,000,000				850,000,000	850,000,000	20,000,000,000
Common Stock, Shares, Outstanding			93,624,289				14,973,819				93,624,289	14,973,819
Stock Issued During Period, Value, New Issues											$ 2,515,374
Stock Issued During Period, Shares, New Issues		25,500,000
Common Stock, Par or Stated Value Per Share			$ 0.0001				$ 0.0001				$ 0.0001	$ 0.0001		$ 0.0001
Preferred Stock, Shares Authorized			20,000,000				20,000,000				20,000,000	20,000,000	20,000,000
Preferred Stock, Par or Stated Value Per Share			$ 0.0001				$ 0.0001				$ 0.0001	$ 0.0001
Stock Issued During Period, Shares, Share-based Compensation, Gross							5,000,000	1,400,000
Stock Issued During Period, Value, Share-based Compensation, Gross							$ 50,000	$ 140,000			$ 84,000	$ 696,000
Stock Issued During Period, Value, Issued for Services			$ 126,384									$ 43,000
Debt Conversion, Converted Instrument, Shares Issued			5,156,933								1,591,556
Debt Conversion, Original Debt, Amount				$ 85,695	$ 47,826	$ 21,518		$ 51,729
Adjustments to Additional Paid in Capital, Stock Split	$ 387,978
Stockholders' Equity, Reverse Stock Split	own one share of Common Stock for every one thousand (1,000​​​​​​​)
Stock holders Equity Post Reverse Stock Split			35,000								35,000
Stock Issued During Period, Shares, Conversion of Convertible Securities					500,000	300,000		533,348,384
Stock Issued During Period, Value, Conversion of Convertible Securities, Net of Adjustments					$ 22,500	$ 3,600		$ 30,779
Adjustments to Additional Paid in Capital, Equity Component of Convertible Debt, Subsequent Adjustments								$ 22,556
Preferred Stock, Shares Outstanding			1,000,000				1,000,000				1,000,000	1,000,000
Accounts Payable, Related Parties, Current			$ 403,620				$ 123,697				$ 403,620	$ 123,697
Class of Warrant or Right, Number of Securities Called by Warrants or Rights		25,000,000	63,094,634								63,094,634
Share based Compensation Share based payments Forfeiture Rate											0.00%
Share Price														$ 0.50
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate											646.00%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Minimum											2.52%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Maximum											2.96%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate											0.00%
Class of Warrant or Right, Outstanding			25,000,000								25,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term											1 year 7 months 2 days
Proceeds from Issuance of Private Placement											$ 2,515,376	0
Common Stock, Share Subscribed but Unissued, Subscriptions Receivable			$ 220,319				$ 0				$ 220,319	0
Maximum [Member]
Stockholders' Deficit [Line Items]
Share Price			$ 0.210								$ 0.210
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Exercise Price			0.150								$ 0.150
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term											3 years
Minimum [Member]
Stockholders' Deficit [Line Items]
Share Price			0.060								$ 0.060
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Exercise Price			$ 0.050								$ 0.050
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term											2 years
Private Placement [Member]
Stockholders' Deficit [Line Items]
Stock Issued During Period, Shares, Issued for Services											63,094,634
Stock Issued During Period, Value, Issued for Services											$ 2,735,545
Class of Warrant or Right, Outstanding			63,094,634								63,094,634
Proceeds from Issuance of Private Placement											$ 215,680
Private Placement [Member] | Maximum [Member]
Stockholders' Deficit [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term											2 years 11 months 23 days
Private Placement [Member] | Minimum [Member]
Stockholders' Deficit [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term											1 year 5 months 26 days
Convertible Promissory Notes [Member]
Stockholders' Deficit [Line Items]
Stock Issued During Period, Shares, Issued for Services									234,458
Stock Issued During Period, Value, Issued for Services									$ 181,530
Debt Conversion, Converted Instrument, Shares Issued				4,551,990	2,500,000
Debt Conversion, Original Debt, Amount											$ 318,494
Advisory And Consultancy services [Member]
Stockholders' Deficit [Line Items]
Stock Issued During Period, Shares, Issued for Services										4,000	80,000
Stock Issued During Period, Value, Issued for Services										$ 36,000
Management Services [Member]
Stockholders' Deficit [Line Items]
Stock Issued During Period, Shares, Share-based Compensation, Gross									40,000
Stock Issued During Period, Value, Share-based Compensation, Gross									$ 108,000
Stock Issued During Period, Shares, Issued for Services										20,000	52,000
Stock Issued During Period, Value, Issued for Services										$ 50,000
Website Development Services [Member]
Stockholders' Deficit [Line Items]
Stock Issued During Period, Value, Issued for Services											$ 247,306
Gain Loss On Settlement Of Website Development Service Cost												$ 226,306
Common Stock [Member]
Stockholders' Deficit [Line Items]
Stock Issued During Period, Value, New Issues											$ 2,276
Stock Issued During Period, Shares, New Issues											22,757,102
Stock Issued During Period, Shares, Share-based Compensation, Gross											5,529,412	12,920,000
Stock Issued During Period, Value, Share-based Compensation, Gross											$ 553	$ 1,292
Stock Issued During Period, Shares, Issued for Services												96,079
Stock Issued During Period, Value, Issued for Services												$ 8
Debt Conversion, Converted Instrument, Shares Issued			7,964,528		3,140,506			675,627
Stock Issued During Period, Shares, Conversion of Convertible Securities											20,813,957	1,922,094
Common Stock [Member] | Lower Than Par Value [Member]
Stockholders' Deficit [Line Items]
Stock Issued During Period, Value, New Issues												$ 22,556
Stock Issued During Period, Shares, New Issues												533,348
Common Stock [Member] | Visava Inc [Member]
Stockholders' Deficit [Line Items]
Stock Issued During Period, Shares, New Issues				25,500,000
Stock Issued During Period, Shares, Issued for Services				750,000
Stock Issued During Period, Value, Issued for Services				$ 46,575
Shares To Be Issued											40,337,532
Common Stock [Member] | Convertible Promissory Notes [Member]
Stockholders' Deficit [Line Items]
Stock Issued During Period, Shares, Issued for Services										13,917
Stock Issued During Period, Value, Issued for Services										$ 26,126
Common Stock [Member] | Website Development Services [Member]
Stockholders' Deficit [Line Items]
Stock Issued During Period, Value, Issued for Services												$ 21,000
Capitalization [Member]
Stockholders' Deficit [Line Items]
Common Stock, Shares Authorized			850,000,000								850,000,000
Common Stock, Shares, Outstanding			93,624,289				14,973,819				93,624,289	14,973,819
Common Stock, Par or Stated Value Per Share			$ 0.0001								$ 0.0001
Preferred Stock, Shares Authorized			20,000,000				20,000,000				20,000,000	20,000,000
Preferred Stock, Par or Stated Value Per Share			$ 0.0001				$ 0.0001				$ 0.0001	$ 0.0001
Preferred Stock, Shares Outstanding			1,000,000				1,000,000				1,000,000	1,000,000
Warrant [Member]
Stockholders' Deficit [Line Items]
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned			$ 1,623,092								$ 1,623,092
Warrant [Member] | Private Placement [Member]
Stockholders' Deficit [Line Items]
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned			$ 6,417,010								$ 6,417,010
Intellectual Property [Member]
Stockholders' Deficit [Line Items]
Stock Issued During Period, Shares, Issued for Services											250,000
Stock Issued During Period, Value, Issued for Services											$ 27,000
Rubin Schindermann [Member]
Stockholders' Deficit [Line Items]
Stock Issued During Period, Shares, Share-based Compensation, Gross						5,529,412
Stock Issued During Period, Value, Share-based Compensation, Gross						$ 84,000
Accounts Payable, Related Parties, Current						$ 9,000

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LEASE AGREEMENT (Details)	Dec. 31, 2018 USD ($)
2019	$ 235,488
2020	235,488
2021	235,488
2022	235,488
2023 and onwards	340,252
Total	$ 1,282,204

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LEASE AGREEMENT (Details Textual)	12 Months Ended
	Dec. 31, 2018 USD ($)	Dec. 31, 2018 CAD ($)
Operating Leased Assets [Line Items]
Operating Leases, Rent Expense, Minimum Rentals	$ 1,833	$ 2,500
Operating Leases, Rent Expense, Net	$ 18,326	$ 25,000
Lessee, Operating Lease, Term of Contract	10 years	10 years
Premises [Member]
Operating Leased Assets [Line Items]
Operating Leases, Rent Expense, Minimum Rentals	$ 1,298

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INCOME TAXES (Details) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Effective Income Tax Rate Reconciliation [Line Items]
Expected income tax recovery from net loss	$ 399,072	$ 365,963
Tax effect of expenses not deductible for income tax:
Annual effect of book/tax differences	(131,861)	(303,870)
Change in valuation allowance	(267,211)	(62,093)
Income Tax Expense (Benefit), Total	$ 0	$ 0

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INCOME TAXES (Details 1) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2018
Deferred Tax Assets - Non-current:
Tax effect of NOL Carryover	$ 452,343	$ 563,454
Cumulative change due to reduced rate	(156,117)
Less valuation allowance	(296,226)	(563,454)
Deferred tax assets, net of valuation allowance	$ 0	$ 0

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INCOME TAXES (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Deferred Tax Assets Non Current [Line Items]
Deferred Tax Assets, Operating Loss Carryforwards	$ 2,683,112	$ 1,410,682
Operating Loss Expiration Period Description	2038
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	35.00%	21.00%

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SUBSEQUENT EVENTS (Details Textual) - USD ($)	1 Months Ended				12 Months Ended
	Mar. 31, 2019	Jan. 31, 2019	Jan. 25, 2019	Jun. 27, 2018	Dec. 31, 2018	Dec. 31, 2017
Subsequent Event [Line Items]
Stock Issued During Period, Shares, New Issues				25,500,000
Shares Issued, Price Per Share				$ 0.10
Class of Warrant or Right, Number of Securities Called by Warrants or Rights				25,000,000	63,094,634
Proceeds from Issuance of Private Placement					$ 2,515,376	$ 0
Private Placement [Member]
Subsequent Event [Line Items]
Proceeds from Issuance of Private Placement					$ 215,680
Subsequent Event [Member]
Subsequent Event [Line Items]
Stock Issued During Period, Shares, New Issues	588,237
Shares Issued, Price Per Share			$ 0.10
Business Acquisition, Percentage of Voting Interests Acquired			100.00%
Class of Warrant or Right, Number of Securities Called by Warrants or Rights			7,200,000
Percentage Tendered of the Capital Stock for Exchange			90.00%
Proceeds from Issuance of Private Placement		$ 220,319
Subsequent Event [Member] | Private Placement [Member]
Subsequent Event [Line Items]
Stock Issued During Period, Shares, New Issues	29,074,075
Subsequent Event [Member] | CannaKorp [Member]
Subsequent Event [Line Items]
Stock Issued During Period, Shares, New Issues	30,407,712		30,000,000