Convertible Promissory Notes

3 Months Ended

Mar. 31, 2025

12. Convertible Promissory Notes

Interest amounting to $10 was accrued for the three months ended March 31, 2025 (March 31, 2024: $9).

Principal amount outstanding as of March 31, 2025 and December 31, 2024 was $480. At both reporting dates, the entire balance was current.

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

Derivative liability

During the three months ended March 31, 2025, there were no conversion of principal balance of convertible promissory notes (March 31, 2024: $nil). The Company recorded and fair valued the derivative liability as follows:


	Derivative	Conversions /			Derivative
	liability as at	Redemption			liability as at
	December 31,	during the	Change due to	Fair value	March 31,
	2024	period	Issuances	adjustment	2025
	$	$	$	$	$
Note D	864	—	—	1,011	1,875
Note F	5,205	—	—	6,895	12,100
Note G	1,890	—	—	2,504	4,394
	7,959	—	—	10,410	18,369

Key assumptions used for the valuation of convertible notes

Derivative element of the convertible notes was fair valued using a multinomial lattice model. Following assumptions were used to fair value these notes as of March 31, 2025:

●

Projected annual volatility of 270%;

●

Risk free interest rate of 4.07%;

●

Stock price of $0.002;

●

Liquidity term of 0.25 years;

●

Dividend yield of 0%; and

●

Exercise price of $0.0008 to $0.0151.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

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+ Details

Target Group Inc. 10-Q