Company: TCRG
Filing Date: 2025-09-09
Form Type: 10-Q
Source: 0001185185-25-001156
Chunk: 50

Company: Cannaisseur Group Inc.
Filing Date: 2025-09-09
Form: 10-Q
Item: Item 2
Chunk 50
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quired a fifty-one percent (51%) interest in Atlanta CBD Inc. (d/b/a as Inno Medicinals) (“Atlanta CBD”). Atlanta CBD was
formed to engage in hemp cultivation, extraction, manufacturing, distribution, and retail sales through CBD stores. The Company, however,
has now transitioned into a health and wellness company, with the aim of promoting and selling health and wellness products, including
CBD-related products. Currently, the Company’s only assets and operations consist of the 51% interest it owns in Atlanta CBD, Inc.
TCRG manages and operates Atlanta CBD’s business on a day-to-day basis. The Company intends to work in conjunction with Atlanta
CBD to grow the business operations.

Atlanta
CBD, at its inception, was a hemp products supplier and retailer. It sold its retail hemp products through the trade name, Inno Medicinals,
located in Atlanta Georgia. Currently, Atlanta CBD, in order to better reflect the direction of TCRG, intends to sell health and wellness
products, through its retail operations. The products offered for sale will also reflect the shift in strategy of TCRG.

Results
of Operations for the Three Months Ended June 30, 2025 Compared with the Three Months Ended June 30, 2024

Revenue

Revenue
was $0 for the three months ended June 30, 2025 and 2024. The lack of revenue was due to a decline in retail sales driven by the closing
of the Company’s retail store. The Company is in the process of restructuring its website and plans to conduct business online.
The Company may reopen a physical store or stores in the future if it is advantageous to its operations.

Costs
of Revenue

Cost
of revenue was $282 for the three months ended June 30, 2025, compared to $485 during the three months ended June 30, 2024, a decrease
of $203, or 41.9%. The decrease was driven primarily by reduced write off of obsolete inventories in the current period.

The
Company reported negative gross profit for the three months ended June 30, 2025 and 2024. The negative profit margins were the result
of reduced sales, due to the closing of the Company’s retail store, and increases in write-offs of obsolete inventory. Continued
growth of the consumer market for CBD products and increases in competition are anticipated to continue to create pressure on gross profit
margins.

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Table of Contents

Selling,
General and