7.     Fixed Assets

The Company’s subsidiary, Canary, initiated construction on its leased 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. On May 1, 2019, the Company completed the construction of its 44,000 square foot cannabis cultivation facility and on May 14, 2019, the Company submitted a Site Evidence Package to Health Canada as part of the steps to obtain the license to cultivate cannabis at the Company’s facility. On October 8, 2019, the Company was granted licenses to cultivate, process and sell cannabis pursuant to the Cannabis Act (Bill C-45). Canary currently operates as a licensed producer/wholesaler of craft cannabis in Ontario and has since been granted its sales amendment from Health Canada to sell directly to provincial retail boards for consumer products.

Canary has recorded a depreciation expense of $196,733 during the three months ended March 31, 2025 (March 31, 2024: $212,876) while CannaKorp has recorded a depreciation expense of $nil during the three months ended March 31, 2025 (March 31, 2024: $57). Target recorded a depreciation of $93 during the three months ended March 31, 2025 (March 31, 2024: $ nil). JVCo recorded depreciation of $21,650 during the three months ended March 31, 2025 (March 31, 2024: $23,038).

Below is a breakdown of the consolidated fixed asset, category wise:

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