11. Commitments The Company is a party to a 5-year lease agreement (initiated on September 2018) with respect to its office premises. Total rent for the premises is $848 (CAD $1,100) plus applicable taxes per month. On the first anniversary date, the rent per month will increase to $869 (CAD $1,138) plus applicable taxes, on the second anniversary date, the rent per month will increase to $891 (CAD $1,166) plus applicable taxes, on the third anniversary date, the rent per month will increase to $912 (CAD $1,193) plus applicable taxes, on the fourth anniversary date, the rent per month will increase to $933 (CAD $1,221) plus applicable taxes. The Companys subsidiary, Canary, 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 $1,910 (CAD $2,500) plus applicable taxes per month. Effective January 1, 2019, the rent was increased to $19,103 (CAD $25,000) plus applicable taxes per month. The lease agreement has three 10-year renewal options and on each anniversary date, commencing from January 1, 2020, the rent will increase by the cumulative annual percentage increase in the Canadian Consumer Price Index. Deferred rent is due to the amortization of the operating lease expense resulting from the use of straight-line method versus the non-level lease payments and tenant improvements being made in the Companys production facility paid by the Companys landlord in amount of $1,716,694 (CAD $2,331,063). As at June 30, 2019, The Company has recorded tenant improvement allowance incentive amount in work in progress. The Company will be amortizing these deferred rent charges on a monthly basis in the amount of $27,831 (CAD $36,423) over the remaining term ending on June 30, 2024 as a reduction in rent expense. The Companys subsidiary, CannaKorp, is a party to a monthly lease agreement (initiated on December 01, 2014) with respect to its facility, approximately 1,000 square feet of space located in a multi-tenant building. Total rent for the premises is $1,200 plus applicable taxes per month, tenancy may be terminated by a sixty (60) days written notice by the Company or the landlord. Future minimum rent payments for the above leases are as follows: $ 2019 179,643 2020 239,752 2021 240,012 2022 240,264 2023 and onwards 351,318 1,250,989