UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X]
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended
August 31, 2018
[ ]
TRANSITION REPORT UNDER
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from [
] to [ ]
Commission file number
000-51866
ENERTOPIA CORP.
(Exact name of registrant as specified in its charter)
Nevada
|
20-1970188
|
(State or other jurisdiction of incorporation or
organization)
|
(I.R.S. Employer Identification No.)
|
156 VALLEYVIEW RD, KELOWNA, BRITISH
|
|
COLUMBIA, CANADA
|
V1X 3M4
|
(Address of principal executive offices)
|
(Zip Code)
|
Registrant's telephone number, including area code:
250-765-6412
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
|
Name of Each Exchange On Which Registered
|
N/A
|
N/A
|
Securities registered pursuant to Section 12(g) of the Act:
N/A
(Title of class)
Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 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 registrant: (1) has filed
all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 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 and posted on its corporate Website, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-K (§229.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post 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.
[ ]
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 definition of large accelerated filer, accelerated
filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ]
|
Accelerated filer [ ]
|
Non-accelerated filer [ ]
|
Smaller reporting company [X]
|
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 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 ask price of such common
equity, as of the last business day of the registrants most recently completed
second fiscal quarter.
The aggregate market value of Common Stock held by
non-affiliates of the Registrant on February 28, 2018 was $5,559,000 based on a
$0.060 closing price for the Common Stock on February 28, 2018. For purposes of
this computation, all executive officers and directors have been deemed to be
affiliates. Such determination should not be deemed to be an admission that such
executive officers and directors are, in fact, affiliates of the Registrant.
Indicate the number of shares outstanding of each of the
registrants classes of common stock as of the latest practicable date.
121,964,931 common shares as of November 19,
2018
DOCUMENTS INCORPORATED BY REFERENCE
None.
TABLE OF CONTENTS
PART I
This annual report contains forward-looking statements. These
statements relate to future events or our future financial performance. In some
cases, you can identify forward-looking statements by terminology such as may,
should, expects, plans, anticipates, believes, estimates,
predicts, potential or continue or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors, including the risks in the
section entitled Risk Factors that may cause our or our industrys actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements.
Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. Except as required by
applicable law, including the securities laws of the United States, we do not
intend to update any of the forward-looking statements to conform these
statements to actual results.
Our financial statements are stated in United States Dollars
(US$) and are prepared in accordance with United States Generally Accepted
Accounting Principles.
In this annual report, unless otherwise specified, all dollar
amounts are expressed in United States dollars and all references to common
shares refer to the common shares in our capital stock.
As used in this annual report and unless otherwise indicated,
the terms "we", "us", "our, our Company, the Company, and "Enertopia" mean
Enertopia Corp.
General Overview
Enertopia Corp. was formed on November 24, 2004 under the laws
of the State of Nevada and commenced operations on November 24, 2004.
From inception until April 2010, we were primarily engaged in
the acquisition and exploration of natural resource properties. Beginning in
April 2010, we began our entry into the renewable energy sector by purchasing an
interest in a solar thermal design and installation company. In late summer
2013, we began our entry into medicinal marijuana business. During our 2014
fiscal year end our activities in the clean energy sector were discontinued.
During fiscal 2015 our activities in the Medicinal Marijuana sector were
discontinued. During fiscal 2016 our activities in the Womens personal
healthcare sector were discontinued.
The Company is actively pursuing business opportunities in the
resource sector, whereby we signed a definitive agreement for a Lithium Brine
Project in May 2016. In May 2017 the Company dropped the Lithium Brine Project
and subsequently acquired the Clayton Valley, NV Lithium Project announced in
August 2017.The Companys main focus is in natural resource sector and using
3
rd
party off the shelf technologies that can be, used for Lithium
extraction through brines.
The address of our principal executive office is 156 Valleyview
RD, Kelowna, British Columbia V1X 3M4. Our telephone number is (250) 765-6412.
In addition, we have a second office located in Kelowna, British Columbia. Our
current location provides adequate office space for our purposes at this stage
of our development.
Summary of Recent Business
Our Company is diverse in its pursuit of business opportunities
in the natural resource sector and technology used in the resource sector.
On
October 27, 2017
we entered into a one year Investor
Relations Consulting agreement with FronTier Merchant Capital Group. Terms of
the agreement, FronTier Capital Group has been retained for a 12-month period at
$CAD87,000 (plus applicable sales tax) per annum plus direct expenses. The
company also granted 300,000 stock options to FronTier at an exercise price of
0.05 per share expiring 5 years from the date of grant.
On
November 1, 2017
, we closed the first tranche of a
private placement of 2,600,000 units at a price of CAD$0.05 per unit for gross
proceeds of CAD$130,000. Each unit consists of one common share of our Company
and one non-transferable share purchase warrant, each full warrant entitling the
holder to purchase one additional common share of our Company for a period of 24
months from the date of issuance, at a purchase price of $0.06.
On
November 1, 2017
, we granted 500,000 stock options to
a director of the company at an exercise price of 0.05 per share expiring 5
years from the date of grant.
On
December 8, 2017
, we closed the second tranche of a
private placement of 3,954,000 units at a price of CAD$0.05 per unit for gross
proceeds of CAD $197,700. Each unit consists of one common share of our Company
and one non-transferable share purchase warrant, each full warrant
entitling the holder to purchase one additional common share of our Company for
a period of 24 months from the date of issuance, at a purchase price of $0.06. A
cash finders fee for CAD $12,770 and 230,400 full broker warrants was paid to
third parties. Each full broker warrant entitling the holder to purchase one
additional common share of our Company for a period of 24 months from the date
of issuance, at a purchase price of $0.06.
On
December 8, 2017
, we issued 240,000 common shares of
our Company on the exercise of 240,000 stock options that were exercised by a
director of the Company at $0.05 for $12,000 for net proceeds to the company.
On
December 15, 2017
, we paid Genesis Water Technologies
(GWT) $96,465 for the second and final payment for the Second phase of the
second bench test and $8,998 for the bill of materials for the bench test.
On
January 12, 2018
, we closed the final tranche of a
private placement of 1,611,000 units at a price of CAD$0.05 per unit for gross
proceeds of CAD$80,550. Each unit consists of one common share of the Company
and one non-transferable share purchase warrant, each full warrant entitling the
holder to purchase one additional common share of the Company for a period of 24
months from the date of issuance, at a purchase price of $0.06. A cash finders
fee of CAD$3,880 and 77,600 broker warrants was paid to a third party. The
broker warrants have the same terms as the warrants issued as part of the unit
offering.
On
February 2, 2018
, we issued 50,000 common shares of
our Company on the exercise of 50,000 warrants that were exercised at $0.07 for
$3,500 for net proceeds to the company.
On
May 11, 2018
, we issued 200,000 shares for gross
proceeds of $12,000 from the exercise of stock options at $0.06.
On
May 11, 2018
, we closed the first tranche of a
private placement of 1,746,900 units at a price of CAD$0.06 per unit for gross
proceeds of CAD$104,814. Each unit consists of one common share of the Company
and one non-transferable share purchase warrant, each full warrant entitling the
holder to purchase one additional common share of the Company for a period of 24
months from the date of issuance, at a purchase price of $0.075. A cash finders
fee of CAD$9,281 and 144,690 full broker warrants that expire May 11, 2020 was
paid to third parties. The broker warrants have the same terms as the warrants
issued as part of the unit offering.
On
May 22, 2018
, we entered into an Investor Relations
Consulting agreement with FronTier Flex Marketing. Terms of the agreement,
FronTier Flex Marketing has been retained for a 9-month period at $CAD66,000
(plus applicable sales taxes) plus direct expenses. The Company also granted
300,000 stock options at an exercise price of $0.07 per share expiring 5 years
from the date of grant.
On
May 25, 2018
, we closed the final tranche of a
private placement of 2,470,000 units at a price of CAD$0.06 per unit for gross
proceeds of CAD$148,200. Each unit consists of one common share of the Company
and one non-transferable share purchase warrant, each full warrant entitling the
holder to purchase one additional common share of the Company for a period of 24
months from the date of issuance, at a purchase price of $0.075. A cash finders
fee of CAD$5,820 and 70,000 full broker warrants that expire May 25, 2020 was
paid to third parties. The broker warrants have the same terms as the warrants
issued as part of the unit offering.
On
July 4, 2018
, the Company, after receiving 3rd party
lab results that reported impurities above allowable limits for battery-grade
Li2CO3, provided formal notice of termination to GWT of the commercialization
agreement dated December 6, 2016 and as amended on October 9, 2017.
On
August 31, 2018
, we closed the first tranche of a
private placement of 4,400,000 units at a price of CAD$0.03 per unit for gross
proceeds of CAD$132,000. Each unit consists of one common share of the Company
and one non-transferable share purchase warrant, each full warrant entitling the
holder to purchase one additional common share of the Company for a period of 36
months from the date of issuance, at a purchase price of $0.05. A cash finders
fee of CAD$12,000 and 400,000 full broker warrants that expire August 31, 2021
was paid to third parties. The broker warrants have the same terms as the
warrants issued as part of the unit offering.
On
August 31, 2018
, we issued 170,000 shares for gross
proceeds of $9,000 from the exercise of 50,000 stock options at $0.06 and
120,000 stock options at $0.05 respectively.
Chronological Overview of our Business over the Last Five
Years
On September 28, 2012, the Company closed an offering
memorandum placement of 995,000 units at a price of CAD$0.05 per unit for gross
proceeds of CAD$49,750 or US$49,750. Each Unit consisted of one common share of
the Issuer and one common share purchase warrant. Each warrant was exercisable
into one further common share at a price of US$0.15 per warrant share for a
period of twelve months following closing; or at a price of US$0.20 per warrant
for the period of twelve months plus one day to twenty-four months following
closing. The Company issued 79,500 shares, 79,500 warrants and 79,500 broker
warrants in connection with the private placement.
On October 24, 2012, the Company issued 100,000 common shares
to Altar Resources at the price of $0.06. per share ($6,000 in the aggregate)
pursuant to its option agreement for Mildred Peak property
On November 15, 2012, the Company closed an offering memorandum
placement of 1,013,000 units at a price of CAD$0.05 per unit for gross proceeds
of CAD$50,650 or US$50,650. Each Unit consisted of one common share of the
Issuer and one common share purchase warrant. Each warrant was exercisable into
one further common share at a price of US$0.10 per warrant share for a period of
twelve months following closing; or at a price of US$0.20 per warrant for the
period of twelve months plus one day to twenty-four months following closing.
The Company issued 38,000 common shares, 101,300 units, and 101,300 broker
warrants in connection with the private placement.
On March 1, 2013, we settled accrued consulting fees of $42,000
payable to Mr. Mark Snyder by transferring 1.68% of our ownership interest in
GSWPS back to Mr. Snyder, thereby reducing our interest in GSWPS from 9.82% to
8.14% . During the year ended August 31, 2013, based on our managements
assessment of GSWPSs current operations, we wrote down our long-term investment
in GSWPS to $1.
On March 1, 2013, the Company settled a debt of $16,000
incurred from September 1, 2011 to February 28, 2013 for consulting fees paid to
Mr. Mark Snyder by issuing 160,000 restricted common shares of the Company at a
price of $0.10 per share.
On May 30, 2013, the Company terminated its Option Agreement
with Altar Resources with respect to the Mildred Peak property.
On June 26, 2013, the Company terminated its Option Agreement
with Wildhorse Copper Inc. with respect to the Copper Hills property.
On September 17, 2013 we entered into an AMI Participation
Agreement with Downhole Energy LLC to participate in 100% gross interest and 75%
net revenue interest for drilling, completion and production of up to 100 oil
wells on certain oil and gas leases covering 2,924 in the historic field located
in Forest and Venango counties, Pennsylvania. On execution of this agreement we
issued 100,000 of our common shares to Downhole Energy LLC. The Company decided
not to continue with the agreement and wrote off the asset.
On October 4, 2013 we entered into a consulting agreement with
Olibri Acquisitions and issued 750,000 of our common shares to Olibri.
On November 1, 2013 we entered into a Letter of Intent
Agreement (LOI) with 0786521 BC Ltd. (also known as World of Marijuana
Productions Ltd. or WOM) to acquire 51% of the issued and outstanding capital
stock of WOM. WOM was the owner and operator of a Medical Marihuana operation
located in Mission, British Columbia, Canada. The LOI was not comprehensive and
subject to the negotiation of a definitive agreement. Upon execution of the LOI,
we issued 10,000,000 of our common shares to WOM. The LOI was superseded by our
joint venture agreement with WOM dated January 16, 2014, described below.
On November 5, 2013 we granted 675,000 stock options to
directors, officers, and consultant of our Company with an exercise price of
$0.06 vested immediately, expiring November 5, 2018.
On November 18, 2013, we granted 25,000 stock options to a
consultant with an exercise price of $0.09 vested immediately, expiring November
18, 2018.
On November 18, 2013, we entered into an investor relations
contract with Coal Harbour Communications Inc. The initial term of this
agreement began on the date of execution of the agreement and continue for
two months
. Thereafter the agreement continues on a month-by-month basis
subject to cancelation by 30 days written notice. In consideration for the
services the Company paid the designees of Coal Harbour Communications a
one-time payment of two hundred thousand shares (200,000) of our restricted
common stock. We also agree to pay to Coal Harbour Communications a monthly fee
of $5,000 payable on the 1st day of each monthly period starting 60 days from
the signing of the agreement and $500 per month to cover expenses incurred on
our Companys behalf. Any expenses above $500 per month must be pre-approved.
On November 26, 2013, our Company closed the first tranche of a
private placement of 2,720,000 units at a price of CAD$0.05 per unit for gross
proceeds of CAD$136,000 ($136,000). Each warrant is exercisable into one further
share at a price of US$0.10 per warrant share for a period of thirty-six month
following the close.
On November 29, 2013, our wholly-owned subsidiary, Target
Energy, Inc. was discontinued and dissolved.
On December 23, 2013, we closed the final tranche of a private
placement of 2,528,000 units at a price of CAD$0.05 per unit for gross proceeds
of CAD$126,400 ($126,400). Each warrant is exercisable into one further share at
a price of $0.10 per warrant share for a period of thirty-six months following
closing. We also paid a cash finders fee of $10,140 and 202,800 broker warrants
to Canaccord Genuity and Wolverton Securities that are exercisable into one
common share per warrant at a price of $0.10 that expire on December 23, 2016.
On January 1, 2014, we entered into a Social Media/Web
Marketing Agreement with Stuart Gray. The initial term of the agreement began on
the date of execution and continued for three
months. In consideration
for the services we paid Stuart Gray a monthly fee of $5,000. As additional
compensation we issued 200,000 stock options to Mr. Gray. The exercise price of
the stock options is $0.075, with 100,000 stock options vested immediately,
50,000 stock options vested 30 days after the grant, and 50,000 stock options
vested 60 days after the grant, expiring January 1, 2019.
On January 13, 2014, we entered into a corporate development
agreement with Don Shaxon for an initial term of twelve months. Thereafter the
agreement continued on a month-by-month basis subject to cancelation by 30 days
written notice. In consideration for the services we paid to Mr. Shaxon a
signing stock bonus of 250,000 of our common shares, a one-time cash bonus of
$40,000, and a monthly fee of $3,500 plus $500 in monthly expenses. Upon
execution of the Agreement we also granted 250,000 stock options to Mr. Shaxon
with an exercise price of $0.16, vesting immediately and expiring January 13,
2019.
On January 16, 2014 we entered into a Joint Venture Agreement
with WOM to acquire up to a 51% ownership interest in a prospective medical
marijuana production facility to be located at WOMs establishment in Mission,
British Columbia. WOM was to hold a 49% interest in the joint venture and was
responsible to acquire a medical marijuana production licence from Health
Canada. The Joint Venture Agreement superseded the Letter of Intent between our
company and WOM dated November 1, 2013 (the "LOI"). As at March 11, 2014 our
Company had earned a 31% interest in the World of Marijuana Joint Venture by
paying and advancing $375,000 and issuing 16,000,000 million shares of our
common stock. The $375,000 was intended to fund the joint venture through
completion of facility upgrades and completion of the licensing process.
Pursuant to the terms of the Joint Venture Agreement, our company could purchase
up to a 51% interest in the joint venture in consideration of an additional
4,000,000 shares and $1,000,000 in the aggregate. On January 31, 2014, we
accepted and received gross proceeds of CAD$40,500 (US$37,500), for the exercise
of 350,000 stock options; 100,000 at $0.075 each, 150,000 stock options at $0.10
each, and 100,000 stock options at $0.15 each; into 350,000 common shares of our
Company.
On January 31, 2014, we closed the first tranche of a private
placement of 4,292,000 units at a price of US$0.10 per unit for gross proceeds
of US$429,200. Each Unit consists of one share of our common stock and one half
(1/2) of one non-transferable common share purchase warrant Each whole warrant
is exercisable to purchase one common share at a price of US$0.15 per share for
a period of twenty-four (24) months following closing. A cash finders fee
consisting of $29,616 and 296,160 full broker warrants that expire on January
31, 2016 with an exercise price of $0.15 was paid to Canaccord Genuity, Leede
Financial and Wolverton Securities.
On February 5, 2014, Ryan Foster joined our Company as an
advisor. We granted 50,000 stock options to Mr. Foster with an exercise price of
$0.35 per common share expiring February 5, 2019. 25,000 of the stock options
vested immediately and 25,000 vested on July 1, 2014.
On February 13, 2014, we closed the final tranche of a private
placement by issuing 12,938,000 units at a price of US$0.10 per unit for gross
proceeds of US$1,293,800. Each unit consists of one common share and one half
(1/2) of one non-transferable share purchase warrant with each whole warrant
exercisable into one common share at a price of US$0.15 per share for a period
of twenty-four (24) months following closing. One director and one officer of
our Company participated in the final tranche for $30,000. A cash finders fee
consisting of $98,784; 8,000 common shares in lieu of $800 and 995,840 full
broker warrants that expire on February 13, 2016 with an exercise price of $0.15
was paid to Canaccord Genuity, Global Market Development LLC and Wolverton
Securities.
On February 13, 2014, 50,000 stock options were exercised at a
price of $0.06 by a Director and 50,000 stock options were exercised at a price
of $0.075 by a Consultant for net proceeds to our Company of CAD$7,050
(US$6,750) into 100,000 common shares of the Company.
On February 13, 2014, 541,500 warrants from previous private
placements were exercised into 541,500 common shares of our Company for net
proceeds of $101,100.
On February 27, 2014, 585,000 warrants from previous private
placements were exercised into 585,000 common shares of our Company for net
proceeds of $115,000.
On February 27, 2014, we signed a $50,000 12 month marketing
agreement with Agoracom payable in shares of our common stock. The first quarter
payment of $12,500 was paid with the issuance of 54,347 common shares of our
Company at a market price of $0.23 per share.
On February 28, 2014, we entered into a Joint Venture Agreement
with The Green Canvas Ltd.
("
GCL
") pursuant to which we could
acquire up to a 75% interest in the business of GCL, being the business of
legally producing, manufacturing, propagating, importing/exporting, testing,
researching and developing, and selling marijuana for medical purposes. We paid
$100,000 to the GCL upon execution of the agreement. Subsequently, we issued to
GCL an aggregate of 10,000,000 of our common shares at a price of $0.235 per
share; and paid to GCL the aggregate sum of $500,000, to earn a 49% interest in
GCLs business by February 28, 2015. With the exception of $113,400 payable to
Wolverton Securities, the full amount of the $500,000 was to be used by GCL to
upgrade the GCLs existing medical marijuana production facility to meet the
standards introduced by the Marihuana for Medical Purposes Regulations (MMPR)
administered by Health Canada.
On March 5, 2014, our Company and our CEO and Director, Robert
McAllister, entered into a Joint Venture Agreement with Lexaria Corp. to jointly
source and develop business opportunities in the medical marijuana industry.
Pursuant to the terms of the agreement, Lexaria Corp. issued to our Company 1
million restricted common shares and issued 500,000 common shares to Mr.
McAllister for his participation as a key representative for the joint venture.
Additionally, Lexaria agreed to issue to Mr. McAllister options to purchase
500,000 common shares of Lexaria in consideration for Mr. McAllisters
participation on the Lexaria Advisory Board.
On March 10, 2014, our Companys Board appointed Mathew
Chadwick as Senior Vice President of Marijuana Operations and entered into a
Management Agreement with Mr. Chadwick for his services. The initial term of the
agreement began on the date of execution of this agreement and continued for six
months. Thereafter the agreement continued on a month-by-month basis until it
was terminated on October 16, 2014 pursuant to a termination and settlement
agreement, dated effective October 14, 2014, with World of Marijuana Productions
Ltd. and Mr. Chadwick. We paid in total $125,000 to Mr. Chadwick pursuant to the
Management Agreement. Mr. Chadwick resigned as a director and officer of our
Company on October 16, 2014.
On March 11, 2014, Robert Chadwick and Clayton Newbury joined
the Company as advisors and were each paid a $1,000 honorarium. Robert Chadwick
was issued a one-time 100,000 common shares of our Company. On March 11, 2014,
we granted 100,000 stock options to Robert Chadwick with an exercise price of
$0.68 per share expiring March 11, 2019. 50,000 of the stock options vested
immediately, and 50,000 vested on September 11, 2014. We also granted 100,000 options to Clayton Newbury on the same terms. Robert
Chadwick and Clayton Newbury stepped down as advisors on October 17, 2014.
On March 14, 2014, we signed a six month contract for $21,735
with The Money Channel to provide services for national television, internet and
radio media campaign.
On March 14, 2014, 815,310 warrants from previous private
placements were exercised into 815,310 common shares of our Company for net
proceeds of $163,062.
On March 14, 2014, we accepted and received gross proceeds from
a director of our Company of CAD$8,250 (US$7,500), for the exercise of 50,000
stock options at an exercise price of $0.15, into 50,000 common shares of our
Company.
On March 17, 2014, 1,548,000 warrants from previous private
placements were exercised into 1,548,000 common shares of our Company for net
proceeds of US$289,475.
On March 25, 2014, we accepted and received gross proceeds of
$67,750, for the exercise of 325,000 stock options at $0.06 to $0.25 each, into
325,000 common shares of our Company.
On March 25, 2014, 1,095,000 warrants from previous private
placements were exercised into 1,095,000 common shares of our Company for net
proceeds of US$114,250.
On March 26, 2014, our Board appointed Dr. Robert Melamede as
an Advisor to the Board of Directors. We paid to Dr. Melamede, an honorarium of
$2,500 for the first year of participation on our Advisory Board and issued
250,000 shares of our common stock. On March 26, 2014 we granted to Dr. Melamede
500,000 stock options with an exercise price of $0.70 and expiring March 26,
2019. 250,000 of the stock options vested immediately and the remaining 250,000
stock options vested on September 26, 2014, Dr. Melamede stepped down as an
advisor on June 16, 2015.
On April 1, 2014, we entered into a one year consulting
agreement with Kristian Dagsaan to provide controller services for CAD$3,000
(plus goods and services tax) per month. We also granted 100,000 fully vested
stock options with an exercise price of $0.86, expiring April 1, 2019. The
agreement was cancelled effective August 31, 2014.
On April 1, 2014, we entered into a 90 day investor relations
contract for CAD $9,000 with Ken Faulkner. We also granted 100,000 fully vested
stock options to Mr. Faulkner with an exercise price of $0.86, expiring April 1,
2019.
On April 3, 2014, we entered into another 3 month Social
Media/Web Marketing Agreement with Stuart Gray. In consideration for the
services the Company we agreed to pay Mr. Gray a monthly fee of $5,000. Upon
execution of the Agreement, we issued 100,000 stock options to Mr. Gray with an
exercise price of $0.72, expiring on April 3, 2019. The agreement was terminated
on July 31, 2014.
On April 3, 2014, 1,293,500 warrants from previous private
placements were exercised into 1,293,500 common shares of our Company for net
proceeds of US$177,950.
On April 3, 2014, we accepted and received gross proceeds from
past consultant of our Company of US$1,500 for the exercise of 25,000 stock
options at an exercise price of $0.06, into 25,000 common shares of our Company.
On April 8, 2014, we granted 50,000 fully vested stock options
to a consultant of our Company, Taven White. The stock options are exercisable
at $0.50 per share and expire on April 8, 2019.
On April 10, 2014, we entered into a Letter of Intent ("LOI")
with Lexaria Corp regarding the establishment of a joint venture to establish a
medical marijuana production facility in Burlington, Ontario under the MMPR
regulations. Pursuant to the LOI Lexaria issued 500,000 of its common shares to
our company to be held in escrow subject to receipt of an MMPR production
license by our joint venture. Lexaria also contributed $55,000 to acquire a 49%
interest in the joint venture and the responsibility to pay 55% of all joint
venture expenses. We contributed $45,000 for a 51% interest and the responsibility to pay 45% of all
expenses. We were to be responsible for management of the joint venture for as
long as we maintained majority ownership.
Also, effective April 10, 2014 the Burlington Joint Venture
entered into a letter of intent with Mr. Jeff Paikin on behalf of 1475714
ONTARIO INC. to secured a future lease for a 30,000 ft² medical marijuana
production space in Burlington, Ontario. We also acquired a right of first
refusal for another 45,000 ft² to accommodate future growth. We issued 38,297
common shares to Mr. Paikin at a deemed price of $0.47 to secure our interest in
the lease. The production target for the facility based on 30,000 ft² (with
approximately 50% devoted to production space) was approximately 10,000
kilograms per year production.
On April 14, 2014, the Company appointed Mr. Jeff Paikin to its
Advisory Board for a period of not less than one year, but to be determined by
certain performance thresholds described in the letter. Upon signing of the
letter of acceptance the Company issued 90,000 common shares at a deemed price
of $0.34. Based on the milestones listed in the letter, Mr. Paikin can be
eligible to receive up to a total of 472,500 common shares of the Company.
Consulting agreement amended on June 18, 2014, Mr. Paikin can be eligible to
receive up to a total of 1,350,000 common shares of the Company. Based on the
milestones listed in the amended contract, the Company issued Mr. Paikin 135,000
common shares at a deemed price of $0.14 on July 14, 2014.
On April 17, 2014, our Company accepted and received gross
proceeds from a director of CAD$8,475 (US$7,500), for the exercise of 50,000
stock options at $0.15 into 50,000 common shares of our Company.
On April 17, 2014, 651,045 warrants from previous private
placements were exercised into 651,045 common shares of our Company for net
proceeds of $110,209.
On April 24, 2014 our Company entered into a one year
consulting contract with Clark Kent as Media Coordinator for a monthly fee of
CAD$2,250 plus GST. We issued 90,000 common shares to the consultant at a deemed
price of $0.34. Based on the milestones listed in the contract, Mr. Kent can be
eligible to receive up to a total of 472,500 common shares of our Company. On
June 18, 2014, the consulting agreement was amended so that Mr. Kent can be
eligible to receive up to a total of 1,350,000 common shares of our Company.
Based on achievement of the milestones listed in the amended contract, we issued
to Mr. Kent 135,000 common shares at a deemed price of $0.14 on July 14, 2014.
This agreement was terminated on February 4, 2015.
On April 24, 2014 we entered into a one year consulting
contract with Don Shaxon as Ontario Operations Manager for a monthly fee of
CAD$3,375 plus GST. Upon signing of the contract we issued to Mr. Shaxon 90,000
common shares at a deemed price of $0.34. Based on the milestones listed in the
contract, Mr. Shaxon can be eligible to receive up to a total of 472,500 common
shares of our Company. We amended the consulting agreement on June 18, 2014,
following which Mr. Shaxon became eligible to receive up to a total of 1,350,000
common shares of our Company. Based on achievement of the milestones listed in
the amended contract, we issued to Mr. Shaxon 135,000 common shares at a deemed
price of $0.14 on July 14, 2014. The agreement was terminated on June 16, 2015.
On April 24, 2014 we entered into a one year consulting
contract with 490072 Ontario Ltd. operating as HEC Group, for the services of
Greg Boone as Human Resources Manager. Upon signing of the contract we issued
90,000 common shares at a deemed price of $0.34. Based on the milestones listed
in the contract, Mr. Boone or his company can be eligible to receive up to a
total of 472,500 common shares of our Company. We amended the agreement on June
18, 2014, further to which Mr. Boone became eligible to receive up to a total of
1,350,000 common shares of our Company. Based on achievement of the milestones
listed in the amended contract, the Company issued Mr. Boone 135,000 common
shares at a deemed price of $0.14 on July 14, 2014. This agreement was
terminated on February 4, 2015.
On April 24, 2014 we entered into a one year consulting
contract with Jason Springett as Master Grower for Ontario Operations for a
monthly fee of $3,375 plus GST. Upon signing of the contract we issued 90,000
common shares at a deemed price of $0.34. Based on the milestones listed in the
contract, Mr. Springett was eligible to receive up to a total of 472,500 common
shares of the Company. We amended the agreement on June 18, 2014 further to
which Mr. Springett became eligible to receive up to a total of 1,350,000 common
shares of our Company. Based on achievement of the milestones listed in the
amended contract, we issued Mr. Springett 135,000 common shares at a deemed
price of $0.14 on July 14, 2014. This agreement was terminated on June 16, 2015.
On April 24, 2014 we entered into a one year consulting
contract with 2342878 Ontario Inc. for the services of Chris Hornung as
Assistant Operations Manager. Upon signing of the contract we issued 90,000
common shares to the consultant at a deemed price of $0.34. Subject to
achievement of the milestones listed in the contract, Mr. Hornung or his company
were eligible to receive up to a total of 472,500 common shares of our Company.
Mr. Hornung resigned on July 14, 2014 prior to the accrual of additional
compensation. The 90,000 common shares of the Company that were issued have been
returned back to treasury on September 24, 2014.
On April 30, 2014, 200,000 warrants from previous private
placements were exercised into 200,000 common shares of our Company for net
proceeds of $40,000.
On May 3, 2014 we entered into a one year consulting contract
with B. Mullan and Associates for the services of Brian Mullan as Security
Consultant. Upon signing of the contract we issued to the consultant 45,000
common shares at a deemed price of $0.28. Subject to achievement of the
milestones listed in the contract, Mr. Mullan or his company are be eligible to
receive up to a total of 225,000 common shares of our Company. Subsequently, we
issued an additional 45,000 common shares to the consultant at a deemed price of
$0.14 on July 14, 2014. This agreement was terminated on February 4, 2015.
On May 28, 2014, our LOI with Lexaria was replaced by a
definitive joint venture agreement (the Burlington Joint Venture) to establish
a medical marijuana production facility under the MMPR at our planned
Burlington, Ontario location. We received municipal zoning approval for the
proposed site in July, 2014. Design and construction of the proposed facility
was anticipated to cost approximately $3,000,000, and we would be responsible
for $1,350,000 of this cost. Unable to estimate when a production license might
be granted by Health Canada, the joint venture sought assurances from Health
Canada prior to commencement of construction. In the event that Health Canada
did not grant a production license by May 27, 2015, the Burlington Joint Venture
was to terminate.
On May 29, 2014, we accepted and received gross proceeds of
$20,000 for the exercise of 200,000 warrants at $0.10 each into 200,000 common
shares of our Company.
On June 2, 2014, we signed a 30 day contract for $10,000 with
TDM Financial to provide services for original video production, original
coverage, network placement of video and article, article and video syndication,
email distribution, and reporting.
On June 9. 2014, Pursuant to our 12 month marketing agreement
with Agoracom dated February 27, 2014, we made a second quarter payment to
Agoracom of $12,500 plus GST paid by the issuance of 72,917 common shares of the
Company at a market price of $0.18 per share.
On July 1, 2014, we entered into a one year services agreement
with TDM Financial for $120,000 payable in common shares of our Company. TDM
Financial will provide marketing solutions and strategies to our Company. Upon
the signing of the contract with TDM Financial, we issued 750,000 common stock
of our Company at a deemed price of $0.16.
On July 23, 2014, 252,000 warrants from previous private
placements were exercised into 252,000 common shares of our Company for net
proceeds of $25,200.
On August 1, 2014 we entered into a three month Investor
Relations and Marketing Agreement with Neil Blake with a monthly fee of
CAD$2,500.
On August 1, 2014, through our wholly owned subsidiary Thor
Pharma Corp. we signed an extension to the letter of intent with 1475714 ONTARIO
INC. and Lexaria Canpharm Corp. (a subsidiary of Lexaria) to secure a 5 year
lease on the Burlington, Ontario facility for our Burlington Joint Venture. In
consideration of the extension, on August 5, 2014, we issued 118,416 of our
common shares of to the lessor at a deemed price of $0.19 per share.
On
September 16, 2014, our joint venture with the Green Canvas Ltd. made an
application to Health Canada under the Marihuana for Medical Purposes
Regulations (MMPR) to obtain a medical marijuana production license for a
proposed facility located near Regina, Saskatchewan. Pursuant to the joint
venture agreement, if a Heath Canada production license was not received by the
first anniversary date of the agreement (February 28, 2015) our company would
have no further obligations under the joint venture. If a license was obtained
by February 28, 2015, we would be responsible to pay to the GCL $250,000 and 3,000,000 common
shares in consideration of an additional 2% interest in the joint venture.
On September 18, 2014 we announced that we had provided notice
to WOM alleging default under the terms of the joint venture agreement for,
among other things, WOMs failure to provide an accounting and financial
information for the use of proceeds paid into the joint venture. On October 16,
2014 we entered into a termination and settlement agreement, dated effective
October 14, 2014, with WOM and Mathew Chadwick (WOMs representative and our
former director), pursuant to which we relinquished our 31% interest in the
joint venture and exchanged mutual releases with WOM and Mr. Chadwick. Mr.
Chadwick resigned from our board of directors and as an officer of our company,
and WOM returned for cancellation 15,127,287 of our common shares that had been
issued to it. Given the foregoing, all relationships between the parties,
including but not limited to the joint venture, have been terminated. No
production license under the MMPR had been awarded or was forthcoming at the
time of termination.
On October 16, 2014, we entered into a termination and
settlement agreement, dated effective October 14, 2014, with World of Marihuana
Productions Ltd. (WOM) and Mathew Chadwick (WOMs representative and our
former director), pursuant to which we relinquished our 31% interest in the
joint venture and exchanged mutual releases with WOM and Mr. Chadwick. Mr.
Chadwick resigned from our board of directors and as an officer of our company,
and WOM returned for cancellation 15,127,287 of our common shares that had been
issued to it. Given the foregoing, all relationships between the parties,
including but not limited to the joint venture, have been terminated. No
production license under the MMPR had been awarded or was forthcoming at the
time of termination.
On November 3, 2014, the Company granted 2,100,000 stock
options to directors, officers and consultants of the Company, vesting
immediately with an exercise price of $0.10, expiring November 3, 2019.
On November 18, 2014, the Company granted 100,000 stock options
to a consultant of the Company, vesting immediately with an exercise price of
$0.10, expiring November 18, 2019.
On January 30, 2015, we closed the first tranche of a private
placement of 1,665,000 units at a price of CAD$0.06 per unit for gross proceeds
of US$79,920, CAD$99,900. Each Unit consists of one common share of the Company
and full non-transferable Share purchase warrant. Each Warrant will be
exercisable into one further Share at a price of US$0.10 per Warrant Share at
any time until the close of business on the day which is 24 months from the date
of issue of the Warrant, and thereafter at a price of US$0.15 per Warrant Share
at any time until the close of business on the day which is 36 months from the
date of issue of the Warrant.
On February 6, 2015, the Companys Board has appointed Bal
Bhullar as a Director of the Company. Ms. Bhullar has been and continues to be
the Chief Financial Officer of the Company since October 9, 2009.
February 6, 2015, the Board of Directors accepted the
resignation of John Thomas as Director of the Company.
On February 9, 2015, Enertopia announced the launch of a new
product line V-Love
TM
for womens sexual pleasure. V-Love
TM
is a brand new water based, silky smooth fragrance free personal
lubricant and intimate gel especially designed for women.
On March 12, 2015, the Company closed its final tranche of a
private placement of 590,000 units at a price of CAD$0.06 per unit for gross
proceeds of CAD$35,400. Each unit consists
of one common share of the
Company and one non-transferable share purchase warrant, each full warrant
entitling the holder to purchase one additional common share of the Company for
a period of 36 months from the date of issuance, at a purchase price of US$0.10
during the first 24 months and at US$0.15 after 24 months. A cash finders fee
of CAD$2,832 and 47,200 full broker warrants that expire on March 12, 2018 was
paid to Canaccord Genuity.
In May, 2015, V-Love
TM
was available to the retail
market for purchase in stores and at various events.
On June 11, 2015, we entered into a mutual Termination
Agreement with The Green Canvas Ltd. pursuant to which we terminated our
relationship and relinquished our 49% interest in the joint venture to establish
a medical marijuana production facility near Regina, Saskatchewan. In
consideration of the termination, The Green Canvas returned for cancellation
6,400,000 shares of our common stock previously issued to GCL.
On June 11, 2015, we entered into a Letter of Intent dated June
10, 2015 with Shaxon Enterprises Ltd. to sell our 51% interest in our Burlington
Joint Venture with Lexaria Corp., including our interest in MMPR application
number 10QMM0610 for the proposed Burlington, Ontario production
facility. The sale would be completed by the sale of our wholly owned
subsidiary, Thor Pharma Corp.
Subsequent to the LOI with Shaxon Enterprises Ltd., the
Burlington Joint Venture between Enertopia and Lexaria which was entered into on
May 28, 2014 was terminated due to the pending sale of the project. As a result
of the termination, 500,000 restricted and escrowed common shares of Lexaria
issued to our Company at a deemed price of $0.40 will be returned to treasury
and cancelled. The Enertopia and Lexaria Master Joint Venture Agreement entered
into on March 5, 2014 is still effective and governs the relationship between
the parties.
On June 26, 2015, we signed a Definitive agreement to sell our
wholly owned subsidiary, Thor Pharma Corp along with the MMPR application number
10MMPR0610. The Burlington MMPR license application will continue in the
application process under new ownership. Pursuant to the agreement, we received
a non-refundable $10,000 deposit and are entitled to receive up to $1,500,000 in
milestone payments upon the Burlington facility becoming licensed under the
MMPR. These monies would be split equally with Lexaria Corp. Notwithstanding the
foregoing, we can neither guarantee nor provide a meaningful time estimate
regarding the potential grant of a production license for the Burlington
facility.
On June 29, 2015, we that announced V-Love
TM
became
available at London Drugs Limited stores. V-Love
TM
is currently
available at London Drugs stores across Western Canada in the provinces of
British Columbia, Alberta, Saskatchewan and Manitoba.
On July 7, 2015 we announced that V-Love
TM
became
available for purchase online in Canada at Amazon.ca.
On July 30, 2015 we announced the launch of V-Love.co, our
product website for V-Love
TM
. As at August 31, 2016, with the
Companys strategic direction mostly being focused on natural resources and
technology relating to the resource sector, the health and wellness portion of
the business is discontinued.
On October 23, 2015, the Companys Board has appointed Kevin
Brown as a Director of the Company and Victor Lebouthillier as an advisor to the
Board of Directors.
On October 23, 2015, the Board of Directors accepted the
resignation of Donald Findlay as Director of the Company.
On October 23, 2015, we granted 1,850,000 stock options to
Directors, Executives and Consultants of the Company. The exercise price of the
stock options is $0.05, vested immediately, expiring October 23, 2020.
On December 16, 2015, extended two classes of warrants by two
years with all other terms and conditions remaining the same. We approved the
expiry extension from January 31, 2016 till January 31, 2018 on 2,167,160
warrants that remain outstanding from the non-brokered private placement that
closed on January 31, 2014. The Company approved the expiry extension from
February 13, 2016 till February 13, 2018 on 7,227,340 warrants that remain
outstanding from the non-brokered private placement that closed on February 13,
2014.
On February 4, 2016, the Companys Board has appointed Olivier
Vincent as an Advisor the Board of Directors and a consultant for a term of one
year and granted 100,000 stock options to Olivier Vincent. The exercise price of
the stock options is $0.05, vested immediately, expiring February 4, 2021. We
issued 100,000 common shares at a price of $0.05 per share on exercise of these
options.
On March 9, 2016, we closed a binding Letter of Intent to
acquire 100% of an established profitable private nutritional vitamin/supplement
company. The private nutritional vitamin/supplement company has been in business
for over 5 years showing good positive cash flows. All products are manufactured
by a GMP, NSF, FDA approved manufacturer in the United States. Enertopia has
agreed subject to further due diligence, review of financials and financing to a
total amount of $350,000 for the acquisition, with $300,000 due on the signing
of the Definitive Purchase Agreement. The Definitive Purchase Agreement is
expected to be completed before the end of April. The Company did not further
pursue this.
On April 21, 2016, Enertopia has signed a binding letter of
intent with a to enter into negotiations to effect the optional acquisition of
certain placer mining claims (the Claims) in Nevada covering approximately
2,560 acres from S P W Inc. S P W Inc. holds the Claims directly (Underlying
Owner). Upon the closing date of the transaction (the Effective Date) S P W
Inc. will have the right to transfer, option, sell or assign the Claims to
Enertopia. The Placer mining claims and any underlying agreements will be acquired by
Enertopia through a mineral property option agreement, an assignment agreement
or an asset acquisition (the Transaction).
On May 12, 2016 Enertopia has signed the Definitive Agreement
with the Vendor respecting the option to purchase a 100% interest in
approximately 2,560 acres of placer mining claims in Churchill, Lander and Nye
Counties Nevada, USA. These placer mining claims are subject to a 1.5% NSR from
commercial production with the Company able to buy back the NSR at the rate of
$500,000 per 0.5% NSR.
On May 20, 2016, Enertopia closed the first tranche of a
private placement of 6,413,333 units at a price of CAD$0.015 per unit for gross
proceeds of US$74,074 (CAD$96,200). Each Unit consists of one common share of
the Company and full non-transferable Share purchase warrant (each whole
warrant, a Warrant). Each Warrant will be exercisable into one further Share
(a Warrant Share) at a price of US$0.05 per Warrant Share at any time until
the close of business on the day which is 18
months
from the date of
issue of the Warrant, and thereafter at a price of US$0.10 per Warrant Share at
any time until the close of business on the day which is 36
months
from
the date of issue of the Warrant.
On June 8, 2016, Enertopia closed its final tranche of a
private placement of 3,016,667 units a price of CAD$0.015 per unit for gross
proceeds of US$34,390 (CAD$45,250). Each Unit consists of one common share of
the Company and full non-transferable Share purchase warrant (each whole
warrant, a Warrant). Each Warrant will be exercisable into one further Share
(a Warrant Share) at a price of US$0.05 per Warrant Share at any time until
the close of business on the day which is 18
months
from the date of
issue of the Warrant, and thereafter at a price of US$0.10 per Warrant Share at
any time until the close of business on the day which is 36
months
from
the date of issue of the Warrant. A cash finders fee of CAD$3,300 and 286,666
full broker warrants that expire June 8, 2019 was paid to Canaccord Genuity,
Leede Jones Gable, PI Financial and Mackie Research.
On August 9, 2016, we closed the first tranche of a private
placement of 4,500,000 units at a price of CAD$0.035 per unit for gross proceeds
of CAD$157,500. Each unit consists
of one common share of our Company and
one non-transferable share purchase warrant, each full warrant entitling the
holder to purchase one additional common share of our Company for a period of 24
months from the date of issuance, at a purchase price of US$0.07.
On August 10, 2016, we retained a private consulting firm to
assist with mergers, acquisitions and market awareness for a 12 month contract.
The consulting firm operates a resource holding company that has been active in
acquiring out of favor mining assets over the past several years. It also
provides breaking news, commentary and analysis on listed companies. We engaged
and paid the consulting firm USD$75,000.
On August 15, 2016 binding Letter of Intent was signed by us
and Genesis Water Technologies, Inc. ("GWT") with regard to the acquisition by
Enertopia (the "Acquisition") of the exclusive worldwide licensing rights (the
"Licensing Rights") of all of the technology used in the process of recovering
and extraction of battery grade lithium carbonate powder Li2CO3 grading 99.5% or
higher purity from brine solutions (the "Technology") and covered under patent
pending process #XXXXXX (the "Pending Patent"). On August 15, 2016, we issued
250,000 common shares at an exercise price of $0.05 per share as per the binding
LOI signed with Genesis Water Technologies Inc.
On August 31, 2016, with the Companys strategic direction
mostly being focused on natural resources and technology relating to the
resource sector, the health and wellness portion of the business is
discontinued.
On September 19, 2016, we entered into a one year Investor
Relations Consulting agreement with Duncan McKay. Based on the terms of the
agreement, Mr. McKay can earn up to a maximum of 10% commissions on capital
raised. We issued 800,000 stock options with an exercise price of $0.07.
On September 23, 2016, we closed the final tranche of a private
placement of 3,858,571 units at a price of CAD$0.035 per unit for gross proceeds
of CAD$135,050. Each unit consists of one common share of our Company and one
non-transferable share purchase warrant, each full warrant entitling the holder
to purchase one additional common share of our Company for a period of 24 months
from the date of issuance, at a purchase price of US$0.07. A cash finders fee
of CAD$3,300 and 286,666 full broker warrants that expire June 8, 2019 was paid
to Canaccord Genuity and Leede Jones Gable.
On October 7, 2016, we issued 175,000 common shares of our
Company and paid $5,000 to comply with the Definitive Agreement signed May 12,
2016.
On December 6, 2016, we signed a Definitive Commercial
Agreement with Genesis Water Technologies with regard to the acquisition of
exclusive licensing rights of the technology as outlined in the agreement.
On January 20, 2017, the Company closed the first tranche of a
private placement of 1,000,000 units at a price of CAD$0.04 per unit for gross
proceeds of CAD $40,000. Each unit consists of one common share of the Company
and one-nontransferable share purchase warrant, each full warrant entitling the
holder to purchase one additional common share of the Company for a period of 24
months from the date of issuance, at a purchase price of $0.06. A cash finders
fee of CAD$800 and 20,000 full broker warrants that expire January 20, 2019 was
paid to Leede Jones Gable Inc.
On January 20, 2017, the Company granted 1,535,000 stock
options to directors, officers and consultant of the Company with an exercise
price of $0.07 which vested immediately, expiring January 20, 2022.
On January 31, 2017, the Company granted 1,500,000 stock
options to consultant of the Company with an exercise price of $0.07 vested
immediately, expiring January 31, 2022.
On February 28, 2017, the Company closed the first tranche of a
private placement of 4,250,000 units at a price of CAD$0.04 per unit for gross
proceeds of CAD $170,000. Each unit consists of one common share of the Company
and one-nontransferable share purchase warrant, each full warrant entitling the
holder to purchase one additional common share of the Company for a period of 24
months from the date of issuance, at a purchase price of $0.06. A cash finders
fee of CAD$11,100 and 227,500 full broker warrants that expire February 28, 2019
was paid to Leede Jones Gable Inc., Canaccord Genuity and Duncan McKay.
On February 28, 2017, the Company signed a Letter of Engagement
with Adam Mogil and issued 1,000,000 warrant options to convert to 1,000,000
common shares to Adam Mogil to provide corporate services. The warrants have an
exercise price of $0.09 and expire August 28, 2017. These warrant options
expired without being exercised.
On April 21, 2017, the Company issued 95,500 shares for gross
proceeds of $5,685 from the exercise of warrants of previous financings at $0.05
and $0.07.
On April 30, 2017 the Company issued 166,500 shares for gross
proceeds of $11,655 from the exercise of warrants from a previous financing at
$0.07.
On April 30, 2017, the Company closed the first and final
tranche of a private placement of 3,224,000 units at a price of CAD$0.09 per
unit for gross proceeds of CAD $290,160. Each unit consists of one common share
of the Company and one-nontransferable share purchase warrant, each full warrant
entitling the holder to purchase one additional common share of the Company for
a period of 24 months from the date of issuance, at a purchase price of $0.12. A
cash finders fee of CAD$20,736 and 230,400 full broker warrants that expire
April 28, 2019 was paid to Leede Jones Gable and Canaccord Genuity.
On May 5, 2017, the Company granted 500,000 stock options to
consultant of the Company with an exercise price of $0.10 vested immediately,
expiring May 5, 2022.
On May 5, 2017, the Company terminated the Definitive Agreement
dated May 12, 2016 with the Vendor on the Nevada Lithium brine properties.
On July 31, 2017, the Company announced the resignation of CFO
and Director Bal Bhullar, the appointment of Kristian Ross as director and
president Robert McAllister assuming the interim duties of CFO.
On August 14, 2017 the Company announced the appointment of
Davidson and Company, LLP, Chartered Professional Accountants as its new
independent registered auditing firm which replaced MNP LLP independent
registered auditing firm.
On August 30, 2017 the Company announced the Staking of lode
and placer claims covering approximately 160 acres for Lithium in Clayton
Valley, NV.
Our Current Business
We are a development stage company pursuing business
opportunities in diverse sectors natural resource and technology used in the
resource sector currently specific to the extraction, recovery and concentration
of Lithium.
Mineral Property
Lithium Property
Enertopia signed the Definitive
Agreement on May 12,
2016 respecting the option to purchase a 100%
interest in approximately 2,560 acres of placer mining claims in Churchill,
Lander and Nye Counties Nevada, USA. These placer mining claims are subject to a
1.5% NSR from commercial production with the Company able to buy back the NSR at
the rate of $500,000 per 0.5% NSR.
Purchase Price for the Claims
The consideration payable by Enertopia to the Optionor.
pursuant to this Offer shall consist of:
|
(a)
|
paying $7,000 on signing the Offer; (paid)
|
|
|
|
|
(b)
|
paying $12,000 on signing of the definitive agreement
(the Agreement) and issuing 3,500,000 common shares in the capital stock
of Enertopia as soon as practicable following the execution of the
Agreement, (paid)
|
|
|
|
|
(c)
|
paying an optional $12,000 on or before the six month
anniversary of the Agreement (paid $5,000 and issued 175,000 common shares
of the Company),
|
|
|
|
|
(d)
|
paying an optional $22,500 on or before the one year
anniversary of the Agreement (not paid, property returned to
vendor),
|
|
|
|
|
(e)
|
issuing additional common shares in the capital of the
Optionee, as constituted on the date hereof, to be issued to the Optionor
pursuant to the discovery of a Lithium enriched brine with an average
300ppm Li over 100 foot vertical interval in the enriched lithium brine in
the Central Nevada Brine Project. 1,000,000 Bonus Shares will be issued
per each successful property discovery meeting the foregoing criteria up
to a maximum 3,000,000 Bonus Shares.
|
NSR
There is a 1.5% Net Smelter Return
(NSR) payable on all Placer mining claims from commercial production to be
paid according to the terms and conditions as set forth in the Transaction
Documents. The NSR can be re purchased for $500,000 per every 0.5% .
On
May 5, 2017
, the Company terminated the Definitive
Agreement dated May 12, 2016 with the Vendor on the Nevada Lithium brine
properties.
On
August 30, 2017
, the Company announced the staking of
Lode and Placer claims of BLM lands in Esmeralda county Nevada covering
approximately 160 Acres subject to adjustment. The Company has an 100% interest
in the lands and is only responsible for the yearly maintenance fees to the BLM
(estimated to be $2,635) and County (estimated to be $212) due November 1, 2018
to keep its 100% interest. During the year ending August 31, 2018, the Company
paid $2,859 in maintenance fees. The claims are in good standing until August
31, 2019. As at August 31, 2018, the Company has incurred BLM and county costs
of $8,874 and associated surface sampling, assaying and 3
rd
party lab
testing of $7,329.
Access to the property can be achieved by paved Hwy 265 to
Silver Springs, NV or paved Hwy from north of Goldfields, NV. Access is then by
graded gravel road. The last 1.8 miles to the property is by trail road using
4x4 vehicle. The property is covered with extensive outcroppings of the
Esmeralda Formation. Power transmission line is within ½ mile of the northern
property boundary. Water would have to be trucked in or by pipe line if a
processing facility was built onsite. Of particular interest is a section of
green, volcanoclastic, evaporate-rich mudstone strata known as the Frontera
Verde zone that host lithium of potential economic significance. The Frontera
Verde Zone is exposed over approximately 100 acres of the northern two thirds of
the property, and underlies the rest of the property at shallow depths. Third party drilling adjacent to the west
and eastern boundaries of the property supports this analysis. The property is
without known reserves and the current work programs are exploratory in
nature.
Current exploration is at the grass roots stage with surface
sampling and two small 250 pound bulk samples being taken in 2017. The Company
completed additional laboratory testing of synthetic brines. The Company
continues to evaluate off the shelf technology to determine the preferred
methods for potentially producing commercial products from the processing of
synthetic brines. The Company is in the planning stage for completing a diamond
drill program during the 2019 fiscal year that will provide an 43-101 lithium
resource for the project.
Property Map:
Esmeralda County Lode and Placer Claims:
Claim Name
|
Claim Type
|
BLM Serial #
|
STEVE 1
|
PLACER
|
NMC 1148769
|
STEVE 2
|
PLACER
|
NMC 1148770
|
STEVE 3
|
PLACER
|
NMC 1148771
|
STEVE 4
|
PLACER
|
NMC 1148772
|
STEVE 5
|
PLACER
|
NMC 1148773
|
STEVE 6
|
PLACER
|
NMC 1148774
|
STEVE 7
|
PLACER
|
NMC 1148775
|
STEVE 8
|
PLACER
|
NMC 1148776
|
DAN 1
|
LODE
|
NMC 1148760
|
DAN 2
|
LODE
|
NMC 1148761
|
DAN 3
|
LODE
|
NMC 1148762
|
DAN 4
|
LODE
|
NMC 1148763
|
DAN 5
|
LODE
|
NMC 1148764
|
DAN 6
|
LODE
|
NMC 1148765
|
DAN 7
|
LODE
|
NMC 1148766
|
DAN 8
|
LODE
|
NMC 1148767
|
DAN 9
|
LODE
|
NMC 1148768
|
LITHIUM TECHNOLOGY
On August 15, 2016, a binding Letter of Intent (LOI) was
signed by Enertopia and Genesis Water Technologies, Inc. ("GWT") with regard to
the acquisition by Enertopia of the exclusive worldwide licensing rights (the
"Licensing Rights") by Enertopia of all of the technology used in the process of
recovering and extraction of battery grade lithium carbonate powder Li2CO3
grading 99.5% or higher purity from brine solutions.
Upon the execution of this LOI, Enertopia issued 250,000 common
shares valued at $12,500 to GWT.
On December 6, 2016, and amended on October 9, 2017, Enertopia
and GWT signed a Definitive Commercial Agreement with regard to the acquisition
by Enertopia of the exclusive licensing rights in the United States of America,
Argentina, Bolivia and Chile of all of the technology used in the process of
recovering and extraction of battery grade lithium carbonate powder Li2CO3
grading 99.5% or higher purity from brine solutions.
The following are key points of the terms of the formal
Definitive Commercial Agreement:
|
a)
|
Enertopia to pay within 30 days to GWT $10,000 (paid) for
the bench testing of four lithium brine samples to confirm the June 2016
feasibility report. During the year ended August 31, 2018, the Company
signed a Lab Testing Service Agreement with GWT and paid $204,190 for the
purpose of additional bench testing services plus materials costs of
$8,998. Within 30 days of successful independent 3
rd
party lab
testing of the bench test results, Enertopia will issue 250,000 common
shares to GWT.
|
|
b)
|
Upon successful test pilot facility results, start the
construction of commercial Lithium recovery production facility.
|
|
c)
|
Upon receipt of a patent for the process for extracting
lithium from wastewater, Enertopia will issue 250,000 common shares to
GWT.
|
|
d)
|
GWT has granted Enertopia exclusive rights and
relicensing rights to the usage of GWTs patent pending technology
covering United States of America, Argentina, Bolivia and Chile as per the
Commercialization Agreement in return for 10 per cent of net sales royalty
payments for battery grade Lithium Carbonate Li2CO3 produced.
|
|
e)
|
In order to maintain its exclusive rights, Enertopia will
need to make the following minimal payments to GWT on the anniversary of
bench testing achieving 99.5% battery grade Li2CO3 recovery verified by
independent laboratory testing:
|
|
a.
|
On or before the first anniversary, the greater of 10 per
cent of Enertopia net Lithium Carbonate Li2CO3 sales from brine sources or
$50,000;
|
|
b.
|
On or before the second anniversary, the greater of 10
per cent of Enertopia net Lithium Carbonate Li2CO3 sales from brine
sources or $150,000;
|
|
c.
|
On or before the third anniversary annually until the
seventh anniversary, the greater of 10 per cent of Enertopia net Lithium
Carbonate Li2CO3 sales from brine sources or $200,000;
|
|
d.
|
Right of first refusal to renew exclusive rights and
relicensing rights for another 10 years after the first seven year
licensing period on the same net sales terms as those of 2023 or $250,000
per annum.
|
On July 4, 2018, the Company provided GWT with a formal notice
of termination of the commercialization agreement dated December 6, 2016 and as
amended on October 9, 2017. As a result, the Company wrote off capitalized costs
of $12,500.
Genesis Water Technologies Ltd. (GWT) is a USA based
manufacturer of advanced, innovative and sustainable treatment solutions for
applications in process water, drinking water, water reuse and waste water for
the energy, agriculture processing, industrial, municipal infrastructure, and
building/hotels sectors. GWT will provide management and technical expertise and
access to its patent pending ENERLET for exclusive USA, Argentina, Bolivia and
Chile for license by the Company.
The ENERLET process consists of six main steps 1) Clarification
/ filtration, 2) Electrocoagulation, 3) Ion-exchange, 4) Evaporation, 5)
Rehydration / precipitation, 6) Drying
The company has had a 3
rd
party laboratory conduct
testing on the two bulk samples collected by using various water rock ratios
and varying Ph levels. The data from these technical testing programs will be
the basis for the creation of the synthetic brines for the current bench testing
program.
Summary
The continuation of our business is dependent upon obtaining
further financing, a successful program of development, and, finally, achieving
a profitable level of operations. The issuance of additional equity securities
by us could result in a significant dilution in the equity interests of our
current stockholders. Obtaining commercial loans, assuming those loans would be
available, will increase our liabilities and future cash commitments.
There are no assurances that we will be able to obtain further
funds required for our continued operations. As noted herein, we are pursuing
various financing alternatives to meet our immediate and long-term financial
requirements. There can be no assurance that additional financing will be
available to us when needed or, if available, that it can be obtained on
commercially reasonable terms. If we are not able to obtain the additional
financing on a timely basis, we will be unable to conduct our operations as
planned, and we will not be able to meet our other obligations as they become
due. In such event, we will be forced to scale down or perhaps even cease our
operations. There is significant uncertainty as to whether we can obtain
additional financing.
Employees
We primarily used the services of sub-contractors and
consultants for our intended business operations. Our technical consultant is
Mr. McAllister, our president and a director.
We entered into a consulting agreement with Mr. Robert
McAllister on December 1, 2007. During the term of this agreement, Mr.
McAllister is to provide corporate administration and consulting services, such
duties and responsibilities to include provision of oil and gas industry
consulting services, strategic corporate and financial planning, management of
the overall business operations of the Company, and supervising office staff and
exploration and oil & gas consultants. Mr. McAllister is reimbursed at the
rate of $2,000 per month. On December 1, 2008, the consulting fee was increased
to $5,000 per month. We may terminate this agreement without prior notice based
on a number of conditions. Mr. McAllister may terminate the agreement at any
time by giving 30 days written notice of his intention to do so. Effective March
1, 2014, the Company entered into a new Management Consulting Agreement
replacing the original agreement with a consulting fee of $6,500 plus GST per
month. Effective July 1, 2017, the Company entered into a new Management
Consulting Agreement replacing the March 1, 2014 agreement with a consulting fee
of $3,500 plus GST per month. On July 31, 2017 Mr. McAllister agreed to be
intern CFO until such time as a replacement could be sourced.
We do not expect any material changes in the number of
employees over the next 12 month period. We do and will continue to outsource
contract employment as needed.
Research and Development
We have incurred $251,360 in research and development
expenditures over the last two fiscal years.
Our business operations are subject to a number of risks and
uncertainties, including, but not limited to those set forth below:
Risks Associated with Our Business
Our company has no operating history and an evolving
business model. which raises doubt about our ability to achieve profitability or
obtain financing.
Our Company has no operating history. Moreover, our business
model is still evolving, subject to change, and will rely on the cooperation and
participation of our joint venture partners. Our Company's ability to continue
as a going concern is dependent upon our ability to obtain adequate financing
and to reach profitable levels of operations has and we no proven history of
performance, earnings or success. There can be no assurance that we will achieve
profitability or obtain future financing.
Uncertain demand for mineral resources sector may cause our
business plan to be unprofitable.
Demand for mineral resources is based on the world economy and
new technologies. Current lithium demand exceeds available supply due to the
rapid increase in lithium batteries in portable electronics and the growing
electric vehicle markets. There can be no assurance that current supply and
demand factors will remain the same or that projected supply and demand factors
will actually come to pass from 3
rd
party projections that are
currently believed to be true and accurate. There can be no assurance that new
disruptive technologies will replace lithium as a significant component in
battery storage over time.
Conflicts of interest between our company and our directors
and officers may result in a loss of business opportunity.
Our directors and officers are not obligated to commit their
full time and attention to our business and, accordingly, they may encounter a
conflict of interest in allocating their time between our future operations and
those of other businesses. In the course of their other business activities,
they may become aware of investment and business opportunities which may be
appropriate for presentation to us as well as other entities to which they owe a
fiduciary duty. As a result, they may have conflicts of interest in determining
to which entity a particular business opportunity should be presented. They may
also in the future become affiliated with entities, engaged in business
activities similar to those we intend to conduct.
In general, officers and directors of a corporation are
required to present business opportunities to a corporation if:
|
the corporation could financially undertake the
opportunity;
|
|
the opportunity is within the corporations
line of business; and
|
|
it would be unfair to the corporation and its
stockholders not to bring the opportunity to the attention of the
corporation.
|
We plan to adopt a code of ethics that obligates our directors,
officers and employees to disclose potential conflicts of interest and prohibits
those persons from engaging in such transactions without our consent. Despite
our intentions, conflicts of interest may nevertheless arise which may deprive
our company of a business opportunity, which may impede the successful
development of our business and negatively impact the value of an investment in
our company.
The speculative nature of our business plan may result in
the loss of your investment.
Our operations are in the start-up or stage only, and are
unproven. We may not be successful in implementing our business plan to become
profitable. There may be less demand for our services than we anticipate. There
is no assurance that our business will succeed and you may lose your entire
investment.
Changing consumer preferences may cause our planned products
to be unsuccessful in the marketplace.
The decision of a potential client to undergo an environmental
audit or review may be based on ethical or commercial reasons. In some
instances, or with certain businesses, there may be no assurance that an
environmental review will result in any cost savings or increased revenues. As
such, unless the ethical consideration is also a material factor, there may be
no incentive for such businesses to undertake an environmental review. Changes
in consumer and commercial preferences, or trends, toward or away from
environmental issues may impact on businesses decisions to undergo
environmental reviews.
General economic factors may negatively impact the market
for our planned products.
The willingness of businesses to spend time and money on energy
efficiency may be dependent upon general economic conditions; and any material
downturn may reduce the likelihood of businesses incurring costs toward what
some businesses may consider a discretionary expense item.
A wide range of economic and logistical factors may
negatively impact our operating results.
Our operating results will be affected by a wide variety of
factors that could materially affect revenues and profitability, including the
timing and cancellation of customer orders and projects, competitive pressures
on pricing, availability of personnel, and market acceptance of our services. As
a result, we may experience material fluctuations in future operating results on
a quarterly and annual basis which could materially affect our business,
financial condition and operating results.
Changes in environmental regulations may have an impact on
our operations
We believe that we currently comply with existing environmental
laws and regulations affecting our proposed operations. While there are no
currently known proposed changes in these laws or regulations, significant
changes have affected the industry in the past and additional changes may occur
in the future. The company is subject to the Bureau of Land Management (BLM),
State and potentially other government agencies with respect to its lithium
brine business.
Our operations may be subject to environmental laws,
regulations and rules promulgated from time to time by government. In addition,
certain types of operations require the submission and approval of environmental
impact assessments. Environmental legislation is evolving in a manner that means
stricter standards and enforcement. Fines and penalties for non-compliance are
more stringent. Environmental assessments of proposed projects carry a
heightened degree of responsibility for companies, directors, officers and
employees. The cost of compliance with changes in governmental regulations has
potential to reduce the profitability of operations. We intend to comply with
all environmental regulations in the United States and Canada.
Loss of consumer confidence in our company or in our
industry may harm our business.
Demand for our services may be adversely affected if consumers
lose confidence in the quality of our services or the industrys practices.
Adverse publicity may discourage businesses from buying our services and could
have a material adverse effect on our financial condition and results of
operations. Various factors may adversely impact our reputation, including
product quality inconsistencies or contamination resulting in product recalls.
Reputational risks may also arise from our third parties labour standards,
health, safety and environmental standards, raw material sourcing, and ethical
standards. We may also be the victim of product tampering or counterfeiting or
grey imports. Any litigation, disputes on tax matters and pay structures may
subject us to negative attention in the press, which can damage reputation.
The failure to secure customers may cause our operations to
fail.
We currently have no long-term agreements with any customers.
Many of our sales may be on a onetime basis. Accordingly, we will require new
customers on a continuous basis to sustain our operations. Risk of material
impact on Group growth and profit of consumer led slowdown in key developing
markets, exacerbated by increasing currency volatility. A variety of factors may
adversely affect our results of operations and financial condition during
periods of economic uncertainty or instability, social or labour unrest or
political upheaval in the markets in which we operate. Such periods may also
lead to government actions, such as imposition of martial law, trade
restrictions, foreign ownership restrictions, capital, price or currency
controls, nationalization or expropriation of property or other resources, or
changes in legal and regulatory requirements and taxation regimes.
If we fail to effectively and efficiently advertise, the
growth of our business may be compromised.
The future growth and profitability of our business will be
dependent in part on the effectiveness and efficiency of our advertising and
promotional expenditures, including our ability to (i) create greater awareness
of our products, (ii) determine the appropriate creative message and media mix
for future advertising expenditures, and (iii) effectively manage advertising
and promotional costs in order to maintain acceptable operating margins. There
can be no assurance that we will experience benefits from advertising and
promotional expenditures in the future. In addition, no assurance can be given
that our planned advertising and promotional expenditures will result in
increased revenues, will generate levels of service and name awareness or that
we will be able to manage such advertising and promotional expenditures on a
cost-effective basis.
Our success is dependent on our unproven ability to attract
qualified personnel.
We depend on our ability to attract, retain and motivate our
management team, consultants and advisors. There is strong competition for
qualified technical and management personnel in the business sector, and it is
expected that such competition will increase. Our planned growth will place
increased demands on our existing resources and will likely require the addition
of technical personnel and the development of additional expertise by existing
personnel. There can be no assurance that our compensation packages will be
sufficient to ensure the continued availability of qualified personnel who are
necessary for the development of our business.
We have a limited operating history with losses and we
expect the losses to continue, which raises concerns about our ability to
continue as a going concern.
We have generated minimal revenues since our inception and
will, in all likelihood, continue to incur operating expenses with minimal
revenues until we are able to successfully develop our business. Our business
plan will require us to incur further expenses. We may not be able to ever
become profitable. These circumstances raise concerns about our ability to
continue as a going concern. We have a limited operating history and must be
considered in the start-up stage.
There is an explanatory paragraph to their audit opinion issued
in connection with the financial statements for the year ended August 31, 2018
with respect to their doubt about our ability to continue as a going concern. As
discussed in Note 2 to our financial statements for the year ended August 31,
2018, we have incurred a net loss of $650,055 for the year ended August 31, 2018
(net loss $801,166 for the year ended August 31, 2017) and as at August 31, 2018
has incurred cumulative losses of $13,891,818 that raises substantial doubt
about its ability to continue as a going concern. Our management has been able,
thus far, to finance the operations through equity financing and cash on hand.
There is no assurance that our company will be able to continue to finance our
company on this basis.
Without additional financing to develop our business plan,
our business may fail.
Because we have generated only minimal revenue from our
business and cannot anticipate when we will be able to generate meaningful
revenue from our business, we will need to raise additional funds to conduct and
grow our business. We do not currently have sufficient financial resources to
completely fund the development of our business plan. We anticipate that we will
need to raise further financing. We do not currently have any arrangements for
financing and we can provide no assurance to investors that we will be able to
find such financing if required. The most likely source of future funds
presently available to us is through the sale of equity capital. Any sale of
share capital will result in dilution to existing security-holders.
We may not be able to obtain all of the licenses necessary
to operate our business, which would cause our business to fail.
Our operations require licenses and permits from various
governmental authorities related to the establishment of our planned facilities,
to the production, storage and distribution of our products, and to the disposal
of waste. We believe that we will be able to obtain all necessary licenses and
permits under applicable laws and regulations for our operations and believe we
will be able to comply in all material respects with the terms of such licenses
and permits. However, such licenses and permits are subject to change in various
circumstances. There can be no guarantee that we will be able to obtain or
maintain all necessary licenses and permits.
Changes in health and safety regulation may result in
increased or insupportable financial burden on our company.
We believe that we currently comply with existing laws and
regulations affecting our product and operations. While there are no currently
known proposed changes in these laws or regulations, significant changes have
affected the industry in the past and additional changes may occur in the
future.
Our products and operations may be subject to unanticipated
regulations and rules promulgated from time to time by government, namely those
related to consumer health and safety which may render certain production
methods, ingredients, products or practices obsolete. The cost of compliance
with changes in governmental regulations has potential to reduce the viability
or profitability of our products or operations.
If we are unable to recruit or retain qualified personnel,
it could have a material adverse effect on our operating results and stock
price.
Our success depends in large part on the continued services of
our executive officers and third party relationships. We currently do not have
key person insurance on these individuals. The loss of these people, especially
without advance notice, could have a material adverse impact on our results of
operations and our stock price. It is also very important that we be able to
attract and retain highly skilled personnel, including technical personnel, to
accommodate our exploration plans and to replace personnel who leave.
Competition for qualified personnel can be intense, and there are a limited
number of people with the requisite knowledge and experience. Under these
conditions, we could be unable to recruit, train, and retain employees. If we
cannot attract and retain qualified personnel, it could have a material adverse
impact on our operating results and stock price.
If we fail to effectively manage our growth our future
business results could be harmed and our managerial and operational resources
may be strained.
As we proceed with our business plan, we expect to experience
significant and rapid growth in the scope and complexity of our business. We
will need to add staff to market our services, manage operations, handle sales
and marketing efforts and perform finance and accounting functions. We will be
required to hire a broad range of additional personnel in order to successfully
advance our operations. This growth is likely to place a strain on our
management and operational resources. The failure to develop and implement
effective systems, or to hire and retain sufficient personnel for the
performance of all of the functions necessary to effectively service and manage
our potential business, or the failure to manage growth effectively, could have
a materially adverse effect on our business and financial condition.
Risks Associated with the Shares of Our Company
Because we do not intend to pay any dividends on our shares,
investors seeking dividend income or liquidity should not purchase our
shares.
We have not declared or paid any dividends on our shares since
inception, and do not anticipate paying any such dividends for the foreseeable
future. We presently do not anticipate that we will pay dividends on any of our
common stock in the foreseeable future. If payment of dividends does occur at
some point in the future, it would be contingent upon our revenues and earnings,
if any, capital requirements, and general financial condition. The payment of
any common stock dividends will be within the discretion of our Board of
Directors. We presently intend to retain all earnings to implement our business
plan; accordingly, we do not anticipate the declaration of any dividends for
common stock in the foreseeable future.
Investors seeking dividend income or liquidity should not
invest in our shares.
Because we can issue additional shares, purchasers of our
shares may incur immediate dilution and may experience further dilution.
We are authorized to issue up to 200,000,000 shares. The board
of directors of our company has the authority to cause us to issue additional
shares, and to determine the rights, preferences and privileges of such shares,
without consent of any of our stockholders. Consequently, our stockholders may
experience more dilution in their ownership of our company in the future.
Other Risks
Trading on the OCTQB and CSE may be volatile and sporadic,
which could depress the market price of our common stock and make it difficult
for our stockholders to resell their shares.
Our common stock is quoted on the OTCQB electronic quotation
service operated by OTC Markets Group Inc.. Trading in stock quoted on the OTCQB
is often thin and characterized by wide fluctuations in trading prices, due to
many factors that may have little to do with our operations or business
prospects. This volatility could depress the market price of our common stock
for reasons unrelated to operating performance. Moreover, the OTCQB is not a
stock exchange, and trading of securities on the OTCQB is often more sporadic
than the trading of securities listed on a quotation system like Nasdaq or a
stock exchange like Amex. Accordingly, shareholders may have difficulty
reselling any of the shares.
Our stock is a penny stock. Trading of our stock may be
restricted by the Securities and Exchange Commissions penny stock regulations
which may limit a stockholders ability to buy and sell our stock.
Our stock is a penny stock. The Securities and Exchange
Commission has adopted Rule 15g-9 which generally defines penny stock to be
any equity security that has a market price (as defined) less than $5.00 per
share or an exercise price of less than $5.00 per share, subject to certain
exceptions. Our securities are covered by the penny stock rules, which impose
additional sales practice requirements on broker-dealers who sell to persons
other than established customers and accredited investors. The term
accredited investor refers generally to institutions with assets in excess of
$5,000,000 or individuals with a net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock
rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from the rules, to deliver a standardized risk disclosure
document in a form prepared by the Securities and Exchange Commission which
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 customers
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 customers confirmation. In addition, the penny stock rules
require that prior to a transaction in a penny stock not otherwise exempt from
these rules, the broker-dealer must make a special written determination that
the penny stock is a suitable investment for the purchaser and receive the
purchasers written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in and limit the marketability of our common stock.
The Financial Industry Regulatory Authority, or FINRA, has
adopted sales practice requirements which may also limit a stockholders ability
to buy and sell our stock.
In addition to the penny stock rules described above, FINRA
has adopted rules that require that in recommending an investment to a customer,
a broker-dealer must have reasonable grounds for believing that the investment
is suitable for that customer. Prior to recommending speculative low priced
securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customers financial status,
tax status, investment objectives and other information. Under interpretations
of these rules, FINRA believes that there is a high probability that speculative
low priced securities will not be suitable for at least some customers. FINRA
requirements make it more difficult for broker-dealers to recommend that their
customers buy our common stock, which may limit your ability to buy and sell our
stock and have an adverse effect on the market for our shares.
We believe that our operations comply, in all material
respects, with all applicable environmental regulations.
Our operating partners maintain insurance coverage customary to
the industry; however, we are not fully insured against all possible
environmental risks.
Any change to government regulation/administrative practices
may have a negative impact on our ability to operate and our
profitability.
The laws, regulations, policies or current administrative
practices of any government body, organization or regulatory agency in the
United States, Canada, or any other jurisdiction, may be changed, applied or
interpreted in a manner which will fundamentally alter the ability of our
company to carry on our business.
The actions, policies or regulations, or changes thereto, of
any government body or regulatory agency, or other special interest groups, may
have a detrimental effect on us. Any or all of these situations may have a
negative impact on our ability to operate and/or our profitably.
Because we can issue additional shares, purchasers of our
shares may incur immediate dilution and may experience further dilution.
We are authorized to issue up to 200,000,000 shares. The board
of directors of our company has the authority to cause us to issue additional
shares, and to determine the rights, preferences and privileges of such shares,
without consent of any of our stockholders. Consequently, our stockholders may
experience more dilution in their ownership of our company in the future.
Our by-laws contain provisions indemnifying our officers and
directors against all costs, charges and expenses incurred by them.
Our by-laws contain provisions with respect to the
indemnification of our officers and directors against all costs, charges and
expenses, including an amount paid to settle an action or satisfy a judgment,
actually and reasonably incurred by him, including an amount paid to settle an
action or satisfy a judgment in a civil, criminal or administrative action or
proceeding to which he is made a party by reason of his being or having been one
of our directors or officers.
Investors interests in our company will be diluted and
investors may suffer dilution in their net book value per share if we issue
additional shares or raise funds through the sale of equity securities.
Our constating documents authorize the issuance of 200,000,000
shares of common stock with a par value of $0.001. In the event that we are
required to issue any additional shares or enter into private placements to
raise financing through the sale of equity securities, investors interests in
our company will be diluted and investors may suffer dilution in their net book
value per share depending on the price at which such securities are sold. If we
issue any such additional shares, such issuances also will cause a reduction in
the proportionate ownership and voting power of all other shareholders. Further,
any such issuance may result in a change in our control.
Our by-laws do not contain anti-takeover provisions, which
could result in a change of our management and directors if there is a take-over
of our company.
We do not currently have a shareholder rights plan or any
anti-takeover provisions in our By-laws. Without any anti-takeover provisions,
there is no deterrent for a take-over of our company, which may result in a
change in our management and directors.
As a result of a majority of our directors and officers are
residents of other countries other than the United States, investors may find it
difficult to enforce, within the United States, any judgments obtained against
our company or our directors and officers.
Other than our operations offices in Vancouver and Kelowna,
British Columbia, we do not currently maintain a permanent place of business
within the United States. In addition, a majority of our directors and officers
are nationals and/or residents of countries other than the United States, and
all or a substantial portion of such persons assets are located outside the
United States. As a result, it may be difficult for investors to enforce within
the United States any judgments obtained against our company or our officers or
directors, including judgments predicated upon the civil liability provisions of
the securities laws of the United States or any state thereof.
Trends, risks and uncertainties.
We have sought to identify what we believe to be the most
significant risks to our business, but we cannot predict whether, or to what
extent, any of such risks may be realized nor can we guarantee that we have
identified all possible risks that might arise such as a black swan event. An
absolute worst case scenario with sufficient potential impact to risk the future
of the company as an independent business operating in its chosen markets.
Significant reputational impact as a result of a major issue resulting in
multiple fatalities, possibly compounded by apparently negligent management
behavior; extreme adverse press coverage and viral social media linking the
Company name to consumer brands, leads to a catastrophic share price fall, very
significant loss of consumer confidence and inability to retain and recruit
quality people. Investors should carefully consider all of such risk factors
before making an investment decision with respect to our common shares.
Item 1B.
|
Unresolved Staff Comments
|
As a smaller reporting company, we are not required to
provide the information required by this Item.
Executive Offices
The address of our executive office is 156 Valleyview RD,
Kelowna, British Columbia V1X 3M4. This space is leased at CAD$600 per month.
Our main telephone number is (250) 765-6412. Our current location provides
adequate office space for our purposes at this stage of our development.
Item 3.
|
Legal Proceedings
|
We know of no material, existing or pending legal proceedings
against us, nor are we involved as a plaintiff in any material proceeding or
pending litigation. There are no proceedings in which any of our directors,
officers or affiliates, or any registered or beneficial shareholder, is an
adverse party or has a material interest adverse to our Company.
Item 4.
|
(Removed and Reserved).
|
PART II
Item 5.
|
Market for Registrants Common Equity,
Related Stockholder Matters and Issuer Purchases of
Equity
Securities
|
Our common shares are quoted on the Over-the-Counter Bulletin
Board and the OTCQB quotation service under the symbol ENRT. Our CUSIP number
is 29277Q1047. Since August 13, 2010, our common shares have also been listed on
the Canadian Securities Exchange (formerly known as the Canadian National Stock
Exchange) under the symbol "
TOP"
.
The following quotations reflect the high and low bids for our
common shares based on inter-dealer prices, without retail mark-up, mark-down or
commission and may not represent actual transactions.
The high and low bid prices of our common stock on the OTCQB
quotation service and Over-the-Counter Bulletin Board for the periods indicated
below are as follows:
Quarter Ended
(1)
|
High
|
Low
|
August 2018
|
$0.075
|
$0.015
|
May 2018
|
$0.075
|
$0.045
|
February 2018
|
$0.105
|
$0.035
|
November 2017
|
$0.055
|
$0.032
|
August 2017
|
$0.065
|
$0.035
|
May 2017
|
$0.125
|
$0.050
|
February 2017
|
$0.098
|
$0.020
|
November 2016
|
$0.050
|
$0.020
|
August 2016
|
$0.044
|
$0.014
|
(1) The quotations above were obtained from Yahoo Finance,
reflect inter-dealer prices, without retail mark-up, mark-down or commission and
may not represent actual transactions.
On November 19, 2018, the last closing price for one share of
our common stock as reported by the OTC Bulletin Board was $0.022. This closing
price reflects an inter-dealer price, without retail mark-up, mark-down or
commission, and may not represent an actual transaction.
The high and low bid prices (given in Canadian Dollars) of our
common stock on the Canadian Securities Exchange for the periods indicated below
are as follows:
Quarter Ended
(1)
|
High
|
Low
|
August 2018
|
$0.105
|
$0.025
|
May 2018
|
$0.095
|
$0.060
|
February 2018
|
$0.140
|
$0.040
|
November 2017
|
$0.085
|
$0.040
|
August 2017
|
$0.080
|
$0.050
|
May 2017
|
$0.165
|
$0.070
|
February 2017
|
$0.150
|
$0.025
|
November 2016
|
$0.060
|
$0.025
|
August 2016
|
$0.060
|
$0.020
|
(1) The quotations above were obtained from TD Waterhouse
Investor Services and/or stockcharts.com, reflect inter-dealer prices, without
retail mark-up, mark-down or commission and may not represent actual
transactions.
As of November 19, 2018, there were 580 holders of record of
our common stock. As of November 19, 2018, 121,964,931 common shares were issued
and outstanding.
Our common shares are issued in registered form. Computershare,
2nd Floor, 510 Burrard Street, Vancouver, BC V6C 3B9 (Telephone: 604-661-9400;
Facsimile: 604-661-9549) is the transfer agent for our common shares.
Nevada Agency and Trust Company, is the agent for service in
Nevada, 50 West Liberty Street, Suite 880, Reno, Nevada 89501 (Telephone:
775.322.0626; Facsimile: 775.322.5623) is the registrar agent.
Dividend Policy
We have not paid any cash dividends on our common stock and
have no present intention of paying any dividends on the shares of our common
stock. Our current policy is to retain earnings, if any, for use in our
operations and in the development of our business. Our future dividend policy
will be determined from time to time by our board of directors.
Recent Sales of Unregistered Securities
On September 23, 2016, we closed the final tranche of a private
placement of 3,858,571 units at a price of CAD$0.035 per unit for gross proceeds
of CAD$135,050. Each unit consists of one common share of our Company and one
non-transferable share purchase warrant, each full warrant entitling the holder
to purchase one additional common share of our Company for a period of 24 months
from the date of issuance, at a purchase price of US$0.07. A cash finders fee
of CAD$3,300 and 286,666 full broker warrants that expire June 8, 2019 was paid
to Canaccord Genuity and Leede Jones Gable.
On October 7, 2016, we issued 175,000 common shares of our
Company and paid $5,000 to comply with the Definitive Agreement signed May 12,
2016.
On January 20, 2017 we closed the first tranche of a private
placement of 1,000,000 units at a price of CAD$0.04 per unit for gross proceeds
of CAD$40,000. Each unit consists of one common share of our Company and one
non-transferable share purchase warrant, each full warrant entitling the holder
to purchase one additional common share of our Company for a period of 24 months
from the date of issuance, at a purchase price of US$0.06. A cash finders fee
of CAD$800.00 and 20,000 full warrants that expire January 20, 2019 was paid to
Leede Jones Gable Inc.
On February 28, 2017 we closed the final tranche of a private
placement of 4,250,000 units at a price of CAD$0.04 per unit for gross proceeds
of CAD$170,000. Each unit consists of one common share of our Company and one
non-transferable share purchase warrant, each full warrant entitling the holder
to purchase one additional common share of our Company for a period of 24 months
from the date of issuance, at a purchase price of US$0.06. A cash finders fee
of CAD$11,100.00 and 20,000 full warrants that expire January 20, 2019 was paid
to Leede Jones Gable Inc. Canaccord Genuity and Duncan McKay.
On April 21, 2017, the Company issued 95,500 shares for gross
proceeds of $5,685 from the exercise of warrants of previous financings at $0.05
and $0.07.
On April 30, 2017 the Company issued 166,500 shares for gross
proceeds of $11,655 from the exercise of warrants from a previous financing at
$0.07.
On April 30, 2017, the Company closed the first and final
tranche of a private placement of 3,224,000 units at a price of CAD$0.09 per
unit for gross proceeds of CAD $290,160. Each unit consists of one common share
of the Company and one-nontransferable share purchase warrant, each full warrant
entitling the holder to purchase one additional common share of the Company for
a period of 24 months from the date of issuance, at a purchase price of $0.12. A
cash finders fee of CAD$20,736 and 230,400 full broker warrants that expire
April 28, 2019 was paid to Leede Jones Gable and Canaccord Genuity.
On November 1, 2017, the Company closed the first tranche of a
private placement of 2,600,000 units at a price of CAD$0.05 per unit for gross
proceeds of CAD $130,000. Each unit consists of one common share of the Company
and one-nontransferable share purchase warrant, each full warrant entitling the
holder to purchase one additional common share of the Company for a period of 24
months from the date of issuance, at a purchase price of $0.06.
On December 8, 2017, the Company closed the second tranche of a
private placement of 3,954,000 units at a price of CAD$0.05 per unit for gross
proceeds of CAD$197,700 (equivalent of $154,397). Each unit consists of one
common share of the Company and one non-transferable share purchase warrant,
each full warrant entitling the holder to purchase one additional common share
of the Company for a period of 24 months from the date of issuance, at a
purchase price of $0.06. A cash finders fee of CAD$12,770 and 230,400 broker
warrants was paid to a third party. The broker warrants have the same terms as
the warrants issued as part of the unit offering.
On December 8, 2017, the Company issued 240,000 shares for
gross proceeds of $12,000 from the exercise of stock options at $0.05.
On January 12, 2018, the Company closed the final tranche of a
private placement of 1,611,000 units at a price of CAD$0.05 per unit for gross
proceeds of CAD$80,550 (equivalent of $64,371). Each unit consists of one common
share of the Company and one non-transferable share purchase warrant, each full
warrant entitling the holder to purchase one additional common share of the
Company for a period of 24 months from the date of issuance, at a purchase price
of $0.06. A cash finders fee of CAD$3,880 and 77,600 broker warrants was paid
to a third party. The broker warrants have the same terms as the warrants issued
as part of the unit offering.
On February 2, 2018, the Company issued 50,000 shares for gross
proceeds of $3,500 from the exercise of warrants from a previous financing at
$0.07.
On May 11, 2018, the Company issued 200,000 shares for gross
proceeds of $12,000 from the exercise of stock options at $0.06.
On May 11, 2018, the Company closed the first tranche of a
private placement of 1,746,900 units at a price of CAD$0.06 per unit for gross
proceeds of CAD$104,814 (equivalent of $81,987). Each unit consists of one
common share of the Company and one non-transferable share purchase warrant,
each full warrant entitling the holder to purchase one additional common share
of the Company for a period of 24 months from the date of issuance, at a
purchase price of $0.075. A cash finders fee of CAD$9,281 and 144,690 full
broker warrants that expire May 11, 2020 was paid to third parties. The broker
warrants have the same terms as the warrants issued as part of the unit
offering.
On May 25, 2018, the Company closed the final tranche of a
private placement of 2,470,000 units at a price of CAD$0.06 per unit for gross
proceeds of CAD$148,200 (equivalent of $114,822). Each unit consists of one
common share of the Company and one non-transferable share purchase warrant,
each full warrant entitling the holder to purchase one additional common share
of the Company for a period of 24 months from the date of issuance, at a
purchase price of $0.075. A cash finders fee of CAD$5,820 and 70,000 full
broker warrants that expire May 25, 2020 was paid to third parties. The broker
warrants have the same terms as the warrants issued as part of the unit
offering.
On August 31, 2018, the Company closed the first tranche of a
private placement of 4,400,000 units at a price of CAD$0.03 per unit for gross
proceeds of CAD$132,000. Each unit consists of one common share of the Company
and one non-transferable share purchase warrant, each full warrant entitling the
holder to purchase one additional common share of the Company for a period of 36
months from the date of issuance, at a purchase price of $0.05. A cash finders
fee of CAD$12,000 and 400,000 full broker warrants that expire August 31, 2021
was paid to third parties. The broker warrants have the same terms as the
warrants issued as part of the unit offering.
On August 31, 2018, the Company issued 170,000 shares for gross
proceeds of $9,000 from the exercise of stock options at $0.06 and $0.05
respectively.
Equity Compensation Plan Information
We have no long-term incentive plans other than the stock
option plan described below:
2007 Equity Compensation Plan
On April 25, 2007, our shareholders approved and adopted the
2007 equity incentive plan. The purpose of the Plan is to secure for our company
and our shareholders the benefits of incentive inherent in share ownership by
the directors and employees of our company and our Affiliates who, in the
judgment of our board, will be largely responsible for our companys future
growth and success. It is generally recognized that equity incentive plans of
the nature provided for herein aid in retaining and encouraging directors and
employees of exceptional ability because of the opportunity offered them to
acquire a proprietary interest in our company.
The maximum number of Options available under the Plan, are for
the issuance of up to 1,000,000 shares of common stock of our company.
On December 14, 2007, we granted 892,500 post share
consolidation stock options to directors, officers, and consultants of our
company exercisable at a price of $0.70 per share for a period of 5 years. On
October 22, 2009, we modified the exercise price of these stock options to $0.20
per share. The vesting dates of the options are as below:
Vesting Dates
|
Percentage of options granted
|
December 14, 2007
|
25%
|
December 14, 2008
|
25%
|
December 14, 2009
|
25%
|
December 14, 2010
|
25%
|
On October 22, 2009, we granted an additional 500,000 stock
options to our directors and consultants. The exercise price of the stock
options is $0.10 per share, which are vested immediately and expire October 22,
2014. This plan was rolled into the 2011 Stock Option Plan as approved by our
shareholders on April 14, 2011.
2010 Equity Compensation Plan
On February 5, 2010, our shareholders approved and adopted the
2010 equity incentive plan. The purpose of the 2010 Plan is to enhance the
long-term stockholder value of our company by offering opportunities to our
directors, officers, employees and eligible consultants to acquire and maintain
stock ownership in our company in order to give these persons the opportunity to
participate in our growth and success, and to encourage them to remain in our
service.
Options that are eligible for grant under the 2010 Plan to
Participants include: (a) incentive stock options, whereby we will grant options
to purchase shares of our common stock to Participants with the intention that
the options qualify as "incentive stock options" as that term is defined in
Section 422 of the Internal Revenue Code; (b) non-incentive stock options,
whereby we will grant options to purchase shares of our common stock to
Participants that do not qualify as "incentive stock options" under the Internal
Revenue Code; (c) stock appreciation rights; and (d) restricted shares. The 2010
Plan provides that a maximum of Two Million (2,000,000) shares of common stock
are available for granting of awards under the 2010 Plan.
This plan was rolled into the 2011 Stock Option Plan as
approved by our shareholders on April 14, 2011.
2011 Stock Option Plan
On April 14, 2011, our shareholders approved and adopted at the
Annual General Meeting to roll our 2007 Equity compensation plan and our 2010
Equity Compensation Plan into a new 2011 Stock Option Plan. The purpose of this
Plan is to advance the interests of our company, through the grant of Options,
by providing an incentive mechanism to foster the interest of eligible persons
in the success of our company and our affiliates; encouraging eligible persons
to remain with our company or our affiliates; and attracting new directors,
officers, employees and consultants.
This Plan shall be administered by our board. Subject to the
provisions of this Plan, our board shall have the authority: to determine the
Eligible Persons to whom Options are granted, to grant such Options, and to
determine any terms and conditions, limitations and restrictions in respect of
any particular Option grant, including but not limited to the nature and
duration of the restrictions, if any, to be imposed upon the acquisition, sale
or other disposition of shares of common stock acquired upon exercise of the
Option, and the nature of the events and the duration of the period, if any, in
which any Participant's rights in respect of an Option or shares of common stock
acquired upon exercise of an Option may be forfeited; to interpret the terms of
this Plan, to make all such determinations and take all such other actions in
connection with the implementation, operation and administration of this Plan,
and to adopt, amend and rescind such administrative guidelines and other rules
and regulations relating to this Plan, as it shall from time to time deem
advisable, including without limitation for the purpose of ensuring compliance
with Section legislation hereof. Our board's interpretations, determinations,
guidelines, rules and regulations shall be conclusive and binding upon our
company, Eligible Persons, Participants and all other persons.
The aggregate number of Common Shares that may be reserved,
allotted and issued pursuant to Options shall not exceed 4,720,348 shares of
common stock, less the aggregate number of shares of common stock then reserved
for issuance pursuant to any other share compensation arrangement. For greater
certainty, if an Option is surrendered, terminated or expires without being
exercised, the Common Shares reserved for issuance pursuant to such Option shall
be available for new Options granted under this Plan.
2014 Stock Option Plan
On July 15, 2014, the shareholders approved and adopted at the
Annual General Meeting the Companys 2014 Stock Option Plan. The purpose of
these Plan is to advance the interests of the Corporation, through the grant of
Options, by providing an incentive mechanism to foster the interest of eligible
persons in the success of the Corporation and its affiliates; encouraging
eligible persons to remain with the Corporation or its affiliates; and
attracting new Directors, Officers, Employees and Consultants.
This Plan shall be administered by our board. Subject to the
provisions of this Plan, our board shall have the authority: to determine the
Eligible Persons to whom Options are granted, to grant such Options, and to
determine any terms and conditions, limitations and restrictions in respect of
any particular Option grant, including but not limited to the nature and
duration of the restrictions, if any, to be imposed upon the acquisition, sale
or other disposition of shares of common stock acquired upon exercise of the
Option, and the nature of the events and the duration of the period, if any, in
which any Participant's rights in respect of an Option or shares of common stock
acquired upon exercise of an Option may be forfeited; to interpret the terms of
this Plan, to make all such determinations and take all such other actions in
connection with the implementation, operation and administration of this Plan,
and to adopt, amend and rescind such administrative guidelines and other rules
and regulations relating to this Plan, as it shall from time to time deem
advisable, including without limitation for the purpose of ensuring compliance
with Section legislation hereof. Our board's interpretations, determinations,
guidelines, rules and regulations shall be conclusive and binding upon our
company, Eligible Persons, Participants and all other persons.
The aggregate number of Common Shares that may be reserved,
allotted and issued pursuant to Options shall not exceed 17,400,000 shares of
common stock, less the aggregate number of shares of common stock then reserved
for issuance pursuant to any other share compensation arrangement. For greater
certainty, if an Option is surrendered, terminated or expires without being
exercised, the Common Shares reserved for issuance pursuant to such Option shall
be available for new Options granted under this Plan.
The Board may amend, subject to the approval of any regulatory
authority whose approval is required, suspend or terminate this Plan or any
portion thereof. No such amendment, suspension or termination shall alter or
impair any outstanding unexercised Options or any rights without the consent of
such Participant. If this Plan is suspended or terminated, the provisions of
this Plan and any administrative guidelines, rules and regulations relating to
this Plan shall continue in effect for the duration of such time as any Option
remains outstanding.
As at the date of the annual report, there was nil stock
options exercised except for those disclosed in the regulatory filings and in
the notes to the financial statements.
Equity Compensation Plan
Information
|
Plan category
|
Number of
securities
to be issued upon
exercise of
outstanding options,
warrants and rights
|
Weighted-average
exercise price of
outstanding options,
warrants and rights
|
Number of
securities
remaining available
for future
issuance
under equity
compensation plans
(excluding securities
reflected in column
(a))
|
Equity compensation plans
approved by
security
holders
|
Nil
|
Nil
|
Nil
|
2011Stock Option Plan
approved by security
holders
|
250,000
|
$0.06
|
4,470,348
|
2014 Stock Option Plan
approved by security
holders
|
8,320,000
|
$0.07
|
9,080,000
|
Total
|
8,570,000
|
$0.07
|
13,550,348
|
Purchases of Equity Securities by the Issuer and Affiliated
Purchasers
We did not purchase any of our shares of common stock or other
securities during our fiscal year ended August 31, 2018.
Item 6.
|
Selected Financial Data
|
As a smaller reporting company, we are not required to
provide the information required by this Item.
Item 7.
|
Managements Discussion and Analysis of
Financial Condition and Results of Operations
|
The following discussion should be read in conjunction with our
audited financial statements and the related notes that appear elsewhere in this
annual report. The following discussion contains forward-looking statements that
reflect our plans, estimates and beliefs. Our actual results could differ
materially from those discussed in the forward looking statements. Factors that
could cause or contribute to such differences include, but are not limited to;
those discussed below and elsewhere in this annual report, particularly in the
section entitled Risk Factors beginning on page 10 of this annual report.
Our audited financial statements are stated in United States
Dollars and are prepared in accordance with United States Generally Accepted
Accounting Principles.
Plan of Operation
During the next twelve month period (beginning September 1,
2018), we intend to:
|
|
identify and secure sources of equity and/or
debt financing for property payments;
|
|
|
identify and secure sources of equity and/or
debt financing for resource acquisitions;
|
|
|
identify and secure sources of equity and/or
debt financing for pilot testing for Lithium technology
|
We anticipate that we will incur the following operating
expenses during this period:
Estimated Funding Required During the
12 Months beginning September 1, 2018
|
Expense
|
Amount ($)
|
Mineral Costs
|
5,000
|
Bench Tests for Lithium Technology
|
50,000
|
Resource Acquisitions and or Drilling
|
75,000
|
Management Consulting Fees
|
100,000
|
Professional fees
|
100,000
|
Rent
|
15,000
|
Other general administrative expenses
|
75,000
|
Total
|
$ 425,000
|
As at the date of this annual report,
we do not have sufficient cash on hand to finance our entire potential and
estimated $425,000 cash obligation to the proposed spending for the 12 months
beginning September 1, 2018. Based on our current cash position of $176,409, we
anticipate that we will require $250,000 in additional cash to execute our
business plan. In the event that we are unable raise sufficient cash we intend
to reduce our planned expenditures to accommodate our means with a view toward
prioritizing revenue generating activity and fulfilling our public reporting
obligations. As at the date of this registration statement we have no financing
arrangements in place.
Results of Operations for our Years Ended August 31, 2018
and 2017
Our net loss and comprehensive loss for our year ended August
31, 2018, for our year ended August 31, 2017 and the changes between those
periods for the respective items are summarized as follows:
|
|
|
|
|
|
|
|
Change Between
|
|
|
|
|
|
|
|
|
|
Year Ended
|
|
|
|
Year Ended
|
|
|
Year Ended
|
|
|
August 31, 2018
|
|
|
|
August 31,
|
|
|
August 31,
|
|
|
and Year Ended
|
|
|
|
2018
|
|
|
2017
|
|
|
August 31, 2017
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
Revenue
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
Cost of Goods Sold
|
|
-
|
|
|
-
|
|
|
-
|
|
Other Expenses
|
|
12,227
|
|
|
74,291
|
|
|
(62,064)
|
|
General and Administrative
|
|
637,828
|
|
|
726,875
|
|
|
(89,047)
|
|
Bank Charges and Interest Expense
|
|
1,282
|
|
|
2,210
|
|
|
(928)
|
|
Exploration Costs
|
|
11,465
|
|
|
61,609
|
|
|
(50,144)
|
|
Consulting Fees
|
|
44,604
|
|
|
136,585
|
|
|
(91,981)
|
|
Professional Fees
|
|
63,808
|
|
|
75,555
|
|
|
(11,747)
|
|
Research and Development
|
|
230,550
|
|
|
20,810
|
|
|
209,740
|
|
Stock-based Compensation
|
|
89,596
|
|
|
227,428
|
|
|
(137,832)
|
|
Net Loss
|
|
650,055
|
|
|
801,166
|
|
|
(151,111)
|
|
Other Expenses
The decrease in other expenses of $62,064 relates primarily to
the termination, in fiscal 2017, of the Definitive Agreement respecting the
option to purchase a 100% interest in placer mining claims in Churchill, Lander
and Nye Counties, Nevada, USA.
General and Administrative
Our general and administrative expenses were lower by $89,047
for our year ended August 31, 2018 compared to August 31, 2017. The decrease in
costs were largely due to a decrease in stock-based compensation expense of
$137,832 due to less options granted to directors, officers and consultants of
the Company, a decrease in exploration costs as the Companys costs for the year
ended August 31, 2017 were from expenditures made on the Nevada Lithium
properties acquired by the Company in fiscal 2016 and terminated in fiscal 2017,
and a decrease in consulting fees due to decreases in monthly fees paid to the
CEO and the resignation of the Companys CFO in the fourth quarter of fiscal
2017. These decreases were offset by an increase in research and development
expense due to bench testing costs associated with the Companys lithium
technology agreement with Genesis Water Technologies Inc. during the year ended
August 31, 2018.
Bank Charges and Interest Expense
There was a decrease in bank charges and interest expense for
our year ended August 31, 2018 by $928 compared to the prior year. The decrease
is primarily attributable to fewer charges for the sale of marketable securities
than the previous year as the Company disposed of all its marketable securities
during the year ended August 31, 2017.
Exploration Costs
As noted above, exploration costs decreased by $50,144 during
the year ended August 31, 2018 as compared to the year ended August 31, 2017.
This was due to expenditures made during the year ended August 31, 2017 on the
Nevada Lithium properties that the Company acquired during the year ended August
31, 2016. Costs incurred during the year ended August 31, 2018, primarily related to
maintenance costs on the Companys staked lode and placer claims on BLM lands in
Esmerelda county Nevada.
Consulting Fees
There was a decrease in consulting fees for the year ended
August 31, 2018 compared to August 31, 2017 by $91,981. This was largely due to
non-renewal of consulting agreements and decreased consulting fees paid to the
CEO of the Company and the resignation of the CFO in the fourth quarter of
fiscal 2017.
Liquidity and Financial Condition
Working Capital
|
|
At
|
|
|
At
|
|
|
|
August 31,
|
|
|
August 31,
|
|
|
|
2018
|
|
|
2017
|
|
Current assets
|
$
|
271,690
|
|
$
|
178,712
|
|
Current liabilities
|
|
449,270
|
|
|
428,741
|
|
|
|
|
|
|
|
|
Working capital surplus/(deficit)
|
$
|
(177,580
|
)
|
$
|
(250,029
|
)
|
Cash Flows
|
|
Year Ended
|
|
|
|
August 31,
|
|
|
August 31
|
|
|
|
2018
|
|
|
2017
|
|
Cash flows (used in)
operating activities
|
$
|
(594,868
|
)
|
|
(370,271
|
)
|
Cash flows from investing activities
|
|
-
|
|
|
26,096
|
|
Cash flows from financing
activities
|
|
620,407
|
|
|
464,011
|
|
Net increase (decrease) in cash during year
|
$
|
25,539
|
|
$
|
119,836
|
|
Operating Activities
Net cash used in operating activities was $594,868 for the year
ended August 31, 2018 compared with cash used in operating activities of
$370,271 in 2017. The increase in net cash used in operating activities is due
to non-cash items such as the decrease in stock based compensation expense and
the write down of properties and lithium technology.
Investing Activities
Net cash provided from investing activities was $Nil for the
year ended August 31, 2018 compared to net cash provided in investing activities
of $26,096 in the same period in 2017. The decrease is from all the marketable
securities held by the Company being sold during the year ended August 31,
2017.
Financing Activities
Net cash provided by financing activities was $620,407 for the
year ended August 31, 2018 compared to $464,011 in the same period in 2017. This
increase is primarily due to increased financings compared to the prior year
end.
Contractual Obligations
As a smaller reporting company, we are not required to
provide tabular disclosure obligations.
Going Concern
Our financial statements have been prepared in accordance with
accounting principles generally accepted in the United States applicable to a
going concern, which contemplates the realization of assets and the satisfaction
of liabilities and commitments in the normal course of business. The Company had a
working capital deficit of $177,580 for the year ended August 31, 2018 [deficit
of $250,029 for the year ended August 31, 2017]. The Company incurred a net loss
of $650,055 for the year ended August 31, 2018 [net loss of $801,166 for the
year ended August 31, 2017] and as at August 31, 2018 has incurred cumulative
losses of $13,891,818. We require additional funds to maintain our existing
operations and to acquire new business assets. These conditions raise
substantial doubt about our Companys ability to continue as a going concern.
Managements plans in this regard are to raise equity and debt financing as
required, but there is no certainty that such financing will be available or
that it will be available at acceptable terms. The outcome of these matters
cannot be predicted at this time and the financing environment is exceptionally
difficult.
These financial statements do not include any adjustments to
reflect the future effects on the recoverability and classification of assets or
the amounts and classification of liabilities that might result from the outcome
of this uncertainty.
At this time, we cannot provide investors with any assurance
that we will be able to raise sufficient funding from the sale of our common
stock or through a loan from our directors to meet our obligations over the next
twelve months. We do not have any arrangements in place for any future debt or
equity financing.
Off-Balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have
or are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that are
material to stockholders.
Critical Accounting Policies
The discussion and analysis of our financial condition and
results of operations are based upon our financial statements, which have been
prepared in accordance with the accounting principles generally accepted in the
United States of America. Preparing financial statements requires management to
make estimates and assumptions that affect the reported amounts of assets,
liabilities, revenue, and expenses. These estimates and assumptions are affected
by managements application of accounting policies. We believe that
understanding the basis and nature of the estimates and assumptions involved
with the following aspects of our financial statements is critical to an
understanding of our financial statements.
Recent Accounting Pronouncements
In June 2018, the FASB issued ASU 2018-07, which simplifies the
accounting for nonemployee share-based payment transactions. The amendments
specify that Topic 718 applies to all share-based payment transactions in which
a grantor acquires goods or services to be used or consumed in a grantors own
operations by issuing share-based payment awards. The standard will be effective
for us in the first quarter of our fiscal year 2020, although early adoption is
permitted (but no sooner than the adoption of Topic 606). We do not expect that
the adoption of this ASU will have a significant impact on our consolidated
financial statements.
On November 22, 2017, the FASB issued ASU 2017-14 Income
StatementReporting Comprehensive Income (Topic 220), Revenue Recognition (Topic
605), and Revenue from Contracts with Customers (Topic 606). This update amends
SEC paragraphs pursuant to the SEC Staff Accounting Bulletin No. 116 and SEC
Release No. 33-10403, which bring existing guidance into conformity with Topic
606, Revenue from Contracts with Customers. This update is effective in fiscal
years, including interim periods, beginning after December 15, 2017. The
adoption of this standard is not expected to have a material impact on the
Company´s consolidated financial statements.
In August 2016, the FASB issued ASU No. 2016-15 related to the
statement of cash flows. This new guidance addresses eight specific cash flow
issues with the objective of reducing the existing diversity in practice in how
certain cash receipts and cash payments are presented and classified in the
statement of cash flows. This update is effective in fiscal years, including
interim periods, beginning after December 15, 2017, and early adoption is
permitted. The Company has made a preliminary evaluation and expects no material
impact to arise from the adoption of this standard on September 1, 2018.
In February 2016, Topic 842, Leases was issued to replace the
leases requirements in Topic 840, Leases. The main difference between previous
GAAP and Topic 842 is the recognition of lease assets and lease liabilities by
lessees for those leases classified as operating leases under previous GAAP. A
lessee should recognize in the balance sheet a liability to make lease payments
(the lease liability) and a right-of-use asset representing its right to use the
underlying asset for the lease term. For leases with a term of 12 months or
less, a lessee is permitted to make an accounting policy election by class of
underlying asset not to recognize lease assets and lease liabilities. If a
lessee makes this election, it should recognize lease expense for such leases
generally on a straight-line basis over the lease term. The accounting applied
by a lessor is largely unchanged from that applied under previous GAAP. Topic
842 will be effective for annual reporting periods beginning after December 15,
2018, including interim periods within those annual periods and is to be
retrospectively applied. Earlier application is permitted. The adoption of this
standard is not expected to have a significant impact on the Companys results
of operations, financial condition, cash flows, and financial statement
disclosures.
In May 2014, the FASB issued ASU No. 2014-09, Revenue from
Contracts with Customers. The new standard provides a five-step approach to be
applied to all contracts with customers and also requires expanded disclosures
about revenue recognition. The ASU is effective for annual reporting periods
beginning after December 15, 2017, including interim periods and is to be
retrospectively applied. The adoption of this standard is not expected to have a
significant impact on the Companys results of operations, financial condition,
and cash flows.
Other accounting standards that have been issued or proposed by
the FASB or other standards-setting bodies that do not require adoption until a
future date are not expected to have a material impact on the Companys
financial statements upon adoption.
Item 7A.
|
Quantitative and Qualitative Disclosures
About Market Risk
|
As a smaller reporting company, we are not required to
provide the information required by this Item.
Item 8.
|
Financial Statements and Supplementary
Data
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Directors of
Enertopia Corp.
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Enertopia
Corp. (the Company), as of August 31, 2018 and 2017, and the related
statements of stockholders equity, operations, and cash flows for the years
ended August 31, 2018 and 2017, 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 Enertopia Corp. as
of August 31, 2018 and 2017, and the results of its operations and its cash
flows for the years ended August 31, 2018 and 2017, 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
2 to the financial statements, the Company has suffered recurring losses from
operations and has a net capital deficiency that raise substantial doubt about
its ability to continue as a going concern. Management's plans in regard to
these matters are also described in Note 2. 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
Companys management. Our responsibility is to express an opinion on the
Companys 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.
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 Companys internal control over financial reporting.
Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks
of material misstatements 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 Companys auditor since 2017.
|
DAVIDSON & COMPANY LLP
|
Vancouver, Canada
|
|
|
Chartered Professional Accountants
|
November 19, 2018
|
|
ENERTOPIA CORP.
|
BALANCE SHEETS
|
(Expressed in U.S. Dollars)
|
|
|
August 31
|
|
|
August 31
|
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
Cash and
cash equivalents
|
$
|
176,409
|
|
$
|
150,870
|
|
Accounts receivable
|
|
7,504
|
|
|
9,060
|
|
Prepaid
expenses and deposit
|
|
87,777
|
|
|
18,782
|
|
Total current assets
|
|
271,690
|
|
|
178,712
|
|
Non-Current
|
|
|
|
|
|
|
Long term investments
(Note 5)
|
|
-
|
|
|
1
|
|
Lithium
technology (Note 7)
|
|
-
|
|
|
12,500
|
|
Total Assets
|
$
|
271,690
|
|
$
|
191,213
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
Accounts payable
|
$
|
278,036
|
|
$
|
287,706
|
|
Due to
related parties (Note 8)
|
|
171,234
|
|
|
141,035
|
|
Total Current Liabilities
|
|
449,270
|
|
|
428,741
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital
|
|
|
|
|
|
|
Authorized:
|
|
|
|
|
|
|
200,000,000 common shares with a par value of $0.001 per share
Issued
and outstanding:
119,739,931 common shares at August 31, 2018 and
August 31,2017: 102,298,031
|
|
119,741
|
|
|
102,299
|
|
Additional paid-in capital
(Note 9)
|
|
13,594,497
|
|
|
12,901,936
|
|
Deficit accumulated during the exploration
stage
|
|
(13,891,818
|
)
|
|
(13,241,763
|
)
|
Total Stockholders'
Equity
|
|
(177,580
|
)
|
|
(237,528
|
)
|
Total Liabilities and Stockholders'
Equity
|
$
|
271,690
|
|
$
|
191,213
|
|
The accompanying notes are an integral part of these financial
statements
ENERTOPIA CORP.
|
STATEMENTS OF STOCKHOLDERS' EQUITY
|
(Expressed in U.S. Dollars)
|
|
|
COMMON STOCK
|
|
|
ADDITIONAL
|
|
|
|
|
|
TOTAL
|
|
|
|
|
|
|
|
|
|
PAID-IN
|
|
|
DEFICIT
|
|
|
STOCKHOLDERS'
|
|
|
|
SHARES
|
|
|
AMOUNT
|
|
|
CAPITAL
|
|
|
ACCUMULATED
|
|
|
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, August 31, 2016
|
|
89,528,460
|
|
|
89,528
|
|
|
12,214,934
|
|
|
(12,440,597
|
)
|
|
(136,135
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Based Compensation
|
|
-
|
|
|
-
|
|
|
227,428
|
|
|
-
|
|
|
227,428
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for private
placement on September 23
|
|
3,858,571
|
|
|
3,859
|
|
|
93,792
|
|
|
-
|
|
|
97,651
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for Definitive
Agreement on October 7
|
|
175,000
|
|
|
175
|
|
|
6,825
|
|
|
-
|
|
|
7,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for Private
Placement on January 20
|
|
1,000,000
|
|
|
1,000
|
|
|
28,600
|
|
|
-
|
|
|
29,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for Private
Placement on February 28
|
|
4,250,000
|
|
|
4,250
|
|
|
115,119
|
|
|
-
|
|
|
119,369
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrant conversion on April
21
|
|
95,500
|
|
|
96
|
|
|
5,590
|
|
|
-
|
|
|
5,686
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrant conversion on April
28
|
|
166,500
|
|
|
167
|
|
|
11,488
|
|
|
-
|
|
|
11,655
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for Private
Placement on April 28
|
|
3,224,000
|
|
|
3,224
|
|
|
198,160
|
|
|
-
|
|
|
201,384
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(801,166
|
)
|
|
(801,166
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, August 31, 2017
|
|
102,298,031
|
|
$
|
102,299
|
|
$
|
12,901,936
|
|
$
|
(13,241,763
|
)
|
$
|
(237,528
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Based Compensation
|
|
-
|
|
|
-
|
|
|
89,596
|
|
|
-
|
|
|
89,596
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for Private
Placement on November 1
|
|
2,600,000
|
|
|
2,600
|
|
|
98,598
|
|
|
-
|
|
|
101,198
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for Private
Placement on December 8
|
|
3,954,000
|
|
|
3,954
|
|
|
140,505
|
|
|
-
|
|
|
144,459
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option conversion on December
8
|
|
240,000
|
|
|
240
|
|
|
11,760
|
|
|
-
|
|
|
12,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for Private
Placement on January 12
|
|
1,611,000
|
|
|
1,611
|
|
|
59,657
|
|
|
-
|
|
|
61,268
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrant conversion on
February 2
|
|
50,000
|
|
|
50
|
|
|
3,450
|
|
|
-
|
|
|
3,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option conversion on May 11
|
|
200,000
|
|
|
200
|
|
|
11,800
|
|
|
-
|
|
|
12,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for Private
Placement on May 11
|
|
1,746,900
|
|
|
1,747
|
|
|
72,982
|
|
|
-
|
|
|
74,729
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for Private
Placement on May 25
|
|
2,470,000
|
|
|
2,470
|
|
|
107,864
|
|
|
-
|
|
|
110,334
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for Private
Placement on August 31
|
|
4,400,000
|
|
|
4,400
|
|
|
87,519
|
|
|
-
|
|
|
91,919
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option conversion on August
31
|
|
170,000
|
|
|
170
|
|
|
8,830
|
|
|
-
|
|
|
9,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(650,055
|
)
|
|
(650,055
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, August 31, 2018
|
|
119,739,931
|
|
|
119,741
|
|
|
13,594,497
|
|
|
(13,891,818
|
)
|
|
(177,580
|
)
|
The accompanying notes are an integral part of these financial
statements
ENERTOPIA CORP.
|
STATEMENTS OF OPERATIONS
|
(Expressed in U.S. Dollars)
|
|
|
Year
Ended
|
|
|
|
August 31
|
|
|
August 31
|
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
Accounting and audit
|
|
52,490
|
|
|
64,455
|
|
Bank charges and interest expense
|
|
1,282
|
|
|
2,210
|
|
Consulting (Note 8)
|
|
44,604
|
|
|
136,585
|
|
Mineral exploration costs
|
|
11,465
|
|
|
61,609
|
|
Fees and dues
|
|
31,659
|
|
|
30,432
|
|
Insurance
|
|
13,477
|
|
|
12,770
|
|
Investor relations
|
|
129,437
|
|
|
119,302
|
|
Legal and professional
|
|
11,318
|
|
|
11,100
|
|
Office and miscellaneous
|
|
4,186
|
|
|
4,338
|
|
Research and development
|
|
230,550
|
|
|
20,810
|
|
Rent
|
|
5,379
|
|
|
15,824
|
|
Stock based compensation
|
|
89,596
|
|
|
227,428
|
|
Telephone
|
|
1,791
|
|
|
2,972
|
|
Training & Conferences
|
|
-
|
|
|
1,643
|
|
Travel
|
|
10,594
|
|
|
15,397
|
|
|
|
|
|
|
|
|
Total expenses
|
|
637,828
|
|
|
726,875
|
|
|
|
|
|
|
|
|
(Loss) for the period before other
items
|
|
(637,828
|
)
|
|
(726,875
|
)
|
|
|
|
|
|
|
|
Other income (expense)
|
|
|
|
|
|
|
Foreign exchange gain (loss)
|
|
274
|
|
|
9,144
|
|
Write down of long term investments
|
|
(1
|
)
|
|
(1
|
)
|
Gain
(loss) on marketable securities (Note 4)
|
|
-
|
|
|
12,316
|
|
Write down of lithium technology
|
|
(12,500
|
)
|
|
-
|
|
Write down of properties
|
|
-
|
|
|
(95,750
|
)
|
|
|
|
|
|
|
|
Net loss and comprehensive
loss for the
period
|
$
|
(650,055
|
)
|
$
|
(801,166
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss per share
|
$
|
(0.01
|
)
|
$
|
(0.01
|
)
|
|
|
|
|
|
|
|
Weighted average number of common
shares outstanding - basic and diluted
|
|
109,821,751
|
|
|
97,249,025
|
|
The accompanying notes are an integral part of these financial
statements
ENERTOPIA CORP.
|
STATEMENTS OF CASH FLOWS
|
(Expressed in U.S. Dollars)
|
|
|
Year
Ended
|
|
|
|
August 31
|
|
|
August 31
|
|
|
|
2018
|
|
|
2017
|
|
Cash flows used in
operating activities
|
|
|
|
|
|
|
Net Loss
|
$
|
(650,055
|
)
|
$
|
(801,166
|
)
|
Changes to reconcile net loss to net cash used in operating
activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock based
compensation
|
|
89,596
|
|
|
227,428
|
|
Write down of lithium technology
|
|
12,500
|
|
|
-
|
|
Write down of
properties
|
|
-
|
|
|
95,750
|
|
(Gain) loss from sale of
securities
|
|
-
|
|
|
(12,316
|
)
|
Write down of long
term investments
|
|
1
|
|
|
1
|
|
Change in non-cash
working capital items:
|
|
|
|
|
|
|
Accounts receivable
|
|
1,556
|
|
|
1,952
|
|
Prepaid expenses and deposit
|
|
(68,995
|
)
|
|
64,504
|
|
Accounts payable
and accrued liabilities
|
|
(9,670
|
)
|
|
51,464
|
|
Due to related parties
|
|
30,199
|
|
|
2,112
|
|
|
|
|
|
|
|
|
Net cash (used in) operating
activities
|
|
(594,868
|
)
|
|
(370,271
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from (used in)
investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from
sale of marketable securities
|
|
-
|
|
|
31,096
|
|
Mineral resource properties
acquisition
|
|
-
|
|
|
(5,000
|
)
|
Net cash from investing
activities
|
|
-
|
|
|
26,096
|
|
|
|
|
|
|
|
|
Cash flows from financing
activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds
from Options exercised
|
|
33,000
|
|
|
-
|
|
Proceeds from Warrants
exercised
|
|
3,500
|
|
|
17,341
|
|
Net
proceeds from subscriptions received
|
|
583,907
|
|
|
446,670
|
|
Net cash from financing activities
|
|
620,407
|
|
|
464,011
|
|
|
|
|
|
|
|
|
Increase (Decrease) in cash and cash
equivalents
|
|
25,539
|
|
|
119,836
|
|
Cash
and cash equivalents, beginning of period
|
|
150,870
|
|
|
31,034
|
|
Cash and cash equivalents, end of
period
|
$
|
176,409
|
|
$
|
150,870
|
|
|
|
|
|
|
|
|
Supplemental information of cash flows
|
|
|
|
|
|
|
Interest
paid in cash
|
$
|
-
|
|
$
|
-
|
|
Income taxes paid in cash
|
$
|
-
|
|
$
|
-
|
|
Shares
issued for mineral property
|
$
|
-
|
|
$
|
7,000
|
|
The accompanying notes are an integral part of these financial
statements
ENRTOPIA CORP.
|
NOTES TO FINANCIAL STATEMENTS
|
August 31, 2018
|
(Expressed in U.S. Dollars)
|
|
The Company was formed on November 24,
2004 under the laws of the State of Nevada and commenced operations on November
24, 2004. The Company was an independent natural resource company engaged in the
exploration, development and acquisition of natural resources in the United
States and Canada. In the fiscal year 2010, the Company shifted its strategic
plan from its non-renewal energy operations to its planned renewal energy
operations and natural resource acquisition and development. In late summer of
2013, the Company had another business sector in alternative health and
wellness. During spring of 2016, the Company shifted its strategic plan to
natural resource acquisitions and Lithium brine extraction technology. The
Company has offices in Vancouver and Kelowna, B.C., Canada.
2.
|
GOING CONCERN UNCERTAINTY
|
The accompanying financial statements
have been prepared on a going concern basis which contemplates the realization
of assets and the satisfaction of liabilities and commitments in the normal
course of business for the foreseeable future. The Company had a working capital
deficit of $177,580 for the year ended August 31, 2018 (deficit of $250,029 for
the year ended August 31, 2017). The Company incurred a net loss of $650,055 for
the year ended August 31, 2018 (net loss of $801,166 for the year ended August
31, 2017) and as at August 31, 2018 has incurred cumulative losses of
$13,891,818 that raises substantial doubt about its ability to continue as a
going concern. Management has been able, thus far, to finance the operations
through equity financing and cash on hand. There is no assurance that the
Company will be able to continue to finance the Company on this basis.
In view of these conditions, the
ability of the Company to continue as a going concern is in substantial doubt
and dependent upon its ability to generate sufficient cash flow to meet its
obligations on a timely basis, to obtain additional financing as may be
required, to receive the continued support of the Companys shareholders, and
ultimately to obtain successful operations. There are no assurances that we will
be able to obtain further funds required for our continued operations. As noted
herein, we are pursuing various financing alternatives to meet our immediate and
long-term financial requirements. There can be no assurance that additional
financing will be available to us when needed or, if available, that it can be
obtained on commercially reasonable terms. If we are not able to obtain the
additional financing on a timely basis, we will be unable to conduct our
operations as planned, and we will not be able to meet our other obligations as
they become due. In such event, we will be forced to scale down or perhaps even
cease our operations. There is significant uncertainty as to whether we can
obtain additional financing. These financial statements do not give effect to
any adjustments which would be necessary should the Company be unable to
continue as a going concern and therefore be required to realize its assets and
discharge its liabilities in other than the normal course of business and at
amounts different from those reflected in the accompanying financial
statements.
3.
|
SIGNIFICANT ACCOUNTING
POLICIES
|
The accompanying financial statements
have been prepared in accordance with U.S. generally accepted accounting
principles.
The Company recognizes revenue from
product sales when persuasive evidence of an arrangement exists, title to
product and associated risk of loss has passed to the customer, the price is
fixed or determinable, collection from the customer is reasonably assured, the
Company has no further performance obligation, and returns can be reasonably
estimated.
|
c.
|
Cash and Cash Equivalents
|
Cash equivalents comprise certain
highly liquid instruments with a maturity of three months or less when
purchased. As of August 31, 2018 and 2017, cash and cash equivalents consist of
cash only.
Marketable securities are classified at
fair value through profit (loss). They consist of equities which are all traded
in the public markets. Marketable securities are recorded at fair value, with
changes to fair value recorded in profit or loss.
|
e.
|
Investments in Affiliated Companies Accounted for
Using the Equity Method
|
Investments in equity method investees
are accounted for using the equity method based upon the level of ownership
and/or the Companys ability to exercise significant influence over the
operating and financial policies of the investee. Investments of this nature are
recorded at original cost and adjusted periodically to recognize the Companys
proportionate share of the investees net income or losses after the date of
investment. When net losses from and investment accounted for under the equity
method exceeds its carrying amount, the investment balance is reduced to zero.
The Company resumes accounting for the investment under the equity method if the
entity subsequently reports net income and the Companys share of that net
income exceed the share of the net losses not recognized during the period the
equity method was suspended. Investments are written down only when there is
clear evidence that a decline in value that is other than temporary has
occurred. When an investment accounted for using the equity method issues its
own shares, the subsequent reduction in the Companys proportionate interest in
the investee is reflected in income as a deemed dilution gain or loss on
disposition. The Company evaluates its investments in companies accounted for
the equity or cost method for impairment when there is evidence or indicators
that a decrease in value may be other than temporary.
Other long term investments for which
the Company does not have the ability to exercise significant influence and for
which there is not a readily determinable market value are accounted for under
the cost method of accounting, such that they are recorded at the lower of cost
or estimated net realizable value. Management periodically reviews the cost
method investments for instances where fair value is less than the carrying
amount and the decline in value is determined to be other than temporary. If the
decline in value is judged to be other than temporary, the carrying amount of
the security is written down to fair value and the resulting loss is charged to
operations.
Acquisition costs of mineral rights are
initially capitalized as incurred while exploration and pre-extraction
expenditures are expensed as incurred until such time proven or probable
reserves are established for that project. Acquisition costs include cash
consideration and the fair market value of shares issued on the acquisition of
mineral properties.
Expenditures relating to exploration
activities are expensed as incurred and expenditures relating to pre-extraction
activities are expensed as incurred until such time proven or probable reserves
are established for that project, after which subsequent expenditures relating
to development activities for that particular project are capitalized as
incurred.
Where proven and probable reserves have
been established, the projects capitalized expenditures are depleted over
proven and probable reserves using the units-of production method upon
commencement of production. Where proven and probable reserves have not been
established, the projects capitalized expenditures are depleted over the
estimated extraction life using the straight-line method upon commencement of
extraction. The Company has not established proven or probable reserves for any
of its projects.
The carrying values of the mineral
rights are assessed for impairment by management on a quarterly basis and as
required whenever indicators of impairment exist. An impairment loss is
recognized if it is determined that the carrying value is not recoverable and
exceeds fair value.
The Company has capitalized the cost of
the purchase of licensing rights for technology used in the process of
recovering and extraction of battery grade lithium carbonate powder from brine
solutions as an intangible asset. The licensing agreement has a term of 7 years,
with a right of refusal option for an additional ten year period, beginning from
the date of a successful bench test. Until a successful bench test is achieved,
there is no finite life for this agreement, and it is as of now an intangible
asset with an indefinite life. In accordance with ASC 350, the Company has not
yet begun to amortize the indefinite life intangible asset, instead testing it
for impairment at reporting periods. Aside from the capitalized acquisition
cost, all costs to date have been related to research and development of the
technology and expensed to profit and loss in accordance with ASC 730.
During the year ended August 31, 2018,
the agreement, which provided licensing rights was terminated and the related
costs were expensed to profit and loss.
|
i.
|
Stock-Based Compensation
|
The Company followed Accounting
Standards Codification (ASC) 718, Compensation Stock Compensation, to
account for its stock options and similar equity instruments issued.
Accordingly, compensation costs attributable to stock options or similar equity
instruments granted are measured at the fair value at the grant date, and
expensed over the expected vesting period. ASC 718 requires excess tax benefits
be reported as a financing cash inflow rather than as a reduction of taxes paid.
The preparation of financial statements
in conformity with U.S GAAP requires us to make certain estimates, judgments and
assumptions that affect the reported amounts of assets and liabilities, the
disclosure of contingent liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period. Some
of the Companys accounting policies require us to make subjective judgments,
often as a result of the need to make estimates of matters that are inherently
uncertain. These accounting policies involve critical accounting estimates
because they are particularly dependent on estimates and assumptions made by
management about matters that are highly uncertain at the time the accounting
estimates are made. Although we have used our best estimates based on facts and
circumstances available to us at the time, different estimates reasonably could
have been used. Changes in the accounting estimates used by the Company are
reasonably likely to occur from time to time, which may have a material effect
on the presentation of financial condition and results of operations.
The Company reviews these estimates,
judgments and assumptions periodically and reflect the effects of revisions in
the period in which they are deemed to be necessary. We believe that these
estimates are reasonable; however, actual results could differ from these
estimates.
Significant accounting estimates and
assumptions are used for, but not limited to:
a) The
Valuation of Deferred Tax Assets
Judgement is required in determining whether
deferred tax assets are recognized on the balance sheet. The recognition of
deferred tax assets requires management to assess the likelihood that the
Company will generate taxable income in future periods to utilize the deferred
tax assets. Due to the Companys history of losses, deferred tax assets have not
been recognized by the Company.
b) Value
of Stock Options
The Company provides compensation benefits to its employees,
directors, officers, and consultants, through a stock option plan. The fair
value of each option award is estimated on the date of grant using the
Black-Scholes option pricing model. Expected volatility assumption used in the
model is based on the historical volatility of the Companys share
price. The Company uses historical data to estimate the period of option
exercises for use in the valuation model. The risk-free interest rate for the
expected term of the option is based on the yields of government bonds. Changes
in these assumptions, especially the share price volatility and the expected
life determination could have a material impact on the Companys profit and loss
for the periods presented. All estimates used in the model are based on
historical data which may not be representative of future results.
Loss per share is computed using the
weighted average number of shares outstanding during the period. The Company has
adopted ASC 220 Earnings Per Share. Diluted loss per share is equivalent to
basic loss per share because the potential exercise of the equity-based
financial instruments was anti-dilutive.
|
l.
|
Foreign Currency
Translations
|
The Companys operations are located in
the United States of America and it has offices in Canada. The Company maintains
its accounting records in U.S. Dollars, as follows:
At the transaction date, each asset,
liability, revenue and expense that was acquired or incurred in a foreign
currency is translated into U.S. dollars by the using of the exchange rate in
effect at that date. At the year end, monetary assets and liabilities are
translated at the exchange rate in effect at that date. The resulting foreign
exchange gains and losses are included in operations.
ASC 820 Fair Value Measurements and
Disclosures requires an entity to maximize the use of observable inputs and
minimize the use of unobservable inputs when measuring fair value. ASC 820
establishes a fair value hierarchy based on the level of independent, objective
evidence surrounding the inputs used to measure fair value. A financial
instruments categorization within the fair value hierarchy is based upon the
lowest level of input that is significant to the fair value measurement. ASC 820
prioritizes the inputs into three levels that may be used to measure fair
value:
Level 1 - Quoted prices in active
markets for identical assets or liabilities;
Level 2 - Inputs other than quoted
prices included within Level 1 that are either directly or indirectly
observable; and
Level 3 - Unobservable inputs that are
supported by little or no market activity, therefore requiring an entity to
develop its own assumptions about the assumptions that market participants would
use in pricing.
The Companys financial instruments
consist primarily of cash and cash equivalents, marketable securities, accounts
receivable, accounts payable and due to related parties. With the exception of
marketable securities, the carrying amounts of these financial instruments
approximate their fair values due to their short maturities. The fair value of
marketable securities are measured based on quoted prices in active markets.
Cash and cash equivalents and marketable securities were in level 1 within the
fair value hierarchy.
The Companys operations are in United
States of America and Canada, which results in exposure to market risks from
changes in foreign currency rates. The financial risk is the risk to the
Companys operations that arise from fluctuations in foreign exchange rates and
the degree of volatility of these rates. Currently, the Company does not use
derivative instruments to reduce its exposure to foreign currency risk.
The Company has adopted ASC 740,
Income Taxes, which requires the Company to recognize deferred tax liabilities
and assets for the expected future tax consequences of events that have been
recognized in the Companys financial statements or tax returns using the
liability method. Under this method, deferred tax liabilities and assets are
determined based on the temporary differences between the financial statement
and tax bases of assets and liabilities using enacted tax rates in
effect in the year in which the differences are expected to reverse. The effect
on deferred tax assets and liabilities of a change in tax rates is recognized in
the period that includes the enactment date. In addition, a valuation allowance
is established to reduce any deferred tax asset for which it is determined that
it is more likely than not that some portion of the deferred tax asset will not
be realized.
|
o.
|
Long-Lived Assets
Impairment
|
In accordance with ASC 360, Accounting
for Impairment or Disposal of Long Lived Assets, the carrying value of long
lived assets are tested for recoverability whenever events or changes in
circumstances indicate that its carrying amount may not be recoverable. The
Company recognizes impairment when the sum of the expected undiscounted future
cash flows is less than the carrying amount of the asset. Impairment losses, if
any, are measured as the excess of the carrying amount of the asset over its
estimated fair value.
|
p.
|
Asset Retirement
Obligations
|
The Company accounts for asset
retirement obligations in accordance with the provisions of ASC 410, Asset
Retirement and Environmental Obligations. ASC 410 requires the Company to
record the fair value of an asset retirement obligation as a liability in the
period in which it incurs a legal obligation associated with the retirement of
tangible long-lived assets that result from the acquisition, construction,
development and/or normal use of the assets. The Company does not believe it has
any asset retirement obligation as of August 31, 2018 and 2017.
The Company has adopted ASC 220,
Comprehensive Income, which establishes standards for reporting and display of
comprehensive income, its components and accumulated balances. The Company is
disclosing this information on its Statement of Stockholders Equity.
Comprehensive income comprises equity except those transactions resulting from
investments by owners and distributions to owners.
|
r.
|
Concentration of credit
risk
|
The Company places its cash and cash
equivalent with high credit quality financial institution.
|
s.
|
Commitments and
Contingencies
|
In accordance with ASC 450-20,
Accounting for Contingencies, the Company records accruals for such loss
contingencies when it is probable that a liability has been incurred and the
amount of loss can be reasonably estimated. In the event that estimates or
assumptions prove to differ from actual results, adjustments are made in
subsequent periods to reflect more current information. Historically, the
Company has not experienced any material claims.
|
t.
|
Research and Development
|
Research and development costs are
expensed as incurred.
|
u.
|
New Accounting
Pronouncements
|
In June 2018, the FASB issued ASU
2018-07, which simplifies the accounting for nonemployee share-based payment
transactions. The amendments specify that Topic 718 applies to all share-based
payment transactions in which a grantor acquires goods or services to be used or
consumed in a grantors own operations by issuing share-based payment awards.
The standard will be effective for us in the first quarter of our fiscal year
2020, although early adoption is permitted (but no sooner than the adoption of
Topic 606). We do not expect that the adoption of this ASU will have a
significant impact on our consolidated financial statements.
On November 22, 2017, the FASB issued
ASU 2017-14 Income StatementReporting Comprehensive Income (Topic 220),
Revenue Recognition (Topic 605), and Revenue from Contracts with Customers (Topic 606). This update amends SEC paragraphs
pursuant to the SEC Staff Accounting Bulletin No. 116 and SEC Release No.
33-10403, which bring existing guidance into conformity with Topic 606, Revenue
from Contracts with Customers. This update is effective in fiscal years,
including interim periods, beginning after December 15, 2017. The adoption of
this standard is not expected to have a material impact on the Company´s
consolidated financial statements.
In August 2016, the FASB issued ASU No.
2016-15 related to the statement of cash flows. This new guidance addresses
eight specific cash flow issues with the objective of reducing the existing
diversity in practice in how certain cash receipts and cash payments are
presented and classified in the statement of cash flows. This update is
effective in fiscal years, including interim periods, beginning after December
15, 2017, and early adoption is permitted. The Company has made a preliminary
evaluation and expects no material impact to arise from the adoption of this
standard on September 1, 2018.
In February 2016, Topic 842, Leases was
issued to replace the leases requirements in Topic 840, Leases. The main
difference between previous GAAP and Topic 842 is the recognition of lease
assets and lease liabilities by lessees for those leases classified as operating
leases under previous GAAP. A lessee should recognize in the balance sheet a
liability to make lease payments (the lease liability) and a right-of-use asset
representing its right to use the underlying asset for the lease term. For
leases with a term of 12 months or less, a lessee is permitted to make an
accounting policy election by class of underlying asset not to recognize lease
assets and lease liabilities. If a lessee makes this election, it should
recognize lease expense for such leases generally on a straight-line basis over
the lease term. The accounting applied by a lessor is largely unchanged from
that applied under previous GAAP. Topic 842 will be effective for annual
reporting periods beginning after December 15, 2018, including interim periods
within those annual periods and is to be retrospectively applied. Earlier
application is permitted. The adoption of this standard is not expected to have
a significant impact on the Companys results of operations, financial
condition, cash flows, and financial statement disclosures.
In May 2014, the FASB issued ASU No.
2014-09, Revenue from Contracts with Customers. The new standard provides a
five-step approach to be applied to all contracts with customers and also
requires expanded disclosures about revenue recognition. The ASU is effective
for annual reporting periods beginning after December 15, 2017, including
interim periods and is to be retrospectively applied. The adoption of this
standard is not expected to have a significant impact on the Companys results
of operations, financial condition, and cash flows.
As at August 31, 2018 and 2017, the
Company held no marketable securities.
During the year ended August 31, 2017,
the Company disposed of the balance of 156,500 common shares of Lexaria Corp.
with a cost basis of $18,780. The proceeds from the sales of shares were
$31,096. Accordingly, a gain of $12,316 was recognized in profit and loss.
Global Solar Water Power Systems
Inc. (GSWPS)
On February 28, 2010, the Company
entered into an Asset and Share Purchase Agreement with the Companys former
chief technical officer - Mr. Mark Snyder to acquire up to 20% ownership
interest of GSWPS.
During the year ended August 31, 2013,
based on the managements assessment of GSWPSs current operations, the Company
decided to write down long-term investment in GSWPS to $1.
During the year ended August 31, 2018,
based on the managements assessment of GSWPSs current operations, the Company
decided to write down long-term investment in GSWPS to $nil.
Pro Eco Energy USA Ltd.
During the year ended August 31, 2008,
the Company purchased 900,000 shares in Pro Eco Energy USA Ltd. (Pro Eco
Energy) for $45,000. During the year ended August 31, 2014, the Company sold
its investment in Pro Eco Energy to Western Standard Energy Corp. for $40,000.
During the year ended August 31, 2015, 600,000 shares of Pro Eco Energy were
returned to the Company and the receivable from Western Standard Energy Corp.
was settled. The Company has no significant influence in Pro Eco Energy.
During the year ended August 31, 2017,
Pro Eco Energy announced it will be closing out the company and the asset was
written down to $nil.
During the year ended August 30, 2017
the Company staked lode and placer claims on BLM lands in Esmerelda county
Nevada covering approximately 160 Acres subject to adjustment. The Company has a
100% interest in the lands and is only responsible for the yearly maintenance
fees to keep its 100% interest. The claims are in good standing until August 31,
2019.
On August 15, 2016, a binding Letter of
Intent (LOI) was signed by Enertopia and Genesis Water Technologies, Inc.
("GWT") with regard to the acquisition by Enertopia of the exclusive worldwide
licensing rights (the "Licensing Rights") by Enertopia of all of the technology
used in the process of recovering and extraction of battery grade lithium
carbonate powder Li2CO3 grading 99.5% or higher purity from brine solutions.
Upon the execution of this LOI,
Enertopia issued 250,000 common shares valued at $12,500 to GWT.
On December 6, 2016, and amended on
October 9, 2017, Enertopia and GWT signed a Definitive Commercial Agreement with
regard to the acquisition by Enertopia of the exclusive licensing rights in the
United States of America, Argentina, Bolivia and Chile of all of the technology
used in the process of recovering and extraction of battery grade lithium
carbonate powder Li2CO3 grading 99.5% or higher purity from brine solutions.
On July 4, 2018, the Company provided
GWT with a formal notice of termination of the commercialization agreement.
Following termination, the Company has no further obligations with respect to
the commercialization agreement. As a result, for the year ended August 31,
2018, the Company wrote off capitalized costs of $12,500.
8.
|
RELATED PARTY TRANSACTIONS
|
For the year ended August 31, 2018, the
Company was party to the following related party transactions with key
management personnel, which consists of the President, Chief Executive Officer,
Chief Financial Officer and directors:
|
|
Incurred $42,000 (August 31, 2017: $72,000) to the
President of the Company in consulting fees (Note 11(a)). As at August 31,
2018, the accounts payable to the President of the Company was $171,234
(August 31, 2017: $141,035)
|
|
|
Incurred $Nil (August 31, 2017: $62,040) in consulting
fees to a company controlled by the former CFO of the Company.
|
|
|
Incurred share based compensation expenses of $43,938 in
relation to stock options issued to officers and directors of the Company
(August 31, 2017: $58,942).
|
|
|
Incurred $787 (August 31, 2017: $Nil) to a director of
the Company.
|
The related party transactions are
recorded at the exchange amount established and agreed to between the related
parties.
On September 23, 2016, the Company
closed the final tranche of a private placement of 3,858,571 units at a price of
CAD$0.035 per unit for gross proceeds of CAD$135,050 (equivalent of $100,037).
Each unit consists of one common share of the Company and one non-transferable
share purchase warrant, each full warrant entitling the holder to purchase one
additional common share of the Company for a period of 24 months from the date
of issuance, at a purchase price $0.07. A cash finders fee of CAD$4,830 and
138,000 full broker warrants that expire September 23, 2018 was paid to
Canaccord Genuity and Leede Jones Gable Inc.
On October 7, 2016, the Company issued
175,000 shares with a fair value of $7,000 per the definitive agreement signed
on May 12, 2016 to purchase a 100% interest in approximately 2,560 acres of
placer mining claims in Churchill, Lander and Nye Counties Nevada, USA. Also see
Note 7. The value of the shares was capitalized to Mineral Properties.
On January 20, 2017, the Company closed
the first tranche of a private placement of 1,000,000 units at a price of
CAD$0.04 per unit for gross proceeds of CAD$40,000 (equivalent of $29,630). Each
unit consists of one common share of the Company and one non-transferable share
purchase warrant, each full warrant entitling the holder to purchase one
additional common share of the Company for a period of 24 months from the date
of issuance, at a purchase price of $0.06. A cash finders fee of CAD$800 and
20,000 full broker warrants that expire January 20, 2019 was paid to Leede Jones
Gable Inc.
On February 28, 2017, the Company
closed the first tranche of a private placement of 4,250,000 units at a price of
CAD$0.04 per unit for gross proceeds of CAD$170,000 (equivalent of $125,926).
Each unit consists of one common share of the Company and one non-transferable
share purchase warrant, each full warrant entitling the holder to purchase one
additional common share of the Company for a period of 24 months from the date
of issuance, at a purchase price of $0.06. A cash finders fee of CAD$11,100 and
227,500 full broker warrants that expire February 28, 2019 was paid to Leede
Jones Gable Inc., Canaccord Genuity and Duncan McKay.
On April 21, 2017, the Company issued
95,500 shares for gross proceeds of $5,685 from the exercise of warrants of
previous financings at $0.05 and $0.07.
On April 30, 2017, the Company issued
166,500 shares for gross proceeds of $11,655 from the exercise of warrants from
a previous financing at $0.07.
On April 30, 2017, the Company closed
the final tranche of a private placement of 3,224,000 units at a price of
CAD$0.09 per unit for gross proceeds of CAD$290,160 (equivalent of $214,933).
Each unit consists of one common share of the Company and one non-transferable
share purchase warrant, each full warrant entitling the holder to purchase one
additional common share of the Company for a period of 24 months from the date
of issuance, at a purchase price of $0.12. A cash finders fee of CAD$20,736 and
230,400 full broker warrants that expire April 28, 2019 was paid to Leede Jones
Gable and Canaccord Genuity.
On November 1, 2017, the Company closed
the first tranche of a private placement of 2,600,000 units at a price of
CAD$0.05 per unit for gross proceeds of CAD$130,000 (equivalent of $101,198).
Each unit consists of one common share of the Company and one non-transferable
share purchase warrant, each full warrant entitling the holder to purchase one
additional common share of the Company for a period of 24 months from the date
of issuance, at a purchase price of $0.06.
On December 8, 2017, the Company closed
the second tranche of a private placement of 3,954,000 units at a price of
CAD$0.05 per unit for gross proceeds of CAD$197,700 (equivalent of $154,397).
Each unit consists of one common share of the Company and one non-transferable
share purchase warrant, each full warrant entitling the holder to purchase one
additional common share of the Company for a period of 24 months from the date
of issuance, at a purchase price of $0.06. A cash finders fee of CAD$12,770
(equivalent of $9,938) and 230,400 broker warrants was paid to a third party.
The broker warrants have the same terms as the warrants issued as part of the
unit offering.
On December 8, 2017, the Company issued
240,000 shares for gross proceeds of $12,000 from the exercise of stock options
at $0.05.
On January 12, 2018, the Company closed
the final tranche of a private placement of 1,611,000 units at a price of
CAD$0.05 per unit for gross proceeds of CAD$80,550 (equivalent of $64,371). Each
unit consists of one common share of the Company and one non-transferable share
purchase warrant, each full warrant entitling the holder to purchase one
additional common share of the Company for a period of 24 months from the date
of issuance, at a purchase price of $0.06. A cash finders fee of CAD$3,880
(equivalent of $3,103) and 77,600 broker warrants was paid to a third party. The
broker warrants have the same terms as the warrants issued as part of the unit
offering.
On February 2, 2018, the Company issued
50,000 shares for gross proceeds of $3,500 from the exercise of warrants at
$0.07.
On May 11, 2018, the Company issued
200,000 shares for gross proceeds of $12,000 from the exercise of stock options
at $0.06.
On May 11, 2018, the Company closed the
first tranche of a private placement of 1,746,900 units at a price of CAD$0.06
per unit for gross proceeds of CAD$104,814 (equivalent of $81,987). Each unit
consists of one common share of the Company and one non-transferable share
purchase warrant, each full warrant entitling the holder to purchase one
additional common share of the Company for a period of 24 months from the date
of issuance, at a purchase price of $0.075. A cash finders fee of CAD$9,281
(equivalent of $7,258) and 144,690 full broker warrants that expire May 11, 2020
was paid to third parties. The broker warrants have the same terms as the
warrants issued as part of the unit offering.
On May 25, 2018, the Company closed the
final tranche of a private placement of 2,470,000 units at a price of CAD$0.06
per unit for gross proceeds of CAD$148,200 (equivalent of $114,822). Each unit
consists of one common share of the Company and one non-transferable share
purchase warrant, each full warrant entitling the holder to purchase one
additional common share of the Company for a period of 24 months from the date
of issuance, at a purchase price of $0.075. A cash finders fee of CAD$5,820
(equivalent of $4,488) and 70,000 full broker warrants that expire May 25, 2020
was paid to third parties. The broker warrants have the same terms as the
warrants issued as part of the unit offering.
On August 31, 2018, the Company closed
the first tranche of a private placement of 4,400,000 units at a price of
CAD$0.03 per unit for gross proceeds of CAD$132,000 (equivalent of $101,111).
Each unit consists of one common share of the Company and one non-transferable
share purchase warrant, each full warrant entitling the holder to purchase one
additional common share of the Company for a period of 36 months from the date
of issuance, at a purchase price of $0.05. A cash finders fee of CAD$12,000
(equivalent of $9,192) and 400,000 full broker warrants that expire August 31,
2021 was paid to third parties. The broker warrants have the same terms as the
warrants issued as part of the unit offering.
On August 31, 2018, the Company issued
170,000 shares for gross proceeds of $9,000 from the exercise of 50,000 stock
options at $0.06 and 120,000 stock options at $0.05 respectively.
As at August 31, 2018 the Company had
119,739,931 shares issued and outstanding and as at August 31, 2017, the Company
had 102,298,031 shares issued and outstanding.
10.
|
STOCK OPTIONS AND WARRANTS
|
Stock Options
On July 15, 2014, the shareholders
approved and adopted at the Annual General Meeting the Companys 2014 Stock
Option Plan. On April 14, 2011, the shareholders approved and adopted at the
Annual General Meeting to consolidate the Companys
2007 Equity compensation plan and the Companys 2010 Equity Compensation Plan
into a new Company 2011 Stock Option Plan. The purpose of these Plans is to
advance the interests of the Corporation, through the grant of Options, by
providing an incentive mechanism to foster the interest of eligible persons in
the success of the Corporation and its affiliates; encouraging eligible persons
to remain with the Corporation or its affiliates; and attracting new Directors,
Officers, Employees and Consultants.
On September 19, 2016, the Company
granted 800,000 stock options to consultant of the Company with an exercise
price of $0.07 vested immediately, expiring September 19, 2021.
On January 20, 2017, the Company
granted 1,535,000 stock options to directors, officers and consultant of the
Company with an exercise price of $0.07 vested immediately, expiring January 20,
2022.
On January 31, 2017, the Company
granted 1,500,000 stock options to consultant of the Company with an exercise
price of $0.07 vested immediately, expiring January 31, 2022.
On May 2, 2017, the Company granted
500,000 stock options to consultant of the Company with an exercise price of
$0.10, vested immediately, expiring May 2, 2022.
On November 1, 2017, the Company
granted 800,000 stock options to a director and consultant of the Company with
an exercise price of $0.05, expiring November 2, 2022.
On May 11, 2018, the Company granted
535,000 stock options to a director and consultant of the Company with an
exercise price of $0.06, expiring May 11, 2023.
On May 22, 2018, the Company granted
550,000 stock options to consultants of the Company with an exercise price of
$0.07, expiring May 22, 2023.
For the year ended August 31, 2018, the
Company recorded $89,596 (August 31, 2017: $227,428) stock based compensation
expense.
A summary of the changes in stock
options for the year ended August 31, 2018 is presented below:
|
|
|
|
|
|
Options Outstanding
|
|
|
|
|
|
|
|
Weighted Average
|
|
|
|
|
Number of Shares
|
|
|
Exercise Price
|
|
|
Balance, August 31, 2016
|
|
3,210,000
|
|
$
|
0.07
|
|
|
Cancelled
|
|
(250,000
|
)
|
|
0.06
|
|
|
Granted
|
|
4,335,000
|
|
|
0.07
|
|
|
Balance, August 31, 2017
|
|
7,295,000
|
|
$
|
0.07
|
|
|
Granted
|
|
1,885,000
|
|
|
0.06
|
|
|
Exercised
|
|
(610,000
|
)
|
|
0.05
|
|
|
Balance, August 31, 2018
|
|
8,570,000
|
|
$
|
0.07
|
|
The fair value of options granted has
been estimated as of the date of the grant by using the Black-Scholes option
pricing model with the following assumptions:
|
|
|
August 31, 2018
|
|
|
August 31, 2017
|
|
|
Expected volatility
|
|
204%
|
|
|
182%-232%
|
|
|
Risk-free interest rate
|
|
1.93%
|
|
|
1.22%-1.95%
|
|
|
Expected life
|
|
5.00 years
|
|
|
5.00 years
|
|
|
Dividend yield
|
|
0.00%
|
|
|
0.00%
|
|
|
Estimated fair value per option
|
|
$0.05
|
|
|
$0.05-$0.09
|
|
The Company has the following options
outstanding and exercisable.
August 31, 2018
|
|
|
|
|
|
Options
outstanding and
|
|
|
|
exercisable
|
|
|
|
Number
|
|
|
Remaining
|
|
Exercise prices
|
|
of shares
|
|
|
contractual
|
|
|
|
|
|
|
life
|
|
$0.07
|
|
550,000
|
|
|
4.73 years
|
|
$0.06
|
|
535,000
|
|
|
4.70 years
|
|
$0.05
|
|
800,000
|
|
|
4.16 years
|
|
$0.10
|
|
500,000
|
|
|
3.67 years
|
|
$0.07
|
|
1,500,000
|
|
|
3.42 years
|
|
$0.07
|
|
1,535,000
|
|
|
3.39 years
|
|
$0.07
|
|
800,000
|
|
|
3.05 years
|
|
$0.05
|
|
1,100,000
|
|
|
2.15 years
|
|
$0.10
|
|
1,000,000
|
|
|
1.18 years
|
|
$0.06
|
|
250,000
|
|
|
0.18 years
1
|
|
|
|
|
|
|
|
|
|
|
8,570,000
|
|
|
2.88 years
|
|
|
1.
|
250,000 options expired unexercised subsequent to August
31, 2018
|
August 31, 2017
|
|
Options
outstanding and
|
|
|
|
exercisable
|
|
|
|
Number
|
|
|
Remaining
|
|
Exercise prices
|
|
of shares
|
|
|
contractual
|
|
|
|
|
|
|
life
|
|
$0.10
|
|
500,000
|
|
|
4.67 years
|
|
$0.07
|
|
1,500,000
|
|
|
4.42 years
|
|
$0.07
|
|
1,535,000
|
|
|
4.39 years
|
|
$0.07
|
|
800,000
|
|
|
4.05 years
|
|
$0.05
|
|
1,460,000
|
|
|
3.15 years
|
|
$0.10
|
|
1,000,000
|
|
|
2.18 years
|
|
$0.06
|
|
500,000
|
|
|
1.18 years
|
|
|
|
|
|
|
|
|
|
|
7,295,000
|
|
|
3.43 years
|
|
The aggregate intrinsic value for
options vested and total options as at August 31, 2018 and 2017 is $Nil.
Warrants
On February 28, 2017, the Company
signed a Letter of Engagement with Adam Mogil and issued 1,000,000 warrant
options to convert to 1,000,000 common shares to Adam Mogil to provide corporate
services. The warrants have an exercise price of $0.09 and expire August 28,
2017. The fair value of the warrants granted has been estimated as of the date
of the grant by using the Black-Scholes option pricing model with the following
assumptions: expected volatility: 182%, risk-free interest rate: 1.22%, expected
life: 0.50 years, dividend yield: 0.00% . The Company has recorded $29,168 in
stock based compensation expense related to these warrants in the year ended
August 31, 2017.
On April 21, 2017, the Company issued
95,500 shares for gross proceeds of $5,685 from the exercise of warrants of
previous financings at $0.05 and $0.07.
On April 30, 2017, the Company issued
166,500 shares for gross proceeds of $11,655 from the exercise of warrants from
a previous financing at $0.07.
During the year ended August 31, 2017,
the Company issued 12,332,571 warrants attached to units issued in multiple
private placements, see Note 9 for disclosure of individual amounts and terms of
warrants by private placement. In addition, the Company issued 615,900 brokers
warrants in connection with these private placements, also disclosed in Note 9.
The fair value of the brokers warrants was $33,213 (2016 - $Nil), recorded as
share issuance costs off-setting the gross proceeds of private placements in
additional-paid-in-capital, and was calculated using the Black Scholes option
pricing model, with the following weighted average assumptions: expected
volatility 168%, risk-free interest rate: 1.14%, expected life: 2 years,
dividend yield: 0.00% .
During the year ended August 31, 2018,
the Company issued 16,781,900 warrants attached to units in private placements
and 922,690 broker warrants in connection with the private placements, see Note
9 for disclosure of the terms of the warrants. The fair value of the brokers
warrants was $27,791, recorded as share issuance costs off-setting the gross
proceeds of private placements in additional-paid-in-capital, and was calculated
using the Black Scholes option pricing model, with the following weighted
average assumptions: expected volatility 152%, risk-free interest rate: 2.10%,
expected life: 2.43 years, dividend yield: 0.00% .
A summary of warrants as at August 31,
2018 and August 31, 2017 is as follows:
|
|
|
|
|
|
Warrant Outstanding
|
|
|
|
|
|
|
|
Weighted Average
|
|
|
|
|
Number of warrants
|
|
|
Exercise Price
|
|
|
Balance, August 31, 2016
|
|
29,412,139
|
|
$
|
0.09
|
|
|
Expired
|
|
(3,906,800
|
)
|
|
0.10
|
|
|
Exercised
|
|
(262,000
|
)
|
|
0.07
|
|
|
Issued
|
|
13,948,471
|
|
|
0.08
|
|
|
Balance, August 31, 2017
|
|
39,191,810
|
|
$
|
0.09
|
|
|
Expired
|
|
(16,107,340
|
)
|
|
0.12
|
|
|
Issued
|
|
17,704,590
|
|
|
0.06
|
|
|
Exercised
|
|
(50,000
|
)
|
|
0.07
|
|
|
Balance, August 31, 2018
|
|
40,739,060
|
|
$
|
0.06
|
|
|
Number
|
|
|
|
|
Exercise
|
|
|
Expiry
|
|
|
Outstanding
1
|
|
|
|
|
Price
|
|
|
Date
|
|
|
4,800,000
|
|
|
|
|
$0.050
|
|
|
August 31, 2021
|
|
|
2,540,000
|
|
|
|
|
$0.075
|
|
|
May 25, 2020
|
|
|
1,891,590
|
|
|
|
|
$0.075
|
|
|
May 11, 2020
|
|
|
1,688,600
|
|
|
|
|
$0.060
|
|
|
January 12, 2020
|
|
|
4,184,400
|
|
|
|
|
$0.060
|
|
|
December 8, 2019
|
|
|
2,600,000
|
|
|
|
|
$0.060
|
|
|
November 1, 2019
|
|
|
3,253,333
|
|
|
|
|
$0.050 and $0.10
after 18 months
|
|
|
June 8, 2019
|
|
|
6,882,666
|
|
|
|
|
$0.050 and $0.10 after 18 months
|
|
|
May 20, 2019
|
|
|
3,454,400
|
|
|
|
|
$0.120
|
|
|
April 29, 2019
|
|
|
4,477,500
|
|
|
|
|
$0.060
|
|
|
February 28, 2019
|
|
|
1,020,000
|
|
|
|
|
$0.060
|
|
|
January 20, 2019
|
|
|
3,946,571
|
|
|
|
|
$0.070
|
|
|
September 23, 2018
2
|
|
|
40,739,060
|
|
|
|
|
|
|
|
|
|
|
1.
|
Each warrant entitles a holder to purchase one common
share.
|
|
2.
|
3,946,571 warrants expired unexercised subsequent to
August 31, 2018
|
|
(a)
|
The Company has a consulting agreement with the President
of the Company for corporate administration and consulting services for
$3,500 per month plus goods and services tax (GST) on a continuing
basis.
|
The following table reconciles the
income tax benefit at the U.S. Federal statutory income tax rates to income tax
benefit at the Companys effective tax rates at August 31, 2018 and 2017:
|
|
|
August 30,
|
|
|
August 30,
|
|
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
Loss before taxes
|
$
|
(650,055
|
)
|
$
|
(801,166
|
)
|
|
Statutory tax rate
|
|
25.3%
|
|
|
34%
|
|
|
Expected income tax recovery
|
|
(164,680
|
)
|
|
(272,396
|
)
|
|
Non-deductible items
|
|
22,698
|
|
|
77,326
|
|
|
Change in enacted rates and
other
|
|
1,618,859
|
|
|
(40,132
|
)
|
|
Adjustment to prior years provision versus
statutory tax returns and expiry of non-capital losses
|
|
(65,410
|
)
|
|
-
|
|
|
Share issuance costs
|
|
-
|
|
|
(17,769
|
)
|
|
Change in valuation allowance
|
|
(1,411,467
|
)
|
|
252,971
|
|
|
Income tax expense (recovery)
|
$
|
-
|
|
$
|
-
|
|
In December 2017, the United States
Government proposed changes to the Federal corporate income tax rate to reduce
the rate from 34% to 21% effective January 1, 2018 and onwards. This change in
tax rate was substantively enacted on December 22, 2017. The relevant deferred
tax balances have been remeasured to reflect the decrease in the Company's
Federal income tax rate from 34% to 21%.
Deferred taxes reflect the tax effects
of temporary differences between the carrying amount of assets and liabilities
for financial reporting purposes. Deferred tax assets (liabilities) at August
31, 2018 and 2017 are comprised of the following:
|
|
|
August 30,
|
|
|
August 30,
|
|
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
Net operating loss carry
forwards
|
$
|
2,722,136
|
|
$
|
4,110,965
|
|
|
Marketable securities
|
|
5,698
|
|
|
9,225
|
|
|
Financing costs
|
|
7,253
|
|
|
15,839
|
|
|
Intangible assets
|
|
4,725
|
|
|
-
|
|
|
Mineral property
|
|
20,108
|
|
|
32,555
|
|
|
Capital loss carry forwards
|
|
4,526
|
|
|
7,328
|
|
|
|
|
2,764,446
|
|
|
4,175,912
|
|
|
Valuation allowance
|
|
2,764,446
|
|
|
4,175,912
|
|
|
Deferred tax assets
(liabilities)
|
$
|
-
|
|
$
|
-
|
|
The Company has net operating loss
carry forwards of approximately $12,963,000 which may be carried forward to
apply against future taxable income for US tax purposes, subject to the final
determination by the taxation authority, expiring in the following years. Future
tax assets have not been recognized because it is not probable that future
taxable profit will be available against which the Company can utilize the
benefits therefrom.
13.
|
SEGMENTED INFORMATION
|
As at August 31, 2018 and August 31,
2017, the Company is operating its business in one reportable segment: natural
resource acquisitions.
On September 21, 2018, the Company
closed the final tranche of a private placement of 2,225,000 units at a price of
CAD$0.03 per unit for gross proceeds of CAD$66,750. Each unit consists of one
common share of the Company and one non-transferable share purchase warrant,
each full warrant entitling the holder to purchase one additional common share
of the Company for a period of 36 months from the date of issuance, at a
purchase price of $0.05. A cash finders fee of CAD$6,075 and 202,500 full
broker warrants that expire September 21, 2021 was paid to third parties. The
broker warrants have the same terms as the warrants issued as part of the unit
offering.
Item 9.
|
Changes in and Disagreements With
Accountants on Accounting and Financial Disclosure
|
There were no disagreements related to accounting principles or
practices, financial statement disclosure, internal controls or auditing scope
or procedure during the two fiscal years and interim periods, including the
interim period up through the date the relationship ended.
Item 9A.
|
Controls and Procedures
|
Managements Report on Disclosure Controls and
Procedures
We maintain disclosure controls and procedures that are
designed to ensure that information required to be disclosed in our reports
filed under the
Securities Exchange Act of 1934
, as amended, is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms, and that such information
is accumulated and communicated to our management, including our president and
chief executive officer (also our principal executive officer) and our chief
financial officer (also our principal financial and accounting officer) to allow
for timely decisions regarding required disclosure.
As of August 31, 2018, the end of our fiscal year covered by
this report, we carried out an evaluation, under the supervision and with the
participation of our president and chief executive officer (also our principal
executive officer) and our chief financial officer (also our principal financial
and accounting officer), of the effectiveness of the design and operation of our
disclosure controls and procedures. Based on the foregoing, our president and
chief executive officer (also our principal executive officer) and our chief
financial officer (also our principal financial and accounting officer)
concluded that our disclosure controls and procedures were effective as of the
end of the period covered by this annual report.
Managements Report on Internal Control over Financial
Reporting
Our management is responsible for establishing and maintaining
adequate internal control over financial reporting. Responsibility, estimates
and judgments by management are required to assess the expected benefits and
related costs of control procedures. The objectives of internal control include
providing management with reasonable, but not absolute, assurance that assets
are safeguarded against loss from unauthorized use or disposition, and that
transactions are executed in accordance with managements authorization and
recorded properly to permit the preparation of financial statements in
conformity with accounting principles generally accepted in the United States.
Our management assessed the effectiveness of our internal control over financial
reporting as of August 31, 2018. In making this assessment, our management used
the criteria set forth by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO) in
Internal Control-Integrated Framework
.
Our management has concluded that, as of August 31, 2018, our internal control
over financial reporting is effective in providing reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with US generally
accepted accounting principles. Our management reviewed the results of their
assessment with our Board of Directors.
This annual report does not include an attestation report of
our Companys registered public accounting firm regarding internal control over
financial reporting. Managements report was not subject to attestation by our
Companys registered public accounting firm pursuant to temporary rules of the
Securities and Exchange Commission that permit our Company to provide only
managements report in this annual report.
Inherent limitations on effectiveness of controls
Internal control over financial reporting has inherent
limitations which include but is not limited to the use of independent
professionals for advice and guidance, interpretation of existing and/or
changing rules and principles, segregation of management duties, scale of
organization, and personnel factors. Internal control over financial reporting
is a process which involves human diligence and compliance and is subject to
lapses in judgment and breakdowns resulting from human failures. Internal
control over financial reporting also can be circumvented by collusion or
improper management override. Because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements on a
timely basis, however these inherent limitations are known features of the
financial reporting process and it is possible to design into the process
safeguards to reduce, though not eliminate, this risk. Therefore, even those systems determined
to be effective can provide only reasonable assurance with respect to financial
statement preparation and presentation. Projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
Changes in Internal Control over Financial
Reporting
There have been no changes in our internal controls over
financial reporting that occurred during the year ended August 31, 2017 that
have materially or are reasonably likely to materially affect, our internal
controls over financial reporting.
Item 9B.
|
Other Information
|
None.
PART III
Item 10.
|
Directors, Executive Officers and Corporate
Governance
|
All directors of our company hold office until the next annual
meeting of the security holders or until their successors have been elected and
qualified. The officers of our company are appointed by our board of directors
and hold office until their death, resignation or removal from office. Our
directors and executive officers, their ages, positions held, and duration as
such, are as follows:
Name
|
Position Held with
our Company
|
Age
|
Date First
Elected
Or Appointed
|
Robert McAllister
|
President, Chief Executive Officer, Chief
Financial Officer and Director
|
58
|
November 2007
April 14, 2008
|
Kristian Ross
|
Director
|
68
|
July 31, 2017
|
Kevin Brown
|
Director
|
54
|
October 23, 2015
|
Business Experience
The following is a brief account of the education and business
experience of each director and executive officer during at least the past five
years, indicating each person's principal occupation during the period, and the
name and principal business of the organization by which he was employed.
Robert McAllister, President, Director
Mr. McAllister was appointed as president in November 2007 and
director in April 2008.
Mr. McAllister has devoted approximately 90% of his
professional time to the business and intends to continue to devote this amount
of time in the future, or more as required.
Mr. McAllister has been a corporate consultant since 2004. He
has also provided and written business and investment articles from 1996 to 2006
in various North American publications. Mr. McAllister is a resource investment
entrepreneur with over 20 years of experience in resource sector evaluations and
commodity cycle analysis.
Kevin Brown, Director
With an investment and business background, Mr. Kevin Brown
leads his organization: Character Counts Coaching and Consulting. Mr. Brown
works with business owners and executives in creating unity and strategy and
overcoming the roadblocks towards achieving short and long term goals.
Currently, Mr. Brown is an asset to many organizations, being directly involved in mediation, negotiations, and
consulting leaders and their teams in developing strategy and execution.
Kristian Ross, Director
Mr. Kristian Ross has extensive experience in management and
financing of Canadian junior resource companies for the past 40 years, including
from early-stage project exploration and project procurement through
feasibility, mine development, and production. Mr. Ross has experience in both
base metal and precious metals project development and was previously President
and CEO of a public mining company with two underground gold and silver mines in
northern Canada.
Family Relationships
There are no family relationships between any of our directors,
executive officers and proposed directors or executive officers.
Involvement in Certain Legal Proceedings
None of our directors, executive officers, promoters or control
persons has been involved in any of the following events during the past five
years:
1. A petition under the Federal
bankruptcy laws or any state insolvency law was filed by or against, or a
receiver, fiscal agent or similar officer was appointed by a court for the
business or property of such person, or any partnership in which he was a
general partner at or within two years before the time of such filing, or any
corporation or business association of which he was an executive officer at or
within two years before the time of such filing;
2. Such person was convicted in a
criminal proceeding or is a named subject of a pending criminal proceeding
(excluding traffic violations and other minor offenses);
3. Such person was the subject of
any order, judgment, or decree, not subsequently reversed, suspended or vacated,
of any court of competent jurisdiction, permanently or temporarily enjoining him
from, or otherwise limiting, the following activities:
|
i.
|
Acting as a futures commission merchant, introducing
broker, commodity trading advisor, commodity pool operator, floor broker,
leverage transaction merchant, any other person regulated by the Commodity
Futures Trading Commission, or an associated person of any of the
foregoing, or as an investment adviser, underwriter, broker or dealer in
securities, or as an affiliated person, director or employee of any
investment company, bank, savings and loan association or insurance
company, or engaging in or continuing any conduct or practice in
connection with such activity
|
|
|
|
|
ii.
|
Engaging in any type of business practice; or
|
|
|
|
|
iii.
|
Engaging in any activity in connection with the purchase
or sale of any security or commodity or in connection with any violation
of Federal or State securities laws or Federal commodities
laws;
|
4. Such person was the subject of
any order, judgment or decree, not subsequently reversed, suspended or vacated,
of any Federal or State authority barring, suspending or otherwise limiting for
more than 60 days the right of such person to engage in any activity described
in paragraph (f)(3)(i) of this section, or to be associated with persons engaged
in any such activity;
5. Such person was found by a
court of competent jurisdiction in a civil action or by the Commission to have
violated any Federal or State securities law, and the judgment in such civil
action or finding by the Commission has not been subsequently reversed,
suspended, or vacated;
6. Such person was found by a
court of competent jurisdiction in a civil action or by the Commodity Futures
Trading Commission to have violated any Federal commodities law, and the
judgment in such civil action or finding by the Commodity Futures Trading
Commission has not been subsequently reversed, suspended or vacated;
7. Such person was the subject
of, or a party to, any Federal or State judicial or administrative order,
judgment, decree, or finding, not subsequently reversed, suspended or vacated,
relating to an alleged violation of:
|
i.
|
Any Federal or State securities or commodities law or
regulation; or
|
|
|
|
|
ii.
|
Any law or regulation respecting financial institutions
or insurance companies including, but not limited to, a temporary or
permanent injunction, order of disgorgement or restitution, civil money
penalty or temporary or permanent cease-and-desist order, or removal or
prohibition order; or
|
|
|
|
|
iii.
|
Any law or regulation prohibiting mail or wire fraud or
fraud in connection with any business entity; or
|
8. Such person was the subject of, or a party to, any sanction
or order, not subsequently reversed, suspended or vacated, of any
self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act
(15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29)
of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange,
association, entity or organization that has disciplinary authority over its
members or persons associated with a member.
Compliance with Section 16(a) of the Securities Exchange Act
of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires
our executive officers and directors and persons who own more than 10% of our
common stock to file with the Securities and Exchange Commission initial
statements of beneficial ownership, reports of changes in ownership and annual
reports concerning their ownership of our common stock and other equity
securities, on Forms 3, 4 and 5 respectively. Executive officers, directors and
greater than 10% shareholders are required by the SEC regulations to furnish us
with copies of all Section 16(a) reports that they file.
Based solely on our review of the copies of such forms received
by us, or written representations from certain reporting persons, we believe
that during fiscal year ended August 31, 2018, all filing requirements
applicable to our officers, directors and greater than 10% percent beneficial
owners were complied with, with the exception of the following:
Name
|
Number of Late
Reports
|
Number of
Transactions Not
Reported on a Timely
Basis
|
Failure to
File
Requested Forms
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
(1)
|
The director / officer was late filing a Form 4, Change
of Beneficial Ownership.
|
(2)
|
The director / officer was late filing a Form 3, Initial
Statement of Beneficial Ownership.
|
Code of Ethics
We adopted a Code of Ethics applicable to our senior financial
officers and certain other finance executives, which is a "code of ethics" as
defined by applicable rules of the SEC. Our Code of Ethics is attached as an
exhibit to our Annual Report on Form 10-KSB filed on November 29, 2007. If we
make any amendments to our Code of Ethics other than technical, administrative,
or other non-substantive amendments, or grant any waivers, including implicit
waivers, from a provision of our Code of Ethics to our chief executive officer,
chief financial officer, or certain other finance executives, we will disclose
the nature of the amendment or waiver, its effective date and to whom it applies
in a Current Report on Form 8-K filed with the SEC.
Board and Committee Meetings
Our board of directors held no formal meetings during the year
ended August 31, 2018. All proceedings of the board of directors were conducted
by resolutions consented to in writing by all the directors and filed with the
minutes of the proceedings of the directors. Such resolutions consented to in
writing by the directors entitled to vote on that resolution at a meeting of the
directors are, according to the Nevada General Corporate Law and our Bylaws, as
valid and effective as if they had been passed at a meeting of the directors
duly called and held.
Nomination Process
As of August 31, 2018, we did not affect any material changes
to the procedures by which our shareholders may recommend nominees to our board
of directors. Our board of directors does not have a policy with regards to the
consideration of any director candidates recommended by our shareholders. Our
board of directors has determined that it is in the best position to evaluate
our Companys requirements as well as the qualifications of each candidate when
the board considers a nominee for a position on our board of directors. If
shareholders wish to recommend candidates directly to our board, they may do so
by sending communications to the president of our Company at the address on the
cover of this annual report.
Audit Committee and Audit Committee Financial Expert
Currently our audit committee consists of our entire board of
directors. We currently do not have nominating, compensation committees or
committees performing similar functions. There has not been any defined policy
or procedure requirements for shareholders to submit recommendations or
nomination for directors.
Our board of directors has determined that it does not have a
member of its board of directors (audit committee) that qualifies as an "audit
committee financial expert" as defined in Item 407(d)(5)(ii) of Regulation S-K,
and is "independent" as the term is used in Item 7(d)(3)(iv) of Schedule 14A
under the Securities Exchange Act of 1934, as amended.
We believe that the members of our board of directors are
collectively capable of analyzing and evaluating our financial statements and
understanding internal controls and procedures for financial reporting. We
believe that retaining an independent director who would qualify as an "audit
committee financial expert" would be overly costly and burdensome and is not
warranted in our circumstances given the early stages of our development and the
fact that we have not generated any material revenues to date. In addition, we
currently do not have nominating, compensation or audit committees or committees
performing similar functions nor do we have a written nominating, compensation
or audit committee charter. Our board of directors does not believe that it is
necessary to have such committees because it believes the functions of such
committees can be adequately performed by our board of directors.
Item 11.
|
Executive Compensation
|
The particulars of the compensation paid to the following
persons:
|
(a)
|
our principal executive officer;
|
|
|
|
|
(b)
|
each of our two most highly compensated executive
officers who were serving as executive officers at the end of the years
ended August 31, 2018 and 2017; and
|
|
|
|
|
(c)
|
up to two additional individuals for whom disclosure
would have been provided under (b) but for the fact that the individual
was not serving as our executive officer at the end of the years ended
August 31, 2018 and 2017
|
who we will collectively refer to as the named executive
officers of our Company, are set out in the following summary compensation
table, except that no disclosure is provided for any named executive officer,
other than our principal executive officers, whose total compensation did not
exceed $100,000 for the respective fiscal year:
SUMMARY COMPENSATION TABLE
|
Name
and Principal
Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
(#)
|
Non-Equity
Incentive
Plan
Compensa-
tion
($)
|
Nonqualified
Deferred
Compensation
Earnings
($)
|
All
Other
Compensa
-
tion
($)
|
Total
($)
|
Robert
McAllister
(1)
President
and Director
|
2018
2017
|
$42,000
$72,000
|
Nil
Nil
|
Nil
Nil
|
Nil
Nil
|
Nil
$19,647
|
Nil
Nil
|
Nil
Nil
|
$42,000
$91,647
|
Kristian Ross
Director
|
2018
2017
|
Nil
Nil
|
Nil
Nil
|
Nil
Nil
|
Nil
Nil
|
$31,730
Nil
|
Nil
Nil
|
Nil
Nil
|
$31,730
Nil
|
Kevin Brown
Director
|
2018
2017
|
Nil
Nil
|
Nil
Nil
|
Nil
Nil
|
Nil
Nil
|
$12,207
$19,647
|
Nil
Nil
|
Nil
Nil
|
$12,207
$19,647
|
(1) On November 30, 2007, Mr.
McAllister was appointed as our President and on April 14, 2008 he was appointed
as a director. Salary for Mr. McAllister was partially accrued for 2017, 2016,
2015 and 2014. On July 31, 2017, Mr. McAllister was appointed interim CFO.
Employment/Consulting Agreements
We entered into a consulting agreement with Mr. Robert
McAllister on December 1, 2007. During the term of this agreement, Mr.
McAllister is to provide corporate administration and oil & gas exploration
and production consulting services, such duties and responsibilities to include
provision of oil and gas industry consulting services, strategic corporate and
financial planning, management of the overall business operations of our
company, and supervising office staff and exploration and oil & gas
consultants. Mr. McAllister is reimbursed at the rate of $2,000 per month. On
December 1, 2008, the consulting fee was increased to $5,000 per month. We may
terminate this agreement without prior notice based on a number of conditions.
Mr. McAllister may terminate the agreement at any time by giving 30 days written
notice of his intention to do so. Effective March 1, 2014, the Company entered
into a new consulting contract with the consulting services at $6,500 per month
plus GST. Effective July 1, 2017, a new consulting contract was entered into
with remuneration set at $3,500 per month plus GST.
Other than as set out in this annual report on Form 10-K we
have not entered into any employment or consulting agreements with any of our
current officers, directors or employees.
Grants of Plan-Based Awards Table
On April 14, 2011, the shareholders approved and adopted at the
Annual General Meeting to consolidate the Companys 2007 Equity compensation
plan and the Companys 2010 Equity Compensation Plan into a new Company 2011
Stock Option Plan. The purpose of this Plan is to advance the interests of the
Corporation, through the grant of Options, by providing an incentive mechanism
to foster the interest of eligible persons in the success of the Corporation and
its affiliates; encouraging eligible persons to remain with the Corporation or
its affiliates; and attracting new Directors, Officers, Employees and
Consultants.
On November 5, 2013 the Company granted 675,000 stock options
to directors, officers, and consultant of the Company with an exercise price of
$0.06 vested immediately, expiring November 5, 2018. 125,000 stock options were
exercised. 50,000 stock options were cancelled.
On November 3, 2014 the Company granted 2,100,000 stock options
to directors, officers, and consultant of the Company with an exercise price of
$0.10 vested immediately, expiring November 3, 2019. 1,050,000 stock options
were cancelled.
On October 23, 2015, the Company granted 1,850,000 stock
options to directors, officers and consultant of the Company with an exercise
price of $0.05 vested immediately, expiring October 23, 2020. 50,000 stock
options were cancelled.
On February 4, 2016, the Company granted 100,000 stock options
to Advisor of the Board of the Company with an exercise price of $0.05 vested
immediately, expiring February 4, 2021.
On January 20, 2017, the Company granted 1,535,000 stock
options to directors, officers and consultant of the Company with an exercise
price of $0.07 vested immediately, expiring January 20, 2022.
On November 1, 2017, the Company granted 800,000 stock options
to a director and consultant of the Company with an exercise price of $0.05,
expiring November 2, 2022.
On May 11, 2018, the Company granted 535,000 stock options to a
director and consultant of the Company with an exercise price of $0.06, expiring
May 11, 2023.
Outstanding Equity Awards at Fiscal Year End
The particulars of unexercised options, stock that has not
vested and equity incentive plan awards for our named executive officers are set
out in the following table:
OUTSTANDING EQUITY AWARDS AT FISCAL
YEAR-END
|
|
OPTION
AWARDS
|
STOCK
AWARDS
|
Name
(a)
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
(b)
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
(c)
|
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
(d)
|
Option
Exercise
Price
($)
(e)
|
Option
Expiration
Date
(f)
|
Number
of
Shares
or Units
of
Stock
That
Have
Not
Vested
(#)
(g)
|
Market
Value of
Shares
or Units
of Stock
That
Have
Not
Vested
($)
(h)
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units
or
Other
Rights
That
Have Not
Vested
(#)
(i)
|
Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That Have
Not Vested
(#)
(j)
|
Robert
McAllister
|
500,000
500,000
|
|
|
$0.10
$0.07
|
2019/11/03
2022/01/20
|
|
|
|
|
Kevin
Brown
|
500,000
500,000
250,000
|
|
|
$0.05
$0.07
$0.06
|
2020/10/23
2022/01/20
2023/05/11
|
|
|
|
|
Kristian
Ross
|
500,000
250,000
|
|
|
$0.05
$0.06
|
2022/10/27
2023/05/11
|
|
|
|
|
Option Exercises
During our fiscal year ended August 31, 2018, there was 610,000
stock options exercised.
Compensation of Directors
Except as otherwise disclosed, we do not have any agreements
for compensating our directors for their services in their capacity as
directors, although such directors are expected in the future to receive stock
options to purchase shares of our common stock as awarded by our board of
directors.
Pension, Retirement or Similar Benefit Plans
There are no arrangements or plans in which we provide pension,
retirement or similar benefits for directors or executive officers. We have no
material bonus or profit sharing plans pursuant to which cash or non-cash
compensation is or may be paid to our directors or executive officers, except
that stock options may be granted at the discretion of the board of directors or
a committee thereof.
Indebtedness of Directors, Senior Officers, Executive
Officers and Other Management
None of our directors or executive officers or any associate or
affiliate of our Company during the last two fiscal years is or has been
indebted to our Company by way of guarantee, support agreement, letter of credit
or other similar agreement or understanding currently outstanding.
Item 12.
|
Security Ownership of Certain Beneficial
Owners and Management and Related Stockholder
Matters
|
The following table sets forth, as of November 19, 2018,
certain information with respect to the beneficial ownership of our common
shares by each shareholder known by us to be the beneficial owner of more than
5% of our common shares, as well as by each of our current directors and
executive officers as a group. Each person has sole voting and investment power
with respect to the shares of common stock, except as otherwise indicated.
Beneficial ownership consists of a direct interest in the shares of common
stock, except as otherwise indicated.
Name and Address of
Beneficial Owner
|
Amount and
Nature of
Beneficial
Ownership
|
Percentage
of Class(1)
|
Robert McAllister
Kelowna, British
Columbia, Canada
|
9,060,000
(2)
|
7.43%
|
Kevin Brown
Kelowna, British Columbia,
Canada
|
1,250,000
(3)
|
1.02%
|
Kristian Ross
Kelowna, British Columbia,
Canada
|
810,000
(4)
|
.66%
|
Directors and Executive Officers as a
Group (3 people)
|
11,120,000
|
9.11%
|
Total
|
11,120,000
|
9.11%
|
(1)
|
Under Rule 13d-3, a beneficial owner of a security
includes any person who, directly or indirectly, through any contract,
arrangement, understanding, relationship, or otherwise has or shares: (i)
voting power, which includes the power to vote, or to direct the voting of
shares; and (ii) investment power, which includes the power to dispose or
direct the disposition of shares. Certain shares may be deemed to be
beneficially owned by more than one person (if, for example, persons share
the power to vote or the power to dispose of the shares). In addition,
shares are deemed to be beneficially owned by a person if the person has
the right to acquire the shares (for example, upon exercise of an option)
within 60 days of the date as of which the information is provided. In
computing the percentage ownership of any person, the amount of shares
outstanding is deemed to include the amount of
shares beneficially owned by such person (and only such person) by
reason of these acquisition rights. As a result, the percentage of outstanding
shares of any person as shown in this table does not necessarily reflect the
persons actual ownership or voting power with respect to the number of shares
of common stock actually outstanding on November 19, 2018. As of November 19,
2018, there were 121,964,931 shares of our companys common stock issued and
outstanding.
|
|
1.
|
500,000 options which are exercisable at $0.10 into
common shares;
|
|
2.
|
500,000 options which are exercisable at $0.07 into
common shares;
|
|
3.
|
200,000 warrants which are exercisable at $0.075 into
common shares;
|
|
4.
|
600,000 warrants which are exercisable at $0.05 into
common shares;
|
|
5.
|
1,100,000 warrants which are exercisable at $0.06 into
common shares; and
|
|
6.
|
6,160,000 common shares.
|
|
1.
|
500,000 options which are exercisable at $0.05 into
common shares;
|
|
2.
|
500,000 options which are exercisable at $0.07 into
common shares;
|
|
3.
|
250,000 options which are exercisable at $0.06 into
common shares;
|
|
1.
|
500,000 options which are exercisable at $0.05 into
common shares; and
|
|
2.
|
250,000 options which are exercisable at $0.06 into
common shares.
|
|
3.
|
60,000 common shares beneficially owned in Wildhorse
Copper Inc.
|
Changes in Control
We are unaware of any contract or other arrangement the
operation of which may at a subsequent date result in a change in control of our
company.
Item 13.
|
Certain Relationships and Related
Transactions, and Director Independence
|
Except as disclosed herein, no director, executive officer,
shareholder holding at least 5% of shares of our common stock, or any family
member thereof, had any material interest, direct or indirect, in any
transaction, or proposed transaction since the year ended August 31, 2014, in
which the amount involved in the transaction exceeded or exceeds the lesser of
$120,000 or one percent of the average of our total assets at the year-end for
the last two completed fiscal years.
For the year ended August 31, 2018, the
Company was party to the following related party transactions:
|
|
Incurred $42,000 (August 31, 2017: $72,000) to
the President of the Company in consulting fees. As at August 31, 2018,
the accounts payable to the President of the Company was $171,234 (August
31, 2017: $141,035)
|
|
|
Incurred $Nil (August 31, 2017: $62,040) in
consulting fees to a company controlled by the former CFO of the Company.
|
|
|
Incurred share based compensation expenses of
$43,938 in relation to stock options issued to officers and directors of
the Company (August 31, 2017: $58,942).
|
|
|
Incurred $787 (August 31, 2017: $Nil) to a
director of the Company.
|
The related party transactions are
recorded at the exchange amount established and agreed to between the related
parties.
Director Independence
We currently act with three (3) directors, consisting of Robert
McAllister, Kevin Brown, and Kristian Ross. We have determined that Kristian
Ross is an independent director as defined in NASDAQ Marketplace Rule
4200(a)(15).
Currently our audit committee consists of three board of
directors. We currently do not have nominating, compensation committees or
committees performing similar functions. There has not been any defined policy
or procedure requirements for shareholders to submit recommendations or
nomination for directors.
Our board of directors has determined that it does not have a
member of its audit committee who qualifies as an audit committee financial
expert as defined in as defined in Item 407(d)(5)(ii) of Regulation S-K.
From inception to present date, we believe that the members of
our audit committee and the board of directors have been and are collectively
capable of analyzing and evaluating our financial statements and understanding
internal controls and procedures for financial reporting.
We do not have a standing compensation or nominating committee,
but our entire board of directors act in such capacity. We believe that our
directors are capable of analyzing and evaluating our financial statements and
understanding internal controls and procedures for financial reporting. Our
directors do not believe that it is necessary to have an audit committee because
we believe that the functions of an audit committee can be adequately performed
by the board of directors. In addition, we believe that retaining additional
independent directors who would qualify as an audit committee financial expert
would be overly costly and burdensome and is not warranted in our circumstances
given the early stages of our development.
Item 14.
|
Principal Accounting Fees and Services
|
The aggregate fees billed for the most recently completed
fiscal year ended August 31, 2018 and for fiscal year ended August 31, 2017 for
professional services rendered by the principal accountant for the audit of our
annual financial statements and review of the financial statements included in
our quarterly reports on Form 10-Q and services that are normally provided by
the accountant in connection with statutory and regulatory filings or
engagements for these fiscal periods were as follows:
|
Year Ended
|
|
August 31, 2018
|
August 31, 2017
|
Audit Fees
|
34,547
|
20,023
|
Audit Related Fees
|
Nil
|
Nil
|
Tax Fees
|
Nil
|
Nil
|
All Other Fees
|
Nil
|
Nil
|
Total
|
34,547
|
20,023
|
Audit Fees.
Audit fees consist of fees billed for
professional services rendered for the audits of our financial statements,
reviews of our interim financial statements included in quarterly reports,
services performed in connection with filings with the Securities and Exchange
Commission and related comfort letters and other services that are normally
provided by Davidson & Company LLP for fiscal year ended August 31, 2018.
Audit related Fees.
There were no audit related fees
paid to Davidson & Company LLP for the fiscal year ended August 31, 2018 or
for the fiscal year ended August 31, 2017.
Tax Fees.
Tax fees consist of fees billed for
professional services for tax compliance, tax advice and tax planning. These
services include assistance regarding federal, state and local tax compliance
and consultation in connection with various transactions and acquisitions. For
the fiscal years ended August 31, 2018 and August 31, 2017, we did not use
Davidson & Company LLP for non-audit professional services or preparation of
corporate tax returns.
We do not use Davidson & Company LLP, for financial
information system design and implementation. These services, which include
designing or implementing a system that aggregates source data underlying the
financial statements or generates information that is significant to our
financial statements, are provided internally or by other service providers. We
do not engage Davidson & Company LLP to provide compliance outsourcing
services.
Effective May 6, 2003, the Securities and Exchange Commission
adopted rules that require that before our independent auditors are engaged by
us to render any auditing or permitted non-audit related service, the engagement
be:
|
|
approved by our audit committee (which consists
of our entire board of directors); or
|
|
|
entered into pursuant to pre-approval policies and
procedures established by the board of directors, provided the policies
and procedures are detailed as to the particular service, the board of
directors is informed of each service, and such policies and procedures do
not include delegation of the board of directors' responsibilities to
management.
|
Our board of directors pre-approves all services provided by
our independent auditors. All of the above services and fees were reviewed and
approved by the board of directors either before or after the respective
services were rendered.
Our board of directors has considered the nature and amount of
fees billed by our independent auditors and believes that the provision of
services for activities unrelated to the audit is compatible with maintaining
our independent auditors independence.
PART IV
Item 15.
|
Exhibits, Financial Statement Schedules
|
|
(1)
|
Financial statements for our Company are listed in the
index under Item 8 of this document
|
|
|
|
|
(2)
|
All financial statement schedules are omitted because
they are not applicable, not material or the required information is shown
in the financial statements or notes thereto.
|
Exhibit
|
Description
|
No.
|
|
|
|
3.1
|
Articles of Incorporation
|
|
|
3.2
|
Bylaws
|
|
|
10.1
|
Mining Lease between Nevada North Resources (U.S.A.),
Inc. and Miranda U.S.A. Inc. (incorporated by reference to our
Registration Statement on Form SB-2 filed January 9, 2006)
|
|
|
10.2
|
Exploration Agreement with Options for Joint Venture
between our company and Miranda U.S.A. Inc. (incorporated by reference to
our Registration Statement on Form SB-2 filed January 9, 2006)
|
|
|
10.3
|
Amended Exploration Agreement between our company and
Miranda U.S.A. Inc. (incorporated by reference to our Registration
Statement on Form SB-2 filed January 9, 2006)
|
|
|
10.4
|
Consulting Agreement between our company and KGE
Management Ltd. (incorporated by reference to our Registration Statement
on Form SB-2 filed January 9, 2006)
|
|
|
10.5
|
Assignment Agreement with 0743608 B.C. Ltd. (incorporated
by reference to our Current Report on Form 8-K filed March 19, 2007)
|
|
|
10.6
|
Consulting Agreement with Mr. Robert McAllister dated
December 1, 2008 (incorporated by reference to Exhibit 10.6 of our Annual
Report on Form 10-K filed December 6, 2013)
|
|
|
10.7
|
Joint Venture Agreement with The Green Canvas Ltd. dated
February 28, 2014 (incorporated by reference to Exhibit 10.1 of our
Current Report on Form 8-K filed February 28, 2014).
|
|
|
10.8
|
Definitive Joint Venture Agreement dated May 28, 2014
with Lexaria (incorporated by reference to Exhibit 10.1 of our Current
Report on Form 8-K filed May 29, 2014).
|
|
|
10.9
|
Form of Stock Option Agreement dated November 18, 2014
((incorporated by reference to Exhibit 10.1 of our Current Report on Form
8-K filed November 18, 2014)
|
|
|
10.10
|
Form of Stock Option Agreement dated November 3, 2014
((incorporated by reference to Exhibit 10.1 of our Current Report on Form
8-K filed November 4, 2014)
|
|
|
10.11
|
Termination and Settlement Agreement dated October 14,
2014 with 0786521 B.C. Ltd (formerly World of Marihuana Productions Ltd.)
and Mathew Chadwick (incorporated by reference to Exhibit 10.1 of our
Current Report on Form 8-K filed October 20, 2014)
|
|
|
10.12
|
Form of Subscription Agreement for Private Placement
closed on January 30, 2015 (incorporated by reference to Exhibit 10.1 of
our Current Report on Form 8-K filed January 30, 2015)
|
10.13
|
Form of Warrant Agreement dated January 30, 2015
(incorporated by reference to Exhibit 10.2 of our Current Report on Form
8-K filed January 30, 2015)
|
|
|
10.14
|
Form of Subscription Agreement for Private Placement
closed on March 12, 2015 (incorporated by reference to Exhibit 10.1 of our
Current Report on Form 8-K filed March 12, 2015)
|
|
|
10.15
|
Form of Warrant Agreement dated March 12, 2015
(incorporated by reference to Exhibit 10.2 of our Current Report on Form
8-K filed March 12, 2015)
Share Purchase Agreement dated June 24, 2015
with Shaxon Enterprises Ltd. (incorporated by reference to Exhibit 10.1 of
our Current Report on Form 8-K filed June 26, 2015)
|
|
|
10.16
|
Joint Agreement and Mutual Release dated June 11, 2015
with Green Canvas Ltd. and Tim Selenski (incorporated by reference to
Exhibit 10.2 of our Current Report on Form 8-K filed June 2, 2015)
|
|
|
10.17
|
Joint Venture Extension Agreement dated April 29, 2015
with The Green Canvas Ltd. and Tim Selenski (incorporated by reference to
Exhibit 10.1 of our Current Report on Form 8-K filed May 1, 2015)
|
|
|
14.1
|
Code of Ethics (incorporated by reference by from our
annual report on Form 10-KSB filed on November 29, 2007).
|
|
|
31.1*
|
Certification pursuant to Rule 13a-14 and Rule 15d-14(a),
promulgated under the Securities and Exchange Act of 1934, as amended
(Chief Executive Officer).
|
|
|
31.2*
|
Certification pursuant to Rule 13a-14 and Rule 15d-14(a),
promulgated under the Securities and Exchange Act of 1934, as amended
(Chief Financial Officer).
|
|
|
32.1*
|
Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002 (Chief
Executive Officer).
|
|
|
32.2*
|
Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002 (Chief
Financial Officer).
|
* Filed herewith.
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.
ENERTOPIA CORP.
|
|
By:
/s/
Robert
McAllister
|
Robert McAllister
|
President and Director
|
Principal Executive Officer
|
Date: November 19, 2018.
|
|
|
By:
/s/
Robert
McAllister
|
Robert McAllister
|
Chief Financial Officer
|
Principal Financial Officer and Principal Accounting
Officer
|
Date: November 19, 2018.
|
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.
By:
/s/
Robert
McAllister
|
Robert McAllister
|
President and Director
|
Principal Executive Officer
|
Date: November 19, 2018.
|
|
|
By:
/s/
Robert
McAllister
|
Robert McAllister
|
Chief Financial Officer
|
Principal Financial Officer and Principal Accounting
Officer
|
Date: November 19, 2018.
|
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