Our unaudited condensed financial statements for the nine month
period ended May 31, 2019 form part of this quarterly report. They are stated in
United States Dollars (US$) and are prepared in accordance with United States
generally accepted accounting principles.
ENERTOPIA CORP.
UNAUDITED CONDENSED INTERIM BALANCE
SHEETS
(Expressed in U.S. Dollars)
|
|
May 31
|
|
|
August 31
|
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
14,202
|
|
$
|
176,409
|
|
Accounts receivable
|
|
4,827
|
|
|
7,504
|
|
Prepaid expenses and
deposit
|
|
44,788
|
|
|
87,777
|
|
Total current assets
|
|
63,817
|
|
|
271,690
|
|
Total Assets
|
$
|
63,817
|
|
$
|
271,690
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
Accounts payable
|
$
|
277,280
|
|
$
|
278,036
|
|
Due to related parties (Note 6)
|
|
186,464
|
|
|
171,234
|
|
Total Current Liabilities
|
|
463,744
|
|
|
449,270
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital
|
|
|
|
|
|
|
Authorized:
200,000,000
common shares with a par value of $0.001 per share
Issued and
outstanding:
127,471,700
common shares at May 31, 2019 and August 31,2018: 119,739,931
|
|
127,473
|
|
|
119,741
|
|
Additional paid-in capital (Note 7)
|
|
13,730,801
|
|
|
13,594,497
|
|
Deficit accumulated during the exploration stage
|
|
(14,258,201
|
)
|
|
(13,891,818
|
)
|
Total Stockholders' Equity
|
|
(399,927
|
)
|
|
(177,580
|
)
|
Total Liabilities and Stockholders' Equity
|
$
|
63,817
|
|
$
|
271,690
|
|
The accompanying notes are an integral part of these unaudited
condensed interim financial statements
F-1
ENERTOPIA CORP.
CONDENSED INTERIM STATEMENTS OF
STOCKHOLDERS' EQUITY (UNAUDITED)
(Expressed in U.S.
Dollars)
|
|
COMMON STOCK
|
|
|
ADDITIONAL
|
|
|
|
|
|
TOTAL
|
|
|
|
|
|
|
|
|
|
PAID-IN
|
|
|
DEFICIT
|
|
|
STOCKHOLDERS'
|
|
|
|
SHARES
|
|
|
AMOUNT
|
|
|
CAPITAL
|
|
|
ACCUMULATED
|
|
|
EQUITY
|
|
Balance, August 31, 2017
|
|
102,298,031
|
|
$
|
102,299
|
|
$
|
12,901,936
|
|
$
|
(13,241,763
|
)
|
$
|
(237,528
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Based Compensation
|
|
-
|
|
|
-
|
|
|
31,237
|
|
|
-
|
|
|
31,237
|
|
Shares issued for Private Placement on
November 1
|
|
2,600,000
|
|
|
2,600
|
|
|
98,293
|
|
|
-
|
|
|
100,893
|
|
Comprehensive income (loss)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(193,341
|
)
|
|
(193,341
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, November 31, 2017
|
|
104,898,031
|
|
|
104,899
|
|
|
13,031,466
|
|
|
(13,435,104
|
)
|
|
(298,739
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for Private
Placement on November 1
|
|
-
|
|
|
-
|
|
|
305
|
|
|
-
|
|
|
305
|
|
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
|
|
Comprehensive income (loss)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(199,548
|
)
|
|
(199,548
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, February 28, 2018
|
|
110,753,031
|
|
|
110,754
|
|
|
13,247,143
|
|
|
(13,634,652
|
)
|
|
(276,755
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Based Compensation
|
|
-
|
|
|
-
|
|
|
58,359
|
|
|
-
|
|
|
58,359
|
|
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
|
|
Comprehensive income (loss)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(179,577
|
)
|
|
(179,577
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, May 31, 2018
|
|
115,169,931
|
|
|
115,171
|
|
|
13,498,148
|
|
|
(13,814,229
|
)
|
|
(200,910
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(77,589
|
)
|
|
(77,589
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, August 31, 2018
|
|
119,739,931
|
|
|
119,741
|
|
|
13,594,497
|
|
|
(13,891,818
|
)
|
|
(177,580
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for Private Placement on
September 21
|
|
2,225,000
|
|
|
2,225
|
|
|
44,750
|
|
|
-
|
|
|
46,975
|
|
Comprehensive income (loss)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(94,799
|
)
|
|
(94,799
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, November 31, 2018
|
|
121,964,931
|
|
|
121,966
|
|
|
13,639,247
|
|
|
(13,986,617
|
)
|
|
(225,404
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(204,456
|
)
|
|
(204,456
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, February 28, 2019
|
|
121,964,931
|
|
|
121,966
|
|
|
13,639,247
|
|
|
(14,191,073
|
)
|
|
(429,860
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for Private
Placement on March 27
|
|
5,506,769
|
|
|
5,507
|
|
|
91,554
|
|
|
-
|
|
|
97,061
|
|
Comprehensive income (loss)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(67,128
|
)
|
|
(67,128
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, May 31, 2019
|
|
127,471,700
|
|
|
127,473
|
|
|
13,730,801
|
|
|
(14,258,201
|
)
|
|
(399,927
|
)
|
The accompanying notes are an integral part of these unaudited
condensed interim financial statements
F-2
ENERTOPIA CORP.
CONDENSED INTERIM STATEMENTS OF
OPERATIONS (UNAUDITED)
(Expressed in U.S. Dollars)
|
|
THREE MONTHS ENDED
|
|
|
NINE MONTHS ENDED
|
|
|
|
May 31
|
|
|
May 31
|
|
|
May 31
|
|
|
May 31
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounting and audit
|
|
13,896
|
|
|
16,212
|
|
|
40,019
|
|
|
38,182
|
|
Bank charges and
interest expense
|
|
307
|
|
|
335
|
|
|
788
|
|
|
1,072
|
|
Consulting
|
|
10,500
|
|
|
10,897
|
|
|
33,450
|
|
|
32,597
|
|
Mineral
exploration costs
|
|
1,007
|
|
|
4,135
|
|
|
125,539
|
|
|
10,218
|
|
Fees and dues
|
|
7,543
|
|
|
5,362
|
|
|
29,018
|
|
|
24,798
|
|
Insurance
|
|
2,994
|
|
|
3,100
|
|
|
9,036
|
|
|
10,377
|
|
Investor relations
|
|
20,460
|
|
|
44,413
|
|
|
90,842
|
|
|
95,916
|
|
Legal and
professional
|
|
1,628
|
|
|
2,790
|
|
|
6,298
|
|
|
9,757
|
|
Office and miscellaneous
|
|
666
|
|
|
45
|
|
|
4,689
|
|
|
3,908
|
|
Research and
development
|
|
6,163
|
|
|
18,429
|
|
|
10,586
|
|
|
230,173
|
|
Rent
|
|
1,462
|
|
|
1,331
|
|
|
5,158
|
|
|
4,064
|
|
Stock based
compensation
|
|
-
|
|
|
58,359
|
|
|
-
|
|
|
89,596
|
|
Telephone
|
|
-
|
|
|
19
|
|
|
-
|
|
|
(110
|
)
|
Travel
|
|
1,764
|
|
|
3,406
|
|
|
10,670
|
|
|
10,365
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
68,390
|
|
|
168,833
|
|
|
366,093
|
|
|
560,913
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) for the period before other
items
|
|
(68,390
|
)
|
|
(168,833
|
)
|
|
(366,093
|
)
|
|
(560,913
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange gain (loss)
|
|
1,262
|
|
|
1,756
|
|
|
(290
|
)
|
|
947
|
|
Write-down of lithium
technology
|
|
-
|
|
|
(12,500
|
)
|
|
|
|
|
(12,500
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss and comprehensive loss for the
period
|
$
|
(67,128
|
)
|
$
|
(179,577
|
)
|
$
|
(366,383
|
)
|
$
|
(572,466
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted income (loss) per
share
|
$
|
(0.00
|
)
|
$
|
(0.00
|
)
|
$
|
(0.00
|
)
|
$
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
common shares
outstanding basic and diluted
|
|
123,276,066
|
|
|
111,337,357
|
|
|
123,104,913
|
|
|
108,019,434
|
|
The accompanying notes are an integral part of these unaudited
condensed interim financial statements
F-3
ENERTOPIA CORP.
CONDENSED INTERIM STATEMENTS OF
CASH FLOWS (UNAUDITED)
(Expressed in U.S. Dollars)
|
|
NINE MONTHS ENDED
|
|
|
|
May 31
|
|
|
May 31
|
|
|
|
2019
|
|
|
2018
|
|
Cash flows used in operating
activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
(loss)
|
$
|
(366,383
|
)
|
$
|
(572,466
|
)
|
Changes to
reconcile net loss to net cash used in operating
activities
|
|
|
|
|
|
|
Stock based compensation
|
|
-
|
|
|
89,596
|
|
Write-down of lithium technology
|
|
-
|
|
|
12,500
|
|
Change in non-cash working capital
items:
|
|
|
|
|
|
|
Accounts receivable
|
|
2,677
|
|
|
3,078
|
|
Prepaid expenses and
deposit
|
|
42,989
|
|
|
(103,690
|
)
|
Accounts payable and accrued liabilities
|
|
(756
|
)
|
|
(16,227
|
)
|
Due to related parties
|
|
15,230
|
|
|
42,920
|
|
Net cash (used in) operating activities
|
|
(306,243
|
)
|
|
(544,289
|
)
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
Net
proceeds from options exercised
|
|
-
|
|
|
24,000
|
|
Net proceeds from
warrants exercised
|
|
-
|
|
|
3,500
|
|
Net
proceeds from subscriptions received
|
|
144,036
|
|
|
491,988
|
|
Net cash from financing activities
|
|
144,036
|
|
|
519,488
|
|
Increase (Decrease) in cash and cash
equivalents
|
|
(162,207
|
)
|
|
(24,801
|
)
|
Cash and cash equivalents, beginning of period
|
|
176,409
|
|
|
150,870
|
|
Cash and cash equivalents, end of
period
|
$
|
14,202
|
|
$
|
126,069
|
|
|
|
|
|
|
|
|
Supplemental information of cash flows
|
|
|
|
|
|
|
Interest paid in cash
|
$
|
-
|
|
$
|
-
|
|
Income
taxes paid in cash
|
$
|
-
|
|
$
|
-
|
|
The accompanying notes are an integral part of these unaudited
condensed interim financial statements
F-4
ENERTOPIA CORP.
|
NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
|
May 31, 2019
|
(Expressed in U.S. Dollars)
|
1.
|
ORGANIZATION
|
|
|
|
The unaudited condensed interim financial statements for the period ended May 31, 2019 included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in annual financial statements prepared in accordance with United States generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These unaudited condensed interim financial statements should be read in conjunction with the August 31, 2018
audited annual financial statements and notes thereto.
|
|
|
|
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 office is located in Kelowna, B.C., Canada.
|
|
|
2.
|
GOING CONCERN UNCERTAINTY
|
|
|
|
The accompanying unaudited condensed interim 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 $399,927 for the nine month period ended May 31, 2019 (deficit of $177,580 for the year ended August 31, 2018). The Company incurred a net loss of $366,383
for the nine month period ended May 31, 2019 (net loss of $572,466 for the nine month period ended May 31, 2018) and as at May 31, 2019 has incurred cumulative losses of $14,258,201 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 Company’s 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 unaudited condensed interim 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 unaudited condensed interim financial statements.
|
3.
|
SIGNIFICANT ACCOUNTING POLICIES
|
a)
|
Basis of Presentation
|
|
|
|
The accompanying unaudited condensed interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and
the instructions to Securities and Exchange Commission (“SEC”) Form 10-Q and Article 10 of SEC Regulation S-X. They do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. Therefore,
these financial statements should be read in conjunction with our audited financial statements and notes thereto for the year ended August 31, 2018.
|
|
|
b)
|
Accounting Estimates
|
|
|
|
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. On an ongoing basis, we evaluate our estimates, judgments, and assumptions, including those related to
revenue recognition, inventory valuation, and stock based compensation (expense and liability). Our estimates, judgments, and assumptions are based on historical experience, future expectations, and other factors which we believe to be reasonable.
Actual results could differ from those estimates and assumptions.
|
|
|
c)
|
Recently Adopted Accounting Pronouncements
|
|
|
|
On November 22, 2017, the FASB issued “ASU 2017-14 — Income Statement—Reporting 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 had no impact on the Company’s balance sheets or statements of operations or cash flows.
|
|
|
|
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 adoption of
this standard had no impact on the Company’s balance sheets or statements of operations or cash flows.
|
|
|
|
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 had no impact on the Company’s balance sheets or
statements of operations or cash flows.
|
|
|
d)
|
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 grantor’s 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.
|
|
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.
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|
|
4.
|
MINERAL PROPERTY
|
|
|
|
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.
|
|
|
5.
|
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.
|
|
|
|
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.
|
|
|
6.
|
RELATED PARTIES TRANSACTION
|
|
|
|
For the nine month period ended May 31, 2019, the Company
was party to the following related party
transactions:
|
|
|
Incurred $31,500 (May 31, 2018: $31,500) to the
President of the Company in consulting fees.
|
|
|
$186,464 (August 31, 2018: $171,234) was
payable to the President of the Company.
|
|
|
Incurred share based compensation expenses of
$Nil in relation to stock options issued to a director of the Company (May
31, 2018: $43,938).
|
The related party transactions are
recorded at the exchange amount established and agreed to between the related
parties.
7.
|
COMMON STOCK
|
|
|
|
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 finder’s 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 finder’s 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 (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.
|
|
|
|
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 (equivalent of $51,678). 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.
|
|
|
|
On March 27, 2019, the Company closed the final tranche of a private placement of 5,506,769 units at a price of CAD$0.03 per unit for gross proceeds of CAD$143,176 (equivalent of $106,809). 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 48 months from the date of issuance, at a purchase price of
$0.04. A cash finders’ fee of CAD$13,068 and 502,600 full broker warrants that expire March 27, 2023 was paid to third parties. The broker warrants have the same terms as the warrants issued as part of the unit offering.
|
|
|
|
As at May 31, 2019 the Company had 127,471,700 shares issued and outstanding and as at August 31, 2018, the Company had 119,739,931 shares issued and outstanding.
|
|
|
8.
|
STOCK OPTIONS AND WARRANTS
|
|
|
|
Stock Options
|
|
|
|
On July 15, 2014, the shareholders approved and adopted at the Annual General Meeting the Company’s 2014 Stock Option Plan. On April 14, 2011, the shareholders approved and adopted at the Annual General Meeting to
consolidate the Company’s 2007 Equity compensation plan and the Company’s 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 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 nine month period ended May 31, 2019, the Company recorded $Nil (May 31, 2018 – $89,596) stock based compensation expenses.
|
|
|
|
A summary of the changes in stock options for the nine month period ended May 31, 2019 is presented below:
|
|
|
|
|
|
Options Outstanding
|
|
|
|
|
|
|
Weighted Average
|
|
|
|
Number of Shares
|
|
|
Exercise Price
|
|
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
|
|
Granted
|
|
-
|
|
|
-
|
|
Expired
|
|
(250,000
|
)
|
|
0.06
|
|
Balance, May 31, 2019
|
|
8,320,000
|
|
$
|
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:
|
|
May
31, 2019
|
May
31, 2018
|
|
Expected volatility
|
-
|
204%
|
|
Risk-free interest rate
|
-
|
1.93%
|
|
Expected life
|
-
|
5.00 years
|
|
Dividend yield
|
-
|
0.00%
|
|
Estimated fair value per option
|
-
|
$0.05
|
The Company has the following options
outstanding and exercisable.
May 31, 2019
|
Options outstanding and
|
|
exercisable
|
|
Number
|
Remaining
|
Exercise prices
|
of shares
|
contractual
|
|
|
life
|
$0.07
|
550,000
|
3.98 years
|
$0.06
|
535,000
|
3.95 years
|
$0.05
|
800,000
|
3.41 years
|
$0.10
|
500,000
|
2.92 years
|
$0.07
|
1,500,000
|
2.67 years
|
$0.07
|
1,535,000
|
2.64 years
|
$0.07
|
800,000
|
2.31 years
|
$0.05
|
1,100,000
|
1.40 years
|
$0.10
|
1,000,000
|
0.43 years
|
|
8,320,000
|
2.63 years
|
*The aggregate intrinsic value for
options outstanding and exercisable as at May 31, 2019 was $Nil.
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
|
|
8,570,000
|
2.88 years
|
Warrants
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
7 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% .
During the nine month period ended May
31, 2019, the Company issued 7,731,769 warrants attached to units in private
placements and 705,100 broker warrants in connection with the private
placements. The fair value of the brokers warrants was $12,861, 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 150%, risk-free interest rate: 2.38%, expected life: 3.71 years,
dividend yield: 0.00% .
A summary of the changes in stock
options for the nine month period ended May 31, 2019 is presented below:
|
|
|
|
|
Warrants Outstanding
|
|
|
|
|
|
|
Weighted Average
|
|
|
|
Number of warrants
|
|
|
Exercise Price
|
|
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
|
|
Expired
|
|
(19,781,137
|
)
|
|
0.07
|
|
Issued
|
|
8,436,869
|
|
|
0.04
|
|
Balance, May 31, 2019
|
|
29,394,792
|
|
$
|
0.05
|
|
|
Number
|
|
|
|
|
Exercise
|
|
Expiry
|
|
|
Outstanding
1
|
|
|
|
|
Price
|
|
Date
|
|
|
6,009,369
|
|
|
|
$
|
0.040
|
|
March 27, 2023
|
|
|
2,427,500
|
|
|
|
$
|
0.050
|
|
September 21, 2021
|
|
|
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
|
|
|
29,394,792
|
|
|
|
|
|
|
|
|
1
Each warrant
entitles a holder to purchase one common share.
9.
|
COMMITMENTS - OTHER
|
|
|
|
|
(a)
|
The Company has a consulting agreement with the President
of the Company for corporate administration and consulting services for
$3,500 per month plus goods and services tax (GST) on a continuing
basis.
|
10.
|
SEGMENTED INFORMATION
|
|
|
|
As at May 31, 2019 and August 31, 2018, the Company is
operating its business in one reportable segment: natural resource
acquisitions. All of the Companys material long-lived assets are located
in the United States.
|
(a)
Item
2. Managements Discussion and Analysis of Financial Condition and Results of
Operations
Forward-Looking Statements
This quarterly report contains forward-looking statements as
that term is defined in the Private Securities Litigation Reform Act of 1995.
These statements relate to future events or our future financial performance. In
some cases, you can identify forward-looking statements by terminology such as
"may", "should", "expects", "plans", "anticipates", "believes", "estimates",
"predicts", "potential" or "continue" or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors, including the risks in the
section entitled "Risk Factors", that may cause our or our industry's actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements. Although
we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the forward-looking
statements to conform these statements to actual results.
Our unaudited condensed financial statements are stated in
United States Dollars (US$) and are prepared in accordance with United States
Generally Accepted Accounting Principles. The following discussion should be
read in conjunction with our unaudited condensed financial statements and the
related notes that appear elsewhere in this quarterly 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 quarterly report, particularly in the section entitled "Risk Factors" of
this quarterly report.
In this quarterly report, unless otherwise specified, all
dollar amounts are expressed in United States dollars. All references to "CDN$"
refer to Canadian dollars and all references to "common shares" refer to the
common shares in our capital stock.
As used in this quarterly report, the terms "we", "us", "our"
and "Company" mean Company and/or our subsidiaries, unless otherwise indicated.
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.
The address of our principal executive office is #22 1873 Spall
Road, Kelowna, British Columbia V1Y 4R2. Our telephone number is (250) 870-2219.
Our current location provides adequate office space for our purposes at this
stage of our development.
Due to the implementation of British Columbia Instrument 51-509
on September 30, 2008 by the British Columbia Securities Commission, we have
been deemed to be a British Columbia based reporting issuer. As such, we are
required to file certain information and documents at
www.sedar.com
.
Summary of Recent Business
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.
On March 27, 2019, the Company closed the final tranche of a private placement of 5,506,769 units at a price of CAD$0.03 per unit for gross proceeds of CAD$143,176. 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 48 months from the date of issuance, at a purchase price of $0.04. A cash finders’ fee
of CAD$13,068 and 502,600 full broker warrants that expire March 27, 2023 was paid to third parties. The broker warrants have the same terms as the warrants issued as part of the unit offering.
Chronological Overview of our Business over the Last Five Years
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. McAllister’s participation on the Lexaria Advisory Board.
On March 10, 2014, our Company’s 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, WOM’s 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 (WOM’s 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 (WOM’s 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 Company’s 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 women’s 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 Company’s 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 Company’s 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 Company’s 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 Company’s 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.
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 $87,000 (plus applicable sales
tax) per annum plus direct expenses. The company will also grant 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 finder’s 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 finder’s 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 $66,000 (plus applicable sales taxes) plus direct
expenses. The Company will also grant 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.
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
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 May 31, 2019, the Company has incurred BLM and county costs of $Nil and associated surface sampling, assaying and 3
rd
party drilling and lab testing of $131,701.
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.
On November 5, 2018, the Company received an Area of Disturbance permit from the Bureau of Land Management, Nevada, allowing the Company access for a series of diamond drill holes. In connection with the Area of Disturbance permit the company posted
a bond of $6,520 to insure completion of future restoration obligations, if necessary. Otherwise, the bond will be returned to the Company. The diamond drill program was completed in December 2018 and consisted of 5 diamond drill holes totaling
approximately 2,000 feet. Four drill holes were for resource definition drilling to allow the Company to provide an inaugural 43-101 project wide lithium resource. A fifth diamond drill hole drilled to an estimated depth of approximately 265 feet
with the recovered lithium enriched material being used for metallurgical and pH solution testing. The Company will undertake systematic and through solution testing of the drilled lithium enriched horizons. This will enable the Company to map the
subsurface horizons as per oxide and reduced horizons and further differentiate the grade of Lithium in solution that can be potentially recovered in a low CAPEX and low-cost extraction methods.
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.
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.
On May 23, 2019 the Company announced the 3
rd
phase of grain sorting testing results. With the goal of this round of testing to show that potentially pre-sorting of the lithium hosted claystone material could be concentrated, these tests
are ongoing, and the Company continues to concentrate on using off the shelf technology under a potential low capex scenario.
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.
Competition
There is strong competition relating to all aspects of the resource sector. We actively compete for capital, skilled personnel, market share, and in all other aspects of our operations with a substantial number of other organizations. These
organizations include small development stage companies like our own, and large, established companies, many of which have greater technical and financial resources than our company.
Compliance with Government Regulation
The exploration and development of mineral properties is subject to various United States federal, state and local and foreign governmental regulations. We may from time to time, be required to obtain licenses and permits from various governmental
authorities in regards to the exploration of our property interests.
Purchase of Significant Acquisition
Not applicable
Corporate Offices
The address of our principal executive office is #22-1873 Spall Road, Kelowna, British Columbia V1Y 4R2. Our telephone number is (250) 870-2219. Our current location provides adequate office space for our purposes at this stage of our
development.
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.
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
Our financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles used 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 management's 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 financials.
Mineral Properties
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 project’s 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 project’s 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.
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.
Revenue Recognition
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.
Going Concern
We have suffered recurring losses from operations. The continuation of our Company as a going concern is dependent upon our Company attaining and maintaining profitable operations and/or raising additional capital. The financial statements do not
include any adjustment relating to the recovery and classification of recorded asset amounts or the amount and classification of liabilities that might be necessary should our Company discontinue operations.
The continuation of our business is dependent upon us raising additional financial support and/or attaining and maintaining profitable levels of internally generated revenue. 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.
Recently Issued Accounting Standards
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 grantor’s 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.
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 Company’s
results of operations, financial condition, cash flows, and financial statement disclosures.
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 Company’s financial statements upon
adoption.
Results of Operations Three Months Ended May 31, 2019 and
May 31, 2018
The following summary of our results of operations should be
read in conjunction with our financial statements for the nine month period
ended May 31, 2019, which are included herein.
Our operating results for the three month period ended May 31,
2019, for the three month period ended May 31, 2018 and the changes between
those periods for the respective items are summarized as follows:
|
|
|
|
|
|
|
|
Change Between
|
|
|
|
|
|
|
|
|
|
Three Month
|
|
|
|
Three Months
|
|
|
Three Months
|
|
|
Period Ended
|
|
|
|
Ended
|
|
|
Ended
|
|
|
May 31, 2019 and
|
|
|
|
May 31, 2019
|
|
|
May 31, 2018
|
|
|
May 31, 2018
|
|
Other expenses (income)
|
$
|
(1,262
|
)
|
$
|
10,744
|
|
$
|
(12,006
|
)
|
General and administrative
|
|
68,390
|
|
|
168,833
|
|
|
(100,443
|
)
|
Bank charges and interest
expense
|
|
307
|
|
|
335
|
|
|
(28
|
)
|
Consulting fees
|
|
10,500
|
|
|
10,897
|
|
|
(397
|
)
|
Stock based compensation
|
|
-
|
|
|
58,359
|
|
|
(58,359
|
)
|
Exploration expenses
|
|
1,007
|
|
|
4,135
|
|
|
(3,128
|
)
|
Research and development
|
|
6,163
|
|
|
18,429
|
|
|
(12,266
|
)
|
Professional fees
|
|
15,524
|
|
|
19,002
|
|
|
(3,478
|
)
|
Investor relations
|
|
20,460
|
|
|
44,413
|
|
|
(23,953
|
)
|
Net
loss
|
|
67,128
|
|
|
179,577
|
|
|
(112,449
|
)
|
Our financial statements report revenue of $Nil for the three
months ended May 31, 2019 and May 31, 2018. Our financial statements report a
net loss of $67,128 for the three month period ended May 31, 2019, compared to a
net loss of $179,577 for the three month period ended May 31, 2018. Our net
losses have decreased by $112,449 for the three month period ended May 31, 2019.
Our general and administrative expenses were lower by $100,443 for three month
period ended May 31, 2019 compared to May 31, 2018. The decrease was largely due
to decreased investor relations, research and development expenditures and stock
based compensation for the three month period ended May 31, 2019 compared to May
31, 2018.
Results of Operations Nine Months Ended May 31, 2019 and
May 31, 2018
The following summary of our results of operations should be
read in conjunction with our financial statements for the nine month period
ended May 31, 2019, which are included herein.
Our operating results for the nine month period ended May 31,
2019, for the nine month period ended May 31, 2018 and the changes between those
periods for the respective items are summarized as follows:
|
|
|
|
|
|
|
|
Change Between
|
|
|
|
|
|
|
|
|
|
Nine Month Period
|
|
|
|
Nine Months
|
|
|
Nine Months
|
|
|
Ended
|
|
|
|
Ended
|
|
|
Ended
|
|
|
May 31, 2019 and
|
|
|
|
May 31, 2019
|
|
|
May 31, 2018
|
|
|
May 31, 2018
|
|
Other expenses
|
$
|
290
|
|
$
|
11,553
|
|
$
|
(11,263
|
)
|
General and administrative
|
|
366,093
|
|
|
560,913
|
|
|
(194,820
|
)
|
Bank charges and interest
expense
|
|
788
|
|
|
1,072
|
|
|
(284
|
)
|
Consulting fees
|
|
33,450
|
|
|
32,597
|
|
|
853
|
|
Stock based compensation
|
|
-
|
|
|
89,596
|
|
|
(89,596
|
)
|
Exploration expenses
|
|
125,539
|
|
|
10,218
|
|
|
115,321
|
|
Research and development
|
|
10,586
|
|
|
230,173
|
|
|
(219,587
|
)
|
Professional fees
|
|
46,317
|
|
|
47,939
|
|
|
(1,622
|
)
|
Investor relations
|
|
90,842
|
|
|
95,916
|
|
|
(5,074
|
)
|
Net
loss
|
|
366,383
|
|
|
572,466
|
|
|
(206,083
|
)
|
Our accumulated losses increased to $14,258,201 as at May 31,
2019. Our financial statements report revenue of $Nil for the nine months ended
May 31, 2019 and May 31, 2018. Our financial statements report a net loss of
$366,383 for the nine month period ended May 31, 2019, compared to a net loss of
$572,466 for the nine month period ended May 31, 2018. Our net losses have
decreased by $206,083 for the nine month period ended May 31, 2019. Our general
and administrative expenses were lower by $194,820 for the nine month period
ended May 31, 2019 compared to the nine month period ended May 31, 2018. The
decrease was largely due to decreased stock based compensation and research and
development expenses, which were offset by an increase in exploration expenses
for the nine month period ended May 31, 2019 compared to May 31, 2018.
As at May 31, 2019, we had $463,744 in current liabilities,
which is comparable to current liabilities as at August 31, 2018. Our net cash
used in operating activities for the nine month period ended May 31, 2019 was
$306,243 compared to $544,289 used in the nine month period ended May 31,
2018.
Our total liabilities as at May 31, 2019 were $463,744 as
compared to total liabilities of $449,270 as of August 31, 2018.
Liquidity and Financial Condition
Working Capital
|
|
At
|
|
|
At
|
|
|
|
May 31,
|
|
|
August 31,
|
|
|
|
2019
|
|
|
2018
|
|
Current assets
|
$
|
63,817
|
|
$
|
271,690
|
|
Current liabilities
|
|
463,744
|
|
|
449,270
|
|
Working capital surplus/(deficit)
|
$
|
(399,927
|
)
|
$
|
(177,580
|
)
|
Cash Flows
|
|
At
|
|
|
At
|
|
|
|
May 31,
|
|
|
May 31,
|
|
|
|
2019
|
|
|
2018
|
|
Cash flows (used in) operating activities
|
$
|
(306,243
|
)
|
$
|
(544,289
|
)
|
Cash flows from investing activities
|
|
-
|
|
|
-
|
|
Cash flows from financing activities
|
|
144,036
|
|
|
519,488
|
|
Net increase (decrease) in cash during year
|
$
|
(162,207
|
)
|
$
|
(24,801
|
)
|
Operating Activities
Net cash used in operating activities was $306,243 for the nine
month period ended May 31, 2019 compared with net cash used in operating
activities of $544,289 for the same period in 2018. The decrease in cash used is
the result of a decrease in net loss for the period.
Financing Activities
Net cash provided by financing activities was $144,036 for the
nine month period ended May 31, 2019 compared to $519,488 for the same period in
2018. The cash provided was from private placements, option exercises and
warrant exercises.
Investing Activities
Net cash provided in investing activities was $Nil in the nine
month period ended May 31, 2019 compared to $Nil in the same period in 2018.