Our unaudited condensed financial statements for the three
months period ended November 30, 2017 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)
|
|
November 30
|
|
|
August 31
|
|
|
|
2017
|
|
|
2017
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents
|
$
|
51,593
|
|
$
|
150,870
|
|
Accounts receivable
|
|
14,209
|
|
|
9,060
|
|
Prepaid
expenses and deposit
|
|
60,533
|
|
|
18,782
|
|
|
|
|
|
|
|
|
Total current assets
|
|
126,335
|
|
|
178,712
|
|
|
|
|
|
|
|
|
Non-Current
|
|
|
|
|
|
|
Long term investments
(Note 5)
|
|
1
|
|
|
1
|
|
Lithium
Technology (Note 7)
|
|
12,500
|
|
|
12,500
|
|
|
|
|
|
|
|
|
Total Assets
|
$
|
138,836
|
|
$
|
191,213
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
$
|
289,191
|
|
$
|
287,706
|
|
Shares Subscription
Received
|
|
-
|
|
|
-
|
|
Due to
related parties (Note 8)
|
|
148,385
|
|
|
141,035
|
|
Total Current Liabilities
|
|
437,576
|
|
|
428,741
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital
|
|
|
|
|
|
|
Authorized:
200,000,000
common shares with a par value of $0.001 per share
Issued and
outstanding:
104,898,031
common shares at November 30, 2017 and August 31,2017: 102,298,031
|
|
104,899
|
|
|
102,299
|
|
|
|
|
|
|
|
|
Additional paid-in capital
(Note 9)
|
|
13,031,466
|
|
|
12,901,936
|
|
|
|
|
|
|
|
|
Deficit accumulated during
the exploration stage
|
|
(13,435,105
|
)
|
|
(13,241,763
|
)
|
|
|
|
|
|
|
|
Total Stockholders'
Equity
|
|
(298,740
|
)
|
|
(237,528
|
)
|
|
|
|
|
|
|
|
Total Liabilities and
Stockholders' Equity
|
$
|
138,836
|
|
$
|
191,213
|
|
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, 2016
|
|
89,528,460
|
|
|
89,528
|
|
|
12,214,934
|
|
|
(12,440,597
|
)
|
|
(136,135
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Based Compensation
|
|
-
|
|
|
-
|
|
|
39,646
|
|
|
-
|
|
|
227,428
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for private
placement on September 23
|
|
3,858,571
|
|
|
3,859
|
|
|
93,792
|
|
|
-
|
|
|
97,651
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for Definitive
Agreement on October 7
|
|
175,000
|
|
|
175
|
|
|
6,825
|
|
|
-
|
|
|
7,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss):
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(165,712
|
)
|
|
(165,712
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, November 30, 2016
|
|
93,562,031
|
|
|
93,562
|
|
|
12,355,197
|
|
|
(12,606,309
|
)
|
|
(157,550
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Based Compensation
|
|
-
|
|
|
-
|
|
|
187,782
|
|
|
-
|
|
|
187,782
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for Private
Placement on January 20
|
|
1,000,000
|
|
|
1,000
|
|
|
28,600
|
|
|
-
|
|
|
29,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for Private
Placement on February 28
|
|
4,250,000
|
|
|
4,250
|
|
|
115,119
|
|
|
-
|
|
|
119,369
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrant conversion on April
21
|
|
95,500
|
|
|
96
|
|
|
5,590
|
|
|
-
|
|
|
5,686
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrant conversion on April
28
|
|
166,500
|
|
|
167
|
|
|
11,488
|
|
|
-
|
|
|
11,655
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for Private
Placement on April 28
|
|
3,224,000
|
|
|
3,224
|
|
|
198,161
|
|
|
-
|
|
|
201,385
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss):
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(635,454
|
)
|
|
(635,454
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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):
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(193,342
|
)
|
|
(193,342
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, November 30, 2017
|
|
104,898,031
|
|
|
104,899
|
|
|
13,031,466
|
|
|
(13,435,105
|
)
|
|
(298,740
|
)
|
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)
|
|
Quarter Ended
|
|
|
|
|
|
|
November 30
|
|
|
|
November 30
|
|
|
2016
|
|
|
|
2017
|
|
|
(Note 13)
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
Net Sales
|
|
-
|
|
|
-
|
|
Cost of Product Sales
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
Gross Profit
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
Accounting and audit
|
|
6,118
|
|
|
14,800
|
|
Sales
& Marketing
|
|
-
|
|
|
-
|
|
Bank charges and interest
expense
|
|
357
|
|
|
1,252
|
|
Consulting (Note 8)
|
|
10,700
|
|
|
39,128
|
|
Mineral exploration costs
|
|
-
|
|
|
31,509
|
|
Fees and
dues
|
|
11,804
|
|
|
11,268
|
|
Insurance
|
|
3,002
|
|
|
3,548
|
|
Investor
relations
|
|
12,651
|
|
|
27,255
|
|
Legal and professional
|
|
3,748
|
|
|
6,336
|
|
Office
and miscellaneous
|
|
1,775
|
|
|
(2,379
|
)
|
Research and Development
|
|
108,748
|
|
|
-
|
|
Rent
|
|
1,362
|
|
|
4,724
|
|
Stock based compensation
|
|
31,237
|
|
|
39,646
|
|
Telephone
|
|
(203
|
)
|
|
697
|
|
Training &
Conferences
|
|
-
|
|
|
-
|
|
Travel
|
|
2,631
|
|
|
527
|
|
|
|
|
|
|
|
|
Total expenses
|
|
193,931
|
|
|
178,311
|
|
|
|
|
|
|
|
|
Loss for the period before
other items
|
|
(193,931
|
)
|
|
(178,311
|
)
|
|
|
|
|
|
|
|
Other income (expense)
|
|
|
|
|
|
|
Foreign exchange gain
|
|
589
|
|
|
-
|
|
Gain on
marketable securities (Note 4)
|
|
-
|
|
|
12,599
|
|
|
|
|
|
|
|
|
Net loss and comprehensive
loss for the period
|
$
|
(193,342
|
)
|
$
|
(165,712
|
)
|
|
|
|
|
|
|
|
Basic and diluted loss per
share
|
$
|
(0.00
|
)
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
Weighted average number of
common shares
outstanding - basic and diluted
|
|
102,504,606
|
|
|
81,823,821
|
|
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)
|
|
Quarter End
|
|
|
|
November 30
|
|
|
November 30
|
|
|
|
2017
|
|
|
2016
|
|
Cash flows used in
operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (loss)
|
$
|
(193,342
|
)
|
$
|
(165,712
|
)
|
Changes
to reconcile net loss to net cash used in operating
activities
|
|
|
|
|
|
|
Stock based
compensation
|
|
31,237
|
|
|
39,646
|
|
Gain on owned securities
|
|
-
|
|
|
(12,599
|
)
|
Change in non-cash working capital items:
|
|
|
|
|
|
|
Accounts receivable
|
|
(5,149
|
)
|
|
(2,599
|
)
|
Prepaid
expenses and deposit
|
|
(41,751
|
)
|
|
26,759
|
|
Accounts payable and
accrued liabilities
|
|
1,485
|
|
|
(13,404
|
)
|
Due to
related parties
|
|
7,350
|
|
|
11,086
|
|
Net cash (used in) operating
activities
|
|
(200,170
|
)
|
|
(116,823
|
)
|
|
|
|
|
|
|
|
Cash flows from (used in) investing
activities
|
|
|
|
|
|
|
Proceeds from sale of marketable securities
|
|
-
|
|
|
25,979
|
|
Mineral
resource properties acquisition
|
|
-
|
|
|
(5,000
|
)
|
Net cash from investing
activities
|
|
-
|
|
|
20,979
|
|
|
|
|
|
|
|
|
Cash flows from financing
activities
|
|
|
|
|
|
|
Net
proceeds from subscriptions received
|
|
100,893
|
|
|
97,651
|
|
Net cash from financing
activities
|
|
100,893
|
|
|
97,651
|
|
Increase (Decrease) in cash and cash
equivalents
|
|
(99,277
|
)
|
|
1,807
|
|
Cash and cash equivalents, beginning of period
|
|
150,870
|
|
|
31,034
|
|
Cash and cash equivalents, end of
period
|
$
|
51,593
|
|
$
|
32,841
|
|
|
|
|
|
|
|
|
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 FINANCIAL STATEMENTS
(unaudited)
|
November 30, 2017
|
(Expressed in U.S. Dollars)
|
|
1.
|
ORGANIZATION
|
|
|
|
The unaudited condensed interim financial statements for
the period ended November 30, 2017 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, 2017 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 $311,241 for the quarter
ended November 30, 2017 [deficit of $250,029 for the year ended August 31,
2017]. The Company incurred a net loss of $193,342 for the three months
ended November 30, 2017 [net loss of $165,712 for the three months ended
November 30, 2016] and as at November 30, 2017 has incurred cumulative
losses of $13,435,105 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 be adequately
financed on this basis.
|
|
|
|
In view of these conditions, the ability of the Company
to continue as a going concern is in substantial doubt and dependent upon
its ability to generate sufficient cash flow to meet its obligations on a
timely basis, to obtain additional financing as may be required, to
receive the continued support of the Companys shareholders, and
ultimately to obtain successful operations. There are no assurances that
we will be able to obtain further funds required for our continued
operations. As noted herein, we are pursuing various financing
alternatives to meet our immediate and long-term financial requirements.
There can be no assurance that additional financing will be available to
us when needed or, if available, that it can be obtained on commercially
reasonable terms. If we are not able to obtain the additional financing on
a timely basis, we will be unable to conduct our operations as planned,
and we will not be able to meet our other obligations as they become due.
In such event, we will be forced to scale down or perhaps even cease our
operations. There is significant uncertainty as to whether we can obtain
additional financing. These unaudited interim condensed 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, 2017.
|
|
|
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
|
|
|
|
In May 2015, the FASB issued guidance to remove the
requirement to categorize within the fair value hierarchy all investments
for which fair value is measured using net asset value per share practical
expedient. The guidance is effective for the Company in the first quarter
of fiscal 2017 and early adoption is permitted. Adoption of the new
guidance, effective for the quarter beginning September 1, 2017, had no
impact on the Companys balance sheets or statements of operations or cash
flows.
|
|
|
d)
|
New Accounting Pronouncements
|
|
|
|
Restricted Cash
|
|
In November 2016, ASU No. 2016-18 was issued related to
the inclusion of restricted cash in the statement of cash flows. This new
guidance requires that a statement of cash flows explain the change during
the period in the total of cash, cash equivalents and amounts generally
described as restricted cash or restricted cash equivalents. This update
is effective in fiscal years, including interim periods, beginning after
December 15, 2017 and early adoption is permitted. The adoption of this
guidance will result in the inclusion of the restricted cash balances
within the overall cash balance and removal of the changes in restricted
cash activity, which are currently recognized in Other financing
activities, on the Statements of Consolidated Cash Flows. Furthermore, an
additional reconciliation will be required to reconcile Cash and cash
equivalents and restricted cash reported within the Consolidated Balance
Sheets to sum to the total shown in the Statements of Consolidated Cash
Flows. The Company is currently evaluating this guidance and the impact it
will have on the Financial Statements and disclosures.
|
|
|
|
Intra-Entity Transfers
|
|
In October 2016, ASU No. 2016-16 was issued related to
the intra-entity transfers of assets other than inventory. This new
guidance requires entities to recognize the income tax consequences of an
intra-entity transfer of an asset other than inventory when the transfer
occurs. This update is effective in fiscal years, including interim
periods, beginning after December 15, 2017 and early adoption is
permitted. The Company is currently evaluating this guidance and the
impact it will have on the Financial Statements and disclosures.
|
|
|
|
Statement of Cash Flows
|
|
In August 2016, ASU No. 2016-15 was issued related to the
statement of cash flows. This new guidance addresses eight specific cash
flow issues with the objective of reducing the existing diversity in
practice in how certain cash receipts and cash payments are presented
and classified in the statement of cash flows. This update is effective in
fiscal years, including interim periods, beginning after December 15, 2017
and early adoption is permitted. The Company is currently evaluating this
guidance and the impact it will have on the Financial Statements and
disclosures.
|
|
Leases
|
|
In February 2016, ASU No. 2016-02 was issued related to
leases. The new guidance modifies the classification criteria and requires
lessees to recognize the assets and liabilities arising from most leases
on the balance sheet. This update is effective in fiscal years, including
interim periods, beginning after December 15, 2018 and early adoption is
permitted. The Company is currently evaluating the updated
guidance.
|
|
|
|
Investments
|
|
In January 2016, ASU No. 2016-01 was issued related to
financial instruments. The new guidance requires entities to measure
equity investments that do not result in consolidation and are not
accounted for under the equity method at fair value and recognize any
changes in fair value in net income. This new guidance also updates
certain disclosure requirements for these investments. This update is
effective in fiscal years, including interim periods, beginning after
December 15, 2017 and early adoption is not permitted. The Company is
currently evaluating the updated guidance.
|
|
|
|
Revenue recognition
|
|
In May 2014, ASU No. 2014-09 was issued related to
revenue from contracts with customers. This ASU was further amended in
August 2015, March 2016, April 2016, May 2016 and December 2016 by ASU No.
2015-14, No. 2016- 08, No. 2016-10, No. 2016-12 and No. 2016-20,
respectively. The new standard provides a five-step approach to be applied
to all contracts with customers and also requires expanded disclosures
about revenue recognition. In August 2015, the effective date was deferred
to reporting periods, including interim periods, beginning after December
15, 2017 and will be applied retrospectively. Early adoption is not
permitted. The Company is currently evaluating the updated
guidance.
|
|
|
4.
|
MARKETABLE SECURITIES
|
|
|
|
As at November 30, 2017 and August 31, 2017, the Company
held no marketable securities.
|
|
|
|
During the quarter end November 30, 2016, the Company
disposed of 134,000 common shares of Lexaria. The proceeds from the sales
of sales were $25,979. The Company recorded a gain of $12,599 in profit
and loss on the sale of marketable securities.
|
|
|
5.
|
LONG TERM INVESTMENTS
|
|
|
|
Global Solar Water Power Systems Inc.
(GSWPS)
|
|
|
|
During the year ended August 31, 2013, based on the
managements assessment of GSWPSs current operations, the Company decided
to write down long-term investment in GSWPS to $1.
|
|
|
6.
|
MINERAL PROPERTY
|
|
|
|
During the year ended August 30, 2017 the company staked
lode and placer claims of 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, 2018.
|
|
|
|
7. LITHIUM TECHNOLOGY
|
|
|
|
On August 15, 2016, a binding Letter of Intent (LOI)
was signed by Enertopia and Genesis Water Technologies, Inc. ("GWT") with
regard to the acquisition by Enertopia of the exclusive worldwide
licensing rights (the "Licensing Rights") by Enertopia of all of the
technology used in the process of recovering and extraction of battery
grade lithium carbonate powder Li2CO3 grading 99.5% or higher purity from
brine solutions.
|
Upon the execution of this LOI,
Enertopia issued 250,000 common shares valued at $12,500 to GWT.
On December 6, 2016, and amended on
October 9, 2017, Enertopia and GWT signed a Definitive Commercial Agreement with
regard to the acquisition by Enertopia of the exclusive licensing rights in the
United States of America, Argentina, Bolivia and Chile of all of the technology
used in the process of recovering and extraction of battery grade lithium
carbonate powder Li2CO3 grading 99.5% or higher purity from brine solutions.
The following are key points of the
terms of the formal Definitive Commercial Agreement:
|
a)
|
Enertopia to pay within 30 days to GWT $10,000 (paid) for
the bench testing of four lithium brine samples to confirm the June 2016
feasibility report. During the period ended November 30, 2017, the Company
signed a Lab Testing Service Agreement with GWT and paid $96,475 for the
purpose of additional bench testing services with a further $96,475 due
December 15, 2017 (paid subsequent to the three month period ended
November 30, 2017) plus materials costs of $8,998 (paid subsequent to the
three month period ended November 30, 2017). Within 30 days of successful
independent 3
rd
party lab testing of the bench test results,
Enertopia will issue 250,000 common shares to GWT.
|
|
b)
|
Upon successful test pilot facility results, start the
construction of commercial Lithium recovery production facility.
|
|
c)
|
Upon receipt of a patent for the process for extracting
lithium from wastewater, Enertopia will issue 250,000 common shares to
GWT.
|
|
d)
|
GWT has granted Enertopia exclusive rights and
relicensing rights to the usage of GWTs patent pending technology
covering United States of America, Argentina, Bolivia and Chile as per the
Commercialization Agreement in return for 10 per cent of net sales royalty
payments for battery grade Lithium Carbonate Li2CO3 produced.
|
|
e)
|
In order to maintain its exclusive rights, Enertopia will
need to make the following minimal payments to GWT on the anniversary of
bench testing achieving 99.5% battery grade Li2CO3 recovery verified by
independent laboratory testing:
|
|
a.
|
On or before the first anniversary, the greater of 10 per
cent of Enertopia net Lithium Carbonate Li2CO3 sales from brine sources or
$50,000;
|
|
b.
|
On or before the second anniversary, the greater of 10
per cent of Enertopia net Lithium Carbonate Li2CO3 sales from brine
sources or $150,000;
|
|
c.
|
On or before the third anniversary annually until the
seventh anniversary, the greater of 10 per cent of Enertopia net Lithium
Carbonate Li2CO3 sales from brine sources or $200,000;
|
|
d.
|
Right of first refusal to renew exclusive rights and
relicensing rights for another 10 years after the first seven year
licensing period on the same net sales terms as those of 2023 or $250,000
per annum.
|
8.
|
RELATED PARTIES TRANSACTION
|
|
|
|
For the three months ended November 30, 2017, the Company
was party to the following related party
transactions:
|
|
|
Incurred $10,500 (November 30, 2016: $19,500) to the
President of the Company in consulting fees.
|
|
|
Incurred CAD$Nil (November 30, 2016: CAD$22,500) in
consulting fees to a company controlled by the former CFO of the Company.
|
|
|
$148,385 (August 31, 2017: $141,035) was payable to the
President of the Company.
|
|
|
Incurred share based compensation expenses of $19,523 in
relation to stock options issued to a director of the Company (November
30, 2016: $nil).
|
The related party transactions are
recorded at the exchange amount established and agreed to between the related
parties.
9.
|
COMMON STOCK
|
|
|
|
On September 23, 2016, the Company closed the final tranche of a private placement of 3,858,571 units at a price of CAD$0.035 per unit for gross proceeds of CAD$135,050 (equivalent of $100,037). Each unit consists of
one common share of the Company and one non-transferable share purchase warrant, each full warrant entitling the holder to purchase one additional common share of the Company for a period of 24 months from the date of issuance, at a purchase price
$0.07. A cash finders’ fee of CAD$4,830 and 138,000 full broker warrants that expire September 23, 2018 was paid to Canaccord Genuity and Leede Jones Gable Inc.
|
|
|
|
On October 7, 2016, the Company issued 175,000 shares with a fair value of $7,000 per the definitive agreement signed on May 12, 2016 to purchase a 100% interest in approximately 2,560 acres of placer mining claims in
Churchill, Lander and Nye Counties Nevada, USA. Also see Note 7. The value of the shares was capitalized to Mineral Properties.
|
|
|
|
On January 20, 2017, the Company closed the first tranche of a private placement of 1,000,000 units at a price of CAD$0.04 per unit for gross proceeds of CAD$40,000 (equivalent of $29,630). Each unit consists of one
common share of the Company and one non-transferable share purchase warrant, each full warrant entitling the holder to purchase one additional common share of the Company for a period of 24 months from the date of issuance, at a purchase price of
$0.06. A cash finders’ fee of CAD$800 and 20,000 full broker warrants that expire January 20, 2019 was paid to Leede Jones Gable Inc.
|
|
|
|
On February 28, 2017, the Company closed the first tranche of a private placement of 4,250,000 units at a price of CAD$0.04 per unit for gross proceeds of CAD$170,000 (equivalent of $125,926). Each unit consists of one
common share of the Company and one non-transferable share purchase warrant, each full warrant entitling the holder to purchase one additional common share of the Company for a period of 24 months from the date of issuance, at a purchase price of
$0.06. A cash finders’ fee of CAD$11,100 and 227,500 full broker warrants that expire February 28, 2019 was paid to Leede Jones Gable Inc., Canaccord Genuity and Duncan McKay.
|
|
|
|
On April 21, 2017, the Company issued 95,500 shares for gross proceeds of $5,685 from the exercise of warrants of previous financings at $0.05 and $0.07.
|
|
|
|
On April 30, 2017, the Company issued 166,500 shares for gross proceeds of $11,655 from the exercise of warrants from a previous financing at $0.07.
|
|
|
|
On April 30, 2017, the Company closed the final tranche of a private placement of 3,224,000 units at a price of CAD$0.09 per unit for gross proceeds of CAD$290,160 (equivalent of $214,933). Each unit consists of one
common share of the Company and one non-transferable share purchase warrant, each full warrant entitling the holder to purchase one additional common share of the Company for a period of 24 months from the date of issuance, at a purchase price of
$0.12. A cash finders’ fee of CAD$20,736 and 230,400 full broker warrants that expire April 28, 2019 was paid to Leede Jones Gable and Canaccord Genuity.
|
|
|
|
On November 1, 2017, the Company closed the first tranche of a private placement of 2,600,000 units at a price of CAD$0.05 per unit for gross proceeds of CAD$130,000 (equivalent of $100,893). 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.
|
|
|
|
As at November 30, 2017 the Company had 104,898,031 shares issued and outstanding and as at August 31, 2017, the Company had 102,298,031 shares issued and outstanding.
|
10.
|
STOCK OPTIONS AND WARRANTS
|
|
|
|
Stock Options
|
|
|
|
On July 15, 2014, the shareholders approved and adopted
at the Annual General Meeting the Companys 2014 Stock Option Plan. On
April 14, 2011, the shareholders approved and adopted at the Annual
General Meeting to consolidate the Companys 2007 Equity compensation plan
and the Companys 2010 Equity Compensation Plan into a new Company 2011
Stock Option Plan. The purpose of these Plans is to advance the interests
of the Corporation, through the grant of Options, by providing an
incentive mechanism to foster the interest of eligible persons in the
success of the Corporation and its affiliates; encouraging eligible
persons to remain with the Corporation or its affiliates; and attracting
new Directors, Officers, Employees and Consultants.
|
|
|
|
On October 23, 2015, the Company granted 1,850,000 stock
options to directors, officers and consultant of the Company with an
exercise price of $0.05 vested immediately, expiring October 23,
2020.
|
|
|
|
On February 4, 2016, the Company granted 100,000 stock
options to Advisor of the Board of the Company with an exercise price of
$0.05 vested immediately, expiring February 4, 2021.
|
|
|
|
On September 19, 2016, the Company granted 800,000 stock
options to consultant of the Company with an exercise price of $0.07
vested immediately, expiring September 19, 2021.
|
|
|
|
On January 20, 2017, the Company granted 1,535,000 stock
options to directors, officers and consultant of the Company with an
exercise price of $0.07 vested immediately, expiring January 20,
2022.
|
|
|
|
On January 31, 2017, the Company granted 1,500,000 stock
options to consultant of the Company with an exercise price of $0.07
vested immediately, expiring January 31, 2022.
|
|
|
|
On May 2, 2017, the Company granted 500,000 stock options
to consultant of the Company with an exercise price of $0.10, vested
immediately, expiring May 2, 2022.
|
|
|
|
On November 1, 2017, the Company granted 800,000 stock
options to a director and consultant of the Company with an exercise price
of $0.05, expiring November 2, 2022.
|
|
|
|
For the three months ended November 30, 2017, the Company
recorded $31,237 (November 30, 2016 $39,646) stock based compensation
expenses.
|
|
|
|
A summary of the changes in stock options for the three
months ended November 30, 2017 is presented
below:
|
|
|
Options Outstanding
|
|
|
Weighted Average
|
|
Number of Shares
|
Exercise Price
|
Balance, August 31, 2017
|
7,295,000
|
$
0.07
|
Granted
|
800,000
|
0.05
|
Balance, November 30, 2017
|
8,095,000
|
$
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:
|
November 30, 2017
|
November 30, 2016
|
Expected volatility
|
204%
|
223%
|
Risk-free interest rate
|
2.03%
|
1.22%
|
Expected life
|
5.00 years
|
5.00 years
|
Dividend yield
|
0.00%
|
0.00%
|
Estimated fair value per option
|
$0.04
|
$0.05
|
The Company has the following options
outstanding and exercisable.
November 30, 2017
|
Options outstanding and
|
|
exercisable
|
|
Number
|
Remaining
|
Exercise prices
|
of shares
|
contractual
|
|
|
life
|
$0.05
|
800,000
|
4.91 years
|
$0.10
|
500,000
|
4.42 years
|
$0.07
|
1,500,000
|
4.17 years
|
$0.07
|
1,535,000
|
4.14 years
|
$0.07
|
800,000
|
3.81 years
|
$0.05
|
1,460,000*
|
2.90 years
|
$0.10
|
1,000,000
|
1.93 years
|
$0.06
|
500,000
|
0.93
years
|
|
|
|
|
8,095,000
|
3.40 years
|
*Subsequent to the three month period
ended November 30, 2017, 240,000 options were exercised for net proceeds of
$12,000.
August 31, 2017
|
Options outstanding and
|
|
exercisable
|
|
Number
|
Remaining
|
Exercise prices
|
of shares
|
contractual
|
|
|
life
|
$0.10
|
500,000
|
4.67 years
|
$0.07
|
1,500,000
|
4.42 years
|
$0.07
|
1,535,000
|
4.39 years
|
$0.07
|
800,000
|
4.05 years
|
$0.05
|
1,460,000
|
3.15 years
|
$0.10
|
1,000,000
|
2.18 years
|
$0.06
|
500,000
|
1.18 years
|
|
|
|
|
7,295,000
|
3.43 years
|
*The aggregate intrinsic value for
options outstanding and exercisable as at November 30, 2017 was $Nil.
Warrants
On December 16, 2015, the Company
submitted to the CSE the Form 13 for extending two classes of warrants by two
years with all other terms and conditions remaining the same. The Company
approved the expiry extension from January 31, 2016 till January 31, 2018 on
2,167,160 warrants that remain outstanding as of November 30, 2017 from the
non-brokered private placement that closed on January 31, 2014. The Company
approved the expiry extension from February 13, 2016 until February 13, 2018 on
7,227,340 warrants that remain outstanding as of November 30, 2017 from the
non-brokered private placement that closed on February 13, 2014. The warrants
were evaluated against ASC 815 Derivatives and Hedging, and determined to be
equity instrument at initial recognition.
On February 28, 2017, the Company
signed a Letter of Engagement with Adam Mogil and issued 1,000,000 warrant
options to convert to 1,000,000 common shares to Adam Mogil to provide corporate
services. The warrants have an exercise price of $0.09 and expire August 28,
2017. The fair value of the warrants granted has been estimated as of the date
of the grant by using the Black-Scholes option pricing model with the following
assumptions: expected volatility: 182%, risk-free interest rate: 1.22%, expected
life: 0.50 years, dividend yield: 0.00% . The Company has recorded $29,168 in
stock based compensation expense.
On April 21, 2017, the Company issued
95,500 shares for gross proceeds of $5,685 from the exercise of warrants of
previous financings at $0.05 and $0.07.
On April 30, 2017, the Company issued
166,500 shares for gross proceeds of $11,655 from the exercise of warrants from
a previous financing at $0.07.
During the year ended August 31, 2017,
the Company issued 12,332,571 warrants attached to units issued in multiple
private placements, see Note 9 for disclosure of individual amounts and terms of
warrants by private placement. In addition, the Company issued 615,900 brokers
warrants in connection with these private placements, also disclosed in Note 9.
The fair value of the brokers warrants was $33,213, recorded as share issuance
costs off-setting the gross proceeds of private placements in
additional-paid-in-capital, and was calculated using the Black Scholes option
pricing model, with the following weighted average assumptions: expected
volatility 168%, risk-free interest rate: 1.14%, expected life: 2 years,
dividend yield: 0.00% .
During the three month period ended
November 30, 2017, the Company issued 2,600,000 warrants attached to units in a
private placement, see Note 9 for disclosure of the terms of the warrants.
A summary of warrants as at November
30, 2017 and August 31, 2017 is as follows:
|
|
Warrant Outstanding
|
|
|
Weighted Average
|
|
Number of warrant
|
Exercise Price
|
Balance, August 31, 2017
|
39,191,810
|
$
0.09
|
Expired
|
-
|
-
|
Issued
|
2,600,000
|
0.06
|
Balance, November 30, 2017
|
41,791,810
|
$
0.09
|
Number
|
Exercise
|
Expiry
|
Outstanding
1
|
Price
|
Date
|
2,600,000
|
$0.06
|
November 1, 2019
|
3,454,400
|
$0.12
|
April 28, 2019
|
4,477,500
|
$0.06
|
February 28, 2019
|
1,020,000
|
$0.06
|
January 20,2019
|
2,167,160
|
$0.15
|
January 31, 2018
|
7,227,340
|
$0.15
|
February 13, 2018
|
1,787,640
|
$0.15
|
January 30, 2018
|
637,200
|
$0.10 and $0.15 after 24 months
|
March 12, 2018
|
6,882,666
|
$0.05 and $0.10 after 18 months
|
May 20, 2019
|
3,253,333
|
$0.05 and $0.10 after 18 months
|
June 8, 2019
|
4,288,000
|
$0.07
|
August 9, 2018
|
3,996,571
|
$0.07
|
September 23, 2018
|
41,791,810
|
|
|
|
1.
|
Each warrant entitles a holder to purchase one common
share.
|
11.
|
COMMITMENTS - OTHER
|
|
|
|
|
(a)
|
The Company has a consulting agreement with the President
of the Company for corporate administration and consulting services for
$5,000 per month plus goods and services tax (GST) on a continuing
basis. Effective March 1, 2014, the Company entered into a new consulting
contract with the consulting services at $6,500 per month plus GST.
Effective July 1, 2017, the Company entered into a new consulting contract
for consulting service at $3,500 per month plus GST.
|
|
|
|
|
(b)
|
On September 19, 2016, the Company 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.
|
12.
|
SEGMENTED INFORMATION
|
|
|
|
As at November 30, 2017 and August 31, 2017, 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.
|
|
|
13.
|
COMPARATIVE FIGURES
|
|
|
|
Certain comparative figures have been reclassified to
conform to the current period's presentation. These reclassifications did
not affect prior periods' net losses.
|
|
|
14.
|
SUBSEQUENT EVENT
|
|
|
|
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. Each unit consists of one
common share of the Company and one non-transferable share purchase
warrant, each full warrant entitling the holder to purchase one additional
common share of the Company for a period of 24 months from the date of
issuance, at a purchase price of $0.06. A cash finders fee of CAD $12,770
and 230,400 full broker warrants was paid to third parties. Each full
broker warrant entitles 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 $0.06.
|
(a)
Item 2.
Managements Discussion and Analysis of Financial Condition and Results of
Operations
Forward-Looking Statements
This quarterly report contains forward-looking statements as
that term is defined in the Private Securities Litigation Reform Act of 1995.
These statements relate to future events or our future financial performance. In
some cases, you can identify forward-looking statements by terminology such as
"may", "should", "expects", "plans", "anticipates", "believes", "estimates",
"predicts", "potential" or "continue" or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors, including the risks in the
section entitled "Risk Factors", that may cause our or our industry's actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements. Although
we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the forward-looking
statements to conform these statements to actual results.
Our unaudited condensed financial statements are stated in
United States Dollars (US$) 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 and licensed
patent pending technology from Genesis Water Technologies, used for Lithium
extraction through brines.
The address of our principal executive office is 156 Valleyview
RD, Kelowna, British Columbia V1X 3M4. Our telephone number is (250) 765-6412.
Our current location provide 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.
Effective September 25, 2009, we effected a one (1) for two (2)
share consolidation of our authorized and issued and outstanding common stock.
As a result, our authorized capital decreased from 75,000,000 shares of common
stock with a par value of $0.001 to 37,500,000 shares of common stock with a par
value of $0.001 and our issued and outstanding shares decreased from 29,305,480
shares of common stock to 14,652,740 shares of common stock. The consolidation
became effective with the Over-the-Counter Bulletin Board at the opening for
trading on September 25, 2009 under the new stock symbol GLCP. Our new CUSIP
number at that time was 38079Q207.
On February 8, 2010, the Company changed its name from Golden
Aria Corp. to Enertopia Corp. Our new CUSIP number is 29277Q1047 On February 22,
2010, the Company increased its authorized share capital to 200,000,000 common
shares.
On February 28, 2010, the Company entered into an Asset and
Share Purchase Agreement with Mr. Mark Snyder to acquire up to 20% ownership
interest of Global Solar Water Power Systems Inc. (GSWPS).
Effective March 26, 2010, Enertopia Corp. (the Company) had
its stock quotation under the symbol GLCP deleted from the OTC Bulletin Board.
The symbol was deleted for factors beyond the Companys control due to various
market makers electing to shift their orders from the OTCBB to the Pink OTC
Markets Inc. As a result of these market makers not providing a quote on the
OTCBB for four consecutive days the Company was deemed to be deficient in
maintaining a listing standard at the OTCBB pursuant to Rule 15c2-11. That
determination was made entirely without the Companys knowledge.
On April 7, 2010, FINRA confirmed the name change from Golden
Aria Corp. to Enertopia Corp., and approved the Companys new symbol as ENRT. On
February 5, 2010, the Companys shareholders approved an amendment to the
Companys articles of incorporation to change its name from Golden Aria Corp. to
Enertopia Corp. The name change was effected with the Nevada Secretary of State
on February 8, 2010.
On May 31, 2010, the Company closed a private placement
financing of 557,500 units at a price of $0.15 per unit for gross proceeds of
$83,625. Each unit consisted of one common share in the capital of the Company
and one non-transferable share purchase warrant, each full warrant entitling the
holder to purchase one additional common share in the capital of the Company
until May 31, 2012, at a purchase price of $0.30 per share.
On August 12, 2010, the Company was approved for listing on the
Canadian National Stock Exchange (CNSX). Trading date commenced on August 13,
2010 with the symbol TOP.
On October 25, 2010 Company disposed of the Coteau Lake
interests for cash consideration of $100,000 plus an additional potential payout
which shall be based on a 10% profit interest on any and all productive wells
drilled on the property, up to $150,000. No receivable was recorded as the
future potential payout cannot be reasonably determined.
On January 31, 2011, the Company entered into a letter of
intent and paid $7,500 deposit to Wildhorse Copper Inc. and its wholly owned
subsidiary Wildhorse Copper (AZ) Inc. (collectively, the Optionors). On April
11, 2011, the Company signed a Mineral Purchase Option Agreement (Option
Agreement) with the Optionors respecting an option to earn a 100% interest,
subject to a 1% NSR capped to a maximum of $2,000,000 in a property known as the
Copper Hills property. The Copper Hills property is comprised of 56 located
mining claims covering a total of 1,150 acres located in New Mexico, USA. The
Optionors hold the Copper Hills property directly and indirectly through
property purchase agreements between the Optionors and third parties
(collectively, the Indirect Agreements). Pursuant to the Option Agreement the
Optionors have assigned the Indirect Agreements to the Company. In order to earn
the interest in the Copper Hills property, the Company is required to make
aggregate cash payments of $591,650 over an eight year period and issue an
aggregate of 1,000,000 shares of its common stock over a three year period. As
at August 31, 2013, the Company has issued 500,000 shares at price of $0.15 per
share and 150,000 shares at price of $0.10 per share to the Optionors and made
aggregate cash payment of $106,863 (August 31, 2012-$106,863); the Company has
expensed exploration costs of $143,680 (August 31, 2012-$143,680). On June 26,
2013, the Company announced the termination of its Option Agreement. the Company
had made aggregate cash payments of $106,863 and issued 500,000 shares at price
of $0.15 per share and 150,000 common shares at $0.10 per share to Wildhorse Copper Inc. On
June 26, 2013, the Company terminated its Option Agreement with Wildhorse Copper
Inc. on Copper Hills property.
On March 3, 2011, the Company closed a private placement of
8,729,000 units at a price of CAD$0.10 per unit for gross proceeds of
CAD$872,900, or US$893,993. Each unit consisted of one common share in the
capital of our company and one non-transferable share purchase warrant, each
full warrant entitling the holder to purchase one additional common share in the
capital of our company until March 3, 2013, subject to accelerated expiry as set
out in the warrant certificate, at a purchase price of CAD$0.20. As per the
terms of the Subscription Agreement, our company grants to the Subscribers a
participation right to participate in future offerings of our securities as to
their pro rata shares for a period of 12 months from the closing of the Private
Placement. We paid broker commissions of $48,930 in cash and issued 489,300
brokers warrants. Each full warrant entitled the holder to purchase one
additional common share in the capital of our company that expired on March 3,
2013, which was subject to accelerated expiry as set out in the warrant
certificate, at a purchase price of CAD$0.20.
On March 16, 2011, we entered into a debt settlement agreement
with an officer of our company, whereby we issued 78,125 shares of common stock
in connection with the settlement of $12,500 debt at a deemed price of $0.16 per
share pursuant to a consulting agreement. We recorded $12,422 in additional paid
in capital for the gain on the settlement of the debt.
On April 14, 2011, we held our Annual and Special Meeting of
Shareholders for the following purposes:
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1.
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To elect Robert McAllister, Dr. Gerald Carlson and Chris
Bunka as directors of the Company for the ensuing year.
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2.
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To ratify Chang Lee LLP, independent public accounting
firm for the fiscal year ending August 31, 2011, and to allow directors to
set the remuneration.
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3.
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To approve, ratify and confirm the consolidation of the
2007 Stock Option Plan and the 2010 Equity Compensation Plan into one plan
and approve the terms of this new plan, the 2011 Stock Option
Plan.
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All proposals were approved by the shareholders. The proposals
are described in detail in our definitive proxy statement filed with the
Securities and Exchange Commission on March 9, 2011.
On April 27, 2011, we entered into a debt settlement agreement
with the President of our Company, who is a related party, in the amount of
$46,000, whereby $25,000 was settled by issuing common shares of 100,000, and
$21,000 was forgiven for Nil consideration. In connection with the debt
settlement, we recorded $100 in share capital and $45,900 in additional paid in
capital for the gain on the settlement of the debt.
On May 31, 2011, the Company settled the amount due to related
parties into two promissory notes of $80,320 (CAD$84,655) and $90,000. Both
promissory notes were unsecured, non-interest bearing and due on May 31, 2012 at
an imputed interest rate of 12% per annum upon the settlement. On April 27,
2011, we entered into debt settlement agreement with one of the holders, a
company controlled by the Chairman/CEO of the Company, whereby the Company
issued common shares of 360,000 to the holder, and the holder agreed to accept
the shares as full and final payment of the promissory note of $90,000. On the
same day, we entered into a debt settlement agreement with another holder, a
company controlled by the Chairman/CEO of our Company, whereby the holder agreed
to forgive the repayment of debt for Nil consideration. In connection with the
settlements and forgiveness of the above promissory notes, the Company recorded
$79,997and $77,415 in additional paid in capital for the gain on settlement of
debt, respectively.
On June 22, 2011, Change Lee LLP (Chang Lee) resigned as our
independent registered public accounting firm because Chang Lee was merged with
another company: MNP LLP (MNP). Most of the professional staff of Chang Lee
continued with MNP either as employees or partners of MNP and will continue
their practice with MNP.
On June 22, 2011, we engaged MNP as our independent registered
public accounting firm.
On July 19, 2011, the Company entered into a letter of intent
and paid US$15,000 deposit to Altar Resources. Subsequent to August 31, 2011, on
October 11, 2011, the Company signed a Mineral Purchase Option Agreement with Altar Resources with respect to an option to earn 100%
interest, subject to a 2.5% NSR in a property known as Mildred Peak. The mining
claims are in Arizona covering approximately 7,148 acres from Altar Resources
which holds the mining claims directly and indirectly through federal mining
claims and state mineral exploration leases; or, represented that it would hold
such claims in good standing at the time of closing a definitive agreement. The
Company is required to make aggregate cash payments of $881,000 over a five year
period and issue an aggregate of 1,000,000 shares of its common stock over a
four year period. As at February 28, 2013, the Company had made aggregate cash
payments of $124,980 (August 31, 2012-$84,980) and issued 100,000 shares at
price of $0.10 per share and 100,000 common shares at $0.06 per share to Altar
Resources; along with expensed incurred exploration costs of $13,380. On May 30,
2013, the Company terminated the Option Agreement and has written off $140,980
of capital costs.
On March 19, 2012, the Companys Board has appointed Dr. John
Thomas as Director and Mr. Tony Gilman and Dr. Stefan Kruse as Advisors of the
Company. The Company has granted additional 450,000 stock options to Directors
and Advisors of the Company. The exercise price of the stock options is $0.15,
of which are 225,000 options vest immediately, 225,000 options vest on August
15, 2012. The options expire March 19, 2017.
On April 10, 2012, Enertopia Corporation (Enertopia or the
Company) held its Annual and Special Meeting of Shareholders for the following
purposes:
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1.
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To elect Robert McAllister, Donald Findlay, Greg Dawson
and Chris Bunka as directors of the Company for the ensuing
year.
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2.
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To ratify MNP LLP, independent public accounting firm for
the fiscal year ending August 31, 2012, and to permit directors to set the
remuneration.
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3.
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To transact such other business as may properly come
before the Meeting.
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All proposals were approved by the shareholders. The proposals
are described in detail in the Companys definitive proxy statement filed with
the Securities and Exchange Commission on March 13, 2012.
On April 10, 2012, the Company issued 93,750 common shares in
connection with the settlement of debt of $9,375 at a price of $0.10 per common
share pursuant to a consulting agreement.
On April 13, 2012, the Company closed an offering memorandum
placement of 2,080,000 units at a price of CAD$0.10 per unit for gross proceeds
of CAD$208,000, US$208,000. Each Unit consisted of one common share of the
Issuer and one common share purchase warrant. One warrant will be exercisable
into one further common share at a price of US$0.15 per warrant share for a
period of twelve months following closing; or at a price of US$0.20 per warrant
for the period that is twelve months plus one day to twenty-four months
following closing. The Company paid broker commissions of $14,420 in cash and
issued 144,200 brokers warrants in connection with the private placement.
On August 24, 2012, the Company closed the second tranche of an
offering memorandum placement of 160,000 units at a price of CAD$0.05 per unit
for gross proceeds of CAD$8,000 or US$8,000. Each warrant will be exercisable
into one further share at a price of US$0.10 per warrant share for a period of
twelve months following closing; or at a price of US$0.20 per warrant share for
a period that is twelve months and one day to thirty-six months following
closing. The Companys President participated in the private placement for
$4,000.00 dollars. The Company issued 16,000 brokers warrants in connection with
the private placement for broker commissions.
On September 28, 2012, the Company closed an offering
memorandum placement of 995,000 units at a price of CAD$0.05 per unit for gross
proceeds of CAD$49,750 or US$49,750. Each Unit consisted of one common share of
the Issuer and one common share purchase warrant. One warrant will be
exercisable into one further common share at a price of US$0.10 per warrant
share for a period of twelve months following closing; or at a price of US$0.20
per warrant for the period that is twelve months plus one day to twenty-four
months following closing. The Company issued 79,500 shares, 79,500 warrants and
79,500 broker warrants in connection with the private placement.
On October 24, 2012, the Company issued 100,000 common shares
in connection with Altar Resources, Mildred Peak property for an amount of
$6,000 at a price of $0.06.
On November 15, 2012, the Company closed an offering memorandum placement of 1,013,000 units at a price of CAD$0.05 per unit for gross proceeds of CAD$50,650 or US$50,650. Each Unit consisted of one common share of the Issuer and one
common share purchase warrant. One warrant will be exercisable into one further common share at a price of US$0.10 per warrant share for a period of twelve months following closing; or at a price of US$0.20 per warrant for the period that is
twelve months plus one day to twenty-four months following closing. The Company issued 38,000 common shares, 101,300 units, and 101,300 broker warrants in connection with the private placement.
On March 1, 2013, the Company settled the debt incurred of $16,000 from September 1, 2011 to February 28, 2013 for consulting fees with Mr. Mark Snyder by issuing 160,000 restricted common shares of the Company at a price of $0.10 per share.
On March 1, 2013, the Company settled the debt incurred of $16,000 from September 1, 2011 to February 28, 2013 for consulting fees with Mr. Mark Snyder by issuing 160,000 restricted common shares of the Company at a price of $0.10 per share.
On May 30, 2013, the Company terminated its Option Agreement with Altar Resources on Mildred Peak property.
On June 26, 2013, the Company terminated its Option Agreement with Wildhorse Copper Inc. on Copper Hills property.
On September 17, 2013 we entered into an AMI Participation Agreement with Downhole Energy LLC to participate in 100% gross interest and 75% net revenue interest for drilling, completion and production of up to 100 oil wells on certain oil and gas
leases covering 2,924 in the historic field located in Forest and Venango counties, Pennsylvania. On execution of this agreement we issued 100,000 of our common shares to Downhole Energy LLC. The Company decided not to continue with the agreement
and wrote off the asset.
On October 4, 2013 we entered into a consulting agreement with Olibri Acquisitions and issued 750,000 of our common shares to Olibri.
We entered into a Letter of Intent Agreement (“LOI”) on November 1, 2013 with 0786521 BC Ltd. (also known as World of Marijuana Productions Ltd.) (the “Vendor”) to acquire 51% of the issued and outstanding capital stock of
the Vendor. The Vendor is the owner, operator of a Medical Marijuana operation located at 33420 Cardinal Street, Mission, British Columbia, Canada. The LOI was not comprehensive and subject to the negotiation of a definitive agreement. On the
execution of the LOI, we issued 10,000,000 of our common shares to the Vendor. The LOI was superseded by our joint venture agreement with World of Marijuana Productions Ltd. dated January 16, 2014, described below.
On November 5, 2013 we granted 675,000 stock options to directors, officers, and consultant of our Company with an exercise price of $0.06 vested immediately, expiring November 5, 2018.
On November 18, 2013, we granted 25,000 stock options to consultant of our with an exercise price of $0.09 vested immediately, expiring November 18, 2018.
On November 18, 2013, we entered into an investor relations contract with Coal Harbour Communications Inc. The initial term of this agreement shall begin on the date of execution of this Agreement and continue for
two months
. Thereafter the
agreement will continue on a month-by-month basis pending cancelation by written notification with 30 days notice. In consideration for the services the Company will pay the Provider a one-time payment of two hundred thousand shares (200,000) of
restricted common stock in Enertopia Corporation. The stock will be issued in the name of Dale Paruk for 100,000 shares and Neil Blake for 100,000 shares. In consideration of the services provided, the Company shall pay. We also agree to pay to Coal
Harbour Communications a monthly fee of $5,000 payable on the 1st day of each monthly period starting 60 days from the signing of the agreement and $500 per month to cover expenses incurred on our Company’s behalf. Any expenses above
$500 per month must be pre-approved.
On November 26, 2013, our Company closed the first tranche of a private placement of 2,720,000 units at a price of CAD$0.05 per unit for gross proceeds of CAD$136,000 ($136,000). Each warrant is exercisable into one further share at a
price of US$0.10 per warrant share for a period of thirty six month following the close.
On November 29, 2013, our wholly-owned subsidiary, Target Energy, Inc was discontinued and dissolved.
On December 23, 2013, we closed the final tranche of a private placement of 2,528,000 units at a price of CAD$0.05 per unit for gross proceeds of CAD$126,400 ($126,400). Each warrant is exercisable into one further share at a price of
$0.10 per warrant share for a period of thirty six months following closing. We also paid a cash finders’ fee of $10,140 and 202,800 broker warrants to Canaccord Genuity and Wolverton Securities that are exercisable into one common
share at a price of $0.10 that expire on December 23, 2016.
On January 1, 2014, we entered into a Social Media/Web Marketing Agreement with Stuart Gray. The initial term of this agreement shall begin on the date of execution of this Agreement and continue for three
months. In consideration for the
services we will pay Stuart Gray a monthly fee of $5,000. As additional compensation we issued 200,000 stock options to Mr. Gray. The exercise price of the stock options is $0.075, with 100,000 stock options vested immediately, 50,000 stock
options vested 30 days after the grant and 50,000 stock options vested 60 days after the grant, expiring January 1, 2019.
On January 13, 2014, we entered into a corporate development agreement with Don Shaxon for an initial term of twelve months. Thereafter the agreement continued on a month-by-month basis pending cancelation by written notification with 30 days
notice. In consideration for the services we paid to Mr. Shaxon a signing stock bonus of 250,000 of our common shares, a one-time cash bonus of $40,000, and a monthly fee of $3,500 plus $500 in monthly expenses. Upon execution of the
Agreement we also granted 250,000 stock options. to Mr. Shaxon with an exercise price of $0.16, vesting immediately and expiring January 13, 2019.
On January 16, 2014 we entered into a Joint Venture Agreement with World of Marijuana Productions Ltd. (“WOM”) to acquire up to a 51% ownership interest in a joint venture between WOM and our company. WOM was to acquire a medical
marijuana production licence from Health Canada to in order to establish a medical marijuana production facility to be located at 33420 Cardinal Street, Mission, British Columbia.. The Joint Venture Agreement superseded the Letter of Intent between
our company and WOM dated November 1, 2013 (the "LOI"). Our company issued 16,000,000 common shares and paid a total of $375,000 to WOM to acquire a 31% interest in the joint venture. Subsequent to year end, on October 16, 2014 we entered into a
termination and settlement agreement, dated effective October 14, 2014, with WOM and Mathew Chadwick (the “Settlement Agreement”), pursuant to which the parties have entered into mutual releases, Mr. Chadwick has resigned from our board
of directors and as an officer of our company, and WOM has 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.
On January 31, 2014, we accepted and received gross proceeds of CAD$40,500 (US$37,500), for the exercise of 350,000 stock options; 100,000 at $0.075 each, 150,000 stock options at $0.10 each, and 100,000 stock options at $0.15
each; into 350,000 common shares of our Company.
On January 31, 2014, we closed the first tranche of a private placement of 4,292,000 units at a price of US$0.10 per unit for gross proceeds of US$429,200. Each Unit consists of one share of our common stock and one half (1/2) of one
non-transferable common share purchase warrant Each whole warrant is exercisable to purchase one common share at a price of US$0.15 per share for a period of twenty four (24) months following closing. A cash finders’ fee consisting of
$29,616 and 296,160 full broker warrants that expire on January 31, 2016 with an exercise price of $0.15 was paid to Canaccord Genuity, Leede Financial and Wolverton Securities.
On February 5, 2014, Ryan Foster joined our Company as an advisor. We granted 50,000 stock options to Mr. Foster with an exercise price of $0.35 per common share expiring February 5, 2019. 25,000 of the stock options vested immediately and
25,000 vested on July 1, 2014.
On February 13, 2014, we closed the final tranche of a private placement by issuing 12,938,000 units at a price of US$0.10 per unit for gross proceeds of US$1,293,800. Each unit consists of one common share and one half (1/2) of one
non-transferable share purchase warrant with each whole warrant exercisable into one common share at a price of US$0.15 per share for a period of twenty four (24) months following closing. One director and one officer of our Company participated
in the final tranche for $30,000. A cash finders’ fee consisting of $98,784; 8,000 common shares in lieu of $800 and 995,840 full broker warrants that expire on February 13, 2016 with an exercise price of $0.15 was paid to
Canaccord Genuity, Global Market Development LLC and Wolverton Securities.
On February 13, 2014, 50,000 stock options were exercised at a price of $0.06 by a Director and 50,000 stock options were exercised at a price of $0.075 by a Consultant for net proceeds to our Company of CAD$7,050 (US$6,750) into
100,000 common shares of the Company.
On February 13, 2014, 541,500 warrants from previous private placements were exercised into 541,500 common shares of our Company for net proceeds of $101,100.
On February 27, 2014, 585,000 warrants from previous private placements were exercised into 585,000 common shares of our Company for net proceeds of $115,000.
On February 27, 2014, we signed a $50,000 12 month marketing agreement with Agoracom payable in shares of our common stock. The first quarter payment of $12,500 was paid with the issuance of 54,347 common shares of our Company at a market
price of $0.23 per share.
On February 28, 2014, we entered into a Joint Venture Agreement with The Green Canvas Ltd.
("
GCL
") pursuant to which we may acquire up to a 75% interest in the business of GCL, being the business of legally producing, manufacturing,
propagating, importing/exporting, testing, researching and developing, and selling marijuana for medical purposes. We paid $100,000 to the GCL upon execution of the agreement. Subsequently, we issued to GCL an aggregate of 10,000,000 of our
common shares at a price of $0.235 per share; and paid to GCL the aggregate sum of $500,000, to earn a 49% interest in GCL’s business. With the exception of $113,400 payable to Wolverton Securities, the full amount of the
$500,000 is to be used by GCL to upgrade the its existing medical marijuana production facility to meet the standards introduced by the Marijuana for Medical Purposes Regulations (“MMPR”) administered by Health Canada. Subsequent to
quarter end, this agreement has been terminated.
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 our company 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 paid a $1,000 honorarium each. 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.
On March 11, 2014, as per the terms of the Joint Venture Agreement dated January 16, 2014 with World of Marijuana Productions Ltd. (“WOM”), our company made a payment of $200,000 and issued 1,000,000 common shares at a price of
$0.60 per share to 0984329 B.C. LTD. As a result our company acquired 31% of the Joint Venture business interest. We subsequently relinquished the 31% interest pursuant to the Termination and Settlement Agreement with WOM and Mathew Chadwick
dated October 14, 2014. WOM returned for cancellation 15,127,287 previously issued shares of our common stock in consideration for our 31% interest.
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, Subsequent to quarter end, Dr. Robert Melamede is no longer an Advisor to the Board of Directors.
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 on 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, a Letter of Intent ("LOI") was signed by Enertopia Corporation, or its wholly-owned subsidiary ("Enertopia") and Lexaria Corp., or its wholly-owned subsidiary ("Lexaria") (collectively, the "Parties") with regard to the ownership
by Enertopia of a 51% interest in the business, and the ownership by Lexaria of a 49% interest in the business of legally producing, manufacturing, propagating, importing/exporting, testing, researching and developing, and selling marijuana for
medical purposes under the MMPR (the "Business") Acquisition Structure. Whereby, Lexaria issued 500,000 common shares to Enertopia. In accordance with the terms of a formal and definitive Agreement to be entered into between Enertopia and Lexaria
(the "Definitive Agreement"), Enertopia shall own 51% ownership interest in the Business (the "Enertopia Ownership") and Lexaria shall own 49% ownership interest in the Business (the “Lexaria Ownership”). Within 10 days, Enertopia shall
contribute $45,000 and Lexaria shall contribute $55,000 to the Business. Upon the execution of this LOI, Enertopia and Lexaria shall structure a joint venture for legally producing, manufacturing, propagating, importing/exporting, testing,
researching and developing, and selling marijuana for medical purposes under the MMPR. At such time the Parties will be deemed to have formed a joint venture for the operation, management and further development of the Business (the "Joint
Venture"). Lexaria will pay 55% of all costs to earn its 49% net Ownership Interest and Enertopia will pay 45% of all costs to earn its 51% Ownership Interest. A total of 500,000 Definitive Agreement Shares shall be issued to Enertopia, held in
escrow (the "Escrow Shares") by Lexaria's solicitors until such date as the License (as hereinafter defined) has been obtained by Enertopia (the "Effective Date"). Upon occurrence of the Effective Date, the Escrow Shares will be released from escrow. In the event the Effective Date does not occur within 12 months of the date of the Definitive Agreement (the "Execution Date"), the Definitive Agreement Shares shall be cancelled and returned to
treasury. Subsequent to quarter end, this agreement has been terminated.
On April 10, 2014 a letter of intent, was executed on behalf of a corporation to be incorporated by Lexaria Corp. and Enertopia Corporation(Lessee) and Mr. Jeff Paikin of Ontario Inc. (Lessor) sets out the Lessee’s and Lessor’s shared
intent to enter into a lease agreement (the “Lease”) for warehouse space (the “Leased Premises”) in the building located in Ontario (the “Building”). The Company issued the 38,297 common shares at a deemed price
of $0.47 per the terms of the Letter of Intent to lease space in Ontario. On August 1, 2014 the Company signed an extension to the Letter of intent executed on April 10, 2014 on behalf of a corporation to be incorporated by Lexaria Corp. and
Enertopia Corporation(Lessee) and Mr. Jeff Paikin of 1475714 Ontario Inc. (Lessor) sets out the Lessee’s and Lessor’s shared intent to enter into a lease agreement (the “Lease”) for warehouse space (the “Leased
Premises”) in the building located at Burlington, Ontario (the “Building”). On August 5, 2014, as per the terms of the extension, 118,416 common shares of the Company were issued at a deemed price of $0.19 per share. Subsequent
to quarter end, this agreement was not renewed.
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 February 4, 2015, Mr. Paikin resigned as an Advisor to the Board and the agreement was terminated.
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.
Subsequent to quarter end, the agreement was not renewed.
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.
Subsequent to quarter end the agreement was not renewed.
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 Bmullan and Associates wholly owned company by 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 company and Lexaria entered into a definitive agreement to develop a joint business for the production, manufacture, propagation, import/export, testing, research and development of marijuana in the Province of Ontario under the
MMPR, Pursuant to the Agreement, ownership, revenues, and liability related to the Joint Venture is 51% to Enertopia and 49% to Lexaria. Expenses incurred by the joint venture shall be allocated 45% to Enertopia and 55% to Lexaria. Enertopia shall
be responsible for management of the joint venture for as long as it maintains majority ownership. To date, Lexaria and Enertopia have contributed $55,000 and $45,000 to the joint venture, respectively. The joint venture has identified a
production location in Burlington, Ontario and received municipal approval for the site in July, 2014. We intend to engage an architect to design the production facility upon acceptance of our application. Construction is anticipated to cost
approximately $3,000,000; Enertopia will be responsible for $1,350,000 of this cost. The joint venture is unable to estimate at this time when a production license might be granted by Health Canada, however it is seeking assurances from
Health Canada prior to commencement of construction. Subsequent to quarter end, this agreement was terminated.
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 September 18, 2014, we entered into a contract with our joint venture partner Lexaria Corp., and Maureen McGrath pursuant to which Ms. McGrath will lead the National Medical Marijuana Awareness and Outreach Strategy, a public awareness program
jointly administered by Lexaria and our company.
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, 2014, we entered into a one year contract with Maureen McGrath/McGrath Group as Lead Medical Strategist, with a monthly fee of CAD$3,000.
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
.
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, we 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 USD$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. A cash finders’ fee of USD$5,421 (CAD$7,040) and 469,333 full broker warrants that expire May 20, 2019 was paid to Canaccord Genuity and Haywood.
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 USD$2,508 (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 USD$120,078 (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 USD$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 September 19, 2016, we entered into a one year Investor Relations
Consulting agreement with Duncan McKay. Based on the terms of the agreement, Mr. McKay can earn up to a maximum of 10% commissions on capital raised. We issued 800,000 stock options with an exercise price of $0.07.
On September 23, 2016, we closed the final tranche of a private placement of 3,858,571 units at a price of CAD$0.035 per unit for gross proceeds of CAD$135,050. Each unit consists of one common share of our Company and one non-transferable
share purchase warrant, each full warrant entitling the holder to purchase one additional common share of our Company for a period of 24 months from the date of issuance, at a purchase price of US$0.07. A cash finders’ fee of CAD$3,300
and 286,666 full broker warrants that expire June 8, 2019 was paid to Canaccord Genuity and Leede Jones Gable.
On October 7, 2016, we issued 175,000 common shares of our Company and paid $5,000 to comply with the Definitive Agreement signed May 12, 2016.
On December 6, 2016, we signed a Definitive Commercial Agreement with Genesis Water Technologies with regard to the acquisition of exclusive licensing rights of the technology as outlined in the agreement.
On January 20, 2017, the Company closed the first tranche of a private placement of 1,000,000 units at a price of CAD$0.04 per unit for gross proceeds of CAD $40,000. Each unit consists of one common share of the Company and
one-nontransferable share purchase warrant, each full warrant entitling the holder to purchase one additional common share of the Company for a period of 24 months from the date of issuance, at a purchase price of $0.06. A cash finders’ fee of CAD$800 and 20,000 full broker warrants that expire January 20, 2019 was paid to Leede Jones Gable
Inc.
On January 20, 2017, the Company granted 1,535,000 stock options to directors, officers and consultant of the Company with an exercise price of $0.07 which vested immediately, expiring January 20, 2022.
On January 31, 2017, the Company granted 1,500,000 stock options to consultant of the Company with an exercise price of $0.07 vested immediately, expiring January 31, 2022.
On February 28, 2017, the Company closed the first tranche of a private placement of 4,250,000 units at a price of CAD$0.04 per unit for gross proceeds of CAD $170,000. Each unit consists of one common share of the Company and
one-nontransferable share purchase warrant, each full warrant entitling the holder to purchase one additional common share of the Company for a period of 24 months from the date of issuance, at a purchase price of $0.06. A cash finders’
fee of CAD$11,100 and 227,500 full broker warrants that expire February 28, 2019 was paid to Leede Jones Gable Inc., Canaccord Genuity and Duncan McKay.
On February 28, 2017, the Company signed a Letter of Engagement with Adam Mogil and issued 1,000,000 warrant options to convert to 1,000,000 common shares to Adam Mogil to provide corporate services. The warrants have an exercise price of $0.09
and expire August 28, 2017. These warrant options expired without being exercised.
On April 21, 2017, the Company issued 95,500 shares for gross proceeds of $5,685 from the exercise of warrants of previous financings at $0.05 and $0.07.
On April 30, 2017 the Company issued 166,500 shares for gross proceeds of $11,655 from the exercise of warrants from a previous financing at $0.07.
On April 30, 2017, the Company closed the first and final tranche of a private placement of 3,224,000 units at a price of CAD$0.09 per unit for gross proceeds of CAD $290,160. Each unit consists of one common share of the Company and
one-nontransferable share purchase warrant, each full warrant entitling the holder to purchase one additional common share of the Company for a period of 24 months from the date of issuance, at a purchase price of $0.12. A cash finders’
fee of CAD$20,736 and 230,400 full broker warrants that expire April 28, 2019 was paid to Leede Jones Gable and Canaccord Genuity.
On May 5, 2017, the Company granted 500,000 stock options to consultant of the Company with an exercise price of $0.10 vested immediately, expiring May 5, 2022.
On May 5, 2017, the Company terminated the Definitive Agreement dated May 12, 2016 with the Vendor on the Nevada Lithium brine properties.
On July 31, 2017, the Company announced the resignation of CFO and Director Bal Bhullar, the appointment of Kristian Ross as director and president Robert McAllister assuming the interim duties of CFO.
On August 14, 2017 the Company announced the appointment of Davidson and Company, LLP, Chartered Professional Accountants as its new independent registered auditing firm which replaced MNP LLP independent registered auditing firm.
On August 30, 2017 the Company announced the Staking of lode and placer claims covering approximately 160 acres for Lithium in Clayton Valley, NV.
Our Current Business
The Company is diverse in its pursuit of business opportunities in the resource sector.
On October 27, 2017 we entered into a one year Investor Relations Consulting agreement with FronTier Merchant Capital Group. Terms of the agreement, FronTier Capital Group has been retained for a 12-month period at $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.
Subsequent to quarter end, on December 8, 2017, we closed the
second tranche of a private placement of 3,954,000 units at a price of CAD$0.05
per unit for gross proceeds of CAD $197,700. Each unit consists of one common
share of our Company and one non-transferable share purchase warrant, each full
warrant entitling the holder to purchase one additional common share of our
Company for a period of 24 months from the date of issuance, at a purchase price
of $0.06. A cash finders fee for CAD $12,770 and 230,400 full broker warrants
was paid to third parties. Each full broker warrant entitling the holder to
purchase one additional common share of our Company for a period of 24 months
from the date of issuance, at a purchase price of $0.06.
On December 8, 2017 we issued 240,000 common shares of our
Company on the exercise of 240,000 stock options that were exercised by a
director of the Company at $0.05 for $12,000 for net proceeds to the company.
On December 15, 2017 we paid Genesis Water Technologies (GWT)
$96,465 for the second and final payment for the Second phase of the second
bench test and $8,998 for the bill of materials for the bench test.
Mineral Property
Lithium Property
Enertopia (Optionee) has signed the Definitive Agreement on May
12,
2016 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.
Purchase Price for the Claims
The consideration payable by Enertopia to the Optionor pursuant
to this Offer shall consist of:
|
(a)
|
paying $7,000 on signing the Offer; (paid)
|
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(b)
|
paying $12,000 on signing of the definitive agreement
(the Agreement) and issuing 3,500,000 common shares in the capital stock
of Enertopia as soon as practicable following the execution of the
Agreement, (paid)
|
|
|
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(c)
|
paying an optional $12,000 on or before the six month
anniversary of the Agreement (paid $5,000 and issued 175,000 common shares
of the Company),
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(a)
|
paying an optional $22,500 on or before the one year
anniversary of the Agreement (not paid, property returned to
vendor),
|
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(e)
|
issuing additional common shares in the capital of the
Optionee, as constituted on the date hereof, to be issued to the Optionor
pursuant to the discovery of a Lithium enriched brine with an average
300ppm Li over 100 foot vertical interval in the enriched lithium brine in
the Central Nevada Brine Project. 1,000,000 Bonus Shares will be issued
per each successful property discovery meeting the foregoing criteria up
to a maximum 3,000,000 Bonus Shares.
|
NSR
There is a 1.5% Net Smelter Return
(NSR) payable on all Placer mining claims from commercial production to be
paid according to the terms and conditions as set forth in the Transaction
Documents. The NSR can be re purchased for $500,000 per every 0.5% .
On May 5, 2017, the Company terminated the Definitive Agreement
dated May 12, 2016 with the Vendor on the Nevada Lithium brine properties.
On August 30, 2017 the Company announced the staking of Lode
and Placer claims of BLM lands in Esmeralda county Nevada covering approximately
160 Acres subject to adjustment. The Company has an 100% interest in the lands
and is only responsible for the yearly maintenance fees to the BLM and County to
keep its 100% interest. The claims are in good standing until August 31, 2018
Esmeralda County Lode and Placer Claims:
Claim Name
|
Claim Type
|
BLM Serial #
|
STEVE 1
|
PLACER
|
NMC 1148769
|
STEVE 2
|
PLACER
|
NMC 1148770
|
STEVE 3
|
PLACER
|
NMC 1148771
|
STEVE 4
|
PLACER
|
NMC 1148772
|
STEVE 5
|
PLACER
|
NMC 1148773
|
STEVE 6
|
PLACER
|
NMC 1148774
|
STEVE 7
|
PLACER
|
NMC 1148775
|
STEVE 8
|
PLACER
|
NMC 1148776
|
DAN 1
|
LODE
|
NMC 1148760
|
DAN 2
|
LODE
|
NMC 1148761
|
DAN 3
|
LODE
|
NMC 1148762
|
DAN 4
|
LODE
|
NMC 1148763
|
DAN 5
|
LODE
|
NMC 1148764
|
DAN 6
|
LODE
|
NMC 1148765
|
DAN 7
|
LODE
|
NMC 1148766
|
DAN 8
|
LODE
|
NMC 1148767
|
DAN 9
|
LODE
|
NMC 1148768
|
LITHIUM TECHNOLOGY
On August 15, 2016, a binding Letter of Intent (LOI) was
signed by Enertopia and Genesis Water Technologies, Inc. ("GWT") with regard to
the acquisition by Enertopia of the exclusive worldwide licensing rights (the
"Licensing Rights") by Enertopia of all of the technology used in the process of
recovering and extraction of battery grade lithium carbonate powder Li2CO3
grading 99.5% or higher purity from brine solutions.
Upon the execution of this LOI, Enertopia issued 250,000 common
shares valued at $12,500 to GWT.
On December 6, 2016, and amended on October 9, 2017, Enertopia
and GWT signed a Definitive Commercial Agreement with regard to the acquisition
by Enertopia of the exclusive licensing rights in the United States of America,
Argentina, Bolivia and Chile, of all of the technology used in the process of
recovering and extraction of battery grade lithium carbonate powder Li2CO3
grading 99.5% or higher purity from brine solutions.
The following are key points of the terms of the formal
Definitive Commercial Agreement:
|
a)
|
Enertopia to pay within 30 days to GWT $10,000 (paid) for
the bench testing of four lithium brine samples to confirm the June 2016
feasibility report. During the three month period ended November 30, 2017,
the Company signed a Lab Testing Service Agreement with GWT and paid
$96,475 for the purpose of additional bench testing services with a
further $96,475 due December 15, 2017 (paid subsequent to the three months
ended November 30, 2017) plus materials costs of $8,998 (paid subsequent
to the three months ended November 30, 2017). Within 30 days of successful
independent 3
rd
party lab testing of the bench test results,
Enertopia will issue 250,000 common shares to
GWT.
|
|
b)
|
Upon successful test pilot facility results, start the
construction of commercial Lithium recovery production facility.
|
|
c)
|
Upon receipt of a patent for the process for extracting
lithium from wastewater, Enertopia will issue 250,000 common shares to
GWT.
|
|
d)
|
GWT has granted Enertopia exclusive rights and
relicensing rights to the usage of GWTs patent pending technology
covering United States of America, Argentina, Bolivia and Chile as per the
Commercialization Agreement in return for 10 per cent of net sales royalty
payments for battery grade Lithium Carbonate Li2CO3 produced.
|
|
e)
|
In order to maintain its exclusive rights, Enertopia will
need to make the following minimal payments to GWT on the anniversary of
bench testing achieving 99.5% battery grade Li2CO3 recovery verified by
independent laboratory testing:
|
|
a.
|
On or before the first anniversary, the greater of 10 per
cent of Enertopia net Lithium Carbonate Li2CO3 sales from brine sources or
$50,000;
|
|
b.
|
On or before the second anniversary, the greater of 10
per cent of Enertopia net Lithium Carbonate Li2CO3 sales from brine
sources or $150,000;
|
|
c.
|
On or before the third anniversary annually until the
seventh anniversary, the greater of 10 per cent of Enertopia net Lithium
Carbonate Li2CO3 sales from brine sources or $200,000;
|
|
d.
|
Right of first refusal to renew exclusive rights and
relicensing rights for another 10 years after the first seven year
licensing period on the same net sales terms as those of 2023 or $250,000
per annum.
|
Investments
We currently hold the following investment interests:
Equity Investment in Global Solar Water Power Systems
Inc.
During the year ended August 31, 2013, based on the
managements assessment of GSWPSs current operations, the Company decided to
write down long-term investment in GSWPS to $1.
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 156 Valleyview Rd, Kelowna, British Columbia V1X 3M4. Our telephone number is (250) 765-6412. 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 March 2016, the FASB issued guidance which simplifies several aspects of accounting for share-based payment award transactions including income tax consequences, classification of awards as either equity or liabilities and classification on the
statement of cash flows. The guidance is effective for the Company in the first quarter of fiscal 2018 and earlier adoption is permitted. The Company is evaluating the impact of adopting this new accounting guidance on its financial statements.
In June 2016, the FASB issued guidance that changes the accounting for recognizing impairments of financial assets. Under the new guidance, credit losses for certain types of financial instruments will be estimated based on expected losses. The new
guidance also modifies the impairment models for available for-sale debt securities and for purchased financial assets with credit deterioration since their origination. The guidance is effective for the Company in the first quarter of fiscal 2021
and earlier adoption is permitted. The Company is evaluating the impact of adopting this new accounting guidance on its financial statements.
In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which clarifies how companies present and classify certain cash receipts and
cash payments in the statement of cash flows. The standard will be effective for the Company beginning August 1, 2018. The Company is evaluating the impact of adopting this new accounting guidance on its financial statements.
In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”), which requires the statement of cash flows to report changes in cash, cash equivalents, and restricted cash. The
standard will be effective for the Company beginning August 1, 2018. The Company is evaluating the impact of adopting this new accounting guidance on its financial statements.
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 November 30, 2017
and November 30, 2016
The following summary of our results of operations should be
read in conjunction with our financial statements for the quarter ended November
30, 2017, which are included herein.
Our operating results for the three months ended November 30,
2017, for the three months ended November 30, 2016 and the changes between those
periods for the respective items are summarized as follows:
|
|
Three Months
Ended
November 30,
2017
|
|
Three Months
Ended
November 30,
2016
|
|
Change Between
Three Month Period
Ended
November 30, 2017
and
November 30, 2016
|
Revenue (cost recovery)
|
$
|
Nil
|
$
|
Nil
|
$
|
Nil
|
Cost of Product Sales
|
|
Nil
|
|
Nil
|
|
Nil
|
Other (income) expenses
|
|
(589)
|
|
(12,599)
|
|
12,010
|
General and administrative
|
|
193,931
|
|
178,311
|
|
15,620
|
Bank charges and interest expense
|
|
357
|
|
1,252
|
|
(895)
|
Consulting fees
|
|
10,700
|
|
39,128
|
|
(28,428)
|
Stock Based Compensation
|
|
31,237
|
|
39,646
|
|
(8,409)
|
Exploration Expenses
|
|
Nil
|
|
31,509
|
|
(31,509)
|
Research and Development
|
|
108,748
|
|
Nil
|
|
108,748
|
Professional Fees
|
|
3.748
|
|
6,336
|
|
(2,588)
|
Net income (loss)
|
|
(193,342)
|
|
(165,712)
|
|
(27,630)
|
Our accumulated losses increased to $13,435,105 at November 30,
2017. Our financial statements report revenue of $nil for the three months ended
November 30, 2017 and November 30, 2016. Our financial statements report a net
loss of $193,342 for the three-month period ended November 30, 2017, compared to
a net loss of $165,712 for the three-month period ended November 30, 2016. Our
net losses have increased by $27,630 for the three month period ended November
30, 2017. Our general and administrative expenses were higher by $15,620 for
November 30, 2017 compared to November 30, 2016. The increase was largely due to
increased research and development expenditures, which were offset by lower
consulting fees, stock based compensation, exploration expenses and professional
fees for the three month period ended November 30, 2017 compared to November 30,
2016. Additionally, the Company incurred lower investor relations and rent
expenses for the three month period ended November 30, 2017, compared to
November 30, 2016.
As at November 30, 2017, we had $437,576 in current
liabilities. The increase is largely due to timing of trade payables due for the
quarter. Our net cash used in operating activities for the three months ended
November 30, 2017 was $200,170 compared to $116,823 used in the three months
ended November 30, 2016.
Our total liabilities as of November 30, 2017 were $437,576 as
compared to total liabilities of $428,741 as of August 31, 2017.
Liquidity and Financial Condition
Working Capital
|
|
|
|
|
|
|
|
|
At November 30,
|
|
|
At August 31,
|
|
|
|
2017
|
|
|
2017
|
|
Current assets
|
$
|
126,335
|
|
$
|
178,712
|
|
Current liabilities
|
|
(437,576
|
)
|
|
(428,741
|
)
|
Working capital (deficiency)
|
$
|
(311,241
|
)
|
$
|
(250,029
|
)
|
Cash Flows
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
November 30
|
|
|
November 30
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
Cash flows (used in)
operating activities
|
$
|
(200,170
|
)
|
$
|
(116,823
|
)
|
Cash flows from financing activities
|
|
100,893
|
|
|
97,651
|
|
Cash flows from investing
activities
|
|
-
|
|
|
20,979
|
|
Net increase (decrease) in cash during period
|
$
|
(99,277
|
)
|
$
|
1,807
|
|
Operating Activities
Net cash used in operating activities was $200,170 in the three
months ended November 30, 2017 compared with net cash used in operating
activities of $116,823 in the same period in 2016. The increase in cash used
mostly results from increased operating costs incurred in the current period
from research and development expenses and increased prepaid expenses.
Financing Activities
Net cash provided by financing activities was $100,893 in the
three months ended November 30, 2017 compared to $97,651 in the same period in
2016. The cash provided was from the private placements.
Investing Activities
Net cash provided in investing activities was $Nil in the three
months ended November 30, 2017 compared to $20,979 in the same period in 2016.
The cash provided in the three months ended November 30, 2016 was from sale of
marketable securities and purchase of Lithium Brine properties.