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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended  February 28, 2022
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________________________________ to _________________________________
Commission File Number  000-51866
Enertopia Corporation
(Exact name of registrant as specified in its charter)
 
Nevada
(State or other jurisdiction of incorporation or organization)
#18 1873 Spall Road, Kelowna, BC
(Address of principal executive offices)
20-1970188
(IRS Employer Identification No.)
V1Y 4R2
(
Zip Code)

250-870-2219
(Registrant's telephone number, including area code)

Enertopia Corporation
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
[ X ] YES [  ] NO
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of "large accelerated filer", "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act
Large accelerated filer [  ] Accelerated filer [  ]
Non-accelerated filer [  ] (Do not check if a smaller reporting company) Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act
[  ] YES  [ X ] NO

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.
[  ] YES [  ] NO

APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
155,116,088 common shares issued and outstanding as of February 28, 2022

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Audit Committee of
Enertopia Corp.
Results of Review of Interim Financial Statements
We have reviewed the accompanying balance sheet of Enertopia Corp. as of February 28, 2022, and the related statements of operations, changes in stockholders' equity for the six month periods ended February 28, 2022 and 2021, and cash flows for the six month periods ended February 28, 2022 and 2021 and the related notes (collectively referred to as the "interim financial information or statements"). Based on our reviews, we are not aware of any material modifications that should be
made to the accompanying interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.
Basis for Review Results
These interim financial statements are the responsibility of the Company's management. We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States) ("PCAOB"). We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB
A review of interim financial statements consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
This report is intended solely for the information and use of management and the Audit Committee of Enertopia Corp. and is not intended to be and should not be used by anyone other than these specified parties.
  /s/ DAVIDSON & COMPANY LLP
Vancouver, Canada
Chartered Professional Accountants
April 11, 2022



PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements.
Our unaudited condensed financial statements for the six month period ended February 28, 2022 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)
 
    February 28     August 31  
    2022     2021  
ASSETS            
Current            
Cash and cash equivalents $ 131,199   $ 354,286  
Marketable securities   -     14,994  
Accounts receivable   576     4,552  
Prepaid expenses and deposit   137,249     41,263  
Total current assets   269,024     415,095  
             
Non-Current            
Mineral Property (Note 5)   10,500     -  
Total Assets $ 279,524   $ 415,095  
             
LIABILITIES AND STOCKHOLDERS' EQUITY            
             
LIABILITIES            
Current            
Accounts payable $ 274,716   $ 309,277  
Due to related parties (Note 8)   85,409     111,659  
Total Current Liabilities   360,125     420,936  
             
STOCKHOLDERS' EQUITY            
             
Share capital (Note 9)            
Authorized:            
200,000,000 common shares with a par value of $0.001 per share            
Issued and outstanding:            
155,116,088 common shares at February 28, 2022 and August 31,2021: 139,211,700   155,117     139,213  
Additional paid-in capital (Note 10)   15,288,404     14,524,341  
Deficit accumulated during the exploration stage   (15,524,122 )   (14,669,395 )
Total Stockholders' Equity   (80,601 )   (5,841 )
Total Liabilities and Stockholders' Equity $ 279,524   $ 415,095  
             
Commitments (Note 11)            

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, 2020   128,471,700   $ 128,473   $ 13,758,598   $ (14,280,027 ) $ (392,956 )
                               
Shares issued for LOI   -     -     15,450     -     15,450  
                               
Comprehensive loss   -     -     -     222,603     222,603  
                               
Balance, November 30, 2020   128,471,700     128,473     13,774,048     (14,057,424 )   (154,903 )
Shares issued for patent   2,000,000     2,000     67,000     -     69,000  
Private placement   3,000,000     3,000     177,000     -     180,000  
Stock options granted   -     -     273,236     -     273,236  
Stock options exercised   2,720,000     2,720     72,328     -     75,048  
Warrants exercised   40,000     40     1,560     -     1,600  
Comprehensive loss   -     -     -     (295,225 )   (295,225 )
                               
Balance, February 28, 2021   136,231,700     136,233     14,365,172     (14,352,649 )   148,756  
Stock options granted   -           9,005     -     9,005  
Stock options exercised   200,000     200     13,800     -     14,000  
Comprehensive loss   -     -     -     (91,066 )   (91,064 )
                               
Balance, May 31, 2021   136,431,700     136,433     14,387,977     (14,443,715 )   80,695  
Stock options exercised   100,000     100     6,844     -        
Warrants exercised   2,680,000     2,680     129,520     -        
Comprehensive loss   -     -     -     (225,680 )   (225,680 )
                               
Balance, August 31, 2021   139,211,700     139,213     14,524,341     (14,669,395 )   (5,841 )
Warrants exercised   2,791,000     2,791     128,599     -     131,390  
Stock options granted on Sept 1   -           23,056     -     23,056  
                               
Comprehensive income (loss)   -     -     -     (116,219 )   (116,219 )
                               
Balance, November 30, 2021   142,002,700     142,004     14,675,996     (14,785,614 )   32,386  
                               
Shares issued for hydrogen technology   2,000,000     2,000     98,400     -     100,400  
Shares issued for investment in Joint Venture   10,000,000     10,000     440,000     -     450,000  
Shares issued for services   1,000,000     1,000     41,300           42,300  
Stock options granted   -     -     32,821     -     32,821  
Stock options exercised   113,388     113     (113 )   -     -  
Comprehensive loss   -     -     -     (738,508 )   (738,508 )
                               
Balance, February 28, 2022   155,116,088     155,117     15,288,404     (15,524,122 )   (80,601 )

The accompanying notes are an integral part of these unaudited condensed interim financial statements

F-2



ENERTOPIA CORP.
CONDENSED INTERIM STATEMENTS OF OPERATIONS (UNAUDITED)
(Expressed in U.S. Dollars)
                       
                       
      THREE MONTHS ENDED     SIX MONTHS ENDED  
      February 28     February 28     February 28     February 28  
      2022     2021     2022     2021  
Expenses                        
                         
  Accounting and audit $ 9,795   $ 11,026   $ 12,465   $ 16,261  
  Bank charges and interest expense   602     329     1,066     554  
  Consulting (Note 7)   57,593     10,500     91,629     13,500  
  Mineral exploration costs   3,298     3,540     10,333     4,913  
  Fees and dues   10,970     7,122     16,975     13,938  
  Investor relations   8,608     11,427     20,356     15,674  
  Legal and professional   6,478     7,252     26,062     11,165  
  Office and miscellaneous   3,130     289     3,538     1,297  
  Research and development (Note 6,7)   645,912     1,349     651,137     3,333  
  Rent   2,593     1,722     5,224     1,722  
  Stock based compensation (Note 10)   32,821     273,236     55,877     288,686  
  Telephone   -     -     4,093     -  
                           
Total expenses   781,800     327,792     898,755     371,043  
                           
Loss for the period before other items   (781,800 )   (327,792 )   (898,755 )   (371,043 )
                           
Other income (expense)                        
  Foreign exchange gain (loss)   (1,329 )   (1,040 )   (1,042 )   (2,330 )
  Unrealized gain on marketable securities (Note 4)   2,262     11,997     2,711     28,247  
  Gain on disposal of marketable securities (Note 4)   (7,641 )   21,610     (7,641 )   22,504  
  Income from mineral property sale (Note 5)   50,000     -     50,000     -  
  Income from royalty grant (Note 5)   -     -     -     250,000  
                           
Net Income (loss) and comprehensive Income (loss) for the period $ (738,508 ) $ (295,225 ) $ (854,727 ) $ (72,622 )
                         
Basic earnings (loss) per share $ (0.00)   $ (0.00 ) $ (0.01 ) $ 0.00  
Diluted earnings (loss) per share $ (0.00)   $ (0.00 ) $ (0.01 ) $ 0.00  
                         
Weighted average number of common shares outstanding - basic   151,986,777     132,405,922     146,780,966     130,427,943  
Weighted average number of common shares outstanding - diluted   151,986,777     132,405,922     146,780,966     130,427,943  

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)
 
    SIX MONTHS ENDED  
    February 28     February 28  
    2022     2021  
Cash flows used in operating activities            
             
Net Income (loss) $ (854,727 ) $ (72,622 )
Changes to reconcile net loss to net cash used in operating activities            
Shares issued for consulting   42,300     -  
Shares issued for purchase of hydrogen technology   100,400     -  
Shares issued for battery management technology   450,000        
Stock based compensation   55,877     288,686  
Income from mineral property sale   (50,000 )   (250,000 )
Unrealized gain on marketable securities   (2,711 )   (28,247 )
Loss (gain) on disposal of marketable securities   7,641     (22,504 )
Change in non-cash working capital items:            
Accounts receivable   3,976     483  
Prepaid expenses and deposit   (95,986 )   (38,930 )
Accounts payable and accrued liabilities   (34,561 )   (15,826 )
Due to related parties   (26,250 )   (28,875 )
Net cash (used in) operating activities   (404,041 )   (167,835 )
             
Cash flows from Investing activities            
Proceeds from disposal of marketable securities   10,064     31,905  
Staking of mineral property   (10,500 )   -  
Proceeds from mineral property sale   50,000     -  
Proceeds from royalty grant   -     250,000  
Net cash from investing activities   49,564     281,905  
             
Cash flows from (used in) Financing activities            
Net proceeds from options exercised   -     75,048  
Net proceeds from warrants exercised   131,390     1,600  
Net proceeds from subscriptions received   -     180,000  
Net cash from (used in) Financing activities   131,390     256,648  
             
Increase (Decrease) in cash and cash equivalents   (223,087 )   370,718  
Cash and cash equivalents, beginning of period   354,286     45,528  
Cash and cash equivalents, end of period $ 131,199   $ 416,246  
             
Supplemental information of cash flows            
Cashless option exercise   113     -  

The accompanying notes are an integral part of these unaudited condensed interim financial statements

F-4


ENERTOPIA CORP.

NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
February 28, 2022

(Expressed in U.S. Dollars)


1. ORGANIZATION

The unaudited condensed interim financial statements for the period ended February 28, 2022 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, 2021 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 incurred net cash outflows from operating activities of $404,041 for the six months ended February 28, 2022 ($167,835 for the six months ended February 28, 2021) and as at February 28, 2022 has incurred cumulative losses of $15,524,122 that raises substantial doubt about its ability to continue as a going concern. Management has been able, thus far, to finance the operations through equity financing and cash on hand. There is no assurance that the Company will be able to continue to finance the Company on this basis.

In view of these conditions, the ability of the Company to continue as a going concern is in substantial doubt and dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis, to obtain additional financing as may be required, to receive the continued support of the Company's shareholders, and ultimately to obtain successful operations. There are no assurances that we will be able to obtain further funds required for our continued operations. As noted herein, we are pursuing various financing alternatives to meet our immediate and long-term financial requirements. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will be unable to conduct our operations as planned, and we will not be able to meet our other obligations as they become due. In such event, we will be forced to scale down or perhaps even cease our operations. There is significant uncertainty as to whether we can obtain additional financing. These unaudited condensed interim financial statements do not give effect to any adjustments which would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying unaudited condensed interim financial statements.

Since March 2020, several measures have been implemented in Canada, the United States, and the rest of the world in response to the increased impact from the novel coronavirus ("COVID-19"). While the impact of COVID-19 is expected to be temporary, the current circumstances are dynamic and the impact on our business operations cannot be reasonably estimated at this time. We anticipate this could have an adverse impact on our exploration plans, results of operations, financial position and cash flows.


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, 2021.

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 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.

4. MARKETABLE SECURITIES

Marketable securities consist of the Company's investment in units of Grayscale Bitcoin Trust. As at February 28, 2022, the movement in the Company's marketable securities is as follows:

Balance, August 31, 2020

24,354

Additions

17,705

Proceeds from disposals

(21,385)

Unrealized Gain

(5,680)

Balance, August 31, 2021

14,994

Unrealized gain

2,711

Proceeds from disposal

(10,064)

Loss on disposal

(7,641)

Balance, February 28, 2022

-

5.         MINERAL PROPERTY

During the year ended August 30, 2017 the Company staked lode and placer claims on BLM lands in Esmerelda county Nevada covering approximately 160 Acres subject to adjustment. The Company has a 100% interest in the lands and is only responsible for the yearly maintenance fees to keep its 100% interest. The claims are in good standing until August 31, 2022.

On October 28, 2019, the Company signed an LOI with Eagle Plains Resources Ltd. ("Eagle Plains") to earn up to 75% interest in the Pine Channel gold project in Saskatchewan, Canada (the "Pine Channel SK Property"). The terms of the LOI included periodic payments cash payments, exploration expenditures, as well as issuance of common shares of the Company. Upon signing the LOI, the Company issued 1,000,000 of its common shares to Eagle Plains, valued at $11,489. The Company dropped the LOI on Dec 13th, 2019 and has no further related commitments.

On February 11, 2020, the Company signed a 1% Royalty agreement with respect to any future commercial lithium production from the Company's Clayton Valley, Nevada claims in exchange for $200,000. The Company has a right of first refusal to repurchase the royalty upon any proposed sale by the royalty holder to a third party.


On October 29, 2020, the Company signed a 1% Royalty agreement with respect to any future commercial lithium production from the Company's Clayton Valley, Nevada claims in exchange for $250,000. The Company has a right of first refusal to repurchase the royalty upon any proposed sale by the royalty holder to a third party.

On February 24, 2022, the Company announced the proposed sale of the Lode and Placer claims of BLM lands in Esmeralda county Nevada covering approximately 160 Acres subject to adjustment to Cypress Development Corp.

The Agreed upon selling price is $1,100,000 cash with $50,000 of this total being received on signing the definitive agreement and the issuance of 3,000,000 shares of Cypress Development Corp. This proposed sale is subject to Company shareholders approving the transaction at a special meeting to be held April 29, 2022 with a shareholder date of record being March 25th 2022, and other regulatory approvals.

On February 25, 2022 the Company completed the staking of approximately 1,760 acres, covering 88 lode claims, prospective for Lithium Claystone in the Big Smoky Valley of western Nevada. Respective payments have been made to Esmeralda County and BLM for the year ending August 31, 2022. The Company owns 100% of the project, with no royalties payable.

6. TECHNOLOGY DEVELOPMENT

On December 6, 2021, The Company entered into a Definitive Purchase and Sale Agreement with Mr. Terry Galyon to acquire 100% ownership and rights to the Hydrogen Technology. The Company paid $25,000 in cash and issued 1,000,000 shares to Mr. Terry Galyon in consideration for acquiring the Hydrogen Technology. The Company has recorded the considerations for the purchase of the Hydrogen Technology as research and development expense in the condensed statement of operations for the period ended February 28, 2022, as follows:

Consideration for Purchase of Hydrogen Technology   Amount $  
2,000,000 shares at FV 0.0502 (Adjusted closing price on the date of the issuance)   100,400  
Cash payment   25,000  
Total   125,400  

The technology is still in research and development phase and is not commercially feasible as at period ended February 28, 2022. The Company has incurred an additional $16,905 as research and development costs for the period ended February 28, 2022 related to hydrogen technology.

7. BATTERY MANAGEMENT TECHNOLOGY ("BMT")

On December 17, 2021, The Company entered into a Definitive Purchase and Sale Agreement with Mr. Mark Snyder and Paul Sandler to acquire 100% ownership and rights to their Provisional Patent Pending BMT. The Company created a Joint Venture ("JV") with 51% controlling interest to run the commercial and industrial operations related to the BMT and has paid $30,000 in cash and issued 10,000,000 shares (5,000,000 shares of which are in escrow) valued at $450,000 for purchase of the BMT. BMT is still in research and development phase and have not obtained commercial or operational feasibility as at period ended February 28, 2022. The The Company has recorded the entire considerations of $480,000 for the ownership of the BMT as research and development expense in the condensed statement of operations for the period ended February 28, 2022.

8. RELATED PARTIES TRANSACTION

For the six month period ended February 28, 2022, the Company was party to the following related party transactions:

  • The Company incurred $Nil (February 28, 2021: $Nil) to the President of the Company in consulting fees.
  • The amounts outstanding in accounts payable to the President of the Company as at February 28, 2022 is $85,409 (August 31, 2021 - $111,659).
  • On December 6, 2021, the Company issued 250,000 stock options valued at $8,205 to the President of the Company (Note 10).

The related party transactions are recorded at the exchange amount established and agreed to between the related parties.

9. COMMON STOCK

On December 14, 2020 the Company issued 1,000,000 common shares and an additional 1,000,000 common shares in escrow in connection with the signed Definitive Agreement (Note 6).

On January 14, 2021 the Company closed the final tranche of a private placement of 3,000,000 units at a price of $0.06 per unit for gross proceeds of $180,000. Each unit consists of one common share of the Company and one half (0.5) of a non-transferable share purchase warrant, each warrant entitling the holder to purchase one additional common share of the Company for a period of 12 months from the date of issuance at a purchase price of $0.09.

During the year ended August 31, 2021 the Company also issued 3,020,000 common shares as a result of the exercise of stock options and 2,720,000 common shares as a result of the exercise of warrants.

During the six months ended February 28, 2022, the Company also issued 113,388 common shares as a result of the exercise of stock options and 2,791,000 common shares as a result of the exercise of warrants (Note10).

On December 6, 2021 the Company issued 1,000,000 common shares and an additional 1,000,000 common shares in escrow in connection with the purchase of Hydrogen Technology (Note 6).

On December 17, 2021 the Company issued 5,000,000 common shares and an additional 5,000,000 common shares in escrow in connection with the Investment in JV (Note 7).

On February 25, 2022, the Company issued 1,000,000 shares to one consultant of the Company.

As at February 28, 2022 and August 31, 2021 the Company had 155,116,088 (August 31, 2021: 139,211,700) 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 Company's 2014 Stock Option Plan. On April 14, 2011, the shareholders approved and adopted at the Annual General Meeting to consolidate the Company's 2007 Equity compensation plan and the Company's 2010 Equity Compensation Plan into a new Company 2011 Stock Option Plan. The purpose of these Plans is to advance the interests of the Corporation, through the grant of Options, by providing an incentive mechanism to foster the interest of eligible persons in the success of the Corporation and its affiliates; encouraging eligible persons to remain with the Corporation or its affiliates; and attracting new Directors, Officers, Employees and Consultants.

On September 9, 2021, the Company issued 500,000 stock options to one of the consultants of the Company with an exercise price of $0.08 vested immediately, expiring September 9, 2026.

On December 6, 2021, the Company issued 500,000 stock options to one of the consultants of the Company with an exercise price of $0.07 vested immediately, expiring December 6, 2026.

On December 6, 2021, the Company issued 250,000 stock options to one of the consultants of the Company with an exercise price of $0.07 vested immediately, expiring December 6, 2026.

On December 6, 2021, the Company issued 250,000 stock options to one director of the Company with an exercise price of $0.07 vested immediately, expiring December 6, 2026.


The fair value of the options granted was estimated on the date of the grant using the Black-Scholes options pricing model, with the following weighted average assumptions:
 

Expected dividend yield

0.00%

Expected stock volatility

92%

Risk-free interest rate

1.20%

Expected life of options (years)

5.00

Expected forfeiture rate

0.00%

Grant date fair value per option

$0.06

During the six month period ended February 28, 2022, the Company recorded $55,877 (February 28, 2021 $288,686) as stock based compensation expenses. In addition, the Company issued 113,388 (February 28, 2021: 2,720,000) common shares of the Company as a result of exercise of 226,776 cashless stock options and a total of 2,950,000 stock options expired without being exercised (February 29, 2021: 1,100,000).

A summary of the changes in stock options for the six months ended February 28, 2022 is presented below:

          Options Outstanding  
          Weighted Average  
    Number of Shares     Exercise Price  
Balance, August 31, 2020   9,320,000   $ 0.06  
Issued   5,150,000     0.10  
Expired   (1,100,000 )   0.05  
Exercised   (3,293,224 )   0.04  
Balance, August 31, 2021   10,076,776   $ 0.08  
Issued   1,500,000     0.10  
Expired   (2,950,000 )   0.07  
Exercised   (226,776 )   0.04  
Balance, February 28, 2022   8,400,000   $ 0.08  

The Company has the following options outstanding and exercisable: 

February 28, 2022    
Issue Date Expiry Date Exercise
Price
Number of
Options
Remaining
Life
May 2, 2017 May 2, 2022 0.10 500,000 0.17 years
October 27, 2017 October 27, 2022 0.05 800,000 0.66 years
May 11, 2018 May 11, 2023 0.06 500,000 1.20 years
May 22, 2018 May 22, 2023 0.07 450,000 1.23 years
December 14, 2020 December 14, 2025 0.05 2,100,000 3.79 years
January 28, 2021 January 28, 2026 0.14 2,000,000 3.92 years
February 4, 2021 February 4, 2026 0.18 100,000 3.94 years
February 5, 2021 February 5, 2026 0.18 300,000 3.94 years
April 27, 2021 April 27, 2026 0.12 100,000 4.16 years
May 28, 2021 May 28, 2026 0.12 50,000 4.25 years
September 1, 2021 September 1, 2026 0.08 500,000 4.51 years
December 6, 2021 December 6, 2026 0.07 1,000,000 4.77 years
         
         
    0.09 8,400,000 3.19 years

*As at February 28, 2022 the market price of the Company's common shares was $0.0423 per share. No incentive stock options were in the money.


 

August 31, 2021    
Issue Date Expiry Date Exercise
Price
Number of
Options
Remaining
Life
September 19, 2016 September 19, 2021 0.07 500,000 0.05 years
January 20, 2017 January 20, 2022 0.07 1,200,000 0.39 years
January 31, 2017 January 31, 2022 0.07 1,250,000 0.42 years
May 2, 2017 May 2, 2022 0.10 500,000 0.67 years
October 27, 2017 October 27, 2022 0.05 800,000* 1.16 years
May 11, 2018 May 11, 2023 0.06 500,000* 1.69 years
May 22, 2018 May 22, 2023 0.07 450,000 1.72 years
February 25, 2020 February 25, 2022 0.02 226,776* 0.49 years
December 14, 2020 December 14, 2025 0.05 2,100,000 4.29 years
January 28, 2021 January 28, 2026 0.14 2,000,000 4.41 years
February 4, 2021 February 4, 2026 0.18 100,000 4.43 years
February 5, 2021 February 5, 2026 0.18 300,000 4.44 years
April 27, 2021 April 27, 2026 0.12 100,000 4.66 years
May 28, 2021 May 28, 2026 0.12 50,000 4.74 years
         
    0.08 10,076,776 2.40 years

*As at August 31, 2021 the market price of the Company's common shares was $0.0629 per share. A total of 3,626,776 incentive stock options were in the money with an intrinsic value of $48,589.

Warrants

During the period ended February 28, 2022 the Company extended 1,500,000 warrants attached to units in a private placement January 14th 2021 until May 14, 2022 ( Note 9).

A summary of warrants as at February 28, 2022 and August 31, 2021 is as follows:

          Weighted Average  
    Number of warrants     Exercise Price  
Balance, August 31, 2020   13,236,869   $ 0.05  
Issued   1,500,000     0.09  
Forfeited   (2,300,000 )   0.05  
Exercised   (2,720,000 )   0.07  
Balance, August 31, 2021   9,716,869   $ 0.05  
Forfeited   (452,500 )   0.05  
Exercised   (2,791,000 )   0.05  
Balance, February 28, 2022   6,473,369   $ 0.05  

The Company has the following warrants outstanding:

February 28, 2022  
Issue Date Expiry Date Exercise
Price
Number of
Warrants*
March 27, 2019 March 27, 2023 0.04 4,973,369
January 14, 2021 May 14, 2022 0.09 1,500,000
       
    0.05 6,473,369

*Each warrant entitles a holder to purchase one common share.

11.        COMMITMENTS

The Company has a consulting agreement with the President of the Company for corporate administration and consulting services for $3,500 per month plus goods and services tax ("GST") on a continuing basis. The President voluntarily suspended and terminated accrual of these consulting fees commencing on December 1, 2019 and continuing until such time as the Company's financial condition permits a resumption of such cost.


12.       SEGMENTED INFORMATION

As at February 28, 2022 and August 31, 2021, the Company is operating its business in one reportable segment: natural resource acquisitions.  All of the Company's material long-lived assets are located in the United States.


(a) Item 2.  Management's 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 Women's 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 Company's main focus is in natural resource sector.

The address of our principal executive office is #18 1873 Spall Road, Kelowna, British Columbia V1Y 4R2. Our telephone number is (250) 870-2219. 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.


Summary of Recent Business

On February 12th 2020 the Company signed a 1% Royalty agreement with respect to any future commercial lithium production from the Company's Clayton Valley, Nevada claims in exchange for $200,000. The Company has a right of first refusal to repurchase the royalty upon any proposed sale by the royalty holder to a third party.

On February 25th 2020 the Company signed Mark Snyder to a one year Technology Advisory Board. Monthly contract rate of $1,000 per month and the issuance of 2,000,000 stock options valid for two years at a strike price of $0.02 per share.

On October 29, 2020 the Company signed a 1% royalty agreement with respect to any future commercial lithium production from the Company's Clayton Valley, Nevada claims in exchange for $250,000. The Company has a right of first refusal to repurchase the royalty upon any proposed sale by the royalty holder to a third party.

On November 12, 2020 the Company signed Flathead Business Solutions to a 12 month contract for $12,000 and the issuance of 500,000 stock options valid for 5 years at $0.05 cents each.

On December 14, 2020, the Company signed Definitive Agreement to acquire 100% interest in United States Patent and Trademark Office ("USPTO") patent #6,024,086 - Solar energy collector having oval absorption tubes by issuing 1,000,000 common shares of the Company. The Company issued 1,000,000 additional common shares in escrow to be released upon the successful approval of patent pending work derived from patent #6,024,086. The shares were issued at a price of $0.0345 resulting in a purchase price of $69,000. The patent has since expired and was therefore written off.

On December 14, 2020 the Company signed Rodney Blake to a 12 month contract for the issuance of 100,000 stock options valid for 5 years at $0.05 cents each.

On December 14, 2020 the Company signed Albert Clark Rich to a 12 month contract for the issuance of 500,000 stock options valid for 5 years at $0.05 cents each.

On January 28, 2021 the Company signed Mark Snyder to a 12 month contract for $30,000 and the issuance of 2,000,000 stock options valid for 5 years at $0.14 cents each.

On February 4, 2021 the Company signed Barry Brooks to a 12 month contract for the issuance of 100,000 stock options valid for 5 years each at $0.18 cents each.

On February 5, 2021 the Company signed Paul Sandler to a 12 month contract for the issuance of 100,000 stock options valid for 5 years each at $0.18 cents each.

On February 5, 2021 the Company signed Bruce Shellinger to a 12 month contract for the issuance of 100,000 stock options valid for 5 years each at $0.18 cents each.

On February 5, 2021 the Company signed Richard Smith to a 12 month contract for the issuance of 100,000 stock options valid for 5 years each at $0.18 cents each.

On April 27, 2021 the Company signed Michael Cornelius to a 12 month contract for the issuance of 100,000 stock options valid for 5 years at $0.12 cents each.

On May 25, 2021 the Company announced the filing of provisional patent #1, known as the Enertopia Solar Booster TM

On May 26, 2021the Company announced the filing of provisional patent #2, known as Enertopia Heat ExtractorTM

On May 28, 2021, the Company issued 50,000 stock options to one of the consultants of the Company with an exercise price of $0.12 vested immediately, expiring May 28, 2026.


On July 29, 2021 the Company announced it had engaged Fundamental Research Corp. Fundamental Research Corp. is an issuer-paid independent research house.

On August 17, 2021 the Company announced the filing of provisional patent #3, known as Enertopia RainmakerTM

On Sep 01, 2021 the Company granted 500,000 options to a consultant of the Company for 5yrs at $0.08 per common share.

On December 6, 2021, the Company issued 500,000 stock options to one of the consultants of the Company with an exercise price of $0.07 vested immediately, expiring December 6, 2026.

On December 6, 2021, the Company issued 250,000 stock options to one of the consultants of the Company with an exercise price of $0.07 vested immediately, expiring December 6, 2026.

On December 6, 2021, the Company issued 250,000 stock options to one director of the Company with an exercise price of $0.07 vested immediately, expiring December 6, 2026.

On February 25, 2022, the Company issued 1,000,000 shares at $0.04 to one consultant of the Company and $2,500 cash.


Chronological Overview of our Business over the Last Five Years

On September 19, 2016, we entered into a one year Investor Relations Consulting agreement with Duncan McKay. Based on the terms of the agreement, Mr. McKay can earn up to a maximum of 10% commissions on capital raised.  We issued 800,000 stock options with an exercise price of $0.07.

On September 23, 2016, we closed the final tranche of a private placement of 3,858,571 units at a price of CAD$0.035 per unit for gross proceeds of CAD$135,050.  Each unit consists of one common share of our Company and one non-transferable share purchase warrant, each full warrant entitling the holder to purchase one additional common share of our Company for a period of 24 months from the date of issuance, at a purchase price of US$0.07.  A cash finders' fee of CAD$3,300 and 286,666 full broker warrants that expire June 8, 2019 was paid to Canaccord Genuity and Leede Jones Gable.

On October 7, 2016, we issued 175,000 common shares of our Company and paid $5,000 to comply with the Definitive Agreement signed May 12, 2016.

On December 6, 2016, we signed a Definitive Commercial Agreement with Genesis Water Technologies with regard to the acquisition of exclusive licensing rights of the technology as outlined in the agreement.

On January 20, 2017, the Company closed the first tranche of a private placement of 1,000,000 units at a price of CAD$0.04 per unit for gross proceeds of CAD $40,000.  Each unit consists of one common share of the Company and one-nontransferable share purchase warrant, each full warrant entitling the holder to purchase one additional common share of the Company for a period of 24 months from the date of issuance, at a purchase price of $0.06.  A cash finders' fee of CAD$800 and 20,000 full broker warrants that expire January 20, 2019 was paid to Leede Jones Gable Inc.

On January 20, 2017, the Company granted 1,535,000 stock options to directors, officers and consultant of the Company with an exercise price of $0.07 which vested immediately, expiring January 20, 2022.

On January 31, 2017, the Company granted 1,500,000 stock options to consultant of the Company with an exercise price of $0.07 vested immediately, expiring January 31, 2022.

On February 28, 2017, the Company closed the first tranche of a private placement of 4,250,000 units at a price of CAD$0.04 per unit for gross proceeds of CAD $170,000.  Each unit consists of one common share of the Company and one-nontransferable share purchase warrant, each full warrant entitling the holder to purchase one additional common share of the Company for a period of 24 months from the date of issuance, at a purchase price of $0.06.  A cash finders' fee of CAD$11,100 and 227,500 full broker warrants that expire February 28, 2019 was paid to Leede Jones Gable Inc., Canaccord Genuity and Duncan McKay.

On February 28, 2017, the Company signed a Letter of Engagement with Adam Mogil and issued 1,000,000 warrant options to convert to 1,000,000 common shares to Adam Mogil to provide corporate services.  The warrants have an exercise price of $0.09 and expire August 28, 2017. These warrant options expired without being exercised.

On April 21, 2017, the Company issued 95,500 shares for gross proceeds of $5,685 from the exercise of warrants of previous financings at $0.05 and $0.07.

On April 30, 2017 the Company issued 166,500 shares for gross proceeds of $11,655 from the exercise of warrants from a previous financing at $0.07.

On April 30, 2017, the Company closed the first and final tranche of a private placement of 3,224,000 units at a price of CAD$0.09 per unit for gross proceeds of CAD $290,160.  Each unit consists of one common share of the Company and one-nontransferable share purchase warrant, each full warrant entitling the holder to purchase one additional common share of the Company for a period of 24 months from the date of issuance, at a purchase price of $0.12.  A cash finders' fee of CAD$20,736 and 230,400 full broker warrants that expire April 28, 2019 was paid to Leede Jones Gable and Canaccord Genuity.

On May 5, 2017, the Company granted 500,000 stock options to consultant of the Company with an exercise price of $0.10 vested immediately, expiring May 5, 2022.


On May 5, 2017, the Company terminated the Definitive Agreement dated May 12, 2016 with the Vendor on the Nevada Lithium brine properties.

On July 31, 2017, the Company announced the resignation of CFO and Director Bal Bhullar, the appointment of Kristian Ross as director and president Robert McAllister assuming the interim duties of CFO.

On August 14, 2017 the Company announced the appointment of Davidson and Company, LLP, Chartered Professional Accountants as its new independent registered auditing firm which replaced MNP LLP independent registered auditing firm.

On August 30, 2017 the Company announced the Staking of lode and placer claims covering approximately 160 acres for Lithium in Clayton Valley, NV.

On October 27, 2017 we entered into a one year Investor Relations Consulting agreement with FronTier Merchant Capital Group. Terms of the agreement, FronTier Capital Group has been retained for a 12-month period at $87,000 (plus applicable sales tax) per annum plus direct expenses. The company will also grant 300,000 stock options to FronTier at an exercise price of 0.05 per share expiring 5 years from the date of grant.

On November 1, 2017, we closed the first tranche of a private placement of 2,600,000 units at a price of CAD$0.05 per unit for gross proceeds of CAD$130,000.  Each unit consists of one common share of our Company and one non-transferable share purchase warrant, each full warrant entitling the holder to purchase one additional common share of our Company for a period of 24 months from the date of issuance, at a purchase price of $0.06. 

On November 1, 2017, we granted 500,000 stock options to a director of the company at an exercise price of 0.05 per share expiring 5 years from the date of grant.

On December 8, 2017, we closed the second tranche of a private placement of 3,954,000 units at a price of CAD$0.05 per unit for gross proceeds of CAD $197,700. Each unit consists of one common share of our Company and one non-transferable share purchase warrant, each full warrant entitling the holder to purchase one additional common share of our Company for a period of 24 months from the date of issuance, at a purchase price of $0.06.  A cash finder's fee for CAD $12,770 and 230,400 full broker warrants was paid to third parties. Each full broker warrant entitling the holder to purchase one additional common share of our Company for a period of 24 months from the date of issuance, at a purchase price of $0.06.

On December 8, 2017 we issued 240,000 common shares of our Company on the exercise of 240,000 stock options that were exercised by a director of the Company at $0.05 for $12,000 for net proceeds to the company.

On December 15, 2017 we paid Genesis Water Technologies (GWT) $96,465 for the second and final payment for the Second phase of the second bench test and $8,998 for the bill of materials for the bench test.

On January 12, 2018, we closed the final tranche of a private placement of 1,611,000 units at a price of CAD$0.05 per unit for gross proceeds of CAD$80,550. Each unit consists of one common share of the Company and one non-transferable share purchase warrant, each full warrant entitling the holder to purchase one additional common share of the Company for a period of 24 months from the date of issuance, at a purchase price of $0.06.  A cash finder's fee of CAD$3,880 and 77,600 broker warrants was paid to a third party.  The broker warrants have the same terms as the warrants issued as part of the unit offering.

On February 2, 2018 we issued 50,000 common shares of our Company on the exercise of 50,000 warrants that were exercised at $0.07 for $3,500 for net proceeds to the company.

On May 11, 2018, we issued 200,000 shares for gross proceeds of $12,000 from the exercise of stock options at $0.06.

On May 11, 2018, we closed the first tranche of a private placement of 1,746,900 units at a price of CAD$0.06 per unit for gross proceeds of CAD$104,814.  Each unit consists of one common share of the Company and one non-transferable share purchase warrant, each full warrant entitling the holder to purchase one additional common share of the Company for a period of 24 months from the date of issuance, at a purchase price of $0.075. A cash finders' fee of CAD$9,281 and 144,690 full broker warrants that expire May 11, 2020 was paid to third parties.  The broker warrants have the same terms as the warrants issued as part of the unit offering.


On May 22, 2018, we entered into an Investor Relations Consulting agreement with FronTier Flex Marketing.  Terms of the agreement, FronTier Flex Marketing has been retained for a 9-month period at $66,000 (plus applicable sales taxes) plus direct expenses.  The Company will also grant 300,000 stock options at an exercise price of $0.07 per share expiring 5 years from the date of grant.

On May 25, 2018, we closed the final tranche of a private placement of 2,470,000 units at a price of CAD$0.06 per unit for gross proceeds of CAD$148,200.  Each unit consists of one common share of the Company and one non-transferable share purchase warrant, each full warrant entitling the holder to purchase one additional common share of the Company for a period of 24 months from the date of issuance, at a purchase price of $0.075.  A cash finders' fee of CAD$5,820 and 70,000 full broker warrants that expire May 25, 2020 was paid to third parties.  The broker warrants have the same terms as the warrants issued as part of the unit offering.

On July 4, 2018, the Company, after receiving 3rd party lab results that reported impurities above allowable limits for battery-grade Li2CO3, provided formal notice of termination to GWT of the commercialization agreement dated December 6, 2016 and as amended on October 9, 2017.

On August 31, 2018, we closed the first tranche of a private placement of 4,400,000 units at a price of CAD$0.03 per unit for gross proceeds of CAD$132,000.  Each unit consists of one common share of the Company and one non-transferable share purchase warrant, each full warrant entitling the holder to purchase one additional common share of the Company for a period of 36 months from the date of issuance, at a purchase price of $0.05.  A cash finders' fee of CAD$12,000 and 400,000 full broker warrants that expire August 31, 2021 was paid to third parties.  The broker warrants have the same terms as the warrants issued as part of the unit offering.

On August 31, 2018, we issued 170,000 shares for gross proceeds of $9,000 from the exercise of 50,000 stock options at $0.06 and 120,000 stock options at $0.05 respectively.

On September 21, 2018, the Company closed a private placement of 2,225,000 units at a price of CAD$0.03 per unit for gross proceeds of CAD$66,750 (equivalent to $51,678).  Each unit consists of one common share of the Company and one non-transferable share purchase warrant, each full warrant entitling the holder to purchase one additional common share of the Company for a period of 36 months from the date of issuance, at a purchase price of $0.05.  A cash finders' fee of CAD$6,075 ($4,703) and 202,500 full broker warrants that expire September 21, 2021 was paid to third parties.  The broker warrants have the same terms as the warrants issued as part of the unit offering.

On November 5, 2018, the Company received an Area of Disturbance permit from the Bureau of Land Management, Nevada, allowing the Company access for a series of diamond drill holes. The diamond drill program was completed in December 2018 and consisted of 5 diamond drill holes totaling approximately 2,000 feet. Four drill holes were for resource definition drilling to allow the Company to provide an inaugural 43-101 project wide lithium resource. A fifth diamond drill hole drilled to an estimated depth of approximately 265 feet with the recovered lithium enriched material being used for metallurgical and pH solution testing.

On March 27, 2019, the Company closed a tranche of a private placement of 5,506,769 units at a price of CAD$0.03 per unit for gross proceeds of CAD$143,176 ($106,809).  Each unit consists of one common share of the Company and one non-transferable share purchase warrant, each full warrant entitling the holder to purchase one additional common share of the Company for a period of 48 months from the date of issuance, at a purchase price of $0.04.  A cash finders' fee of CAD$13,068 ($9,748) and 502,600 full broker warrants that expire March 27, 2023 was paid to third parties.  The broker warrants have the same terms as the warrants issued as part of the unit offering.

On July 19, 2019, the President of the Company provided a short term loan to the Company for the amount of CAD$20,000 ($15,301). The loan provides for a 10% annual interest rate and was repayable on October 19, 2019. On February 15, 2020, the loan plus interest was paid back in full.

On December 31st, 2019, the Company accepted the resignation of directors Kristian Ross and Kevin Brown.

On February 12th, 2020, the Company signed a 1% Royalty agreement with respect to any future commercial lithium production from the Company's Clayton Valley, Nevada claims in exchange for $200,000. The Company has a right of first refusal to repurchase the royalty upon any proposed sale by the royalty holder to a third party.


On February 25th, 2020, the Company signed Mark Snyder to a one year Technology Advisory Board. Monthly contract rate of $1,000 per month and the issuance of 2,000,000 stock options valid for two years at a strike price of $0.02 per share.

On October 29, 2020 the Company signed a 1% royalty agreement with respect to any future commercial lithium production from the Company's Clayton Valley, Nevada claims in exchange for $250,000. The Company has a right of first refusal to repurchase the royalty upon any proposed sale by the royalty holder to a third party.

On November 12, 2020 the Company signed Flathead Business Solutions to a 12 month contract for $12,000 and the issuance of 500,000 stock options valid for 5 years at $0.05 cents each.

On December 14, 2020 the Company signed Definitive Agreement to acquire 100% interest in United States Patent and Trademark Office ("USPTO") patent #6,024,086 - Solar energy collector having oval absorption tubes by issuing 1,000,000 common shares of the Company. The Company issued 1,000,000 additional common shares in escrow to be released upon the successful approval of patent pending work derived from patent #6,024,086.

On December 14, 2020 the Company signed Rodney Blake to a 12 month contract for the issuance of 100,000 stock options valid for 5 years at $0.05 cents each.

On December 14, 2020 the Company signed Albert Clark Rich to a 12 month contract for the issuance of 500,000 stock options valid for 5 years at $0.05 cents each.

On January 9, 2021 the Company issued 70,000 common shares as a result of the exercise of 70,000 options exercised at $0.065 per common share.

On January 14, 2021, Enertopia closed a private placement of 3,000,000 units a price of $0.06 per unit for net proceeds of $180,000.  Each Unit consists of one common share of the Company and one-half 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 $0.09 per Warrant Share at any time until the close of business on the day which is 12 months from the date of issue of the Warrant.

On January 28, 2021 the Company signed Mark Snyder to a 12 month contract for $30,000 and the issuance of 2,000,000 stock options valid for 5 years at $0.14 cents each.

On January 29, 2021 the Company issued 1,500,000 common shares as a result of the exercise of 1,773,224 cashless options exercised at $0.02 per common share.

On February 4, 2021 the Company signed Barry Brooks to a 12 month contract for the issuance of 100,000 stock options valid for 5 years each at $0.18 cents each.

On February 5, 2021 the Company signed Paul Sandler to a 12 month contract for the issuance of 100,000 stock options valid for 5 years each at $0.18 cents each.

On February 5, 2021 the Company signed Bruce Shellinger to a 12 month contract for the issuance of 100,000 stock options valid for 5 years each at $0.18 cents each.

On February 5, 2021 the Company signed Richard Smith to a 12 month contract for the issuance of 100,000 stock options valid for 5 years each at $0.18 cents each.

On March 2, 2021 the Company issued 250,000 common shares as a result of the exercise of 250,000 options exercised at $0.07 per common share.

On March 3, 2021 the Company issued 300,000 common shares as a result of the exercise of 300,000 options exercised at $0.07 per common share.

On April 27, 2021 the Company signed Michael Cornelius to a 12 month contract for the issuance of 100,000 stock options valid for 5 years at $0.12 cents each.

On May 25, 2021 the Company announced the filing of provisional patent #1, known as the Enertopia Solar Booster TM


On May 26, 2021the Company announced the filing of provisional patent #2, known as Enertopia Heat ExtractorTM.

On May 28, 2021, the Company issued 50,000 stock options to one of the consultants of the Company with an exercise price of $0.12 vested immediately, expiring May 28, 2026.

On June 1, 2021, the Company issued 2,000,000 common shares as a result of the exercise of 2,000,000 warrants exercised at $0.05 per common share.

On June 8, 2021, the Company issued 400,000 common shares to the Company CEO as a result of the exercise of 400,000 warrants exercised at $0.05 per common share.

On June 8, 2021 the Company issued 100,000 common shares as a result of the exercise of 100,000 options exercised at $0.07 per common share.

On June 29, 2021 the Company issued 100,000 common shares as a result of the exercise of 100,000 warrants exercised at $0.05 per common share.

On July 29, 2021 the Company issued 40,000 common shares as a result of the exercise of 40,000 warrants exercised at $0.04 per common share.

On July 29, 2021 the Company announced it had engaged Fundamental Research Corp. Fundamental Research Corp. is an issuer-paid independent research house.

On August 17, 2021 the Company announced the filing of provisional patent #3, known as Enertopia RainmakerTM.

On Aug 23, 2021 the Company issued 40,000 common shares as a result of the exercise of 40,000 warrants exercised at $0.04 per common share.

On Aug 31, 2021 the Company issued 40,000 common shares as a result of the exercise of 40,000 warrants exercised at $0.04 per common share.

On Sep 01, 2021 the Company granted 500,000 options to a consultant of the Company for 5yrs at $0.08 per common share.

On Sep 02, 2021 the Company issued 100,000 common shares as a result of the exercise of 100,000 warrants exercised at $0.04 per common share and the Company issued 120,000 common shares as a result of the exercise of 120,000 warrants exercised at $0.05 per common share.

On Sep 08, 2021 the Company issued 520,000 common shares as a result of the exercise of 520,000 warrants exercised at $0.04 per common share and the Company issued 155,000 common shares as a result of the exercise of 155,000 warrants exercised at $0.05 per common share.

On Sep 13, 2021 the Company issued 96,000 common shares as a result of the exercise of 96,000 warrants exercised at $0.04 per common share and issued 100,000 common shares as a result of the exercise of 100,000 warrants exercised at $0.05 per common share.

On Sep 17, 2021 the Company issued 1,550,000 common shares as a result of the exercise of 1,550,000 warrants exercised at $0.05 per common share.

On Sep 21, 2021 the Company issued 50,000 common shares as a result of the exercise of 50,000 warrants exercised at $0.05 per common share.

On Oct 29, 2021 the Company issued 100,000 common shares as a result of the exercise of 100,000 warrants exercised at $0.04 per common share.


Our Current Business

We are a development stage company pursuing business opportunities in diverse sectors natural resource and technology used in the resource sector currently specific to the extraction, recovery and concentration of Lithium.

Mineral Property

On August 30, 2017, the Company announced the staking of Lode and Placer claims of BLM lands in Esmeralda county Nevada covering approximately 160 Acres subject to adjustment. The Company has an 100% interest in the lands and is only responsible for the yearly maintenance fees to the BLM (estimated to be $2,635) and County (estimated to be $212) due November 1, 2018 to keep its 100% interest.  During the year ending August 31, 2019, the Company paid $2,805 in maintenance fees.  The claims are in good standing until August 31, 2020. 

Access to the property can be achieved by paved Hwy 265 to Silver Springs, NV or paved Hwy from north of Goldfields, NV. Access is then by graded gravel road. The last 1.8 miles to the property is by trail road using 4x4 vehicle. The property is covered with extensive outcroppings of the Esmeralda Formation. Power transmission line is within ½ mile of the northern property boundary. Water would have to be trucked in or by pipe line if a processing facility was built onsite. Of particular interest is a section of green, volcanoclastic, evaporate-rich mudstone strata known as the Frontera Verde zone that host lithium of potential economic significance. The Frontera Verde Zone is exposed over approximately 100 acres of the northern two thirds of the property, and underlies the rest of the property at shallow depths. Third party drilling adjacent to the west and eastern boundaries of the property supports this analysis. The property is without known reserves and the current work programs are exploratory in nature. 

Current exploration is at the grass roots stage with surface sampling and two small 250 pound bulk samples being taken in 2017. The Company completed additional laboratory testing of synthetic brines. The Company continues to evaluate off the shelf technology to determine the preferred methods for potentially producing commercial products from the processing of synthetic brines.

On November 5, 2018, the Company received an Area of Disturbance permit from the Bureau of Land Management, Nevada, allowing the Company access for a series of diamond drill holes. The diamond drill program will consist of 5 diamond drill holes totaling approximately 2,000 feet. Four drill holes will allow the Company to provide an inaugural 43-101 project wide lithium resource. A fifth diamond drill hole drilled to an estimated depth of 400 feet with the recovered lithium enriched material being used for metallurgical and pH solution testing.

On February 14, 2019 the Company announced the drill result from the diamond drill program. The Company will undertake systematic and through solution testing of the drilled lithium enriched horizons. This will enable the Company to map the subsurface horizons as per oxide and reduced horizons and further differentiate the grade of Lithium in solution that can be potentially recovered in a low CAPEX and low-cost extraction methods.

On April 2, 2020 the Company announced it's maiden 43-101 Lithium resource report which can be found at the Company's website www.enertopia.com

On February 24, 2022 the Company announced the proposed sale of the Lode and Placer claims of BLM lands in Esmeralda county Nevada covering approximately 160 Acres subject to adjustment to Cypress Development Corp.

The Agreed upon selling price is $1,100,000 cash with $50,000 of this total being received on Signing the definitive agreement and the issuance of 3,000,000 shares of Cypress Development Corp. This proposed sale is subject to Company shareholders approving the transaction at a special meeting to be held April 29, 2022 with a shareholder date of record being March 25th 2022.

On February 25, 2022 the Company completed the staking of approximately 1,760 acres, covering 88 lode claims, prospective for Lithium Claystone in the Big Smoky Valley of western Nevada. Respective payments have been made to Esmeralda County and BLM for the year ending August 31, 2022. The Company owns 100% of the project, with no royalties payable.


Property Map

Esmeralda County Lode and Placer Claims:

Claim Name

Claim Type

BLM Serial #

STEVE 1

PLACER

NMC 1148769

STEVE 2

PLACER

NMC 1148770

STEVE 3

PLACER

NMC 1148771

STEVE 4

PLACER

NMC 1148772

STEVE 5

PLACER

NMC 1148773

STEVE 6

PLACER

NMC 1148774

STEVE 7

PLACER

NMC 1148775

STEVE 8

PLACER

NMC 1148776

DAN 1

LODE

NMC 1148760

DAN 2

LODE

NMC 1148761

DAN 3

LODE

NMC 1148762

DAN 4

LODE

NMC 1148763

DAN 5

LODE

NMC 1148764

DAN 6

LODE

NMC 1148765

DAN 7

LODE

NMC 1148766

DAN 8

LODE

NMC 1148767

DAN 9

LODE

NMC 1148768

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 #18 1873 Spall Road, Kelowna, British Columbia V1Y 4R2. Our telephone number is (250) 870-2219.  Our current location provides adequate office space for our purposes at this stage of our development.

Employees

We primarily used the services of sub-contractors and consultants for our intended business operations. Our technical consultant is Mr. McAllister, our president and a director.

We entered into a consulting agreement with Mr. Robert McAllister on December 1, 2007. During the term of this agreement, Mr. McAllister is to provide corporate administration and consulting services, such duties and responsibilities to include provision of oil and gas industry consulting services, strategic corporate and financial planning, management of the overall business operations of the Company, and supervising office staff and exploration and oil & gas consultants. Mr. McAllister is reimbursed at the rate of $2,000 per month. On December 1, 2008, the consulting fee was increased to $5,000 per month. We may terminate this agreement without prior notice based on a number of conditions. Mr. McAllister may terminate the agreement at any time by giving 30 days written notice of his intention to do so. Effective March 1, 2014, the Company entered into a new Management Consulting Agreement replacing the original agreement with a consulting fee of $6,500 plus GST per month. Effective July 1, 2017, the Company entered into a new Management Consulting Agreement replacing the March 1, 2014 agreement with a consulting fee of $3,500 plus GST per month. On July 31, 2017 Mr. McAllister agreed to be intern CFO until such time as a replacement could be sourced. Mr. McAllister voluntarily suspended and terminated accrual of these consulting fees commencing on December 1, 2019 and continuing until such time as the Company's financial condition permits a resumption of such cost.

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.

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.


Results of Operations - Three Months Ended February 28, 2022 and February 28, 2021

The following summary of our results of operations should be read in conjunction with our financial statements for the quarter ended February 28, 2022, which are included herein.

Our operating results for the three months ended February 28, 2022, for the three months ended February 28, 2021 and the changes between those periods for the respective items are summarized as follows:



 


 


Three Months
Ended 

February 28,
2022


 


Three Months
Ended 

February 28,
2021


 
Change Between
Three Month Period
Ended

February 28, 2022 and
February 28, 2021
Revenue (cost recovery) $ Nil $ Nil $ Nil
Cost of product sales   Nil   Nil   Nil
Professional fees   16,273   18,278   (2,005)
Exploration expenses   3,298   3,540   (242)
Consulting fees   57,593   10,500   47,093
Fees and dues   10,970   7,122   3,848
Investor relations   8,608   11,427   (2,819)
Research and development   645,912   1,349   644,563
Stock based compensation   32,821   273,236   (240,415)
Other administrative expenses   6,325   2,340   3,985
Other expenses (income)   (43,292)   (32,567)   (10,725)
Net loss (income)   738,508   295,225   443,283

Our financial statements report revenue of $Nil for the three months ended February 28, 2022 and February 28, 2021.  Our financial statements report a net loss of $738,508 for the three-month period ended February 28, 2022, compared to a net loss of $295,225 for the three-month period ended February 28, 2021. Our net loss has increased by $443,283 for the three-month period ended February 28, 2022. Our operating costs were higher by $454,008 for February 28, 2022 compared to February 28, 2021. The increased costs were primarily due to increase in research and development costs, higher by $644,563 when compared to February 28, 2021.


Results of Operations - Six Months Ended February 28, 2022 and February 28, 2021

The following summary of our results of operations should be read in conjunction with our financial statements for the quarter ended February 28, 2022, which are included herein.

Our operating results for the six months ended February 28, 2022, for the six months ended February 28, 2021 and the changes between those periods for the respective items are summarized as follows:



 


 


Six Months Ended 
February 28,
2022


 


Six Months
Ended 

February 28,
2021


 
Change Between
Three Month Period
Ended

February 28, 2022 and
February 28, 2021
Revenue (cost recovery) $ Nil $ Nil $ Nil
Cost of product sales   Nil   Nil   Nil
Professional fees   38,527   27,426   11,101
Exploration expenses   10,333   4,913   5,420
Consulting fees   91,629   13,500   78,129
Fees and dues   16,975   13,938   3,037
Investor relations   20,356   15,674   4,682
Research and development   651,137   3,333   647,804
Stock based compensation   55,877   288,686   (232,809)
Other administrative expenses   13,921   3,573   (10,348)
Other expenses (income)   (44,028)   (298,421)   (254,393)
Net loss (income)   854,727   72,622   782,105

Our accumulated losses are $15,524,122 at February 28, 2022. Our financial statements report revenue of $Nil for the six months ended February 28, 2022 and February 28, 2021.  Our financial statements report a net loss of $854,727 for the six month period ended February 28, 2022, compared to a net loss of $72,622 for the six month period ended February 28, 2021. Our net loss was higher by $782,105 for the six month period ended February 28, 2022. Our operating costs were higher by $527,712 for February 28, 2022 when compared to February 28, 2021. The higher net loss in February 28, 2022 is primarily attributable to increase in research and development costs, higher by $647,804 when compared to February 28, 2021.

As at February 28, 2022, we had $360,125 in current liabilities, which is lower than the current liabilities of $420,936 as at August 31, 2021.  Our net cash used in operating activities for the six months ended February 28, 2022 was $404,041 compared to $167,835 used in the six months ended February 28, 2021.


Liquidity and Financial Condition

Working Capital   At       At  
    February 28,       August 31,  
    2022       2021  
Current assets $ 269,024   $   415,095  
Current liabilities   360,125       420,936  
               
Working capital surplus/(deficit) $ (91,101 ) $   (5,841 )
       
Cash Flows      
    At
February 28,
      At
February 28,
 
    2022       2021  
Cash flows (used in) operating activities $ (404,041 ) $   (167,835 )
Cash flows from investing activities   49,564       281,905  
Cash flows from (used in) financing activities   131,390       256,648  
Net increase in cash during year $ (223,087 ) $   370,718  

Operating Activities

Net cash used in operating activities was $404,041 in the six months ended February 28, 2022 compared with net cash used in operating activities of $167,835 in the same period in 2021. 

Financing Activities

Net cash provided by financing activities was $131,390 in the six months ended February 28, 2022 compared to $256,648 in the same period in 2021. 

Investing Activities

Net cash from investing activities was $49,564 in the six months ended February 28, 2022 compared to $281,905 used by investing activities in the same period in 2021. 

Item 4.  Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president (also our principal executive officer) and our secretary, treasurer and chief financial officer (also our principal financial and accounting officer) to allow for timely decisions regarding required disclosure.

As of February 28, 2021, the end of the second quarter covered by the comparative information of this report, we carried out an evaluation, under the supervision and with the participation of our president (also our principal executive officer) and our secretary, treasurer and chief financial officer (also our principal financial and accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president (also our principal executive officer) and our secretary, treasurer and chief financial officer (also our principal financial and accounting officer) concluded that our disclosure controls and procedures were effective in providing reasonable assurance in the reliability of our financial reports as of the end of the period covered by this quarterly report.

Inherent limitations on effectiveness of controls

Internal control over financial reporting has inherent limitations which include but is not limited to the use of independent professionals for advice and guidance, interpretation of existing and/or changing rules and principles, segregation of management duties, scale of organization, and personnel factors. Internal control over financial reporting is a process which involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis, however these inherent limitations are known features of the financial reporting process and it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


Changes in Internal Control over Financial Reporting

There have been no changes in our internal controls over financial reporting that occurred during the quarter ended February 28, 2022, that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II

OTHER INFORMATION

Item 1. Legal Proceedings

We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, executive officers or affiliates, or any registered or beneficial stockholder, is an adverse party or has a material interest adverse to our interest.

Item 1A.  Risk Factors

Much of the information included in this prospectus includes or is based upon estimates, projections or other "forward-looking statements". Such forward-looking statements include any projections or estimates made by us and our management in connection with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are