Enertopia Corp. 10-K

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with our audited consolidated financial statements and the related notes that appear elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to; those discussed below and elsewhere in this annual report, particularly in the section Item 1A entitled Risk Factors of this annual report. Our audited consolidated financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles. 25 Plan of Operation During the next twelve-month period (beginning September 1, 2024), we intend to: • identify and secure sources of equity and/or debt financing for property payments; • identify and secure sources of equity and/or debt financing for continued testing for Lithium technology • identify and secure sources of equity and/or debt financing for clean technology acquisitions; We anticipate that we will incur the following operating expenses during this period: Estimated Funding Required During the 12 Months beginning September 1, 2024 Expense Amount ($) Mineral Costs 19,000 Management Consulting Fees 140,000 Technology Development 120,000 Professional fees 75,000 Rent 12,000 Other general administrative expenses 125,000 Total $491,000 As at the date of this annual report, we do not have sufficient cash on hand to finance our entire potential and estimated $491,000 cash obligation to the proposed spending for the 12 months beginning September 1, 2024. Based on our current cash position of $247,350 we anticipate that we will require approximately $243,650 in additional cash to execute our business plan. In the event that we are unable raise sufficient cash we intend to reduce our planned expenditures to accommodate our means with a view toward prioritizing our pending patents and fulfilling our public reporting obligations. As at the date of this annual report we have no financing arrangements in place. Results of Operations for our Years Ended August 31, 2024 and 2023 Our net income (loss) and comprehensive income (loss) for our year ended August 31, 2024, for our year ended August 31, 2023 and the changes between those periods for the respective items are summarized as follows: Years Ended August 31, August 31, 2024 2023 Change Revenue $ - $ - $ - General and administrative 64,304 110,789 46,485 Investor relations 25,493 63,293 37,800 Consulting fees 172,448 181,258 8,810 Fees and dues 64,497 89,733 25,236 Exploration expenses 55,480 464,665 409,185 Research and development 156,680 156,561 (119 ) Professional fees 126,731 158,286 31,555 Other expenses 333,377 607,593 274,216 Net loss $ 999,010 $ 1,832,178 $ 833,168 Our consolidated financial statements report no revenue for the years ended August 31, 2024, and August 31, 2023. Our consolidated financial statements report a net loss of $999,010 for the year ended August 31, 2024, compared to a net loss of $1,832,178 for the year ended August 31, 2023. Our net loss has decreased by $833,168 for the year ended August 31, 2024, primarily due to the decrease in Other expenses and the completion of the drilling program in he prior year. Our operating costs were lower by $558,952 for August 31, 2024, compared to August 31, 2023, primarily due to the costs of our drilling program of $325,170 in the prior year and general cost containment efforts. Other expense for the year ended August 31, 2024 primarily consisted of realized losses and realized foreign exchange losses on the sale of marketable securities of $1,265,781 and $67,053, offset by unrealized gains and unrealized foreign exchange losses on marketable securities of $1,003,760 and $6,596, respectively. 26 Liquidity and Financial Condition Working Capital August 31, August 31, 2024 2023 Current assets $ 332,130 $ 1,347,708 Current liabilities 316,032 332,600 Working capital $ 16,098 $ 1,015,108 August 31, August 31, Cash Flows 2024 2023 Cash flows used in operating activities $ (665,810 ) $ (1,212,225 ) Cash flows from investing activities 586,122 854,599 Cash flows from financing activities - 2,000 Net (decrease) increase in cash during year $ (79,688 ) $ (355,626 ) Operating Activities Net cash used in operating activities was $665,810 for the year ended August 31, 2024 compared with cash used in operating activities of $1,212,225 in 2023. The decrease in net cash used in operating activities is due to the overall decrease in costs as described above. Investing Activities Net cash provided in investing activities was $586,122 for the year ended August 31, 2024 compared to $854,599 in the same period in 2023. During the year ended August 31, 2024 and 2023, the net cash was provided by the sale of the Century Lithium stock. Financing Activities Net cash provided in financing activities was $0 for the year ended August 31, 2024, compared to $2,000 in the same period in 2023. Contractual Obligations As a "smaller reporting company", we are not required to provide tabular disclosure obligations. Going Concern Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company had a working capital of $16,098 as at August 31, 2024 (2023 - $1,015,108). As at August 31, 2024, the Company has incurred cumulative losses of $15,524,969. We require additional funds to maintain our existing operations and to acquire new business assets. These conditions raise substantial doubt about our Company's ability to continue as a going concern. Management's plans in this regard are to raise equity and debt financing as required, but there is no certainty that such financing will be available or that it will be available at acceptable terms. The outcome of these matters cannot be predicted at this time and the financing environment is exceptionally difficult. The Company's consolidated financial statements do not include any adjustments to reflect the future effects on the recoverability and classification of assets or the amounts and classification of liabilities that might result from the outcome of this uncertainty. At this time, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock or through a loan from our directors to meet our obligations over the next twelve months. We do not have any arrangements in place for any future debt or equity financing. 27 Off-Balance Sheet Arrangements We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders. Critical Accounting Policies The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States of America. Preparing consolidated 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 consolidated financial statements is critical to an understanding of our consolidated financial statements. 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 consolidated 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. 28