Enertopia Corp. 10-Q

Item 1. Financial Statements. Our unaudited condensed financial statements for the three month period November 30, 2024 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. CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS (UNAUDITED) (Expressed in U.S. Dollars) November 30, August 31, 2024 2024 ASSETS Current Cash and cash equivalents $ 152,768 $ 179,893 Marketable securities (Note 4) - 67,516 Accounts receivable 7,518 5,927 Prepaid expenses and deposit (Note 12) 47,587 78,794 Total Current Assets 207,873 332,130 Non-current assets, net Mineral property (Note 5) 10,500 10,500 TOTAL ASSETS $ 218,873 $ 342,630 LIABILITIES Current Accounts payable and accrued liabilities $ 274,905 $ 316,032 Total Liabilities 274,905 316,032 STOCKHOLDERS' EQUITY Share Capital (Note 8) Authorized: 500,000,000 common voting shares with a par value of $ 0.001 per share Issued and outstanding: 155,166,088 common shares at November 30, 2024 and 155,166,088 at August 31, 2024 155,167 155,167 Additional paid-in capital (Note 9) 15,397,607 15,397,607 Deficit ( 15,608,047 ) ( 15,524,969 ) Equity attributable to shareholders of the Company ( 55,273 ) 27,805 Non-controlling interest ( 1,259 ) ( 1,207 ) Total Stockholders' Equity ( 56,532 ) 26,598 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 218,373 $ 342,630 The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements. ENERTOPIA CORP. CONDENSED CONSOLIDATED INTERIM STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) (Expressed in U.S. Dollars) COMMON STOCK SHARES AMOUNT ADDITIONAL PAID-IN CAPITAL ACCUMULATED DEFICIT NON- CONTROLLING INTEREST TOTAL STOCKHOLDERS' EQUITY (DEFICIT) Balance, August 31, 2023 155,166,088 $ 155,167 $ 15,397,607 $ ( 14,526,485 ) $ ( 681 ) $ 1,025,608 Non controlling interest - - - - ( 292 ) ( 292 ) Comprehensive loss - - - ( 409,456 ) - ( 409,456 ) Balance, November 30, 2023 155,166,088 $ 155,167 $ 15,397,607 $ ( 14,935,941 ) $ ( 973 ) $ 615,860 Non controlling interest - - - - ( 130 ) ( 130 ) Comprehensive loss - - - ( 147,402 ) - ( 147,402 ) Balance, February 29, 2024 155,166,088 $ 155,167 $ 15,397,607 $ ( 15,083,343 ) $ ( 1,103 ) $ 468,328 Non controlling interest - - - - ( 52 ) ( 52 ) Comprehensive loss - - - ( 287,901 ) - ( 287,901 ) Balance, May 31, 2024 155,166,088 $ 155,167 $ 15,397,607 $ ( 15,371,244 ) $ ( 1,155 ) $ 180,375 Non controlling interest - - - - ( 52 ) ( 52 ) Comprehensive loss - - - ( 153,725 ) - ( 153,725 ) Balance, August 31, 2024 155,166,088 $ 155,167 $ 15,397,607 $ ( 15,524,969 ) $ ( 1,207 ) $ 26,598 Non controlling interest - - - - ( 52 ) ( 52 ) Comprehensive loss - - - ( 83,078 ) - ( 83,078 ) Balance, November 30, 2024 155,166,088 $ 155,167 $ 15,397,607 $ ( 15,608,047 ) $ ( 1,259 ) $ ( 56,532 ) The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements. ENERTOPIA CORP. CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS (UNAUDITED) (Expressed in U.S. Dollars) THREE MONTHS ENDED November 30, November 30, 2024 2023 Expenses Accounting and audit $ 6,486 $ 14,518 Consulting (Note 7) 16,711 48,211 Fees and dues 12,594 438 Investor relations 3,124 9,946 Legal and professional 4,065 26,605 Office and miscellaneous 18,606 17,701 Mineral exploration costs 8,490 45,652 Research and development 22,948 88,300 Total expenses 93,024 251,371 Loss for the period before other items ( 93,024 ) ( 251,371 ) Other income (expense) Foreign exchange gain (loss) 1,463 ( 1,406 ) Realized gain (loss) on marketable securities ( 352,239 ) ( 327,784 ) Realized foreign exchange gain (loss) on marketable securities ( 17,133 ) ( 20,640 ) Unrealized gain (loss) on marketable securities 377,803 183,690 Unrealized foreign exchange gain (loss) on marketable securities - 7,763 Net income (loss) for the period ( 83,130 ) ( 409,748 ) Net income (loss) attributable to: Common shareholders ( 83,078 ) ( 409,456 ) Non controlling interest ( 52 ) ( 292 ) Basic and diluted income (loss) per share Basic and diluted $ ( 0.00 ) $ ( 0.00 ) Weighted average number of common shares outstanding Basic and diluted 155,166,088 155,166,088 The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements. ENERTOPIA CORP. CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS (UNAUDITED) (Expressed in U.S. Dollars) THREE MONTHS ENDED November 30, November 30, 2024 2023 Cash flows used in operating activities Net Income (Loss) $ ( 83,130 ) $ ( 409,748 ) Changes to reconcile net loss to net cash used in operating activities Unrealized (gain) loss on marketable securities ( 377,803 ) ( 183,690 ) Unrealized foreign exchange loss on marketable securities - ( 7,763 ) Loss on disposal of marketable securities 352,239 327,784 Foreign exchange loss on disposal of marketable securities 17,133 20,640 Change in non-cash working capital items: Accounts receivable ( 1,591 ) ( 5,088 ) Prepaid expenses and deposits 31,207 42,677 Accounts payable and accrued liabilities ( 41,127 ) ( 14,725 ) Due to related parties - ( 37 ) Net cash used in operating activities $ ( 103,072 ) $ ( 229,950 ) Cash flows used in investing activities Proceeds from sale of marketable securities 75,947 218,555 Net cash used in investing activities $ 75,947 $ 218,555 Decrease in cash and cash equivalents ( 27,125 ) ( 11,395 ) Cash and cash equivalents at beginning of period 179,893 259,581 Cash and cash equivalents at end of period $ 152,768 $ 248,186 Supplemental information of cash flows: Cash paid for interest $ - $ - Cash paid for taxes $ - $ - The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements ENERTOPIA CORP. NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED) November 30, 2024 (Expressed in U.S. Dollars) 1. ORGANIZATION The unaudited condensed consolidated interim financial statements for the period ended November 30, 2024 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. These unaudited condensed consolidated interim financial statements should be read in conjunction with the August 31, 2024 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 is engaged in the business of Lithium exploration at their Nevada claims, along with holding intellectual property & patents in the green technology space. The Company office is located in Kelowna, B.C., Canada. 2. GOING CONCERN UNCERTAINTY The accompanying unaudited condensed consolidated 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. The Company incurred net cash outflows from operating activities of $ 103,072 for the three months ended November 30, 2024 ($ 229,950 for the three months ended November 30, 2023) and as at November 30, 2024 has incurred cumulative losses of $ 15,608,047 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 consolidated 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 consolidated interim financial statements. 3. SIGNIFICANT ACCOUNTING POLICIES a. Basis of Presentation The accompanying unaudited condensed consolidated 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, 2024. b. Basis of Consolidation The financial statements have been prepared on a consolidated basis with those of the Company's 76 % owned subsidiary, CapNTrack Inc. All intercompany transactions and balances have been eliminated. c. Cash and Cash Equivalents Cash and cash equivalents include cash in bank accounts and money market funds with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value. As of November 30, 2024 and August 31, 2024, cash and cash equivalents consisted of the following: November 30, August 31, 2024 2024 Cash $ 61,199 $ 61,048 Cash equivalents 91,569 118,845 $ 152,768 $ 179,893 d. Accounting Estimates The preparation of financial statements in conformity with U.S GAAP requires us to make certain estimates, judgements and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Some of the Company's accounting policies require us to make subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. These accounting policies involve critical accounting estimates because they are particularly dependent on estimates and assumptions made by management about matters that are highly uncertain at the time the accounting estimates are made. Although we have used our best estimates based on facts and circumstances available to us at the time, different estimates reasonably could have been used. Changes in the accounting estimates used by the Company are reasonably likely to occur from time to time, which may have a material effect on the presentation of financial condition and results of operations. The Company reviews these estimates, judgments, and assumptions periodically and reflect the effects of revisions in the period in which they are deemed to be necessary. We believe that these estimates are reasonable; however, actual results could differ from these estimates. Significant accounting estimates and assumptions are used for, but not limited to: a) The Valuation of Deferred Tax Assets Judgement is required in determining whether deferred tax assets are recognized on the balance sheet. The recognition of deferred tax assets requires management to assess the likelihood that the Company will generate taxable income in future periods to utilize the deferred tax assets. Due to the Company's history of losses, deferred tax assets have not been recognized by the Company. b) Value of Stock Options The Company provides compensation benefits to its employees, directors, officers, and consultants, through a stock option plan. The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model. Expected volatility assumption used in the model is based on the historical volatility of the Company's share price. The Company uses historical data to estimate the period of option exercises for use in the valuation model. The risk-free interest rate for the expected term of the option is based on the yields of government bonds. Changes in these assumptions, especially the share price volatility and the expected life determination could have a material impact on the Company's profit and loss for the periods presented. All estimates used in the model are based on historical data which may not be representative of future results. c) Fair value of shares issued in non-cash transactions The Company at times grants common shares in lieu of cash to certain vendors for their services to the Company. The Company recognizes the associated cost in the same period and manner as if the Company paid cash for the services provided by calculating the fair value of the share offering at the cost of the service provided. e. Earnings Per Share Loss per share is computed using the weighted average number of shares outstanding during the period. The Company has adopted ASC 220 "Earnings Per Share". Basic earnings per share ("EPS") is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted EPS is computed based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding stock options. f. Financial Instruments ASC 820 "Fair Value Measurements and Disclosures" requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value: Level 1 - Quoted prices in active markets for identical assets or liabilities; Level 2 - Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and Level 3 - Unobservable inputs that are supported by little or no market activity, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing. The Company's financial instruments consist primarily of cash and cash equivalents, marketable securities, accounts receivable, accounts payable and due to related party. The carrying amounts of these financial instruments approximate their fair values due to their short maturities. Cash and cash equivalents and marketable securities are in Level 1 within the fair value hierarchy. The Company's operations are in United States of America and Canada, which results in exposure to market risks from changes in foreign currency rates. The financial risk is the risk to the Company's operations that arise from fluctuations in foreign exchange rates and the degree of volatility of these rates. Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk. g. Research and Development Research and development costs are expensed as incurred. 4. MARKETABLE SECURITIES On May 4, 2022 ("Closing Date"), the Company announced the sale of its Clayton Valley unpatented mining claims to Cypress Development Corporation ("Cypress") and as a result of this transaction received 3,000,000 shares of Cypress along with $ 1,100,000 in cash. During January 2023 Cypress underwent a name change to Century Lithium Corp ("Century"). Marketable securities as at November 30, 2024 consist of the Company's investment in 3,000,000 shares of Century of which a total of 3,000,000 have been sold, 350,600 of which were sold during the three month period ended November 30, 2024 (three months ended November 30, 2023 - 446,000 ). As at November 30, 2024, the movement in the Company's marketable securities is as follows: Balance, August 31, 2024 $ 67,516 Mark to market 377,803 Proceeds from disposal ( 75,947 ) Realized loss on disposal ( 352,239 ) Realized Foreign exchange loss on disposal ( 17,133 ) Balance, November 30, 2024 $ - 5. MINERAL PROPERTY West Tonopah On February 25, 2022, the Company staked approximately 1,818 acres of unpatented mineral claims in Esmeralda County, Nevada for cash consideration of $ 10,500 . During the three month period ended November 30, 2024, the Company expensed $ 8,490 in expenses relating to geologist work, sample assays, and travel expenses. During the three month period ended November 30, 2023, the Company expensed $ 45,652 in expenses relating to geologist work, sample assays, travel expenses and 43-101 report expenses. November 30, November 30, 2024 2023 Geologists $ - $ 21,175 Sample Assays - 13,307 Travel & Misc 8,490 11,171 Total Exploration $ 8,490 $ 45,652 6. RESEARCH AND DEVELOPMENT Clean Technologies On December 6, 2021, The Company entered into a Definitive Purchase and Sale Agreement to acquire 100 % ownership and rights to the hydrogen technology ("Hydrogen Technology"). By acquiring this Hydrogen Technology, the Company is currently researching the opportunity to create process gas that can be used in commercial, industrial and mining applications by splitting the hydrogen from water via electrolysis. The technology is still in the research and development phase and is not commercially feasible as at the period ended November 30, 2024. Energy Management System ("EMS") On December 17, 2021, The Company entered into a Definitive Purchase and Sale Agreement to acquire 100 % ownership and rights to their Provisional Patent Pending EMS. The Company created a Joint Venture ("JV") with 51 %, now 76 %, controlling interest in CapNTrack to run the commercial and industrial operations related to the EMS. As of November 30, 2024, one of the co inventors passed away and per the agreement 2.5 million shares held in escrow will be returned to treasury and cancelled. The company is waiting for the estate to provide the completed agreed to Release and Settlement Agreement to complete the return to treasury of the shares held in escrow. As at the period ended date of November 30, 2024, there have been no operations in the JV and only office costs have been incurred. The EMS is still in the research and development phase and it has not obtained commercial or operational feasibility as at the period end date of November 30, 2024. On November 19, 2024 the United States Patent Trademark Office (USPTO) notified the Company that patent number 12149091 was issued for EMS (Energy Management System). November 30, November 30, 2024 2023 Clean Technologies $ 22,948 $ 88,300 Total Research and Development $ 22,948 $ 88,300 7. RELATED PARTY TRANSACTIONS For the three month period ended November 30, 2024, the Company was party to the following related party transactions: • The Company incurred $ 0 (November 31, 2023: $ 28,500 ) to the President of the Company in consulting fees. • The Company incurred $ 7,500 (November 30, 2023: $ 7,500 ) to the CFO of the Company in consulting fees. • The Company incurred $ 184 to a director of the Company in geological consulting services • The Company incurred $ 2,173 in total to two directors of the Company for director fees. 8. SHARE CAPITAL The Company is authorized to issue up to 500 million shares. During the three months ended November 30, 2024 and 2023, the Company issued no shares. As at November 30, 2024 the Company had 155,166,088 (August 31, 2024: 155,166,088 ) shares issued and outstanding. As at November 30, 2024 the Company had 7,000,000 (August 31 2024 - 7,000,000 ) shares held in escrow, that are included in the total shares issued and outstanding. 2,500,000 million of the shares held in Escrow are in process for release with respect to the issuance of the Energy Management System Patent, United States Patent Trademark Office (USPTO) #12149091, as per the terms and conditions of the contract. 9. 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. 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. The aggregate number of Common Shares that may be reserved, allotted and issued pursuant to Options shall not exceed 17,400,000 shares of common stock, less the aggregate number of shares of common stock then reserved for issuance pursuant to any other share compensation arrangement. For greater certainty, if an Option is surrendered, terminated or expires without being exercised, the Common Shares reserved for issuance pursuant to such Option shall be available for new Options granted under this Plan. The options are deemed as vested and exercisable on issuance and the maximum life of the options granted under this Plan may not exceed 5 years. At the Annual General Meeting held March 22, 2023, a new 2023 Stock Option Plan was approved. Under the 2023 Stock Option Plan (the "2023 Plan") the Company may grant options to purchase shares of common stock, $ 0.001 par value per share, of the Company. The stock subject to options granted under the 2023 Plan shall be shares of authorized but unissued or reacquired common stock. The maximum number of shares of common stock of the Company which may be issued and sold under the 2023 Plan shall be 31,000,000 , subject to adjustment for stock splits or consolidations with a maximum life of 5 years and vesting at the discretion of the Board of Directors. Management plans to issue all new option grants under the 2023 Plan and to cancel the 2014 Plan once all currently issued options are either exercised or expire. During the three months ended November 30, 2024 the Company did not issue any options. During the three months ended November 30, 2024 and 2023, the Company recorded $ 0 as stock based compensation expenses. A summary of the changes in stock options for the three months ended November 30, 2024 is presented below: Options Outstanding Number of Options Weighted Average Exercise Price $ Weighted Average Remaining Life (Years) Aggregate Intrinsic Value $ Balance, August 31, 2023 8,150,000 0.09 Expired - - Balance, August 31, 2024 8,150,000 0.09 Expired - - Balance, November 30, 2024 (Outstanding & Exercisable) 8,150,000 0.09 1.66 - The Company has the following options outstanding and exercisable as at November 30, 2024: Issue Date Expiry Date Exercise Price Number of Options Remaining Life (Years) 14-Dec-20 14-Dec-25 0.05 2,100,000 1.04 28-Jan-21 28-Jan-26 0.14 2,000,000 1.16 4-Feb-21 4-Feb-26 0.18 100,000 1.18 5-Feb-21 5-Feb-26 0.18 300,000 1.18 27-Apr-21 27-Apr-26 0.12 100,000 1.41 28-May-21 28-May-26 0.12 50,000 1.49 1-Sep-21 1-Sep-26 0.08 500,000 1.75 6-Dec-21 6-Dec-26 0.07 1,000,000 2.02 18-Aug-22 18-Aug-27 0.06 2,000,000 2.72 Balance outstanding and exercisable 8,150,000 1.66 Warrants There were no warrants issued during the period ended November 30, 2024. There were no warrants outstanding as of November 30, 2024 and August 31, 2024. 10. COMMITMENTS The Company has a consulting agreement with the President of the Company for corporate administration and consulting services for $ 9,500 per month plus goods and services tax ("GST") on a continuing basis, the financial terms of the contract have been suspended since July 1, 2024 pending improvement in financing conditions. The Company has a consulting agreement with the CFO of the Company for corporate administration and consulting services for $ 7,500 per quarter plus goods and services tax ("GST") on a continuing basis. The Company has a director fee agreement with two directors for CDN $ 1,500 each plus GST per quarter. The Company has a rental agreement for a corporate office for CDN $ 853 per month plus GST that expires December 31, 2024. Rent expense for the three months ended November 30, 2024 and 2023 were $ 1,878 and $ 2,440 , respectively. 11. SEGMENTED INFORMATION The Company's operations involve the development of natural resources and green technologies. The Company is centrally managed and its chief operating decision maker, being the CEO, uses the consolidated and other financial information to make operational decisions and to assess the performance of the Company. The Company has three reportable segments: Natural Resources, Technology and Corporate, none of which are revenue generating as at the period ended date and for the period ended November 30, 2024. Long term Assets Amount United States of America $ 10,500 Balance November 30, 2024 $ 10,500 Natural Resources Technology Corporate Consolidated Total November 30, 2024 $ $ $ $ Expenses ( 8,490 ) ( 22,948 ) ( 61,586 ) ( 93,024 ) Other income (Note 4) - - 9,894 9,894 Segment Loss ( 8,490 ) ( 22,948 ) ( 51,692 ) ( 83,130 ) Total Assets (Note 4, 5) 10,500 - 207,873 218,373 Long term Assets Amount United States of America $ 10,500 Balance August 31, 2024 $ 10,500 Natural Resources Technology Corporate Consolidated Total August 31, 2024 $ $ $ $ Expenses ( 55,480 ) ( 156,680 ) ( 453,473 ) ( 665,633 ) Other income (Note 4) - - ( 333,377 ) ( 333,377 ) Segment Loss ( 55,480 ) ( 156,680 ) ( 786,850 ) ( 999,010 ) Total Assets (Note 4, 5) 10,500 - 332,130 342,630 12. PREPAID EXPENSES AND DEPOSITS The balance of Prepaid Expenses and Deposits consisted of the following: November 30, August 31, Prepaid Expenses & Deposits 2024 2024 Consultants $ 6,000 $ 12,000 Exploration costs 14,183 22,673 Fees and Dues 3,996 9,256 Insurance 22,480 33,720 Office Expenses 928 1,145 Total Prepaid Expenses& Deposits $ 47,587 $ 78,794 13. SUBSEQUENT EVENTS Management has evaluated subsequent events through the date these financial statements were issued. Based on our evaluation the are no material events have occurred that require disclosure.