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|UNITED STATES                     
|----------------------------------
|SECURITIES AND EXCHANGE COMMISSION
|Washington, D.C. 20549            

FORM 10-K/A
Amendment #2

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended August 31, 2011

[ ] 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 CORP.(Exact name
of registrant as specified in its charter)

|Nevada                                                               | 20-1970188                          
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)
|                                                                     |                                     
|                                                                     |                                     
|                                                                     |                                     
|#950-1130 WEST PENDER STREET, VANCOUVER, BRITISH                     |                                     
|COLUMBIA, CANADA                                                     | V6E 4A4                             
|(Address of principal executive offices)                             | (Zip Code)                          

Registrant's telephone number, including area code:
604-602-1633

Securities registered pursuant to Section 12(b) of the Act:

|Title of Each Class | Name of Each Exchange On Which Registered
|------------------- | -----------------------------------------
|N/A                 | N/A                                      

Securities registered pursuant to Section 12(g) of the Act:

N/A(Title of class)

Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 the Securities Act.

Yes [  ] No [x]

Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the Act

Yes [  ] No [x]

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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 last 90 days.

Yes [x] No [  ]

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Website, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-K (§229.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such
files).

Yes [x] No [  ]

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not
contained herein, and will not be contained, to the best of registrant's
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form 10-K.

[  ]

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See definition 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   | [  ] | 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 [  ] No [x]

State the aggregate market value of voting and non-voting common
equity held by non-affiliates computed by reference to the price at which the
common equity was last sold, or the average bid and ask price of such common
equity, as of the last business day of the registrants most recently completed
second fiscal quarter.

The aggregate market value of Common Stock held by
non-affiliates of the Registrant on February 28, 2011 was $810,285 based on a $0.09
closing price for the Common Stock on February 28, 2011. For purposes of this
computation, all executive officers and directors have been deemed to be
affiliates. Such determination should not be deemed to be an admission that such
executive officers and directors are, in fact, affiliates of the Registrant.

Indicate the number of shares outstanding of each of the
registrants classes of common stock as of the latest practicable date.

24,743,865 common shares as of November 25, 2011

DOCUMENTS INCORPORATED BY REFERENCE

None.

2

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TABLE OF CONTENTS

|Item 1.  | Business                                                                                                                 | 4 
|-------- | ------------------------------------------------------------------------------------------------------------------------ | --
|Item 1A. | Risk Factors                                                                                                             | 12
|Item 1B. | Unresolved Staff Comments                                                                                                | 16
|Item 2.  | Properties                                                                                                               | 16
|Item 3.  | Legal Proceedings                                                                                                        | 24
|Item 4.  | (Removed and Reserved).                                                                                                  | 24
|Item 5.  | Market for Registrants Common
      Equity, Related Stockholder Matters and Issuer Purchases of Equity
      Securities | 24
|Item 6.  | Selected Financial Data                                                                                                  | 27
|Item 7.  | Managements Discussion and
      Analysis of Financial Condition and Results of Operations                              | 28
|Item 7A. | Quantitative and Qualitative Disclosures About
      Market Risk                                                         | 31
|Item 8.  | Financial Statements and
      Supplementary Data                                                                        | 31
|Item 9.  | Changes in and Disagreements With Accountants
      on Accounting and Financial Disclosure                               | 55
|Item 9A. | Controls and Procedures                                                                                                  | 55
|Item 9B. | Other Information                                                                                                        | 56
|Item 10. | Directors, Executive Officers
      and Corporate Governance                                                             | 56
|Item 11. | Executive Compensation                                                                                                   | 61
|Item 12. | Security Ownership of Certain
      Beneficial Owners and Management and Related Stockholder Matters.                    | 65
|Item 13. | Certain Relationships and Related Transactions,
      and Director Independence                                          | 66
|Item 14. | Principal Accounting Fees and
      Services                                                                             | 67
|Item 15. | Exhibits, Financial Statement Schedules                                                                                  | 68

3

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PART I

|Item 1. | Business
|------- | --------

This annual report contains forward-looking statements. 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 financial statements are stated in United States Dollars
(US$) and are prepared in accordance with United States Generally Accepted
Accounting Principles.

In this annual report, unless otherwise specified, all dollar
amounts are expressed in United States dollars and all references to common
shares refer to the common shares in our capital stock.

As used in this annual report and unless otherwise indicated,
the terms "we", "us", "our" and "Enertopia" mean Enertopia Corp.

General 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 2008, we were primarily engaged in
the acquisition and exploration of natural resource properties. Beginning in
April 2008, we began our entry into the clean energy sector by purchasing an
interest in a solar thermal design and installation company.

We are a renewable energy and a resource company that is
pursuing business opportunities in mineral properties and several cleantech
sectors, including: Solar PV (Photovoltaic), Solar Thermal (Hot Water), Energy
Retrofits and Recovery, Solar powered Filtered Drinking Water.

The address of our principal executive office is Suite 950,
1130 West Pender Street, Vancouver, British Columbia V6E 4A4. Our telephone
number is (604) 602-1633. In addition, we have a second office located in
Kelowna, British Columbia. Our current locations provide adequate office space
for our purposes at this stage of our development.

During the year ended August 31, 2010, our oil and gas
properties became available for sale as the result of our company shifting its
focus from non-renewable energy operations to a renewable energy operation.
Pursuant to Accounting Standards Codification 360 Accounting for the Impairment
or Disposal of long-Lived Assets, we reclassified the remaining oil and gas
properties to be sold as assets held for sale and recorded at their recoverable
amount on August 31, 2010. In the year ended August 31, 2011, we received
the cash payment of $100,000 from the sale.

On January 31, 2011, we entered into a letter of intent and
paid US$7,500 deposit to Wildhorse Copper Inc. and its wholly owned subsidiary
Wildhorse Copper (AZ) Inc. (collectively, the Optionors). On April 11, 2011,
we signed a Mineral Purchase Option Agreement with the Optionor respecting an
option to earn a 100% interest, subject to a 1% NSR capped to a maximum of $2,000,000 on one claim, in a
property known as the Copper Hills property. The Copper Hills property is
comprised of 56 located mining claims covering a total of 1,150 acres located in
New Mexico, USA. The Optionors hold the Copper Hills property directly and
indirectly through property purchase agreements between the Optionors and third
parties (collectively, the Indirect Agreements). Pursuant to the Agreement the
Optionors have assigned the Indirect Agreements to Enertopia. In order to earn
the interest in the Copper Hills property, we are required to make aggregate
cash payments of $591,650 over an eight year period and issue an aggregate of
1,000,000 shares of its common stock over a three year period. On April 11,
2011, we made aggregate cash payments of $54,150 and issued 500,000 shares to
the Optionors. As at August 31, 2011, total consideration including cash paid
and common stock issued was $147,045; the Company has expensed the exploration
costs of $14,094 and prepaid the exploration costs of $32,250.

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On March 3, 2011, we closed a private placement of 8,729,000
units at a price of CAD$0.10 per unit for gross proceeds of CAD$872,900,
US$893,993. Each unit consisted of one common share in the capital of our
company and one non-transferable share purchase warrant, each full warrant
entitling the holder to purchase one additional common share in the capital of
our company until March 3, 2013, subject to accelerated expiry as set out in the
warrant certificate, at a purchase price of CAD$0.20. As per the terms of the
Subscription Agreement, our company grants to the Subscribers a participation
right to participate in future offerings of our securities as to their pro rata
shares for a period of 12 months from the closing of the Private. We paid broker
commissions of $48,930 in cash and issued 489,300 brokers warrants. Each full
warrant entitling the holder to purchase one additional common share in the
capital of our company until March 3, 2013, subject to accelerated expiry as set
out in the warrant certificate, at a purchase price of CAD$0.20.

On March 16, 2011, we entered into a debt settlement agreement
with an officer of our company, whereby we issued 78,125 shares of common stock
in connection with the settlement of $12,500 debt at a deemed price of $0.16 per
share pursuant to a consulting agreement. We recorded $12,422 in additional paid
in capital for the gain on the settlement of the debt.

On April 14, 2011, we held our Annual and Special Meeting of
Shareholders for the following purposes:

| | 1. | To elect Robert McAllister, Dr. Gerald Carlson and Chris
      Bunka as directors of the Company for the ensuing year.                                                                                              
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                     
| | 2. | To ratify Chang Lee LLP, independent public accounting
      firm for the fiscal year ending August 31, 2011, and to allow directors to
      set the remuneration.                                                 
| |    |                                                                                                                                                                                                                     
| | 3. | To approve, ratify and confirm the consolidation of the
      2007 Stock Option Plan and the 2010 Equity Compensation Plan into one plan
      and approve the terms of this new plan, the 2011 Stock Option
  Plan.

All proposals were approved by the shareholders. The proposals
are described in detail in our definitive proxy statement filed with the
Securities and Exchange Commission on March 9, 2011.

On April 27, 2011, we entered into a debt settlement agreement
with the President of our Company regarding due to related parties in the amount
of $46,000, whereby $25,000 was settled by issuing common shares of 100,000, and
$21,000 was forgiven for Nil consideration. In connection with the debt
settlement, we recorded $100 in share capital and $45,900 in additional paid in
capital for the gain on the settlement of the debt.

On May 31, 2011, the Company settled the amount due to related
parties into two promissory notes of $80,320 (CAD$84,655) and $90,000. Both
promissory notes were unsecured, non-interest bearing and due on May 31, 2012 at
an imputed interest rate of 12% per annum upon the settlement. On April 27,
2011, we entered into debt settlement agreement with one of the holders, a
company controlled by the Chairman/CEO of the Company, whereby the Company
issued common shares of 360,000 to the holder, and the holder agreed to accept
the shares as full and final payment of the promissory of $90,000. On the same
day, we entered into a debt settlement agreement with another holder, a company
controlled by the Chairman/CEO of our Company, whereby the holder agreed to
forgive the repayment of debt for Nil consideration. In connection with the
settlements and forgiveness of the above
promissory notes, the Company recorded $79,997and $77,415 in additional paid in capital for the gain on settlement of debt, respectively.

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On June 22, 2011, Change Lee LLP (“Chang Lee”) resigned as our independent registered public accounting firm because Chang Lee was merged with another company: MNP LLP (“MNP”). Most of the professional staff of Chang Lee
continued with MNP either as employees or partners of MNP and will continue their practice with MNP. On June 22, 2011, we engaged MNP
as our independent registered public accounting firm.

On July 19, 2011, we entered into a letter of intent and paid
US$15,000 deposit to the Altar Resources. Subsequent to August 31, 2011, on October 11, 2011, we signed a Mineral Purchase Option Agreement with Altar Resources respecting an option to earn 100% interest, subject to a 2.5% NSR in a property
known as Mildred Peak. The mining claims are in Arizona covering approximately 6,220 acres from Altar Resources who holds the mining claims directly, and indirectly through federal mining claims and state mineral exploration leases, or represents
that it will hold such claims in good standing at the time of closing a definitive agreement. Our company is required to make aggregate cash payments of $881,000 over a five year period and issue an aggregate of 1,000,000 shares of our common
stock over a four year period. On October 11, 2011, we made aggregate cash payments of $71,000 and issued 100,000 shares of our common stock to Altar Resources.

Overview of Business over the Last Five Years

We were initially engaged in the acquisition and exploration of natural resource properties. We commenced operations in November 2004 and discontinued such operations in April 2010. As a result, the foregoing discussion describes the Company’s
operations while it was involved in the acquisition and exploration of natural resource properties.

On April 6, 2005 we entered into an Exploration Agreement with Options for Joint Venture with Miranda U.S.A., Inc. We had the option of acquiring an undivided 60% interest in Miranda’s lease in sixty-four mineral claims situated in Eureka
County, Nevada.  During the fiscal year ended August 31, 2007, we abandoned our option to acquire the 60% interest in the Eureka County mineral lease claims.

As management of our company investigated opportunities and challenges in the business of being a natural gas and oil property exploration company, management realized that the business did not present the best opportunity for our company to realize
value for our shareholders. Accordingly, we abandoned our previous business plan and focused on the exploration and development of natural gas and oil properties.

On April 16, 2007, we acquired a 25% (net 15%) before payout  (12.5% (net 7.5%)) after payout  interest in Queensdale, Saskatchewan Project (known as the Queensdale Property) from 0743608 B.C. Ltd., a company controlled by a Director/CEO of our
company, for a total cost of CAD$250,000 and 250,000 shares (post consolidation) of our common stock.

On November 30, 2007, we completed the acquisition of all the issued and outstanding common stock of Target Energy pursuant to a share exchange agreement dated October 15, 2007 among our company, as purchaser, and all of the shareholders of Target
Energy, as vendors. In exchange for all of the issued and outstanding shares of Target Energy, we issued to the shareholders of Target Energy an aggregate of 6,905,000 shares (post consolidation) of our common stock. Through our acquisition of
Target Energy we acquired an 8% gross interest before payout in the Queensdale, Queensdale West HZ 4A9-25/3A15-25-6-2 W2 well (known as the Queensdale West property). We also acquired a 3.75% net interest in two wells located in Wordsworth,
Saskatchewan (known as the Wordsworth property).

On April 21, 2008, we acquired a passive minority interest in Pro Eco Energy USA Ltd., a private corporation focused on the installation and integration of alternative energy – mainly solar thermal – systems in Western Canada.

On May 14, 2008, we acquired one land parcel of 160 acres in the Glen Park area of central Alberta, Canada. We subsequently entered into a 50/50 Joint Venture with Vanguard Exploration to explore and develop the joint lands
on Alberta Petroleum and Natural Gas Lease No. 0408050364. The joint venture owns the Petroleum and Natural Gas rights below the base of the Mannville GRP to basement.

6

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On June 11, 2008, we acquired two land parcels of 160 acres each in the Glen Park area of central Alberta, Canada. These 320 acres are believed to be prospective for reef development and the potential accumulation of oil deposits. We own the
Petroleum and Natural Gas rights below the base of the Mannville GRP to basement as to 100%.

In November 2008, the Wordsworth property that had the second well was drilled and completed as a successful oil well in December 2008.

On December 8, 2008 Enertopia and its partner were successful in acquiring 800 acres of land in the Coteau Lake project area and our company owned a 50% gross and net interest in a total of 2,080 acres of land in this area.

On July 31, 2009, we sold all of our interests in the Queensdale, West Queensdale, and the Wordsworth properties for an aggregate amount of CAD$453,116.

Effective September 1, 2009, we entered into an assignment agreement with Cheetah Oil & Gas Ltd. The assignment agreement dated August 28, 2009, provides for the purchase by our company of a revenue interest of 40.432% of an 8% share of
Cheetah’s net revenue after field operating expenses from the Belmont Lake PP F-12-4 horizontal well, located in Belmont Lake Field, Wilkinson County, Mississippi. As consideration, we agreed to pay to Cheetah 57.76% of Cheetah’s costs
currently budgeted at $77,905.36, subject to revision and 57.76% of Cheetah’s 8% share of PP F-12-4 well costs from time to time for infrastructure, pipes, tanks, compressors, trucking, etc. On May 31, 2010, this assigned interest was
converted into common shares and warrants of Cheetah Oil & Gas Ltd, leaving our company with no direct interest in this well. As a result, we have 375,000 restricted common shares in the capital of Cheetah and 375,000 share purchase warrants
which entitled our company to acquire 375,000 restricted common shares in the capital of Cheetah at a purchase price of US$0.20 per share for a period of two years.

Effective September 1, 2009, we entered into an assignment agreement with Lexaria Corp. The assignment agreement dated August 28, 2009, provides for the purchase by our company of a revenue interest of 13.475% of a 32% share of Lexaria’s net
revenue after field operating expenses from the Belmont Lake PP F-12-4 horizontal well, located in Belmont Lake Field, Wilkinson County, Mississippi. As consideration, we agreed to pay to Lexaria 19.25% of Lexaria’s costs currently budgeted at
$311,621.44, subject to revision and 19.25% of Lexaria’s 32% share of PP F-12-4 well costs from time to time for infrastructure, pipes, tanks, compressors, trucking, etc. On May 31, 2010, this assigned interest was converted into common
shares and warrants of Lexaria Corp, leaving our company with no direct interest in this well. As a result, we have 499,893 restricted common shares in the capital of Lexaria and 499,983 share purchase warrants which entitle our company to acquire
499,983 restricted common shares in the capital of Lexaria at a purchase price of US$0.20 per share for a period of two years.

Effective September 25, 2009, we effected a one (1) for two (2) share consolidation of our authorized and issued and outstanding common stock. As a result, our authorized capital decreased from 75,000,000 shares of common stock with a par value of
$0.001 to 37,500,000 shares of common stock with a par value of $0.001 and our issued and outstanding shares decreased from 29,305,480 shares of common stock to 14,652,740 shares of common stock. The consolidation became effective with the
Over-the-Counter Bulletin Board at the opening for trading on September 25, 2009 under the new stock symbol “GLCP”. Our CUSIP number was changed to 38079Q207.

On October 9, 2009, we appointed Bal Bhullar as our chief financial officer. Concurrent with the appointment of Ms. Bhullar, we entered into an initial six-month management agreement, thereafter month to month, with BKB Management Ltd., a consulting
company controlled by Bal Bhullar.

On October 9, 2009, we entered into a month to month management agreement with Mark Snyder, whereby Mark Snyder will act as the Chief Technical Officer of the Company.

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On January 31, 2010, we entered into an Independent Sales and
Marketing Representative Agreement with Global Solar Water Power Systems Inc., a
private company beneficially owned by Mark Snyder, the Companys Chief Technical
Officer.

On February 8, 2010, we changed our name from Golden Aria Corp.
to Enertopia Corp. Our CUSIP number is 29277Q1047

On February 22, 2010, we increased our authorized share capital
to 200,000,000 common shares.

On February 28, 2010, we entered into an Asset and Share
Purchase Agreement with Mr. Mark Snyder to acquire up to 20% ownership interest
of Global Solar Water Power Systems Inc.

Effective March 26, 2010,  our stock quotation under the
symbol GLCP was deleted from the OTC Bulletin Board. The symbol was deleted
for factors beyond our companys control due to various market makers electing
to shift their orders from the OTCBB to the Pink OTC Markets Inc. As a result of
these market makers not providing a quote on the OTCBB for four consecutive days
our company was deemed to be deficient in maintaining a listing standard at the
OTCBB pursuant to Rule 15c2-11. That determination was made entirely without our
companys knowledge.

On April 7, 2010, FINRA confirmed the name change from Golden
Aria Corp. to Enertopia Corp., and approved our new symbol "ENRT".

On May 31, 2010, we closed a private placement financing of
557,500 units at a price of $0.15 per unit for gross proceeds of $83,625. Each
unit consisted of one share of common stock in the capital of our company and
one non-transferable share purchase warrant, each full warrant entitling the
holder to purchase one additional share of common stock in the capital of our
company until May 31, 2012, at a purchase price of $0.30 per share.

On August 12, 2010, we received approval for listing on the
Canadian National Stock Exchange. Trading date commenced on August 13, 2010
under the symbol "TOP".

Our Current Business

We are a renewable energy and a resource company that is pursuing business
opportunities in mineral properties and several cleantech sectors, including: Solar PV (Photovoltaic),
Solar Thermal (Hot Water), Energy Retrofits and Recovery, Solar powered Filtered
Drinking Water.

We currently hold the following interests:

Equity Investment in Pro Eco Energy, Inc.

On April 21, 2008, we announced that we had made an 8.25%
equity investment into Pro Eco Energy USA Ltd., a clean tech energy company
involved in designing, developing and installing solar energy solutions for
commercial and residential customers. We also welcomed the President of Pro Eco
Energy, Mr. Roger Huber, as the first member of our Clean Tech Advisory board.
Mr. Huber has a long career in optimizing energy solutions and his knowledge and
wide industry contacts are expected to help us develop our alternative energy
solutions.

Pro Eco Energy USA Ltd. owns 100% of the shares of a
wholly-owned subsidiary company in Canada called Pro Eco Energy Ltd. (together,
Pro Eco). The Chairman of our company is a director and shareholder of Pro Eco
Energy USA Ltd.

Mr. Huber has been active in the fields of clean energy design
and installations for many years. Through his private consulting and
construction companies, he has helped to design and construct many of the
largest solar thermal projects in Western Canada, These include the Best Western
Hotel in Kelowna, British Columbia; the North Vancouver Public Library; the
Comfort Inn in Red Deer, Alberta, and others. Pro Eco primarily services
commercial clients and is both an installation and consulting company.

8

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Pro Ecos range of services includes:

| | 1. | Consulting. Pro Eco evaluates customers current energy
      needs and helps recommend ways that can optimize savings and energy
      efficiency; and                                                   
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                           
| | 2. | Design. Pro Eco designs personalized, custom systems to
      take the greatest advantage of the customers unique geographical setting,
      fuel costs and availability, and building construction; and
| |    |                                                                                                                                                                                                           
| | 3. | Installation. Pro Ecos experts install and support a
      wide variety of commercial and residential systems including solar
      thermal, ground-source heat pumps, and heat
recovery.                

Pro Eco specializes in both energy retrofits of commercial
buildings, and systems for new commercial construction.

Pro Eco has mainly focused its activities throughout British
Columbia, Alberta and Saskatchewan. Pro Ecos prior projects included a number
of large and small companies, including hotels and apartment buildings, and
residential installations. Some of Pro Ecos recent projects include:

| | 1.  | North Vancouver Library          
| | --- | ---------------------------------
| | 2.  | Listel Hotel                     
| | 3.  | Singer Specialized Trucking      
| | 4.  | Gateway Bonavista                
| | 5.  | Burrowing Owl Winery             
| | 6.  | Renaissance Retirement Residences
| | 7.  | Strata Corporation               
| | 8.  | Best Western Inn                 
| | 9.  | Comfort Inn & Suites             
| | 10. | Inn at Big White                 

At the request of our company, Pro Eco had designed an energy
recovery and retrofit system at an existing facility in Alberta. That
anticipated project includes recovery and reuse of waste heat and replacement
of certain equipment.

Equity Investment in Global Solar Water Power Systems
Inc.

Effective February 28, 2010, we entered into an asset and share
purchase agreement with Mr. Mark Snyder to acquire up to 20% ownership of Global
Solar Water Power Systems Inc., a private company beneficially owned by Mark
Snyder, our companys Chief Technical Officer. Global Solar owns certain
technology invented and developed by Mark Snyder for the design and manufacture
of certain water filtration equipment. Under the terms of the agreement, we may
acquire up to a 20% equitable ownership interest in Global Solar payable as
follows:

| | (a) | for the initial 10% equity interest, by the issuance of
      500,000 restricted shares of our common stock at a deemed price of US
      $0.20 per share, payable within 10 days of signing the
agreement;                                    
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                
| | (b) | for the initial 10% equity interest, cash payments and/or
      deferred commissions totaling $150,000 payable in installments of $3,500
      per month;                                                                                      
| |     |                                                                                                                                                                                                                                                
| | (c) | for the additional 10% equity interest, the issuance of
      500,000 restricted shares of our common stock at any time up to December
      31, 2011; and                                                                                     
| |     |                                                                                                                                                                                                                                                
| | (d) | for the additional 10% equity interest, cash payments
      and/or deferred commissions totaling $250,000 paid a minimum of $3,500 per
      month and beginning not later than December 31, 2011, as further described
      in the agreement.

Pursuant to the terms of the agreement Global Solar is required
to pay our proportionate interest in any after tax profits on a quarterly basis.
Our management obtained an independent valuation dated February 5, 2010 in
support of the value ascribed to the proposed equity interest in Global Solar.
As at August 31, 2011, we have paid $103,500
in US dollars and issued 500,000 restricted shares of our common stock, following which we have acquired 8.14% equity interest in Global Solar.

9

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Also on January 31, 2010, we entered into an Independent Sales and Marketing Representative Agreement with Global Solar.  Pursuant to the terms of the agreement, Global Solar agreed to appoint our company as its independent sales representative to
solicit orders for those solar and/or wind turbine powered water filtration products marketed from time to time by Global Solar and/or our company on an exclusive basis in Africa and non-exclusive basis throughout the rest of the world, with the
exception of Iraq. In consideration for services to be rendered by our company under the agreement, we will receive a minimum of 5% of the net invoice price from any product orders and not more than 12% of the net invoice price. Our company and
Global Solar have the right to jointly determine specific sales cases individually to generate unique commissions by their joint agreement on a case by case basis. The agreement expires on January 31, 2015.

One of Global Solar’s business lines is the business of developing and manufacturing a portable solar powered trailer mounted water purification units that can be delivered and operated nearly anywhere in the world and can provide a village,
resort, or remote work-camps with all their drinking water and domestic water requirements. The technology was developed in 2009 by Mark Snyder. Over 300 locations in Iraq were benefiting from clean drinking water as a result of the deployment of
these systems, which were delivered to Iraq during 2009, prior to our company’s involvement.

Clean Tech Alliance with Snyder Electric.

On June 5, 2008, Mark Snyder, a long time clean energy expert in California, also joined our Clean Tech Advisory board. Mr. Snyder is an expert in alternative energy systems. Mr. Snyder’s focus is on complete “net zero” home
solutions – homes that generate through alternative energy systems such as solar thermal, solar PV etc, as much energy as they consume.

Belmont Lake Field, Wilkinson County, Mississippi

Effective September 1, 2009, we entered into an assignment agreement with Cheetah Oil & Gas Ltd. The assignment agreement dated August 28, 2009, provides for the purchase by our company of a revenue interest of 40.432% of an 8% share of
Cheetah’s net revenue after field operating expenses from the Belmont Lake PP F-12-4 horizontal well, located in Belmont Lake Field, Wilkinson County, Mississippi. As consideration, we agreed to pay to Cheetah 57.76% of Cheetah’s costs
currently budgeted at $77,905.36, subject to revision and 57.76% of Cheetah’s 8% share of PP F-12-4 well costs from time to time for infrastructure, pipes, tanks, compressors, trucking, etc. On May 31, 2010, this assigned interest was
converted into common shares and warrants of Cheetah Oil & Gas Ltd, leaving our company with no direct interest in this well. As a result, we have 375,000 restricted common shares in the capital of Cheetah and 375,000 share purchase warrants
which entitled our company to acquire 375,000 restricted common shares in the capital of Cheetah at a purchase price of US$0.20 per share for a period of two years.

Effective September 1, 2009, we entered into an assignment agreement with Lexaria Corp. The assignment agreement dated August 28, 2009, provides for the purchase by our company of a revenue interest of 13.475% of a 32% share of Lexaria’s net
revenue after field operating expenses from the Belmont Lake PP F-12-4 horizontal well, located in Belmont Lake Field, Wilkinson County, Mississippi. As consideration, we agreed to pay to Lexaria 19.25% of Lexaria’s costs currently budgeted at
$311,621.44, subject to revision and 19.25% of Lexaria’s 32% share of PP F-12-4 well costs from time to time for infrastructure, pipes, tanks, compressors, trucking, etc. On May 31, 2010, this assigned interest was converted into common
shares and warrants of Lexaria Corp, leaving our company with no direct interest in this well. As a result, we have 499,893 restricted common shares in the capital of Lexaria and 499,983 share purchase warrants which entitle our company to acquire
499,983 restricted common shares in the capital of Lexaria at a purchase price of US$0.20 per share for a period of two years.

10

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Copper Hills Project, New Mexico

On January 31, 2011, we entered into a letter of intent and paid US$7,500 deposit to the Optionor. On April 11, 2011, we signed a Mineral Purchase Option Agreement with Wildhorse Copper Inc. and its wholly owned subsidiary Wildhorse Copper (AZ)
Inc. (collectively, the “Optionors”) respecting an option to earn a 100% interest, subject to a 1% NSR capped to a maximum of $2,000,000 on one claim, in a property known as the Copper Hills property.  The Copper Hills property is
comprised of 56 located mining claims covering a total of 1,150 acres located in New Mexico, USA.  The Optionors hold the Copper Hills property directly and indirectly through property purchase agreements between the Optionors and third parties
(collectively, the “Indirect Agreements”). Pursuant to the Agreement the Optionors have assigned the Indirect Agreements to Enertopia. In order to earn the interest in the Copper Hills property, we are required to make aggregate cash
payments of $591,650 over an eight year period and issue an aggregate of 1,000,000 shares of its common stock over a three year period. On April 11, 2011, we made aggregate cash payments of $54,150, issued 500,000 shares to the Optionors. As
at August 31, 2011, total consideration including cash paid and common stock issued was $147,045; the Company has expensed the exploration costs of $14,094 and prepaid the exploration costs of $32,250.

Mildred Peak Project, Arizona

On July 19, 2011, we entered into a letter of intent and paid US$15,000 deposit to the Altar Resources. Subsequent to August 31, 2011, on October 11, 2011, we signed a Mineral Purchase Option Agreement with Altar Resources respecting an option
to earn 100% interest, subject to a 2.5% NSR in a property known as Mildred Peak. Mining claims are in Arizona covering approximately 6,220 acres from Altar Resources who holds the mining claims directly, and indirectly through federal mining claims
and state mineral exploration leases, or represents that it will hold such claims in good standing at the time of closing a definitive agreement. We are required to make aggregate cash payments of $881,000 over a five year period and issue an
aggregate of 1,000,000 shares of its common stock over a four year period. On October 11, 2011, we made aggregate cash payments of $71,000 and issued 100,000 shares of common stock to Altar Resources.

The continuation of our business is dependent upon obtaining further financing, a successful program of exploration and/or 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.

Competition

There is strong competition relating to all aspects of the alternative energy sector. We will actively compete for capital, skilled personnel, energy retrofit and new alternative energy projects, and in all other aspects of its operations with a
substantial number of other organizations, many of which have greater technical and financial resources than our company. Some of those organizations not only design and install alternative energy systems but also manufacture alternative energy
products on a world-wide basis and as such have greater and more diverse resources on which to draw. We will actively compete for alternative energy projects and opportunities in the fields of Solar PV; Solar Thermal; Wind; Biomass; Energy
Optimization and related sectors, and will constantly be facing competition by both smaller and larger companies in all geographical and industrial segments of the market.

11

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Compliance with Government Regulation

The exploration and development of oil and gas 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.

Employees

Currently our employees are Robert McAllister, our president
and director and Mark Snyder, our Chief Techical Officer. We primarily use the
services of sub-contractors and consultants for our intended business
operations.

We entered into a consulting agreement with Mr. Robert
McAllister on December 1, 2007. During the term of this agreement, Mr.
McAllister was to provide corporate administration and consulting services Mr.
McAllister was 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.

On December 1, 2008, we entered into a consulting agreement
with CAB Financial Services, a company controlled by one of the directors of our
Company. A fee of $5,000 per month is accrued. We may terminate this agreement
without prior notice based on a number of conditions. CAB Financial Services
Ltd. may terminate the agreement at any time by giving 30 days written notice of
his intention to do so.

On October 9, 2009, we entered into a consulting agreement with
BKB Management Ltd, a company controlled by our Chief Financial Officer. A fee
of CAD$4,675 including GST is paid per month. We may terminate this agreement
without prior notice based on a number of conditions. BKB Management Ltd. may
terminate the agreement at any time by giving 30 days written notice of his
intention to do so. Effective April 1, 2011, the fee is CAD$5,500 plus HST.

On October 9, 2009, we entered into a consulting agreement with
Mark Snyder as the Chief Technical Officer. A fee of $1,000 is paid per
month.

On August 23, 2010, we entered into a consulting agreement with
Tom Ihrke, Senior Vice-President of Business Development for $3125 per
month.

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. However, with project advancement and if we
successfully initiate any material new clean energy contracts we may retain
additional employees.

Research and Development

We have incurred $Nil in research and development expenditures
over the last two fiscal years.

|Item 1A. | Risk Factors
|-------- | ------------

Our business operations are subject to a number of risks and
uncertainties, including, but not limited to those set forth below:

Risks Associated with Our Business

We Are A Start-Up Stage Company, There Is No Assurance Of
Profitability.

Our renewable energy business operations are in the start-up stage only, and are unproven. We may not be successful in implementing our business plan to become profitable. There may be less demand for our services than we anticipate. There is no
assurance that this business will succeed.

12

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Changing Consumer Preferences Towards Environmental Issues May Have an Impact on Our Business Decisions.

The decision of a potential client to undergo an environmental audit or review may be based on ethical or commercial reasons. In some instances, or with certain businesses, there may be no assurance that an environmental review will result in any
cost savings or increased revenues. As such, unless the ethical consideration is also a material factor, there may be no incentive for such businesses to undertake an environmental review. Changes in consumer and commercial preferences, or trends,
toward or away from environmental issues may impact on businesses’ decisions to undergo environmental reviews.

Our Operating Results Will Be Affected By A Wide Variety Of Factors That Could Materially Affect Revenues And Profitability.Our operating results will be affected by a wide variety of factors that could materially affect revenues and
profitability, including the timing and cancellation of customer orders and projects, competitive pressures on pricing, availability of personnel, and market acceptance of our services. As a result, we may experience material fluctuations in future
operating results on a quarterly and annual basis which could materially affect our business, financial condition and operating results.

Fixed Price Contracts May Expose Us To Some Significant Risks Which Could Lead To Losses On Contracts.

Fixed price contracts require the service provider to perform all agreed services for a specified lump-sum amount. We anticipate a material percentage of our services will be performed on a fixed price basis. Fixed price contracts expose us to some
significant risks, including under-estimation of costs, ambiguities in specifications, unforeseen costs or difficulties, and delays beyond our control. These risks could lead to losses on contracts which may be substantial and which could adversely
affect the results of our operations.

The Future Growth And Profitability Of Our Clean Energy Business Sectors Will Be Dependent In Part On The Effectiveness And Efficiency Of Our Advertising And Promotional Expenditures.The future growth and profitability of our clean energy
business sectors will be dependent in part on the effectiveness and efficiency of our advertising and promotional expenditures, including our ability to (i) create greater awareness of our services, (ii) determine the appropriate creative message
and media mix for future advertising expenditures, and (iii) effectively manage advertising and promotional costs in order to maintain acceptable operating margins. There can be no assurance that we will experience benefits from advertising and
promotional expenditures in the future. In addition, no assurance can be given that our planned advertising and promotional expenditures will result in increased revenues, will generate levels of service and name awareness or that we will be able to
manage such advertising and promotional expenditures on a cost-effective basis.

We have a limited operating history with losses and we expect the losses to continue, which raises concerns about our ability to continue as a going concern.

We have generated minimal revenues since our inception and will, in all likelihood, continue to incur operating expenses with minimal revenues until we are able to successfully develop our business. Our business plan will require us to incur further
expenses. We may not be able to ever become profitable. These circumstances raise concerns about our ability to continue as a going concern. We have a limited operating history and must be considered in the start-up stage.

We will require additional financing to develop our business plan.

Because we have generated only minimal revenue from our business and cannot anticipate when we will be able to generate meaningful revenue from our business, we will need to raise additional funds to conduct and grow our business. We do not
currently have sufficient financial resources to completely fund the development of our business plan. We anticipate that we will need to raise further financing. We do not currently have any arrangements for financing and we can provide no
assurance to investors that we will be able to find such financing if required.

13

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The most likely source of future funds presently available to us is through the sale of equity capital. Any sale of share capital will result in dilution to existing security-holders.

We may not be able to obtain all of the licenses necessary to operate our business.

Our operations may require licenses and permits from various governmental authorities to build and install alternative energy systems or to conduct energy retrofits. We believe that we will be able to obtain all necessary licenses and permits under
applicable laws and regulations for our operations and believe we will be able to comply in all material respects with the terms of such licenses and permits. However, such licenses and permits are subject to change in various circumstances. There
can be no guarantee that we will be able to obtain or maintain all necessary licenses and permits.

Changes In Environmental Regulations May Have An Impact On Our Operations

We believe that we currently comply with existing environmental laws and regulations affecting our proposed operations. While there are no currently known proposed changes in these laws or regulations, significant changes have affected the industry
in the past and additional changes may occur in the future.

Our operations may be subject to environmental laws, regulations and rules promulgated from time to time by government. In addition, certain types of operations require the submission and approval of environmental impact assessments. Environmental
legislation is evolving in a manner that means stricter standards and enforcement. Fines and penalties for non-compliance are more stringent. Environmental assessments of proposed projects carry a heightened degree of responsibility for companies,
directors, officers and employees. The cost of compliance with changes in governmental regulations has potential to reduce the profitability of operations. We intend to comply with all environmental regulations in the United States and Canada.

If we are unable to recruit or retain qualified personnel, it could have a material adverse effect on our operating results and stock price.

Our success depends in large part on the continued services of our executive officers and third party relationships. We currently do not have key person insurance on these individuals. The loss of these people, especially without advance notice,
could have a material adverse impact on our results of operations and our stock price. It is also very important that we be able to attract and retain highly skilled personnel, including technical personnel, to accommodate our exploration plans and
to replace personnel who leave. Competition for qualified personnel can be intense, and there are a limited number of people with the requisite knowledge and experience. Under these conditions, we could be unable to recruit, train, and retain
employees. If we cannot attract and retain qualified personnel, it could have a material adverse impact on our operating results and stock price.

Risks Associated with Our Common Stock

Trading on the OTCBB may be volatile and sporadic, which could depress the market price of our common stock and make it difficult for our stockholders to resell their shares.

Our common stock is quoted on the OTCBB service of the Financial Industry Regulatory Authority. Trading in stock quoted on the OTCBB is often thin and characterized by wide fluctuations in trading prices, due to many factors that may have little to
do with our operations or business prospects. This volatility could depress the market price of our common stock for reasons unrelated to operating performance. Moreover, the OTCBB is not a stock exchange, and trading of securities on the OTCBB is
often more sporadic than the trading of securities listed on a quotation system like Nasdaq or a stock exchange like Amex. Accordingly, shareholders may have difficulty reselling any of the shares.

14

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Our stock is a penny stock. Trading of our stock may be restricted by the Securities and Exchange Commission's penny stock regulations which may limit a stockholder's ability to buy and sell our stock.

Our stock is a penny stock. The Securities and Exchange Commission has adopted Rule 15g-9 which generally defines "penny stock" to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less
than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and "accredited
investors". The term "accredited investor" refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with
their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the Securities and Exchange Commission
which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the
broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account. The bid and offer quotations, and the broker-dealer and salesperson compensation
information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation. In addition, the penny stock rules require that prior to a
transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the
transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability
of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.

The Financial Industry Regulatory Authority, or FINRA, has adopted sales practice requirements which may also limit a stockholder's ability to buy and sell our stock.

In addition to the "penny stock" rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that
customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and
other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for
broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares

Because we do not intend to pay any dividends on our shares, investors seeking dividend income or liquidity should not purchase our shares.

We have not declared or paid any dividends on our shares since inception, and do not anticipate paying any such dividends for the foreseeable future. Investors seeking dividend income or liquidity should not invest in our shares.

Because we can issue additional shares, purchasers of our shares may incur immediate dilution and may experience further dilution.

We are authorized to issue up to 200,000,000 shares. The board of directors of our company has the authority to cause us to issue additional shares, and to determine the rights, preferences and privileges of such shares, without consent of any of
our stockholders. Consequently, our stockholders may experience more dilution in their ownership of our company in the future.

Other Risks

Our By-laws contain provisions indemnifying our officers and directors against all costs, charges and expenses incurred by them.

Our By-laws contain provisions with respect to the
indemnification of our officers and directors against all costs, charges and
expenses, including an amount paid to settle an action or satisfy a judgment,
actually and reasonably incurred by him, including an amount paid to settle an
action or satisfy a judgment in a civil, criminal or administrative action or
proceeding to which he is made a party by reason of his being or having been one
of our directors or officers.

15

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Investors' interests in our company will be diluted and
investors may suffer dilution in their net book value per share if we issue
additional shares or raise funds through the sale of equity securities.

Our constating documents authorize the issuance of 200,000,000
shares of common stock with a par value of $0.001. In the event that we are
required to issue any additional shares or enter into private placements to
raise financing through the sale of equity securities, investors' interests in
our company will be diluted and investors may suffer dilution in their net book
value per share depending on the price at which such securities are sold. If we
issue any such additional shares, such issuances also will cause a reduction in
the proportionate ownership and voting power of all other shareholders. Further,
any such issuance may result in a change in our control.

Our By-laws do not contain anti-takeover provisions, which
could result in a change of our management and directors if there is a take-over
of our company.

We do not currently have a shareholder rights plan or any
anti-takeover provisions in our By-laws. Without any anti-takeover provisions,
there is no deterrent for a take-over of our company, which may result in a
change in our management and directors.

As a result of a majority of our directors and officers are
residents of other countries other than the United States, investors may find it
difficult to enforce, within the United States, any judgments obtained against
our company or our directors and officers.

Other than our operations offices in Vancouver and Kelowna,
British Columbia, we do not currently maintain a permanent place of business
within the United States. In addition, a majority of our directors and officers
are nationals and/or residents of countries other than the United States, and
all or a substantial portion of such persons' assets are located outside the
United States. As a result, it may be difficult for investors to enforce within
the United States any judgments obtained against our company or our officers or
directors, including judgments predicated upon the civil liability provisions of
the securities laws of the United States or any state thereof.

Trends, Risks and Uncertainties

We have sought to identify what we believe to be the most
significant risks to our business, but we cannot predict whether, or to what
extent, any of such risks may be realized nor can we guarantee that we have
identified all possible risks that might arise. Investors should carefully
consider all of such risk factors before making an investment decision with
respect to our common shares.

|Item 1B. | Unresolved Staff Comments
|-------- | -------------------------

As a smaller reporting company, we are not required to
provide the information required by this Item.

|Item 2. | Properties
|------- | ----------

Executive Offices

The address of our principal executive office is Suite 950,
1130 West Pender Street, Vancouver, British Columbia V6E 4A4. This space is
leased at $650 per month. Our main telephone number is (604) 602-1633. We have a
second office located in Kelowna, British Columbia. Our current locations
provide adequate office space for our purposes at this stage of our development.

Resource Properties

16

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Coteau Lake, Saskatchewan

In connection with the acquisition of Target, we acquired certain working interest in Coteau Lake, Saskatchewan.

Coteau Lake is an exploration property and we have no producing oil or gas wells on this land at this time. The Coteau Lake exploration project covers 1,280 acres of land. Our gross and net interest in this project is 50%. There has been historic
oil production on the Coteau Lake project lands.

On November 7, 2007, our subsidiary Target Energy entered into a Letter of Intent (the “LOI”) with Primrose Drilling Ventures Ltd. of Calgary, Alberta. Pursuant to the LOI, our subsidiary Target is the interest title holder of
Saskatchewan Crown Land parcels 124, 125 and 126.

Primrose elected to proceed with a 50/50 joint venture with Target by reimbursing Target for 50% of its land cost on parcels 124, 125 and 126 for CAD$26,590 which was paid within 15 days of signing the LOI. Primrose would become operator of the
project upon its acceptance of such appointment and agreement to assume the duties, obligations and rights of the operator. A formal Participation Agreement which included an Area of Mutual Interest which would govern future land acquisitions and
timeline set out in the LOI. On December 31, 2008, an additional CAD$22,270 was spent on land acquisitions with Primrose Drilling Ventures.

On October 25, 2010, we disposed of the Coteau Lake interests for a cash consideration of $100,000 plus an additional potential payout which shall be based on a 10% profit interest on any and all productive wells drilled on the property up to
$150,000.  We did not take into consideration of the future potential payout as it cannot reasonably determinable as at August 31, 2011.

Belmont Lake

Effective September 1, 2009, we entered into an assignment
agreement with Cheetah Oil & Gas Ltd. The assignment agreement dated August 28,
2009, provides for the purchase by our company of a revenue interest of 40.432%
of an 8% share of Cheetahs net revenue after field operating expenses from the
Belmont Lake PP F-12-4 horizontal well, located in Belmont Lake Field, Wilkinson
County, Mississippi. As consideration, we agreed to pay to Cheetah 57.76% of
Cheetahs costs currently budgeted at $77,905.36, subject to revision and 57.76%
of Cheetahs 8% share of PP F-12-4 well costs from time to time for
infrastructure, pipes, tanks, compressors, trucking, etc. On May 31, 2010, this
assigned interest was converted into common shares and warrants of Cheetah Oil &
Gas Ltd, leaving our company with no direct interest in this well. As a result,
we have 375,000 restricted common shares in the capital of Cheetah and 375,000
share purchase warrants which entitled our company to acquire 375,000 restricted
common shares in the capital of Cheetah at a purchase price of US$0.20 per share
for a period of two years.

Effective September 1, 2009, we entered into an assignment agreement with Lexaria Corp. The assignment agreement dated August 28, 2009, provides for the purchase by our company of a revenue interest of 13.475% of a 32% share of Lexaria’s net
revenue after field operating expenses from the Belmont Lake PP F-12-4 horizontal well, located in Belmont Lake Field, Wilkinson County, Mississippi. As consideration, we agreed to pay to Lexaria 19.25% of Lexaria’s costs currently budgeted at
$311,621.44, subject to revision and 19.25% of Lexaria’s 32% share of PP F-12-4 well costs from time to time for infrastructure, pipes, tanks, compressors, trucking, etc. On May 31, 2010, this assigned interest was converted into common
shares and warrants of Lexaria Corp, leaving our company with no direct interest in this well. As a result, we have 499,893 restricted common shares in the capital of Lexaria and 499,983 share purchase warrants which entitle our company to acquire
499,983 restricted common shares in the capital of Lexaria at a purchase price of US$0.20 per share for a period of two years.

Copper Hills Project, New Mexico

On January 31, 2011, we entered into a letter of intent and paid US$7,500 deposit to the  Wildhorse Copper Inc. and its wholly owned subsidiary Wildhorse Copper (AZ)
Inc. (collectively, the “Optionors”). On April 11, 2011, we signed a
Mineral Purchase Option Agreement with Optionors respecting an option to earn a 100% interest, subject to a 1% NSR capped to a maximum of $2,000,000 on one
claim, in a property known as the Copper Hills property. The Copper Hills
property is comprised of 56 located mining claims covering a total of 1,150
acres located in New Mexico, USA. The Optionors hold the Copper Hills property
directly and indirectly through property purchase agreements between the
Optionors and third parties (collectively, the Indirect Agreements). Pursuant
to the Agreement the Optionors have assigned the Indirect Agreements to
Enertopia. In order to earn the interest in the Copper Hills property, we are
required to make aggregate cash payments of $591,650 over an eight year period
and issue an aggregate of 1,000,000 shares of its common stock over a three year
period. On April 11, 2011, we made aggregate cash payments of $54,150, issued
500,000 shares to the Optionors. As at August 31, 2011, total consideration
including cash paid and common stock issued was $147,045; the Company has
expensed the exploration costs of $14,094 and prepaid the exploration costs of
$32,250.

17

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The Company has entered into an Option Agreement (Agreement)
dated April 11, 2011 with Wildhorse Copper Inc, Wildhorse Copper (AZ) Inc.,
Northern Tiger Resources Inc., and Timber Wolf Minerals Ltd. (the Optionor)
respecting the assignment of up to 100% interest in approximately 1,150 acres of
56 located mining claims in New Mexico, USA. One of these located mining claims
is subject to a 1% NSR capped at US $2,000,000 from commercial production from
this located mining claim. The Optionor holds the located mining claims (the
Claims) directly and indirectly through an option agreement between the
Optionor and a third party. The Optionor hereby grants to the Company the sole
and exclusive right and option to acquire up to an undivided 100% right, title
and interest in and to the Property, free and clear of all charges,
encumbrances, claims, liabilities and adverse interests of any nature or kind,
except for the Royalty. The Option shall be in good standing and exercisable by
the Company by paying the following amounts on or before the dates specified in
the following schedule:

|i.   | paying the Optionor $7,500 on signing the letter of
      intent (paid),                                                                                                                                                                          
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ii.  | paying the Optionor $51,150 on or before the execution of
      this Agreement and issuing to the Optionor 500,000 common shares in the
      capital stock of the Company as soon as practicable following the
      execution of this Agreement,
|iii. | issuing to the Optionor 150,000 shares in the capital
      stock of the Company on or before the first anniversary of this
      Agreement,                                                                                                      
|iv.  | issuing to the Optionor 150,000 shares in the capital
      stock of the Company on or before the second anniversary of the Agreement,
      and                                                                                                  
|v.   | issuing to the Optionor 200,000 shares in the capital
      stock of the Company on or before the third anniversary of the
      Agreement.                                                                                                       

The Company shall also pay Timber Wolf the following amounts on
or before the dates specified in the following schedule, with such amounts and
terms as further described in the Timber Wolf Agreement:

|i.    | paying $3,000 on signing of this Agreement,                                               
|----- | ------------------------------------------------------------------------------------------
|ii.   | paying an additional $7,500 on or before the first
      anniversary of the Agreement,    
|iii.  | paying an additional $10,000 on or before the second
      anniversary of the Agreement,  
|iv.   | paying an additional $12,500 on or before the third
      anniversary of the Agreement,   
|v.    | paying an additional $25,000 on or before the fourth
      anniversary of the Agreement,  
|vi.   | paying an additional $25,000 on or before the fifth
      anniversary of the Agreement,   
|vii.  | paying an additional $50,000 on or before the sixth
      anniversary of the Agreement,   
|viii. | paying an additional $200,000 on or before the seventh
      anniversary of the Agreement,
|ix.   | paying an additional $200,000 on or before the eighth
      anniversary of the Agreement. 

Copper Hills is located on BLM land and as such mineral and
surface rights are held by the BLM. Enertopia has acquired an option of 56
located mining claims. These claims are valid for one year and need to be
renewed annually.

There are 56 federal located unpatented mining claims.

18

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BUREAU OF LAND MANAGEMENT
    SOCORRO COUNTY, NEW MEXICO,
      RECORDATION**MAINTENANCE****CLAIM NAME**
    SERIAL NO.
    MC LOCATION
    **MC DATE**
    MC LOCATION
    INSTRUMENT NO.
    **YEAR**RECEIVED
    
    
    **2012**
    **2011**COPPER HILLS #1
    NMMC169266
    9/14/2000
    27/10/2000
    
    Book 503 Page 3660WILDHORSE 1
    NMMC190849
    3/1/2011
    22/04/2011
    3/11/2011
    201100729WILDHORSE 2
    NMMC190850
    3/1/2011
    22/04/2011
    3/11/2011
    201100730WILDHORSE 3
    NMMC190851
    3/1/2011
    22/04/2011
    3/11/2011
    201100731WILDHORSE 4
    NMMC190852
    3/1/2011
    22/04/2011
    3/11/2011
    201100732WILDHORSE 5
    NMMC190853
    3/1/2011
    22/04/2011
    3/11/2011
    201100733WILDHORSE 6
    NMMC190854
    3/1/2011
    22/04/2011
    3/11/2011
    201100734WILDHORSE 7
    NMMC190855
    3/1/2011
    22/04/2011
    3/11/2011
    201100735WILDHORSE 8
    NMMC190856
    3/1/2011
    22/04/2011
    3/11/2011
    201100736WILDHORSE 9
    NMMC190857
    3/1/2011
    22/04/2011
    3/11/2011
    201100737WILDHORSE 10
    NMMC190858
    3/1/2011
    22/04/2011
    3/11/2011
    201100738WILDHORSE 11
    NMMC190859
    3/1/2011
    22/04/2011
    3/11/2011
    201100739WILDHORSE 12
    NMMC190860
    3/1/2011
    22/04/2011
    3/11/2011
    201100740WILDHORSE 13
    NMMC190861
    3/1/2011
    22/04/2011
    3/11/2011
    201100741WILDHORSE 14
    NMMC190862
    3/1/2011
    22/04/2011
    3/11/2011
    201100742WILDHORSE 15
    NMMC190863
    3/1/2011
    22/04/2011
    3/11/2011
    201100743TIMBERWOLF 16
    NMMC190864
    3/1/2011
    22/04/2011
    3/11/2011
    201100744TIMBERWOLF 17
    NMMC190865
    3/1/2011
    22/04/2011
    3/11/2011
    201100745TIMBERWOLF 18
    NMMC190866
    3/1/2011
    22/04/2011
    3/11/2011
    201100746TIMBERWOLF 19
    NMMC190867
    3/1/2011
    22/04/2011
    3/11/2011
    201100747TIMBERWOLF 20
    NMMC190868
    3/1/2011
    22/04/2011
    3/11/2011
    201100748WILDHORSE 21
    NMMC190869
    3/1/2011
    22/04/2011
    3/11/2011
    201100749WILDHORSE 22
    NMMC190870
    3/1/2011
    22/04/2011
    3/11/2011
    201100750WILDHORSE 23
    NMMC190871
    2/28/2011
    22/04/2011
    3/11/2011
    201100751WILDHORSE 24
    NMMC190872
    2/28/2011
    22/04/2011
    3/11/2011
    201100752TIMBERWOLF 25
    NMMC190873
    2/28/2011
    22/04/2011
    3/11/2011
    201100753TIMBERWOLF 26
    NMMC190874
    2/28/2011
    22/04/2011
    3/11/2011
    201100754TIMBERWOLF 27
    NMMC190875
    2/28/2011
    22/04/2011
    3/11/2011
    201100755TIMBERWOLF 28
    NMMC190876
    2/28/2011
    22/04/2011
    3/11/2011
    201100756TIMBERWOLF 29
    NMMC190877
    2/28/2011
    22/04/2011
    3/11/2011
    201100757WILDHORSE 30
    NMMC190878
    2/28/2011
    22/04/2011
    3/11/2011
    201100758WILDHORSE 31
    NMMC190879
    2/28/2011
    22/04/2011
    3/11/2011
    201100759WILDHORSE 32
    NMMC190880
    2/28/2011
    22/04/2011
    3/11/2011
    201100760WILDHORSE 33
    NMMC190881
    2/28/2011
    22/04/2011
    3/11/2011
    201100761WILDHORSE 34
    NMMC190882
    2/28/2011
    22/04/2011
    3/11/2011
    201100762WILDHORSE 35
    NMMC190883
    2/28/2011
    22/04/2011
    3/11/2011
    201100763WILDHORSE 36
    NMMC190884
    2/28/2011
    22/04/2011
    3/11/2011
    201100764WILDHORSE 37
    NMMC190885
    2/28/2011
    22/04/2011
    3/11/2011
    201100765


19

---



WILDHORSE 38
    NMMC190886
    2/28/2011
    22/04/2011
    3/11/2011
    201100766WILDHORSE 39
    NMMC190887
    2/28/2011
    22/04/2011
    3/11/2011
    201100767WILDHORSE 40
    NMMC190888
    2/28/2011
    22/04/2011
    3/11/2011
    201100768WILDHORSE 41
    NMMC190889
    2/28/2011
    22/04/2011
    3/11/2011
    201100769WILDHORSE 42
    NMMC190890
    2/28/2011
    22/04/2011
    3/11/2011
    201100770WILDHORSE 43
    NMMC190891
    2/28/2011
    22/04/2011
    3/11/2011
    201100771WILDHORSE 44
    NMMC190892
    2/28/2011
    22/04/2011
    3/11/2011
    201100772WILDHORSE 45
    NMMC190893
    2/28/2011
    22/04/2011
    3/11/2011
    201100773WILDHORSE 46
    NMMC190894
    2/28/2011
    22/04/2011
    3/11/2011
    201100774WILDHORSE 47
    NMMC190895
    2/28/2011
    22/04/2011
    3/11/2011
    201100775WILDHORSE 48
    NMMC190896
    2/28/2011
    22/04/2011
    3/11/2011
    201100776WILDHORSE 49
    NMMC190897
    2/28/2011
    22/04/2011
    3/11/2011
    201100777WILDHORSE 50
    NMMC190898
    2/28/2011
    22/04/2011
    3/11/2011
    201100778WILDHORSE 51
    NMMC190899
    2/28/2011
    22/04/2011
    3/11/2011
    201100779WILDHORSE 52
    NMMC190900
    2/28/2011
    22/04/2011
    3/11/2011
    201100780WILDHORSE 53
    NMMC190901
    2/28/2011
    22/04/2011
    3/11/2011
    201100781WILDHORSE 54
    NMMC190902
    2/28/2011
    22/04/2011
    3/11/2011
    201100782WILDHORSE 55
    NMMC190903
    2/28/2011
    22/04/2011
    3/11/2011
    201100783


The conditions for retaining our claims include the following:

|i.   | paying the Optionor $7,500 on signing the letter of
      intent (paid),                                                                                                                                                                          
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ii.  | paying the Optionor $51,150 on or before the execution of
      this Agreement and issuing to the Optionor 500,000 common shares in the
      capital stock of the Company as soon as practicable following the
      execution of this Agreement,
|iii. | issuing to the Optionor 150,000 shares in the capital
      stock of the Company on or before the first anniversary of this
      Agreement,                                                                                                      
|iv.  | issuing to the Optionor 150,000 shares in the capital
      stock of the Company on or before the second anniversary of the Agreement,
      and                                                                                                  
|v.   | issuing to the Optionor 200,000 shares in the capital
      stock of the Company on or before the third anniversary of the
      Agreement.                                                                                                       

The Company shall also pay Timber Wolf the following amounts on
or before the dates specified in the following schedule, with such amounts and
terms as further described in the Timber Wolf Agreement:

|i.    | paying $3,000 on signing of this Agreement,                                               
|----- | ------------------------------------------------------------------------------------------
|ii.   | paying an additional $7,500 on or before the first
      anniversary of the Agreement,    
|iii.  | paying an additional $10,000 on or before the second
      anniversary of the Agreement,  
|iv.   | paying an additional $12,500 on or before the third
      anniversary of the Agreement,   
|v.    | paying an additional $25,000 on or before the fourth
      anniversary of the Agreement,  
|vi.   | paying an additional $25,000 on or before the fifth
      anniversary of the Agreement,   
|vii.  | paying an additional $50,000 on or before the sixth
      anniversary of the Agreement,   
|viii. | paying an additional $200,000 on or before the seventh
      anniversary of the Agreement,
|ix.   | paying an additional $200,000 on or before the eighth
      anniversary of the Agreement. 

20

---

Yearly maintenance fee to the BLM at $140 per claim, due no
later than August 31st each year.

Yearly recording fee State of NM approximately $250 per year.

Copper Hills project is located approximately 8 miles west on
HWY 60 from Magdalena, NM. HWY 60 actually crosses the property. Access south of
the hwy is by dirt or gravel roads. Access north of the hwy is through locked
ranch gate.

The property is located within the physiographic province known
as the Datil Mogollon Section, locally characterized by volcanic highlands.

The geology of the project area was described by Wilkinson
(1976). A northerly trending fault separates volcanic rocks to the west from
younger piedmont gravels, alluvium and basalt to the east. Volcanic rocks are
dominantly Oligocene Spears Formation andesitic volcaniclastics. The important
Nipple Mountain tuff member is an interbedded lithic and variably welded tuff
with deposition controlled by northeast and east northeast trending, partly
fault bounded paleovalleys. The overlying Hells Mesa Formation and the A L
Peak Tuff represents a change to ash flow volcanism related to the Mt.
Withington caldera collapse. The caldera margin is situated 7 1⁄2 km south of the
Copper Hills prospect.

Structurally the property is situated within a north northwest
trending uplifted block bounded to the east by the Mulligan Gulch graben.
Three major structural trends are present at Copper Hills. The west northwest
trending Capitan lineament is a pre volcanic feature that was reactivated in
the Oligocene. The northeast to east northeast trending Morenci Magdalena
lineament is also a basement feature that in part controlled deposition of the
Nipple Mountain tuff. The north to 335° trend reflects the monoclinal eastern
edge of the uplifted block and controlled the emplacement of intrusive stocks
and later Basin and Range faulting. Convergence of the three structural trends
in the vicinity of the Copper Hills prospect resulted in an intense shattering
of the rocks.

Mineralization at Copper Hills includes fracture controlled and
disseminated copper oxides (plus silver) at the Copper Hills prospect and
epithermal goldsilver veins. Wilkinson (1976) describes previous work conducted
on the property. Various stakeholders held mining claims in the area almost
continuously between 1950 and 2007. During the 1950s minor copper oxide
production from the Copper Hills main outcrop took place and five short holes
were drilled. In 1968 the Banner Mining Company reportedly drilled a deeper hole
to 1,622 ft (494.5 m) and intersected pervasive propylitic alteration with
abundant fresh and oxidized pyrite throughout the hole. Samples taken from the
last 100 ft reportedly contained small amounts of pyrite plus chalcopyrite,
sphalerite and galena. Numerous other prospecting pits and shafts are found on
the property and most appear to be related to exploration and minor extraction
of minerals associated with epithermal vein type systems. The Banner hole is on
the eastern edge of a strong IPchargeability anomaly defined by the IP survey
completed by Wright geophysics in August, 2011.

The most recent exploration work done at Copper Hills was by
Coyote Copper in the early part of 2008 which included a ground magnetics
geophysical survey, followed by a reconnaissance and field verification mapping
and rock chip sampling program and a soil sampling geochemical survey. Enertopia
engaged Wright geophysical to manage an IP geophysical survey conducted in
August, 2011. Wright also interpreted the results and provided a technical
report.

In the Fall of 2011 IP/Res Survey was completed and returned
sulphide targets at depth that have been recommended for drilling.

The total costs incurred to date and all planned future costs
are as follows:

Exploration costs incurred by Enertopia to date ~ $120,000

Future exploration plans involve a two phase drill program
described below:

A two phase exploration program:

21

---

Phase 1 would commence with 3 core drill holes to an average
depth of 550 meters designed to test the strong IP-chargeability anomalies
defined by the geophysical survey completed in August, 2011. In addition,
reverse circulation drilling will be undertaken to verify the grade and extent
of the copper (+silver) mineralization as documented by previous operators,
within and peripheral to the Copper Hills Prospect. This is will require about
750 m of drilling in 10 reverse circulation holes each about 75 m in depth
spaced on a 50 m x 50 m grid. The total Phase 1 program will cost of $720,000.

Contingent upon Phase 1 providing positive results it is
recommended for Phase 2 that additional drilling be undertaken to add to the
grade and extent of the copper (+silver) mineralization as documented by
previous operators, within and peripheral to the Copper Hills Prospect. This is
will require about 1,500 m of drilling in 20 reverse circulation holes each
about 75 m in depth designed to extend the a 50 m x 50 m grid.

An additional 2,500 m of core drilling is recommended to offset
the two core holes into the IP anomaly. Other facets of a Phase 2 program
include conducting additional geological mapping, prospecting and sampling of
priority targets based on geophysical and geochemical survey interpretations.
The cost of Phase 2 will be about $1,210,000. The total for both phases is
US$1,930,000.

The property is without known reserves and the program is
exploratory in nature.

22

---



23



---

Results from the ground IP survey show a strong chargeability
anomaly to the east of the Tres Montosas fault. The anomaly is about 500 meters
wide eastwest and about 1,000 meters long northsouth. Wright concludes that
the chargeability anomaly may be related to pyritic alteration. The IP anomaly
is coincident with the presence of oxidized pyrite and copper at the surface
along with quartz veining, silicification and strongly anomalous base metal
anomalies along northtrending structures. These features are permissive of a
porphyrystyle hydrothermal system.

The exploration program would be funded through equity
financing or a joint venture. The proposed work is dependant whether on the type
of financing or joint venture that the company completes.

The required permits include BLM notice level application for
an area of disturbance estimated to be less than 5 acres. Location map of drill
locations and road or routes for vehicle traffic. The State of New Mexico also
requires a minimal impact exploration permit application to be filed at the same
time as the BLM notice level application is filed.





Mildred Peak Project, Arizona

On July 19, 2011, we entered into a letter of intent and paid
US$15,000 deposit to the Altar Resources. Subsequent to August 31, 2011, on
October 11, 2011, we signed a Mineral Purchase Option Agreement with Altar
Resources respecting an option to earn 100% interest, subject to a 2.5% NSR in a
property known as Mildred Peak. Mining claims are in Arizona covering
approximately 6,220 acres from Altar Resources who holds the mining claims
directly, and indirectly through federal mining claims and state mineral
exploration leases, or represents that it will hold such claims in good standing
at the time of closing a definitive agreement. We are required to make aggregate
cash payments of $881,000 over a five year period and issue an aggregate of
1,000,000 shares of its common stock over a four year period. On October 11,
2011, we made aggregate cash payments of $71,000 and issued 100,000 shares of
common stock to Altar Resources.

|Item 3. | Legal Proceedings
|------- | -----------------

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

|Item 4. | (Removed and Reserved).
|------- | -----------------------

PART II

|Item 5. | **Market for Registrants
      Common Equity, Related Stockholder Matters and Issuer Purchases
      of** **Equity Securities**
|------- | --------------------------------------------------------------------------------------------------------------------------------

Our common shares are quoted on the Over-the-Counter Bulletin
Board under the symbol ENRT. The following quotations, obtained from Yahoo
Finance, reflect the high and low bids for our common shares based on
inter-dealer prices, without retail mark-up, mark-down or commission and may not
represent actual transactions.

The high and low bid prices of our common stock for the periods
indicated below are as follows:

Quarter
      Ended(1)
    High
    LowAugust 2011
    $0.09
    $0.06May 2011
    $0.28
    $0.15February 2011
    $0.15
    $0.14November 2010
    $0.15
    $0.15August 2010
    $0.25
    $0.11May 2010
    $0.21
    $0.20February 2010
    $0.25
    $0.25November 2009
    $0.06
    $0.06August 2009
    $0.20
$0.12


24

---

On November 25, 2011, the last closing price for one share of
our common stock as reported by the OTC Bulletin Board was $0.06. This closing
price reflects an inter-dealer price, without retail mark-up, mark-down or
commission, and may not represent an actual transaction.

As of November 25, there were 133 holders of record of our common
stock. As of November 25, 2011 24,743,865 common shares were issued and
outstanding.

Our common shares are issued in registered form. Olympia Trust
Company, 1003-750 West Pender Street, Vancouver, BC V6C 2T8 (Telephone:
604-484-8612; Facsimile: 604-484-8638) is the transfer agent for our common
shares.

Nevada Agency and Trust Company, is the agent for service in
Nevada, 50 West Liberty Street, Suite 880, Reno, Nevada 89501 (Telephone:
775.322.0626; Facsimile: 775.322.5623) is the registrar agent.

Dividend Policy

We have not paid any cash dividends on our common stock and
have no present intention of paying any dividends on the shares of our common
stock. Our current policy is to retain earnings, if any, for use in our
operations and in the development of our business. Our future dividend policy
will be determined from time to time by our board of directors.

Recent Sales of Unregistered Securities

On March 3, 2011, we closed a private placement of 8,729,000
units at a price of CAD$0.10 per unit for gross proceeds of CAD$872,900,
(US$893,993). Each unit consisted of one share of common stock in the capital of
our company and one non-transferable share purchase warrant (Subscribers
Warrants), each full warrant entitling the holder to purchase one additional
share of common stock in the capital of our company until March 3, 2013, subject
to accelerated expiry as set out in the warrant certificate, at a purchase price
of CAD$0.20. As per the terms of the Subscription Agreement, we have granted to
the subscribers a participation right to participate in future offerings of our
companys securities as to their pro rata shares for a period of 12 months from
the closing of the private placement. We paid broker commissions of $48,930 in
cash and issued 489,300 brokers warrants. Each full warrant entitling the holder
to purchase one additional share of common stock in the capital of our company
until March 3, 2013, subject to accelerated expiry as set out in the warrant
certificate, at a purchase price of CAD$0.20. We issued the units to six (6) US
persons pursuant to the exemption from registration provided for under Rule 506
of Regulation D, promulgated under the United States Securities Act 1933, as
amended. Each of the subscribers represented that they were an accredited
investor as such term is defined in Regulation D. We issued the units to
sixty-four (64) non-US persons in an off-shore transaction pursuant to the
exemption from registration provided for under Regulation S, promulgated under
the United States Securities Act of 1933, as amended. Each of the subscribers
represented that they were not a US person as such term is defined in
Regulation S.

Equity Compensation Plan Information

We have no long-term incentive plans other than the stock
option plan described below:

2007 Equity Compensation Plan

On April 25, 2007, our shareholders approved and adopted the
2007 equity incentive plan. The purpose of the Plan is to secure for our company and our shareholders the benefits
of incentive inherent in share ownership by the directors and employees of our
company and our Affiliates who, in the judgment of our board, will be largely
responsible for our companys future growth and success. It is generally
recognized that equity incentive plans of the nature provided for herein aid in
retaining and encouraging directors and employees of exceptional ability because
of the opportunity offered them to acquire a proprietary interest in our
company.

25

---

The maximum number of Options available under the Plan, are for
the issuance of up to 1,000,000 shares of common stock of our company.

On December 14, 2007, we granted 892,500 post share
consolidation stock options to directors, officers, and consultants of our
company exercisable at a price of $0.70 per share for a period of 5 years. On
October 22, 2009, we modified the exercise price of these stock options to $0.20
per share. The vesting dates of the options are as below:

Vesting Dates
    Percentage of options grantedDecember 14, 2007
    25%December 14, 2008
    25%December 14, 2009
    25%December 14, 2010
    25%


On October 22, 2009, we granted an additional 500,000 stock
options to our directors and consultants. The exercise price of the stock
options is $0.10 per share, which are vested immediately and expire October 22,
2014. This plan was rolled into the 2011 Stock Option Plan as approved by our
shareholders on April 14, 2011.

2010 Equity Compensation Plan

On February 5, 2010, our shareholders approved and adopted the
2010 equity incentive plan. The purpose of the 2010 Plan is to enhance the
long-term stockholder value of our company by offering opportunities to our
directors, officers, employees and eligible consultants to acquire and maintain
stock ownership in our company in order to give these persons the opportunity to
participate in our growth and success, and to encourage them to remain in our
service.

Options that are eligible for grant under the 2010 Plan to
Participants include: (a) incentive stock options, whereby we will grant options
to purchase shares of our common stock to Participants with the intention that
the options qualify as "incentive stock options" as that term is defined in
Section 422 of the Internal Revenue Code; (b) non-incentive stock options,
whereby we will grant options to purchase shares of our common stock to
Participants that do not qualify as "incentive stock options" under the Internal
Revenue Code; (c) stock appreciation rights; and (d) restricted shares. The 2010
Plan provides that a maximum of Two Million (2,000,000) shares of common stock
are available for granting of awards under the 2010 Plan.

This plan was rolled into the 2011 Stock Option Plan as
approved by our shareholders on April 14, 2011.

2011 Stock Option Plan

On April 14, 2011, our shareholders approved and adopted at the
Annual General Meeting to roll our 2007 Equity compensation plan and our 2010
Equity Compensation Plan into a new 2011 Stock Option Plan. The purpose of this
Plan is to advance the interests of our company, through the grant of Options,
by providing an incentive mechanism to foster the interest of eligible persons
in the success of our company and our affiliates; encouraging eligible persons
to remain with our company or our affiliates; and attracting new directors,
officers, employees and consultants.

This Plan shall be administered by our board. Subject to the
provisions of this Plan, our board shall have the authority: to determine the
Eligible Persons to whom Options are granted, to grant such Options, and to
determine any terms and conditions, limitations and restrictions in
respect of any particular Option grant, including but not limited to the nature
and duration of the restrictions, if any, to be imposed upon the acquisition,
sale or other disposition of shares of common stock acquired upon exercise of
the Option, and the nature of the events and the duration of the period, if any,
in which any Participant's rights in respect of an Option or shares of common
stock acquired upon exercise of an Option may be forfeited; to interpret the
terms of this Plan, to make all such determinations and take all such other
actions in connection with the implementation, operation and administration of
this Plan, and to adopt, amend and rescind such administrative guidelines and
other rules and regulations relating to this Plan, as it shall from time to time
deem advisable, including without limitation for the purpose of ensuring
compliance with Section legislation hereof. Our board's interpretations,
determinations, guidelines, rules and regulations shall be conclusive and
binding upon our company, Eligible Persons, Participants and all other
persons.

26

---

The aggregate number of Common Shares that may be reserved,
allotted and issued pursuant to Options shall not exceed 4,720,348 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 Board may amend, subject to the approval of any regulatory
authority whose approval is required, suspend or terminate this Plan or any
portion thereof. No such amendment, suspension or termination shall alter or
impair any outstanding unexercised Options or any rights without the consent of
such Participant. If this Plan is suspended or terminated, the provisions of
this Plan and any administrative guidelines, rules and regulations relating to
this Plan shall continue in effect for the duration of such time as any Option
remains outstanding.

As at the date of the annual report, there was nil stock
options exercised

Equity Compensation Plan InformationPlan category
    Number of securities
      to be issued upon exercise of outstanding
      options, warrants and rights
    Weighted-average
      exercise price of outstanding options,
      warrants and rights
    Number of securities
      remaining available for future issuance under
      equity compensation plans (excluding securities
      reflected in column (a))Equity compensation plans approved by
      security holders
    Nil
    Nil
    Nil2011Stock Option Plan  approved by security holders
    3,260,000
    $0.15
    1,460,348Total
    3,260,000
    $0.15
    1,460,348


Purchases of Equity Securities by the Issuer and Affiliated
Purchasers

We did not purchase any of our shares of common stock or other
securities during our fiscal year ended August 31, 2011.

|Item 6. | Selected Financial Data
|------- | -----------------------

As a smaller reporting company, we are not required to
provide the information required by this Item.

27

---

|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 entitled "Risk Factors" beginning on
page 10 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.

Results of Operations for our Years Ended August 31, 2011
and 2010

Our net loss and comprehensive loss for our year ended August
31, 2011, for our year ended August 31, 2010 and the changes between those
periods for the respective items are summarized as follows:

Year Ended August
      31, 2011 **$**
    
    
    Year Ended August
      31, 2010$
    
    
    Change Between
      Year Ended August 31, 2011 and Year Ended
      August 31, 2010 **$**Revenue
    $
    20,512
    
    $
    11,861
    
    $
    (8,651)Other (income)expenses
    
    (626,508)
    
    
    3,227,901
    
    
    (3,854,409)General and administrative
    
    797,654
    
    
    468,837
    
    
    328,817Interest expense
    
    23,635
    
    
    8,206
    
    
    15,429Write down in carrying value of oil and gas
      properties
    
    Nil
    
    
    3,463,861
    
    
    (3,463,861)Consulting fees
    
    511,598
    
    
    274,817
    
    
    236,781Oil and gas operating expenses
    
    Nil
    
    
    Nil
    
    
    NilProfessional Fees
    
    94,557
    
    
    86,633
    
    
    7,924Net Income (loss)
    
    (165,405)
    
    
    (2,955,141)
    
    
    2,789,736


Revenue

We have earned minimal amounts of revenue since inception. The
revenues for our years ended August 31, 2011 and 2010 were from clean
energy.

Other Income

The increase in other income for our year ended August 31,
2011, was from the gain on marketable securities held for sale and revaluation
of warrants liability. During the year
ended August 31, 2010 the large loss was due to a write down of oil and gas
properties offset by income recovery of deferred taxes.

28

---

General and Administrative

The increase in our general and administrative expenses for our
year ended August 31, 2011 was due to increased consulting, advertising and
promotion, travel, and professional fees.

Professional Fees

There was an increase in accounting, audit and legal fees for
our year ended August 31, 2011. This was due to adaption of a new stock option
plan and a Form S-8 listing with the US Securities Exchange Commission.

Interest Expense

The increase in interest expense for our year ended August 31,
2011 was due to an increase of loans during the current year compared to prior
year.

Oil and Gas Operating Expenses

There were no oil and gas sales for the year ended August 31,
2011.

Liquidity and Financial Condition

|Working Capital                             |   | At         |   |   | At         |  
|------------------------------------------- | - | ---------- | - | - | ---------- | -
|                                            |   | August 31, |   |   | August 31, |  
|                                            |   | 2011       |   |   | 2010       |  
|Current assets                              | $ | 720,570    |   | $ | 498,674    |  
|Current liabilities                         |   | 88,689     |   |   | 149,944    |  
|Working capital                             | $ | 631,881    |   | $ | 348,730    |  
|                                            |   |            |   |   |            |  
|                                            |   |            |   |   |            |  
|Cash Flows                                  |   | Year Ended |  
|                                            |   | August 31, |   |   | August 31  |  
|                                            |   | 2011       |   |   | 2010       |  
|Cash flows (used in) operating activities   | $ | (537,372   | ) |   | (273,335   | )
|Cash flows (used in) investing activities   |   | (29,045    | ) |   | (108,731   | )
|Cash flows provided by financing activities |   | 795,063    |   |   | 133,625    |  
|Net increase (decrease) in cash during year | $ | 228,646    |   |   | (248,441   | )

Operating Activities

Net cash used in operating activities was $537,372 for our year
ended August 31, 2011 compared with cash used in operating activities of
$273,335 in the same period in 2010. The increase in net cash used in operating
activities is due to our company paying down monies owed to related parties,
compared to August 31, 2010 where there was a write down of oil and gas
properties offset by income recovery of deferred taxes.

Investing Activities

Net cash used in investing activities was $29,045 for our year
ended August 31, 2011 compared to net cash provided in investing activities of
$108,731 in the same period in 2010. The decrease in funds used was for the
proceeds received from the disposition of the oil and gas interests during the
year, which were offset by the investment in Global Solar and in the option
agreements with Wildhorse Copper Inc. and Altar Resources.

29

---

Financing Activities

Net cash provided by financing activities was $795,063 for our year ended August 31, 2011 compared to $133,625 in the same period in 2010. This increase is primarily attributed to our private placement which closed in March 2011.

Contractual Obligations

As a “smaller reporting company”, we are not required to provide tabular disclosure obligations.

Going Concern

Our 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. We have a net loss of $165,405 for the year ended August 31, 2011 [2010 – net loss of $2,955,141] and at August 31, 2011 had a deficit accumulated during the exploration stage of
$4,384,019 [2010 – $4,218,614]. We generated revenue of $20,512 for the year ended August 31, 2011 [2010 - $11,861]. We have working capital of $631,881 as at August 31, 2011 [2010 - $348,730]. 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.

These 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.

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 financial statements, which have been prepared in accordance with the accounting principles generally accepted 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 financial statements.

Recent Accounting Pronouncements

In January 2010, the FASB issued an update to the Fair Value topic. This update requires new disclosures for (1) transfers in and out of levels 1 and 2, and (2) activity in level 3, by requiring the reconciliation to present separate information
about purchases, sales, issuance, and settlements. Also, this update clarifies the disclosures related to the fair value of each class of assets and liabilities and the input and valuation techniques for both recurring and nonrecurring fair value
measurements in levels 2 and 3. the effective date for the disclosures and clarifications is for the interim and annual reporting periods beginning after
December 15, 2009 except for the disclosures about purchases, sales, issuances
and settlements, which is effective for fiscal years beginning after December
15, 2010. This update is not expected to have a material impact on the Companys
financial statements.

30

---

In February 2010, the FASB issued ASC No. 2010-09, Amendments
to Certain Recognition and Disclosure Requirements, which eliminates the
requirement for SEC filers to disclose the date through which an entity has
evaluated subsequent events. ASC No. 2010-09 is effective for its fiscal quarter
beginning after 15 December 2010. The adoption of ASC No. 2010-09 is not
expected to have a material impact on the Companys financial statements ASU No.
2010-13 was issued in April 2010, and clarified the classification of an
employee share based payment award with an exercise price denominated in the
currency of a market in which the underlying security trades. This ASU will be
effective for the first fiscal quarter beginning after December 15, 2010, with
early adoption permitted. The adoption of ASU No. 2010-13 is not expected to
have a material impact on the Companys financial statements.

On March 5, 2010, the FASB issued ASU No. 2010-11 Derivatives
and Hedging Topic 815 Scope Exception Related to Embedded Credit Derivatives.
This ASU clarifies the guidance within the derivative literature that exempts
certain credit related features from analysis as potential embedded derivatives
requiring separate accounting. The ASU specifies that an embedded credit
derivative feature related to the transfer of credit risk that is only in the
form of subordination of one financial instrument to another is not subject to
bifurcation from a host contract under ASC 815-15-25, Derivatives and Hedging 
Embedded Derivatives  Recognition. All other embedded credit derivative
features should be analyzed to determine whether their economic characteristics
and risks are clearly and closely related to the economic characteristics and
risks of the host contract and whether bifurcation is required. The adoption of
this ASU did not have a material impact on the Companys financial
statements.

In May 2011, the FASB issued new authoritative guidance to
provide a consistent definition of fair value and ensure that fair value
measurements and disclosure requirements are similar between GAAP and
International Financial Reporting Standards. This guidance changes certain fair
value measurement principles and enhances the disclosure requirements for fair
value measurements. This guidance is effective for interim and annual periods
beginning after December 15, 2011 and is applied prospectively. The Company does
not expect that the adoption of this guidance will have a material impact on its
financial statements.

Other accounting standards that have been issued or proposed by
the FASB or other standards-setting bodies that do not require adoption until a
future date are not expected to have a material impact on the Companys
financial statements upon adoption.

|Item 7A. | Quantitative and Qualitative Disclosures
      About Market Risk
|-------- | ----------------------------------------------------------------

As a smaller reporting company, we are not required to
provide the information required by this Item.

|Item 8. | Financial Statements and Supplementary
      Data
|------- | -------------------------------------------------

31

---



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Enertopia Corp.(A development stage company)

We have audited the consolidated balance sheet of Enertopia
Corp. (the Company) (a development stage company, formerly Golden Aria Corp.)
as at August 31, 2011 and the related consolidated statements of stockholders
equity, operations and cash flow for the year then ended and the period from
November 24, 2004 (inception) to August 31, 2011. These financial
statements are the responsibility of the Companys management. Our
responsibility is to express an opinion on these financial statements based on
our audit. We did not audit the Companys financial statements as of and for the
year ended August 31, 2010, and the cumulative data from November 24, 2004
(inception) to August 31, 2010 in the statements of stockholders equity,
operations and cash flows, which were audited by other auditors whose report,
dated November 25, 2010 which expressed an unqualified opinion, has been
furnished to us. Our opinion, insofar as it relates to the amounts included for
cumulative data from November 24, 2004 (inception) to August 31, 2010, is based
solely on the report of the other auditors.

We conducted our audit in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform an audit to obtain reasonable assurance whether
the financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstance, but not for the purpose of expressing an
opinion on the effectiveness of the companys internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial position of the
Company as at August 31, 2011 and the result of its operations and its cash flow
for the year then ended and the period from November 24, 2004 (inception) to
August 31, 2011 in conformity with accounting principles generally
accepted in the United States of America.

The accompanying consolidated financial statements refer to
above have been prepared assuming the Company will continue as a going concern.
As discussed in Note 2 to the consolidated financial statements, the Company
incurred losses from operations since inception, has not attained profitable
operations and is dependent upon obtaining adequate financing to fulfil its
operating activities. These factors raise substantial doubt about the Company's
ability to continue as a going concern. The consolidated financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.

|Vancouver, Canada |                      
|----------------- | ---------------------
|November 29, 2011 | Chartered Accountants



32

---



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

ENERTOPIA CORP.(A development stage company)

We have audited the consolidated balance sheets of Golden Aria
Corp. (the Company) (a development stage company) as at August 31, 2010 and
2009 and the related consolidated statements of stockholders equity, operations
and cash flows for the years then ended and for the period cumulative from
inception November 24, 2004 (inception) to August 31, 2010. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform an audit to obtain reasonable assurance whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial position of the
Company as at August 31, 2010 and 2009 and the results of their operations and
their cash flows for the years then ended and for the period cumulative from
inception November 24, 2004 (inception) to August 31, 2010 in conformity with
generally accepted accounting principles in the United States of America.

The accompanying consolidated financial statements refer to
above have been prepared assuming that the Company will continue as a going
concern. As discussed in Note 2 to the consolidated financial statements, the
Company has incurred losses from inception and further losses are anticipated.
These factors raise substantial doubt about its ability to continue as a going
concern. Managements plans in regard to these matters are also described in
Note 2. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

|Vancouver, Canada |                      
|----------------- | ---------------------
|November 25, 2010 | Chartered Accountants

33

---

|ENERTOPIA CORP.              
|-----------------------------
|(A Development Stage Company)
|CONSOLIDATED BALANCE SHEETS  
|(Expressed in U.S. Dollars)  

|                                                                          |   | August 31  |   |   | August 31  |  
|------------------------------------------------------------------------- | - | ---------- | - | - | ---------- | -
|                                                                          |   | 2011       |   |   | 2010       |  
|ASSETS                                                                    |   |            |   |   |            |  
|                                                                          |   |            |   |   |            |  
|Current                                                                   |   |            |   |   |            |  
|Cash and cash
      equivalents                                           | $ | 263,152    |   | $ | 34,506     |  
|Owned securities (Note 4)                                                 |   | 375,910    |   |   | 343,074    |  
|Accounts
      receivable                                                 |   | 37,243     |   |   | 16,903     |  
|Prepaid expenses and deposit                                              |   | 44,265     |   |   | 4,191      |  
|Assets held for
      sale (Note 6)                                       |   | -          |   |   | 100,000    |  
|Total current assets                                                      |   | 720,570    |   |   | 498,674    |  
|                                                                          |   |            |   |   |            |  
|Non-Current                                                               |   |            |   |   |            |  
|Long term
      investments - Pro Eco & GSWPS (Note 5)                    |   | 261,431    |   |   | 220,986    |  
|Deferred charges                                                          |   | 29,038     |   |   | -          |  
|Mineral Property
      (Note 7)                                           |   | 162,045    |   |   | -          |  
|Total Assets                                                              | $ | 1,173,084  |   | $ | 719,660    |  
|                                                                          |   |            |   |   |            |  
|LIABILITIES AND STOCKHOLDERS' EQUITY                                      |   |            |   |   |            |  
|                                                                          |   |            |   |   |            |  
|LIABILITIES                                                               |   |            |   |   |            |  
|                                                                          |   |            |   |   |            |  
|Current                                                                   |   |            |   |   |            |  
|Accounts payable                                                          | $ | 14,881     |   | $ | 27,035     |  
|Promissory notes - related party
      (Note 8)                           |   | -          |   |   | 50,000     |  
|Due to related
      parties (Note 9)                                     |   | 73,808     |   |   | 72,909     |  
|Total Current Liabilities                                                 |   | 88,689     |   |   | 149,944    |  
|                                                                          |   |            |   |   |            |  
|Promissory notes - related party
      (Note 8)                           |   | -          |   |   | 139,844    |  
|Warrants
      Liability (Note 11)                                        |   | 300,792    |   |   | -          |  
|                                                                          |   | 389,481    |   |   | 289,788    |  
|STOCKHOLDERS' EQUITY                                                      |   |            |   |   |            |  
|                                                                          |   |            |   |   |            |  
|Share capital                                                             |   |            |   |   |            |  
|Authorized:                                                               |   |            |   |   |            |  
|200,000,000 common shares with a par value of
      $0.001 per share      |   |            |   |   |            |  
|Issued and outstanding:                                                   |   |            |   |   |            |  
|24,643,865 common shares at August 31, 2011 and August 31,2010:15,710,240 |   | 24,644     |   |   | 15,710     |  
|Additional paid-in capital                                                |   | 5,142,978  |   |   | 4,632,777  |  
|Deficit accumulated during the
      exploration stage                    |   | (4,384,019 | ) |   | (4,218,614 | )
|Total Stockholders' Equity                                                |   | 783,603    |   |   | 429,873    |  
|Total Liabilities and Stockholders'
      Equity                          | $ | 1,173,084  |   | $ | 719,660    |  

The accompanying notes are an integral part of these
consolidated financial statements

34

---

|ENERTOPIA CORP.                      
|-------------------------------------
|(A Development Stage Company)        
|CONSOLIDATED STATEMENTS OF OPERATIONS
|(Expressed in U.S. Dollars)          

|                                                                         |   |            |   |   |            |   |   | CUMULATIVE        |  
|------------------------------------------------------------------------ | - | ---------- | - | - | ---------- | - | - | ----------------- | -
|                                                                         |   |            |   |   |            |   |   | PERIOD FROM       |  
|                                                                         |   |            |   |   |            |   |   | INCEPTION         |  
|                                                                         |   |            |   |   |            |   |   | NOVEMBER 24, 2004 |  
|                                                                         |   | YEAR ENDED |   |   | TO         |  
|                                                                         |   | August 31  |   |   | August 31  |   |   | August 31         |  
|                                                                         |   | 2011       |   |   | 2010       |   |   | 2011              |  
|                                                                         |   |            |   |   |            |   |   |                   |  
|Revenue                                                                  |   |            |   |   |            |   |   |                   |  
|Non-renewal energy -
      natural gas and oil revenue                   | $ | -          |   | $ | 254        |   | $ | 374,342           |  
|Renewal energy - service revenue                                         |   | 20,512     |   |   | 11,607     |   |   | 32,119            |  
|                                                                         |   |            |   |   |            |   |   |                   |  
|                                                                         |   | 20,512     |   |   | 11,861     |   |   | 406,462           |  
|Cost of revenue                                                          |   |            |   |   |            |   |   |                   |  
|Non-renewal energy:                                                      |   |            |   |   |            |   |   |                   |  
|Natural gas and
      oil operating costs and royalties                  |   | -          |   |   | -          |   |   | 141,197           |  
|Depletion                                                                |   | -          |   |   | -          |   |   | 298,489           |  
|Write-down in
      carrying value of oil and gas property               |   | -          |   |   | -          |   |   | 293,436           |  
|Renewal energy                                                           |   | 14,771     |   |   | 32,969     |   |   | 47,740            |  
|                                                                         |   |            |   |   |            |   |   |                   |  
|                                                                         |   | 14,771     |   |   | 32,969     |   |   | 780,862           |  
|                                                                         |   |            |   |   |            |   |   |                   |  
|Gross Profit                                                             |   | 5,741      |   |   | (21,108    | ) |   | (374,401          | )
|                                                                         |   |            |   |   |            |   |   |                   |  
|Expenses                                                                 |   |            |   |   |            |   |   |                   |  
|Accounting and audit                                                     |   | 46,378     |   |   | 44,621     |   |   | 284,845           |  
|Sales & Marketing                                                        |   | 846        |   |   | -          |   |   | 846               |  
|Advertising &
      Promotions                                           |   | 40,627     |   |   | 8,020      |   |   | 63,005            |  
|Bank charges and interest expense                                        |   | 23,635     |   |   | 8,206      |   |   | 54,240            |  
|Consulting                                                               |   | 511,598    |   |   | 274,817    |   |   | 1,294,251         |  
|Mining exploration costs                                                 |   | 14,094     |   |   | -          |   |   | 332,386           |  
|Fees and dues                                                            |   | 31,866     |   |   | 36,773     |   |   | 94,202            |  
|Insurance                                                                |   | 15,045     |   |   | 8,323      |   |   | 38,572            |  
|Investor relations                                                       |   | 10,050     |   |   | 12,840     |   |   | 36,055            |  
|Legal an professional                                                    |   | 48,179     |   |   | 42,012     |   |   | 201,905           |  
|Office and
      miscellaneous                                           |   | 7,210      |   |   | (813       | ) |   | 46,655            |  
|Rent                                                                     |   | 14,960     |   |   | 9,100      |   |   | 67,093            |  
|Telephone                                                                |   | 3,783      |   |   | 3,427      |   |   | 12,120            |  
|Training & Conferences                                                   |   | -          |   |   | 5,674      |   |   | 10,248            |  
|Travel                                                                   |   | 29,383     |   |   | 15,837     |   |   | 65,662            |  
|                                                                         |   |            |   |   |            |   |   |                   |  
|Total expenses                                                           |   | 797,654    |   |   | 468,837    |   |   | 2,602,086         |  
|                                                                         |   |            |   |   |            |   |   |                   |  
|(Loss) for the period before other
      items                           |   | (791,913   | ) |   | (489,945   | ) |   | (2,976,486        | )
|                                                                         |   |            |   |   |            |   |   |                   |  
|Other income (expense)                                                   |   |            |   |   |            |   |   |                   |  
|Interest income                                                          |   | -          |   |   | -          |   |   | 9,433             |  
|Others                                                                   |   | -          |   |   | (791       | ) |   | 25,732            |  
|Equity interest pick up                                                  |   | (1,555     | ) |   | (1,336     | ) |   | (12,070           | )
|Gain on owned
      securities                                           |   | 32,836     |   |   | 118,597    |   |   | 32,836            |  
|Gain on disposition of oil and gas
      interests                       |   | -          |   |   | 119,490    |   |   | 522,976           |  
|Revaluation of warrants
      liability                                  |   | 595,227    |   |   | -          |   |   | 595,227           |  
|Write down of oil and gas properties                                     |   | -          |   |   | (3,463,861 | ) |   | (3,344,372        | )
|                                                                         |   |            |   |   |            |   |   |                   |  
|Income (loss) before income taxes                                        |   | (165,405   | ) |   | (3,717,846 | ) |   | (5,146,724        | )
|                                                                         |   |            |   |   |            |   |   |                   |  
|Income tax recovery - deferred                                           |   | -          |   |   | 762,704    |   |   | 762,704           |  
|                                                                         |   |            |   |   |            |   |   |                   |  
|Net loss and comrehensive loss for the period                            | $ | (165,405   | ) | $ | (2,955,141 | ) | $ | (4,384,019        | )
|                                                                         |   |            |   |   |            |   |   |                   |  
|Basic and diluted income (loss) per share                                | $ | (0.01      | ) | $ | (0.20      | ) |   |                   |  
|                                                                         |   |            |   |   |            |   |   |                   |  
|Weighted average number of common shares outstanding - basic and diluted |   | 19,893,489 |   |   | 15,086,412 |   |   |                   |  

The accompanying notes are an integral part of these
consolidated financial statements

35

---

|ENERTOPIA CORP.                                 
|------------------------------------------------
|(A Development Stage Company)                   
|CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY 
|NOVEMBER 24, 2004 (inception) TO August 31, 2011
|(Expressed in U.S. Dollars)                     

|                                                                                                                                        |  |              |   |   |            |   |   |           |   |   |        |   |   | DEFICIT     |   |   |               |  
|--------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | - | - | ---------- | - | - | --------- | - | - | ------ | - | - | ----------- | - | - | ------------- | -
|                                                                                                                                        |  |              |   |   |            |   |   |           |   |   |        |   |   | ACCUMULATED |   |   |               |  
|                                                                                                                                        |  | COMMON STOCK |   |   | ADDITIONAL |   |   | STOCK     |   |   | DURING |   |   | TOTAL       |  
|                                                                                                                                        |  |              |   |   |            |   |   | PAID-IN   |   |   | TO BE  |   |   | EXPLORATION |   |   | STOCKHOLDERS' |  
|                                                                                                                                        |  | SHARES       |   |   | AMOUNT     |   |   | CAPITAL   |   |   | ISSUED |   |   | STAGE       |   |   | EQUITY        |  
|Balance November 24, 2004
      (Inception)                                                                                             |  | -            |   | $ | -          |   | $ | -         |   | $ | -      |   | $ | -           |   | $ | -             |  
|Issuance of common stock for cash at $0.02 per share on March 22,
      2005                                                            |  | 5,467,500    |   |   | 5,468      |   |   | 103,882   |   |   | -      |   |   | -           |   |   | 109,350       |  
|Issuance of common stock for
      cash at $0.30 per share on April
      6, 2005                                                       |  | 1,112,500    |   |   | 1,112      |   |   | 332,638   |   |   | -      |   |   | -           |   |   | 333,750       |  
|Stock to be issued                                                                                                                      |  | 125,000      |   |   | -          |   |   | 37,375    |   |   | 125    |   |   | -           |   |   | 37,500        |  
|Comprehensive income (loss):
      
    (Loss) for the period                                                                           |  | -            |   |   | -          |   |   | -         |   |   | -      |   |   | (167,683    | ) |   | (167,683      | )
|Balance, August 31, 2005                                                                                                                |  | 6,705,000    |   |   | 6,580      |   |   | 473,895   |   |   | 125    |   |   | (167,683    | ) |   | 312,917       |  
|Stock issued on September 29,
      2005                                                                                                |  | -            |   |   | 125        |   |   | -         |   |   | (125   | ) |   | -           |   |   | -             |  
|Comprehensive income (loss):
      
    (Loss) for the year                                                                             |  | -            |   |   | -          |   |   | -         |   |   | -      |   |   | (200,091    | ) |   | (200,091      | )
|Balance, August 31, 2006                                                                                                                |  | 6,705,000    |   |   | 6,705      |   |   | 473,895   |   |   | -      |   |   | (367,774    | ) |   | 112,826       |  
|Units issued for cash at $0.50 per unit to related parties on March 6,
      2007 (included stock based
      compensation of $116,959) |  | 92,740       |   |   | 93         |   |   | 163,236   |   |   |        |   |   |             |   |   | 163,329       |  
|Stock issued for property on
      April 18, 2007                                                                                       |  | 250,000      |   |   | 250        |   |   | 274,750   |   |   | -      |   |   | -           |   |   | 275,000       |  
|Units issued for cash at $0.50 per unit on April 19, 2007                                                                               |  | 100,000      |   |   | 100        |   |   | 49,900    |   |   | -      |   |   | -           |   |   | 50,000        |  
|Units issued for cash at
      $0.50 per unit on August 31, 2007                                                                        |  | 600,000      |   |   | 600        |   |   | 299,400   |   |   | -      |   |   | -           |   |   | 300,000       |  
|Imputed interest from non-interest bearing
      loan                                                                                   |  | -            |   |   | -          |   |   | 3,405     |   |   | -      |   |   | -           |   |   | 3,405         |  
|Comprehensive income (loss):
      
    (Loss) for the year                                                                             |  | -            |   |   | -          |   |   | -         |   |   | -      |   |   | (607,397    | ) |   | (607,397      | )
|Balance, August 31, 2007                                                                                                                |  | 7,747,740    |   | $ | 7,748      |   | $ | 1,264,586 |   | $ | -      |   | $ | (975,171    | ) | $ | 297,163       |  
|Units issued for acquisition
      at $0.42 per unit on November 30,
      2007                                                         |  | 6,905,000    |   |   | 6,905      |   |   | 2,893,195 |   |   | -      |   |   | -           |   |   | 2,900,100     |  
|Imputed interest from non-interest bearing
      loan                                                                                   |  | -            |   |   | -          |   |   | 7,139     |   |   | -      |   |   | -           |   |   | 7,139         |  
|Stock-based compensation on
      1,785,000 options granted                                                                             |  | -            |   |   | -          |   |   | 104,257   |   |   | -      |   |   | -           |   |   | 104,257       |  
|Comprehensive income (loss):
      
    (Loss) for the year                                                                             |  | -            |   |   | -          |   |   | -         |   |   | -      |   |   | (372,535    | ) |   | (372,535      | )
|Balance, August 31, 2008                                                                                                                |  | 14,652,740   |   | $ | 14,653     |   | $ | 4,269,177 |   | $ | -      |   | $ | (1,347,706  | ) | $ | 2,936,124     |  
|Imputed interest for non-interest bearing
      loan                                                                                    |  | -            |   |   | -          |   |   | 4,410     |   |   | -      |   |   | -           |   |   | 4,410         |  
|Stock-based compensation                                                                                                                |  | -            |   |   | -          |   |   | 35,780    |   |   | -      |   |   | -           |   |   | 35,780        |  
|Comprehensive income (loss):
      
    (Loss) for the year                                                                             |  | -            |   |   | -          |   |   | -         |   |   | -      |   |   | 84,233      |   |   | 84,233        |  
|Balance, August 31, 2009                                                                                                                |  | 14,652,740   |   | $ | 14,653     |   | $ | 4,309,367 |   | $ | -      |   | $ | (1,263,473  | ) | $ | 3,060,547     |  
|Imputed interest for non-interest bearing
      loan                                                                                    |  |              |   |   |            |   |   | 2,442     |   |   |        |   |   |             |   |   | 2,442         |  
|Stock-based compensation                                                                                                                |  |              |   |   |            |   |   | 78,858    |   |   |        |   |   |             |   |   | 78,858        |  
|Stock issued for acquisition at $0.20 per
      share on February 28, 2010                                                              |  | 500,000      |   |   | 500        |   |   | 124,500   |   |   |        |   |   |             |   |   | 125,000       |  
|Units issued for cash at
      $0.15 per unit on May 31, 2010                                                                           |  | 557,500      |   |   | 557        |   |   | 83,068    |   |   |        |   |   |             |   |   | 83,625        |  
|Gain on settlement of the amount due
      to related parties                                                                           |  |              |   |   |            |   |   | 34,542    |   |   |        |   |   |             |   |   | 34,542        |  
|Comprehensive income (loss):
      
    (Loss) for the year                                                                             |  | -            |   |   | -          |   |   | -         |   |   | -      |   |   | (2,955,141  | ) |   | (2,955,141    | )
|Balance, August 31, 2010                                                                                                                |  | 15,710,240   |   |   | 15,710     |   |   | 4,632,777 |   |   | -      |   |   | (4,218,614  | ) |   | 429,873       |  
|Debt settlement on November
      22, 2010                                                                                              |  | 62,500       |   |   | 63         |   |   | 9,313     |   |   |        |   |   |             |   |   | 9,376         |  
|Debt settlement on November 19, 2010                                                                                                    |  | 100,000      |   |   | 100        |   |   | 14,900    |   |   |        |   |   |             |   |   | 15,000        |  
|Stock-based compensation                                                                                                                |  |              |   |   |            |   |   | 254,443   |   |   |        |   |   |             |   |   | 254,443       |  
|Share Subscriptions on March 3, 2011                                                                                                    |  | 8,729,000    |   |   | 8,729      |   |   | 885,264   |   |   | -      |   |   |             |   |   | 893,993       |  
|Share Issuance costs                                                                                                                    |  |              |   |   |            |   |   | (96,490   | ) |   |        |   |   |             |   |   | (96,490       | )
|Warrants issued on March 3, 2011                                                                                                        |  |              |   |   |            |   |   | (848,459  | ) |   |        |   |   |             |   |   | (848,459      | )
|Common Shares cancelled on
      January 1, 2011                                                                                        |  | (1,000,000   | ) |   | (1,000     | ) |   | 1,000     |   |   |        |   |   |             |   |   | -             |  
|Debt settlement on March 16, 2011                                                                                                       |  | 78,125       |   |   | 78         |   |   | 12,422    |   |   |        |   |   |             |   |   | 12,500        |  
|Debt settlement on April 27,
      2011                                                                                                 |  | 360,000      |   |   | 360        |   |   | 157,412   |   |   |        |   |   |             |   |   | 157,772       |  
|Debt settlement on April 27, 2011                                                                                                       |  | 100,000      |   |   | 100        |   |   | 45,900    |   |   |        |   |   |             |   |   | 46,000        |  
|Shares issued Wildhorse on
      April 11, 2011                                                                                         |  | 500,000      |   |   | 500        |   |   | 74,500    |   |   |        |   |   |             |   |   | 75,000        |  
|Share issuance correction on Jun 4, 2011                                                                                                |  | 4,000        |   |   | 4          |   |   | (4        | ) |   |        |   |   |             |   |   | -             |  
|Comprehensive income (loss):
      
    (Loss) for the year                                                                             |  |              |   |   |            |   |   |           |   |   |        |   |   | (165,405    | ) |   | (165,405      | )
|Balance, August 31, 2011                                                                                                                |  | 24,643,865   |   | $ | 24,644     |   | $ | 5,142,978 |   | $ | - $    |   |   | (4,384,019  | ) | $ | 783,603       |  

The accompanying notes are an integral part of these
consolidated financial statements

36

---

|ENERTOPIA CORP.                      
|-------------------------------------
|(A Development Stage Company)        
|CONSOLIDATED STATEMENTS OF CASH FLOWS
|(Expressed in U.S. Dollars)          

|                                                                             |   |            |   |   |            |   |   | CUMULATIVE        |   |  | CUMULATIVE        |  
|---------------------------------------------------------------------------- | - | ---------- | - | - | ---------- | - | - | ----------------- | - |  | ----------------- | -
|                                                                             |   |            |   |   |            |   |   | PERIOD FROM       |   |  | PERIOD FROM       |  
|                                                                             |   |            |   |   |            |   |   | INCEPTION         |   |  | INCEPTION         |  
|                                                                             |   |            |   |   |            |   |   | November 24, 2004 |   |  | November 24, 2004 |  
|                                                                             |   | YEAR ENDED |   |   | TO         |   |   | TO                |  
|                                                                             |   | August 31, |   |   | August 31, |   |   | August 31,        |   |  | August 31         |  
|                                                                             |   | 2011       |   |   | 2010       |   |   | 2011              |   |  | 2010              |  
|                                                                             |   |            |   |   |            |   |   |                   |   |  |                   |  
|Cash flows used in operating
      activities                                |   |            |   |   |            |   |   |                   |   |  |                   |  
|                                                                             |   |            |   |   |            |   |   |                   |   |  |                   |  
|Net Income (loss)                                                            | $ | (165,405   | ) | $ | (2,955,141 | ) | $ | (4,384,019        | ) |  | (4,218,614        | )
|                                                                             |   |            |   |   |            |   |   |                   |   |  |                   |  
|Changes to reconcile net
      loss to net cash used in operating activities |   |            |   |   |            |   |   |                   |   |  |                   |  
|Consulting - Stock based
      compensation                                  |   | 281,638    |   |   | 78,858     |   |   | 617,492           |   |  | 335,854           |  
|Depletion                                                                    |   | -          |   |   | -          |   |   | 298,490           |   |  | 298,490           |  
|Write down in carrying
      value of oil and gas properties                 |   | -          |   |   | -          |   |   | 293,437           |   |  | 293,437           |  
|Stock
      issued for mineral resource and oil and gas property             |   | -          |   |   | -          |   |   | 37,500            |   |  | 37,500            |  
|Write down of oil and gas
      properties                                   |   | -          |   |   | 3,463,861  |   |   | 3,344,371         |   |  | 3,344,371         |  
|Gain on
      disposition of oil and gas properties                          |   | -          |   |   | (119,490   | ) |   | (522,976          | ) |  | (522,976          | )
|Fair value of warrants
      liabilities                                     |   | (595,227   | ) |   | -          |   |   | (595,227          | ) |  |                   |  
|Gain on
      owned securities                                               |   | (32,836    | ) |   | (118,597   | ) |   | (32,836           | ) |  |                   |  
|Equity pick-up                                                               |   | 1,555      |   |   | 1,336      |   |   | 12,070            |   |  | 10,515            |  
|Imputed
      interest                                                       |   | -          |   |   | 2,442      |   |   | 17,396            |   |  | 17,396            |  
|Accrued loan interest                                                        |   | 17,928     |   |   | -          |   |   | 17,928            |   |  |                   |  
|Income
      tax recovery                                                    |   | -          |   |   | (762,704   | ) |   | (762,704          | ) |  | (762,704          | )
|                                                                             |   |            |   |   |            |   |   |                   |   |  |                   |  
|Change in non-cash working
      capital items:                              |   |            |   |   |            |   |   |                   |   |  |                   |  
|Accounts receivable                                                          |   | (20,340    | ) |   | (7,295     | ) |   | (26,535           | ) |  | (6,195            | )
|Prepaid
      expenses and deposit                                           |   | (40,074    | ) |   | (1,414     | ) |   | (19,981           | ) |  | 20,093            |  
|Deferred charges                                                             |   | (29,038    | ) |   | -          |   |   | (29,038           | ) |  |                   |  
|Accounts
      payable and accrued liabilities                               |   | (2,472     | ) |   | 27,035     |   |   | (3,357            | ) |  | (885              | )
|Due to related parties                                                       |   | 46,899     |   |   | 117,774    |   |   | 91,137            |   |  | 44,238            |  
|                                                                             |   |            |   |   |            |   |   |                   |   |  |                   |  
|Net cash (used in) operating activities                                      |   | (537,372   | ) |   | (273,335   | ) |   | (1,646,852        | ) |  | (1,109,480        | )
|                                                                             |   |            |   |   |            |   |   |                   |   |  |                   |  
|                                                                             |   |            |   |   |            |   |   |                   |   |  |                   |  
|Cash flows from (used in) investing
      activities                         |   |            |   |   |            |   |   |                   |   |  |                   |  
|                                                                             |   |            |   |   |            |   |   |                   |   |  |                   |  
|Oil and gas properties
      acquisition and divestment                      |   | -          |   |   | (47,231    | ) |   | (345,180          | ) |  | (345,180          | )
|Proceeds from sale of oil and gas interests                                  |   | 100,000    |   |   | -          |   |   | 521,545           |   |  | 421,545           |  
|Mineral resource properties
      acquisition                                |   | (87,045    | ) |   | -          |   |   | (87,046           | ) |  | (1                | )
|Investment in GSWPS                                                          |   | (42,000    | ) |   | (61,500    | ) |   | (103,500          | ) |  | (61,500           | )
|Investment in Pro Eco                                                        |   | -          |   |   | -          |   |   | (45,000           | ) |  | (45,000           | )
|Cash provided in connection with business
      acquisition                  |   | -          |   |   | -          |   |   | 201,028           |   |  | 201,028           |  
|                                                                             |   |            |   |   |            |   |   |                   |   |  |                   |  
|Net cash from (used in) investing activities                                 |   | (29,045    | ) |   | (108,731   | ) |   | 141,847           |   |  | 170,892           |  
|                                                                             |   |            |   |   |            |   |   |                   |   |  |                   |  
|                                                                             |   |            |   |   |            |   |   |                   |   |  |                   |  
|Cash flows from financing activities                                         |   |            |   |   |            |   |   |                   |   |  |                   |  
|Promissory notes - related party                                             |   | (50,000    | ) |   | 50,000     |   |   | -                 |   |  | 50,000            |  
|Net proceeds from
      subscriptions received                               |   | 845,063    |   |   | 83,625     |   |   | 1,768,158         |   |  | 923,095           |  
|                                                                             |   |            |   |   |            |   |   |                   |   |  |                   |  
|Net cash from financing activities                                           |   | 795,063    |   |   | 133,625    |   |   | 1,768,158         |   |  | 973,095           |  
|                                                                             |   |            |   |   |            |   |   |                   |   |  |                   |  
|Increase (Decrease) in cash and cash
      equivalents                       |   | 228,646    |   |   | (248,441   | ) |   | 263,153           |   |  | 34,507            |  
|                                                                             |   |            |   |   |            |   |   |                   |   |  |                   |  
|Cash and cash equivalents,
      beginning of period                         |   | 34,506     |   |   | 282,948    |   |   | -                 |   |  | -                 |  
|                                                                             |   |            |   |   |            |   |   |                   |   |  |                   |  
|Cash and cash equivalents, end of
      period                               | $ | 263,152    |   | $ | 34,507     |   | $ | 263,153           |   |  | 34,507            |  
|                                                                             |   |            |   |   |            |   |   |                   |   |  |                   |  
|Supplemental information of cash flows                                       |   |            |   |   |            |   |   |                   |   |  |                   |  
|Interest paid in cash                                                        | $ | 4,500      |   | $ | -          |   | $ | -                 |   |  |                   |  
|Income taxes paid in cash                                                    | $ | -          |   | $ | -          |   | $ | -                 |   |  |                   |  

The accompanying notes are an integral part of these
consolidated financial statements

37

---

|ENERTOPIA CORP.                           
|------------------------------------------
|(A Development Stage Company)             
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|August 31, 2011                           
|(Expressed in U.S. Dollars)               
|                                          

|1.     | ORGANIZATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       | 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 gas and oil company engaged in the
      exploration, development and acquisition of natural gas and oil properties
      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 considered as a development stage
      company. The Company has offices in Vancouver and Kelowna, B.C.,
      Canada.                                                                                                                                                                                                                                             
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       | Effective September 25, 2009, we effected one (1) for two
      (2) share consolidation of our authorized and issued and outstanding
      common stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       | On February 8, 2010, the Company changed its name from
      Golden Aria Corp. to Enertopia Corp.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       | On February 22, 2010, the Company increased its
      authorized share capital to 200,000,000 common shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|**2.** | GOING CONCERN UNCERTAINTY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       | The accompanying consolidated 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
      a net loss of $165,405 for the year ended August 31, 2011 [net loss
      $2,955,141 for the year ended August 31, 2010] and as at August 31, 2011
      has incurred cumulative losses of $4,384,019 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. These consolidated 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 interim consolidated financial
      statements.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|**3.** | SIGNIFICANT ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       | **a)**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

38

---

| | **b)** | Revenue Recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | ------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |        | The Company recognizes its renewal energy service revenue
      when services are performed and payments are received or rights to receive
      consideration are obtained, evidence of an arrangement exists, and
      collection of consideration is reasonably assured.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | c)     | Cash and Cash Equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |        | Cash equivalents comprise certain highly liquid
      instruments with a maturity of three months or less when purchased. As of
      August 31, 2011 and 2010, cash and cash equivalents consist of cash
      only.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | d)     | Investments in Companies Accounted for Using the
      Equity Method                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |        | Investments in equity method investees are accounted for
      using the equity method based upon the level of ownership and/or the
      Companys ability to exercise significant influence over the operating and
      financial policies of the investee. Investments of this nature are
      recorded at original cost and adjusted periodically to recognize the
      Companys proportionate share of the investees net income or losses after
      the date of investment. When net losses from and investment accounted for
      under the equity method exceed its carrying amount, the investment balance
      is reduced to zero. The Company resumes accounting for the investment
      under the equity method if the entity subsequently reports net income and
      the Companys share of that net income exceeds the share of the net losses
      not recognized during the period the equity method was suspended.
      Investments are written down only when there is clear evidence that a
      decline in value that is other than temporary has occurred. When an
      investment accounted for using the equity method issues its own shares,
      the subsequent reduction in the Companys proportionate interest in the
      investee is reflected in income as a deemed dilution gain or loss on
      disposition. The Company evaluates its investments in companies accounted
      for the equity or cost method for impairment when there is evidence or
      indicators that a decrease in value may be other than temporary.
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | e)     | Mineral Property Rights Acquisition and Exploration
      and Development Expenditures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |        | Mineral property acquisition costs are initially
      capitalized as tangible assets when purchased. The Company assesses the
      carrying costs for impairment when indicators of impairment exist. If
      proven and probable reserves are established for a property and it has
      been determined that a mineral property can be economically developed,
      costs will be amortized using the units-of-production method over the
      estimated total recoverable proven and probable reserves.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |        | Mineral property exploration and development costs are
      expensed as incurred until the establishment of economically viable
      reserves.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | f)     | Stock-Based Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |        | The Company followed Accounting Standards Codification
      (ASC) 718, Compensation  Stock Compensation, to account for
      its stock options and similar equity instruments issued. Accordingly,
      compensation costs attributable to stock options or similar equity
      instruments granted are measured at the fair value at the grant date, and
      expensed over the expected vesting period. ASC 718 requires excess tax
      benefits be reported as a financing cash inflow rather than as a reduction
      of taxes paid.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | g)     | 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 revenues and expenses during the reporting period. Actual
    results could differ from those estimates and assumptions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

39

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| | h) | Loss 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. Diluted loss per share is equivalent
      to basic loss per share because the potential exercise of the equity-based
      financial instruments was anti-dilutive.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | i) | Foreign Currency Translations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    | The Companys operations are located in the United States
      of America and Canada, and it has offices in Canada. The Company maintains
      its accounting records in U.S. Dollars, as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    | At the transaction date, each asset, liability, revenue
      and expense that was acquired or incurred in a foreign currency is
      translated into U.S. dollars by the using of the exchange rate in effect
      at that date. At the period end, monetary assets and liabilities are
      translated at the exchange rate in effect at that date. The resulting
      foreign exchange gains and losses are included in operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | j) | 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, owned securities, accounts receivable, accounts
      payable, promissory notes due to related parties, due to related parties,
      and warrants liability. With the exception of owned securities,
      non-current portion of promissory notes and warrants liability, the
      carrying amounts of these financial instruments approximate their fair
      values due to their short maturities. The fair values of the non-current
      portion of promissory notes are estimated using quoted market prices or
      are based on the discounted value of future cash flows. The fair value of
      owned securities are measured based on quoted prices in active markets.
      The fair value of the warrants liability is determined by using the
      Black-Scholes option pricing model.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    | The Companys operations are in 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

40

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| | k) | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | The Company has adopted ASC 740, Income Taxes,
      which requires the Company to recognize deferred tax liabilities and
      assets for the expected future tax consequences of events that have been
      recognized in the Companys financial statements or tax returns using the
      liability method. Under this method, deferred tax liabilities and assets
      are determined based on the temporary differences between the financial
      statement and tax bases of assets and liabilities using enacted tax rates
      in effect in the year in which the differences are expected to
    reverse.                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | l) | Long-Lived Assets Impairment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | Long-term assets of the Company are reviewed for
      impairment when circumstances indicate the carrying value may not be
      recoverable in accordance with the guidance established in ASC 360,
      Property, Plant and Equipment. For assets that are to be held and
      used, an impairment loss is recognized when the estimated undiscounted
      cash flows associated with the asset or group of assets is less than their
      carrying value. If impairment exists, an adjustment is made to write the
      asset down to its fair value. Fair values are determined based on
      discounted cash flows or internal and external appraisals, as applicable.
      Assets to be disposed of are carried at the lower of carrying value or
      estimated net realizable value.                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | m) | Asset Retirement Obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | The Company accounts for asset retirement obligations in
      accordance with the provisions of ASC 410, Asset Retirement and
      Environmental Obligations. ASC 410 requires the Company to record the
      fair value of an asset retirement obligation as a liability in the period
      in which it incurs a legal obligation associated with the retirement of
      tangible long-lived assets that result from the acquisition, construction,
      development and/or normal use of the assets. The management of the Company
      had estimated the asset retirement obligation to be immaterial and
      therefore was not reflected on the financial statements as of August 31,
      2011.                                                                                                                                                                                                                                                                    
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | n) | Comprehensive Income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | The Company has adopted ASC 220, Comprehensive
      Income, which establishes standards for reporting and display of
      comprehensive income, its components and accumulated balances. The Company
      is disclosing this information on its Statement of Stockholders Equity.
      Comprehensive income comprises equity except those transactions resulting
      from investments by owners and distributions to owners.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | o) | Concentration of credit risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | The Company places its cash and cash equivalent with high
      credit quality financial institution. As of August 31, 2011, the Company
      had approximately $175,046 in a bank beyond insured limit (August 31,
      2010: $0).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | p) | New Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | In January 2010, the FASB issued an update to the Fair
      Value topic. This update requires new disclosures for (1) transfers in and
      out of levels 1 and 2, and (2) activity in level 3, by requiring the
      reconciliation to present separate information about purchases, sales,
      issuance, and settlements. Also, this update clarifies the disclosures
      related to the fair value of each class of assets and liabilities and the
      input and valuation techniques for both recurring and nonrecurring fair
      value measurements in levels 2 and 3. the effective
date for the disclosures and clarifications
is for the interim and annual reporting periods beginning after December 15,
2009 except for the disclosures about purchases, sales, issuances and
settlements, which is effective for fiscal years beginning after December 15,
2010. This update is not expected to have a material impact on the Companys
financial statements.

41

---

In December 2010, the Financial
Accounting Standards Board (FASB) issued Accounting Standards Update (ASU)
No. 2010-29, Business Combinations (Topic 805): Disclosure of Supplementary Pro
Forma Information for Business Combinations. This guidance was issued to
clarify that pro forma disclosures should be presented as though the business
combination that occurred during the current year had occurred as of the
beginning of the comparable prior annual reporting period. The disclosures
should also be accompanied by a narrative description of the nature and amount
of material, nonrecurring pro forma adjustments. This new guidance is effective
prospectively for business combinations consummated on or after the annual
reporting period beginning on or after December 15, 2010. Early adoption is
permitted. The Company does not believe that the adoption of this guidance will
have a material impact on its financial statements.

On March 5, 2010, the FASB issued ASU
No. 2010-11 Derivatives and Hedging Topic 815 Scope Exception Related to
Embedded Credit Derivatives. This ASU clarifies the guidance within the
derivative literature that exempts certain credit related features from analysis
as potential embedded derivatives requiring separate accounting. The ASU
specifies that an embedded credit derivative feature related to the transfer of
credit risk that is only in the form of subordination of one financial
instrument to another is not subject to bifurcation from a host contract under
ASC 815-15-25, Derivatives and Hedging  Embedded Derivatives  Recognition.
All other embedded credit derivative features should be analyzed to determine
whether their economic characteristics and risks are clearly and closely
related to the economic characteristics and risks of the host contract and
whether bifurcation is required. The Company does not believe that the adoption
of this guidance will have a material impact on its financial statements.

In May 2011, the FASB issued new
authoritative guidance to provide a consistent definition of fair value and
ensure that fair value measurements and disclosure requirements are similar
between GAAP and International Financial Reporting Standards. This guidance
changes certain fair value measurement principles and enhances the disclosure
requirements for fair value measurements. This guidance is effective for interim
and annual periods beginning after December 15, 2011 and is applied
prospectively. The Company does not expect that the adoption of this guidance
will have a material impact on its financial statements.

In June 2011, the Financial Accounting
Standards Board (FASB) issued Accounting Standards Update (ASU) 2011-05,
Comprehensive Income (Topic 220): Presentation of Comprehensive Income, which is
effective for annual reporting periods beginning after December 15, 2011. This
guidance eliminates the option to present the components of other comprehensive
income as part of the statement of changes in stockholders equity. In addition,
items of other comprehensive income that are reclassified to profit or loss are
required to be presented separately on the face of the financial statements.
This guidance is intended to increase the prominence of other comprehensive
income in financial statements by requiring that such amounts be presented
either in a single continuous statement of income and comprehensive income or
separately in consecutive statements of income and comprehensive income. The
adoption of ASU 2011-05 is not expected to have a material impact on the
Companys financial position or results of operations.

Other accounting standards that have
been issued or proposed by the FASB or other standards-setting bodies that do
not require adoption until a future date are not expected to have a material
impact on the Companys financial statements upon adoption.

42

---

|4. | OWNED SECURITIES
|-- | ----------------

Owned securities includes, 375,000
common shares and 375,000 warrants of Cheetah Oil & Gas Ltd. and 499,893
common shares and 499,893 warrants of Lexaria Corp, obtained through the
disposal of the Companys oil and gas properties in Mississippi in 2010. The
Company classified the securities owned as held-for-trade and recorded at fair
value. The Chairman of the Company is a Director and Officer of Lexaria
Corp.

The fair values of the common shares of
Cheetah Oil & Gas Ltd. and Lexaria Corp. as at August 31, 2011 were $0.07
and $0.40 per share, respectively. The fair values of warrants of Cheetah Oil
& Gas Ltd. and Lexaria Corp. as at August 31, 2011 were $0.07 and $0.40 per
share, respectively. The above fair values of warrants have been estimated as of
August 31, 2011 by using the Black-Scholes option pricing model with the
following assumptions:

| |                         | Cheetah Oil & Gas Ltd. | Lexaria Corp.
| | ----------------------- | ---------------------- | -------------
| | Expected volatility     | 462.55%                | 138.40%      
| | Risk-free interest rate | 1.12%                  | 1.12%        
| | Expected life           | .75 years              | .75 years    
| | Dividend yield          | 0.00%                  | 0.00%        

|5. | LONG TERM INVESTMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Pro Eco Energy USA Ltd.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | On April 21, 2008, the Company purchased 900,000 shares
      for $45,000 in Pro Eco Energy USA Ltd. (Pro Eco Energy) which
      represented 8.25% ownership. The Chairman of the Company is a Director in
      Pro Eco Energy which established the existence of significant influence in
      Pro Eco Energy and accordingly the equity method of accounting is adopted
      for the investment.                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | During the year ended August 31, 2011, the Company
      recorded an equity loss of $2,304 (2010  equity gain of $3,504), which
      resulted in a net investment of $37,021 (2010 - $39,326).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Global Solar Water Power Systems Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | On August 31, 2011 the Company has purchased 8.14% (2010
       6.46%) investment in Global Solar Water Power Systems Inc. (GSWPS).
      This was made by a cash contribution of $103,500 and an issuance of
      500,000 shares of the Company. at $0.25 per share for a combined value of
      $228,500. GSWPS is owned by an executive officer of the Company.                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | During the year ended August 31, 2011, the Company
      recorded an equity gain of $750 (2010  equity loss of ($4,840)), which
      resulted in a net investment of $224,410 (2010 - $181,660).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|6. | ASSETS HELD FOR SALE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | During the year ended August 31, 2010, the Companys oil
      and gas properties became available for sale as the result of the Company
      shifted its focus from its non-renewable energy operations to renewable
      energy plan. Pursuant to Accounting Standards Codification 360 Accounting
      for the Impairment or Disposal of long-Lived Assets, the Company
      reclassified the remaining oil and gas properties to be sold as assets
      held for sale and recorded at their recoverable amount on August 31, 2010.
      During the year ended August 31, 2011, the Company received the cash
      payment of $100,000 from the sale. The Company does not have any remaining
      oil and gas properties as at August 31, 2011.

43

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|   | Coteau Lake, Saskatchewan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Through the Companys subsidiary, Target Energy Inc.
      (Target), the Company owns certain working interest in Coteau Lake,
      Saskatchewan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Coteau Lake is an exploration property and the Company
      has no producing oil or gas wells on this land at this time. The Coteau
      Lake exploration project covers 1,280 acres of land. The Companys gross
      and net interest in this project is 50%. There has been historic oil
      production on the Coteau Lake project lands.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | On October 25, 2010, the Company disposed the Coteau Lake
      interests for a cash consideration of $100,000 plus an additional
      potential payout which shall be based on a 10% profit interest on any and
      all productive wells drilled on the property up to $150,000. No receivable
      was recorded as the future potential payout cannot be reasonably
      determined.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Belmont Lake, Mississippi                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Effective September 1, 2009, the Company entered into an
      assignment agreement with Cheetah Oil & Gas Ltd. (Cheetah). The
      assignment agreement dated August 28, 2009, provides for the purchase by
      the Company of a revenue interest of 40.432% of an 8% share of Cheetahs
      net revenue after field operating expenses from the Belmont Lake PP F-12-4
      horizontal well, located in Belmont Lake Field, Wilkinson County,
      Mississippi. As consideration, the Company agreed to pay to Cheetah 57.76%
      of Cheetahs costs currently budgeted at $77,905.36, subject to revision
      and 57.76% of Cheetahs 8% share of PP F-12-4 well costs from time to time
      for infrastructure, pipes, tanks, compressors, trucking, etc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | In connection with the managements decision to shift its
      non-renewal energy operations to its renewal energy plan, the Company
      disposed its related working interest for a consideration of 375,000 units
      in the capital of Cheetah at $0.12 per unit which included 375,000
      restricted shares and 375,000 share purchase warrants which entitle the
      Company to acquire 375,000 restricted shares in the capital of Cheetah at
      a purchase price of US$0.20 per share for a period of two years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | On August 28, 2009, the Company entered into an
      assignment agreement with Lexaria Corp. The assignment agreement dated
      August 28, 2009, provides for the purchase by the Company of a revenue
      interest of 13.475% of a 32% share of Lexarias net revenue after field
      operating expenses from the Belmont Lake PP F-12-4 horizontal well,
      located in Belmont Lake Field, Wilkinson County, Mississippi. As
      consideration, the Company agreed to pay to Lexaria 19.25% of Lexarias
      costs currently budgeted at $311,621.44, subject to revision and 19.25% of
      Lexarias 32% share of PP F-12-4 well costs from time to time for
      infrastructure, pipes, tanks, compressors, trucking, etc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | In connection with the managements shift its non-renewal
      energy operations to its renewal energy plan, the Company disposed its
      related working interest for a consideration of 499,893 units in the
      capital of Lexaria at $0.12 per unit which included 499,983 restricted
      shares and 499,983 share purchase warrants which entitle the Company to
      acquire 499,983 restricted shares in the capital of Lexaria at a purchase
      price of US$0.20 per share for a period of two years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | On August 31, 2011, the fair values of Cheetah and
      Lexaria shares, based on market value, and warrants, using Black-Scholes
      pricing model, were $47,447 and $328,463 respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|7. | MINERAL PROPERTY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | On January 31, 2011, the Company entered into a letter of
      intent and paid US$7,500 deposit to Wildhorse Copper Inc. and its wholly
      owned subsidiary Wildhorse Copper (AZ) Inc. (collectively, the
      Optionors). On April 11, 2011, the Company signed a Mineral Purchase
      Option Agreement (Option Agreement) with the Optionors for an option to
      earn a 100% interest, subject to a 1% NSR capped to a maximum of
      $2,000,000 on one claim, in a property known as the Copper Hills property.
      The Copper Hills property is comprised of 56 located mining claims
      covering a total of 1,150 acres located in New Mexico, USA. The Optionors
      hold the Copper Hills property directly and indirectly through property
      purchase agreements between the Optionors and third parties (collectively,
      the Indirect Agreements). Pursuant to the Option Agreement the Optionors
      have assigned the Indirect Agreements to the Company. In order to earn the
      interest in the Copper Hills property, the Company is required to make
      aggregate cash payments of $591,650 over an eight year period and issue an
      aggregate of 1,000,000 shares of its common stock over a three year
      period. On April 11, 2011, the Company made aggregate cash payments of
      $54,150, issued 500,000 shares to the Optionors. As at August 31, 2011,
      total consideration including cash paid and common stock issued was
      $147,045; the Company has expensed the exploration costs of $14,094 and
    prepaid the exploration costs of $32,250.

44

---

|   | On July 19, 2011, the Company entered into a letter of
      intent and paid US$15,000 deposit to Altar Resources. Subsequent to August
      31, 2011, on October 11, 2011, the Company signed a Mineral Purchase
      Option Agreement with Altar Resources respecting an option to earn 100%
      interest, subject to a 2.5% NSR in a property known as Mildred Peak.
      Mining claims are in Arizona covering approximately 6,220 acres from Altar
      Resources who holds the mining claims directly, and indirectly through
      federal mining claims and state mineral exploration leases, or represents
      that it will hold such claims in good standing at the time of closing a
      definitive agreement. The Company is required to make aggregate cash
      payments of $881,000 over a five year period and issue an aggregate of
      1,000,000 shares of its common stock over a four year period. On October
      11, 2011, Enertopia made aggregate cash payments of $71,000 and issued
      100,000 shares to Altar Resources.                                                                                                                                                            
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|8. | PROMISSORY NOTES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | On May 31, 2010, the Company settled the amount due to
      related parties into two promissory notes of $80,320 (CAD$84,655) and
      $90,000. Both promissory notes were unsecured, non-interest bearing and
      due on May 31, 2012 at an imputed interest rate of 12% per annum upon the
      settlement. On April 27, 2011, the Company entered into debt settlement
      agreement with one of the holders, a company controlled by the
      Chairman/CEO of the Company, whereby the Company issued 360,000 common
      shares at a price of $0.15 per share to the holder, and the holder agreed
      to accept the shares as full and final payment of the promissory note of
      $90,000. On the same day, the Company entered into a debt settlement
      agreement with another holder, another company controlled by the
      Chairman/CEO of the Company, of the promissory note, whereby the holder
      agreed to forgive the repayment of debt for Nil consideration. In
      connection with the settlements and forgiveness of the above promissory
      notes, the Company recorded $79,997and $26,357 in additional paid in
      capital for the gain on settlement of debt, respectively.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | On August 23, 2010, the Company entered into an
      unsecured, one year promissory note of US$50,000 with a 12% interest rate
      with the Chairman of the board of and CEO of the Company. The promissory
      note was due and fully repaid as of August 23,
  2011.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

| |                                                                                                               |  | August 31, 2011 |  |  | August 31, 2010 | 
| | ------------------------------------------------------------------------------------------------------------- |  | --------------- |  |  | --------------- | 
| | Promissory note of $50,000, interest rate
      of 12% per annum, uncollateralized and due on August 23, 2011 |  | -               |  |  | 50,000          | 
| | Promissory note of $80,320, non-interest bearing,
      uncollateralized and due on May 31, 2012              |  | -               |  |  | 66,006          | 
| | Promissory note of $90,000, non-interest
      bearing, uncollateralized and due on May 31, 2012              |  | -               |  |  | 73,838          | 
| |                                                                                                               |  | -               |  |  | 189,444         | 
| | Less: current maturities                                                                                      |  | -               |  |  | 50,000          | 
| |                                                                                                               |  | -               |  |  | 139,844         | 

45

---



|9.  | RELATED PARTIES TRANSACTION                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | For the year ended August 31, 2010, the Company was party
      to the following related party transactions:                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | · Paid / accrued $60,000 (2010: $62,900) to the President
      of the Company in consulting fees.                                                                                                                                                                                                                                                                                                                                                                                                
|    | · Paid / accrued $60,000 (2010: $66,717) and $nil (2010:
      $5,911); of consulting fees and office rent, respectively, to a company
      controlled by a Director/CEO of the Company.                                                                                                                                                                                                                                                                                                         
|    | · Paid $59,643 (2010: $43,916) in consulting fees to a
      company controlled by the CFO of the Company.                                                                                                                                                                                                                                                                                                                                                                                        
|    | · Paid $12,000 (2010: $11,000) in consulting fee to the
      COO of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | · Paid / accrued $42,000 (2010: $8,815 in cost of renewal
      energy service to the COO of the Company and a company controlled by the
      executive officer.                                                                                                                                                                                                                                                                                                                                 
|    | · Paid / accrued $37,500 (2010: $Nil) in consulting fee
      to the Senior VP, Business Development. · Director fee of total $6,023
      paid to three directors of the company as of August 31, 2011.                                                                                                                                                                                                                                                                                          
|    | · See Notes 5, 8 and 12.                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | On April 27, 2011, the Company entered into a debt
      settlement agreement with the President of the Company regarding due to
      related parties in the amount of $46,000, whereby $15,000 was settled by
      issuing common shares of 100,000, and $31,000 was forgiven for Nil
      consideration. In connection with the debt settlement, the Company
      recorded $100 in share capital and $45,900 in additional paid in capital
      for the gain on the settlement of the debt.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | On March 16, 2011, the Company entered into a debt
      settlement agreement with an officer of the company, whereby the Company
      issued 78,125 common stock in connection with the settlement of debt of
      $12,500 at a price of $0.15 per share pursuant to a consulting agreement.
      The Company recorded $781 in additional paid in capital for the gain on
      the settlement of the debt.                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | The related party transactions are recorded at the
      exchange amount established and agreed to between the related parties. On
      August 31, 2011, amounts due to related parties are unsecured,
      non-interest bearing and due on demand.                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | See Note 8.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10. | COMMON STOCK                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | Common Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | On February 22, 2010, the Company had increased its
      authorized share capital from 37,500,000 common shares to 200,000,000
      common shares.                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | On February 28, 2010, the Company entered into a stock
      purchase agreement with Mr. Mark Snyder to acquire up to 20% of ownership
      in Global Solar Water Power Systems Inc. (GSWPS), a private US
      corporation that is solely owned by an Officer of the Company. The Company
      issued 500,000 common stocks at a fair value of $0.25 per share to Mr.
      Mark Snyder in exchange to acquire a percentage minority ownership in
      GSWPS.                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | On May 31, 2010, the Company closed a private placement
      financing of 557,500 units at a price of $0.15 per unit for gross proceeds
      of $83,625. Each unit consisted of one common share in the capital of the
      Company and one non-transferable share purchase warrant, each full warrant
      entitling the holder to purchase one additional common share in the
      capital of the Company until May 31, 2012, at a purchase price of $0.30
      per share.                

46

---

|    | On November 19, 2010, the Company issued 100,000 common
      shares to Mercury Media pursuant to the Media Relation Agreement (See Note
      12 (g)) for services at $0.15 per common share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | On November 22, 2010, the Company issued 62,500 common
      shares in connection with the settlement of debt of $9,375 at a price of
      $0.15 per common share pursuant to consulting agreement (See Note 12
      (h)).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | On January 1, 2011, 1,000,000 common shares were
      cancelled by the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | On March 3, 2011, the Company closed a private placement
      of 8,729,000 units at a price of CAD$0.10 per unit for gross proceeds of
      CAD$872,900, US$893,993. Each unit consisted of one common share in the
      capital of the Company and one non-transferable share purchase warrant
      (Subscribers Warrants), each full warrant entitling the holder to
      purchase one additional common share in the capital of the Company until
      March 3, 2013, subject to accelerated expiry as set out in the warrant
      certificate, at a purchase price of CAD$0.20. As per the terms of the
      Subscription Agreement, the Company grants to the Subscribers a
      participation right to participate in future offerings of the Companys
      securities as to their pro rata shares for a period of 12 months from the
      closing of the Private Placement (the Participation Right). The Company
      paid broker commissions of $48,930 in cash and issued 489,300 brokers
      warrants (Brokers Warrants). Each full warrant entitling the holder to
      purchase one additional common share in the capital of the Company until
      March 3, 2013, subject to accelerated expiry as set out in the warrant
      certificate, at a purchase price of CAD$0.20. The fair value of the
      Brokers Warrants is calculated as $47,560 by using Black-Scholes model
      (see Note 11 warrants).
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | On March 16, 2011, the Company issued 78,125 common
      shares in connection with the settlement of debt of $12,500 at a price of
      $0.15 per common share pursuant to a consulting agreement (See Note 9 and
      12 (h)).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | On April 11, 2011, the Company issued 500,000 common
      shares in connection with the Wildhorse Copper (AZ) Copper Hills property
      (See Note 7) for an amount of $75,000 at a price of $0.15 per common
      share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | On April 27, 2011, the Company issued 360,000 common
      shares to CAB Financial Services Ltd. in connection with a debt settlement
      for promissory note of $90,000 at a price of $0.15 per common share. In
      connection with the settlement of the amounts due to related parties, the
      Company recorded $26,357 in additional paid in capital for the gain on
      settlement of debt.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | On April 27, 2011, the Company issued 100,000 common
      shares to the president of the Company in connection with a debt
      settlement for consulting fees of $46,000, refer to Note 9.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | On June 8, 2011, the Company issued 4,000 common shares
      to a shareholder in connection with the May 31, 2010 private
    placement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | As at August 31, 2011, the Company had 24,643,865 shares
      issued and outstanding.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|11. | STOCK OPTIONS AND WARRANTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | On October 22, 2009, the Company re-priced the stock
      options to directors, officers and consultants with the exercise price of
      $0.20.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | The vesting dates of options are as
  below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

Vesting Dates
    Percentage of options grantedDecember 14, 2007
    25%December 14, 2008
    25%December 14, 2009
    25%December 14, 2010
    25%


47

---



On October 22, 2009, the Company granted 500,000 stock options
to directors and officers of the Company with the exercise price of $0.10 per
share, expiring over 5 years. These options were vested immediately.

On December 30, 2009, the Company adopted the 2010 Equity
Incentive Plan that was ultimately approved at the Annual General Meeting that
occurred on February 5, 2010.

On December 30, 2009, the Company granted 650,000 stock options
to directors and officers of the Company with the exercise price of $0.10 per
share, expiring over 5 years. These options vested immediately.

On March 5, 2010, the Company granted 100,000 stock options to
a consultant of the Company with the exercise price of $0.20, which vested 50%
on March 5, 2010 and 50% on August 31, 2010 and expires on March 5, 2015.

On May 14, 2010, the Company dismissed certain directors and
consultants by which 125,000 unvested stock options were cancelled on May 14,
2010 and 377,500 vested stock options expired on August 14, 2010.

On August 23, 2010, the Company granted 150,000 stock options
to an executive of the Company with the exercise price of $0.20, which are
vested 50% on August 23, 2010 and 50% on August 23, 2011 and expires on August
23, 2015.

On November 9, 2010, the Company granted 100,000 stock options
to an advisor of the Company exercisable at $0.20 per share, which are vested
immediately and expired on November 9, 2015.

On November 15, 2010, the Company dismissed a consultant by
which 50,000 vested options were cancelled on November 15, 2010 and another
50,000 vested stock options expired on February 15, 2011 unexercised.

On February 14, 2011 the Company granted 1,010,000 stock
options to directors, officers, and consultants of the Company with the exercise
price of $0.15, which are vested immediately and expire on February 14,
2016.

On March 10, 2011, the Company granted 150,000 stock options to
a director of the Company with an exercise price of $0.15, which are vested
immediately and expire on March 10, 2016.

On March 16, 2011, the Company granted 150,000 stock options to
an advisor of the Company with an exercise price of $0.18, which are vested
immediately and expire on March 16, 2016.

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 this Plan 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 June 2, 2011, the Company granted 300,000 stock options to
directors of the Company with an exercise price of $0.15, which are vested
immediately and expire on June 2, 2016.

For the year ended August 31, 2011, the Company recorded
$254,443 (2010  $78,858) stock based compensation expenses which has been
included in consulting fees.

48

---

A summary of the changes in stock
options for the years ended August 31, 2011 and 2010 is presented below:

Options OutstandingWeighted AverageNumber of Shares
    
    
    Exercise PriceBalance, August 31, 2010
    
    1,790,000
    
    
    $ 0.14Granted
    
    1,110,000
    
    
    $ 0.15Granted
    
    150,000
    
    
    $ 0.15Granted
    
    150,000
    
    
    $ 0.18Granted
    
    300,000
    
    
    $ 0.15Cancelled
    
    (240,000)
    
    
    $
      0.20Balance, August 31, 2011
    
    3,260,000
    
    
    $ 0.15


Options OutstandingWeighted AverageNumber of Shares
    
    
    Exercise PriceBalance, August 31, 2008 and 2009
    
    892,500
    
    
    $ 0.20Granted
    
    1,400,000
    
    
    $ 0.11Cancelled
    
    (502,500)
    
    
    $ 0.20Balance, August 31, 2010
    
    1,790,000
    
    
    $
  0.14


The fair value of options granted has
been estimated as of the date of the grant by using the Black-Scholes option
pricing model with the following assumptions:

| |                                                  | year
      ended August 31, 2011
| | ------------------------------------------------ | --------------------------------
| | Expected volatility                              | 142.56  160.89%                
| | Risk-free interest rate                          | 1.49-2.71%                      
| | Expected life                                    | 2.00-5.00 years                 
| | Dividend yield                                   | 0.00%                           
| | Weighted average fair value of the options       | $0.18                           
| |                                                  |                                 
| |                                                  | year ended August 31, 2010      
| |                                                  |                                 
| | Expected volatility                              | 141.90%                         
| | Risk-free interest rate                          | 2.68%                           
| | Expected life                                    | 5.00 years                      
| | Dividend yield                                   | 0.00%                           
| | Weighted average
      fair value of the options | $0.14                           

49

---

The exercise prices of the options
granted are higher than its market prices as at the dates of grant.

The Company has the following options
outstanding and exercisable.

| | August 31 2011  |  |           |  |  | Options outstanding |  |  | Options exercisable | 
| | --------------- |  | --------- |  |  | ------------------- |  |  | ------------------- | 
| |                 |  |           |  |  | Weighted            |  |  |                     | 
| |                 |  |           |  |  | average             |  |  | Weighted            | 
| |                 |  |           |  |  | remaining           |  |  | Average             | 
| | Exercise prices |  | Number    |  |  | contractual         |  |  | Exercise            | 
| |                 |  | of shares |  |  | life                |  |  | Price               | 
| |                 |  |           |  |  |                     |  |  |                     | 
| | $0.10           |  | 500,000   |  |  | 3.14 years          |  |  | $0.10               | 
| | $0.10           |  | 650,000   |  |  | 3.33 years          |  |  | $0.10               | 
| | $0.20           |  | 350,000   |  |  | 1.29 years          |  |  | $0.20               | 
| | $0.20           |  | 150,000   |  |  | 3.98 years          |  |  | $0.20               | 
| | $0.20           |  | 100,000   |  |  | 4.19 years          |  |  | $0.20               | 
| | $0.15           |  | 910,000   |  |  | 4.46 years          |  |  | $0.15               | 
| | $0.15           |  | 150,000   |  |  | 4.53 years          |  |  | $0.15               | 
| | $0.18           |  | 150,000   |  |  | 4.54 years          |  |  | $0.18               | 
| | $0.25           |  | 300,000   |  |  | 4.76 years          |  |  | $0.15               | 
| |                 |  |           |  |  |                     |  |  |                     | 
| |                 |  | 3,260,000 |  |  | 3.70 years          |  |  | $0.15               | 
| |                 |  |           |  |  |                     |  |  |                     | 
| | August 31, 2010 |  |           |  |  | Options outstanding |  |  | Options exercisable | 
| |                 |  |           |  |  | Weighted            |  |  | Weighted            | 
| |                 |  | Number    |  |  | average             |  |  | Average             | 
| |                 |  | of shares |  |  | remaining           |  |  | Exercise            | 
| | Exercise prices |  | life      |  |  | contractual         |  |  | Price               | 
| |                 |  |           |  |  |                     |  |  |                     | 
| | $0.10           |  | 500,000   |  |  | 4.14 years          |  |  | $0.10               | 
| |                 |  |           |  |  |                     |  |  |                     | 
| | $0.10           |  | 650,000   |  |  | 4.33 years          |  |  | $0.10               | 
| |                 |  |           |  |  |                     |  |  |                     | 
| | $0.20           |  | 390,000   |  |  | 2.28 years          |  |  | $0.20               | 
| |                 |  |           |  |  |                     |  |  |                     | 
| | $0.20           |  | 100,000   |  |  | 4.50 years          |  |  | $0.20               | 
| |                 |  |           |  |  |                     |  |  |                     | 
| | $0.20           |  | 150,000   |  |  | 4.98 years          |  |  | $0.20               | 
| |                 |  |           |  |  |                     |  |  |                     | 
| |                 |  | 1,790,000 |  |  | 3.89 years          |  |  | $0.14               | 

50

---

Warrants

8,729,000 Subscribers Warrants and
489,300 Brokers Warrants issued in association with the private placement on
March 3, 2011 meet the definition of a derivative. Since the exercise price of
these warrants is denominated in Canadian dollars, which is different from the
Companys functional currency, the Subscribers Warrants and Brokers Warrants
are not considered indexed to the Companys common shares and they cannot be
classified within equity. Therefore the Subscribers Warrants and the Brokers
Warrants, which expires on March 31, 2013, are classified as warrants liability
in the amount of $848,459 on the Companys consolidated balance sheet.

The fair value of the Subscribers
Warrants and the Brokers Warrants was revalued on August 31, 2011 using the
Black-Scholes option pricing model with the following assumptions:

| |                                                      | Period ended August 31, 2011
| | ---------------------------------------------------- | ----------------------------
| | Exercise price (CDN dollars per warrant)             | 0.20                        
| | Expected volatility                                  | 121.34%                     
| | Risk-free interest rate                              | 1.12%                       
| | Expected life                                        | 1.50 years                  
| | Dividend yield                                       | 0.00%                       
| | Estimated fair
      value per warrant (CDN dollars) | 0.0326                      

|12. | COMMITMENTS  OTHER
|--- | -------------------
|    |                    
|    | (a)                
|    |                    
|    | (b)                
|    |                    
|    | (c)                
|    |                    
|    | (d)                
|    |                    
|    | (e)                

51

---

|    | (f)                                                                           | On February 28, 2010, the Company entered into an Asset
      and Share Purchase Agreement with the Companys chief technical officer -
      Mr. Mark Snyder to acquire up to 20% ownership interest of GSWPS. As at
      August 31, 2011, the Company has acquired 8.14% (August 31, 2010  6.46%)
      (see Note 5) with the remaining 11.86% ownership payable by issuance of
      500,000 common shares of the Company and cash of $93,000 paid on a minimum
      monthly basis of $3,500.               
|--- | ----------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | (g)                                                                           | On August 23, 2010, the Company entered into a consulting
      agreement with the Senior Vice-President, Business Development for $3,125
      per month. On November 17, 2010, the Company renewed the agreement into a
      month to month consulting agreement with the Senior Vice-President,
      Business Development for $3,125.                                                                                                                                                                        
|    |                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | (h)                                                                           | On June 27, 2011, the Company entered into a
      non-exclusive 12 month agreement with a third party, IBK Capital Corp. to
      assist with raising capital of up to $3million. IBK Capital Corp. will be
      paid a work fee of $25,000 plus $3,500 on out of pocket costs. IBK Capital
      Corp. will be paid 8.5% cash commission and 8.5% common share purchase
      warrants on funds raised. As at August 31, 2011, the Company has not paid
      any cash commission nor issued any common shares.
|    |                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                               | See Note 7.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|13. | DEFERRED INCOME TAX                                                          
|    |                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | The Companys provision for income taxes is comprised of
      the following:

2011
    
    
    2010Current Tax Provision
    $
    Nil
    
    $
    NilDeferred Tax Recovery
    $
    Nil
    
    $
    (762,704
    )Income tax (recovery)
    $
    Nil
    
    $
    (762,704
    )


Income taxes vary from the amount that
would be computed by applying the statutory federal income tax rate of 34% for
the following reasons:

| |                                                                    |   | 2011     |   |   | 2010       |  
| | ------------------------------------------------------------------ | - | -------- | - | - | ---------- | -
| | Income tax (recovery) expense at U.S.
      Federal Statutory Rate | $ | (56,237  | ) | $ | (1,264,068 | )
| | Non-deductible items                                               |   | 87,039   |   |   | 27,266     |  
| | Unrealized gain on owned securities                                |   | (213,541 | ) |   | (80,950    | )
| | Changes in Valuation Allowance                                     |   | 182,739  |   |   | 555,048    |  
| |                                                                    |   |          |   |   |            |  
| | Income tax expense (recovery)                                      | $ | -        |   | $ | (762,704   | )

52

---

The tax effects of temporary
differences that give rise to the Companys deferred tax asset (liability) are
as follows:

| |                                   |   | 2011     |   |   | 2010     |  
| | --------------------------------- | - | -------- | - | - | -------- | -
| |                                   |   |          |   |   |          |  
| | Net Operating Loss Carry forward  | $ | 831,542  |   | $ | 648,830  |  
| | Long term Investment              |   | (10,177  | ) |   | 3,575    |  
| | Owned Securities                  |   | (92,114  | ) |   | (80,950  | )
| | Valuation Allowance               |   | (729,251 | ) |   | (571,455 | )
| |                                   |   |          |   |   |          |  
| | Deferred Tax Assets (Liabilities) | $ | -        |   | $ | (648,830 | )

For tax purpose, as of August 31, 2011
the Company has operating loss carry forwards of approximately $2,439,680 which
expire in 2025 through 2031 as follows:

Amount
    
    
    Expiration Date2011
    $
    537,000
    
    
    20312010
    
    870,000
    
    
    20302009
    
    70,000
    
    
    20292008
    
    459,000
    
    
    20282007
    
    329,000
    
    
    20272006
    
    114,000
    
    
    20262005
    
    61,000
    
    
    2025Total loss carry forward
    $
    2,440,000


53

---

|14. | SEGMENTED INFORMATION
|--- | ---------------------

The Company identifies its segments
based on the way management organizes the Company to assess performance and make
operating decisions regarding the allocation of resources. In accordance with
the criteria in FASB ASC 280 "Segment Reporting," the Company has
concluded it has two reportable segments: renewable energy, and mining
exploration and developments, which are managed separately based on fundamental
differences in their operations nature.

Summarized financial information
concerning the Companys reportable segments is shown in the following
tables:

| |                                   |   |                  |   |   | Mining
      exploration and |   |   |            |   |   |              |  
| | --------------------------------- | - | ---------------- | - | - | ---------------------------- | - | - | ---------- | - | - | ------------ | -
| | Year ended August
      31, 2011  |   | Renewable energy |   |   | development                  |   |   | Corporate  |   |   | Consolidated |  
| | Revenues                          | $ | 20,512           |   | $ | -                            |   | $ | -          |   | $ | 20,512       |  
| | Net income (loss) from operations |   | (135,147         | ) |   | (169,545                     | ) |   | 139,287    |   |   | (165,405     | )
| | Total assets                      | $ | 298,509          |   | $ | 196,181                      |   | $ | 678,394    |   | $ | 1,173,084    |  
| |                                   |   |                  |   |   |                              |   |   |            |   |   |              |  
| |                                   |   |                  |   |   | Mining exploration and       |   |   |            |   |   |              |  
| | Year ended August
      31, 2010  |   | Renewable energy |   |   | development                  |   |   | Corporate  |   |   | Consolidated |  
| | Revenues                          | $ | 11,607           |   | $ | -                            |   | $ | 254.00     |   | $ | 11,861       |  
| | Net income (loss) from operations |   | (32,623          | ) |   | -                            |   |   | (2,922,518 | ) |   | (2,955,141   | )
| | Total assets                      | $ | 47,015           |   | $ | -                            |   | $ | 672,645    |   | $ | 719,660      |  

The operations of the Group are located
in only one geographic location, United States.

|15. | COMPARATIVE FIGURES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Certain 2010 comparative figures have been
      reclassified to conform with the financial statements presentation adopted
      for 2011.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|16. | SUBSEQUENT EVENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|a.  | On October 1, 2011, the Company entered into a
      non-exclusive 12 month agreement with Peter Grandich to assist the Company
      with the development and implementation of a public and investor relations
      and communications program, and provide ongoing assistance to the Company
      regarding the development and enhancement of the Company's public and
      market image. Mr. Grandich will receive compensation of US$7,500 for the
      first three months of his engagement and subsequently, US$2,500 on the
      first day of each successive month for the term of the agreement unless
      previously terminated as per the agreement.                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|b.  | The Company has entered into an Option Agreement on
      October 11, 2011 with Altar Resources with respect to the proposed option
      to purchase a 100% interest in approximately 6,220 acres of State mining
      leases and Federal mining claims in Arizona, USA. These leases and claims
      are subject to a 2.5% NSR from commercial production. The Altar holds the
      mining claims directly and indirectly through federal mining claims and
      state mineral leases. Upon execution of the Option Agreement, the Company
      provided a US$15,000 payment to the Vendor and US$41,000 in Escrow. The
      Company issued 100,000 common stock of the Company to Altar Resources at a
      deemed price of $0.10 on October 11, 2011. In order to earn its 100%
      interest, the Company is required to make aggregate cash payments of
      US$881,000 and issue an aggregate of 1,000,000 shares of its common stock
      over a five year period.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | We have evaluated events subsequent to August 31, 2011,
      through the date the financial statements were issued, and determined that
      no events have occurred that require adjustment of or disclosure in the
      consolidated financial statements, other than as disclosed
  above.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

54

---

|Item 9. | Changes in and Disagreements With
      Accountants on Accounting and Financial Disclosure
|------- | ------------------------------------------------------------------------------------------

There were no disagreements related to accounting principles or
practices, financial statement disclosure, internal controls or auditing scope
or procedure during the two fiscal years and interim periods, including the
interim period up through the date the relationship ended.

|Item 9A. | Controls and Procedures
|-------- | -----------------------

Managements Report on Disclosure 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 and
chief executive officer (also our principal executive officer) and our chief
financial officer (also our principal financial and accounting officer) to allow
for timely decisions regarding required disclosure.

As of August 31, 2011, the end of our fiscal year covered by
this report, we carried out an evaluation, under the supervision and with the
participation of our president and chief executive officer (also our principal
executive officer) and our 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 and
chief executive officer (also our principal executive officer) and our chief
financial officer (also our principal financial and accounting officer)
concluded that our disclosure controls and procedures were effective as of the
end of the period covered by this annual report.

Managements Report on Internal Control over Financial
Reporting

Our management is responsible for establishing and maintaining
adequate internal control over financial reporting. Responsibility, estimates
and judgments by management are required to assess the expected benefits and
related costs of control procedures. The objectives of internal control include
providing management with reasonable, but not absolute, assurance that assets
are safeguarded against loss from unauthorized use or disposition, and that
transactions are executed in accordance with managements authorization and
recorded properly to permit the preparation of consolidated financial statements
in conformity with accounting principles generally accepted in the United
States. Our management assessed the effectiveness of our internal control over
financial reporting as of August 31, 2011. In making this assessment, our
management used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) in Internal
Control-Integrated Framework. Our management has concluded that, as of
August 31, 2011, our internal control over financial reporting is effective in
providing reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with US generally accepted accounting principles. Our management reviewed the
results of their assessment with our Board of Directors.

This annual report does not include an attestation report of
our Companys registered public accounting firm regarding internal control over
financial reporting. Managements report was not subject to attestation by our
Companys registered public accounting firm pursuant to temporary rules of the
Securities and Exchange Commission that permit our Company to provide only
managements report in this annual 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.

55

---

Changes in Internal Control over Financial
Reporting

There have been no changes in our internal controls over
financial reporting that occurred during the year ended August 31, 2011 that
have materially or are reasonably likely to materially affect, our internal
controls over financial reporting.

|Item 9B. | Other Information
|-------- | -----------------

None.

PART III

|Item 10. | Directors, Executive Officers and Corporate
    Governance
|-------- | ----------------------------------------------------------

All directors of our company hold office until the next annual
meeting of the security holders or until their successors have been elected and
qualified. The officers of our company are appointed by our board of directors
and hold office until their death, resignation or removal from office. Our
directors and executive officers, their ages, positions held, and duration as
such, are as follows:

Name
    Position Held with our Company
    Age
    Date First Elected Or AppointedRobert McAllister
    President and Director
    51
    November 2007April 14, 2008Gerald Carlson
    Director
    62
    March 2005Donald Findlay
    Director
    60
    June
      2, 2011Greg Dawson
    Director
    52
    June 2, 2011Chris Bunka
    Chairman, Director and Chief Executive
      Officer
    50
    November 2004Bal Bhullar
    Chief Financial Officer
    42
    October 9, 2009Mark Snyder
    Chief Technical Officer
    57
  October 9, 2009


Business Experience

The following is a brief account of the education and business
experience of each director and executive officer during at least the past five
years, indicating each person's principal occupation during the period, and the
name and principal business of the organization by which he was employed.

Robert McAllister, President, Director

Mr. McAllister was appointed as president in November 2007 and
director in April 2008.

Mr. McAllister has devoted approximately 50% of his
professional time to the business and intends to continue to devote this amount
of time in the future, or more as required.

56

---

Mr. McAllister has been a corporate consultant since 2004. He has also provided and written business and investment articles from 1996 to 2006 in various North American publications. Mr. McAllister is a resource investment entrepreneur with over 20
years experience in resource sector evaluations and commodity cycle analysis.

Gerald Carlson, Director

Dr. Gerald Carlson has served as one of our directors since March 2005. Dr. Carlson had devoted some of his professional time to the business of our company and will continue on a as needed basis will provide some of time in the future by corporate
events.

From March 1999 to present, Dr. Carlson has been the president and co founder of Copper Ridge Explorations Inc., a publicly listed company located in Vancouver, British Columbia and a junior explorer with exploration projects in Alaska, Yukon,
British Columbia and Mexico. Copper Ridge is currently focusing on iron oxide copper-gold targets in Yukon.

From February 1999 to December 2007, Dr. Carlson had been the chairman of IMA Exploration Inc., a publicly listed junior exploration company headquartered in Vancouver, British Columbia. IMA has active exploration projects in Argentina and Peru.

From February 2000 to October 2004, Dr. Carlson was the president of Nevada Star Resource Corp., a publicly listed company located in Vancouver, British Columbia, exploring for nickel-copper-PGEs (platinum group metals) in Alaska.

Dr. Carlson received his Ph.D. through Dartmouth College in 1978, a M.Sc. from Michigan Technological University in 1974 and a B.Sc. from the University of Toronto in 1969, majoring in Geological Engineering.

Donald Findlay, Director

Don Findlay has worked in the resource exploration business since 1980. He has worked in different capacities from consultant to the positions of Senior Exploration Geologist and Exploration Manager. Mr. Findlay completed his MSc in geology in 1978
with his thesis on copper molybdenum porphyry deposits.

Greg Dawson, Director

Greg Dawson has worked in the resource exploration business for over 25 years with Teck Exploration Ltd. and more recently as President of Redtail Metals Corp a TSXV company. From 2004 to 2010 Mr. Dawson was VP of exploration of Copper Ridge
Resources, and was also responsible for the evaluation of acquisition opportunities, with emphasis on world class copper gold porphyry deposits and precious metal enriched VMS deposits.

Chris Bunka, Chief Executive Officer, Chairman and Director

Mr. Chris Bunka has served as one of our directors since November 2004. Mr. Bunka has devoted approximately 25% of his professional time to the business and intends to continue to devote this amount of time in the future, or more as required.

Since 1988, Mr. Bunka has been the CEO of CAB Financial Services Ltd., a private holding company located in Kelowna, Canada. He is a venture capitalist, corporate consultant, and former business and investment commentator.

From 1999 to 2002, Mr. Bunka was the President and CEO of Secure Enterprise Solutions (symbol SETP-OTC) (formerly Newsgurus.com, symbol NGUR-OTC). The company subsequently changed its name to Edgetech Services and traded on the OTC with the symbol
EDGH. Newsgurus.com was a web-based media company. Secure Enterprise Solutions moved into Internet-based computer security products and services and was subsequently purchased by Edgetech Services. Mr Bunka is also Chairman and CEO of Lexaria Corp,
(symbol LXRP-OTC and LXX-CNSX) an oil & gas exploration and production company.
Mr. Bunka is a director of Defiance Capital Corp. (symbol DEF-TSXV), a Canadian
resource company.

57

---

Bal Bhullar, Chief Financial Officer

Ms. Bhullar brings over 18 years of diversified financial and
risk management experience in both private and public companies, in the
industries of high-tech, film, mining, marine, oil & gas, energy, transport,
and spa industries. Among some of the areas of experience, Ms. Bhullar brings
expertise in financial & strategic planning, operational & risk
management, regulatory compliance reporting, business expansion, startup
operations, financial modeling, program development, corporate financing, and
corporate governance/internal controls. Previously, Ms. Bhullar has held various
positions as President of BC Risk Management Association of BC, and served as
Director and CFO of private and public companies. Currently, Ms. Bhullar serves
as a Director and CFO for Bare Elegance Medspa, a former CFO for ISEE3D Inc.,
and is CFO and a Director of Lexaria Corp.

Ms. Bhullar is a Certified General Accountant and as well holds
a CRM designation from Simon Fraser University and a diploma in Financial
Management from British Columbia Institute of Technology.

Mark Snyder, Chief Technical Officer

In 1985 Mark Snyder developed one of Californias first large
scale bio energy conversion projects where a significant client was enabled to
produce electric power from agricultural waste and heat 20 acres of greenhouses
for agriculture. Mark was selected by the Clinton Administration to serve on a
White House Council addressing the needs of our National Electrical
Infrastructure in anticipation of the Y2K Conversion.

Co-founded Clean Air USAand has partnered with Willie
Nelson Biodiesel to bring clean alternative fuels to California. Mark helped
champion Solar Rights in California. Using the appeal of the Green Ribbon Home
and Californias Solar Rights Law, Mark has had success in changing the electric
metering in parks to net metering, which has opened up the solar power market to
millions of Californians that currently reside in master metered dwellings.

Family Relationships

There are no family relationships between any of our directors,
executive officers and proposed directors or executive officers.

Involvement in Certain Legal Proceedings

None of our directors, executive officers, promoters or control
persons has been involved in any of the following events during the past five
years:

1.     A petition under the Federal
bankruptcy laws or any state insolvency law was filed by or against, or a
receiver, fiscal agent or similar officer was appointed by a court for the
business or property of such person, or any partnership in which he was a
general partner at or within two years before the time of such filing, or any
corporation or business association of which he was an executive officer at or
within two years before the time of such filing;

2.     Such person was convicted in a
criminal proceeding or is a named subject of a pending criminal proceeding
(excluding traffic violations and other minor offenses);

58

---

3.     Such person was the subject of any
order, judgment, or decree, not subsequently reversed, suspended or vacated, of
any court of competent jurisdiction, permanently or temporarily enjoining him
from, or otherwise limiting, the following activities:

| | i.   | Acting as a futures commission merchant, introducing
      broker, commodity trading advisor, commodity pool operator, floor broker,
      leverage transaction merchant, any other person regulated by the Commodity
      Futures Trading Commission, or an associated person of any of the
      foregoing, or as an investment adviser, underwriter, broker or dealer in
      securities, or as an affiliated person, director or employee of any
      investment company, bank, savings and loan association or insurance
      company, or engaging in or continuing any conduct or practice in
      connection with such activity
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | ii.  | Engaging in any type of business practice; or                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | iii. | Engaging in any activity in connection with the purchase
      or sale of any security or commodity or in connection with any violation
      of Federal or State securities laws or Federal commodities
  laws;                                                                                                                                                                                                                                                                                                                                                                                                                           

4.     Such person was the subject of any
order, judgment or decree, not subsequently reversed, suspended or vacated, of
any Federal or State authority barring, suspending or otherwise limiting for
more than 60 days the right of such person to engage in any activity described
in paragraph (f)(3)(i) of this section, or to be associated with persons engaged
in any such activity;

5.     Such person was found by a court of
competent jurisdiction in a civil action or by the Commission to have violated
any Federal or State securities law, and the judgment in such civil action or
finding by the Commission has not been subsequently reversed, suspended, or
vacated;

6.     Such person was found by a court of
competent jurisdiction in a civil action or by the Commodity Futures Trading
Commission to have violated any Federal commodities law, and the judgment in
such civil action or finding by the Commodity Futures Trading Commission has not
been subsequently reversed, suspended or vacated;

7.     Such person was the subject of, or a
party to, any Federal or State judicial or administrative order, judgment,
decree, or finding, not subsequently reversed, suspended or vacated, relating to
an alleged violation of:

| | i.   | Any Federal or State securities or commodities law or
      regulation; or                                                                                                                                                                                                                                                
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                           
| | ii.  | Any law or regulation respecting financial institutions
      or insurance companies including, but not limited to, a temporary or
      permanent injunction, order of disgorgement or restitution, civil money
      penalty or temporary or permanent cease-and-desist order, or removal or
      prohibition order; or
| |      |                                                                                                                                                                                                                                                                                                                           
| | iii. | Any law or regulation prohibiting mail or wire fraud or
      fraud in connection with any business entity; or                                                                                                                                                                                                            

8.      Such person was the subject
of, or a party to, any sanction or order, not subsequently reversed, suspended
or vacated, of any self-regulatory organization (as defined in Section 3(a)(26)
of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined
in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any
equivalent exchange, association, entity or organization that has disciplinary
authority over its members or persons associated with a member.

Compliance with Section 16(a) of the Securities Exchange Act
of 1934

Section 16(a) of the Securities Exchange Act of 1934 requires
our executive officers and directors and persons who own more than 10% of our
common stock to file with the Securities and Exchange Commission initial
statements of beneficial ownership, reports of changes in ownership and annual
reports concerning their ownership of our common stock and other equity securities, on Forms 3, 4 and 5
respectively. Executive officers, directors and greater than 10% shareholders
are required by the SEC regulations to furnish us with copies of all Section
16(a) reports that they file.

59

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Based solely on our review of the copies of such forms received
by us, or written representations from certain reporting persons, we believe
that during fiscal year ended August 31, 2011, all filing requirements
applicable to our officers, directors and greater than 10% percent beneficial
owners were complied with, with the exception of the following:

Name
    Number of Late Reports
    Number of Transactions Not Reported
      on a Timely Basis
    Failure to File Requested FormsRobert McAllister
    1
    1
  Nil


Code of Ethics

We adopted a Code of Ethics applicable to our senior financial
officers and certain other finance executives, which is a "code of ethics" as
defined by applicable rules of the SEC. Our Code of Ethics is attached as an
exhibit to our Annual Report on Form 10-KSB filed on November 29, 2007. If we
make any amendments to our Code of Ethics other than technical, administrative,
or other non-substantive amendments, or grant any waivers, including implicit
waivers, from a provision of our Code of Ethics to our chief executive officer,
chief financial officer, or certain other finance executives, we will disclose
the nature of the amendment or waiver, its effective date and to whom it applies
in a Current Report on Form 8-K filed with the SEC.

Board and Committee Meetings

Our board of directors held no formal meetings during the year
ended August 31, 2011. All proceedings of the board of directors were conducted
by resolutions consented to in writing by all the directors and filed with the
minutes of the proceedings of the directors. Such resolutions consented to in
writing by the directors entitled to vote on that resolution at a meeting of the
directors are, according to the Nevada General Corporate Law and our Bylaws, as
valid and effective as if they had been passed at a meeting of the directors
duly called and held.

Nomination Process

As of August 31, 2011, we did not effect any material changes
to the procedures by which our shareholders may recommend nominees to our board
of directors. Our board of directors does not have a policy with regards to the
consideration of any director candidates recommended by our shareholders. Our
board of directors has determined that it is in the best position to evaluate
our Companys requirements as well as the qualifications of each candidate when
the board considers a nominee for a position on our board of directors. If
shareholders wish to recommend candidates directly to our board, they may do so
by sending communications to the president of our Company at the address on the
cover of this annual report.

Audit Committee and Audit Committee Financial Expert

Currently our audit committee consists of our entire board of
directors. We currently do not have nominating, compensation committees or
committees performing similar functions. There has not been any defined policy
or procedure requirements for shareholders to submit recommendations or
nomination for directors.

Our board of directors has determined that it does not have a
member of its board of directors (audit committee) that qualifies as an "audit
committee financial expert" as defined in Item 407(d)(5)(ii) of Regulation S-K,
and is "independent" as the term is used in Item 7(d)(3)(iv) of Schedule 14A
under the Securities Exchange Act of 1934, as amended.

60

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We believe that the members of our board of directors are
collectively capable of analyzing and evaluating our financial statements and
understanding internal controls and procedures for financial reporting. We
believe that retaining an independent director who would qualify as an "audit
committee financial expert" would be overly costly and burdensome and is not
warranted in our circumstances given the early stages of our development and the
fact that we have not generated any material revenues to date. In addition, we
currently do not have nominating, compensation or audit committees or committees
performing similar functions nor do we have a written nominating, compensation
or audit committee charter. Our board of directors does not believe that it is
necessary to have such committees because it believes the functions of such
committees can be adequately performed by our board of directors.

|Item 11. | Executive Compensation
|-------- | ----------------------

The particulars of the compensation paid to the following
persons:

| | (a) | our principal executive officer;                                                                                                                                                                                                               
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                
| | (b) | each of our two most highly compensated executive
      officers who were serving as executive officers at the end of the years
      ended August 31, 2011 and 2010; and                                                                      
| |     |                                                                                                                                                                                                                                                
| | (c) | up to two additional individuals for whom disclosure
      would have been provided under (b) but for the fact that the individual
      was not serving as our executive officer at the end of the years ended
      August 31, 2011 and 2010,

who we will collectively refer to as the named executive
officers of our Company, are set out in the following summary compensation
table, except that no disclosure is provided for any named executive officer,
other than our principal executive officers, whose total compensation did not
exceed $100,000 for the respective fiscal year:

SUMMARY COMPENSATION
      TABLEName and Principal
      Position
    Year
    Salary
      ($)
    Bonus
      ($)
    Stock Awards($)
    Option**Awards** (#)
    Non-Equity Incentive
      Plan **Compensa-****tion**
      ($)
    Nonqualified
      Deferred **Compensation**Earnings
      ($)
    All Other
      **Compensa-** tion ($)
    Total
      ($)Robert McAllister(1)President
      and Director
    2011 2010
    $60,000 
      $62,900
    Nil Nil
    Nil Nil
    255,000 
      300,000
    Nil Nil
    Nil Nil
    Nil Nil
    $60,000 
      $62,900Gerald Carlson (2) Director and
      Former President
    2011 2010
    NilNil
    Nil Nil
    Nil Nil
    100,000 150,000
    Nil Nil
    Nil Nil
    Nil Nil
    Nil NilDonald Findlay Director
    2011 2010
    Nil Nil
    Nil Nil
    Nil Nil
    200,000 Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil NilGreg Dawson Director
    2011 2010
    Nil Nil
    Nil Nil Nil
    Nil Nil Nil
    250,000 Nil Nil
    Nil Nil Nil
    Nil Nil Nil
    Nil Nil Nil
    Nil Nil Nil


61

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SUMMARY COMPENSATION
      TABLEName and Principal
      Position
    Year
    Salary
      ($)
    Bonus
      ($)
    Stock
      Awards ($)
    OptionAwards (#)
    Non-Equity Incentive
      Plan **Compensa-**tion
      ($)
    Nonqualified
      Deferred **Compensation**Earnings
      ($)
    All Other
      **Compensa-**tion ($)
    Total
      ($)Chris Bunka Chief ExecutiveOfficer, Director and Former Chief
      Financial Officer
    2011
      2010
    $60,000(3)
      $60,000(3)
    Nil Nil
    Nil Nil
    255,000 
      300,000
    Nil Nil
    Nil Nil
    $Nil $10,628
    $60,000 
      $70,628Bal Bhullar Chief Financial Officer
    2011 2010
    $59,749 $43,916
    Nil Nil
    Nil Nil
    300,000 200,000
    Nil Nil
    Nil Nil
    Nil Nil
    $59,749 $43,916Mark Snyder Chief Technical Officer
    2011 2010
    $12,000 $11,000
    Nil Nil
    Nil Nil
    Nil 200,000
    Nil Nil
    Nil Nil
    $42,000 $8,815
    $54,000 $19,815


(1)     On November 30, 2007, Mr.
McAllister was appointed as our President and on April 14, 2008 he was appointed
as a director.

(2)     On November 30, 2007, Mr. Carlson
resigned as our President but remained a director of our company.

(3)     Salary compensation for Chris Bunka
is accrued fees.

Employment/Consulting Agreements

We entered into a consulting agreement with Dr. Gerald G.
Carlsons company, KGE Management Ltd. from March 1, 2005 to November 30, 2007.
During the term of this agreement, Dr. Carlson, provided geological and
corporate administration consulting services to our company, such duties and
responsibilities included the provision of geological consulting services,
strategic corporate and financial planning, management of the overall business
operations of our company, and the supervision of office staff and exploration
and mining consultants. Dr. Carlson, through KGE Management Ltd., was reimbursed
at the rate of $2,000 per month. This agreement was terminated on November 30,
2007, but Dr. Carlson does remain on the Board as 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 oil & gas exploration
and production 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 our
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.

On March 2, 2008, we entered into a controller agreement with
CAB Financial Services, a corporation organized under the laws of the Province
of British Columbia. CAB Financial Services is a consulting company controlled
by the chairman of the board and chief executive officer of the Company.
Pursuant to the controller agreement, CAB Financial Services will provide
corporate accounting and controller services to our company in consideration for
the payment of CAD$3,675 (including $175 GST) per month. This agreement was
terminated on October 9, 2009.

62

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On December 1, 2008, we entered into a consulting agreement with CAB Financial Services, a corporation organized under the laws of the Province of British Columbia. CAB Financial Services is a consulting company controlled by the chairman of the
board and the chief executive officer of our company. A fee of $5,000 per month is accrued. We may terminate this agreement without prior notice based on a number of conditions. CAB Financial Services Ltd. may terminate the agreement at any time
by giving 30 days written notice of his intention to do so.

On October 9, 2009, we entered into a consulting agreement with BKB Management Ltd, a corporation organized under the laws of the Province of British Columbia. BKB Management controlled by the chief financial officer of the Company. A fee of
CAD$4,675 including HST is paid per month. We may terminate this agreement without prior notice based on a number of conditions. BKB Management Ltd. may terminate the agreement at any time by giving 30 days written notice of his intention to do
so. Effective April 1, 2011, the consulting services are CAD$5,500 per month plus HST.

On October 9, 2009, weentered into a consulting agreement with Mark Snyder as the Chief Technical Officer. A fee of $1,000 paid per month.

On August 23, 2010, we entered into a consulting agreement with the Senior Vice-President, Business Development for $3,125 per month.

Other than as set out in this annual report on Form 10-K we have not entered into any employment or consulting agreements with any of our current officers, directors or employees.

Grants of Plan-Based Awards Table

On October 22, 2009, we granted 500,000 stock options to directors and officers of our company with the exercise price of $0.10 per share, expiring over 5 years.

On December 30, 2009, we granted 650,000 stock options to directors and officers of our company with the exercise price of $0.10 per share, expiring over 5 years. On March 5, 2010, we granted 100,000 stock options to a consultant of our company
with the exercise price of $0.20, which expire on March 5, 2015.

On August 23, 2010, we granted 150,000 stock options to an executive of our company with the exercise price of $0.20, which expire on August 23, 2015.

On November 9, 2010, we granted 100,000 stock options to an advisor of our company exercisable at $0.20 per share, which expire on November 9, 2015.

On November 15, 2010, cancelled 100,000 options pursuant to the termination of a consultant.

On February 14, 2011 we granted 1,010,000 stock options to directors, officers, and consultants of our company with the exercise price of $0.15, which expire on February 14, 2016.

On March 10, 2011, we granted 150,000 stock options to a director of our company with an exercise price of $0.15, which expire on March 10, 2016.

On March 16, 2011, we granted 150,000 stock options to an advisor of our company with an exercise price of $0.18, which expire on March 16, 2016.

On June 2, 2011, we granted 300,000 stock options to directors of our company with an exercise price of $0.15, which expire on June 2, 2016.

Outstanding Equity Awards at Fiscal Year End

The particulars of unexercised options, stock that has not vested and equity incentive plan awards for our named executive officers are set out in the following table:

63

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|OUTSTANDING EQUITY AWARDS AT FISCAL
      YEAR-END
|--------------------------------------------------
|                                                  
|Name
      (a)                                    
|Robert McAllister                                 
|Gerald Carlson                                    
|Donald Findlay                                    
|Greg Dawson                                       
|Chris Bunka                                       
|Bal Bhullar                                       
|Mark Snyder                                       

(1)     On October 22, 2009, the exercise
price was changed from $0.70 to $0.20.

Option Exercises

During our fiscal year ended August 31, 2011 there were no
options exercised by our named officers.

Compensation of Directors

Except as otherwise disclosed, we do not have any agreements
for compensating our directors for their services in their capacity as
directors, although such directors are expected in the future to receive stock
options to purchase shares of our common stock as awarded by our board of
directors.

Pension, Retirement or Similar Benefit Plans

There are no arrangements or plans in which we provide pension,
retirement or similar benefits for directors or executive officers. We have no
material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive
officers, except that stock options may be granted at the discretion of the
board of directors or a committee thereof.

64

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Indebtedness of Directors, Senior Officers, Executive
Officers and Other Management

None of our directors or executive officers or any associate or
affiliate of our Company during the last two fiscal years is or has been
indebted to our Company by way of guarantee, support agreement, letter of credit
or other similar agreement or understanding currently outstanding.

|Item 12. | Security Ownership of Certain Beneficial
      Owners and Management and Related Stockholder **Matters**
|-------- | --------------------------------------------------------------------------------------------------------

The following table sets forth, as of November 25, 2011,
certain information with respect to the beneficial ownership of our common
shares by each shareholder known by us to be the beneficial owner of more than
5% of our common shares, as well as by each of our current directors and
executive officers as a group. Each person has sole voting and investment power
with respect to the shares of common stock, except as otherwise indicated.
Beneficial ownership consists of a direct interest in the shares of common
stock, except as otherwise indicated.

Name and
      Address of Beneficial Owner
    Amount and Nature of Beneficial Ownership
    Percentage of ClassGerald Carlson Vancouver, British Columbia, Canada
    642,740(1)
    1.7%Chris
      Bunka Kelowna, British Columbia, Canada
    4,407,666(2)
    11.6%Robert McAllister 
    Kelowna, British Columbia, Canada
    3,330,000(3)
    8.76%Bal Bhullar Vancouver, British Columbia,
      Canada
    502,000(4)
    1.3%Mark Snyder California, USA
    700,000(5)
    1.8%Donald
      Findlay Calgary, Alberta, Canada
    200,000(6)
    0.5%Greg Dawson Vancouver,
      British Columbia, Canada
    250,000(7)
    0.7%Directors and Executive
      Officers as a Group (5 people)(8)


(1)     Includes 50,000, 150,000, and
100,000 options which are exercisable at $0.20, $0.10 and $0.15.

(2)     Includes 2,334,333 shares and
333,333 warrants exercisable at $0.30 held in the name of C.A.B. Financial
Services and 200,000 shares held in 0743608 BC Ltd for which Chris Bunka is the
sole beneficiary. Includes 150,000, 300,000, and 255,000 options which are
exercisable at $0.20, $0.10, and $0.15.

65

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(3)     Includes 150,000, 300,000, and
255,000 options which are exercisable at $0.20, $0.10, and $0.15.

(4)     Includes 1,000 warrants exercisable
at $0.30 and 200,000 and 300,000 options which are exercisable at $0.10 and
$0.15.

(5)     Includes 200,000 options which are
exercisable at $0.10 and 500,000 shares in the name of GSWPS for which Mark
Snyder is the majority shareholder.

(6)     Includes 150,000 and 50,000 options
which are exercisable at $0.15 and $0.25.

(7)     Includes 250,000 options which are
exercisable at $0.25.

(8)     Under Rule 13d-3, a beneficial
owner of a security includes any person who, directly or indirectly, through any
contract, arrangement, understanding, relationship, or otherwise has or shares:
(i) voting power, which includes the power to vote, or to direct the voting of
shares; and (ii) investment power, which includes the power to dispose or direct
the disposition of shares. Certain shares may be deemed to be beneficially owned
by more than one person (if, for example, persons share the power to vote or the
power to dispose of the shares). In addition, shares are deemed to be
beneficially owned by a person if the person has the right to acquire the shares
(for example, upon exercise of an option) within 60 days of the date as of which
the information is provided. In computing the percentage ownership of any
person, the amount of shares outstanding is deemed to include the amount of
shares beneficially owned by such person (and only such person) by reason of
these acquisition rights. As a result, the percentage of outstanding shares of
any person as shown in this table does not necessarily reflect the persons
actual ownership or voting power with respect to the number of shares of common
stock actually outstanding on October 22, 2011. As of October 18, 2011, there
were 24,743,865 shares of our companys common stock issued and outstanding.

Changes in Control

We are unaware of any contract or other arrangement the
operation of which may at a subsequent date result in a change in control of our
company.

|Item 13. | Certain Relationships and Related
      Transactions, and Director Independence
|-------- | -------------------------------------------------------------------------------

Except as disclosed herein, no director, executive officer,
shareholder holding at least 5% of shares of our common stock, or any family
member thereof, had any material interest, direct or indirect, in any
transaction, or proposed transaction since the year ended August 31, 2011, in
which the amount involved in the transaction exceeded or exceeds the lesser of
$120,000 or one percent of the average of our total assets at the year end for
the last two completed fiscal years.

For the year ended August 31, 2011, our company was party to
the following related party transactions:

- Paid / accrued $60,000 (August 31, 2010: $62,900) to the
  President of our company in consulting fees.

Paid / accrued $60,000 (August 31, 2010:
  $66,717) and $nil (August 31, 2010: $5,911); of consulting fees and office
  rent, respectively, to a company controlled by a Director/CEO of our company.

Paid $59,643 (August 31, 2010: $43,916) in
  consulting fees to a company controlled by the CFO of our company.

Paid $12,000 (August 31, 2010: $11,000) in
  consulting fee to an Officer of our company.

Paid / accrued $42,000 (August 31, 2010:
  $8,815 in cost of renewal energy service to an executive officer of our
  company and a company controlled by the executive officer.

Paid / accrued $37,500 (August 31, 2010:
  $Nil) in consulting fee to the Senior VP, Business Development.

Director fee of total $6,023 paid to three
  directors of the company as of August 31, 2011.

On April 27, 2011, the Company entered into
  a debt settlement agreement with the President of the Company regarding due to
  related parties in the amount of $46,000, whereby $25,000 was settled by
  issuing common shares of 100,000, and $21,000 was forgiven for Nil
  consideration. In connection with the debt settlement, the Company recorded
  $100 in share capital and $45,900 in additional paid in capital for the gain
  on the settlement of the debt.

On April 27, 2011, our company issued
  360,000 common shares to CAB Financial Services Ltd. in connection with a debt
  settlement for promissory note of $90,000 (balance immediately before
  settlement was $80,357) at a price of $0.15 per common share. In connection
  with the settlement of the amounts due to related parties, we recorded $26,357
  in additional paid in capital for the gain on settlement of debt.

On March 16, 2011, our company entered into
  a debt settlement agreement with an officer of our company, whereby our
  company issued 78,125 common stock in connection with the settlement of debt
  of $12,500 at a price of $0.15 per share pursuant to a consulting agreement.
  Our company recorded $781 in additional paid in capital for the gain on the
  settlement of the debt.

66

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Director Independence

We currently act with five (5) directors, consisting of
Christopher Bunka, Robert McAllister, Gerald Carlson, Donald Findlay and Greg
Dawson. We have determined that Greg Dawson, Donald Findlay, and Gerald Carlson
are an independent director as defined in NASDAQ Marketplace Rule
4200(a)(15).

Currently our audit committee consists of three board of
directors. We currently do not have nominating, compensation committees or
committees performing similar functions. There has not been any defined policy
or procedure requirements for shareholders to submit recommendations or
nomination for directors.

Our board of directors has determined that it does not have a
member of its audit committee who qualifies as an audit committee financial
expert as defined in as defined in Item 407(d)(5)(ii) of Regulation S-K.

From inception to present date, we believe that the members of
our audit committee and the board of directors have been and are collectively
capable of analyzing and evaluating our financial statements and understanding
internal controls and procedures for financial reporting.

We do not have a standing compensation or nominating committee,
but our entire board of directors act in such capacity. We believe that our
directors are capable of analyzing and evaluating our financial statements and
understanding internal controls and procedures for financial reporting. Our
directors do not believe that it is necessary to have an audit committee because
we believe that the functions of an audit committee can be adequately performed
by the board of directors. In addition, we believe that retaining additional
independent directors who would qualify as an audit committee financial expert
would be overly costly and burdensome and is not warranted in our circumstances
given the early stages of our development.

|Item 14. | Principal Accounting Fees and Services
|-------- | --------------------------------------

The aggregate fees billed for the most recently completed
fiscal year ended August 31, 2011 and for fiscal year ended August 31, 2010 for
professional services rendered by the principal accountant for the audit of our
annual financial statements and review of the financial statements included in
our quarterly reports on Form 10-Q and services that are normally provided by
the accountant in connection with statutory and regulatory filings or
engagements for these fiscal periods were as follows:

Year EndedAugust 31, 2011
    August 31, 2010Audit Fees
    20,729
    19,000Audit Related Fees
    9,295
    19,481Tax Fees
    Nil
    NilAll Other Fees
    Nil
    NilTotal
    30,024
    38,481


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Audit related Fees.There were $20,729 audit related
fees paid to Chang Lee LLP for the fiscal year ended August 31, 2011 and $19,000
for the fiscal year ended August 31, 2010.

Tax Fees.Tax fees consist of fees billed for
professional services for tax compliance, tax advice and tax planning. These
services include assistance regarding federal, state and local tax compliance
and consultation in connection with various transactions and acquisitions. For
the fiscal years ended August 31, 2011 and August 31, 2010, we did not use MNP
LLP for non-audit professional services or preparation of corporate tax returns.

We do not use MNP LLP, for financial information system design
and implementation. These services, which include designing or implementing a
system that aggregates source data underlying the financial statements or
generates information that is significant to our financial statements, are
provided internally or by other service providers. We do not engage MNP LLP to
provide compliance outsourcing services.

Effective May 6, 2003, the Securities and Exchange Commission
adopted rules that require that before our independent auditors are engaged by
us to render any auditing or permitted non-audit related service, the engagement
be:

- approved by our audit committee (which consists of our entire board of
  directors); or
- entered into pursuant to pre-approval policies and procedures established
  by the board of directors, provided the policies and procedures are detailed
  as to the particular service, the board of directors is informed of each
  service, and such policies and procedures do not include delegation of the
  board of directors' responsibilities to management.

Our board of directors pre-approves all services provided by
our independent auditors. All of the above services and fees were reviewed and
approved by the board of directors either before or after the respective
services were rendered.

Our board of directors has considered the nature and amount of
fees billed by our independent auditors and believes that the provision of
services for activities unrelated to the audit is compatible with maintaining
our independent auditors independence.

PART IV

|Item 15. | Exhibits, Financial Statement Schedules
|-------- | ---------------------------------------

|(a) | Financial Statements
|--- | --------------------
|    |                     
|    | (1)                 
|    |                     
|    | (2)                 
|    |                     
|(b) | Exhibits            

68

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|Exhibit |                                                                                                                                                                                                                
|------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|No.     | Description                                                                                                                                                                                                    
|3.1     | Articles of Incorporation dated November
      24, 2004 (incorporated by reference on our Registration Statement on Form
      SB-2 filed January 9, 2006)                                                     
|3.2     | Bylaws (incorporated by reference on our
      Registration Statement on Form SB-2/A filed March 6, 2006)                                                                                                      
|10.1    | Mining Lease between Nevada
      North Resources (U.S.A.), Inc. and Miranda U.S.A. Inc. (incorporated by
      reference on our Registration Statement on Form SB-2 filed January 9,
      2006)              
|10.2    | Exploration Agreement with Options for Joint
      Venture between our company and Miranda U.S.A. Inc. (incorporated by
      reference on our Registration Statement on Form SB-2 filed January 9,
      2006)
|10.3    | Amended Exploration Agreement
      between our company and Miranda U.S.A. Inc. (incorporated by reference on
      our Registration Statement on Form SB-2 filed January 9, 2006)                             
|10.4    | Consulting Agreement between our company and
      KGE Management Ltd. (incorporated by reference on our Registration
      Statement on Form SB-2 filed January 9, 2006)                                      
|10.5    | Assignment Agreement with
      0743608 B.C. Ltd. (incorporated by reference on our Current Report on Form
      8-K filed March 19, 2007)                                                                     
|10.6    | Consulting Agreement with Mr. Robert McAllister
    dated December 1, 2008                                                                                                                                     
|14.1    | Code of Ethics (incorporated by
      reference by from our annual report on Form 10-KSB filed on November 29,
      2007).                                                                                    
|23.1*   | Consent of MNP LLP                                                                                                                                                                                             
|23.2*   | Consent of Chang Lee
    LLP                                                                                                                                                                                   
|31.1*   | Certification pursuant to Rule 13a-14 and Rule
      15d-14(a), promulgated under the Securities and Exchange Act of 1934, as
      amended (Chief Executive Officer).                                         
|31.2*   | Certification pursuant to Rule
      13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange
      Act of 1934, as amended (Chief Financial Officer).                                         
|32.1*   | Certification pursuant to 18 U.S.C. Section
      1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
      (Chief Executive Officer).                                                  
|32.2*   | Certification pursuant to 18
      U.S.C. Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002 (Chief Financial Officer).                                                  
|        |                                                                                                                                                                                                                
|        |                                                                                                                                                                                                                
|*       | Filed herewith.                                                                                                                                                                                                

69

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

ENERTOPIA CORP.

|By:                                                                                                                 | /s/ Robert McAllister | 
|------------------------------------------------------------------------------------------------------------------- | --------------------- | 
|Robert McAllister                                                                                                   |                      
|President and Director                                                                                              |                      
|Principal Executive Officer                                                                                         |                      
|Date: March 14, 2012.                                                                                               |                      
|                                                                                                                    |                       | 
|By:                                                                                                                 | /s/ Bal Bhullar       | 
|Bal Bhullar                                                                                                         |                      
|Chief Financial Officer                                                                                             |                      
|Principal Financial Officer and Principal
      Accounting Officer                                                  |                      
|Date: March 14, 2012.                                                                                               |                      
|                                                                                                                    |                       | 
|Pursuant to the requirements of the Securities
      Exchange Act of 1934, this report has been signed below by the |                      
|following persons on behalf of the registrant and
      in the capacities and on the dates indicated.               |                      
|                                                                                                                    |                       | 
|By:                                                                                                                 | /s/ Robert McAllister | 
|Robert McAllister                                                                                                   |                      
|President and Director                                                                                              |                      
|Principal Executive Officer                                                                                         |                      
|Date: March 14, 2012.                                                                                               |                      
|                                                                                                                    |                       | 
|By:                                                                                                                 | /s/ Bal Bhullar       | 
|Bal Bhullar                                                                                                         |                      
|Chief Financial Officer                                                                                             |                      
|Principal Financial Officer and Principal
      Accounting Officer                                                  |                      
|Date: March 14, 2012.                                                                                               |                      
|                                                                                                                    |                       | 
|By:                                                                                                                 | /s/ Chris Bunka       | 
|Chris Bunka                                                                                                         |                      
|Chairman, Director and Chief Executive Officer                                                                      |                      
|Date: March 14, 2012.                                                                                               |                      

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