Six Months Ended August 31,
		2017				2016
Period end Canadian $: US Dollar exchange rate		$	0.80			$	0.76
Average period Canadian $: US Dollar exchange rate		$	0.76			$	0.77

Restricted cash

Expenditures are translated atIn December 2016, the average exchange rateFASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash which requires that a statement of cash flows explain the change during the period in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. As a result, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This guidance must be applied retrospectively to all periods presented. Management adopted this ASU beginning March 1, 2017. All prior periods have been adjusted to conform to the current period presentation, which resulted in no changes to the statement of cash flows for the period presented.nine months ended November 30, 2016.

As at November 30, 2017, the Company’s restricted cash consists of term deposits, held as collateral for the revolving credit facility (Note 5).

Value added tax, tax credits and other receivables

The Company is registered for the Canadian Federal and Provincial Goods and Services Taxes. As a registrant, the company is obligated to collect, and is entitled to claim sale taxes paid on its expenses and capital expenditures incurred in Canada. As at the Balance Sheet date of August 31November 30 and February 28, 2017, the computed net recoverable sale taxes amounted to $79,723$128,905 and $198,830, respectively.

Research and Development Costs

Research and development expenses relate primarily to the development, design, testing of preproduction samples, prototypes and models, compensation, and consulting fees, and are expensed as incurred. Total research and development costs recorded amounted to $950,775$3,894,454 and $433,629$368,403 for the three months ended August 31,November 30, 2017 and 2016, respectively, and to $1,447,309$5,341,763 and $849,198$1,217,600 for the sixnine months ended August 31,November 30, 2017 and 2016, respectively. Research and development costs are net of $4,472 of grants received and research and development tax credit of $127,713 claimed during the period ended August 31,November 30, 2017.

Net Loss per Share

The Company computes net loss per share in accordance with FASB ASC 260 Earnings per share. Basic earnings (loss) per share is computed by dividing the net income (loss) applicable to Common Stockholders by the weighted average number of shares of Common Stock outstanding during the year. Diluted earnings (loss) per share is computed by dividing the net income (loss) applicable to Common Stockholders by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method. Potential common shares are excluded from the computation if their effect is antidilutive.

For the three and sixnine months ended August 31,November 30, 2017 and 2016, the calculations of basic and diluted loss per share are the same because potential dilutive securities would have an anti-dilutive effect. The potentially dilutive securities consisted of 1,000,000 common shares issuable, and 2,004,5822,684,582 outstanding warrants and 34,102 outstanding restricted stock units as of August 31,November 30, 2017 and 2,035,004 outstanding warrants as of August 31,November 30, 2016.

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Stock Compensation

In March 2016, the FASB issued ASU 2016-09, Compensation–Stock Compensation (Topic 718), which is intended to simplify accounting for share-based payment transactions. The ASU changed several aspects of the accounting for share-based payment award transactions, including accounting for income taxes, forfeitures and minimum statutory tax withholding requirements. Management adopted this ASU beginning March 1, 2017, with an immaterial impact to the Company's consolidated net loss and cash flows.

The Company accounts for stock compensation in accordance with ASC Subtopic 718-10. Stock compensation expense for a given warrant is recognized over the requisite service period. The Company accounts for forfeitures on share-based payments by recognizing forfeiture awards as they occur

The Company determines the fair value of restricted stock units awarded to employees and directors based on the closing market price of the Company's common stock on the date of grant.

Recently Issued Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-09 (ASU 2014-09), Revenue from Contracts with Customers. ASU 2014-09 will eliminate transaction- and industry-specific revenue recognition guidance under current U.S. GAAP and replace it with a principle based approach for determining revenue recognition. On August 12, 2015, FASB delayed the required implementation to fiscal years beginning after December 15, 2017 but now permitted organizations such the Company to adopt earlier. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. As the Company does not currently have any revenues from contracts with customers, the adoption of ASU 2014-09 on March 1, 2018 will not to have an impact, on transition.

In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases. ASU 2016-02 requires a lessee to record a right of use asset and a corresponding lease liability on the balance sheet for all leases with terms longer than 12 months. ASU 2016-02 is effective for all interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is in the process of evaluating the impact of ASU 2016-02 on the Company’s financial statements and disclosures.

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Note 3 – Property and Equipment

Depreciation expense amounted to $75,880$82,859 and $65,596$86,349 for the three months ended August 31,November 30, 2017 and 2016, respectively and to $150,472$233,332 and $156,363$242,712 for the sixnine months ended August 31,November 30, 2017 and 2016, respectively.

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Note 4 – Intellectual Property

On October 27, 2014, the Company entered into an intellectual property agreement with Mr. Hatem Essaddam wherein the Company purchased for cash of $445,050, a certain technique and method for the depolymerization of polyethylene terephthalate at ambient temperature and atmospheric pressure. The Company is using such intellectual property as part of their research and development activities. The technology is being amortized using the straight-line method over the 7 years estimated useful life of the patents.

In addition to the $445,050 paid by the Company under the Intellectual Property Assignment Agreement, the Company is required to make additional payments totaling CDN$800,000 to Mr. Essaddam within sixty (60) days of each of the following milestones (the “Milestones”) having been met, as follows:

	(i)	CDN$200,000 when an average of twenty (20) metric tons per day of terephthalic acid is produced by the Company for twenty (20) operating days;
	(ii)	CDN$200,000 when an average of thirty (30) metric tons per day of terephthalic acid is produced by the Company for thirty (30) operating days;
	(iii)	CDN$200,000 when an average of sixty (60) metric tons per day of terephthalic acid is produced by the Company for sixty (60) operating days; and
	(iv)	CDN$200,000 when an average of one hundred (100) metric tons per day of terephthalic acid is produced by the Company for sixty (60) operating days.

As of August 31,November 30, 2017, the Company is still in its test pilot program, none of the Milestones have been met, and accordingly no additional payments have been made.

Additionally, the Company is obligated to make royalty payments to Mr. Essaddam of up to CDN$25,700,000, payable as follows:

	(a)	10% of gross profits on the sale of all products derived by the Company from the technology assigned to the Company under the agreement;
	(b)	10% of any license fee paid to the Company in respect of any licensing or other right to use the technology assigned to the Company and granted to a third party by the Assignee;
	(c)	5% of any royalty or other similar payment made to the Company by a third party to whom a license or other right to use the technology assigned to the Company has been granted by the Company; and
	(d)	5% of any royalty or other similar payment made to the Company by a third party in respect of a sub-license or other right to use the technology assigned to the Company granted by the third party.

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As of August 31,November 30, 2017, the Company has not made any royalty payments under the Intellectual Property Assignment Agreement.

Amortization expense amounted to $15,895 and $9,532$15,895 for the three months ended August 31,November 30, 2017 and 2016, respectively and to $31,789$47,684 and $31,789$47,684 for the sixnine months ended August 31,November 30, 2017 and 2016, respectively.

Note 5 – Credit facility

On September 12, 2017, the Company entered into a credit facility consisting of a CDN$50,000 credit card facility, secured by a CDN$50,000 Guaranteed Investment Certificate bearing interest at 0.45%, annually, maturing on October 1, 2018.

Note 56 – Related Party Transactions

Advances from Major Shareholder

Mr. Daniel Solomita, the Company’s major stockholder and CEO, or companies controlled by him, previously made advances to the Company. The advances were unsecured, non-interest bearing with no formal terms of repayment. During the period ended August 31,November 30, 2017, the Company repaid to Mr. Solomita or companies controlled by him, as applicable, an aggregate amount of $249,762 and netted against the advances an aggregate amount of $113,223 representing value added taxes and other receivables owing.owed to Mr. Solomita. The amounts due to these entities as of February 28, 2017 were $391,695.

Employment Agreement and Accrued Compensation due to Major Shareholder

The Company entered into an employment agreement with Daniel Solomita, the Company’s President and Chief Executive Officer for an indefinite term. During the term, the officer shall receive monthly salary of $15,000. Compensation expense under this agreement for the nine month period ended November 30, 2017 and 2016 amounted to $45,000.$135,000. As at February 28, 2017, accrued compensation $360,000 was due to Mr. Solomita. As at August 31,November 30, 2017, the total accrued compensation due to Mr. Solomita was paid.

In addition, as previously disclosed, the Company agreed to grant the officerMr. Solomita 4 million shares of the Company’s common stock, form of equity to be determined, if certain milestones were met.

Effective April 10, 2017, the Company achieved the first milestone by becoming qualified to trade on the OTCQX and began trading thethat same date. Accordingly, asTherefore, management determined it was probable that the first performance condition would be achieved at August 31,February 28, 2017 and the officer’s entitlement to 1,000,000 shares with a fair value of $5,500,000,$800,000, in aggregate, havehad vested. The milestonesperformance conditions for the remaining 3,000,000 shares of common stock haveare not yetconsidered probable therefore the stock based compensation expense associated with the grant has not been met.recognized. 

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Note 67 – Stockholders’ Equity

Common Stock

During the six months ended August 31,On May 4, 2017, the Company soldBoard of Directors approved the issuance and sale of 1,123,266 common shares of itsthe Company’s common stock, par value $0.0001 per share at an offering price of $5.25 per share, resulting in netfor gross proceeds toof $5,897,188.

On September 7, 2017, the Board of Directors approved the issuance and sale of 18,128 common shares of the Company’s common stock, par value $0.0001 per share at an offering price of $12.00 per share, for gross proceeds of $217,536. In addition, the Company reclassified the stock subscriptions in the amount of $5,897,188.$54,780, in aggregate, to common stock and paid-in capital.

The shares issued to investors were not registered under the Securities Act of 1933, as amended (the “Act”), in reliance upon the private offering safe harbor provision of Rule 506 Regulation D.

Equity Incentive Plan

On July 6, 2017, the Company adopted the 2017 Equity Incentive Plan (the “Plan”). The Plan permits the granting of options, stock appreciation rights, restricted stock and restricted stock units to employees, directors and consultants of the Company. A total of 3,000,000 shares of common stock were reserved for issuance under the Plan with an automatic share reserve increase, as defined in the Plan, effective commencing March 1, 2018. The Plan is administered by the Board of Directors who designates eligible participants to be included under the Plan, the number of stock optionsawards granted, the share price pursuant to the stock optionsawards and the vesting conditions and period. The options,awards, when granted, will have an exercise price of no less than the estimated fair value of shares at the date of grant and a life not exceeding 10 years from the grant date. However, where a participant, at the time of the grant, owns stock representing more than 10% of the voting power of the Company, the life of the option will not exceed 5 years.

DuringStock Options

On October 19, 2017, the period ended August 31,Company’s former Chief Financial Officer, terminated her employment and pursuant to the separation agreement of October 25, 2017, forfeited all vested and unvested warrants, being 100,000 vested and 450,000 unvested warrants. All requisite services were rendered for stock compensation costs recognized, amounting to $505,986, until the date of termination. The warrants were originally granted on April 3, 2017 with an exercise price of $5.25 and had an aggregate fair value of $2,524,995, as determined by a Black-Scholes option pricing model.

On November 8, 2017, the Company issued to its new Chief Financial Officer, Mr. Frank Zitella, under the Plan, a warrant to purchase up to 400,000200,000 shares of our common stock at an exercise price of $5.25$13.89 per share, which vests quarterly in equal amounts1/3 increments over 24 months beginninga period of three years, commencing on April 3, 2017,November 8, 2018, and havehaving a contractual life of 10 years. This warrant has a grant date fair value of $1,836,360$1,928,840 as determined by a Black Scholes option pricing model and will be amortized over the vesting period. In addition, the Company issued to its Chief Financial Officer a warrant to purchase up to 150,00080,000 additional shares of our common stock at an exercise price of $5.25 per share$13.89 that will vest when certain milestones are achieved. This warrant has a grantgrand date fair value of $688,635$771,536 as determined by a Black Scholes option pricing model and amortization will commence when it is probable that the milestones will be achieved.

The warrants grant date fair value were determined by a Black Scholes option pricing model with the following assumptions:

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During the periodthree months ended August 31, 2017, the Company issued three warrants to two employees, not covered under the Plan, to purchase up to 530,000 shares of our common stock, in aggregate, at an exercise price of $5.25 per share. The warrants to purchase up to an aggregate of 100,000 and 380,000 shares of our common stock, respectively, each vest quarterly in equal amounts over 24 and 48 months, respectively, beginning on July 24, 2017 and June 13, 2017, respectively, and each have a contractual life of 10 years. These warrants collectively have a grant date fair value of $4,786,142 as determined by a Black Scholes option pricing model and will be amortized over the vesting period. In addition, a warrant to purchase up to 50,000 additional shares of our common stock will vest when certain milestones are achieved. This warrant had a grant date fair value of $479,885 as determined by a Black Scholes option pricing model and amortization will commence when it is probable that the milestones will be achieved.

The warrants grant date fair value were determined by a Black Scholes option pricing model with the following assumptions:

Risk-free interest rate	1.601.46 to 2.02%1.74%
Expected dividend yield	0%
Expected volatility	82 to 84%94%
Expected life	43 to 5 years

During the three months ended November 30, 2017, the Company issued three warrants to three employees, under the Plan, to purchase up to 950,000 shares of common stock, in aggregate, at exercise prices ranging from $12.00 to $13.49 per share. The warrants to purchase up to an aggregate of 950,000 shares of common stock vest 200,000 and 100,000 warrants immediately, respectively, and, the balance, monthly in equal amounts over 60 and 24 months, respectively, beginning September 14, 2017 and October 16, 2017, respectively, and each have a contractual life of 10 years. These warrants collectively have a grant date fair value of $10,412,575, in aggregate, as determined by a Black Scholes option pricing model and will be amortized over the vesting period.

The warrants grant date fair value were determined by a Black Scholes option pricing model with the following assumptions:

During the period ended August 31, 2017, the Company amended the terms of warrants to purchase up to 702,452702,081 shares of our common stock which were originally issued on December 1, 2015 to three employees. The amendment extended the expiry date of the warrants to November 30, 2025 from November 30, 2017. As a result of the modification, we recognized additional compensation expense of $63,677.

Amortization of these costs amounted to $697,869$4,314,880 and $32,348 for the three months period ended August 31,November 30, 2017 and 2016, respectively, and to $920,373$5,235,253 and $73,707$106,053 for the sixnine months period ended August 31,November 30, 2017 and 2016, respectively, and are included in operating expenses. As of August 31,November 30, 2017 and 2016, the unamortized balance of these costs was $7,637,197$15,844,331 and $456,488.$424,142. The aggregate intrinsic value of the warrants outstanding as of August 31,November 30, 2017 was $22,529,036$20,251,990 calculated as the difference between the closing market price of $14.45$14.70 and the exercise price of the Company’s warrants as of August 31,November 30, 2017.

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The table below summarizes the Company’s warrant activities:

As at August 31,November 30, 2017, 20,000 shares of the Company’s common stock were issued as a result of a cashless exercise of 22,919 warrants with an exercise price of $0.80 and a fair value of $0.55. In addition, the Company issued 193,770 shares of its common stock upon the exercise of warrants at an offering price of $6.00 per share, resulting in proceeds of $1,163,016.

The following table summarizes information concerning outstanding and exercisable warrants as of August 31,November 30, 2017:

				Warrants Outstanding												Warrants Exercisable
Range of Exercise Prices				Number Outstanding				Average Remaining Contractual Life (in years)				Weighted Average Exercise Price				Number Exercisable				Average Remaining Contractual Life (in years)				Weighted Average Exercise Price
$	0.80				912,082				6.50			$	0.80				557,082				6.48			$	0.80
$	3.00				12,500				0.76			$	3.00				9,375				0.76			$	3.00
$	5.25				1,080,000				9.93			$	5.25				50,000				9.73			$	5.25

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Note 7 – Geographic Information

As of August 31, 2017 and 2016, the Company had two reportable diverse geographical concentrations (and therefore, two reportable segments), the United States and Canada. Information related to these operating segments, net of eliminations, consists of the following for the periods below:

		As at August 31, 2017
		United States				Canada				Elimination				Total
Current Assets		$	3,442,854			$	2,057,492							$	5,500,346
Property and equipment, net			141,535				1,539,978								1,681,513
Intangible assets, net			276,211				-								276,211
Loan receivable, parent company			-				5,767,440				(5,767,440	)			-
Total assets		$	3,860,600			$	9,364,910				(5,767,440	)		$	7,458,070
Current liabilities		$	255,716			$	646,737							$	902,453
Loan payable, subsidiairy company			5,767,440				-				(5,767,440	)			-
Equity			9,372,397				(2,816,780	)							6,555,617
Total liabilities and equity		$	15,395,553			$	(2,170,043	)			(5,767,440	)		$	7,458,070