UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2009
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _____________ to _____________
Commission file number 333-148266
LITHIUM CORPORATION
(Exact name of registrant as specified in its charter)
Nevada N/A
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 S. Virginia St. - 8th Floor, Reno, Nevada 89501
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 775.322.0626
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]
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-T (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registration statement was required to submit and post such files).
Yes [ ] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss.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]
The aggregate market value of Common Stock held by non-affiliates of the
Registrant on June 30, 2009 (the last business day of the registrant's most
recently completed second fiscal quarter) was $54,511 based on a $.00167 closing
price for the Common Stock on June 30, 2009. 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. 62,641,553 as of April 14, 2010
DOCUMENTS INCORPORATED BY REFERENCE
None.
TABLE OF CONTENTS
Item 1. Business............................................................ 3
Item 1A. Risk Factors........................................................ 5
Item 1B. Unresolved Staff Comments........................................... 8
Item 2. Properties.......................................................... 8
Item 3. Legal Proceedings................................................... 8
Item 4. (Removed and Reserved).............................................. 9
Item 5. Market for Registrant's Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities................... 9
Item 6. Selected Financial Data............................................. 10
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations........................................... 10
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.......... 16
Item 8. Financial Statements and Supplementary Data......................... 17
Item 9. Changes in and Disagreements With Accountants on Accounting
and Financial Disclosure............................................ 31
Item 9A. Controls and Procedures............................................. 31
Item 9B. Other Information................................................... 32
Item 10. Directors, Executive Officers and Corporate Governance.............. 32
Item 11. Executive Compensation.............................................. 34
Item 12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters..................................... 37
Item 13. Certain Relationships and Related Transactions, and Director
Independence........................................................ 38
Item 14. Principal Accounting Fees and Services.............................. 39
Item 15. Exhibits, Financial Statement Schedules............................. 39
2
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 current report and unless otherwise indicated, the terms "we",
"us", "our" and "Lithium" mean Lithium Corporation. and our wholly owned
subsidiary, Nevada Lithium Corporation, unless otherwise indicated.
GENERAL OVERVIEW
We were incorporated under the laws of the State of Nevada on January 30, 2007
under the name "Utalk Communications Inc." At inception, we were a development
stage corporation engaged in the business of developing and marketing a
call-back service using a call-back platform. Because we were not successful in
implementing our business plan, we considered various alternatives to ensure the
viability and solvency of our company.
On August 31, 2009, we entered into a letter of intent with Nevada Lithium
Corporation regarding a business combination which may be effected in one of
several different ways, including an asset acquisition, merger of our company
and Nevada Lithium Corporation, or a share exchange whereby we would purchase
the shares of Nevada Lithium Corporation from its shareholders in exchange for
restricted shares of our common stock.
Effective September 30, 2009, we effected a one (1) old for 60 new forward stock
split of our issued and outstanding common stock. As a result, our authorized
capital increased from 50,000,000 shares of common stock with a par value of
$0.001 to 3,000,000,000 shares of common stock with a par value of $0.001 and
our issued and outstanding shares increased from 4,470,000 shares of common
stock to 268,200,000 shares of common stock.
Also effective September 30, 2009, we have changed our name from "Utalk
Communications, Inc." to "Lithium Corporation", by way of a merger with our
wholly owned subsidiary Lithium Corporation, which was formed solely for the
change of name. The name change and forward stock split becomes effective with
the Over-the-Counter Bulletin Board at the opening for trading on October 1,
2009 under the new stock symbol "LTUM". Our new CUSIP number is 536804 107.
On October 9, 2009, we entered into a share exchange agreement with Nevada
Lithium Corporation, a Nevada corporation, and the shareholders of Nevada
Lithium Corporation. The closing of the transactions contemplated in the share
exchange agreement and the acquisition of all of the issued and outstanding
common stock in the capital of Nevada Lithium Corporation occurred on October
19, 2009. In accordance with the closing of the share exchange agreement, we
issued 12,350,000 shares of our common stock to the former shareholders of
Nevada Lithium Corporation in exchange for the acquisition, by our company, of
all of the 12,350,000 issued and outstanding shares of Nevada Lithium
Corporation. Also, pursuant to the terms of the share exchange agreement, a
director of our company cancelled 220,000,000 restricted shares of our common
stock.
We are an exploration stage mining company engaged in the identification,
acquisition, and exploration of metals and minerals with a focus on lithium
mineralization on properties located in Nevada.
3
OUR CURRENT BUSINESS
We are an exploration stage mining company engaged in the identification,
acquisition, and exploration of metals and minerals with a focus on lithium
mineralization on properties located in Nevada.
Our current operational focus is to conduct exploration activities on our newly
acquired properties in Nevada, known as the Fish Lake Valley property and the
Fish Creek Caldera property.
FISH LAKE VALLEY PROPERTY
Fish Lake Valley is a lithium enriched salar (also known as a Playa, dry lake,
or Salt Pan), which is located in west central Nevada in northern Esmeralda
county, and the property is roughly centered at 417050E 4195350N (NAD 27 CONUS).
We currently hold eighty (80) acre Association Placer claims that cover
approximately 6400 acres. Lithium-enriched Tertiary-era Fish Lake formation
Rhyolitic tuffs or ash flow tuffs have accumulated in a valley or basinal
environment. Over time interstitial formational waters in contact with these
tuffs, have become enriched in lithium, which could possibly be amenable to the
extraction by evaporative methods. Additionally evaporative brine mining is
environmentally benign, and is achieved with a minimal carbon footprint. The
geological setting at Fish Lake Valley is highly analogous to the salars of
Chile, Bolivia, & Peru. Access is excellent in Fish Lake Valley with all weather
gravel roads leading to the property from State Highways 264, and 265, and
maintained gravel roads ring the Playa. Power is available approximately 15
kilometers from the property, and the village of Dyer is approximately 20
kilometers to the south, while the town of Tonopah Nevada is approximately 75
kilometers to the East. Further sediment and brine sampling studies were
conducted on the property in early September, and the company is awaiting
further assay information. The company anticipates additional sampling programs
in Fall 2009, followed by a geophysical survey, and eventual drilling in Spring
2010. The property is held under mining lease purchase agreement dated June 1,
2009 between Nevada Lithium Corporation, and Nevada Alaska Mining Co. Inc.,
Robert Craig, Barbara Craig, and Elizabeth Dickman. Nevada Lithium has agreed to
issue the vendors $350,000 worth of common stock of the company in eight regular
disbursements, the last of which is slated to occur on March 31st 2011. To date
one disbursement has been made of stock worth $43,750.
FISH CREEK CALDERA
The Fish Creek Caldera prospect is located in west-central Lander County
approximately 55 kilometers south of the county seat at the town of Battle
Mountain in northern Nevada. The property is roughly centered at 473052E
4453013N (NAD 27 CONUS), and is comprised of 117 conventional 20 acre Lode
Mining Claims which cover an area of approximately 2340 acres. Unlike the Fish
Lake Valley prospect it is a more traditional bulk mining target which covers an
area of clay altered Caetano, and Fish Creek formation Tertiary volcanic tuffs.
Both formations originally contained relatively high concentrations of lithium,
and locally, through a possible combination of weathering, and hydrothermal
processes, these volcanic rocks have been altered to clays. It is thought that
the alteration process may have contributed to further lithium enrichment of the
clays. During the conduct of uranium exploratory drilling operations here in
1978 by Phillips Uranium Corporation, lithium mineralization of up to 20,000 ppm
was discovered. Access is good to the property with an all weather road leading
up from Buffalo Valley to the west of the property, and a county maintained
track leading up from Highway 305, some 15 kilometers to the east of the
property. A low voltage powerline does terminate at the west edge of the claim
block, and higher tension power lines can be found in the general area. We
intend to begin preliminary work this fall to outline areas of lithium
enrichment in an effort to define drill targets, for more precise evaluation of
the economic potential of the property in 2010.
Our wholly owned subsidiary, Nevada Lithium Corporation, entered into a lease
agreement with Cerro Rico Ventures LLC on March 16, 2009. The lease is
maintained by an initial payment, and continuing lease payments as set forth in
the table below. Cerro Rico reserves a 3% NSR. We may purchase 1% of the NSR
within 5 years for a payment of $500,000. We can purchase an additional 1% of
the NSR by paying $1,000,000 within 10 years. The remainder of the NSR can be
purchased within 15 years by paying $2,000,000.
Payment Amount Timing
------- ------ ------
Upon signature $ 20,000 March 16, 2009 (paid)
Upon 1st anniversary $ 25,000 March 16, 2010 (paid)
Upon 2nd anniversary $ 30,000 March 16, 2011
Upon 3rd -10th anniversary $ 50,000 March 16, 2012 - 2019
Upon 11th - 20th anniversary $ 75,000 March 16, 2020 - 2029
At any time upon commercial production $250,000
4
Any commercial production and payment therefore shall supercede the annual lease
payment requirements, which cease so long as production is maintained. Upon
cessation of production for any period in excess of 6 months, the annual lease
payments shall resume.
COMPETITION
The mining industry is intensely competitive. We compete with numerous
individuals and companies, including many major mining companies, which have
substantially greater technical, financial and operational resources and staffs.
Accordingly, there is a high degree of competition for access to funds. There
are other competitors that have operations in the area and the presence of these
competitors could adversely affect our ability to compete for financing and
obtain the service providers, staff or equipment necessary for the exploration
and exploitation of our properties.
COMPLIANCE WITH GOVERNMENT REGULATION
Mining operations and exploration activities are subject to various national,
state, provincial and local laws and regulations in United States, as well as
other jurisdictions, which govern prospecting, development, mining, production,
exports, taxes, labor standards, occupational health, waste disposal, protection
of the environment, mine safety, hazardous substances and other matters.
We believe that we are and will continue to be in compliance in all material
respects with applicable statutes and the regulations passed in the United
States. There are no current orders or directions relating to our company with
respect to the foregoing laws and regulations.
RESEARCH AND DEVELOPMENT
We have incurred $Nil in research and development expenditures over the last two
fiscal years.
EMPLOYEES
Currently we have no employees.
We do and will continue to outsource contract employment as needed. With project
advancement and if we are successful in any exploration or drilling programs, we
may retain additional employees.
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 MINING
ALL OF OUR PROPERTIES ARE IN THE EXPLORATION STAGE. THERE IS NO ASSURANCE THAT
WE CAN ESTABLISH THE EXISTENCE OF ANY MINERAL RESOURCE ON ANY OF OUR PROPERTIES
IN COMMERCIALLY EXPLOITABLE QUANTITIES. UNTIL WE CAN DO SO, WE CANNOT EARN ANY
REVENUES FROM OPERATIONS AND IF WE DO NOT DO SO WE WILL LOSE ALL OF THE FUNDS
THAT WE EXPEND ON EXPLORATION. IF WE DO NOT DISCOVER ANY MINERAL RESOURCE IN A
COMMERCIALLY EXPLOITABLE QUANTITY, OUR BUSINESS COULD FAIL.
Despite exploration work on our mineral properties, we have not established that
any of them contain any mineral reserve, nor can there be any assurance that we
will be able to do so. If we do not, our business could fail.
A mineral reserve is defined by the Securities and Exchange Commission in its
Industry Guide 7 (which can be viewed over the Internet at
http://www.sec.gov/divisions/corpfin/forms/industry.htm#secguide7) as that part
of a mineral deposit which could be economically and legally extracted or
produced at the time of the reserve determination. The probability of an
individual prospect ever having a "reserve" that meets the requirements of the
Securities and Exchange Commission's Industry Guide 7 is extremely remote; in
all probability our mineral resource property does not contain any 'reserve' and
any funds that we spend on exploration will probably be lost.
Even if we do eventually discover a mineral reserve on one or more of our
properties, there can be no assurance that we will be able to develop our
properties into producing mines and extract those resources. Both mineral
exploration and development involve a high degree of risk and few properties
which are explored are ultimately developed into producing mines.
5
The commercial viability of an established mineral deposit will depend on a
number of factors including, by way of example, the size, grade and other
attributes of the mineral deposit, the proximity of the resource to
infrastructure such as a smelter, roads and a point for shipping, government
regulation and market prices. Most of these factors will be beyond our control,
and any of them could increase costs and make extraction of any identified
mineral resource unprofitable.
MINERAL OPERATIONS ARE SUBJECT TO APPLICABLE LAW AND GOVERNMENT REGULATION. EVEN
IF WE DISCOVER A MINERAL RESOURCE IN A COMMERCIALLY EXPLOITABLE QUANTITY, THESE
LAWS AND REGULATIONS COULD RESTRICT OR PROHIBIT THE EXPLOITATION OF THAT MINERAL
RESOURCE. IF WE CANNOT EXPLOIT ANY MINERAL RESOURCE THAT WE MIGHT DISCOVER ON
OUR PROPERTIES, OUR BUSINESS MAY FAIL.
Both mineral exploration and extraction require permits from various foreign,
federal, state, provincial and local governmental authorities and are governed
by laws and regulations, including those with respect to prospecting, mine
development, mineral production, transport, export, taxation, labour standards,
occupational health, waste disposal, toxic substances, land use, environmental
protection, mine safety and other matters. There can be no assurance that we
will be able to obtain or maintain any of the permits required for the continued
exploration of our mineral properties or for the construction and operation of a
mine on our properties at economically viable costs. If we cannot accomplish
these objectives, our business could fail.
We believe that we are in compliance with all material laws and regulations that
currently apply to our activities but there can be no assurance that we can
continue to remain in compliance. Current laws and regulations could be amended
and we might not be able to comply with them, as amended. Further, there can be
no assurance that we will be able to obtain or maintain all permits necessary
for our future operations, or that we will be able to obtain them on reasonable
terms. To the extent such approvals are required and are not obtained, we may be
delayed or prohibited from proceeding with planned exploration or development of
our mineral properties.
IF WE ESTABLISH THE EXISTENCE OF A MINERAL RESOURCE ON ANY OF OUR PROPERTIES IN
A COMMERCIALLY EXPLOITABLE QUANTITY, WE WILL REQUIRE ADDITIONAL CAPITAL IN ORDER
TO DEVELOP THE PROPERTY INTO A PRODUCING MINE. IF WE CANNOT RAISE THIS
ADDITIONAL CAPITAL, WE WILL NOT BE ABLE TO EXPLOIT THE RESOURCE, AND OUR
BUSINESS COULD FAIL.
If we do discover mineral resources in commercially exploitable quantities on
any of our properties, we will be required to expend substantial sums of money
to establish the extent of the resource, develop processes to extract it and
develop extraction and processing facilities and infrastructure. Although we may
derive substantial benefits from the discovery of a major deposit, there can be
no assurance that such a resource will be large enough to justify commercial
operations, nor can there be any assurance that we will be able to raise the
funds required for development on a timely basis. If we cannot raise the
necessary capital or complete the necessary facilities and infrastructure, our
business may fail.
MINERAL EXPLORATION AND DEVELOPMENT IS SUBJECT TO EXTRAORDINARY OPERATING RISKS.
WE DO NOT CURRENTLY INSURE AGAINST THESE RISKS. IN THE EVENT OF A CAVE-IN OR
SIMILAR OCCURRENCE, OUR LIABILITY MAY EXCEED OUR RESOURCES, WHICH WOULD HAVE AN
ADVERSE IMPACT ON OUR COMPANY.
Mineral exploration, development and production involves many risks which even a
combination of experience, knowledge and careful evaluation may not be able to
overcome. Our operations will be subject to all the hazards and risks inherent
in the exploration for mineral resources and, if we discover a mineral resource
in commercially exploitable quantity, our operations could be subject to all of
the hazards and risks inherent in the development and production of resources,
including liability for pollution, cave-ins or similar hazards against which we
cannot insure or against which we may elect not to insure. Any such event could
result in work stoppages and damage to property, including damage to the
environment. We do not currently maintain any insurance coverage against these
operating hazards. The payment of any liabilities that arise from any such
occurrence would have a material adverse impact on our company.
MINERAL PRICES ARE SUBJECT TO DRAMATIC AND UNPREDICTABLE FLUCTUATIONS.
We expect to derive revenues, if any, either from the sale of our mineral
resource properties or from the extraction and sale of lithium ore. The price of
those commodities has fluctuated widely in recent years, and is affected by
numerous factors beyond our control, including international, economic and
political trends, expectations of inflation, currency exchange fluctuations,
interest rates, global or regional consumptive patterns, speculative activities
and increased production due to new extraction developments and improved
extraction and production methods. The effect of these factors on the price of
base and precious metals, and therefore the economic viability of any of our
exploration properties and projects, cannot accurately be predicted.
THE MINING INDUSTRY IS HIGHLY COMPETITIVE AND THERE IS NO ASSURANCE THAT WE WILL
CONTINUE TO BE SUCCESSFUL IN ACQUIRING MINERAL CLAIMS. IF WE CANNOT CONTINUE TO
ACQUIRE PROPERTIES TO EXPLORE FOR MINERAL RESOURCES, WE MAY BE REQUIRED TO
REDUCE OR CEASE OPERATIONS.
6
The mineral exploration, development, and production industry is largely
un-integrated. We compete with other exploration companies looking for mineral
resource properties. While we compete with other exploration companies in the
effort to locate and acquire mineral resource properties, we will not compete
with them for the removal or sales of mineral products from our properties if we
should eventually discover the presence of them in quantities sufficient to make
production economically feasible. Readily available markets exist worldwide for
the sale of mineral products. Therefore, we will likely be able to sell any
mineral products that we identify and produce.
In identifying and acquiring mineral resource properties, we compete with many
companies possessing greater financial resources and technical facilities. This
competition could adversely affect our ability to acquire suitable prospects for
exploration in the future. Accordingly, there can be no assurance that we will
acquire any interest in additional mineral resource properties that might yield
reserves or result in commercial mining operations.
RISKS RELATED TO OUR COMPANY
THE FACT THAT WE HAVE NOT EARNED ANY OPERATING REVENUES SINCE OUR INCORPORATION
RAISES SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE TO EXPLORE OUR MINERAL
PROPERTIES AS A GOING CONCERN.
We have not generated any revenue from operations since our incorporation and we
anticipate that we will continue to incur operating expenses without revenues
unless and until we are able to identify a mineral resource in a commercially
exploitable quantity on one or more of our mineral properties and we build and
operate a mine. We had cash in the amount of $360,511 as of December 31, 2009.
At December 31, 2009, we had working capital of $112,056. We incurred a net loss
of $190,414 for the year ended December 31, 2009 and $240,730 since inception.
We estimate our average monthly operating expenses to be approximately $20,000
to $40,000, including property costs, management services and administrative
costs. Should the results of our planned exploration require us to increase our
current operating budget, we may have to raise additional funds to meet our
currently budgeted operating requirements for the next 12 months. As we cannot
assure a lender that we will be able to successfully explore and develop our
mineral properties, we will probably find it difficult to raise debt financing
from traditional lending sources. We have traditionally raised our operating
capital from sales of equity securities, but there can be no assurance that we
will continue to be able to do so. If we cannot raise the money that we need to
continue exploration of our mineral properties, we may be forced to delay, scale
back, or eliminate our exploration activities. If any of these were to occur,
there is a substantial risk that our business would fail.
Management has plans to seek additional capital through a private placement of
its capital stock. These conditions raise substantial doubt about our company's
ability to continue as a going concern. Although there are no assurances that
management's plans will be realized, management believes that our company will
be able to continue operations in the future. The financial statements do not
include any adjustments relating to the recoverability and classification of
recorded assets, or the amounts of and classification of liabilities that might
be necessary in the event our company cannot continue in existence." We continue
to experience net operating losses.
RISKS ASSOCIATED WITH OUR COMMON STOCK
TRADING ON THE OTC BULLETIN BOARD 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 OTC Bulletin Board service of the Financial
Industry Regulatory Authority. Trading in stock quoted on the OTC Bulletin Board
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 OTC Bulletin Board
is not a stock exchange, and trading of securities on the OTC Bulletin Board 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 their shares.
OUR STOCK IS A PENNY STOCK. TRADING OF OUR STOCK MAY BE RESTRICTED BY THE SEC'S
PENNY STOCK REGULATIONS AND FINRA'S SALES PRACTICE REQUIREMENTS, 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
7
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 SEC 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.
In addition to the "penny stock" rules promulgated by the Securities and
Exchange Commission, the Financial Industry Regulatory Authority 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, the Financial Industry Regulatory Authority believes that there
is a high probability that speculative low-priced securities will not be
suitable for at least some customers. The Financial Industry Regulatory
Authority ' 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.
OTHER RISKS
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 stock.
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
Our corporate head office is located at 200 S Virginia St - 8th Floor, Reno,
Nevada, 89501 and our monthly rent is approximately $200.
MINERAL PROPERTIES
As of the date of this annual report on Form 10-K, we hold the following
properties: Fish Lake Valley Property and Fish Creek Caldera. For detail
description of these properties, please see the section entitled "Business"
above.
ITEM 3. LEGAL PROCEEDINGS
We know of no material, existing or pending legal proceedings against our
company, nor are we involved as a plaintiff in any material proceeding or
pending litigation. There are no proceedings in which any of our directors,
officers or affiliates, or any registered or beneficial stockholder, is an
adverse party or has a material interest adverse to our interest. The outcome of
open unresolved legal proceedings is presently indeterminable. Any settlement
resulting from resolution of these contingencies will be accounted for in the
period of settlement. We do not believe the potential outcome from these legal
proceedings will significantly impact our financial position, operations or cash
flows.
8
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 "LTUM." The following quotations, obtained from Stockwatch, 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:
National Association of Securities Dealers OTC Bulletin Board (1)(2)
Quarter Ended High Low
------------- ---- ---
December 31, 2009 $ 1.40 $0.60
September 30, 2009 $0.113 $0.11
June 30, 2009 N/A N/A
March 31, 2009 N/A N/A
December 31, 2008 N/A N/A
September 30, 2008 N/A N/A
June 30, 2008 N/A N/A
March 31, 2008 N/A N/A
December 31, 2007 N/A N/A
----------
(1) Over-the-counter market quotations reflect inter-dealer prices without
retail mark-up, mark-down or commission, and may not represent actual
transactions.
(2) Our common stock was quoted on the Over-the-Counter Bulletin Boards on July
2, 2008. The first trade did not occur until September 16, 2009.
Our shares are issued in registered form. Nevada Agency & Trust Company., 50
West Liberty Street, Suite 880, Reno, Nevada 89501 (Telephone: (775) 322-0626;
Facsimile: (775) 322-5623) is the registrar and transfer agent for our common
shares.
On April 14, 2010, the shareholders' list showed 22 registered shareholders with
62,641,553 common shares outstanding.
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.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
On December 29, 2009, our board of approved the adoption of the 2009 Stock Plan
which permits our company to issue up to 6,050,000 shares of our common stock to
directors, officers, employees and consultants. This plan has not been approved
by our security holders.
The following table summarizes certain information regarding our equity
compensation plans as at December 31, 2009:
9
Equity Compensation Plan Information
Number of Securities
Number of Securities to be Remaining Available for
Issued Upon Exercise of Weighted-Average Exercise Future Issuance Under
Outstanding Options, Price of Outstanding Options, Equity Compensation Plans
Plan Category Warrants and Rights Warrants and Rights (excluding column (a))
------------- ------------------- ------------------- ----------------------
Equity Compensation Plans -- -- --
Approved by Security
Holders
Equity Compensation Plans Not -- -- 6,050,000
Approved by Security Holders
Total -- -- 6,050,000
RECENT SALES OF UNREGISTERED SECURITIES; USE OF PROCEEDS FROM REGISTERED
SECURITIES
We did not sell any equity securities which were not registered under the
Securities Act during the year ended December 31, 2009 that were not otherwise
disclosed on our quarterly reports on Form 10-Q or our current reports on Form
8-K filed during the year ended December 31, 2009.
PURCHASE 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 fourth quarter of our fiscal year ended December 31, 2009.
ITEM 6. SELECTED FINANCIAL DATA
As a "smaller reporting company", we are not required to provide the information
required by this Item.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with our consolidated
audited 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 6 of this annual report.
Our consolidated audited financial statements are stated in United States
Dollars and are prepared in accordance with United States Generally Accepted
Accounting Principles.
OVERVIEW
We were incorporated under the laws of the State of Nevada on January 30, 2007
under the name "Utalk Communications Inc." At inception, we were a development
stage corporation engaged in the business of developing and marketing a
call-back service using a call-back platform. Because we were not successful in
implementing our business plan, we considered various alternatives to ensure the
viability and solvency of our company.
We are an exploration stage mining company engaged in the identification,
acquisition, and exploration of metals and minerals with a focus on lithium
mineralization on properties located in Nevada.
PLAN OF OPERATIONS AND CASH REQUIREMENTS
CASH REQUIREMENTS
Our current operational focus is to conduct exploration activities on our
properties in Nevada, known as the Fish Lake Valley property and the Fish Creek
Caldera property. We expect to review other potential exploration projects from
time to time as they are presented to us.
Our net cash provided by financing activities during the year ended December 31,
2009 was $680,197 as compared to $52,500 during the year ended December 31,
2008.
10
Over the next twelve months we expect to expend funds as follows:
Estimated Net Expenditures During the Next Twelve Months
$
-------
General, Administrative Expenses 100,000
Exploration Expenses 250,000
-------
TOTAL 350,000
=======
We have suffered recurring losses from operations. The continuation of our
company is dependent upon our company attaining and maintaining profitable
operations and raising additional capital as needed.
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.
RESULTS OF OPERATIONS - TWELVE MONTHS ENDED DECEMBER 31, 2009 AND 2008
The following summary of our results of operations should be read in conjunction
with our financial statements for the year ended December 31, 2009, which are
included herein.
Our operating results for the twelve months ended December 31, 2009, for the
twelve months ended December 31, 2008 and the changes between those periods for
the respective items are summarized as follows:
11
Change Between Twelve
Month Period Ended
Twelve Months Twelve Months December 31, 2009
Ended Ended and
December 31, December 31, December 30,
2009 2008 2008
---------- ---------- ----------
Revenue $ Nil $ Nil $ Nil
Professional fees 33,431 11,524 21,907
Amortization 504 Nil 504
Investor Relations 16,875 Nil 16,875
Interest 6,916 Nil 6,916
Management fees 12,000 Nil 12,000
Rent 1,663 Nil 1,663
Transfer agent and filing fees 16,135 Nil 16,135
Travel 6,120 Nil 6,120
Website development fees 412 3,500 (3,088)
General and administrative 18,094 11,844 6,250
Net loss $ (190,414) $ (26,868) $ (163,546)
Our accumulated losses increased to $240,730 as of December 31, 2009. Our
financial statements report a net loss of $190,414for the twelve month period
ended December 31, 2009 compared to a net loss of $26,868 for the twelve month
period ended December 31, 2008. Our losses have increased primarily as a result
of increased overall activities necessary to prospect and stake property claims
and activities related to the acquisition of Nevada Lithium Corp.
Our total current liabilities as of December 31, 2009 were $275,005 as compared
to total current liabilities of $9,700 as of December 31, 2008. The increase was
due to financing through debt to secure lithium properties and an overall
increase in activity.
Our operating expenses for the year ended December 31, 2009 were $112,150
compared to $26,868 as of December 31, 2008. The increase in operating expenses
were primarily a result of an overall increase in activity necessary to secure
additional lithium properties and fees related to the acquisition of Nevada
Lithium Corp.
LIQUIDITY AND FINANCIAL CONDITION
At At
December 31, December 31,
2009 2008
-------- --------
Current assets $387,061 $ 14,384
Current liabilities 275,005 9,700
-------- --------
Working capital $112,056 $ 4,684
======== ========
12
WORKING CAPITAL
CASH FLOWS
Year Ended December 31,
2009 2008
--------- ---------
Net cash (used in) operating activities $(102,052) $ (40,968)
Net Cash (used in) investing activities (224,718) (12,000)
Net cash provided by financing activities 680,197 52,500
--------- ---------
Net increase (decrease) in cash during period $ 353,427 $ (468)
========= =========
OPERATING ACTIVITIES
Net cash used in operating activities was $102,052 for the year ended December
31, 2009 compared with net cash used in operating activities of $40,968 in the
same period in 2008.
INVESTING ACTIVITIES
Net cash used in investing activities was $224,718 for the year ended December
31, 2009 compared to net cash used in investing activities of $12,000 in the
same period in 2008. The increase in use of cash of $212,718 in investing
activities is mainly attributable to the acquisition of lithium properties.
FINANCING ACTIVITIES
Net cash provided by financing activities was $680,197 for the year ended
December 31, 2009 compared to $52,500 provided by financing activities in the
same period in 2008.
CONTRACTUAL OBLIGATIONS
As a "smaller reporting company", we are not required to provide tabular
disclosure obligations.
GOING CONCERN
Due to the uncertainty of our ability to meet our current operating and capital
expenses, in their report on the annual financial statements for the year ended
December 31, 2009, our independent auditors included an explanatory paragraph
regarding concerns about our ability to continue as a going concern.
We anticipate that additional funding will be required in the form of equity
financing from the sale of our common stock. 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 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 is material to stockholders.
13
CRITICAL ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of consolidated 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 consolidated
financial statements and the reported amount of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
LOSS PER SHARE
Basic earnings (loss) per share is computed by dividing income (loss) available
to common shareholders by the weighted average number of common shares
outstanding during the year. The computation of diluted earnings per share
assumes the conversion, exercise or contingent issuance of securities only when
such conversion, exercise or issuance would have a dilutive effect on earnings
per share. The dilutive effect of convertible securities is reflected in diluted
earnings per share by application of the "if converted" method. In years in
which a loss is incurred, the effect of potential issuances of shares under
options and warrants would be anti-dilutive, and therefore basic and diluted
loss per share are the same
CASH AND CASH EQUIVALENTS
Cash includes cash on account, demand deposits, and short-term instruments with
maturities of three months or less.
COMPUTER EQUIPMENT
Computer equipment is stated on the basis of historical cost less accumulated
depreciation. Depreciation is provided using the straight-line method over the
estimated useful lives of the assets which has been estimated as 2 years.
Impairment losses are recorded on computer equipment used in operations when
indicators of impairment are present and the undiscounted cash flows estimated
to be generated by those assets are less than the assets' carrying amount.
INCOME TAXES
The asset and liability approach is used to account for income taxes by
recognizing deferred tax assets and liabilities for the expected future tax
consequences of temporary differences between the carrying amounts and the tax
basis of assets and liabilities.
FINANCIAL INSTRUMENTS
The Company's financial instruments consist of cash, accounts payable and
accrued liabilities, interest payable, and loans payable. Unless otherwise
noted, it is management's opinion that the Company is not exposed to significant
interest, currency or credit risks arising from these financial instruments.
Because of the short maturity and capacity of prompt liquidation of such assets
and liabilities, the fair value of these financial instruments approximate their
carrying values, unless otherwise noted.
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.
MINERAL PROPERTIES
Costs of exploration, carrying and retaining unproven mineral lease properties
are expensed as incurred. Mineral property acquisition costs are capitalized
including licenses and lease payments. Although the Company has taken steps to
verify title to mineral properties in which it has an interest, these procedures
do not guarantee the Company's title. Such properties may be subject to prior
agreements or transfers and title may be affected by undetected defects.
Impairment losses are recorded on mineral properties used in operations when
indicators of impairment are present and the undiscounted cash flows estimated
to be generated by those assets are less than the assets' carrying amount.
RECENT ACCOUNTING PRONOUNCEMENTS
VARIABLE INTEREST ENTITIES
In June 2009, the FASB issued changes to require an enterprise to perform an
analysis to determine whether the enterprise's variable interest or interests
give it a controlling financial interest in a variable interest entity; to
14
require ongoing reassessments of whether an enterprise is the primary
beneficiary of a variable interest entity; to eliminate the quantitative
approach previously required for determining the primary beneficiary of a
variable interest entity; to add an additional reconsideration event for
determining whether an entity is a variable interest entity when any changes in
facts and circumstances occur such that holders of the equity investment at
risk, as a group, lose the power from voting rights or similar rights of those
investments to direct the activities of the entity that most significantly
impact the entity's economic performance; and to require enhanced disclosures
that will provide users of financial statements with more transparent
information about an enterprise's involvement in a variable interest entity. The
guidance became effective for the Company on February 1, 2010. The adoption of
the guidance did not have an impact on the Company's consolidated financial
statements.
CODIFICATION OF GAAP
In June 2009, the FASB issued guidance to establish the Accounting Standards
Codification TM ("Codification") as the source of authoritative accounting
principles recognized by the FASB to be applied by nongovernmental entities in
the preparation of financial statements in conformity with GAAP. Rules and
interpretive releases of the SEC under authority of federal securities laws are
also sources of authoritative GAAP for SEC registrants. The FASB will no longer
issue new standards in the form of Statements, FASB Staff Positions, or Emerging
Issues Task Force Abstracts; instead, the FASB will issue Accounting Standards
Updates ("ASU"). ASUs will not be authoritative in their own right as they will
only serve to update the Codification. The issuance of SFAS 168 and the
Codification does not change GAAP. The guidance became effective for the Company
for the period ending October 31, 2009. The adoption of the guidance did not
have an impact on the Company's consolidated financial statements.
SUBSEQUENT EVENTS
On July 31, 2009, the Company adopted changes issued by the FASB that
establishes general standards of accounting for and disclosure of events that
occur after the balance sheet date but before financial statements are issued or
are available to be issued. Specifically, the guidance sets forth the period
after the balance sheet date during which management of a reporting entity
should evaluate events or transactions that may occur for potential recognition
or disclosure in the financial statements, the circumstances under which an
entity should recognize events or transactions occurring after the balance sheet
date in its financial statements, and the disclosures that an entity should make
about events or transactions that occurred after the balance sheet date. The
Company has evaluated subsequent events through the date the financial
statements were issued.
BUSINESS COMBINATIONS
The Company adopted the changes issued by the FASB that requires the acquiring
entity in a business combination to recognize all (and only) the assets acquired
and liabilities assumed in the transaction; establishes the acquisition-date
fair value as the measurement objective for all assets acquired and liabilities
assumed; and requires the acquirer to disclose additional information needed to
evaluate and understand the nature and financial effect of the business
combination.
The Company also adopted the changes issued by the FASB which requires assets
and liabilities assumed in a business combination that arise from contingencies
be recognized on the acquisition date at fair value if it is more likely than
not that they meet the definition of an asset or liability; and requires that
contingent consideration arrangements of the target assumed by the acquirer be
initially measured at fair value.
The guidance is effective for the Company's acquisitions occurring on or after
February 1, 2009. The Company applied these new provisions to two acquisitions
that occurred during the year, Rock Coast Media, Inc. and Pixel Bridge, Inc.
These acquisitions are more fully disclosed in Note 5 in our Consolidated
Financial Statements.
NON-CONTROLLING INTERESTS
In December 2007, the FASB issued changes to establish accounting and reporting
standards for all entities that prepare consolidated financial statements that
have outstanding non-controlling interests, sometimes called minority interest.
These standards require that ownership interests in subsidiaries held by outside
parties be clearly identified, labeled and presented in equity separate from the
parent's equity; the amount of net income attributable to the parent and the
non-controlling interest be separately presented on the consolidated statement
of income; accounting standards applied to changes in a parent's interest be
consistently applied; fair value measurement upon deconsolidation of a
non-controlling interest be used; and the interests of the non-controlling
owners be already identified and distinguished. The adoption of this guidance
had no impact on the Company's consolidated financial statements.
15
INTANGIBLE ASSETS
In April 2008, the FASB adopted changes to require companies estimating the
useful life of a recognized intangible asset to consider their historical
experience in renewing or extending similar arrangements or, in the absence of
historical experience, to consider assumptions that market participants would
use about renewal or extension as adjusted for entity-specific factors. The
guidance is effective for fiscal years beginning after December 15, 2008 and is
to be applied prospectively to intangible assets whether acquired before or
after the effective date. The Company adopted the guidance on February 1, 2009.
The adoption had no impact on the Company's consolidated financial statements.
HIERARCHY OF GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP")
In May 2008, the FASB issued changes to identify the sources of accounting
principles and the framework for selecting the principles used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with GAAP (the GAAP hierarchy). The guidance is
effective 60 days following the SEC's approval of the Public Company Accounting
Oversight Board amendments to AU section 411, THE MEANING OF PRESENT FAIRLY IN
CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. Management is
currently evaluating the guidance and assessing the impact, if any, on the
Company's consolidated financial statements.
REVENUE RECOGNITION
In September 2009, the FASB issued new revenue recognition guidance on multiple
deliverable arrangements. It updates the existing multiple-element revenue
arrangements guidance currently included under the Accounting Standards
Codification ("ASC") 605-25. The revised guidance primarily provides two
significant changes: 1) eliminates the need for objective and reliable evidence
of the fair value for the undelivered element in order for a delivered item to
be treated as a separate unit of accounting, and 2) requires the use of the
relative selling price method to allocate the entire arrangement consideration.
In addition, the guidance also expands the disclosure requirements for revenue
recognition. ASU 2009-13 will be effective for the first annual reporting period
beginning on or after fiscal 2011, with early adoption permitted provided that
the revised guidance is retroactively applied to the beginning of the year of
adoption. Management is currently evaluating the impact of adopting this
guidance on the Company's consolidated financial statements.
RECLASSIFICATIONS
Certain balances in the prior years have been reclassified to conform to the
current year presentation.
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.
16
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Lithium Corporation
(An Exploration Stage Company)
Table of Contents
December 31, 2009 and 2008
Report of Independent Registered Public Accounting Firm 18
Report of Independent Registered Public Accounting Firm 19
Consolidated Balance Sheets as of December 31, 2009 and 2008 20
Consolidated Statements of Operations for the years ended
December 31, 2009 and 2008 and the period from
January 30, 2007 (date of inception) to December 31, 2009 21
Consolidated Statement of Stockholders' Equity (Deficit) as of
December 31, 2009 22
Consolidated Statement of Cash Flows for the years ended
December 31, 2009 and 2008 and the period from January 30, 2007
(date of inception) to December 31, 2009 23
Consolidated Notes to the Financial Statements 24
17
Silberstein Ungar, PLLC CPAs and Business Advisors
--------------------------------------------------------------------------------
Phone (248) 203-0080
Fax (248) 281-0940
30600 Telegraph Road, Suite 2175
Bingham Farms, MI 48025-4586
www.sucpas.com
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors of
Lithium Corporation
Reno, Nevada
We have audited the accompanying consolidated balance sheet of Lithium
Corporation (the "Company") as of December 31, 2009, and the related
consolidated statements of operations, stockholder's equity (deficit), and cash
flows for the period then ended. 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 did not audit the
financial statements for the period January 30, 2007 (Inception) through
December 31, 2008. Those statements were audited by other auditors whose report
has been furnished to us, and our opinion on the statements of operations,
stockholders' equity, and cash flows for the period January 30, 2007 (Inception)
through December 31, 2009, insofar as it relates to the amounts for prior
periods through December 31, 2008, 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 the audit to obtain reasonable assurance about 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 circumstances, 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 also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, 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 Lithium Corporation
as of December 31, 2009 and the results of its operations and its cash flows for
the year then ended and for the period from January 30, 2007 (inception) through
December 31, 2009 in conformity with accounting principles generally accepted in
the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has limited working capital, has received no
revenue from sales of products or services, and has incurred losses from
operations. These factors raise substantial doubt about the Company's ability to
continue as a going concern. Management's plans with regard to these matters are
described in Note 2. The accompanying financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Silberstein Ungar, PLLC
----------------------------------
Bingham Farms, Michigan
April 13, 2010
18
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
Lithium Corp (formerly Utalk Communications, Inc.)
(a development stage company)
Reno, Nevada
We have audited the accompanying consolidated balance sheet of Lithium Corp. as
of December 31, 2008 and the related consolidated statements of operations,
shareholders' equity, and cash flows for the year then ended and for the period
from inception (January 30, 2007) through December 31, 2008. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit.
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 about 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 circumstances, 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 also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, 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 financial statements referred to above present fairly, in
all material respects, the financial position of Lithium Corp. as of December
31, 2008 and the results of operations and cash flows for the year then ended
and for the period from inception (January 30, 2007) through December 31, 2008,
in conformity with accounting principles generally accepted in the United States
of America.
/s/ MaloneBailey, LLP
--------------------------------
MaloneBailey, LLP
www.malonebailey.com
Houston, Texas
April 6, 2009
19
Lithium Corporation
(An Exploration Stage Company)
Consolidated Balance Sheets
As of December 31, 2009 and 2008
December 31, December 31,
2009 2008
---------- ----------
ASSETS
CURRENT ASSETS
Cash $ 360,511 $ 7,084
Prepaid expenses 26,550 7,300
---------- ----------
Total Current Assets 387,061 14,384
---------- ----------
OTHER ASSETS
Computer equipment, net of amortization 1,498 --
Software development -- 12,000
Mineral properties 262,421 --
---------- ----------
Total Other Assets 263,919 12,000
---------- ----------
TOTAL ASSETS $ 650,980 $ 26,384
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities $ 99,308 $ 4,200
Due to director 6,234 5,500
Loans payable 169,463 --
---------- ----------
Total Current Liabilities 275,005 9,700
---------- ----------
Total Liabilities 275,005 9,700
---------- ----------
STOCKHOLDERS' EQUITY
Common stock, 300,000,000 shares authorized, par value
$0.001; 60,550,000 common shares issued and outstanding
(2008 - 268,200,000) 60,550 4,470
Additional paid in capital 556,155 62,530
Deficit accumulated during the exploration stage (240,730) (50,316)
---------- ----------
Total Stockholders' Equity 375,975 16,684
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 650,980 $ 26,384
========== ==========
The accompanying notes are an integral part of these financial statements
20
Lithium Corporation
(An Exploration Stage Company)
Consolidated Statements of Operations
For the Years Ended December 31, 2009 and 2008
For the Period from January 30, 2007 (Inception) to December 31, 2009
From
January 30, 2007
Year ended Year ended (Inception) to
December 31, December 31, December 31,
2009 2008 2009
------------ ------------ ------------
REVENUE $ -- $ -- $ --
EXPENSES
Professional fees 33,431 11,524 66,310
Amortization 504 -- 504
Exploration expenses 66,264 -- 66,264
Investor relations 16,875 -- 16,875
Interest 6,916 -- 6,916
Management fees 12,000 -- 12,000
Rent 1,663 -- 1,663
Transfer agent and filing fees 16,135 -- 16,135
Travel 6,120 -- 6,120
Website development costs 412 3,500 3,912
Write-down of software development costs 12,000 -- 12,000
General and administrative 18,094 11,844 32,031
------------ ------------ ------------
TOTAL EXPENSES 190,414 26,868 240,730
------------ ------------ ------------
LOSS BEFORE INCOME TAXES (190,414) (26,868) (240,730)
PROVISION FOR INCOME TAXES -- -- --
------------ ------------ ------------
NET LOSS $ (190,414) $ (26,868) $ (240,730)
============ ============ ============
NET LOSS PER SHARE: BASIC AND DILUTED $ (0.00) $ (0.00)
============ ============
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:
BASIC AND DILUTED 226,670,000 264,646,027
============ ============
The accompanying notes are an integral part of these financial statements
21
Lithium Corporation
(An Exploration Stage Company)
Consolidated Statement of Stockholders' Equity (Deficit)
For the Period from January 30, 2007 (Inception) to December 31, 2009
Deficit
Accumulated
Common Stock Additional during the
---------------------- Paid in Exploration
Shares Amount Capital Stage Total
------ ------ ------- ----- -----
Balance, January 30, 2007
(date of inception) -- $ -- $ -- $ -- $ --
Shares issued to founder on
January 30, 2007 @ $0.001 per
share (par value $0.001 per share) 240,000,000 240,000 (220,000) -- 20,000
Net loss for the period ended
December 31, 2007 -- -- -- (23,448) (23,448)
------------ --------- --------- --------- ---------
Balance, December 31, 2007 240,000,000 240,000 (220,000) (23,448) (3,448)
Common stock issued for cash @
$0.0016 per share 28,200,000 28,200 18,800 -- 47,000
Net loss for the year ended
December 31, 2008 -- -- -- (26,868) (26,868)
------------ --------- --------- --------- ---------
Balance, December 31, 2008 268,200,000 268,200 (201,200) (50,316) 16,684
Shares issued in conjunction
with merger 12,350,000 12,350 537,355 -- 549,705
Shares cancelled (220,000,000) (220,000) 220,000 -- --
Net loss for the year ended
December 31, 2009 -- -- -- (190,414) (190,414)
------------ --------- --------- --------- ---------
Balance, December 31, 2009 60,550,000 $ 60,550 $ 556,155 $(240,730) $ 375,975
============ ========= ========= ========= =========
The accompanying notes are an integral part of these financial statements
22
Lithium Corporation
(An Exploration Stage Company)
Consolidated Statements of Cash Flows
For the Years Ended December 31, 2009 and 2008
For the Period from January 30, 2007 (Inception) to December 31, 2009
From
January 30, 2007
Year ended Year ended (Inception) to
December 31, December 31, December 31,
2009 2008 2009
---------- ---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss for the period $ (190,414) $ (26,868) $ (240,730)
Adjustment for non-cash items:
Write-down of software development 12,000 -- 12,000
Depreciation 504 -- 504
Changes in assets and liabilities:
(Increase) in prepaid expenses (19,250) (7,001) (26,550)
Increase (decrease) in accounts payable
and accrued liabilities 95,108 (7,099) 99,308
---------- ---------- ----------
Cash used in operating activities (102,052) (40,968) (155,468)
---------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment (2,002) -- (2,002)
Purchase of software development -- (12,000) (12,000)
Interest in mineral properties (222,716) -- (222,716)
---------- ---------- ----------
Cash used in investing activities (224,718) (12,000) (236,718)
---------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from loan payable 169,463 5,500 169,463
Proceeds from director 734 -- 6,234
Proceeds from sale of stock 510,000 47,000 577,000
---------- ---------- ----------
Cash provided by financing activities 680,197 52,500 752,697
---------- ---------- ----------
Increase (decrease) in cash 353,427 (468) 360,511
Cash, opening 7,084 7,552 --
---------- ---------- ----------
Cash, closing $ 360,511 $ 7,084 $ 360,511
========== ========== ==========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest $ -- $ -- $ --
========== ========== ==========
Cash paid for income taxes $ -- $ -- $ --
========== ========== ==========
The accompanying notes are an integral part of these financial statements
23
Lithium Corporation
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
December 31, 2009
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Lithium Corporation (formerly Utalk Communications Inc.) was incorporated on
January 30, 2007 under the laws of Nevada. On September 30, 2009, Utalk
Communications Inc. changed its name to Lithium Corporation.
Nevada Lithium Corp. was incorporated on March 16, 2009 under the laws of Nevada
under the name Lithium Corp. On September 10, 2009, the Company amended its
articles of incorporation to change its name to Nevada Lithium Corp. Lithium
intends to engage in the exploration of certain lithium interests in the state
of Nevada. The Company is in the exploration stage. These consolidated financial
statements have been prepared in accordance with U.S. generally accepted
accounting principles.
USE OF ESTIMATES
The preparation of consolidated 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 consolidated
financial statements and the reported amount of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
LOSS PER SHARE
Basic earnings (loss) per share is computed by dividing income (loss) available
to common shareholders by the weighted average number of common shares
outstanding during the year. The computation of diluted earnings per share
assumes the conversion, exercise or contingent issuance of securities only when
such conversion, exercise or issuance would have a dilutive effect on earnings
per share. The dilutive effect of convertible securities is reflected in diluted
earnings per share by application of the "if converted" method. In years in
which a loss is incurred, the effect of potential issuances of shares under
options and warrants would be anti-dilutive, and therefore basic and diluted
loss per share are the same.
CASH AND CASH EQUIVALENTS
Cash includes cash on account, demand deposits, and short-term instruments with
maturities of three months or less.
COMPUTER EQUIPMENT
Computer equipment is stated on the basis of historical cost less accumulated
depreciation. Depreciation is provided using the straight-line method over the
estimated useful lives of the assets which has been estimated as 2 years.
Impairment losses are recorded on computer equipment used in operations when
indicators of impairment are present and the undiscounted cash flows estimated
to be generated by those assets are less than the assets' carrying amount.
INCOME TAXES
The asset and liability approach is used to account for income taxes by
recognizing deferred tax assets and liabilities for the expected future tax
consequences of temporary differences between the carrying amounts and the tax
basis of assets and liabilities.
FINANCIAL INSTRUMENTS
The Company's financial instruments consist of cash, accounts payable and
accrued liabilities, interest payable, and loans payable. Unless otherwise
noted, it is management's opinion that the Company is not exposed to significant
interest, currency or credit risks arising from these financial instruments.
Because of the short maturity and capacity of prompt liquidation of such assets
and liabilities, the fair value of these financial instruments approximate their
carrying values, unless otherwise noted.
24
Lithium Corporation
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
December 31, 2009
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
MINERAL PROPERTIES
Costs of exploration, carrying and retaining unproven mineral lease properties
are expensed as incurred. Mineral property acquisition costs are capitalized
including licenses and lease payments. Although the Company has taken steps to
verify title to mineral properties in which it has an interest, these procedures
do not guarantee the Company's title. Such properties may be subject to prior
agreements or transfers and title may be affected by undetected defects.
Impairment losses are recorded on mineral properties used in operations when
indicators of impairment are present and the undiscounted cash flows estimated
to be generated by those assets are less than the assets' carrying amount.
RECENTLY ADOPTED PRONOUNCEMENTS
VARIABLE INTEREST ENTITIES
In June 2009, the FASB issued changes to require an enterprise to perform an
analysis to determine whether the enterprise's variable interest or interests
give it a controlling financial interest in a variable interest entity; to
require ongoing reassessments of whether an enterprise is the primary
beneficiary of a variable interest entity; to eliminate the quantitative
approach previously required for determining the primary beneficiary of a
variable interest entity; to add an additional reconsideration event for
determining whether an entity is a variable interest entity when any changes in
facts and circumstances occur such that holders of the equity investment at
risk, as a group, lose the power from voting rights or similar rights of those
investments to direct the activities of the entity that most significantly
impact the entity's economic performance; and to require enhanced disclosures
that will provide users of financial statements with more transparent
information about an enterprise's involvement in a variable interest entity. The
guidance became effective for the Company on February 1, 2010. The adoption of
the guidance did not have an impact on the Company's consolidated financial
statements.
CODIFICATION OF GAAP
In June 2009, the FASB issued guidance to establish the Accounting Standards
Codification TM ("Codification") as the source of authoritative accounting
principles recognized by the FASB to be applied by nongovernmental entities in
the preparation of financial statements in conformity with GAAP. Rules and
interpretive releases of the SEC under authority of federal securities laws are
also sources of authoritative GAAP for SEC registrants. The FASB will no longer
issue new standards in the form of Statements, FASB Staff Positions, or Emerging
Issues Task Force Abstracts; instead, the FASB will issue Accounting Standards
Updates ("ASU"). ASUs will not be authoritative in their own right as they will
only serve to update the Codification. The issuance of SFAS 168 and the
Codification does not change GAAP. The guidance became effective for the Company
for the period ending October 31, 2009. The adoption of the guidance did not
have an impact on the Company's consolidated financial statements.
SUBSEQUENT EVENTS
On July 31, 2009, the Company adopted changes issued by the FASB that
establishes general standards of accounting for and disclosure of events that
occur after the balance sheet date but before financial statements are issued or
are available to be issued. Specifically, the guidance sets forth the period
after the balance sheet date during which management of a reporting entity
should evaluate events or transactions that may occur for potential recognition
or disclosure in the financial statements, the circumstances under which an
entity should recognize events or transactions occurring after the balance sheet
date in its financial statements, and the disclosures that an entity should make
about events or transactions that occurred after the balance sheet date. The
Company has evaluated subsequent events through the date the financial
statements were issued.
25
Lithium Corporation
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
December 31, 2009
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
BUSINESS COMBINATIONS
The Company adopted the changes issued by the FASB that requires the acquiring
entity in a business combination to recognize all (and only) the assets acquired
and liabilities assumed in the transaction; establishes the acquisition-date
fair value as the measurement objective for all assets acquired and liabilities
assumed; and requires the acquirer to disclose additional information needed to
evaluate and understand the nature and financial effect of the business
combination.
The Company also adopted the changes issued by the FASB which requires assets
and liabilities assumed in a business combination that arise from contingencies
be recognized on the acquisition date at fair value if it is more likely than
not that they meet the definition of an asset or liability; and requires that
contingent consideration arrangements of the target assumed by the acquirer be
initially measured at fair value.
The guidance is effective for the Company's acquisitions occurring on or after
February 1, 2009. The Company applied these new provisions to two acquisitions
that occurred during the year, Rock Coast Media, Inc. and Pixel Bridge, Inc.
These acquisitions are more fully disclosed in Note 5 in our Consolidated
Financial Statements.
NON-CONTROLLING INTERESTS
In December 2007, the FASB issued changes to establish accounting and reporting
standards for all entities that prepare consolidated financial statements that
have outstanding non-controlling interests, sometimes called minority interest.
These standards require that ownership interests in subsidiaries held by outside
parties be clearly identified, labeled and presented in equity separate from the
parent's equity; the amount of net income attributable to the parent and the
non-controlling interest be separately presented on the consolidated statement
of income; accounting standards applied to changes in a parent's interest be
consistently applied; fair value measurement upon deconsolidation of a
non-controlling interest be used; and the interests of the non-controlling
owners be already identified and distinguished. The adoption of this guidance
had no impact on the Company's consolidated financial statements.
INTANGIBLE ASSETS
In April 2008, the FASB adopted changes to require companies estimating the
useful life of a recognized intangible asset to consider their historical
experience in renewing or extending similar arrangements or, in the absence of
historical experience, to consider assumptions that market participants would
use about renewal or extension as adjusted for entity-specific factors. The
guidance is effective for fiscal years beginning after December 15, 2008 and is
to be applied prospectively to intangible assets whether acquired before or
after the effective date. The Company adopted the guidance on February 1, 2009.
The adoption had no impact on the Company's consolidated financial statements.
HIERARCHY OF GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP") In May 2008, the
FASB issued changes to identify the sources of accounting principles and the
framework for selecting the principles used in the preparation of financial
statements of nongovernmental entities that are presented in conformity with
GAAP (the GAAP hierarchy). The guidance is effective 60 days following the SEC's
approval of the Public Company Accounting Oversight Board amendments to AU
section 411, THE MEANING OF PRESENT FAIRLY IN CONFORMITY WITH GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES. Management is currently evaluating the guidance and
assessing the impact, if any, on the Company's consolidated financial
statements.
26
Lithium Corporation
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
December 31, 2009
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
REVENUE RECOGNITION
In September 2009, the FASB issued new revenue recognition guidance on multiple
deliverable arrangements. It updates the existing multiple-element revenue
arrangements guidance currently included under the Accounting Standards
Codification ("ASC") 605-25. The revised guidance primarily provides two
significant changes: 1) eliminates the need for objective and reliable evidence
of the fair value for the undelivered element in order for a delivered item to
be treated as a separate unit of accounting, and 2) requires the use of the
relative selling price method to allocate the entire arrangement consideration.
In addition, the guidance also expands the disclosure requirements for revenue
recognition. ASU 2009-13 will be effective for the first annual reporting period
beginning on or after fiscal 2011, with early adoption permitted provided that
the revised guidance is retroactively applied to the beginning of the year of
adoption. Management is currently evaluating the impact of adopting this
guidance on the Company's consolidated financial statements.
RECLASSIFICATIONS
Certain balances in the prior years have been reclassified to conform to the
current year presentation.
NOTE 2 - GOING CONCERN
Lithium's financial statements are prepared using generally accepted accounting
principles applicable to a going concern, which contemplates that the Company
will continue in operation for the foreseeable future and will realize its
assets and liquidate its liabilities in the normal course of business. However,
Lithium has no current source of revenue, recurring losses, a working capital of
$112,056 and a deficit accumulated during the exploration stage of $240,730 as
of December 31, 2009. These factors, among others, raise, substantial doubt
about the Company's ability to continue as a going concern. Lithium's management
plans on raising cash from public or private debt or equity financing, on an
as-needed basis and in the longer term, revenues from the acquisition,
exploration and development of mineral interests, if found. Lithium's ability to
continue as a going concern is dependent on these additional cash financings
and, ultimately, upon achieving profitable operations through the development of
mineral interests. The successful outcome of future activities cannot be
determined at this time. The accompanying financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
NOTE 3 - ACQUISITION OF NEVADA LITHIUM CORP.
On October 9, 2009, the Lithium Corporation completed the acquisition of Nevada
Lithium Corp. whereby it issued 12,350,000 common shares in exchange for 100% of
the issued and outstanding common shares of Nevada Lithium Corp. This
acquisition has been accounted for using the acquisition method.
The deemed value of the acquisition was $549,705 based upon the fair value of
consideration received.
NOTE 4 - COMPUTER EQUIPMENT
Accumulated
Cost Amortization Net Book Value
---- ------------ --------------
Computer Equipment $2,002 $ 504 $1,498
====== ====== ======
27
Lithium Corporation
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
December 31, 2009
NOTE 5 - MINERAL PROPERTIES
FISH CREEK PROPERTY
On March 16, 2009, the Company entered into a lease agreement whereby it
optioned 100% interest in the property by making the following payments:
Payment Amount Date
------- ------ ----
Upon signature $ 20,000 March 16, 2009 (paid)
1st anniversary $ 25,000 March 16, 2010 (paid)
2nd anniversary $ 30,000 March 16, 2011
3rd through 10th anniversary $ 50,000 March 16, 2012 - 2019
11th through 20th anniversary $ 75,000 March 16, 2010 - 2029
At any time upon commercial production $250,000
The lessor reserves a 3% NSR. The Company may purchase 1% of the NSR within 5
years for $500,000, an additional 1% of the NSR within 10 years for $1,000,000
and the remaining 1% of the NSR within 15 years for $2,000,000.
FISH LAKE PROPERTY
The Company has purchased a 100% interest in the Fish Lake property $350,000
worth of equity whereby title shall be transferred to the Company through quit
claim deed upon the final stock disbursement. Stock disbursements shall be made
quarterly upon the following schedule:
1st Disbursement: Within 10 days of signing agreement (paid)
2nd Disbursement: within 10 days of June 30, 2009 (paid)
3rd Disbursement: within 10 days of December 30, 2009 (paid)
4th Disbursement: within 10 days of March 31, 2010 (paid)
5th Disbursement: within 10 days of June 30, 2010
6th Disbursement: within 10 days of September 30, 2010
7th Disbursement: within 10 days of December 31, 2010
8th Disbursement: within 10 days of March 31, 2011
In addition, the Company will be required to expend $250,000 on the property
over the term of the lease.
STAKED PROPERTIES
The Company has staked claims with various registries as summarized below:
Name Claims (Area in Acres) Amount
---- ---------------------- ------
West Big Smoky 34 (2,720) $ 9,915
Salt Wells 156 (12,480) $45,482
Cortez 62 (4,960) $18,077
Beowawe 16 (1,280) $ 5,481
28
Lithium Corporation
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
December 31, 2009
NOTE 6 - LOANS PAYABLE
As of December 31, 2009, the Company has a loan payable of $125,000 which bears
interest at 10% per annum, is secured by the assets of Nevada Lithium Corp. and
is due on May 20, 2010.
As of December 31, 2009, the Company has a loan payable of $40,000 which bears
interest at 10% per annum, is secured by the assets of Nevada Lithium Corp. and
is due on March 17, 2009.
As of December 31, 2009, $10,872 of interest has been accrued in relation to
these loans.
The Company has a balance owing of $4,463 to a related party which is unsecured
and bears no interest. There are no specific terms of repayment with this loan.
NOTE 7 - CAPITAL STOCK
The Company is authorized to issue 300,000,000 shares of it $0.001 par value
common stock. On September 30, 2009, the Company effected a 60-for-1 forward
stock split of its $0.001 par value common stock.
All share and per share amounts have been retroactively restated to reflect the
splits discussed above.
COMMON STOCK
On January 30, 2007, the Company issued 240,000,000 shares of its common stock
to founders for proceeds of $20,000.
During the year-ended December 31, 2008, the Company issued 28,200,000 shares of
its common stock for total proceeds of 47,000.
On October 9, 2009, the Company cancelled 220,000,000 shares of its common
stock. Also on October 9, 2009, the Company issued 12,350,000 shares of its
common stock for 100 percent of the issued and outstanding stock of Nevada
Lithium Corp. Refer to Note 3.
NOTE 8 - INCOME TAXES
The Company did not provide any current or deferred United States federal, state
or foreign income tax provision or benefit for the period presented because it
has experienced operation losses since inception. The Company has provided a
full valuation allowance on the deferred tax asset, consisting primarily of net
operating loss carry-forwards, because of uncertainty regarding its realization.
Deferred income taxes reflect the net tax effect of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the net deferred taxes at December 31, 2009 are as follows:
2009 2008
-------- --------
Deferred tax asset attributable to:
Net operating losses carried forward $ 52,960 $ 11,069
Valuation allowance (52,960) (11,069)
-------- --------
Total net deferred tax asset $ -- $ --
======== ========
29
Lithium Corporation
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
December 31, 2009
NOTE 8 - INCOME TAXES (CONTINUED)
Lithium follows Statement of Financial Accounting Standards Number 109 (SFAS
109) (ASC 740-10), "Accounting for Income Taxes." SFAS No. 109 (ASC 740-10)
requires a valuation allowance, if any, to reduce the deferred tax assets
reported if, based on the weight of the evidence, it is more likely than not
that some portion or all of the deferred tax assets will not be realized.
Management has determined that a valuation allowance of $52,960 at December 31,
2009 (2008: $11,069) is necessary to reduce the deferred tax assets to the
amount that will more likely than not be realized.
At December 31, 2009, the Company had net operating loss carry-forwards
amounting to approximately $240,730 (2008: $50,316) that expire in various
amounts beginning in 2029 in the U.S.
NOTE 9 - SUBSEQUENT EVENTS
The Company has analyzed its operations subsequent to December 31, 2009 through
the date these financial statements were filed with the Securities and Exchange
Commission.
On January 10, 2010, the Company issued 53,484 shares of its common stock as
part of the Fish Lake Property acquisition.
On March 24, 2010, the Company issued 2,000,000 units in a private placement,
raising gross proceeds of $2,000,000, or $1.00 per unit. Each unit consists of
one common share in the capital of our company and one non-transferable common
share purchase warrant. Each whole common share purchase warrant
non-transferable entitles the holder thereof to purchase one share of common
stock in the capital of our company, for a period of twelve months commencing
the closing, at a purchase price of $1.20 per warrant share and at a purchase
price of $1.35 per warrant share for a period of twenty-four months thereafter.
On April 10, 2010, the Company issued 38,069 shares of its common stock as part
of the Fish Lake Property acquisition.
30
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 (our principal executive
officer, principal financial officer and principle accounting officer) to allow
for timely decisions regarding required disclosure.
As of December 31, 2009, 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 (our principal executive officer, principal financial officer and
principle accounting officer), of the effectiveness of the design and operation
of our disclosure controls and procedures. Based on the foregoing, our president
(our principal executive officer, principal financial officer and principle
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 December 31, 2009. 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 December 31, 2009, our
internal control over financial reporting is effective. 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
31
presentation. Projections of any evaluation of effectiveness to future periods
are subject to the risk that controls may become inadequate because of changes
in conditions, or that the degree of compliance with the policies or procedures
may deteriorate.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There have been no changes in our internal controls over financial reporting
that occurred during the year ended December 31, 2009 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:
Position Held Date First Elected
Name with the Company Age or Appointed
---- ---------------- --- ------------
Tom Lewis President, Treasurer, 56 August 25, 2009
Secretary and Director
John Hiner Vice President of 62 October 25, 2009
Exploration and Director
Henry (Kip) Tonking Director 55 November 17, 2009
Stephen Goss Director 59 February 8, 2010
BUSINESS EXPERIENCE
The following is a brief account of the education and business experience during
at least the past five years of each director, executive officer and key
employee of our company, indicating the person's principal occupation during
that period, and the name and principal business of the organization in which
such occupation and employment were carried out.
TOM LEWIS - PRESIDENT, TREASURER, SECRETARY AND DIRECTOR
Mr. Lewis has more than 35 years experience in the Oil and Gas and Mineral
exploration industries. He has held various positions including Project
Geologist, Project Manager, Senior Project Geologist, and Vice President
Exploration. He also was an integral member of the development team that
explored, and developed the Cortez Hills deposit in Crescent Valley Nevada.
In 1973 Mr. Lewis started his career in the Oil Fields, and worked in the
Geophysical, and Drilling industries until 1981, when he became a Petroleum
Landman for Westburne Petroleum & Minerals. While there he was responsible for
the acquisition and disposition of interests and maintaining title to petroleum
lands in various locales in the United States, and Western Canada. In 1989 he
started his own business as a consulting geologist and has worked in numerous
locations over the past 20 years, including the United States, Mexico, Canada,
32
Portugal, Chile, Africa, India and Honduras. Some of the positions he held
include: working with Teck Cominco in 1996 evaluating and exploring precious
metal deposits in Southern Mexico; Project Manager on the Farim Phosphate
deposit for Champion Resources in Guinea Bissau, West Africa in 1998; Project
Geologist in 2001 and 2002 for Crystal Graphite Corporation, Project Geologist
on the Midway Gold project in Tonopah Nevada, followed by two years as Senior
Geologist at the Cortez Joint Venture in Crescent Valley, Nevada. By August 2005
he was named Vice President of Exploration in Portugal for St Elias Mines,
working on the Jales project, and developing grass roots projects in Nevada.
Following his experience in Portugal and Nevada he consulted to Selkirk Metals
and New World Resource Corp. on projects in western Canada and Nevada. Most
recently he consulted to Kinross Gold USA evaluating possible acquisitions.
JOHN HINER - VICE PRESIDENT OF EXPLORATION AND DIRECTOR
Mr. Hiner is a Geologist who has over 30 years of experience in the Mineral
exploration, and Oil and Gas industries, and has considerable experience in this
capacity, and also has been an officer or director of several public companies.
HENRY (KIP) TONKING - DIRECTOR
Mr. Tonking is a graduate of the Mackay School of Mines at the University of
Nevada in Reno, Nevada, graduating with a B.Sc. in Geology in 1979. Currently
based in Reno, Kip has provided exploration and management services to a number
of major and junior mining firms throughout the western Unites States, with his
principal focus being the State of Nevada. He has over 30 years of experience in
minerals exploration and real estate development. Mr. Tonking is currently the
owner and President of T & T Exploration, a mineral exploration consulting firm,
Vice President of Golden Crescent Corporation, and Manager of All American
Resources, all of which are Nevada based companies.
STEPHEN GOSS - DIRECTOR
Mr. Goss has over twenty years experience as a mineral landman, and has worked
for The Bunker Hill Company, U.S. Borax and Chemical Corporation and Kennecott
Exploration Company. He has been involved with several start-up mineral
exploration companies, most notably Timberline Resources Corporation, where he
was a co-founder and acted as its CEO from January 2004 to May 2006. Mr. Goss
received a M.S. degree in Geography from the University of Idaho and is licensed
as a Certified General real estate appraiser in the State of Washington.
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. any bankruptcy petition filed by or against any business of which such
person was a general partner or executive officer either at the time
of the bankruptcy or within two years prior to that time;
2. any conviction in a criminal proceeding or being subject to a pending
criminal proceeding, excluding traffic violations and other minor
offences;
3. being subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining, barring,
suspending or otherwise limiting his involvement in any type of
business, securities or banking activities; or
33
4. being found by a court of competent jurisdiction in a civil action,
the Securities and Exchange Commission or the Commodity Futures
Trading Commission to have violated a federal or state securities or
commodities law and the judgment has not been reversed, suspended, or
vacated.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
We do not have a class of equity securities registered pursuant to section 12 of
the Securities Exchange Act of 1934 and therefore, we are not subject to the
reporting requirements under Section 16(a) of the Securities Exchange Act of
1934.
CODE OF ETHICS
We have not adopted a code of ethics.
BOARD AND COMMITTEE MEETINGS
Our board of directors held no formal meetings during the year ended December
31, 2009. 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.
AUDIT COMMITTEE
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.
During fiscal 2009 aside from quarterly review teleconferences, there were no
meetings held by this committee. The business of the audit committee was
conducted though these teleconferences and by resolutions consented to in
writing by all the members and filed with the minutes of the proceedings of the
audit committee.
AUDIT COMMITTEE FINANCIAL EXPERT
Our board of directors has determined that it does not have a member of its
audit committee that qualifies as an "audit committee financial expert" as
defined in Item 407(d)(5)(ii) of Regulation S-K.
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 December
31, 2009 and 2008; 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
December 31, 2009 and 2008,
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 $100,000 for the
respective fiscal year:
34
SUMMARY COMPENSATION TABLE
Change in
Pension
Value and
Non-Equity Nonqualified
Name and Incentive Deferred
Principal Stock Option Plan Compensation All Other
Position Year Salary($) Bonus($) Awards($) Awards($) Compensation($) Earnings($) Compensation($) Totals($)
-------- ---- --------- -------- --------- --------- --------------- ----------- --------------- ---------
Tom Lewis 2009 Nil Nil Nil Nil Nil Nil $40,380 $40,380
President, 2008 N/A N/A N/A N/A N/A N/A N/A N/A
Treasurer,
Secretary and
Director (1)
Mazen Hleiss 2009 Nil Nil Nil Nil Nil Nil Nil Nil
Former 2008 Nil Nil Nil Nil Nil Nil Nil Nil
President,
Treasurer,
Secretary and
Director (2)
----------
(1) Mr. Lewis was appointed the president, treasurer, secretary and a director
of our company on August 25, 2009.
(2) Mr. Hleiss was appointed the president, treasurer, secretary and a director
of our company January 30, 2007 and resigned as president, treasurer,
secretary on August 25, 2009, and as a director on November 17, 2009.
Other than as set out below, there are no arrangements or plans in which we
provide pension, retirement or similar benefits for directors or executive
officers. Our directors and executive officers may receive share options at the
discretion of our board of directors in the future. We do not have any material
bonus or profit sharing plans pursuant to which cash or non-cash compensation is
or may be paid to our directors or executive officers, except that share options
may be granted at the discretion of our board of directors.
2009 GRANTS OF PLAN-BASED AWARDS
The following table provides information about equity and non-equity awards
granted to the named executives in 2009:
35
GRANTS OF PLAN-BASED AWARDS
All
Other
Stock Grant
Awards: All Other Exercise Date
Number Option or Fair
of Awards: Base Value
Estimated Future Payouts Estimated Future Payouts Shares Number Price of
Under Non-Equity Incentive Under Equity Incentive of of of Stock
Plan Awards Plan Awards Stocks Securities Option and
Grant ----------------------------------- ----------------------------------- or Underlying Awards Option
Name Date Threshold($) Target($) Maximum($) Threshold($) Target($) Maximum($) Units(#) Options(#) ($/Sh) Awards
---- ---- ------------ --------- ---------- ------------ --------- ---------- -------- ---------- ------ ------
Tom Lewis 2009 Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil
President, 2008 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Treasurer,
Secretary
and Director
Mazen Hleiss 2009 Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil
Former 2008 Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil
President,
Treasurer,
Secretary
and Director
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:
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
Option Awards Stock Awards
----------------------------------------------------------------- -------------------------------------------------
Equity
Incentive
Equity Plan
Incentive Awards:
Plan Market or
Awards: Payout
Equity Number of Value of
Incentive Number Unearned Unearned
Plan Awards; of Market Shares, Shares,
Number of Number of Number of Shares Value of Units or Units or
Securities Securities Securities or Units Shares or Other Other
Underlying Underlying Underlying of Stock Units of Rights Rights
Unexercised Unexercised Unexercised Option Option That Stock That That That
Options Options Unearned Exercise Expiration Have Not Have Not Have Not Have Not
Name Exercisable(#) Unexercisable(#) Options(#) Price($) Date Vested(#) Vested($) Vested(#) Vested(#)
---- -------------- ---------------- ---------- -------- ---- --------- --------- --------- ---------
Tom Lewis 2009 Nil Nil Nil Nil Nil Nil Nil Nil Nil
President, 2009 N/A N/A N/A N/A N/A N/A N/A N/A N/A
Treasurer,
Secretary
and Director
Mazen Hleiss 2009 Nil Nil Nil Nil Nil Nil Nil Nil Nil
Former 2009 N/A N/A N/A N/A N/A N/A N/A N/A N/A
President,
Treasurer,
Secretary
and Director
36
OPTION EXERCISES AND STOCK VESTED
During our Fiscal year ended December 31, 2009 there were no options exercised
by our named officers.
COMPENSATION OF DIRECTORS
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.
The following table sets forth a summary of the compensation paid to our
non-employee directors in 2009:
DIRECTOR COMPENSATION
Change in
Pension
Value and
Fees Non-Equity Nonqualified
Earned Incentive Deferred
Paid in Stock Option Plan Compensation All Other
Name Cash($) Awards($) Awards($) Compensation($) Earnings($) Compensation($) Total($)
---- ------- --------- --------- --------------- ----------- --------------- --------
Tom Lewis Nil Nil Nil Nil Nil Nil Nil
John Hiner Nil Nil Nil Nil Nil Nil Nil
Henry Tonking Nil Nil Nil Nil Nil Nil Nil
Stephen Goss Nil Nil Nil Nil Nil Nil Nil
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.
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 April 14, 2010, 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.
37
Name and Address of Amount and Nature of Percentage
Beneficial Owner Beneficial Ownership of Class(1)
---------------- -------------------- -----------
Tom Lewis 10,000,000 15.96%
PO Box 2053
Richland, WA 99352
John Hiner 10,000,000 15.96%
9443 Axlunde Road
Lynden, WA 98264
Henry Tonking Nil 0.00%
PO Box 6945
Incline Village, NV 89450
Stephen Goss Nil 0.00%
36 W. 16th Ave
Spokane, WA 99203
Directors and Executive
Officers as a Group (1) 20,000,000 common shares 31.92%
----------
(1) 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
April 14, 2010. As of April 14, 2010 there were 62,641,553 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 December 31, 2009, 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 three completed
fiscal years.
DIRECTOR INDEPENDENCE
We currently act with four (4) directors, consisting of Tom Lewis, John Hiner,
Henry Tonking and Stephen Goss.
38
We have determined that John Hiner, Henry Tonking and Stephen Goss are
independent directors, as that term is used in Rule 4200(a)(15) of the Rules of
National Association of Securities Dealers.
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 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.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The aggregate fees billed for the most recently completed fiscal year ended
December 31, 2009 and for fiscal year ended December 31, 2008 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 Ended
December 31, December 31,
2009 2008
------ ------
$ $
Audit Fees 8,000 11,524
Audit Related Fees Nil Nil
Tax Fees Nil Nil
All Other Fees 4,250 Nil
------ ------
Total 12,250 11,524
====== ======
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) Financial statements for our company are listed in the index under
Item 8 of this document
(2) All financial statement schedules are omitted because they are not
applicable, not material or the required information is shown in the
financial statements or notes thereto.
39
(b) Exhibits
Exhibit
Number Description
(3) ARTICLES OF INCORPORATION AND BYLAWS
3.1 Articles of Incorporation (incorporated by reference from our
Registration Statement on Form SB-2 filed on December 21, 2007).
3.2 By-laws (incorporated by reference from our Registration Statement on
Form SB-2 filed on December 21, 2007).
3.3 Articles of Merger (incorporated by reference from our Current Report
on Form 8-K filed on October 2, 2009).
3.4 Certificate of Change (incorporated by reference from our Current
Report on Form 8-K filed on October 2, 2009).
(4) INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING
INDENTURES
4.1 2009 Stock Option Plan (incorporated by reference from our Current
Report on Form 8-K filed on December 30, 2009)
(10) MATERIAL CONTRACTS
10.1 Share exchange agreement dated October 9, 2009, among our company,
Nevada Lithium Corporation and the selling shareholders of Nevada
Lithium Corporation as set out in the share exchange agreement
(incorporated by reference from our Current Report on Form 8-K filed
on October 26, 2009).
10.2 Lease Purchase Agreement dated June 1, 2009 between Nevada Lithium
Corporation as purchaser and Nevada Mining Co., Inc., Robert Craig,
Barbara Craig and Elizabeth Dickman as vendors. (incorporated by
reference from our Current Report on Form 8-K filed on October 26,
2009).
10.3 Lease Agreement dated March 16, 2009 between Nevada Lithium
Corporation as Lessee and Cerro Rico Ventures LLC as Lessor
(incorporated by reference from our Current Report on Form 8-K filed
on October 26, 2009).
(21) SUBSIDIARIES OF THE REGISTRANT
21.1 Nevada Lithium Corporation
(23) CONSENTS OF EXPERTS
23.1* Consent of Silberstein Ungar, PLLC CPAs and Business Advisors
23.2* Consent of MaloneBailey, LLP
(31) RULE 13A-14(D)/15D-14(D) CERTIFICATIONS
31.1* Section 302 Certification of Principal Executive Officer and Principal
Financial Officer.
(32) SECTION 1350 CERTIFICATIONS
32.1* Section 906 Certification of Principal Executive Officer and Principal
Financial Officer.
----------
* Filed herewith.
40
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its
LITHIUM CORPORATION
(Registrant)
Dated: April 15, 2010 /s/ Tom Lewis
-------------------------------------------------
Tom Lewis
President, Treasurer, Secretary and Director
(Principal Executive Officer, Principal Financial
Officer and Principal Accounting Officer)
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.
Dated: April 15, 2010 /s/ Tom Lewis
-------------------------------------------------
Tom Lewis
President, Treasurer, Secretary and Director
(Principal Executive Officer, Principal Financial
Officer and Principal Accounting Officer)
Dated: April 15, 2010 /s/ John Hiner
-------------------------------------------------
John Hiner
Director
Dated: April 15, 2010 /s/ Henry (Kip) Tonking
-------------------------------------------------
Henry (Kip) Tonking
Director
Dated: April 15, 2010 /s/ Stephen Goss
-------------------------------------------------
Stephen Goss
Director
41