UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 2010
or
[ ] 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 98-0530295
(State or Other Jurisdiction Of (IRS Employer
Incorporation or Organization) Identification Number)
200 S Virginia St - 8th Floor, Reno, Nevada 89501
(Address of Principal Executive Offices) (Zip Code)
(775) 322-0626
(Registrant's Telephone Number, Including Area Code)
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 past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, 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 registrant was required to submit and post such files). Yes [ ] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a small reporting company. See
the definitions 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]
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act [ ] YES [X] NO
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant has filed all documents and reports required to be
filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. [ ] YES [ ] NO
APPLICABLE ONLY TO CORPORATE ISSUERS
As of November 15, 2010, there were 62,917,288 shares of the registrant's $0.001
par value common stock issued and outstanding.
LITHIUM CORPORATION
FORM 10-Q INDEX
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 15
Item 3. Quantitative and Qualitative Disclosures About Market Risk 21
Item 4T. Controls and Procedures 22
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 22
Item 1A. Risk Factors 22
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 22
Item 3. Defaults Upon Senior Securities 22
Item 4. [Removed and Reserved] 22
Item 5. Other Information 22
Item 6. Exhibits 23
Signature Page 24
2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Lithium Corporation
(An Exploration Stage Company)
Consolidated Balance Sheets
As of September 30, 2010 and December 31, 2009
September 30, December 31,
2010 2009
---------- ----------
(unaudited)
ASSETS
Current Assets
Cash $1,552,472 $ 360,511
Prepaid expenses 1,695 26,550
Due from director 985 --
---------- ----------
Total Current Assets 1,555,152 387,061
---------- ----------
Other Assets
Computer equipment, net of amortization 748 1,498
Mineral properties 481,917 262,421
---------- ----------
Total Other Assets 482,665 263,919
---------- ----------
TOTAL ASSETS $2,037,817 $ 650,980
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities $ 39,413 $ 99,308
Due to director 6,335 6,234
Loans payable -- 169,463
----------
Total Current Liabilities 45,748 275,005
---------- ----------
TOTAL LIABILITIES 45,748 275,005
---------- ----------
STOCKHOLDERS' EQUITY
Common stock, 3,000,000,000 shares authorized, par value $0.001;
62,745,720 common shares issued and outstanding (2009 - 60,550,000) 62,746 60,550
Additional paid in capital 1,239,584 556,155
Additional paid in capital - options 244,045 --
Additional paid in capital - warrants 1,445,625 --
Deficit accumulated during the exploration stage (999,931) (240,730)
---------- ----------
TOTAL STOCKHOLDERS' EQUITY 1,992,069 375,975
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $2,037,817 $ 650,980
========== ==========
The accompanying notes are an integral part of
these consolidated financial statements
3
Lithium Corporation
(An Exploration Stage Company)
Consolidated Statements of Operations (unaudited)
For the Three and Nine Months Ended September 30, 2010 and 2009
For the Period from January 30, 2007 (Inception) to September 30, 2010
From
Three Months Three Months Nine Months Nine Months January 30, 2007
Ended Ended Ended Ended (Inception) to
September 30, September 30, September 30, September 30, September 30,
2010 2009 2010 2009 2010
------------ ------------ ------------ ------------ ------------
REVENUE $ -- $ -- $ -- $ -- $ --
------------ ------------ ------------ ------------ ------------
OPERATING EXPENSES
Professional fees 6,308 2,500 43,732 6,500 110,042
Amortization 250 -- 750 -- 1,254
Exploration expenses 42,110 -- 112,853 -- 179,117
Consulting fees 3,744 -- 178,744 -- 178,744
Investor relations 23,121 -- 79,356 -- 96,231
Management fees -- -- 41,800 -- 53,800
Rent -- -- (243) -- 1,420
Transfer agent and filing fees 1,636 -- 4,828 -- 20,963
Travel 6,647 -- 18,402 -- 24,522
Stock option compensation 244,045 -- 244,045 -- 244,045
Website development costs -- -- -- 412 3,912
General and administrative 1,830 3,729 14,861 11,610 46,892
------------ ------------ ------------ ------------ ------------
TOTAL OPERATING EXPENSES 329,691 6,229 739,128 18,522 960,942
------------ ------------ ------------ ------------ ------------
LOSS FROM OPERATIONS (329,691) (6,229) (739,128) (18,522) (960,942)
OTHER (INCOME) EXPENSES
Interest (income) expense (575) -- 4,677 -- 11,593
Write-down of website costs -- 12,000 -- 12,000 12,000
Write-down of mineral properties 15,396 -- 15,396 -- 15,396
------------ ------------ ------------ ------------ ------------
TOTAL OTHER (INCOME) EXPENSES 14,821 12,000 20,073 12,000 38,989
------------ ------------ ------------ ------------ ------------
LOSS BEFORE INCOME TAXES (344,512) (18,229) (759,201) (30,522) (999,931)
PROVISION FOR INCOME TAXES -- -- -- -- --
------------ ------------ ------------ ------------ ------------
NET LOSS $ (344,512) $ (18,229) $ (759,201) $ (30,522) $ (999,931)
============ ============ ============ ============ ============
NET LOSS PER SHARE: BASIC AND DILUTED $ (0.00) $ (0.00) $ (0.01) $ (0.00)
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING: BASIC AND DILUTED 62,603,484 268,200,000 61,993,466 268,200,000
============ ============ ============ ============
The accompanying notes are an integral part of
these consolidated financial statements
4
Lithium Corporation
(An Exploration Stage Company)
Consolidated Statement of Stockholders' Equity (unaudited)
For the Period from January 30, 2007 (Inception) to September 30, 2010
Deficit
Additional Additional Accumulated
Common Stock Additional Paid in Paid in during the
-------------------- Paid in Capital - Capital - Exploration
Shares Amount Capital Warrants Options 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 @
$0.10 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
Shares issued with respect to
Fish Lake 195,720 196 131,054 -- -- -- 131,250
Common stock issued for cash @
$1.00 per share 2,000,000 2,000 552,375 1,445,625 -- -- 2,000,000
Options issued -- -- -- -- 244,045 -- 244,045
Net loss for the period ended
September 30, 2010 -- -- -- -- -- (759,201) (759,201)
------------ --------- ---------- ---------- -------- --------- ----------
Balance, September 30, 2010 62,745,720 $ 62,746 $1,239,584 $1,445,625 $244,045 $(999,931) $1,992,069
============ ========= ========== ========== ======== ========= ==========
The accompanying notes are an integral part of
these consolidated financial statements
5
Lithium Corporation
(An Exploration Stage Company)
Consolidated Statements of Cash Flows (unaudited)
For the Nine Months Ended September 30, 2010 and 2009
For the Period from January 30, 2007 (Inception) to September 30, 2010
From
Nine Months Nine Months January 30, 2007
Ended Ended (Inception) to
September 30, September 30, September 30,
2010 2009 2010
----------- ----------- -----------
Cash Flows from Operating Activities:
Net loss for the period $ (759,201) $ (30,522) $ (999,931)
Adjustment for non-cash items:
Write-down of software development -- 12,000 12,000
Write-down of mineral properties 15,396 -- 15,396
Stock option compensation expense 244,045 -- 244,045
Amortization 750 -- 1,254
Changes in assets and liabilities:
(Increase) decrease in prepaid expenses 24,855 7,300 (1,695)
Increase (decrease) in accounts payable and accrued liabilities (59,895) (7) 39,413
----------- ----------- -----------
Cash used in operating activities (534,050) (11,229) (689,518)
----------- ----------- -----------
Cash Flows from Investing Activities:
Purchase of equipment -- -- (2,002)
Advances to director (985) -- (985)
Purchase of software development -- -- (12,000)
Interest in mineral properties (234,892) -- (497,313)
----------- ----------- -----------
Cash used in investing activities (235,877) -- (512,300)
----------- ----------- -----------
Cash Flows from Financing Activities:
Repayment of loan payable (169,463) -- --
Proceeds from director 101 5,000 6,335
Proceeds from sale of stock 2,131,250 -- 2,747,955
----------- ----------- -----------
Cash provided by financing activities 1,961,888 5,000 2,754,290
----------- ----------- -----------
Increase (decrease) in cash 1,191,961 (6,229) 1,552,472
Cash, opening 360,511 7,084 --
----------- ----------- -----------
Cash, closing $ 1,552,472 $ 855 $ 1,552,472
=========== =========== ===========
Supplemental Cash Flow Information:
Cash paid for interest $ 0 $ 0 $ 0
=========== =========== ===========
Cash paid for income taxes $ 0 $ 0 $ 0
=========== =========== ===========
The accompanying notes are an integral part of
these consolidated financial statements
6
Lithium Corporation
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
September 30, 2010
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.
The accompanying unaudited interim financial statements of Lithium Corp., have
been prepared in accordance with accounting principles generally accepted in the
United States of America and the rules of the Securities and Exchange
Commission, and should be read in conjunction with the audited financial
statements and notes thereto contained in Lithium Corp.'s Annual Report filed
with the SEC on Form 10-K. In the opinion of management, all adjustments,
consisting of normal recurring adjustments, necessary for a fair presentation of
financial position and the results of operations for the interim periods
presented have been reflected herein. The results of operations for interim
periods are not necessarily indicative of the results to be expected for the
full year. Notes to the financial statements which would substantially duplicate
the disclosure contained in the audited financial statements for fiscal 2009 as
reported in the form 10-K have been omitted.
LOSS PER SHARE
Basic loss per share is computed by dividing 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 the periods 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 losses 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.
7
Lithium Corporation
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
September 30, 2010
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
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.
8
Lithium Corporation
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
September 30, 2010
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 4 in our 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.
9
Lithium Corporation
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
September 30, 2010
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
STOCK BASED COMPENSATION
The Company accounts for stock based compensation arrangements using a fair
value method and records such expense as options are granted.
10
Lithium Corporation
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
September 30, 2010
NOTE 2 - 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 (purchase
method?).
The deemed value of the acquisition was $549,705 based upon the fair value of
consideration received.
Assets Purchased:
Cash $ 506,213
Prepaid expenses 25,000
Equipment 1,514
Mineral Properties 197,775
Liabilities Assumed:
Accounts payable (750)
Due to related parties (6,628)
Loans payable (169,463)
---------
Consideration Paid $ 549,705
=========
The consideration was paid through the issuance of 12,350,000 shares of common
stock.
NOTE 3 - COMPUTER EQUIPMENT
Accumulated
Cost Depreciation Net Book Value
---- ------------ --------------
Computer Equipment $2,002 $1,254 $ 748
====== ====== =====
NOTE 4 - 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.
11
Lithium Corporation
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
September 30, 2010
NOTE 4 - MINERAL PROPERTIES (CONTINUED)
FISH LAKE PROPERTY
The Company has purchased a 100% interest in the Fish Lake property for $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 (paid)
6th Disbursement: within 10 days of September 30, 2010 (paid)
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
---- ---------------------- ------
Salt Wells 156 (12,480) $73,318
Cortez 62 (4,960) $32,029
12
Lithium Corporation
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
September 30, 2010
NOTE 5 - CAPITAL STOCK
The Company is authorized to issue 3,000,000,000 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.
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 30, 2010, the Company issued 38,068 shares of its common stock as part
of the Fish Lake Property acquisition.
On July 10, 2010, the Company issued 104,168 shares of its common stock as part
of the Fish Lake Property acquisition.
STOCK OPTIONS
On September 23, 2010, the Company granted 800,000 options at an exercise price
of $0.24 and 500,000 options at an exercise price of $0.28. The Company uses the
Black-Scholes option valuation model to value stock options granted. The Black-
Scholes model was developed for use in estimating the fair value of traded
options that have no vesting restrictions and are fully transferable. The model
requires management to make estimates, which are subjective and may not be
representative of actual results. Assumptions used to determine the fair value
of the stock-based compensation is as follows:
Risk free interest rate 2.40%
Expected dividend yield 0%
Expected stock price volatility 93%
Expected life of options 5 years
The grant-date fair value of the options granted with an exercise price of $0.28
on September 23, 2010 was $0.17 and grant-date fair value of the options granted
with an exercise price of $0.24 on September 23, 2010 was $0.14. Total
stock-based compensation for the three months ended September 30, 2010 and 2009
was $244,045 and $nil, respectively, and $244,045 from the period of inception
to September 30, 2010.
13
Lithium Corporation
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
September 30, 2010
NOTE 6 - 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 September 30, 2010 are as follows:
2010
---------
Deferred tax asset attributable to:
Net operating losses carried forward $ 219,985
Valuation allowance (219,985)
---------
Total net deferred tax asset $ --
=========
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 $144,000 at September
30, 2010 is necessary to reduce the deferred tax assets to the amount that will
more likely than not be realized.
At September 30, 2010, the Company had net operating loss carry-forwards
amounting to approximately $999,931 that expire in various amounts beginning in
2029 in the U.S.
NOTE 7 - SUBSEQUENT EVENTS
On October 10, 2010, the Company issued 171,568 shares of its common stock as
part of the Fish Lake Property acquisition.
The Company has analyzed its operations subsequent to September 30, 2010 and
through November 18, 2010, the date these financial statements were issued, and
has determined that it does not have any other material subsequent events to
disclose
14
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
FORWARD LOOKING STATEMENTS
Except for historical information, the following Management's Discussion and
Analysis contains forward-looking statements based upon current expectations
that involve certain risks and uncertainties. Such forward-looking statements
include statements regarding, among other things, (a) discussions about mineral
resources and mineralized material, (b) our projected sales and profitability,
(c) our growth strategies, (d) anticipated trends in our industry, (e) our
future financing plans, (f) our anticipated needs for working capital, (g) our
lack of operational experience and (h) the benefits related to ownership of our
common stock. Forward-looking statements, which involve assumptions and describe
our future plans, strategies, and expectations, are generally identifiable by
use of the words "may," "will," "should," "expect," "anticipate," "estimate,"
"believe," "intend," or "project" or the negative of these words or other
variations on these words or comparable terminology. This information may
involve known and unknown risks, uncertainties, and other factors that may cause
our actual results, performance, or achievements to be materially different from
the future results, performance, or achievements expressed or implied by any
forward-looking statements. These statements may be found under "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Description of Business," as well as in this Report generally. Actual events or
results may differ materially from those discussed in forward-looking statements
as a result of various factors, including, without limitation, the risks
outlined under "Risk Factors" and matters described in this Report generally. In
light of these risks and uncertainties, there can be no assurance that the
forward-looking statements contained in this Report will in fact occur as
projected.
In this quarterly report, unless otherwise specified, all dollar amounts are
expressed in United States dollars. All references to "common shares" refer to
the common shares in our capital stock. As used in this quarterly report, the
terms "we," "us," and "our" mean Lithium Corporation, unless otherwise indicated
and the term "Nevada Lithium" means our wholly owned subsidiary, Nevada Lithium
Corporation, a Nevada corporation.
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 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 became effective with
the Over-the-Counter Bulletin Board at the opening for trading on October 1,
2009 under the new stock symbol "LTUM". Our 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
15
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.
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. As at
June 30, 2010 two disbursements have been made of stock worth $87,500.
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
16
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 Date
------- ------ ----
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
Any commercial production and payment therefore shall supersede 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.
STAKED PROPERTIES
Our company has staked claims with various registries as summarized below:
Name Claims (Area in Acres) Amount
---- ---------------------- ------
Salt Wells 156 (12,480) $73,318
Cortez 62 (4,960) $32,029
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.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2010 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2009
We had a net loss of $344,512 for the quarter ended September 30, 2010, which
was $326,683 greater than the net loss of $18,229 for the quarter ended
September 30, 2009. The significant change in our results over the two periods
is primarily the result of increases in exploration expenses, investor
relations, professional fees, management fees, amortization, interest, travel
and general and administrative fees.
17
The following table summarizes key items of comparison and their related
increase (decrease) for the quarters ended September 30, 2010 and 2009:
Three Months Three Months
Ended Ended
September 30, September 30, Increase
2010 2009 (Decrease)
---------- ---------- ----------
REVENUE $ -- $ -- $ --
---------- ---------- ----------
OPERATING EXPENSES
Professional fees 6,308 2,500 3,808
Amortization 250 -- 250
Exploration expenses 42,110 -- 42,110
Consulting expenses 3,744 -- 3,744
Investor relations 23,121 -- 23,121
Management fees -- -- --
Rent -- -- --
Transfer agent and filing fees 1,636 -- 1,636
Travel 6,647 -- 6,647
Stock option compensation 244,045 -- 244,045
Website development costs -- -- --
General and administrative 1,830 3,729 (1,899)
---------- ---------- ----------
TOTAL OPARATING EXPENSES 329,691 6,229 323,862
---------- ---------- ----------
OTHER (INCOME) EXPENSES
Interest (income) expense (575) -- (575)
Write-down of website costs -- 12,000 (12,000)
Write-down of mineral properties 15,396 -- 15,396
---------- ---------- ----------
TOTAL OTHER (INCOME) EXPENSES 14,821 12,000 2,821
---------- ---------- ----------
NET LOSS $ (344,512) $ (18,229) $ (326,683)
========== ========== ==========
REVENUE
We have not earned any revenues since our inception and we do not anticipate
earning revenues in the upcoming quarter.
EQUITY COMPENSATION
We currently do not have any stock option or equity compensation plans or
arrangements.
NINE MONTHS ENDED SEPTEMBER 30, 2010 COMPARED TO THE NINE MONTHS ENDED SEPTEMBER
30, 2009
We had a net loss of $759,201 for the nine months ended September 30, 2010,
which was $728,679 greater than the net loss of $30,522 for the nine months
ended September 30, 2009. The significant change in our results over the two
periods is primarily the result of increases in exploration expenses, investor
relations, professional fees, management fees, amortization, interest, travel
and general and administrative fees.
The following table summarizes key items of comparison and their related
increase (decrease) for the nine month periods ended September 30, 2010 and
2009:
18
Nine Months Nine Months
Ended Ended
September 30, September 30, Increase
2010 2009 (Decrease)
---------- ---------- ----------
REVENUE $ -- $ -- $ --
---------- ---------- ----------
OPERATING EXPENSES
Professional fees 43,732 6,500 37,232
Amortization 750 -- 750
Exploration expenses 112,853 -- 112,853
Consulting expenses 178,744 -- 178,744
Investor relations 79,356 -- 79,356
Management fees 41,800 -- 41,800
Rent (243) -- (243)
Transfer agent and filing fees 4,828 -- 4,828
Travel 18,402 -- 18,402
Stock option compensation 244,045 -- 244,045
Website development costs -- 412 (412)
General and administrative 14,861 11,610 3,251
---------- ---------- ----------
TOTAL OPERATING EXPENSES 739,128 18,522 720,606
---------- ---------- ----------
OTHER (INCOME) EXPENSES
Interest 4,677 -- 4,677
Write-down of website costs -- 12,000 (12,000)
Write-down of mineral properties 15,396 -- 15,396
---------- ---------- ----------
TOTAL OTHER (INCOME) EXPENSES) 20,073 12,000 8,073
---------- ---------- ----------
NET LOSS $ (759,201) $ (30,522) $ (728,679)
========== ========== ==========
REVENUE
We have not earned any revenues since our inception and we do not anticipate
earning revenues in the upcoming quarter.
EQUITY COMPENSATION
We currently do not have any stock option or equity compensation plans or
arrangements.
PURCHASE OR SALE OF EQUIPMENT
We do not expect to purchase or sell any plant or significant equipment.
19
LIQUIDITY AND CAPITAL RESOURCES
Our balance sheet as of September 30, 2010, reflects assets of $2,037,817. We
had cash in the amount of $1,552,472 and a working capital in the amount of
$1,509,404 as of September 30, 2010. We have sufficient working capital to
enable us to carry out our stated plan of operation for the next twelve months.
At At
September 30, December 31,
2010 2009
---------- ----------
Current assets $1,555,152 $ 387,061
Less: Current
liabilities 45,748 275,005
---------- ----------
Working capital $1,509,404 $ 112,056
========== ==========
We anticipate generating losses and, therefore, may be unable to continue
operations in the future. If we require additional capital, we would have to
issue debt or equity or enter into a strategic arrangement with a third party.
CASH FLOWS
Nine months Nine months
Ended Ended
September 30, September 30,
2010 2009
---------- ----------
Net Cash Used in Operating Activities $ (534,050) $ (11,229)
Net Cash Used in Investing Activities $ (235,877) $ --
Net Cash Provided by Financing Activities $1,961,888 $ 5,000
---------- ----------
Net Increase (Decrease) in Cash During the Period $1,191,961 $ (6,229)
========== ==========
OPERATING ACTIVITIES
Net cash flow used in operating activities during the nine-months ended
September 30, 2010 was $534,050 - an increase of $522,821 from the $11,229 net
cash outflow during the nine-months ended September 30, 2009.
INVESTING ACTIVITIES
The primary driver of cash used in investing activities was capital spending in
the acquisition of lithium properties.
Cash used in investing activities during the nine-months ended September 30,
2010 was $235,877, which was an increase of $235,877 from the $0 of cash used in
investing activities during the nine-months ended September 30, 2009. This
increase in the cash used in investing activities was primarily due to scheduled
payments on the Fish Creek and Fish Lake Properties.
FINANCING ACTIVITIES
Cash from financing activities during the nine-months ended September 30, 2010
was $1,961,888, which was an increase of $1,956,888 from the $5,000 of cash from
financing activities during the nine-months ended September 30, 2009. This
increase in the cash from financing activities was primarily due a private
placement offset by the repayment of loans.
We estimate that we will spend approximately $350,000 on general and
administrative expenses, $675,000 on exploration and $20,000 on travel over the
next 12 months.
20
Specifically, we estimate our operating expenses and working capital
requirements for the next 12 months to be as follows:
Estimated Funding Required During the Next 12 Months
Expense Amount
------- ----------
General and administrative $ 300,000
Exploration $ 750,000
Mineral Property Costs $ 117,000
Travel $ 20,000
----------
TOTAL $1,187,000
==========
CASH ON HAND, SEPTEMBER 30, 2010 $1,552,472
We are not aware of any known trends, demands, commitments, events or
uncertainties that will result in or that are reasonably likely to result in our
liquidity increasing or decreasing in any material way.
FUTURE FINANCINGS
We anticipate continuing to rely on equity sales of our common stock in order to
continue to fund our business operations. Issuances of additional shares will
result in dilution to our existing stockholders. There is no assurance that we
will achieve any additional sales of our equity securities or arrange for debt
or other financing to fund our planned business activities.
We presently do not have any arrangements for additional financing for the
expansion of our exploration operations, and no potential lines of credit or
sources of financing are currently available for the purpose of proceeding with
our plan of operations.
CONTRACTUAL OBLIGATIONS
As a "smaller reporting company", we are not required to provide tabular
disclosure obligations.
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.
RECENT ACCOUNTING PRONOUNCEMENTS
For recent accounting pronouncements, please refer to the notes to the financial
statements section of this Quarterly Report.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a "smaller reporting company", we are not required to provide the information
required by this Item.
21
ITEM 4. 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 (who is acting as our
principal executive officer, principal financial officer and principle
accounting officer) to allow for timely decisions regarding required disclosure.
As of September 30, 2010, the end of our quarter covered by this report, we
carried out an evaluation, under the supervision and with the participation of
our president (who is acting as 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 (who is acting as 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 quarterly report.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There have been no changes in our internal controls over financial reporting
that occurred during our quarter ended September 30, 2010 that have materially
or are reasonably likely to materially affect, our internal controls over
financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We may be involved from time to time in ordinary litigation, negotiation and
settlement matters that will not have a material effect on our operations or
finances. We are not aware of any pending or threatened litigation against us or
our officers and directors in their capacity as such that could have a material
impact on our operations or finances.
ITEM 1A. RISK FACTORS
As a "smaller reporting company", we are not required to provide the information
required by this Item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
There were no unregistered sales of equity securities in the three months ended
September 30, 2010.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. [REMOVED AND RESERVED]
ITEM 5. OTHER INFORMATION
None.
22
ITEM 6. EXHIBITS
Exhibit
No. Description
------- -----------
(3) ARTICLES OF INCORPORATION AND BYLAWS
3.1 Articles of Incorporation (Attached as an exhibit to our Registration
Statement on Form SB-2 originally filed with the SEC on December 21,
2007 and incorporated herein by reference).
3.2 Bylaws (Attached as an exhibit to our Registration Statement on Form
SB-2 originally filed with the SEC on December 21, 2007 and
incorporated herein by reference).
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, amount 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 on 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
(31) RULE 13A-14 (D)/15D-14D) CERTIFICATIONS
31.1* Section 302 Certification by the Principal Executive Officer and
Principal Financial Officer
(32) SECTION 1350 CERTIFICATIONS
32.1* Section 906 Certification by the Principal Executive Officer and
Principal Financial Officer
----------
* Filed herewith
23
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
LITHIUM CORPORATION
Date: November 19, 2010 By: /s/ Tom Lewis
------------------------------------------------
Name: Tom Lewis
Title: President, Treasurer, Secretary and Director
(Principal Executive Officer, Principal
Financial Officer and Principal Accounting
Officer)
24