-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ECrDOvI9v8MejYyZrPxZtUW8q4low/VthTjWUE9M5VCeVQ3hnF2UZYd8WUV2JWhZ pAVYTXqBca6RGP7AkD1ARg== 0001165527-10-000298.txt : 20100415 0001165527-10-000298.hdr.sgml : 20100415 20100415073249 ACCESSION NUMBER: 0001165527-10-000298 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20091231 FILED AS OF DATE: 20100415 DATE AS OF CHANGE: 20100415 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Lithium Corp CENTRAL INDEX KEY: 0001415332 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATION SERVICES, NEC [4899] IRS NUMBER: 980530295 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-148266 FILM NUMBER: 10750709 BUSINESS ADDRESS: STREET 1: 200 S VIRGINIA ST - 8TH FLOOR CITY: RENO STATE: NV ZIP: 89501 BUSINESS PHONE: 775.322.0626 MAIL ADDRESS: STREET 1: 200 S VIRGINIA ST - 8TH FLOOR CITY: RENO STATE: NV ZIP: 89501 FORMER COMPANY: FORMER CONFORMED NAME: Utalk Communications Inc. DATE OF NAME CHANGE: 20071016 10-K 1 g4000a.txt ANNUAL REPORT FOR THE YEAR ENDED 12-31-09 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 EX-23.1 2 ex23-1.txt CONSENT OF ACCOUNTANTS Exhibit 23.1 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 April 14, 2010 To the Board of Directors of Lithium Corporation Reno, Nevada CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Silberstein Ungar, PLLC, hereby consents to the use in the Form 10-K, Annual Report Pursuant to Section 13 or 15(d) of the Securities Act of 1934, filed by Lithium Corporation of our report dated April 13, 2010, relating to the financial statements of Lithium Corporation as of and for the year ended December 31, 2009 and for the period from January 30, 2007 (inception) through December 31, 2009. Sincerely, /s/ Silberstein Ungar, PLLC - ----------------------------------- Silberstein Ungar, PLLC Bingham Farms, Michigan EX-23.2 3 ex23-2.txt CONSENT OF ACCOUNTANTS Exhibit 23.2 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM CONSENT We consent to the use {incorporation by reference} in this Form 10-K of Lithium Corporation (formerly Utalk Communications, Inc. of our report dated April 6, 2009 for our audit of 2008. We also consent to the reference to us under the heading "Experts" in this registration statement. /s/ MaloneBailey, LLP - ------------------------------ MaloneBailey, LLP www.malonebailey.com Houston, Texas April 14, 2010 EX-31.1 4 ex31-1.txt SECTION 302 CERTIFICATION EXHIBIT 31.1 CERTIFICATION PURSUANT TO 18 U.S.C. SS 1350, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Tom Lewis, certify that: 1. I have reviewed this Annual Report on Form 10-K of Lithium Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. 6. The registrant's other certifying officer(s) and I have indicated in this report whether or not there were significant changes in internal controls or on other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: April 15, 2010 /s/ Tom Lewis - --------------------------------------------------------- Tom Lewis President, Treasurer, Secretary and Director (Principal Executive Officer, Principal Financial Officer and Principal and Accounting Officer) EX-32.1 5 ex32-1.txt SECTION 906 CERTIFICATION EXHIBIT 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 I, Tom Lewis, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) the Annual Report on Form 10-K of Lithium Corporation for the year ended December 31, 2009 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Lithium Corporation. Date: April 15, 2010 /s/ Tom Lewis -------------------------------------------- Tom Lewis President, Treasurer, Secretary and Director (Principal Executive Officer, Principal Financial Officer and Principal and Accounting Officer) A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Lithium Corporation and will be retained by Lithium Corporation and furnished to the Securities and Exchange Commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----