10-K 1 ltum_10k.htm FORM
10-K
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UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
FORM 10-K
(Mark
One)
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ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For
the fiscal year ended December 31, 2020 |
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TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For
the transition period from [ ] to [
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Commission file
number 000-54332
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LITHIUM
CORPORATION |
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(Exact name of
registrant as specified in its charter) |
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Nevada |
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98-0530295 |
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(State or other
jurisdiction of incorporation or organization) |
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(I.R.S. Employer
Identification No.) |
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1031 Railroad
St, Suite 102B., Elko, Nevada |
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89801 |
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(Address of
principal executive offices) |
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(Zip Code) |
Registrant’s
telephone number, including area code: (775) 410-5287
Securities
registered pursuant to Section 12(b) of the Act:
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Title of Each
Class |
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Name of Each
Exchange On Which Registered |
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N/A |
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N/A |
Securities
registered pursuant to Section 12(g) of the Act:
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Common Stock,
$0.001 par value |
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(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 ☒
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 ☒
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 ☒
No ☐
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-K (§229.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes ☒ No ☐
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (§229.405 of this chapter) is not contained herein, and will not
be contained, to the best of registrant’s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. Yes ☐
No ☒
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.
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Large
accelerated filer |
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Accelerated
filer |
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Non-accelerated
filer |
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Smaller
reporting company |
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(Do
not check if smaller reporting company) |
Emerging
growth company |
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If an
emerging growth company, indicate by check mark if the registrant has elected
not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the
Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes ☐
No ☒
The
aggregate market value of Common Stock held by non-affiliates of the Registrant
on June 30, 2020, the last business day of the registrant’s most recently
completed second fiscal quarter, was $8,241,797 based on a $0.12 average bid
and asked price of such common equity.
Indicate
the number of shares outstanding of each of the registrant’s classes of common
stock as of the latest practicable date.
As of
March 16, 2021, there were 97,408,375 common shares outstanding.
DOCUMENTS
INCORPORATED BY REFERENCE
None.
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TABLE OF CONTENTS
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PART I
Item
1. Business
This
annual report contains forward-looking statements. These statements relate to
future events or our future financial performance. In some cases, you can
identify forward-looking statements by terminology such as “may”, “should”,
“expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”,
“potential” or “continue” or the negative of these terms or other comparable
terminology. These statements are only predictions and involve known and
unknown risks, uncertainties and other factors, including the risks in the
section entitled “Risk Factors” that may cause our or our industry’s actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements.
Although
we believe that the expectations reflected in the forward-looking statements
are reasonable, we cannot guarantee future results, levels of activity,
performance or achievements. Except as required by applicable law, including
the securities laws of the United States, we do not intend to update any of the
forward-looking statements to conform these statements to actual results.
Our
financial statements are stated in United States Dollars (US$) and are prepared
in accordance with United States Generally Accepted Accounting Principles.
In
this annual report, unless otherwise specified, all dollar amounts are
expressed in United States dollars and all references to “common shares” refer
to the common shares in our capital stock.
As
used in this current report and unless otherwise indicated, the terms “we”,
“us” and “our” mean 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
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, or a share exchange whereby we would purchase the shares of
Nevada Lithium from its shareholders in exchange for restricted shares of our
common stock.
Effective
September 30, 2009, we effected a 1 old for 60 new forward stock split of our
issued and outstanding common stock. As a result, our authorized capital
increased from 50,000,000 shares of common stock with a par value of $0.001 to
3,000,000,000 shares of common stock with a par value of $0.001 and our issued
and outstanding shares increased from 4,470,000 shares of common stock to
268,200,000 shares of common stock.
Also
effective September 30, 2009, we changed our name from “Utalk Communications,
Inc.” to “Lithium Corporation”, by way of a merger with our wholly owned
subsidiary Lithium Corporation, which was formed solely for the change of name.
The name change and forward stock split became effective with the
Over-the-Counter Bulletin Board at the opening for trading on October 1, 2009
under the stock symbol “LTUM”. Our CUSIP number is 536804 107.
On
October 9, 2009, we entered into a share exchange agreement with Nevada Lithium
and the shareholders of Nevada Lithium. 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 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 in exchange for the acquisition, by our company,
of all of the 12,350,000 issued and outstanding shares of Nevada Lithium. 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. Nevada Lithium’s
corporate status was allowed to lapse and the company’s status with the Nevada
Secretary of State has been revoked.
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In
June 2013, we purchased a claim in the Cherryville, BC area for 250,000 shares
of our common stock. The claim area is known as the BC Sugar Property, and
since this time we expanded the claim block considerably, and then have allowed
a number of the less prospective claims to lapse. The company’s holdings here
are currently 203 acres (82 hectares). In January, 2014, we agreed to buy back
the shares issued pursuant to the June agreement for $2,500.
Effective
April 23, 2014, we entered into an operating agreement with All American
Resources, L.L.C and TY & Sons Investments Inc. with respect to Summa, LLC,
a Nevada limited liability company incorporated on December 12, 2013, wherein
we hold a 25% membership. Our company’s capital contribution to Summa, LLC was
$125,000, of which $100,000 was in cash and the balance in services. To date we
have contributed an additional $16,700 in cash, and also over the years an
indeterminate amount of casual geological expertise to Summa, LLC. In
recognition, Summa transferred five urban lots in Tonopah of indeterminate
value in 2020, and issued a check to the company for $6,000 in late December of
that year.
In
April of 2016, our Company established a wholly owned subsidiary called Lithium
Royalty Corp. The subsidiary was a Nevada Corporation and was the entity
through which we had planned to build a portfolio of lithium mineral
properties. Also that April Lithium Royalty Corp. acquired through staking the
North Big Smoky Prospect, a block of placer mineral claims in Nye County
Nevada. On May 13, 2016 our wholly owned subsidiary sold 100% of the interest
in the North Big Smoky Property through a Property Acquisition Agreement with
1069934 Nevada Ltd. (“Purchaser”) a private company. Consideration paid to
Lithium Royalty Corp. consisted of $10,000.00, reimbursement of staking and
filing fees, 300,000 shares in the “Purchaser Parent”, 1069934 B.C. Ltd. Lithium
Royalty Corp. retained a 2.5% Net Smelter Royalty (“Vendor NSR”) on the North
Big Smoky Property and the Purchaser had the right to purchase up to one-half
(50%) of the Vendor NSR for $1,000,000 to reduce the Vendor NSR to 1.25%. By
agreement dated September 13, 2017 Lithium Corporation agreed to sell back the
shares of 1069934 Nevada Ltd. to San Antone Minerals Corp. (successor of
1069934) for $3,000, which was to be paid to Lithium Corporation upon
completion of a $500,000 financing, or by October 27, 2017 whichever occured
the earliest. The Company received the compensation under the agreement on
November 2, 2017. The North Big Smoky claims were abandoned by the Purchaser in
2017 and as a result the Company’s NSR interest in the property was extinguished.
On
February 16, 2017, we issued a news release announcing that we had signed a
letter of intent with Nevada Sunrise Gold Corp., (“NEV” (TSX-V - NEV, OTC -
NVSGF)) with respect to our Salt Wells lithium-in-brine prospect located in
Churchill County Nevada. Under the terms of the agreement NEV was to earn a
100% interest in the property subject to a 2% Net Smelter Royalty (NSR), and by
making staged payments of cash and shares over the next two years. Issues arose
with respect to the claim block and Nevada Sunrise’s understanding of the
placement of the block, and ultimately it was determined that the Company would
be best served by cancelling the agreement and refunding the money (minus bank
fees) that Nevada Sunrise had sent. An informal letter agreement releasing the
parties of all obligations save for the Area of Mutual Interest clause was
executed by both parties on May 5, 2017 and funds in the amount of $24,950 were
returned to NEV.
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, and Graphite and other energy metals
properties in British Columbia.
Our
current operational focus is to conduct exploration activities on our San
Emidio lithium-brine property in Nevada, and our titanium/ree/tantalum-niobium
property, in British Columbia.
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On
March 2, 2017 we issued a news release announcing that we had signed a letter
of intent with Bormal Resources Inc. with respect to three Tantalum-Niobium
(Ta-Nb) properties (Michael, Yeehaw, and Three Valley Gap) located in British
Columbia, Canada.
The
Michael property in the Trail Creek Mining Division was originally staked to
cover one of the most compelling tantalum in stream sediment anomalies as seen
in the government RGS database in British Columbia. Bormal conducted a stream
sediment sampling program in 2014, and determined that the tantalum-niobium in
stream sediment anomaly here is bona fide, and in the order of 6 kilometers in
length. In November of 2016 Lithium Corporation conducted a short soil
geochemistry orientation program on the property as part of its due diligence,
and determined that there are elevated levels of tantalum-niobium in soils
here.
Also
in the general area of the Michael property, the Yeehaw property had been
staked over a similar but lower amplitude tantalum/total rare earth elements
(TREE’s) in stream sediment anomaly. Both properties are situated in the Eocene
Coryell Batholith, and at the time it was thought that these anomalies may
arise from either carbonatite or pegmatite type deposits. The Company conducted
a helicopter borne bio-geochemical survey on these two properties in June 2017,
which did return anomalous results. This was followed up by a geological and
geochemical examination of the Yeehaw property in early July 2017, and
additional work of a similar nature later in July, and again in early October
2017. These examinations uncovered a zone roughly 30 meters wide which included
an interval that is mineralized with approximately 0.75% TREE’s. While markedly
anomalous it is not exceedingly enriched in TREE’s. However this zone may not
be the “main event” in the area but a harbinger of bigger and better things,
and also it is enriched in titanium (Ti), which could possibly be in the form
of Perovskite, a mineral of considerable interest for the next generation of
photo-voltaic cells. Preliminary geological and geochemical work were performed
on the Michael property in October of 2016, followed by a brief airborne
biogeochemical survey in June of 2017, and additional ground geological and
geochemical assessment work in early October, 2017. The third property – Three
Valley Gap, is in the Revelstoke Mining Division and is situated in a locale
where several Nb-Ta enriched carbonatites have been noted to occur. A brief
field program by Bormal in 2015 located one of these carbonatites, and
concurrent soil sampling determined that the soils here are enriched with Nb-Ta
over the known carbonatite, and indicated that there are other geochemical
anomalies locally that may indicate that more carbonatites exist here and are
shallowly buried.
On
February 23, 2018 we issued a news release announcing that we had dropped any
interest in the Michael and Three Valley Gap properties, and had renegotiated
the final share payment as required in the agreement from 750,000 to 400,000
shares. The final consideration shares have been issued and the Yeehaw property
has been transferred by Bormal. During 2017 the Company conducted initial
stream, rock and magnetometer surveys on the property, and discovered a 30
meter wide lamprophyric dyke (Horseshoe Bend showing) that exhibits anomalous
Titanium/REE mineralization. The company staked an additional 5227 acre
(2115.51 hectares) mineral claim and conducted a brief exploration program in
Spring 2018 of geological mapping and rock and soil sampling on the property.
This program discovered a slightly stronger zone of similar mineralization
approximately 660 feet (200 meters) to the northwest of the Horseshoe Bend, and
similar float mineralization another 0.75 miles (1.2 kms) further to the
northwest. Additional work was performed on the property in 2019 and 2020 which
extended the known strike of the Horseshoe Bend showing approximately 50 meters
to the west, and mineralized float was found that possibly indicates it could
continue to the east for another several hundred meters.
On
February 16, 2016, we issued a news release announcing that our company has
entered into a letter of intent with 1032701 B.C. Ltd. with respect to our Fish
Lake Valley lithium brine property in Esmeralda County, Nevada. On March 10,
2016 we issued a news release announcing the signing of the Fish Lake Valley
Earn-In Agreement. The terms of the Earn-In Agreement allowed 1032701 to earn
an 80% interest in Fish Lake Valley for payments over three years totaling
$300,000 and issuance of 400,000 common shares of the publicly traded company
anticipated to result from a Going Public Transaction, and work performed on
the property over three years in the amount of $1,100,000. 1032701 then had a
Subsequent Earn-In option to purchase Lithium Corporation’s remaining 20%
working interest within one year of earning the 80% by paying the Company a
further $1,000,000, at that point the Company would retain a 2.5% Net Smelter
Royalty, half of which could have been purchased by 1032701 for an additional
$1,000,000. Menika Mining, a publicly traded company on the TSX Venture
Exchange trading under the symbol MML announced on March 8, 2016 that it
intended to acquire 1032701 B.C. Ltd and the right to acquire the Fish Lake
Valley Property. Menika Mining completed the acquisition of 1032701 B.C. and
fulfilled the initial obligations of the Fish Lake Valley Earn-In-Agreement in
April of 2016. Meninka later changed their name to American Lithium. While the
Purchaser did comply with all terms of the agreement with respect to cash and
share payments it did not meet the expenditure level necessary with respect to
its work commitment on the property, and the Company received formal notice of
the relinquishment of the Purchasers right to earn an interest in the property
on April 30th 2019. As this was the termination of the option
agreement $443,308 was taken into income. During the year-ended December 31,
2019, the Company recorded a $159,859 allowance for the properties and has a
net book value of $Nil.
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Effective
May 3, 2016, our company entered in to an Exploration Earn-In Agreement with
1067323 B.C. Ltd. with respect to our San Emidio property. The terms of the
formal agreement were; payment of $100,000, issuance of 300,000 common shares
of 1067323 B.C. Ltd., or of the publicly traded company anticipated to result
from a Going Public Transaction, and work performed on the property by the
Optionee in the amount of $600,000 over the following three years to earn an
80% interest in the property. 1067323 then had a subsequent Earn-In option to
purchase Lithium Corporation’s remaining 20% working interest within three
years of earning the 80% by paying our company a further $1,000,000, at which
point our company would retain a 2.5% Net Smelter Royalty, half of which could
have been purchased by 1067323 for an additional $1,000,000. 1067323 B.C. Ltd.
merged with American Lithium Corp., and the first tranche of cash and shares
were issued in June of 2016. The Company waived the work requirement for the
first year and received extra shares of American Lithium Corp as consideration
for the amendment to the Agreement. In June 2018, the Company received
notification that the purchaser was relinquishing any right to earn an interest
in the property and, as such, $202,901 was taken into income. During the
year-ended December 31, 2019, the Company recorded a $217,668 allowance for the
property which then had a net book value of $Nil.
The
Company revised its trenching permit at BC Sugar in 2017 and conducted a
program of 12 mechanized test pits in May 2018. This work was done in an area
ranging from 1 to 1.5 kilometers to the east of the Weather Station Zone in a
zone of numerous discrete conductors detected during the 2015 FDEM geophysical
survey. Three of these pits intercepted weathered weak to moderately
mineralized graphitic material with the best assay being 2.62% graphitic,
carbon, and six test pits bottomed in non-mineralized bedrock. The remaining
three did not reach bedrock or intercept graphitic material prior to reaching
the maximum digging capability of the excavating equipment used. The Company
has reduced its acreage holdings here to approximately 203 acres (82 hectares) to
facilitate applying 5 years assessment credit to the property, and is
effectively looking to place it on the “back burner” in favor of developing
other prospects that are presently of greater commercial interest.
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 and Canada, 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 and Canada. There are no current orders or directions relating to our
company with respect to the foregoing laws and regulations.
Research
and Development
We
have not incurred any research and development expenditures over the last two
fiscal years.
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Intellectual
Property
We do
not currently have any intellectual property, other than our domain name and
website, www.lithiumcorporation.com.
Employees
We
have no employees. Our officers and directors provide their services to our
company as independent consultants.
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/about/forms/industryguides.pdf)
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.
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, labor 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.
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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 and/or associated
byproducts. 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.
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.
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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 $191,125 as of December 31, 2020.
At December 31, 2020, we had working capital of $191,235. We incurred a net
loss of $159,320 for the year ended December 31, 2020. We estimate our average
monthly operating expenses to be approximately $15,000, 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 private placements 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 OCTQB 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 OTCQB electronic quotation service operated by
OTC Markets Group Inc. Trading in stock quoted on the OTCQB 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 OTCQB is not a stock
exchange, and trading of securities on the OTCQB is often more sporadic than
the trading of securities listed on a quotation system like Nasdaq or a stock
exchange like Amex. Accordingly, shareholders may have difficulty reselling any
of the shares.
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Our
stock is a penny stock. Trading of our stock may be restricted by the
Securities and Exchange Commission’s penny stock regulations 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 (“SEC”) has
adopted Rule 15g-9 which generally defines “penny stock” to be any equity
security that has a market price (as defined) less than $5.00 per share or an
exercise price of less than $5.00 per share, subject to certain exceptions. Our
securities are covered by the penny stock rules, which impose additional sales
practice requirements on broker-dealers who sell to persons other than
established customers and “accredited investors”. The term “accredited
investor” refers generally to institutions with assets in excess of $5,000,000
or individuals with a net worth in excess of $1,000,000 or annual income
exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules
require a broker-dealer, prior to a transaction in a penny stock not otherwise
exempt from the rules, to deliver a standardized risk disclosure document in a
form prepared by the 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 SEC, FINRA has adopted
rules that require that in recommending an investment to a customer, a
broker-dealer must have reasonable grounds for believing that the investment is
suitable for that customer. Prior to recommending speculative low priced
securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customer’s financial status,
tax status, investment objectives and other information. Under interpretations
of these rules, FINRA believes that there is a high probability that
speculative low-priced securities will not be suitable for at least some
customers. FINRA’s 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
Our
corporate head office is located at 1031 Railroad St., Ste 102B, Elko Nevada
89801, our monthly rent is $350, which also includes storage space for field
gear.
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Mineral
Properties
Fish
Lake Valley Property
Fish
Lake Valley is a lithium/boron/potassium enriched playa (also known as a salar,
or salt pan), which is located in northern Esmeralda County in west central
Nevada, and the area of greatest interest is roughly centered at 417050E
4195350N (NAD 27 CONUS). After staking numerous new claims in 2016 we currently
hold 143, nominally 80-acre Association Placer claims that cover approximately
11,360 acres (4,597 hectares). 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, boron and potassium which could
possibly be economic, and amenable to extraction by evaporative methods.
The
property was originally 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 issued to
the vendors $350,000 worth of common stock of our company in eight regular
disbursements. All disbursements were made of stock worth a total of $350,000,
and claim ownership was transferred to our company.
The
geological setting at Fish Lake Valley is highly analogous to the salars of
Chile, Bolivia, and Peru, and more importantly Clayton Valley, where Albemarle
has its Silver Peak lithium-brine operation. 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 10 miles from the property, and the village of Dyer is
approximately 12 miles to the south, while the town of Tonopah, Nevada is
approximately 50 miles to the east.
Our
company completed a number of geochemical and geophysical studies on the
property, and conducted a short drill program on the periphery of the playa in
the fall of 2010. Near-surface brine sampling during the spring of 2011
outlined a boron/lithium/potassium anomaly on the northern portions of the
northern playa, that is roughly 1.3 x 2 miles long, which has a smaller higher
grade core where lithium mineralization ranges from 100 to 150 mg/L (average
122.5 mg/L), with boron ranging from 1,500 to 2,670 mg/L (average 2,219 mg/L),
and potassium from 5,400 to 8,400 mg/L (average 7,030 mg/L). Wet conditions on
the playa precluded drilling there in 2011, and for a good portion of 2012,
however a window of opportunity presented itself in late fall 2012. In November/December
2012 we conducted a short direct push drill program on the northern end of the
playa, wherein a total of 1,240.58 feet (378.09 meters) was drilled in 20 holes
at 17 discrete sites, and an area of 3,356 feet (1,023 meters) by 2,776 feet (846
meters) was systematically explored by grid probing. The deepest hole was 81
feet (24.69 meters), and the shallowest hole that produced brine was 34 feet
(10.36 meters). The average depth of the holes drilled during the program was
62 feet (18.90 meters). The program successfully demonstrated that
lithium-boron-potassium-enriched brines exist to at least 62 feet (18.9 meters)
depth in sandy or silty aquifers that vary from approximately three to ten feet
(one to three meters) in thickness. Average lithium, boron and potassium
contents of all samples are 47.05 mg/L, 992.7 mg/L, and 0.535% respectively,
with lithium values ranging from 7.6 mg/L to 151.3 mg/L, boron ranging from 146
to 2,160.7 mg/L, and potassium ranging from 0.1 to 1.3%. The anomaly outlined
by the program is 1,476 by 2,461 feet (450 meters by 750 meters), and is not
fully delimited, as the area available for probing was restricted due to soft
ground conditions to the east and to the south. A 50 mg/L lithium cutoff is
used to define this anomaly and within this zone average lithium, boron and
potassium contents are 90.97 mg/L, 1,532.92 mg/L, and 0.88% respectively. On
September 3, 2013, we announced that drilling had commenced at Fish Lake
Valley. Due to storms and wet conditions in the area that our company had hoped
to concentrate on, the playa was not passable, and so the program concentrated
on larger step-out drilling well off the playa. This 11 hole, 1,025 foot
program did prove that mineralization does not extend much, if at all, past the
margins of the playa, as none of the fluids encountered in this program were
particularly briny, and returned values of less than 5 mg/L lithium.
Results
from the work done in the past by Lithium Corporation have been very positive,
and our company believes that the playa at Fish Lake Valley may be conducive to
the formation of a “Silver Peak” style lithium brine deposit.
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Early
in 2016 the company signed an Exploration Earn-In Agreement with 1032701 B.C.
Ltd., a private British Columbia company with respect to our Fish Lake Valley
lithium brine property, wherein 1032701 B.C. Ltd., may acquire an initial 80%
undivided interest in the Fish Lake Valley property through the payment of an
aggregate of US$300,000 in cash, completing a “Going Public Transaction” on or
before May 6, 2016, and subject to the completion of the “Going Public
Transaction, arranging for the issuance of a total of 400,000 common shares in
the capital of the resulting issuer as follows: (i) within five business days
following the effective date,
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Pay
$100,000 to our company and issue 200,000 common shares of the TSX-V listed
public company. |
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On
or before the first anniversary of the signing of the Definitive Agreement
pay $100,000 to our company and issue 100,000 common shares of the
Optionee/TSX-V listed public company. |
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On
or before the second anniversary of the signing of the definitive agreement
pay $100,000 to our company and issue 100,000 common shares of the
Optionee/TSX-V listed public company. |
The
Optionee must make qualified exploration or development expenditures on the
property of $200,000 before the first anniversary, an additional $300,000
before the second anniversary, an additional $600,000 prior to the third
anniversary, and make all payments and perform all other acts to maintain the
Property in good standing before fully earning their 80% interest.
Additionally, after the initial earn-in the Optionee has the right for up to 12
months to purchase our 20% interest in the property for $1,000,000, at which
point our interest would revert to a 2 1/2% Net Smelter Royalty (NSR). The
Optionee may then elect at any time to purchase one half (1.25%) of our NSR for
$1,000,000.
American
Lithium Corp. subsequently acquired 100% of 1032701 BC, and currently maintains
1032701 as a fully owned subsidiary. A formal option agreement was entered
into, effective March 31, 2016. An amendment to the agreement was entered into
on the 14th of February 2018 whereby American Lithium issued
10,000 post consolidation “Agreement Year” shares to Lithium Corporation as
mandated by the agreement, as well as a further 80,000 shares in consideration
for Lithium Corporation agreeing to extend the work commitment date for Year 2
of the agreement to September 30, 2018. We had received all money, and common
shares issuable in relation to the Fish Lake Valley option agreement, but the
Purchaser did not satisfy the work commitment per the terms of the agreement,
and issued formal notice of the relinquishment of the Purchasers right to earn
the interest in the property on April 30th 2019. As this was
the termination of the option agreement $443,308 was taken into income. During
the year-ended December 31, 2019, the Company recorded a $159,859 allowance for
the properties and has a net book value of $Nil.
San
Emidio Property
The
San Emidio property, located in Washoe County in northwestern Nevada, was
acquired through the staking of claims in September 2011. The twenty, 80-acre,
Association Placer claims currently held here cover an area of approximately
1,600 acres (640 hectares). Ten claims in the southern portions of the original
claim block that was staked in 2011 were allowed to lapse on September 1, 2012,
and a further ten claims were then staked and recorded. These new claims are
north of and contiguous to the surviving claims from our earlier block. In 2015
eight claims were allowed to lapse, but then in 2016 a further 10 claims were
staked and recorded. The property is approximately 65 miles north-northeast of
Reno, Nevada, and has excellent infrastructure.
We
identified this prospect during 2009, and 2010 through surficial geochemical
sampling, and geological interpretation. The early reconnaissance sampling
determined that anomalous values for lithium occur in sediments over a good
portion of the playa. Our company conducted near-surface brine sampling in the
spring of 2011, and a high resolution gravity geophysical survey in summer/fall
2011. Our company then permitted a 7 hole drilling program with the Bureau of
Land Management in late fall 2011, and a direct push drill program was commenced
in early February 2012. Drilling here delineated a narrow elongated shallow
brine reservoir which is greater than 2.5 miles length, somewhat distal to the
basinal feature outlined by the earlier gravity survey. The anomaly aligns with
the present day topographical low in the valley, which could be the result of
extension along a north-easterly trending fault. Two values of over 20
milligrams/liter lithium were obtained from two shallow direct push probe holes
located centrally in this brine anomaly.
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We
drilled this prospect in late October 2012, further testing the area of the
property in the vicinity where prior exploration by our company discovered
elevated lithium levels in subsurface brines. During the 2012 program a total
of 856 feet (260.89 meters) was drilled at 8 discrete sites. The deepest hole
was 160 feet (48.76 meters), and the shallowest hole that produced brine was 90
feet (27.43 meters). The average depth of the seven hole program was 107 feet
(32.61 meters). The program better defined the lithium-in-brine anomaly that
was discovered in early 2012. This anomaly is approximately 0.6 miles (370
meters) wide at its widest point by more than 2 miles (3 kilometers) long. The
peak value seen within the anomaly is 23.7 mg/l lithium, which is 10 to 20
times background levels outside the anomaly. Our company believes that, much
like Fish Lake Valley, the playa at San Emidio may be conducive to the
formation of a “Silver Peak” style lithium brine deposit, and the recent
drilling indicates that the anomaly occurs at or near the intersection of
several faults that may have provided the structural setting necessary for the
formation of a lithium-in-brine deposit at depth.
Our
company entered into an exploration earn-in agreement on the property on May 3,
2016 with 1067323 B.C. Ltd., wherein the Optionee was to pay an initial
$100,000 and issue 100,000 shares within 30 days of a “Going Public
Transaction”. 1067323 subsequently merged with American Lithium Corp., who then
assumed the duties of the Optionee, and fulfilled the initial obligations. The
further terms of the agreement were that American Lithium was to issue 100,000
shares to Lithium Corporation on or before both the first & second
anniversaries of the going public transaction. Additionally American Lithium
was to conduct $100,000 exploration work in year 1, $200,000 in year 2, and
$300,000 in year 3. On fulfillment of all its obligations American Lithium
would have earned an 80% interest in the property. The Optionee also had the
option to earn a further 20% interest in the property by paying $1,000,000 to
the company within 36 months of the exercise of the initial earn-in. If
American Lithium had exercised its right with respect to the subsequent earn-in
then Lithium Corporation’s interest would have reverted to a 2.5% Net Smelter
Revenue (NSR) interest. American Lithium then could have purchased one half of
the NSR (1.25%) for $1,000,000 at any time thereafter.
In
June 2018, the Company received notification that the purchaser was relinquishing
any right to earn an interest in the property and, as such, $202,901 was taken
into income. During the year-ended December 31, 2019, the Company recorded a
$217,668 allowance for the property which then had a net book value of $Nil.
Lithium
Corporation was granted a drilling permit in 2019 to drill three drill holes
here, and had intended to drill in 2020, however the weak market for lithium
carbonate precluded expending capital on this project, and so drilling has been
delayed until such time as the market picks up again.
BC
Sugar Flake Graphite Property
On
June 6, 2013, we entered into a mining claim sale agreement with Herb Hyder
wherein Mr. Hyder agreed to sell to our company a 50.829 acre (20.57 hectare)
claim located in the Cherryville area of British Columbia. As consideration for
the purchase of the property, we issued 250,000 shares of our company’s common
stock to Mr. Hyder. In addition to the acquired claim, our company staked or
acquired another 13 claims at various times over the subsequent months, to
bring the total area held under tenure to approximately 19,816 acres (8,020
hectares). Since that time the company has let all but what appears to be the
most prospective claims lapse, and currently the company holds one title – the
“Heavy Weather” claim that is 1422 acres (575.67 hectares) in size. The flake
graphite mineralization of interest here is hosted predominately in graphitic
quartz/biotite, and lesser graphitic calc-silicate gneisses. The rocks and
mineralization in the general area of the BC Sugar prospect are similar to the
host rocks in the area of the crystal graphite deposit 55 miles (90 kms) to the
southeast that is being mined by Eagle Graphite.
The BC
Sugar property is within the Shushwap Metamorphic Complex, in a geological
environment favorable for the formation of flake graphite deposits, and is in
an area of excellent logistics and infrastructure, with a considerable network
of logging roads within the project area. Additionally the town of Lumby is approximately
19 miles (30 kms) to the south of the property, while the City of Vernon is
only 30 miles (50 kms) to the southwest of the western portions of the claim
block.
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Work
progressed, and the property expanded throughout the summer of 2013, and
culminated with the receipt of the final assays from the last phases of the
prospecting and geological program in December of 2013. That work increased the
area known to be underlain by graphitic bearing gneisses, and further
evaluations were made in the area of the Sugar Lake, Weather Station, and
Taylor Creek showings. In the general vicinity of the Weather Station showing
that was initially discovered in early July 2013, a further 13 samples were
taken, and hand trenching was performed at one of several outcrops in the area.
In the trench a 5.2 meter interval returned an average of 3.14% graphitic
carbon, all in an oxidized relatively friable gneissic host rock. Additionally
a hydrothermal or vein type mineralized graphitic quartz boulder was discovered
in the area which graded up to 4.19% graphitic carbon. The source of this
boulder was not discovered during this program, but it is felt to be close to
its point of origin. Samples representative of the mineralization encountered
here were taken for petrographic study, which was received in late 2013. A
brief assessment work program was performed in September 2014 to ensure all
claims in the package were in good standing prior to the anticipated sale of
this asset to Pathion Inc. Recommendations were made by the consulting
geologist who wrote the assessment report with respect to trenching, and
eventually drilling the Weather Station showing. Our company submitted a Notice
of Work to the BC Government in early May 2015 to enable our company to conduct
a program of excavator trenching, sampling and geological mapping on the
Weather Station showing. In May of 2015 we signed an agreement with KLM
Geosciences LLC of Las Vegas to conduct a short Ground Penetrating Radar (GPR)
survey on the property in the Weather Station – Taylor Creek areas. The GPR
survey as well as a GEM-2 frequency domain electromagnetic (FDEM) survey took
place in approximately mid-May 2015. The GPR survey did not provide useful data
because of the moisture saturation in the shallow subsurface. The FDEM survey
successfully generated an anomaly over known mineralization and possibly
indicates that the mineralization may extend both to the west and to the east
in areas blanketed by glaciofluvial till.
In
August of 2015 our Notice of Work for trenching was approved by the BC
Government and in October we commenced work. A trench of 265.76 feet (81
meters) was excavated and graphitic gneiss was mapped and sampled. In all 23
samples were taken over the 69 meters of exposed mineralization that could be
safely sampled. Trench depths varied from 1.2 meters in areas of
semi-consolidated rock to 4.8 meters in areas of mainly decomposed material.
There was an approximately 12 meter section of the trench of sand, and fluvial
till in an ancient stream bed where the excavator could not reach the graphitic
material that is inferred to exist at depths greater than 5 meters. Also there
was a 4 meter section at depths from 4.8 to 5 meters where graphite
mineralization could be seen at depth, but could not be safely sampled.
The
entire 69 meter interval that was sampled averaged 1.997% graphitic carbon, and
mineralization remains open in all directions. Within that interval there was a
30 meter section that averaged 2.73% graphitic carbon, and within that interval
there was a 12 meter section that averaged 2.99% graphitic carbon. The best
mineralization, and most friable material is proximal to the aforementioned
abandoned creek channel, and it appears that proximity to this feature gave
rise to the deep weathering profile encountered here. Determining the tenor,
and extent of the friable material were the two major objectives of this
program as this material, which is very similar to that mined at Eagle
Graphite’s operation is very easy/economical to be mined and processed, and
typically contains the highest percentages of graphite over consistent widths.
A
“mini-bulk sample” was taken from the Weather Zone in October 2017, and
submitted to SGS Vancouver for preliminary bench tests, and further
petrographic analysis. Tests indicated that the “fairly coarse” flake graphite
was easily liberated from the unconsolidated host material, and initial
flotation tests were positive with over 80% of the graphite in the sample being
floated off.
The
Company revised its trenching permit in 2017 and conducted a program of 12
mechanized test pits in May 2018. This work was done in an area ranging from 1
to 1.5 kilometers to the east of the Weather Station Zone in a zone of numerous
discrete conductors detected during the 2015 FDEM geophysical survey. Three of
these pits intercepted weathered weak to moderately mineralized graphitic
material with the best assay being 2.62% graphitic, carbon, and six test pits
bottomed in non-mineralized bedrock. The remaining three did not reach bedrock
or intercept graphitic material prior to reaching the maximum digging
capability of the excavating equipment used. The Company has reduced its
acreage holdings here to approximately 203 acres (82 hectares) to facilitate
applying 5 years assessment credit to the property, and is effectively looking
to place it on the “back burner” in favor of developing other prospects that
are of greater commercial interest at this point.
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The
Hughes Claims
Effective
April 23, 2014, we entered into an operating agreement with All American
Resources, LLC and TY & Sons Investments Inc. with respect to Summa, LLC, a
Nevada limited liability company incorporated on December 12, 2013. Through our
25% membership interest in Summa we hold an indirect interest in a number of
patented mining claims that spring from the once considerable mineral holdings
of Howard Hughes’s Summa Corp. Our company’s capital contribution paid to
Summa, LLC was $125,000, of which $100,000 was in cash and the balance in
services.
Lithium
Corporation participated in the formation of Summa, which holds 88 fee-title
patented lode claims that cover approximately 1,191.3 acres of prospective
mineral lands. Our company signed a joint operating agreement with the other
participants in Spring 2014 to govern the conduct of Summa, and the development
of the lands. Our company’s director, Tom Lewis, was named as a managing member
of Summa, and as such has a direct say in the day to day operations of that
company.
The
Hughes lands are situated in six discrete prospect areas in Nevada, the most
notable of which being the Tonopah block in Nye County where Summa holds 56
claims that cover approximately 770 acres in the heart of the historic mining
camp where over 1.8 million ounces of gold and 174 million ounces of silver
were produced predominately in the early 1900’s. The Hughes claims include a
number of the prolific past producers in Tonopah, such as the Belmont, the
Desert Queen, and the Midway mines. In addition there are also claims in the
area of the past producing Klondyke East mining district, which is to the south
of Tonopah, and at the town of Belmont (not to be confused with the Belmont
claim in Tonopah), Nevada, another notable silver producer from the 1800’s,
which is roughly 40 miles to the northeast of Tonopah.
Summa
has conducted preliminary research on the Hughes properties, focusing on the
Tonopah area where reporting in the 1980’s, indicated that over 2.175 million
tons of mine dumps and mill tailings exist at surface on Summa’s properties
that contain in the order of 3.453 million ounces of silver, and 28,500 ounces
of gold. In addition to this easily extractable surficial resource, other
reports indicate that 300 - 500,000 tons of mineralized material is expected to
remain at depth in old workings on Summa’s properties, which is believed to
contain an average 20 ounces silver and 0.20 ounces gold per ton. Also several
partially tested exploration targets have been identified on Summa’s Tonopah
claims, where further work could potentially lead to a marked increase in known
underground resources.
West
Kirkland Mining has been working on the development of their 75% owned project
in Tonopah, most recently drilling to increase the resource at the Three Hills
gold/silver deposit where they intend to kick-off their mining efforts in the
future. To that end they have bought an additional six patented mining claims
here recently, and have also negotiated an agreement to procure rights for the
water that they will need for processing. Presently the reserve at their
Hasbrouck/Three Hills/Hill of Gold project stands at 45.3 million tons
containing 762,000 ounces gold, and 10.6 million ounces Silver. Coeur Mines and
partner Idaho North Resources drilled in the Klondyke area to the south of
Tonopah (the same area where Summa holds several patented mining claims that
arise from the Hughes acquisition), and have done some drilling recently in
Tonopah on a prospect they have optioned adjacent and to the west of Summa’s
holdings. In 2018 Coeur Mines also conducted drilling on Ely Gold’s claims to
the west of Summa’s property on Patented claims that were once a portion of the
Hughes holdings here. Although it has been reported that they intersected 5’ of
20 opt Ag, 0.3 opt Au, Coeur dropped their interest in this property. Recently
Ely Gold entered into an agreement to purchase a further 75 patented claims
adjacent to their Tonopah West prospect, and again announced on February 25,
2020 that they have signed a purchase/option agreement with Blackrock Gold Corp
on the property. Under the terms of the agreement Blackrock is to pay
$3,000,000 by April 01, 2020, and Ely will retain a 3% Nets Smelter Royalty on
the property. Since June of 2020 Blackrock has drilled a number of holes on
their property with significant focus and some relatively high grade intercepts
on the Victor vein only a few hundred meters to the northwest of the mutual
boundary with Summa’s land package. Slightly further afield Gemfield Resources
LLC., (a subsidiary of Waterton Global Resource Management) has recently
completed the re-routing of Highway 95 south of Tonopah to facilitate the
imminent mining of their 1.5 million ounce gold deposit near Goldfield Nevada.
The
ongoing litigation with respect to Summa’s Tonopah holdings had precluded
investing time or money into the property immediately after the court awarded
Summa ownership in 2013, however in 2018 Summa won a “quiet title” case in the
Fifth Judicial Court in Tonopah, which determined that Summas’ title is
superior to all other claimants. The subsequent appeal of this verdict was
quashed later in 2018, and there has been no further action on that account.
Summa signed a Letter of Intent on January 14, 2020 with respect to the Tonopah
property whereby 1237025 BC Ltd, can earn a 100% interest in the property
(subject to a 1.0% Net Smelter Royalty or NSR) by paying $400,000 in cash,
issuing $400,000 in shares, and incurring $1.5 million in exploration
expenditures in stages over the next 5 years. The Optionee would also have the
right to purchase ¼ of the NSR for $1,500,000, and the future right to purchase
a further ¼ of the NSR for $2,500,000. The definitive agreement was signed in
March of 2020, and 1237025 BC Ltd subsequently merged with Pinnacle North Gold
Corp., who then changed their name to Summa Silver Corp. Summa Silver actively
explored the property in the second half of 2020, drilling roughly 14,000
meters in 29 drill holes. Additionally more work was performed on the Belmont
tailings portion of the project aided by Lithium Corporation personnel, who
have been actively promoting and advancing this aspect of the Tonopah holdings
since acquisition.
|
|
|
15 |
|
|
British
Columbia Tantalum/REE/Titanium Properties
On
March 1st 2017 the company signed a letter of intent (LOI) with
Bormal Resources Inc. wherein the company may earn an interest in three
properties in British Columbia. The Michael property in the Trail Creek Mining
Division was originally staked by Bormal to cover one of the most compelling
tantalum (Ta) in stream sediment anomalies as seen in the government RGS
database in British Columbia. Bormal conducted a stream sediment sampling
program in 2014, and determined that the tantalum-niobium (Nb) in stream
sediment anomaly is bona fide, and in the order of 6 kilometers in length. In November
of 2016 Lithium Corporation conducted a short soil geochemical orientation
program on the property as part of its due diligence, and determined that there
are elevated levels of niobium-tantalum in soils here.
Also
in the general area of the Michael property the Yeehaw prospect has been staked
by Bormal over a similar but lower amplitude Tantalum/Rare Earth Element
(REE’s) stream sediment anomaly. Both properties are situated depicted on
government geological maps as being within the Eocene Coryell batholith, and it
is thought that these anomalies may arise from either carbonatite or pegmatite
type deposits.
The
third property at Three Valley Gap, is in the Revelstoke Mining Division and is
situated in a locale where several Nb-Ta enriched carbonatites have been noted
to occur. A brief field program by Bormal in 2015 located one of these
carbonatites, and concurrent soil sampling determined that the soils here are
enriched with Nb-Ta over the known carbonatite, and indicated that there are
other geochemical anomalies locally that may indicate that more carbonatites
exist here and are shallowly buried.
Lithium
Corporation conducted fieldwork on the Michael, and Yeehaw properties during
summer 2017. At Yeehaw a 30 meter wide structure was discovered that is
anomalous for titanium and Rare Earth Elements, while soil sampling at Michael
detected an anomaly that is greater than 800 meters in length that exhibits
increased Tantalum-Niobium plus Rare Earth Element mineralization. The Company
has dropped any further interest in both the Michael and Three Valley Gap
properties, and has earned its 100% interest in the Yeehaw property. Field work
on the Yeehaw property in Spring 2018 discovered a further zone of Ti/REE
enrichment, and additional work was performed on the property in 2019 which
extended the known strike of the Horseshoe Bend showing approximately 50 meters
to the west, and mineralized float was found that possibly indicates it could
continue to the east for another several hundred meters. The Company is
currently assessing options for field season 2020 work here.
Our
company is looking to do a financing in early 2020, and then will be looking to
ramp up its exploration activities on our existing properties, as well as
embarking on a generative program exploring for new deposits of next generation
battery related materials and are currently pursuing other properties which are
believed to be prospective for hosting lithium, graphite or other “energy
metals” as well as continuing to evaluate opportunities brought to our company
by third parties.
Item
3. Legal Proceedings
From
time to time, we may become involved in litigation relating to claims arising
out of its operations in the normal course of business. We are not involved in
any pending legal proceeding or litigation and, to the best of our knowledge,
no governmental authority is contemplating any proceeding to which we area
party or to which any of our properties is subject, which would reasonably be
likely to have a material adverse effect on us, except for the following:
Lithium
Corporations interest in the Tonopah Hughes property through its ownership of
25% of Summa, LLC was challenged in 2015. On March 13, 2018 Summa was
victorious in a “Quiet Title” ruling set out in the Fifth Judicial District
Court where Judge Wanker ruled that Summa’s claim to title in the contested
claims was superior to that of any other entity that has come forward with a
claim to date. An appeal of that decision filed later in 2018 was denied by the
courts, and no further actions have since been filed.
|
|
|
16 |
|
|
Item
4. Mine Safety Disclosures
Not
applicable.
Item
5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
Our
common shares are quoted on the OTCQB operated by OTC Markets Inc., 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:
|
OTC Bulletin
Board (1) |
||||||||
|
Quarter
Ended |
|
High |
|
|
Low |
|
||
|
December 31, 2020 |
|
$ |
0.269 |
|
|
$ |
0.250 |
|
|
September 30, 2020 |
|
$ |
0.213 |
|
|
$ |
0.170 |
|
|
June 30, 2020 |
|
$ |
0.128 |
|
|
$ |
0.111 |
|
|
March 31, 2020 |
|
$ |
0.090 |
|
|
$ |
0.081 |
|
|
December 31, 2019 |
|
$ |
0.056 |
|
|
$ |
0.051 |
|
|
September 30, 2019 |
|
$ |
0.068 |
|
|
$ |
0.062 |
|
|
June 30, 2019 |
|
$ |
0.089 |
|
|
$ |
0.08 |
|
|
March 31, 2019 |
|
$ |
0.122 |
|
|
$ |
0.111 |
|
|
December 31, 2018 |
|
$ |
0.12 |
|
|
$ |
0.103 |
|
(1) Over-the-counter
market quotations reflect inter-dealer prices without retail mark-up, mark-down
or commission, and may not represent actual transactions.
Our
shares are issued in registered form. Nevada Agency and Transfer 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
March 16, 2021, the shareholders’ list showed 52 registered shareholders with
97,408,375 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.
|
|
|
17 |
|
|
Equity
Compensation Plan Information
On
December 29, 2009, our board of approved the adoption of the 2009 Stock Plan
which permits our company to issue up to 6,055,000 shares of our common stock
to directors, officers, employees and consultants. This plan had not been
approved by our security holders. Over the 10 years the plan was in effect
seven consultants, one past director and one current director utilized it to
purchase a total of 1,900,000 shares of the Company at various times over the
life of the plan.
The
following table summarizes certain information regarding our equity
compensation plans as at December 31, 2020:
|
Equity
Compensation Plan Information |
||||||
|
Plan
category |
|
Number of
securities to (a) |
|
Weighted-average |
|
Number of
securities (c) |
|
Equity compensation plans |
|
Nil |
|
Nil |
|
Nil |
|
Equity compensation plans |
|
Nil |
|
Nil |
|
Nil |
|
Total |
|
Nil |
|
Nil |
|
Nil |
Convertible
Securities
As of
December 31, 2020, we had no outstanding options to purchase any shares of our
common stock.
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, 2020 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, 2020.
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, 2020.
Item
6. Selected Financial Data
As a
“smaller reporting company”, we are not required to provide the information
required by this Item.
|
|
|
18 |
|
|
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.
Plan
of Operations and Cash Requirements
Cash
Requirements
Our
current operational focus is to conduct exploration activities on the Fish Lake
Valley property and San Emidio prospect in Nevada and the BC Sugar and Mount
Heimdal properties in British Columbia. We expect to review other potential
exploration projects from time to time as they are presented to us.
Our
net cash from financing activities during the year ended December 31, 2020 was
$Nil as compared to $Nil during the year ended December 31, 2019. As at
December 31, 2020, we had approximately $191,125 in cash.
Over
the next twelve months (beginning March 1, 2021) we expect to expend funds as
follows:
|
EEstimated Net Expenditures During the Next Twelve
Months |
|
|
|
|
|
|
|
$ |
|
|
|
General, Administrative Expenses |
|
|
150,000 |
|
|
Exploration Expenses |
|
|
500,000 |
|
|
Investor Relations |
|
|
40,000 |
|
|
Employee and Consultant Compensation |
|
|
131,000 |
|
|
Equipment |
|
|
40,000 |
|
|
Travel |
|
|
30,000 |
|
|
Total |
|
|
891,000 |
|
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.
|
|
|
19 |
|
|
Results
of Operations - Twelve Months Ended December 31, 2020 and 2019
The
following summary of our results of operations should be read in conjunction
with our financial statements for the year ended December 31, 2020, which are
included herein.
Our
operating results for the twelve months ended December 31, 2020, for the twelve
months ended December 31, 2019 and the changes between those periods for the
respective items are summarized as follows:
|
|
|
Twelve Month
Period Ended |
|
|
Twelve Month
Period Ended |
|
|
Change Between 2020 and December 31, 2019 |
|
|||
|
Revenue |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
Professional fees |
|
|
28,174 |
|
|
|
35,185 |
|
|
|
(7,011 |
) |
|
Exploration expenses |
|
|
21,684 |
|
|
|
15,899 |
|
|
|
5,785 |
|
|
Consulting fees |
|
|
76,500 |
|
|
|
107,500 |
|
|
|
(31,000 |
) |
|
Insurance expense |
|
|
- |
|
|
|
6,935 |
|
|
|
(6,935 |
) |
|
Investor relations |
|
|
320 |
|
|
|
67,161 |
|
|
|
(66,841 |
) |
|
Transfer agent and filing fees |
|
|
19,908 |
|
|
|
12,920 |
|
|
|
6,988 |
|
|
Travel |
|
|
3,731 |
|
|
|
7,228 |
|
|
|
(3,497 |
) |
|
General and administrative |
|
|
9,003 |
|
|
|
9,398 |
|
|
|
(395 |
) |
|
Writedown of mineral property |
|
|
- |
|
|
|
390,200 |
|
|
|
(390,200 |
) |
|
Interest (income) |
|
|
- |
|
|
|
(140 |
) |
|
|
140 |
|
|
Loss on sale of marketable securities |
|
|
- |
|
|
|
919 |
|
|
|
(919 |
) |
|
Gain on sale of mineral property |
|
|
- |
|
|
|
(443,308 |
) |
|
|
443,380 |
|
|
Loss on investment |
|
|
- |
|
|
|
10,000 |
|
|
|
(10,000 |
) |
|
Net loss |
|
$ |
159,320 |
|
|
$ |
219,897 |
|
|
$ |
(60,577 |
) |
Our
financial statements report a net loss of $159,320 for the twelve month period
ended December 31, 2020 compared to a net loss of $219,897 for the twelve month
period ended December 31, 2019. Our losses have decreased by $60,577, primarily
as a result of decreases in operating expenses including investor relations and
shareholder communications and consulting fees and the gain on sale of mineral
property being offset by the writedown on mineral property.
Our
operating expenses for the year ended December 31, 2020 were $159,320 compared
to $652,426 as of December 31, 2019. The decrease in operating expenses was
across the board as the Company looked to mitigate expenditures.
|
|
|
20 |
|
|
Liquidity
and Financial Condition
Working
Capital
|
|
|
At 2020 |
|
|
At 2019 |
|
||
|
Current assets |
|
$ |
206,051 |
|
|
$ |
367,464 |
|
|
Current liabilities |
|
|
14,816 |
|
|
|
16,909 |
|
|
Working capital (deficiency) |
|
$ |
191,235 |
|
|
$ |
350,555 |
|
Cash
Flows
|
|
|
Year Ended |
|
|||||
|
|
|
December 31 |
|
|||||
|
|
|
2020 |
|
|
2019 |
|
||
|
Net cash (used in) operating activities |
|
$ |
(155,135 |
) |
|
$ |
(186,855 |
) |
|
Net cash (used in) investing activities |
|
|
- |
|
|
|
(21,914 |
) |
|
Net cash (used in) financing activities |
|
|
- |
|
|
|
- |
|
|
Net increase (decrease) in cash during
period |
|
$ |
(155,135 |
) |
|
$ |
(208,769 |
) |
Our
total current liabilities as of December 31, 2020 were $14,816 as compared to
total current liabilities of $16,909 as of December 31, 2019. The decrease was
a result of decreased monthly consulting fees being charged to the Company.
Operating
Activities
Net
cash used in operating activities was $155,135 for the year ended December 31,
2020 compared with net cash used in operating activities of $186,895 in the
same period in 2019.
Investing
Activities
Net
cash used in investing activities was $Nil for the year ended December 31, 2020
compared to net cash used in investing activities of $21,914 in the same period
in 2019.
Financing
Activities
The
Company did not have any financing activities during the years ended December
31, 2020 and 2019.
Contractual
Obligations
As a
“smaller reporting company”, we are not required to provide tabular disclosure
obligations.
Going
Concern
As of
December 31, 2020, our company had a net loss of $159,320 and has earned no
revenues. Our company intends to fund operations through equity financing
arrangements, which may be insufficient to fund its capital expenditures,
working capital and other cash requirements for the year ending December 31,
2021. The ability of our company to emerge from the development stage is
dependent upon, among other things, obtaining additional financing to continue
operations, and development of our business plan. In response to these
problems, management intends to raise additional funds through public or
private placement offerings. These factors, among others, raise substantial
doubt about our company’s ability to continue as a going concern. The
accompanying financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
|
|
|
21 |
|
|
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.
Critical
Accounting Policies
The
discussion and analysis of our financial condition and results of operations
are based upon our financial statements, which have been prepared in accordance
with the accounting principles generally accepted in the United States of
America. Preparing financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets, liabilities,
revenue, and expenses. These estimates and assumptions are affected by
management’s application of accounting policies. We believe that understanding
the basis and nature of the estimates and assumptions involved with the
following aspects of our financial statements is critical to an understanding
of our financial statements.
Exploration
Stage Company
The
accompanying financial statements have been prepared in accordance with
generally accepted accounting principles related to accounting and reporting by
exploration stage companies. An exploration stage company is one in which
planned principal operations have not commenced or if its operations have
commenced, there has been no significant revenues there from.
Accounting
Basis
The
Company uses the accrual basis of accounting and accounting principles
generally accepted in the United States of America (“GAAP” accounting). The
Company has adopted a December 31 fiscal year end.
Cash
and Cash Equivalents
Cash
includes cash on account, demand deposits, and short-term instruments with
maturities of three months or less.
Concentrations
of Credit Risk
The
Company maintains its cash in bank deposit accounts, the balances of which at
times may exceed federally insured limits. The Company continually monitors its
banking relationships and consequently has not experienced any losses in such
accounts. The Company believes it is not exposed to any significant credit risk
on cash and cash equivalents.
Use
of Estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amount of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Revenue
Recognition
The
Company has yet to realize revenues from operations. Once the Company has
commenced operations, it will recognize revenues when delivery of goods or
completion of services has occurred provided there is persuasive evidence of an
agreement, acceptance has been approved by its customers, the fee is fixed or determinable
based on the completion of stated terms and conditions, and collection of any
related receivable is probable.
|
|
|
22 |
|
|
Loss
per Share
Basic
loss per share is computed by dividing loss available to common shareholders by
the weighted average number of common shares outstanding during the year. The
computation of diluted earnings per share assumes the conversion, exercise or
contingent issuance of securities only when such conversion, exercise or
issuance would have a dilutive effect on earnings per share. The dilutive
effect of convertible securities is reflected in diluted earnings per share by
application of the “if converted” method. In the periods in which a loss is
incurred, the effect of potential issuances of shares under options and
warrants would be anti-dilutive, and therefore basic and diluted losses per
share are the same.
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, deposits, prepaid expenses,
and accounts payable and accrued liabilities. Unless otherwise noted, it is
management’s opinion that the Company is not exposed to significant interest,
currency or credit risks arising from these financial instruments. Because of
the short maturity and capacity of prompt liquidation of such assets and
liabilities, the fair value of these financial instruments approximate their
carrying values, unless otherwise noted.
Mineral
Properties
Costs
of exploration, carrying and retaining unproven mineral lease properties are
expensed as incurred. Mineral property acquisition costs are capitalized
including licenses and lease payments. Although the Company has taken steps to
verify title to mineral properties in which it has an interest, these
procedures do not guarantee the Company’s title. Such properties may be subject
to prior agreements or transfers and title may be affected by undetected
defects. Impairment losses are recorded on mineral properties used in
operations when indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the assets’
carrying amount.
Recent
Accounting Pronouncements
Leases
(Topic 842). In
February 2016, FASB issued ASU 2016-02, Leases (“ASU 2016-02”). The new
standard establishes a right-of-use (“ROU”) model that requires a lessee to
record a ROU asset and a lease liability on the balance sheet for all leases
with terms longer than 12 months. Leases will be classified as either finance
or operating, with classification affecting the pattern of expense recognition
in the income statement. The new standard is effective for fiscal years
beginning after December 15, 2018, including interim periods within those
fiscal years. A modified retrospective transition approach is required for
lessees for capital and operating leases existing at, or entered into after,
the beginning of the earliest comparative period presented in the financial
statements, with certain practical expedients available.
The
Company adopted the standard effective January 1, 2019. The standard allows a
number of optional practical expedients to use for transition. The Company
choose the certain practical expedients allowed under the transition guidance
which permitted us to not to reassess any existing or expired contracts to
determine if they contain embedded leases, to not to reassess our lease
classification on existing leases, to account for lease and non-lease
components as a single lease component for equipment leases, and whether
initial direct costs previously capitalized would qualify for capitalization
under FASB ASC 842. The new standard also provides practical expedients and
recognition exemptions for an entity’s ongoing accounting policy elections. The
Company has elected the short-term lease recognition for all leases that
qualify, which means that we do not recognize a ROU asset and lease liability
for any lease with a term of twelve months or less.
|
|
|
23 |
|
|
The
most significant impact of adopting the standard was the recognition of ROU
assets and lease liabilities for operating leases on the Company’s consolidated
balance sheet but it did not have an impact on the Company’s consolidated
statements of operations or consolidated statements of cash flows.
The
Company did not have a cumulative effect on adoption prior to January 1, 2019.
In
August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic
820), Disclosure Framework – Changes to the Disclosure Requirements for Fair
Value Measurement. The amendments in this Update modify certain
disclosure requirements of fair value measurements and are effective for all
entities for fiscal years, and interim periods within those fiscal years,
beginning after December 15, 2019. Early adoption is permitted. The Company is
currently unable to determine the impact on its financial statements of the
adoption of this new accounting pronouncement.
In
June 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting
Standards Update (“ASU”) 2018-07, Compensation-Stock Compensation
(Topic 718): Improvements to Nonemployee Share-Based Payment Accounting ,
which expands the scope of Topic 718 to include share-based payment
transactions for acquiring goods and services from nonemployees. An entity
should apply the requirements of Topic 718 to nonemployee awards except for
specific guidance on inputs to an option pricing model and the attribution of
cost (that is, the period of time over which share-based payment awards vest
and the pattern of cost recognition over that period). The new guidance is
effective for all entities for annual periods, and interim periods within those
annual periods, beginning after December 15, 2017, with early adoption
permitted. The Company does not expect the adoption of this ASU to have a
material impact on its consolidated financial statements.
In
March 2018, the FASB issued ASU No. 2018-05, Income Taxes (Topic 740) -
Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No.
118 . The amendment provides guidance on accounting for the impact of
the Tax Cuts and Jobs Act (the “Tax Act”) and allows entities to complete the
accounting under ASC 740 within a one-year measurement period from the Tax Act
enactment date. This standard is effective upon issuance. The Tax Act has
several significant changes that impact all taxpayers, including a transition
tax, which is a one-time tax charge on accumulated, undistributed foreign
earnings. The calculation of accumulated foreign earnings requires an analysis
of each foreign entity’s financial results going back to 1986. The Company does
not expect the adoption of this ASU to have a material impact on its consolidated
financial statements.
In
February 2018, the FASB issued ASU No. 2018-02, Reclassification of
Certain Tax Effects from Accumulated Other Comprehensive Income . The
guidance permits entities to reclassify tax effects stranded in Accumulated
Other Comprehensive Income as a result of tax reform to retained earnings. This
new guidance is effective for annual and interim periods in fiscal years
beginning after December 15, 2018. Early adoption is permitted in annual and
interim periods and can be applied retrospectively or in the period of
adoption. The Company is currently in the process of evaluating the impact of
adoption on its consolidated financial statements.
In
July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260),
Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging
(Topic 815): I. Accounting for Certain Financial Instruments with Down Round
Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable
Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily
Redeemable Non-Controlling Interests with a Scope Exception. Part I of
this update addresses the complexity of accounting for certain financial
instruments with down round features. Down round features are features of
certain equity-linked instruments (or embedded features) that result in the
strike price being reduced on the basis of the pricing of future equity
offerings. Current accounting guidance creates cost and complexity for entities
that issue financial instruments (such as warrants and convertible instruments)
with down round features that require fair value measurement of the entire
instrument or conversion option. Part II of this update addresses the
difficulty of navigating Topic 480, Distinguishing Liabilities from
Equity, because of the existence of extensive pending content in the
FASB Accounting Standards Codification. This pending content is the result of
the indefinite deferral of accounting requirements about mandatorily redeemable
financial instruments of certain nonpublic entities and certain mandatorily
redeemable non-controlling interests. The amendments in Part II of this update
do not have an accounting effect. This ASU is effective for fiscal years, and
interim periods within those years, beginning after December 15, 2018. The
Company is currently unable to determine the impact on its consolidated
financial statements of the adoption of this new accounting pronouncement.
|
|
|
24 |
|
|
In May
2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation
(Topic 718): Scope of Modification Accounting , which clarifies when a
change to the terms or conditions of a share-based payment award must be
accounted for as a modification. The new guidance requires modification
accounting if the fair value, vesting condition or the classification of the
award is not the same immediately before and after a change to the terms and
conditions of the award. The new guidance is effective for all entities for
annual periods, and interim periods within those annual periods, beginning
after December 15, 2017, with early adoption permitted. The Company does not
expect the adoption of this ASU to have a material impact on its consolidated
financial statements.
In
January 2017, the FASB issued ASU No. 2017-4, Intangibles – Goodwill
and Other (Topic 350): “Simplifying the Test for Goodwill Impairment. This
update simplifies how an entity is required to test goodwill for impairment by
eliminating Step 2 from the goodwill impairment test. Step 2 measures a
goodwill impairment loss by comparing the implied fair value of a reporting
unit’s goodwill with the carrying amount of that goodwill. Instead, under the
amendments in this update, an entity should perform its annual, or interim,
goodwill impairment test by comparing the fair value of a reporting unit with
its carrying amount. An entity should recognize an impairment charge for the
amount by which the carrying amount exceeds the reporting unit’s fair value. An
entity should apply the amendments in this update on a prospective basis. An
entity is required to disclose the nature of and reason for the change in
accounting principle upon transition. That disclosure should be provided in the
first annual period and in the interim period within the first annual period
when the entity initially adopts the amendments in this update. A public
business entity that is an SEC filer should adopt the amendments in this Update
for its annual or any interim goodwill impairment tests in fiscal years
beginning after December 15, 2019. The Company is currently unable to determine
the impact on its financial statements of the adoption of this new accounting
pronouncement.
In
January 2017, the FASB issued ASU No. 2017-1, Business Combinations
(Topic 805): Clarifying the Definition of a Business. The amendments
in this update clarify the definition of a business with the objective of
adding guidance to assist entities with evaluating whether transactions should
be accounted for as acquisitions (or disposals) of assets or businesses. The
definition of a business affects many areas of accounting including
acquisitions, disposals, goodwill, and consolidation. The amendments of this
ASU are effective for public business entities for annual periods beginning
after December 15, 2018, and interim periods within annual periods beginning
after December 15, 2019. The amendments in this Update are to be applied
prospectively on or after the effective date. The Company is currently unable
to determine the impact on its financial statements of the adoption of this new
accounting pronouncement.
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.
|
|
|
25 |
|
|
Item
8. Financial Statements and Supplementary Data
To the
Board of Directors and
Stockholders of Lithium Corporation
Opinion
on the Financial Statements
We
have audited the accompanying balance sheets of Lithium Corporation (the
Company) as of December 31, 2020 and 2019, and the related statements of
operations, stockholders’ equity, and cash flows for each of the years in the
two-year period ended December 31, 2020, and the related notes (collectively
referred to as the financial statements). In our opinion, the financial
statements present fairly, in all material respects, the financial position of
the Company as of December 31, 2020 and 2019, and the results of its operations
and its cash flows for each of the years in the two-year period ended December
31, 2020, in conformity with accounting principles generally accepted in the
United States of America.
Basis
for Opinion
These
financial statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on the Company’s financial statements
based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (PCAOB) and are required to
be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and
Exchange Commission and the PCAOB.
We
conducted our audits in accordance with the standards of the PCAOB. Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. As part of our audits, we are required to obtain an
understanding of internal control over financial reporting, 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.
Our
audits included performing procedures to assess the risks of material
misstatement of the financial statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures included examining, on
a test basis, evidence regarding the amounts and disclosures in the financial
statements. Our audits also included evaluating the accounting principles used
and significant estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that our audits provide a
reasonable basis for our opinion.
Going
Concern
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 suffered net losses from operations and has a net
capital deficiency, which raises substantial doubt about its ability to continue
as a going concern. Management’s plans regarding those matters are discussed in
Note 2. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
Critical
Audit Matters
The
critical audit matters communicated below are matters arising from the current
period audit of the financial statements that were communicated or required to
be communicated to the audit committee and that: (1) relate to accounts or
disclosures that are material to the financial statements and (2) involved our
especially challenging, subjective, or complex judgments. The communication of
critical audit matters does not alter in any way our opinion on the financial
statements, taken as a whole, and we are not, by communicating the critical
audit matters below, providing separate opinions on the critical audit matters
or on the accounts or disclosures to which they relate.
Going
Concern
As
discussed in Note 2 to the financial statements, the Company had a going
concern due the company suffering net losses and due to the company having a
working capital deficiency. Auditing management’s evaluation of a going concern
can be a significant judgment given the fact that the Company uses management
estimates on future revenues and expenses, which are not able to be
substantiated. To evaluate the appropriateness of the going concern, we
examined and evaluated the financial information that was the initial cause
along with management’s plans to mitigate the going concern and management’s
disclosure on going concern.
M&K
CPAS, PLLC
We
have served as the Company’s auditor since 2016.
Houston,
TX
March
16, 2021
|
|
|
26 |
|
|
LITHIUM
Corporation
Balance
Sheets
|
ASSETS |
||||||||
|
|
|
December 31, 2020 |
|
|
December 31, 2019 |
|
||
|
CURRENT
ASSETS |
|
|
|
|
|
|
||
|
Cash |
|
$ |
191,125 |
|
|
$ |
346,260 |
|
|
Deposits |
|
|
700 |
|
|
|
700 |
|
|
Prepaid expenses |
|
|
14,226 |
|
|
|
20,504 |
|
|
Total Current Assets |
|
|
206,051 |
|
|
|
367,464 |
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS |
|
$ |
206,051 |
|
|
$ |
367,464 |
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||||
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
|
|
|
Accounts payable and accrued
liabilities |
|
$ |
14,816 |
|
|
$ |
16,909 |
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL CURRENT LIABILITIES |
|
|
14,816 |
|
|
|
16,909 |
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES |
|
|
14,816 |
|
|
|
16,909 |
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
Common stock, 3,000,000,000 shares
authorized, par value $0.001; 95,651,644 and 95,651,644 common shares
outstanding, respectively |
|
|
95,652 |
|
|
|
95,652 |
|
|
Additional paid in capital |
|
|
4,322,347 |
|
|
|
4,322,347 |
|
|
Additional paid in capital - options |
|
|
191,513 |
|
|
|
191,513 |
|
|
Additional paid in capital - warrants |
|
|
369,115 |
|
|
|
369,115 |
|
|
Accumulated deficit |
|
|
(4,787,392 |
) |
|
|
(4,628,072 |
) |
|
|
|
|
|
|
|
|
|
|
|
TOTAL STOCKHOLDERS' EQUITY |
|
|
191,235 |
|
|
|
350,555 |
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
$ |
206,051 |
|
|
$ |
367,464 |
|
The accompanying
notes are an integral part of these financial statements.
|
|
|
27 |
|
|
LITHIUM
Corporation
Statements
of Operations
|
|
|
Year Ended December 31, 2020 |
|
|
Year Ended December 31, 2019 |
|
||
|
|
|
|
|
|
|
|
||
|
REVENUE |
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
Professional fees |
|
|
28,174 |
|
|
|
35,185 |
|
|
Exploration expenses |
|
|
21,684 |
|
|
|
15,899 |
|
|
Consulting fees - related party |
|
|
76,500 |
|
|
|
107,500 |
|
|
Insurance expense |
|
|
- |
|
|
|
6,935 |
|
|
Investor relations and shareholder
communications |
|
|
320 |
|
|
|
67,161 |
|
|
Transfer agent and filing fees |
|
|
19,908 |
|
|
|
12,920 |
|
|
Travel |
|
|
3,731 |
|
|
|
7,228 |
|
|
General and administrative expenses |
|
|
9,003 |
|
|
|
9,398 |
|
|
Writedown of mineral property |
|
|
- |
|
|
|
390,200 |
|
|
TOTAL OPERATING EXPENSES |
|
|
159,320 |
|
|
|
652,426 |
|
|
|
|
|
|
|
|
|
|
|
|
LOSS FROM OPERATIONS |
|
|
(159,320 |
) |
|
|
(652,426 |
) |
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME (EXPENSES) |
|
|
|
|
|
|
|
|
|
Gain (Loss) on sale of marketable
securities |
|
|
- |
|
|
|
(919 |
) |
|
Gain on sale of mineral property |
|
|
- |
|
|
|
443,308 |
|
|
Loss on investment |
|
|
- |
|
|
|
(10,000 |
) |
|
Interest income |
|
|
- |
|
|
|
140 |
|
|
TOTAL OTHER INCOME (EXPENSE) |
|
|
- |
|
|
|
432,529 |
|
|
|
|
|
|
|
|
|
|
|
|
LOSS BEFORE INCOME TAXES |
|
|
(159,320 |
) |
|
|
(219,897 |
) |
|
|
|
|
|
|
|
|
|
|
|
PROVISION FOR INCOME TAXES |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS |
|
$ |
(159,320 |
) |
|
$ |
(219,897 |
) |
|
|
|
|
|
|
|
|
|
|
|
NET LOSS PER SHARE: BASIC AND DILUTED |
|
$ |
(0.00 |
) |
|
$ |
(0.00 |
) |
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING: BASIC AND DILUTED |
|
|
95,651,644 |
|
|
|
95,651,644 |
|
The accompanying
notes are an integral part of these financial statements.
|
|
|
28 |
|
|
LITHIUM
Corparation
Statements
of Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
Additional |
|
|
Additional |
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
Additional |
|
|
Paid-in |
|
|
Paid-in |
|
|
Other |
|
|
|
|
|
Total |
|
||||||||
|
|
|
Common Stock |
|
|
Paid-in |
|
|
Capital - |
|
|
Capital - |
|
|
Comprehensive |
|
|
Accumulated |
|
|
Stockholders' |
|
|||||||||||
|
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Warrants |
|
|
|||||||||||||||||||