ltum_ex321.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________to ________________

Commission File Number 000-54332

LITHIUM CORPORATION

(Exact name of registrant as specified in its charter)

Nevada		98-0530295
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

1031 Railroad St. Ste. 102B, Elko, Nevada		89801
(Address of principal executive offices)		(Zip Code)

(775) 410-5287

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of exchange on which registered
Common Stock		LTUM		N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐				Accelerated filer ☐
Non-Accelerated filer ☒		Smaller reporting company ☒		Emerging growth company ☐

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 ☒

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☐ No ☐

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. 116,292,441 common shares issued and outstanding as of August 14, 2023.


	Comment

LITHIUM CORPORATION

FORM 10-Q

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements 4	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	30
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 3.	Defaults Upon Senior Securities	31
Item 4.	Mine Safety Disclosures	31
Item 5.	Other Information	31
Item 6.	Exhibits	32
SIGNATURES		33


2	Comment

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Our unaudited interim financial statements for the three month period ended June 30, 2023 form part of this quarterly report. They are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.

LITHIUM Corporation

Balance Sheets

ASSETS
	June 30, 2023 (unaudited)			December 31, 2022
CURRENT ASSETS
Cash	$	3,659,396		$	3,576,911
Marketable securities		212,247			372,972
Deposits		700			700
Prepaid expenses		18,756			37,832
Total Current Assets		3,891,099			3,988,415

OTHER ASSETS
Equipment, net of accumulated depreciation		24,652			28,318

TOTAL ASSETS	$	3,915,751		$	4,016,733

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	4,687		$	5,598
Accounts payable and accrued liabilities - related party		20,811			25,718
Allowance for optioned properties		1,999,364			1,999,364

TOTAL CURRENT LIABILITIES		2,024,862			2,030,680

TOTAL LIABILITIES		2,024,862			2,030,680

Commitments and contingencies

STOCKHOLDERS' EQUITY
Common stock, 3,000,000,000 shares authorized, par value $0.001; 116,092,441 and 113,692,441 common shares outstanding, respectively		116,093			113,693
Additional paid in capital		8,823,724			8,571,524
Additional paid in capital - options		957,247			887,910
Additional paid in capital - warrants		369,115			369,115
Accumulated deficit		(8,375,290	)		(7,956,189	)

TOTAL STOCKHOLDERS' EQUITY		1,890,889			1,986,053

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	3,915,751		$	4,016,733

The accompanying notes are an integral part of these financial statements.


3	Comment

Table of Contents

LITHIUM Corporation

Statements of Operations

(unaudited)

	Three Months Ended June 30, 2023			Three Months Ended June 30, 2022			Six Months Ended June 30, 2023			Six Months Ended June 30, 2022

REVENUE	$	-		$	-		$	-		$	-

OPERATING EXPENSES
Professional fees		24,023			32,431			35,526			42,313
Depreciation		1,833			1,833			3,666			3,666
Exploration expenses - related party		-			3,078			3,779			9,297
Exploration expenses		4,798			62,355			4,798			71,221
Consulting fees - related party		68,000			367,967			169,984			412,967
Consulting fees		12,800			384,480			65,953			389,730
Transfer agent and filing fees		4,812			10,634			13,198			17,227
Travel		1,511			3,692			2,596			6,825
General and administrative expenses		7,868			6,579			21,034			10,528
Writedown of mineral property		-			-			-			-
TOTAL OPERATING EXPENSES		125,645			873,049			320,534			963,774

LOSS FROM OPERATIONS		(125,645	)		(873,049	)		(320,534	)		(963,774	)

OTHER INCOME (EXPENSES)
Change in fair value of marketable securities		(49,773	)		(400,605	)		(151,448	)		(55,005	)
Other income		18,688			19,500			37,076			59,500
Gain (Loss) on sale of marketable securities		5,805			-			5,805			-
Other income - related party		-			-			10,000			-
TOTAL OTHER INCOME (EXPENSE)		(25,280	)		(381,105	)		(98,567	)		4,495

LOSS BEFORE INCOME TAXES		(150,925	)		(1,254,154	)		(419,101	)		(959,279	)

PROVISION FOR INCOME TAXES		-			-			-			-

NET INCOME (LOSS)	$	(150,925	)	$	(1,254,154	)	$	(419,101	)	$	(959,279	)

NET LOSS PER SHARE: BASIC AND DILUTED	$	(0.00	)	$	(0.01	)	$	(0.00	)	$	(0.01	)

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED		115,907,826			105,861,672			115,176,419			104,990,784

The accompanying notes are an integral part of these financial statements.


4	Comment

Table of Contents

LITHIUM Corparation

Statements of Stockholders' Equity

(unaudited)

							Additional		Additional
					Additional		Paid-in		Paid-in					Total
	Common Stock				Paid-in		Capital -		Capital -		Accumulated			Stockholders'
	Shares		Amount		Capital		Warrants		Options		Deficit			Equity

Balance, December 31, 2021		103,492,441	$	103,493	$	6,925,724	$	369,115	$	191,513	$	(6,532,665	)	$	1,057,180

Shares issued for cash		1,600,000		1,600		332,400		-		-		-			334,000
Net income		-		-		-		-		-		294,875			294,875

Balance, March 31, 2022		105,092,441		105,093		7,258,124		369,115		191,513		(6,237,790	)		1,686,055

Shares issued for cash		2,000,000		2,000		441,200		-		-		-			443,200
Stock based compensation		-		-		-		-		696,397		-			696,397
Net income		-		-		-		-		-		(1,254,154	)		(1,254,154	)

Balance, June 30, 2022		107,092,441	$	107,093	$	7,699,324	$	369,115	$	887,910	$	(7,491,944	)	$	1,571,498

Balance, December 31, 2022		113,692,441		113,693		8,571,524		369,115		887,910		(7,956,189	)		1,986,053

Shares issued for cash		2,200,000		2,200		233,200		-		-		-			235,400
Stock based compensation		-		-		-		-		69,337		-			69,337
Net income		-		-		-		-		-		(268,176	)		(268,176	)

Balance, March 31, 2023		115,892,441		115,893		8,804,724		369,115		957,247		(8,224,365	)		2,022,614

Shares issued for cash		200,000		200		19,000		-		-		-			19,200
Net income		-		-		-		-		-		(150,925	)		(150,925	)

Balance, June 30, 2023		231,984,882	$	116,093	$	8,823,724	$	369,115	$	957,247	$	(8,375,290	)	$	1,890,889

The accompanying notes are an integral part of these financial statements.


5	Comment

Table of Contents

LITHIUM Corporation

Statements of Cash Flows

(unaudited)

	Six Months Ended June 30, 2023			Six Months Ended June 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) for the period	$	(419,101	)	$	(959,279	)
Adjustment to reconcile net income (loss) to net cash used in operating activities
Change in fair value of marketable securities		151,448			55,005
Depreciation		3,666			3,666
Stock based compensation		69,337			696,397
Gain on sale of marketable securities		(5,805	)		-
Changes in assets and liabilities:
(Increase) Decrease in prepaid expenses		19,076			4,385
Increase (decrease) in accounts payable and accrued liabilities		(5,818	)		11,057
Net Cash (Used in) Operating Activities		(187,197	)		(188,769	)

CASH FLOWS FROM INVESTING ACTIVITY:
Cash from property agreements		-			65,000
Cash from sale of marketable securities		15,082			-
Purchase of equipment		-			(35,650	)
Net Cash Provided by Investing Activities		15,082			29,350

CASH FLOWS FROM FINANCING ACTIVITY:
Shares issued for cash		254,600			777,200
Net Cash Provided by Finanicng Activity		254,600			777,200

Increase (Decrease) in cash		82,485			617,781
Cash, beginning of period		3,576,911			2,243,121
Cash, end of period	$	3,659,396		$	2,860,902

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-

NON CASH TRANSACTIONS
Marketable securities received as consideration for mineral property	$	-		$	-

The accompanying notes are an integral part of these financial statements.


6	Comment

Table of Contents

Lithium Corporation

Notes to the Financial Statements

June 30, 2023

Note 1 - Summary of Significant Accounting Policies

Lithium Corporation (formerly Utalk Communications Inc.) (the “Company”) was incorporated on January 30, 2007 under the laws of Nevada. On September 30, 2009, Utalk Communications Inc. changed its name to Lithium Corporation.

Nevada Lithium Corporation was incorporated on March 16, 2009 under the laws of Nevada under the name Lithium Corporation. On September 10, 2009, the Company amended its articles of incorporation to change its name to Nevada Lithium Corporation. By agreement dated October 9, 2009 Nevada Lithium Corporation and Lithium Corporation amalgamated as Lithium Corporation. Lithium Corporation is engaged in the acquisition and development of certain lithium interests in the state of Nevada, and battery or Tech metals prospects in British Columbia and is currently in the exploration stage.

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. Such estimates include the useful life of equipment and inputs related to the calculation of the fair value of stock options. Actual results could differ from those estimates.

Revenue Recognition

The Company recognizes revenues under ASC 606 — Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue from the commercial sales of products, licensing agreements and contracts to perform pilot studies by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.

Research and Development

Research and development costs are expensed as incurred. During the three and six months ended June 30, 2023 and 2022, the Company did not have any research and development costs.


7	Comment

Table of Contents

Advertising Costs

Advertising costs are expensed as incurred. During three and six months ended June 30, 2023 and 2022, the Company did not have any advertising costs.

Income per Share

Basic income per share is computed by dividing loss available to common shareholders by the weighted average number of common shares outstanding during the period. 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, represented by 3,700,000 stock options outstanding at June 30, 2023 (December 31, 2022: 3,700,000), is excluded 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.

Optioned Properties

Properties under the Company’s ownership which have been optioned to a third party are deemed the Company’s property until all obligations under an option agreement are met, at which point the ownership of the property transfers to the third party. All non-refundable payments received prior to all obligations under an option agreement being met are considered liabilities until such time all obligations have been met, at which time ownership of the property transfers to the third party and the Company includes option payments into its statement of operations.

Recent Accounting Pronouncements

In January 2016, the Financial Accounting Standards Board ("FASB"), issued Accounting Standards Update ("ASU") 2016-01, "Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities," which amends the guidance in U.S. generally accepted accounting principles on the classification and measurement of financial instruments. Changes to the current guidance primarily affect the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the ASU clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities.

The Company does not expect that recent accounting pronouncements or changes in accounting pronouncements during the three and six months ended June 30, 2023, are of significance or potential significance to the Company.


8	Comment

Table of Contents

Note 2 – Going Concern

As reflected in the accompanying financial statements, the Company has used $187,197 (2022: $188,769) of cash in operations for the six months ended June 30, 2023. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern.

Note 3 – Fair Value of Financial Instruments

Under FASB ASC 820-10-5, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under GAAP, certain assets and liabilities must be measured at fair value, and FASB ASC 820-10-50 details the disclosures that are required for items measured at fair value.

The Company has certain financial instruments that must be measured under the new fair value standard. The Company’s financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels are as follows:

	·	Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

	·	Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

	·	Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.


9	Comment

Table of Contents

The following schedule summarizes the valuation of financial instruments at fair value on a recurring basis in the balance sheets as of June 30, 2023 and December 31, 2022, respectively:

	Fair Value Measurements at June 30, 2023
	Level 1		Level 2		Level 3
Assets
Cash	$	3,659,396	$	-	$	-
Marketable securities		212,247		-		-
Total Assets		3,871,643		-		-
Liabilities
Total Liabilities		-		-		-
	$	3,871,643	$	-	$	-

	Fair Value Measurements at December 31, 2022
	Level 1		Level 2		Level 3
Assets
Cash	$	3,576,911	$	-	$	-
Marketable securities		372,972		-		-
Total Assets		3,949,883		-		-
Liabilities
Total Liabilities		-		-		-
	$	3,949,883	$	-	$	-

Note 4 – Marketable Securities

The Company owns marketable securities (common stock) as outlined below:

Balance, December 31, 2022	$	372,972
Fair value adjustment		(151,448	)
Disposals		(9,277	)

Balance, June 30, 2023	$	212,247

The Company classifies it’s marketable securities as available for sale.

During the year ended December 31, 2022, the Company received 7,050,000 common shares from a related party with a value of $126,697 related to the option of the Fish Lake Property.

During the three and six months ended June 30, 2023, the Company disposed marketable securities with a cost of $9,277 for proceeds of $15,083 resulting in a gain of $5,805.

Note 5 - Prepaid Expenses

Prepaid expenses consisted of the following at June 30, 2023 and December 31, 2022:

	June 30, 2023		December 31, 2022
Professional fees	$	4,500	$	4,500
Other		7,269		14,918
Transfer agent fees		6,987		18,413
Total prepaid expenses	$	18,756	$	37,832


10	Comment

Table of Contents

Note 6 - Capital Stock

The Company is authorized to issue 3,000,000,000 shares of it $0.001 par value common stock.

Common Stock

During the year-ended December 31, 2022, the Company issued 10,200,000 common shares for proceeds of $1,656,000.

During the six months ended June 30, 2023, the Company issued 2,400,000 common shares for proceeds of $254,600.

Note 7 – Stock Options

On May 26, 2022, the Company granted 3,700,000 stock options with an exercise price of $0.22, a term of 5 years and vest immediately. These options were vested on the date of grant and resulted in stock-based compensation of $696,397. Of the options granted, 1,600,000 were granted to 4 related parties including officers and directors and 2,100,000 were granted to 15 consultants of the Company. On January 24, 2023, the exercise price of the options was amended to $0.10 per share resulting in a $69,337 stock-based compensation expense for the six months ended June 30, 2023. As of June 30, 2023, no stock options have been exercised.

The fair value of options granted during the year ended December 31, 2022 were determined using the Black Scholes method with the following assumptions:

	June 30, 2023
Risk free interest rate		3.58	%
Stock volatility factor	101%-114		%
Weighted average expected life of options	1.8-4.3 years
Expected dividend yield		0	%

A summary of the Company’s stock option activity and related information follows:

	Six Months Ended June 30, 2023					Six Months Ended June 30, 2022
	Options		Weighted Average Exercise Price			Options		Weighted Average Exercise Price
Outstanding, beginning of period		3,700,000	$	0.22			-		-
Granted		-		-			3,700,000	$	0.22
Repricing		-		(0.12	)		-		-

Outstanding, end of period		3,700,000	$	0.10			3,700,000	$	0.22

As of June 30, 2023, the intrinsic value of the stock options was approximately $0. Stock option expense for the six months ended June 30, 2023 was $69,337 (2022: $777,200).

The following table summarizes the stock options outstanding at June 30, 2023:

Issue Date

Number

Price

Expiry Date

Outstanding at

June 30, 2023

Weighted Average Remaining Contractual Life

(in years)

May 26, 2022

3,700,000

0.10

May 26, 2027

3,700,000

3.85


11	Comment

Table of Contents

Note 8 – Mineral Properties

Fish Lake Valley

On April 29, 2021 we signed a Letter Of Intent (LOI) with Morella Corporation (formerly Altura Mining Limited) an Australian Lithium explorer and developer, and related party, whereby Morella can earn a 60% interest in the Fish Lake Valley property by paying the Company $675,000, issuing the equivalent of $500,000 worth of Altura stock, and expending $2,000,000 of exploration work in the next four years. To date Morella Corporation has paid $250,000 and issued 28,176,951 common shares with a fair value of $1,456,407.

The Letter of Intent was signed with a purchaser that has a common director as the Company.

San Emidio

On September 16^th 2021 Lithium Corporation signed an agreement with Surge Battery Metals whereby Surge could have earned an 80% interest in the Company’s San Emidio lithium-in-brine prospect in Washoe County Nevada. Surge paid Lithium Corporation $50,000 and issued 200,000 common shares valued at $51,260 on signing the agreement, but relinquished all interest in the agreement and the property in July of 2022, so no further funds or shares were issued under the terms of the agreement.

North Big Smokey

The Letter of Intent was signed with a purchaser that has a common director as the Company.

Note 9 – Allowance for Optioned Properties

Fish Lake Valley

On October 21, 2021 we signed an agreement with Morella Corporation, an Australian Lithium explorer and developer, and related entity whereby Morella Corporation can earn a 60% interest in the Fish Lake Valley property by paying the Company $675,000, issuing the equivalent of $500,000 worth of Altura stock, and expending $2,000,000 of exploration work in the next four years.

As of June 30, 2023, the Company has received $250,000 and received 35,226,951 common shares with a fair value of $1,456,407 in relation to the letter of intent. The Company recorded $1,706,407 as a liability against the property until either the purchaser returns the property to the Company or the purchaser has met all the obligations associated with the agreement, at which time the liability will be charged to the statement of operations.

The agreement was signed with a purchaser that has a common director as the Company.


12	Comment

Table of Contents

San Emidio

On September 16, 2021, the Company entered into a Letter of Intent with respect to the San Emidio Property whereby the optionor will pay $50,000 on signing (received) and issue 200,000 common shares within 5 days of closing.

As of June 30, 2023, the Company has received $50,000 and 200,000 common shares, valued at $51,260, in relation to the letter of intent. The Company recorded $101,260 as a liability against the property until either the purchaser returns the property to the Company or the purchaser has met all the obligations associated with the agreement, at which time the liability will be charged to the statement of operations.

North Big Smokey

On May 24, 2022 the Company signed a Letter Of Intent (LOI) with Morella Corporation, an Australian Lithium explorer and developer, and related party, whereby Morella can earn a 60% interest in the Big North Smokey property by issuing the equivalent of $500,000 worth of Morella Corporation stock, and expending $1,000,000 of exploration work in the next four years. To date Morella Corporation has paid $65,000 and received 7,050,000 common shares with a fair value of $126,697. The Company recorded $191,697 as a liability against the property until either the purchaser returns the property to the Company or the purchaser has met all the obligations associated with the agreement, at which time the liability will be charged to the statement of operations.

The Letter of Intent was signed with a purchaser that has a common director as the Company.

Note 10 – Related Party Transactions

For the three and six months ended June 30, 2023, the Company paid cash consulting fees totaling $68,000 and $140,000 (2022: $45,000 and $90,000), respectively, to related parties and non-cash stock option compensation expenses of $Nil and $29,984 ($322,966 and $322,966) to related parties.

The Company paid exploration fees totaling $0 and $3,779 to related parties for the three and six months ended June 30, 2023 (2022: $3,078 and $9,297).

The Company paid rent fees totaling $1,500 and $3,000 to related parties for the three and six months ended June 30, 2023 (2022: $1,500 and $3,000).

As at June 30, 2023, the Company had $20,811 owing to related parties (December 31, 2022: $25,718).

During the six months ended June 30, 2023, the company received $10,000 (2022: $Nil) in distributions from Summa, LLC, a Limited Liability Corporation with some shared management. The Company holds a 25% investment in Summa LLC. The investment was written off in 2016 as there was significant doubt about the fair value of the investment in the period.

During the year ended December 31, 2022, the Company received $65,000 and received 7,050,000 common shares with a fair value of $126,697 from a related party through common directors in relation to the letter of intent signed in relation to the North Big Smokey Property. See notes 4, 7 and 8.

During the year ended December 31, 2022, the Company received $150,000 and 35,226,951 common shares from a related party through common directors with a fair value of $1,456,407 in relation to the agreement signed in relation to the Fish Lake property. See note 4, 7 and 8.


13	Comment

Table of Contents

Note 12 – Commitments and Contingencies

On July 1, 2021, the Company signed a rental agreement with a related party for office and storage space. The rental agreement is on a month-to-month basis for a monthly fee of $500 with no escalating payments. As the Company cannot determine the amount of time it will stay in the lease then a lease period cannot be determined and, as such, the agreement does not fall under ASC 842.

From time to time, we may be involved in routine legal proceedings, as well as demands, claims and threatened litigation that arise in the normal course of our business. The ultimate amount of liability, if any, for any claims of any type (either alone or in the aggregate) may materially and adversely affect our financial condition, results of operations and liquidity. In addition, the ultimate outcome of any litigation is uncertain. Any outcome, whether favorable or unfavorable, may materially and adversely affect us due to legal costs and expenses, diversion of management attention and other factors. We expense legal costs in the period incurred. We cannot assure you that additional contingencies of a legal nature or contingencies having legal aspects will not be asserted against us in the future, and these matters could relate to prior, current or future transactions or events. As of December 31, 2022, there were no pending or threatened litigation against the Company.

Note 13 – Subsequent Events

The Company has analyzed its operations subsequent to June 30, 2023 through the date these financial statements were issued, and has determined that it does not have any material subsequent events.


14	Comment

Table of Contents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

FORWARD LOOKING STATEMENTS

This quarterly 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 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 unaudited financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly 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 quarterly report.

Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.

In this quarterly 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 quarterly report, the terms “we”, “us”, “our” and “our company” mean Lithium Corporation and our now defunct wholly-owned subsidiary Lithium Royalty Corp., a Nevada company, unless otherwise indicated.

General Overview

We were incorporated under the laws of the State of Nevada on January 30, 2007 under the name “Utalk Communications Inc.”. At inception, we were a development stage corporation engaged in the business of developing and marketing a call-back service using a call-back platform. Because we were not successful in implementing our business plan, we considered various alternatives to ensure the viability and solvency of our company.

On August 31, 2009, we entered into a letter of intent with Nevada Lithium Corporation regarding a business combination which could 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 then 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 536804107.


15	Comment

Table of Contents

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.

Our Current Business

We are an exploration stage mining company engaged in the identification, acquisition, and exploration of metals and minerals with a primary focus on lithium mineralization on properties located in Nevada, and Graphite and Rare Earth Element properties in British Columbia.

Our current operational focus is to judiciously conduct exploration activities on all our mineral properties and generate additional prospects for our exploration portfolio.

In March of 2022 we staked a block of claims covering approximately 3400 acres which roughly corresponds to the lands previously held by Lithium Corporation’s former subsidiary Lithium Royalty Corp. in 2016/2017. On May 13, 2022 we signed a Letter of Intent (LOI) with Morella Corporation (a related party) whereby Morella can earn a 60% interest in the property by paying $65,000 US (done) to the Company on the signing of the LOI, and issuing $100,000 worth of Morella shares at the time of signing the formal agreement, and issuing $100,000 worth of shares at each anniversary of the signing of the formal agreement over the next four years. Additionally Morella must incur exploration expenditures of $100,000, $200,000, $300,000 and $400,000 in years one through four of the option agreement. Should they fulfill these obligations they will have earned an undivided 60% interest in the property and may purchase a further 20% interest within 1 year for $750,000, and purchase the remaining 20% interest within the following year for $750,000. Should Morella buy Lithium Corporation’s undivided working interest in the property, the Company will revert to a 2.5 % Net Smelter Royalty interest, ½ of which would be purchasable by Morella for $1,000,000. Since Optioning the property Morella has conducted Controlled Source Audio-Magnetotelluric geophysical and sediment geochemical surveys, staked more claims adjacent to the original option claim block as well as staking a non-contiguous area to the north and west of the earlier claims here. Most recently Morella has commenced a drilling program, testing for both lithium-in-brine and clay mineralization.

On September 16^th 2021 Lithium Corporation signed an agreement with Surge Battery Metals whereby Surge could have earned an 80% interest in the Company’s San Emidio lithium-in-brine prospect in Washoe County Nevada, by paying an initial $50,000 and issuing 200,000 shares of Surge (TSX-V:Nili). Surge had undertaken to make payments of $620,000 in cash and stock over 5 years while incurring expenditures on the property of $1,000,000 over that period. Upon fulfillment of the aforementioned commitments Surge would have been deemed to have earned their undivided 80% interest and could have formed a joint venture with the Company. The Company had optioned this property off before as 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. Surge Battery Metals completed some geochemical work on the prospect block and gave Lithium Corporation formal notice in Summer 2022 that they were relinquishing all interest in the property. In Fall 2022 the Company completed a Controlled Source Audio- Magnetotelluric (CSAMT) survey on the property, and is currently considering next steps with respect to exploring and developing this property.


16	Comment

Table of Contents

On April 29, 2021 we signed a Letter Of Intent (LOI) with Altura Mining Limited (now Morella Corporation after a name change) an Australian Lithium explorer and developer, and related party whereby Morella can earn a 60% interest in the Fish Lake Valley lithium-in-brine property in Esmeralda County, Nevada by paying the Company $675,000, issuing the equivalent of $500,000 worth of Morella stock, and expending $2,000,000 of exploration work over the next four years. To date Morella is current with its obligations under the formal agreement ratified on October 12th 2021, having paid the initial $50,000 on signing the LOI, the $100,000 due on signing the formal agreement, and has issued 28,176,951 shares of Morella (1MC:ASX, Altaf:OTC-QB) common stock. In the last couple of years Morella has completed two phases passive seismic and magnetotelluric (MT) surveys, and are most recently have received permits for drilling on both the south and northern blocks. Preparatory work is currently being done, and drilling on the north block is scheduled to commence in August 2023. The Company had originally acquired this property through a June 2009 Option Agreement, and conducted geochemical, geological, geophysical and drilling work on it over the next several years eventually announcing via press release on February 16, 2016, that our company has entered into a letter of intent with 1032701 B.C. Ltd. 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 option to purchase Lithium Corporation's remaining 20% working interest, which would have left the Company with a 2.5% Net Smelter Royalty, half of which could have been purchased. Menika Mining, a publicly traded company on the TSX Venture Exchange subsequently acquired 1032701 B.C. Ltd and changed their name to American Lithium Corp. The Company received formal relinquishment of the Purchasers right to earn the interest in the property on April 30^th 2019.

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 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 (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 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 Niobium-Tantalum 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/rare earth elements in stream sediment anomaly. Both properties are situated in the Eocene Coryell Batholith, and it is 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 subsequently in July 2017, and in early October 2017. The examination uncovered a zone roughly 30 meters wide which includes an interval that is mineralized with approximately 0.75% Total Rare Earth Elements (TREE’s). 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, follow-up work in May of 2018, and more work in 2019, and 2020.

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.


17	Comment

Table of Contents

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 were issued and the Yeehaw property was transferred by Bormal. During 2017 the Company conducted initial stream, rock and magnetometer surveys on the property, and discovered a 30 meter wide structure (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 m