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 |
For the fiscal year ended December 31, 2023
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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
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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) |
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Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined
in Rule 405 the Securities Act. |
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Yes ☐ No ☒ |
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Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act |
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Yes ☐ No ☒ |
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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. |
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Yes ☒ No ☐ |
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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). |
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Yes ☒ No ☐ |
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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. |
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Yes ☐ No
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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) |
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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. ☐
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Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). |
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Yes ☐ No
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The aggregate market value of Common Stock held by non-affiliates of the
Registrant on June 30, 2023, the last business day of the registrant’s most
recently completed second fiscal quarter, was $10,363,102 based on a
$0.1025 average bid and asked price of such common equity.
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Indicate the number of shares
outstanding of each of the registrant’s classes of common stock as of the
latest practicable date. |
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117,892,441 common shares
as of April 3, 2024. |
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DOCUMENTS INCORPORATED BY REFERENCE
None.
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TABLE OF CONTENTS
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PART I
Item 1. Business
This annual report contains forward-looking statements. These statements
relate to future events or our future financial performance. In some cases, you
can identify forward-looking statements by terminology such as “may”, “should”,
“expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”,
“potential” or “continue” or the negative of these terms or other comparable
terminology. These statements are only predictions and involve known and
unknown risks, uncertainties and other factors, including the risks in the
section entitled “Risk Factors” that may cause our or our industry’s actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements.
Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. Except as required by
applicable law, including the securities laws of the United States, we do not
intend to update any of the forward-looking statements to conform these
statements to actual results.
Our financial statements are stated in United States Dollars (US$) 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.
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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.
In June 2009 we optioned the Fish Lake Valley property in Esmeralda
County Nevada, and ultimately earned a 100% interest in the property through a
combination of exploration expenditures and share issuances. Lithium
Corporation performed geophysical, geochemical and drilling work in the area
into early 2016 at which time we entered into an agreement with the forerunner
of American Lithium Corporation (TSX-V:Li) who could
have earned an undivided 80% interest (with the residual 20% interest being
purchasable post earn-in) in the property by incurring exploration expenses,
making cash and share payments over a period of three years. American Lithium
relinquished all interest in the property/option agreement in April 2019. In
April 2021 the Company entered into a Letter of Intent with Altura Mining
Limited whereby Altura (now Morella Corporation ASX:1MC, OTC-QB: ALTAF) may
earn a 60% interest in the property by incurring exploration expenses, and
making staged cash and share payments to Lithium Corporation over the next four
years. Morella Corporation is the single largest shareholder in Lithium
Corporation with over 8% of the Company’s common shares, having acquired an
interest through a non-brokered private placement in our Company in 2012.
In 2010 the Company acquired the San Emidio property through the staking
of claims on open Bureau of Land Management administered Federal land in Washoe
County Nevada. The company conducted geochemical, geophysical and drilling work
over the next several years, and eventually optioned them off to American
Lithium Corporation in May 2016 for a combination of exploration work, cash and
share payments over the following three years. American Lithium allowed the
option to lapse in 2018. In September 2021 Surge Battery Metals (TSX-V: Nili)
entered into an option to earn an 80% interest in the property by incurring
exploration expenses and making staged cash and share payments over the
following five years. Lithium Corporation received notification in August 2022
that Surge was relinquishing all interest in the property. The company
conducted a CSAMT geophysical survey on the property in Fall 2022.
In June 2013, we purchased a claim in the Sugar Lake area of British
Columbia for 250,000 shares of our common stock. Known as the BC Sugar Property
this property has expanded and contracted over time as we allowed a number of
the less prospective claims to lapse. In January, 2014, we agreed to buy back
the shares issued pursuant to the June 2013 agreement for $2,500. After doing
considerable work up until spring 2019 all but approximately 203 acres (82.33
Hectares) of claims were allowed to lapse, and the property sat dormant. The
market for flake graphite is improving, and the Company’s holdings here are
currently approximately 102 acres (41 hectares), and the company is currently
contemplating a small work program here this year.
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 25%, and are active “Managing Members”. Our company's
initial 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
$31,700 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 since Jan 2021 have
issued checks to the company for $138,000. The Tonopah property was optioned in
early 2020, and the Optionee has earned a 100% interest in the property. Summa
still retains a 1% (LTUM’s share 0.25%) Net Smelter Royalty on the property, as
well as other interests around the state of Nevada, including a property in
Belmont Nevada that is currently under option to Nevada Silver Corporation.
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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 mainly of 300,000 shares in the
"Purchaser Parent", 1069934 B.C. Ltd. By agreement dated September
13, 2017 Lithium Corporation agreed to sell back the shares of 1069934 Nevada
Ltd. to San Antone Minerals Corp. and compensation under the agreement was
received on November 2, 2017. The North Big Smoky claims were abandoned by the
Purchaser in 2017 and in 2021 the Company re-staked claims in the general area,
and optioned the property to Morella Corp (a related company) who conducted
geochemical and geophysical work on the claims in 2022, and an initial 2 hole
drilling program in 2023.
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 generative exploration
activities in Nevada, and on our titanium/REE and graphite properties, in
British Columbia.
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 mainly of 300,000 shares in the
"Purchaser Parent", 1069934 B.C. Ltd. By agreement dated September
13, 2017 Lithium Corporation agreed to sell back the shares of 1069934 Nevada
Ltd. to San Antone Minerals Corp (successor corporation) and the North Big
Smoky claims were allowed to lapse. In March of 2022 we staked a block of
claims in North Big Smoky Valley 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 concluded a two-hole
drilling program, testing for both lithium-in-brine and clay mineralization,
where anomalous lithium-in-clay mineralization was discovered, but no
lithium-in-brine mineralization was encountered.
On September 16th 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 into 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.
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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 26,791,685 shares of Morella (1MC:ASX, Altaf:OTC-QB)
common stock in consideration for this agreement. On February 16, 2016, Lithium
Corp had issued a news release announcing that our company had entered into a
letter of intent with 1032701 B.C. Ltd. with respect to our Fish Lake Valley
property. 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 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 at that time had a net book value of $Nil. 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 following four years. To
date Morella is current with its obligations under the formal agreement
ratified on October 12th 2021, having paid all initial and anniversary cash
disbursements as per the agreement, and has issued a total of 55,560,526 shares
of Morella (1MC:ASX, Altaf:OTC-QB) common stock
relating to this agreement to date. In the last couple of years Morella has
completed two phases of passive seismic and magnetotelluric
(MT) surveys, and have received permits for drilling on both the south and
northern blocks. Preparatory work for drilling was done during the summer of
2022, with surface casing being installed on the prospect to the south in late
2022, and drilling commenced in early October 2023, to the northeast of the
playa, proximal to but away from the area of known mineralization. Only
moderate mineralization was encountered in the 2023 drillhole in both clays and
brines. Winter 2023-24 was very wet in western Nevada, so it will be several
months before work can be contemplated on the playa at Fish Lake Valley,
however initial planning has commenced for the 2024 program.
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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 within 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 were 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. The Company is currently in the
planning stages for field season 2024.
At the BC Sugar property in the Okanagan Highlands to the east of Vernon
British Columbia 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) and
is currently considering further work this year.
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. Summa was formed to acquire and
administer the residual lands that originated in the 60’s and 70’s through
Howard Hughes’s – Hughes Corporation, which went on a mining property buying
spree at that time. 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 $31,700 in cash, and also over the years an
indeterminate amount of casual geological and land expertise to Summa, LLC. In
recognition, Summa transferred five urban lots in Tonopah of indeterminate
value in 2020, and since Jan 2021 have issued checks to the company for
$167,500. The Tonopah property was optioned in early 2020, and the Optionee has
earned a 100% interest in the property. Summa still retains a 1% (LTUM’s share
0.25%) Net Smelter Royalty on the property. Recently Summa entered into an
agreement with North American Silver Corporation (TSX-V:NSC) whereby NSC can
earn a 100% interest with respect to Summa’s Belmont Nevada claims (not to be
confused with the Belmont mine in Tonopah) by paying $200,000 in cash or at
Optionor’s discretion shares over 5 years, and election must be made by the
sixth agreement anniversary to purchase the lands (69.96 acres) at $10,000 per
acre. Should NSC earn their interest Summa, LLC would retain a 1% Net Smelter
Royalty – 50% of which may be subsequently purchased by the Optionor. Summa,
LLC still retains a 100% interest (subject to a 2% NSR in favor of Summa Corp.
(the successor entity to the Hughes Corporation) in a further five project
areas in the state of Nevada, and Lithium Corporation remains committed to
casually helping them move the projects along so that they may be optioned
eventually.
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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.
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:
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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.
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.
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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.
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.
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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
$3,667,617 as of December 31, 2023. At December 31, 2023, we had working
capital of $1,797,272. We incurred a net loss of $618,193 for the year ended December
31, 2023. We estimate our average monthly operating expenses to be
approximately $74,000, 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.
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Item 1C. Cybersecurity
Risk Management and Strategy
The Company has processes for assessing, identifying, and managing
material risks from cybersecurity threats. These processes are integrated into
the Company’s overall risk management systems, as overseen by the Company’s
board of directors, primarily through its audit committee.
Governance
Board of Directors
The audit committee of the Company’s board of directors, with the input
of management, oversees the Company’s internal controls, including internal
controls designed to assess, identify, and manage material risks from
cybersecurity threats. The audit committee is informed of material risks, when
applicable, from cybersecurity threats by the Company’s Chief Executive
Officer. Updates on cybersecurity matters, including material risks and
threats, are provided to the Company’s audit committee, and the audit committee
provides updates to the Company’s board of directors at regular board meetings.
Management
Under the oversight of the audit committee of the Company’s board of
directors, the Company’s Chief Executive Officer is primarily responsible for
the assessment and management of material cybersecurity risks and establishing
and maintaining adequate and effective internal controls covering cybersecurity
matters.
The audit committee of the Company’s board of directors, with the
assistance of the Company’s Chief Executive Officer, is responsible for
overseeing the establishment and effectiveness of controls and other
procedures, including controls and procedures related to the public disclosure
of material cybersecurity matters.
As of the date of this report, other than the foregoing, the Company is
not aware of any cybersecurity incidents that have materially affected or are
reasonably likely to materially affect the Company, including its business
strategy, results of operations, or financial condition and that are required
to be reported in this report. For further discussion of the risks associated
with cybersecurity incidents, see the cybersecurity risk factors in Item 1A.
Risk Factors in this report.
Item 2. Properties
Our corporate head office is located at 1031 Railroad St., Ste 102B,
Elko Nevada 89801, our monthly rent is $500 paid to a Rangefront
Geological, a related party, which also includes storage space for field gear.
We also rent office and storage space in Richland WA in support of our Yeehaw and BC Sugar prospects, which rent is also $500 per
month. Additionally Lithium Corporation owns outright 2.3 acres (five lots) of
undeveloped fee-title land in the town of Tonopah, NV.
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.
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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.
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. |
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The Optionee needed to 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 had 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 have reverted to a 2 1/2% Net Smelter Royalty (NSR).
The Optionee could then have elected 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 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 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.
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 a 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 all
anniversary payments since, and has issued a total of 55,560,526 shares of Morella
(1MC:ASX, Altaf:OTC-QB) common stock to date. Morella
has completed Passive Seismic and Magneto-telluric surveys, have permitted 8
drill sites, installed surface casing on the first site on the southern block,
while conducting ongoing tests for amenability to direct lithium extraction
(DLE). Drilling commenced in early October 2023, to the northeast of the playa,
proximal to but away from the area of known mineralization. Only moderate
lithium mineralization was encountered in the 2023 drillhole in both clays and
brines.
San Emidio Property
The San Emidio property, located in Washoe County in northwestern
Nevada, was acquired through the staking of claims in September 2011, and has
expanded and contracted over time depending on the state of the lithium
carbonate market. Currently the Company holds 35 - 80-acre, Association Placer
claims here covering an area of approximately 2,800 acres (1133 hectares). 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 was delayed until such time as the market picked up again.
On September 16th 2021 Lithium Corporation signed an
agreement with Surge Battery Metals whereby Surge may earn 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. 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 actively searching for a Joint Venture Partner for
this prospect.
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.
|
|
|
16 |
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.
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 Station 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.
|
|
|
17 |
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 had reduced
its acreage holdings here to approximately 203 acres (82 hectares) to facilitate
applying 5 years assessment credit to the most prospective area of the
property, and had placed it on the “back burner” in favor of developing other
prospects. The Company is currently in the planning stages with respect to the
work to be done on these prospects this summer.
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 President 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.
|
|
|
18 |
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. In 2021 Summa Silver
accelerated the earn-in provisions of the option agreement and was transferred
a 100% interest in the property. Summa still retains a 1% (LTUM’s share 0.25%)
Net Smelter Royalty on the property. Recently Summa entered into an agreement
with North American Silver Corporation (TSX-V:NSC) with respect to Summa’s
Belmont Nevada claims (not to be confused with the Belmont mine in Tonopah)
whereby NSC can earn a 100% interest by paying $200,000 in cash or at
Optionor’s discretion shares over 5 years, and election must be made by the
sixth agreement anniversary to purchase the lands (69.96 acres) at $10,000 per
acre. Should NSC earn their interest Summa, LLC would retain a 1% Net Smelter
Royalty – 50% of which may be subsequently purchased by the Optionor. Summa,
LLC still retains a 100% interest (subject to a 2% NSR in favor of Summa Corp.
(the successor entity to the Hughes Corporation) in a further five project
areas in the state of Nevada, and Lithium Corporation remains committed to
casually helping them move the projects along so that they may be optioned
eventually.
North Big Smoky Property
During the period 2011 through 2012 the Company conducted geophysical,
and geochemical work on BLM lands in North Big Smoky Valley, Nye County Nevada,
in an area that proved to be geochemically anomalous, both in sediment and
brines. The geological setting in this area is quite similar to that at our
other brine prospects, and Clayton Valley to the southwest of here, and had
experienced some geothermal and petroleum exploration in the past. In April of
2016 Lithium Royalty Corp (a wholly owned subsidiary through which we had
planned to build a portfolio of lithium mineral properties) 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 property to 1069934 Nevada Ltd. ("Purchaser") a
private company. Consideration paid to Lithium Royalty Corp. consisted of
mainly of 300,000 shares in the "Purchaser Parent", 1069934 B.C. Ltd,
and retained a royalty on the property. No appreciable work was done and by
agreement dated September 13, 2017 Lithium Corporation agreed to sell back the
shares of 1069934 Nevada Ltd. to San Antone Minerals Corp (successor
corporation) who subsequently allowed the claims here to lapse.
This area was subsequently re-staked by Lithium Corporation in March
2022, and on April 29, 2021 we signed a Letter Of Intent (LOI) with Altura
Mining Limited a related party, and an Australian Lithium explorer and
developer, Under the formal agreement which was signed in October 2021 Altura
(now Morella Corp) 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
Morella stock, and expending $2,000,000 of exploration work in the next four
years. To date Morella is current with all conditions and commitments with
respect to the agreement, and has conducted a sediment geochemistry program,
and several geophysical surveys on a phased basis on the property. Drilling was
conducted in 2023 with moderate lithium in clay mineralization having been
uncovered in the course of the first two-hole program.
|
|
|
19 |
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 in the planning stages
for field season 2023.
Our company has been financing progressively since Spring 2021, and is
ramping up 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.
|
|
|
20 |
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 OTC Markets,
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, 2023 |
|
$ |
0.091 |
|
|
$ |
0.041 |
|
|
September 30, 2023 |
|
$ |
0.1098 |
|
|
$ |
0.060 |
|
|
June 30, 2023 |
|
$ |
0.15 |
|
|
$ |
0.090 |
|
|
March 31, 2023 |
|
$ |
0.1704 |
|
|
$ |
0.079 |
|
|
December 31, 2022 |
|
$ |
0.149 |
|
|
$ |
0.072 |
|
|
September 30, 2022 |
|
$ |
0.230 |
|
|
$ |
0.136 |
|
|
June 30, 2022 |
|
$ |
0.408 |
|
|
$ |
0.195 |
|
|
March 31, 2022 |
|
$ |
0.298 |
|
|
$ |
0.202 |
|
|
December 31, 2021 |
|
$ |
0.347 |
|
|
$ |
0.195 |
|
|
|
(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 April 3, 2024, the shareholders’ list showed 15 registered
shareholders with 117,892,441 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.
|
|
|
21 |
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.
On May 16, 2022, our board of approved the adoption of the 2022 Stock
Plan which permits our company to issue up to 12,000,000 shares of our common
stock to directors, officers, employees and consultants. This plan had not been
approved by our security holders. To date no shares have been issued
subject to the provisions of this plan.
The following table summarizes certain information regarding our equity
compensation plans as at December 31, 2023:
|
Equity
Compensation Plan Information |
|||
|
Plan
category |
Number
of securities to be
issued upon exercise of
outstanding options, warrants
and rights (a) |
Weighted-average exercise
price of outstanding
options, warrants
and rights (b) |
Number
of securities remaining
available for future
issuance under equity compensation
plans (excluding
securities reflected
in column (a)) (c) |
|
Equity compensation plans approved by security holders |
Nil |
Nil |
Nil |
|
Equity compensation plans not approved by security holders |
Nil |
Nil |
Nil |
|
Total |
Nil |
Nil |
Nil |
Convertible Securities
As of December 31, 2023, 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, 2023 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, 2023.
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,
2023.
Item 6. Selected Financial Data
As a “smaller reporting company”, we are not required to provide the
information required by this Item.
|
|
|
22 |
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 Yeehaw, and BC Sugar properties in British
Columbia, and the San Emidio, property in Nevada, while especially working
towards generating other energy metals related projects. We expect to review
other potential exploration third-party projects from time to time as they are
presented to us.
Our net cash from financing activities during the year ended December
31, 2023 was $400,260 as compared to $1,656,000 during the year ended December
31, 2022. As at December 31, 2023, we had approximately $3,667,618 in
cash.
Over the next twelve months (beginning March 1, 2024) we expect to
expend funds as follows:
|
Estimated 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.
|
|
|
23 |
Results of Operations - Twelve Months Ended December 31, 2023 and 2022
The following summary of our results of operations should be read in
conjunction with our financial statements for the year ended December 31, 2023,
which are included herein.
Our operating results for the twelve months ended December 31, 2023, for
the twelve months ended December 31, 2022 and the changes between those periods
for the respective items are summarized as follows:
|
|
|
Twelve
Month Period Ended December
31, 2022 |
|
|
Twelve
Month Period Ended December 31, 2022 |
|
|
Change
Between Twelve
Month Periods Ended December
31, 2023 and December
31, 2022 |
|
|||
|
Revenue |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
Professional fees |
|
|
61,818 |
|
|
|
57,740 |
|
|
|
4,078 |
|
|
Depreciation |
|
|
7,332 |
|
|
|
7,332 |
|
|
|
- |
|
|
Exploration expenses |
|
|
50,334 |
|
|
|
159,967 |
|
|
|
(109,633 |
) |
|
Consulting fees – related party |
|
|
127,337 |
|
|
|
459,772 |
|
|
|
(332,435 |
) |
|
Consulting fees |
|
|
288,000 |
|
|
|
474,425 |
|
|
|
(186,425 |
) |
|
Transfer agent and filing fees |
|
|
32,856 |
|
|
|
26,679 |
|
|
|
6,177 |
|
|
Travel |
|
|
7,748 |
|
|
|
16,085 |
|
|
|
(8,337 |
) |
|
General and administrative |
|
|
35,549 |
|
|
|
32,619 |
|
|
|
2,930 |
|
|
Change in fair value of marketable securities |
|
|
199,611 |
|
|
|
258,689 |
|
|
|
(59,078 |
) |
|
Other income |
|
|
(192,392 |
) |
|
|
(69,784 |
) |
|
|
(122,608 |
) |
|
Net loss |
|
$ |
618,193 |
|
|
$ |
1,423,524 |
|
|
$ |
(805,331 |
) |
Our financial statements report a net loss of $618,193 for the twelve
month period ended December 31, 2023 compared to a net loss of $1,423,524 for
the twelve month period ended December 31, 2022. Our losses have decreased by
$805,331, primarily as a result of a decrease in consulting fees both to
related parties and non-related parties due to a decrease in stock based
compensation. In addition, the decrease in net loss is attributable to a
decrease in exploration expenses, a decrease in changes in fair value of
marketable securities and by an increase in other income.
Our operating expenses for the year ended December 31, 2023 were
$610,974 compared to $1,234,619 for the year ended December 31, 2022. The
decrease in operating expenses primarily a result of a decrease in stock based
compensation included in consulting expenses and a decrease in exploration
expenses.
|
|
|
24 |
Liquidity and Financial Condition
Working Capital
|
|
|
At December
31, 2023 |
|
|
At December
31, 2022 |
|
||
|
Current assets |
|
$ |
4,023,249 |
|
|
$ |
3,988,415 |
|
|
Current liabilities |
|
|
2,225,977 |
|
|
|
2,030,680 |
|
|
Working capital (deficiency) |
|
$ |
1,797,272 |
|
|
$ |
1,957,735 |
|
Cash Flows
|
|
|
Year
Ended |
|
|||||
|
|
|
December
31 |
|
|||||
|
|
|
2023 |
|
|
2022 |
|
||
|
Net cash (used in) operating activities |
|
$ |
(430,437 |
) |
|
$ |
(466,528 |
) |
|
Net cash provided by (used in) investing activities |
|
|
140,082 |
|
|
|
144,318 |
|
|
Net cash provided by financing activities |
|
|
381,061 |
|
|
|
1,656,000 |
|
|
Net increase (decrease) in cash during period |
|
$ |
90,706 |
|
|
$ |
1,333,790 |
|
Operating Activities
Net cash used in operating activities was $430,437 for the year ended
December 31, 2023 compared with net cash used in operating activities of
$466,528 in the same period in 2022.
Investing Activities
Net cash provided by investing activities was $140,082 for the year
ended December 31, 2023 compared to net cash used in investing activities of $
144,318 in the same period in 2022.
Financing Activities
On January 25, 2021 we entered into a purchase agreement (the “Purchase
Agreement”), and a registration rights agreement, (the “Registration
Rights Agreement”), with Lincoln Park Capital Fund, LLC (“Lincoln Park”),
pursuant to which Lincoln Park has committed to purchase up to $10,300,000 of
the Company’s common stock, $0.001 par value per share (the “Common Stock”).
In connection with the execution of the Purchase Agreement, the Company sold,
and Lincoln Park purchased, 380,952 shares of Common Stock for a purchase price
of $160,000 (“Original Purchase”), and then another 357,995 shares (“Initial
Purchase”) for $150,000 after SEC approval of the S-1 document in April
2021.
Under the terms and subject to the conditions of the Purchase Agreement,
the Company has the right, but not the obligation, to sell to Lincoln Park, and
Lincoln Park is obligated to purchase up to $10,300,000 worth of shares of
Common Stock. Such sales of Common Stock by the Company, if any, will be
subject to certain limitations, and may occur from time to time, at the
Company’s sole discretion, over the 36-month period commencing on the date that
a registration statement covering the resale of shares of Common Stock that
have been and may be issued under the Purchase Agreement, which the Company
agreed to file with the Securities and Exchange Commission (the “SEC”)
pursuant to the Registration Rights Agreement, is declared effective by the SEC
and a final prospectus in connection therewith is filed and the other
conditions set forth in the Purchase Agreement are satisfied, all of which are
outside the control of Lincoln Park (such date on which all of such conditions
are satisfied, the “Commencement Date”). The Company shall also have the
right, but not the obligation to sell to Lincoln Park up to $150,000 of shares
of Common Stock on the Commencement Date at the Purchase Price (as defined
below).
|
|
|
25 |
Under the Purchase Agreement, on any business day over the term of the
Purchase Agreement, the Company has the right, in its sole discretion, to
present Lincoln Park with a purchase notice (each, a “Purchase Notice”)
directing Lincoln Park to purchase up to 100,000 shares of Common Stock per
business day, which increases to up to 150,000 shares in the event the price of
the Company’s Common Stock is not below $0.25 per share; up to 200,000 shares
in the event the price of the Company’s Common Stock is not below $0.35 per
share and up to 250,000 shares in the event the price of the Company’s Common
Stock is not below $0.50 (the “Regular Purchase”) (subject to adjustment
for any reorganization, recapitalization, non-cash dividend, stock split,
reverse stock split or other similar transaction as provided in the Purchase
Agreement). In each case, Lincoln Park’s maximum commitment in any single Regular
Purchase may not exceed $500,000. The Purchase Agreement provides for a
purchase price per Purchase Share (the “Purchase Price”) equal to 93% of
the lesser of:
|
● |
the lowest sale price of the
Company’s Common Stock on the purchase date; and |
|
|
|
|
● |
the average of the three lowest
closing sale prices for the Company’s Common Stock during the twelve
consecutive business days ending on the business day immediately preceding
the purchase date of such shares. |
In addition, on any date on which the Company submits a Purchase Notice
to Lincoln Park, the Company also has the right, in its sole discretion, to
present Lincoln Park with an accelerated purchase notice (each, an “Accelerated
Purchase Notice”) directing Lincoln Park to purchase an amount of stock
(the “Accelerated Purchase”) equal to up to the lesser of (i) three times the number of shares of Common Stock
purchased pursuant to such Regular Purchase; and (ii) 30% of the aggregate
shares of the Company’s Common Stock traded during all or, if certain trading
volume or market price thresholds specified in the Purchase Agreement are
crossed on the applicable Accelerated Purchase Date, the portion of the normal
trading hours on the applicable Accelerated Purchase Date prior to such time
that any one of such thresholds is crossed (such period of time on the
applicable Accelerated Purchase Date, the “Accelerated Purchase Period”).
The purchase price per share of Common Stock for each such Accelerated Purchase
will be equal to 93% of the lesser of:
|
● |
the
volume weighted average price of the Company’s Common Stock during the
applicable Accelerated Purchase Period on the applicable Accelerated Purchase
Date; and |
|
|
|
|
● |
the
closing sale price of the Company’s Common Stock on the applicable
Accelerated Purchase Date. |
Lincoln Park has no right to require the Company to sell any shares of
Common Stock to Lincoln Park, but Lincoln Park is obligated to make purchases
as the Company directs, subject to certain conditions. There are no upper
limits on the price per share that Lincoln Park must pay for shares of Common
Stock.
The Company issued to Lincoln Park 1,375,779 shares of Common Stock as
commitment shares in consideration for entering into the Purchase Agreement on
the Execution Date.
Actual sales of shares of Common Stock to Lincoln Park under the
Purchase Agreement will depend on a variety of factors to be determined by the
Company from time to time, including, among others, market conditions, the
trading price of the Common Stock and determinations by the Company as to the
appropriate sources of funding for the Company and its operations. Lincoln Park
has no right to require any sales by the Company but is obligated to make
purchases from the Company as it directs in accordance with the Purchase
Agreement. Lincoln Park has covenanted not to cause or engage in any manner
whatsoever, any direct or indirect short selling or hedging of the Company’s
shares.
At the end of the fiscal year on December 31, 2023 the company has sold
in total 20,865,018 common shares to Lincoln Park for gross proceeds of
$4,101,888, and there has been no change to this number up to April 3, 2024 as
the Company has suspended utilizing this financing due to the current low share
price of the Company’s common stock.
|
|
|
26 |
Contractual Obligations
As a “smaller reporting company”, we are not required to provide tabular
disclosure obligations.
Going Concern
As of December 31, 2023, our company had a net loss of $618,193 and has
earned no revenues. Our company has suspended funding operations through our
financing arrangement with Lincoln Park Capital, however the company has
sufficient funds on hand to fund its capital expenditures, working capital and
other cash requirements for the year ending December 31, 2024. 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.
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.
|
|
|
27 |
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.
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.
|
|
|
28 |
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.
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.
|
|
|
29 |
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.
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.
|
|
|
30 |
Item 8. Financial Statements and Supplementary Data
LITHIUM CORPORATION
|
F-1 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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, 2023 and 2022, and the related statements of
operations, stockholders’ equity, and cash flows for each of the years in the
two-year period ended December 31, 2023, 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, 2023 and 2022, and the results of its operations
and its cash flows for each of the years in the two-year period ended December
31, 2023, in conformity with accounting principles generally accepted in the
United States of America.
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 negative cash flows from operations for
the year which raise 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.
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.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from
the current period audit of the financial statements that was 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 the critical audit matter 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 matter below, providing separate opinions on
the critical audit matter or on the accounts or disclosures to which it
relates.
Black Scholes Calculations
As discussed in Note 7 to the financial statements, the Company utilizes
Black Scholes calculations to determine fair value of the Company’s stock
options.
Auditing management’s calculations of fair value of stock options
involves significant judgements and estimates to determine the proper value.
Volatility and term are the major assumptions used by management in determining
the value of the stock options.
To evaluate the appropriateness of fair value calculation, we evaluated
management’s significant judgements and estimates in what inputs were utilized
within the Black Scholes calculations. Additionally, we evaluated management’s
disclosure of the Black Scholes calculations in Note 7 of the financial
statements.
/s/ M&K CPAS, PLLC
We have served as the Company’s auditor since 2016.
The Woodlands, TX
April 4, 2024
|
|
|
F-2 |
|
LITHIUM
Corporation |
||||||||
|
Balance
Sheets |
||||||||
|
|
|
|
|
|
|
|
||
|
ASSETS |
||||||||
|
|
|
December
31, 2023 |
|
|
December
31, 2022 |
|
||
|
CURRENT ASSETS |
|
|
|
|
|
|
||
|
Cash |
|
$ |
3,667,617 |
|
|
$ |
3,576,911 |
|
|
Marketable securities |
|
|
332,082 |
|
|
|
372,972 |
|
|
Deposits |
|
|
700 |
|
|
|
700 |
|
|
Prepaid expenses |
|
|
22,850 |
|
|
|
37,832 |
|
|
Total Current Assets |
|
|
4,023,249 |
|
|
|
3,988,415 |
|
|
|
|
|
|
|
|
|
|
|
|
OTHER ASSETS |
|
|
|
|
|
|
|
|
|
Equipment, net of accumulated depreciation |
|
|
20,986 |
|
|
|
28,318 |
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS |
|
$ |
4,044,235 |
|
|
$ |
4,016,733 |
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||||
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
8,386 |
|
|
$ |
5,598 |
|
|
Accounts payable and accrued liabilities -
related party |
|
|
26,489 |
|
|
|
25,718 |
|
|
Allowance for optioned properties |
|
|
2,191,102 |
|
|
|
1,999,364 |
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL CURRENT LIABILITIES |
|
|
2,225,977 |
|
|
|
2,030,680 |
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES |
|
|
2,225,977 |
|
|
|
2,030,680 |
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
Common
stock, 3,000,000,000 shares authorized, par value
$0.001; 117,092,441 and 113,692,441 common shares
outstanding, respectively |
|
|
117,893 |
|
|
|
113,693 |
|
|
Additional
paid in capital |
|
|
8,948,385 |
|
|
|
8,571,524 |
|
|
Additional
paid in capital - options |
|
|
957,247 |
|
|
|
887,910 |
|
|
Additional
paid in capital - warrants |
|
|
369,115 |
|
|
|
369,115 |
|
|
Accumulated
deficit |
|
|
(8,574,382 |
) |
|
|
(7,956,189 |
) |
|
|
|
|
|
|
|
|
|
|
|
TOTAL STOCKHOLDERS' EQUITY |
|
|
1,818,258 |
|
|
|
1,986,053 |
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
|
$ |
4,044,235 |
|
|
$ |
4,016,733 |
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of
these financial statements. |
||||||||
|
|
|
F-3 |
|
LITHIUM
Corporation |
||||||||
|
Statements
of Operations |
||||||||
|
|
||||||||
|
|
|
Year
Ended December 31, 2023 |
|
|
Year
Ended December 31, 2022 |
|
||
|
|
|
|
|
|
|
|
||
|
REVENUE |
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
Professional fees |
|
|
61,818 |
|
|
|
57,740 |
|
|
Depreciation |
|
|
7,332 |
|
|
|
7,332 |
|
|
Exploration expenses |
|
|
50,334 |
|
|
|
159,967 |
|
|
Consulting fees - related party |
|
|
127,337 |
|
|
|
459,772 |
|
|
Consulting fees |
|
|
288,000 |
|
|
|
474,425 |
|
|
Transfer agent and filing fees |
|
|
32,856 |
|
|
|
26,679 |
|
|
Travel |
|
|
7,748 |
|
|
|
16,085 |
|
|
General and administrative expenses |
|
|
35,549 |
|
|
|
32,619 |
|
|
TOTAL OPERATING EXPENSES |
|
|
610,974 |
|
|
|
1,234,619 |
|
|
|
|
|
|
|
|
|
|
|
|
LOSS FROM OPERATIONS |
|
|
(610,974 |
) |
|
|
(1,234,619 |
) |
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME (EXPENSES) |
|
|
|
|
|
|
|
|
|
Gain (Loss) on sale of marketable securities |
|
|
- |
|
|
|
- |
|
|
Change in fair value of marketable securities |
|
|
(199,611 |
) |
|
|
(258,689 |
) |
|
Other income |
|
|
75,327 |
|
|
|
10,284 |
|
|
Gain on
return of mineral property |
|
|
101,260 |
|
|
|
- |
|
|
Gain (Loss) on sale of marketable securities |
|
|
5,805 |
|
|
|
- |
|
|
Other income - related party |
|
|
10,000 |
|
|
|
59,500 |
|
|
TOTAL OTHER INCOME (EXPENSE) |
|
|
(7,219 |
) |
|
|
(188,905 |
) |
|
|
|
|
|
|
|
|
|
|
|
LOSS BEFORE INCOME TAXES |
|
|
(618,193 |
) |
|
|
(1,423,524 |
) |
|
|
|
|
|
|
|
|
|
|
|
PROVISION FOR INCOME TAXES |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) |
|
$ |
(618,193 |
) |
|
$ |
(1,423,524 |
) |
|
|
|
|
|
|
|
|
|
|
|
Gain on change in fair value of marketable securities |
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE INCOME (LOSS) |
|
$ |
(618,193 |
) |
|
$ |
(1,423,524 |
) |
|
|
|
|
|
|
|
|
|
|
|
NET LOSS PER SHARE: BASIC AND DILUTED |
|
$ |
(0.01 |
) |
|
$ |
(0.01 |
) |
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED |
|
|
116,108,879 |
|
|
|
107,814,085 |
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of
these financial statements. |
||||||||
|
|
|
F-4 |
|
LITHIUM
Corporation |
|||||||||||||||||||||||||||||
|
Statements
of Stockholders' Equity |
|||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
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 |
|
|
10,200,000 |
|
|
|
10,200 |
|
|
|
1,645,800 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,656,000 |
|
|
|
Stock based compensation |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
696,397 |
|
|
|
- |
|
|
|
696,397 |
|
|
|
Net income |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1,423,524 |
) |
|
|
(1,423,524 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
4,200,000 |
|
|
|
4,200 |
|
|
|
376,861 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
381,061 |
|
|
|
Stock based compensation |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
69,337 |
|
|
|
- |
|
|
|
69,337 |
|
|
|
Net income |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(618,193 |
) |
|
|
(618,193 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2023 |
|
|
117,892,441 |
|
|
$ |
117,893 |
|
|
$ |
8,948,385 |
|
|
$ |
369,115 |
|
|
$ |
957,247 |
|
|
$ |
(8,574,382 |
) |
|
$ |
1,818,258 |
|
|
The accompanying notes are an integral part of these financial
statements.
|
|
|
F-5 |
|
LITHIUM
Corporation |
||||||||
|
Statements
of Cash Flows |
||||||||
|
|
|
|
|
|
||||
|
|
|
Year
Ended December 31, 2023 |
|
|
Year
Ended December 31, 2022 |
|
||
|
CASH FLOWS FROM OPERATING
ACTIVITIES: |
|
|
|
|
|
|
||
|
Net income (loss) for the period |
|
$ |
(618,193 |
) |
|
$ |
(1,423,524 |
) |
|
Adjustment to reconcile net income (loss) to net cash used in
operating activities |
|
|
|
|
|
|
|
|
|
Change in fair value of marketable securities |
|
|
199,611 |
|
|
|
258,689 |
|
|
Depreciation |
|
|
7,332 |
|
|
|
7,332 |
|
|
Stock based compensation |
|
|
69,337 |
|
|
|
696,397 |
|
|
Loss (Gain) on sale of marketable securities |
|
|
(5,805 |
) |
|
|
246 |
|
|
(Gain) on return of mineral property |
|
|
(101,260 |
) |
|
|
- |
|
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
|
(Increase) Decrease in prepaid expenses |
|
|
14,982 |
|
|
|
(16,028 |
) |
|
Increase (decrease) in accounts payable and
accrued liabilities |
|
|
3,559 |
|
|
|
10,360 |
|
|
Net Cash (Used in) Operating Activities |
|
|
(430,437 |
) |
|
|
(466,528 |
) |
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITY: |
|
|
|
|
|
|
|
|
|
Cash from property agreements |
|
|
125,000 |
|
|
|
165,000 |
|
|
Cash from sale of marketable securities |
|
|
15,082 |
|
|
|
14,968 |
|
|
Purchase of equipment |
|
|
- |
|
|
|
(35,650 |
) |
|
Net Cash Provided by Investing Activities |
|
|
140,082 |
|
|
|
144,318 |
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITY: |
|
|
|
|
|
|
|
|
|
Shares issued for cash |
|
|
381,061 |
|
|
|
1,656,000 |
|
|
Net Cash Provided by Financing Activity |
|
|
381,061 |
|
|
|
1,656,000 |
|
|
|
|
|
|
|
|
|
|
|
|
Increase (Decrease) in cash |
|
|
90,706 |
|
|
|
1,333,790 |
|
|
Cash, beginning of period |
|
|
3,576,911 |
|
|
|
2,243,121 |
|
|
Cash, end of period |
|
$ |
3,667,617 |
|
|
$ |
3,576,911 |
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL CASH FLOW INFORMATION: |
|
|
|
|
|
|
|
|
|
Cash paid for interest |
|
$ |
- |
|
|
$ |
- |
|
|
Cash paid for income taxes |
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
NON CASH TRANSACTIONS |
|
|
|
|
|
|
|
|
|
Marketable securities received as consideration
for mineral property |
|
$ |
167,968 |
|
|
$ |
253,394 |
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of
these financial statements. |
||||||||
|
|
|
F-6 |
Lithium Corporation
Notes to the Financial Statements
December 31, 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
Effective January 1, 2018, the Company adopted 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. For the comparative periods, revenue has
not been adjusted and continues to be reported under ASC 605 — Revenue
Recognition. Under ASC 605, revenue is recognized when the following criteria
are met: (1) persuasive evidence of an arrangement exists; (2) the performance
of service has been rendered to a customer or delivery has occurred; (3) the
amount of fee to be paid by a customer is fixed and determinable; and (4) the
collectability of the fee is reasonably assured.
Research and Development
Research and development costs are expensed as incurred. During the year
ended December 31, 2023 and 2022, the Company did not have any research and
development costs.
Advertising Costs
Advertising costs are expensed as incurred. During the year ended
December 31, 2023 and 2022, the Company did not have any advertising costs.
|
|
|
F-7 |
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, 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. The Company did not have any
dilutive securities for the period ended December 31, 2023.
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.
Investments in Marketable Securities
The Company’s Marketable Securities are considered Held-For-Trading
(“HFT”) or Trading Assets. HTF- Trading securities are valued at their fair
value when purchased/sold, and any unrealized gains or losses are recorded
periodically on financial reporting dates as other income or loss.
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 year ended December 31, 2023,
are of significance or potential significance to the Company.
|
|
|
F-8 |
Note 2 – Going Concern
As reflected in the accompanying financial statements, the Company has
used $430,437 (2022: $466,528) of cash in operations for the year ended
December 31, 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. |
The following schedule summarizes the valuation of financial instruments
at fair value on a recurring basis in the balance sheets as of December 31,
2023 and December 31, 2022, respectively:
|
|
|
Fair
Value Measurements at December 31, 2023 |
|
|||||||||
|
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|||
|
Assets |
|
|
|
|
|
|
|
|
|
|||
|
Cash |
|
$ |
3,667,617 |
|
|
$ |
- |
|
|
$ |
- |
|
|
Marketable securities |
|
|
332,082 |
|
|
|
|
|
|
|
|
|
|
Total Assets |
|
|
3,999,699 |
|
|
|
- |
|
|
|
- |
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
$ |
3,999,699 |
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
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 |
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
F-9 |
Note 4 – Marketable Securities
The Company owns marketable securities (common stock) as outlined below:
|
Balance, December 31, 2022 |
|
$ |
372,972 |
|
|
Additions |
|
|
167,998 |
|
|
Disposals |
|
|
(9,277 |
) |
|
Fair value adjustment |
|
|
(199,611 |
) |
|
|
|
|
|
|
|
Balance, December 31, 2023 |
|
$ |
332,082 |
|
The Company classifies it’s marketable securities as available for sale.
During the year ended December 31, 2023, the Company
received 20,333,575 common shares from a related party with a value
of $85,224 related to the option of the Fish Lake Property.
During the year ended December 31, 2023, the Company
received 19,741,685 common shares from a related party with a value
of $82,774 related to the option of the North Big Smoky Property.
Note 5 - Prepaid Expenses
Prepaid expenses consisted of the following at December 31, 2023 and
December 31, 2022:
|
|
|
December
31, 2023 |
|
|
December
31, 2022 |
|
||
|
Professional fees |
|
$ |
5,500 |
|
|
$ |
- |
|
|
Other |
|
|
15,150 |
|
|
|
14,918 |
|
|
Transfer agent fees |
|
|
2,200 |
|
|
|
18,413 |
|
|
Total prepaid expenses |
|
$ |
22,850 |
|
|
$ |
37,832 |
|
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, we
issued 10,200,000 common shares for proceeds of $1,656,000.
During the year-ended December 31, 2023, we
issued 4,400,000 common shares for proceeds of $381,061.
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. Due to the continuing decline of the company’s share
price these options were repriced to $0.10 on January 24th 2023
(resulting in a stock based compensation expense of $69,337), and again to
$0.04 on Jan 11th 2024. As of December 31, 2023 no
stock options have been exercised, and none have been exercised up to and
including the date of this document.
|
|
|
F-10 |
The fair value of options granted during the year ended December 31,
2022 were determined using the Black Scholes method with the following
assumptions:
|
|
|
Year-ended
December 31, 2023 |
|
|
Year-ended
December 31, 2022 |
|
||
|
Risk free interest rate |
|
3.6%-4.1 |
% |
|
|
2.8 |
% |
|
|
Stock volatility factor |
|
95%-101 |
% |
|
107%-118 |
% |
||
|
Weighted average expected life of options |
|
2-4 years |
|
|
2.5-5 years |
|
||
|
Expected dividend yield |
|
|
0 |
% |
|
|
0 |
% |
A summary of the Company’s stock option activity and related information
follows:
|
|
|
Year
Ended December 31, 2023 |
|
|
Year
Ended December 31, 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 December 31, 2023, the intrinsic value of the stock options was
approximately $0. Stock option expense for the year ended December 31,
2023 was $69,337 (2022: $696,397). As at December 31,
2023, 3,700,000 are exercisable (December 31, 2022: 3,700,000).
The following table summarizes the stock options outstanding at December
31, 2023:
|
Issue
Date |
|
Number |
|
|
Price |
|
|
Expiry
Date |
|
Outstanding
at December
31, 2023 |
|
|
Weighted
Average Remaining Contractual Life (in
years) |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
May 26, 2022 |
|
|
3,700,000 |
|
|
$ |
0.10 |
|
|
May 26, 2027 |
|
|
2,100,000 |
|
|
|
3.40 |
|
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 $375,000 and issued 55,560,526 common
shares with a fair value of $1,541,631.
The Letter of Intent was signed with a purchaser that has a common
director as the Company.
|
|
|
F-11 |
San Emidio
On September 16th, 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, so
no further funds or shares were issued under the terms of the agreement.
During the year-ended December 31, 2023, $101,260 was taken into income as
a result of the cancellation of the agreement.
North Big Smokey
On May 24, 2022 our 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
issued 26,791,685 common shares with a fair value of $209,441.
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 December 31, 2023, the Company has received $375,000 and
received 55,560,526 common shares with a fair value of
$1,541,631 in relation to the letter of intent. The Company recorded
$1,916,631 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.
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 our company has
received 26,791,685 common shares with a fair value of
$209,441. The Company recorded $274,471 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.
|
|
|
F-12 |
Note 10 – Related Party Transactions
The Company paid cash consulting fees totaling $288,000 to related
parties and non-cash stock option compensation expenses of $37,280 to
related parties for the year ended December 31, 2023, respectively (2022:
$204,000 and $255,772).
The Company paid rent fees totaling $6,000 to related parties for
the year ended December 31, 2023 (2022: $6,000).
As at December 31, 2023, the Company had $22,490 owing to related
parties.
During the year ended December 31, 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, 2023, the Company
received 20,037,630 common shares with a fair value of
$83,984 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, 8 and 9.
During the year ended December 31, 2023, 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, 8 and 9.
Note 11 – Income Taxes
As of December 31, 2023, the Company had net operating loss carry
forwards of approximately $8,675,000 that may be available to reduce
future years' taxable income in varying amounts through 2034. Future tax
benefits which may arise as a result of these losses have not been recognized
in these financial statements, as their realization is determined not likely to
occur and accordingly, the Company has recorded a valuation allowance for the
deferred tax asset relating to these tax loss carry-forwards.
The provision for Federal income tax consists of the following for the
years ended December 31, 2023 and 2022:
|
|
|
2023 |
|
|
2022 |
|
||
|
Federal income tax benefit attributable to: |
|
|
|
|
|
|
||
|
Current operations |
|
$ |
151,085 |
|
|
$ |
298,830 |
|
|
Less: valuation allowance |
|
|
(151,085 |
) |
|
|
(298,830 |
) |
|
Net provision for Federal income taxes |
|
$ |
- |
|
|
$ |
- |
|
The cumulative tax effect at the expected rate of 21%
(2022: 21%) of significant items comprising our net deferred tax amount is
as follows at December 31, 2023 and 2022:
|
|
|
December
31, 2023 |
|
|
December
31, 2022 |
|
||
|
Deferred tax asset attributable
to: |
|
|
|
|
|
|
||
|
Net operating loss carryover |
|
$ |
1,821,679 |
|
|
$ |
1,670,594 |
|
|
Less: valuation allowance |
|
|
(1,821,679 |
) |
|
|
(1,670,594 |
) |
|
Net deferred tax asset |
|
$ |
- |
|
|
$ |
- |
|
Due to the change in ownership provisions of the Tax Reform Act of 1986,
net operating loss carry forwards of approximately $8,675,000 for Federal
income tax reporting purposes are subject to annual limitations. Should a
change in ownership occur net operating loss carry forwards may be limited as
to use in future years.
|
|
|
F-13 |
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,
2023, there were no pending or threatened litigation against the Company.
Note 13 – Subsequent Events
The Company has analyzed its operations subsequent to December 31, 2023
through the date these financial statements were issued, and has determined
that it does not have any material subsequent events to disclose.
|
F-14 |
Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure
There were no disagreements related to accounting principles or
practices, financial statement disclosure, internal controls or auditing scope
or procedure during the two fiscal years and interim periods.
Item 9A. Controls and Procedures
Disclosure Controls and Procedures
We have established disclosure controls and procedures to ensure that
material information relating to the Company, including its consolidated
subsidiaries, is made known to the officers who certify the Company’s financial
reports and to other members of senior management and the Board of Directors.
Based on their evaluation, the Company’s principal executive and
principal financial officers have concluded that the Company’s disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934) were ineffective as of December 31, 2023 to
ensure that the information required to be disclosed by the Company in the
reports that it files or submits under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported within the time periods specified
in the SEC rules and forms. Our officers also concluded that our disclosure
controls and procedures are ineffective to ensure that information required to
be disclosed in the reports that we file or submit under the Exchange Act is
accumulated and communicated to our management, including our principal
executive and principal financial officers to allow timely decisions regarding
required disclosure.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate
internal control over financial reporting. Responsibility, estimates and
judgments by management are required to assess the expected benefits and
related costs of control procedures. The objectives of internal control include
providing management with reasonable, but not absolute, assurance that assets
are safeguarded against loss from unauthorized use or disposition, and that
transactions are executed in accordance with management’s authorization and
recorded properly to permit the preparation of financial statements in
conformity with accounting principles generally accepted in the United States.
Our management assessed the effectiveness of our internal control over
financial reporting as of December 31, 2023. In making this assessment, our
management used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (“COSO”) in Internal
Control-Integrated Framework, as published in 1992.
Management, with the participation of the Chief Executive Officer and
Chief Financial Officer, evaluated the effectiveness of the Company’s internal
control over financial reporting as of December 31, 2023. In making this
assessment, management used the criteria set forth by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) 2013 Framework in
Internal Control — Integrated Framework. Based on this evaluation, management,
with the participation of the Chief Executive Officer and Chief Financial
Officer, concluded that, as of December 31, 2023, our internal control over
financial reporting was ineffective.
A material weakness is a deficiency, or combination of deficiencies, in
internal control over financial reporting, such that there is a reasonable
possibility that a material misstatement of our company’s annual or interim
financial statements will not be prevented or detected on a timely basis. In
its assessment of the effectiveness of internal control over financial
reporting as of December 31, 2023, our management determined that there were
control deficiencies that constituted material weaknesses, as described below:
|
● |
There is a lack of accounting
personnel with the requisite knowledge of Generally Accepted Accounting
Principles in the US (“GAAP”) and the financial reporting requirements of the
Securities and Exchange Commission; |
|
● |
There are insufficient written
policies and procedures to ensure the correct application of accounting and
financial reporting with respect to the current requirements of GAAP and SEC
disclosure requirements; and |
|
|
|
31 |
|
● |
There
is a lack of segregation of duties, in that we only had one person performing
all accounting-related duties. |
|
● |
The
Company did not establish a formal written policy for the approval,
identification and authorization of related party transactions. |
Our management reviewed the results of its assessment with our
Board of Directors. Notwithstanding the existence of these material
weaknesses in our internal control over financial reporting, our management
believes that the financial statements included in its reports fairly present
in all material respects our company’s financial condition, results of
operations and cash flows for the periods presented.
This annual report does not include an attestation report of our
company’s registered public accounting firm regarding internal control over
financial reporting. Management’s report was not subject to attestation by our
company’s registered public accounting firm pursuant to temporary rules of the
Securities and Exchange Commission that permit our company to provide only
management’s report in this annual report.
Inherent limitations on effectiveness of controls
Internal control over financial reporting has inherent limitations which
include but is not limited to the use of independent professionals for advice
and guidance, interpretation of existing and/or changing rules and principles,
segregation of management duties, scale of organization, and personnel factors.
Internal control over financial reporting is a process which involves human
diligence and compliance and is subject to lapses in judgment and breakdowns
resulting from human failures. Internal control over financial reporting also
can be circumvented by collusion or improper management override. Because of
its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements on a timely basis, however these inherent
limitations are known features of the financial reporting process and it is
possible to design into the process safeguards to reduce, though not eliminate,
this risk. Therefore, even those systems determined to be effective can provide
only reasonable assurance with respect to financial statement preparation and
presentation. Projections of any evaluation of effectiveness to future periods
are subject to the risk that controls may become inadequate because of changes
in conditions, or that the degree of compliance with the policies or procedures
may deteriorate.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal controls over financial
reporting that occurred during the year ended December 31, 2021 that have
materially or are reasonably likely to materially affect, our internal controls
over financial reporting.
Item 9B. Other Information
None.
|
|
|
32 |
PART III
Item 10. Directors, Executive Officers and Corporate Governance
All directors of our company hold office until the next annual meeting
of the security holders or until their successors have been elected and
qualified. The officers of our company are appointed by our board of directors
and hold office until their death, resignation or removal from office. Our
directors and executive officers, their ages, positions held, and duration as
such, are as follows:
|
Name |
|
Position
Held with
the Company |
|
Age |
|
Date
First Elected or Appointed |
|
Tom Lewis |
|
President, Treasurer, Secretary and Director |
|
69 |
|
August 25, 2009 |
|
James Brown |
|
Director |
|
60 |
|
December 19, 2012 |
|
Brian Goss |
|
Director |
|
45 |
|
May 30, 2014 |
Business Experience
The following is a brief account of the education and business
experience during at least the past five years of each director, executive
officer and key employee of our company, indicating the person’s principal
occupation during that period, and the name and principal business of the
organization in which such occupation and employment were carried out.
Tom Lewis – President, Secretary, Treasurer, Director
Tom Lewis acted as president, treasurer, secretary and director of our
company since August 25, 2009. Mr. Lewis resigned as president, treasurer and
secretary of our company on August 13, 2014 and resumed the positions of
President, Chief Financial Officer and Treasurer on February 7, 2017 Mr.
Lewis has more than 38 years’ experience in the oil and gas and mineral
exploration industries. He has held various positions including project
geologist, project manager, senior project geologist, and vice president
exploration. He also was an integral member of the development team that
explored, and developed the Cortez Hills deposit in Crescent Valley Nevada.
In 1974, Mr. Lewis started his career in the oil fields, and worked in
the geophysical, and drilling industries until 1981, when he became a petroleum
landman for Westburne Petroleum & Minerals. While
there he was responsible for the acquisition and disposition of interests and
maintaining title to petroleum lands in various locales in the United States,
and Western Canada. In 1989, he started his own business as a consulting
geologist and has worked in numerous locations over the past 30 years,
including the United States, Mexico, Canada, Portugal, Chile, Africa, India and
Honduras. Some of the positions he held include: working with Teck Cominco in
1996 evaluating and exploring precious metal deposits in Southern Mexico;
project manager on the Farim phosphate deposit for Champion Resources in Guinea
Bissau, West Africa in 1998; project geologist in 2001 and 2002 for Crystal
Graphite Corporation, project geologist on the Midway Gold project in Tonopah,
Nevada, followed by two years as senior geologist at the Cortez Joint Venture
in Crescent Valley, Nevada. By August 2005 he was named vice president of
exploration in Portugal for St. Elias Mines, working on the Jales project, and
developing grass roots projects in Nevada. Following his experience in Portugal
and Nevada he consulted to Selkirk Metals and New World Resource Corp. on
projects in western Canada and Nevada. Most recently he consulted to Kinross
Gold USA evaluating possible acquisitions.
James Brown - Director
James Brown has acted as a director of our company since December 19,
2012. Mr. Brown is a mining engineer with more than 25 years’ experience in the
coal mining and exploration industry in Australia and Indonesia, including 22
years at Australian based coal producer New Hope Corporation. During this time
he has held positions from front line mine planning and supervision, land
acquisition, government approvals and mine and business development. Mr. Brown
is also the managing director of Morella Corporation (ASX:1MC, OTC-QB:altaf) -(formerly Altura Mining Limited) an
Australian listed company presently focused primarily on developing the Fish
Lake Valley lithium-in-brine deposit. James is a member of the Australian
Institute of Company Directors (MAICD). Currently James is also the
acting Managing Director of Sayona Mining an Australian lithium miner who is
currently operating the North American Lithium mine in Quebec in a joint
venture with Piedmont Lithium.
|
|
|
33 |
Brian Goss –Director
Brian Goss has been a director of our company since May 30, 2014. Mr.
Goss was appointed president, treasurer, secretary and director of our company
on August 13, 2014, and resigned those positions on February 7. 2017. Mr. Goss
also served as president, chief executive officer, chief financial officer,
treasurer and a director of Graphite Corp. July 9, 2012 through August 12,
2014. Brian graduated from Wayne State University with a Bachelor of Science
Degree in Geology in 2003. Mr. Goss worked the 2002-2003 field seasons for
Kennecott Exploration during the early exploration stages of the Eagle Project,
a Duluth Type high grade nickel and copper deposit in Michigan's Upper
Peninsula. At the end of 2003, he moved to Northeast Nevada to explore for
Carlin Type gold deposits. From 2004-2007, he worked as a staff geologist for
Cameco Corporation, and subsequently in its spin out company, Centerra Gold
Inc., on the REN deposit where the exploration team drilled deep exploration
holes using pre-collars with core tails to contribute to the expansion of the
+1 million ounce gold deposit that was subsequently taken over by Barrick
Gold. Mr. Goss also held several other project geologist positions before
founding Rangefront Geological in early 2008. Mr.
Goss has built Rangefront into a premier geological
services company that caters to a large spectrum of clients in the mining and
minerals exploration industries, and also is a director and officer of several
Canadian publicly listed companies.
Employment Agreements
We have no formal employment agreements with any of our directors or
officers.
Family Relationships
There are no family relationships between any of our directors,
executive officers and proposed directors or executive officers.
Involvement in Certain Legal Proceedings
To the best of our knowledge, none of our directors or executive
officers has, during the past ten years:
|
|
1. |
been
convicted in a criminal proceeding or been subject to a pending criminal
proceeding (excluding traffic violations and other minor offences); |
|
|
|
|
|
|
2. |
had any
bankruptcy petition filed by or against the business or property of the
person, or of any partnership, corporation or business association of which
he was a general partner or executive officer, either at the time of the
bankruptcy filing or within two years prior to that time; |
|
|
|
|
|
|
3. |
been
subject to any order, judgment, or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction or federal or
state authority, permanently or temporarily enjoining, barring, suspending or
otherwise limiting, his involvement in any type of business, securities,
futures, commodities, investment, banking, savings and loan, or insurance
activities, or to be associated with persons engaged in any such activity; |
|
|
|
|
|
|
4. |
been
found by a court of competent jurisdiction in a civil action or by the SEC or
the Commodity Futures Trading Commission to have violated a federal or state
securities or commodities law, and the judgment has not been reversed,
suspended, or vacated; |
|
|
|
|
|
|
5. |
been
the subject of, or a party to, any federal or state judicial or
administrative order, judgment, decree, or finding, not subsequently
reversed, suspended or vacated (not including any settlement of a civil
proceeding among private litigants), relating to an alleged violation of any
federal or state securities or commodities law or regulation, any law or
regulation respecting financial institutions or insurance companies
including, but not limited to, a temporary or permanent injunction, order of
disgorgement or restitution, civil money penalty or temporary or permanent
cease-and-desist order, or removal or prohibition order, or any law or
regulation prohibiting mail or wire fraud or fraud in connection with any
business entity; or |
|
|
|
|
|
|
6. |
been
the subject of, or a party to, any sanction or order, not subsequently
reversed, suspended or vacated, of any self-regulatory organization (as
defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26)), any
registered entity (as defined in Section 1(a)(29) of the Commodity Exchange
Act (7 U.S.C. 1(a)(29)), or any equivalent exchange, association, entity or
organization that has disciplinary authority over its members or persons
associated with a member. |
|
|
|
34 |
Compliance with Section 16(A) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires our executive officers and directors and persons who own more than 10%
of a registered class of our equity securities to file with the SEC initial
statements of beneficial ownership, reports of changes in ownership and annual
reports concerning their ownership of our shares of common stock and other
equity securities, on Forms 3, 4 and 5, respectively. Executive officers,
directors and greater than 10% shareholders are required by the SEC regulations
to furnish us with copies of all Section 16(a) reports they file.
Based solely on our review of the copies of such forms received by our
company, or written representations from certain reporting persons that no Form
5s were required for those persons, we believe that, during the fiscal year
ended December 31, 2021, all filing requirements applicable to our officers,
directors and greater than 10% beneficial owners as well as our officers,
directors and greater than 10% beneficial owners of our subsidiaries were
complied with, with the exception of the following:
|
Name |
|
Number
of Late Reports |
|
|
Number
of Transactions
Not Reported
on a Timely Basis |
|
|
Failure
to File Requested
Forms |
|
|||
|
Brian Goss(1) |
|
|
1 |
|
|
|
1 |
|
|
|
0 |
|
|
|
(1) |
The insider was late filing a
Form 4, Statement of Changes of Beneficial Ownership. |
Code of Ethics
Effective March 25, 2011, our company’s board of directors adopted a
Code of Business Conduct and Ethics that applies to, among other persons, our
company’s principal executive officer and our principal financial and
accounting officer, as well as persons performing similar functions. As
adopted, our Code of Business Conduct and Ethics sets forth written standards
that are designed to deter wrongdoing and to promote:
|
|
1. |
honest
and ethical conduct, including the ethical handling of actual or apparent
conflicts of interest between personal and professional relationships; |
|
|
|
|
|
|
2. |
full,
fair, accurate, timely, and understandable disclosure in reports and
documents that we file with, or submit to, the SEC and in other public
communications made by us; |
|
|
|
|
|
|
3. |
compliance
with applicable governmental laws, rules and regulations; |
|
|
|
|
|
|
4. |
the
prompt internal reporting of violations of the Code of Business Conduct and
Ethics to an appropriate person or persons identified in the Code of Business
Conduct and Ethics; and |
|
|
|
|
|
|
5. |
accountability
for adherence to the Code of Business Conduct and Ethics. |
|
|
|
35 |
Our Code of Business Conduct and Ethics requires, among other things,
that all of our company’s personnel shall be accorded full access to our
president and secretary with respect to any matter which may arise relating to
the Code of Business Conduct and Ethics. Further, all of our company’s
personnel are to be accorded full access to our company’s board of directors if
any such matter involves an alleged breach of the Code of Business Conduct and
Ethics by our president or secretary.
In addition, our Code of Business Conduct and Ethics emphasizes that all
employees, and particularly managers and/or supervisors, have a responsibility
for maintaining financial integrity within our company, consistent with
generally accepted accounting principles, and federal, provincial and state
securities laws. Any employee who becomes aware of any incidents involving
financial or accounting manipulation or other irregularities, whether by
witnessing the incident or being told of it, must report it to his or her
immediate supervisor or to our company’s president or secretary. If the
incident involves an alleged breach of the Code of Business Conduct and Ethics
by the president or secretary, the incident must be reported to any member of
our board of directors. Any failure to report such inappropriate or irregular
conduct of others is to be treated as a severe disciplinary matter. It is
against our company policy to retaliate against any individual who reports in
good faith the violation or potential violation of our company’s Code of
Business Conduct and Ethics by another.
Our Code of Business Conduct and Ethics was attached as an exhibit to
our annual report filed on Form 10-K with the SEC on April 15, 2013. We will
provide a copy of the Code of Business Conduct and Ethics to any person without
charge, upon request. Requests can be sent to: Lithium Corporation, 1031
Railroad St, Suite 102B., Elko, Nevada 89801.
Board and Committee Meetings
Our board of directors held no formal meetings during the year ended
December 31, 2023. All proceedings of the board of directors were conducted by
resolutions consented to in writing by all the directors and filed with the
minutes of the proceedings of the directors. Such resolutions consented to in
writing by the directors entitled to vote on that resolution at a meeting of
the directors are, according to the Nevada General Corporate Law and our
Bylaws, as valid and effective as if they had been passed at a meeting of the
directors duly called and held.
Nomination Process
As of December 31, 2023, we did not effect any material changes to the
procedures by which our shareholders may recommend nominees to our board of
directors. Our board of directors does not have a policy with regards to the
consideration of any director candidates recommended by our shareholders. Our
board of directors has determined that it is in the best position to evaluate
our company’s requirements as well as the qualifications of each candidate when
the board considers a nominee for a position on our board of directors. If
shareholders wish to recommend candidates directly to our board, they may do so
by sending communications to the president of our company at the address on the
cover of this annual report.
Audit Committee
Currently our audit committee consists of our entire board of directors.
We do not have a standing audit committee as we currently have limited working
capital and no revenues. Should we be able to raise sufficient funding to
execute our business plan, we will form an audit, compensation committee and
other applicable committees utilizing our directors’ expertise.
Audit Committee Financial Expert
Currently our audit committee consists of our entire board of directors.
We do not currently have a director who is qualified to act as the head of the
audit committee.
|
|
|
36 |
Item 11. Executive Compensation
The particulars of the compensation paid to the following persons:
|
|
(a) |
our
principal executive officer; |
|
|
|
|
|
|
(b) |
each of
our two most highly compensated executive officers who were serving as
executive officers at the end of the years ended December 31, 2023 and 2022;
and |
|
|
|
|
|
|
(c) |
up to
two additional individuals for whom disclosure would have been provided under
(b) but for the fact that the individual was not serving as our executive
officer at the end of the years ended December 31, 2023 and 2022, who we will
collectively refer to as the named executive officers of our company, are set
out in the following summary compensation table, except that no disclosure is
provided for any named executive officer, other than our principal executive
officers, whose total compensation did not exceed $100,000 for the respective
fiscal year: |
|
SUMMARY
COMPENSATION TABLE |
||||||||||||||||||
|
Name and Principal
Position |
|
Year |
|
Salary ($) |
|
Bonus ($) |
|
Stock
Awards ($) |
|
Option
Awards ($) |
|
Non-Equity
Incentive Plan Compensa- tion ($) |
|
Change
in Pension Value
and Nonqualified Deferred Compensa- tion Earnings ($) |
|
All Other Compensa- tion ($) |
|
Total ($) |
|
Tom Lewis(1) President, Treasurer, Secretary, and Director |
|
2023 2022 |
|
Nil Nil |
|
Nil Nil |
|
Nil Nil |
|
Nil Nil |
|
Nil Nil |
|
Nil Nil |
|
240,000(2) 180,000 |
|
240,000 180,000 (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brian Goss(3) Director, Former President, Treasurer, Secretary |
|
2023 2022 |
|
Nil Nil |
|
Nil Nil |
|
Nil Nil |
|
Nil Nil |
|
Nil Nil |
|
Nil Nil |
|
48,000 28,000 |
|
48,000 28,000 |
|
|
(1) |
Tom
Lewis acted as president, treasurer, secretary and director of our company
since August 25, 2009. Mr. Lewis resigned as president, treasurer and
secretary of our company on August 13, 2014. Mr. Lewis resumed his positions
of President, Chief Financial Officer and Treasurer on February 7, 2017 |
|
|
(2) |
Mr.
Lewis provides consulting services to our company as needed in relation to
administration, project generation, and exploration of our company’s
properties. |
|
|
(3) |
Mr.
Goss has acted as a director of our company since May 30, 2014 and served as
president, treasurer and secretary of our company from August 13, 2014 until
February 7, 2017, and since September 14, 2021 is our Vice President of
Business Development. |
There are no arrangements or plans in which we provide pension,
retirement or similar benefits for directors or executive officers. Our
directors and executive officers may receive share options at the discretion of
our board of directors in the future. We do not have any material bonus or
profit sharing plans pursuant to which cash or non-cash compensation is or may
be paid to our directors or executive officers, except that share options may
be granted at the discretion of our board of directors.
|
|
|
37 |
2021 Grants of Plan-Based Awards
None.
Outstanding Equity Awards at Fiscal Year End
None.
Option Exercises and Stock Vested
None.
Compensation of Directors
We do not have any agreements for compensating our directors for their
services in their capacity as directors, although such directors are expected
in the future to receive stock options to purchase shares of our common stock
as awarded by our board of directors.
The following table sets forth a summary of the compensation paid to our
non-employee directors in 2023:
|
DIRECTOR
COMPENSATION |
||||||||||||||
|
Name |
|
Fees Earned
or Paid in Cash ($) |
|
Stock Awards ($) |
|
Option Awards ($) |
|
Non-Equity Incentive Plan Compensation ($) |
|
Change
in Pension Value
and Nonqualified Deferred Compensation Earnings ($) |
|
All Other Compensation ($) |
|
Total ($) |
|
Tom Lewis(1) |
|
Nil |
|
Nil |
|
Nil |
|
Nil |
|
Nil |
|
Nil |
|
Nil |
|
James Brown(2) |
|
Nil |
|
Nil |
|
Nil |
|
Nil |
|
Nil |
|
Nil |
|
Nil |
|
Brian Goss(3) |
|
Nil |
|
Nil |
|
Nil |
|
Nil |
|
Nil |
|
Nil |
|
Nil |
|
|
(1) |
Tom
Lewis acted as president, treasurer, secretary and director of our company
since August 25, 2009. Mr. Lewis resigned as president, treasurer and
secretary of our company on August 13, 2014. Mr. Lewis resumed his positions
as president, Chief Financial Officer and treasurer on February 7, 2017. |
|
|
(2) |
James
Brown was appointed as a director of our company on December 19, 2012. |
|
|
(4) |
Brian
Goss has acted as a director of our company since May 30, 2014. Mr. Goss was
appointed as president, treasurer and secretary of our company on August 13,
2014. Mr. Goss resigned as president, treasurer and secretary on February 7,
2017, and since September 14, 2021 is our Vice President of Business
Development. |
Pension, Retirement or Similar Benefit Plans
There are no arrangements or plans in which we provide pension,
retirement or similar benefits for directors or executive officers. We have no
material bonus or profit sharing plans pursuant to which cash or non-cash
compensation is or may be paid to our directors or executive officers, except
that stock options may be granted at the discretion of the board of directors
or a committee thereof.
|
|
|
38 |
Indebtedness of Directors, Senior Officers, Executive Officers and Other
Management
None of our directors or executive officers or any associate or
affiliate of our company during the last two fiscal years, is or has been
indebted to our company by way of guarantee, support agreement, letter of
credit or other similar agreement or understanding currently outstanding.
Item 12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters
The following table sets forth, as of April 01, 2023, certain
information with respect to the beneficial ownership of our common shares by
each shareholder known by us to be the beneficial owner of more than 5% of our
common shares, as well as by each of our current directors and executive
officers as a group. Each person has sole voting and investment power with
respect to the shares of common stock, except as otherwise indicated.
Beneficial ownership consists of a direct interest in the shares of common stock,
except as otherwise indicated.
|
Name
and Address of Beneficial Owner |
|
Amount
and Nature of Beneficial
Ownership |
|
Percentage of
Class (1) |
|
|
|
Tom Lewis(2) PO Box 2053 Richland, WA 99352 |
|
5,000,000 Common Shares |
|
|
4.24% |
|
|
James Brown(3) Apartment Pearl Garden, Unit No. Wp00606 Jl. Jen. Gatot Subroto Kav 5-7 Jakarta 12930 Indonesia |
|
Nil |
|
|
0% |
|
|
Brian Goss(4) 1031 Railroad Street Suite 102B Elko, NV 89801 |
|
Nil |
|
|
0% |
|
|
Directors and Executive Officers as a Group |
|
5,000,000 Common Shares |
|
4.24% |
|
|
|
Altura Lithium Pty. Ltd. P.O. Box 4088 Springfield, Qld., 4300 Australia |
|
9,989,076 Common Shares |
|
|
8.47% |
|
|
|
|
|
|
|
|
|
|
Shareholders Holding Over 5% |
|
9,989,076 Common Shares |
|
|
12.61% |
|
|
|
(1) |
Under
Rule 13d-3, a beneficial owner of a security includes any person who,
directly or indirectly, through any contract, arrangement, understanding,
relationship, or otherwise has or shares: (i)
voting power, which includes the power to vote, or to direct the voting of
shares; and (ii) investment power, which includes the power to dispose or
direct the disposition of shares. Certain shares may be deemed to be
beneficially owned by more than one person (if, for example, persons share
the power to vote or the power to dispose of the shares). In addition, shares
are deemed to be beneficially owned by a person if the person has the right
to acquire the shares (for example, upon exercise of an option) within 60
days of the date as of which the information is provided. In computing the
percentage ownership of any person, the amount of shares outstanding is
deemed to include the amount of shares beneficially owned by such person (and
only such person) by reason of these acquisition rights. As a result, the
percentage of outstanding shares of any person as shown in this table does
not necessarily reflect the person’s actual ownership or voting power with
respect to the number of shares of common stock actually outstanding on April
01, 2024. As of April 01, 2024 there were 117,892,441 shares of our company’s
common stock issued and outstanding. |
|
|
(2) |
Tom
Lewis acted as president, treasurer, secretary and director of our company
since August 25, 2009. Mr. Lewis resigned as president, treasurer and
secretary of our company on August 13, 2014. Mr. Lewis resumed his positions
as president, Chief Financial Officer and treasurer on February 7, 2017. |
|
|
(3) |
James
Brown was appointed as a director of our company on December 19, 2012. |
|
|
(3) |
Mr.
Goss has acted as a director of our company since May 30, 2014 and was
appointed as president, treasurer and secretary of our company on August 13,
2014. Mr. Goss resigned as president, treasurer and secretary on February 7,
2017, but remained as a director of our company. |
|
|
|
39 |
Changes in Control
We are unaware of any contract or other arrangement or provisions of our
Articles or Bylaws the operation of which may at a subsequent date result in a
change of control of our company. There are not any provisions in our Articles
or Bylaws, the operation of which would delay, defer, or prevent a change in
control of our company.
Item 13. Certain Relationships and Related Transactions, and Director
Independence
Except as disclosed herein, no director, executive officer, shareholder
holding at least 5% of shares of our common stock, or any family member
thereof, had any material interest, direct or indirect, in any transaction, or
proposed transaction since the year ended December 31, 2023, in which the
amount involved in the transaction exceeded or exceeds the lesser of $120,000
or one percent of the average of our total assets at the year-end for the last
three completed fiscal years.
Director Independence
We currently act with three directors, consisting of Tom Lewis, James
Brown and Brian Goss.
We have determined that James Brown is an independent director, as that
term is used in Rule 4200(a)(15) of the Rules of National Association of
Securities Dealers.
Currently our audit committee consists of our entire board of directors.
We currently do not have nominating, compensation committees or committees
performing similar functions. There has not been any defined policy or
procedure requirements for shareholders to submit recommendations or nomination
for directors.
From inception to present date, we believe that the members of our audit
committee and the board of directors have been and are collectively capable of
analyzing and evaluating our financial statements and understanding internal
controls and procedures for financial reporting.
Item 14. Principal Accounting Fees and Services
The aggregate fees billed for the most recently completed fiscal year
ended December 31, 2023 and for fiscal year ended December 31, 2023 for
professional services rendered by the principal accountant for the audit of our
annual financial statements and review of the financial statements included in
our quarterly reports on Form 10-Q and services that are normally provided by
the accountant in connection with statutory and regulatory filings or
engagements for these fiscal periods were as follows:
|
|
|
Year
Ended |
|
|||||
|
|
|
December
31, 2023 |
|
|
December
31, 2022 |
|
||
|
Audit Fees |
|
$ |
15,000 |
|
|
$ |
16,500 |
|
|
Audit Related Fees |
|
Nil |
|
|
Nil |
|
||
|
Tax Fees |
|
$ |
2,500 |
|
|
$ |
2,000 |
|
|
All Other Fees |
|
$ |
13,500 |
|
|
$ |
7,500 |
|
|
Total |
|
$ |
31,000 |
|
|
$ |
26,000 |
|
Our board of directors pre-approves all services provided by our
independent auditors. All of the above services and fees were reviewed and
approved by the board of directors either before or after the respective
services were rendered.
Our board of directors has considered the nature and amount of fees
billed by our independent auditors and believes that the provision of services
for activities unrelated to the audit is compatible with maintaining our
independent auditors’ independence.
|
|
|
40 |
PART IV
Item 15. Exhibits, Financial Statement Schedules
|
|
(a) |
Financial Statements |
|
|
(1) |
Financial statements for our
company are listed in the index under Item 8 of this document. |
|
|
|
|
|
|
(2) |
All financial statement
schedules are omitted because they are not applicable, not material or the
required information is shown in the financial statements or notes thereto. |
|
|
(b) |
Exhibits |
|
Exhibit
Number |
|
Description |
|
(3) |
|
Articles of Incorporation and Bylaws |
|
|
||
|
|
||
|
|
||
|
|
||
|
(4) |
|
Instruments Defining the Rights of Security Holders, Including
Indentures |
|
|
||
|
(10) |
|
Material Contracts |
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
|
|
|
41 |
|
Exhibit
Number |
|
Description |
|
|
||
|
|
||
|
|
||
|
|
||
|
|
|
|
|
(14) |
|
Code of Ethics |
|
|
||
|
(21) |
|
Subsidiaries of the Registrant |
|
21.1 |
|
Nevada Lithium Corporation, a Nevada corporation |
|
(31) |
|
Rule 13a-14 (d)/15d-14d) Certifications |
|
31.1* |
|
Section 302 Certification by the Principal Executive Officer,
Principal Financial Officer and Principal Accounting Officer |
|
(32) |
|
Section 1350 Certifications |
|
32.1* |
|
Section 906 Certification by the Principal Executive Officer,
Principal Financial Officer and Principal Accounting Officer |
|
101* |
|
Interactive Data File |
|
101.INS |
|
XBRL Instance Document |
|
101.SCH |
|
XBRL
Taxonomy Extension Schema Document |
|
101.CAL |
|
XBRL Taxonomy Extension Calculation Linkbase Document |
|
101.DEF |
|
XBRL Taxonomy Extension Definition Linkbase Document |
|
101.LAB |
|
XBRL Taxonomy Extension Label Linkbase
Document |
|
101.PRE |
|
XBRL Taxonomy Extension Presentation Linkbase Document |
* Filed herewith.
|
|
|
42 |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereto duly authorized.
|
|
|
LITHIUM
CORPORATION |
|
|
|
|
(Registrant) |
|
|
Dated: April 4, 2024 |
|
/s/ Tom Lewis |
|
|
|
|
Tom Lewis |
|
|
|
|
President, Chief Financial
Officer, Treasurer, Secretary and Director |
|
|
|
|
(Principal Executive Officer,
Principal Financial Officer and Principal Accounting Officer) |
|
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
|
Dated: April 4, 2024 |
|
/s/ Tom Lewis |
|
|
|
|
Tom Lewis |
|
|
|
|
President, Chief Financial
Officer, Treasurer, Secretary and Director |
|
|
|
|
(Principal Executive Officer,
Principal Financial Officer and Principal Accounting Officer) |
|
|
Dated: April 4, 2024 |
|
/s/ Brian Goss |
|
|
|
|
Brian Goss |
|
|
|
|
Director |
|
|
Dated: April 4, 2024 |
|
/s/ James Brown |
|
|
|
|
James Brown |
|
|
|
|
Director |
|
|
|
|
43 |