UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 19, 2009
LITHIUM CORPORATION
(Exact name of registrant as specified in its charter)
Nevada 333-148266 98-0530295
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
200 S Virginia St - 8th Floor, Reno, Nevada 89501 89501
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 714-475-3512
9121 Atlanta Avenue, #314, Huntington Beach, CA 92646
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
FORWARD LOOKING STATEMENTS
This current report contains forward-looking statements as that term is defined
in section 27A of the United States Securities Act of 1933, as amended, and
section 21E of the United States Securities Exchange Act of 1934, as amended.
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", "will", "should", "intends", "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" on page 5 of
this current report, which may cause our or our industry's actual results,
levels of activity or performance to be materially different from any future
results, levels of activity or performance 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 or performance. 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.
Unless otherwise specified, all dollar amounts are expressed in United States
dollars and all references to "common shares" refer to the common shares in our
capital stock.
As used in this current report and unless otherwise indicated, the terms "we",
"us", "our" and the "Company" mean Lithium Corporation, a Nevada corporation,
unless otherwise indicated and the term "Nevada Lithium" means Nevada Lithium
Corporation, a private Nevada corporation whose shares we have acquired.
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On October 9, 2009, we entered into a share exchange agreement with Nevada
Lithium Corporation, a Nevada corporation, and the shareholders of Nevada
Lithium Corporation. Pursuant to the terms of the share exchange agreement, we
have agreed to acquire all of the issued and outstanding shares of Nevada
Lithium Corporation's common stock in exchange for the issuance by our company
of 12,350,000 shares of our common stock to the shareholders of Nevada Lithium
Corporation.
BUSINESS OF NEVADA LITHIUM CORPORATION
Nevada Lithium Corporation is an exploration stage mining company whose
principal focus is identification, acquisition, and development of its
properties in which it has an interest, located in Nevada.
The closing of the transactions contemplated in the share exchange agreement and
the acquisition of all of the issued and outstanding common stock in the capital
of Nevada Lithium Corporation occurred on October 19, 2009. Please refer to the
information provided under Item 2.01 of this current report for information
related to the share exchange agreement and our business as a result of the
acquisition.
ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS
On October 9, 2009, we entered into a share exchange agreement with Nevada
Lithium Corporation, a Nevada corporation, and the shareholders of Nevada
Lithium Corporation. The closing of the transactions contemplated in the share
exchange agreement and the acquisition of all of the issued and outstanding
common stock in the capital of Nevada Lithium Corporation occurred on October
19, 2009. In accordance with the closing of the share exchange agreement, we
issued 12,350,000 shares of our common stock to the former shareholders of
Nevada Lithium Corporation in exchange for the acquisition, by our company, of
all of the 12,350,000 issued and outstanding shares of Nevada Lithium
Corporation. Also, pursuant to the terms of the share exchange agreement, a
director of our company cancelled 220,000,000 restricted shares of our common
stock.
Our company had 60,550,000 common shares issued and outstanding as of October
19, 2009 as a result of the issuance of 12,350,000 common shares in connection
with the closing of the share exchange agreement. As of the closing date, the
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former shareholders of Nevada Lithium Corporation held approximately 20.40% of
the issued and outstanding common shares of our company.
BUSINESS OF NEVADA LITHIUM CORPORATION
Nevada Lithium Corporation is an exploration stage mining company whose
principal focus is developing the properties that it has an interest in which
are located in Nevada.
Because we were a shell company before our acquisition of all of the common
stock of Nevada Lithium Corporation, we have included in this Current Report on
Form 8-K, the information on our company that would be required if we were
filing a general form for registration of securities on Form 10.
We are an early stage mineral exploration company. For further details on our
business, please see the section entitled "Description of Our Business"
beginning on page 3.
BUSINESS
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 25, 2009, Tom Lewis was appointed as President, Treasurer, Secretary
and director of our company and Mazen Hleiss resigned as the President,
Treasurer and Secretary of our company.
On August 31, 2009, we entered into a letter of intent with Nevada Lithium
Corporation regarding a business combination which may be effected in one of
several different ways, including an asset acquisition, merger of our company
and Nevada Lithium Corporation, or a share exchange whereby we would purchase
the shares of Nevada Lithium Corporation from its shareholders in exchange for
restricted shares of our common stock.
Effective September 30, 2009, we effected a one (1) old for 60 new forward stock
split of our issued and outstanding common stock. As a result, our authorized
capital increased from 50,000,000 shares of common stock with a par value of
$0.001 to 3,000,000,000 shares of common stock with a par value of $0.001 and
our issued and outstanding shares increased from 4,470,000 shares of common
stock to 268,200,000 shares of common stock.
Also effective September 30, 2009, we have changed our name from "Utalk
Communications, Inc." to "Lithium Corporation", by way of a merger with our
wholly owned subsidiary Lithium Corporation, which was formed solely for the
change of name. The name change and forward stock split becomes effective with
the Over-the-Counter Bulletin Board at the opening for trading on October 1,
2009 under the new stock symbol "LTUM". Our new CUSIP number is 536804 107.
On October 9, 2009, we entered into a share exchange agreement with Nevada
Lithium Corporation, a Nevada corporation, and the shareholders of Nevada
Lithium Corporation. Pursuant to the terms of the share exchange agreement, we
have agreed to acquire all of the issued and outstanding shares of Nevada
Lithium Corporation's common stock in exchange for the issuance by our company
of 12,350,000 shares of our common stock to the shareholders of Nevada Lithium
Corporation.
BUSINESS SUBSEQUENT TO THE CLOSING OF THE SHARE EXCHANGE AGREEMENT
We are an exploration stage mining company engaged in the identification,
acquisition, and exploration of metals and minerals with a focus on lithium
mineralization on properties located in Nevada.
Our current operational focus is to conduct exploration activities on our newly
acquired properties in Nevada, known as the Fish Lake Valley property and the
Fish Creek Caldera property.
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FISH LAKE VALLEY PROPERTY
Fish Lake Valley is a lithium enriched salar (also known as a Playa, dry lake,
or Salt Pan), which is located in west central Nevada in northern Esmeralda
county, and the property is roughly centered at 417050E 4195350N (NAD 27 CONUS).
We currently hold eighty (80) acre Association Placer claims that cover
approximately 6400 acres. Lithium-enriched Tertiary-era Fish Lake formation
Rhyolitic tuffs or ash flow tuffs have accumulated in a valley or basinal
environment. Over time interstitial formational waters in contact with these
tuffs, have become enriched in lithium, which could possibly be amenable to the
extraction by evaporative methods. Additionally evaporative brine mining is
environmentally benign, and is achieved with a minimal carbon footprint. The
geological setting at Fish Lake Valley is highly analogous to the salars of
Chile, Bolivia, & Peru. Access is excellent in Fish Lake Valley with all weather
gravel roads leading to the property from State Highways 264, and 265, and
maintained gravel roads ring the Playa. Power is available approximately 15
kilometers from the property, and the village of Dyer is approximately 20
kilometers to the south, while the town of Tonopah Nevada is approximately 75
kilometers to the East. Further sediment and brine sampling studies were
conducted on the property in early September, and the company is awaiting
further assay information. The company anticipates additional sampling programs
in Fall 2009, followed by a geophysical survey, and eventual drilling in Spring
2010. The property is held under mining lease purchase agreement dated June 1,
2009 between Nevada Lithium Corporation, and Nevada Alaska Mining Co. Inc.,
Robert Craig, Barbara Craig, and Elizabeth Dickman. Nevada Lithium has agreed to
issue the vendors $350,000 worth of common stock of the company in eight regular
disbursements, the last of which is slated to occur on March 31st 2011. To date
one disbursement has been made of stock worth $43,750.
FISH CREEK CALDERA
The Fish Creek Caldera prospect is located in west-central Lander County
approximately 55 kilometers south of the county seat at the town of Battle
Mountain in northern Nevada. The property is roughly centered at 473052E
4453013N (NAD 27 CONUS), and is comprised of 117 conventional 20 acre Lode
Mining Claims which cover an area of approximately 2340 acres. Unlike the Fish
Lake Valley prospect it is a more traditional bulk mining target which covers an
area of clay altered Caetano, and Fish Creek formation Tertiary volcanic tuffs.
Both formations originally contained relatively high concentrations of lithium,
and locally, through a possible combination of weathering, and hydrothermal
processes, these volcanic rocks have been altered to clays. It is thought that
the alteration process may have contributed to further lithium enrichment of the
clays. During the conduct of uranium exploratory drilling operations here in
1978 by Phillips Uranium Corporation, lithium mineralization of up to 20,000 ppm
was discovered. Access is good to the property with an all weather road leading
up from Buffalo Valley to the west of the property, and a county maintained
track leading up from Highway 305, some 15 kilometers to the east of the
property. A low voltage powerline does terminate at the west edge of the claim
block, and higher tension power lines can be found in the general area. We
intend to begin preliminary work this fall to outline areas of lithium
enrichment in an effort to define drill targets, for more precise evaluation of
the economic potential of the property in 2010.
Our wholly owned subsidiary, Nevada Lithium Corporation, entered into a lease
agreement with Cerro Rico Ventures LLC on March 16, 2009. The lease is
maintained by an initial payment, and continuing lease payments as set forth in
the table below. Cerro Rico reserves a 3% NSR. We may purchase 1% of the NSR
within 5 years for a payment of $500,000. We can purchase an additional 1% of
the NSR by paying $1,000,000 within 10 years. The remainder of the NSR can be
purchased within 15 years by paying $2,000,000.
Payment Amount Timing
------- ------ ------
Upon signature $20,000 March 16, 2009 (paid)
Upon 1st anniversary $25,000 March 16, 2010
Upon 2nd anniversary $30,000 March 16, 2011
Upon 3rd -10th anniversary $50,000 March 16, 2012 - 2019
Upon 11th - 20th anniversary $75,000 March 16, 2020-2029
At any time upon commercial prod $250,000
4
Any commercial production and payment therefore shall supercede the annual lease
payment requirements, which cease so long as production is maintained. Upon
cessation of production for any period in excess of 6 months, the annual lease
payments shall resume.
COMPETITION
We are a mineral resource exploration company. We compete with other mineral
resource exploration companies for financing and for the acquisition of new
mineral properties. Many of the mineral resource exploration companies with whom
we compete have greater financial and technical resources than those available
to us. Accordingly, these competitors may be able to spend greater amounts on
acquisitions of mineral properties of merit, on exploration of their mineral
properties and on development of their mineral properties. In addition, they may
be able to afford more geological expertise in the targeting and exploration of
mineral properties. This competition could result in competitors having mineral
properties of greater quality and interest to prospective investors who may
finance additional exploration. This competition could adversely impact on our
ability to finance further exploration and to achieve the financing necessary
for us to develop our mineral properties.
COMPLIANCE WITH GOVERNMENT REGULATION
We are committed to complying with and are, to our knowledge, in compliance
with, all governmental and environmental regulations applicable to our company
and our properties. Permits from a variety of regulatory authorities are
required for many aspects of mine operation and reclamation. We cannot predict
the extent to which these requirements will affect our company or our properties
if we identify the existence of minerals in commercially exploitable quantities.
In addition, future legislation and regulation could cause additional expense,
capital expenditure, restrictions and delays in the exploration of our
properties.
RESEARCH AND DEVELOPMENT EXPENDITURES
We have incurred $Nil in research and development expenditures over the last
fiscal year.
EMPLOYEES
Currently, we do not have any employees. Our directors and certain contracted
individuals play an important role in the running of our company. We do not
expect any material changes in the number of employees over the next 12 month
period. We do and will continue to outsource contract employment as needed.
We engage contractors from time to time to consult with us on specific corporate
affairs or to perform specific tasks in connection with our exploration
programs.
SUBSIDIARIES
We do not have any subsidiaries other than Nevada Lithium Corporation.
INTELLECTUAL PROPERTY
We do not own, either legally or beneficially, any patent or trademark.
RISK FACTORS
Our business operations are subject to a number of risks and uncertainties,
including, but not limited to those set forth below:
RISKS ASSOCIATED WITH MINING
ALL OF OUR PROPERTIES ARE IN THE EXPLORATION STAGE. THERE IS NO ASSURANCE THAT
WE CAN ESTABLISH THE EXISTENCE OF ANY MINERAL RESOURCE ON ANY OF OUR PROPERTIES
IN COMMERCIALLY EXPLOITABLE QUANTITIES. UNTIL WE CAN DO SO, WE CANNOT EARN ANY
REVENUES FROM OPERATIONS AND IF WE DO NOT DO SO WE WILL LOSE ALL OF THE FUNDS
THAT WE EXPEND ON EXPLORATION. IF WE DO NOT DISCOVER ANY MINERAL RESOURCE IN A
COMMERCIALLY EXPLOITABLE QUANTITY, OUR BUSINESS COULD FAIL.
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Despite exploration work on our mineral properties, we have not established that
any of them contain any mineral reserve, nor can there be any assurance that we
will be able to do so. If we do not, our business could fail.
A mineral reserve is defined by the Securities and Exchange Commission in its
Industry Guide 7 (which can be viewed over the Internet at
http://www.sec.gov/divisions/corpfin/forms/industry.htm#secguide7) as that part
of a mineral deposit which could be economically and legally extracted or
produced at the time of the reserve determination. The probability of an
individual prospect ever having a "reserve" that meets the requirements of the
Securities and Exchange Commission's Industry Guide 7 is extremely remote; in
all probability our mineral resource property does not contain any 'reserve' and
any funds that we spend on exploration will probably be lost.
Even if we do eventually discover a mineral reserve on one or more of our
properties, there can be no assurance that we will be able to develop our
properties into producing mines and extract those resources. Both mineral
exploration and development involve a high degree of risk and few properties
which are explored are ultimately developed into producing mines.
The commercial viability of an established mineral deposit will depend on a
number of factors including, by way of example, the size, grade and other
attributes of the mineral deposit, the proximity of the resource to
infrastructure such as a smelter, roads and a point for shipping, government
regulation and market prices. Most of these factors will be beyond our control,
and any of them could increase costs and make extraction of any identified
mineral resource unprofitable.
MINERAL OPERATIONS ARE SUBJECT TO APPLICABLE LAW AND GOVERNMENT REGULATION. EVEN
IF WE DISCOVER A MINERAL RESOURCE IN A COMMERCIALLY EXPLOITABLE QUANTITY, THESE
LAWS AND REGULATIONS COULD RESTRICT OR PROHIBIT THE EXPLOITATION OF THAT MINERAL
RESOURCE. IF WE CANNOT EXPLOIT ANY MINERAL RESOURCE THAT WE MIGHT DISCOVER ON
OUR PROPERTIES, OUR BUSINESS MAY FAIL.
Both mineral exploration and extraction require permits from various foreign,
federal, state, provincial and local governmental authorities and are governed
by laws and regulations, including those with respect to prospecting, mine
development, mineral production, transport, export, taxation, labour standards,
occupational health, waste disposal, toxic substances, land use, environmental
protection, mine safety and other matters. There can be no assurance that we
will be able to obtain or maintain any of the permits required for the continued
exploration of our mineral properties or for the construction and operation of a
mine on our properties at economically viable costs. If we cannot accomplish
these objectives, our business could fail.
We believe that we are in compliance with all material laws and regulations that
currently apply to our activities but there can be no assurance that we can
continue to remain in compliance. Current laws and regulations could be amended
and we might not be able to comply with them, as amended. Further, there can be
no assurance that we will be able to obtain or maintain all permits necessary
for our future operations, or that we will be able to obtain them on reasonable
terms. To the extent such approvals are required and are not obtained, we may be
delayed or prohibited from proceeding with planned exploration or development of
our mineral properties.
IF WE ESTABLISH THE EXISTENCE OF A MINERAL RESOURCE ON ANY OF OUR PROPERTIES IN
A COMMERCIALLY EXPLOITABLE QUANTITY, WE WILL REQUIRE ADDITIONAL CAPITAL IN ORDER
TO DEVELOP THE PROPERTY INTO A PRODUCING MINE. IF WE CANNOT RAISE THIS
ADDITIONAL CAPITAL, WE WILL NOT BE ABLE TO EXPLOIT THE RESOURCE, AND OUR
BUSINESS COULD FAIL.
If we do discover mineral resources in commercially exploitable quantities on
any of our properties, we will be required to expend substantial sums of money
to establish the extent of the resource, develop processes to extract it and
develop extraction and processing facilities and infrastructure. Although we may
derive substantial benefits from the discovery of a major deposit, there can be
no assurance that such a resource will be large enough to justify commercial
operations, nor can there be any assurance that we will be able to raise the
funds required for development on a timely basis. If we cannot raise the
necessary capital or complete the necessary facilities and infrastructure, our
business may fail.
MINERAL EXPLORATION AND DEVELOPMENT IS SUBJECT TO EXTRAORDINARY OPERATING RISKS.
WE DO NOT CURRENTLY INSURE AGAINST THESE RISKS. IN THE EVENT OF A CAVE-IN OR
SIMILAR OCCURRENCE, OUR LIABILITY MAY EXCEED OUR RESOURCES, WHICH WOULD HAVE AN
ADVERSE IMPACT ON OUR COMPANY.
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Mineral exploration, development and production involves many risks which even a
combination of experience, knowledge and careful evaluation may not be able to
overcome. Our operations will be subject to all the hazards and risks inherent
in the exploration for mineral resources and, if we discover a mineral resource
in commercially exploitable quantity, our operations could be subject to all of
the hazards and risks inherent in the development and production of resources,
including liability for pollution, cave-ins or similar hazards against which we
cannot insure or against which we may elect not to insure. Any such event could
result in work stoppages and damage to property, including damage to the
environment. We do not currently maintain any insurance coverage against these
operating hazards. The payment of any liabilities that arise from any such
occurrence would have a material adverse impact on our company.
MINERAL PRICES ARE SUBJECT TO DRAMATIC AND UNPREDICTABLE FLUCTUATIONS.
We expect to derive revenues, if any, either from the sale of our mineral
resource properties or from the extraction and sale of lithium ore. The price of
those commodities has fluctuated widely in recent years, and is affected by
numerous factors beyond our control, including international, economic and
political trends, expectations of inflation, currency exchange fluctuations,
interest rates, global or regional consumptive patterns, speculative activities
and increased production due to new extraction developments and improved
extraction and production methods. The effect of these factors on the price of
base and precious metals, and therefore the economic viability of any of our
exploration properties and projects, cannot accurately be predicted.
THE MINING INDUSTRY IS HIGHLY COMPETITIVE AND THERE IS NO ASSURANCE THAT WE WILL
CONTINUE TO BE SUCCESSFUL IN ACQUIRING MINERAL CLAIMS. IF WE CANNOT CONTINUE TO
ACQUIRE PROPERTIES TO EXPLORE FOR MINERAL RESOURCES, WE MAY BE REQUIRED TO
REDUCE OR CEASE OPERATIONS.
The mineral exploration, development, and production industry is largely
un-integrated. We compete with other exploration companies looking for mineral
resource properties. While we compete with other exploration companies in the
effort to locate and acquire mineral resource properties, we will not compete
with them for the removal or sales of mineral products from our properties if we
should eventually discover the presence of them in quantities sufficient to make
production economically feasible. Readily available markets exist worldwide for
the sale of mineral products. Therefore, we will likely be able to sell any
mineral products that we identify and produce.
In identifying and acquiring mineral resource properties, we compete with many
companies possessing greater financial resources and technical facilities. This
competition could adversely affect our ability to acquire suitable prospects for
exploration in the future. Accordingly, there can be no assurance that we will
acquire any interest in additional mineral resource properties that might yield
reserves or result in commercial mining operations.
RISKS RELATED TO OUR COMPANY
THE FACT THAT WE HAVE NOT EARNED ANY OPERATING REVENUES SINCE OUR INCORPORATION
RAISES SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE TO EXPLORE OUR MINERAL
PROPERTIES AS A GOING CONCERN.
We have not generated any revenue from operations since our incorporation and we
anticipate that we will continue to incur operating expenses without revenues
unless and until we are able to identify a mineral resource in a commercially
exploitable quantity on one or more of our mineral properties and we build and
operate a mine. We had cash in the amount of $1,559 as of June 30, 2009. At June
30, 2009, we had working capital of $10,489. We incurred a net loss of $15,173
for the six month period ended June 30, 2009 and $65,459 since inception. We
estimate our average monthly operating expenses to be approximately $20,000 to
$40,000, including mineral 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.
7
These circumstances lead our independent registered public accounting firm, in
their report dated April 6, 2009, to comment about our company's ability to
continue as a going concern. Management has plans to seek additional capital
through a private placement of its capital stock. These conditions raise
substantial doubt about our company's ability to continue as a going concern.
Although there are no assurances that management's plans will be realized,
management believes that our company will be able to continue operations in the
future. The financial statements do not include any adjustments relating to the
recoverability and classification of recorded assets, or the amounts of and
classification of liabilities that might be necessary in the event our company
cannot continue in existence." We continue to experience net operating losses.
RISKS ASSOCIATED WITH OUR COMMON STOCK
TRADING ON THE OTC BULLETIN BOARD MAY BE VOLATILE AND SPORADIC, WHICH COULD
DEPRESS THE MARKET PRICE OF OUR COMMON STOCK AND MAKE IT DIFFICULT FOR OUR
STOCKHOLDERS TO RESELL THEIR SHARES.
Our common stock is quoted on the OTC Bulletin Board service of the Financial
Industry Regulatory Authority. Trading in stock quoted on the OTC Bulletin Board
is often thin and characterized by wide fluctuations in trading prices, due to
many factors that may have little to do with our operations or business
prospects. This volatility could depress the market price of our common stock
for reasons unrelated to operating performance. Moreover, the OTC Bulletin Board
is not a stock exchange, and trading of securities on the OTC Bulletin Board is
often more sporadic than the trading of securities listed on a quotation system
like NASDAQ or a stock exchange like Amex. Accordingly, shareholders may have
difficulty reselling any of their shares.
OUR STOCK IS A PENNY STOCK. TRADING OF OUR STOCK MAY BE RESTRICTED BY THE SEC'S
PENNY STOCK REGULATIONS AND FINRA'S SALES PRACTICE REQUIREMENTS, WHICH MAY LIMIT
A STOCKHOLDER'S ABILITY TO BUY AND SELL OUR STOCK.
Our stock is a penny stock. The Securities and Exchange Commission has adopted
Rule 15g-9 which generally defines "penny stock" to be any equity security that
has a market price (as defined) less than $5.00 per share or an exercise price
of less than $5.00 per share, subject to certain exceptions. Our securities are
covered by the penny stock rules, which impose additional sales practice
requirements on broker-dealers who sell to persons other than established
customers and "accredited investors". The term "accredited investor" refers
generally to institutions with assets in excess of $5,000,000 or individuals
with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or
$300,000 jointly with their spouse. The penny stock rules require a
broker-dealer, prior to a transaction in a penny stock not otherwise exempt from
the rules, to deliver a standardized risk disclosure document in a form prepared
by the SEC which provides information about penny stocks and the nature and
level of risks in the penny stock market. The broker-dealer also must provide
the customer with current bid and offer quotations for the penny stock, the
compensation of the broker-dealer and its salesperson in the transaction and
monthly account statements showing the market value of each penny stock held in
the customer's account. The bid and offer quotations, and the broker-dealer and
salesperson compensation information, must be given to the customer orally or in
writing prior to effecting the transaction and must be given to the customer in
writing before or with the customer's confirmation. In addition, the penny stock
rules require that prior to a transaction in a penny stock not otherwise exempt
from these rules, the broker-dealer must make a special written determination
that the penny stock is a suitable investment for the purchaser and receive the
purchaser's written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in, and limit the marketability of, our common stock.
In addition to the "penny stock" rules promulgated by the Securities and
Exchange Commission, the Financial Industry Regulatory Authority has adopted
rules that require that in recommending an investment to a customer, a
broker-dealer must have reasonable grounds for believing that the investment is
suitable for that customer. Prior to recommending speculative low priced
securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customer's financial status,
tax status, investment objectives and other information. Under interpretations
of these rules, the Financial Industry Regulatory Authority believes that there
is a high probability that speculative low-priced securities will not be
suitable for at least some customers. The Financial Industry Regulatory
Authority ' requirements make it more difficult for broker-dealers to recommend
that their customers buy our common stock, which may limit your ability to buy
and sell our stock.
8
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.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
PURCHASE OF SIGNIFICANT EQUIPMENT
We do not intend to purchase any significant equipment over the next twelve
months.
PERSONNEL PLAN
We do not expect any material changes in the number of employees over the next
12 month period (although we may enter into employment or consulting agreements
with our officers or directors). We do and will continue to outsource contract
employment as needed.
OFF-BALANCE SHEET ARRANGEMENTS
There are 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 investors.
Our principal capital resources have been through the subscription and issuance
of common stock, although we have also used stockholder loans and advances from
related parties.
RESULTS OF OPERATIONS OF NEVADA LITHIUM CORPORATION FOR THE PERIOD FROM MARCH
16, 2009 (INCEPTION) TO JULY 31, 2009
The following summary of our results of operations should be read in conjunction
with the audited financial statements for Nevada Lithium Corporation for the
period from March 16, 2009 (inception) to July 31, 2009 which are included
herein.
The operating results of Nevada Lithium Corporation for the period from March
16, 2009 (inception) to July 31, 2009 are summarized as follows:
Period from March 16, 2009 (inception)
to July 31, 2009
----------------
Revenue $ Nil
Professional Fees 6,922
Interest Expense 3,956
Consulting Fees 10,000
Filing and License Fees 1,075
Depreciation Expense 42
General and Administrative Expenses 1,550
-------
Net loss $23,545
=======
9
LIQUIDITY AND FINANCIAL CONDITION
WORKING CAPITAL
Pro-Forma Consolidated
Nevada Lithium Corporation Lithium Corporation and
as at Nevada Lithium Coporation as at
July 31, 2009 July 31, 2009
------------- -------------
Current Assets $ 65,690 $ 69,549
Current Liabilities $ 188,596 $ 202,944
Working Capital (deficit) $(122,906) $(133,395)
CASH FLOWS
Nevada Lithium Corporation
Period from March 16, 2009
(inception) to
July 31, 2009
-------------
(audited)
Cash Flows provided by Operating Activities $ 66,502
Cash Flows used in Investing Activities $(196,903)
Cash Flows provided by Financing Activities $ 169,463
---------
Net Increase (Decrease) in Cash During Period $ 39,062
=========
At July 31, 2009, our total assets, including the assets of Nevada Lithium
Corporation, were $2,791,955, which consisted of cash and cash equivalents of
$40,621, other current assets of $28,928, equipment and software of $12,714 and
mineral properties of $2,709,692.
The principal components of Nevada Lithium Corporation's loss for the period
from March 16, 2009 (inception) to July 31, 2009 were professional fees and
consulting fees.
PROPERTIES
Property held by us: As of the date of this current report on Form 8-K, we hold
the following properties: Fish Lake Valley Property and Fish Creek Caldera. For
detail descriptions of these properties, please see the section entitled
"Business" above.
Our facilities: As of the date of this current report, our executive,
administrative, and operating offices are located at 200 S Virginia St - 8th
Floor, Reno, Nevada 89501. We lease these premises at a cost of $199 per month.
We believe these facilities are adequate for our current needs and that
alternate facilities on similar terms would be readily available if needed.
10
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of October 19, 2009, certain information with
respect to the beneficial ownership of our common stock by each stockholder
known by us to be the beneficial owner of more than 5% of our common stock and
by each of our current directors and executive officers. Each person has sole
voting and investment power with respect to the shares of common stock.
Beneficial ownership consists of a direct interest in the shares of common
stock, except as otherwise indicated.
Amount and Nature of Percentage
Name and Address of Beneficial Owner Beneficial Ownership of Class(1)
------------------------------------ -------------------- -----------
Tom Lewis
President, Treasurer, Secretary and Director
4502 E Big Springs Rd
Spokane, WA 99223 10,000,000 16.52%
Mazen Hleiss
Director
Awkaf Building, 5th Floor (SCIS) Jemayzat Str
Tripoli, North Lebanon, Lebanon 10,000,000 16.52%
Directors and Executive Officers as a Group(1) 20,000,000 33.04%
common shares
John E. Hiner
9443 Axlund Road
Lynden, WA 98264 10,000,000 16.52%
----------
(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
October 19, 2009. As of October 19, 2009, there were 60,550,000 shares of
our company's common stock issued and outstanding.
CHANGE IN CONTROL
We are not aware of any arrangement that might result in a change in control of
our company in the future.
DIRECTORS AND EXECUTIVE OFFICERS
All directors of our company hold office until the next annual meeting of the
security holders or until their successors have been elected and qualified. The
officers of our company are appointed by our board of directors and hold office
until their death, resignation or removal from office. Our directors and
executive officers, their ages, positions held, and duration as such, are as
follows:
Position Held Date First Elected
Name with the Company Age or Appointed
---- ---------------- --- ------------
Tom Lewis President, Treasurer, 55 August 25, 2009
Secretary and Director
Mazen Hleiss Director 37 January 30, 2007
11
BUSINESS EXPERIENCE
The following is a brief account of the education and business experience during
at least the past five years of our director and executive officer, indicating
his 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
Mr. Lewis has more than 35 years experience in the Oil and Gas and Mineral
exploration industries. He has held various positions including Project
Geologist, Project Manager, Senior Project Geologist, and Vice President
Exploration. He also was an integral member of the development team that
explored, and developed the Cortez Hills deposit in Crescent Valley Nevada.
In 1973 Mr. Lewis started his career in the Oil Fields, and worked in the
Geophysical, and Drilling industries until 1981, when he became a Petroleum
Landman for Westburne Petroleum & Minerals. While there he was responsible for
the acquisition and disposition of interests and maintaining title to petroleum
lands in various locales in the United States, and Western Canada. In 1989 he
started his own business as a consulting geologist and has worked in numerous
locations over the past 20 years, including the United States, Mexico, Canada,
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.
MAZEN HLEISS
Since November 1996, Mr. Hleiss has been the general manager and 50% owner of
SCIS (Servicing & Consulting for Information Systems), based in Lebanon. Mr.
Hleiss received his degree in Electrical and Electronic Engineering (Computer
specialization) from Lebanese University in 1993. Since 1994, he has been a
member of the Engineering Order in Lebanon.
FAMILY RELATIONSHIPS
There are no family relationships among our directors or executive officers.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
Our directors, executive officers and control persons have not been involved in
any of the following events during the past five years:
1. any bankruptcy petition filed by or against any business of which such
person was a general partner or executive officer either at the time
of the bankruptcy or within two years prior to that time;
2. any conviction in a criminal proceeding or being subject to a pending
criminal proceeding (excluding traffic violations and other minor
offenses);
3. being subject to any order, judgment, or decree, not subsequently
reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining, barring,
suspending or otherwise limiting his involvement in any type of
business, securities or banking activities; or
12
4. being found by a court of competent jurisdiction (in a civil action),
the Securities and Exchange Commission or the Commodity Futures
Trading Commission to have violated a federal or state securities or
commodities law, and the judgment has not been reversed, suspended, or
vacated.
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, 2008 and 2007; 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, 2008 and 2007,
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 $100,000 for the
respective fiscal year:
SUMMARY COMPENSATION TABLE
Change in
Pension
Value and
Non-Equity Nonqualified
Name and Incentive Deferred
Principal Stock Option Plan Compensation All Other
Position Year Salary($) Bonus($) Awards($) Awards($) Compensation($) Earnings($) Compensation($) Totals($)
-------- ---- --------- -------- --------- --------- --------------- ----------- --------------- ---------
Tom Lewis, 2008 N/A N/A N/A N/A N/A N/A N/A N/A
President, 2007 N/A N/A N/A N/A N/A N/A N/A N/A
Treasurer,
Secretary and
Director(1)
Mazen Hleiss, 2008 Nil Nil Nil Nil Nil Nil Nil Nil
Former President, 2007 Nil Nil Nil Nil Nil Nil Nil Nil
Treasurer,
Secretary and
Current Director(2)
----------
(1) Mr. Lewis was appointed the President, Treasurer, Secretary and a director
of our company on August 25, 2009.
(2) Mr. Hleiss was appointed the President, Treasurer, Secretary and a director
of our company on January 30, 2007. Mr. Hleiss resigned as our President,
Treasurer and Secretary on August 25, 2009. Mr. Hleiss remains a director
of our company.
There are no compensatory plans or arrangements with respect to our executive
officers resulting from their resignation, retirement or other termination of
employment or from a change of control.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
As at December 31, 2008, there were no unexercised options or stock that had not
vested in regards to our executive officers, and there were no equity incentive
plan awards for our executive officers during the year ended December 31, 2008.
13
OPTIONS GRANTS IN THE YEAR ENDED DECEMBER 31, 2008
During the year ended December 31, 2008, no stock options were granted to our
executive officers.
AGGREGATED OPTIONS EXERCISED IN THE YEAR ENDED DECEMBER 31, 2008 AND YEAR END
OPTION VALUES
There were no stock options exercised during the year ended December 31, 2008
and no stock options held by our executive officers at the end of the year ended
December 31, 2008.
REPRICING OF OPTIONS/SARS
We did not reprice any options previously granted to our executive officers
during the year ended December 31, 2008.
DIRECTOR COMPENSATION
Directors of our company may be paid for their expenses incurred in attending
each meeting of the directors. In addition to expenses, directors may be paid a
sum for attending each meeting of the directors or may receive a stated salary
as director. No payment precludes any director from serving our company in any
other capacity and being compensated for such service. Members of special or
standing committees may be allowed similar reimbursement and compensation for
attending committee meetings. During the year ended December 31, 2008, we did
not pay any compensation or grant any stock options to our directors.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Except as disclosed below, there have been no transactions or proposed
transactions in which the amount involved exceeds the lesser of $120,000 or one
percent of the average of our total assets at year-end for the last two
completed fiscal years in which any of our directors, executive officers or
beneficial holders of more than 5% of the outstanding shares of our common
stock, or any of their respective relatives, spouses, associates or affiliates,
has had or will have any direct or material indirect interest.
CORPORATE GOVERNANCE
We currently act with two directors, consisting of Tom Lewis and Mazen Hleiss.
We have determined that we do not have a director that would be considered an
"independent director" as defined by Nasdaq Marketplace Rule 4200(a)(15).
We do not have a standing audit, compensation or nominating committee, but our
entire board of directors acts in such capacities. We believe that our board of
directors is capable of analyzing and evaluating our financial statements and
understanding internal controls and procedures for financial reporting. The
board of directors of our company does not believe that it is necessary to have
a standing audit, compensation or nominating committee because we believe that
the functions of such committees can be adequately performed by the board of
directors.
LEGAL PROCEEDINGS
We know of no material, existing or pending legal proceedings against our
company, nor are we involved as a plaintiff in any material proceeding or
pending litigation. There are no proceedings in which any of our directors,
officers or affiliates, or any registered or beneficial shareholder, is an
adverse party or has a material interest adverse to our interest.
MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
Our shares of common stock are currently trading on the OTC Bulletin Board under
the Symbol "LTUM". Our shares of common stock were initially approved for
quotation on the OTC Bulletin Board on July 2, 2008 under the name "Utalk
Communications, Inc." under the symbol, "UTAK". On September 30, 2009, we
changed our name to "Lithium Corporation" upon completion of our merger with our
wholly owned subsidiary, "Lithium Corporation" and our trading symbol was
changed to our current trading symbol, "LTUM". There have been no trades in our
shares of common stock on the OTC Bulletin Board since we were approved for
quotation.
14
Our shares of common stock are issued in registered form. The registrar and
transfer agent for our shares of common stock is Island Stock Transfer Inc., 100
Second Avenue South, Suite 104N, St. Petersburg, Florida 33701.
On October 19, 2009, the list of stockholders for our shares of common stock
showed 19 registered stockholders and 60,550,000 shares of common stock
outstanding.
DIVIDENDS
We have not declared or paid any cash dividends since inception and we do not
intend to pay any cash dividends in the foreseeable future. Although there are
no restrictions that limit our ability to pay dividends on our shares of common
stock other than as described below, we intend to retain future earnings for use
in our operations and the expansion of our business.
EQUITY COMPENSATION PLAN INFORMATION
We have not adopted any equity compensation plans.
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
We did not purchase any of our shares of common stock or other securities for
the year ended December 31, 2008.
RECENT SALES OF UNREGISTERED SECURITIES
The following sets forth certain information concerning securities which were
sold or issued by us without the registration of the securities under the
Securities Act of 1933 in reliance on exemptions from such registration
requirements within the past three years:
On March 22, 2007, we issued 4,000,000 shares of common stock to Mazen Hleiss,
our former president and a current director. The shares were issued in
consideration for the payment of a purchase price of $0.005 per share, which
amounted in the aggregate to $20,000. This transaction was conducted in reliance
upon an exemption from registration provided under Section 4(2) of the
Securities Act of 1933, as amended. Mr. Hleiss was our officer and director and
had access to all of the information which would be required to be included in a
registration statement, and the transaction did not involve a public offering.
In connection with the closing of the share exchange agreement, on October 19,
2009 we issued 12,350.000 restricted shares of our common stock to the former
shareholders of Nevada Lithium Corporation. The shares of common stock were
issued to one (1) non-US persons in reliance on Regulation S and/or Section 4(2)
of the Securities Act of 1933, as amended and to five (5) US persons in reliance
upon Rule 506 of Regulation D of the Securities Act of 1933, as amended.
DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
GENERAL
Our authorized capital stock consists of 3,000,000,000 shares of common stock at
a par value of $0.001 per share.
COMMON STOCK
As of October 19, 2009, there were 60,550,000 shares of our common stock issued
and outstanding that are held by 19 stockholders of record.
Holders of our common stock are entitled to one vote for each share on all
matters submitted to a stockholder vote. Holders of common stock do not have
cumulative voting rights. Therefore, holders of a majority of the shares of
common stock voting for the election of directors can elect all of the
directors. Holders of our common stock representing a majority of the voting
power of our capital stock issued, outstanding and entitled to vote, represented
in person or by proxy, are necessary to constitute a quorum at any meeting of
our stockholders. A vote by the holders of a majority of our outstanding shares
is required to effectuate certain fundamental corporate changes such as
liquidation, merger or an amendment to our articles of incorporation.
15
Holders of common stock are entitled to share in all dividends that the board of
directors, in its discretion, declares from legally available funds. In the
event of a liquidation, dissolution or winding up, each outstanding share
entitles its holder to participate pro rata in all assets that remain after
payment of liabilities and after providing for each class of stock, if any,
having preference over the common stock. Holders of our common stock have no
pre-emptive rights, no conversion rights and there are no redemption provisions
applicable to our common stock.
PREFERRED STOCK
We do not have an authorized class of preferred stock.
DIVIDEND POLICY
We have never declared or paid any cash dividends on our common stock. We
currently intend to retain future earnings, if any, to finance the expansion of
our business. As a result, we do not anticipate paying any cash dividends in the
foreseeable future.
SHARE PURCHASE WARRANTS
We have not issued and do not have outstanding any warrants to purchase shares
of our common stock.
OPTIONS
We have not issued and do not have outstanding any options to purchase shares of
our common stock.
CONVERTIBLE SECURITIES
We have not issued and do not have outstanding any securities convertible into
shares of our common stock or any rights convertible or exchangeable into shares
of our common stock.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Nevada Revised Statutes provide that:
* a corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, except an action by or in the right of the corporation,
by reason of the fact that he is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise,
against expenses, including attorneys' fees, judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in
connection with the action, suit or proceeding if he acted in good
faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful;
* a corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against expenses, including amounts paid in
settlement and attorneys' fees actually and reasonably incurred by him
in connection with the defense or settlement of the action or suit if
he acted in good faith and in a manner which he reasonably believed to
be in or not opposed to the best interests of the corporation.
Indemnification may not be made for any claim, issue or matter as to
which such a person has been adjudged by a court of competent
jurisdiction, after exhaustion of all appeals therefrom, to be liable
to the corporation or for amounts paid in settlement to the
corporation, unless and only to the extent that the court in which the
action or suit was brought or other court of competent jurisdiction
determines upon application that in view of all the circumstances of
the case, the person is fairly and reasonably entitled to indemnity
for such expenses as the court deems proper; and
16
* to the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense
of any action, suit or proceeding, or in defense of any claim, issue
or matter therein, the corporation shall indemnify him against
expenses, including attorneys' fees, actually and reasonably incurred
by him in connection with the defense.
We may make any discretionary indemnification only as authorized in the specific
case upon a determination that indemnification of the director, officer,
employee or agent is proper in the circumstances. The determination must be
made:
* by our stockholders;
* by our board of directors by majority vote of a quorum consisting of
directors who were not parties to the action, suit or proceeding;
* if a majority vote of a quorum consisting of directors who were not
parties to the action, suit or proceeding so orders, by independent
legal counsel in a written opinion;
* if a quorum consisting of directors who were not parties to the
action, suit or proceeding cannot be obtained, by independent legal
counsel in a written opinion; or
* by court order.
Unless limited by our articles of incorporation (which is not the case with our
articles of incorporation) a corporation must indemnify a director who is wholly
successful, on the merits or otherwise, in the defence of any proceeding to
which the director was a party because of being a director of the corporation
against reasonable expenses incurred by the director in connection with the
proceeding.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLSOURE
Please see Item 4.01 "Changes in Registrant's Certifying Accountant".
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES
In connection with the closing of the share exchange agreement, on October 19,
2009 we issued 12,350.000 restricted shares of our common stock to the former
shareholders of Nevada Lithium Corporation. The shares of common stock were
issued to one (1) non-US persons in reliance on Regulation S and/or Section 4(2)
of the Securities Act of 1933, as amended and to five (5) US persons in reliance
upon Rule 506 of Regulation D of the Securities Act of 1933, as amended.
ITEM 4.01 CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
On October 19, 2009, we engaged Maddox Ungar Silberstein, PLLC, an independent
registered firm of Certified Public Accountants, as our principal independent
accountant with the approval of our company's board of directors. Accordingly,
we dismissed Malone & Bailey, PC, on October 19, 2009. Our board of directors
approved the dismissal of Malone & Bailey, PC and the engagement of Maddox Ungar
Silberstein, PLLC as our independent auditor.
Malone & Bailey, PC's report dated April 6, 2009 for the past two fiscal years
ended December 31, 2008 and 2007, did not contain an adverse opinion or
disclaimer of opinion, or qualification or modification as to uncertainty, audit
scope, or accounting principles, except that Malone & Bailey, PC expressed in
their report substantial doubt about our ability to continue as a going concern.
During our two most recent fiscal years and the subsequent interim periods
through the date of dismissal, there were no disagreements, resolved or not,
with Malone & Bailey, PC on any matters of accounting principles or practices,
financial statement disclosure, or auditing scope and procedures which
disagreements, if not resolved to the satisfaction of Malone & Bailey, PC, would
have caused Malone & Bailey, PC to make reference to the subject matter of the
17
disagreements in connection with their report. Our company provided Malone &
Bailey, PC with a copy of this Current Report on Form 8-K prior to its filing
with the Securities and Exchange Commission, and requested that they furnish our
company with a letter addressed to the Securities and Exchange Commission
stating whether they agree with the statements made in this Current Report on
Form 8-K, and if not, stating the aspects with which they do not agree. A copy
of the letter provided from Malone & Bailey, PC, dated October 21, 2009, is
filed as Exhibit 16.1 to this Form 8-K.
During the years ended December 31, 2008 and 2007, and the subsequent interim
period through the date hereof, we have not consulted Maddox Ungar Silberstein,
PLLC on any matter relating to accounting principles to a specific transaction,
either completed or proposed, or the type of audit opinion that might be
rendered on our financial statements. Neither was a written report provided by
Maddox Ungar Silberstein, PLLC nor oral advice provided that Maddox Ungar
Silberstein, PLLC concluded was an important factor considered by us in reaching
a decision as to the accounting, auditing or financial reporting issue; or was
there any matter that was either subject of disagreement or event, as defined in
Item 304(a)(1)(iv) of Regulation S-K and the related instruction to Item 304 of
Regulation S-K, or a reportable event, as that term is explained in Item
304(a)(1)(iv) of Regulation S-K.
ITEM 5.06 CHANGE IN SHELL COMPANY STATUS
Management has determined that, as of the closing of the share exchange
agreement, our company has ceased to be a shell company as defined in Rule 12b-2
of the United States Securities Exchange Act of 1934, as amended. Please refer
to Item 2.01 of this current report for a detailed description of the share
exchange agreement and the business of our company following the closing date.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired
Included herein as Exhibit 99.1 to this Current Report on Form 8-K are the
following audited financial statements of Nevada Lithium Corporation,
prepared in accordance with US generally accepted accounting principals and
stated in US dollars:
1. Report of Independent Registered Public Accounting Firm
2. Balance Sheet as at July 31, 2009
3. Statements of Operations for the period from inception (March 16,
2009) to July 31, 2009
4. Statements of Stockholders' Deficit for the period from inception
(March 16, 2009) to July 31, 2009
5. Statements of Cash Flows for the period from inception (March 16,
2009) to July 31, 2009
6. Notes to Financial Statements.
(b) Pro-forma Financial Information
Included herein as Exhibit 99.2 to this Current Report on Form 8-K are the
following unaudited pro-forma consolidated financial statements:
1. Unaudited Pro Forma Consolidated Balance Sheet as of July 31, 2009
2. Unaudited Pro Forma Consolidated Statement of Operations for the
period ended July 31, 2009
18
EXHIBITS
Exhibits required by Item 601 of Regulation S-K
Exhibit Number Description
-------------- -----------
(3) ARTICLES OF INCORPORATION AND BYLAWS
3.1 Articles of Incorporation (incorporated by reference from our
Registration Statement on Form SB-2 filed on December 21,
2007).
3.2 By-laws (incorporated by reference from our Registration
Statement on Form SB-2 filed on December 21, 2007).
3.3 Articles of Merger (incorporated by reference from our Current
Report on Form 8-K filed on October 2, 2009).
3.4 Certificate of Change (incorporated by reference from our
Current Report on Form 8-K filed on October 2, 2009).
(10) MATERIAL CONTRACTS
10.1* Share exchange agreement dated October 9, 2009, among our
company, Nevada Lithium Corporation and the selling
shareholders of Nevada Lithium Corporation as set out in the
share exchange agreement.
10.2* Lease Purchase Agreement dated June 1, 2009 between Nevada
Lithium Corporation as purchaser and Nevada Mining Co., Inc.,
Robert Craig, Barbara Craig and Elizabeth Dickman as vendors.
10.3* Lease Agreement dated March 16, 2009 between Nevada Lithium
Corporation as Lessee and Cerro Rico Ventures LLC as Lessor.
(16) LETTER RE CHANGE IN CERTIFYING ACCOUNTANT
16.1* Letter from Malone & Bailey, PC
(21) SUBSIDIARIES OF THE REGISTRANT
21.1 Nevada Lithium Corporation
(23) CONSENTS OF EXPERTS AND COUNSEL
23.1* Consent of Maddox Ungar Silberstein, PLLC
(99) ADDITIONAL EXHIBITS
99.1* Financial Statements of Nevada Lithium Corporation for the
period ended July 31, 2009
99.2* Pro Forma Financial Information
----------
* filed herewith.
19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LITHIUM CORPORATION
/s/ Tom Lewis
-----------------------------------------------
Tom Lewis
President, Chief Executive Officer and Director
Date: October 23, 2009
20