Exhibit 99.1
NEVADA LITHIUM CORPORATION
(formerly known as Lithium Corporation)
(AN EXPLORATION STAGE COMPANY)
TABLE OF CONTENTS
JULY 31, 2009
Report of Independent Registered Public Accounting Firm F-1
Balance Sheet as of July 31, 2009 F-2
Statement of Operations for the Period from
March 16, 2009 (date of inception) to July 31, 2009 F-3
Statement of Stockholder's Deficit as of July 31, 2009 F-4
Statement of Cash Flows for the Period from
March 16, 2009 (date of inception) to July 31, 2009 F-5
Notes to Financial Statements F-6 - F-9
Maddox Ungar Silberstein, PLLC CPAs and Business Advisors
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Phone (248) 203-0080
Fax (248) 281-0940
30600 Telegraph Road, Suite 2175
Bingham Farms, MI 48025-4586
www.maddoxungar.com
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors
Nevada Lithium Corporation
Lynden, Washington
We have audited the accompanying balance sheet of Nevada Lithium Corporation
(formerly known as Lithium Coporation) (an exploration stage company) as of July
31, 2009 and the related statements of operations, stockholders' deficit and
cash flows for the period from March 16, 2009 (date of inception) to July 31,
2009. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company has determined that it
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audit included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company's internal control
over financial reporting. Accordingly, we express no such opinion. An audit
includes examining on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Nevada Lithium Corporation
(formerly known as Lithium Corporation) as of July 31, 2009, and the results of
its operations and its cash flows for the period from March 16, 2009 (date of
inception) to July 31, 2009, in conformity with accounting principles generally
accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has negative working capital, has not yet
received revenue from sales of products or services, and has incurred losses
from operations. These factors raise substantial doubt about the Company's
ability to continue as a going concern. Management's plans with regard to these
matters are described in Note 2. The accompanying financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
/s/ Maddox Ungar Silberstein PLLC
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Maddox Ungar Silberstein, PLLC
Bingham Farms, Michigan
October 20, 2009
F-1
NEVADA LITHIUM CORPORATION
(formerly known as Lithium Corporation)
(AN EXPLORATION STAGE COMPANY)
BALANCE SHEET
As of July 31, 2009
ASSETS
Current Assets
Cash and equivalents $ 39,062
Refunds receivable 1,628
Prepaid expenses 25,000
---------
Total Current Assets 65,690
---------
Property and Equipment, net 714
---------
Other Assets
Fish Creek mineral properties 74,697
Fish Lake mineral properties 121,450
---------
Total Other Assets 196,147
---------
TOTAL ASSETS $ 262,551
=========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accrued expenses $ 19,133
Loans payable 169,463
---------
Total Liabilities 188,596
---------
Stockholders' Deficit
Common Stock - $.001 par value, 50,000,000 shares
authorized, 10,350,000 shares issued and outstanding 10,350
Additional paid-in capital 87,150
Deficit accumulated during the exploration stage (23,545)
---------
Total Stockholders' Deficit 73,955
---------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 262,551
=========
See accompanying notes to financial statements.
F-2
NEVADA LITHIUM CORPORATION
(formerly known as Lithium Corporation)
(AN EXPLORATION STAGE COMPANY)
STATEMENT OF OPERATIONS
Period from March 16, 2009 (Inception) to July 31, 2009
REVENUES $ 0
------------
OPERATING EXPENSES
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
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TOTAL OPERATING EXPENSES 23,545
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NET LOSS $ (23,545)
============
NET LOSS PER SHARE:
Basic and diluted $ (0.00)
============
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic and diluted 10,119,203
============
See accompanying notes to financial statements.
F-3
NEVADA LITHIUM CORPORATION
(formerly known as Lithium Corporation)
(AN EXPLORATION STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' DEFICIT
Period from March 16, 2009 (Inception) to July 31, 2009
Deficit
accumulated
Common stock Additional during the
-------------------- paid-in exploration
Shares Amount capital stage Total
------ ------ ------- ----- -----
Inception, March 16, 2009 -- $ -- $ -- $ -- $ --
Issuance of common stock for
services 10,000,000 10,000 -- -- 10,000
Issuance of common stock per
lease agreement 350,000 350 87,150 -- 87,500
Net loss for the period ended
July 31, 2009 -- -- -- (23,545) (23,545)
---------- -------- -------- --------- --------
Balance, July 31, 2009 10,350,000 $ 10,350 $ 87,150 $ (23,545) $ 73,955
========== ======== ======== ========= ========
See accompanying notes to financial statements.
F-4
NEVADA LITHIUM CORPORATION
(formerly known as Lithium Corporation)
(AN EXPLORATION STAGE COMPANY)
STATEMENT OF CASH FLOWS
Period from March 16, 2009 (Inception) to July 31, 2009
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period $ (23,545)
CHANGE IN NON-CASH WORKING CAPITAL ITEMS:
Depreciation expense 42
Stock issued per lease agreement 87,500
Stock issued for services 10,000
CHANGES IN ASSETS AND LIABILITIES:
(Increase) in refunds receivable (1,628)
(Increase) in prepaid expenses (25,000)
Increase in accrued expenses and interest 19,133
---------
CASH FLOWS FROM OPERATING ACTIVITIES 66,502
---------
CASH FLOWS USED IN INVESTING ACTIVITIES
Acquisition of property and equipment (756)
Acquisition of mineral properties - Fish Creek (74,697)
Acquisition of mineral properties - Fish Lake (121,450)
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CASH FLOWS USED IN INVESTING ACTIVITIES (196,903)
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CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Note payable - Cerro Rico 5,963
Payments on Note payable - Cerro Rico (1,500)
Proceeds from Notes payable - Premier Financial and Marketing 165,000
---------
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES 169,463
---------
NET INCREASE IN CASH 39,062
Cash, beginning of period 0
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CASH, END OF PERIOD $ 39,062
=========
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid $ 0
=========
Income taxes paid $ 0
=========
See accompanying notes to financial statements.
F-5
NEVADA LITHIUM CORPORATION
(formerly known as Lithium Corporation)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
July 31, 2009
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nevada Lithium Corporation ("Lithium" and the "Company") was incorporated on
March 16, 2009 as Lithium Corporation under the laws of Nevada to engage in any
lawful business or activity for which corporations may be organized under the
laws of the State of Nevada. On September 10, 2009 the Company amended its
articles of incrporation to change its name to "Nevada Lithium Corporation".
Lithium intends to engage in the exploration of certain lithium interests in the
state of Nevada. The Company is in the exploration stage. These consolidated
financial statements have been prepared in accordance with U.S. generally
accepted accounting principles.
USE OF ESTIMATES
The preparation of consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amount of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
LOSS PER SHARE
Basic earnings (loss) per share is computed by dividing income (loss) available
to common shareholders by the weighted average number of common shares
outstanding during the year. The computation of diluted earnings per share
assumes the conversion, exercise or contingent issuance of securities only when
such conversion, exercise or issuance would have a dilutive effect on earnings
per share. The dilutive effect of convertible securities is reflected in diluted
earnings per share by application of the "if converted" method. In years in
which a loss is incurred, the effect of potential issuances of shares under
options and warrants would be anti-dilutive, and therefore basic and diluted
loss per share are the same
CASH AND CASH EQUIVALENTS
Cash includes cash on account, demand deposits, and short-term instruments with
maturities of three months or less.
LONG-LIVED ASSETS
Equipment is stated on the basis of historical cost less accumulated
depreciation. Depreciation is provided using the straight-line method over the
estimated useful lives of the assets. Major renewals and improvements are
capitalized, while minor replacements, maintenance and repairs are charged to
current operations.
Impairment losses are recorded on fixed assets used in operations and mineral
properties 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. There were no impairment losses in 2009.
F-6
NEVADA LITHIUM CORPORATION
(formerly known as Lithium Corporation)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
July 31, 2009
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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. Lithium records a valuation allowance to reduce
the deferred tax assets to the amount that is more likely than not to be
realized.
FINANCIAL INSTRUMENTS
Lithium's financial instruments consist of cash, accrued expenses, and loans
payable. Unless otherwise noted, it is management's opinion that the Company is
not exposed to significant interest, currency or credit risks arising from these
financial instruments. Because of the short maturity and capacity of prompt
liquidation of such assets and liabilities, the fair value of these financial
instruments approximate their carrying values, unless otherwise noted.
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.
NOTE 2 - GOING CONCERN
Lithium's financial statements are prepared using generally accepted accounting
principles applicable to a going concern, which contemplates that the Company
will continue in operation for the foreseeable future and will realize its
assets and liquidate its liabilities in the normal course of business. However,
Lithium has no current source of revenue, recurring losses, a working capital
deficit of $122,906 and a deficit accumulated during the exploration stage of
$23,545 as of July 31, 2009. These factors, among others, raise, substantial
doubt about the Company's ability to continue as a going concern. Lithium's
management plans on raising cash from public or private debt or equity
financing, on an as-needed basis and in the longer term, revenues from the
acquisition, exploration and development of mineral interests, if found.
Lithium's ability to continue as a going concern is dependent on these
additional cash financings and, ultimately, upon achieving profitable operations
through the development of mineral interests. The successful outcome of future
activities cannot be determined at this time. The accompanying financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
F-7
NEVADA LITHIUM CORPORATION
(formerly known as Lithium Corporation)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
July 31, 2009
NOTE 3 - LOANS PAYABLE
Loans payable consisted of the following at July 31, 2009:
Loan payable - Cerro Rico $ 4,463
Loans payable - Premier Financial and Marketing 165,000
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Total Loans Payable $169,463
========
The loan payable to Cerro Rico is non-interest bearing, unsecured and due on
demand.
The loans payable to Premier Financial and Marketing Co. Ltd. have a 10%
interest rate and are also due on demand. Accrued interest for both loans
totalled $3,956 as of July 31, 2009.
NOTE 4 - CAPITAL STOCK
The Company issued 350,000 shares during the period ended July 31, 2009 as per
the terms of a lease agreement. The shares were valued at a total of $87,500.
The agreement calls for a total of $350,000 worth of shares to be issued over 24
months vesting quarterly. The 350,000 shares issued during the period ended July
31, 2009 constitutes two quarters of vested shares. Additionally, 10,000,000
shares were issued for services during the year at par value.
Total shares outstanding at July 31, 2009 were 10,350,000.
NOTE 5 - PROPERTY AND EQUIPMENT
Lithium's fixed assets consist solely of computer equipment. The fixed assets
are depreciated using the straight-line method with a useful life of 3 years.
Details at July 31, 2009 were as follows:
Computer equipment $ 756
Less: Accumulated depreciation (42)
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Net Book Value $ 714
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NOTE 6 - ACCRUED EXPENSES
Accrued expenses and interest consisted of the following at July 31, 2009:
Reimbursements payable $ 8,255
Accrued audit fees 6,000
Accrued interest 3,956
Accrued accounting and legal 922
-------
Total Accrued Expenses $19,133
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F-8
NEVADA LITHIUM CORPORATION
(formerly known as Lithium Corporation)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
July 31, 2009
NOTE 7 - INCOME TAXES
For the period ended July 31, 2009, Lithium has incurred net losses and,
therefore, has no tax liability. The net deferred tax asset generated by the
loss carry-forward has been fully reserved. The cumulative net operating loss
carry-forward is $23,545 at July 31, 2009, and will begin to expire in the year
2029.
The cumulative tax effect at the expected rate of 34% of significant items
comprising our net deferred tax amount at July 31, 2009 was as follows:
Deferred tax asset attributable to:
Net operating losses carried forward $ 8,005
Valuation allowance (8,005)
-------
Total net deferred tax asset $ --
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NOTE 8 - SUBSEQUENT EVENTS
On September 10, 2009, the Company amended its articles of incorpoation and
changed its name from Lithium Coporation to Nevada Lithium Corporation.
On October 9, 2009, the Companuy's shareholders entered into a Share Exchange
Agreement with Lithium Coporation. Under the Share Exchange Agreemen, the
shareholders of the Copany exchanged 100% of their shares for shares of Lithium
Corporation.
F-9