Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment 1 to
FORM 10-K
[X] 15, ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended: December 31, 2010 OR
[ ] 15, TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 333-155059
AMERILITHIUM CORP.
(Exact name of registrant in its charter)
Nevada 61-1604254
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
Suite 200
871 Coronado Center Drive
Henderson, NV 89052
(Address of principal executive offices) (Zip Code)
Registrant's Telephone number, including area code: 702-583-7790
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common
Stock, $.001 par value
Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [x]
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or 15(d) of the Exchange act
Yes [ ] No [x]
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-T (section 232.406 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files). Yes [ ] No [ ]
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act during the preceding 12 months (or such shorter period that Dale the
registrant was required to file such reports), and (2) has been subject
to such filing requirements for at least the part 90 days.
Yes [x] No[ ]
2
Indicate by check mark if disclosure of delinquent filers in response to
Item 405 of Regulation S-K is not contained hereof, and will not be
contained, to will 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. [ ]
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [x]
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [x]
State the aggregate market value of the voting and non-voting common
equity held by non-affiliates computed by reference to the price at
which the common equity was last sold, or the average bid and asked
price of such common equity, as of the last business day of the
registrant's most recently completed second fiscal quarter. The market
value of the registrant's voting $.001 par value common stock held by
non-affiliates of the Registrant was approximately $0.00.
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date. The number
of shares outstanding of the registrant's only class of common stock, as
of March 31, 2011 was 70,494,104 shares of its $.001 par value common
stock.
No documents are incorporated into the text by reference.
Explanatory Note
This Amendment 1 to the Annual Report on Form 10-K for the year ended
December 31, 2010 of the registrant, originally filed with the
Securities and Exchange Commission on April 8, 2011 amends the original
Form 10-K in the manner described below.
Amendment 1 is being filed to expand the disclosure relating to the
registrant's business, to include a revised audit report and a revised
statement of cash flows.
For convenience, Amendment 1 includes our complete Annual Report on Form
10-K. However, no information in the original Form 10-K is being
modified or amended by Amendment 1 other than changes described above.
Further, unless indicated otherwise, Amendment 1 does not reflect events
occurring after April 8, 2011, which is the filing date of the original
Form 10-K. Accordingly, Amendment 1 should be read in conjunction with
the registrant's other filings with the SEC.
Pursuant to SEC rules, we have included currently-dated certifications
from our chief executive officer and our chief financial officer as
required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002.
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Amerilithium Corp.
Form 10-K
For the Fiscal Year Ended December 31, 2010
Table of Contents
Part I
ITEM 1. BUSINESS 5
ITEM 1A. RISK FACTORS 17
ITEM 1B. UNRESOLVED STAFF COMMENTS 17
ITEM 2. PROPERTIES 17
ITEM 3. LEGAL PROCEEDINGS 17
ITEM 4. (REMOVED AND RESERVED)
Part II
ITEM 5. MARKET FOR COMPANY'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS 18
ITEM 6. SELECTED FINANCIAL DATA 18
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 18
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK 25
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 25
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE 44
ITEM 9A. CONTROLS AND PROCEDURES 44
ITEM 9B. OTHER INFORMATION 45
Part III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS, CONTROL
PERSONS AND CORPORATE GOVERANCE; COMPLIANCE WITH
SECTION 16(a) OF THE EXCHANGE ACT 46
ITEM 11. EXECUTIVE COMPENSATION 46
ITEM 12. SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDERS MATTERS 47
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
DIRECTOR INDEPENDENCE 47
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 47
Part IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES 49
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
Certain statements in this annual report contain or may contain forward-
looking statements that are subject to known and unknown risks,
uncertainties and other factors which may cause actual results,
performance or achievements to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. These factors include, but are not limited
to, our ability to raise sufficient capital to fund our ongoing
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operations and satisfy our obligations as they become due, our ability
to implement our strategic initiatives, economic, political and market
conditions and fluctuations government and industry regulation, interest
rate risk, U.S. and global competition, and other factors. Most of
these factors are difficult to predict any forward-looking statements
that may be made herein. Readers are cautioned not to place undue
reliance on these forward-looking statements and readers should
carefully review this annual report in its entirety. Except for our
ongoing obligations to disclose material information under the Federal
securities laws, we undertake no obligation to release publicly any
revisions to any forward-looking statements, to report events or to
report the occurrence of unanticipated events. These forward-looking
statements speak only as of the date of this annual report, and you
should not rely on these statements without also considering the risks
and uncertainties associated with these statements and our business.
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PART I
ITEM 1. BUSINESS
On February 18, 2010, the articles of incorporation were amended to
change the name of the corporation from Kodiak International, Inc. to
Amerilithium Corp. and to increase the authorized common shares to
150,000,000 common shares.
The registrant is a mineral exploration company. The registrant intends
to pursue an exploration program to continue the exploration and
development of the registrant's claims described below with a view to
establish sufficient mineral-bearing reserves.
We have not earned any revenues to date. We do not anticipate earning
revenues until such time as we enter into commercial production of our
mineral properties. We are presently in the exploration stage of our
business and we can provide no assurance that commercially viable
mineral deposits exist on our mineral claims or that we will discover
commercially exploitable levels of mineral resources on our properties,
or if such deposits are discovered, that we will enter into further
substantial exploration programs. Further exploration is required
before a final evaluation as to the economic and legal feasibility is
required to determine whether our mineral claims posses commercially
exploitable mineral deposits.
Clayton Deep & Full Monty Acquisition
-------------------------------------
On April 26, 2010, the registrant entered into a property purchase
agreement with Nevada Alaska Mining Company, Inc., Robert Craig, Barbara
Anne Craig and Elizabeth Dickman. The properties include Clayton Deep
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which is comprised of 5,280 acres and Full Monty which is comprised of
5,760 acres. Pursuant to the agreement, the sellers sold a 100%
interest in certain mining claims located in the state of Nevada.
In consideration of the purchase, the registrant paid a total of
$125,000 and issued 400,000 common shares. Additionally, the registrant
granted a 2% Net Smelter Royalty to the sellers whereby 1% of the NSR is
subject to buyback at any time by the registrant for $500,000.
Clayton Deep and Full Monty properties have been physically examined by
Robert Craig, P.E. Robert Craig graduated as a mining engineer from the
University of Alaska in 1972, and is a Registered Civil Engineer.
Both Clayton Deep and Full Monty were visited by the registrant's chief
executive officer and chief geologist during the period from June 17,
2010 to June 20, 2010
Clayton Deep covers a total area of 5,280 acres (8.25 square miles) in
the southern part of Clayton Valley, Esmeralda County, Nevada, USA.
The project consists of 66 unpatented federal placer mining claims,
granted by the United States Department of the Interior, Bureau of Land
Management, Reno, Nevada.
The claims were fully recorded April 30, 2010 with the US Bureau of Land
Management, Reno, Nevada. Named CD1 thru CD66, and assigned the Serial
Numbers NMC 1022861-1022926.
In accordance with USA mining regulations, the Clayton Deep unpatented
federal placer mining claims are in good standing until September 1,
2010. Thereafter, a maintenance fee, currently of $9,240 must be paid
annually by September 1st along with a "Notice of Intent to Hold" The
fees for 2010 till 2011 have been paid in full.
The registrant is responsible for meeting the conditions above.
Full Monty covers a total area of 5,760 acres (9 square miles) in Nye
County, Nevada, USA. The claims are approximately 25 miles north of
Clayton Valley, Esmeralda County, Nevada, USA
The project consists of 72 unpatented federal placer mining claims,
granted by the United States Department of the Interior, Bureau of Land
Management, Reno, Nevada.
The claims were fully recorded April 30, 2010 with the US Bureau of Land
Management, Reno, Nevada. Named FM1 thru FM72, and assigned the Serial
Numbers NMC 1022927-1022998.
In accordance with USA mining regulations, the Full Monty unpatented
federal placer mining claims are in good standing until September 1,
2010. Thereafter, a maintenance fee, currently $10,080 must be paid
annually by September 1st along with a "Notice of Intent to Hold" The
fees for 2010 till 2011 have been paid in full.
The registrant is responsible for meeting the conditions above.
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Clayton Deep is located in the southern part of the Clayton Valley,
Nevada, USA and is approximately 45 miles from Tonopah, Nevada, USA. The
property is easily accessible by car from Reno and Las Vegas, Nevada,
USA along US Highway 95. Tonopah is also serviced by its own Airport.
Full Monty is located approximately 7 miles North West of Tonopah,
Nevada, USA. The property is easily accessible by car from both Reno and
Las Vegas, Nevada, USA along US Highway 95. Tonopah is also serviced by
its own Airport.
Clayton Deep and Full Monty Claims provide surface access and mineral
rights.
Rock formations and mineralization
Clayton Deep
The Clayton Valley-Montezuma Range is underlain by a thick body of
tuffaceous sediments, ranging from upper Miocene to Pliocene in age. The
volcanic sequence has been named the Esmeralda formation and consists of
approximately 15,000 feet of lucustrine volcanic sediments which include
poorly sorted conglomerates and sandstones, limestone, mudstones and
tuffaceous units. Fossils suggest a relatively fresh environment of
deposition.
Two major volcanic events where recorded in the Tertiary sediments. An
early Pliocene volcanic episode is represented by a single welded tuff
unit with an age of 22 million years and is exposed on the northern end
of the Silver Peak Range. The tuff was ejected prior to the block
faulting that disturbed the drainage of the Silver Peak region and
created several closed basins into which the lower part of the Esmeralda
formation was deposited.
A second period of volcanic eruptions with major faulting occurred
during the middle Pliocene and resulted in the deformation of the lower
Esmeralda sediments creating an angular unconformity. The oldest
sediments above the unconformity were assigned to the upper Esmeralda
unit and have been dated at 6.9 million years. The widespread ash fall
tuff that crops out around Clayton Valley and the Montezuma peak area
has the same age as the upper Esmeralda sediments (6.9 million years)
and has been subjected to major faulting in the form of the Clayton
Ridge and Paymaster Faults as well as numerous other unnamed faults
which created the present topography.
The uplift of the Sierra Nevada at the beginning of the Pleistocene
caused the climate of the Basin and Range Province to become generally
arid. Pluvial periods, correlative with the glacial stages in the
highlands, resulted in increased runoff and formation of temporary lakes
in the basins. The interpluvial periods were more arid and led to the
concentration of the lake waters the remnants of which are the lithium-
rich evaporities and brines.
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Full Monty
Rocks immediately underlying the Full Monty property consist of a thick
sequence of layered and interbedded Quaternary alluvium that was derived
from the metamorphic and igneous complex that comprises the surrounding
highlands. A portion of the property is occupied by a playa in which
evaporites have accumulated. The thickness and nature of the sediments
and playa deposits is currently unknown owing to the lack of exploration
in this area.
The Full Monty claim block is situated over the intersection of the
Montezuma and Big Smoky Valley structural lineaments within the
northwest-southeast trending Walker Lane structural belt. The gravity
low which characterizes the intersection of the two structural
lineaments was identified by the United States Geological Survey during
its gravity surveys of Nevada (USGS Open-File Report 80-611, 1980).
Gravity lows such as the Full Monty Gravity Low are thought to be traps
for lithium-bearing groundwater.
The Full Monty claims are located just west of the Hall Molybdenum Mine,
a Climax-type deposit associated with a large, multi-stage Cretaceous
quartz monzonite porphyry stock that was intruded into Devonian to
Triassicage metasediments. The Hall porphyry is anomalous in lithium
with a high geothermal gradient and may have been the source of lithium
in sediments and groundwater in the vicinity of the Full Monty property.
Groundwater enriched in lithium and other alkali metals may be
sequestered in one or more favorable aquifer units occupying the Full
Monty Gravity Low.
Post-Cretaceous Basin and Range faulting has tilted and displaced rocks
in the area forming the existing topographic and geomorphic features.
No exploration work has been completed. We have a preliminary
exploration plan developed for these two sites.
No exploration costs have been incurred to date.
From the production of exploration plans for both Clayton Deep and Full
Monty, we have a combined estimated cost in the region of $2,100,000.00
USD.
Water and grid-supplied electricity are available either on site or in
close proximity.
This property is currently without known reserves and the proposed
property is exploratory in nature.
Power Mining Ventures Asset Purchase Agreements
-----------------------------------------------
On March 1, 2010, the registrant entered into an asset purchase
agreement with Power Mining Ventures, Inc. Pursuant to the agreement,
Power Mining sold a 100% net revenue interest in certain mineral lease
interests for the exploration of minerals in the Athena Lithium Brine
Project located in Alberta, Canada. Additionally, Power Mining pledged
a 2% Net Smelter Return Royalty on the property to a third party. 1% of
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which can be purchased for $1,000,000. The NSR will be payable upon
commencement of commercial production, at which time a more formal
agreement concerning NSR will be entered into. The registrant issued
300,000 pre 8:1 forward split restricted common shares for the lease
interests.
The project covers a total area of 269,353.04 Hectares in Alberta,
Canada encompassing Nampa, Berwyn, Grimshaw and Peace River. The
project consists of 33 Metallic and Industrial Minerals permits, which
were granted, with a commencement date of January 13, 2010
Permit numbers are sequential from and including No: 9310010413 through
and including No: 9310010445 and were granted by the Coal and Mineral
Development Unit of the Department of Energy.
A permit grants the exclusive right to explore for Alberta-owned
metallic and industrial minerals in a specified location. Other
jurisdictions in Canada use the term "mineral claim" for this type of
agreement. A permit can be held for up to 14 years, and is not
renewable. While there is no annual rent, permit holders are required to
conduct exploration work and must report on the work every two years.
The costs to maintain the permits are as follows.
(a) during the first assessment work period, not less in the
aggregate than an amount equal to $5 for each hectare in the location;
(b) during the 2nd assessment work period, not less in the aggregate
than an amount equal to $10 for each hectare in the location;
(c) during the 3rd assessment work period, not less in the aggregate
than an amount equal to $10 for each hectare in the location;
(d) during the 4th assessment work period, not less in the aggregate
than an amount equal to $15 for each hectare in the location;
(e) during the 5th assessment work period, not less in the aggregate
than an amount equal to $15 for each hectare in the location;
(f) during the 6th assessment work period, not less in the aggregate
than an amount equal to $15 for each hectare in the location;
(g) during the 7th assessment work period, not less in the aggregate
than an amount equal to $15 for each hectare in the location.
The registrant is responsible for meeting the conditions.
During this period the holder of the permit may apply for a metallic and
industrial minerals lease.
A lease grants the exclusive right to develop and mine Alberta-owned
metallic and industrial minerals in a specified location. The term of a
lease is 15 years, and it may be renewed. Annual rent must be paid.
Royalties must be paid if any mineral production takes place on the
lease.
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Location and means of access
The Athena Lithium Brine Project is located in the Northern part of
Alberta, encompassing Nampa, Berwyn, Grimshaw and Peace River,
approximately 480 miles north of Calgary. The project is easily accessed
by Car using Alberta Provincial Highways 2, 43 and 49. Peace River is
also serviced by its own Airport.
The Metallic and Industrial Minerals permits that we hold are for
mineral rights. Any exploration causing surface disturbance (e.g.,
motorized ground equipment, line cutting, drilling) will require a
Metallic Mineral Exploration Approval pursuant to the Metallic and
Industrial Minerals Exploration Regulation, prior to exploration. This
requirement applies to public and non-public land.
Rock formations and mineralization
The large block of permits that comprise the registrant's Alberta
holdings covers much of the Devonian-age sedimentary rocks that surround
the large structural feature that is the Peace River Arch in
northwestern Alberta. Continental brines and evaporates as well as
brines associated with oil and gas pools occur in carbonate rocks of the
Leduc Formation of the Woodbend Group and in the carbonate and evaporite
deposits of the Devonian Beaverhill Lake Group. Formation waters in the
rocks contain anomalous concentrations of lithium and other alkali
metals.
To date, we have not completed any work or exploration on the property.
We are currently in the process of developing an exploration plan.
No exploration costs have been incurred to date. First stage exploration
budgets will be an integral part of the exploration plan.
Water and grid-supplied electricity are available on or in close
proximity to the property.
This property is currently without known reserves and the proposed
program is exploratory in nature.
The registrant's Alberta, Canada, property is highly prospective for
economic deposits of lithium and other metals. Formation water samples
from producing wells in the Peace River Arch area contain anomalous
concentrations of lithium as reported by the Alberta Geological Survey
(2010) and the Alberta Research Council (1995). Oilfield and
continental brines in the area contain anomalous lithium concentrations.
Evaporite deposits similar to those from which lithium is currently
produced in Clayton Valley, Nevada have also been identified and study
within the boundaries of the registrant's permit holdings.
The registrant's Alberta, Canada, Property represents approximately
269,353.04 Hectares overlying a potential extension of the Leduc
Formation and Beaverhill Lake Group strata/Swan Hills Formation. These
two formations were identified by the Alberta Geological Survey (AGS) as
containing formation waters containing potentially economic amounts of
lithium.(1)
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The AGS recommended further analysis of the formation waters for
lithium, stating that the lithium contents are similar to those of the
only US-based lithium plant in Clayton Valley, Nevada(2)
The AGS singled out formation waters containing high concentrations of
dissolved lithium where rock porosity and permeability would allow
production.
In the Leduc Formation, reef thicknesses exceed 980 feet in places
(based on 88 existing wells and 3,768 core analyses), while the
carbonate platform in the Beaverhill varies in thickness from over 490
feet in the south to roughly 160 feet in the northwest (based on 183
existing wells and 18,256 core analyses)(1)
AGS findings on both formations show concentrations exceeding 100 mg/l
with a maximum concentration of 130 mg/l occurring in the Beaverhill
Lake formation.(2)
This property has currently not been physically examined in the field by
a professional geologist or mining engineer. The Alberta claim has not
been visited by either the registrant's chief geologist or chief
executive officer.
1 Resource Estimates of Industrial Minerals in Alberta Formation
Waters. Alberta Geological Survey, Jan. 31, 1995
2 Industrial Mineral Potential of Alberta Formation Waters. Alberta
Geological Survey, 1995
On March 22, 2010, the registrant entered into an asset purchase
agreement with Power Mining Ventures, Inc. Pursuant to the agreement,
Power Mining sold a 100% net revenue interest in certain mineral lease
interests for the exploration of minerals in three lithium brine
projects located in southwestern Australia. Additionally, Power Mining
pledged a 2% Net Smelter Return Royalty on the property to a third
party. 1% of which can be purchased for $1,000,000. The NSR will be
payable upon commencement of commercial production, at which time a more
formal agreement concerning NSR will be entered into. The registrant
issued 2,400,000 restricted common shares for the lease interests.
Bare Rocks, Hoffman Hills & Normans Lake Projects cover an area of
approximately 43,000 Acres (67 square miles) in Western Australia, lose
to the town of Wagin, Australia. The projects total 55 graticule blocks.
Bare Rocks and Hoffman Hills Exploration licenses' are valid until April
18, 2016 and have a yearly rental of $1,816.00 & $1,702.50 AUD, due on
the April 18, every year. These licenses have a combined annual
commitment of $40,000.00 AUD.
Normans Lake Project Exploration license is valid until May 24, 2016 and
has a yearly rental of $2,724.00 AUD, due on the May 24, every year.
This license has an annual commitment of $24,000.00 AUD.
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The registrant currently holds exploration licenses. The holder of an
exploration license may in accordance with the license conditions,
extract or disturb up to 1000 tonnes of material from the ground,
including overburden, and the minister may approve extraction of larger
tonnages.
In order to mine economic quantities of lithium, the registrant must
obtain a mining lease. The lessee of a mining lease may work and mine
the land, take and remove minerals and do all things necessary to
effectually carry out mining operations in, on or under the land,
subject to conditions of title. The term of a mining lease is 21 years
and may be renewed for further terms. Section 67(1) of the Mining Act
gives the holder of an exploration tenement an automatic right to apply
for, and have granted, a mining lease, or mining leases, within the area
of that exploration tenement. The registrant is responsible for meeting
the conditions.
Bare Rocks, Hoffman Hills & Normans Lake Projects are located in Western
Australia, close to the town of Wagin, Australia. Wagin is accessible
by state route 120 and 107, and is approximately 165 miles from Perth by
road.
Rock formations and mineralization
The registrant's projects are situated within the South West Mineral
Field of Western Australia. This region includes the Wagin-Dumbleyung
salt lake system which has been shown to occur at the western confluence
of a very extensive surface drainage catchment area. The catchment
drains an area of extensive Archaean granite of the Yilgarn Craton where
the lithium may have originated from dissolution of lithium-bearing
minerals occurring in trace amounts in the granitic bedrock. The three
separate properties - Bear Rock, Hoffmans Hill, and Norman's Lake -
within the Wagin-Dumbleyung system exhibit similar characteristics and
anomalous lithium concentrations.
To date, we have not completed any work or exploration on the property.
No exploration costs have been incurred to date. Water and Grid-
supplied electricity are available on or in close proximity to the
property.
This property is currently without known reserves and the proposed
program is exploratory in nature.
This property has currently not been physically examined in the field by
a professional geologist or mining engineer. Bare Rocks, Hoffman Hills
& Normans Lake Projects have not been visited by the registrant's chief
executive officer at this time.
Neither the registrant nor a professional geologist or mining engineer
represented by the registrant have visited the Australia or Alberta
properties covered by the mineral leases described above. There can be
no assurance that the lease interests purchased pursuant to the asset
purchase agreements are as represented nor that the properties will
result in significant revenues.
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GeoXplor Corporation
--------------------
On March 12, 2010, the registrant entered into an Asset Purchase
Agreement with GeoXplor Corporation. GeoXplor has a 100% interest in
and to approximately 81 claims comprising nearly 6,000 acres in the
immediate Clayton Valley area, nearby the Chemetall Foot lithium brine
plant at Silver Peak, Nevada.
Pursuant to the Asset Purchase Agreement, the registrant agreed to
purchase all of GeoXplor's rights, title and interest, if any, in and to
the property described above. The total purchase price was $1,678,000.
The registrant will provide a work commitment for the property of up to
USD $1,000,000 over three years as follows:
- USD $150,000 within one year of the closing of this definitive
Agreement,
- USD $250,000 within two years of the closing of this definitive
Agreement, and
- USD $600,000 within three years of the closing of this definitive
Agreement.
The registrant will grant GeoXplor 750,000 post-split shares of the
registrant as follows:
- 250,000 shares at closing of this definitive Agreement,
- 250,000 shares within six months of the closing of this
definitive Agreement, and
- 250,000 shares within twelve months of the closing of this
definitive Agreement.
It is also recognized that these shares may be issued in its entirety to
an escrow agent upon closing, and that the shares would be released in
three equal amounts at six months, twelve months and eighteen months of
the closing of this definitive Agreement, respectively.
GeoXplor will retain a 3% Net Smelter Returns Royalty on the property as
defined in Schedule B. The registrant is hereby granted an option to
purchase up to a total of 2% of NSR by paying GeoXplor USD $1,000,000
for each 1% (1/3) at anytime. GeoXplor shall be named Operator, to
perform and conduct all necessary exploration on the property to
industry standards.
Paymaster
The registrant's Paymaster property has been physically examined in the
field by Robert Allender, vice president of exploration and chief
geologist, and James Hasbrouck of Hasbrouck Geophysics, Inc. 2473 North
Leah Lane Prescott, AZ 86301 USA.
The Paymaster Property has been visited by the registrant's chief
executive officer during the period June 17, 2010 and June 20, 2010, and
the registrant's vice president of exploration and chief geologist,
during the periods April 22-27, 2010, June 17-20, 2010, July 6-10, 2010,
September 29-30, 2010, November 30-December 3, 2010, March 13-24, 2011,
March 28-April 1, 2011 and May 10-13, 2011.
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Paymaster covers a total area of 5,880 acres (9.19 square miles)
Situated within the Paymaster Canyon, located north of the Clayton
Valley playa and east of Alkali Flats playa. Clayton Valley, Esmeralda
County, Nevada, USA.
The project consists of 78 unpatented federal placer claims, granted by
the United States Department of the Interior, Bureau of Land Management.
The claims were fully recorded with the US Bureau of Land Management.
Named PM13 thru PM90, and assigned the Serial Numbers NMC 1018759-
1018836.
In accordance with USA mining regulations, the Paymaster unpatented
placer mining claims are in good standing until September 1, 2010.
Thereafter, a maintenance fee of $140 must be paid annually by September
1st along with a "Notice of Intent to Hold" The fees for 2010 till 2011
have been paid in full.
The registrant responsible for meeting the conditions above.
Paymaster is located within the Paymaster Canyon, in the northern part
of Clayton Valley, Nevada, USA and is approximately 20 miles from
Tonopah, Nevada, USA. The property is easily accessed by car from both
Reno and Las Vegas, Nevada, USA, along US Highway 95 to Goldfield,
Nevada, USA, then 15 miles west on the Silver Peak County Road to the
junction of the Pearl Hot Springs road, which forks into the Paymaster
Canyon road that traverses the entire length of the canyon.
Paymaster claims provide surface access and mineral rights.
Rock formations and mineralization
Paymaster Project
The Clayton Valley-Montezuma Range is underlain by a thick body of
tuffaceous sediments, ranging from upper Miocene to Pliocene in age. The
volcanic sequence has been named the Esmeralda formation and consists of
approximately 15,000 feet of lucustrine volcanic sediments which include
poorly sorted conglomerates and sandstones, limestone, mudstones and
tuffaceous units. Fossils suggest a relatively fresh environment of
deposition.
Two major volcanic events where recorded in the Tertiary sediments. An
early Pliocene volcanic episode is represented by a single welded tuff
unit with an age of 22 million years and is exposed on the northern end
of the Silver Peak Range. The tuff was ejected prior to the block
faulting that disturbed the drainage of the Silver Peak region and
created several closed basins into which the lower part of the Esmeralda
formation was deposited.
A second period of volcanic eruptions with major faulting occurred
during the middle Pliocene and resulted in the deformation of the lower
Esmeralda sediments creating an angular unconformity. The oldest
sediments above the unconformity were assigned to the upper Esmeralda
unit and have been dated at 6.9 million years. The widespread ash fall
15
tuff that crops out around Clayton Valley and the Montezuma peak area
has the same age as the upper Esmeralda sediments (6.9 million years)
and has been subjected to major faulting in the form of the Clayton
Ridge and Paymaster Faults as well as numerous other unnamed faults
which created the present topography.
The uplift of the Sierra Nevada at the beginning of the Pleistocene
caused the climate of the Basin and Range Province to become generally
arid. Pluvial periods, correlative with the glacial stages in the
highlands, resulted in increased runoff and formation of temporary lakes
in the basins. The interpluvial periods were more arid and led to the
concentration of the lake waters the remnants of which are the lithium-
rich evaporities and brines.
To date we have completed the following work on the property.
Geophysics - Gravity Survey
Geophysics - CSAMT/MT Survey (Controlled Source Audio Magnetotellurics/
Magnetotellurics)
Drilling - Initial 3 Holes of the 8 Hole drilling program
Paymaster Canyon
Geophysics - Gravity $ 65,000 Paid
Geophysics - CSAMT/MT 90,000 Paid
Phase Ia Drilling (3 holes) 165,042 Paid
Phase Ib Drilling (5 holes) 375,000
Analytical - 1 31,000
Mapping - 2 50,000
Borehole Geophysics - 3 75,000
Preliminary Engineering - 4 100,000
Metallurgical testing - 5 25,000
--------
Total $976,042
Estimated Remaining $656,000
Notes:
1. geologic formation and water sample analysis by Method 6010b
2. mapping - GIS base map, exploration data overlays, topo contour
mapping, isopach maps, groundwater maps, etc.
3. borehole geophysics - EM resistivity, gamma, etc.
4. process engineering, preliminary plant design parameter definition,
design testing protocols, etc.
5. metallurgical testing for process definition and preliminary plant
design considerations, etc
Drilling estimated based on contractor quotes at US$75 per foot.
Drillholes estimated total depth of 1000 feet each.
Water and Grid-supplied electricity are available within the Clayton
Valley.
This property is currently without known reserves and the proposed
program is exploratory in nature.
16
Financing Agreement
-------------------
On March 28, 2010, the registrant entered into a financing agreement
with Sunrise Energy Investment Ltd. The registrant will sell up to
$10,000,000 of its common stock. The common shares will also have an
attached warrant to purchase future shares for $1.60. There were no
transactions during the first quarter of 2010.
As of December 31, 2010, the registrant has drawn $1,200,000 and has
issued 1,218,891 shares to Sunrise Energy Investment.
Consulting Agreement
-------------------
On March 12, 2010, the registrant entered into a consulting agreement
with Robert Allender, Jr. to provide geological and mineral evaluation
consulting for $100,000 and 100,000 shares of stock in which the
registrant will pay $40,000 on signing and six equal installments of
$10,000 monthly. As of December 31, 2010, $100,000 of this agreement
has been paid and the 100,000 shares have been issued.
On October 8, 2010, the registrant renewed its consultancy agreement for
an additional 24 months at $5,000 per month. The registrant will also
issue 250,000 shares of common stock every six months in advance.
Competition
-----------
Metal prices may be unstable. The mining industry in general is
intensely competitive and there is no assurance that, even if commercial
quantities of a mineral resource are discovered, a profitable market
will exist for the sale of it. Factors beyond the control of Kodiak may
affect the marketability of any substances discovered. The price of
various metals has experienced significant movements over short periods
of time, and is affected by numerous factors beyond the control of
Kodiak, including international economic and political trends,
expectations of inflation, currency exchange fluctuations, interest
rates and global or regional consumption patterns, speculative
activities and increased production due to improved mining and
production methods. The supply of and demand for metals are affected by
various factors, including political events, economic conditions and
production costs in major producing regions. There can be no assurance
that the price of any metal will be such that Kodiak's properties can be
mined at a profit.
Government Regulations
----------------------
Domestic mineral exploration operations are subject to extensive federal
regulation and, with respect to federal leases, to interruption or
termination by governmental authorities on account of environmental and
other considerations. The trend towards stricter standards in
environmental legislation and regulation could increase our costs and
others in the industry. Mineral lessees are subject to liability for
the costs of clean-up of pollution resulting from a lessee's operations,
and may also be subject to liability for pollution damages. We intend
17
to obtain insurance against costs of clean-up operations, but we have no
such insurance at this time and it is unlikely that we will be able to
fully insure against all such risks.
A serious incident of pollution may also result in the Department of the
Interior requiring lessees under federal leases to suspend or cease
operation in the affected area.
Employees
---------
We have no employees. For the foreseeable future, we intend to use
the services of independent consultants and contractors to perform
various professional services, including reservoir engineering, land,
legal, environmental and tax services.
ITEM 1A. RISK FACTORS
Not applicable to a smaller reporting company.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 2. PROPERTIES
We currently have an office located at Suite 200, 871 Coronado Center
Drive, Henderson, NV 89052. Telephone 702-583-7790. Our monthly lease
payment is $642 per month.
ITEM 3. LEGAL PROCEEDINGS.
The registrant is not involved in any legal proceedings at this date.
ITEM 4. REMOVED AND RESERVED
18
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Item 5(a)
a) Market Information. The registrant began trading publicly on the
NASD Over the Counter Bulletin Board on March 12, 2010 under the symbol
"AMEL".
b) Holders. At March 31, 2011, there were approximately 37
shareholders of the registrant.
c) Dividends. Holders of the registrant's common stock are entitled to
receive such dividends as may be declared by its board of directors. No
dividends on the registrant's common stock have ever been paid, and the
registrant does not anticipate that dividends will be paid on its common
stock in the foreseeable future.
d) Securities authorized for issuance under equity compensation plans.
No securities are authorized for issuance by the registrant under equity
compensation plans.
e) Performance graph. Not applicable.
f) Sale of unregistered securities. None.
Item 5(b) Use of Proceeds. Not applicable.
Item 5(c) Purchases of Equity Securities by the issuer and
affiliated purchasers. None.
ITEM 6. SELECTED FINANCIAL DATA
Not applicable to a smaller reporting company.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Trends and Uncertainties
------------------------
The registrant is in the exploration stage, has not commenced material
operations and has sustained a loss to date. The demand for our
products would be negatively affected by adverse weather conditions,
impurities in the minerals and volume limitations.
19
Investing Activities
--------------------
For the year ended December 31, 2010, the registrant purchased fixed
assets of $6,892 and purchased mining rights of $7,111,000. As a
result, the registrant had net cash flows from investing activities of
$7,117,892. For the year ended December 31, 2009, the registrant did
not pursue any investing activities.
Financing Activities
--------------------
For the year ended December 31, 2010, the registrant received proceeds
from the sale of common stock of $8,347,371 and stock subscription
payable of $10,000. Additionally, registrant received proceeds of notes
payable of $40,000. As a result, registrant had net cash flows from
financing activities of $8,377,371 for the year ended December 31, 2010.
For the year ended December 31, 2009, the registrant received proceeds
from the sale of common stock of $50,000. Additionally, registrant had
advances from shareholder of $10,000. As a result, registrant had net
cash flows from financing activities of $60,000 for the year ended
December 31, 2009.
Results of Operations
---------------------
We are an exploration stage company and have not yet commenced material
operations.
For the years ended December 31, 2010 and 2009, the registrant paid
salaries of $208,500 and $19,500, respectively. Depreciation and
amortization were $887 and $0, respectively. For the year ended
December 31, 2010 and 2009, the registrant paid legal and professional
fees of $419,427 and $57,380, respectively. The increase in legal and
professional fees was commencement of operations and the costs
associated with being a reporting company under the Securities Exchange
Act of 1934. Mineral property expenditures in 2010 and 2009 were
$287,923 and $0, respectively. Other general and administrative
expenses increased from $5,008 in 2009 to $25,841 in 2010 due to
increased operations.
Going Concern
-------------
At December 31, 2010, we were engaged in a business and had suffered
losses from exploration stage activities to date. In addition, we have
minimal operating funds. Although management is currently attempting to
identify business opportunities and is seeking additional sources of
equity or debt financing, there is no assurance these activities will be
successful. Accordingly, we must rely on our officers to perform
essential functions without compensation until a business operation can
be commenced. No amounts have been recorded in the accompanying
financial statements for the value of officers' services, as it is not
considered material. These factors raise doubt about the ability of
registrant to continue as a going concern.
20
Plan of Operation
-----------------
Our ability to continue in existence is dependent on our ability to
commence full scale operations.
Clayton Deep and Full Monty properties
The Full Monty property is of interest due to two significant geologic
indicators for lithium potential. The first indicator is the presence
of a deep bedrock surface evidenced by the gravity low discovered by the
USGS. This feature corresponds with the presence of a thick sequence of
sedimentary rocks favorable as a trap for lithium-bearing groundwater.
The second indicator of interest is the proximity of a potential lithium
source, namely the igneous intrusive body at the nearby Hall Mine.
Estimated Costs
Clayton Deep Full Monty
Geophysics - Gravity $ 85,000 $ 85,000
Geophysics - CSAMT/MT 90 000 90,000
Phase Ia Drilling (3 holes) 225,000 225,000
Phase Ib Drilling (5 holes) 375,000 375,000
Analytical - 1 46,000 46,000
Mapping - 2 50,000 50,000
Borehole Geophysics - 3 75,000 75,000
Preliminary Engineering - 4 100,000 100,000
Metallurgical testing - 5 25,000 25,000
---------- ----------
Total $1,071,000 $1,071,000
Notes:
1. geologic formation and water sample analysis by Method 6010b
2. mapping - GIS base map, exploration data overlays, topo contour
mapping, isopach maps, groundwater maps, etc.
3. borehole geophysics - EM resistivity, gamma, etc.
4. process engineering, preliminary plant design parameter definition,
design testing protocols, etc.
5. metallurgical testing for process definition and preliminary plant
design considerations, etc
Drilling estimated based on contractor qoutes at US$75 per foot.
Drillholes estimated total depth of 1000 feet each.
Paymaster
Paymaster Canyon area is one of a group of intermountain structures in
west-central Nevada and is surrounded by Paymaster Ridge on the east and
the Weepah Hills to the west, Clayton Valley and the Silver Peak
Range to the south. It has a playa floor of about 10 square miles
that receives surface drainage from an area of about 50 square miles.
Two large eastward-trending faults spaced a little over half a mile
apart and comprise what is believed to be part of a large conduit for
lithium enrichment from Alkali Flats and Big Smokey Valley into
the lower Clayton Valley playa.
21
Geophysics - Gravity $ 65,000 Paid
Geophysics - CSAMT/MT 90,000 Paid
Phase Ia Drilling (3 holes) 65,042 Paid
Phase Ib Drilling (5 holes) 375,000
Analytical - 1 31,000
Mapping - 2 50,000
Borehole Geophysics - 3 75,000
Preliminary Engineering - 4 100,000
Metallurgical testing - 5 25,000
--------
Total $976,042
Estimated Remaining $656,000
Initial Exploration has consisted Geophysics, Drilling and Analytical
Notes:
1. geologic formation and water sample analysis by Method 6010b
2. mapping - GIS base map, exploration data overlays, topo contour
mapping, isopach maps, groundwater maps, etc.
3. borehole geophysics - EM resistivity, gamma, etc.
4. process engineering, preliminary plant design parameter definition,
design testing protocols, etc.
5. metallurgical testing for process definition and preliminary plant
design considerations, etc
Drilling estimated based on contractor quotes at US$75 per foot.
Drillholes estimated total depth of 1000 feet each.
Geophysics - Gravity: Gravity survey techniques yield information about
the depth and topography of the buried bedrock surface. In the context
of lithium exploration this method yields information about possible
stratigraphic traps for lithium-bearing groundwater. It is the least
expensive of the three preferred geophysical techniques used in lithium
brine exploration the other two being electromagnetic surveys and
seismic testing. Gravity surveying is used to define target areas for
further exploration and more detailed testing.
Geophysics - CSAMT/MT: The Controlled Source Audio Magnetotellurics/
Magnetotellurics geophysical survey method is used to map geologic
stratigraphy and structure, identify electrical conductors
representative of lithium-bearing brines, and provide more detailed
information for the selection and design of additional geophysical
surveys and drilling program specifications. This method yields greater
detail than gravity surveying and is employed to identify targets for
drilling and sampling programs.
Drilling - Drilling, as opposed to the non-intrusive geophysical
techniques, provides physical evidence from which to draw conclusions
about the deposit. Drilling methods vary but all provide samples of
geologic materials penetrated by the drill and allow for the sampling
and analysis of formation waters. In the case of sedimentary rock
sequences, like the registrant's Nevada properties, drilling techniques
are critical. The recovery of cuttings and water samples for analysis
are the primary goal of the drilling and must be accomplished with a
22
minimum of formation disturbance and contamination of samples from
specific intervals by overlying intervals. Air and mud rotary drilling
techniques allow for the collection of water and rock samples from
discreet depth intervals within the well. Drilling also provides the
conduit through which the testing of hydrogeologic characteristics of an
aquifer can be accomplished. Once exploration and aquifer testing are
complete, it is possible that drillholes can be converted to production
tools for the extraction of lithium-bearing brines.
QA/QC: The reliability of the analytical testing results are measured
using the results of the quality control samples inserted in the process
by the registrant. The registrant inserts field duplicates into the
sample process to test the accuracy and precision of laboratory testing.
One duplicate may be sent along with the original and the other may be
sent to the secondary laboratory. The registrant also inserts trip
blanks into each sample lot or shipment to test for contamination. Trip
blanks are prepared in the field by the onsite geologist using deionized
water or coarse silica sand. Duplicate analyses are performed by a
secondary or referee laboratory. Control samples are inserted into the
sample sequence at a frequency of 15% of the total sample number.
Statistical analysis of the laboratory results and the QA/QC sample
analysis is completed to insure sample integrity.
The program will be funded from the equity line or any additional
sources of finance that we may obtain in the future. We have currently
not finalized a start date for exploration on this project as our
current focus remains with additional properties.
All work will be supervised by Robert Allender, vice president of
exploration and chief geologist. Robert Allender is a graduate in B.S
Geology from Colorado State University and a Postgraduate in Engineering
Economics from the Colorado School of Mines.
We have not currently entered into an agreement with any parties to
undertake the exploration programs on any property other than Paymaster
All additional exploration will be completed using the same criteria as
used for the Paymaster exploration.
Based on information provided by the BLM website, the BLM regulates
surface management on mining activity conducted on lands administered by
BLM. Other federal agencies such as U.S. Forest Service have different
regulations regarding surface management; if a claim is located within
another agency's administrative jurisdiction, the claimant needs to
check with that agency for proper procedures.
All mining activities require reasonable reclamation. The lowest level
of mining activity, "casual use," is designed for the miner or weekend
prospector who creates only negligible surface disturbance (for example,
activities that do not involve the use of earth-moving equipment or
explosives may be considered casual use). Dredging at any level of use
may require a permit from the appropriate state agency administering
water quality.
23
The second level of activity, where surface disturbance is 5 acres or
less per year, requires a notice advising BLM of the anticipated work 15
days prior to commencement. This notice needs to be filed with the
appropriate field office No approval is needed although bonding is
required. State agencies need to be notified to assure that their
requirements are met.
For operations involving more than 5 acres, a detailed plan of operation
must be filed with the appropriate BLM field office. Bonding is required
to ensure proper reclamation.
Our exploration operations involve more than 5 acres and we are required
to file a 43 CFR 3809 - Surface Management Notice. The Bureau of Land
management, Tonopah, Nevada, USA on November 16, 2010, granted the
filing for the registrant's Paymaster Drilling program.
Power Mining Venture - Australia and Alberta
We do not have a current exploration plan as our focus is currently on
our northern American properties.
Recent Accounting Pronouncements
--------------------------------
In May 2008, the Accounting Standards Codification issued 944.20.15,
"Accounting for Financial Guarantee Insurance Contracts-and
interpretation of Accounting Standards Codification 944.20.05".
Accounting Standards Codification 944.20.15 clarifies how Accounting
Standards Codification 944.20.05 applies to financial guarantee
insurance contracts, including the recognition and measurement of
premium revenue and claims liabilities. This statement also requires
expanded disclosures about financial guarantee insurance contracts.
Accounting Standards Codification 944.20.15 is effective for fiscal
years beginning on or after December 15, 2008, and interim periods
within those years. Accounting Standards Codification 944.20.15 has no
effect on the registrant's financial position, statements of operations,
or cash flows at this time.
In March 2008, the Accounting Standards Codification issued 815.10.15,
Disclosures about Derivative Instruments and Hedging Activities-an
amendment of Accounting Standards Codification 815.10.05. This standard
requires companies to provide enhanced disclosures about (a) how and why
an entity uses derivative instruments, (b) how derivative instruments
and related hedged items are accounted for under 815.10.15 and its
related interpretations, and (c) how derivative instruments and related
hedged items affect an entity's financial position, financial
performance, and cash flows. This Statement is effective for financial
statements issued for fiscal years and interim periods beginning after
November 15, 2008, with early application encouraged. The registrant
has not yet adopted the provisions of Accounting Standards Codification
815.10.15, but does not expect it to have a material impact on its
consolidated financial position, results of operations or cash flows.
In December 2007, the Accounting Standards Codification 815.10.65,
Noncontrolling Interests in Consolidated Financial Statements-an
amendment of Accounting Standards Codification 810.10.65. This
24
statement amends Accounting Standards Codification 810.10.65 to
establish accounting and reporting standards for the noncontrolling
interest in a subsidiary and for the deconsolidation of a subsidiary. It
clarifies that a noncontrolling interest in a subsidiary is an ownership
interest in the consolidated entity that should be reported as equity in
the consolidated financial statements. Before this statement was issued,
limited guidance existed for reporting noncontrolling interests. As a
result, considerable diversity in practice existed. So-called minority
interests were reported in the consolidated statement of financial
position as liabilities or in the mezzanine section between liabilities
and equity. This statement improves comparability by eliminating that
diversity. This statement is effective for fiscal years, and interim
periods within those fiscal years, beginning on or after December 15,
2008 (that is, January 1, 2009, for entities with calendar year-ends).
Earlier adoption is prohibited. The effective date of this statement is
the same as that of the related Accounting Standards Codification
805.10.10 (revised 2007). The registrant will adopt this Statement
beginning March 1, 2009. It is not believed that this will have an
impact on the registrant's consolidated financial position, results of
operations or cash flows.
In December 2007, the Accounting Standards Codification, issued
Accounting Standards Codification 805.10.10 (revised 2007), Business
Combinations.' This Statement establishes principles and requirements
for how the acquirer: (a) recognizes and measures in its financial
statements the identifiable assets acquired, the liabilities assumed,
and any noncontrolling interest in the acquiree; (b) recognizes and
measures the goodwill acquired in the business combination or a gain
from a bargain purchase; and (c) determines what information to disclose
to enable users of the financial statements to evaluate the nature and
financial effects of the business combination. This statement applies
prospectively to business combinations for which the acquisition date is
on or after the beginning of the first annual reporting period beginning
on or after December 15, 2008. An entity may not apply it before that
date. The effective date of this statement is the same as that of the
related Accounting Standards Codification 810.10.65, Noncontrolling
Interests in Consolidated Financial Statements. The registrant adopted
this statement beginning March 1, 2009. It is not believed that this
will have an impact on the registrant's consolidated financial position,
results of operations or cash flows.
In February 2007, the Accounting Standards Codification, issued
Accounting Standards Codification 810.10.65, The Fair Value Option for
Financial Assets and Liabilities-Including an Amendment of Accounting
Standards Codification 320.10.05. This standard permits an entity to
choose to measure many financial instruments and certain other items at
fair value. This option is available to all entities.
Most of the provisions in Accounting Standards Codification 810.10.65
are elective; however, an amendment to Accounting Standards Codification
320.10.05 Accounting for Certain Investments in Debt and Equity
Securities applies to all entities with available for sale or trading
securities. Some requirements apply differently to entities that do not
report net income. Accounting Standards Codification 810.10.65 is
25
effective as of the beginning of an entities first fiscal year that
begins after November 15, 2007. Early adoption is permitted as of the
beginning of the previous fiscal year provided that the entity makes
that choice in the first 120 days of that fiscal year and also elects to
apply the provisions of ASC 810 Fair Value Measurements. The registrant
will adopt Accounting Standards Codification 810 beginning March 1, 2008
and is currently evaluating the potential impact the adoption of this
pronouncement will have on its consolidated financial statements.
In September 2006, the Accounting Standards Codification issued
Accounting Standards Codification 820, Fair Value Measurements. This
statement defines fair value, establishes a framework for measuring fair
value in generally accepted accounting principles, and expands
disclosures about fair value measurements. This statement applies under
other accounting pronouncements that require or permit fair value
measurements, the Board having previously concluded in those accounting
pronouncements that fair value is the relevant measurement attribute.
Accordingly, this statement does not require any new fair value
measurements. However, for some entities, the application of this
statement will change current practice. This statement is effective for
financial statements issued for fiscal years beginning after November
15, 2007, and interim periods within those fiscal years. Earlier
application is encouraged, provided that the reporting entity has not
yet issued financial statements for that fiscal year, including
financial statements for an interim period within that fiscal year. The
registrant will adopt this statement March 1, 2008, and it is not
believed that this will have an impact on the registrant's consolidated
financial position, results of operations or cash flows.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Amerilithium Corp.
Index to the Financial Statements
Report of Independent Registered Public Accounting Firm 26
Financial Statements of Amerilithium Corp.:
Balance Sheets:
December 31, 2010 and 2009 27
Statements of Operations For the Years
Ended December 31, 2010 and 2009 29
Statements of Stockholders' Deficit For
the Years Ended December 31, 2010 and 2009 30
Statements of Cash Flows For the Years Ended
December 31, 2010 and 2009 32
Notes to Financial Statements 34
26
THOMAS J. HARRIS
CERTIFIED PUBLIC ACCOUNTANT
3901 STONE WAY N., SUITE 202
SEATTLE, WA 98103
206.547.6050
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors
AMERILITHIUM CORP.
(FORMERLY KODIAK INTERNATIONAL, INC.)
Las Vegas, Nevada
We have audited the balance sheets of AMERILITHIUM CORP. (FORMERLY
KODIAK INTERNATIONAL INC.) an exploration stage company, as at December
31, 2010 and 2009, the statements of earnings and deficit, stockholders'
deficiency and cash flows for the years then ended and the period from
inception February 2, 2004 to December 31, 2010. 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 audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards
require that I plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. 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
AMERILITHIUM CORP. (FORMERLY KODIAK INTERNATIONAL INC.) a development
stage company, as of December 31, 2010 and 2009 and the results of its
operations and its cash flows for the years then ended, including the
period from inception February 2, 2004 to December 31, 2010, in
conformity with generally accepted accounting principles 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,
the company's significant operating losses, working capital deficiency
and need for new capital raise substantial doubt about its ability to
continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/Thomas J Harris, CPA
-----------------------------------
Thomas J Harris, CPA
Seattle, WA
April 1, 2011
27
AMERILITHIUM CORP.
Formerly Kodiak International Inc.
(An Exploration Stage Enterprise)
Balance Sheet
----------------------------------
(Audited) (Audited)
December 31, December 31,
2010 2009
---------- --------
ASSETS
Current assets:
Cash $ 230,554 $ 591
Accounts receivable - -
Inventory - -
---------- --------
Total current assets 230,554 591
---------- --------
Fixed Assets
Furniture and Equipment - -
Computer Equipment 6,892
Leasehold Improvements - -
---------- --------
Total Fixed Assets 6,892 -
Less Accumulated Depreciation (887)
---------- --------
Net Fixed Assets 6,005 -
---------- --------
Other Assets
Mining Claims 7,111,000 -
Goodwill - -
---------- --------
Total Other Assets 7,111,000 -
------- --------
Total assets $7,347,559 $ 591
========== ========
LIABILITIES
Current liabilities:
Accounts payable and accrued expenses $ 17,303 $ -
Accrued taxes 18,360
Advances from shareholder - 10,000
Notes payable 40,000 -
---------- --------
Total current liabilities 75,663 10,000
---------- --------
Total liabilities 75,663 10,000
---------- --------
28
STOCKHOLDERS' EQUITY
Common stock, $.0001 par value,
150,000,000 authorized, 67,277,224
and 6,800,000 shares
issued and outstanding 6,728 6,800
Capital in excess of par value 8,476,643 129,200
Deficit accumulated during the
development stage (1,211,475) (145,409)
---------- --------
Total stockholders' equity 7,271,896 (9,409)
---------- --------
Total liabilities and
stockholders' deficit $7,347,559 $ 591
========== ========
29
AMERILITHIUM CORP.
Formerly Kodiak International Inc.
(An Exploration Stage Enterprise)
Statements of Operations
----------------------------------
Cumulative,
Inception,
February 2,
Year Ended Year Ended 2004 Through
December 31, December 31, December 31,
2010 2009 2010
---------- -------- ----------
Sales $ - $ - $ -
---------- -------- ----------
Cost of Sales - - -
General and administrative expenses:
Salaries 208,500 19,500 271,257
Depreciation and Amortization 887 887
Mineral Property Expenditures 287,923 287,923
Legal and professional fees 419,427 57,380 490,045
Marketing and Advertising 74,116 75,287
Insurance 18,163 18,163
Dues and Subscriptions 11,824 13,469
Taxes 18,360 18,360
Other general and administrative 25,841 5,008 26,828
----------- -------- -----------
Total operating expenses 1,065,041 81,888 1,202,219
----------- -------- -----------
(Loss) from operations (1,065,041) (81,888) (1,202,219)
----------- -------- -----------
Other income (expense):
Interest Income -
Currency Losses - (877) (8,231)
Interest (expense) (1,025) (1,025)
----------- -------- -----------
(Loss) before taxes (1,066,066) (82,765) (1,211,475)
----------- -------- -----------
Provision (credit) for
taxes on income - -
----------- -------- -----------
Net (loss) $(1,066,066) $(82,765) $(1,211,475)
=========== ======== ===========
Basic earnings (loss)
per common share $ (0.0174) $ (0.0015)
=========== ===========
Weighted average number of
shares outstanding 61,338,612 54,115,072
=========== ===========
**** Prior year weighted shares have been adjusted for 8:1 forward stock
split.
30
AMERILITHIUM CORP.
Formerly Kodiak International Inc.
(An Exploration Stage Enterprise)
Statements of Stockholders' Deficit
-----------------------------------
Deficit
Accumulated
Capital in During the
Common Stock Excess of Exploration
Shares Amount Par Value Stage Total
---------- ------ ---------- ----------- ----------
Inception, February 2, 2004
through December 31,
2005 (Audited):
Shares Issued 4,740,000 $4,740 $ 14,060 - $ 18,800
Net (loss) - - - (104) (104)
---------- ------ ---------- ----------- ----------
Balances, December 31, 2005 4,740,000 4,740 14,060 (104) 18,696
Year Ended December 31,
2006 (Audited)
Shares Issued 360,000 360 6,840 - 7,200
Net (loss) - - - (20,020) (20,020)
---------- ------ ---------- ----------- ----------
Balances, December 31, 2006 5,100,000 5,100 20,900 (20,124) 5,876
Year Ended December 31,
2007 (Audited)
Shares issued - - - - -
Net (loss) - - - (981) (981)
---------- ------ ---------- ----------- ----------
Balances, December 31,
2007 (Audited) 5,100,000 5,100 20,900 (21,105) 4,895
Shares Issued,
August 22, 2008 1,500,000 1,500 58,500 - 60,000
Net (loss) - - - (41,539) (41,539)
---------- ------ ---------- ----------- ----------
Balances, December 31,
2008 (Audited) 6,600,000 6,600 79,400 (62,644) 23,356
Shares Issued,
November 18, 2009 200,000 200 49,800 50,000
Net (loss) - - - (82,765) (82,765)
---------- ------ ---------- ----------- ----------
Balances, December 31,
2009 (Audited) 6,800,000 6,800 129,200 (145,409) (9,409)
---------- ------ ---------- ----------- ----------
Forward Stock Split 8:1 54,400,000 (1,360) 1,360 - -
Stock issued for purchase
of mining claims 5,950,000 595 6,809,405 - 6,810,000
Stock issued for
financing agreement 1,218,891 122 1,045,649 - 1,045,771
Stock issued for
loan conversion 4,800,000 480 29,520 - 30,000
31
Stock issued for
advisory services 175,000 18 80,582 - 80,600
Stock issued for
consultancy agreement 350,000 35 184,965 - 185,000
Stock issued for finders
fee agreement 300,000 30 95,970 - 96,000
Stock issued with warrant 83,333 8 99,992 - 100,000
Net (loss) (1,066,066) (1,066,066)
---------- ------ ---------- ----------- ----------
Balances, December 31,
2010 (Audited) 67,277,224 $6,728 $8,476,643 $(1,211,475) $7,271,896
========== ====== ========== =========== ==========
32
AMERILITHIUM CORP.
Formerly Kodiak International Inc.
(An Exploration Stage Enterprise)
Statements of Cash Flows
Cumulative,
Inception
February 2,
Year Ended Year Ended 2004 Through
December 31, December 31, December 31,
2010 2009 2010
----------- -------- -----------
Cash flows from
operating activities:
Net (loss) $(1,066,066) $(82,765) $(1,211,475)
Adjustments to reconcile
net (loss) to cash provided
(used) by developmental
stage activities:
Depreciation and Amortization 887 - 887
Change in current assets and liabilities:
Inventory - - -
Deposits - - -
Accounts payable and
accrued expenses 35,663 - 35,663
----------- -------- -----------
Net cash flows from operating
activities (1,029,516) (82,765) (1,174,925)
----------- -------- -----------
Cash flows from investing activities:
Purchase of fixed assets (6,892) - (6,892)
Purchase of Mining Rights (7,111,000)* (7,111,000)
----------- -------- -----------
Net cash flows from investing
activities (7,117,892) - (7,117,892)
----------- -------- -----------
Cash flows from financing activities:
Proceeds from sale of
common stock 8,347,371 50,000 8,483,371
Checks in excess of deposits
Stock subscription payable - - -
Advances from shareholder (10,000) 10,000 -
Proceeds/(Payment) of
notes payable 40,000 - 40,000
----------- -------- -----------
Net cash flows from financing
activities 8,377,371 60,000 8,523,371
----------- -------- -----------
Net cash flows 229,963 (22,765) 230,554
Cash and equivalents,
beginning of period 591 23,356 -
----------- -------- -----------
Cash and equivalents,
end of period $ 230,554 $ 591 $ 230,554
=========== ======== ===========
33
Supplemental cash flow disclosures:
Cash paid for interest $ (1,025) $ - $ -
Cash paid for income taxes $ - $ - $ -
*Cash $ 440,500
Notes 185,000
Stock 6,485,500
==========
Total $7,111,000
==========
34
AMERILITHIUM CORP.
Formerly Kodiak International, Inc.
(An exploration stage enterprise)
Notes to Financial Statements
December 31, 2010
Note 1 - Organization and summary of significant accounting policies:
Following is a summary of the Company's organization and significant
accounting policies:
Organization and nature of business -Amerilithium Corp formerly Kodiak
International Inc., ("We," or "the Company") is a Nevada corporation
incorporated on February 2, 2004. The Company is primarily engaged in
the acquisition and exploration of mining properties.
The Company has been in the exploration stage since its formation and
has not yet realized any revenues from its planned operations. Upon the
location of commercially mineable reserves, the Company plans to prepare
for mineral extraction and enter the development stage.
Basis of presentation - Our accounting and reporting policies conform to
U.S. generally accepted accounting principles applicable to exploration
stage enterprises. Changes in classification of 2009 amounts have been
made to conform to current presentations.
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.
Cash and cash equivalents -For purposes of the statement of cash flows,
we consider all cash in banks, money market funds, and certificates of
deposit with a maturity of less than three months to be cash
equivalents.
Property and Equipment - The Company values its investment in property
and equipment at cost less accumulated depreciation. Depreciation is
computed primarily by the straight line method over the estimated useful
lives of the assets ranging from five to thirty-nine years.
Mineral Property Acquisition and Exploration Costs - The company
expenses all costs related to the acquisition and exploration of mineral
properties in which it has secured exploration rights prior to
establishment of proven and probable reserves. Per Note 7, the Company
has expanded $7,111,000 in acquisition of mining rights.
Fair value of financial instruments and derivative financial instruments
- We have adopted Accounting Standards Codification regarding Disclosure
About Derivative Financial Instruments and Fair Value of Financial
Instruments. The carrying amounts of cash, accounts payable, accrued
expenses, and other current liabilities approximate fair value because
of the short maturity of these items. These fair value estimates are
35
AMERILITHIUM CORP.
Formerly Kodiak International, Inc.
(An exploration stage enterprise)
Notes to Financial Statements
December 31, 2010
Note 1 - Organization and summary of significant accounting policies:
(continued)
subjective in nature and involve uncertainties and matters of
significant judgment, and, therefore, cannot be determined with
precision.
Changes in assumptions could significantly affect these estimates. We
do not hold or issue financial instruments for trading purposes, nor do
we utilize derivative instruments in the management of foreign exchange,
commodity price or interest rate market risks.
Federal income taxes - Deferred income taxes are reported for timing
differences between items of income or expense reported in the financial
statements and those reported for income tax purposes in accordance with
Accounting Standards Codification regarding Accounting for Income Taxes,
which requires the use of the asset/liability method of accounting for
income taxes. Deferred income taxes and tax benefits are recognized for
the future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and liabilities
and their respective tax bases, and for tax loss and credit
carryforwards. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or
settled. Deferred taxes are provided for the estimated future tax
effects attributable to temporary differences and carryforwards when
realization is more likely than not.
Net income per share of common stock - We have adopted Accounting
Standards Codification regarding Earnings per Share, which requires
presentation of basic and diluted EPS on the face of the income
statement for all entities with complex capital structures and requires
a reconciliation of the numerator and denominator of the basic EPS
computation to the numerator and denominator of the diluted EPS
computation. In the accompanying financial statements, basic earnings
per share of common stock is computed by dividing net income by the
weighted average number of shares of common stock outstanding during the
period. We do not have a complex capital structure requiring the
computation of diluted earnings per share.
Note 2 - Uncertainty, going concern:
At December 31, 2010, we were engaged in a business and had suffered
losses from exploration stage activities to date. In addition, we have
minimal operating funds. Although management is currently attempting to
identify business opportunities and is seeking additional sources of
equity or debt financing, there is no assurance these activities will be
successful. Accordingly, we must rely on our officers to perform
essential functions without compensation until a business operation can
36
AMERILITHIUM CORP.
Formerly Kodiak International, Inc.
(An exploration stage enterprise)
Notes to Financial Statements
December 31, 2010
Note 2 - Uncertainty, going concern: (continued)
be commenced. No amounts have been recorded in the accompanying
financial statements for the value of officers' services, as it is not
considered material.
These factors raise doubt about the ability of the Company to continue
as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Note 3 - Federal income tax:
We follow Accounting Standards Codification regarding Accounting for
Income Taxes. Deferred income taxes reflect the net effect of (a)
temporary difference between carrying amounts of assets and liabilities
for financial purposes and the amounts used for income tax reporting
purposes, and (b) net operating loss carryforwards. No net provision for
refundable Federal income tax has been made in the accompanying
statement of loss because no recoverable taxes were paid previously.
Similarly, no deferred tax asset attributable to the net operating loss
carryforward has been recognized, as it is not deemed likely to be
realized.
The provision for refundable Federal income tax consists of the
following:
2009 2010
-------- ---------
Refundable Federal income tax attributable to:
Current operations $(28,140) $(362,462)
Less, Nondeductible expenses -0- -0-
Less, Change in valuation allowance 28,140 362,462
Net refundable amount - -
The cumulative tax effect at the expected rate of 34% of significant
items comprising our net deferred tax amount is as follows:
2009 2010
------- --------
Deferred tax asset attributable to:
Net operating loss carryover $49,439 $411,902
Less, Valuation allowance (49,439) (411,902)
Net deferred tax asset - -
At December 31, 2010, an unused net operating loss carryover
approximating $1,211,475 is available to offset future taxable income;
it expires beginning in 2025.
37
Note 4 - Cumulative sales of stock:
Since its inception, we have issued shares of common stock as follows:
On August 8, 2005, our Directors authorized the issuance of 2,000,000
founder shares at par value of $0.001. These shares are restricted
under rule 144 of the Securities Exchange Commission.
On August 28, 2005, our Directors authorized the issuance of 2,000,000
shares of common stock at a price of $0.001 per share as fully paid and
non-assessable to the subscriber. These shares are not restricted and
are free trading.
On July 14, 2006, our Directors authorized the issuance of 1,100,000
shares of common stock at a price of $0.002 per share as fully paid and
non-assessable to the subscriber. These shares are not restricted and
are free trading.
On August 21, 2008, our Directors authorized the issuance of 1,500,000
shares of common stock at a price of $0.04 per share as fully paid and
non-assessable to the subscriber. These shares are not restricted and
are free trading.
On November 18, 2009, our Directors authorized the issuance of 200,000
shares of common stock at a price of $0.25 per share as fully paid and
non-assessable to the subscriber. These shares are not restricted and
are free trading.
On February 18, 2010 the Company and the Shareholders consented to and
authorized an 8 for 1 forward stock split and adjusted the par value to
$0.0001 per share.
In March 2010, the Company issued 4,800,000 common stock shares at
prices ranging from $0.95 to $1.65 per share for the purchase of mining
claims. These shares are restricted.
As part of purchase of mining claims the Company has committed to the
issuance of 750,000 shares of common stock at a price of $1.65. The
Company has recorded this as a stock subscription payable. 250,000
shares were issued in April 2010 and an additional 250,000 shares were
issued in July 2010. The remaining shares were issued in December 2010.
On March 30, 2010, the Company issued 83,333 shares of common stock at a
price of $1.20 per share. This was part of a private placement offering
that included a stock warrant to purchase additional shares of stock for
$1.60 per share.
During April 2010, the Company submitted drawdown notices of $500,000 in
regards to their financing agreement with Sunrise Energy Investments.
On April 26, 2010 the Company purchased the mining rights from Nevada
Alaska Mining Co. for stock and cash. The agreement includes the
issuance of 400,000 shares at a price of $1.72 per share. These shares
were originally recorded as a subscription payable but were fully issued
in July 2010.
38
AMERILITHIUM CORP.
Formerly Kodiak International, Inc.
(An exploration stage enterprise)
Notes to Financial Statements
December 31, 2010
Note 4 - Cumulative sales of stock: (continued)
During June 2010, the Company issued 45,000 shares of stock to three
advisors at a price of $0.71 per share. The amount will be granted
every three months and priced at the current market price. These shares
are restricted.
During June 2010, the Company submitted drawdown notices of $500,000 in
regards to their financing agreement with Sunrise Energy Investments.
During June 2010, the Company issued 20,000 shares of stock to one
advisor at $0.71 per share. The amount will be granted every three
months and priced at the current market price. These shares are
restricted.
During July 2010, the Company submitted drawdown notices of $200,000 in
regards to their financing agreement with Sunrise Energy Investments.
During September 2010, the Company issued 65,000 shares of stock to four
advisors at a price of $0.32 per share. The amount will be granted
every three months and priced at the current market price. These shares
are restricted.
During September 2010, the Company issued 300,000 shares of stock at
$0.32 per share, per the finder's fee agreement on its Paymaster Master
Claim, Nevada.
On October 10, 2010, the Company issued 250,000 shares of stock at $0.26
per share, as part of the consultancy agreement. The amount will be
granted every six months at its current trading price. These shares are
restricted.
On December 20, 2010, the Company issued 45,000 shares at $0.29 per
share as part of the advisory agreements.
Note 5 - Employment and Consulting Agreements
On March 12, 2010 the Company entered into an employment contract with
their Chief Executive Officer to pay this individual a guaranteed
monthly fee of $6,500 for 36 months.
On March 12, 2010 the Company entered into a consulting agreement for
$100,000 and 100,000 shares of stock in which the Company will pay
$40,000 on signing and six equal installments of $10,000 monthly. As of
December 31, 2010, $100,000 of this agreement has been paid and the
100,000 shares have been issued.
39
AMERILITHIUM CORP.
Formerly Kodiak International, Inc.
(An exploration stage enterprise)
Notes to Financial Statements
December 31, 2010
Note 5 - Employment and Consulting Agreements (Continued)
On October 8, 2010, The Company renewed its consultancy agreement for an
additional 24 months at $5,000 per month. The Company will also issue
250,000 shares of common stock every six months in advance.
Note 6 - Financing Agreement
On March 28, 2010 the Company entered into a financing agreement with
Sunrise Energy Investment Ltd. The Company will sell up to $10,000,000
of its common stock. The Common Stock will also have an attached
warrant to purchase future shares for $1.60. There were no transactions
during the first quarter of 2010.
As of December 31, 2010, the Company has drawn $1,200,000 and has issued
1,218,891 shares to Sunrise Energy Investment.
Note 7 - Mining Rights
In September 2008, the Company purchased the Kodiak Lode Mining Claim
for $7,500. The mining claim is in the Sunset Mining District in the
extreme southern portion of the State of Nevada. The claim is on 20.66
acres and includes gold, silver, copper and lead. The full mining claim
was recorded as a period expense.
On March 2, 2010 the Company entered into an agreement to purchase 100%
net revenue in assets of Power Mining Ventures, Inc. in Alberta, Canada.
The purchase is funded by restricted common stock shares. The total
purchase price was $2,280,000
On March 12, 2010 the Company entered into an agreement to purchase 78
mining claims comprising of nearly 6,000 acres with GeoXplor
Corporation. The total purchase price was $1,678,000.
On March 22, 2010 the Company entered into an agreement to purchase 100%
net revenue in assets of Power Mining Ventures, Inc located in
southwestern Australia. The purchase is funded by restricted common
shares and cash. The total purchase price was $2,340,000.
On April 26, 2010 the Company entered into an agreement to purchase 100%
of the mining rights of the "Property" located in the State of Nevada.
The "Property" includes Clayton Deep which is comprised of 5,280 acres
and Full Monty which is comprised of 5,760 acres. The purchase consists
of cash and restricted common shares.
40
AMERILITHIUM CORP.
Formerly Kodiak International, Inc.
(An exploration stage enterprise)
Notes to Financial Statements
December 31, 2010
Note 8 - Notes Payable
The Company has notes payable for the purchase of mining rights. These
amounts are all payable within one year and carry no rate of interest.
The balance at December 31, 2010 is $40,000.
The Company has a note payable with one of its shareholders. The note
is due on February 1, 2012 and carries and interest rate of 8%. The
note also has an option to convert to common stock at a price of $0.05
per share. On April 22, 2010, the Company issued 4,800,000 shares of
post split shares in exchange for this note.
Note 9 - Subsequent Events
On January 20, 2011, the Company issued 20,000 shares of stock to one
advisor as part of the advisory agreement.
On February 17, 2011, the Company entered into an agreement with
GeoXplor Corporation for the initial stages of its drilling program.
The value of this agreement is $155,125.
On February 28, 2011, the Company drew down $200,000 on their financing
agreement.
On March 7, 2011, the Company issued 751,880 shares to Sunrise Energy
Investments as part of the financing agreement draw down.
On March 23, 2011, the Company issued 45,000 shares of stock to three
advisors as part of the advisory agreement.
Note 10 - New accounting pronouncements
Recent Accounting Pronouncements
In May 2008, the Accounting Standards Codification issued 944.20.15,
"Accounting for Financial Guarantee Insurance Contracts-and
interpretation of Accounting Standards Codification 944.20.05".
Accounting Standards Codification 944.20.15 clarifies how Accounting
Standards Codification 944.20.05 applies to financial guarantee
insurance contracts, including the recognition and measurement of
premium revenue and claims liabilities. This statement also requires
expanded disclosures about financial guarantee insurance contracts.
Accounting Standards Codification 944.20.15 is effective for fiscal
years beginning on or after December 15, 2008, and interim periods
within those years. Accounting Standards Codification 944.20.15 has no
effect on the Company's financial position, statements of operations, or
cash flows at this time.
41
AMERILITHIUM CORP.
Formerly Kodiak International, Inc.
(An exploration stage enterprise)
Notes to Financial Statements
December 31, 2010
Note 10 - New accounting pronouncements (Continued)
In March 2008, the Accounting Standards Codification issued 815.10.15,
Disclosures about Derivative Instruments and Hedging Activities-an
amendment of Accounting Standards Codification 815.10.05. This standard
requires companies to provide enhanced disclosures about (a) how and why
an entity uses derivative instruments, (b) how derivative instruments
and related hedged items are accounted for under 815.10.15 and its
related interpretations, and (c) how derivative instruments and related
hedged items affect an entity's financial position, financial
performance, and cash flows. This Statement is effective for financial
statements issued for fiscal years and interim periods beginning after
November 15, 2008, with early application encouraged. The Company has
not yet adopted the provisions of Accounting Standards Codification
815.10.15, but does not expect it to have a material impact on its
consolidated financial position, results of operations or cash flows.
In December 2007, the Accounting Standards Codification 815.10.65,
Noncontrolling Interests in Consolidated Financial Statements-an
amendment of Accounting Standards Codification 810.10.65. This
statement amends Accounting Standards Codification 810.10.65 to
establish accounting and reporting standards for the noncontrolling
interest in a subsidiary and for the deconsolidation of a subsidiary. It
clarifies that a noncontrolling interest in a subsidiary is an ownership
interest in the consolidated entity that should be reported as equity in
the consolidated financial statements. Before this statement was issued,
limited guidance existed for reporting noncontrolling interests. As a
result, considerable diversity in practice existed. So-called minority
interests were reported in the consolidated statement of financial
position as liabilities or in the mezzanine section between liabilities
and equity. This statement improves comparability by eliminating that
diversity. This statement is effective for fiscal years, and interim
periods within those fiscal years, beginning on or after December 15,
2008 (that is, January 1, 2009, for entities with calendar year-ends).
Earlier adoption is prohibited. The effective date of this statement is
the same as that of the related Accounting Standards Codification
805.10.10 (revised 2007). The Company will adopt this Statement
beginning March 1, 2009. It is not believed that this will have an
impact on the Company's consolidated financial position, results of
operations or cash flows.
In December 2007, the Accounting Standards Codification, issued
Accounting Standards Codification 805.10.10 (revised 2007), Business
Combinations.' This Statement establishes principles and requirements
for how the acquirer: (a) recognizes and measures in its financial
statements the identifiable assets acquired, the liabilities assumed,
and any noncontrolling interest in the acquiree; (b) recognizes and
measures the goodwill acquired in the business combination or a gain
from a bargain purchase; and (c) determines what information to disclose
42
AMERILITHIUM CORP.
Formerly Kodiak International, Inc.
(An exploration stage enterprise)
Notes to Financial Statements
December 31, 2010
to enable users of the financial statements to evaluate the nature and
financial effects of the business combination. This statement applies
prospectively to business combinations for which the acquisition date is
on or after the beginning of the first annual reporting period beginning
on or after December 15, 2008. An entity may not apply it before that
date. The effective date of this statement is the same as that of the
related Accounting Standards Codification 810.10.65, Noncontrolling
Interests in Consolidated Financial Statements. The Company will adopt
this statement beginning March 1, 2009. It is not believed that this
will have an impact on the Company's consolidated financial position,
results of operations or cash flows.
In February 2007, the Accounting Standards Codification, issued
Accounting Standards Codification 810.10.65, The Fair Value Option for
Financial Assets and Liabilities-Including an Amendment of Accounting
Standards Codification 320.10.05. This standard permits an entity to
choose to measure many financial instruments and certain other items at
fair value. This option is available to all entities.
Most of the provisions in Accounting Standards Codification 810.10.65
are elective; however, an amendment to Accounting Standards Codification
320.10.05 Accounting for Certain Investments in Debt and Equity
Securities applies to all entities with available for sale or trading
securities. Some requirements apply differently to entities that do not
report net income. Accounting Standards Codification 810.10.65 is
effective as of the beginning of an entities first fiscal year that
begins after November 15, 2007. Early adoption is permitted as of the
beginning of the previous fiscal year provided that the entity makes
that choice in the first 120 days of that fiscal year and also elects to
apply the provisions of ASC 810 Fair Value Measurements. The Company
will adopt Accounting Standards Codification 810 beginning March 1, 2008
and is currently evaluating the potential impact the adoption of this
pronouncement will have on its consolidated financial statements.
In September 2006, the Accounting Standards Codification issued
Accounting Standards Codification 820, Fair Value Measurements. This
statement defines fair value, establishes a framework for measuring fair
value in generally accepted accounting principles (GAAP), and expands
disclosures about fair value measurements. This statement applies under
other accounting pronouncements that require or permit fair value
measurements, the Board having previously concluded in those accounting
pronouncements that fair value is the relevant measurement attribute.
Accordingly, this statement does not require any new fair value
measurements. However, for some entities, the application of this
statement will change current practice. This statement is effective for
financial statements issued for fiscal years beginning after November
15, 2007, and interim periods within those fiscal years. Earlier
application is encouraged, provided that the reporting entity has not
43
AMERILITHIUM CORP.
Formerly Kodiak International, Inc.
(An exploration stage enterprise)
Notes to Financial Statements
December 31, 2010
yet issued financial statements for that fiscal year, including
financial statements for an interim period within that fiscal year. The
Company will adopt this statement March 1, 2008, and it is not believed
that this will have an impact on the Company's consolidated financial
position, results of operations or cash flows.
44
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures:
We maintain disclosure controls and procedures, as defined in Rules 13a-
15(e) and 15d-15(e) under the Exchange Act that are designed to insure
that information required to be disclosed in the reports we file or
submit under the Exchange Act is recorded, processed, summarized and
reported within the periods specified in the Securities and Exchange
Commission's rules and forms and that such information is accumulated
and communicated to our management, including our chief executive
officer and chief financial officer, or the persons performing similar
functions, to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of our CEO and CFO, or
the persons performing similar functions, our management has evaluated
the effectiveness of our disclosure controls and procedures as of the
end of the period covered by this annual report. Based on that
evaluation, our CEO and CFO, or the persons performing similar
functions, concluded that our disclosure controls and procedures were
effective as of December 31, 2010.
Management's Annual Report on Internal Control over Financial Reporting:
Our management is responsible for establishing and maintaining adequate
internal control over financial reporting. Our internal control over
financial reporting is the process designed by and under the supervision
of our CEO and CFO, or the persons performing similar functions, to
provide reasonable assurance regarding the reliability of our financial
reporting and the preparation of our financial statements for external
reporting in accordance with accounting principles generally accepted in
the United States of America. Management has evaluated the
effectiveness of our internal control over financial reporting using the
criteria set forth by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO) in Internal Control over Financial Reporting
- Guidance for Smaller Public Companies.
Under the supervision and with the participation of our CEO and CFO, or
the persons performing similar functions, our management has assessed
the effectiveness of our internal control over financial reporting as of
December 31, 2010, and concluded that it is effective.
This annual report does not include an attestation report of the
registrant's registered public accounting firm regarding internal
control over financial reporting. Management's report was not subject
to attestation by the registrant's registered public accounting firm
pursuant to temporary rules of the Securities and Exchange Commission
that permit the registrant to provide only management's report in this
annual report.
45
Evaluation of Changes in Internal Control over Financial Reporting:
Under the supervision and with the participation of our CEO and CFO, or
those persons performing similar functions, our management has evaluated
changes in our internal controls over financial reporting that occurred
during the fourth quarter of 2010. Based on that evaluation, our CEO
and CFO, or those persons performing similar functions, did not identify
any change in our internal control over financial reporting that has
materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.
Important Considerations:
The effectiveness of our disclosure controls and procedures and our
internal control over financial reporting is subject to various inherent
limitations, including cost limitations, judgments used in decision
making, assumptions about the likelihood of future events, the soundness
of our systems, the possibility of human error, and the risk of fraud.
Moreover, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate
because of changes in conditions and the risk that the degree of
compliance with policies or procedures may deteriorate over time.
Because of these limitations, there can be no assurance that any system
of disclosure controls and procedures or internal control over financial
reporting will be successful in preventing all errors or fraud or in
making all material information known in a timely manner to the
appropriate levels of management.
ITEM 9B. OTHER INFORMATION
None
46
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Our sole director is as follows:
NAME AND ADDRESS AGE POSITIONS HELD TERM
Matthew Worrall 37 CEO, CFO, President March 12, 2010
Pembroke House Director to present
Upper Pembroke Street
Dublin 2, Republic of Ireland
Business Experience
-------------------
Matthew Worrall. Mr. Worrall was a partner of Imagex, a print and
design agency engaging in ecommerce operations and providing business
consultancy to both small and blue chip organization from July 2006 to
August 2008. From November 2005 -July 2006, Mr. Worrall was a business
development manager for Ideasbynet, a promotion goods company. From
August 1997 to November 2005, Mr. Worrall was a group manager for
Boatworld Ltd., a marine hardware and accessories web store. From
September 1999 to present, Mr. Worrall has worked as an independent
property developer, completing several small to medium sized property
developments.
The sole director will serve in his capacity as director until our next
annual shareholder meeting to be held within six months of our fiscal
year's close. Directors are elected for one-year terms.
Code of Ethics Policy
---------------------
We have not yet adopted a code of ethics that applies to our principal
executive officer, principal financial officer, principal accounting
officer or controller or persons performing similar functions.
Corporate Governance
--------------------
There have been no changes in any state law or other procedures by which
security holders may recommend nominees to our board of directors. In
addition to having no nominating committee for this purpose, we
currently have no specific audit committee and no audit committee
financial expert. Based on the fact that our current business affairs
are simple, any such committees are excessive and beyond the scope of
our business and needs.
ITEM 11. EXECUTIVE COMPENSATION
We may elect to award a cash bonus to key employees, directors, officers
and consultants based on meeting individual and corporate planned
objectives.
To date, no compensation has been paid to our officers.
47
On March 12, 2010, the registrant entered into an employment agreement
with Matthew Worrall. The term of the agreement is for three years and
shall continue thereafter renewable on a twelve month basis. Mr.
Worrall shall receive a salary of $6,500 per month. Mr. Worrall is
eligible to participate in any benefits made generally available by the
registrant and shall be reimburse for all reasonable business expenses
incurred in the performance of his duties. The registrant and Mr.
Worrall shall review terms of Mr. Worrall's salary and benefits on a
semi-annual basis.
We do not have any other standard arrangements by which directors are
compensated for any services provided as a director. No cash has been
paid to our sole director in his capacity as such.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS.
The following table sets forth, as of March 31, 2011, the number and
percentage of outstanding shares of the registrant's common stock owned
by (i) each person known to us to beneficially own more than 5% of its
outstanding common stock, (ii) each director, (iii) each named executive
officer and significant employee, and (iv) all officers and directors as
a group.
Name Amount Percentage
---- ------ ----------
Matthew Worrall 19,736,328 27.6%
---------- ----
Officers and Directors
As a group (1 person) 19,736,328 27.6%
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE.
Director Independence
---------------------
The registrant's board of directors consists of Matthew Worrall. He is
not independent as such term is defined by a national securities
exchange or an inter-dealer quotation system.
During the year ended December 31, 2010, there were no transactions with
related persons.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
Audit Fees. We incurred aggregate fees and expenses of approximately
$13,000 and $8,750 respectively, from Thomas J. Harris, certified public
accountant, for the 2010 and 2009 fiscal years. Such fees included work
completed for our annual audits and for the review of our financial
statements included in our Form 10-Q.
48
Tax Fees. We did not incur any aggregate tax fees and expenses from
Thomas J. Harris, certified public accountant for the 2010 and 2009
fiscal years for professional services rendered for tax compliance, tax
advice, and tax planning.
All Other Fees. We did not incur any other fees from Thomas J. Harris,
certified public accountant during fiscal 2010 and 2009.
The board of directors, acting as the Audit Committee considered
whether, and determined that, the auditor's provision of non-audit
services was compatible with maintaining the auditor's independence.
All of the services described above for fiscal years 2010 and 2009 were
approved by the Board of Directors pursuant to its policies and
procedures. We intend to continue using Thomas J. Harris, certified
public accountant solely for audit and audit-related services, tax
consultation and tax compliance services, and, as needed, for due
diligence in acquisitions.
49
Part IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a)(1) List of Financial statements included in Part II hereof
Balance Sheets, December 31, 2010 and 2009
Statements of Operations for the years ended December 31, 2010 and 2009
Statements of Stockholders' Equity for the years ended December 31, 2010
and 2009
Statements of Cash Flows for the years ended December 31, 2010 and 2009
Notes to the Financial Statements
(a)(2) List of Financial Statement schedules included in Part IV hereof:
None
(a)(3) Exhibits
The following of exhibits are filed with this report:
(31) 302 certification
(32) 906 certification
50
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the registrant has duly caused this
Report to be signed on its behalf by the undersigned duly authorized
person.
Date: June 24, 2011
Amerilithium Corp.
/s/ Matthew Worrall
------------------------------
By: Matthew Worrall, CEO
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated.
By: /s/ Matthew Worrall
-----------------------
Matthew Worrall
CEO, CFO, Director
June 24, 2011
