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EX-31.1 - EXHIBIT 31.1 - INTEGRATED ENERGY SOLUTIONS, INC.ex31_1apg.htm
EX-32.2 - EXHIBIT 32.2 - INTEGRATED ENERGY SOLUTIONS, INC.ex32_2apg.htm
EX-31.2 - EXHIBIT 31.2 - INTEGRATED ENERGY SOLUTIONS, INC.ex31_2apg.htm
EX-32 - EXHIBIT 32.1 - INTEGRATED ENERGY SOLUTIONS, INC.ex32_1apg.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549


FORM 10-K


[X] ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934


For the fiscal year ended: December 31, 2012


[   ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934


Commission file number: 333-155059


AMERILITHIUM CORP.

(Exact name of registrant as specified in its charter)


Nevada

 

61-16014254

(State or Other Jurisdiction of

Incorporation or Organization)

 

(I.R.S. Employer Identification No.)


871 Coronado Center Dr., Suite 200

Henderson, NV 89052

(Address of principal executive offices)


(702) 583-7790

(Registrant’s telephone number, including area code)


Securities registered under Section 12(b) of the Exchange Act: None


Securities registered under Section 12(g) of the Exchange Act: None


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 Section 15(d) of the Act. Yes[  ] No[X]


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


Indicate by checkmark 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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes[X]  No[  ]


Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [  ]


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

 

Large accelerated filer

[   ]

 

Non-accelerated filer

[   ]

 

 

 

 

 

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]





The aggregate market value of registrant’s voting and non-voting common equity held by non-affiliates (as defined by Rule 12b-2 of the Exchange Act) computed by reference to the average bid and asked price of such common equity on June 30, 2012, was $2,606,019  As of April 16, 2013, the registrant has one class of common equity, and the number of shares outstanding of such common equity was 146,704,662.



TABLE OF CONTENTS


PART I

 

3

 

 

 

 

Item 1.

Business.

 

3

Item 1A.

Risk Factors.

 

16

Item 1B.

Unresolved Staff Comments.

 

22

Item 2.

Properties.

 

22

Item 3.

Legal Proceedings.

 

22

Item 4.

Mine Safety Disclosures.

 

22

 

 

 

PART II

 

23

 

 

 

 

Item 5.

Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

 

23

Item 6.

Selected Financial Data.

 

26

Item 7.

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

 

26

Item 7A

Quantitative and Qualitative Disclosures About Market Risk.

 

26

Item 8.

Financial Statements

 

29

Item 9.

Changes In and Disagreements With Accountants on Accounting and Financial Disclosure.

 

29

Item 9A.

Controls and Procedures.

 

29

Item 9B.

Other Information.

 

30

 

 

 

 

PART III

 

 

30

 

 

 

 

Item 10.

Directors, Executive Officers and Corporate Governance.

 

30

Item 11.

Executive Compensation.

 

31

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

 

32

Item 13.

Certain Relationships and Related Transactions, and Director Independence.

 

32

Item 14.

Principal Accounting Fees and Services.

 

32

 

 

 

 

PART IV

 

 

33

 

 

 

 

Item 15.

Exhibits, Financial Statements Schedules.

 

33

 

 

 

 

SIGNATURES

 

34




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PART I


Item 1. Business.


Corporate History


We are a mineral exploration company.  We intend to pursue an exploration program to continue the exploration and development of the mineral 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 possess commercially exploitable mineral deposits.


On February 18, 2010, our articles of incorporation were amended to change the name of the corporation from “Kodiak International, Inc.”  to “Amerilithium Corp.”  as well as increase our authorized common shares to 150,000,000.  On January 31, 2013 we amended our articles of incorporation to increase authorized common shares from 150,000,000 to 500,000,000 and authorized 10,000,000 shares, par value $0.001 per share, of “blank-check” preferred stock.


Clayton Deep & Full Monty Acquisition


On April 26, 2010, we 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, which is comprised of 5,280 acres and Full Monty, which is comprised of 5,280 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, we paid a total of $125,000 and issued 400,000 common shares.  Additionally, we granted a 2% Net Smelter Royalty (“NSR”) to the sellers, whereby 1% of the NSR is subject to buyback at any time by the Company for $500,000.


Clayton Deep and Full Monty properties have been physically examined by a Registered Civil Engineer.  Our Chief Executive Officer and Chief Geologist have visited both Clayton Deep and Full Monty on numerous times during the period from June 17, 2010 to April 15, 2013.


On July 27, 2011, we entered into a geophysical service agreement with Magee Geophysical Services LLC Contractor. Magee agreed to conduct a gravity survey over Clayton Deep during the approximate period of August 2011. The gravity survey is expected to take a maximum of eight chargeable days including mobilization and demobilization. The gravity surveys on both Clayton Deep and Full Monty were completed during the months of August 2011 and September 2011.


On September 23, 2011, we entered into a property purchase agreement with Nevada Alaska Mining Company, Inc., Robert Craig, Barbara Anne Craig and Elizabeth Dickman.  The property is an extension to Clayton Deep, which is comprised of 1,360 acres.  Pursuant to the agreement, the sellers sold a 100% interest in certain mining claims located in the State of Nevada.


Pursuant to the terms of the purchase agreement, the Company agreed to: (i) issue an aggregate of 200,000 shares of the Company’s common stock to the sellers; (ii) pay a cash price of $6,000; (iii) grant a 2% Net Smelter Royalty (NSR) to the sellers whereby 1% of the NSR is subject to buyback at any time by the Company for $500,000.


On October 26, 2011, the registrant entered into a geophysical services agreement with Zonge International, Inc. to conduct a CSMAT survey relating to the registrant’s Clayton Deep and Full Monty Properties, Nevada, USA.  These surveys were completed during the months of November 2011, and December 2011.


On September 1, 2012, We reduced the size number of claims held with the BLM for Full Monty. Full Monty is now comprised of 6 claims, totaling 480 Acres.


Clayton Deep covers a total area of 6,640 acres (10.375 square miles) in the southern part of Clayton Valley, Esmeralda County, Nevada, USA.  The following is a small-scale map showing the location and access to our Clayton Deep property:



3



[amel_10k123112apg2001.jpg]


The project consists of 83 unpatented federal placer mining claims, granted by the United States Department of the Interior, Bureau of Land Management, Reno, Nevada.  The initial 66 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.  The additional 17 claims were recorded September 7, 2011, with the US Bureau of Land Management, Reno, Nevada. Named CD67 thru CD83, and assigned the Serial Numbers NMC 1053833-1053849.


In accordance with USA mining regulations, the Clayton Deep unpatented federal placer mining claims are in good standing until September 1, 2013.  Thereafter, a maintenance fee, currently of $48,189.50 must be paid annually by September 1st along with a “Notice of Intent to Hold.”  The fees for 2012 until 2013 have been paid in full. We are responsible for meeting the conditions above.


Full Monty covers a total area of 480 acres (0.75 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 6 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 FM26, 27, 44, 45, 57 and 58, and assigned the Serial Numbers NMC 1022952, 1022953, 1022970, 1022971, 1022983 and 1022984. The following is a small-scale map showing the location and access to our Full Monty property:



4



[amel_10k123112apg2002.jpg]


In accordance with USA mining regulations, the Full Monty unpatented federal placer mining claims are in good standing until September 1, 2013.  Thereafter, a maintenance fee, currently $3,487 must be paid annually by September 1st along with a “Notice of Intent to Hold.”  The fees for 2012 until 2013 have been paid in full.  We are responsible for meeting the conditions above.


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, with the exception of claim FM 58, which we currently hold only mineral rights.


Rock formations and mineralization




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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.


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.


To date we have completed the following work on the Clayton Deep property:


- Geophysics - Gravity Survey; and


- Geophysics - CSAMT/MT Survey (Controlled Source Audio Magnetotellurics/Magnetotellurics).


To date we have completed the following work on the Full Monty property:


- Geophysics - Gravity Survey; and


- Geophysics - CSAMT/MT Survey (Controlled Source Audio Magnetotellurics/Magnetotellurics).


We are currently in the process of developing a drilling program for both Clayton Deep and Full Monty Assets.  From the results and recommendations outlined in the CSAMT reports for both Clayton Deep and Full Monty, we have a preliminary cost in the region of $400,000 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.


Jackson Wash Acquisition


On September 23, 2011, we entered into a property purchase agreement with Robert Craig and Barbara Anne Craig. Jackson Wash is comprised of 2,450 acres, 65 unpatented federal placer mining claims.  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, we issued 400,000 common shares.  Additionally, we granted a 2% Net Smelter Royalty (“NSR”) to the sellers, whereby 1% of the NSR is subject to buyback at any time by the Company for $500,000.




6



Jackson Wash has been physically examined by a Registered Civil Engineer.  Our Chief Executive Officer and Chief Geologist have visited both Clayton Deep and Full Monty on numerous times during the period from August 14, 2011 to April 15, 2013.


On October 11, 2011, we extended a geophysical service agreement with Magee Geophysical Services LLC Contractor.  Magee agreed to conduct a gravity survey over Jackson Wash during the approximate period of October 2011.  The gravity survey is expected to take a maximum of eight chargeable days including mobilization and demobilization.  The gravity survey on Jackson Wash was completed during the month of October 2011.


On December 4, 2011, the registrant extended a geophysical services agreement with Zonge International, Inc.  To conduct a CSMAT survey relating to the registrant’s Jackson Wash Property, Nevada, USA.  The survey was completed during the month of December 2011.


Jackson Wash covers an approximate area of 2,450 acres (3.83 square miles) in, Esmeralda County, Nevada, USA.


The following is a small-scale map showing the location and access to our Jackson Wash property:

[amel_10k123112apg2003.jpg]



7




The project consists of 65 unpatented federal placer mining claims, granted by the United States Department of the Interior, Bureau of Land Management, Reno, Nevada.  


The 65 claims were recorded September 1, 2011, with the US Bureau of Land Management, Reno, Nevada. Named JAC 1 thru 56, 62 thru 64, 70 thru 72, and 78 thru 80.


In accordance with USA mining regulations, the Jackson Wash unpatented federal placer mining claims are in good standing until September 1, 2013.  Thereafter, a maintenance fee, currently of $19,537 must be paid annually by September 1st along with a “Notice of Intent to Hold.”  The fees for 2012 until 2013 have been paid in full.  We are responsible for meeting the conditions above.


Rock formations and mineralization


The Jackson Wash Basin area’s geology is characterized by rocks and sediments typical of Basin and Range terrain.  The surface of Jackson Wash Basin is composed of Quaternary alluvial deposits derived from rocks in the surround ranges by erosion and mass wasting.


The Montezuma Range to the north and west, the Goldfield Hills on the east, and Mount Jackson Ridge to the south, are composed of Paleozoic sedimentary rocks, Tertiary volcanic deposits, and intrusive bodies.  Jackson Wash flows through the middle of the property and drains a large section of the southeastern slopes of the Montezuma Range.


A large scale US Geological Survey (USGS) gravity survey found a distinct gravity low (-205 milligals) in the center of the Jackson Wash Basin. This gravity low is probably filled by a thick sequence of sediments that accumulated over about the past 20 million years during the erosion of the surrounding volcanic mountain ranges and the tectonic events that resulted in the formation of the closed basins characteristic of the Great Basin.


Sources of lithium in the basin could be certain lithium-rich lithologic units within a sedimentary sequence similar to nearby Clayton Valley, as described by Kunasz.  The source of this lithium could be, as suggested by Price, et al, the devitrification of rhyolitic vitrophyres of the adjacent Montezuma Range, which are some of the most lithium-rich rocks in the world.


Deposition of lithium into Jackson Wash Basin may have been the result of direct mass wasting of these volcanic rocks into the valley, or by dissolution and transport of lithium by surface and groundwater, or some combination of these processes.  The Jackson Wash Basin gravity anomaly is likely associated with the Basin and Range structure that developed during the formation of the Silver Peak Range-Montezuma Range complex within the Walker Lane deformation belt Albers and Stewart also suggested that the Jackson Wash valley contained one or more large north-trending fault structures.


These inferred structures may be buried Basin and Range faults. Bedrock in the surrounding ridges and mountain ranges reveal evidence of thrust faults, high-angle strike slip faults, and high-angle dip slip faults.6 Many of these fractures are largely or entirely concealed by the post-fault sedimentary formations of Jackson Wash Basin.  To date we have completed the following work on the Jackson Wash property:


- Geophysics - Gravity Survey; and


- Geophysics - CSAMT/MT Survey (Controlled Source Audio Magnetotellurics/Magnetotellurics).


We are currently in the process of developing a drilling program for our Jackson Wash property. From the results and recommendations outlined in the CSAMT reports, we have a preliminary cost in the region of $250,000 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, we 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 which can be purchased for $1,000,000. The NSR will be payable upon commencement of commercial production, at



8



which time a more formal agreement concerning NSR will be entered into.  We issued 2,400,000 restricted common shares for the lease interests.


The following is a small-scale map showing the location and access to the Athena Lithium Brine Project:


[amel_10k123112apg2004.jpg]


The project covers a total area of 262,697.04 Hectares in Alberta, Canada encompassing Nampa, Berwyn, Grimshaw and Peace River. The project consists of 31 Metallic and Industrial Minerals permits, which were accepted, March 29, 2012.




9



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; and


(g) during the 7th assessment work period, not less in the aggregate than an amount equal to $15 for each hectare in the location.


We are 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.


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 Company’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 theLeduc Formation of the Woodbend Group and in the carbonate and evaporate 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.


Our 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.




10



Evaporite deposits similar to those from which lithium is currently produced in Clayton Valley, Nevada have also been identified within the boundaries of the registrant’s permit holdings.


Our 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.


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.


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).(2)


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.


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.


On March 22, 2010, we 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.  We issued 2,400,000 restricted common shares for the lease interests.


Bare Rocks, Hoffman Hills & Normans Lake Properties have been physically examined by a qualified geologist.  Bare Rocks, Hoffman Hills & Normans Lake Properties were visited by our Chief Executive Officer and Chief Geologist during the period of March 5, 2013 to March 7, 2013.


Bare Rocks, Hoffman Hills & Normans Lake Properties 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.


The following is a small-scale map showing the location and access to Bare Rocks, Hoffman Hills and Normans Lake:




11



[amel_10k123112apg2005.jpg]


Bare Rocks and Hoffman Hills Exploration licenses’ are valid until April 18, 2016, and have a yearly rental of $1,816 & $1,703 AUD, due on April 18, every year.  These licenses have a combined annual commitment of $40,000 AUD.


Normans Lake Project Exploration license is valid until May 24, 2016 and has a yearly rental of $2,724 AUD, due on the May 24, every year.  This license has an annual commitment of $24,000 AUD.  As of December 31, 2012 the Company is currently up to date with meeting all annual commitments.


We currently hold exploration licenses.  The holder of an exploration license may in accordance with the license conditions, extract or disturb up to 1,000 tonnes of material from the ground, including overburden, and the minister may approve extraction of larger tonnages.




12



In order to mine economic quantities of lithium, we 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.  We are 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


Our 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.


As of April 1st, 2013, the Company has completed preliminary geophysical studies and sampling of the properties and is finalizing an initial drill program.  At this time, we have estimated costs for this project of $150,000.


This property is currently without known reserves and the proposed program is exploratory in nature. There can be no assurance that the properties will result in significant revenues.


GeoXplor Corporation


On March 12, 2010, we 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.


The Pay Master property has been physically examined by a Registered Civil Engineer.  Our Chief Executive Officer and Chief Geologist have visited both Clayton Deep and Full Monty on numerous times during the period from June 17, 2010 to April 15, 2013.



Pursuant to the Asset Purchase Agreement, we 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. We 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.


We will grant GeoXplor 750,000  shares of the Company 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.




13



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.  The Company amended the agreement on March 21, 2012, to forego the original two-year deadline in exchange for issuing to GeoXplor shares of the Company’s common stock valued at $13,500.  No other terms or deadlines contained in the agreement have been amended. As of March 12, 2013 we have not met the required work commitment. The company is currently in negotiations to remedy this position with GeoXplor Corp.


On September 1, 2012 The Company after analysis and evaluation of the companies’ exploration results, reduced the claims held with the BLM for Pay Master.


Paymaster


Paymaster covers a total area of 3,160 acres (4.95 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 PM73, and assigned the Serial Numbers NMC 1018759-1018819.


In accordance with USA mining regulations, the Paymaster unpatented placer mining claims are in good standing until September 1, 2013. Thereafter, a maintenance fee currently of $23,374.50 must be paid annually by September 1st along with a “Notice of Intent to Hold.” The fees for 2012 until 2013 have been paid in full.  We are 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.


To date we have completed the following work on the property:


- Geophysics - Gravity Survey;


- Geophysics - CSAMT/MT Survey (Controlled Source Audio Magnetotellurics/Magnetotellurics); and


- 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.




14



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.  The following is a small-scale map showing the location and access to the Paymaster property.


[amel_10k123112apg2006.jpg]



The Paymaster Canyon project area lies within a group of intermountain basin and range structures in west central Nevada and is surrounded by the Paymaster Ridge on the east, the Weepah Hills to the west, and Clayton Valley and the Silver Peak Range to the south.  It has a playa floor of about ten square miles that receives surface drainage from an area of about fifty square miles.


The geology of the Paymaster claim block is dominantly related to basin and range development.  Rocks exposed in Paymaster Ridge, which bounds the Canyon on the east, are composed of sedimentary and volcanic units of the Esmeralda Formation.  To the west lies the Weepah Hills, composed predominantly Precambrian to Ordovician metamorphic and intrusive core rocks overlain by Tertiary sediments and volcanics.



15




Both areas are structurally complex with considerable normal and thrust faulting evident in Paymaster Ridge and the southeastern sections of the Weepah Hills.  The dominant structural feature of Paymaster Canyon is the Paymaster Fault, a range-front fault along the west side of the Ridge which exhibits up to 3,000 feet of vertical displacement.  Two large eastward trending faults, spaced a little over half a mile apart, at the south end of the property comprise what is believed to be part of a large conduit for lithium-enriched groundwater transfer and enrichment from Alkali Flats and Big Smoky Valley into the lower Paymaster Canyon and Clayton Valley playa.


Paymaster Canyon is underlain by valley fill sediments derived from lithium-rich volcanic rocks that compose parts of the surrounding hills.  The volcanic rocks and the derived basin-fill sediments include lithium-rich volcanic tuff and ash beds.  The basin-fill sediments consist of interbedded layers of Quaternary muds, volcanic tuff and ash beds, and salt.  This environment is ideal for the formation and accumulation of lithium evaporates and brines.


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 our control 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 our control, 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 our 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 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 other than our sole executive officer.  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.


Risks Relating to Our Business


NONE OF THE PROPERTIES IN WHICH WE HAVE AN INTEREST OR THE RIGHT TO EARN AN INTEREST HAS ANY KNOWN RESERVES.


None of the properties in which we have an interest or the right to earn an interest has any reserves.  To date, we have engaged in only limited preliminary exploration activities on the properties.  Accordingly, in which we do not have sufficient information upon which to assess the ultimate success of our exploration efforts.  If we do not establish reserves, we may be required to curtail or suspend our operations, in which case the market value of our common stock may decline, and you may lose all or a portion of your investment.


OUR CURRENT CASH WILL NOT BE SUFFICIENT TO FUND OUR BUSINESS AS CURRENTLY PLANNED FOR THE NEXT 12 MONTHS. WE WILL NEED ADDITIONAL FUNDING, EITHER THROUGH EQUITY OR DEBT FINANCINGS OR PARTNERING ARRANGEMENTS, THAT COULD NEGATIVELY AFFECT US AND OUR STOCK PRICE.




16



We will need significant additional funds to continue operations, which we may not be able to obtain. We estimate that we must raise approximately $1.0 million over the next 12 months to fund our anticipated capital requirements and obligations.  Although we have entered into an equity line which may provide a substantial portion of the funds needed, there is no assurance that all of such funds will be available when needed for our operations.


We have historically satisfied our working capital requirements through the private issuances of equity securities and convertible notes.  We will continue to seek additional funds through such channels and from collaboration and other arrangements with corporate partners.  However, we may not be able to obtain adequate funds when needed or funding that is on terms acceptable to us. If we fail to obtain sufficient funds, we may need to delay, scale back or terminate some or all of our mining exploration programs.


WE ARE AN EXPLORATION STAGE COMPANY, AND BASED ON OUR NEGATIVE CASH FLOWS FROM OPERATING ACTIVITIES THERE IS UNCERTAINTY AS TO OUR ABILITY TO CONTINUE AS A GOING CONCERN, AS NOTED BY OUR AUDITORS.


From inception, we have generated no revenues and have experienced negative cash flows from operating losses.  We anticipate continuing to incur such operating losses and negative cash flows for the foreseeable future, and to accumulate increasing deficits as we increase our expenditures for exploration and mining of minerals, infrastructure, research and development and general corporate purposes.  Any increases in our operating expenses will require us to achieve significant revenue before we can attain profitability.


Our history of operating losses and negative cash flows from operating activities will result in our continued dependence on external financing arrangements.  In the event that we are unable to achieve or sustain profitability or are otherwise unable to secure additional external financing, we may not be able to meet our obligations as they come due, raising substantial doubts as to our ability to continue as a going concern. Any such inability to continue as a going concern may result in our security holders losing their entire investment.  There is no guaranty that we will generate revenues or secure additional external financing.  Our financial statements, which have been prepared in accordance with United States Generally Accepted Accounting Principles, contemplate that we will continue as a going concern and do not contain any adjustments that might result if we were unable to continue as a going concern.  Changes in our operating plans, our existing and anticipated working capital needs, the acceleration or modification of our expansion plans, lower than anticipated revenues, increased expenses, potential acquisitions or other events will all affect our ability to continue as a going concern.


The report of independent auditors of our consolidated financial statements dated April 15, 2013 contains an explanatory paragraph which note our recurring operating losses since inception and our lack of capital, and that these conditions give rise to substantial doubt about our ability to continue as a going concern.  In the event that we are unable to successfully achieve future profitable operations and obtain additional sources of financing to sustain our operations, we may be unable to continue as a going concern.


WE HAVE A HISTORY OF OPERATING LOSSES AND WE ANTICIPATE FUTURE LOSSES.


We have not generated any revenues to date.  We incurred losses of approximately $3,532,961 and $1,068,159, respectively, for the fiscal years ended December 31, 2012 and 2011.  We have accumulated losses since inception of approximately $5,812,592  We anticipate that losses will continue until such time when revenue from operations is sufficient to offset our operating costs, if ever.  If we are unable to increase our revenues or to increase them significantly enough to cover our costs, our financial condition will worsen and you could lose some or all of your investment.


BECAUSE WE DO NOT HAVE SUFFICIENT CAPITAL WE HAVE LIMITED OUR EXPLORATION ACTIVITY, WHICH MAY RESULT IN A LOSS OF YOUR INVESTMENT.


Because we are small and do not have excess capital, we have limited our exploration activity.  As such, we may not be able to complete exploration programs as planned. In that event, an existing ore body may go undiscovered.  Without an ore body, we cannot generate revenues, in which case, you may lose your entire investment.


BECAUSE OF THE SPECULATIVE NATURE OF MINERAL PROPERTY EXPLORATION, THERE IS SUBSTANTIAL RISK THAT NO COMMERCIALLY EXPLOITABLE MINERALS WILL BE FOUND AND OUR BUSINESS WILL FAIL.


Exploration for minerals is a speculative venture involving substantial risk.  We cannot provide investors with any assurance that our claims and properties contain commercially exploitable reserves.  The exploration work that we intend to conduct on our claims or properties may not result in the discovery of commercial quantities of minerals.  Problems such as unusual and unexpected rock formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts.  In such a case, our business may fail.



17




JOINT VENTURES AND OTHER PARTNERSHIPS IN RELATION TO OUR PROPERTIES MAY EXPOSE US TO RISKS.


In the future we may enter into joint ventures or other partnership arrangements with other parties in relation to the exploration, development and production of the properties in which we have an interest.  Joint ventures can often require unanimous approval of the parties to the joint venture or their representatives for certain fundamental decisions such as an increase or reduction of registered capital, merger, division, dissolution, amendments of constating documents, and the pledge of joint venture assets, which means that each joint venture party may have a veto right with respect to such decisions which would lead to deadlock in the operations of the joint venture or partnership.  Further, we may be unable to exert control over strategic decision made in respect of such properties. Any failure of such other companies to meet their obligations to us or to third parties, or any disputes with respect to the parties’ respective rights and obligations, could have a material adverse effect on the joint ventures or their properties and, therefore, could have a material adverse effect on our results of operations, financial performance, cash flows and share price.


WE ARE HIGHLY DEPENDENT ON OUR KEY EXECUTIVE OFFICER FOR THE SUCCESS OF OUR BUSINESS PLAN AND MAY BE DEPENDENT ON THE EFFORTS AND RELATIONSHIPS OF THE PRINCIPALS OF FUTURE ACQUISITIONS AND MERGERS. IF ANY OF THESE INDIVIDUALS BECOME UNABLE TO CONTINUE IN THEIR ROLE, OUR BUSINESS COULD BE ADVERSELY AFFECTED.


We believe our success will depend, to a significant extent, on the efforts and abilities of Matthew Worrall, our President and Chief Executive Officer.  If we lost Mr. Worrall, we would be forced to expend significant time and money in the pursuit of a replacement, which would result in both a delay in the implementation of our business plan and the diversion of limited working capital.  We can give you no assurance that we could find a satisfactory replacement for Mr. Worrall at all, or on terms that are not unduly expensive or burdensome.


If we grow and implement our business plan, we will need to add managerial talent to support our business plan.  There is no guarantee that we will be successful in adding such managerial talent.  These professionals are regularly recruited by other companies and may choose to change companies.  Given our relatively small size compared to some of our competitors, the performance of our business may be more adversely affected than our competitors would be if we lose well-performing employees and are unable to attract new ones.


OUR PRESIDENT AND CHIEF EXECUTIVE OFFICER CONTROLS A SIGNIFICANT PERCENTAGE OF OUR COMMON STOCK.


As of April 16, 2013, Matthew Worrall, our President and Chief Executive Officer, beneficially owned approximately 12.50% of our outstanding common stock.  Mr. Worrall is able to influence all matters requiring stockholder approval, including election of directors and approval of significant corporate transactions.  This concentration of ownership, which is not subject to any voting restrictions, could limit the price that investors might be willing to pay for our common stock.  In addition, Mr. Worrall is in a position to impede transactions that may be desirable for other shareholders.  He could, for example, make it more difficult for anyone to take control of the Company.


Risks Relating to the Industry


PLANNED EXPLORATION, AND IF WARRANTED, DEVELOPMENT AND MINING ACTIVITIES INVOLVE A HIGH DEGREE OF RISK.


We cannot assure you of the success of our planned operations.  Exploration costs are not fixed, and resources cannot be reliably identified until substantial development has taken place, which entails high exploration and development costs.  The costs of mining, processing, development and exploitation activities are subject to numerous variables that could result in substantial cost overruns.  Mining for silver and other base or precious metals may involve unprofitable efforts, not only from dry properties, but from properties that are productive but do not produce sufficient net revenues to return a profit after accounting for mining, operating and other costs.


Our operations may be curtailed, delayed or cancelled as a result of numerous factors, many of which are beyond our control, including economic conditions, mechanical problems, title problems, weather conditions, compliance with governmental requirements and shortages or delays of equipment and services.  If our drilling activities are not successful, we will experience a material adverse effect on our future results of operations and financial condition.


There is a substantial risk that the properties that we drill will not eventually be productive or may decline in productivity over time. We do not insure against all risks associated with our business because insurance is either unavailable or its cost of coverage is



18



prohibitive.  The occurrence of an event that is not covered by insurance could have a material adverse effect on our financial condition.


THE IMPACT OF GOVERNMENT REGULATION COULD ADVERSELY AFFECT OUR BUSINESS.


Our business is subject to applicable domestic and foreign laws and regulations, including laws and regulations on taxation, exploration, and environmental and safety matters.  Many laws and regulations require drilling permits and govern the spacing of mines, rates of production, prevention of waste and other matters.  These laws and regulations may increase the costs and timing of planning, designing, drilling, installing, operating and abandoning our mines and other facilities. In addition, our operations are subject to complex environmental laws and regulations adopted by domestic and foreign jurisdictions where we operate.  We could incur liability to governments or third parties for any unlawful discharge of pollutants into the air, soil or water, including responsibility for remedial costs.


THE SUBMISSION AND APPROVAL OF ENVIRONMENTAL IMPACT ASSESSMENTS MAY BE REQUIRED.


Environmental legislation is evolving in a manner that means stricter standards; enforcement, fines and penalties for noncompliance are more stringent. Environmental assessments of proposed projects carry a heightened degree of responsibility for companies and directors, officers and employees. The cost of compliance with changes in governmental regulations has a potential to reduce the profitability of operations.


Because the requirements imposed by these laws and regulations frequently change, we cannot assure you that laws and regulations enacted in the future, including changes to existing laws and regulations, will not adversely affect our business.  In addition, because we acquire interests in properties that have been operated in the past by others, we may be liable for environmental damage caused by former operators.


DECLINE IN MINERAL PRICES MAY MAKE IT COMMERCIALLY INFEASIBLE FOR US TO DEVELOP OUR PROPERTY AND MAY CAUSE OUR STOCK PRICE TO DECLINE.


The value and price of your investment in our common shares, our financial results, and our exploration, development and mining activities may be significantly adversely affected by declines in the price of minerals and other precious metals. Mineral prices fluctuate widely and are affected by numerous factors beyond our control such as interest rates, exchange rates, inflation or deflation, fluctuation in the value of the United States dollar and foreign currencies, global and regional supply and demand, and the political and economic conditions of mineral-producing countries throughout the world.  The price of minerals fluctuates in response to many factors, which are beyond anyone’s prediction abilities.  The prices used in making the estimates in our plans differ from daily prices quoted in the news media.  Because mining occurs over a number of years, it may be prudent to continue mining for some periods during which cash flows are temporarily negative for a variety of reasons.  Such reasons include a belief that the low price is temporary, and/or the expense incurred is greater when permanently closing a mine.


WE MAY NOT HAVE ACCESS TO ALL OF THE SUPPLIES AND MATERIALS WE NEED TO BEGIN EXPLORATION, WHICH COULD CAUSE US TO DELAY OR SUSPEND OPERATIONS.


Competition and unforeseen limited sources of supplies in the industry could result in occasional spot shortages of supplies such as dynamite as well as certain equipment like bulldozers and excavators that we might need to conduct exploration.  If we cannot obtain the necessary supplies, we will have to suspend our exploration plans until we do obtain such supplies.


Risks Relating to Our Common Stock:


AT THIS TIME, WE ARE NOT LISTED ON THE OTCBB WHICH COULD LIMIT THE ABILITY OF BROKER-DEALERS TO SELL OUR SECURITIES AND THE ABILITY OF STOCKHOLDERS TO SELL THEIR SECURITIES IN THE SECONDARY MARKET.


At this time, we are not listed on the OTCBB. We plan to begin the relisting process for the OTCBB this quarter. Currently, we are solely listed on the OTC Markets OTCQB. As a result, the market liquidity for our securities could be adversely affected by limiting the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market. In addition, we may be unable to get re-listed on the OTCBB, which may have an adverse material effect on our company.




19



BECAUSE THE PUBLIC MARKET FOR SHARES OF OUR COMMON STOCK IS LIMITED, INVESTORS MAY BE UNABLE TO RESELL THEIR SHARES OF COMMON STOCK.


Currently, there is only a limited public market for our common stock on the OTCQB in the United States. Thus, investors may be unable to resell their shares of our common stock.  The development of an active public trading market depends upon the existence of willing buyers and sellers who are able to sell their shares as well as market makers willing to create a market in such shares.  Under these circumstances, the market bid and ask prices for the shares may be significantly influenced by the decisions of the market makers to buy or sell the shares for their own account.  Such decisions of the market makers may be critical for the establishment and maintenance of a liquid public market in our common stock.  Market makers are not required to maintain a continuous two-sided market and are free to withdraw firm quotations at any time.  We cannot give you any assurance that an active public trading market for the shares will develop or be sustained.


THE PRICE OF OUR COMMON STOCK IS VOLATILE, WHICH MAY CAUSE INVESTMENT LOSSES FOR OUR SHAREHOLDERS.


The market for our common stock is highly volatile, having ranged in the last twelve months from a low of $0.01 to a high of $0.10 on the OTCQB.  The trading price of our common stock on the OTCQB is subject to wide fluctuations in response to, among other things, quarterly variations in operating and financial results, and general economic and market conditions.


In addition, statements or changes in opinions, ratings, or earnings estimates made by brokerage firms or industry analysts relating to our market or relating to us could result in an immediate and adverse effect on the market price of our common stock.  The highly volatile nature of our stock price may cause investment losses for our shareholders.  In the past, securities class action litigation has often been brought against companies following periods of volatility in the market price of their securities.  If securities class action litigation is brought against us, such litigation could result in substantial costs while diverting management’s attention and resources.


OUR COMMON STOCK IS CONSIDERED TO BE A “PENNY STOCK,” WHICH MAY MAKE IT MORE DIFFICULT FOR INVESTORS TO SELL THEIR SHARES.


Our common stock has been subject to the provisions of Section 15(g) and Rule 15g-9 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), commonly referred to as the “penny stock” rule. Section 15(g) sets forth certain requirements for transactions in penny stocks and Rule 15g-9(d)(1) incorporates the definition of penny stock as that used in Rule 3a51-1 of the Exchange Act. The SEC generally defines penny stock to be any equity security that has a market price less than US$5.00 per share, subject to certain exceptions. Rule 3a51-1 provides that any equity security is considered to be penny stock unless that security is: registered and traded on a national securities exchange meeting specified criteria set by the SEC; issued by a registered investment company; excluded from the definition on the basis of price (at least US$5.00 per share) or the registrant’s net tangible assets; or exempted from the definition by the SEC. Our common stock is considered to be a “penny stock.” The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in “penny stocks.”


As our common stock is considered to be “penny stock,” trading in our common stock will be subject to additional sales practice requirements on broker-dealers who sell penny stock to persons other than established customers and accredited investors. This may reduce the liquidity and trading volume of our shares.


THE FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC. (“FINRA”) SALES PRACTICE REQUIREMENTS MAY LIMIT A SHAREHOLDER’S ABILITY TO BUY AND SELL OUR COMMON SHARES.


In addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.


THE MARKET PRICE FOR OUR COMMON SHARES IS PARTICULARLY VOLATILE GIVEN OUR STATUS AS A RELATIVELY UNKNOWN COMPANY WITH A SMALL AND THINLY TRADED PUBLIC FLOAT, LIMITED OPERATING HISTORY AND LACK OF PROFITS WHICH COULD LEAD TO WIDE FLUCTUATIONS IN OUR SHARE PRICE. YOU MAY



20



BE UNABLE TO SELL YOUR COMMON SHARES AT OR ABOVE YOUR PURCHASE PRICE, WHICH MAY RESULT IN SUBSTANTIAL LOSSES TO YOU.


The market for our common shares is characterized by significant price volatility when compared to the shares of larger, more established companies that trade on a national securities exchange and have large public floats, and we expect that our share price will continue to be more volatile than the shares of such larger, more established companies for the indefinite future. The volatility in our share price is attributable to a number of factors. First, as noted above, our common shares are, compared to the shares of such larger, more established companies, sporadically and thinly traded. As a consequence of this limited liquidity, the trading of relatively small quantities of shares by our shareholders may disproportionately influence the price of those shares in either direction.  The price for our shares could, for example, decline precipitously in the event that a large number of our common shares are sold on the market without commensurate demand. Secondly, we are a speculative or “risky” investment due to our limited operating history and lack of profits to date, and uncertainty of future market acceptance for our potential products. As a consequence of this enhanced risk, more risk-adverse investors may, under the fear of losing all or most of their investment in the event of negative news or lack of progress, be more inclined to sell their shares on the market more quickly and at greater discounts than would be the case with the stock of a larger, more established company that trades on a national securities exchange and has a large public float. Many of these factors are beyond our control and may decrease the market price of our common shares, regardless of our operating performance. We cannot make any predictions or projections as to what the prevailing market price for our common shares will be at any time, including as to whether our common shares will sustain their current market prices, or as to what effect that the sale of shares or the availability of common shares for sale at any time will have on the prevailing market price.


WE DO NOT INTEND TO PAY DIVIDENDS.


We do not anticipate paying cash dividends on our common stock in the foreseeable future. We may not have sufficient funds to legally pay dividends. Even if funds are legally available to pay dividends, we may nevertheless decide in our sole discretion not to pay dividends. The declaration, payment and amount of any future dividends will be made at the discretion of our board of directors, and will depend upon, among other things, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors our board of directors may consider relevant. There is no assurance that we will pay any dividends in the future, and, if dividends are paid, there is no assurance with respect to the amount of any such dividend.


AS A PUBLIC COMPANY, WE ARE SUBJECT TO COMPLEX LEGAL AND ACCOUNTING REQUIREMENTS THAT WILL REQUIRE US TO INCUR SIGNIFICANT EXPENSES AND WILL EXPOSE US TO RISK OF NON-COMPLIANCE.


As a public company, we are subject to numerous legal and accounting requirements that do not apply to private companies. The cost of compliance with many of these requirements is material, not only in absolute terms but, more importantly, in relation to the overall scope of the operations of a small company. Our relative inexperience with these requirements may increase the cost of compliance and may also increase the risk that we will fail to comply.


Failure to comply with these requirements can have numerous adverse consequences including, but not limited to, our inability to file required periodic reports on a timely basis, loss of market confidence and/or governmental or private actions against us. We cannot assure you that we will be able to comply with all of these requirements or that the cost of such compliance will not prove to be a substantial competitive disadvantage vis-à-vis our privately held and larger public competitors.


WE MAY BE SUBJECT TO SHAREHOLDER LITIGATION, THEREBY DIVERTING OUR RESOURCES THAT MAY HAVE A MATERIAL EFFECT ON OUR PROFITABILITY AND RESULTS OF OPERATIONS.


As discussed in the preceding risk factors, the market for our common shares is characterized by significant price volatility when compared to seasoned issuers, and we expect that our share price will continue to be more volatile than a seasoned issuer for the indefinite future.  In the past, plaintiffs have often initiated securities class action litigation against a company following periods of volatility in the market price of its securities. We may become the target of similar litigation.  Securities litigation will result in substantial costs and liabilities and will divert management’s attention and resources.


COMPLIANCE WITH CHANGING REGULATION OF CORPORATE GOVERNANCE AND PUBLIC DISCLOSURE WILL RESULT IN ADDITIONAL EXPENSES AND POSE CHALLENGES FOR OUR MANAGEMENT.


Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Dodd-Frank Wall Street Reform and Consumer Protection Act, and the rules and regulations promulgated thereunder, the Sarbanes-Oxley Act and SEC regulations, have created uncertainty for public companies and significantly increased the costs and risks associated with accessing the U.S. public markets.  Our management team will need to devote significant time and financial resources to comply with both existing



21



and evolving standards for public companies, which will lead to increased general and administrative expenses and a diversion of management time and attention from revenue generating activities to compliance activities.


Item 1B. Unresolved Staff Comments.


Not applicable for a smaller reporting company.


Item 2. Properties.


We currently have an office located at Suite 200, 871 Coronado Center Drive, Henderson, NV 89052.  Our monthly lease payment is $269, and runs on a month by month basis.


We currently have an office located at Suite 300, 7702 E. Doubletree Ranch Road, Scottsdale, AZ 85258.  Our monthly lease payment is $853, and the current lease expires on June 22, 2013.


Item 3. Legal Proceedings.


We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations.  There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.


Item 4. Mine Safety Disclosures.


Not applicable.



22



PART II


Item 5. Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.


(a) Market Information


Our common stock is quoted on the OTCQB under the symbol “AMEL”. Our common stock was not quoted prior to March 12, 2010.


For the periods indicated, the following table sets forth the high and low bid prices per share of common stock. These prices represent inter-dealer quotations without retail markup, markdown, or commission and may not necessarily represent actual transactions.


Calendar Quarter Ended:


Quarter ended

High

 

Low

December 31, 2012

$

0.01

 

 

$

0.01

 

September 30, 2012

$

0.02

 

 

$

0.02

 

June 30, 2012

$

0.04

 

 

$

0.03

 

March 31, 2012

$

0.075

 

 

$

0.063

 

December 31, 2011

$

0.19

 

 

$

0.044

 

September 30, 2011

$

0.23

 

 

$

0.13

 

June 30, 2011

$

0.57

 

 

$

0.20

 

March 31, 2011

$

0.53

 

 

$

0.25

 

December 31, 2010

$

0.57

 

 

$

0.20

 

September 30, 2010

$

0.78

 

 

$

0.27

 

June 30, 2010

$

1.90

 

 

$

0.50

 

March 31, 2010

$

3.00

 

 

$

0.90

 


(b) Holders


As of April 16, 2013, we had approximately 75 holders of record of our common stock. This number does not include beneficial owners whose shares are held in the names of various security brokers, dealers, and registered clearing agencies.


(c) Dividend Policy


The payment by us of dividends, if any, in the future rests within the discretion of our Board of Directors and will depend, among other things, upon our earnings, capital requirements and financial condition, as well as other relevant factors. We do not intend to pay any cash dividends in the foreseeable future, but intend to retain all earnings, if any, for use in our business.


(d) Securities Authorized for Issuance under Equity Compensation Plan


None.





23



Transfer Agent and Registrar


The transfer agent and registrar for our common stock is Island Stock Transfer with its business address at 15500 Roosevelt Boulevard, Suite 301, Clearwater, Florida 33760.


Unregistered Sales of Equity Securities


On January 21, 2011, the Company issued 20,000 shares at $0.29 per share as part of the advisory agreements.


On March 7, 2011, the Company issued 751,880 shares at $0.40 to Sunrise Energy Investments as part of the financing agreement draw down.


On March 23, 2011, the Company issued 45,000 shares at $0.37 to three advisors as part of the advisory agreements.


On May 3, 2011, the Company issued 270,000 shares at $0.35, 20,000 to two advisors per their advisory agreements and 250,000 as part of the consultancy agreement.


On June 15, 2011, the Company issued 45,000 shares at $0.25 to three advisors as part of their advisory agreements.


On September 21, 2011, JMJ Financial converted part of their convertible debenture.  The Company issued 300,000 shares to reduce the note payable by $46,500.


On September 23, 2011, the Company issued 65,000 shares at $0.18 to four advisors as part of their advisory agreements.


On September 23, 2011, the Company issued 200,000 shares at $0.18 as part of the purchase agreement for Clayton Deep extension.


On September 23, 2011, the Company issued 400,000 shares at $0.18 as part of the purchase agreement for Jackson Wash.


On September 29, 2011, JMJ Financial converted part of their convertible debenture.  The Company issued 200,000 shares to reduce the note payable by $30,000.


On October 11, 2011 JMJ Financial converted part of their convertible debenture.  The Company issued 400,000 shares to reduce the note payable by $56,000.


On November 8, 2011, the Company issued 250,000 shares of stock at $0.14 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 November 11, 2011 JMJ Financial converted part of their convertible debenture.  The Company issued 500,000 shares to reduce the note payable by $50,000.


On November 22, 2011 JMJ Financial converted part of their convertible debenture.  The Company issued 1,000,000 shares to reduce the note payable by $100,000.


On January 3, 2012, JMJ Financial converted part of their convertible debentures.  The Company issued 3,500,000 shares to reduce the note payable by $154,000.


On January 30, 2012, The Company issued 1,149,425 at $0.087 to TCA Global for a total of $100,000 as part of the financing agreement.  


On February 9, 2012, JMJ Financial converted part of their convertible debentures.  The Company issued 1,800,000 shares to reduce the note payable by $135,000.


On February 24, 2012, JMJ Financial converted part of their convertible debentures.  The Company issued 2,000,000 shares to reduce the note payable by $120,000


On March 14, 2012, the Company issued 50,000 shares to three advisors for a total of $3,000 as part of their advisory agreements.


On March 21, 2012, the Company issued 225,000 shares at $0.08 to GeoXplor as part of the renegotiation of the payment plan on the



24



purchase of mining property.  


On March 23, 2012, JMJ Financial converted part of their convertible debentures.  The Company issued 2,000,000 shares to reduce the note payable by $117,200.


On April 11, 2012, JMJ Financial converted part of their convertible debentures.  The Company issued 2,000,000 shares to reduce the note payable by $114,000.


On April 25, 2012, JMJ Financial converted part of their convertible debentures.  The Company issued 1,300,000 shares to reduce the note payable by $67,600.


On May 3, 2012, JMJ Financial converted part of their convertible debentures.  The Company issued 1,200,000 shares to reduce the note payable by $62,400.


On May 14, 2012, JMJ Financial converted part of their convertible debentures.  The Company issued 600,000 shares to reduce the note payable by $31,200.


On May 30, 2012, JMJ Financial converted part of their convertible debentures.  The Company issued 941,356 shares to reduce the note payable by $44,244


On June 6, 2012, JMJ Financial converted part of their convertible debentures.  The Company issued 500,000 shares to reduce the note payable by $20,000.


On June 13, 2012, JMJ Financial converted part of their convertible debentures.  The Company issued 1,400,000 shares to reduce the note payable by $42,000.


On July 11, 2012, JMJ Financial converted part of their convertible debentures.  The Company issued 2,000,000 to reduce the note payable by $60,000.


On July 26, 2012, JMJ Financial converted part of their convertible debentures.  The Company issued 2,100,000 to reduce the note payable by $57,750.


On August 15, 2012, JMJ Financial converted part of their convertible debentures.  The Company issued 1,740,385 shares to reduce the note payable by $45,250.


On August 15, 2012, JMJ Financial converted part of their convertible debentures.  The Company issued 557,693 shares to reduce the note payable by $14,500.


On August 29, 2012, JMJ Financial converted part of their convertible debentures.  The Company issued 3,000,000 shares to reduce the note payable by $63,000.


On September 27, 2012, JMJ Financial converted part of their convertible debentures.  The Company issued 2,400,000 shares to reduce the note payable by $48,240.


On October 17, 2012, JMJ Financial converted part of their convertible debentures.  The Company issued 4,000,000 shares to reduce the note payable by $52,000.


On November 8, 2012, The Company issued 5,170,813 shares valued at $134,441 for a commitment fee with TCA Global Credit Master Fund.  The Company recorded this issuance as interest expense.


On November 19, 2012, JMJ Financial converted part of their convertible debentures.  The Company issued 3,000,000 to reduce the note payable by $27,000


On December 17, 2012, JMJ Financial converted part of their convertible debentures.  The Company issued 3,100,000 shares to reduce the note payable by $21,700.






25



There were no other unregistered sales of the Company’s equity securities during the fiscal year end December 31, 2012, other than those previously reported in a Current Report on Form 8-K or Form 10-Q.


The foregoing recent sales of unregistered securities were not registered under the Securities Act of 1933, as amended (the “Securities Act”), but qualified for exemption under Section 4(2) of the Securities Act because the issuance of the shares by the Company did not involve a “public offering,” as defined in Section 4(2) of the Securities Act, and due to the insubstantial number of persons involved in the offering, size of the offering, manner of the offering and number of securities offered. In addition, these shareholders had the necessary investment intent as required by Section 4(2) of the Securities Act since they agreed to, and received, share certificates bearing a legend stating that such securities are restricted pursuant to Rule 144 of the Securities Act. This restriction ensures that these securities would not be immediately redistributed into the market and therefore not be part of a “public offering.” Based on an analysis of the above factors, we believe we have met the requirements to qualify for exemption under Section 4(2) of the Securities Act.


Rule 10B-18 Transactions


During the years ended December 31, 2012 and 2011, there were no repurchases of the Company’s common stock by the Company.


Item 6. Selected Financial Data.


Not applicable.


Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.


This report and other reports filed by our Company from time to time with the United States Securities and Exchange Commission (collectively the “Filings”) contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available to, our management as well as estimates and assumptions made by our management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the filings, the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan,” or the negative of these terms and similar expressions as they relate to us or our management identify forward-looking statements. Such statements reflect our current view with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including those set forth in the Risk Factors on page 18.  Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.


Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements.  Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.


Our financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates and actual results. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result. The following discussion should be read in conjunction with our consolidated financial statements and notes thereto appearing elsewhere in this report.


Plan of Operation


Headquartered in Henderson, Nevada, Amerilithium has amassed a portfolio of properties covering in excess of 727,000 acres in the USA, Canada and Australia.


During 2011, the Company completed the initial three holes of the Company’s drill program on its Paymaster Asset, Nevada, USA and both Gravity and CSAMT (controlled source audio-frequency magnetotellurics) on the Company’s Full Monty, Clayton Deep and Jackson Wash Assets in Nevada, USA.  During 2012 the Company has processed this acquired data to complete an amended drill program for the Company’s Paymaster Asset, along with new programs to cover, Full Monty, Clayton Deep and the Jackson Wash



26



Assets.  The Company has submitted the relevant documentation to BLM (Bureau of Land Management) in Nevada and has received approval.


The company’s current primary focus during 2013 is as follows:


(1) The continued development of our U.S. properties;


(2) The continued exploration and development of our Australian properties;


(3) Establish an economically viable lithium resource; and


(4) To strengthen the Company internally by the recruitment of strategic employees and advisors.


It is the Company’s intention that, now that relevant approvals have been granted, to implement a staged drill program focusing on the Company’s Lithium Brine Assets in Nevada, USA.  It is the Company’s intention to start this stage of development once the required funds have been secured.


The Company is also in the process of finalizing its exploration program for the Company’s Australian assets, specifically related to the potential for both lithium and gold discoveries.  The work shall be conducted under the supervision of an appointed strategic partner due to the properties’ geographical location.  The initial work and exploration has incorporated the following elements:


·

Geophysical review and data acquisition;

·

EIS (Exploration Incentive Scheme) application; (Re-applied for)

·

Geomorphology interpretation;

·

Review tenement status and opportunities;

·

Develop GIS (Geographic Information Systems) layer of assets and surrounding projects; and

·

On-site visit:

·

Initial water and solid sampling.


The Company will then look to extend the exploration program to incorporate drilling and further sampling.


The Company intends to fund the intended exploration with current assets and additional funding from the Company’s current financing agreements, and additional supplementary agreements.  The Company believes that it will require an additional $1.5 million over the next 12 months to achieve its goals.  Our ability to continue in existence is dependent on our ability to secure additional funding and commence full scale operations. There is no assurance that additional funding will be available or if available, that such additional funding will be on terms acceptable to the Company.


Trends and Uncertainties


Amerilithium 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 impurities in the minerals and volume limitations.


Investing Activities


For the year ended December 31, 2012, Amerilithium purchased fixed assets of $2,392 and mining rights of $0.  As a result, net cash flows from investing activities for the year ended December 31, 2012, were $2,392.


Financing Activities


For the year ended December 31, 2012, Amerilithium received proceeds from the sale of common stock of $0, total proceeds from convertible notes of $639,000 resulting in net cash flows from financing activities of $639,000.


Results of Operations


For the Year Ended December 31, 2012 Compared to December 31, 2011


We are an exploration stage company and have not yet commenced material operations.




27



General and Administrative Expenses


For the years ended December 31, 2012 and 2011, general and administrative expenses increased from $155,037 to $237,318, respectively, due to increased business activities  Amerilithium paid legal and professional fees of $192,150 and $247,455 for the years ended December 31, 2012 and 2011, respectively.  The decrease in legal and professional fees was due to re-negotiation of existing agreements.  Additionally, general and administrative expenses for the year ended December 31, 2012, consisted of salaries of $150,250, mineral property expenditures of $200,867, and other general and administrative expenses of $237,318 and an impairment loss of $2,046,120.


Comparatively, for the year ended December 31, 2011, in addition to the legal and professional fees described above, general and administrative expenses consisted of salaries of $150,500, exploration expenses of $364,956 and other general and administrative costs of $155,036.  The increase between periods was due to the increase in impairment losses.


The Company has increased their loss by $2,464,803 for the year ended December 31, 2012 versus December 31, 2011.  The Company recorded a loss of $3,532,961 and $1,068,159 for the years ended December 31, 2012 and 2011, respectively. The increase was primarily due to property impairment.   



Liquidity and Capital Resources


The following table summarizes total current assets, liabilities and working capital at December 31, 2012, compared to December 31, 2011.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December

31,

2012

 

December

31,

2011

 

Increase/Decrease

 

Current Assets

 

 

 

$

250,413

 

$

551,203

 

$

300,790

 

Current Liabilities

 

 

 

$

304,570

 

$

159,520

 

$

117,029

 

Working Capital (Deficit)

 

 

 

$

(54,157)

 

$

391,683

 

$

183,761 

 




At December 31, 2012, we had a working capital deficit of $54,157, as compared to working capital of $391,683, at December 31, 2011, a decrease of $445,840  The decrease is primarily attributable to the Company issuing $1,523,085 in capital stock and $250,000 of convertible notes during the year ended December 31, 2012.  The Company continues to devote significant resources to continue selling stock until the Company leaves the exploration stage.


Going Concern


At December 31, 2012, we were engaged in a business and had suffered losses from development 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 ‘Director’ services, as it is not considered material.


These factors raise substantial 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.


Off-Balance Sheet Arrangements


As of December 31, 2012, the Company did not have any off-balance sheet arrangements.


Item 7A. Quantitative and Qualitative Disclosures about Market Risk


Not applicable.




28



Item 8. Financial Statements and Supplementary Data.


Our financial statements are contained in pages F-1 through F-15 which appear at the end of this Annual Report.


Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.


Not applicable.


Item 9A. Controls and Procedures.


a) Evaluation of Disclosure Controls and Procedures


We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in the reports we file pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”) are recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our Principal Executive Officer (“PEO”) and Principal Financial Officer (“PFO”), to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can only provide a reasonable assurance of achieving the desired control objectives, and in reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Management designed the disclosure controls and procedures to provide reasonable assurance of achieving the desired control objectives.


We carried out an evaluation, under the supervision and with the participation of our management, including our PEO and PFO, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Annual Report. Based upon that evaluation, the PEO and PFO concluded that the Company’s disclosure controls and procedures were not effective.


(b) Management’s Assessment of Internal Control over Financial Reporting


Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in the Exchange Act Rules 13a-15(f). A system of internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.


Under the supervision and with the participation of management, including the principal executive officer and the principal financial officer, the Company’s management has evaluated the effectiveness of its internal control over financial reporting as of December 31, 2012, based on the criteria established in a report entitled “Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission” and the interpretive guidance issued by the Commission in Release No. 34-55929. Based on this evaluation, the Company’s management has evaluated and concluded that the Company’s internal control over financial reporting was ineffective as of December 31, 2012, and identified the following material weaknesses:


- There is a lack of accounting personnel with the requisite knowledge of Generally Accepted Accounting Principles in the US (“GAAP”) and the financial reporting requirements of the U.S. Securities and Exchange Commission.


- There are insufficient written policies and procedures to insure the correct application of accounting and financial reporting with respect to the current requirements of GAAP and SEC disclosure requirements.


Not withstanding the existence of these material weaknesses in our internal control over financial reporting, our management believes that the financial statements included in its reports fairly present in all material respects the Company’s financial condition, results of operations and cash flows for the periods presented.


We plan to hire personnel and resources to address these material weaknesses. We believe these issues can be solved with hiring in-house accounting support and plan to do so as soon as we have funds available for this.


This annual report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. The Company’s registered public accounting firm was not required to issue an attestation on



29



its internal controls over financial reporting pursuant to temporary rules of the Securities and Exchange Commission. The Company will continue to evaluate the effectiveness of internal controls and procedures on an on-going basis.


(c) Changes in Internal Control over Financial Reporting


There have been no changes in our internal controls over financial reporting (as such term is defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act) during the year ended December 31, 2012, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


Item 9B. Other Information.


Not applicable.




PART III


Item 10. Directors, Executive Offices and Corporate Governance.


The following table and text sets forth the names and ages of all our directors and executive officers and our key management personnel as of April 16, 2013. All of our directors serve until the next annual meeting of stockholders and until their successors are elected and qualified, or until their earlier death, retirement, resignation or removal. Executive officers serve at the discretion of the board of directors, and are elected or appointed to serve until the next Board of Directors meeting following the annual meeting of stockholders.  Also provided is a brief description of the business experience of each director and executive officer and the key management personnel during the past five years and an indication of directorships held by each director in other companies subject to the reporting requirements under the Federal securities laws.


Name

Positions Held

Age

Matthew Worrall

President, Chief Executive Officer, Chief Financial Officer, Director

39


Mr. Worrall was appointed President, Chief Executive Officer, Chief Financial Officer and our sole director in March 2010. 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 to 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.


Term of Office


Our directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board, except to the extent governed by an employment agreement.


Involvement in Certain Legal Proceedings


To the best of our knowledge, during the past ten years, none of the following occurred with respect to a director or executive officer of the Company: (1) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of any competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; (4) being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodity Futures Trading Commission to have violated a Federal or State securities or commodities law, and the judgment has not been reversed, suspended or vacated; (5) being subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of any Federal or State securities or commodities law or regulation or any law or regulation respecting financial institutions or insurance companies or prohibiting mail or wire fraud or fraud



30



in connection with any business entity; or (6) being subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization, any registered entity of the Commodity Exchange Act, or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.


Board Committees and Independence


Our sole director is Mr. Matthew Worrall. He is not independent as such term is defined by a national securities exchange or an inter-dealer quotation system.

 

We currently have no nominating committee, 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.


Code of Ethics


We do not currently have a code of ethics that applies to our Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer or Controller, or persons performing similar functions.  Because we have only limited business operations and four officers and directors, we believe a code of ethics would have limited utility. We intend to adopt such a code of ethics as our business operations expand and we have more directors, officers and employees.


Changes in Nominating Procedures


None.


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.


On March 12, 2010, we 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  receives a salary of $6,500 per month.  Mr. Worrall is eligible to participate in any benefits made generally available by the Company and shall be reimbursed for all reasonable business expenses incurred in the performance of his duties.  The Company and Mr. Worrall shall review terms of Mr. Worrall’s salary and benefits on a semi-annual basis.


Name &

Principal Position

Year

 

Salary($)

 

 

Bonus ($)

 

 

Stock Awards ($)

 

 

Option Awards ($)

 

 

Non-Equity Incentive Plan Compensation ($)

 

 

Change in Person Value and Qualified Deferred Compensation Earnings ($)

 

 

All Other Compensation ($)

 

Total($)

Matthew Worrall President, Chief Executive Officer, Chief Financial Officer, Director

2011

 

$

78,000

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

$

78,000

 

2010

 

$

78,000

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

$

78,000

 

2009

 

$

65,000

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

$

65,000



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.


Outstanding Equity Awards


None.


Director Compensation


None.




31



Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.


As of April 16, 2013, our authorized capitalization is 500,000,000 shares of common stock, $0.001 par value per share and 10,000,000 shares, par value $0.001 per share, of “blank-check” preferred stock.  As of April 16, 2013, there were 146,704,662 shares of our common stock and 0 shares of our preferred stock outstanding, all of which were fully paid, non-assessable and entitled to vote. Each share of our common stock entitles its holder to one vote on each matter submitted to the stockholders.  There is currently no designation for any of the Company’s authorized preferred stock.


The following table sets forth, as of April 16, 2013, the number of shares of our common stock owned by (i) each person who is known by us to own of record or beneficially five percent (5%) or more of our outstanding shares, (ii) each of our directors, (iii) each of our executive officers and (iv) all of our directors and executive officers as a group. Unless otherwise indicated, each of the persons listed below has sole voting and investment power with respect to the shares of our common stock beneficially owned.


Executive Officers, Directors, and More than 5% Beneficial Owners


The address of our officer or director is c/o the Company at 871 Coronado Center Drive, Suite 200, Henderson, Nevada 89052.


Name of Beneficial Owner (1)

 

Number of Shares

 

 

Percent of Class

 

 

 

 

 

 

 

 

Matthew Worrall

 

18,332,315

 

 

12.496

%

President, Chief Executive Officer, Chief Financial Officer, Director

 

 

 

 

 

 


 

(1)

Beneficial ownership is determined in accordance with Rule 13d-3(a) of the Exchange Act and generally includes voting or investment power with respect to securities.


Changes in Control


We are not aware of any arrangements that may result in “changes in control” as that term is defined by the provisions of Item 403(c) of Regulation S-K.


Item 13. Certain Relationships and Related Transactions, and Director Independence.


There are no transactions since our inception, or proposed transactions, to which we were or are to be a party, in which any of the following persons had or is to have a direct or indirect material interest:


 

(a)

Any director or executive officer of the Company;


 

(b)

Any majority security holder; and


 

(c)

Any member of the immediate family (including spouse, parents, children, siblings, and in-laws) of any of the persons in the above.



Item 14. Principal Accountant Fees and Services.


Summary of Principal Accountant Fees for Professional Services Rendered


The following table presents the aggregate fees for professional audit services and other services rendered by Thomas J. Harris, CPA, our independent registered public accountant in 2012 and 2011, respectively.


 

 

Fiscal Year Ended

 

Fiscal Years Ended

 

 

 

December 31, 2012

 

December 31, 2011

 

 

 

 

 

 

 

Audit and Audit Related Fees

 

$

22,500

 

$

21,000

 

Tax Fees

 

$

0

 

$

0

 

All Other Fees

 

$

0

 

$

0

 



32





PART IV


Item 15. Exhibits, Financial Statement Schedules.


Exhibit No.

 

Description

 

 

 

3.1

 

Articles of Incorporation (Incorporated by reference to Form S-1 filed on November 5, 2008)

 

 

 

3.2

 

Amendment to Articles of Incorporation (Incorporated by reference to Current Report on Form 8-K filed on March 12, 2010)

 

 

 

3.3

 

Bylaws (Incorporated by reference to Form S-1 filed on November 5, 2008)

 

 

 

4.1

 

JMJ Financial Convertible Promissory Note $1,850,000 (Incorporated by reference to Current Report on Form 8-K filed on July 6, 2011)

 

 

 

4.2

 

JMJ Financial Convertible Promissory Note $540,000 (Incorporated by reference to Current Report on Form 8-K filed on July 6, 2011)

 

 

 

4.3

 

Additional Default Provisions with JMJ Financial, dated June 29, 2011 (Incorporated by reference to Current Report on Form 8-K filed on July 6, 2011)

 

 

 

4.4

 

Secured & Collateralized Promissory Notes $540,000 (Incorporated by reference to Current Report on Form 8-K filed on July 6, 2011)

 

 

 

4.5

 

Amendment to Convertible Promissory Note (Incorporated by reference to Current Report on Form 8-K filed on July 18, 2011)

 

 

 

10.1

 

Letter Agreement, dated June 29, 2011 between the Company and JMJ Financial (Incorporated by reference to Current Report on Form 8-K filed on July 6, 2011)

 

 

 

10.2

 

Investor Relations Service Agreement, dated September 30, 2011, between 1830012 Ontario Ltd. O/A Circadian Group and Amerilithium Corp. (Incorporated by reference to Current Report on Form 8-K/A filed on December 19, 2011)

 

 

 

10.3

 

Geophysical Service Agreement dated July 27, 2011 (Incorporated by reference to Current Report on Form 8-K filed on July 28, 2011)

 

 

 

10.4

 

Committed Equity Facility Agreement, dated January 30, 2012, by and between Amerilithium Corp. and TCA Global Credit Master Fund, LP (Incorporated by reference to Registration Statement on Form S-1 filed on February 14, 2012)

 

 

 

10.5

 

Registration Rights Agreement, dated January 30, 2012, by and between Amerilithium Corp. and TCA Global Credit Master Fund, LP (Incorporated by reference to Registration Statement on Form S-1 filed on February 14, 2012)

 

 

 

10.6

 

Purchase Agreement, dated September 23, 2011 by and between the Company, Nevada Alaska Mining Co., Inc., Robert Craig, Barbara Anne Craig and Elizabeth Dickman (Incorporated by reference to Current Report on Form 8-K filed on September 27, 2011)

 

 

 

10.7

 

Purchase Agreement, dated September 23, 2011 by and between the Company, Robert Craig and Barbara Anne Craig (Incorporated by reference to Current Report on Form 8-K filed on September 27, 2011)

 

 

 

31.1

 

Certification by the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14 (a)). *

 

 

 



33






31.2

 

Certification by the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14 (a)). *

 

 

 

32.1

 

Certification by the Principal Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *

 

 

 

32.2

 

Certification by the Principal Financial Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *

 

 

 

*filed herewith




SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



 

AMERILITHIUM CORP.

 

 

 

 

 

 

Dated: April 16, 2013                                                                                                            

By:

/s/ Matthew Worrall

 

Matthew Worrall

 

Chief Executive Officer

(Principal Executive Officer)

Chief Financial Officer

(Principal Financial Officer)

(Principal Accounting Officer)



PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, THIS REPORT HAS BEEN SIGNED BY OR ON BEHALF OF THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED:


Signature

 

Title

 

Date

 

 

 

 

 

 

 

 

 

 

/s/ Matthew Worrall

 

Chairman, Chief Executive Officer (Principal Executive

 

April 16, 2013

Matthew Worrall

 

Officer), Chief Financial Officer (Principal Financial

 

 

 

 

Officer) (Principal Accounting Officer)

 

 




34





























 

 

 

 

 

AMERILITHIUM CORP.

Formerly Kodiak International Inc.

Index to Financial Statements

 

 

 

 

 

 

 

 

 

 

Report of Independent Registered Public Accounting Firm – De Joya Griffith, LLC

 

 

 

F-2

Report of Independent Registered Public Accounting Firm – Thomas J. Harris

 

 

 

F-3

 

 

 

 

 

Balance Sheets:

 

 

 

 

    December 31, 2012 and 2011 (Restated)

 

 

 

F-3

 

 

 

 

 

Statements of Operations:

 

 

 

 

     For the Years Ended December 31, 2012 and 2011 (Restated)

 

 

F-4

 

 

 

 

 

Statements of Stockholders' Equity

 

 

 

 

     For the Years Ended December 31, 2012 and 2011 (Restated)

 

 

 

F-5

 

 

 

 

 

Statements of Cash Flows:

 

 

 

 

     For the Years Ended December 31, 2012 and 2011 (Restated)

 

 

 

F-6

 

 

 

 

 

Notes to Financial Statements:

 

 

     December 31, 2012

 

F-7




F-1



[amel_10k123112apg2008.gif]

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors and Stockholders

Amerilithium Corp.


We have audited the accompanying balance sheet of Amerilithium, Corp. (An Exploration Stage Enterprise) (the “Company”) as of December 31, 2012 and the related statements of operations, stockholders’ equity and cash flows for the year then ended and for the cumulative period from February 2, 2004 (inception) to December 31, 2012. The financial statements for the period from February 2, 2004 (inception) through December 31, 2011 were audited by other auditors.  Amerilithium Corp's management is responsible for these financial statements.  Our responsibility is to express an opinion on these financial statements based on our audit.


We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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. (An Exploration Stage Enterprise) as of December 31, 2012 and the results of its operations and its cash flows for the year then ended and for the cumulative period from February 2, 2004 (inception) to December 31, 2012 in conformity with accounting principles generally accepted in the United States of America.


The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has incurred losses from operations, which raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.


/s/ De Joya Griffith, LLC

Henderson, Nevada

April 15, 2013

Corporate Headquarters:

De Joya Griffith, LLC

2580 Anthem Village Drive, Henderson, NV 89052 Phone:  (702) 563-1600 Fax: (702) 920-8049




F-2



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



To the Board of Directors

AMERILITHIUM CORP. (Formerly Kodiak International, Inc.)


I have audited the accompanying restated balance sheets of AMERILITHIUM CORP. (Formerly Kodiak International, Inc; An Exploration Stage Company) as of December 31, 2011 and 2010, and the related restated statements of operations, stockholders’ equity and cash flows for the years then ended, and the period from February 2, 2004 (inception) to December 31, 2011.  These financial statements are the responsibility of the Company’s management.  My responsibility is to express an opinion on these financial statements based on my audit.


I conducted my audit 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.  I believe that my audit provides a reasonable basis for my opinion.


In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of AMERILITHIUM CORP. (Formerly Kodiak International, Inc.; An Exploration Stage Company) as of December 31, 2011 and 2010 and the results of its operations and cash flows for the years then ended and the period from February 2, 2004 (inception) to December 31, 2011 in conformity with generally accepted accounting principles in the United States of America.


The accompanying financial statements have been prepared assuming the Company will continue as a going concern.  As discussed in Note #2 to the financial statements, the Company has had no operations and has no established source of revenue.  This raises substantial doubt about its ability to continue as a going concern.  Management’s plan in regard to these matters is also described in Note #2.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.




/s/ Thomas J Harris


Thomas J Harris, CPA

Seattle, Washington

March 29, 2012 except Note 3 which is dated April 15, 2013



F-3




AMERILITHIUM CORP.

  Formerly Kodiak International Inc.

 (An Exploration Stage Enterprise)

 Balance Sheets

 (Audited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

December 31,

 

 

 

2012

 

2011

ASSETS

 

 

 

 

(Restated)

  Current assets:

 

 

 

 

 

    Cash

 

 

$

215,245 

 

$

501,203 

    Prepaid expense

 

 

1,200 

 

    Unamortized loan fees

 

 

33,968 

 

50,000 

      Total current assets

 

 

250,413 

 

551,203 

 

 

 

 

 

 

 Fixed assets

 

 

 

 

 

     Computer equipment, net

 

 

4,670 

 

6,587 

     Furniture and equipment, net

 

 

2,244 

 

 Total fixed assets

 

 

6,914 

 

6,587 

 

 

 

 

 

 

Other assets

 

 

 

 

 

    Mining claims

 

 

5,178,880 

 

7,225,000 

 

 

 

 

 

 

      Total assets

 

 

$

5,436,206 

 

$

7,782,790 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

  Current liabilities:

 

 

 

 

 

    Accounts payable and accrued expenses

 

 

$

42,491 

 

$

122,677 

    Convertible notes net of discount - current

 

 

262,079 

 

36,843 

      Total current liabilities

 

 

304,570 

 

159,520 

 

 

 

 

 

 

  Long-term  liabilities:

 

 

 

 

 

   Convertible notes, net of discount

 

 

128,831 

 

654,130 

 

 

 

 

 

 

      Total long-term liabilities

 

 

128,831 

 

654,130 

 

 

 

 

 

 

      Total liabilities

 

 

433,401 

 

813,650 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY

 

 

 

 

 

  Common stock, $0.001 par value, 150,000,000 authorized,

 

 

 

 

 

  117,458,776 and 71,724,104 shares issued and outstanding

 

 

117,459 

 

71,724 

  Additional paid-in capital

 

 

10,683,838 

 

9,177,047 

  Stock payable

 

 

14,100 

 

  Deficit accumulated during exploration stage

 

 

(5,812,592)

 

(2,279,631)

      Total stockholders' equity

 

 

5,002,805 

 

6,969,140 

      Total liabilities and stockholders' equity

 

 

$

5,436,206 

 

$

7,782,790 

 

 

 

 

 

 

The accompanying notes are an integral part of these financial statements




F-4




AMERILITHIUM CORP.

  Formerly Kodiak International Inc.

 (An Exploration Stage Enterprise)

 Statements of Operations

 Audited

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

From inception

 

 

 

Year ended

 

(February 2, 2004)

through

 

 

 

December 31,

 

December 31,

 

 

 

2012

 

2011

 

2012

 

 

 

 

 

(Restated)

 

 

 

Revenue

 

$

 

$

 

$

 

 

 

 

 

 

 

 

 

General and administrative expenses

 

237,318 

 

155,037 

 

553,576 

 

Exploration expenses

 

200,867 

 

364,956 

 

639,746 

 

Impairment losses

 

2,046,120 

 

 

2,046,120 

 

Salaries

 

150,250 

 

150,500 

 

572,007 

 

Professional fees

 

192,150 

 

247,455 

 

1,125,651 

 

    Total operating expenses

 

2,826,705 

 

917,948 

 

4,955,100 

 

 

 

 

 

 

 

 

 

Loss from operations

 

(2,826,705)

 

(917,947)

 

(4,955,100)

 

 

 

 

 

 

 

 

 

Other expense:

 

 

 

 

 

 

 

  Interest expense

 

(706,256)

 

(150,211)

 

(857,492)

 

Total other expenses

 

(706,256)

 

(150,211)

 

(857,492)

 

 

 

 

 

 

 

 

 

Provision for taxes on income

 

 

 

 

 

 

 

 

 

 

 

 

    Net loss

 

$

(3,532,961)

 

$

(1,068,158)

 

$

(5,812,592)

 

 

 

 

 

 

 

 

 

Weighted average number of shares

outstanding-basic

 

76,939,340 

 

69,500,664 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share - basic

 

$

0.05 

 

$

0.02 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these financial statements




F-5




AMERILITHIUM CORP.

Formerly Kodiak International Inc.

(An Exploration Stage Enterprise)

Statement of Stockholders' Equity (Audited)

 

 

 

 

 

 

 

 

 

 

 Deficit

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

Additional

 

 

 

 During the

 

 

 

 

 Common Stock

 

 Paid-in

 

 Stock

 

 Exploration

 

 

 

 

 Shares

 

 Amount

 

 Capital

 

 Payable

 

 Stage

 

 Total

 Inception, February 2, 2004

 


 


 

 

 


 


 

 Shares Issued

 

37,920,000

 

$

37,920

 

$

(19,120)

 

$

-

 

$

 

$

18,800 

 Net (loss)

 

 

 

 

 

 

 

 

 

(104)

 

(104)

 Balances, December 31, 2005

 

37,920,000

 

37,920

 

(19,120)

 

-

 

(104)

 

18,696 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Shares Issued

 

2,880,000

 

2,880

 

4,320 

 

-

 

 

7,200 

 Net (loss)

 

 

 

 

 

 

 

 

 

(20,020)

 

(20,020)

 Balance, December 31, 2006

 

40,800,000

 

40,800

 

(14,800)

 

 

 

(20,124)

 

5,876 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares Issued

 

-

 

-

 

 

-

 

 

  Net (loss)

 

 

 

 

 

 

 

 

 

(981)

 

(981)

 Balance, December 31, 2007

 

40,800,000

 

40,800

 

(14,800)

 

 

 

(21,105)

 

4,895 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares Issued, August 22, 2008

 

12,000,000

 

12,000

 

48,000 

 

-

 

 

60,000 

  Net (loss)

 

 

 

 

 

 

 

 

 

(41,539)

 

(41,539)

 Balance, December 31, 2008

 

52,800,000

 

52,800

 

33,200 

 

 

 

(62,644)

 

23,356 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares Issued, November 18, 2009

 

1,600,000

 

1,600

 

48,400 

 

-

 

 

50,000 

  Net (loss)

 

 

 

 

 

 

 

 

 

(82,765)

 

(82,765)

 Balance, December 31, 2009

 

54,400,000

 

54,400

 

81,600 

 

 

 

(145,409)

 

(9,409)

 

 

 

 

 

 

 

 

 

 

 

 

 

  Stock issued for purchase of mining claims

 

5,950,000

 

5,950

 

6,804,050 

 

-

 

 

6,810,000 

  Stock issued for financing agreement

 

1,218,891

 

1,219

 

1,044,552 

 

-

 

 

1,045,771 

  Stock issued for loan conversion

 

4,800,000

 

4,800

 

25,200 

 

-

 

 

30,000 

  Stock issued for advisory services

 

175,000

 

175

 

80,425 

 

-

 

 

80,600 

  Stock issued for consultancy agreement

 

350,000

 

350

 

184,650 

 

-

 

 

185,000 

  Stock issued for finders fee agreement

 

300,000

 

300

 

95,700 

 

-

 

 

96,000 

  Stock issued with warrant

 

83,333

 

83

 

99,917 

 

-

 

 

100,000 

  Net (loss)

 

 

 

 

 

 

 

 

 

(1,066,066)

 

(1,066,066)

 Balance, December 31, 2010

 

    67,277,224

 

67,277

 

8,416,094 

 

-

 

(1,211,472)

 

7,271,896 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Stock issued for purchase of mining claims

 

600,000

 

600

 

107,400 

 

-

 

 

108,000 

  Stock issued for financing agreement

 

751,880

 

752

 

199,248 

 

-

 

 

200,000 

  Stock issued for loan conversion

 

2,400,000

 

2,148

 

223,852 

 

-

 

 

226,000 

  Bond discount on convertible debentures

 

 

 

252

 

56,248 

 

-

 

 

56,500 

  Stock issued for advisory services

 

195,000

 

195

 

52,205 

 

-

 

 

52,400 

  Stock issued for consultancy agreement

 

500,000

 

500

 

122,000 

 

-

 

 

122,500 

  Net (loss)

 

 

 

 

 

 

 

 

 

(1,068,158)

 

(1,068,158)

Balance, December 31, 2011 (Restated)

 

71,724,104

 

71,724

 

9,177,047 

 

-

 

(2,279,631)

 

6,969,140 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Stock issued for purchase of mining claims

 

225,000

 

225

 

17,775 

 

-

 

 

18,000 

  Stock issued for financing agreement

 

6,320,238

 

6,320

 

228,121 

 

-

 

 

234,441 

  Stock issued for loan conversion

 

39,139,434

 

39,140

 

1,257,945 

 

-

 

 

1,297,085 

  Stock issued for advisory services

 

50,000

 

50

 

2,950 

 

-

 

 

3,000 

  Stock subscription

 

-

 

-

 

 

14,100

 

 

14,100 

  Net (loss)

 

 

 

 

 

 

 

 

 

(3,532,961)

 

(3,532,961)

Balance, December 31, 2012

 

117,458,776

 

$117,459

 

$10,683,838 

 

$14,100

 

$(5,812,592)

 

$5,002,805

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these financial statements



F-6




AMERILITHIUM CORP.

Formerly Kodiak International Inc.

(An Exploration Stage Enterprise)

Statements of Cash Flows

Audited

 

 

 

 

 

 

From inception

 

 

 

 

 

 

(February 2, 2004)

 

 

Year Ended

 

Year Ended

 

through

 

 

December 31,

 

December 31,

 

December 31,

 

 

2012

 

2011

 

2012

 

 

 

 

(Restated)

 

 

 Cash flows from operating activities:

 

 

 

 

 

 

  Net (loss)

 

$

(3,532,961)

 

$

(1,068,158)

 

$

(5,812,592)

 

 

 

 

 

 

 

 Adjustments to reconcile net (loss) to cash  

 

 

 

 

 

 

   provided (used) by developmental stage activities:

 

 

 

 

 

 

      Common stock issued for services

 

17,100 

 

173,550 

 

$

553,600 

      Shares issued for exploration expense

 

18,000 

 

 

18,000 

      Shares issued for interest

 

559,520 

 

3,298 

 

559,520 

       Amortization of debt discount

 

40,197 

 

77,878 

 

158,046

       Amortization of loan fees

 

16,032

 

10,000 

 

66,032 

      Impairment of mining claims

 

2,046,120 

 

 

2,046,120 

     Depreciation and Amortization

 

2,065 

 

1,223 

 

3,184 

   Change in current assets and liabilities:  

 

 

 

 

 

 

     Decrease in prepaids

 

(1,200)

 

(50,000)

 

(1,200)

     Accounts payable and accrued expenses

 

(87,440)

 

123,858 

 

(54,142)

       Net cash flows from operating activities

 

(922,567)

 

(700,845)

 

(2,463,432)

 

 

 

 

 

 

 

 Cash flows from investing activities:

 

 

 

 

 

 

     Purchase of fixed assets

 

(2,391)

 

 

(10,095)

      Purchase of Mining Rights

 

 

(6,000)

 

(307,000)

       Net cash flows from investing activities

 

(2,392)

 

(6,000)

 

(317,095)

 

 

 

 

 

 

 

 Cash flows from financing activities:

 

 

 

 

 

 

   Proceeds from sale of common stock

 

                               -

 

200,000 

 

1,887,162 

    Proceeds from convertible notes

 

639,000 

 

845,000 

 

1,108,610 

   Payment on notes payable

 

 

(40,000)

 

 

 

 

 

 

 

 

       Net cash flows from financing activities

 

639,000 

 

1,005,000 

 

2,995,772 

       Net cash flows

 

(285,958)

 

(270,649)

 

215,245 

 

 

 

 

 

 

 

 Cash and equivalents, beginning of period

 

501,203 

 

230,554 

 

 Cash and equivalents, end of period

 

$

215,245 

 

$

501,203 

 

$

215,245 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOWS FOR:

 

 

 

 

 

     Interest

 

$

73,175

 

$

 

$

73,175

     Income taxes

 

$

 

$

 

$

SUPPLEMENTAL DISCLOSURE OF

 

 

 

 

 

 

  NON-CASH FINANCING AND INVESTING:

 

 

 

 

 

 

     Stock issued to acquire assets

 

$

 

$

108,000 

 

$

6,918,000 

     Shares issued to settle convertible debenture

 

$

535,947 

 

$

61,200 

 

$

1,165,700 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these financial statements



F-7



AMERILITHIUM CORP

Formerly Kodiak International Inc.

(An exploration stage enterprise)

Notes to Financial Statements

December 31, 2012 and 2011




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 - The accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America, and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and reflect all adjustments, consisting of normal recurring adjustments, which management believes are necessary to fairly present the financial position, results of operations and cash flows of the Company as of and for the years ended December 31, 2012 and 2011.

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 - The Company maintains a cash balance in a non-interest-bearing account that currently does not exceed federally insured limits. For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. There were no cash equivalents as of December 31, 2012 and 2011.


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 three to five years. As of December 31, 2012 and 2011 the company had recognized total depreciation expense of $2,065 and $838, respectively.

Mineral Property Acquisition and Exploration Costs - The Company is primarily engaged in the business of the acquisition, exploration, development, mining, and production of domestic strategic energy and mineral properties, with emphasis on lithium carbonate and additional strategic minerals. Mineral claim and other property acquisition costs are capitalized as incurred. Such costs are carried as an asset of the Company until it becomes apparent through exploration activities that the cost of such properties will not be realized through mining operations. Mineral exploration costs are expensed as incurred, and when it becomes apparent that a mineral property can be economically developed as a result of establishing proven or probable reserve, the exploration costs, along with mine development cost, are capitalized. The costs of acquiring mineral claims, capitalized exploration costs, and mine development costs are recognized for depletion and amortization purposes under the units-of-production method over the estimated life of the probable and proven reserves. If mineral properties, exploration, or mine development activities are subsequently abandoned or impaired, any capitalized costs are charged to operations in the current period.






F-8



AMERILITHIUM CORP

Formerly Kodiak International Inc.

(An exploration stage enterprise)

Notes to Financial Statements

December 31, 2012 and 2011



Note 1 - Organization and summary of significant accounting policies: (continued)


Mineral Property Acquisition and Exploration Costs (continued)

The Company conducted an impairment analysis on the carrying value of its mining properties and the related lease acreage for the period ended December 31, 2012 and determined an impairment in the amount of $2,046,120 was necessary. Key indicators were evaluated to determine that sufficient progress had been made over the last 12 months including maintaining the commitment of our geologist, significant progress in evaluating the properties program which is very complex and continued resources for financing for third parties.


Asset retirement obligations - The Company has adopted the provisions of FASB ASC 410-20 “Asset Retirement and Environmental Obligations," which requires the fair value of a liability for an asset retirement obligation to be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The associated asset retirement costs are capitalized as part of the carrying amount of the related mining properties. As of December 31 2012, there have been no asset retirement obligations recorded.


Fair value of financial instruments - The Company’s financial instruments include cash, accounts receivable, accounts payable, and notes payable. All instruments are accounted for on a historical cost basis, which, due to the short maturity of these financial instruments, approximates fair value at December 31, 2012 and 2011. The Company did not engage in any transaction involving derivative instruments.


Income Taxes - The Company accounts for its income taxes in accordance with Income Taxes Topic of the FASB ASC 740, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards. 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. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date.


Net loss per share calculation - Net loss per share is provided in accordance with FASB ASC 260-10, “Earnings per Share”. Basic net loss per common share ("EPS") is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing net income by the weighted average shares outstanding, assuming all dilutive potential common shares were issued, unless doing so is anti-dilutive. The weighted-average number of common shares outstanding for computing basic EPS for the years ended December 31, 2012 and 2011 were 76,939,340 and 69,500,664, respectively.  


Stock Based Compensation - The Company recognizes stock-based compensation in accordance with ASC Topic 718 “Stock Compensation”, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors including employee stock options and employee stock purchases related to an Employee Stock Purchase Plan based on the estimated fair values.


For non-employee stock-based compensation, we have adopted ASC Topic 505 “Equity-Based Payments to Non-Employees”, which requires stock-based compensation related to non-employees to be accounted for based on the fair value of the related stock or options or the fair value of the services on the grant date, whichever is more readily determinable in accordance with ASC Topic 718.


Exploration Stage Enterprise - The Company’s financial statements are prepared pursuant to the provisions of Topic 26, “Accounting for Development Stage Enterprises,” as it devotes substantially all of its efforts to acquiring and exploring mining interests that will eventually provide sufficient net profits to sustain the Company’s existence. Until such interests are engaged in major commercial production, the Company will continue to prepare its financial statements and related disclosures in accordance with entities in the development stage. Mining companies subject to Topic 26 are required to label their financial statements as an “Exploratory Stage Company,” pursuant to guidance provided by SEC Guide 7 for Mining Companies.




F-9



AMERILITHIUM CORP

Formerly Kodiak International Inc.

(An exploration stage enterprise)

Notes to Financial Statements

December 31, 2012 and 2011



Note 1 - Organization and summary of significant accounting policies: (continued)

Recently Issued Accounting Pronouncements - As of and for the years ended December 31, 2012 and 2011, the

Company does not expect any of the recently issued accounting pronouncements to have a material impact on its financial   condition or results of operations.

Note 2 -Going concern


The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs to allow it to continue as a going concern. As of December 31, 2012, the Company had an accumulated deficit of $5,812,592. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.


In order to continue as a going concern, the Company will need, among other things, additional capital resources. The Company is contemplating conducting an offering of its debt or equity securities to obtain additional operating capital. The Company is dependent upon its ability, and will continue to attempt, to secure equity and/or debt financing. There are no assurances that the Company will be successful and without sufficient financing it would be unlikely for the Company to continue as a going concern.


The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.


Note 3 - Restatement


Changes in classification of 2011 amounts have been made to conform to current presentations. The company has determined accounting principle ASC 480-10-25-14 is more appropriate over ASC 470-20-25-8 when recording convertible note discounts. This has led to certain changes being required in order to correct and apply this principle going forward. In addition certain accounting errors relating to debts payable have been rectified. These restatements apply to amounts previously reported as of December 31, 2011.




F-10



AMERILITHIUM CORP

Formerly Kodiak International Inc.

(An exploration stage enterprise)

Notes to Financial Statements

December 31, 2012 and 2011




The following is a summary of the impact of these restatements on the Company’s Balance Sheet at December 31, 2011:


 

 

December 31, 2011

 

 

As previously

 

Error

 

 

 

 

Reported

 

correction

 

As restated

Unamortized loan fees

$0

 

$50,000

(a)

$50,000

 

 

 

 

 

 

         Total assets

$7,732,790

 

$50,000

(a)

$7,782,790

 

 

 

 

 

 

Accounts payable and accrued expenses

$29,909

 

$92,768

(a)

$122,677

 

 

 

 

 

 

Convertible notes payable related party, net of unamortized discount

$ 451,108

 

$ 239,865

(a)

$690,973

 

 

 

 

 

 

 

 

Total liabilities

$ 481,017

 

$ 332,633

(a)

$813,650

 

 

 

 

 

 

 

Additional paid-in capital

$9,387,787

 

$210,740

(a)

$9,177,047

 

 

 

 

 

 

 

Retained deficits

$(2,207,740)

 

$(71,891)

(a)

$(2,279,631)

 

 

 

 

 

 

 

 

Total stockholders’ equity

$ 7,251,771

 

$ 282,631

(a)

$6,969,140

 

 

 

 

 

 

 

(a)

To correct errors in accounts payable, debt discount and unamortized loan fees on convertible notes payable.




F-11



AMERILITHIUM CORP

Formerly Kodiak International Inc.

(An exploration stage enterprise)

Notes to Financial Statements

December 31, 2012 and 2011




The following is a summary of the impact of these restatements on the Company’s Statements of Equity for the fiscal year ended December 31, 2011:


 

 

December 31, 2011

 

 

As previously

 

Error

 

 

 

 

Reported

 

correction

 

As restated

Balance Additional Paid-in Capital

$9,387,787

 

$ 210,740

(a

$9,177,047

Balance Retained Deficits

$(2,207,740)

 

$(71,891)

(a

$(2,279,631)

Balance December 31, 2011 - Total Stockholder's Equity

$7,251,771

 

$ 282,631

(a

$6,969,140

 

To correct errors in accounts payable, debt discount and unamortized loan fees on convertible notes payable.



Note 4 - Income tax:


As of December 31, 2012 and 2011, the Company had a net operating loss (NOL) carryforward of approximately $3,537,162 and $2,123,853, respectively, adjusted for stock based compensation and certain other non-deductible items available to reduce future taxable income, if any. The NOL carryforward begins to expire in 2029, and fully expires 2032. Because management is unable to determine that it is more likely than not that the Company will realize the tax benefit related to the NOL carryforward , by having taxable income, a valuation allowance has been established at December 31, 2012 and 2011 to reduce the tax benefit asset value to zero.


Components of net deferred tax assets, including a valuation allowance, are as follows at December 31:


 

 

December 31,

 

 

2012

 

2011

Deferred tax assets

 

1,238,007 

 

743,349 

Valuation allowance

 

(1,238,007)

 

(743,349)

Total deferred tax assets

$

$



The valuation allowance for deferred tax assets as of December 31, 2012 and 2011 was $1,238,007 and $743,349, respectively. In assessing the recovery of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible. Management considers the scheduled reversals of future deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. As a result, management determined it was more likely than not the deferred tax assets would not be realized as of December 31, 2012 and 2011, and recorded a full valuation allowance.

 

Reconciliation between the statutory rate and the effective tax rate is as follows at December 31, 2012 and 2011:

 

Federal statutory tax rate

 

 

(35.0

)%

Permanent difference and other

 

 

35.0

%

Effective tax rate

 

 

0.0

%

   


F-12



AMERILITHIUM CORP

Formerly Kodiak International Inc.

(An exploration stage enterprise)

Notes to Financial Statements

December 31, 2012 and 2011



Note 5 – Stockholder's Equity:


On February 18, 2010, our articles of incorporation were amended to increase our authorized common shares to 150,000,000. On January 31, 2013 we amended our articles of incorporation to increase authorized common shares from 150,000,000 to 500,000,000 and authorized 10,000,000 shares, par value $0.001 per share, of “blank-check” preferred stock.


Since its inception, we have issued shares of common stock as follows:

On August 8, 2005, our Directors authorized the issuance of 16,000,000 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 16,000,000 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 8,800,000 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 12,000,000 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 1,600,000 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.


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 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.


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 for a total of 352,374 shares of the company's common stock, in regards to their financing agreement with Sunrise Energy Investments.


The Company has a note payable with one of its shareholders. On April 22, 2010, the Company issued 4,800,000 shares in exchange for this note.  


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 have been fully issued in July 2010.


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 through termination of agreements, and priced at the current market price.  These shares are restricted.




F-13



AMERILITHIUM CORP

Formerly Kodiak International Inc.

(An exploration stage enterprise)

Notes to Financial Statements

December 31, 2012 and 2011



During June 2010, the Company submitted drawdown notices of $500,000 for a total of 554,017 shares of the company's common stock, 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 through termination of agreements and priced at the current market price.  These shares are restricted.


During July 2010, the Company submitted drawdown notices of $200,000 for a total of 312,500 shares of the company's common stock, 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.  


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 through termination of agreements 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.


On January 21, 2011, the Company issued 20,000 shares at $0.29 per share as part of the advisory agreements.


On March 7, 2011, the Company issued 751,880 shares at $0.40 to Sunrise Energy Investments as part of the financing agreement draw down.


On March 23, 2011, the Company issued 45,000 shares at $0.37 to three advisors as part of the advisory agreements.


On May 3, 2011, the Company issued 270,000 shares at $0.35, 20,000 to two advisors per their advisory agreements and 250,000 as part of the consultancy agreement.


On June 15, 2011, the Company issued 45,000 shares at $0.25 to three advisors as part of their advisory agreements.


On September 21, 2011, JMJ Financial converted part of their convertible debenture.  The Company issued 300,000 shares to reduce the note payable by $46,500.


On September 23, 2011, the Company issued 65,000 shares at $0.18 to four advisors as part of their advisory agreements.


On September 23, 2011, the Company issued 200,000 shares at $0.18 as part of the purchase agreement for Clayton Deep extension.


On September 23, 2011, the Company issued 400,000 shares at $0.18 as part of the purchase agreement for Jackson Wash.


On September 29, 2011, JMJ Financial converted part of their convertible debenture.  The Company issued 200,000 shares to reduce the note payable by $30,000.


On October 11, 2011 JMJ Financial converted part of their convertible debenture.  The Company issued 400,000 shares to reduce the note payable by $56,000.


On November 8, 2011, the Company issued 250,000 shares of stock at $0.14 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 November 11, 2011 JMJ Financial converted part of their convertible debenture.  The Company issued 500,000 shares to



F-14



AMERILITHIUM CORP

Formerly Kodiak International Inc.

(An exploration stage enterprise)

Notes to Financial Statements

December 31, 2012 and 2011



reduce the note payable by $50,000.


On November 22, 2011 JMJ Financial converted part of their convertible debenture.  The Company issued 1,000,000 shares to reduce the note payable by $100,000.


On January 3, 2012, JMJ Financial converted part of on their convertible debentures.  The Company issued 3,500,000 shares to reduce the note payable by $154,000.


On January 30, 2012, The Company issued 1,149,425 at $0.087 to TCA Global for a total of $100,000 as part of the financing agreement.  


On February 9, 2012, JMJ Financial converted part of their convertible debentures.  The Company issued 1,800,000 shares to reduce the note payable by $135,000.


On February 24, 2012, JMJ Financial converted part of their convertible debentures.  The Company issued 2,000,000 shares to reduce the note payable by $120,000


On March 14, 2012, the Company issued 50,000 shares to three advisors for a total of $3,000 as part of their advisory agreements.


On March 21, 2012, the Company issued 225,000 shares at $0.08 to GeoXplor as part of the renegotiation of the payment plan on the purchase of mining property.  


On March 23, 2012, JMJ Financial converted part of their convertible debentures.  The Company issued 2,000,000 shares to reduce the note payable by $117,200.


On April 11, 2012, JMJ Financial converted part of their convertible debentures.  The Company issued 2,000,000 shares to reduce the note payable by $114,000.


On April 25, 2012, JMJ Financial converted part of their convertible debentures.  The Company issued 1,300,000 shares to reduce the note payable by $67,600.


On May 3, 2012, JMJ Financial converted part of their convertible debentures.  The Company issued 1,200,000 shares to reduce the note payable by $62,400.


On May 14, 2012, JMJ Financial converted part of their convertible debentures.  The Company issued 600,000 shares to reduce the note payable by $31,200.


On May 30, 2012, JMJ Financial converted part of their convertible debentures.  The Company issued 941,356 shares to reduce the note payable by $44,244


On June 6, 2012, JMJ Financial converted part of their convertible debentures.  The Company issued 500,000 shares to reduce the note payable by $20,000.


On June 13, 2012, JMJ Financial converted part of their convertible debentures.  The Company issued 1,400,000 shares to reduce the note payable by $42,000.


On July 11, 2012, JMJ Financial converted part of their convertible debentures.  The Company issued 2,000,000 to reduce the note payable by $60,000.


On July 26, 2012, JMJ Financial converted part of their convertible debentures.  The Company issued 2,100,000 to reduce the note payable by $57,750.



F-15



AMERILITHIUM CORP

Formerly Kodiak International Inc.

(An exploration stage enterprise)

Notes to Financial Statements

December 31, 2012 and 2011




On August 15, 2012, JMJ Financial converted part of their convertible debentures.  The Company issued 1,740,385 shares to reduce the note payable by $45,250.


On August 15, 2012, JMJ Financial converted part of their convertible debentures.  The Company issued 557,693 shares to reduce the note payable by $14,500.


On August 29, 2012, JMJ Financial converted part of their convertible debentures.  The Company issued 3,000,000 shares to reduce the note payable by $63,000.


On September 27, 2012, JMJ Financial converted part of their convertible debentures.  The Company issued 2,400,000 shares to reduce the note payable by $48,240.


On October 17, 2012, JMJ Financial converted part of their convertible debentures.  The Company issued 4,000,000 shares to reduce the note payable by $52,000.


On November 8, 2012, The Company issued 5,170,813 shares valued at $134,441 for a commitment fee with TCA Global Credit Master Fund.  The Company recorded this issuance as interest expense.


On November 19, 2012, JMJ Financial converted part of their convertible debentures.  The Company issued 3,000,000 to reduce the note payable by $27,000


On December 17, 2012, JMJ Financial converted part of their convertible debentures.  The Company issued 3,100,000 shares to reduce the note payable by $21,700.


The Company has accrued but not issued shares associated with consultancy and advisory agreements.  The Company has reported a stock subscription payable of $14,100.


Note 6 - Warrants

The following table summarizes activity in the Company's stock option plan during the years ended December 31, 2012 and 2011:



F-16



AMERILITHIUM CORP

Formerly Kodiak International Inc.

(An exploration stage enterprise)

Notes to Financial Statements

December 31, 2012 and 2011




 

 

Warrants for

 

 

Weighted Average

 

 

 

Common Shares

 

 

Exercise Price

 

Outstanding as of December 31, 2010

 

 

83,333

 

 

$

1.60

 

Granted

 

 

0-

 

 

 

0-

 

Exercised

 

 

0-

 

 

 

0-

 

Forfeited

 

 

0-

 

 

 

0-

 

Cancelled

 

 

0-

 

 

 

0-

 

Expired

 

 

0-

 

 

 

0-

 

Outstanding as of December 31, 2011

 

 

83,333

 

 

$

1.60

 

Granted

 

 

0

 

 

 

0

 

Exercised

 

 

0-

 

 

 

0-

 

Forfeited

 

 

0-

 

 

 

0-

 

Cancelled

 

 

0-

 

 

 

0-

 

Expired

 

 

0-

 

 

 

0-

 

Outstanding/exercisable as of December 31, 2012

 

 

83,333

 

 

$

1.60

 


Note 7 - 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 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.


Note 8 – 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.  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



F-17



AMERILITHIUM CORP

Formerly Kodiak International Inc.

(An exploration stage enterprise)

Notes to Financial Statements

December 31, 2012 and 2011



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 was funded by restricted common shares and cash.  The total purchase price was $2,340,000.


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 was 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 from Nevada Alaska Mining Company, Inc., the Clayton Deep and Full Monty properties situated in Nevada, USA, and comprising 138 claims. The purchase was funded by restricted common stock and cash. The total purchase price was $813,000.


On September 23, 2011, the Company entered into an agreement to purchase from Nevada Alaska Mining Company, Inc., an extension to its Clayton Deep property situated in Nevada, USA, comprising 17 claims. The purchase was funded by restricted common stock and cash. The total purchase price was $42,000.


On September 23, 2011, the Company entered into an agreement to purchase from Robert Craig and Barbara Anne Craig the Jackson Wash property situated in Nevada, USA, comprising 66 claims. The purchase was funded by restricted common stock. The total purchase price was $72,000.


On December 31, 2012, The Company, determined that an impairment loss should be recorded against the mining rights and

properties.  The Company has determined that the amount of the impairment to be $2,046,120.  The total mining properties   and rights have been adjusted to a net figure of $5,178,880.  The Company will continue to evaluate the need for an   impairment adjustment.


Note 9 - Convertible Notes:


The Company had the following notes payable outstanding as of December 31, 2012 and December 31, 2011:


 

 

December 31,

 

 

 

2012

 

 

2011

 

 

 

 

 

 

 

Promissory note payable dated June 30, 2011 due to JMJ including accrued interest of $0 and $33,546 as of December 31, 2012 and 2011, respectively.

 

$

 

$

832,244 

Promissory note payable dated July 7, 2011 due to JMJ including accrued interest of $19,445 and $3,298 as of December 31, 2012 and 2011, respectively.

 

 

133,305 

 

 

71,298 

Promissory note payable dated January 30, 2012 due to TCA Global including accrued interest of $28,991 and $0 as of December 31, 2012 and 2011, respectively.

 

 

292,149 

 

 

Promissory note payable dated June 29, 2012 due to JMJ including accrued interest of $1,723 and $0 as of December 31, 2012 and 2011, respectively.

 

 

35,723 

 

 

 

 

 

461,177 

 

 

903,542 


Less: Debt discount

 

 

(41,276)

 

 

(212,569)

Total notes payable

 

$

419,901 

 

$

690,973 




F-18



AMERILITHIUM CORP

Formerly Kodiak International Inc.

(An exploration stage enterprise)

Notes to Financial Statements

December 31, 2012 and 2011





JMJ Financial #1


On June 28, 2011, the Company entered into an agreement with JMJ Financial, whereby JMJ Financial will loan the Company the aggregate principal amount up to $1,850,000, less 150,000 original issue discount and less $60,000 for legal related cost, together with interest at the rate of eight percent (8%) per annum, until the maturity date of June 29, 2014. The original issue discount note, as described in ASC 480-55, may not be prepaid in whole or in part.


If the Note is not paid in full with interest on the maturity date, JMJ Financial has the right to convert this Note into restricted common shares of the Company. The Company at its option may elect to convert all or part of the principal and any accrued unpaid interest on these notes at any time or times on or before the maturity based on a conversion price. The conversion price (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower) shall equal to 80% multiplied by the lowest trading price during the twenty-five (25) trading days prior to conversion notice.


During the year ended December 31, 2011, the Company received a total of $795,000 in cash, which represented principal amount total of $864,960 (original issue discount of $69,960), and valued at $1,081,200. During the year ended December 31, 2011, the Company converted a total of $226,000 principal amount of JMJ Note to 2,400,000 shares of common stock, which reduced $282,500 from the value of the note.


As of December 31, 2011, the original issue discount note was valued for $798,700, consisting of principal of $638,960 and 80% conversion rate discount of $159,740. During the year ended December 31, 2011, $88,721 discount and $10,000 financing fees had been amortized and expensed. As of December 31, 2011, the Company has unamortized fees of $50,000, unamortized original issue discount of $37,739, and incurred accrued interest with discount of $33,546.


During the year ended December 31, 2012, the Company converted a total of $688,115, consist of $638,960 principal amount plus $49,155 accrued interests, to 15,899,049 shares of common stock, which reduced $860,144 from the value of the note and accrued interests. As of December 31, 2012, the original issue discount note has been fully converted.


JMJ Financial #2

On July 7, 2012, the Company entered into an agreement with JMJ Financial, whereby JMJ Financial will loan the Company the aggregate principal amount up to $540,000, less $40,000 for original issue discount, together with interest at the rate of eight percent (8%) per annum, until the maturity date of three years from the effective date of July 7, 2012. The original issue discount note, as described in ASC 480-55, may not be prepaid in whole or in part.


If the Note is not paid in full with interest on the maturity date, JMJ Financial has the right to convert this Note into restricted common shares of the Company. The Company at its option may elect to convert all or part of the principal and any accrued unpaid interest on these notes at any time or times on or before the maturity based on a conversion price. The conversion price (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower) shall equal to 80% multiplied by the lowest trading price during the twenty-five (25) trading days prior to conversion notice.


During the year ended December 31, 2011, the Company received a total of $50,000 in cash, which represented principal amount total of $54,400 (original issue discount of $4,400), and valued at $68,000 based on the 80% conversion rate. For the year ended December 31, 2011, $2,910 discount and $3,298 interest had been amortized and expensed. As of December 31, 2012, the Company has unamortized discount of $15,090 and accrued interest of $3,298.  


During the year ended December 31, 2012, the Company received a total of $355,000 in cash, which represented principal amount total of $386,240 (original issue discount of $31,240), and valued at $482,800 based on the 80% conversion rate. During the year ended December 31, 2012, the Company converted a total of $349,552 principal amount of JMJ Note to 23,240,385 shares of common stock, which reduced $436,940 from the value of the note.




F-19



AMERILITHIUM CORP

Formerly Kodiak International Inc.

(An exploration stage enterprise)

Notes to Financial Statements

December 31, 2012 and 2011



As of December 31, 2012, the original issue discount note was valued for $113,860, consisting of principal of $91,088 and 80% conversion rate discount of $22,772. During the year ended December 31, 2012, $17,256 discount and $16,148 interests had been amortized and expensed. As of December 31, 2012, the Company has unamortized original issue discount of $9,574 and accrued interest of $19,445.  


TCA Global

On January 30, 2013, the Company entered into an agreement with TCA Global Credit Master Fund, LP, a Cayman Islands Limited Partnership, whereby TCA Global loaned the Company the aggregate principal amount of $250,000, less $73,175 for loan related costs, together with interest at the rate of eight percent (12%) per annum, until the maturity date of January 30, 2013. The original issue discount note, as described in ASC 480-55, may not be prepaid in whole or in part.


If the Note is not paid in full with interest on the maturity date, TCA Global has the right to convert this Note into restricted common shares of the Company. The Company at its option may elect to convert all or part of the principal and any accrued unpaid interest on these notes at any time or times on or before the maturity based on a conversion price. The conversion price (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower) shall equal to 95% multiplied by the lowest daily volume weighted average price during the five (5) trading days prior to conversion notice.


The original issue discount note was valued for $263,158, consisting of principal of $250,000 and a discount of $13,158 which was valued based on the 95% conversion rate. For the year ended December 31, 2012, $12,079 discount and $28,991 interest had been amortized and expensed. As of December 31, 2012, the Company has unamortized fees of $32,718 and unamortized discount of $1,079.  


In addition to the note, the Company is to issue a facility fee. The facility fee includes an issuance of shares with a value of $100,000. The facility fee should be revalued nine months after the initial valuation date (business day immediately prior to executing note agreement). Upon the revaluation date, the value of the shares should be $100,000, should there any monetary difference the Company will issue additional shares to meet the facility fee requirements. As of December 31, 2012 the Company issued a total of 6,320,238 shares valued at $234,441 as a facility fee. As of December 31, 2012, a total of $214,904 had been recognized as interest expense.


JMJ Financial #2

On June 29, 2012, the Company entered into an agreement with JMJ Financial, whereby JMJ Financial will loan the Company the aggregate principal amount up to $540,000, less $40,000 for original issue discount, together with interest at the rate of eight percent (8%) per annum, until the maturity date of three years from the effective date of June 29, 2012. The original issue discount note, as described in ASC 480-55, may not be prepaid in whole or in part.


If the Note is not paid in full with interest on the maturity date, JMJ Financial has the right to convert this Note into restricted common shares of the Company. The Company at its option may elect to convert all or part of the principal and any accrued unpaid interest on these notes at any time or times on or before the maturity based on a conversion price. The conversion price (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower) shall equal to 80% multiplied by the lowest trading price during the twenty-five (25) trading days prior to conversion notice.


During the year ended December 31, 2012, the Company received a total of $25,000 in cash, which represented principal amount total of $27,200 (original issue discount of $2,200), and valued at $34,000 based on the 80% conversion rate.


As of December 31, 2012, the original issue discount note was valued for $34,000, consisting of principal of $27,200 and a discount of $6,800. During the year ended December 31, 2012, $1,149 discount and $1,723 interests had been amortized and expensed. As of December 31, 2012, the Company has unamortized discount of $7,851 and accrued interest of $1,723.  





F-20



AMERILITHIUM CORP

Formerly Kodiak International Inc.

(An exploration stage enterprise)

Notes to Financial Statements

December 31, 2012 and 2011





Note 10 – Subsequent Events:

On January 8, 2013, JMJ Financial converted an amount on their convertible debentures.  The Company issued 5,000,000 shares at $0.0056 and reduced the note payable by $28,000.


On January 30, 2013, TCA Global Capital Master Fund converted an amount on their convertible debentures.  The Company issued 5,000,000 shares at $0.01 and reduced the note payable by $50,000.


On February 06, 2013, JMJ Financial converted an amount on their convertible debentures.  The Company issued 4,084,524shares at $0.00672 and reduced the note payable by $27,448.


On February 07, 2013, The Company received the sum of $125,000 from JMJ Financial as payment on one of its notes.


On February 27, 2013, JMJ Financial converted an amount on their convertible debentures.  The Company issued 4,500,000shares at $0.006 and reduced the note payable by $27,000.


On March 19, 2013, JMJ Financial converted an amount on their convertible debentures.  The Company issued 5,000,000 shares at $0.006 and reduced the note payable by $30,000.




F-21