UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒ ANNUAL
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2022
☐ TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission File Number: 333-108715
Idaho Copper Corporation
(Exact Name of Registrant as Specified in Its
Charter)
(Address of Principal Executive Offices) (Zip Code)
(208)274-9220
(Registrant’s telephone number, including
area code)
Securities registered pursuant to Section 12(b)
of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
None N/A N/A
Securities registered pursuant to Section 12(g)
of the Act:
N/A
(Title of class)
Indicate by check mark if the Registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐No☒
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
☐
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☐ No ☐
Note: The Registrant has voluntarily filed all periodic reports under the Securities Exchange Act of 1934 for the preceding
12 months.
Indicate by check mark whether the Registrant
has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes☒ No
☐
Indicate by check mark whether the Registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, a small Reporting company, or an emerging growth company.
See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”
or an “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☐ Smaller Reporting company ☒
Emerging Growth company ☐
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant
has filed a Report on and attestation to its management’s assessment of the effectiveness of its internal control over financial
Reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit Report. ☐
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No
☒
The aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and
asked price of such common equity, as of the last business day of the Registrant’s most recently completed second fiscal quarter
was approximately $750,020. Solely for purposes of this Annual Report, shares of common stock held by executive officers and directors
of the Registrant as of such date have been excluded because such persons may be deemed to be affiliates. This determination of executive
officers and directors as affiliates is not necessarily a conclusive determination for any other purposes.
As of March 1, 2023, there were 202,294,000 shares
of the registrant’s common stock issued and outstanding.
IDAHO COPPER CORPORATION
(FORMERLY KNOWN AS JOWAY HEALTH INDUSTRIES GROUP
INC.)
Annual Report on Form 10-K
For the year ended December 31, 2022
TABLE OF CONTENTS
Page
PART I
ITEM 1. BUSINESS 1
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS 3
ITEM 1A. RISK FACTORS 4
ITEM 1B. UNRESOLVED STAFF COMMENTS 9
ITEM 2. PROPERTIES 9
ITEM 3. LEGAL PROCEEDINGS 22
ITEM 4. MINE SAFETY DISCLOSURES 23
PART II
ITEM 6. [RESERVED] 25
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 29
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 29
ITEM 9A. CONTROLS AND PROCEDURES 29
ITEM 9B. OTHER INFORMATION 31
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 31
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 32
ITEM 11. EXECUTIVE COMPENSATION 34
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 41
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES 42
SIGNATURES 44
i
PART I
Item 1. BUSINESS.
Overview
Background
Idaho Copper Corporation (formerly known as Joway
Health Industries Group Inc.) (the “Company” or “Idaho Copper”), incorporated in Nevada, was initially
engaged in the manufacture, distribution, and sales of tourmaline-related healthcare products through operating entities in China. As
a result of the consummation of the transactions contemplated by the Merger Agreement (the “Merger Agreement”), dated
as of December 31, 2020, with Dynamic Elite International Limited, a British Virgin Islands company, Crystal Globe Limited, a British
Virgin Islands company, and Joway Merger Subsidiary Limited, a British Virgin Islands company, the Company no longer had any assets or
business operations. Accordingly, the Company became a shell company, as that term is defined in Rule 12b-2 of the Exchange Act of 1934,
as amended (the “Exchange Act”).
On February 3, 2022, the Company consummated the
transactions contemplated by the Stock Purchase Agreement dated as of January 31, 2022 (the “Purchase Agreement”),
by and among the Company, Crystal Globe Limited and JHP Holdings, Inc., a Nevada corporation (“JHP”), pursuant to which
JHJP purchased 16,644,820 shares of common stock of the Company from Crystal Globe. The shares represented 83% of the issued and outstanding
shares of the Company on a fully diluted basis. The purchase price for the shares paid by JHP was $100,000. Pursuant to the Purchase Agreement,
each of Crystal Globe, the JHP and the Company made customary representations and warranties to each other. In connection with the acquisition
of the 83% by JHP, Jinghe Zhang, the sole officer and director of the Company, resigned and Ramon Lata was appointed as the sole officer
and director of the Company.
Change in Control
On January 23, 2023, the Company entered
into and consummated the transactions contemplated by a share exchange agreement (the “Share Exchange Agreement”)
by and among the Company, International CuMo Mining Corporation, an Idaho corporation (“ICUMO”), and all of the
shareholders of ICUMO (collectively, the “ICUMO Shareholders”). Pursuant to the terms of the Share Exchange
Agreement, the ICUMO Shareholders transferred all the issued and outstanding shares of common stock of ICUMO to the Company in
exchange for newly issued shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”). As a result of this share
exchange (the “Exchange”), ICUMO became a wholly owned subsidiary of the Company.
ICUMO owns or controls the mining claims and rights
to the CuMo Project, a large primary molybdenum deposit with silver and copper deposits. Located in Boise County, Idaho, ICUMO was formed
to explore the geologic and environmental factors that will determine the future development plan of the CuMo Project. A more detailed
description of ICUMO’s history and business is included in Item 2 below.
Pursuant to the terms of the Share Exchange Agreement,
each share of ICUMO’s common stock held by the ICUMO Shareholders was converted into the right to receive the number of shares of
Common Stock (the “Exchange Shares”) equal to an exchange ratio of 1.34 (the “Exchange Ratio”).
As a result of the Exchange, a change in control
of the Company has occurred with the ICUMO Shareholders now owning 90.1% of the issued and outstanding shares of Common Stock. Immediately
after giving effect to the Exchange, there were 202,294,000 issued and outstanding shares of Common Stock, held as follows:
Pursuant to the terms of the Share Exchange Agreement,
on January 23, 2023 at the closing of the Exchange (the “Closing”) the Company assumed: (i) all ICUMO’s obligations
for the options, whether or not vested, granted to key management personnel pursuant to certain incentive stock option agreements (the
“Incentive Stock Options”), and any vested options are now exercisable to purchase shares of Common Stock at an exercise
price of $0.125 until December 31, 2027; and (ii) all ICUMO’s obligations pursuant to certain warrants to purchase shares of ICUMO
common stock (the “2021 Warrants”), which warrants are now exercisable to purchase shares of Common Stock, at an exercise
price of $0.15, until May 11, 2027. These assumed Incentive Stock Options and 2021 Warrants have the same terms and conditions set forth
in their respective agreements immediately prior to the Exchange, except that (i) such options and warrants will be exercisable for that
number of shares of Common Stock equal to the number of shares of ICUMO’s common stock subject to such option and warrants, immediately
prior to the Closing and as adjusted by the Exchange Ratio, and (ii) the initial exercise price per share shall remain as the initial
exercise price per share in effect for that option or warrant immediately prior to the Closing. With respect to these Incentive Stock
Options and 2021 Warrants, the Company assumed, after applying the Exchange Ratio, vested and unvested options to purchase an aggregate
of 56,615,000 shares of Common Stock and warrants exercisable for up to 41,540,000 shares of Common Stock.
At the Closing, Ramon Lata, the sole officer and
director of the Company, resigned from all his offices and from the Board of Directors of the Company (the “Board”).
In his place, the Board appointed four new directors, Robert Scannell, John Moeller, Shaun Dykes, and Andrew Brodkey, and the following
four executive officers, Steven Rudofsky as Chief Executive Officer and President, Robert Scannell as Chief Financial Officer, Andrew
Brodkey as Chief Operating Officer, and Shaun Dykes as Vice President, Exploration.
1
Private Placement by ICUMO
Prior to entering into the Share Exchange Agreement,
from December 2022 to January 9, 2023, ICUMO conducted a private placement offering whereby it issued and sold convertible secured promissory
notes in the total amount of $898,000 with a conversion price of $0.10 (the “Notes”) and 8,980,000 warrants to purchase
ICUMO common stock, with an exercise price of $0.15 (the “2023 Warrants”). As a condition to entering into the Share
Exchange Agreement, ICUMO and the Company agreed that the Company would exchange the Notes and 2023 Warrants for notes and warrants issued
by the Company on substantially comparable terms and conditions. Such replacement notes and warrants were issued by the Company to the
holders of the Notes and 2023 Warrants on January 23, 2023 (the “Replacement Notes and Warrants”). After applying the
Exchange Ratio to the conversion rate, the Company now has outstanding convertible secured promissory notes in the principal amount of
$898,000 which will convert into shares of Common Stock at an adjusted conversion price of $0.075 per share of Common Stock and 11,973,333
warrants to purchase shares of Common Stock at an adjusted exercise price of $0.15 per share. Principal on the Notes is due and payable
on July 23, 2025. The warrants expire January 9, 2028.
The Replacement Notes and Warrants are secured
by a first priority lien on all of the assets and mining claims of the Company, other than certain patented lode mining claims that represent
approximately 7.3% of the CuMo Project.
The Company continues to be a “smaller reporting
company,” as defined under the Exchange Act, however, as a result of the Exchange, the Company has ceased to be a “shell company”.
In connection with the Exchange, the Company entered
into lock-up and leak-out agreements (“Lock-Up Agreements”) with (i) certain majority shareholders of ICUMO, (ii) the
holders of the Incentive Stock Options, (iii) the majority stockholder of the Company prior to the Exchange; and (iv) certain service
providers who will receive shares of Common Stock as payment for services rendered in connection with the Share Exchange Agreement. These
Lock-Up Agreements cover the Exchange Shares, any Common Stock issued pursuant to the exercise of any Incentive Stock Options or 2021
Warrants, and all shares of Common Stock issued to such service providers (the “Covered Securities”). The Lock-up Agreements
provide that the Covered Securities are subject to an 18-month lock-up from January 23, 2023, subject to (i) early release upon the
Company up-listing to a national securities exchange, and (ii) termination upon certain corporate events and transactions, and also provide
for certain limited permitted transfers where the recipient takes the shares subject to the restrictions in the Lock-Up Agreement. At
the end of the lock-up period, the Covered Securities are subject to a one-year leak-out restriction for public resales of five percent
of the trailing ten (10) day average trading volume of the Common Stock. The Company may waive these restrictions.
In connection with the transactions contemplated
by the Share Exchange Agreement, prior to the Closing, the Company assigned all the amounts owed to a third-party service provider to
JHP, the former controlling stockholder of the Company. Pursuant to the terms of this Debt Assignment and Release Agreement, JHP Holdings,
Inc. assumed all the outstanding debts of the Company as of January 23, 2023.
Name Change
On February 7, 2023, the Board and the holder
of 121,343,700 shares of Common Stock, representing approximately 59.98% of the Company’s voting equity, approved by written consent,
in accordance with the applicable provisions of Nevada law, the execution and filing of a Certificate of Amendment to the Articles of
Incorporation of the Company (the “Amendment”) with the Nevada Secretary of State, to effect the change of the Company’s
name from “Joway Health Industries Group Inc.” to “Idaho Copper Corporation”. On March 9, 2023, the Company filed
the Amendment with the Nevada Secretary of State, with immediate effect.
Available Information
We file annual, quarterly, and current reports
and other information with the SEC. You may read and copy any reports, statement or other information that we file with the SEC at the
SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at (202) 551-8090 for further
information on the public reference room. These SEC filings are also available to the public from commercial document retrieval services
and at the Internet site maintained by the SEC at http://www.sec.gov.
Although the Company does not have a dedicated
website, information about the CuMo Project can be found on the website of the Company’s majority shareholder https://cumoco.com.
2
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K (this “Report”)
for the Company, contains forward-looking statements, including, without limitation, in the sections captioned “Business and Properties,”
“Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,”
and elsewhere. Any and all statements contained in this Report that are not statements of historical fact may be deemed forward-looking
statements. Terms such as “may,” “might,” “would,” “should,” “could,” “project,”
“estimate,” “pro-forma,” “predict,” “potential,” “strategy,” “anticipate,”
“attempt,” “develop,” “plan,” “help,” “believe,” “continue,” “intend,”
“expect,” “future” and terms of similar import (including the negative of any of the foregoing) may be intended
to identify forward-looking statements. Not all forward-looking statements, however, may contain one or more of these identifying terms.
Forward-looking statements in this Report may include, without limitation, statements regarding (i) the plans and objectives of management
for future operations, (ii) a projection of income, earnings per share, capital expenditures, dividends, capital structure or other financial
items, (iii) the Company’s future financial performance, including any such statement contained in a discussion and analysis of
financial condition by management or in the results of operations included pursuant to the rules and regulations of the Securities and
Exchange Commission (the “SEC”) and (iv) the assumptions underlying or relating thereto.
The forward-looking statements are neither historical
facts nor assurances of future performance and are not meant to predict or guarantee actual results, performance, events, or circumstances.
Instead, they are based upon the Company’s current projections, plans, objectives, beliefs, expectations, estimates and assumptions.
Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances
that are difficult to predict and many of which are outside of the Company’s control. Actual results, the timing of certain events
and circumstances, and financial condition may differ materially from those indicated by the forward-looking statements as a result of
these risks and uncertainties. Readers are cautioned not to place undue reliance on forward-looking statements because of the risks and
uncertainties related to them. Any forward-looking statement made by the Company in this Report is based only on information currently
available to the Company and speaks only as of the date on which it is made. The Company undertakes no obligation to publicly update any
forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future
developments or otherwise.
3
Item 1A. RISK FACTORS
AS A SMALLER REPORTING COMPANY, WE ARE NOT
REQUIRED TO PROVIDE A STATEMENT OF RISK FACTORS. NONETHELESS, WE ARE VOLUNTARILY PROVIDING RISK FACTORS HEREIN. THIS ANNUAL REPORT CONTAINS
CERTAIN STATEMENTS RELATING TO FUTURE EVENTS OR THE FUTURE FINANCIAL PERFORMANCE OF OUR COMPANY. YOU ARE CAUTIONED THAT SUCH STATEMENTS
ARE ONLY PREDICTIONS AND INVOLVE RISKS AND UNCERTAINTIES, AND THAT ACTUAL EVENTS OR RESULTS MAY DIFFER MATERIALLY. IN EVALUATING SUCH
STATEMENTS, YOU SHOULD SPECIFICALLY CONSIDER THE VARIOUS FACTORS IDENTIFIED IN THIS ANNUAL REPORT, INCLUDING THE MATTERS SET FORTH BELOW,
WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE INDICATED BY SUCH FORWARD-LOOKING STATEMENTS.
AN INVESTMENT IN OUR COMMON STOCK INVOLVES
A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS BEFORE DECIDING TO INVEST IN OUR COMPANY. IF ANY OF THE
FOLLOWING RISKS ACTUALLY OCCUR, OUR BUSINESS, FINANCIAL CONDITION, RESULTS OF OPERATIONS AND PROSPECTS FOR GROWTH WOULD LIKELY SUFFER.
AS A RESULT, YOU MAY LOSE ALL OR PART OF YOUR INVESTMENT IN OUR COMPANY.
Risks Related to Capital Structure
The Common Stock is currently quoted on the Pink
tier of OTC Markets Group Inc., an over-the-counter quotation system, under the symbol “GTVI.” There is, however, currently
no trading market for the Common Stock and there is no assurance that a regular trading market will ever develop. The trading price of
the Company’s securities could be subject to wide fluctuations, in response to quarterly variations in its operating results, announcements
by the Company or others, developments affecting it, and other events or factors. In addition, the stock market has experienced extreme
price and volume fluctuations in recent years. These fluctuations have had a substantial effect on the market prices for many companies,
often unrelated to the operating performance of such companies, and may adversely affect the market prices of the securities Such risks
could have an adverse effect on the stock’s future liquidity.
If our business plan is not successful,
the Company may not be able to continue operations as a going concern and shareholders may lose their entire investment in the Company.
As discussed in the notes to the Company’s
financial statements included in this Report, as of December 31, 2022, since inception the Company has incurred cumulative losses of $7,430,676
and as of December 31, 2022, had a working capital deficiency of $177,761 which may cast significant doubt regarding the Company’s
ability to continue as a going concern. The Company does not generate material cash flows from operations and accordingly, the Company
will need to raise additional funds through future issuance of securities. Although the Company has been successful in raising funds in
the past, there can be no assurance the Company will be able to raise sufficient funds in the future, in which case the Company may be
unable to meet its obligations as they come due in the normal course of business. The Company has not determined whether any of its properties
contain mineral reserves that are economically recoverable. It is not possible to predict whether financing efforts will be successful
or if the Company will attain a profitable level of operations. Should the Company be unable to realize its assets and discharge its liabilities
in the normal course of business, the net realizable value of its assets may be materially less than the amounts on the statement of financial
position.
If the Company fails to raise sufficient capital,
it will have to explore other financing activities to provide it with the liquidity and capital resources to meet its working capital
requirements and to make capital investments in connection with ongoing operations. The Company cannot give assurance that it will be
able to secure the necessary capital when needed. The Company’s independent auditor included an explanatory paragraph on the financial
statements emphasizing to the readers of the audit report that there is substantial doubt about the Company's ability to continue as a
going concern. The Company’s ability to continue as a going concern is dependent upon it being able to generate cash flow sufficient
to fund operations and reducing operating expenses. The Company’s business plans may not be successful in addressing cash flow issues.
If the Company cannot continue as a going concern, its shareholders may lose their entire investment in it.
You may experience dilution of your ownership
interests because of the future issuance of additional shares of Common Stock or other securities that are convertible into or exercisable
for Common Stock or preferred stock.
In the future, the Company may issue authorized
but previously unissued equity securities, resulting in the dilution of the ownership interests of present stockholders. The Company
is authorized to issue an aggregate of 500,000,000 shares of Common Stock and 10,000,000 shares of preferred stock. Additional shares
of Common Stock or other securities that are convertible into or exercisable for Common Stock may be issued in connection with hiring
or retaining employees, future acquisitions, future sales of securities for capital raising purposes, or for other business purposes. The
future issuance of any such additional shares of Common Stock may create downward pressure on the trading price of Common Stock.
4
The Company does
not have a class of securities registered under Section 12 of the Exchange Act. Until it does, or the Company becomes subject to Section
15(d) of the Exchange Act, it will be a “voluntary filer.”
The Company is not currently
required under Section 13 or Section 15(d) of the Exchange Act to file periodic reports with the SEC. It has in the past voluntarily elected
to file some or all of these reports to ensure that sufficient information about it is publicly available to its stockholders and potential
investors. Until the Company becomes subject to the reporting requirements under the Exchange Act, it is a “voluntary filer”
and is currently considered a non-reporting issuer under the Exchange Act. The Company will not be required to file reports under Section
13(a) or 15(d) of the Exchange Act until the earlier to occur of: (i) the registration of a class of securities under Section 12 of the
Exchange Act, which would be required if the Company lists a class of securities on a national securities exchange or if it meets the
size requirements set forth in Section 12(g) of the Exchange Act, or which it may voluntarily elect to undertake at an earlier date; or
(ii) the effectiveness of a registration statement under the Securities Act of 1933, as amended (the “Securities Act”)
relating to Common Stock. Until the Company becomes subject to the reporting requirements under either Section 13(a) or 15(d) of the Exchange
Act, it is not subject to the SEC’s proxy rules, and large holders of its capital stock will not be subject to beneficial ownership
reporting requirements under Sections 13 or 16 of the Exchange Act and their related rules. As a result, the Company’s stockholders
and potential investors may not have available to them as much or as robust information as they may have if and when it becomes subject
to those requirements. In addition, if the Company does not register under Section 12 of the Exchange Act, and remain a “voluntary
filer”, it could cease filing annual, quarterly or current reports under the Exchange Act.
Share of Common
Stock are subject to the “penny stock” rules of the SEC, and the trading market in the Company’s securities is limited,
which makes transactions in its stock cumbersome and may reduce the value of an investment in its stock.
Rule 15g-9 under the
Exchange Act establishes the definition of a “penny stock,” for the purposes relevant to the Company, as any equity security
that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions.
For any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer approve a person’s account
for transactions in penny stocks; and (b) the broker or dealer receive from the investor a written agreement to the transaction, setting
forth the identity and quantity of the penny stock to be purchased.
In order to approve a
person’s account for transactions in penny stocks, the broker or dealer must: (a) obtain financial information and investment experience
objectives of the person; and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and
the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny
stocks.
The broker or dealer
must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock
market, which, in highlight form: (a) sets forth the basis on which the broker or dealer made the suitability determination; and (b) that
the broker or dealer received a signed, written agreement from the investor prior to the transaction. Generally, brokers may be less willing
to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to
dispose of shares of Common Stock and may cause a decline in the market value of the Company’s stock.
Disclosure also has to
be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable
to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available
to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information
for the penny stock held in the account and information on the limited market in penny stocks.
Because the Company
does not intend to pay any cash dividends on share of Common Stock, its stockholders will not be able to receive a return on their shares
unless they sell them.
The Company intends to
retain any future earnings to finance the development and expansion of its business. The Company does not anticipate paying any cash dividends
on share of Common Stock in the foreseeable future. Unless the Company pays dividends, its stockholders will not be able to receive a
return on their shares unless they sell them. The Company cannot assure its stockholders that they will be able to sell shares when they
desire to do so.
The Company’s principal stockholders
and management own a significant percentage of Common Stock and will be able to exercise significant influence over matters subject to
stockholder approval.
As of January 23,
2023, the Company’s executive officers, directors and principal stockholders, together with its other affiliates, owned approximately
85.9% of the issued and outstanding Common Stock. Accordingly, these stockholders will be
able to exert a significant degree of influence over the management and affairs of the Company and over matters requiring stockholder
approval, including the election of the directors and approval of significant corporate transactions. This concentration of ownership
could have the effect of entrenching Company management or the Board, delaying or preventing a change in control or otherwise discouraging
a potential acquirer from attempting to obtain control of the Company, which in turn could have a material and adverse effect on the fair
market value of Common Stock.
5
Risks Associated with Mining
Business
It is uncertain that the Company’s
mineral properties contain any proven or probable reserve, nor can the Company provide such assurance, but its business is highly dependent
on the existence of the mineral property.
As all the Company’s mineral properties
are in the exploration stage, there is no assurance that it can establish the existence of any mineral reserves on any of its properties
in commercially exploitable quantities. Until the Company can do so, it cannot earn any revenues from operations and if it does not do
so, it will lose all of the funds that were expended on exploration. If the Company does not discover any mineral reserves in a commercially
exploitable quantity, its business could fail.
The Company has not established that its mineral
properties contain any proven or probable reserves, nor can there be any assurance that it will be able to do so. If the Company fails
to establish any proven or probable reserve, the business could fail.
Due to the speculative characteristics of
the mine exploration business, there is substantial risk that the Company will not find sufficient commercially exploitable minerals and
fail in its business.
The Company cannot evaluate its success rate on
the CuMo Project. The search for valuable minerals as a business is perilous. The Company may not find commercially exploitable mineral
reserves or other valuable minerals in its mineral property. Exploration for minerals is a speculative venture necessarily involving substantial
risk. The expenditure to be made by the Company on exploration programs may not result in the discovery of commercial quantities of ore.
The likelihood of success must be considered in light of the problems, expenses, difficulties, complications, and delays encountered in
the exploration of the mineral properties the Company plans to undertake. Issues such as unusual or unexpected formations and other conditions
are involved in mineral exploration and often result in unsuccessful exploration efforts. In such a case, the Company would need help
to complete its business plan. Due to the inherent dangers involved in mineral exploration, the business may incur liability or damages.
Even if the Company does eventually discover
a mineral reserve on one or more of its properties, there can be no assurance that it will be able to develop such properties into producing
mines and extract those resources. Both mineral exploration and development involve a high degree of risk and few properties which are
explored are ultimately developed into producing mines.
The commercial viability of an established mineral
deposit will depend on several factors, including, by way of example, the size, grade, and other attributes of the mineral deposit, the
proximity of the resource to infrastructures such as a smelter or processing facilities, power, and water, roads and a point for shipping,
available workforce, government regulation, successful permitting, proximity to markets and consumers, and market prices. Most of these
factors will be beyond the Company’s control, and any of them could increase costs and make extraction of any identified mineral
resource unprofitable.
The Company cannot provide any assurance
about financing for additional exploration. If its exploration costs are higher than anticipated, the Company may only be able to complete
the exploration program with additional financing.
The Company is proceeding with exploration on
its CuMo property. The exploration program outlines the budget for completion of the program but there is no assurance that actual costs
will not exceed the budgeted costs. Factors that could cause actual costs to exceed budgeted costs include increased prices due to competition
for personnel and supplies during the exploration season, unanticipated problems in completing the exploration program and delays due
to weather or other factors experienced in completing the exploration program. Increases in exploration costs could result in the Company
not being able to carry out its exploration program without additional financing. There is no assurance that the Company would be able
to obtain additional financing in this event.
If the Company cannot raise sufficient capital
after it establishes the existence of a mineral resource on any of its properties in a commercially exploitable quantity, it will not
be able to exploit the resource, thus the business could fail.
If the Company discovers mineral resources in
commercially exploitable quantities on any of its properties, it will then be required to expend substantial sums of money to explore
and fully establish the extent of the resources and reserves, develop processes to extract it, and develop extraction and processing facilities
and infrastructure. Although the Company may derive substantial benefits from the discovery of a significant deposit, there can be no
assurance that such a resource or reserve will be large enough to justify commercial operations, nor can there be any assurance that the
Company will be able to raise the funds required for the development on a timely basis. The business may not succeed if the Company cannot
extend the necessary capital or complete the required facilities and infrastructure.
6
Mineral exploration and development are
subject to extraordinary operating risks. The Company does not currently insure against these risks. In the event of a cave-in or similar
occurrence, its liability may exceed its resources, which would have an adverse impact on the business.
Mineral exploration, development, and production
involve many risks that even a combination of experience, knowledge and careful evaluation may be unable to overcome. The Company’s
operations will be subject to all the geological, technical, and operating hazards and risks in exploring mineral resources. If the Company
discovers a mineral resource in commercially exploitable quantity, its operations would be subject to the hazards and risks inherent in
the development and production of resources, including liability for pollution, cave-ins, or similar dangers against which it cannot fully
insure or against which it may elect not to insure. Any such event could result in work stoppages and property damage, including damage
to the environment. The Company does not currently maintain any insurance coverage against these operating hazards. The payment of any
liabilities arising from such occurrences may have a material adverse impact on the business.
Mineral prices are subject to dramatic and
unpredictable fluctuations.
The Company expects to derive revenues from the
sale of its mineral resource properties or from the extraction and sale of molybdenum, silver, copper, and rhenium, and associated minerals.
The price of those commodities has fluctuated widely in recent years. It is affected by numerous factors beyond the Company’s control,
including international, economic, and political trends, expectations of inflation, currency exchange fluctuations, interest rates, global
or regional consumptive patterns, speculative activities, and increased production due to new extraction developments and improved extraction
and production methods. The effect of these factors on the price of base and precious metals, and therefore the economic viability of
any of the Company’s exploration properties and projects, cannot accurately be predicted.
The unpredictable inclement weather may
restrict mineral exploration and cause delay or impact on the Company’s mining progress.
Access to the mineral property may be restricted
between November and April of each year because the period between these months can sometimes feature heavy snow cover, extreme cold,
and high winds, which makes it difficult, if not impossible, to carry out exploration and other activities. Visits, tests, and explorations
of the mineral property can only be attempted when weather permits such activities. These limitations can result in significant delays
in the exploration, mining, and production of commercial minerals. Such delays can cause the business to fail.
Risks Related to Regulatory and Permitting
Requirements in the Industry the Company Operates
Mineral operations are subject to applicable
law and government regulation. Even if the Company discovers a mineral resource in a commercially exploitable quantity, applicable laws
and regulations could restrict or prohibit the exploitation of that mineral resource.
Both mineral exploration and extraction require
permits from various federal, state, provincial and local governmental authorities and are governed by laws and regulations, including
those with respect to prospecting, mine development, mineral production, transport, export, taxation, labor standards, occupational health,
waste disposal, toxic substances, land use, environmental protection, mine safety and other matters. There can be no assurance that the
Company will be able to obtain or maintain any of the permits or bonds required for the continued exploration of its mineral properties
or for the construction and operation of a mine on its properties at economically viable costs.
The Company cannot ensure that all its business
activities will continue to comply with all material laws and regulations because there may be changes to applicable laws and regulations,
and it may not be able to comply with such changes. Further, there is no assurance that the Company will be able to obtain or maintain
all permits or bonds necessary for its future operations or that it will be able to obtain them on reasonable terms. To the extent such
approvals are required and are not accepted, the Company may be delayed or prohibited from proceeding with the planned exploration or
development of its mineral properties. If the Company is prevented from exploiting any mineral resource that it discovers by a failure
to comply with applicable laws and regulations or obtain or to maintain any required permits, the business could fail.
7
Exploration development and exploitation
activities are subject to comprehensive regulation and permitting, which may cause substantial delays or require capital outlays in excess
of what is currently anticipated, causing a material adverse effect on the business.
Exploration, development, and exploitation activities
are subject to federal, provincial, state, and local laws, regulations, and policies, including laws regulating permitting, bonding, and
the removal of natural resources from the ground and the discharge of materials into the environment. Exploration, development, and exploitation
activities are also subject to federal, provincial, state, and local laws and regulations which seek to maintain health and safety standards
by regulating the design and use of drilling methods and equipment and other operational activities.
Environmental and other legal standards imposed
by federal, provincial, state, or local authorities may be changed, and any such changes may prevent the Company from conducting planned
activities or increase its costs of doing so, which could have material adverse effects on the business. Moreover, compliance with such
laws may cause substantial delays or require capital outlays in excess of those currently anticipated, thus causing a material adverse
effect on the business. Additionally, the Company may be subject to liability for pollution or other environmental damages that it may
not be able to, or elect not to, insure against due to prohibitive premium costs and other reasons. Any laws, regulations, or policies
of any government body or regulatory agency may be changed, applied, or interpreted that could materially alter and negatively affect
the Company’s ability to carry on the business.
The Company depends on its senior management
team, and the loss of one or more key employees or an inability to attract and retain highly skilled employees could adversely affect
the business.
The Company’s success depends on the skills,
experience, and performance of its Chief Executive Officer, Steven Rudofsky, and other key employees. The effort of the Chief Executive
Officer will be important as the Company continues to develop and expand its commercial activities. The loss or incapacity of existing
members of the executive management team could negatively impact the Company’s operations if it experiences difficulties in hiring
qualified successors. Qualified employees periodically are in great demand and may be unavailable in the time frame required to satisfy
business requirements. Expansion of the business could require the Company to employ additional personnel. There can be no assurance that
the Company will be able to attract and retain sufficient numbers of skilled employees in the future. The loss of personnel or inability
to hire or retain sufficient personnel at competitive rates could impair the growth of the business.
The Company also relies on its leadership team
in the areas of finance, marketing, services, and general and administrative functions, and on sales. From time to time, there may be
changes in the executive management team resulting from the hiring or departure of executives, which could disrupt the business.
In addition, in making employment decision, job
candidates often consider the value of the equity awards they are to receive in connection with their employment. Volatility in the price
of Common Stock might, therefore, adversely affect the Company’s ability to attract or retain highly skilled personnel. Furthermore,
the requirement to expense certain stock awards might discourage the Company from granting the size or type of stock awards that job candidates
require to join. If the Company fails to attract new personnel or fail to retain and motivate its current personnel, the business and
its future growth prospects could be severely harmed.
8
Item 1B. UNRESOLVED STAFF COMMENTS
None.
Item 2. PROPERTIES.
Mining Property
To determine material mining operations in accordance
with subpart 1300 of SEC Regulation S-K, management considered both quantitative and qualitative factors, assessed in the context of the
Company’s overall business and financial condition. The Company concluded that, as of the date of the filing of this Report, its
sole material mining operation is the CuMo Project. The Company will update its assessment of individually material mines on an annual
basis.
The information relating to such sole material
mining operation is contained in the technical report summary (“TRS”) relating to the CuMo Project prepared in compliance
with the Item 601(b)(96) and subpart 1300 of Regulation S-K. Reference should be made to the full text of the TRS, a copy of which is
filed as Exhibit 96.1 and incorporated herein by reference. A glossary of terms used herein can be found in the TRS.
Pursuant to Item 1302(b)(5) of Regulation S-K
(17 C.F.R. §229.1302(b)(5)), the Company states that the TRS was prepared by Shaun M. Dykes, M. Sc. (Eng), P.Geo of Geologic Systems,
Ltd. Mr. Dykes is also serving as a director of the registrant and is also the registrant’s Director, Vice President, Exploration.
Mr. Dykes meets the qualifications specified under the definition of “qualified person” under Item 1300 of Regulation S-K.
9
The CuMo Project currently consists of one hundred
and twenty-six (126) federal unpatented lode mining claims, and six (6) patented mining claims. In total, the project comprises approximately
2,640 acres. The unpatented lode mining claims and patented claims are situated in an unorganized mining district, in Boise County, Idaho,
spanning Sections in Township 7N and 8N, Range 5E and 6E, Boise Meridian. The names of the unpatented claims, and the place of record
of the location notices thereof in the official records of the Boise County recorder, and the authorized office of the Bureau of Land
Management are as follows:
Table 1
The following table lists the unpatented mining
claims currently a part of the CuMo Project:
10
11
12
On August 24, 2021, ICUMO and Computershare Trust
Company of Canada entered into a 7.5% Secured Note Indenture under which the aggregate principal amount of notes authorized to be issued
is $15,000,00, with a maturity date of May 31, 2028. The 7.5% Secured Note Indenture is secured by all of the mining claims of ICUMO that
represent the CuMo Project, other than the patented lode mining claims located in Section 13, Township 8 North, Range 5 East, Boise Meridian,
Boise County, Idaho, as depicted on Mineral Survey 1706: (i) Blackbird; (ii) Red Flag; (iii) Enterprise; (iv) Enterprise Fraction; (v)
Commonwealth; and (vi) Baby Mine. In connection with this security interest, ICUMO and Computershare Trust Company of Canada, as Mortgagee,
signed a Real Property Mortgage under which the Mortgagee has the right upon default by the mortgagor to choose to sell the real property
constituting the unpatented claims set out above.
Table 2
The following table lists the patented mining
claims currently a part of the CuMo Project:
On October 31, 2014, as subsequently amended March
26, 2015, and January 29, 2016, ICUMO entered into a Loan Agreement with La Familia II, LLC, evidenced by a secured promissory note, in
the amount of $500,000. The promissory note accrues annual interest at 8.5%, has a maturity date of December 31, 2025, and is secured
by a first priority deed of trust over the patented mining claims listed above.
Location, Access, Climate, Infrastructure
and Topography
The CuMo Project is situated in the mountains
of south-central Idaho, in the Boise National Forest, in Boise County, Idaho, approximately 15 miles northeast of the town of Idaho City,
near the unincorporated community of Centerville, roughly 37 miles on a straight line, and 60 miles by road, from the city of Boise. Good
all-weather highways, and USFS logging roads provide access to the project from Idaho City and Centerville. The trip from Boise takes
approximately 1.5 hours. Access is limited during some winter months when significant snow cover can impede passage via the Forest Service
roads.
13
The property is accessed by road from Boise by
taking US State Highway 55 northerly for approximately 40 miles (65 km) to the town of Banks, Idaho, and then east on the Banks Lowman
Road towards the town of Garden Valley for approximately 10 miles (16 km). One mile east of Garden Valley is a secondary road heading
south across the Payette River. Following this secondary road, the western most edge of the CuMo claim block is approximately 10 miles
(16 km) from Garden Valley. Alternatively, access can be gained by traveling northeast from Boise along Highway 21 past the towns of Idaho
City and Centerville, along Grimes Creek, and then over the Grimes Pass.
The elevation of the CuMo project ranges between
5,100 feet and 7,200 feet. The project site features a mountain top which contains the bulk of the mineral deposit, deep ravines adjacent,
and is largely forested, except for sections that have been cleared by several fires which occurred in 2014 and 2016.
14
The climate is defined by summer temperatures
to a maximum of 100° F (38°C) and cold, windy winters with lows to -10° F (-23°C). Precipitation is moderately light with
an average rainfall of 30 inches (<1 meter) and an average snowfall of approximately 140 inches (3.6 m). Vegetation in the project
area consists of cedar, lodgepole pine, mountain mahogany, and juniper.
The area is serviced by the Idaho Power Company
which supplies electricity to residents of Garden Valley, Lowman and Pioneerville. The nearest rail line is the Idaho Northern & Pacific
line formerly operated by Union Pacific that runs through the town of Banks, approximately 20 road miles (32 km) to the west of the property.
Equipment, supplies, and services for exploration and mining development projects are available at Boise. There is also a trained mining-industrial
workforce available in Boise.
Exploration and mining activities at the property
can be conducted year-round, due to the established road system and its proximity to other infrastructure. The property is large enough
to accommodate exploration within the current CuMo deposit property footprint.
Geology and Mineralization
The regional tectonic setting consists of a basement
of amalgamated Archean and Paleoproterozoic crystalline terrains that were joined during the Paleoproterozoic Trans-Montana orogeny, and
are overlain discontinuously by sedimentary rocks of Mesoproterozoic, Neoproterozoic, and Paleozoic ages; and volcanic and sedimentary
rocks of Eocene and Miocene ages. Voluminous tonalite to granite bodies of the Idaho batholith and later granitic plutons of Eocene age
intrude the older rocks. Major deformational episodes superimposed on the Precambrian basement include the Cretaceous Sevier orogeny,
which mainly involved east-vergent “thin-skinned” thrusting; Eocene extensional deformation, which resulted in development
of metamorphic core complexes; and basin and range type faulting.
The CuMo deposit is situated within the Idaho
batholith and is part of a regional scale belt of porphyry and related deposits identified as the Idaho-Montana Porphyry Belt. Igneous
complexes in this belt are interpreted to be related to an Eocene, intra-arc rift, and are characterized by alkalic rocks in the northeast,
mixed alkalic and calc-alkalic rocks in the middle, and calc-alkaline rocks in the southwest. The CuMo deposit is located at the southwestern
end of this belt and is associated with a calc-alkalic monzogranite, reported as 45-52Ma age that intrudes Cretaceous equigranular intrusive
rocks of the Atlanta Lobe of the Idaho Batholith. The CuMo area is underlain by biotite granodiorite, the most common rock type of the
Atlanta lobe of the Idaho batholith. All of the felsic intrusive phases contain molybdenite (MoS2) mineralization.
The CuMo deposit is located in an historic gold
mining camp. Gold was discovered in the Boise Basin in 1862 and lode mining began within a year. As of 1940, total gold production amounted
2.8 million ounces of which 74% was from placer operations. More gold has been produced from the Boise Basin than any other mining locality
in Idaho. Although they are primarily gold deposits, considerable silver and minor copper, lead and zinc were produced as byproducts from
the lodes.
The area features two separate mineralizing events
that are referred to as early Tertiary and early Miocene. The first event consists of gold-quartz veins containing minor sulfide minerals
that occur within the Idaho batholith and are associated with weak wall rock alteration. Associated sulfide minerals include pyrite, arsenopyrite,
sphalerite, tetrahedrite, chalcopyrite, galena, and stibnite. The second mineralizing event occurs within porphyry dikes and stocks as
well as in the batholith, and is characterized by relatively abundant sulfide mineralization, subordinate quartz and widespread wall rock
alteration. Base metal mineralization consists of pyrite, sphalerite, galena, tetrahedrite, chalcopyrite, minor quartz, and siderite with
local occurrences of pyrrhotite and enargite.
15
Molybdenum mineralization was discovered at CuMo
in 1963. Mineralization on the property occurs in veins and veinlets developed within various intrusive bodies. Molybdenite (MoS2) occurs
within quartz veins, veinlets, and vein stockworks. Individual veinlets vary in size from tiny fractures to veinlets five centimeters
in width, with an overall thickness averaging 0.3- 0.4 cm. Pyrite and/or chalcopyrite are commonly associated with molybdenite although
molybdenite can occur alone without other metallic mineralization.
The CuMo deposit has been classified as a porphyry
copper molybdenum deposit. But more specifically, it is a stockwork-type deposit where the principal mineralization, as described immediately
above, is found in thin veins and veinlets, whereas a typical porphyry deposit features disseminated mineralized areas throughout the
orebody.
The CuMo deposit is typical of large, dispersed,
lower grade copper-molybdenum deposits that are associated with hybrid magmas typified by fluorine-poor, differentiated monzogranite igneous
complexes. Due to their large size, the total contained economic molybdenum in these types of deposits can be equivalent to or exceed
that of high-grade molybdenum deposits.
History of CuMo Project Exploration
The Boise Basin was first explored following the
discovery of placer gold deposits in 1862. Several lode gold deposits were discovered and developed immediately following the initial