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 January 31, 2024
☐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
N/A 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 ☐
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. ☐
If securities are registered pursuant to Section 12(b) of the Act,
indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to
previously issued financial statements. ☐
Indicate
by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
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 $13,340,657.
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 May 14, 2024, there were 248,212,528 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 January 31, 2024
TABLE
OF CONTENTS
Page
PART I
ITEM 1. BUSINESS 1
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS 6
ITEM 1A. RISK FACTORS 7
ITEM 1B. UNRESOLVED STAFF COMMENTS 7
ITEM 1C. CYBERSECURITY 7
ITEM 2. PROPERTIES 7
ITEM 3. LEGAL PROCEEDINGS 12
ITEM 4. MINE SAFETY DISCLOSURES 12
PART II
ITEM 6. [RESERVED] 13
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 19
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 19
ITEM 9A. CONTROLS AND PROCEDURES 19
ITEM 9B. OTHER INFORMATION 21
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 21
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 21
ITEM 11. EXECUTIVE COMPENSATION 23
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 28
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES 29
SIGNATURES 30
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, 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.
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 occurred with the ICUMO Shareholders 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. The Incentive Stock
Options and 2021 Warrants are (i) 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) have an initial exercise price per share equal to 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 at Closing, 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.
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. 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 on 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 did not require any additional restrictions to be
added to the Covered Securities at issuance but rather were applicable to the holders of 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.
The CuMo Project, Geology and Mineralization
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 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 to
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.
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.
Internal Controls and Data Verification
Shaun M. Dykes (the “Qualified Person”) reviewed the procedures used by ICUMO and produced a description and an analysis of the results as contained in Section 8 of the TRS.
These are standard data verifications with no limitations.
All assay results used in the verification process
by the Qualified Person were obtained from fully certified analytical laboratories with signed assay certificates.
The Qualified Person has reviewed the data collection
and verification procedures followed by ICUMO and by third parties on behalf of ICUMO, and believes these procedures are consistent with
industry best practices and acceptable for use in geological and resource modelling.
These procedures have also been verified by several
independent qualified people over the years.
For more information about quality control/quality
assurance and data verification, see Section 8 and Section 9 of the TRS.
The mineral resources estimated may ultimately be
affected by a broad range of environmental, permitting, socio-economic (as discussed in Section 17 of the TRS), legal, title (as discussed
in Section 3 of the TRS), marketing and political factors (as discussed in Section 22 of the TRS). At this time the authors are unaware
of any of these factors that could materially affect the mineral resource estimate. Of course, going forward, relevant factors that could
influence the resource estimate include changes to the geological, geotechnical or geometallurgical models, infill drilling to convert
mineral resources to a higher classification, drilling to test for extensions to known resources, collection of additional bulk density
data and significant changes to commodity prices. It should be noted that all these factors pose potential risk and opportunities to the
current mineral resource.
Current Planned Working Programs
Ore Sorting and Updated Preliminary Economic Assessment
ICUMO presently is investigating the potential to
utilize additional ore sorting scanning technologies to optimize the separation of waste from ore post-mining and increase the head grade
of ICUMO ore being fed to a concentrator. The thin-veined, stockwork nature of the CuMo deposit lends itself nicely to ore sorting, as
noted above, since these darker colored veins largely carry the metals of interest and are much different from waste in appearance. A
visual scanning exercise of all of the core recovered from the drilling activities described herein shows that on average, 84% of the
waste mined can be theoretically separated through application of ore sorting, versus the 28% waste removal that SRK Consulting (Canada)
Inc. (“SRK”) conservatively used in its 2020 Preliminary Economic Assessment (“PEA”). There are over 90 active
mines in the world today which utilize some form of ore sorting.
ICUMO’s sorting examination is designed to not
just rely on a single sorting pass, but to possibly integrate multiple sorting technologies, such as combining surface XRF scanning at
the face with downstream penetrative prompt gamma neutron activation analysis (PGNAA) or pulsed fast thermal neutron activation (PFTNA)
scanners installed on the material conveyors, and potentially particle scanners to finish. The potential combination of different ore
sorting technologies and equipment is intended to enable the Company to optimize the separation of ore from waste, substantially increasing
the head grade of mill feed, and thereby reducing the size of the concentrator which then will only be concerned with the processing of
ore. Consequently, this will in theory allow the Company to design and build a smaller concentrator, significantly reducing capital and
operating costs. As an example, the Company believes that if ore sorting can remove 75% of waste pre-mill feed, this result will reduce
the size of the mill to around 30,000 tons per day to produce the same amount of metal as the SRK 2020 PEA mill design of 150,000 tons
per day, and thereby save over $1.5 billion in projected capital expenditures. The Company has just commenced initial discussions with
consultants, and mining equipment providers who design and fabricate penetrative scanning systems for testing of CuMo material.
To date, ICUMO has performed an internal ore
sorting investigation. The next phase of of ore sorting will require the Company to contract with an independent third-party
engineering firm to publish an updated PEA, utilizing ore sorting results to revise the technical and economic sections of the
document. The expected budget for this work is roughly $750,000 and expected completion in the fourth quarter of 2024 assuming the
Company is able to raise sufficient additional capital to commission the PEA. There can be no assurance the Company will be able to raise such capital nor complete the PEA timely based on the
Company’s current operational state and available capital. Refer to the Company’s Item 1A “Risk Factors” additional
information concerning the Company’s current level of available capital.
Additional Exploration and Metallurgical Studies; Pre-Feasibility
Study
Following completion of the updated PEA and pending
issuance of a new FONSI by the USFS relating to the “2018 Supplemental Redline Environmental Assessment CuMo Exploration Project”
issued by the USFS (the “2018 SREA”), the Company intends to resume its plans for additional exploration including infill,
expansion, and geotechnical pit wall drilling. The infill work is intended to enable the Company to reclassify resources currently labeled
as Inferred, to the level of Indicated, or Measured and Indicated. The expansion drilling should allow the Company to add more resources
to at least the Inferred category. The Company has tentatively budgeted $8 million for this drilling work.
The Company also plans to initiate additional metallurgical
studies to (1) determine the optimal concentrator design for both copper-silver, and molybdenum concentrate circuits, and (2) investigate
the potential to recover copper and molybdenum via heap leaching of lower grade ore that is stockpiled and not immediately processed at
the concentrator. The Company has identified a number of outside consultants that can be engaged for both of these studies. In total,
the Company expects that these studies will cost approximately $1,000,000 and will take on the order of four (4) months to complete.
These undertakings are part of the Company’s
plan to develop an independent, third-party Pre-Feasibility Study (PFS) for the CuMo Project. In addition to the exploration and metallurgical
work, explained above, the PFS will include expenditures for infrastructure and road improvements, environmental and permitting work,
preliminary engineering, community, and public/governmental relations work, and potentially costs for expansion of the current land position.
All-in, the Company has budgeted a range of $25 to $30 million to reach the PFS stage and estimates that the PFS can be completed within
two years of the release of the updated PEA.
Competitive Position in the Industry
The mineral exploration, development, and production
industry are largely un-integrated. The Company competes with other exploration companies looking to acquire and obtain financing for
the exploration and development of mineral resource properties. While the Company competes with other exploration companies to locate
and acquire mineral resource properties, it may also compete with them for the removal or sales of mineral products from its properties
if it should eventually discover their presence in quantities sufficient to make production economically feasible. Readily available markets
for the sale of mineral products only sometimes exist for all mineral commodities; however, the principal CuMo Project commodities of
copper, silver and molybdenum are traded on international exchanges and therefore, at a minimum a terminal market exists for which these
commodities can be delivered and sold.
Competition
ICUMO’s competition includes large, established
mining companies with substantial capabilities and more significant financial and technical resources. As a result of this competition,
it may have to compete for financing and may need help to acquire the funding on terms it considers acceptable. ICUMO may also have to
compete with other mining companies to recruit and retain qualified managerial and technical employees. If ICUMO cannot compete successfully
for financing or qualified employees, its exploration programs may be slowed down or suspended, which may cause it to cease operations
as a company.
Employees
As of the date of this Report, other than certain
executives, ICUMO has no employees. ICUMO does not have or maintain any employee benefit plans or similar plans under any applicable laws.
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.
Recent Developments
Between February and
April 2024, we entered into subscription agreements (each a “Subscription Agreement”) with certain accredited investors
(each, a “Subscriber” and collectively, the “Subscribers”), pursuant to which the Company offered and sold
to the Subscribers in a private placement offering (the “Offering”), units (each, a “Unit” and,
collectively, the “Units”), for a purchase price of $12,000 per Unit, for gross proceeds of $1,952,000.
Each Unit consists of one (1) share of the Company’s Series A Convertible
Non-Voting Preferred Stock, par value $0.001 per share (the “Preferred Stock”), and (ii) 62,500 common stock
purchase warrants (the “Warrants”). Each share of Preferred Stock converts into
50,000 shares of the Company’s common stock, par value $0.001 per share (“Common Stock”). The Warrant entitles the
holders to shares of Common Stock for three (3) years, at an exercise price of $0.24 per share. The Company intends to
utilize the net proceeds from the sale of the Units in the Offering for working capital and general corporate purposes.
Newbridge Securities Corporation
acted as the sole placement agent and received cash commissions of 10.0% of the gross proceeds. Certain members of placement agent participated
as investors in the Offering.
Pursuant to the Subscription Agreements, the Company agreed to file a registration
statement with the Securities and Exchange Commission to register the re-sale of the shares of Common Stock issuable upon the conversion
of the Preferred Stock and upon the exercise of the Warrants within 90 business days after the final Closing date. If the Company fails
to file a registration statement by such date, the Company shall pay the Subscribers 2.5% of their respective purchase price for each
30 days that the registration statement is not filed, with a maximum of 10%.
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.
The
Company’s website is www.idaho-copper.com. The Company’s website is not incorporated in this Form 10-K.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form
10-K (this “Report”) for the Company, contains forward-looking statements that relate
to future events or our future financial performance. These statements involve known and unknown risks, uncertainties and other
factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future
results, levels of activity, performance or achievements expressed or implied by the forward-looking statements. These risks and other
factors include those listed under “Risk Factors” and elsewhere in this Report. In some cases, you can identify forward-looking
statements by terminology such as “may,” “will,” “should,” “expects,” “plans,”
“anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue”
or the negative of these terms or other comparable terminology.
Forward-looking statements involve known and unknown risks, uncertainties
and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performances
or achievements expressed or implied by the forward-looking statements. We discuss many of these risks in this Report in greater detail
under the heading “Risk Factors.” Given these uncertainties, you should not place undue reliance on these forward-looking
statements. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date hereof. You
should read this Annual Report on Form 10-K and the documents that we have filed as exhibits to this Annual Report completely and with
the understanding that our actual future results may be materially different from what we expect.
Except as required by law, we assume no obligation to update these forward-looking
statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements,
even if new information becomes available in the future. Given these risks and uncertainties, readers are cautioned not to place undue
reliance on such forward-looking statements.
Item
1A. RISK FACTORS
As a smaller reporting company, we are not required to provide a statement
of risk factors.
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.
Item
1B. UNRESOLVED STAFF COMMENTS
None.
Item
1C. Cybersecurity
Cybersecurity
Risk Management and Strategy
We,
like other companies in our industry, face several cybersecurity risks in connection with our business. Our business strategy, results
of operations, and financial condition have not, to date, been materially affected by risks from cybersecurity threats. During the reporting
period, we have not experience any material cyber incidents, nor have we experienced a series of immaterial incidents, which would require
disclosure.
We
will implement a cybersecurity program in the future. The program will be aimed at safeguarding the confidentiality, integrity, and availability
of our essential systems and information, and will be designed to detect and mitigate risks from cybersecurity threats to our data and
our systems. Central to our future cybersecurity efforts will be a robust incident response plan designed to address potential cyber
incidents swiftly and effectively.
In
designing and evaluating our cybersecurity program, we will adopt the National Institute of Standards and Technology Cybersecurity Framework
(“NIST CSF 2.0”) as a guiding principle. It is important to clarify that our use of the NIST CSF 2.0 is for guidance purposes
to frame our risk identification, assessment and management processes and does not equate to compliance with any specific technical standards
or requirements.
The
key components of our future cybersecurity program will include:
Cybersecurity
Governance
The
governance of cybersecurity risks is a critical function of our Board of Directors which has a key role in the oversight of
cybersecurity and related technology risks. The Board of Directors is tasked with monitoring the effectiveness of our
cybersecurity risk management program as implemented by management.
The
Board of Directors will receive regular updates from management on the state of cybersecurity risks facing the Company. This
includes briefings on any significant cyber incidents and ongoing risk management efforts.
The
responsibility for day-to-day management of cybersecurity risks lies with our management team, including the Chief Financial Officer
and Chief Executive Officer. This team will be at the forefront of our cybersecurity initiatives, coordinating both internal and external resources to
anticipate, identify, and mitigate cyber threats. Our approach will include regular updates from our third-party security expert
consultant, leveraging intelligence from various sources, and utilizing advanced security tools to protect our digital
environment.
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 meets the qualifications specified under the definition of “qualified person”
under Item 1300 of Regulation S-K.
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:
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 $15,000,000, 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.
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 westernmost 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.
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.
Item
3. LEGAL PROCEEDINGS.
We
have no knowledge of any material, active, pending or threatened proceeding against us or our subsidiaries, nor are we, or any subsidiary,
involved as a plaintiff or defendant in any material proceeding or pending litigation.
Item
4. MINE SAFETY DISCLOSURES.
Not applicable.
PART
II
Item
5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Market
Information
The
Common Stock is currently quoted on the OTC Pink marketplace of OTC Markets Group, Inc., under the
symbol “COPR.” There is currently a limited trading market for the Common Stock and there is no assurance that
a regular trading market will ever develop.
Holders
As
of May 15, 2024, there were 480 holders of record of Common Stock, based on information provided by the Company’s transfer agent.
The holders of Common Stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders.
Holders of Common Stock have no preemptive rights and no right to convert their Common Stock into any other securities. There are no
redemption or sinking fund provisions applicable to the Common Stock.
Dividends
In
January 2022, the Company distributed a special dividend to its minority shareholders in connection with the Merger Agreement. Other
than the special distribution in January 2022, the Company does not pay dividends on shares of Common Stock and does not anticipate paying
such dividends in the foreseeable future. The declaration of any future cash dividends is at the discretion of the Board and depends
upon earnings, if any, capital requirements and financial position, the Company’s general economic conditions, and other pertinent
conditions.
Recent Sales of Unregistered
Securities
On January 12, 2024, we entered into
Unit Subscription Purchase Agreements (“Subscription Agreements”) with purchasers for an aggregate of 23
(“Units”) at a price of $12,000 per Unit. Each Unit comprised of one (1) share of Series A Convertible Non-Voting Preferred Stock, $0.001 par value
per share (the “Series A Preferred Stock”), and (ii) 62,500 common stock purchase warrants (the “Warrants”).
The rights and preferences of the Series A Preferred Stock, include without limitation, the right of each holder thereof to convert
each share of Series A Preferred Stock into 50,000 shares of the Company’s common stock, par value $0.001 par value per share
(“Common Stock”), as set forth in the Certificate of Designation of Series A Convertible Non-Voting Preferred Stock (the
“Certificate of Designation”). The Warrant holders have the right to exercise the Warrants for three (3) years at an
exercise price of $0.24 per share of Common Stock. The Units were offered and sold in reliance upon exemptions from the registration
requirements provided by Section 4(a)(2) of the Securities Act of 1933, as amended, and/or Rule 506(b) of Regulation D promulgated
thereunder. The Company has agreed to file a registration statement to cover the re-sale of the shares of Common Stock issuable upon
the conversion of the Series A Preferred Stock, and upon the exercise of the Warrants. The Company intends to utilize the net
proceeds from the sale of the Units in the Offering for working capital and general corporate purposes.
Penny
Stock Regulations
Our
shares of common stock are subject to the “penny stock” rules of the Securities Exchange Act of 1934 and various rules under
this Act. In general terms, “penny stock” is defined as any equity security that has a market price less than $5.00 per share,
subject to certain exceptions. The rules provide that any equity security is considered to be a 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, and
excluded from the definition on the basis of price (at least $5.00 per share), or based on the issuer’s net tangible assets or
revenues. In the last case, the issuer must meet one of the following requirements: (i) net tangible assets must exceed $3,000,000 if
the issuer has been in continuous operation for at least three years; or (ii) net tangible assets must exceed $5,000,000 if the issuer
has been in operation for less than three years; or (iii) the issuer’s average revenues for each of the past three years must exceed
$6,000,000.
Trading
in shares of penny stock is subject to additional sales practice requirements for broker-dealers who sell penny stocks to persons other
than established customers and accredited investors. Accredited investors, in general, include individuals with assets in excess of $1,000,000
or annual income exceeding $200,000 (or $300,000 together with their spouse), and certain institutional investors. For transactions covered
by these rules, broker-dealers must make a special suitability determination for the purchase of the security and must have received
the purchaser’s written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock,
the rules require the delivery, prior to the first transaction of a risk disclosure document relating to the penny stock. A broker-dealer
also must disclose the commissions payable to both the broker-dealer and the registered representative, and current quotations for the
security. Finally, monthly statements must be sent disclosing recent price information for the penny stocks. These rules may restrict
the ability of broker-dealers to trade or maintain a market in our common stock, to the extent it is penny stock, and may affect the
ability of shareholders to sell their shares.
Item
6. [RESERVED].
Item
7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.
The
following discussion of our financial condition and results of operations should be read in conjunction with our audited consolidated
financial statements and the notes to those financial statements appearing elsewhere in this Annual Report.
This discussion and analysis below include
forward-looking statements that are subject to risks, uncertainties and other factors described in the “Risk Factors” section
that could cause actual results could differ materially from those anticipated in these forward- looking statements as a result of various
factors. Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the
future. We caution you to read the “Forward Looking Statements” section of our Annual Report.
Nature
of Operations