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.
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.
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:
| |
● |
The stockholders of the Company prior to the Exchange now hold 20,054,000 shares of issued and outstanding Common Stock; and |
| |
● |
The ICUMO Shareholders now hold 182,240,000 shares of issued and outstanding Common Stock. |
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 $15,000,00, 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.
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.
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.
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
alluvial gold rush, with significant production occurring in the late 1800’s and early 1900’s. No production has occurred
on the CuMo Project itself.
The first interest in the CuMo property was shown
during aerial reconnaissance by Amax Exploration (“Amax”) in 1963. Follow-up geochemical rock and soil sampling indicated
anomalous molybdenum and copper values. Forty claims were then staked, and three previously existing claims were optioned. A 2.5 mile
(4 km) rough access road was constructed in 1964 to facilitate collection of rock samples and geological mapping. Amax completed detailed
bedrock mapping on the CuMo property between 1964 and 1981. Earlier periods of mapping outlined five general rock types, including quartz
monzonite of the Idaho Batholith, rhyolite porphyry, lamprophyre, dacite and diabase dykes. The property was subsequently relinquished
due to the combination of contemporary economic conditions and initial sample grades.
In 1968, Curwood Mining Company staked 12 claims
and undertook detailed mapping and geochemical rock sampling. This work indicated roughly coincident anomalies in copper, molybdenum,
and silver. Several trenches were excavated, and one line of dipole-dipole array induced polarization (“IP”) geophysical
survey was conducted.
In 1969, Midwest Oil Corp. optioned the property
and conducted exploration drilling through 1972 (four short rotary holes (less than 100 ft) initially, which were later deepened using
diamond drilling, followed by six cored holes). Midwest also performed an IP survey in 1971 and an airborne magnetic survey in 1973. The
IP survey indicated a pyrite halo on the north side of the deposit, although an alternative interpretation concluded that the combined
IP data may indicate a halo effect but more probably shows an east-west trend to the rock types and mineralization. The CuMo deposit did
not have a strong magnetic signature, being somewhat of a plateau with surrounding highs.
In 1973, Midwest formed a joint venture with Amax
and then subsequently Midwest was merged with Amoco Minerals Company (“AMOCO”) resulting in an Amax-AMOCO joint venture
with AMOCO as operator. During the period 1973 to 1981, the Amax-AMOCO joint venture completed 30,822 ft of drilling, surface geological
mapping, re-logging of the core, road construction, an aerial topographic survey, and age dating. In 1980, Amax Exploration Inc. transferred
its interest to Climax Molybdenum Company (“Climax”), also a subsidiary of Amax Inc. In 1982, Climax collected more
than 300 soil geochemical samples from three different grids.
A total of twenty-three (23) diamond holes and
three RC holes were drilled on the property during this timeframe. Most RC holes were pre-collars to diamond drill holes with only the
diamond drill component of the holes being used for resource modelling and sampling. The historic holes were sampled mostly at a 20ft
sample interval. A Skelton core representation of the historic drill holes (one four-inch piece of core for each 10-foot interval), and
all the sample rejects were delivered directly from Climax’s secure facility in Colorado and are stored in the project secure warehouse
facility for use by the project.
The drilling efforts from 1969 to 1982 were the
only actual drilling done on the property until ICUMO in 2006, who under option from American CuMo completed one diamond drillhole and
partially completed another before relinquishing the project back to American CuMo in late 2006. Thereafter, American CuMo between 2006
and 2012 drilled a total of 25,486.82m in forty-two (42) holes. All American CuMo drilling programs were directly supervised by onsite
geology staff located in Garden Valley, Idaho. Drilling consisted of both HQ and NQ diameter core with holes being started with HQ diameter
and then reducing at a major fault intersection or at 1000ft which ever was less. Core recoveries were monitored and were excellent (90%+).
All holes were surveyed down-the-hole at regular intervals (100 feet) using a Reflex survey instrument. All core was collected at the
drill site by the diamond drillers under supervision of onsite geology staff and delivered to a secure warehouse facility in Garden Valley
where they were logged, analyzed and samples collected. All drill sites were surveyed using a total field station in order to accurately
locate the holes.
The 2006 through 2012 results confirmed the extent
and grade of mineralization on the property as indicated by previous drilling and demonstrated continuity of mineralization between the
original wide-spaced holes.
American CuMo’s work resulted in the interpretation
and modelling of three distinct mineralized zones within the deposit. These zones were previously interpreted by Amax as distinct shells
that were produced by separate intrusions. Re-interpretation of down-hole histograms for copper (Cu), silver (Ag) and molybdenite (MoS2)
suggests the mineralized zones are part of a single, large, concentrically zoned system with an upper copper-silver zone, underlain by
a transitional copper-molybdenum zone, in turn underlain by a lower molybdenum-rich zone. Three-dimensional modeling of the above zonation
indicates the current area being drilled is located on the north side of a large system extending 4.5km (15,000ft) in diameter, of which
1.5km (3,000ft) has been drilled.
Resource Reports and Preliminary Economic Assessments
A geologically inferred historic resource of 1.36
billion tonnes at 0.092% MoS2 (non-compliant with Canadian National Instrument 43-101 or US Regulation SK-1300) was calculated by block
modeling in 1983 by Climax.
In 2008, an initial Resource Estimate compliant
with Canadian National Instrument 43-101 was commissioned by American CuMo under its former name, Mosquito Consolidated Gold Mines Ltd.
This estimate was based on information from 31 diamond drillholes completed through 2007. The deposit was subdivided into three mineral
domains based on the drill hole data: a Cu-Ag zone, a Cu-Mo zone, and a Mo zone. Within each mineral domain 20 ft. composites were formed.
Blocks 50 x 50 x 50 ft. were estimated for MoS2, Cu, Ag and W by ordinary kriging. At a 0.10 % Cu cutoff there was reported 293 million
tons averaging 0.016 % MoS2 and 0.14 % Cu classified as inferred. Within the Cu-Mo and Mo Zones at a 0.04 % MoS2 cutoff there were 1.72
billion tons averaging 0.091 % MoS2 and 0.075 % Cu classified as inferred.
In May 2009, the authors of the 2008 report provided
an updated Resource Estimate based on a total of 42 diamond drill holes totaling 76,436 ft, including 11 completed during 2008. Using
a Recoverable Metal Value (the “RCV”) cutoff at various US dollar values per ton, and at certain assumed metal recoveries
and metal prices, the authors presented tonnages, metal grades, and contained metal for indicated and inferred resource calculations in
all 3 mineralized zones.
In November 2009, Ausenco Canada Inc. (“Ausenco”),
an independent, third-party engineering firm employed by American CuMo, published a NI 43-101 compliant Preliminary Economic Assessment,
throughput Scoping Study Report based on the same 42 diamond drillholes. In a manner similar to the May 2009 report, Ausenco reported
tonnages, metal grades and contained metal for indicated and inferred resource calculations in all 3 mineralized zones. Ausenco went further
and proposed a mining and processing operational design at various mining rates, from 50,000 to 200,000 tons per day of ore to mill throughput.
This firm also included provisions and estimated capital and operating costs for a conceptual open pit mine, waste dumps, tailings storage
facility, plant/concentrator, molybdenum roaster, and ancillary facilities. Initial capital costs ranged from $1.6 to $3.4 billion (in
2009 dollars). Based on this data, Ausenco was able to perform a Preliminary Economic Analysis (PEA) of the CuMo project, at various throughput
rates, which yielded numeric results for Net Present Value, Internal Rate of Return, Payback, and cash operating costs per pound of molybdenum
equivalent. They concluded that higher throughputs yield a higher NPV and higher IRR, although at a greater capital cost.
In 2011, a new technical study for a NI 43-101
compliant Resource update was commissioned with Snowden Mining Consultants. The resource estimate update was based on a total of 54 diamond
drillholes totaling 99,404 ft. Of these, 12 diamond drillholes were completed in 2009 and 2010. Again, using assumed metal recoveries
and selected RCV cut-off grades, Snowden reported updated global Indicated Resources of over 2 billion tons, and global Inferred Resources
of over 5 billion tons. Snowden adopted most of the other design parameters and assumptions offered by Ausenco.
In August 2015, Gary Giroux of Giroux Consultants
Ltd. (one of the authors of the 2008 and 2009 Reports) was employed by American CuMo to publish a NI 43-101 compliant, updated resource
estimate. This update was based on a total of 65 diamond drill holes totaling 120,685 feet (36,784.9 meters). Nine (9) of the sixty-five
(65) diamond drill holes were completed in 2012 since the previous resource calculation. Using low, medium, and high metal price assumptions,
and different cutoff grades for RCV, Giroux calculated Measured, Indicated, and Inferred mineral resource numbers for ore contained within
a conceptual pit shell. The maximum case reported here was a combined Measured, Indicated, and Inferred resource of over 6 billion tons.
Finally, in 2020 SRK authored a NI 43-101 compliant
Preliminary Economic Assessment and Technical Report for the CuMo project. This document, relying on the previously published 2015 resource
estimate, proposed an open pit mine and concentrator combination at a milling rate of 150,000 tons per day, and an initial mine life of
30 years. It also incorporated particle-based ore sorting technology to remove 28% of the mining waste from the ore stream, prior to entering
the concentrator. SRK projected that operations would produce (yearly Life of Mine average) of 43 million pounds of molybdenum, 84 million
pounds of copper, and 3.7 million ounces of silver. The capital cost estimate prepared by SRK was $3.1 billion, with a cash cost per pound
of molybdenum (after by-product credits) of $4.67, a post-tax Net Present Value (at 5% discount) of $1.7 billion, and an Internal Rate
of Return of 9%.
The mineral resource estimates contained in the
TRS are based on drilling completed through 2012. As no additional drilling has been completed since the 2015 resource was estimated,
the mineral resource estimates are considered current and have not been updated since that time. The mineral resource was classified
on the basis of the quality and uncertainty of the sample data and sample spacing, in accordance with the definitions of “inferred
mineral resource,” “indicated mineral resource” and “measured mineral resource” under the SEC Mining Rules.
For a detailed summary of mineral resource estimates
current as of ICUMO’s most recent fiscal year, including tabular disclosure of measured, indicated, and inferred resources, please
refer to Section 1.5 of the attached TRS.
The mineral resource estimates contained in the
TRS were estimated in conformity with Committee for Mineral Reserves International Reporting Standards (CRIRSCO) “International
Reporting Template for the public reporting of Exploration Targets, Exploration Results, Mineral Resources and Mineral Reserves”
as adopted by the International Council on Mining & Metals November 2019. The mineral resources are reported in in accordance with
§§229.1300 through 229.1305 (subpart 229.1300 of Regulation S-K).
The resource estimate was based on a total of
65 diamond drill holes totaling 36,166 m (118,654 ft). Note that the three reverse circulation holes were not used in the resource estimate.
Nine of the 65 diamond drill holes were completed in 2012.
Internal Controls and Data Verification
Shaun M. Dykes (the “Qualified Person”)
has 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.
In September 2022, ICUMO signed an agreement to
test CuMo material with MineSense, Technologies Ltd., using their ShovelSense scanning systems, which employ X-ray fluorescence (the “XRF”)
surface scanning technology. These systems are installed directly on shovel buckets and scan the blasted material as the shovel scoops
it up, allowing the mine operator to begin to differentiate ore from waste at the mining face. ShovelSense is currently being used successfully
by at least three large producing copper open pit mines (Highland Valley BC, Copper Mountain BC, and Carmen de Andacollo Chile). Contemporaneously
with this test work, the Company plans to scan all of the existing drill cores with portable XRF scanners. The all-in cost of this exercise
is anticipated to be less than $200,000, and the Company believes that the ShovelSense results can be attained by Q1 2023.
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.
At the conclusion of all of ICUMO’s ore
sorting investigations, the Company intends 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.
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 than it. 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.
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. There has, however, been a legal challenge made against governmental approval of certain
operational plans proposed by the Company for the CuMo Project property, as further described below.
Permitting for Drilling and Exploration Activities; Legal Challenges
Exploration on federal lands requires a permit
to conduct exploration except for sampling of rocks and soils by hand and other activities that create no land disturbance. There are
three levels of permits reflecting increasing disturbance:
| |
● |
The lowest level of permit is Categorical Exclusion (CE). This is the least intense disturbance and requires some public notification; |
| |
● |
Environmental assessment requires an in-depth study with 30 days for public comment, plus additional time for appeal; and |
| |
● |
Environmental Impact Statement is the highest permit level and would be required for mine development. |
ICUMO’s predecessor, Mosquito Mining Corporation,
submitted an exploration plan of operations (the “POO”) in 2007 to the USFS for exploration activities which would
result in about twenty (20) miles of drill road, of which 4.7 miles were existing unauthorized drill roads from previous operators and
13.3 miles of new temporary roads. An environmental assessment for these activities was prepared by the USFS. On June 14, 2010, the Environmental
Assessment was completed and submitted for public review and hearing during a mandated 90-day period. On February 14, 2011, a Finding
of No Significant Impact (“FONSI”) was delivered by the USFS. During the mandated 45-day appeal period, an environmental
group, the Idaho Conservation League (the “ICL”) submitted an appeal of the USFS decision.
On May 17, 2011, the USFS denied the appeal allowing
American CuMo to begin work under the new exploration permit following a mandatory fifteen (15) day stay period which ended on June 7,
2011. The ICL filed a challenge to this denial in United States District Court for the District of Idaho on December 15, 2011. ICL and
other non-governmental organizations sought summary judgment reversing and remanding the Forest Service’s February 2011 issuance
of the FONSI.
On August 29, 2012, the judge in the case dismissed
four of the five claims of the opponents but remanded the section on groundwater for further study. As a result, on February 7, 2013,
the USFS initiated a Supplemental Environmental Assessment (2015 SEA) in order to address the judge’s concerns regarding groundwater
and, as needed, consider new information or changed circumstances since the 2011 FONSI was issued, including a proposed change in status
of the wolverine from a regional sensitive species to an Endangered Species Act proposed listed species.
Based on the 2015 SEA, a supplemental FONSI addressing
the 2011 court order and other changes summarized above was issued on September 30, 2015. Plaintiffs from the 2011 lawsuit again filed
a lawsuit challenging the 2015 FONSI in January 2016. The lawsuit challenged the analysis of potential effects of exploration activities
to groundwater and Sacajawea’s bitterroot, a sensitive plant species. The court issued a memorandum decision and order in this lawsuit
on July 11, 2016. The court upheld the 2015 FONSI as to the NEPA challenges related to groundwater, so no further analysis was required.
The court found, however, that the USFS analysis and conclusions concerning Sacajawea’s bitterroot to be arbitrary and capricious
because it failed to reexamine the baseline Sacajawea’s bitterroot population in the project area following the 2014 Grimes Fire
and subsequent 2016 Pioneer Fire.
Each resource area addressed in the 2015 SEA was
affected differently. Similar to the updates made in response to the 2014 Grimes Fire, updates were made in a document produced by the
FS entitled “2018 Supplemental Redline Environmental Assessment CuMo Exploration Project” (2018 SREA) to address the change
in baseline conditions caused by the 2016 Pioneer Fire. The 2018 SREA focused on the re-evaluation of the Sacajawea’s bitterroot
baseline, as well as other resources addressed in the 2015 SEA that were affected by the 2016 Pioneer Fire, to determine whether the conclusions
reached in the 2015 SEA that supported the 2015 FONSI were different or changed. The 2018 SREA focused only on these topics because the
Court determined that other concerns raised during the 2012 and 2015 lawsuits were properly addressed and the evidence and analysis in
the 2015 SEA project record supported the determination that no significant impacts would occur to other resources from proposed management
activities.
Numerous environmental studies were undertaken
for the 2011 Environmental Assessment and subsequently revised in 2015 and 2018. The 2018 SREA incorporated habitat changes and resulting
impacts related to the 2014 Grimes Fire and the 2016 Pioneer Fire. A number of reports supported the preparation of the 2018 SREA. Some
of these updated reports and some earlier reports can be accessed at https://www.fs.usda.gov/project/?project=52875.
The USFS
is currently in process of preparing the final decision on the proposed exploration POO which is expected sometime before the end of calendar
year 2023.
Item 4. MINE SAFETY DISCLOSURES.
The enacted Dodd-Frank Wall Street Reform and
Consumer Protection Act (the “Dodd-Frank Act”) requires the operators of mines to include in each periodic report filed
with the SEC certain specified disclosures regarding the Company’s history of mine safety. The Company did not operate any mines
during the period covered by this Report and currently does not operate any mines and, as such, is not subject to disclosure requirements
regarding mine safety that were imposed by the Dodd-Frank Act.
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., an inter-dealer quotation system, under the
symbol “GTVI”. However, there is currently only a limited trading market for the Common Stock and there is no assurance that
a regular trading market will ever develop.
Holders
As
of January 23, 2023, there were 449 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.
Registration
Rights
We
have not granted registration rights to any person.
Rule
10b-18 Transactions
During
the year ended December 31, 2022, neither the Company nor any affiliated purchaser of the Company, purchased any equity securities of
the Company that are registered pursuant to Section 12 of the Exchange Act.
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 should be read in conjunction with our financial statements and notes to those financial statements, included elsewhere
in this prospectus. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results and
the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various
factors, including those set forth under “Risk factors” and elsewhere in this prospectus.
FORWARD-LOOKING
STATEMENTS:
Certain
statements made in this Report may constitute “forward-looking statements on our current expectations and projections about future
events.” These forward-looking statements involve known or unknown risks, uncertainties and other factors that may cause our actual
results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied
by the forward-looking statements. In some cases you can identify forward-looking statements by some words such as “may,”
“should,” “potential,” “continue,” “expects,” “anticipates,” “intends,”
“plans,” “believes,” “estimates,” and similar expressions. These statements are based on our current
beliefs, expectations, and assumptions and are subject to a number of risks and uncertainties. Although we believe that the expectations
reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.
These forward-looking statements are made as of the date of this Report, and we assume no obligation to update these forward-looking
statements whether as a result of new information, future events, or otherwise, other than as required by law. In light of these assumptions,
risks, and uncertainties, the forward-looking events discussed in this Report might not occur and actual results and events may vary
significantly from those discussed in the forward-looking statements.
Overview and Recent Developments
As
a result of the Exchange, which was consummated January 23, 2023, we are no longer a shell company. However, for the fiscal year ended
as of December 31, 2022, we were a shell company and did not generate any revenues.
The
Report of our independent registered public accountants on our financial statements for the year ended December 31, 2022 states that
these conditions, among others, raise substantial doubt about our ability to continue as a going concern.
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 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.
Results
of Operations
Year
Ended December 31, 2022 Compared to Year Ended December 31, 2021
Revenues.
During the years ended December 31, 2022 and 2021, we did not realize any revenues from operations.
Operating expenses. For the year ended
December 31, 2022, our total operating expenses were $74,708, a decrease by $47,080, or 39%, from $121,788 for the year ended December
31, 2021. This decrease was mainly due to reduction from the professional fees related to legal services. For the year ended December
31, 2021, our total operating expenses were $121,788, decreased by $100,819, or 45%, from $222,607 for the year ended December 31, 2020.
This decrease was mainly due to disposal of operations in 2020 and becoming a shell company as of January 1, 2021.
Loss from operations. As a result
of the foregoing, our loss from operations was $74,708 for the year ended December 31, 2022, compared to $121,788 for the year ended December
31, 2021. This decrease was mainly due to reduction from the professional fees related to legal services.
Income
taxes. We did not incur income tax expenses for the years ended December 31, 2022 and 2021.
Net
loss. For the year ended December 31, 2022, our net loss was $74,708 compared to $121,788 for the year ended December 31, 2021.
The decreased loss was primarily due to the decreased operating expenses.
Liquidity
and Capital Resources
As
of December 31, 2022, we had current assets of $0, we had liabilities of $177,761, and our working capital deficit was $177,761. We anticipate
that our current liquidity is not sufficient to meet the obligations associated with being a company that is fully reporting with the
SEC.
During
fiscal year ended December 31, 2022, we kept our monthly cash flow requirement low for two reasons. First, our sole officer did not draw
a salary. Second, we were able to keep our operating expenses to a minimum by operating in space provided at no expense by our sole officer
and director.
We
currently have no external sources of liquidity such as arrangements with credit institutions or off-balance sheet arrangements that
will have or are reasonably likely to have a current or future effect on our financial condition or immediate access to capital.
Our
financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”),
which contemplates our continuation as a going concern. We have not yet generated any revenue and have incurred losses to date of approximately
$7,430,676. In addition, our current liabilities exceed our current assets by $177,761. These factors raise substantial doubt about our
ability to continue operating as a going concern. Our ability to continue our operations as a going concern, realize the carrying value
of our assets, and discharge our liabilities in the normal course of business is dependent upon our ability to raise capital sufficient
to fund our commitments and ongoing losses, and ultimately generate profitable operations.
Cash
Flows
Operating
Activities
For
the year ended December 31, 2022, net cash used in operating activities was $0 and related to our net loss from continuing operations
of $74,708, offset by an increase in other payables of $74,708.
For
the year ended December 31, 2021, net cash used in operating activities was $70,079, related to our net loss of $121,788, reduced by
an increase in other payables of $51,709.
Investing
Activities
For
the year ended December 31, 2022, we reported no cash provided by our investing activities. For the year ended December 31, 2021, we
reported cash inflow of $119,070 from investing activities due to disposal of our operating subsidiaries.
Financing
Activities
For
the year ended December 31, 2022, we had no cash inflow from our financing activities. For the year ended December 31, 2021, we reported
a cash outflow of $48,991 from our financing activities which was mainly due to distribution of $119,070 as a special dividend to our
minority shareholders and a financial support of $70,079 received from our related party.
Critical
Accounting Policies
Our
financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles
(“GAAP”) applied on a consistent basis. The preparation of financial statements in conformity with GAAP requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.
We
regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these
policies is included in the notes to our financial statements. In general, management’s estimates are based on historical experience,
on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and
circumstances. Actual results could differ from those estimates made by management.
The
financial statements have been prepared in conformity GAAP, which contemplates our continuation as a going concern. The Company has no
revenue since January 1, 2020 and has incurred losses to date of approximately $7.4 million. In addition, the Company’s current
liabilities exceed its current assets by $177,761. The Company intends on financing its future development activities and its working
capital needs largely from the sale of public equity securities with some additional funding from other traditional financing sources,
including term notes until such time that funds provided by operations are sufficient to fund working capital requirements. These factors
raise substantial doubt about the Company’s ability to continue operating as a going concern. The Company’s ability to continue
our operations as a going concern, realize the carrying value of our assets, and discharge our liabilities in the normal course of business
is dependent upon our ability to raise capital sufficient to fund its commitments and ongoing losses, and ultimately generate profitable
operations.
Contractual
Obligations
We
are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this
item.
Off
Balance Sheet Items
Under
SEC regulations, we are required to disclose off-balance sheet arrangements that have or are reasonably likely to have a current or future
effect on our financial condition, such as changes in financial condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that are material to investors. An off-balance sheet arrangement means a transaction, agreement or
contractual arrangement to which any entity that is not consolidated with us is a party, under which we have:
| |
● |
any
obligation under certain guarantee contracts, |
| |
|
|
| |
● |
any
retained or contingent interest in assets transferred to an unconsolidated entity or similar arrangement that serves as credit, liquidity
or market risk support to that entity for such assets, |
| |
|
|
| |
● |
any
obligation under a contract that would be accounted for as a derivative instrument, except that it is both indexed to our stock and
classified in shareholder equity in our statement of financial position, and |
| |
|
|
| |
● |
any
obligation arising out of a material variable interest held by us in an unconsolidated entity that provides financing, liquidity,
market risk or credit risk support to us, or engages in leasing, hedging or research and development services with us. |
We
do not have any off-balance sheet arrangements that we are required to disclose pursuant to these regulations. In the ordinary course
of business, we enter into operating lease commitments, purchase commitments and other contractual obligations. These transactions are
recognized in our financial statements in accordance with generally accepted accounting principles in the United States.
Going
Concern
We incurred net losses of approximately $74,708
for the year ended December 31, 2022. We had an accumulated deficit of approximately $7,430,676 and working capital deficiency of $177,761
as of December 31, 2022. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.
The
continuation of us as a going concern through the next twelve months is dependent upon the continued financial support from its stockholders
or external financing. There can be neither no assurances to that effect, nor no assurance that we will be successful in securing sufficient
funds to sustain the operations.
These financial statements do not include any
adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications
of liabilities that may result from the outcome of these uncertainties. We believe that the actions presently being taken to obtain additional
funding and implement its strategic plan provides the opportunity for the Company to continue as a going concern.
Revenue
Recognition
The
Company recognizes revenue when control of promised goods or services is transferred to the company’s customers, in an amount that
reflects the consideration the Company expects to be entitled to in exchange for those goods or services.
Prior
to the Merger Agreement as of December 31, 2020, with respect to sales of product to both franchisee and non-franchisee customers, the
Company transfers control, invoices the customer and recognizes revenue upon shipment to the customer. Sales prices are based on fixed
price lists that are different depending on whether the price list is for franchisee customers or for non-franchisee customers. Sales,
value add and other taxes collected concurrent with revenue-producing activities are excluded from revenue.
After
the consummation of the Merger as of December 31, 2020, the Company did not report any revenue for the year ended December 31, 2022 or
December 31, 2021.
Recent
Accounting Pronouncements
No accounting standards that have been issued
or proposed by the FASB or other standards-setting bodies that require adoption until a future date are expected to have a material impact
on the Company’s financial statements upon adoption.
Item
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not
applicable.
Item 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The audited financial statements of Idaho Copper Corporation (formerly
known as Joway Health Industries Group Inc.) as of December 31, 2022 and 2021 are appended to this Annual Report beginning on page F-1.
Item 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
Item 9A.
CONTROLS AND PROCEDURES.
Disclosure
Controls and Procedures
We
maintain disclosure controls and procedures, as defined in Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Exchange Act that
are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information
is accumulated and communicated to our senior management, consisting of Steven Rudofsky, President and Chief Executive Officer (Principal
Executive Officer) and Robert Scannell (Principal Financial and Accounting Officer), as appropriate to allow timely decisions regarding
required disclosure.
We
carried out an evaluation, under the supervision and with the participation of our senior management, consisting of Steven Rudofsky,
President and Chief Executive Officer (Principal Executive Officer) and Robert Scannell (Principal Financial and Accounting Officer),
of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2022. Based on the evaluation
of these disclosure controls and procedures, and in light of the material weaknesses found in our internal controls over financial reporting,
our senior management concluded that our disclosure controls and procedures were not effective.
Management’s
Report on Internal Control Over Financial Reporting
Our
management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over
financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the
supervision of, our principal executive and principal financial officers and effected by our Board, management and other personnel, to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and
procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and
dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with accounting principles generally accepted in the United States and that receipts and expenditures of the
company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material
effect on the financial statements.
Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed,
have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect
to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material
misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent
limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to
reduce, though not eliminate, this risk.
As
of December 31, 2022, management consisted solely of Ramon Lata, President, Treasurer and Secretary (Principal Executive Officer and
Principal Financial Officer). Current management assessed the effectiveness of our internal control over financial reporting based on
the criteria for effective internal control over financial reporting established in Internal Control--Integrated Framework issued by
the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in 2013 and SEC guidance on conducting
such assessments. Based on that evaluation, we believe that, during the period covered by this report, such internal controls and procedures
were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies
that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls
and that may be considered to be material weaknesses.
The
matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the
Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee and a lack of independent directors on our
Board, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate
segregation of duties consistent with control objectives; and (3) ineffective controls over period end financial disclosure and reporting
processes. The aforementioned material weaknesses were identified by Steven Rudofsky, President and Chief Executive Officer (Principal
Executive Officer) and Robert Scannell (Principal Financial and Accounting Officer) in connection with the review of our financial statements
as of December 31, 2022.
Management
believes that the material weaknesses set forth in items (2) and (3) above did not have an effect on our financial results. However,
management believes that the lack of a functioning audit committee and the lack of independent directors on our Board results in ineffective
oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement
in our financial statements in future periods.
Management’s
Remediation Initiatives
In
an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we have initiated,
or plan to initiate, the following series of measures:
Assuming
we are able to secure additional working capital, we will create a position to segregate duties consistent with control objectives and
will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us.
We
also plan to appoint one or more outside directors to our Board who shall be appointed to an audit committee resulting in a fully functioning
audit committee which will undertake the oversight in the establishment and monitoring of required internal controls and procedures such
as reviewing and approving estimates and assumptions made by management.
Management
believes that the appointment of one or more independent directors, who shall be appointed to a fully functioning audit committee, will
remedy the lack of a functioning audit committee and a lack of a majority of independent directors on our Board.
Changes
in Internal Control over Financial Reporting
There
were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act)
during the quarter ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.
Item 9B.
OTHER INFORMATION.
None.
Item
9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.
Not
applicable.
PART
III
Item 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Our
Board of Directors
Below
are the names of and certain information regarding the Company’s current executive officers and directors who were appointed effective
as of January 23, 2023:
| NAME
AND ADDRESS |
|
AGE |
|
POSITION(S) |
|
DATE
OF APPOINTMENT |
| Steven
Rudofsky |
|
60 |
|
Chief
Executive Officer and President |
|
January
23, 2023 |
| Robert
Scannell |
|
64 |
|
Director,
Chief Financial Officer, and Treasurer |
|
January
23, 2023 |
| Andrew
Brodkey |
|
66 |
|
Director,
Chief Operating Officer, and Secretary |
|
January
23, 2023 |
| Shaun
Dykes |
|
70 |
|
Director,
Vice President - Exploration |
|
January
23, 2023 |
| John
Moeller |
|
76 |
|
Director |
|
January
23, 2023 |
Directors
are elected to serve until the earlier of the election and qualification of their successors, their removal for cause by the shareholders,
or their resignation. Directors are elected by a plurality of the votes cast at the annual meeting of stockholders and hold office until
the expiration of the term for which he or she was elected and until a successor has been elected and qualified.
A
majority of the authorized number of directors constitutes a quorum of the Board for the transaction of business. The directors must
be present at the meeting to constitute a quorum. Any action required or permitted to be taken by the Board may be taken without a meeting
if all members of the Board individually or collectively consent in writing to the action.
Executive
officers are appointed by the Board and serve at its pleasure.
The
principal occupation and business experience during the past five years for the Company’s executive officers and directors is as
follows:
The
biographies of the individuals appointed as directors and officers as discussed above follow:
Steven
Rudofsky
Mr.
Rudofsky, age 60, has been CEO of ICUMO since January 2022. He has been working in upstream and midstream natural resources for over
30 years. After beginning his career at Glencore (then Marc Rich and Co), he held senior and CEO positions at TransCanada Pipeline Ltd,
Credit Agricole Investment Bank and Alfa Group of Russia. He is the founder of Talex Commodities, which works with private equity and
debt providers, including family offices, to implement innovative financing for the junior mining and oil & gas sectors, including
streaming, convertible debt, and royalties. He holds a Bachelor of Arts degree from Clark University and a Juris Doctor degree from Emory
University School of Law.
Andrew
Brodkey
Mr.
Brodkey, age 66, has been the COO of ICUMO since January 2022. He has more than 30 years of experience working with public companies
in the mining and metals sector, including roles as VP, General Counsel at Magma Copper; VP of Business Development at BHP Copper; CEO
of Pan American Lithium/First Potash Corp; CEO of Zoro Mining Corp; and CEO of Pacific Copper Corp. He was also the Managing Director
of the International Mining Group at CB Richard Ellis, where he represented a number of major mining companies in the valuation, marketing
and sales of mining projects. He currently acts as a Principal with both Critical Metals Ventures, LLC and Energy Metals Discovery Group
LLC, private enterprises dedicated to finding and incubating early-stage copper, lithium, cobalt, vanadium, and titanium projects. He
received a Bachelor of Science degree (with distinction) in Mining Engineering from the University of Arizona, and a Juris Doctor degree
(cum laude) from Creighton University.
Robert
Scannell
Mr.
Scannell, age 64, has been the Chief Financial Officer of ICUMO since January 2022. Since 2015 he has been the Managing Partner of Feehan
Partners, LP, a private family office. Previously he spent nine years at Merrill Lynch & Co. as a Vice President of Institutional
Fixed-Income Sales. Thereafter, he founded Tradewinds Investment Management, LP, which from 1994 to 2015 managed numerous funds investing
in emerging markets, natural resources, and distressed assets. Mr. Scannell holds a Bachelor of Arts degree and Master of Business Administration
degree from Penn State University, a Master of Science degree from the University of Washington, a Juris Doctor degree from Purdue University,
and has been a Chartered Financial Analyst since 1993.
Shaun
Dykes
Mr.
Dykes, age 70, has been Vice President - Exploration of ICUMO since January 2022. He has been instrumental in the development of the
Idaho Copper project, acting as CEO of a predecessor company and as a champion of the project since 1994. He has over 35 years of experience
in the management, exploration, and analysis of mineral properties, and has been directly involved in, or responsible for, the discovery
of numerous mineral deposits, five of which have been placed into commercial production. Previously, Mr. Dykes spent 15 years as a project
geologist with Westmin Resources Ltd., where he managed a variety of early-stage and pre-production projects. He also played a major
role in the discovery and development of the Premier open pit deposit (at one time North America's largest gold mine), which required
analysis and computerization of an extensive historical database. Mr. Dykes is also the founder of Geologic Systems Ltd, which supplies
geological expertise to the mining and exploration community. He holds a Bachelor of Science in Geology and a Master of Science degree
in Geological Engineering from Queen's University.
Dr.
John Moeller
Dr.
Moeller, age 76, has served as a director of ICUMO since 2013. He is an environmental engineer with broad experience in the permitting,
development, and regulatory infrastructure of mining projects in Idaho. Since 2010 Dr. Moeller has represented the Idaho Copper project
before state, local, and federal agency officials, and has led the project's highly visible environmental assessment process. Previously,
he managed water quality and hazardous materials programs at the Idaho Department of Environmental Quality and was awarded an EPA Bronze
Medal for his work with hazardous waste and pollution prevention programs. Later in his career he was a Principal at Forsgren Associates,
a civil and environmental engineering firm in the western US and served on the board of directors for the Idaho Conservation league.
Dr. Moeller earned a PhD in Water Quality/Limnology from Idaho State University, and both a Master of Science (MS) degree in Zoology/Water
Quality and a Bachelor of Science in Electrical Engineering in from the University of Kentucky. From 2005-2017 he was on the Adjunct
Faculty at Boise State University, where he taught Water Quality Management.
For
the fiscal year ended December 31, 2022 and until the consummation of the Exchange on January 23, 2023, the Board of Directors was composed
of one member, Ramon Lata, who was appointed effective as of February 3, 2022. Mr. Lata was also appointed as the President, Treasurer
and Secretary of the Company. Since December 2021, Ramon Lata has been a vice president at Wilhelmina International, a model and talent
agency. Mr. Lata was a vice president at Factor Chosen LLC from April 2015 until September 2017, when it was acquired by MP Management.
From September 2017 until November 2019, Mr. Lata was a vice president at Select Model LA., until it was acquired by MP Management.
Involvement
in Certain Legal Proceedings
To
our knowledge, during the last ten years, none of our directors and executive officers (including those of our subsidiaries) has:
| |
● |
Had
a bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at
the time of the bankruptcy or within two years prior to that time. |
| |
|
|
| |
● |
Been
convicted in a criminal proceeding or been subject to a pending criminal proceeding, excluding traffic violations and other minor
offenses. |
| |
|
|
| |
● |
Been
subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities
or banking activities. |
| |
|
|
| |
● |
Been
found by a court of competent jurisdiction (in a civil action), the SEC, or the Commodities Futures Trading Commission to have violated
a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated. |
| |
|
|
| |
● |
Been
the subject to, or a party to, any sanction or order, not subsequently reverse, suspended or vacated, of any self-regulatory organization,
any registered entity, or any equivalent exchange, association, entity or organization that has disciplinary authority over its members
or persons associated with a member. |
Audit
Committee
We
do not presently have an audit committee. Our Board of Directors currently acts as our audit committee.
Compensation
Committee
We
do not presently have a compensation committee. Our Board of Directors currently acts as our compensation committee.
Nominating
Committee
We
do not presently have a nominating committee. Our Board of Directors currently acts as our nominating committee.
Code
of Ethics
On
May 11, 2012, our Board of Directors approved a renewed Code of Ethics which is applicable to our officers and senior executives, which
include our Chief Financial Officer, Treasurer and Chief Accounting Officer. On January 23, 2023, in connection with the Exchange, the
Board adopted a revised and restated Code of Ethics, applicable to all officers and directors. This Code of Ethics embodies the Company’s
commitment to conduct business in accordance with the highest ethical standards and applicable laws, rules, and regulations.
The
Code of Ethics promotes honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest. It promotes
full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with, or submits to, the SEC
and other public communications made by the Company. The Code of Ethics addresses the following areas:
| |
● |
Honest
and Ethical Conduct |
| |
|
|
| |
● |
Conflicts
of Interest |
| |
|
|
| |
● |
Compliance |
| |
|
|
| |
● |
Disclosure |
| |
|
|
| |
● |
Protection
and Proper Use of Company Assets |
| |
|
|
| |
● |
Corporate
Opportunities |
| |
|
|
| |
● |
Confidentiality |
| |
|
|
| |
● |
Fair
Dealing |
| |
|
|
| |
● |
Reporting
and Enforcement |
This Code embodies our commitment to conduct business in accordance
with the highest ethical standards and applicable laws, rules and regulations. We will provide any person a copy of our Code of Ethics,
without charge, upon written request to the Company’s Secretary. Requests should be addressed in writing to Idaho Copper Corporation
(formerly known as Joway Health Industries Group Inc.), 800 W. Main St., Ste 1460, Boise, Idaho 83702.
Item 11.
EXECUTIVE COMPENSATION.
Executive
Officer Compensation
The
following is a summary of all compensation paid to the Company’s executive officers for the last two completed fiscal years. The
summary is broken out into two tables below, the first of which is for the Company prior to the Closing (“Pre-Closing”)
because the Company’s last two completed fiscal years ended on December 31, 2022, and December 31, 2021. The second summary is
for the Company subsequent to the Closing (“Post-Closing”) and the acquisition of ICUMO because ICUMO’s last
two completed fiscal years ended on June 30, 2021, and June 30, 2022.
Information
in the Pre-Closing table pertains to Jinghe Zhang who was the principal executive officer of the Company until his resignation on February
3, 2022, when Crystal Globe Limited sold 83% of the issued and outstanding shares to JHP. Subsequently, Ramon Lata became the Company’s
principal executive officer and principal financial and accounting officer, serving in such capacity without compensation until the Closing.
Simultaneous with the Closing, Messrs. Rudofsky, Scannell, Brodkey, and Dykes were appointed as officers of the Company.
Summary
Executive Compensation Table 2021-2022 – Pre-Closing
Name and
principal
position | |
Year | |
Salary
($) | | |
Bonus
($) | | |
Stock
awards
($) | | |
Option
awards
($) | | |
Non-equity
incentive
plan
compensation
($) | | |
Nonqualified
deferred
compensation
earnings
($) | | |
All other
compensation
($) | | |
Total
($) | |
Jinghe Zhang President,
Chief Executive Officer | |
2022 | |
$ | 0 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
$ | 0 | |
| | |
2021 | |
$ | | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
$ | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Raymond Lata, President,
Chief Executive Officer | |
2022 | |
$ | 0 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
$ | 0 | |
| | |
2021 | |
$ | | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
$ | | |
Summary
Executive Compensation Table 2021-2022 – Post-Closing (1)
Name and
principal
position | |
Year | |
Salary
($) | |
Bonus
($) | |
Stock
awards
($) | |
Option
awards
($) | |
Non-equity
incentive
plan
compensation
($) | |
Nonqualified
deferred
compensation
earnings
($) | |
All other
compensation
($) | | |
Total
($) | |
Steven Rudofsky President,
Chief Executive Officer | |
2021 | |
$ | — | |
| | |
| | |
| | |
| | |
| | |
| | | |
$ | — | |
| | |
2022 | |
$ | 125,000 | |
| | |
| | |
| | |
| | |
| | |
| | | |
$ | 125,000 | |
| | |
| |
| | |
| | |
| | |
| | |
| | |
| | |
| | | |
| | |
Robert Scannell Treasurer,
Chief Financial Officer | |
2021 | |
$ | — | |
| | |
| | |
| | |
| | |
| | |
| | | |
$ | — | |
| | |
2022 | |
$ | 100,000 | |
| | |
| | |
| | |
| | |
| | |
| | | |
$ | 100,000 | |
| | |
| |
| | |
| | |
| | |
| | |
| | |
| | |
| | | |
| | |
Andrew Brodkey, Secretary,
Chief Operating Officer | |
2021 | |
$ | — | |
| | |
| | |
| | |
| | |
| | |
| | | |
$ | — | |
| | |
2022 | |
$ | 92,000 | |
| | |
| | |
| | |
| | |
| | |
| | | |
$ | 92,000 | |
| | |
| |
| | |
| | |
| | |
| | |
| | |
| | |
| | | |
| | |
Shaun Dykes, Vice President,
Exploration (2) | |
2021 | |
$ | — | |
| | |
| | |
| | |
| | |
| | |
| 46,282 | (2) | |
$ | 46,282 | |
| | |
2022 | |
$ | — | |
| | |
| | |
| | |
| | |
| | |
| 245,409 | (2) | |
$ | 245,409 | |
| (1) |
Compensation
paid by ICUMO to Messrs. Rudofsky, Scannell, Brodkey, and Dykes, are for the fiscal years ended June 30, 2022 and 2021, respectively.
These are the last two completed fiscal years for ICUMO ended prior to the Closing. |
| (2) |
Dykes
Geologic Systems Ltd. (“Geologic Systems”) is 50% owned by Shaun Dykes, President and CEO of the Company, and
50% owned by his spouse. Dykes Geologic Systems Ltd. is the full legal name. That company is also known as Geologic Systems Ltd.,
which is its trade name. In ICUMO’s fiscal year ended June 30, 2022, the Company paid Geologic Systems $155,854 in exploration
fees and $89,555 in salaries and management fees. This is compared with $13,041 for exploration fees and $33,241 paid by the Company
to Geologic Systems in ICUMO’s fiscal year ended June 30, 2021. |
Option
Plan
There
were no stock options and no common shares set aside for any stock option plan as of December 31, 2022 for the Company or for ICUMO as
of June 30, 2022.
Aggregated
Option Exercises and Fiscal Year-End Option Value Table
There
were no stock options exercised during the fiscal year ended December 31, 2022 or during the fiscal year ended June 30, 2022, by the
executive officers named in the Executive Compensation Table.
Long-Term
Incentive Plan (“LTIP”) Awards Table
There
were no awards made to a named executive officer in the last completed fiscal year under any LTIP.
Director
Compensation
The
following is a summary of the compensation paid to directors for the Company’s last completed fiscal year. As stated above, the
summary is broken out into two tables below, the first of which is for the Pre-Closing Period and the second of which is for the Post-Closing
period. The last completed fiscal year for the Company ended on December 31, 2022, and the last completed fiscal year for ICUMO ended
on June 30, 2022.
Summary
Director Compensation Table 2022 – Pre-Closing
| Name | |
| Fees
earned
or paid
in cash
($) | | |
| Stock
awards
($) | | |
| Option
awards
($) | | |
| Non-equity
incentive
plan
compensation
($) | | |
| Nonqualified
deferred
compensation
earnings
($) | | |
| All other
compensation
($) | | |
| Total
($) | |
| Jinghe Zhang (1) | |
$ | — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
$ | — | |
| Ramon Lata (1) | |
$ | — | | |
| | | |
| | | |
| | | |
| | | |
| | | |
$ | — | |
| (1) |
On
February 3, 2022, Ramon Lata was appointed as a director, and Jinghe Zhang resigned as a director. Mr. Lata served without compensation
as a director until his resignation upon the Closing. |
Summary
Director Compensation Table 2022 – Post-Closing
| Name | |
| Fees
earned
or paid
in cash
($) | | |
| Stock
awards
($) | | |
| Option
awards
($) | | |
| Non-equity
incentive
plan
compensation
($) | | |
| Nonqualified
deferred
compensation
earnings
($) | | |
| All other
compensation
($) | | |
| Total
($) | |
| Shaun Dykes | |
$ | — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
$ | — | |
| Trevor Burns (1) | |
$ | — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
$ | — | |
| John Moeller | |
$ | — | | |
| | | |
| | | |
| | | |
| | | |
| | | |
$ | — | |
| Andrew Brodkey | |
$ | — | | |
| | | |
| | | |
| | | |
| | | |
| | | |
$ | — | |
| Robert Scannell | |
$ | — | | |
| | | |
| | | |
| | | |
| | | |
| | | |
$ | — | |
| (1) |
Mr.
Burns resigned as a director of ICUMO on September 12, 2022. |
Employment
Contracts, Termination of Employment, Change-in-Control Arrangements
During
the year ended December 31, 2022, the Company did not have any employment agreement with its sole officer and director.
The
Company does not currently have employment agreements with any of its executive officers but expects to enter into employment agreements
with certain of them in the future. ICUMO currently has Management Agreements with Steven Rudofsky, Robert Scannell, and Andrew
Brodkey.
Mr.
Rudofsky and ICUMO entered into a Management Agreement dated January 1, 2022, for a term of one year with automatic renewals for one-year
periods at December 31 of each year, subject to renegotiation within 60 days of the end of any one year period unless earlier terminated,
with or without cause, upon notice. Unless terminated for cause or other defined reasons, Mr. Rudofsky is entitled to severance of one
(1) month compensation for each two (2) months of service at the end of the third (3) month of service up to a maximum of two (2) years’
wages. Mr. Rudofsky’s annual base compensation is $250,000, reviewable at least annually, and he may participate in any Company
economic benefit plans that exist or may be implemented.
Mr.
Scannell and ICUMO entered into a Management Agreement dated January 1, 2022, for a term of one year with automatic renewals for one-year
periods at December 31 of each year, subject to renegotiation within 60 days of the end of any one year period unless earlier terminated,
with or without cause, upon notice. Unless terminated for cause or other defined reasons, Mr. Scannell is entitled to severance of one
(1) month compensation for each two (2) months of service at the end of the third (3) month of service up to a maximum of two (2) years’
wages. Mr. Scannell’s annual base compensation is $200,000, reviewable at least annually, and he may participate in any Company
economic benefit plans that exist or may be implemented.
Mr.
Brodkey and ICUMO entered into a Management Agreement dated December 15, 2021, for a term of one year with automatic renewals for one-year
periods on December 31 of each year, subject to renegotiation within 60 days of the end of any one year period unless earlier terminated,
with or without cause, upon notice. Unless terminated for cause or other defined reasons, Mr. Scannell is entitled to severance of one
(1) month compensation for each two (2) months of service at the end of the third (3) month of service up to a maximum of two (2) years’
wages. Mr. Scannell’s annual base compensation is $250,000, payable in a combination of cash, common stock (valued at $0.15 per
share) and 5-year warrants (exercisable at $0.15 per share), with payments to be made upon the Company’s raising of certain funding
amounts, or “Trigger Amounts,” as stated in Mr. Brodkey’s agreement.
The
Company currently has no compensation plans or arrangements.
Compensation
Committee
We
do not currently have a compensation committee of the board of directors or a committee performing similar functions. The board
of directors as a whole participates in the consideration of executive officer and director compensation.
Indebtedness
of Directors, Senior Officers, Executive Officers and Other Management
None
of our directors or executive officers or any associate or affiliate of our company during the last two fiscal years is or has been indebted
to our company by way of guarantee, support agreement, letter of credit or other similar agreement or understanding currently outstanding.
Item 12. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
Securities Authorized for Issuance Under Equity
Compensation Plans
As of the end of the most recently completed fiscal
years, December 31, 2022 and December 31, 2021, the Company did not have any equity compensation plans and have not maintained any such
plans since our inception.
Security Beneficial Ownership Table
Beneficial ownership is determined in accordance
with the rules of the SEC and generally includes voting or investment power with respect to securities. In accordance with SEC rules,
shares of Common Stock which may be acquired upon exercise of stock options or warrants which are currently exercisable or which become
exercisable within sixty (60) days of the date of the applicable table below are deemed beneficially owned by the holders of such options
and warrants and are deemed outstanding for the purpose of computing the percentage of ownership of such person, but are not treated as
outstanding for the purpose of computing the percentage of ownership of any other person. Subject to community property laws, where applicable,
the persons or entities named in the tables below have sole voting and investment power with respect to all shares of Common Stock indicated
as beneficially owned by them.
The following table sets forth information with
respect to the beneficial ownership of Common Stock as of March 1, 2023, by (i) each stockholder
known by us to be the beneficial owner of more than 5% of Common Stock (the Company’s only class of voting securities), (ii) each
of the directors and executive officers, and (iii) all of the directors and executive officers as a group. To the best knowledge of the
Company, except as otherwise indicated, each of the persons named in the table has sole voting and investment power with respect to the
shares of Common Stock beneficially owned by such person, except to the extent such power may be shared with a spouse. To the knowledge
of the Company, none of the shares listed below are held under a voting trust or similar agreement, except as noted. Other than the Exchange,
to the knowledge of the Company, there is no arrangement, including any pledge by any person of securities of the Company or any of its
parents, the operation of which may at a subsequent date result in a change in control of the Company.
| Name and Address of Beneficial Owner(1) | |
Number of
Shares
Beneficially
Owned | | |
Percentage of
Beneficial
Ownership | |
| Named Executive Officers and Directors | |
| | |
| |
| Robert Scannell – Director, Chief Financial Officer, and Treasurer | |
| 18,867,334 | (2) | |
| 8.7 | % |
| Steven Rudofsky – Chief Executive Officer and President | |
| 22,093,334 | (3) | |
| 10.4 | % |
| Andrew Brodkey – Director, Chief Operating Officer, and Secretary | |
| 10,170,934 | (4) | |
| 4.8 | % |
| Shaun Dykes – Director, Vice President -Exploration | |
| 8,478,200 | (5) | |
| 4.0 | % |
| John Moeller – Director | |
| 2,680,000 | (6) | |
| 1.3 | % |
| All current directors and executive officers as a group (5 persons) | |
| 62,289,802 | | |
| 29.2 | % |
| | |
| | | |
| | |
| 5% Stockholders | |
| | | |
| | |
| Multi-Metal Development Limited | |
| 128,787,400 | (7) | |
| 61.4 | % |
| JHP Holdings Inc. | |
| 16,644,820 | (8) | |
| 8.2 | % |
| Elatam Family Trust | |
| 35,443,000 | (9) | |
| 16.1 | % |
| (1) |
Unless indicated otherwise, the address of all the persons listed above is c/o the Company at 800 W. Main St, Ste 1460 Boise, ID 83702. |
| (2) |
Consists of: (1) 2,680,000 shares of Common Stock owned by Mr. Scannell and 1,407,000 shares of Common Stock of Feehan Partners LLP (“Feehan”) that Mr. Scannell, as General Partner of Feehan, has discretionary authority to vote and dispose of the shares held by Feehan and may be deemed to be the beneficial owner of these shares; (2) 5,360,000 shares of Common Stock underlying vested options that he holds pursuant to the 2022 Incentive Stock Options; (3) 2,680,000 shares of Common Stock underlying the 2021 Warrants held directly by Mr. Scannell and 1,407,000 shares of Common Stock underlying the 2021 Warrants held by Feehan that Mr. Scannell could be deemed to beneficially own; and (4) 2,666,667shares of Common Stock underlying the 2023 Replacement Warrants and 2,666,667shares of Common Stock underlying the Replacement Note held by Feehan that Mr. Scannell could be deemed to beneficially own. |
| (3) |
Consists of: (1) 11,725,000 shares of Common Stock owned by Mr. Rudofsky; (2) 5,360,000 shares of Common Stock underlying vested options that he holds pursuant to the 2022 Incentive Stock Options; (3) 1,675,000 shares of Common Stock underlying the 2021 Warrants held by Mr. Rudofsky; and (4) 1,666,667 shares of Common Stock underlying the 2023 Replacement Warrants and 1,666,667 shares of Common Stock underlying the Replacement Note held by Mr. Rudofsky. |
| (4) |
Consists of: (1) 1,098,800 shares of Common Stock owned by Mr. Brodkey; (2) 5,360,000 shares of Common Stock underlying vested options that he holds pursuant to the 2022 Incentive Stock Options; (3) 1,098,800 shares of Common Stock underlying the 2021 Warrants held by Mr. Brodkey; and (4) 1,306,667 shares of Common Stock underlying the 2023 Replacement Warrants and 1,306,667 shares of Common Stock underlying the Replacement Note held by Mr. Brodkey. |
| (5) |
Consists of: (1) 1,159,100 shares of Common Stock owned by Mr. Dykes; (2) 5,360,000 shares of Common Stock underlying vested options that he holds pursuant to the 2022 Incentive Stock Options; (3) 1,159,100 shares of Common Stock underlying the 2021 Warrants held by Mr. Dykes; and (4) 400,000 shares of Common Stock underlying the 2023 Replacement Warrants and 400,000 shares of Common Stock underlying the Replacement Note held by Mr. Dykes. |
| (6) |
Consists of 2,680,000 shares of Common Stock underlying vested options that Dr. Moeller holds pursuant to the 2022 Incentive Stock Options. |
| (7) |
Consists of (1) 121,343,700 shares of Common Stock owned by Multi-Metal Development Limited; and (2) 7,443,700 shares of Common Stock underlying the 2021 Warrants held by Multi-Metal Development Limited (“MMD”). MMD is a public company traded on the Toronto Stock Exchange (TSXV: MLY) and the Board of Directors of MMD share voting and dispositive power over the shares of the Company. The address for MMD is 638 Millbank Road Vancouver, BC V5Z 4B7 Canada |
| (8) |
JHP Holdings, Inc. holds a total of 16,644,820 shares of the Company’s common stock. As the shareholder and executive director of JHP Holdings, Inc., Mr. Lata is the beneficial owner of the shares of the Company held by JHP Holdings, Inc. The address for the foregoing entity is 701 S. Carson Street, Suite 200, Carson City, NV, 89701. |
| (9) |
Consists of (1) 17,721,500 shares of Common Stock owned by the Elatam Family Trust; and (2) 17,721,500 shares of Common Stock underlying the 2021 Warrants held by the Elatam Family Trust. As a director of the Elatam Family Trust, Mr. Mohammad Elatam had voting and dispositive power over these shares and may be deemed to be the beneficial owner of such shares. |
Item 13. CERTAIN RELATIONSHIPS, RELATED
TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
The following are transactions for the last two
completed fiscal years and any currently proposed transaction, in which the registrant was or is to be a participant and the amount involved
exceeds the less of $120,000 or one percent of the average of the registrant’s total assets at December 31, 2022 and 2021, and in
which any of the following persons had or will have a direct or indirect material interest.
| |
● |
Any director or executive officer; |
| |
|
|
| |
● |
Any immediate family member of a director or executive officer, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of such director, executive officer and any person (other than a tenant or employee) sharing the household of such director or executive officer; and |
| |
|
|
| |
● |
any person who was in any of the following categories when a transaction in which such person had a direct or indirect material interest occurred or existed: |
| |
|
|
| |
● |
any person who is known to the registrant to be the beneficial owner of more than five percent of any class of the registrant’s voting securities; or |
| |
|
|
| |
● |
Any immediate family member of any such security holder, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of such security holder, and any person (other than a tenant or employee) sharing the household of such security holder. |
Transaction with Crystal Globe
On November 20, 2020, we entered the Merger Agreement with Crystal
Globe Limited, a British Virgin Islands company which is a majority shareholder of Idaho Copper and the other parties signatory thereto.
Upon completion of the transactions contemplated by the Merger Agreement, Crystal Globe acquired all our business in consideration for
$119,070 in cash. The Company has distributed the cash to its shareholders (other than Crystal Globe) in an amount equal to such shareholder’s
proportionate share of the cash consideration based on such shareholders’ percentage of the outstanding common stock of the Company.
Transactions with Jinghe Zhang
During the year ended December 31, 2021, we received
financial supports of $66,235 from our former CEO and chairman, Mr. Jinghe Zhang. The loans due to him are for our daily operating activities
without interest charge and due on demand. On April 28, 2021, the Company entered into an agreement with Mr. Jinghe Zhang to release the
Company from $295,928 of indebtedness owed to him. As of December 31, 2021, the total unpaid principal balance due to Mr. Jinghe Zhang
for advances was $3,999. Upon the resignation of Mr. Zhang on February 3, 2022, each of the Company and Mr. Zhang released the other from
any and all amounts then due.
Transactions with Joway Shengshi
Joway Shengshi was one of the Company’s
subsidiaries but has been sold via the Merger Agreement on December 31, 2020. Mr. Jinghe Zhang owns 99% of the equity interest in Joway
Shengshi. For the years ended December 31, 2021 and 2020, we received $3,844 and $0 of advances from Joway Shengshi, respectively, for
our daily operating activities. On April 28, 2021, Joway Shengshi released the Company from $463,698 of indebtedness owed to it. As of
December 31, 2021, the total unpaid principal balance due to Joway Shengshi was $0.
Transactions with JHP
On February 3, 2022, upon the consummation of
the transactions contemplated by the Purchase Agreement by and among the Company, Crystal Globe Limited and JHP, JHP 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. 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.
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 assumed
all the outstanding debts of the Company as of January 23, 2023.
Other Related Party Transactions
Except as disclosed above, no executive officer,
director or any member of these individuals’ immediate families, any corporation or organization with whom any of these individuals
is an affiliate or any trust or estate in which any of these individuals serve as a trustee or in a similar capacity or has a substantial
beneficial interest in is or has been indebted to us at any time since the beginning of our last fiscal year.
Procedures for Approval of Related Party Transactions
Our Board is charged with reviewing and approving
all potential related party transactions. All such related party transactions must then be reported under applicable SEC rules. We
have not adopted other procedures for review, or standards for approval, of such transactions, but instead review them on a case-by-case
basis.
Item 14. PRINCIPAL ACCOUNTING FEES AND
SERVICES.
Audit Fees
For each fiscal year of 2022 and 2021, we incurred
aggregate fees and expenses of $10,000 and $10,000, respectively, from HHC for works completed for our annual audits and quarterly reviews.
Audit-Related Expenses
Audit-related expenses for 2022 and 2021 were
$0, respectively.
Tax Fees
We incurred aggregate fees and expenses of $0
for each fiscal year of 2022 and 2021, respectively.
All Other Fees
We incurred other fees of $0 for each fiscal year
of 2022 and 2021.
Policy on Audit Committee Pre-Approval of Audit
and Permissible Non-Audit Services of Independent Auditors
Since we did not have a formal audit committee,
our Board served as our audit committee. We have not adopted pre-approval policies and procedures with respect to our accountants in 2022.
All of the services provided, and fees charged by our independent registered accounting firms in 2022 were approved by the Board.
Our Board has reviewed and discussed with HHC,
our audited financial statements contained in this Annual Report on Form 10-K for the 2022 and 2021 fiscal years. The Board also has discussed
with HHC, the matters required to be discussed pursuant to SAS No. 61 (Codification of Statements on Auditing Standards, AU Section 380),
which includes, among other items, matters related to the conduct of the audit of our financial statements.
Our Board has received and reviewed the written
disclosures and the letter from HHC required by Independence Standards Board Standard No.1 (Independence Discussions with Audit Committees),
and has discussed with HHC its independence from our company.
Our Board considered whether the provision of
services other than audit services is compatible with maintaining auditor independence. Based on the review and discussions referred to
above, the Board determined that the audited financial statements be included in our Annual Report on Form 10-K for our 2022 and 2021
fiscal years for filing with the SEC.
STATEMENTS
OF CASH FLOWS
| | |
For the Year ended
December 31, | |
| | |
2022 | | |
2021 | |
| | |
| | |
| |
| CASH FLOWS FROM OPERATING ACTIVITIES: | |
| | |
| |
| Net loss from continuing operations | |
$ | (74,708 | ) | |
$ | (121,788 | ) |
| Adjustments to reconcile net loss to net cash provided by operating activities | |
| | | |
| | |
| Changes in operating assets and liabilities: | |
| | | |
| | |
| Other payables | |
| 74,708 | | |
| 51,709 | |
| Net cash used in operating activities | |
| - | | |
| (70,079 | ) |
| | |
| | | |
| | |
| | |
| | | |
| | |
| CASH FLOWS FROM INVESTING ACTIVITIES: | |
| | | |
| | |
| Cash received from disposal of subsidiary | |
| - | | |
| 119,070 | |
| Net cash provided by investing activities | |
| - | | |
| 119,070 | |
| | |
| | | |
| | |
| CASH FLOWS FROM FINANCING ACTIVITIES: | |
| | | |
| | |
| Distribution of special dividend | |
| - | | |
| (119,070 | ) |
| Due to related parties | |
| - | | |
| 70,079 | |
| Net cash used in financing activities | |
| - | | |
| (48,991 | ) |
| | |
| | | |
| | |
| EFFECT OF EXCHANGE RATE CHANGES ON CASH | |
| - | | |
| - | |
| | |
| | | |
| | |
| NET INCREASE IN CASH | |
| - | | |
| - | |
| | |
| | | |
| | |
| CASH, beginning of year | |
| - | | |
| - | |
| | |
| | | |
| | |
| CASH, end of year | |
$ | - | | |
$ | - | |
| | |
| | | |
| | |
| SUPPLEMENTAL DISCLOSURES: | |
| | | |
| | |
| | |
| | | |
| | |
| Income taxes paid | |
$ | - | | |
$ | - | |
| Interest paid | |
$ | - | | |
$ | - | |
| | |
| | | |
| | |
| NON-CASH TRANSACTIONS OF INVESTING AND FINANCING ACTIVITIES | |
| | | |
| | |
| | |
| | | |
| | |
| Forgiveness of related party debts | |
$ | 3,999 | | |
$ | 759,626 | |
The
accompanying notes are an integral part of these financial statements
IDAHO COPPER CORPORATION
(FORMERLY KNOWN AS JOWAY HEALTH INDUSTRIES GROUP
INC.)
NOTES TO FINANCIAL STATEMENTS
Note 1 – ORGANIZATION
The financial statements include the
financial statements of Idaho Copper Corporation (formerly known as Joway Health Industries Group Inc.) (referred to herein as “Idaho
Copper”). Idaho Copper is hereinafter referred to as the “Company,” “we” and “us”.
Idaho Copper was
originally incorporated under the laws of the State of Texas on March 21, 2003. On September 21, 2010, Idaho Copper entered into a Share
Exchange Agreement (the “Share Exchange”) with the sole stockholder of Dynamic Elite International Limited. As a result of
the Share Exchange, Dynamic Elite became a wholly-owned subsidiary of Idaho Copper and the stockholders of Dynamic Elite acquired approximately
76.08% of the issued and outstanding stock of Idaho Copper. The share exchange transaction resulted in the shareholders of Dynamic Elite
acquiring a majority voting interest in Idaho Copper. Generally accepted accounting principles in the United States of America require
that the company whose shareholders retain the majority interest in the combined business be treated as the acquirer for accounting purposes.
The reverse acquisition process utilized the capital structure of Idaho Copper and the assets and liabilities of Dynamic Elite recorded
at historical cost. On December 22, 2010, Idaho Copper changed its jurisdiction of incorporation from the State of Texas to the State
of Nevada.
Dynamic Elite International Limited (referred
to herein as “Dynamic Elite”) was incorporated under the laws of the British Virgin Islands on June 2, 2010 as a limited liability
company (a BVI company). Dynamic Elite engaged in manufacturing and distributing tourmaline products in China. Its wholly owned subsidiary,
Tianjin Junhe Management Consulting Co., Ltd. was incorporated on September 15, 2010 in Tianjin, People’s Republic of China (“PRC”).
Other than the equity interest in Junhe Consulting, Dynamic Elite does not own any assets or conduct any operations.
Tianjin Junhe Management Consulting Co., Ltd.
(referred to herein as “Junhe Consulting”) conducted its business through Tianjin Joway Shengshi Group Co., Ltd.
Tianjin Joway Shengshi Group Co., Ltd. (referred
to herein as “Joway Shengshi”) was incorporated in PRC on May 17, 2007. Joway Shengshi was owned 99% by Jinghe Zhang, the
Company’s current CEO and President and 1% by Song Baogang. Joway Shengshi engages in manufacturing and distributing tourmaline
products in China. Shenyang Joway Electronic Technology Co., Ltd., Tianjin Joway Decoration Engineering Co., Ltd. and Tianjin Oriental
Shengtang Trading Import & Export Trading Co., Ltd. are subsidiaries of Joway Shengshi.
Shenyang Joway Electronic Technology Co., Ltd.
(referred to herein as “Joway Technology”) was originally named Liaoning Joway Technology Engineering Co., Ltd. which was
incorporated on March 28, 2007 in PRC. The name was changed on June 22, 2011. It engages in the distribution of Tourmaline Activated Water
Machines and the construction of Tourmaline Wellness Houses. Prior to July 25, 2010, Joway Shengshi owned 90.91% of Joway Technology.
Joway Shengshi entered into a share acquisition agreement with Jingyun Chen, another stockholder of Joway Technology on July 25, 2010
to acquire the remaining 9.09% of the share of Joway Technology. As a result of the share acquisition, Joway Technology became a wholly-owned
subsidiary of Joway Shengshi.
Tianjin Joway Decoration Engineering Co., Ltd.
(referred to herein as “Joway Decoration”) was incorporated on April 22, 2009 in PRC. It engages in the distribution of Tourmaline
Activated Water Machines, Tourmaline Wellness Room for family use and Tourmaline Wellness House materials. Prior to July 9, 2010, Joway
Shengshi owned 90% of Joway Decoration. Joway Shengshi entered into a share acquisition agreement with Jingyun Chen, another stockholder
of Joway Decoration on July 9, 2010 to acquire the remaining 10% of the shares of Joway Decoration. As a result of the share acquisition,
Joway Decoration became a wholly-owned subsidiary of Joway Shengshi. Jingyun Chen is currently the General Manager of Joway Decoration.
Tianjin Oriental Shengtang Import & Export
Trading Co., Ltd. (referred to herein as “Shengtang Trading”) was incorporated on September 18, 2009 in the PRC. It engages
in purchasing raw materials which it sells to other companies of the group. Prior to July 28, 2010, Joway Shengshi owned 95% of Shengtang
Trading. Joway Shengshi entered into a share acquisition agreement with Wang Aiying, another stockholder of Shengtang Trading on July
28, 2010 to acquire the remaining 5% of the shares of Shengtang Trading. As a result of the share acquisition, Shengtang Trading became
a wholly-owned subsidiary of Joway Shengshi.
On November 20, 2020, Idaho Copper entered into
a Merger Agreement (the “Merger Agreement”) with Dynamic Elite International Limited, a British Virgin Islands company and
a wholly-owned subsidiary of the Company (“Dynamic Elite”), Crystal Globe Limited, a British Virgin Islands company (“Parent”)
and Joway Merger Subsidiary Limited, a British Virgin Islands company and a wholly-owned subsidiary of Parent (“Merger Sub”).
Pursuant to the terms of the Merger Agreement, Merger Sub merged with and into Dynamic Elite (the “Merger”), with Dynamic
Elite continuing as the surviving corporation as a wholly-owned subsidiary of Parent. The special committee of the Board of Directors
of the Company unanimously approved the Merger Agreement and the transactions contemplated thereby.
Pursuant to the terms of the Merger Agreement,
at the effective time of the Merger (the “Effective Time”) and as a result of the Merger, the ordinary shares of common stock
of Dynamic Elite issued and outstanding immediately prior to the Effective Time, all of which are held by the Company, were cancelled
and extinguished in consideration for $119,070 in cash (the “Merger Consideration”). The Company distributed the Merger Consideration
to its shareholders (other than to Parent) in an amount equal to such shareholder’s proportionate share of the Merger Consideration
based on such shareholders’ percentage of the outstanding common stock of the Company. In addition, the Company received a fairness
opinion from an investment banker opining that the Merger Consideration was fair, from a financial point of view, to the shareholders
of the Company.
As of December 31, 2020, the Effective Time of
the Merger, the 10,000 ordinary shares of common stock of Dynamic Elite issued and outstanding immediately which were held by the Company,
were cancelled for $119,070 in cash as Merger Consideration, or $0.45 per share. In January 2021, the Company had received $119,070 from
Crystal Globe and distributed proportionately to the Company’s minority shareholders, other than Crystal Globe, which represented
2,646,000 shares of our common stock. Since the remaining 17,408,000 shares of our common stock was owned by Crystal Globe, the $0.045
per share payment for the 17,408,000 shares was offset and Crystal Globe did not receive any cash payment in connection with the Merger.
On December 31, 2020, upon the Company completed
the Merger Agreement with Crystal Globe, Idaho Copper became a “shell company” (as such term is defined in Rule 12b-2 under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
On April 28, 2021, Idaho Copper entered into debt
release agreements with Mr. Jinghe Zhang and Joway Shengshi Group Co., Ltd. to release the Company from the debts of $295,928 and $463,698,
respectively. In connection with the transactions, all obligations owed to Mr. Zhang and Joway Shengshi Group Co., Ltd. from the Company
were cancelled and there are no further debts or liabilities owed by the Company to any affiliate or former affiliate of the Company.
Going forward, the Company intends to seek, investigate
and, if such investigation warrants, engage in a business combination with a private entity whose business presents an opportunity for
the Company’s stockholders.
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, a company incorporated under the laws of British Virgin Islands (the
“Seller”), and JHP Holdings, Inc., a Nevada corporation (the “Buyer”), pursuant to which the Buyer purchased 16,644,820
shares of common stock of the Company from the Seller.
On February 2, 2022,
Mr. Ramon Lata was appointed to the board of the directors upon the resignation of Jinghe Zhang, the sole officer and director of the
Company. Mr. Lata was also appointed as the President, Treasurer and Secretary 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. As a result of this share exchange (the “Exchange”), ICUMO became a wholly owned
subsidiary of the Company.
Note 2 – GOING CONCERN
The accompanying financial statements have been
prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the discharge of
liabilities in the normal course of business for the foreseeable future.
As reflected in the accompanying financial
statements, for the years ended December 31, 2022 and 2021, we incurred net losses of $74,708 and $121,788, respectively. In addition,
we reported cash outflow of $0 and $70,079 from our operating activities for the years ended December 31, 2022 and 2021, respectively.
As of December 31, 2022, we had an accumulated deficit of approximately $7.4 million and a net capital deficiency of $177,761. Management
believes these factors raise substantial doubt about our ability to continue as a going concern for the next twelve months.
The continuation of our company as a going concern
through the next twelve months is dependent upon (1) the continued financial support from our stockholders or external financing. Management
believes that our existing stockholders will provide the additional cash to meet our obligations as they become due, and (2) that it will
be able to implement its business plan to expand our company’s operations and generate sufficient revenues to meet its obligations.
These financial statements do not include any adjustments to reflect the possible
future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from
the outcome of these uncertainties. Management believes that the actions presently being taken to obtain additional funding and implement
its strategic plan provides the opportunity for our company to continue as a going concern.
Note 3 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements have been
prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”). The Company’s
functional currency is USD.
Use of Estimates
The preparation of the financial
statements is in conformity with generally accepted accounting principles in the United States of America, which require management to
make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes
these estimates using the best information available at the time the estimates are made. Actual results could differ from those estimates.
Concentrations of Credit Risk
As a result of the consummation of the Merger,
as of December 31, 2020, 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”). Going forward, our main business operations consist of seeking a business combination with a private
entity whose business would present an opportunity for its shareholders.
Fair Value of Financial Instruments
Financial Accounting Standards Board (“FASB”)
Accounting Standards Codification (“ASC”) 820 (formerly Statement of Financial Accounting Standard (“SFAS”) No.
157 Fair Value Measurements) establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value
as the following:
| ● | Level
1—defined as observable inputs such as quoted prices in active markets for identical assets or liabilities; |
| ● | Level
2—defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and |
| ● | Level
3—defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. |
The carrying amounts reported in the balance sheets
for cash, accounts receivable, other receivable, accounts payable, other payable, and amounts due from related parties generally approximate
their fair market values based on the short-term maturity of these instruments. ASC 825-10 “Financial Instruments” allows
entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option
may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is
elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting
date. The Company did not elect to apply the fair value option to any outstanding instruments.
Revenue Recognition
The Company recognizes revenue when control of
promised goods or services is transferred to the company’s customers, in an amount that reflects the consideration the Company expects
to be entitled to in exchange for those goods or services.
Prior to the Merger Agreement (as defined above),
with respect to sales of product to both franchisee and non-franchisee customers, the Company transfers control, invoices the customer
and recognizes revenue upon shipment to the customer. Sales prices are based on fixed price lists that are different depending on whether
the price list is for franchisee customers or for non-franchisee customers. Sales, value add and other taxes collected concurrent with
revenue-producing activities are excluded from revenue.
After the consummation of the Merger as of December
31, 2020, the Company did not report any revenue for the years ended December 31, 2022 or 2021.
Income Taxes
The Company accounts for income taxes in accordance
with FASB ASC 740 “Income Taxes” (formerly SFAS No. 109 Accounting for Income Taxes), which is an asset and liability
approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that
have been recognized in the Company’s financial statements or tax returns. ASC 740 additionally requires the establishment of a
valuation allowance to reflect the likelihood of realization of deferred tax assets. Realization of deferred tax assets is dependent upon
future earnings, if any, of which the timing and amount are uncertain.
According to ASC 740, the evaluation of a tax
position is a two-step process. The first step is to determine whether it is more likely than not that a tax position will be sustained
upon examination, including the resolution of any related appeals or litigation based on the technical merits of that position. The second
step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in
the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50% likelihood of being realized
upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized
in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not
criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. ASC 740 also
provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures, and transition.
Basic and Diluted Earnings per Share
The Company reports earnings per share in accordance
with FASB ASC 260 “Earnings per share”. The Company’s basic earnings per share are computed using the weighted average
number of shares outstanding for the periods presented. Diluted earnings per share are computed based on the assumption that any dilutive
options or warrants were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, the Company’s
outstanding stock warrants are assumed to be exercised, and funds thus obtained were assumed to be used to purchase common stock at the
average market price during the period. There were no dilutive instruments outstanding during the years ended December 31, 2022 and 2021.
Recently Issued Accounting Pronouncements
No accounting standards that have been issued
or proposed by the FASB or other standards-setting bodies that require adoption until a future date are expected to have a material impact
on the Company’s financial statements upon adoption.
Note 4 –
OTHER PAYABLES
As of December
31, 2022 and 2021, the Company reported $177,761 and $103,053 as its other payables, respectively. The other payables mainly consist
of payables for professional services, including audit, legal, and financial statement filing services.
Note 5 – RELATED PARTY TRANSACTIONS
Payables due to related parties consist of the following:
| | |
December 31, | |
| | |
2022 | | |
2021 | |
| Jinghe Zhang | |
$ | - | | |
$ | 3,999 | |
| Total | |
$ | - | | |
$ | 3,999 | |
The amounts owed to related parties are non-interest bearing and have
no specified repayment terms.
Transactions with Jinghe Zhang
During the years ended December 31, 2022 and 2021
we received financial supports of $0 and $66,235 from our former CEO and chairman, Mr. Jinghe Zhang. The loans due to him are for our
daily operating activities without interest charge and due on demand.
On April 28, 2021, the Company entered into an
agreement with Mr. Jinghe Zhang to release the Company from $295,928 of indebtedness owed to him. In January 2022, Mr. Jinghe Zhang released
the Company from $3,999 of indebtedness owed to him. As of December 31, 2022 and 2021, the total unpaid principal balance due to Mr. Jinghe
Zhang for advances was $0 and $3,999, respectively.
Transactions with Crystal Globe
On November 20, 2020, Idaho Copper entered into
a Merger Agreement (the “Merger Agreement”) with Dynamic Elite International Limited, a British Virgin Islands company and
a wholly owned subsidiary of the Company (“Dynamic Elite”), Crystal Globe Limited, a British Virgin Islands company (“Crystal
Globe”) and Joway Merger Subsidiary Limited, a British Virgin Islands company and a wholly-owned subsidiary of Crystal Globe (“Merger
Sub”).
In accordance with the Merger Agreement, Crystal
Globe has offered a cash consideration of $0.045 per share for outstanding shares of Idaho Copper’s common stock (the “Merger
Consideration”). In January 2021, Idaho Copper had received $119,070 from Crystal Globe and distributed proportionately to the Company’s
minority shareholders which represents 2,646,000 shares of Idaho Copper’s common stock. As of December 31, 2022 and 2021, the Company
reported no balance due from Crystal Globe.
Note 6 – INCOME TAXES
The Company’s income tax returns since inception
are subject to audit by regulatory authorities. Changes in tax laws and rates could also affect recorded deferred tax assets and liabilities
in the future. Management is not aware of any such changes that would have a material effect on the Company’s results of operations,
cash flows or financial position. The calculation of our tax liabilities involves dealing with uncertainties in the application of complex
tax laws and regulations. FASB ASC Topic 740, Income Taxes provides that a tax benefit from an uncertain tax position may be recognized
when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or
litigation processes, based on the technical merits. ASC Topic 740 also provides guidance on measurement, derecognition, classification,
interest and penalties, accounting in interim periods, disclosure and transition.
We recognize tax liabilities in accordance with
ASC Topic 740 and we adjust these liabilities when our judgment changes as a result of the evaluation of new information not previously
available. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different
from our current estimate of the tax liabilities. These differences will be reflected as increases or decreases to income tax expense
in the period in which they are determined.
Note 7 – SUBSEQUENT EVENTS
On January 23, 2023, the Company entered into
a share exchange agreement (the “Share Exchange Agreement”) with International CuMo Mining Corporation (“ICUMO”),
an Idaho corporation. Pursuant to the terms of the Share Exchange Agreement, the Company’s issued 182,240,000 new shares of Idaho
Copper’s common stock to the shareholders of ICUMO in exchange for the ICUMO shareholders transferring all the issued and outstanding
shares of common stock of the ICUMO to Idaho Copper. As a result of this share exchange (the “Exchange”), ICUMO became a wholly
owned subsidiary of Idaho Copper.
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