NOTE
1 – NATURE OF OPERATIONS
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.”
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
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 “RTO”), the ICUMO Shareholders transferred all the issued and outstanding shares of common stock of
ICUMO to the Company in exchange for 182,240,000
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.
See Note 7.
The
Company continues to be a “smaller reporting company,” as defined under the Exchange Act of 1934, as amended (the “Exchange
Act”) following the Exchange, however, as a result of the Exchange, the Company has ceased to be a “shell company”
(as such term is defined in Rule 12b-2 under the Exchange Act).
ICUMO
Background
ICUMO
is an exploration and development company with mineral right interests in the United States of America. ICUMO was originally incorporated
under the laws of Nevada in 2005, as Mosquito Mining Corp. In 2013, the Company was moved to Idaho and the name changed to Idaho CuMo
Mining Corporation. In early January 2023 the name was changed to International CuMo Mining Corporation.
Nature
of Operations
The
Company is in the process of exploring its mineral rights interests in the United States and at the date of these financial statements,
has not yet determined whether any of its mineral properties contain economically recoverable mineral reserves. Accordingly, the carrying
amount of mineral right interests represents cumulative expenditures incurred to date and does not necessarily reflect present or future
values. The recovery of these costs is dependent upon the discovery of economically recoverable mineral reserves and the ability of ICMC
to obtain the necessary financing to complete their exploration and development and to resolve any environmental, regulatory, or other
constraints. Uncertainty also exists with respect to the recoverability of the carrying value of certain mineral rights interests. The
ability of the Company to realize its investment in resource properties is contingent upon the resolution of the uncertainties and confirmation
of the Company’s title to the mineral properties.
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
Company follows the accrual basis of accounting in accordance with generally accepted accounting principles in the United States of America
(“US GAAP”) and has a year-end of January 31. On March 9, 2023, the Company filed with the State of Nevada for a year-end
change from December 31 to January 31. The consolidated financial statements are based on the balance sheets and statements of operations
of ICUMO on a post-merger basis.
The
unaudited condensed consolidated financial statements of the Company for the three month periods ended April 30, 2023, and 2022 have
been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information
and pursuant to the requirements for reporting on Form 10-Q and Regulation S-X. Accordingly, they do not include all the information
and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.
However, such information reflects all adjustments (consisting solely of normal recurring adjustments unless otherwise indicated), which
are, in the opinion of management, necessary for the fair presentation of the financial position and the results of operations. Results
shown for interim periods are not necessarily indicative of the results to be obtained for a full fiscal year. The balance sheet information
as of January 31, 2023, was derived from the audited financial statements included in the Company’s financial statements as of
and for the year ended January 31, 2023, included as an exhibit to the Company’s Quarterly Report on Form 10-Q for the period ended
April 30, 2023, as filed with the Securities and Exchange Commission (the “SEC”). These financial statements should be read
in conjunction with that report.
Principles
of Consolidation
The
consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All significant intercompany balances
and transactions have been eliminated in the consolidation. The consolidated financial statements included herein, presented in accordance
with US GAAP and stated in United States dollars, have been prepared by the Company, pursuant to the rules and regulations of the Securities
and Exchange Commission.
Liquidity
and Going Concern
We
have incurred recurring losses since inception and expect to continue to incur losses as a result of legal and professional fees and
our corporate general and administrative expenses. On April 30, 2023, we had $116,721 in cash. Our net loss incurred for the three months
ended April 30, 2023 was $575,001 and the working capital deficit was $308,565 on April 30, 2023. As a result, there is substantial
doubt about our ability to continue as a going concern. In the event that we are unable to generate sufficient cash from our operating
activities or raise additional funds, we may be required to delay, reduce or severely curtail our operations or otherwise impede our
on-going business efforts, which could have a material adverse effect on our business, operating results, financial condition and long-term
prospects. The Company expects to seek to obtain additional funding through increased revenues and future financing. There can be no
assurance as to the availability or terms upon which such financing and capital might be available. The accompanying financial statements
have been prepared assuming that the Company will continue as a going concern.
Use
of Estimates
The
preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent
liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Cash
Cash
is comprised of cash balances. Cash is held at major financial institutions and is subject to credit risk to the extent that those balances
exceed applicable Federal Deposit Insurance Corporation (“FDIC”) insurance amounts of $250,000. From time to time, the Company
has certain cash balances, including restricted cash, that may exceed insured limits. The Company utilizes large and reputable banking
institutions which it believes mitigates these risks.
Stock-Based
Compensation
The
Company accounts for stock-based instruments issued to employees in accordance with ASC Topic 718, Compensation – Stock Compensation,
and Certain Redeemable Financial Instruments. ASC Topic 718 requires companies to recognize in the statement of operations the grant-date
fair value of stock options and other equity-based compensation issued to employees. The value of the portion of an award that is ultimately
expected to vest is recognized as an expense over the requisite service periods using the straight-line attribution method.
Fair
Value of Financial Instruments
The
book values of cash, accounts receivable, and accounts payable approximate their respective fair values due to the short-term nature
of these instruments. The fair value hierarchy under GAAP distinguishes between assumptions based on market data (observable inputs)
and an entity’s own assumptions (unobservable inputs).
The
hierarchy consists of three levels
|
● |
Level
one — Quoted market prices in active markets for identical assets or liabilities; |
|
● |
Level
two — Inputs other than level one inputs that are either directly or indirectly observable; and |
|
● |
Level
three — Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect
those assumptions that a market participant would use. |
Determining
which category an asset or liability falls within the hierarchy requires significant judgment. We evaluate our hierarchy disclosures
each quarter.
Net
Loss Per Share
Net
loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as
defined by FASB, ASC Topic 260, Earnings per Share. Basic earnings per common share (“EPS”) calculations are
determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted
earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and
dilutive common share equivalents outstanding. The Company has 17,960,000
dilutive shares (related to the convertible notes (see Note 4)) of common stock as of April 30, 2023, which were excluded from the
net loss per share calculation because the effect would be anti-dilutive.
Income
Taxes
The
Company accounts for income taxes in accordance with FASB ASC 740, Income Taxes. Deferred tax assets and liabilities are recognized
for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets
and liabilities and loss carryforwards and their respective tax bases.
Deferred
tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income (loss) in the years in which those
temporary differences are expected to be recovered or settled.
The
effect of a change in tax rules on deferred tax assets and liabilities is recognized in operations in the year of change. A valuation
allowance is recorded when it is “more likely-than-not” that a deferred tax asset will not be realized.
Tax
benefits of uncertain tax positions are recognized only if it is more likely than not that the Company will be able to sustain a position
taken on an income tax return. The Company has no liability for uncertain tax positions as of April 30, 2023. Interest and penalties,
if any, related to unrecognized tax benefits would be recognized as interest expense. The Company does not have any accrued interest
or penalties associated with unrecognized tax benefits, nor was any significant interest expense recognized during the three months ended
April 30, 2023.
Recent
Accounting Pronouncements
In
August 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-06, Debt with Conversion and Other Options,
which simplifies accounting for convertible instruments. The new guidance eliminates two of the three models in ASC 470-20, Debt,
that require separating embedded conversion features from convertible instruments. The guidance also addresses how convertible instruments
are accounted for in the diluted earnings per share calculation. The guidance is effective for fiscal year 2023. There was no impact
to the Company’s consolidated financial statements.
Recently
Issued Accounting Standards: Management does not believe that any recently issued, but not yet effective, accounting standards if currently
adopted would have a material effect on the accompanying financial statements.
Unproven
Mineral Right Interests
The
application of the Company’s accounting policy for unproven mineral right interests requires judgment in determining whether it
is likely that future economic benefits will flow to the Company, which may be based on assumptions about future events or circumstances.
Estimates and assumptions may change if new information becomes available. If, after expenditures are capitalized, information becomes
available suggesting that the recovery of the expenditures is unlikely, the amount capitalized is impaired with a corresponding charge
to profit or loss in the period in which the new information becomes available.
Title
to Unproven Mineral Right Interests
Although
the Company has taken steps to verify title to its unproven mineral right interests, these procedures do not guarantee the Company’s
title. Such properties may be subject to prior agreements or transfers and title may be affected by undetected defects.
Convertible
Debentures
The
Company presents convertible debentures separately in its debt and equity components on the statement of financial position. The fair
value of a compound instrument at issuance is assigned to its respective debt and equity components. The fair value of the debt component
is established first with the equity component being determined by the residual amount.
The
Company measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the
date in which they are granted. Estimating fair values for share-based payment transactions requires determining the most appropriate
valuation model, which is dependent on the terms and conditions of the grant.
The
fair value of the Company’s stock option and warrant grants are estimated using the Black-Scholes-Merton Option Pricing model,
which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the stock options or warrants,
and future dividends. Compensation expenses are recorded based upon the value derived from the Black-Scholes-Merton Option Pricing model
and based on actual experience. The assumptions used in the Black-Scholes-Merton Option Pricing model could materially affect compensation
expense recorded in future periods.
Unproven
Mineral Right Interests
The
Company capitalizes into intangible assets all costs, net of any recoveries, of acquiring, exploring, and evaluating an unproven mineral
right interest, until the rights to which they relate are placed into production, at which time these deferred costs will be amortized
over the estimated useful life of the rights upon commissioning the property, or written-off if the rights are disposed of, impaired
or abandoned.
Management
reviews the carrying amounts of mineral rights annually or when there are indicators of impairment and will recognize impairment based
upon current exploration results and upon assessment of the probability of profitable exploitation of the rights. An indication of impairment
includes but is not limited to expiration of the right to explore, substantive expenditure in the specific area is neither budgeted nor
planned, and if the entity has decided to discontinue exploration activity in a specific area. Management’s assessment of the mineral
right’s fair value is also based upon a review of other mineral right transactions that have occurred in the same geographic area
as that of the rights under review.
Costs
include the cash consideration and the fair value of shares issued on the acquisition of mineral rights. Rights acquired under option
or joint venture agreements, whereby payments are made at the sole discretion of the Company, are not accrued and are only recorded in
the accounts when the payments are made. Proceeds from property option payments received by the Company are netted against the deferred
costs of the related mineral rights, with any excess being included in operations.
There
may be material uncertainties associated with the Company’s title and ownership of its unproven mineral right interests.
Ordinarily the Company does not own the land upon which an interest is located, and title may be subject to unregistered prior
agreements or transfers or other undetected defects. As of April 30, 2023 and January 31, 2023, the balance of unproven mineral
right interests was $0.
Impairment of Long-Lived Assets
The
Company’s long-lived assets and other assets (consisting of property and equipment) are reviewed for impairment in accordance with
the guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic
360-10, Property, Plant, and Equipment. Long lived assets are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison
of the carrying amount of an asset to the undiscounted future net cash flows expected to be generated by that asset. If the carrying
amount of an asset exceeds its estimated future undiscounted cash flows, an impairment charge is recognized by the amount by which the
carrying amount of the asset exceeds the fair value of the asset.
Reclamation
provision
An
obligation to incur restoration, rehabilitation and environmental costs arises when environmental disturbance is caused by the exploration,
development, or ongoing production of a mineral property interest. Such costs arising from the decommissioning of plant and other site
preparation work, discounted to their net present value, are provided and capitalized at the start of each project to the carrying amount
of the asset, as soon as the obligation to incur such costs arises. Discount rates using a pre-tax rate that reflect the time value of
money are used to calculate the net present value. These costs are charged against profit or loss over the economic life of the related
asset, through amortization using either the unit-of-production or straight-line method. The related liability is adjusted for each period
for the unwinding of the discount rate and for changes to the current market-based discount rate, amount or timing of the underlying
cash flows needed to settle the obligation. Costs for restoration of subsequent site damage which is created on an ongoing basis during
production are provided for at their net present values and charged against profits as extraction progresses.
Related
party transactions
Parties
are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant
influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject
to common control or significant common influence, related parties may be individuals or corporate entities. A transaction is considered
to be a related party transaction when there is a transfer of resources or obligations between related parties. Related party transactions
that are in the normal course of business and have commercial substance are measured at the exchange amount, which is determined on a
cost recovery basis.
Stock
Purchase Warrants
The
Company accounts for warrants issued to purchase shares of its common stock as equity in accordance with FASB ASC 480, Accounting
for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, Distinguishing Liabilities
from Equity. We determine the accounting classification of warrants we issue, as either liability or equity classified, by first
assessing whether the warrants meet liability classification in accordance with ASC 480-10, Accounting for Certain Financial Instruments
with Characteristics of both Liabilities and Equity, then in accordance with ASC 815-40, Accounting for Derivative Financial Instruments
Indexed to, and Potentially Settled in, a Company’s Own Stock. Under ASC 480, warrants are considered liability classified if the
warrants are mandatorily redeemable, obligate us to settle the warrants or the underlying shares by paying cash or other assets, and
warrants that must or may require settlement by issuing variable number of shares. If warrants do not meet the liability classification
under ASC 480-10, we assess the requirements under ASC 815-40, which states that contracts that require or may require the issuer to
settle the contract for cash are liabilities recorded at fair value, irrespective of the likelihood of the transaction occurring that
triggers the net cash settlement feature.
If
the warrants do not require liability classification under ASC 815-40, in order to conclude equity classification, we also assess whether
the warrants are indexed to our common stock and whether the warrants are classified as equity under ASC 815-40 or other GAAP. After
all such assessments, we conclude whether the warrants are classified as liability or equity. Liability classified warrants require fair
value accounting at issuance and subsequent to initial issuance with all changes in fair value after the issuance date recorded in the
statements of operations. Equity classified warrants only require fair value accounting at issuance with no changes recognized subsequent
to the issuance date. We do not have any liability classified warrants as of any period presented.
NOTE
3 – RECLAMATION BONDS AND PROVISIONS
Reclamation
Bonds and Provisions
During
2016, the Company entered into a surety agreement that guarantees the reclamation bond on the CuMo Property. In order to maintain the
good standing of this surety, the Company is required to make an annual payment of $8,340. The Company has a deposit of $100,000 (as
reflected in other assets on the balance sheet) for the reclamation bond which has a face value of $278,000 as determined by the United
States Department of Agriculture Forest Service.
The
security deposit is refundable when the Company completes the required reclamation clean-up costs.
Although
the Company does not anticipate being required to perform significant reclamation activities, to be conservative, it has recorded provisions
for estimated reclamation costs based on the assumption that the amounts of the reclamation bonds posted with government authorities
and the amount of the non-current deposit (surety deposit), approximate the best estimate of the net present value of expected future
reclamation costs that may need to be incurred by the Company.
The
estimated reclamation provision is comprised of deposits to the Bureau of Land Management, the United States Forest Service, the third-party
provider of the surety, and other agencies for the above properties.
NOTE
4 – CONVERTIBLE NOTES
The
Company has $898,000 in convertible secured notes payable at April 30, 2023 as follows:
SCHEDULE OF CONVERTIBLE SECURED NOTES PAYABLE
| |
| | |
| |
Issue | |
Maturity | |
Conversion | | |
Conversion | | |
Warrants | | |
Exercise | | |
Warrant |
| |
Balance | | |
Collateral | |
Date | |
Date | |
Price | | |
Shares | | |
Shares | | |
Price | | |
Expiration |
Steven Rudofsky | |
$ | 125,000 | | |
Property | |
1/23/23 | |
7/23/25 | |
$ | 0.10 | | |
| 1,250,000 | | |
| 1,250,000 | | |
$ | 0.15 | | |
1/23/28 |
Feehan Partners, LP | |
$ | 87,334 | | |
Property | |
1/23/23 | |
7/23/25 | |
$ | 0.10 | | |
| 873,340 | | |
| 873,340 | | |
$ | 0.15 | | |
1/23/28 |
The Jeffrey V. and Karin R. Hembrock Revocable Trust | |
$ | 100,000 | | |
Property | |
1/23/23 | |
7/23/25 | |
$ | 0.10 | | |
| 1,000,000 | | |
| 1,000,000 | | |
$ | 0.15 | | |
1/23/28 |
The Gaitonde Living Trust, Girish Gaitonde Trustee | |
$ | 100,000 | | |
Property | |
1/23/23 | |
7/23/25 | |
$ | 0.10 | | |
| 1,000,000 | | |
| 1,000,000 | | |
$ | 0.15 | | |
1/23/28 |
Corey Redfield | |
$ | 50,000 | | |
Property | |
1/23/23 | |
7/23/25 | |
$ | 0.10 | | |
| 500,000 | | |
| 500,000 | | |
$ | 0.15 | | |
1/23/28 |
PV Partners, LP | |
$ | 75,000 | | |
Property | |
| |
7/23/25 | |
$ | 0.10 | | |
| 750,000 | | |
| 750,000 | | |
$ | 0.15 | | |
1/23/28 |
Shaun Dykes | |
$ | 30,000 | | |
Property | |
1/23/23 | |
7/23/25 | |
$ | 0.10 | | |
| 300,000 | | |
| 300,000 | | |
$ | 0.15 | | |
1/23/28 |
Patricia Czerniej | |
$ | 30,000 | | |
Property | |
1/23/23 | |
7/23/25 | |
$ | 0.10 | | |
| 300,000 | | |
| 300,000 | | |
$ | 0.15 | | |
1/23/28 |
James Dykes | |
$ | 30,000 | | |
Property | |
1/23/23 | |
7/23/25 | |
$ | 0.10 | | |
| 300,000 | | |
| 300,000 | | |
$ | 0.15 | | |
1/23/28 |
Jason Czerniej | |
$ | 30,000 | | |
Property | |
1/23/23 | |
7/23/25 | |
$ | 0.10 | | |
| 300,000 | | |
| 300,000 | | |
$ | 0.15 | | |
1/23/28 |
Louise Dykes | |
$ | 30,000 | | |
Property | |
1/23/23 | |
7/23/25 | |
$ | 0.10 | | |
| 300,000 | | |
| 300,000 | | |
$ | 0.15 | | |
1/23/28 |
Andrew Brodkey | |
$ | 98,000 | | |
Property | |
1/23/23 | |
7/23/25 | |
$ | 0.10 | | |
| 980,000 | | |
| 980,000 | | |
$ | 0.15 | | |
1/23/28 |
Feehan Partners, LP | |
$ | 112,666 | | |
Property | |
1/23/23 | |
7/23/25 | |
$ | 0.10 | | |
| 1,126,660 | | |
| 1,126,660 | | |
$ | 0.15 | | |
1/23/28 |
Total | |
$ | 898,000 | | |
| |
| |
| |
| | | |
| 8,980,000 | | |
| 8,980,000 | | |
| | | |
|
NOTE 5 – BOND LIABILITIES
The Company has $3,135,000 in bond liabilities as
of April 30, 2023 as follows:
SCHEDULE
OF BOND LIABILITIES
| |
Principal Amount | | |
Note Date | |
Maturity Date |
Yin Yin Silver Limited | |
$ | 1,250,000 | | |
12/21/17 | |
12/21/2024 |
Barry Swenson | |
$ | 500,000 | | |
12/31/17 | |
12/31/2025 |
Don H. Adair or Joanne Adair | |
$ | 125,000 | | |
2/15/17 | |
2/15/2024 |
Joseph Swinford or Danielle Swinford | |
$ | 50,000 | | |
2/15/17 | |
2/15/2024 |
Brandon Swain or Sierra Swain | |
$ | 50,000 | | |
2/15/17 | |
2/15/2024 |
Scott Collins or Kendra Collins | |
$ | 12,500 | | |
2/15/17 | |
2/15/2024 |
Carl Collins or Ellen Collins | |
$ | 12,500 | | |
2/15/17 | |
2/15/2024 |
Jim Hammerel | |
$ | 5,000 | | |
9/21/2017 | |
9/21/2024 |
Bret Renaud | |
$ | 5,000 | | |
10/14/2017 | |
10/14/2024 |
Elatam Group Ltd | |
$ | 67,000 | | |
8/24/2021 | |
5/31/2028 |
James Hardy | |
$ | 7,000 | | |
8/24/2021 | |
5/31/2028 |
Acepac Holdings | |
$ | 1,000,000 | | |
8/24/2021 | |
5/31/2028 |
Rick Ward | |
$ | 15,000 | | |
8/24/2021 | |
5/31/2028 |
Robert & Joan Sweetman | |
$ | 10,000 | | |
7/1/2018 | |
7/1/2025 |
Michael Swenson | |
$ | 10,000 | | |
7/1/2018 | |
7/1/2025 |
Connie Sun | |
$ | 3,000 | | |
7/1/2018 | |
7/1/2025 |
Elizabeth Enoch | |
$ | 10,000 | | |
8/1/2018 | |
7/1/2025 |
William C. Stanton and Carol Stanton | |
$ | 3,000 | | |
7/1/2018 | |
7/1/2025 |
Total | |
$ | 3,135,000 | | |
| |
|
The maturities of the bond liabilities as of April
30, 2023 are as follows:
SCHEDULE OF MATURITIES OF THE BOND LIABILITIES
| |
| | |
2024 | |
$ | 1,510,000 | |
2025 | |
| 536,000 | |
2026 | |
| - | |
2027 | |
| - | |
2028 | |
| 1,089,000 | |
Thereafter | |
| - | |
Total | |
$ | 3,135,000 | |
NOTE
6 – RELATED PARTY TRANSACTIONS
On
March 31, 2023, the Company issued 879,628 shares of common stock to Brodkey (108,024 shares), Scannell (385,802 shares), Kolodner (192,901
shares), and Rudoksky (192,901 shares) in exchange for the conversion of accrued compensation of $18,000, $62,500, $31,250, and $31,250,
respectively. The shares were valued at fair value at $0.162 per share. See Note 7.
As
of April 30, 2023, the Company has accrued compensation of $130,333
for its officers. The Company compensated its officers $166,800 for the three months ended April 30, 2023.
On
January 23, 2023, the Company issued convertible notes payable to the following: Steven Rudofsky (“Rudofsky”), Chairman
and CEO, for $125,000;
Feehan Partners LP (“Feehan”), controlled by Robert Scannell, CFO and Director, for $87,334
and $112,666;
Andrew Brodkey (“Brodkey”). COO and Director, for $98,000;
and Shaun Dykes (“Dykes”), Vice President and Director, for $150,000
(issued to Dykes and related parties to Dykes).
On March 22, 2023, Dykes resigned as Director.
As of April 30, 2023, the Company has payables of $54,000 to Brodkey.
For the three months ended April 30, 2023, and 2022, the Company compensated Dykes, through his consulting firm, $36,224 and $62,500,
respectively, in consulting fees.
NOTE
7 – STOCKHOLDERS’ EQUITY
Preferred Stock
The Company has authorized share capital of 10,000,000
shares of preferred stock with par value of $0.001.
Common
Stock
The
Company has authorized share capital consisted of 500,000,000 shares of common stock with par value of $0.001.
On
January 23, 2023, the Company issued 182,240,000 for the transaction with ICUMO (see Note 1).
On
January 23, 2023, the Company issued 5,467,200
shares of common stock to Newbridge Securities
and affiliates for investment banking services related to the Company’s transaction with ICUMO. The shares were valued at $0.15 per share or $820,080.
On
January 23, 2023, the Company issued 446,623 shares of common stock to Steven Delonga and John Hedges for services. The shares were valued
at $0.15 per share or $66,993.
On
January 23, 2023, the Company issued 250,000 shares of common stock to David Lubin for legal services. The shares were valued at $0.15
per share or $37,500.
On
March 31, 2023, the Company issued 879,628 shares of common stock to Brodkey (108,024 shares), Scannell (385,802 shares), Kolodner (192,901
shares), and Rudofsky (192,901 shares) in exchange for the conversion of accrued compensation of $18,000, $62,500, $31,250, and $31,250,
respectively. The shares were valued at $0.162 per share. See Note 7.
As
of April 30, 2023, the Company had 209,337,451 shares issued and outstanding.
Options
On
January 23, 2023, as part of the RTO, the Company accepted the assignment of the stock options for common stock from ICUMO to the Company,
as consented by the parties. The Company has 56,615,000
options issued to various officers, directors
and employees, based on milestones. As of April 30, 2023, and January 31, 2023, 24,254,000
options have vested. The exercise price for the
options is $0.125 and
they expire on December 31, 2027.
Warrants
On
January 23, 2023, as part of the RTO, the Company accepted the assignment of the warrants for common stock from ICUMO to the Company,
as consented by the parties. These warrants were related to a private placement memorandum for ICUMO in May 2022 and June 2022. As of
April 30, 2023, and January 31, 2023, 41,540,000 warrants are outstanding. The exercise price for the warrants are $0.15 and they expire
on May 11, 2027.
As
of April 30, 2023, the Company had 1,796,000
warrants outstanding with a strike price of $0.15,
which relate to the convertible notes (see Note 4).
NOTE
8 – COMMITMENTS AND CONTINGENCIES
The
Company is subject, from time to time, to claims by third parties under various legal disputes. The defense of such claims, or any adverse
outcome relating to any such claims, could have a material adverse effect on the Company’s liquidity, financial condition and cash
flows.
Certain
conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only
be resolved when one or more future events occur or fail to occur. The Company’s management and its legal counsel assess such contingent
liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings
that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates
the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or
expected to be sought therein.
If
the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability
can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates
that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then
the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be
disclosed.
Loss
contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee
would be disclosed.
During
2016, the Company entered into a surety agreement that guarantees the reclamation bond on the CuMo Property. In order to maintain the
good standing of this surety, the Company is required to make an annual payment of $8,340. The Company has a deposit of $100,000 for
the reclamation bond which has a face value of $278,000 as determined by the United States Department of Agriculture Forest Service.
NOTE
9 – INCOME TAXES
As
of April 30, 2023, and 2022, the Company has net operating loss carry forwards of $510,754 and $0, respectively, which may be available
to reduce future years’ taxable income through 2043. The Company’s net operating loss carry forwards may be subject to annual
limitations, which could reduce or defer the utilization of the losses as a result of an ownership change as defined in Section 382 of
the Internal Revenue Code.
The
Company’s tax expense differs from the “expected” tax expense for Federal income tax purposes (computed by
applying the United States Federal tax rate of 21%
and state rate of 5% to loss before taxes for fiscal year 2023), as follows:
SCHEDULE OF TAX EXPENSE FOR FEDERAL INCOME
TAX PURPOSES
| |
| | | |
| | |
| |
April 30, | | |
April 30, | |
| |
2023 | | |
2022 | |
Tax expense (benefit) at the statutory rate | |
$ | (91,195 | ) | |
$ | (46,956 | ) |
State income taxes, net of federal income tax benefit | |
| (21,713 | ) | |
| (11,180 | ) |
Change in valuation allowance | |
| 112,908 | | |
| 58,137 | |
Total | |
$ | - | | |
$ | - | |
The
tax effects of the temporary differences between reportable financial statement income and taxable income are recognized as deferred
tax assets and liabilities.
The
tax year 2023 remains open for examination by federal agencies and other jurisdictions in which it operates.
The
tax effect of significant components of the Company’s deferred tax assets and liabilities at April 30, 2023 are as follows:
SCHEDULE
OF DEFERRED TAX ASSETS AND LIABILITIES
| |
April 30, | | |
April 30, | |
| |
2023 | | |
2022 | |
Deferred tax assets: | |
| | | |
| | |
Net operating loss carryforward | |
$ | 510,754 | | |
$ | - | |
Timing differences | |
| - | | |
| - | |
Total gross deferred tax assets | |
| 510,754 | | |
| - | |
Less: Deferred tax asset valuation allowance | |
| (510,754 | ) | |
| - | |
Total net deferred taxes | |
$ | - | | |
$ | - | |
In
assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all
of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of
future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal
of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.
Because
of the historical earnings history of the Company, the net deferred tax assets for 2023 were fully offset by a 100% valuation allowance.
The valuation allowance for the remaining net deferred tax assets was $510,754 and $0 as of April 30, 2023, and 2022, respectively.
NOTE
10 – SUBSEQUENT EVENTS
The Company has evaluated subsequent events from the balance sheet through the date of this filing and determined there were no events
to disclose.