UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 20-F
(Mark One)
| ☐ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OR
| ☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
| For the fiscal year ended December 31, |
OR
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OR
| ☐ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Date of event requiring this shell company report:
For the transition period from ______ to ______
Commission file number 333-214872
JUPITER GOLD CORPORATION
(Exact name of Registrant as specified in its charter)
Not Applicable
(Translation of Registrant’s name into English)
Republic of the Marshall Islands
(Jurisdiction of incorporation or organization)
Rua Vereador João Alves Praes nº 95-Abuenos Aires, 10 – 14th Floor
Olhos D’ÁguaBelo Horizonte, MG 39398-000 MG 30.315-570, Brazil
(Address of principal executive offices)
Marc Fogassa
Rua Vereador João Alves Praes nº 95-Abueno Aires, 10 – 14th Floor
Belo HorizonteOlhos D’Água,, MG 39398-00030.315-570, Brazil
Telephone:+55-3155-11-3956-1109
Email: marc.fogassa@jupitergoldcorp.com
(Name, Telephone, E-mail and/or Facsimile number and Address, of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act: None
Securities registered or to be registered pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
Common Stock, par value $0.001 per share
(Title of Class)
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.
There were common shares outstanding on December 31, 2021.2023.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
☐ Yes ☒ No
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
☐ Yes ☒ No
Note - Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):
| ☐ Large accelerated filer | ☐ Accelerated filer | ☒ Non-accelerated filer |
| ☐ |
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, 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.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive- based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check which basis of accounting the registrant has used to prepare the financial statements included in this filing:
| ☒ | International Financial Reporting Standards as issued by the International Accounting Standards Board | ☐ | Other | ☐ |
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.
☐ Item 17 ☐ Item 18
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
☐ Yes ☒No
TABLE OF CONTENTS
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 20-F contains or incorporates by reference forward-looking statements. All statements, other than statements of historical facts, that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future are forward-looking statements. Such statements are characterized by terminology such as “anticipates,” “believes,” “expects,” “future,” “intends,” “assuming,” “projects,” “plans,” “may,” “will,” “should” and similar expressions or the negative of those terms or other comparable terminology. These forward-looking statements, which include statements about the mineral industry; market size, share and demand; performance;demand, performance, our expectations, objectives, anticipations, intentions and strategies regarding the future, expected operating results, revenues and earnings and potential litigation are not guarantees of future performance and are subject to risks and uncertainties, including those risks described under the heading “Risk Factors” set forth herein, or in the documents incorporated by reference herein, that could cause actual results to differ materially from the results contemplated by the forward-looking statements.
Investors are cautioned that our forward-looking statements are not guarantees of future performance and the actual results or developments may differ materially from the expectations expressed in the forward-looking statements.
As for the forward-looking statements that relate to future financial results and other projections, actual results will be different due to the inherent uncertainty of estimates, forecasts and projections may be better or worse than projected. Given these uncertainties, you should not place anyundue reliance on these forward-looking statements. These forward-looking statements also represent our estimates and assumptions only as of the date that they were made. We expressly disclaim a duty to provide updates to these forward-looking statements, and the estimates and assumptions associated with them, after the date of this filing to reflect events or changes in circumstances or changes in expectations or the occurrence of anticipated events.events, unless as otherwise required by law.
We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. You are advised, however, to consult any additional disclosures we make in our reports on Form 20-F and Form 6-K, or their successors. We also note that we have provided a cautionary discussion of risks and uncertainties under the caption “Risk Factors” in this Annual Report. These are factors that we think could cause our actual results to differ materially from expected results. Other factors besides those listed here could also adversely affect us.
Information regarding market and industry statistics contained in this Annual Report is included based on information available to us which we believe is accurate. We have not reviewed or included data from all sources and cannot assure stockholders of the accuracy or completeness of the data included in this Annual Report. Forecasts and other forward-looking information obtained from these sources are subject to the same qualifications and the additional uncertainties accompanying any estimates of future market size, revenue and market acceptance of products and services.
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PART I
Item 1. Identity of Directors, Senior Management and Advisers.
Not applicable.
Item 2. Offer Statistics and Expected Timetable.
Not applicable.
Item 3. Key Information.
Item 3.A. Selected Financial Data.[Reserved].
Our selected financial data are found in our audited consolidated financial statements as of December 31, 2021, and for the year from January 1, 2021 to December 31, 2021, which are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”), which should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included elsewhere in these statements.
Except as may be otherwise indicated, all dollar amounts are stated in U.S. dollars, the Registrant’s reporting currency. The following table sets out the exchange rates, based on the data from the website of Brazil’s “Banco Central” (an equivalent to the U.S. Federal Reserve), for the conversion of the Brazilian real (R$) currency into the United States dollar (US$), for the period from January 1, 2021 to December 31, 2021. The average exchange rates are based on the average of the daily closing exchange rates during such periods:
| Average | High | Low | Close | |||||||||||||
| Fiscal Year Ended 12/31/2021 | R$ | 5.3955 | R$ | 5.8397 | R$ | 4.9200 | R$ | 5.5805 | ||||||||
The exchange rate on December 31, 2021 was R$5.5805 Brazilian reais per one U.S. dollar.
Item 3.B. Capitalization and Indebtedness.
As of December 31, 2021, we had issued 6,148,212 shares of Common Stock and 1 share of a Series A Preferred Stock.Not applicable.
As of December 31, 2021, we had current liabilities of $14,417 all of which was unsecured and attributable to non-related parties. We had no long-term liabilities.
Item 3.C. Reasons for the Offer and Use of Proceeds.
Not applicable.
Item 3.D. Risk Factors.
You should carefully consider the following risk factors and all other information contained in this Report before purchasing our shares. We have assembled these risk factors based upon publicly available information, our own analysis and our own beliefs relative to our understanding of our business. If any of the following risks occur, our business, financial condition or results of operations could be materially and adversely affected, in which case, the value of our shares could decline, and you may lose some or all of your investment.
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General Risks Relating to Our Business
Risks Related to Operations
Our resultsThere is substantial doubt about whether the Company can continue as a going concern.
The audit opinion and notes that accompany the Company’s Financial Statements disclose a going concern qualification to its ability to continue in business. The accompanying Financial Statements have been prepared under the assumption that the Company will continue as a going concern. The Company is an exploration and development stage company and has incurred losses since its inception. The Company has incurred losses resulting in an accumulated deficit of $4,200,308 as of December 31, 2023, and further losses are likely to fluctuate significantlyanticipated in future periods.the development of its business.
Our operatingThe Company currently has no historical recurring source of revenue and financial results are difficultits ability to predict and may fluctuate significantly from period to period. Results of operations may fluctuatecontinue as a result of a variety of factors that are outside of our control including, but not limitedgoing concern is dependent on its ability to lack of sufficientraise capital to fund its future exploration and working capital equipment malfunctionrequirements or its ability to profitably execute its business plan. The Company’s plans for the long-term return to and breakdowns,continuation as a going concern include financing its future operations through sales of its Common Shares and/or debt and regulatorythe eventual profitable exploitation of its gold and quartzite deposits. Additionally, the volatility in capital markets and general economic conditions in the U.S. and elsewhere can pose significant challenges to raising the required funds. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
The Company’s consolidated financial statements do not give effect to any adjustments required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying Financial Statements.
The Company may have difficulty meeting its current and future capital requirements.
The Company’s management and the board of directors monitor overall costs and expenses and, if necessary, adjust programs and planned expenditures in an attempt to ensure that the Company has sufficient operating capital. If the Company is unable to fund future operations by way of financings, including public or licensing delays.private offerings of equity or debt securities, it will need to reorganize or significantly reduce its operations, which may result in an adverse impact on the Company’s business, financial condition and exploration activities. The Company does not have a credit, off-take or other commercial financing arrangement in place that would finance continued evaluation or development of its projects. Moreover, financing may not be available on attractive terms and, if available, will likely result in significant dilution to existing stockholders.
We may be unable to access funding on acceptable terms or at all.
We may seek additional debt or equity financing to finance our business model and for growth. Such financing may not be available on acceptable terms or at all and any failure to obtain additional financing when needed could severely impact our business. Additional equity financing may be dilutive to shareholders, and debt financing may involve significant covenants and future repayment obligations.
The Company is a mineral exploration stage company with no history of operations.
The Company remains an exploration stage enterprise engaged in mineral exploration in Brazil. The Company has a very limited operating history and is subject to all the risks inherent in a new business enterprise. To date, the Company has had no revenues and has relied upon loans from the controlling subsidiary and sales of common shares. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with an exploration stage business, and the competitive and regulatory environment in which the Company operates and will operate, such as under-capitalization, personnel limitations, and limited financing sources.
The Company’s business plan is highly speculative, and its success largely depends on the successful exploration of the Gold and Quartz Projects.
The Company’s business plan has been focused on exploring its primary gold project and developing its quartzite project. At this point in time the Company has not established any mineral reserves as such term is defined by Regulation S-K and its gold project remains in the exploration stage. The Company may never enter the development or production stage of gold. Exploration of mineralization and determination of whether the mineralization might be extracted profitably is highly speculative, and it may take a number of years until production is possible, during which time the economic viability of the project may change. Substantial expenditures are required to establish reserves, extract metals from ore and construct mining and processing facilities.
The Company’s primary gold project is subject to all of the risks inherent in mineral exploration and development. The economic feasibility of any mineral exploration and/or development project is based upon, among other things, estimates of the size and grade of mineral reserves, proximity to infrastructures and other resources (such as water and power), anticipated production rates, capital and operating costs, and metals prices. To advance from an exploration project to a development project, the Company will need to overcome various hurdles, including completing favorable feasibility studies, securing necessary permits, and raising significant additional capital to fund activities. There can be no assurance that the Company will be successful in overcoming these hurdles. Because of the Company’s focus on its primary gold project and its location in Minas Gerais state, the success of its operations and profitability may be disproportionately exposed to the impact of adverse conditions unique to the region.
The nature of mineral exploration and production activities involves a high degree of risk and the possibility of uninsured losses.
Exploration for and the production of minerals is highly speculative and involves much greater risk than many other businesses. Most exploration programs do not result in the discovery of mineralization, and any mineralization discovered may not be of sufficient quantity or quality to be profitably mined. The Company’s operations are, and any future development or mining operations the Company may conduct will be, subject to all of the operating hazards and risks normally incidental to exploring for and development of mineral properties, including, but not limited to:
| ● | economically insufficient mineralized material; | |
| ● | fluctuation in production costs that make mining uneconomical; | |
| ● | labor disputes; | |
| ● | unanticipated variations in grade and other geologic problems; | |
| ● | environmental hazards; | |
| ● | water conditions; | |
| ● | difficult surface or underground conditions; | |
| ● | industrial accidents; | |
| ● | metallurgic and other processing problems; | |
| ● | mechanical and equipment performance problems; | |
| ● | failure of dams, stockpiles, wastewater transportation systems, or impoundments; | |
| ● | unusual or unexpected rock formations; and | |
| ● | personal injury, fire, flooding, cave-ins and landslides. |
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Any of these risks can materially and adversely affect, among other things, the development of properties, production quantities and rates, costs and expenditures, potential revenues, and production dates. If the Company determines that capitalized costs associated with any of its mineral interests are not likely to be recovered, the Company would incur a write-down of its investment in these interests. All these factors may result in losses in relation to amounts spent that are not recoverable, or that result in additional expenses.
Global RisksWe currently do not have mineral reserves as such term is defined by the SEC.
While forAlthough several of our projects are known to have gold, as determined by our own research exploration studies, none of these studies were carried out in a manner as to allow the most part we have beenmeasurement of “reserves” under the SEC’s definition of such term. Lack of “reserves” may lead to lesser desirability from investors and potential partners.
The Company has a history of losses and expects to continue ourto incur losses in the future.
The Company has incurred losses since inception, has had negative cash flow from operating activities, and expects to continue to incur losses in the future. The Company has incurred the following losses from operations during each of the coronavirus pandemic, therefollowing periods:
| ● | $1,057,773 for the year ended December 31, 2023; and | |
| ● | $657,375 for the year ended December 31, 2022 |
The Company expects to continue to incur losses unless and until such time its projects enter into commercial production and generate sufficient revenues to fund continuing operations. The Company recognizes that if it is unable to generate significant revenues from mining operations and dispositions of its properties, the Company will not be able to earn profits or continue operations. At this early stage of its operation, the Company also expects to face the risks, uncertainties, expenses, and difficulties frequently encountered by smaller operating companies. The Company cannot be sure that it will be successful in addressing these risks and uncertainties and its failure to do so could have a materially adverse effect on its financial condition.
Our results are likely to fluctuate significantly in future periods.
Our operating and financial results are difficult to predict and may fluctuate significantly from period to period. Results of operations may fluctuate as a result of a variety of factors that are outside of our control including, but not limited to, foreign exchange variation specially between the Brazilian real and the U.S. dollar, commodity prices, lack of sufficient working capital, equipment malfunction and breakdowns, and regulatory or licensing delays.
The Company is exposed to information systems and cybersecurity risks.
The Company’s information systems (including those of any of its counterparties) may be vulnerable to the increasing threat of continually evolving cybersecurity risks. Unauthorized parties may attempt to gain access to these systems or information through fraud or other means of deception. The Company’s operations depend, in part, on how well it and its counterparties protect networks, equipment, information technology systems and software against damage from threats. The failure of information systems or a component of information systems could, depending on the nature of any such failure, adversely impact the Company’s reputation and results of operations. There can be no assurance that the Company or its counterparties will not incur such losses in the future. The Company’s risk and exposure to these matters cannot be fully mitigated because of, among other things, the evolving nature of these threats. As a significant worsening.result, cybersecurity and the continued development and enhancement of controls, processes and practices designed to protect systems, computers, software, data and networks from attack, damage or unauthorized access remain an area of attention.
Risks Related to Operating in Brazil
Substantially all of our assets are in Brazil.
Substantially all of our assets (mineral properties, equipment) are located in Brazil. We therefore depend on complying with laws and regulations in Brazil to keep such assets free of any liens or judgments. On the other hand, it may be difficult to enforce judgments from other countries’ courts against such assets.
We are subject to extensive mining and environmental regulation in Brazil.
We are subject to various Brazilian federal mining laws and regulations andas well as federal, state and local environmental laws and regulations. For any of the operations that we intend to pursue directly, we will be required to obtain a certain number of permits from regulators. After operations begin, we will have capital expenditures on an ongoing basis to continue to ensure compliance with the permits obtained as well as other mining and environmental laws and regulations. In addition, due to the possibility of changes to mining and environmental laws and regulations, the amount and timing of future regulatory expenditures may vary substantially from those currently anticipated. We could be subject to civil or criminal penalties for non-compliance with mining and environmental laws and regulations under Brazilian law.
Significant volatility in the value of the Brazilian real in relation to the U.S. dollar could harm our results.
The local costs in Brazil are incurred in the currency of Brazil, the Brazilian real. There have been significant fluctuations in the exchange rate between the Brazilian real and the U.S. dollar and this may at times be detrimental to us.
Brazilian economic and political conditions may have an impact on our businesses.
The Brazilian economy has been characterized by frequent, and occasionally drastic, intervention by the Brazilian government, which has often changed monetary, credit and other policies to influence the economy. Actions taken by the Brazilian government concerning the economy may have important effects on us. Our financial condition and results of operations may be adversely affected by the following factors, among others, and by any of the Brazilian government’s actions in response to them: economic and social instability, energy and/or fuel shortages, exchange rate controls and restrictions on remittances abroad, and tax policy.
Brazilian contractLegal proceedings and corporate laws may negatively affect us.investigations could have a material adverse effect on our business
The judicial enforcement of contracts in Brazil is a lengthy process, requiring skillmultifaceted challenge characterized by a protracted and tenacity,intricate legal process. Under Brazilian law, a broad range of behaviors and the applicationconducts could be considered as breaches of corporateagreements and/or violation of laws through the(e.g. Brazilian legal system can be uneven, haphazard and unreliable.environmental, labor or tax laws).
Accordingly, our executive officers, employees and, in certain cases, we and our subsidiaries could be subject to investigations and proceedings in connection with allegations of agreement breaches or legal violations. Defending ourselves in these legal proceedings may be costly and time consuming. The lack of consistency poses challenges for businesses aiming to ensure compliance and mitigate legal risks.
The potential repercussions of adverse outcomes in legal proceedings are substantial and may encompass litigation, financial penalties, the revocation of operating licenses, and harm to our reputation. Such consequences could significantly impact our results of operations and financial condition.
Brazilian tax laws are complex and may be detrimental to us.
Brazilian taxation tendsgovernment has been frequently implementing and may keep implementing changes in their tax policies, including but not limited to be onechanges in tax rates, sector fees and, occasionally, implementation of the more complex tax regimestemporary contributions. Any such changes, as well as changes in the world. We make every effort,interpretation of such tax laws and regulations, may result in conjunction with Brazilian advisors, to limitincreases in the taxes toCompany’s overall tax burden, which we are subject; however, there is no assurance thatwould negatively affect its profitability.
Changes in the tax policies, tax laws in Brazil will not be changed nor interpreted by Brazilian authorities in a manner that could be detrimental to us.and interpretation may impact on our tax obligations and present material adverse impact on our financial status and results of operations and eventually on our share price.
Risks Related to Our Common Stock
There is currently a very limited trading market for our Common Stock.
Our Common Stock trades on OTCQB, a platform of OTC Markets, and as of now it has low liquidity. A possible reason for this includes the fact that only a small percentage of our Common Stock is available to be traded and is held by a small number of holders. Another possible reason may be related to the fact that we are a new company and therefore the demand for our shares is limited by the lack of knowledge about us. We believe that liquidity will be dependent, among other things, on the perception of our business, alongside with steps that we may take to raise investor awareness, including press releases, road shows, and conferences. There can be no assurance as to when an increase in liquidity will occur.
The price and liquidity of our Common Stock may be affected by many reasons, some beyond our control.
The price and liquidity of our Common Stock may be affected by a variety of factors and events outside of our control, some, but not all, of which are listed below:
| ● | overall market conditions; |
| ● | changes in the market valuations of other similar or comparable companies; |
| ● | announcements by competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments; |
| ● | the absence of consistent administrative supervision of “bid” and “ask” quotations; |
| ● | adoption of new accounting standards; |
| ● | changes in estimates and recommendations by advisors and analysts; and |
| ● | changes in gold prices. |
The price and liquidity of our Common Stock may also impair our ability to raise capital by selling shares of our stock, to acquire mineral properties by using our stock as consideration, or to recruit and retain executives with equity-based stock incentive plans.
Our operating results may be volatile and difficult to predict, and if it fails to meet expectations the market price of our Common Stock may decline significantly.
Our operating results may fluctuate significantly from period to period, due to a number of factors. These factors include, but are not limited to:
| ● | the global price for gold; |
| ● | costs related to our operations; |
| ● | the Brazilian real – U.S. dollar exchange rate; |
| ● | extreme weather periods; |
| ● | delays in licensing of mines or mineral properties; |
| ● | departures of key personnel; |
| ● | research results related to any of their projects and mineral rights; |
| ● | new mining, environmental, and/or tax regulations in Brazil; and |
| ● | fluctuations in economic, political, and market conditions. |
Many of these factors are entirely outside of our control, and for others we only have limited influence. As a result of the factors above, and others, we may be unable to forecast our financial projections accurately and may be unable to adjust our spending in a timely manner to compensate for any unexpected revenue and/or funding shortfalls. Additionally, a failure to meet revenue or expense projections may have an immediate and negative impact on our operating results. If this were to happen, the market price of our Common Stock could decline significantly.
Our Common Stock may be considered a “penny stock” and may be difficult to sell.
The U.S. Securities and Exchange Commission (the “SEC”) has adopted regulations which generally define a “penny stock” to be an equity security that has a market price of less than US$5.00 per share or an exercise price of less than US$5.00 per share, subject to specific exemptions. The SEC’s penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from the rules, to deliver to its customer a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and the salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, the penny stock rules generally require that before a transaction in a penny stock, the broker-dealer make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s agreement to the transaction. These rules may adversely impact the liquidity of our Common Stock and may affect the ability of investors to sell their shares.
We do not anticipate paying dividends on our Common Stock for the foreseeable future.
We anticipate that, for the foreseeable future, if and when we generate profits, that our Board of Directors may choose to reinvest such profits or save them as reserves and not pay dividends.
Risks Specific to Jupiter Gold
Our results of operations, financial position and business outlook may become highly dependent on the price of gold, which is subject to significant volatility and uncertainty.
Our results may become substantially related to gold prices. As a result of the volatility of gold prices, such results may fluctuate substantially.
We currently do not have mineral reserves as such term is defined by the SEC.
Although several of our projects are known to have gold, as determined by our own research exploration studies, none of these studies were carried out in a manner as to allow the measurement of “reserves” under the SEC’s definition of such term. Lack of “reserves” may lead to lesser desirability from investors and potential partners.
We are highly dependent on certain members of our management.
We depend on the efforts of a small number of officers and directors. In particular, we are heavily dependent upon the expertise of Marc Fogassa, our Chairman and Chief Executive Officer, who is also formally our Chief Financial Officer and Principal Accounting Officer. Mr. Fogassa speaks Portuguese and English fluently, has extensive networks in both Brazil and the United States of America, and relevant experience in management and finance. If it occurs, any loss of the services of Mr. Fogassa could have a material adverse effect upon our results of operations and financial position.
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Marc Fogassa is both our Chairman and Chief Executive Officer as well as Chairman and Chief Executive Officer of Brazil Minerals, Inc.Atlas Lithium Corporation and may be subject to potential conflicts of interest in matters involving both companies.
Mr. Fogassa, our Chairman and Chief Executive Officer, is Chairman and Chief Executive Officer of Atlas Lithium Corporation (“Atlas Lithium”), our largest shareholder, and is also Chairman and Chief Executive Officer of Brazil Minerals, Inc.Apollo Resources Corporation (“Brazil Minerals”Apollo Resources”), our largest shareholder.a private company focused on the development of iron ore properties in Brazil. Potential conflicts of interest may occur between us and Brazil MineralsAtlas Lithium as related to allocation of opportunities and of Mr. Fogassa’s working time, among others. As a practical manner toTo diminish or eliminate such potential conflicts of interests between these two companies, the Board of Directors of each company has a different composition. InWith regard to board votesapproval of matters that involve a potential conflict of interest, Mr. Fogassa recuses himself, and let the disinterested directors decide.
Our Series A Preferred Stock has the effect of concentrating voting control in Marc Fogassa, our Chairman and Chief Executive Officer.
One share of our Series A Preferred Stock is issued, outstanding and held by Marc Fogassa, Chairman and Chief Executive Officer, since 2016. Mr. Fogassa holds the only outstanding share of such Series A Preferred Stock. The Certificate of Designations, Preferences and Rights of the Series A Convertible Preferred provides that for so long as Series A Preferred Stock is issued and outstanding, the holders of Series A Preferred Stock shall vote together as a single class with the holders of our Common Stock, with the holders of Series A Preferred Stock being entitled to 51% of the total votes on all matters regardless of the actual number of shares of Series A Preferred Stock then outstanding, and the holders of our Common Stock being entitled to their proportional share of the remaining 49% of the total votes based on their respective voting power. Therefore, so long as he holds the only outstanding shares of Series A Preferred Stock, Mr. Fogassa will have effective voting control on all matters requiring a stockholder vote.
Under our Bylaws, stockholders that initiate certain proceedings may be obligated to reimburse us and our officers and directors for all fees, costs and expenses incurred in connection with such proceedings if the claim proves unsuccessful.
Our Bylaws include a fee-shifting provision in Article VI, Section 7 for stockholder claims (the “Fee Shifting Provision”), which reads as follows: “In the event that (a) any current or prior shareholder of the Company or anyone on their behalf (“Claiming Party”) initiates or asserts any claim or counterclaim (“Claim”) or joins, offers assistance to, or has a direct interest in any Claim against the Corporation and/or any of its shareholders, officers, or directors (together, the Corporation and/or any of its shareholders, officers, or directors are henceforth called “Receiving Parties”), including any Claim purportedly filed on behalf of the Corporation or any shareholder, whether direct or derivative, in any jurisdiction, and (b) the Claiming Party (or the third party that received assistance from the Claiming Party or in whose Claim the Claiming Party had a direct interest) does not obtain a favorable judgment on all of the merits of its Claim, with such determination made by the Corporation, then each Claiming Party shall be obligated jointly and severally to reimburse the Receiving Parties for all fees, costs and expenses of every kind and description (including, but not limited to, all attorneys’ fees) that the Receiving Parties may incur in connection with such Claim.”
The Fee Shifting Provision was adopted to eliminate or decrease nuisance and frivolous litigation. We intend to apply the Fee Shifting Provision broadly to all actions, including U.S. federal securities law claims. The level of recovery for the plaintiff to avoid any payment, quoting verbatim the language of the Fee Shifting Provision, would necessitate such plaintiff obtaining a “favorable judgment on all of the merits of its Claim.” The Fee Shifting Provision is intended to apply to “any current or prior shareholder of the Company or anyone on their behalf” and the Company will make such determination based on the facts of any case it may encounter. The parties entitled to recover, quoting verbatim, are “the Corporation and/or any of its shareholders, officers, or directors.”
We are incorporated in the Marshall Islands, which may have fewer rights and protections for shareholders.
We are incorporated in the Republic of the Marshall Islands (“Marshall Islands”). Our corporate affairs are governed by our Articles of Incorporation and Bylaws and by the Marshall Islands Business Corporations Act (the “BCA”). The provisions of the BCA resemble provisions of the corporation laws of a number of states in the United States. However, there have been few judicial cases in the Marshall Islands interpreting the BCA. The rights and fiduciary responsibilities of directors under the law of the Marshall Islands are not as clearly established as the rights and fiduciary responsibilities of directors under statutes or judicial precedent in existence in certain U.S. jurisdictions. Shareholder rights may differ as well. While the BCA does specifically incorporate the non-statutory law, or judicial case law, of the State of Delaware and other states with substantially similar legislative provisions, our public shareholders may have more difficulty in protecting their interests in the face of actions by management, directors or controlling shareholders than would shareholders of a corporation incorporated in a U.S. jurisdiction. Further, the Marshall Islands does not have a well-developed body of bankruptcy law. As such, in the case of our bankruptcy, there may be a delay of bankruptcy proceedings and the ability of shareholders and creditors to receive recovery after a bankruptcy proceeding. Additionally, our incorporation in the Marshall Islands may make service of process more difficult.
Substantially all of our assets are in Brazil.
Substantially all of our assets (mineral properties, equipment) are located in Brazil. We therefore depend on complying with laws and regulations in Brazil to keep such assets free of any liens or judgments. On the other hand, it may be difficult to enforce judgments from other countries’ courts against such assets.
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Item 4. Information on the Company.
History and Development of the Company.
Date of Incorporation, Legal Form, Domicile, & Business Summary
We were incorporated under the laws of the Republic of the Marshall Islands on July 27, 2016, and have been in continuous, active operations since that date. Our common stock symbol is JUPGF and we are currently listed in OTCQB, a platform of OTC Markets.
We are focused on gold properties in Brazil, a well-regarded jurisdiction that we know well and one that presents attractive opportunities.well. We plan to mine properties that lend themselves to year-round, simple open-sky operations to enable steady profitability on gold retrieval. In other situations, we will prefer to partner and collect royalties while another entity operates the project. Our main goal is to become a profitable company as soon as possible.
We also own a quartzite deposit located in Minas Gerais, which, after a drilling campaign, received all permits necessary and was subject to a trial mining period in 2023. We intend to start mining operations and generate revenues from quartzite sales in 2024, as described in section “Material projects” below.
We have no issued debt, except for operational payables. We have been primarily funded to date by sales of our common stock. We are prohibited from issuing variable-rate convertible debt by our Bylaws.
Gold Sector Outlook
Gold
We believe that gold will continue to grow in its usage as a medium of value storage, in addition to uses in jewelry and manufacturing. We also believe that Brazil, a country that is larger than the continental United States, with varied geology, will continue to yield promising areas for gold exploration. Brazil also has a detailed mining code and a long history of welcoming exploration of its resources by foreign groups. We believe the trends favoring gold mining in stable jurisdictions such as Brazil will continue for the next several decades.
Gold has emotional, cultural and financial value and different people across the globe buy gold for different reasons, often influenced by a range of national socio-cultural factors, local market conditions and wider macro-economic drivers. The modern gold market is a picture of diversity and growth. Since the early 1970s, the volume of gold produced each year has tripled, the amount of gold bought annually has quadrupled and gold markets have flourished across the globe. Currently the global gold market has attracted a lot of attention and the price of gold is relatively higher thanachieved, in December 2023, its highest historical trend.rate. Gold is now bought by a far more diverse set of consumers and investors than at any previous time in history. In 2016, 3,100 tons were produced worldwide, with the main producing countries being: China, 455 t (largest producer in the last 10 years); Australia, 270 t; Russia, 250 t; United States of America, 209 t; Canada, 170 t; Peru, 150 t; South Africa, 140 t; Mexico, 125 t; Indonesia, 100 t; Uzbekistan, 100 t; Ghana, 90 t; and Brazil, 80 t (USGS 2017). An estimated 187,200 t of gold has been produced throughout history, with two-thirds since 1950.
Gold’s diverse uses, in jewelry, technology and by central banks and investors, mean different sectors of the gold market rise to prominence at different points in the global economic cycle. This diversity of demand and self-balancing nature of the gold market underpin gold’s robust qualities as an investment asset. The price of gold, as each price, is determined by the market forces of demand and supply. The demand is the amount of a good demanded for purchase at a given price. Therefore, the demand for gold is the amount of a gold demanded for purchase at a given price. Gold demand is often analyzed on an annual basis and divided into jewelry demand, technology demand, central banks’ demand or investment demand.
The gold market is a global market, with London and New York being the two biggest marketplaces for gold in the world. The gold market is quite large, larger than many other markets. It is estimatedThe World Gold Council estimates that the size209,000 tonnes of gold have been mined historically. The financial share of the investablephysical gold market is $2.4 trillion.made up of bars, coins, physically backed gold ETFs and central bank reserves. This accounts for around 82,200 tonnes worth USD 5 trillion, equivalent to 39% of total above-ground gold stocks. The average daily trading volume in gold in the over-the-counter market alone, from 2018 to 2022, is estimated at $67$149 billion, indicating that the gold market is very liquid. Investment demand is the demand for gold for investment purposes. This demand is made up of direct ownership of bars and coins, or indirect ownership via Exchange-Traded Funds (ETFs) and similar products. Investment demand isappears to be the most important category of demand for gold that really drivesgold.
Quartzite
Quartzite is a very hard rock composed predominantly of an interlocking mosaic of quartz crystals. Over the pricelast several years, polished quartzite slabs have become sought after as a higher-end substitute to granite in kitchen countertops and tiles. Brazil has a flourishing quartzite mining industry centered in the neighboring the states of gold.Minas Gerais and Espírito Santo with smaller producers being the norm. Each quarry produces quartzite of different color and texture and therefore stones are unique to their location. Mining is via simple open pit procedures, not particularly labor intensive, and with the mined product normally prepared as cubes of raw quartzite measuring ten meters in each diameter. Buyers are normally responsible for the logistics of transporting such raw quartzite blocks from the mine. Buyers for quartzite mined in Brazil are primarily from four locations: Brazil itself, United States, China, and Italy. It is common for mines to develop an exclusive selling relationship with a buyer.
The most important reason for investingglobal quartzite market size was over 3.6 billion USD in gold2022, and it is diversifying risk. Gold is an excellent portfolio diversifier, since it has very low correlation with other assets. This is why the yellow metal is oneexpected to expand at a CAGR of the most effective hedges or safe havens. Gold can be seen as an insurance against tail risks, financial black swans, high2.46% until 2030, reaching volumes over 4 billion USD by 2028, according to Global Research and accelerating inflation or systemic crises. There are many factors influencing the investment demand for gold, however, the most important are the U.S. dollar strength, the level of real interest rates and the intensity of risk aversion.Insights.
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Current Company Projects
Emerging Growth Company StatusMaterial Properties
We may be deemed to be an “emerging growth company” as defined in the Jumpstart Our Business Startups ActSummary of 2012, or JOBS Act. As long as we remain an emerging growth company, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding an annual nonbinding advisory vote on executive compensation and seeking nonbinding stockholder approval of any golden parachute payments not previously approved. We may take advantage of these reporting exemptions until we are no longer an “emerging growth company.”Material Properties
Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.
| Project | Mineral Right Number | Area (hectares) | Mineral | Municipalities | State, Country | |||||
| Alpha Project | 831.942/2016 | 1,883.01 | gold | Dionisio, Marlieria, Sao Domingos do Prata | Minas Gerais, Brazil | |||||
| Alpha Project | 831.140/2019 | 1,859.51 | gold | Marlieria, Sao Domingos do Prata | Minas Gerais, Brazil | |||||
| Alpha Project | 831.141/2019 | 777.94 | gold | Antonio Dias, Sao Domingos do Prata | Minas Gerais, Brazil | |||||
| Alpha Project | 831.142/2019 | 1,294.65 | gold | Antonio Dias, Sao Domingos do Prata | Minas Gerais, Brazil | |||||
| Alpha Project | 831.143/2019 | 50.68 | gold | Sao Domingos do Prata | Minas Gerais, Brazil | |||||
| Alpha Project | 831.144/2019 | 1,739.78 | gold | Dionisio, Marlieria, Sao Domingos do Prata | Minas Gerais, Brazil | |||||
| Alpha Project | 831.145/2019 | 936.01 | gold | Dionisio, Sao Domingos do Prata | Minas Gerais, Brazil | |||||
| Alpha Project | 831.146/2019 | 557.57 | gold | Sao Domingos do Prata | Minas Gerais, Brazil | |||||
| Alpha Project | 830.064/2021 | 301.31 | gold | Sao Domingos do Prata | Minas Gerais, Brazil | |||||
| Alpha Project | 830.065/2021 | 7.6 | gold | Antonio Dias, Nova Era, Sao Domingos do Prata | Minas Gerais, Brazil | |||||
| Alpha Project | 830.066/2021 | 1,603.58 | gold | Dionisio, Marlieria, Sao Domingos do Prata | Minas Gerais, Brazil | |||||
| Alpha Project | 830.074/2021 | 211.48 | gold | Nova Era, Sao Domingos do Prata | Minas Gerais, Brazil | |||||
| Quartzite Project | 831.665/2016 | 94.44 | quartzite | Augusto de Lima, Diamantina | Minas Gerais, Brazil |
We will remain an “emerging growth company” for up to five years, or December 31, 2022, although we would cease to be an “emerging growth company” prior to such time if we have more than $1,070,000,000 in annual revenue, more than $700,000,000 in market valueMaps of our common stock is held by non-affiliates, or we issue more than $1,000,000,000 of non-convertible debt over a three-year period.Material Properties
Item 4A. Unresolved Staff Comments.
Not applicable.
Figure 1: Map of the Alpha Project mineral rights.
Item 5. Operating and Financial Review and Prospects.
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Figure 2: Map of the Quartzite Project mineral right.
Additional Information on Material Properties
Alpha Project
Infrastructure:
The Alpha Project’s primary mineral right (claim number ANM 831.942/2016) is located in the rural zone of Santana do Alfié, a district in the municipality of São Domingos do Prata, in the interior of the state of Minas Gerais in Brazil. According to the latest data from the Brazilian Institute of Geography and Statistics (“IBGE”), the population of Santana do Alfié was 1,691 inhabitants. We believe that the current population size is similar. Houses in this district have power from the electric grid and utilize wells for water.
The district of Santana do Alfié originated in 1751 as a settlement near locations where alluvial gold had been identified by the Portuguese settlers of Brazil. It is a local understanding that the word “Alfié” derives from the evolutionary phonetic contraction of the term “Ouro Fiel” which can be translated as “Faithful Gold”.
The municipality of São Domingos do Prata, the largest town near the Alpha Project, had 17,392 inhabitants according to the IBGE census of 2022. This town is located only a few miles from the Alpha Project mineral rights and serves as the logistical basis where geologists and consultants stay. São Domingos do Prata offers all of the basic infrastructure needs such as labor and supplies.
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Belo Horizonte, the 6th largest city in Brazil with a population of 2,315,560 according to the IBGE census of 2022, is only 88 miles away from the Alpha Project mineral rights. The Company’s office is located in Belo Horizonte. Belo Horizonte is the capital of the Brazilian state called “Minas Gerais” which in translation means “General Mines”. According to data provided in January 2024 by the Sindicato da Indústria Mineral do Estado de Minas Gerais, an organization representing the Minas Gerais mining industry sector, the state of Minas Gerais is responsible for 41.5% of all mineral output of Brazil, placing it as the top mineral producing state among 27 states in Brazil. In fact, Belo Horizonte is commonly known as “the mining capital of Brazil” for having strong concentration of head offices of mining companies and extensive availability of labor and supplies. The Belo Horizonte metropolitan area is served by a modern airport (Aeroporto Internacional de Confins – symbol CNF) with regional and international flights, including non-stop flights to the U.S.
During visits to the site, it was possible to check the condition of the existing roads, which are generally in good condition and appear to be frequently maintained, due to agricultural and cattle ranching activity in the vicinity (Figure 3).
Figure 3: Local road used to access the Alpha Project showing good condition.
For use in mobile offices, workshops and other support structures during drilling campaigns, the network of the local utility company, already existing on site, will be used. To do this, it will be necessary to install a point on the distribution line to connect with the future unit.
The area near and within the Alpha Project is home to multiple small waterways. We expect to apply for and receive permits for local water usage to support drilling campaign operations.
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Work Completed:
Prior Work
As prior owner of the mineral right ANM 831.942/2016 which currently belongs to Jupiter Gold, Mineração Ouro Fiel (the “Prior Owner”) identified gold targets from soil geochemistry and confirmed mineralization in the colluvium through auger holes. This research work was carried out using a regular mesh, sampling every meter and chemical analysis at an outside laboratory.
Surface Owner Authorization
As the Company owns the mineral right but not the surface, prior to carrying out any exploration work, proper authorization was obtained from the surface owner. Our relations with the surface owner are very good.
Trenching
In 2020 and 2021, Oxford Geoconsultants (“Oxford”), a technical consulting firm with a geologist that meets the Qualified Person definition of Regulation S-K 1300 performed geological studies, including new trenching, in targets within ANM 831.942/2016. A summary of such results is presented below.
The research work carried out by Oxford at the Alpha Project has included semi-detailed geological recognition and mapping, in addition to well resampling and chemical analysis.
The geological recognition of the area was carried out through walks that identified and registered 58 excavations consisting of wells and trenches, carried out by the Prior Owner. At a promising target denominated “Lavrinha”, regional geological reconnaissance was also carried out to identify the main lithotypes existing in the area, as well as collect structural data and mineral occurrences.
Figure 4: Location map of old excavations at the Lavrinha target.
After the geological recognition stage, 188 information collection points were registered, such as lithologies, predominant mineralogy of rock structures and the presence of structures and outcrops of interest, among other relevant geological information of the location, for the preparation of a map of the area on a scale of semi-detail, supported by the description of wells and trenches opened by the Prior Owner (Figure 4).
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Figure 5: Field point map.
In the well resampling stage, two wells were chosen from the 58 existing excavations (Figure 5). Saprolite material and colluvial material were analyzed, resulting in 37 samples at intervals of 1 meter in 1 meter, through vertical channels on one of the faces (north face) of the wells. The samples were collected from the bottom to the wellhead, always in the center of the face, thus avoiding contamination of lower intervals by material from higher intervals. Information on lithology and structures was collected that can assist in the geological-structural understanding of gold mineralization (Figure 6). For each sample, 3 kg of material was collected. All collected material was placed in a properly identified and sealed sample bag, avoiding sample exchange, loss of material or contamination during transport and storage. Finally, the samples were sent for chemical analysis at the SGS Geosol laboratory (“SGS”), in Vespasiano, Minas Gerais, a highly regarded analytical laboratory used by all major mining companies in Brazil. After description and sampling, these wells remained open for future audits, surrounded by a wire fence to prevent accidents with people and/or animals.
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Figure 6: Map with location of sampled wells and registered excavations.
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Figure 7: Photographs of the work performed in resampling of wells.
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Chemical Analysis of Samples
In the chemical analysis stage, the fire assay method was used by SGS, resulting in the results presented in Table 1 below. Well 2 showed high levels in colluvium and saprolite with 4m at 5.0 gAu/t (simple average influenced by high content of sample AM36), a value of 0.70 gAu/t in the range of 7 to 8m depth, and additionally showed some anomalous values between 12 to 14m and 17 to 19m. The AM36 sample is noteworthy because it presented a gold content of 16,523 ppb; however it should be noted that the gold grain in the region is coarse, and a nugget effect may occur.
Table 1: Results of chemical analysis of samples from Wells 1 and 2.
| Well 1 | Well 2 | |||||||||||||
| Sample | From (m) | To (m) | Au content (ppb) | Sample | From (m) | To (m) | Au content (ppb) | |||||||
| AM17 | 0 | 1 | 264 | AM 37 | 0 | 1 | 38 | |||||||
| AM16 | 1 | 2 | 248 | AM 36 | 1 | 2 | 382 | |||||||
| AM15 | 2 | 3 | 335 | AM 35 | 2 | 3 | 262 | |||||||
| AM14 | 3 | 4 | 197 | AM 34 | 3 | 4 | 12 | |||||||
| AM13 | 4 | 5 | 473 | AM 33 | 4 | 5 | 71 | |||||||
| AM12 | 5 | 6 | 91 | AM 32 | 5 | 6 | 39 | |||||||
| AM11 | 6 | 7 | 400 | AM 31 | 6 | 7 | 110 | |||||||
| AM10 | 7 | 8 | 813 | AM 30 | 7 | 8 | 166 | |||||||
| AM09 | 8 | 9 | 26 | AM 29 | 8 | 9 | 84 | |||||||
| AM08 | 9 | 10 | 1,336 | AM 28 | 9 | 10 | 30 | |||||||
| AM07 | 10 | 11 | 319 | AM 27 | 10 | 11 | 18 | |||||||
| AM06 | 11 | 12 | 31 | AM 26 | 11 | 12 | 19 | |||||||
| AM05 | 12 | 13 | 15 | AM 25 | 12 | 13 | 724 | |||||||
| AM04 | 13 | 14 | 20 | AM 24 | 13 | 14 | 28 | |||||||
| AM03 | 14 | 15 | <5 | AM 23 | 14 | 15 | 89 | |||||||
| AM02 | 15 | 16 | 13 | AM 22 | 15 | 16 | 80 | |||||||
| AM01 | 16 | 17 | 17 | AM 21 | 16 | 17 | 376 | |||||||
| AM 20 | 17 | 18 | 1,214 | |||||||||||
| AM 19 | 18 | 19 | 16,523 | |||||||||||
| AM 18 | 19 | 20 | 2,161 | |||||||||||
Exploration Plan:
As of December 31, 2023, the Company has engaged a geologist who meets the “Qualified Person” criteria under Item 1300 of Regulation S-K to prepare an exploration plan for the Alpha Project. Planning and budgeting for such exploration plan described above is ongoing. The Company anticipates that its initial cost will be in the $250,000 to $350,000 range, and will encompass further detailed geological mapping, geophysics, and initial exploratory drill holes.
Book Value of Property:
The book value of the property is less than $10,000. It includes the cost of obtaining the mineral property directly from the Brazilian national mining department. The Company has title to the mineral rights of the Alpha Project, and such title has no known encumbrances and can be assumed to be more valuable than its book value, although no third-party offers have been received or estimates prepared.
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Quartzite Project
Infrastructure:
Our Quartzite Quarry (thereafter, simply “Quarry”) is in the rural zone of Conselheiro Mata, a district in the municipality of Diamantina, in the interior of the state of Minas Gerais in Brazil. According to the latest data from the IBGE, the population of Conselheiro Mata was 819 inhabitants. Most houses in the rural zone of this district have power from the electric grid and utilize wells for water.
The municipality of Diamantina, the largest town near our Quarry, had 47,702 inhabitants according to the IBGE census of 2022. Diamantina offers all the basic infrastructure needs such as labor and supplies.
Belo Horizonte, the capital of the state of Minas Gerais and where the Company has its principal place of business, is 172 miles away from our Quarry. Belo Horizonte is commonly known as “the mining capital of Brazil” for having strong concentration of head offices of mining companies and extensive availability of labor and supplies. The Belo Horizonte metropolitan area is served by a modern airport (Aeroporto Internacional de Confins – symbol CNF) with regional and international flights, including non-stop flights to the U.S.
During visits to the site, it was possible to check the condition of the existing roads, which are generally in good condition and appear to be frequently maintained, due to agricultural and cattle ranching activity in the vicinity.
Work Completed:
Overview
While we are primarily focused on gold, in one of our mineral rights, ANM 831.665/2016 (the “Area”), measuring 94.44 hectares, a greenfield deposit of quartzite was identified by our exploration team which became our “Quartzite Project”.
In 2020, we studied the Quartzite Project with rotary drilling in which we obtained a preliminary volumetric estimate of four deposits of quartzite which had been identified in the Area. Such geological studies, drilling campaign, and volumetric estimates were not carried out under Item 1300 of Regulation S-K.
In 2021, Yan Taffner Binda, a mining engineer with vast experience in quartzite who meets the “Qualified Person” criteria under Item 1300 of Regulation S-K, prepared the mining plan for an open pit quarry at the Quartzite Project.
In 2021, Geoline, an independent engineering and environmental licensing consultancy, performed the field studies needed to file our petition to the applicable regulatory body for an operational license. The filing of such permit occurred in August 2021. On April 4, 2022, our Quartzite Project received the necessary permit from the Brazilian mining department (“ANM”). On December 12, 2022, our Quartzite Project received the operational license from the state of Minas Gerais environmental department (“SUPRAM”). These approvals from ANM and SUPRAM have allowed the Quartzite Project to begin its operations and to be able to commercialize production. As a result, we will refer to our Quartzite Project as the “Quartzite Quarry” or simply “Quarry”.
Preparation of the site for operations of the Quarry began in June 2023. The first quartzite block was retrieved on August 31, 2023. For the period between September 1, 2023, and December 31, 2023, a mining trial period, the Quarry team was comprised of one manager, one supervisor, and five mining workers. The processing was done by cutting the blocks with diamond wire. The blocks produced had dimensions varying between 6 m3 and 12 m3.
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For the period between August 31, 2023, and December 31, 2023, a total of 223.10 cubic meters of quartzite blocks were produced and 80.82 cubic meters were sold to independent third parties from Brazil and Italy for an aggregate total revenue of R$ 531,580.39 (Brazilian reais) or approximately US$ 107,540,81. Thus, the average revenue per cubic meter of raw quartzite block sold was approximately US$ 1,331.
The net results of the trial mining were fully charged to profit and loss of the period.
Figure 8: Example of blocks produced at our Quartzite Quarry in 2023.
One block of quartzite was cut into slabs which were subsequently polished. It is expected that the revenue generated from sales of polished slabs on a per-cubic-meter basis will be three to four times that of raw quartzite blocks according to initial contacts with prospective buyers.
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Figure 9: Polished quartzite slab from our Quartzite Quarry production.
Specific Details
Surface Owner Authorization
As the Company owns the mineral right but not the surface, prior to carrying out any exploration work, proper authorization was obtained from the surface owner. Our relations with the surface owner are very good.
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Figure 10: View of the Area.
Figure 11: Another view of the Area.
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Geological Mapping
Two days of mapping were carried out in the region, one on October 19, 2019, and another on September 10, 2020. The primary objective was to look for signs of gold, manganese, and/or quartzite mineralization in the Area.
The presence of manganese was a consideration given the existence of a deactivated manganese mine from Mineração Vale do Jacaré, a local mining company, approximately 2 km from the Area, as can be seen on the map below.
Figure 12: Lithological map of the Area and deactivated manganese mine nearby.
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Quartzite outcrop formations in the Area were identified during geological mapping. The identified occurrences varied from white to medium gray, sometimes with levels parallel to stratification. White-appearing quartzites were apparent below grayish facies and were particularly observed in drainage channels.
Figure 13: Image of grey quartzite outcrop in the Area.
Figure 14: Foreground image of white quartzite outcrop in the Area.
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Figure 15: Detail of white quartzite sample from the Area.
Subsurface Sampling
Subsurface sampling was carried out by means of shallow detonations.
Figure 16: Subsurface sampling work in the Area.
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Figure 17: Subsurface sampling work in the Area.
Rotary Drilling
The geological exploration was carried out by means of rotary drilling by an independent consultant to 15 meters depth for subsurface recognition of the aesthetic characteristics of the rock identified in the previous stage of blasting sampling, such as basic color, mineralogical alternation due to stratification, presence of layered portions, veins and other characteristics that could be exposed, as they differ completely from the outcrop, susceptible to weathering.
The location of the five planned drill holes is shown in the map below (“FS” stands for “furo de sonda” which means drill hole). Drill holes 1 through 4 were executed, and are succinctly described below.
Figure 18: Map showing drill hole locations in the Area.
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Drill Hole 1
The quartzite rock showed medium gray color with the presence of dark gray portions.
Weathered parts identified in the first 30 cm. From 6.1 m to 6.4 m, and also from 9.2 m to 9.6 m, sandy patches were seen. Two rusty parts were identified, one with 5 cm starting at 12.6 m and other with 8 cm starting at 13.0 m.
Figure 19: Cores obtained from drill hole 1 in the Area.
Drill Hole 2
The quartzite rock showed medium gray color with the presence of dark gray portions, with 74% of core recovery due to the drill rod being stuck at the bottom of the hole.
Rusty parts were identified in the first 60 cm, and also from 8.4 m to 8.9 m, and from 11.6 m to 12.1 m. The drill bit stuck caused an interruption in the planned drilling after this point.
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Figure 20: Cores obtained from drill hole 2 in the Area.
Drill Hole 3
The quartzite rock showed alternances of medium gray color with the presence of dark gray portions and yellowish medium gray parts until 4.6 m.
A sandy interval was dissolved in the drilling mud from 2.9 m to 3.2 m. From 4.6 m to 15 m the rock graded from medium to dark gray to light to medium gray portions indicating a possible second lighter material with strong market potential.
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Figure 21: Cores obtained from drill hole 3 in the Area.
Drill Hole 4
The entire 15 m core was recovered showing alternances of medium gray with light to medium gray matrix with thin layers of dark gray. Some light yellowish weathered parts appeared in the first 5 m.
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Figure 22: Cores obtained from drill hole 4 in the Area.
Aerial Survey
In order to ascertain the size of the quartzite outcrops with greater precision, an aerial survey was carried out using a drone. The flight was planned to prioritize the eastern portion of the Area and Litchi software was used, as can be seen in the figure below.
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Figure 23: Aerial image showing flight plan made by drone.
In 2021, aerial photogrammetry and field survey of the eastern part of the Area was carried out by an outside consultant. This resulted in a planimetric map at scale 1:6,000 with contour lines at each meter and allowed a digital elevation model of the eastern part of the Area to be created.
The resulting map included all basic geographic information, such as drainages, accesses, and relevant physical structures, facilitating field work and serving as a basis for geological mapping of the area and delimitation of search targets for resource calculation. The map was created using ArcGIS 10.5 and Datamine Studio 3 software and RM for resource cubing.
Figure 24: Topographic map from 2021 of the eastern portion of the Area.
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Figure 25: Digital elevation model of the Area made from contour lines.
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Data processing also resulted in an orthoimage of the eastern portion of the Area. Agisoft software Metashape 1.6 was used for orthoimage processing. The orthoimage can be seen below.
Figure 26: Orthoimage with delimitation of quartzite outcrops in the eastern region of the Area.
Surface Area Estimation
With the information provided by the orthoimage above, it was possible to estimate the surface area of the quartzite formations.
Estimation of Depth of Formations
Thickness estimates of quartzites in the region from various Brazilian geologists were consulted. Pflug (1968) suggests that common quartzite thickness in the region is between 700-1,000 meters. On the other hand, Schöll & Fogaça (1980) and Diniz & Pinheiro (1980) both suggest that such thickness isf approximately 250 meters. In our estimation of thickness we used the more conservative figure, 250 meters.
Volume Estimation
Topography data extracted in GIS (System Information Geographic) were processed by the Datamine Studio 3 software, in order to obtain the geological model of quartzite massifs and their respective volumes.
The four rock masses delimited in the field stages were modeled. These four rocky bodies and their respective volume calculations are represented in the sequence of figures and table below.
| Quartzite Formations | Estimated Volume (m3) | |||
| Rocky Body 01 | 302,380 | |||
| Rocky Body 02 | 867,801 | |||
| Rocky Body 03 | 243,292 | |||
| Rocky Body 04 | 40,916 | |||
| TOTAL | 1,454,389 | |||
Table 1: Estimate of volume of quartzite formations in the Area.
Exploration Plan:
As of December 31, 2023, there is no plan for further geological exploration of the Area as the focus going forward will be on mining and revenue generation. The Company plans to continue to rely on the technical expertise of Yan Taffner Binda, a mining engineer with vast experience in quartzite who meets the “Qualified Person” criteria under Item 1300 of Regulation S-K.
As subsequent events after December 31, 2023, in 2024 we have retained two executives to work with our Quarry: a director of operations, and a director of sales and marketing.
The director of operations will focus on safely improving production to 100 m3 per month and then to 250 m3. This will likely require the addition of more equipment, and likely the hiring of additional workers.
The director of sales and marketing will focus on attempting to commercialize quartzite slabs obtained from our production to the U.S. market.
Planning and budgeting for the expansion described above is ongoing. The Company anticipates that it will need working capital of $150,000 to $200,000 to run the Quarry and its developing commercial operations.
Book Value of Property:
The book value of the property is less than $10,000. It includes the cost of obtaining the mineral property directly from the Brazilian national mining department. The Company has title to the Area, and such title has no known encumbrances and can be assumed to be more valuable than its book value, although no third-party offers have been received or estimates prepared.
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Non-Material Properties
Summary of Non-Material Properties
| Project | Mineral Right Number | Area (hectares) | Mineral | Municipality | State, Country | |||||
| Alta Floresta Project | 867.176/2019 | 9,740.91 | gold | Peixoto de Azevedo | Mato Grosso, Brazil | |||||
| Alta Floresta Project | 867.173/2019 | 83.99 | gold | Terra Nova do Norte | Mato Grosso, Brazil | |||||
| Alta Floresta Project | 867.174/2019 | 47.55 | gold | Matupa, Nova Guarita | Mato Grosso, Brazil | |||||
| Apui Project | 880.133/2016 | 9,325.31 | gold | Apui | Amazonas, Brazil | |||||
| Apui Project | 880.134/2016 | 9,391.67 | gold | Apui | Amazonas, Brazil | |||||
| Apui Project | 880.135/2016 | 9,340.04 | gold | Apui | Amazonas, Brazil | |||||
| Brotas de Macauba Project | 870.400/2019 | 1,951.18 | gold, palladium, platinum | Brotas de Macauba | Bahia, Brazil | |||||
| Cavalcante Project | 860.479/2019 | 1,930.79 | gold | Parana (TO), Cavalcante (GO) | Goias and Tocantins, Brazil | |||||
| Crixas Project | 860.807/2016 | 1,241.63 | gold | Crixas, Uirapuru | Goias, Brazil | |||||
| Paracatu Project | 831.883/2016 | 312.66 | gold | Paracatu | Minas Gerais, Brazil |
Maps of Non-Material Properties
Figure 27: Map of the Alta Floresta Project.
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Figure 28: Map of the Apui Project.
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Figure 29: Map of the Brotas de Macauba Project.
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Figure 30: Map of the Cavalcante Project.
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Figure 31: Map of the Crixas Project.
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Figure 32: Map of the Paracatu Project.
We have not implemented formal exploration program to comply with Item 1305 of Regulation S-K, but we have engaged a qualified person for gold and a qualified person for quartzite, as such term is defined in Subpart 1300 of Regulation S-K, who works on both the Alpha Project and the Quartzite Project.
Item 4A. Unresolved Staff Comments.
Not applicable.
Item 5. Operating and Financial Review and Prospects.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and the related notes and other information included elsewhere in this registration statement. This discussion contains forward-looking statements that are based on management’s current expectations, estimates and projections about our business and operations. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements and as a result of the factors we describe under “Risk Factors” and elsewhere in this filing. See “Special Note Regarding Forward-looking Statements” and “Risk Factors.” We undertake no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.
Alpha Project
Overview:
Our 100%-owned Alpha Project encompasses 31,650 acres distributed in twelve mineral rights for gold in an area at the eastern edge of the so-called Iron Quadrangle in the State of Minas Gerais in Brazil. Most of the gold recovered from Brazil has been from mines located in the Iron Quadrangle. This project is located approximately 100 miles east of Belo Horizonte, capital of Minas Gerais, and has excellent infrastructure (roads, power, availability of local labor). Only 2% of the total area was researched in detail fifteen years agofuture, other than as required by a prior owner, by drilling primarily saprolite and colluvial layers; the technical report produced at the time showed gold mineralization of 64,000 oz with an average of 1.54 g/t and at a cutoff of 0.8 g/t. Our technical team has advanced such work, and a revised technical report has been written as of November 2020 with gold mineralization of 84,000 oz at a cutoff of 0.8 g/t. An expert geological services consultancy, RCS Geologia e Meio Ambiente Ltda (“RCS Geologia”), has been retained to study the Alpha Project and propose a pathway to a first producing mine. RCS Geologia has indicated that the gold deposits are of greenstone belt type. Further work is ongoing at Alpha Project to expand the knowledge of and the measured size of the deposit.
Mineral: Gold
Ownership: 100%
Location: State of Minas Gerais
Infrastructure: Paved highway, water, nearby electrical power grid
Size: 31,650 acres
Deposit Type: Greenstone Belt
Geology:
Our Alpha Project region is part of the Araçuaí Belt domain, of the Brasiliano event, part of the northern portion of the structural or geotectonic province Mantiqueira. According to the 2014 Coronel Fabriciano Cartographic Sheet prepared by CPRM (the Brazilian Geological Survey) our Alpha Project is inserted in the context of the Rio das Velhas Indiviso Supergroup.
The Santana do Alfié region where the Alpha Project is located has a metavolcanosedimentary sequence, consisting mainly of paragnaisses that intercalate with amphibolites, ultramafic rocks and small-scale iron formations. In some ranges, these same lithologies were later discorded by pegmatites. These pegmatites belong to the event that generated the vast majority of pegmatites in the Eastern Pegmatitic Province. It is also possible to observe small portions where there is a predominance of ultramafic rocks, such as serpentinite and tremolite. In the southern sector of the region, rocks appear called quartz-muscovite schist, a lithology that is more preserved in relation to the others and sometimes presents small quartz boudins and, in some places, the presence of magnetite crystals and tourmaline disseminated in shale quartz-mica is observed. In smaller proportions, sericitic quartzites and banded iron formation, basically consisting of recrystallized magnetite and quartz, follow.
The rock formation in the region where the Alpha Project is located has some similarities to gold deposits from shear zones in traditional volcanic sedimentary sequences. However, they differ in that they present a complex and marked metamorphic evolution, with the presence of gneissic rocks and late pegmatitic intrusions. Hydrothermal enrichment is also observed.
Location Map:
Geological Map:
Alta Floresta Project
Overview:
Our 100%-owned Alta Floresta Project encompasses 24,395 acres distributed in three mineral rights for gold in the northern portion of the State of Mato Grosso, more specifically in the Alta Floresta Auriferous Province. Two of the mineral rights show prior artisanal and superficial gold mining activities associated with robust production of gold. They also display similar geophysical signatures with known nearby gold deposits. The third area shows strong potential for gold, copper and manganese according to the technical team that visited and studied the area.
Mineral: Gold
Ownership: 100%
Location: State of Mato Grosso
Infrastructure: Paved highway, water, nearby electrical power grid
Size: 24,395 acres
Geology:
The Alta Floresta Project area is geologically inserted in the Province of Rio Negro-Juruena Province. The Rio Negro-Juruena Province consists of numerous granitic bodies, developed through a succession of magmatic arcs. Structural arrangements made of Ductile Shear Zones constitutes one of the main determinants for the accommodation of a large part of the gold deposits and granitic bodies containing systems in gold.law.
The presence of soils is entirely sandy from sandstonesdiscussion and analysis of the Dardanelles Formation; sandy-clay soils, generated from granitoids, clayey soils from volcanic rocks, generallyfinancial condition and results of light colorsoperations of certain items for the fiscal year ended December 31, 2021, and red clayey soils (oxisoils) resulting from weathering. Geomorphologicallyyear-to-year comparison between fiscal year ended December 31, 2022, and December 31, 2021, that are not included in this Form 20-F can be found in “Item 5. Operating And Financial Review And Prospects” of our Form 20-F for the area is mostly contained infiscal year ended December 31, 2022 filed with the unit called Interplanáltica Depression of the Southern Amazon and, to a lesser extent representativeness, in the subdivision Planalto de Dardanelos.
Location Map:
Geological Map:
Quartzite Project
Overview:
Our 100%-owned Quartzite Project (previously referred by us as “Diamantina Project”) encompasses 233 acres in a mineral right for quartzite and manganese located within the state of Minas Gerais. Four quartzite deposits have been identified in the project area, with an estimated mineralization of 3.7 tons of quartzite. The color, texture, and analytical properties of sampled quartzite have been within ornamental rock market standards.
Mineral: Quartzite
Ownership: 100%
Location: State of Minas Gerais
Infrastructure: Paved highway, water, nearby electrical power grid
Size: 233 acres
Geology:
Our Quartzite Project borders the meridional portion of the mountain range known as Serra do Espinhaço. This formation contains a great extension of metamorphic-sedimentary rocks, specially quartzites and meta-sandstones,SEC on April 28, 2023, which is reason why the central region of Minas Gerais, where the city of Diamantina is located, stands out for its significant production of ornamental rocks made of quartzites. The various episodes that structured the Serra do Espinhaço sequences are also responsible for the steep relief that rises to 1200-1600m in altitude in the region. This morphology is supportedincorporated by the horizons quartzites, phyllites and metaconglomerates of the Espinhaço Supergroup. In the local process area, there are lithologies from the Córrego Prereira Formation, which consists of fine-grained quartizites, with well-preserved structures.
Location Map:
Geological Map:
Market
Quartzite is a very hard rock composed predominantly of an interlocking mosaic of quartz crystals. Recently polished quartzite slabs have become sought after as a higher-end substitute to granite in kitchen countertops and tiles. Brazil has a flourishing quartzite mining industry centered in the neighboring the states of Minas Gerais and Espírito Santo with smaller producers being the norm. Each quarry produces quartzite of different color and texture and therefore stones are unique to their location. Mining is via simple open pit procedures, not particularly labor intensive, and with the mined product normally prepared as cubes of raw quartzite measuring ten meters in each diameter. Buyers are normally responsible for the logistics of transporting such raw quartzite blocks from the mine. Buyers for quartzite mined in Brazil are primarily from four locations: Brazil itself, United States, China, and Italy. It is common for mines to develop an exclusive selling relationship to a buyer.
Summary of Our Quartzite Opportunity
While we are primarily focused on gold, in one of our mineral rights, measuring 233 acres, a greenfield deposit of quartzite was identified by our exploration team and became our “Quartzite Project”.
In 2021, we studied the Quartzite Project with detailed drilling and a preliminary volumetric estimate of a deposit was obtained. In 2021, Yan Taffner Binda, a mining engineer with vast experience in quartzite who meets the “Qualified Person” criteria under Item 1300 of Regulation S-K, prepared the mining plan for an open pit quarry at the Quartzite Project. An initial mining license from the Brazilian mining department, has been obtained.
In 2021, Geoline, an independent engineering and environmental licensing consultancy, performed the field studies needed to file our petition to the applicable regulatory body for an operation license. Our expectation is to obtain such approval in 2022 and to start operations two to three months thereafter. We anticipate that our quartzite quarry will require five on-site full-time employees; expected prices for the type of color and texture of the quartzite anticipated to be mined range from $1,200 to $2,000 per cubic meter.
Paracatu Project
Overview:
Our 100%-owned Paracatu Project encompasses 773 acres in one mineral right for gold located the northwest portion of the State of Minas Gerais. This region has been marked by gold mining activities since the 18th century, and currently produces 22% of all gold in Brazil.
Mineral: Gold
Ownership: 100%
Location: State of Minas Gerais
Infrastructure: Paved highway, water, nearby electrical power grid
Size: 773 acres
Deposit Type: Alluvial
Geology:
The gold mineralization occurs in veins associated with sulfides of arsenic, copper, zinc and lead. Gold seen in our Paracatu Project deposit is one remobilized by the river that cuts through these mineralized rocks and concentrated in sand banks.
The primary auriferous mineralizations at the Paracatu district are described embedded in carbonaceous sericite schists and phyllites of the Paracatu Formation, belonging to the Brasilia Fold Belt ridden over the pelitic and carbonate metasediments of the Vazante Belt to the east. Silver to dark brown sericite-xysts predominate over quartzite, containing quartz boudins stretched perpendicular to the direction of the mineral lineation, which suggests the NEE direction of movement, with gentle dips. Deformation in the boudins has produced oblate forms. Arsenopyrite, pyrite, chalcopyrite and pyrrhotite associated with gold define one of the paragenesis of the sulfide mineralization, while galena and sphalerite define the other.
The mineralization that occurred at Paracatu is closely related to aqueous fluids of hydrothermal nature, rich in As, Au and subordinately in Pb and Zn, which percolated along favorable structures contained in the sericite schists and phyllites, thus defining a mineralized region. Apparently, gold, and sulfides were deposited in boudin traction zones, along the contact between boudins and sericite schists and in microcracks and micropores in the boudins themselves. The rocks are more deformed and more sulfidized along the quartz boudin zone where gold contents are higher. This group of mineralized rock is disaggregated and transported by the Rico River which processes the gold and concentrates it naturally in the banks, banks and riverbed that outcrops in our Paracatu Project area.
Location Map:
Geological Map:
Apuí Project
Overview:
Our 100%-owned Apuí Project encompasses 69,330 acres distributed in three mineral rights for gold in the southeast portion of the State of Amazonas. The city of Apuí has an infrastructure capable of offering services such as water supply, electricity, mailing, hospitals and banks.
Mineral: Gold
Ownership: 100%
Location: State of Amazonas
Infrastructure: Waterways, some paved highway, mostly remote areas with extensive vegetation cover
Size: 69,330 acres
Geology:
The Apuí Project is located in the NW portion of a new gold frontier, named the Jureuena-Teles Pires Gold Province. The Jureuena-Teles Pires Gold Province is known to have gold deposits generally explored by artisanal miners. Primary deposits in this region of Brazil are usually greater than 1 million ounces. Geologically, the area is located in the Alto Tapajós basin. The Alto Tapajós basin is non-compliant over the volcanic rock of the Colíder Group (rhyolites) and the Beneficente sedimentary basin (silzite, claystone and quartzites), and over rocks from the Sucunduri Migmatitic Suite and Mafic-Ultramafic Suite. Intrusive Post-orogenic Suites occur on the Beneficente Group.
According to geological studies over the region, the area where the Apuí Project is located has great potential for epithermal, primary, and secondary gold deposits. In fact, there exists an auriferous occurrence proven trough a deactivated gold mine approximately 3.5 km away.
Location Map:
Geological Map:
Crixás Project
Overview:
Our 100%-owned Crixás Project encompasses 3,068 acres in one mineral right for gold located the northwest portion of the State of Goiás. This region has been marked by gold mining activities since the 18th century, and currently produces 22% and currently produces over 6 tons of gold per year.
Mineral: Gold
Ownership: 100%
Location: State of Goiás
Infrastructure: Paved highway, water, nearby electrical power grid
Size: 3,068 acres
Geology:reference herein.
The supracrustal rocks from the Crixás Project region include peridotitic komatiite, overlaid by garnet-quartz-chlorite schist, quartz-muscovite schist, quartzite, garnet-rich quartzite, metagreywacke, metachert, amphibolite and banded iron formation, latter two subjected to shear zone controlled hydrothermal alteration. These rocks constitute a fragment of the Crixás greenstone belt in the Goiás Magmatic Arc. This sequence is intruded by granites and gabbros. Supracrustal rocks are metamorphosed in the transition from greenschist to epidote facies metamorphism. Hydrothermally altered amphibolite and iron formation in the Bocaina shear zone are enriched in Au, As, Ag, Cu, Ba, Bi, Sb and W. Metamorphic fluid involvement is suggested, such as for orogenic gold deposit formation. Gold mineralizations occur in massive sulfide, quartz vein and disseminated styles hosted by metabasalt and carbonaceous shale subjected to hydrothermal alteration.
Location Map:
Geological Map:
Cavalcante Project
Overview:
Our 100%-owned Cavalcante Project encompasses 4,771 acres in one mineral right for gold located in the northernmost portion of the State of Goiás and continuing to the southernmost portion of the State of Tocantins. This region has been marked by gold mining activities since the 18th century.
Mineral: Gold
Ownership: 100%
Location: States of Goiás and Tocantins
Infrastructure: Paved highway, water, nearby electrical power grid
Size: 4,771 acres
Geology:
The ore is located mainly in the Gneissic Granite Complex domain. These are peraluminous, syn-tectonic, S-type granites that host, besides gold mineralization, plationoidy, tin, tantalum, and uranium mineralizations. The mineralized region is in an E-W shear zone, near the contact between the biotite-muscovite granite of the Aurumina Suite and the Ticunzal Formation, composed of schists and graphitic paragnaisses.
Our Cavalcante Project is located near the contact between the Aurumina Suite and the Ticunzal Formation. The shear zone, which has silicified, sericitized and hydrothermally altered zoins, was generated almost concomitantly with the granitic intrusions and develops a band of milonites over the biotite-muscovite granite. The ore-bearing host rocks, which occur in the contact region, are extremely siliceous and micaceous, referred to as muscovite-quartz milonite and were developed over the biotite-muscovite granite of the Aurumina Suite. In general, gold occurs in isolated grains but is also associated with metallic minerals. This deposit is notorious for the association between gold and platinum group element minerals, however PGMs have never been exploited as a by-product of gold in this region.
Location Map:
Geological Map:
Brotas Project
Overview:
Our 100%-owned Brotas Project encompasses 4,821 acres in one mineral right for gold located the central-western portion of the State of Bahia. This region has been marked by gold mining activities since the 18th century.
Mineral: Gold
Ownership: 100%
Location: State of Bahia
Infrastructure: Paved highway, water, nearby electrical power grid
Size: 4,821 acres
Geology:
In the region gold occurs both associated with quartz veins cutting through bedrock and accumulated in alluvial bars and colluvial deposits.
The Brotas Project is situated in the valley of the Paramirim River, a tributary of the São Francisco River, one of the largest rivers in Brazil. The valley is bounded to the west by the Northern Espinhaço Range and to the east by the Western Chapada Diamantina. The area comprises two domains: the pre-Paleoarchean to Paleoproterozoic basement units and the Paleo to Neoproterozoic volcanosedimentary coverings.
The pre-spine basement domain integrates the infrastructure of the São Francisco Craton, an extensive core stabilized at the end of the Transamazonian tectonometamorphic event, between 2,2 and 2,0 Ga, and limited by the Rio Preto, Riacho do Pontal and Sergipana mobile belts to the north, Brasília to the west and Araçuaí to the south, deformed between 650 and 485 Ma. The domain of the volcanosedimentary coverings deposited in the interior of the São Francisco Craton encompasses the Espinhaço and São Francisco supergroups. The sedimentary stack related to the Espinhaço Supergroup accumulated, according to Almeida, in a sedimentary basin of Proterozoic age spared of brasilian deformations, or, as per, in an aulacogenic structure (Aulacogen of Espinhaço), in the time interval from 1,8 to 1,0 Ga.
The stratigraphic stacking of these sedimentary coverings in the Chapada Diamantina region includes the groups Paraguaçu (Rio dos Remédios, Ouricuri do Ouro, Mangabeira, Lagoa de Dentro and Açuruá formations), Chapada Diamantina (Tombador and Caboclo formations) and the Morro do Chapéu Formation; and, in the Northern Espinhaço region, the Oliveira dos Brejinhos Group, subdivided into the Pajeú, Bom Retiro, Riacho do Bento, Mosquito and Fazendinha Formations and the Sítio Novo Formation. The units related to the São Francisco Supergroup correspond to mixed siliciclastic and carbonatic deposits accumulated in the Neoproterozoic, in a passive margin basin, or flexural, generated by mass overburden.
Location Map:
Geological Map:
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Note: None of our projects currently has “reserves” in accordance with the definition of such term by the Securities and Exchange Commission. Our Alpha Project has gold reserves as per the definition of such term under Brazilian mining department guidelines.
Capital Equipment
We built and own a modular gold processing and recovery plant (see photo below); its capacity can be easily increased. This plant uses high speed centrifugation as the primary method of gold separation. Its applicable for gold in saprolite and colluvial layers, as seen for instance in the more superficial layers in the Alpha Project.
The use of centrifugal concentrators for free gold recovery from alluvial ore has been a common practice in the mining industry for decades. This method uses the difference in intrinsic densities for separation; whereas the native gold density is 19.0 g/cm³, and the density of silica, the main component of the waste, is approximately 2.6 g/cm³. This equipment has several advantages over other processes, such as:
An example of a gold bar obtained from the processing of material in our plant is below.
Results of Operations
Except as may be otherwise indicated, all dollar amounts are stated in U.S. dollars, the Registrant’s reporting currency. The following table sets out the exchange rates, based on the data from the website of Brazil’s “Banco Central” (an equivalent to the U.S. Federal Reserve), for the conversion of the Brazilian real (R$) currency into the United States dollar (US$), for the period from January 1, 2023, to December 31, 2023. The average exchange rates are based on the average of the daily closing exchange rates during such periods:
| Average | High | Low | Close | |||||||||||||
| Fiscal Year Ended 12/31/2023 | R$ | 4.9953 | R$ | 5.4459 | R$ | 4.7202 | R$ | 4.8413 | ||||||||
| Fiscal Year Ended 12/31/2022 | R$ | 5.2284 | R$ | 5.7042 | R$ | 4.7378 | R$ | 5.2177 | ||||||||
The exchange rate on December 31, 2023, was R$4.8413 Brazilian reais per one U.S. dollar.
Fiscal Year Ended December 31, 20212023, Compared to Fiscal YearYears Ended December 31, 20202022
We did not record any revenue during the year ended December 31, 2021,2023, compared to revenue of $0 during the year ended December 31, 2020.2022. We expect revenues to increase in future periods as we increase our mining operations;operations, including the start of our quartzite mining activities in 2024; however, we can offer no assurances that we will be successful in our efforts.
Our operating expenses are comprised primarily of stock-based compensation, general administrative expenses, and to a lesser extent professional fees and other compensation related costs. Operating expenses totaled $546,989$1,057,773 for the year ended December 31, 2021,2023, compared to operating expenses of $411,662 during$657,375 for the year ended December 31, 2020.2022. The increase in operating expenses of 32,9%61% comparing 2023 to 2022 and 20% is explained primarily by increased general and administrative expenses and compensation costs.costs, both highly influenced by the increase in activities related to the Quartzite project, including the increase in the number of employees from 1 in 2022 to 7 in 2023.
We incurred a net loss of $548,438$1,071,845 for the year ended December 31,2023, an increase of 63% compared to $657,375 for the year ended December 31, 2021, representing an increase of $138,148, or 36.7%, compared to a net loss of $410,290 incurred during the year ended December 31, 2020.2022.
Net cash used in operating activities was $377,580$862,694 for the year ended December 31,2023, compared to $534,073 used in operations during the year ended December 31, 2022. Net cash provided by investing activities was $638,544 for the year ended December 31,2023, compared to $74,678 for the year ended December 31, 2021, compared to net cash used in operating activities of $285,667 during the year ended December 31, 2020. Net cash used in investing activities was $105,378 for the year ended December 31, 2021, compared to net cash provided by investing activities of $205,216 during the year ended December 31, 2020.2022. Net cash provided by financing activities was $205,496$291,600 for the year ended December 31, 2021,2023, compared to $500,000 during$489,875 for the year ended December 31, 2020.2022.
Liquidity and Capital Resources
As of December 31, 2021,2023, we had total current assets of $86,052$96,432 and total current liabilities of $14,417$734,118 for a current ratio of 60.13 to 1.00 and negative working capital of $637,684 (important to highlight that current liabilities include an amount of $674,461 payable to a group company). By comparison, as of December 31, 2022, we had total current assets of $25,438 and total current liabilities of $20,583 for a current ratio of 1.23 to 1.0 and working capital of $71,634. By comparison, we had total current assets$4,855. The variation of $258,133 and total current liabilities of $10,732 for a current ratio of 24.1 to 1.0 andthe working capital was primarily driven by the resources received from a loan provided by Mineração Apollo Ltd, a wholly owned subsidiary of $247,401 at December 31, 2020. These factors raise substantial doubt aboutApollo Resources Corporation, an affiliate, in order to cover our expenditures with exploration of gold assets and execution of the Company’s ability to continue as a going concern.trial quartzite mining activities.
For both the two years ended December 31, 20212023, and 2020,2022, our primary sourcesources of liquidity waswere derived from the sale of our common stock.stock and loans received from related parties. We expect that our primary source of liquidity will continue to be generated from the sale of our common stock, as well as increasedanticipated revenues to be generated from the operation of our modular plant.Quartzite operations.
The consolidated financial statements have been prepared on a going concern basis. The Company has incurred losses since its inception resulting in an accumulated deficit of $4,200,308 and further losses are anticipated in the development of its business. The Company does not have sufficient cash to fund normal operations and meet debt obligations for the next 12 months without deferring payment to certain current liabilities and/or raising additional funds. In order to continue to meet its fiscal obligations in the current fiscal year and beyond, the Company must seek additional financing. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Its ability to continue as a going concern is dependent upon the ability of the Company to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Item 5.C. R&D, Patents and Licenses
None, except mineral rights described above.
Item 5.E. Off-Balance Sheet Arrangements5.D. Trend Information
None.Having commenced initial quartzite operations in August 2023 with the trial mining period and achieved its first production milestones, the quartzite project is poised for expanded capacity in 2024 on the back of strong market demand corroborated by the current market size of over $3.6 billion and the expected compounded annual growth rate of 2.46% until 2030.
For fiscal year 2024, the Company targets over 850 cubic meters of output driving revenue between $1.5 and $2.0 million (based on same price levels obtained for the production of the trial mining period) and delivering robust operating profit margins.
Figure 1 – Ongoing Quartzite Quarry Operations at Silver River Mine
Figure 2 – Finished Silver River Quartzite Slabs Ready for Sale
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Figure 3 – Finished Silver River Quartzite Slabs Ready for Sale
To support its next growth phase, the Company plans to strengthen its executive team on the quartzite side by appointing a Director of Sales and Marketing. With over twenty years of international sales experience in ornamental stone, this incoming executive will focus on expanding Silver River’s customer base globally including the United States. She is expected to join the Company in early April 2024.
Item 5F. Tabular Disclosure of Contractual Obligations.5.E. Critical Accounting Estimates
The following table sets forth our contractual obligationspreparation of financial statements in conformity with U.S. GAAP requires management to make estimates and commercial commitmentsassumptions that affect the reported amounts of assets and liabilities and disclosure of contingencies at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results may differ from those estimates.
Going Concern
The consolidated financial statements have been prepared on a going concern basis which contemplates the realization of assets and the settlement of liabilities in the normal course of business. The Company has limited working capital, has incurred losses since its inception, and has not yet generated material revenues from the sale of its products or services. These factors create substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern.
The ability of the Company to continue as a going concern is dependent on the Company generating cash from its operations, the sale of its stock and/or obtaining debt financing. During the year ended December 31, 2023, the Company funded operations primarily through the sale of equity securities and loans from related parties. Management intends to cover any operating losses by selling its equity securities and obtaining debt financing. There can be no assurance the Company will be successful in these efforts.
Fair Value of Financial Instruments
Jupiter Gold follows the guidance of Accounting Standards Codification (“ASC”) Topic 820 – Fair Value Measurement and Disclosure. Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of Jupiter Gold. Unobservable inputs are inputs that reflect Jupiter Gold’s assumptions about the factors market participants would use in valuing the asset or liability. The guidance establishes three levels of inputs that may be used to measure fair value:
Level 1. Observable inputs such as quoted prices in active markets;
Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
As of December 31, 2020, due on demand:2023, Jupiter Gold did not have any level 2 or 3 assets or liabilities.
| Payable To | Description | Amount | ||||
| Various third-parties | Professional fees and other general obligations | $ | 14,417 | |||
Jupiter Gold’s financial instruments consist of cash and cash equivalents, accounts payable, and accrued expenses. The carrying amount of these financial instruments approximates fair value due to either length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these consolidated financial statements.
Property and Equipment
Property and equipment are stated at cost. Major improvements and betterments are capitalized. Maintenance and repairs are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful life. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the statements of operations as other gain or loss, net.
The diamond and gold processing plant and other machinery are depreciated over an estimated useful life of ten years; vehicles are depreciated over an estimated life of five years; and computer and other office equipment over an estimated useful life of three years.
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Mineral Properties
Costs of exploration, carrying and retaining unproven mineral lease properties are expensed as incurred. Mineral property acquisition costs, including licenses and lease payments, are capitalized. Impairment losses are recorded on mineral properties used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amount. The Company did not recognize any impairment losses related to mineral properties held during the years ended December 31, 2023, 2022 and 2021.
For intangible assets purchased in a business combination, the estimated fair values of the assets received are used to establish their recorded values. For intangible assets acquired in a non-monetary exchange, the estimated fair values of the assets transferred (or the estimated fair values of the assets received, if more clearly evident) are used to establish their recorded values, unless the values of neither the assets received nor the assets transferred are determinable within reasonable limits, in which case the assets received are measured based on the carrying values of the assets transferred. Valuation techniques consistent with the market approach, income approach and/or cost approach are used to measure fair value. These rights are held in perpetuity provided the Company remains in compliance with various government regulations and industry requirements.
Impairment of Long-Lived Assets
For long-lived assets, such as property and equipment and intangible assets subject to amortization, Jupiter Gold continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future undiscounted cash flows is less than the carrying amount of those assets, Jupiter Gold recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.
Stock-Based Compensation
The Company records stock-based compensation in accordance with ASC Topic 718, Compensation - Stock Compensation. ASC 718 requires companies to measure compensation cost for stock-based employee compensation at fair value at the grant date and recognize the expense over the employee’s requisite service period. Under ASC 718, volatility is based on the historical volatility of our stock or the expected volatility of the stock of similar companies. The expected life assumption is primarily based on historical exercise patterns and employee post-vesting termination behavior. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant.
The Company utilizes the Black-Scholes option-pricing model, which was developed for use in estimating the fair value of options. Option-pricing models require the input of highly complex and subjective variables including the expected life of options granted and the expected volatility of our stock price over a period equal to or greater than the expected life of the options. Because changes in the subjective assumptions can materially affect the estimated value of our employee stock options, it is management’s opinion that the Black-Scholes option-pricing model may not provide an accurate measure of the fair value of our employee stock options. Although the fair value of employee stock options is determined in accordance with ASC Topic 718 using an option-pricing model, that value may not be indicative of the fair value observed in a willing buyer/willing seller market transaction.
On June 20, 2018, the FASB issued ASU 2018-07 which simplifies the accounting for share-based payments granted to non-employees for goods and services. Under the ASU, most of the guidance on such payments to non-employees would be aligned with the requirements for share-based payments granted to employees. Equity classified share-based payments for employees are fixed at the time of grant. Equity-classified non-employee share-based payment awards are measured at the grant date of the award which is the same as share-based payments for employees. The Company adopted the requirements of the new rule as of January 1, 2019, the effective date of the new guidance.
Foreign Currency
Jupiter Gold’s subsidiary, MJL, uses its local currency as its functional currency. Resulting translation gains or losses are recognized as a component of accumulated other comprehensive income. Transaction gains or losses related to balances denominated in a currency other than the functional currency are recognized in the consolidated statements of operations.
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Item 6. Directors, Senior Management and Employees.
Item 6.A. Directors and Senior Management.
Our officers and directors as of April 27, 2022March 12, 2024, were as follows:
| Name | Age | Position | ||
| Marc Fogassa | Chairman of the Board of Directors, Chief Executive Officer, and Chief Financial Officer | |||
| Joel de Paiva Monteiro, Esq. | Director, Vice-President of Administration and Operations, and Secretary | |||
| Areli Nogueira da Silva Júnior | Director, and Vice-President, Mineral Exploration | |||
| Brian W. Bernier | Vice-President, Corporate Development and Investor Relations |
Executive officers are appointed by and serve at the pleasure of our Board of Directors. A biography of each director and officer follows.
Marc Fogassa is our Founder and has been our Chairman and Chief Executive Officer since July 2016. He has lengthy investment experience in executive management for mining projects, as well as in venture capital and capital markets, and has served on boards of directors of multiple private companies. Mr. Fogassa double majored at the Massachusetts Institute of Technology (M.I.T.), graduating with two Bachelor of Science degrees in 1990. He later graduated from the Harvard Medical School with a Doctor of Medicine degree in 1995, and also from the Harvard Business School with a Master in Business Administration degree in 1999. Mr. Fogassa was born in Brazil and is fluent in Portuguese and English. Mr. Fogassa is also the Chairman and Chief Executive Officer of Brazil Minerals, Inc.Atlas Lithium Corporation (“Atlas Lithium”), one of our shareholders, and of Apollo Resources Corporation.
Corporation, an affiliate (“Apollo Resources”).
Joel de Paiva Monteiro, Esq., has been a consultant to us since 2017 and became our Vice-President, Administration and Operations, in 2020. Previously he was a partner of the Brazilian law firm PRA Advogados - Pimenta da Rocha Andrade, with three offices and headquarters in Belo Horizonte, state of Minas Gerais. Mr. Monteiro has worked with all aspects of Brazilian business law, and has extensive experience in a wide range of areas from strategic business planning to litigation. His prior clients included large corporations in a variety of economic sectors in diverse states in Brazil. Mr. Monteiro has a law degree from the Milton Campos Faculty in Belo Horizonte, Brazil. Subsequently he achieved a post-graduate degree in Business and Civil Law from the Pontifical Catholic University of Minas Gerais. Mr. Monteiro is also an officer at Brazil Minerals, Inc.,Atlas Lithium, one of our shareholders, and an officer and a director of Apollo Resources Corporation.Resources.
Areli Nogueira da Silva Júnior has been a consultant to us since 2018 and became our Vice-President, Mineral Exploration, in 2021. He is the Founder and was the Chief Technical Officer of MineXplore, a consultancy focused on mineral rights in Brazil. Mr. da Silva Júnior has been a consultant geologist with GeoEspinhaço, a firm that undertakes geological studies in a variety of minerals across Brazil. Mr. da Silva Júnior has also been a college faculty member teaching geology. Previously, he worked at the Brazilian mining department)department and before that as a geologist at Usiminas Mineração. Mr. da Silva Júnior has a Master of Geology degree from the Federal University of Rio de Janeiro, and an undergraduate degree in Geological Engineering from the School of Mines of the Federal University of Ouro Preto, a premier and the oldest mining-focused college in Brazil. Mr. da Silva is also a director of Jupiter Gold Corporation.has been officer and consultant to Atlas Lithium and Apollo Resources.
Brian W. Bernier has been a consultant to us since 2019 and became our Vice-President, Corporate Development and Investor Relations in 2020. Mr. Bernier has worked in the business development and investor relations sector for over three decades and was most recently at a regional investment bank. He graduated with a degree in Management from Boston University. Mr. Bernier has been an officer and consultant to Atlas Lithium and Apollo Resources.
There are no family relationships between or among any of the persons listed above.
Item 6.B. Compensation.
We adopted an incentive plan (the “2016 Incentive Plan”) to compensate employees, directors, and consultants, and allow it to acquire and retain human talent. The 2016 Incentive Plan is hereby incorporated by reference to Exhibit 10.7 in our Registration Statement on Form F-1 (Registration No. 333-214872) filed with the Securities and Exchange Commission on December 1, 2016 (the “F-1”).
From our founding on July 27, 2016For the year ended December 31, 2023, officers and until February 14, 2020, Marc Fogassa was not paid anydirectors received $410,248 as cash compensation, for his service as chief executive officer and director. In 2020, our Board votedadded to provide Mr. Fogassa withoptions to purchase an annual cash compensationaggregate of $60,000 pro-rated for420,000 shares of its common stock. Such awards corresponded to the period between February 15, 2020 and September 30, 2020. In lieu of any other cash salaryJanuary 1, 2023, to December 31, 2023. The options issued in 2020,2023 were valued at $115,038 in total. The options were valued using the Board voted to compensate Marc FogassaBlack-Scholes option pricing model with the following average assumptions: our stock price on October 1, 2020, on November 1, 2020, and on December 1, 2020 non-qualified stock options to purchase 5,000 shares of our common stock at an exercise price equal to $0.01 and a ten-year exercise period commencing on the date of grant of such option. These options shall be exercisable for cash or on$0.65 to $2.10, a cashless exercise basis. The number of shares subject to the option and current strike price shall be subjectof $0.01 to appropriate adjustment in the case$1.00, illiquidity discount of stock splits, stock dividends75%, expected dividend yield of 0%, annualized volatility of 268% to 364%, risk-free interest rate of 3.42% to 4.73%, and recapitalizations. The annual cash compensationan expected term of Marc Fogassa for his service as chief executive officer and director for the period commencing January 1, 2021 is $60,000 per annum.five to ten years.
In addition,For the Board votedyear ended December 31, 2022, officers and directors received $275,000 as cash compensation, added to compensate Marc Fogassa, on the first day of every month: i) from March 1, 2020 to September 30, 2020, with non-qualified stock options to purchase 25,000an aggregate of our420,000 shares of its common stock with an exercise price equalstock. Such awards corresponded to the period between January 1, 2022, to December 31, 2022. The options issued in 2022 were valued at $104,140 in total. The options were valued using the Black-Scholes option pricing model with the following average assumptions: our stock price of our common stock during the preceding twenty days as such prices are quoted on otcmarkets.com and five years of term to expiration, and b) from October 1, 2020 and thereafter with non-qualified stock options to purchase 15,000 shares of common stock of the Company at an exercise price equal to $0.01 and a ten-year exercise period commencing on the date of grant of such option. These options shall be exercisable for cash or on$0.80 to $1.20, a cashless basis. The number of shares subject to the option and the exercisestrike price of the option shall be subject$0.01 to appropriate adjustment in the case$1.00, illiquidity discount of stock splits, stock dividends,75%, expected dividend yield of 0%, annualized volatility of 295% to 372%, risk-free interest rate of 1.51% to 4.05%, and recapitalizations.
Asan expected term of December 31, 2021, the other two directors receive together monthly cash compensation amountingfive to an aggregate of 2,500 Brazilian real (approximately $481 at the then current exchange rate). Board members will be reimbursed for reasonable travel expenses associated with attending any meetings of the Board of Directors or committees of the Board of Directors.ten years.
Item 6.C. Board Practices.
Our business is managed by the directors who exercise all the powers of the Company, subject to the Business Corporations Act of the Republic of the Marshall Islands, our Articles of Incorporation and our Bylaws, and any special resolution of the Board of Directors. Our Bylaws specify the procedures for the election and removal of directors. Our Bylaws are hereby incorporated by reference to Exhibit 1.31.1.
Board of Director is composed of 3 individuals, as described in item 6.A; two of our F-1.directors are not U.S. residents.
Item 6.D. Employees.
As of December 31, 2021,2023, we had fivesix full time equivalent employees. We also had various consultants with specific expertise being utilized.
Item 6.E. Share Ownership.
The following table sets forth certain information as of April 27, 2022March 12, 2024, regarding the beneficial ownership of our Common Stock by: each of our executive officers, each member of our board of directors and all officers and directors as a group. The number and percentage of our Common Stock beneficially owned by each person is determined in accordance with Rule 13d-3 of the Securities Exchange Act of 1934 (the “Exchange Act”). The information contained in the table below is not necessarily indicative of beneficial ownership for any other purpose.
Beneficial ownership is determined in accordance with the rules of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares issuable upon the exercise of stock options or warrants or the conversion of other securities held by that person that are exercisable or convertible within 60 days are deemed to be issued and outstanding. These shares, however, are not deemed outstanding for the purposes of computing percentage ownership of each other shareholder.
| Name and Address of Officers and Directors (1) | Number of Shares | Percentage of Shares Beneficially Owned | Common stock | Series A Preferred stock | Combined voting power | |||||||||||||||||||||||||||
| Number | % | Number | % | Number | % | |||||||||||||||||||||||||||
| Marc Fogassa | 3,206,466 | (2)(3) | 38.11 | % | 2,965,702 | (2) | 27.2 | % | 1 | (3) | 100.0 | % | 2,965,703 | 64.4 | % | |||||||||||||||||
| Joel de Paiva Monteiro, Esq. | 22,441 | 0.37 | % | 22,441 | 0.2 | % | - | 0.0 | % | 22,441 | 0.1 | % | ||||||||||||||||||||
| Areli Nogueira da Silva Júnior | 7,223 | 0.12 | % | 7,223 | 0.1 | % | - | 0.0 | % | 7,223 | 0.0 | % | ||||||||||||||||||||
| Brian W. Bernier | 63,884 | 1.04 | % | 95,127 | 0.9 | % | - | 0.0 | % | 95,127 | 0.4 | % | ||||||||||||||||||||
| All Officers and Directors as a group (4 persons) | 3,300,014 | (2)(3) | 39.22 | % | 3,090,493 | (2) | 28.4 | % | 1 | (3) | 100.0 | % | 3,090,494 | 64.9 | % | |||||||||||||||||
| (1) | The address for each officer and director is: c/o Jupiter Gold Corporation, Rua |
| (2) | Includes |
| (3) | Mr. Fogassa owns the only outstanding share of our Series A Convertible Preferred Stock (“Preferred A Stock”). The Certificate of Designations, Preferences and Rights of our Preferred A Stock provides that for so long as Preferred A Stock is issued and outstanding, the holders of Preferred A Stock shall vote together as a single class with the holders of our common stock, with the holders of Preferred A Stock being entitled to 51% of the total votes on all matters regardless of the actual number of shares of Preferred A Stock then outstanding, and the holders of our common stock being entitled to their proportional share of the remaining 49% of the total votes based on their respective voting power. Mr. Fogassa is thus deemed to have voting control on all matters requiring a stockholder vote. |
Item 7. Major Shareholders and Related Party Transactions.
| A. | Major Shareholders |
The following table sets forth certain information as of April 27, 2022March 12, 2024, regarding the beneficial ownership of our Common Stock by our major shareholders who beneficially own more than 5% of our voting securities. The number and percentage of our Common Stock beneficially owned by each person is determined in accordance with Rule 13d-3 of the Securities Exchange Act of 1934 (the “Exchange Act”). The information contained in the table below is not necessarily indicative of beneficial ownership for any other purpose.
Beneficial ownership is determined in accordance with the rules of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares issuable upon the exercise of stock options or warrants or the conversion of other securities held by that person that are exercisable or convertible within 60 days are deemed to be issued and outstanding. These shares, however, are not deemed outstanding for the purposes of computing percentage ownership of each other shareholder.
| Common stock | Series A Preferred stock | Combined voting power | ||||||||||||||||||||||
| Name and Address of Shareholder (1) | Number | % | Number | % | Number | % | ||||||||||||||||||
| Marc Fogassa | 2,965,702 | (2) | 27.2 | % | 1 | (3) | 100.0 | % | 2,965,703 | 64.4 | % | |||||||||||||
| Atlas Lithium Corporation | 2,652,584 | 24.4 | % | - | 0.0 | % | 2,652,584 | 11.9 | % | |||||||||||||||
| Name and Address of Shareholder (1) | Number of Shares | Percentage of Shares Beneficially Owned | ||||||
| Marc Fogassa | 3,206,466 | (2)(3) | 38.11 | % | ||||
| Brazil Minerals, Inc. | 1,804,925 | 24.56 | % | |||||
| HSP Resources LLC | 900,000 | 14.64 | % | |||||
| Igor Tkachenko | 350,000 | 5.69 | % | |||||
| (1) | The mailing address for each listed shareholder is c/o Jupiter Gold Corporation, Rua |
| (2) | Includes |
| (3) | Mr. Fogassa owns the only outstanding share of our Series A Convertible Preferred Stock (“Preferred A Stock”). The Certificate of Designations, Preferences and Rights of our Preferred A Stock provides that for so long as Preferred A Stock is issued and outstanding, the holders of Preferred A Stock shall vote together as a single class with the holders of our common stock, with the holders of Preferred A Stock being entitled to 51% of the total votes on all matters regardless of the actual number of shares of Preferred A Stock then outstanding, and the holders of common stock being entitled to their proportional share of the remaining 49% of the total votes based on their respective voting power. Mr. Fogassa is thus deemed to have voting control on all matters requiring a stockholder vote. |
To the best of our knowledge, as of April 27, 2022, over 99% of the outstanding shares of our common stock were beneficially owned or controlled by U.S. persons, and there were 70 record holders of our common stock who were U.S. persons.
We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.
Item 7.B. Related Party Transactions.
As of December 31, 2021, Jupiter Gold was owed $6,3602023, we had $674,461 of amounts payable to Mineração Apollo Ltd, an entity wholly owned by Brazil Minerals, Inc. and its subsidiaries for expenses paid orApollo Resources, an affiliate. The loans madebear no interest.
See discussion about the Registration Rights Agreement under Item 10.C, Material Contracts on behalf of the group, and for consideration paid in connection with the acquisition of fixed assets from the group, offset nominally by amounts accrued under the new service agreement. Details are available in the footnotes to the attached financial statements.page 46.
Item 7.C. Interests of Experts and Counsel.
Not applicable.
Item 8. Financial Information.
Item 8.A. Consolidated Statements and Other Financial Information.
Our consolidated financial statements are stated in U.S. Dollarsdollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”).
The financial statements as required under Item 18 of Form 20-F are attached hereto and found immediately following the text of this Annual Report. The audit report of BF Borgers CPA P.C., our independent auditors, is included herein immediately preceding the financial statements.
Item 8.A.7. Legal/Arbitration Proceedings.
None that are material.
Item 8.A.8. Policy on Dividend Distributions.
No dividends are intended to be declared or paid by us in the foreseeable future.
Item 8.B. Significant Changes.
None
Item 9. The Offer and Listing.
TheOur common stock symbol is notJUPGF and we are currently listed or traded on any stock exchange or other market.in OTCQB, a platform of OTC Markets.
Item 10. Additional Information.
Item 10.A.
As of December 31, 2021,2023, we had 6,148,2129,674,497 shares of our Common Stock, par value $0.001 per share, and 1 share of our Series A Convertible Preferred A Stock, par value $0.001 per share, issued and outstanding.
As of December 31, 2021,2023, we had 40 million common shares and 10 million preferred shares authorized.
Item 10.B. Memorandum and Articles of Association.
Our Articles of Incorporation and Certificate of Incorporation are hereby incorporated by reference to Exhibits 1.1 and 1.2, respectively, in our F-1.
Item 10.C. Material Contracts.
The following descriptions of the material provisions of the referenced agreements do not purport to be complete and are subject to, and qualified in their entirety by reference to the agreements which have been filed as exhibits to this report.
Service Agreement
Starting on October 31, 2017, we pay a fixed monthly fee of $1,250 to Brazil Minerals for infrastructure support.
Registration Rights Agreement
The Registration Rights Agreement provides that whenever we propose to register any of its securities under the Securities Act of 1933, as amended (the “Securities Act”) and the registration form to be used may be used for the registration and contemplated disposition of Registrable Securities (a “Piggyback Registration”), we will give prompt written notice to Brazil MineralsAtlas Lithium of its intention to effect such a registration so that such notice is received by Brazil MineralsAtlas Lithium at least twenty (20) days before the anticipated filing date. We will include in such registration all securities covered by the Registration Agreement (“Registrable Securities”) with respect to which we hashave received a written request for inclusion therein subject to any limitations on the number of shares that may be registered for resale that may be imposed by law, including positions of the staff of the SEC. In connection with each Piggyback Registration, all of the expenses incurred in compliance with the aforesaid, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of our counsel and our blue sky fees and expenses will be paid by us and Brazil MineralsAtlas Lithium shall pay all of the underwriting discounts and selling commissions applicable to the sale of Registrable Securities and all fees and disbursements of counsel for Brazil MineralsAtlas Lithium attributable to the sale of its securities pursuant to the Piggyback Registration.
The Registration Rights Agreement is hereby incorporated by reference to Exhibit 10.2 in our F-1.
Item 10.D. Exchange Controls
Foreign direct investment in Brazil is governed by Law number 14.286 of December 29, 2021 (the “New Foreign Exchange Law”), replacing Brazilian Laws n.number. 4.131 (1962) and number 11.371 (2006), incorporating crucial amendments. Under the New Foreign Exchange Law, foreign direct investors must adhere to a set of September 03, 1962,reporting and n. 11.371,regulatory obligations.
Foreign investments, whether in the form of November 28, 2006, as amended, regulate foreignportfolio investments or direct investments in the capital market by individuals or entities, are subject to rigorous registration requirements. Portfolio investments, now regulated by Brazil requiring thatMonetary Council (“CMN”) Resolution number 4.373 since March 30, 2015, have introduced changes aimed at facilitating the entry of foreign investmentsinvestors into the Brazilian financial and capital markets.
Non-resident investors are obligated to report their status to the Brazilian Central Bank, appoint a tax representative, and engage a representative in Brazil be registered with Brazil’sfor service of process in suits under Brazilian Corporate Law. Additionally, investments exceeding US$ 100,000.00 require prompt reporting to the Brazilian Central Bank (the equivalentthrough the Foreign Capital Information Reporting System – Foreign Direct Investment within 30 days of funds flowing into Brazil.
The reporting obligations extend to various aspects, including the U.S. Federal Reserve) to enable foreign remittance of profits and/abroad, the repatriation of capital, and the formalization of reinvestments. Investments are reported in the foreign currency of origin or in Brazilian currency if derived from a non-resident account in Brazil.
Other than such reporting obligations, foreign investment is not subject to government approvals or authorizations and there are no requirements regarding minimum investment or local participation in capital (except in very limited cases such as in regard to financial institutions, insurance companies and other entities subject to specific regulations). Foreign participation, however, is limited (that is, subject to approvals) or forbidden in several sectors.
Foreign investments in currency must be officially channeled through financial institutions duly authorized to deal in foreign exchange. Foreign currency must be converted into Brazilian currency and vice versa through the execution of an exchange contract. Foreign investments may also be made through the contribution of assets and equipment intended for the local production of goods and services.
The role of attorneys-in-fact from the previous legislation has evolved into the appointment of a representative in Brazil. This representative, authorized by the Brazilian Central Bank, assumes responsibility for compliance with registration and reporting requirements.
Remittances abroad, covering the distribution of profits or interest on equity and repatriation of foreign capital, invested in Brazil.
The Brazilian legislation allows the investment in the capital market by individuals or legal entities, by means of the acquisition of shares and other securities. These investments, designated “portfolio investments”, when performed by non-residents, are subject to registration with the Brazilian Central Bank and Brazilian Securities Commissions (“CVM”), and according to the Resolution n. 4.373, of September 29, 2014 of the Brazil Monetary Council (“CMN”) can be made through Depositary Receipts, with the investor represented by institution authorized to work by Brazil’s Central Bank.
The non-resident investors must indicate one or more attorneys-in-fact in Brazil, which should be institution authorized to work by Central Bank and will be responsible mainly for the provision of information and for the registrations with the Central Bank and the CVM. The registration of the portfolio investments with the Central Bank’s electronic system constitutes an obligatory requirement for remittances abroad as distribution of profits and/or interest on equity, and repatriation of the capital invested. Such remittances may be made by means offollow a meticulous process involving foreign exchange contractcontracts. These contracts are established between the Brazilian company remitting the funds and aan authorized Brazilian commercial bank, duly authorized to operate in the foreign exchange market (Depositary Receipts). Such foreign exchange contract reflectsreflecting the exchange of Brazilian currency into foreign currency at the rate agreed with the Brazilian commercial bank.an agreed-upon rate.
Under current Brazilian legislation,While historical instances, such as the federal government may impose temporary restrictionsfreeze on remittances of foreign capital abroad in the event of a serious imbalance or an anticipated serious imbalance of Brazil’s balance of payments. For approximately six months in 1989 and early 1990, the federal government froze all dividend and capital repatriations held byin 1989 and 1990, demonstrated the Central Bank that were owedgovernment’s use of temporary restrictions to foreign equity investors, in order to conserve Brazil’sprotect foreign currency reserves. These amounts were subsequently released in accordance with federal government directives. There can be no assurance thatreserves, the federal government will not impose similar restrictions on foreign repatriations in the future.
New Foreign Exchange Law provides a framework for potential future restrictions. The likelihood of the imposition of such restrictions is influenced by the Brazilian government may be affected by, among other factors the extent ofsuch as Brazil’s foreign currency reserves, the availability of sufficient foreign currency, on the date a payment is due, the size of Brazil’s debt service burden, relative to the economy as a whole, Brazil’s policy towards the International Monetary Fund, and broader political constraints to which Brazil may be subject.constraints.
Item 10.E. Taxation
Investors should consult their own tax advisor regarding the specific tax consequences of owning and disposing of our common stock, including eligibility for the benefits of any treaty for the avoidance of double taxation, the applicability or effect of any special rules to which they may be subject, and the effect of any state, local, or other tax laws.
Marshall Islands Tax Considerations
The following is applicable only to persons who are not citizens of and do not reside in, maintain offices in or engage in business, transactions or operations in the Marshall Islands.
Because we do not, and we do not expect that we or any of our future subsidiaries will, conduct business, transactions or operationsNon-resident shareholders in the Marshall Islands and because we anticipate that all documentation related to any offerings of our securities will be executed outside of the Marshall Islands, under current Marshall Islands law our shareholders willare not be subject to Marshall Islands taxation or withholding tax on our distributions. In addition, our shareholders will not be subject to Marshall Islands stamp, capital gains or other taxes on the purchase, ownership or disposition of our common shares, and our shareholders will not be required by the Marshall Islands to file a tax return related to our common shares.
Item 10.F. Dividends and Paying Agents.
Not required.
Item 10.G. Statement by Experts.
Not required
Item 10.H. Documents on Display.
We are subject to the informational requirements of the Exchange Act applicable to foreign private issuers and, in accordance with these requirements, we file reports with the SEC. As a foreign private issuer, we are exempt from the rules under the Exchange Act relating to the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the reporting and short swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we are not required under the Exchange Act to file periodic reports and financial statements with the Securities and Exchange Commission as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act.
You may read and copy any documents that we file with the SEC, including this Report and the related exhibits, without charge at the Securities and Exchange Commission’s public reference room at 100 F Street, N.W., Washington, D.C. 20549. You may also obtain copies of the documents at prescribed rates by writing to the public reference room of the Commission at 100 F Street, N.W., Washington, D.C. 20549. Please call the Commission at 1-800-SEC-0330 for further information on the public reference room. In addition, the documents incorporated by reference into this Report are publicly available through the web site maintained by the Securities and Exchange Commission at www.sec.gov.
Item 10.I. Subsidiary Information.
Not applicable.
Item 10.J. Annual Report to Securities Holders
Not applicable.
Item 11. Quantitative and Qualitative Disclosure about Market Risk.
Foreign Exchange Risk
We are subject to risk brought about by the possibility of a significant change in the rate of exchange of the U.S. Dollardollar for the Brazilian Real.real.
Interest Rate Risk
None; as of the date of this Annual Report, we had no fixed or floating rate indebtedness.
Item 12. Description of Securities Other than Equity Securities.
Not applicable.
PART II
Item 13. Defaults, Dividend Arrearages and Delinquencies
None material
Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds.
Not applicable.
Item 15. Controls and Procedures. Disclosure Controls And Procedures
Our management has evaluated the design, operation, and effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act as of December 31, 2021.2022. On the basis of that evaluation, management concluded that our disclosure controls and procedures are designed, and are effective, to provide reasonable assurance that the information required to be disclosed in reports filed or submitted pursuant to the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to management to allow timely decisions regarding required disclosure.
Management’s Report On Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting.
Our internal control over financial reporting is a process designed by, or under the supervision of, our principal executive and financial officer and effected by our Board of Directors, 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. Our internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) 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 our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (3) 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 consolidated financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, 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.
Our management performed an assessment of the effectiveness of our internal control over financial reporting at December 31, 2020,2023, utilizing the criteria described in the “Internal Control — Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. The objective of this assessment was to determine whether our internal control over financial reporting was effective aton December 31, 2021.2023.
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis. In our assessment of the effectiveness of internal control over financial reporting aton December 31, 2021,2023, we did not identify any material weaknesses.
Based on ourthe management’s assessment, and because of the lack of any material weakness as described above, we have concluded that our internal control over financial reporting was effective aton December 31, 2021.
Management’s Remediation Plan In Internal Controls
We will continue to monitor the effectiveness of our internal controls over financial reporting and to make any changes that our management deems appropriate2023.
Changes In Internal Control Over Financial Reporting
Management does not believe that thereThere have been any otherno changes in our internal control over financial reporting during the year ended December 31, 2021,2023, which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 16. Reserved
Item 16A. Audit Committee Financial Expert
Our Board of Directors currently acts as our audit committee. We do not currently have an independent member of our Board of Directors who qualifies as an “audit committee financial expert” as such term is usually defined.
Item 16B. Code of Ethics.
Our Board of Directors plans to adopt in 20222024 a code of ethics to apply to all of our directors, officers, and employees.
Item 16C. Principal Accountant Fees and Services.
BF Borgers CPA PC has served as our independent auditors for our financial statements as of December 31, 20212023 and for the yearyears ended December 31, 2022 and 2021. This firm billed the following fees to us for professional services related to such date and periods:
| 2023 | 2022 | 2021 | ||||||||||||||
| Audit Fees | $ | 8,100 | $ | 22,000 | 8,100 | 8,100 | ||||||||||
| Audit-Related Fees | — | — | — | — | ||||||||||||
| Tax Fees | — | — | — | — | ||||||||||||
| All Other Fees | — | — | — | — | ||||||||||||
| Total | $ | 8,100 | $ | 22,000 | 8,100 | 8,100 | ||||||||||
BF Borgers CPA PC also served as our independent auditors for our financial statements as of December 31, 2020 and for the year ended December 31, 2020. This firm billed $8,100 in audit fees for professional services related to such date and periods.
“Audit Fees” are the aggregate fees billed for the audit of our annual financial statements. This category also includes services that generally the independent accountant provides, such as consents and assistance with and review of documents filed with the SEC.
“Audit-Related Fees” are the aggregate fees billed for assurance and related services that are reasonably related to the performance of the audit and are not reported under Audit Fees. These fees include mainly accounting consultations regarding the accounting treatment of matters that occur in the regular course of business, implications of new accounting pronouncements and other accounting issues that occur from time to time.
“Tax Fees” are the aggregate fees billed for professional services rendered for tax compliance, tax advice, other than in connection with the audit. Tax compliance involves preparation of original and amended tax returns, tax planning and tax advice.
“All Other Fees” are the aggregate fees billed for products and services, other than the services reported on the preceding lines.
All of the audit and non-audit services to us were pre-approved by our Board of Directors.
Item 16D. Exemptions from the Listing Standards for Audit Committees.
Not applicable.
Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers.
None.
Item 16F. Change in Registrant’s Certifying Accountant.
Not applicable.
Item 16G. Corporate Governance.
Not applicable.
Item 16H. Mine Safety Disclosure.
Not applicable.
Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
Item 16K. Cybersecurity.
As an exploration stage company, we have limited operations and our business activity to date has been identifying, acquiring, and exploring mineral properties, and have not yet adopted formal cybersecurity risk management programs or formal processes for assessing cybersecurity risks. We understand the importance of managing material risks from cybersecurity threats and are committed, as part of our continuing growth, to implementing and maintaining an adequate information security program to manage such risks and safeguard our systems and data.
We currently manage our cybersecurity risk through a variety of practices that are applicable to all users of our information technology and information assets, including our employees and contractors. We use a combination of technology, policies, training, and monitoring to promote security awareness and prevent security incidents.
Due to the early stage of development of our projects, we believe have limited exposure to cyber threats other than emails and project data storage. Financial transactions are enabled through well-stablished financial institutions and accounting and employee information storage are outsourced to an external accounting firm.
We have not, as of the date of this report, experienced a cybersecurity threat or incident in the last three years, that materially affected or is reasonably likely to affect our business, results of operations, or financial condition. However, there can be no guarantee that we will not experience such an incident in the future. Refer to our risk factor “The Company is exposed to information systems and cybersecurity risks” on page 4.
Our board of directors oversees cybersecurity risk as part of its role of overseeing enterprise-wide risk.
PART III
Item 17. Financial Statements.
We have responded to Item 18 in lieu of this item.
Item 18. Financial Statements.
The financial statements required by this item are found at the end of this annual report, beginning on page F-1.
Item 19. Exhibits.
*Filed herewith.
** Previously Filed.
SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
| JUPITER GOLD CORPORATION | ||
| (Registrant) | ||
| /s/ Marc Fogassa | ||
| By: | Marc Fogassa | |
| Title: | Chief Executive Officer | |
JUPITER GOLD CORPORATION
FINANCIAL STATEMENTS
| F-1 |
Report of Independent Registered Public Accounting Firm
To the shareholders and the board of directors of Jupiter Gold Corporation
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Jupiter Gold Corporation as of December 31, 20212023 and 2020,2022, the related statements of operations, stockholders’ equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 20212023 and 2020,2022, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.
Substantial Doubt about the Company’s Ability to Continue as a Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations and has a significant accumulated deficit. In addition, the Company continues to experience negative cash flows from operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
/S/ BF Borgers CPA PC(PCAOB ID 5041)
We have served as the Company’s auditor since 2016
Lakewood, CO
April 29, 2022
PCAOB ID: 5041March 12, 2024
| F-2 |
JUPITER GOLD CORPORATION
CONSOLIDATED BALANCE SHEETS
| December 31, | December 31, | December 31, | December 31, | December 31, | ||||||||||||||||
| 2021 | 2020 | 2023 | 2022 | 2021 | ||||||||||||||||
| ASSETS | ||||||||||||||||||||
| Current assets: | ||||||||||||||||||||
| Cash and cash equivalents | $ | 849 | $ | 67,552 | $ | 92,813 | $ | 25,438 | $ | 849 | ||||||||||
| Deposits and advances | - | - | ||||||||||||||||||
| Related party receivables | 85,203 | 190,581 | ||||||||||||||||||
| Related party transactions | - | - | $ | 85,203 | ||||||||||||||||
| Other current assets | $ | 3,621 | - | - | ||||||||||||||||
| Total current assets | 86,052 | 258,133 | $ | 96,434 | $ | 25,438 | $ | 86,052 | ||||||||||||
| Property and equipment, net | 31,404 | 51,985 | 320,700 | $ | 41,929 | $ | 31,404 | |||||||||||||
| Intangible assets, net | 12,796 | 12,723 | - | $ | 11,499 | $ | 12,796 | |||||||||||||
| Total assets | $ | 130,251 | $ | 322,841 | $ | 417,134 | $ | 78,866 | $ | 130,251 | ||||||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||||||||||||||
| Current liabilities: | ||||||||||||||||||||
| Accounts payable and accrued expenses | $ | 14,417 | $ | 10,732 | $ | 59,009 | $ | 20,583 | $ | 14,417 | ||||||||||
| Related party transactions | $ | 674,461 | $ | - | $ | - | ||||||||||||||
| Other current liabilities | $ | 648 | $ | - | $ | - | ||||||||||||||
| Total current liabilities | 14,417 | 10,732 | $ | 734,118 | $ | 20,583 | $ | 14,417 | ||||||||||||
| Non Current liabilities: | ||||||||||||||||||||
| Other non-current liabilities | $ | 4,729 | - | - | ||||||||||||||||
| Total current liabilities | $ | 4,729 | - | - | ||||||||||||||||
| Total liabilities | 14,417 | 10,732 | $ | 738,847 | $ | 20,583 | $ | 14,417 | ||||||||||||
| Stockholders’ equity: | ||||||||||||||||||||
| Series A preferred stock, $ par value. shares authorized; share issued and outstanding | - | - | ||||||||||||||||||
| Common stock, $ par value. shares authorized; and shares issued and outstanding as of December 31, 2020 and 2019, respectively | 6,148 | 5,780 | ||||||||||||||||||
| Series A preferred stock, $ par value, shares authorized; share issued and outstanding | - | - | - | |||||||||||||||||
| Common stock, $ par value, shares authorized; , and shares issued and outstanding as of December 31, 2023, 2022 and 2021, respectively | 9,674 | 8,118 | 6,148 | |||||||||||||||||
| Additional paid-in capital | 2,604,701 | 2,327,244 | 3,935,287 | 3,209,505 | 2,604,701 | |||||||||||||||
| Accumulated other comprehensive loss | (23,927 | ) | (98,265 | ) | (66,366 | ) | (30,877 | ) | (23,927 | ) | ||||||||||
| Stock purchase warrants | - | - | ||||||||||||||||||
| Accumulated deficit | (2,471,088 | ) | (1,922,650 | ) | (4,200,308 | ) | (3,128,463 | ) | (2,471,088 | ) | ||||||||||
| Total stockholders’ equity | 115,834 | 312,109 | (321,713 | ) | 58,283 | 115,834 | ||||||||||||||
| Total liabilities and stockholders’ equity | 130,251 | 322,841 | 417,134 | 78,866 | 130,251 | |||||||||||||||
The accompanying notes are an integral part of the consolidated financial statements.
| F-3 |
JUPITER GOLD CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
| Year Ended December 31, | Year Ended December 31, | Year Ended December 31, | ||||||||||
| 2023 | 2022 | 2021 | ||||||||||
| Revenue | $ | - | $ | - | $ | - | ||||||
| Cost of revenue | $ | - | $ | - | $ | - | ||||||
| Gross profit | $ | - | $ | - | $ | - | ||||||
| Operating expenses: | ||||||||||||
| General and administrative | $ | (340,065 | ) | $ | (212,578 | ) | $ | (291,435 | ) | |||
| Compensation and related costs | $ | (602,670 | ) | $ | (340,657 | ) | $ | (106,701 | ) | |||
| Stock based compensation | $ | (115,038 | ) | $ | (104,140 | ) | $ | (148,853 | ) | |||
| Total operating expenses | $ | (1,057,773 | ) | $ | (657,375 | ) | $ | (546,989 | ) | |||
| Loss from operations | $ | (1,057,773 | ) | $ | (657,375 | ) | $ | (546,989 | ) | |||
| Other expense (income): | ||||||||||||
| Other income (expense) | $ | (14,072 | ) | $ | - | $ | (1,449 | ) | ||||
| Other income (expense) | $ | (14,072 | ) | $ | - | $ | (1,449 | ) | ||||
| Loss before provision for income taxes | $ | (1,071,845 | ) | $ | (657,375 | ) | $ | (548,438 | ) | |||
| Provision for income taxes | $ | - | $ | - | $ | - | ||||||
| Net loss | $ | (1,071,845 | ) | $ | (657,375 | ) | $ | (548,438 | ) | |||
| Basic and diluted loss per share | ||||||||||||
| Net loss per share | $ | ) | $ | ) | $ | ) | ||||||
| Weighted-average number of common shares outstanding: | ||||||||||||
| Basic and diluted | ||||||||||||
| Comprehensive loss: | ||||||||||||
| Net loss | $ | (1,071,845 | ) | $ | (657,375 | ) | $ | (548,438 | ) | |||
| Foreign curreny translation adjustment | $ | (35,489 | ) | $ | (6,950 | ) | $ | 74,338 | ||||
| Comprehensive loss | $ | (1,107,334 | ) | $ | (664,325 | ) | $ | (474,100 | ) | |||
The accompanying notes are an integral part of the consolidated financial statements.
JUPITER GOLD CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSSCHANGES IN STOCKHOLDERS’ EQUITY
| Year Ended December 31, | Year Ended December 31, | |||||||
| 2021 | 2020 | |||||||
| Revenue | $ | - | $ | - | ||||
| Cost of revenue | - | �� | - | |||||
| Gross profit | - | - | ||||||
| Operating expenses: | ||||||||
| Professional fees | 47,970 | 26,659 | ||||||
| General and administrative | 243,466 | 265,935 | ||||||
| Compensation and related costs | 106,701 | 44,711 | ||||||
| Stock based compensation | 148,853 | 74,357 | ||||||
| Total operating expenses | 546,989 | 411,662 | ||||||
| Loss from operations | (546,989 | ) | (411,662 | ) | ||||
| Other expense (income): | ||||||||
| Other expense (income) | (1,449 | ) | (1,372 | ) | ||||
| Total other expense (income) | (1,449 | ) | (1,372 | ) | ||||
| Loss before provision for income taxes | (548,438 | ) | (410,290 | ) | ||||
| Provision for income taxes | - | - | ||||||
| Net loss | $ | (548,438 | ) | $ | (410,290 | ) | ||
| Basic and diluted loss per share | ||||||||
| Net loss per share | $ | (0.09 | ) | $ | (0.08 | ) | ||
| Weighted-average number of common shares outstanding: | ||||||||
| Basic and diluted | 6,148,212 | 5,411,039 | ||||||
| Comprehensive loss: | ||||||||
| Net loss | $ | (548,438 | ) | $ | (410,290 | ) | ||
| Foreign curreny translation adjustment | 74,338 | (114,663 | ) | |||||
| Comprehensive loss | $ | (474,100 | ) | $ | (524,953 | ) | ||
| Shares | Value | Shares | Value | Capital | Income (Loss) | Deficit | Equity | |||||||||||||||||||||||||
| Accumulated | ||||||||||||||||||||||||||||||||
| Series A Preferred Stock | Common Stock | Additional Paid-in | Other Comprehensive | Accumulated | Total Stockholders’ | |||||||||||||||||||||||||||
| Shares | Value | Shares | Value | Capital | Income (Loss) | Deficit | Equity | |||||||||||||||||||||||||
| Balance, December 31, 2020 | 1 | $ | - | 5,780,165 | $ | 5,780 | $ | 2,327,244 | $ | (98,265 | ) | $ | (1,922,650 | ) | $ | 312,109 | ||||||||||||||||
| Issuance of common stock in connection with sales made under private offerings | - | - | 293,889 | $ | 294 | $ | 205,496 | $ | - | $ | - | $ | 205,790 | |||||||||||||||||||
| Stock based compensation | - | - | 74,158 | $ | 74 | $ | 71,961 | $ | - | $ | - | $ | 72,035 | |||||||||||||||||||
| Change in foreign currency translation | - | - | - | $ | - | $ | - | $ | 74,338 | $ | - | $ | 74,338 | |||||||||||||||||||
| Net income (loss) | - | - | - | $ | - | $ | - | $ | - | $ | (548,438 | ) | $ | (548,438 | ) | |||||||||||||||||
| Balance, December 31, 2021 | 1 | $ | - | 6,148,212 | $ | 6,148 | $ | 2,604,701 | $ | (23,927 | ) | $ | (2,471,088 | ) | $ | 115,834 | ||||||||||||||||
| Issuance of common stock in connection with sales made under private offerings | - | - | 1,853,626 | $ | 1,853 | $ | 488,022 | $ | - | $ | - | $ | 489,875 | |||||||||||||||||||
| Stock based compensation | - | - | 116,899 | $ | 117 | $ | 116,782 | $ | - | $ | - | $ | 116,899 | |||||||||||||||||||
| Change in foreign currency translation | - | - | - | $ | - | $ | - | $ | (6,950 | ) | $ | - | $ | (6,950 | ) | |||||||||||||||||
| Net income (loss) | - | - | - | $ | - | $ | - | $ | - | $ | (657,375 | ) | $ | (657,375 | ) | |||||||||||||||||
| Balance, December 31, 2022 | 1 | $ | - | 8,118,737 | $ | 8,118 | $ | 3,209,505 | $ | (30,877 | ) | $ | (3,128,463 | ) | $ | 58,283 | ||||||||||||||||
| Issuance of common stock in connection with sales made under private offerings | - | - | 827,180 | $ | 827 | $ | 611,473 | $ | - | $ | - | $ | 612,300 | |||||||||||||||||||
| Stock based compensation | - | - | 728,580 | $ | 729 | $ | 114,309 | $ | - | $ | - | $ | 115,038 | |||||||||||||||||||
| Change in foreign currency translation | - | - | - | $ | - | $ | - | $ | (35,489 | ) | $ | - | $ | (35,489 | ) | |||||||||||||||||
| Net income (loss) | - | - | - | $ | - | $ | - | $ | - | $ | (1,071,845 | ) | $ | (1,071,845 | ) | |||||||||||||||||
| Balance, December 31, 2023 | 1 | $ | - | 9,674,497 | $ | 9,674 | $ | 3,935,287 | $ | (66,366,00 | ) | $ | (4,200,308 | ) | $ | (321,713 | ) | |||||||||||||||
The accompanying notes are an integral part of the consolidated financial statements.
JUPITER GOLD CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
| Shares | Value | Shares | Value | Capital | Income (Loss) | Deficit | Interests | Equity | ||||||||||||||||||||||||||||
Series A Preferred Stock | Common Stock | Additional Paid-in | Accumulated Other Comprehensive | Accumulated | Noncontrolling | Total Stockholders’ | ||||||||||||||||||||||||||||||
| Shares | Value | Shares | Value | Capital | Income (Loss) | Deficit | Interests | Equity | ||||||||||||||||||||||||||||
| Balance, December 31, 2019 | 1 | $ | - | 4,890,424 | $ | 4,890 | $ | 1,702,636 | $ | 16,398 | $ | (1,492,197 | ) | $ | - | $ | 231,727 | |||||||||||||||||||
| Issuance of common stock in connection with sales made under private offerings | - | - | 461,666 | 462 | 274,538 | - | - | - | 275,000 | |||||||||||||||||||||||||||
| Conversion of convertible debenture(s) and other indebtedness into common stock | - | - | 375,000 | 375 | 224,625 | - | - | - | 225,000 | |||||||||||||||||||||||||||
| Issuance of common stock in exchange for consulting, professional and other services | - | - | 53,075 | 53 | 31,792 | - | - | - | 31,845 | |||||||||||||||||||||||||||
| Stock based compensation | - | - | - | - | 74,357 | - | - | - | 74,357 | |||||||||||||||||||||||||||
| Change in foreign currency translation | - | - | - | - | - | (114,663 | ) | - | - | (114,663 | ) | |||||||||||||||||||||||||
| Net income (loss) | - | - | - | - | - | - | (410,290 | ) | - | (410,290 | ) | |||||||||||||||||||||||||
| Balance, December 31, 2020 | 1 | $ | - | 5,780,165 | $ | 5,780 | $ | 2,327,244 | $ | (98,265 | ) | $ | (1,922,650 | ) | $ | - | $ | 312,109 | ||||||||||||||||||
| Balance | 1 | $ | - | 5,780,165 | $ | 5,780 | $ | 2,327,244 | $ | (98,265 | ) | $ | (1,922,650 | ) | $ | - | $ | 312,109 | ||||||||||||||||||
| Issuance of common stock in connection with sales made under private offerings | - | - | 293,889 | 294 | 205,496 | - | - | - | 205,790 | |||||||||||||||||||||||||||
| Stock based compensation | - | - | 74,158 | 74 | 71,961 | - | - | - | 72,035 | |||||||||||||||||||||||||||
| Change in foreign currency translation | - | - | - | - | - | 74,338 | - | - | 74,338 | |||||||||||||||||||||||||||
| Net income (loss) | - | - | - | - | - | - | (548,438 | ) | - | (548,438 | ) | |||||||||||||||||||||||||
| Balance, December 31, 2021 | 1 | $ | - | 6,148,212 | $ | 6,148 | $ | 2,604,701 | $ | (23,927 | ) | $ | (2,471,088 | ) | $ | - | $ | 115,834 | ||||||||||||||||||
| Balance | 1 | $ | - | 6,148,212 | $ | 6,148 | $ | 2,604,701 | $ | (23,927 | ) | $ | (2,471,088 | ) | $ | - | $ | 115,834 | ||||||||||||||||||
The accompanying notes are an integral part of the consolidated financial statements.
| F-5 |
JUPITER GOLD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
| Year Ended December 31, | Year Ended December 31, | Year Ended December 31, | Year Ended December 31, | Year Ended December 31, | ||||||||||||||||
| 2021 | 2020 | 2023 | 2022 | 2021 | ||||||||||||||||
| Cash flows from operating activities of continuing operations: | ||||||||||||||||||||
| Net loss | $ | (548,438 | ) | $ | (410,290 | ) | $ | (1,071,845 | ) | $ | (657,375 | ) | $ | (548,438 | ) | |||||
| Adjustments to reconcile net loss to cash used in operating activities: | ||||||||||||||||||||
| Stock based compensation and services | 148,853 | 106,202 | $ | 115,038 | $ | 104,140 | $ | 148,853 | ||||||||||||
| Depreciation and amortization | 18,320 | 19,661 | $ | 56,536 | $ | 12,997 | $ | 18,320 | ||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||||||||
| Deposits and advances | - | 2,918 | ||||||||||||||||||
| Accounts payable and accrued expenses | 3,685 | (4,158 | ) | $ | 41,141 | $ | 6,166 | $ | 3,686 | |||||||||||
| Accounts receivable and other assets | $ | (3,566 | ) | $ | - | $ | - | |||||||||||||
| Net cash provided by (used in) operating activities | (377,580 | ) | (285,667 | ) | $ | (862,695 | ) | $ | (534,073 | ) | $ | (377,579 | ) | |||||||
| Cash flows from investing activities: | ||||||||||||||||||||
| Related party | 105,378 | (192,687 | ) | $ | 638,545 | $ | 85,203 | $ | 105,378 | |||||||||||
| Acquisition of capital assets | - | (788 | ) | $ | - | $ | (10,525 | ) | $ | - | ||||||||||
| Increase in intangible assets | - | (11,741 | ) | |||||||||||||||||
| Net cash provided by (used in) investing activities | 105,378 | (205,216 | ) | $ | 638,545 | $ | 74,678 | $ | 105,378 | |||||||||||
| Cash flows from financing activities: | ||||||||||||||||||||
| Net proceeds from sale of common stock | 205,496 | 275,000 | $ | 291,600 | $ | 489,875 | $ | 205,496 | ||||||||||||
| Proceeds from convertible notes payable | - | 225,000 | ||||||||||||||||||
| Net cash provided by (used in) financing activities | 205,496 | 500,000 | $ | 291,600 | $ | 489,875 | $ | 205,496 | ||||||||||||
| Effect of exchange rates on cash and cash equivalents | 2 | (63 | ) | $ | (74 | ) | $ | (5,891 | ) | $ | 2 | |||||||||
| Net increase (decrease) in cash and cash equivalents | (66,703 | ) | 9,054 | $ | 67,375 | $ | 24,589 | $ | (66,703 | ) | ||||||||||
| Cash and cash equivalents at beginning of period | 67,552 | 58,498 | $ | 25,438 | $ | 849 | $ | 67,552 | ||||||||||||
| Cash and cash equivalents at end of period | $ | 849 | $ | 67,552 | $ | 92,813 | $ | 25,438 | $ | 849 | ||||||||||
| (0 | ) | - | ||||||||||||||||||
| Supplemental disclosure of cash flow information: | ||||||||||||||||||||
| Cash paid for interest | $ | - | $ | - | ||||||||||||||||
| Cash paid for income taxes | $ | - | $ | - | ||||||||||||||||
| Supplemental disclosure of non-cash investing and financing activities: | ||||||||||||||||||||
| Shares issued in connection with conversion of debt and accrued interest | $ | - | $ | 225,000 | ||||||||||||||||
The accompanying notes are an integral part of the consolidated financial statements.
| F-6 |
JUPITER GOLD CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION, BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Description of Business
On July 27, 2016, Jupiter Gold Corporation (“Jupiter Gold” or the “Company”) was incorporated under the laws of the Republic of the Marshall Islands. Concurrently, Brazil Minerals, Inc.Atlas Lithium Corporation (“Brazil Minerals”Atlas Lithium”), a U.S. corporation, exchanged its 99.99%99.99% ownership in Mineração Jupiter Ltda (“MJL”), a Brazilian company, for shares of Jupiter Gold’s common stock. Brazil MineralsAtlas Lithium held an approximate 24.56%27.42% interest in the Company as of December 31, 2021.2023.
The Company has 100%-ownership to several gold projects in development and in exploratory stages aggregating over 154,000 acres in Brazil. It also owns a modular gold recovery plant. The Company trades on the OTC Markets (Pink Open Market) under the symbol JUPGF.
The Company also owns a Quartzite deposit located in Minas Gerais, which, after a drilling campaign, received all permits necessary and was subject to a trial mining period in 2023. We intend to start mining operations and generate revenues from Quartzite sales in 2024.
Basis of Presentation
The consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles (“GAAP”) of the United States of America and are expressed in United States dollars. For the years ended December 31, 20212023, 2022 and 2020,2021, the consolidated financial statements include the accounts of the Company and its 99.99% owned subsidiary, Mineração Jupiter Ltda.
All material intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingencies at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results may differ from those estimates.
Going Concern
The consolidated financial statements have been prepared on a going concern basis which contemplates the realization of assets and the settlement of liabilities in the normal course of business. The Company has limited working capital, has incurred losses since its inception, and has not yet generated material revenues from the sale of its products or services. These factors create substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern.
The ability of the Company to continue as a going concern is dependent on the Company generating cash from its operations, the sale of its stock and/or obtaining debt financing. During the year ended December 31, 2021,2023, the Company funded operations primarily through the sale of equity securities.securities and loans from related parties. Management intends to cover any operating losses by selling its equity securities and obtaining debt financing. There can be no assurance the Company will be successful in these efforts.
| F-7 |
Fair Value of Financial Instruments
Jupiter Gold follows the guidance of Accounting Standards Codification (“ASC”) Topic 820 – Fair Value Measurement and Disclosure. Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of Jupiter Gold. Unobservable inputs are inputs that reflect Jupiter Gold’s assumptions about the factors market participants would use in valuing the asset or liability. The guidance establishes three levels of inputs that may be used to measure fair value:
Level 1. Observable inputs such as quoted prices in active markets;
Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
As of December 31, 2021,2023, Jupiter Gold did not have any level 2 or 3 assets or liabilities.
Jupiter Gold’s financial instruments consist of cash and cash equivalents, accounts payable, and accrued expenses. The carrying amount of these financial instruments approximates fair value due to either length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these consolidated financial statements.
Cash and Cash Equivalents
The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents to the extent that the funds are not being held for investment purposes. Funds held in Brazilian banks are insured up to 250,000 Brazilian Real (approximately $44,8033,652 based on the December 31, 20212023 exchange rate).
Property and Equipment
Property and equipment are stated at cost. Major improvements and betterments are capitalized. Maintenance and repairs are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful life. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the statements of operations as other gain or loss, net.
The diamond and gold processing plant and other machinery are depreciated over an estimated useful life of ten years; vehicles are depreciated over an estimated life of five years; and computer and other office equipment over an estimated useful life of three years.
Mineral Properties
Costs of exploration, carrying and retaining unproven mineral lease properties are expensed as incurred. Mineral property acquisition costs, including licenses and lease payments, are capitalized. Impairment losses are recorded on mineral properties used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amount. The Company did not recognize any impairment losses related to mineral properties held during the years ended December 31, 20212023, 2022 and 2020.2021.
For intangible assets purchased in a business combination, the estimated fair values of the assets received are used to establish their recorded values. For intangible assets acquired in a non-monetary exchange, the estimated fair values of the assets transferred (or the estimated fair values of the assets received, if more clearly evident) are used to establish their recorded values, unless the values of neither the assets received nor the assets transferred are determinable within reasonable limits, in which case the assets received are measured based on the carrying values of the assets transferred. Valuation techniques consistent with the market approach, income approach and/or cost approach are used to measure fair value. Intangible assets consist of mineral rights held by MJL and hold a recorded value of $12,796, the cost of fees paid to the Brazilian national mining department. These rights are held in perpetuity provided the Company remains in compliance with various government regulations and industry requirements.
| F-8 |
Impairment of Long-Lived Assets
For long-lived assets, such as property and equipment and intangible assets subject to amortization, Jupiter Gold continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future undiscounted cash flows is less than the carrying amount of those assets, Jupiter Gold recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.
Revenue Recognition
The Company generates revenue from the sale of gold and other minerals excavated from its modular gold recovery plant located in a mining concession in Brazil.
The Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The guidance provided in Accounting Standards Codification (“ASC”) Topic 606 (“ASC 606”) requires entities to use a five-step model to recognize revenue by allocating the consideration from contracts to performance obligations on a relative standalone selling price basis. Revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. The standard also requires new disclosures regarding the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. ASC 606 also includes Subtopic 340-40, Other Assets and Deferred Costs – Contracts with Customers, which requires the deferral of incremental costs of obtaining a contract with a customer.
The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers. The core principle of the new revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:
In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met:
If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct.
The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all of the following:
Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.
The transaction price is allocated to each performance obligation on a relative standalone selling price basis.
The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate.
Stock-Based Compensation
The Company records stock-based compensation in accordance with ASC Topic 718, Compensation - Stock Compensation. ASC 718 requires companies to measure compensation cost for stock-based employee compensation at fair value at the grant date and recognize the expense over the employee’s requisite service period. Under ASC 718, volatility is based on the historical volatility of our stock or the expected volatility of the stock of similar companies. The expected life assumption is primarily based on historical exercise patterns and employee post-vesting termination behavior. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant.
The Company utilizes the Black-Scholes option-pricing model, which was developed for use in estimating the fair value of options. Option-pricing models require the input of highly complex and subjective variables including the expected life of options granted and the expected volatility of our stock price over a period equal to or greater than the expected life of the options. Because changes in the subjective assumptions can materially affect the estimated value of our employee stock options, it is management’s opinion that the Black-Scholes option-pricing model may not provide an accurate measure of the fair value of our employee stock options. Although the fair value of employee stock options is determined in accordance with ASC Topic 718 using an option-pricing model, that value may not be indicative of the fair value observed in a willing buyer/willing seller market transaction.
On June 20, 2018, the FASB issued ASU 2018-07 which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. Equity classified share-based payments for employees are fixed at the time of grant. Equity-classified nonemployee share-based payment awards are measured at the grant date of the award which is the same as share-based payments for employees. The Company adopted the requirements of the new rule as of January 1, 2019, the effective date of the new guidance.
Foreign Currency
Jupiter Gold’s subsidiary, MJL, uses its local currency as its functional currency. Resulting translation gains or losses are recognized as a component of accumulated other comprehensive income. Transaction gains or losses related to balances denominated in a currency other than the functional currency are recognized in the consolidated statements of operations.
The Company computes loss per share in accordance with ASC Topic 260, Earnings per Share, which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. As of December 31, 2021,2023, the Company’s potentially dilutive securities relate to common stock issuable in connection with options. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.
Reclassifications
Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net earnings (loss) or and financial position.
Recent Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new pronouncements that have been issued that might have a material impact on its financial position or results of operations except as noted below:
In August 2020, the FASB issued ASU No. 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. ASU 2020-06 will simplify the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models will result in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. ASU 2020-06 also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. ASU 2020-06 will be effective January 1, 2024, for the Company. Early adoption is permitted, but no earlier than January 1, 2021, including interim periods within that year. The Company is evaluating the effect of the adoption of ASU 2020-06 on the consolidated financial statements, but currently does not believe ASU 2020-06 will have a significant impact on the Company’s accounting for its convertible debt instruments. The effect will largely depend on the composition and terms of the financial instruments at the time of adoption.
In February 2020, the FASB issued ASU 2020-02, Financial Instruments-Credit Losses (Topic 326) and Leases (Topic 842) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842), which amends the effective date of the original pronouncement for smaller reporting companies. ASU 2016-13 and its amendments will be effective for the Company for interim and annual periods in fiscal years beginning after December 15, 2022. The Company believes the adoption will modify the way the Company analyzes financial instruments, but it does not anticipate a material impact on results of operations. The Company is in the process of determining the effects adoption will have on its consolidated financial statements.
In August 2023, the FASB issued ASU 2023-05, Business Combinations - Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement, which clarifies the business combination accounting for joint venture formations. The amendments in the ASU seek to reduce diversity in practice that has resulted from a lack of authoritative guidance regarding the accounting for the formation of joint ventures in separate financial statements. The amendments also seek to clarify the initial measurement of joint venture net assets, including businesses contributed to a joint venture. The guidance is applicable to all entities involved in the formation of a joint venture. The amendments are effective for all joint venture formations with a formation date on or after January 1, 2025. Early adoption and retrospective application of the amendments are permitted. We do not expect adoption of the new guidance to have a material impact on our consolidated financial statements and disclosures.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, amending reportable segment disclosure requirements to include disclosure of incremental segment information on an annual and interim basis. Among the disclosure enhancements are new disclosures regarding significant segment expenses that are regularly provided to the chief operating decision-maker and included within each reported measure of segment profit or loss, as well as other segment items bridging segment revenue to each reported measure of segment profit or loss. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, and are applied retrospectively. Early adoption is permitted. We are currently evaluating the impact of this update on our consolidated financial statements and disclosures.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures, amending income tax disclosure requirements for the effective tax rate reconciliation and income taxes paid. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024 and are applied prospectively. Early adoption and retrospective application of the amendments are permitted. We do not expect adoption of the new guidance to have a material impact on our consolidated financial statements and disclosures.
NOTE 2 – COMPOSITION OF CERTAIN FINANCIAL STATEMENT ITEMS
Property and Equipment, Net
The following table sets forth the components of the Company’s property and equipment as at December 31, 20212023, 22 and December 31, 2020:2021:
SCHEDULE OF PROPERTY AND EQUIPMENT
| December 31, 2021 | December 31, 2020 | December 31, 2023 | ||||||||||||||||||||||||||||||||||
| Cost | Accumulated Depreciation | Net Book Value | Cost | Accumulated Depreciation | Net Book Value | Cost | Accumulated Depreciation | Net Book Value | ||||||||||||||||||||||||||||
| Computers and office equipment | $ | 2,192 | (1,042 | ) | $ | 1,150 | $ | 2,192 | (867 | ) | $ | 1,325 | $ | 2,192 | (2,192 | ) | $ | - | ||||||||||||||||||
| Machinery and equipment | 108,330 | (78,076 | ) | 30,254 | 108,330 | (61,993 | ) | 46,337 | 439,555 | (118,855 | ) | 320,700 | ||||||||||||||||||||||||
| Vehicles | 42,507 | (42,507 | ) | - | 42,507 | (38,184 | ) | 4,323 | 42,507 | (42,507 | ) | - | ||||||||||||||||||||||||
| Total fixed assets | $ | 153,029 | $ | (121,625 | ) | $ | 31,404 | $ | 153,029 | $ | (101,044 | ) | $ | 51,985 | $ | 484,254 | (163,554 | ) | 320,700 | |||||||||||||||||
| December 31, 2022 | ||||||||||||
| Cost | Accumulated Depreciation | Net Book Value | ||||||||||
| Computers and office equipment | $ | 2,192 | (2,192 | ) | $ | - | ||||||
| Machinery and equipment | 118,855 | (76,926 | ) | 41,929 | ||||||||
| Vehicles | 42,507 | (42,507 | ) | - | ||||||||
| Total fixed assets | $ | 163,554 | $ | (121,625 | ) | $ | 41,929 | |||||
| December 31, 2021 | ||||||||||||
| Cost | Accumulated Depreciation | Net Book Value | ||||||||||
| Computers and office equipment | $ | 2,192 | (1,042 | ) | $ | 1,150 | ||||||
| Machinery and equipment | 108,330 | (78,076 | ) | 30,254 | ||||||||
| Vehicles | 42,507 | (42,507 | ) | - | ||||||||
| Total fixed assets | $ | 153,029 | $ | (121,625 | ) | $ | 31,404 | |||||
For the years ended December 31, 20212023, 2022 and 2020,2021, the Company recorded depreciation expense of $19,71442,243, $12,997 and $20,52819,714, respectively.
In 2023, the Company acquired a gold processing plant from Atlas Lithium at a total price of $320,700. Total paid for the plant acquisition was composed of shares issued by the Company at $ each.
Related Party ReceivablesReceivables/Payables
As of December 31, 2023, there are $674,461 of relating parties outstanding balances, represented by amounts owed to Mineração Apollo Ltda.
As of December 31, 2022, there is no related party outstanding balance. As of December 31, 2021, related party receivables totaled $6,36085,203. The entire amount is owed from Brazil MineralsAtlas Lithium for short termshort-term loans made and expenses paid by Jupiter Gold and MJL.
As of December 31, 2020, related party receivables totaled $190,581. The entire amount is owed from Brazil Minerals for short term loans made and expenses paid by Jupiter Gold and MJL.
NOTE 3 – STOCKHOLDERS’ DEFICITEQUITY
Issued and Authorized
As of December 31, 2021,2023, Jupiter Gold had shares of its common stock and share of its preferred stock issued and outstanding. As of December 31, 2021,2022, Jupiter Gold had shares of its common stock and share of its preferred stock issued and outstanding. As of December 31, 2023, Jupiter Gold had common shares and preferred shares authorized.
Common Stock
During the year ended December 31, 2023, Jupiter Gold issued and sold shares of common stock for cash proceeds of $612,300.
During the year ended December 31, 2022, Jupiter Gold issued and sold shares of common stock for cash proceeds of $489,875.
During the year ended December 31, 2021, Jupiter Gold issued and sold shares of common stock for cash proceeds of $205,790. Additionally, the Company issued shares of its common stock in exchange for fees and services totaling $72,035, or an average price of $per share which approximated fair market value.
During the year ended December 31, 2020 Jupiter Gold issued and sold shares of common stock for cash proceeds of $275,000. Additionally, the Company issued shares of its common stock in exchange for fees and services totaling $31,845, or an average price of $ per share which approximated fair market value. Lastly, the Company issued shares of common stock in connection with the conversion of $225,000 of note principal with a related party.
Preferred A Stock
Jupiter Gold has issued to one of its directors one share of a Series A Convertible Preferred Stock (“Preferred A Stock”). The Certificate of Designations, Preferences and Rights of Preferred A Stock provides that for so long as it is issued and outstanding, its holders shall vote together as a single class with the holders of the Company’s common stock, with the holders of Preferred A Stock being entitled to 51% of the total votes on all such matters regardless of the actual number of shares of Preferred A Stock then outstanding, and the holders of common stock are entitled to their proportional share of the remaining 49% of the total votes based on their respective voting power.
Stock Options
During the year ended December 31, 2021,2023, the Company granted Marc Fogassa as contractual compensation options to purchase an aggregate of shares of its common stock. Such awards corresponded to the period between January 1, 2023, to December 31, 2023. The options issued in 2023 were valued at $in total. The options were valued using the Black-Scholes option pricing model with the following average assumptions: our stock price on date of grant $to $, a strike price of $0.01 to $1.00, illiquidity discount of %, expected dividend yield of %, annualized volatility of % to %, risk-free interest rate of % to %, and an expected term of to .
During the year ended December 31, 2022, the Company granted officers and directors as contractual compensation options to purchase an aggregate of shares of its common stock. Such awards corresponded to the period between January 1, 2022, to December 31, 2022. The options issued in 2022 were valued at $in total. The options were valued using the Black-Scholes option pricing model with the following average assumptions: our stock price on date of grant $to $, a strike price of $0.01 to $1.00, illiquidity discount of %, expected dividend yield of %, annualized volatility of % to %, risk-free interest rate of % to %, and an expected term of to .
During the year ended December 31, 2021, the Company granted officers and directors as contractual compensation options to purchase an aggregate of shares of its common stock. Such awards corresponded to the period between January 1, 2021, to June 30, 2021; option awards for the period between July 1, 2021 and December 31, 2021 were issued after December 31, 2021. The options issued in 2021 were valued at $in total. The options were valued using the Black-Scholes option pricing model with the following average assumptions: our stock price on date of grant ($to $), a strike price of $0.01to $1.00, illiquidity discount of %, expected dividend yield of %, annualized volatility of % to %, risk-free interest rate of % to %, and an expected term of to .
During the year ended December 31, 2020, the Company granted to officers and directors as contractual compensation options to purchase an aggregate of shares of its common stock. The options were valued at $ in total. The options were valued using the Black-Scholes option pricing model with the following average assumptions: our stock price on date of grant ($ to $), a strike price of $0.01 to $1.04, expected dividend yield of , historical volatility of , risk-free interest rate of to , and an expected term of to .
SCHEDULE OF STOCK OPTIONS ACTIVITY
| Number of Options Outstanding | Average Exercise Price | Average Remaining Contractual Life (Years) | ||||||||||
| Issued in 2021 | 210,000 | 0.15 | ||||||||||
| Exercised in 2021 | 120,000 | 1.00 | – | |||||||||
| Forfeited in 2021 | 350,000 | 1.25 | – | |||||||||
| Outstanding, December 31, 2020 | 1,915,000 | $ | 1.01 | |||||||||
| Average | ||||||||||||
| Number of | Remaining | |||||||||||
| Options | Average | Contractual Life | ||||||||||
| Outstanding | Exercise Price | (Years) | ||||||||||
| Outstanding, December 31, 2021 | 1,915,000 | 1.01 | ||||||||||
| Issued in 2022 | 420,000 | 0.15 | ||||||||||
| Exercised in 2022 | 430,000 | 1.00 | – | |||||||||
| Outstanding, December 31, 2022 | 1,905,000 | 0.56 | ||||||||||
| Issued in 2023 | 420,000 | 0.15 | ||||||||||
| Exercised in 2023 | 1,115,000 | 0.98 | - | |||||||||
| Outstanding, December 31, 2023 | 1,210,000 | 0.04 | ||||||||||
Stock Warrants
During the yearyears ended December 31, 2023, 2022 and 2021 the company did not issue any warrants.
During the year ended December 31, 2020, the Company issued warrants to purchase an aggregate of 200,000 shares of its common stock in connection with certain sales of its common stock. The warrants were valued at $110,053 in total. The warrants were valued using the Black-Scholes option pricing model with the following average assumptions: our stock price on date of grant ($0.75 to $0.97), a strike price of $0.60 to $0.90, expected dividend yield of 0%, historical volatility of 254.5% to 277.4%, risk-free interest rate of 0.15% to 0.54%, and an expected term of approximately six months. In addition to this, the Company issued further warrants to purchase an aggregate of 67,000 shares of its common stock in connection with a $225,000 convertible note with a related party. The warrants were valued at $19,296. The warrants were valued using the Black-Scholes option pricing model with the following average assumptions: our stock price on date of grant ($0.35), a strike price of $0.60, expected dividend yield of 0%, historical volatility of 253.1%, risk-free interest rate of 1.42%, and an expected term of approximately two years.
The following table reflects all outstanding and exercisable warrants at December 31, 2021. All stock warrants are exercisable for a period ranging from one to four years from the date of issuance.
SCHEDULE OF WARRANT ACTIVITY
| Number of Warrants Outstanding | Weighted Average Exercise Price | Remaining Contractual Life (Years) | Aggregated Intrinsic Value | |||||||||||||
| Outstanding, December 31, 2019 | - | - | - | |||||||||||||
| Issued | 267,000 | 0.79 | ||||||||||||||
| Exercised | ||||||||||||||||
| Forfeited | ||||||||||||||||
| Outstanding, December 31, 2020 | 267,000 | 0.79 | ||||||||||||||
| Issued in 2021 | - | - | - | |||||||||||||
| Exercised in 2021 | - | – | – | - | ||||||||||||
| Forfeited in 2021 | - | – | – | - | ||||||||||||
| Outstanding, December 31, 2021 | 267,000 | $ | 0.79 | |||||||||||||
NOTE 4 – COMMITMENTS AND CONTINGENCIES
Service Agreement
Jupiter Gold pays Brazil Minerals $2,500 per month for support services including facilities and personnel.
NOTE 54 – SUBSEQUENT EVENTS
In accordance with FASB ASC 855-10 Subsequent Events, the Company has analyzed its operations subsequent to December 31, 20212023 to the date these consolidated financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these consolidated financial statements.