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Item 1A. Risk Factors

2023-03-30 compared with 2022-03-25 · 361 added, 236 removed, 273 unchanged (69% of the section changed)

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in our common stock involves a high degree of risk.

You should carefully consider the risks described below, as well as the other information

in this Report, including our financial statements and the related notes thereto and “Management’s Discussion and

Analysis of Financial Condition and Results of Operations,” before deciding whether to invest in our securities.

The occurrence

of any of the events or developments described below could harm our business, financial condition, operating results, and growth prospects.

In such an event, the market price of our common stock could decline, and you may lose all or part of your investment.

Additional risks

and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations.

You should carefully consider the risks described below, as well as the other

information in this Annual Report, including our financial statements and the related notes thereto and “Management’s

Discussion and Analysis of Financial Condition and Results of Operations,” before deciding whether to invest in our

The occurrence of any of the risks, the events or developments described below could harm our business, financial

condition, operating results, and growth prospects.

In such an event, the market price of our common stock could decline, and you

may lose all or part of your investment.

Additional risks and uncertainties not presently known to us or that we currently deem

immaterial also may impair our business operations.

You should consider carefully the risks and uncertainties summarized and set

forth in detail below and elsewhere in this Annual Report before you decide to invest in our common stock.

of Risk Factors

are providing the following summary of the risk factors contained in this Annual Report to enhance the readability and accessibility

of our risk factor disclosures.

This summary does not address all of the risks that we face.

We encourage you to carefully review the

full risk factors contained in this Report in their entirety for additional information regarding the material factors that make an investment

in our securities speculative or risky.

The primary categories by which we classify risks include those related to:

(i) our business,

(ii) regulatory and industry, (iii) country and currency, and (iv) common stock.

Set forth below within each of these categories is a

summary of the principal factors that make an investment in our common stock speculative or risky.

future performance is difficult to evaluate because we have a limited operating history.

should evaluate an investment in us considering the uncertainties encountered by developing companies.

● We have a history of losses

and expect to continue to incur losses in the future.

are an exploration stage company, and there is no guarantee that our properties will result

in the commercial extraction of mineral deposits.

the probability of an individual prospect ever having reserves is not known, our properties

may not contain any reserves, and any funds spent on exploration and evaluation may be lost.

face risks related to mining, exploration and mine construction, if warranted, on our properties.

long-term success will depend ultimately on our ability to achieve and maintain profitability

and to develop positive cash flow from our mining activities.

depend on our ability to successfully access the capital and financial markets.

Any inability

to access the capital or financial markets may limit our ability to fund our ongoing operations,

execute our business plan or pursue investments that we may rely on for future growth.

quarterly and annual operating and financial results and our revenue are likely to fluctuate

significantly in future periods.

ability to manage growth will have an impact on our business, financial condition and results

of operations.

depend upon Marc Fogassa, our Chief Executive Officer and Chairman.

growth will require new personnel, which we will be required to recruit, hire, train and

executive officers and directors may be in a position of conflict of interest.

and Industry Risks

mining industry subjects us to several risks.

mineral projects will be subject to significant government regulations.

will be required to obtain governmental permits in order to conduct development and mining

operations, a process which is often costly and time-consuming.

with environmental regulations and litigation based on environmental regulations could require

significant expenditures.

operations face substantial regulation of health and safety.

operations are subject to extensive environmental laws and regulations.

prices are subject to unpredictable fluctuations.

and Currency Risks

ability to execute our business plan depends primarily on the continuation of a favorable

mining environment in Brazil and our ability to freely sell our minerals.

perception of Brazil by the international community may affect us.

to foreign exchange fluctuations and capital controls may adversely affect our costs, earnings

and the value of some of our assets.

common stock price has been and may continue to be volatile.

do not intend to pay regular future dividends on our common stock and thus stockholders must

look to appreciation of our common stock to realize a gain on their investments.

may seek to raise additional funds, finance acquisitions, or develop strategic relationships

by issuing securities that would dilute your ownership.

Series A Preferred Stock has the effect of concentrating voting control over us in Marc Fogassa,

our Chief Executive Officer and Chairman.

Fogassa, our Chief Executive Officer and member of our Board of Directors, owns greater than

50% of the Company’s voting securities, which means we are deemed a “controlled

company” under the rules of Nasdaq.

stock price may be volatile, and you could lose all or part of your investment.

will experience dilution as a result of future equity offerings.

existing stockholders have substantial influence over our company and their interests may

not be aligned with the interests of our other stockholders, which may discourage, delay

or prevent a change in control of our company, which could deprive our stockholders of an

opportunity to receive a premium for their securities.

of a substantial number of shares of our common stock by our stockholders in the public market

could cause our stock price to fall.

as a result of operating as a public company are significant, and our management is required

to devote substantial time to compliance with our public company responsibilities and corporate

governance practices.

internal control over financial reporting may not meet the standards required by Section

404 of the Sarbanes-Oxley Act, and failure to achieve and maintain effective internal control

over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act, could

have a material adverse effect on our business and share price.

future performance is difficult to evaluate because we have a limited operating history.

should evaluate an investment in us considering the uncertainties encountered by mineral exploration companies.

Although we were incorporated

in 2011, we began to implement our current business strategy in 2016.

Our current business strategy is focused on the exploration of

strategic minerals and, through specific subsidiaries, the exploration of iron and gold.

While we have had a small amount of revenues

from the sales of gold and diamonds mined by us, and currently have a small amount of revenue from the sale of sand mined by us and for

construction use, we have not realized any revenues to date from the sale of strategic minerals or iron.

Our operating cash flow needs

have been financed primarily through debt or equity and not through cash flows derived from our operations.

As a result, we have little

historical financial and operating information available to help you evaluate and predict our future performance.

There can be no assurance

that our efforts will be successful or that we will ultimately be able to attain profitability.

is substantial doubt about our ability to continue as a going concern.

have not been profitable and such condition raises substantial doubt about our ability to continue as a going concern.

in 2011, we began to implement our current business strategy in 2016, which is primarily focused on the exploration of strategic minerals.

We have generated limited revenues from operations and our cash flow needs have been financed primarily through debt or equity and not

through cash flows derived from our operations.

As a result, we have little historical financial and operating information available

to help you evaluate and predict our future performance.

In addition, advancing our projects will require significant capital and time,

and we are subject to all of the risks associated with developing and establishing new mining operations and business enterprises as

further described in these risk factors.

There can be no assurance that our efforts will be successful or that we will ultimately be

able to attain profitability.

We have a history of losses and expect to continue

to incur losses in the future.

We have incurred losses in each of the two past years,

have negative cash flow from operating activities, have had limited revenues and expect to continue to incur losses in the future.

We have an accumulated deficit of approximately $58.7

million as of December 31, 2022.

We expect to continue to incur losses unless and until such time as our projects or one of our future

acquired properties enters into commercial production and generates sufficient revenues to fund continuing operations and we are able

to develop at least one economic deposit.

We recognize that if we are unable to generate cash flows from our operations, we will not be

able to earn profits or continue operations.

At this early stage of our operation, we also expect to face the risks, uncertainties, expenses

and difficulties encountered by companies at the mineral exploration stage.

We cannot be sure that we will be successful in addressing

these risks and uncertainties and our failure to do so could have a materially adverse effect on our financial condition.

There is uncertainty

regarding our ability to implement our business plan and to grow our business to a greater extent than we can with our existing financial

resources without additional financing.

Our long-term future growth and success is dependent upon our ability to raise additional capital

and implement our business plan.

There is no assurance that we will be successful in implementing our business plan or that we will be

able to generate sufficient cash from operations, sell securities or borrow funds on favorable terms or at all.

Our inability to generate

significant revenue or obtain additional financing could have a material adverse effect on our ability to fully implement our business

plan and grow our business to a greater extent than we can with our existing financial resources.

regarding our ability to implement our business plan and to grow our operations with our existing financial resources without additional

Our ability to implement our business plan is dependent on us generating cash from operations, the sale of our stock and/or

obtaining debt financing.

Historically, we have funded our operations primarily through the issuance of debt and equity securities.

plan to fund our capital requirements and ongoing operations include the generation of revenue from our mining operations and projects.

Management’s secondary plan to cover any shortfall is selling our equity securities, including our common stock, or common stock

in Apollo Resources and Jupiter Gold that we own, and obtaining debt financing, There is no assurance that we will be successful in implementing

our business plan or that we will be able to generate sufficient cash from operations, sell securities or borrow funds on favorable terms

Our inability to generate significant revenue or obtain additional financing could have a material adverse effect on our ability

to fully implement our business plan and grow our business to a greater extent than we can with our existing financial resources

are an exploration stage company, and there is no guarantee that our properties will result in the commercial extraction of mineral deposits.

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further exploration and development of other economic deposits, each of which is subject to numerous risk factors.

including all of the

risks associated with developing and establishing new mining operations and business enterprises including:

of studies to verify reserves and commercial viability, including the ability

to find sufficient ore reserves to support a commercial mining operation;

timing and cost, which can be considerable, of further exploration, preparing studies, permitting and construction of infrastructure, mining and processing facilities;

availability and costs of drill equipment, exploration personnel, skilled labor, and mining

and processing equipment, if required;

availability and cost of appropriate smelting and/or refining arrangements, if required;

with stringent environmental and other governmental approval and permit requirements;

availability of funds to finance exploration, development, and construction activities, as

opposition from non-governmental organizations, local groups or local inhabitants that may

delay or prevent development activities;

increases in exploration, construction, and operating costs due to changes in the cost of

fuel, power, materials, and supplies;

shortages of mineral processing, construction, and other facilities related supplies.

we cannot assure you that, even if an economic deposit of minerals is located, any of our property interests can be commercially mined.

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result in substantial rewards, few properties which are explored are ultimately developed into producing mines.

Major expenses may be

required to establish reserves by drilling and to construct mining and processing facilities at a particular site.

It is impossible to

ensure that our current exploration programs will result in profitable commercial mining operations.

Significant expenses

may be required to establish reserves by drilling and to construct mining and processing facilities at a particular site.

It is impossible

to ensure that our current exploration programs will result in profitable commercial mining operations.

The profitability of our operations

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large extent be based upon the interpretation of geologic data, obtained from a limited number of drill holes and other sampling techniques,

as well as future feasibility studies.

as well as future studies.

Actual operating costs and economic returns of all exploration projects may materially differ

from the costs and returns estimated, and accordingly our financial condition, results of operations, and cash flows may be negatively

the probability of an individual prospect ever having reserves is not known, our properties may not contain any reserves, and any funds

the probability of an individual prospect ever having reserves is unknown, our properties may not contain any reserves, and any funds

spent on exploration and evaluation may be lost.

are an exploration stage company, and we have no “reserves” as such term is defined by Industry Guide 7.

We cannot assure

you about the existence of economically extractable mineralization at this time, nor about the quantity or grade of any mineralization

we may have found.

Because the probability of an individual prospect ever having reserves is uncertain, our properties may not contain

any reserves and any funds spent on evaluation and exploration may be lost.

Even if we confirm reserves on our properties, any quantity

or grade of reserves we indicate must be considered as estimates only until such reserves are mined.

We do not know with certainty that

economically recoverable minerals exist on our properties.

In addition, the quantity of any reserves

may vary depending on commodity prices.

Any material change in the quantity or grade of reserves may affect the economic viability of

our properties.

Further, our lack of established reserves means that we are uncertain about our ability to generate revenue from our

are an exploration stage company, and we have no “reserves.” A mineral reserve is defined in Regulation S-K 1300 as an

estimate of tonnage and grade or quality of “indicated mineral resources” and “measured mineral resources”

(as those terms are defined in Regulation S-K 1300) that, in the opinion of a “qualified person” (as defined in Regulation S-K 1300), can be

the basis of an economically viable project.

We cannot assure you about the existence of economically extractable mineralization at

this time, nor about the quantity or grade of any mineralization we may have found.

Because the probability of an individual

prospect ever having reserves is uncertain, our properties may not contain any reserves and any funds spent on evaluation and

exploration may be lost.

Even if we confirm reserves on our properties, any quantity or grade of reserves we indicate must be

considered as estimates only until such reserves are mined.

We do not know with certainty that economically recoverable minerals

exist on our properties.

In addition, the quantity of any reserves may vary depending on commodity prices.

Any material change in

the quantity or grade of reserves may affect the economic viability of our properties.

Further, our lack of established reserves

means that we are uncertain about our ability to generate revenue from our operations.

if we do eventually discover a mineral reserve on one or more of our properties, there can be no assurance that they can be developed

into producing mines and that we can extract those minerals.

Both mineral exploration and development involve a high degree of risk,

and few mineral properties that are explored are ultimately developed into producing mines.

Exploration activities

require significant amounts of capital that may not be recovered and may exceed our budget.

Mineral exploration activities are subject to many risks, including the

risk that no commercially productive or extractable resources will be encountered.

There can be no assurance that the Company’s

activities will ultimately lead to an economically feasible project or that it will recover all or any portion of its investment.

exploration often involves unprofitable efforts, including drilling operations that ultimately do not further exploration efforts.

our efforts to budget such costs, the cost of minerals exploration is often uncertain, and cost overruns are common.

Substantial expenditures

are required to establish reserves through drilling, to develop processes to extract the ore and, in the case of new properties, to develop

the extraction and processing facilities and infrastructure at any site chosen for extraction.

Although substantial benefits may be derived

from the discovery of a major deposit, we cannot provide any assurance that any such deposit will be commercially viable or that we will

be able to obtain the funds required for development on a timely basis.

Drilling and exploration operations may be curtailed, delayed

or canceled as a result of numerous factors, many of which are beyond the Company’s control, including title problems, weather conditions,

protests, compliance with governmental requirements, including permitting issues, and shortages or delays in the delivery of equipment

and services.

For example, following recent results of our exploration plans of our Minas Gerais Lithium Project, we expect to incur greater

cost related to such exploration activities than originally budgeted for.

While we believe we have sufficient resources to fund our operations

for the next twelve months, an increase in our drilling campaigns to keep pace with positive findings of potential economic deposits,

may require us to raise additional capital which, if not available on reasonable terms, may cause us to curtail our operations

and impair our ability to become profitable.

face risks related to mining, exploration and mine construction, if warranted, on our properties.

level of profitability, if any, in future years will depend to a great degree on prices of minerals set by global markets and whether

our exploration-stage properties can be brought into production.

It is impossible to ensure that the current and future exploration programs

and/or feasibility studies on our existing properties will establish reserves.

Whether it will be economically feasible to extract a

mineral depends on a number of factors, including, but not limited to:

the particular attributes of the deposit, such as size, grade

and proximity to infrastructure;

level of profitability, if any, in future years will depend to a great degree on prices of minerals set by global markets and

whether our exploration-stage properties can be brought into production.

We cannot provide any assurances that the current and

future exploration programs and/or studies on our existing properties will establish reserves.

Whether it will be economically

feasible to extract a mineral depends on a number of factors, including, but not limited to:

the particular attributes of the

deposit, such as size, grade and proximity to infrastructure;

drilling costs;

mineral prices;

mining, processing and transportation costs;

the willingness of lenders and investors

to provide project financing;

mining, processing and transportation

the willingness of lenders and investors to provide project financing;

labor costs and possible labor strikes;

and governmental regulations, including, without limitation, regulations

relating to prices, taxes, royalties, land tenure, land use, importing and exporting materials, foreign exchange, environmental protection,

employment, worker safety, transportation, and reclamation and closure obligations.

The exact effect of these factors cannot be accurately

predicted, but the combination of these factors may result in us receiving an inadequate return on invested capital.

governmental regulations, including, without limitation, regulations relating to prices, taxes, royalties, land tenure, land use,

importing and exporting materials, foreign exchange, environmental protection, employment, worker safety, transportation, and

reclamation and closure obligations.

The exact effect of these factors cannot be accurately predicted, but the combination of these

factors may result in us receiving an inadequate return on invested capital.

long-term success will depend ultimately on our ability to achieve and maintain profitability and to develop positive cash flow from

our mining activities.

long-term success, including the recoverability of the carrying values of our assets, our ability to continue with exploration, development

and commissioning and mining activities on our existing projects or to acquire additional projects, will depend ultimately on our ability

long-term success, including the recoverability of the carrying values of our assets, and our ability to continue with exploration, development

and commissioning and mining activities on our existing projects or to acquire additional projects, depends ultimately on our ability

to achieve and maintain profitability and to develop positive cash flow from our operations by establishing ore bodies that contain commercially

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We cannot assure you that such additional funding will be available to us on satisfactory terms, or at all.

finance our current operations and future capital needs, we will require additional funds through the issuance of additional equity and/or

debt securities.

We will continue to seek capital through private placement transactions and by utilizing proceeds available under

the Triton Equity Line Agreement.

In addition, we intend to sell securities in connection with an uplisting of our common stock to

stock exchange.

Depending on the type and the terms of any financing we pursue, shareholders’ rights and the value of

their investment in our shares could be reduced.

Any additional equity financing will dilute shareholdings, and new or additional debt

financing, if available, may involve restrictions on financing and operating activities.

order to finance our current operations and future capital needs, we will require additional funds through the issuance of additional

equity and/or debt securities.

Depending on the type and the terms of any financing we pursue, shareholders’ rights and the value

of their investment in our shares could be reduced.

Any additional equity financing will dilute shareholdings, and new or additional

debt financing, if available, may involve restrictions on financing and operating activities.

For example, on January 30, 2023, the Company raised an aggregate of $4 million in gross proceeds from the sale of

its common stock in transaction exempt under Regulation S of the Securities Act.

In addition, if we issue secured debt securities,

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on such debt securities would increase costs and negatively impact operating results.

we are unable to obtain additional financing, as needed, at competitive rates, our ability to fund our current operations and implement

our business plan and strategy will be affected, and we would be required to reduce the scope of our operations and scale back our exploration,

development and mining programs.

There is, however, no guarantee that we will be able to secure any additional funding or be able to

secure funding which will provide us with sufficient funds to meet our objectives, which may adversely affect our business and financial

global decline in economic conditions, geopolitical instability, and other macroeconomic factors, including inflation, interest rate

and foreign currency rate fluctuations, and volatility in capital markets could negatively impact our business, financial condition,

and results of operations, including our ability to raise capital.

If we are unable to obtain additional financing, as needed, at competitive

rates, our ability to fund our current operations and implement our business plan and strategy will be affected, and we would be required

to reduce the scope of our operations and scale back our exploration, development and mining programs.

There is, however, no guarantee

that we will be able to secure any additional funding or be able to secure funding which will provide us with sufficient funds to meet

our objectives, which may adversely affect our business and financial position.

quarterly and annual operating and financial results and our revenue are likely to fluctuate significantly in future periods.

quarterly and annual operating and financial results are difficult to predict and may fluctuate significantly from period to period.

Our revenues, net income and results of operations may fluctuate as a result of a variety of factors that are outside our control including,

but not limited to, lack of sufficient working capital, equipment malfunction and breakdowns, inability to timely find spare machines

or parts to fix the broken equipment, regulatory or licensing delays and severe weather phenomena.

may be unable to find sources of funding if and when needed, resulting in the failure of our business.

of today, we need additional equity or debt financing beyond our existing cash to operate.

This additional financing may not become available and, if available, may not be available on terms that are acceptable to

If we do obtain acceptable funding, the terms and conditions of receiving such capital would likely result in further dilution.

we are not successful in raising capital or sufficient capital, we will have to modify our business plans and substantially reduce or

eliminate operations, or even seek reorganization.

In these events, the holders of our securities could lose a substantial part or all

of their investment.

quarterly and annual operating and financial results are difficult to predict and may fluctuate significantly from period to period.based

on activities related to our exploration projects.

Our revenues, net income and results of operations may fluctuate as a result of a

variety of factors that are outside our control including, but not limited to, lack of sufficient working capital, equipment malfunction

and breakdowns, inability to timely find spare machines or parts to fix the broken equipment, regulatory or licensing delays and severe

weather phenomena.

ability to manage growth will have an impact on our business, financial condition and results of operations.

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depend on several factors, including:

ability to develop existing projects;

ability to successfully complete our exploration activities and develop existing projects;

ability to identify new projects;

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depend upon Marc Fogassa, our Chief Executive Officer and Chairman.

success is largely dependent upon the personal efforts of Marc Fogassa, our Chief Executive Officer and Chairman.

Currently he is the

only member of our management team that is fluent and fully conversant in both Portuguese, the language of Brazil, and English.

of the services of Mr.

Fogassa would have a material adverse effect on our business and prospects.

We maintain key-man life insurance

on the life of Mr.

existing operations and continued future development are largely dependent upon the personal efforts and continued performance of Marc

Fogassa, our Chief Executive Officer and Chairman and principal stockholder.

The loss of the services of Mr.

Fogassa would have a material

adverse effect on our business and prospects.

We maintain key-man life insurance on the life of Mr.

See “Management.”

If we were to lose Mr.

Fogassa, we may not be able to find appropriate replacements on a timely basis and our financial condition and

results of operations could be materially adversely affected.

Fogassa spends

significant time with the Company and is highly active in our management, he does not devote his full time and attention to Atlas Lithium.

Fogassa also currently serves as Chief Executive Officer and director of Apollo Resources Corporation (“Apollo Resources”)

and Jupiter Gold Corporation (“Jupiter Gold”).

growth will require new personnel, which we will be required to recruit, hire, train and retain.

ability to recruit and assimilate new personnel will be critical to our performance.

We will be required to recruit additional personnel

and to train, motivate and manage employees, which may adversely affect our plans.

We compete with other mining companies in the recruitment

and retention of qualified managerial and technical employees.

As we grow, we will be required to recruit additional personnel and to

train, motivate and manage employees.

If we are unable to successfully compete for qualified employees, our exploration and development

programs may be slowed down or suspended.

executive officers and directors may be in a position of conflict of interest.

Fogassa, our Chief Executive and Chairman, also serves as chief executive officer and director of Apollo Resources Corporation (“Apollo

Resources”) and Jupiter Gold Corporation (“Jupiter Gold”).

Fogassa, our Chief Executive and Chairman, also serves as chief executive officer and director of Apollo Resources and Jupiter Gold.

Joel Monteiro, Esq., one of our officers, is a director

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in the future be in a position of conflict of interest.

Any decision made by such persons involving us will be made in accordance with

their duties and obligations to deal fairly and in good faith with us and such other companies.

In addition, any such officer or directors

will declare, and refrain from voting on, any matter in which they may have a material interest.

Going concern

The condensed 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 in each of the past two years, and has not yet received

material revenues from sales of 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.

Historically,

the Company has funded its operations primarily through the issuance of debt and equity securities.

Management’s plan to fund its

capital requirements and ongoing operations include the generation of revenue from its mining operations and projects.

secondary plan to cover any shortfall is selling its equity securities, including common stock in the Company, or common stock in Apollo

Resources and Jupiter Gold that it owns, and obtaining debt financing.

There can be no assurance the Company will be successful in these

where their interests may not be aligned with the interests of our other stockholders,

and he may from time to time be incentivized to take certain actions that benefit his other interests and that our other stockholders

do not view as being in their interest as investors in our company.

developments affecting the financial services industry, including events or concerns involving liquidity, defaults or non-performance

by financial institutions or transactional counterparties, could adversely affect our business, financial condition or results of operations.

involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional

counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors

about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems.

Most recently, on March 10, 2023, Silicon Valley Bank (“SVB”) was closed by the California Department of Financial Protection

and Innovation, which appointed the Federal Deposit Insurance Corporation (“FDIC”) as receiver.

Similarly, on March 12, 2023,

Signature Bank and Silvergate Capital Corp.

were each swept into receivership.

Although we assess our banking and customer relationships

as we believe necessary or appropriate, our access to funding sources and other credit arrangements in amounts adequate to finance or

capitalize our current and projected future business operations could be significantly impaired by factors that affect us, the financial

services industry or economy in general.

These factors could include, among others, events such as liquidity constraints or failures,

the ability to perform obligations under various types of financial, credit or liquidity agreements or arrangements, disruptions or instability

in the financial services industry or financial markets, or concerns or negative expectations about the prospects for companies in the

financial services industry.

addition, investor concerns regarding the U.S.

or international financial systems could result in less favorable commercial financing

terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit

and liquidity sources, thereby making it more difficult for us to acquire financing on acceptable terms or at all.

Any decline in available

funding or access to our cash and liquidity resources could, among other risks, adversely impact our ability to meet our operating expenses,

financial obligations or fulfill our other obligations, result in breaches of our contractual obligations or result in violations of

federal or state wage and hour laws.

Any of these impacts, or any other impacts resulting from the factors described above or other related

or similar factors not described above, could have material adverse impacts on our liquidity and our business, financial condition or

results of operations.

may be unable to retain the third party contractors upon which we rely, including for drilling.

have agreements with consultants to perform services for us including with respect to performing drilling services for us.

these contractors perform functions that require the services of persons in high demand in the industry and these persons may or may

not always be available when needed based on their status as contractors or at affordable prices.

The implementation of our business

plan and our exploration activities may be impaired if we are not able to retain or afford our significant contractors or if they do

not perform in accordance with their agreements and the failure to conduct our exploration activities could result in delays in our

ability to execute on our business plan will could have an adverse effect on the value of our company and our common

and Industry Risks

mining industry subjects us to several risks.

our operations, we are subject to the risks normally encountered in the mining industry, such as:

our operations, we are subject to the significant risks normally encountered in the mining industry, such as:

discovery of unusual or unexpected geological formations;

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water and other similar mining hazards;

and mining accidents;

labor disruptions and labor disputes;

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known and unknown risks involved in the conduct of exploration and operation of mines.

nature of these risks is such that liabilities could exceed any applicable insurance policy limits or could be excluded from coverage.

There are also risks against which we cannot insure or against which we may elect not to insure.

The potential costs which could be associated

with any liabilities not covered by insurance, or in excess of insurance coverage, or compliance with applicable laws and regulations

may cause substantial delays and require significant capital outlays, adversely affecting our future earnings and competitive position

and, potentially our financial viability.

hazardous activities pose significant management challenges and could result in loss of life, a mine shutdown, damage to or destruction

of our properties and surrounding properties, production facilities or equipment, production delays or business interruption.

mineral projects will be subject to significant governmental regulations.

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and regulations can be substantial.

In addition, changes in such laws and regulations, or more

restrictive interpretations of current laws and regulations by governmental authorities, could result in unanticipated capital expenditures,

expenses, or restrictions on, or suspensions of our operations and delays in the development of our properties.

In addition, changes in such laws and regulations, or more restrictive interpretations of current

laws and regulations by governmental authorities, could result in unanticipated capital expenditures, expenses, or restrictions on, or

suspensions of our operations and delays in the development of our properties.

will be required to obtain governmental permits in order to conduct development and mining operations, a process which is often costly

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our results of operations and financial position.

mines are inspected on a regular basis by government regulators who may issue citations and orders when they believe a violation has

occurred under local mining regulations.

If inspections result in an alleged violation, we may be subject to fines, penalties or sanctions

and our mining operations could be subject to temporary or extended closures.

addition to potential government restrictions and regulatory fines, penalties or sanctions, our ability to operate (including the effect

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for investment opportunities or the payment of expenses, and the ability to repatriate any profits.

common stock price may be volatile.

common stock price has been and may continue to be volatile.

market price of our common stock has been and is likely to continue to be volatile and could fluctuate in price in response to various

factors, many of which are beyond our control, including the following:

ability to grow revenues;

results from our exploration and/or, if warranted, project development efforts;

ability to achieve profitability;

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ability to execute our business plan;

perception of our industry or our prospects;

regulatory, and competitive developments;

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stock regardless of our actual operations and the results from those operations.

is no assurance that an active, liquid and orderly trading market will develop for our common stock or what the market price of our common

stock will be and, as a result, it may be difficult for you to sell your shares of our common stock.

we became a publicly traded company in April 2012, there has been a limited public market for shares of our common stock on the OTCQB.

Until our common stock is listed on that market or a broader exchange, we anticipate

that it will remain quoted on the OTCQB.

In that venue, investors may find it difficult to obtain accurate quotations as to the market

value of our common stock.

In addition, if we fail to meet the criteria set forth in SEC regulations, various requirements would be imposed

by law on broker-dealers who sell our securities to persons other than established customers and accredited investors.

Consequently,

such regulations may deter broker-dealers from recommending or selling our common stock, which may further affect liquidity.

also make it more difficult to raise additional capital.

cannot predict the extent to which investor interest in our Company will lead to the development of a more active trading market on the

OTCQB, whether we will ever meet the initial listing standards of the Nasdaq Capital Market, NYSE American, or other similar national

securities exchange, or how liquid that market might become.

common stock is currently defined as “penny stock” and the rules imposed on the sale of the shares may affect your ability

to resell any shares you may purchase, if at all.

common stock currently trades below $5 and is therefore defined as a “penny stock” under the Securities Exchange Act of 1934

(the “Exchange Act”).

The Exchange Act and penny stock rules generally impose additional sales practice and disclosure requirements

on broker-dealers who sell our securities.

For transactions covered by the penny stock rules, a broker-dealer must make a suitability

determination for each purchaser and receive the purchaser’s written agreement prior to the sale.

In addition, the broker-dealer

must make certain mandated disclosures in penny stock transactions, including the actual sale or purchase price and actual bid and offer

quotations, the compensation to be received by the broker-dealer and certain associated persons, and deliver certain disclosures required

by the Commission.

Consequently, the penny stock rules may affect the ability of broker-dealers to make a market in or trade our common

stock and may consequently affect a stockholder’s ability to resell any of our shares in the public markets.

do not intend to pay regular future dividends on our common stock and thus stockholders must look to appreciation of our common stock

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Fogassa, our Chief Executive Officer and member of our Board of Directors, owns greater than 50% of the Company’s voting securities,

which will cause us to be deemed a “controlled company” under the rules of Nasdaq or NYSE.

which means we are deemed a “controlled company” under the rules of Nasdaq.

a result of his ownership of all issued and outstanding shares of our Series A Preferred Stock, Mr.

Fogassa, our Chief Executive Officer

and member of our Board of Directors, holds more than 50% of our voting securities, and as such, we are a “controlled company” under the rules of Nasdaq

a “controlled company,” we may elect to rely on some or all of these exemptions, and we currently intend to take advantage

of all of these exemptions.

and Chairman, holds more than 50% of our voting securities, and as such, we are a “controlled company” under the rules of

As a “controlled company,”

we may elect to rely on some or all of these exemptions, even though currently we do not take advantage of any of these exemptions, but

may do so in the future.

Accordingly, should the interests of Mr.

Fogassa differ from those of other stockholders, the other stockholders

may not have the same protections afforded to stockholders of companies that are subject to all of the Nasdaq or NYSE corporate governance

Even if we do not avail ourselves of these exemptions, our status as a controlled company could make our common stock less

attractive to some investors or otherwise harm our stock price.

may not have the same protections afforded to stockholders of companies that are subject to all of the Nasdaq corporate governance standards.

Our status as a controlled company could make our common stock less attractive to some investors or otherwise harm our stock price.

stock price may be volatile, and you could lose all or part of your investment.

The trading price of our common stock

may fluctuate substantially and will depend on several factors, including those described in this “Risk Factors” section,

many of which are beyond our control and may not be related to our operating performance.

These fluctuations could cause you to lose

all or part of your investment in our securities.

Factors that could cause fluctuations in the trading price of our common stock include:

trading price of our common stock may fluctuate substantially and will depend on several factors, including those described in this “Risk

Factors” section, many of which are beyond our control and may not be related to our operating performance.

These fluctuations

could cause you to lose all or part of your investment in our securities.

Factors that could cause fluctuations in the trading price

of our common stock include:

from our exploration and/or, if warranted, project development efforts;

to our industry, including demand and regulations;

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geo-political and other external factors, particularly within the country of Brazil.

addition, the stock market in general has experienced extreme price and volume fluctuations that have often been unrelated or

disproportionate to the operating performance of those companies.

Broad market and industry factors, as well as general economic, political

and market conditions such as recessions or interest rate changes, may seriously affect the market price of our common stock, regardless

of our actual operating performance.

addition, the stock market in general has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate

to the operating performance of those companies.

Broad market and industry factors, as well as general economic, political and market

conditions such as recessions or interest rate changes, may seriously affect the market price of our common stock, regardless of our

actual operating performance.

in the past, following periods of volatility in the overall market and the market prices of particular companies’ securities, securities

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common stock or other securities convertible into shares of our common stock in the future, additional and potentially substantial dilution

have not paid cash dividends in the past and do not expect to pay dividends in the future.

Any return on investment will likely be limited

to the value of our common stock.

have never paid cash dividends on our common stock and do not anticipate doing so in the foreseeable future.

The payment of dividends

on our common stock will depend on earnings, financial condition and other business and economic factors affecting us at such time as

our board of directors may consider relevant.

If we do not pay dividends, our common stock may be less valuable because a return on your

investment will only occur if our stock price appreciates.

we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, stock price appreciation, if any, will

be your sole source of gain.

currently intend to retain all of our future earnings, if any, to finance the growth and development of our business.

In addition, the

terms of any future debt agreements may preclude us from paying dividends.

As a result, appreciation, if any, in the market price of

our common stock will be your sole source of gain for the foreseeable future.

may need additional capital, and we may be unable to obtain such capital in a timely manner or on acceptable terms, or at all.

our future capital needs may require us to sell additional equity or debt securities that may dilute our stockholders or introduce covenants

that may restrict our operations or our ability to pay dividends.

grow our business and remain competitive, we may require additional capital from time to time for our daily operation.

Our ability to obtain additional capital is subject to a variety of uncertainties, including:

market position and competitiveness in our industry;

ability to prove reserves in each of our properties and, ultimately, commence commercial extraction on each of our properties;

future profitability, overall financial condition, results of operations and cash flows;

political and other conditions in the U.S., Brazil and other international jurisdictions.

may be unable to obtain additional capital in a timely manner or on acceptable terms or at all.

In addition, our future capital needs

and other business reasons could require us to sell additional equity or debt securities or obtain a credit facility.

The sale of additional

equity or equity-linked securities could dilute our stockholders.

The incurrence of indebtedness would result in increased debt service

obligations and could result in operating and financing covenants that would restrict our operations or our ability to pay dividends

to our stockholders.

existing stockholders have substantial influence over our company and their interests may not be aligned with the interests of our other

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to receive a premium for their securities.

of the date of this Report, certain stockholders control the voting power in us, including management.

As a result, these stockholders

have substantial influence over our business, including decisions regarding mergers, consolidations and the sale of all or substantially

all of our assets, election of directors and other significant corporate actions.

This concentration of ownership may discourage, delay

or prevent a change in our control, which could deprive our stockholders of an opportunity to receive a premium for their shares as part

of any contemplated sale of our Company and may reduce the price of our common stock.

of the date of this Annual Report, certain stockholders control the voting power in us, including management.

As a result, these

stockholders have substantial influence over our business, including decisions regarding mergers, consolidations and the sale of all

or substantially all of our assets, election of directors and other significant corporate actions.

This concentration of ownership

may discourage, delay or prevent a change in our control, which could deprive our stockholders of an opportunity to receive a

premium for their shares as part of any contemplated sale of our Company and may reduce the price of our common stock.

of a substantial number of shares of our common stock by our stockholders in the public market could cause our stock price to fall.

of a substantial number of shares of our common stock in the public market or the perception that these sales might occur could significantly

reduce the market price of our common stock and impair our ability to raise adequate capital through the sale of additional equity securities.

We are unable to predict the effect that such sales may have on the prevailing market price of our common stock.

as a result of operating as a public company are significant, and our management is required to devote substantial time to compliance

with our public company responsibilities and corporate governance practices.

a public company, we incur significant legal, accounting and other expenses that private companies do not incur.

The Sarbanes-Oxley Act,

the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of the Nasdaq Capital Market, and other applicable

securities rules and regulations impose various requirements on public companies.

Our management and other personnel will devote a substantial

amount of time to compliance with these requirements.

Moreover, these rules and regulations will increase our legal and financial compliance

costs and will make some activities more time-consuming and costly.

We cannot predict or estimate the amount of additional costs we will

incur as a public company or the specific timing of such costs.

internal control over financial reporting may not meet the standards required by Section 404 of the Sarbanes-Oxley Act, and failure to

achieve and maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act, could

have a material adverse effect on our business and share price.

management is required to report on the effectiveness of our internal control over financial reporting.

The rules governing the standards

that must be met for our management to assess our internal control over financial reporting are complex and require significant documentation,

testing and possible remediation.

cannot assure you that there will not be material weaknesses or significant deficiencies in our internal control over financial reporting

in the future.

Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report

our financial condition, results of operations or cash flows.

If we are unable to conclude that our internal control over financial reporting

is effective, or if our independent registered public accounting firm determines we have a material weakness or significant deficiency

in our internal control over financial reporting once that firm begins our Section 404 reviews, investors may lose confidence in the

accuracy and completeness of our financial reports, the market price of our common stock could decline, and we could be subject to sanctions

or investigations by Nasdaq, the SEC or other regulatory authorities.

Failure to remedy any material weakness in our internal control

over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict

our future access to the capital markets.

Unresolved Staff Comments.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors