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Item 1A. Risk Factors

2025-04-22 compared with 2024-05-15 · 856 added, 8 removed, 0 unchanged (100% of the section changed)

As a smaller reporting company, we are not required to provide a statement

of risk factors.

An investment in our common stock involves a high degree of risk.

carefully consider the following risk factors before deciding to invest in our company.

If any of the following risks actually occur,

our business, financial condition, results of operations and prospects for growth would likely suffer.

As a result, you may lose all or

part of your investment in our company.

in our common shares involves a high degree of risk.

An investment in our securities is speculative and involves a high degree of risk

due to the nature of our business and the present stage of exploration and development of our mineral properties.

You should carefully

consider the risks described below, as well as the other information in this Annual Report, including our consolidated financial statements

and the related notes and Part II, Item 7.

entitled “Management’s Discussion and Analysis of Financial Condition and Results

of Operations,” and in any documents incorporated in this Annual Report by reference, before deciding whether to invest in our

common shares.

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

of operations, and growth prospects and could cause them to differ materially from the estimates described in forward-looking statements

in this Annual Report.

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

Although we have discussed all known material risks, the risks described below are not the only ones that we may face.

Additional risks

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

Certain statements

below are forward-looking statements.

See also “Cautionary Note Regarding Forward-Looking Statements” in this Annual Report.

Related to Mining and Our Business

ability to continue the exploration, permitting, development, and construction of the project, and to continue as a going concern, will

depend in part on our ability to obtain suitable financing.

have limited financial resources.

We will need external financing to develop and construct the project and to complete the permitting

Although the Company’s current capital resources and liquidity has included approximately $4 million in funding since

2023, we project that we will need approximately $10 million for fiscal year 2026.

We expect to seek additional financing through joint

ventures, capital markets, private financing sources, and the exercise of outstanding warrants and options.

do not currently have sufficient funds or committed financing necessary to commence construction of the Project, and we may be unable

to raise the necessary funds.

on the updated schedule published by the USFS in January 2024, the Company anticipates that the USFS will publish a FEIS and a DROD in

the second quarter of 2024 and a Final ROD in the first quarter of 2025.

We have commenced pre-construction engineering and other preparations

and, if the DROD and ROD are received on the anticipated schedule, we would seek to commence construction in 2025.

According to the TRS,

as of December 31, 2020, the total initial capital cost estimate for the Project was approximately $1,263 million.

Although we have not

updated our capital cost estimates as of December 31, 2023, based on significant inflation and increased financing costs since 2020,

we expect the actual cost estimates to be higher than the 2020 estimate.

These cost estimates may change materially due to inflation,

competition or other unforeseen challenges at the Project site.

do not currently have sufficient funds or committed financing to commence construction of the Project.

Our ability to obtain sufficient

funds or committed financing may be impacted by various factors, including, but not limited to, our ability to raise additional funds

at acceptable rates or at all;

unfavorable interest rates;

the incurrence of additional debt, which may be subject to certain restrictive

restrictions on our use of government funding;

dilution resulting from additional equity financing;

our ability to control

certain property as a result of our entry into joint ventures or other similar arrangements;

and the loss of certain economic benefits

of our property as a result of our entry into royalty agreements.

failure to obtain sufficient financing could result in the delay or indefinite postponement of exploration, permitting, development,

construction, or production at the Project.

The cost and terms of such financing may significantly reduce the expected benefits from

development of the Project and/or render such development uneconomic.

There can be no assurance that additional capital or other types

of financing will be available when needed or that, if available, the terms of such financing will be favorable.

Our failure to obtain

financing could have a material adverse effect on our growth strategy and results of operations and financial condition.

Company does not have a full staff of technical people and relies upon outside consultants to provide critical services.

Company has a relatively small staff and depends upon its ability to hire consultants with the appropriate background and expertise.

The Company’s inability to hire the appropriate consultants at the appropriate time could adversely impact the Company’s

ability to advance its exploration and permitting activities.

For example, the Company will need to hire additional staff and consultants

in order to commence construction of the project.

have no history of commercially producing precious metals from our mineral properties and there can be no assurance that we will successfully

establish mining operations or profitably produce precious metals.

project is not in production or currently under construction, and we have no ongoing mining operations or revenue from mining operations.

Mineral exploration and development has a high degree of risk and few properties that are explored are ultimately developed into producing

The future development of the project will require obtaining federal and state permits and financing and the construction and

operation of mines, processing plants and related infrastructure.

As a result, we are subject to all of the risks associated with establishing

new mining operations and business enterprises, including, among others:

need to obtain necessary environmental and other governmental approvals and permits, and the timing and conditions of those approvals

potential that future exploration and development of mineral claims on or near the project site may be impacted by litigation and/or

consent decrees entered into by previous owners of mineral rights;

availability and cost of funds to finance construction and development activities;

timing and cost, which can be considerable, of the construction of mining and processing facilities as well as other related infrastructure;

opposition from non-governmental organizations, environmental groups or local groups which may delay or prevent development activities;

increases in construction and operating costs due to changes in the cost of labor, fuel, power, materials and supplies, services,

and foreign exchange rates;

availability and cost of skilled labor and mining equipment;

availability and cost of appropriate smelting and/or refining arrangements.

costs, timing and complexities of mine construction and development are increased by the remote location of the project, with additional

challenges related thereto, including access, water and power supply, and other support infrastructure.

Cost estimates may increase significantly

as more detailed engineering work and studies are completed.

New mining operations commonly experience unexpected costs, problems and

delays during development, construction, and mine start-up.

In addition, delays in the commencement of mineral production often occur.

Accordingly, there are no assurances that our activities will result in profitable mining operations, that we will successfully establish

mining operations, or that we will profitably produce precious metals at the Project.

addition, there is no assurance that our mineral exploration activities will result in any discoveries of new ore bodies.

mineralization is discovered there is also no assurance that the mineralized material would be economical for commercial production.

Discovery of mineral deposits is dependent upon a number of factors and significantly influenced by the technical skill of the exploration

personnel involved.

The commercial viability of a mineral deposit is also dependent upon a number of factors which are beyond our control,

including the attributes of the deposit, commodity prices, government policies and regulation, and environmental protection requirements.

resource exploration and, if warranted, development, is a speculative business, characterized by a number of significant risks, including,

among other things, unprofitable efforts resulting not only from the failure to discover mineral deposits but also from finding mineral

deposits, which, though present, are insufficient in volume and/or grade to return a profit from production.

There is no certainty that

the expenditures that have been made and may be made in the future by the Company related to the exploration of its properties will result

in discoveries of mineralized material in commercially viable quantities.

exploration projects do not result in the discovery of commercially viable mineral deposits and no assurance can be given that any particular

level of recovery or mineral reserves will in fact be realized or that any identified mineral deposit will ever qualify as a commercially

viable deposit which can be legally and economically exploited.

Company’s mineral resource and mineral reserve estimates may not be indicative of the actual copper that can be mined.

results from core drilling or reverse circulation drilling can be subject to errors at the laboratory analyzing the drill samples.

addition, reverse circulation or core drilling may lead to samples which may not be representative of the copper or other metals in the

entire deposit.

Mineral resource and mineral reserve estimates are based on interpretation of available facts and extrapolation or interpolation

of data and may not be representative of the actual deposit.

In the context of mineral exploration and future development, there is inherent

variability between duplicate samples taken adjacent to each other and between sampling points that cannot be reasonably eliminated.

There may also be unknown geologic details that have not been identified or correctly appreciated at the current level of delineation

in these types of investigations.

This results in uncertainties that cannot be reasonably eliminated from the estimation process.

of the resulting variances can have a positive effect and others can have a negative effect on mining and processing operations.

calculations of amounts of mineralized material within mineral resources and mineral reserves are estimates only.

Actual recoveries of

copper and other potential by-products from mineral resources and mineral reserves may be lower than those indicated by test work.

material change in the quantity of mineralization, grade, tonnage or stripping ratio, or the price of copper and other potential by-products,

may affect the economic viability of a mineral property.

In addition, there can be no assurance that the recoveries of copper and other

potential by-products in small-scale laboratory tests will be duplicated in larger scale pilot plant tests under on-site conditions or

during production.

Notwithstanding the results of any metallurgical testing or pilot plant tests for metallurgy and other factors, there

remains the possibility that the ore may not react in commercial production in the same manner as it did in testing.

and metallurgy are an inexact science and, accordingly, there always remains an element of risk that a mine may not prove to be commercially

Until a deposit is actually mined and processed, the quantity of mineral reserves, mineral resources and grades must be considered

as estimates only.

In addition, the determination and valuation of mineral reserves and mineral resources is based on, among other things,

assumed metal prices.

Market fluctuations and metal prices may render mineral resources and mineral reserves uneconomic.

change in quantity of mineral reserves, mineral resources, grade, tonnage, percent extraction of those mineral reserves recoverable by

underground mining techniques or stripping ratio for those mineral reserves recoverable by open pit mining techniques may affect the

economic viability of a mining project, including the project and any future operations in which the Company has a direct or indirect

Any or all of these factors may lead to mineral resource and/or mineral reserve estimates being overstated, the mineable copper

that can be received from the project being less than the mineral resource and mineral reserve estimates, and the project not being a

viable project.

the Company’s mineral resource and mineral reserve estimates for the project are not indicative of actual grades of copper and

other potential by-products, the Company will have to continue to explore for a viable deposit or cease operations.

Company faces numerous uncertainties in estimating economically recoverable mineral reserves and mineral resources, and inaccuracies

in estimates could result in lower than expected revenues, higher than expected costs and decreased profitability.

concerning our mining properties in Item 2, Properties has been prepared in accordance with the requirements of S-K 1300.

is economically recoverable when the price at which it can be sold exceeds the costs and expenses of mining, processing and selling the

Mineral reserve and mineral resource estimates of the copper and antimony in our mining properties are based on many factors,

including engineering, economic and geological data assembled and analyzed by internal staff and third parties, which includes various

engineers and geologists, the area and volume covered by mining rights, assumptions regarding extraction rates and duration of mining

operations, and the quality of in-place mineral reserves and mineral resources.

The mineral reserve and mineral resource estimates as

to both quantity and quality are updated from time to time to reflect, among other matters, new data received.

According to the TRS,

as of December 31, 2020, the total initial capital cost estimate for the project was approximately $1,263 million.

The Company has not

updated its capital cost estimates as of December 31, 2023, however, based on significant inflation and increased financing costs since

2020, the Company expects the actual cost estimates to be higher than the 2020 estimate.

These cost estimates may change materially due

to inflation, competition or other unforeseen challenges at the Project site.

are numerous uncertainties inherent in estimating quantities and qualities of minerals and costs to mine recoverable mineral reserves

and mineral resources, including many factors beyond the Company’s control.

Estimates of mineral reserves and mineral resources

necessarily depend upon a number of variable factors and assumptions, any one of which may, if incorrect, result in an estimate that

varies considerably from actual results.

These factors and assumptions include, among others:

and mining conditions, including the Company’s ability to access certain mineral deposits as a result of the nature of the

geologic formations of the deposits or other factors, which may not be fully identified by available exploration data;

for the Company’s minerals;

arrangements, operating costs and capital expenditures;

and reclamation costs;

technology and processing improvements;

effects of regulation by governmental agencies and adverse judicial decisions;

ability to obtain, maintain and renew all required permits;

health and safety;

Company’s ability to convert all or any part of mineral resources to economically extractable mineral reserves.

a result, actual tonnage recovered from identified mining properties and estimated revenues, expenditures and cash flows with respect

to mineral reserves and mineral resources may vary materially from estimates.

Thus, these estimates may not accurately reflect the Company’s

actual mineral reserves and mineral resources.

Any material inaccuracy in estimates related to the Company’s mineral reserves or

mineral resources could result in lower than expected revenues, higher than expected costs or decreased profitability and changes in

future cash flow, which could materially and adversely affect the Company’s business, results of operations, financial position

and cash flows.

Additionally, reserve and resource estimates may be adversely affected in the future by interpretations of, or changes

to, the SEC’s property disclosure requirements for mining companies.

Company has a history of net losses and expects losses to continue for the foreseeable future.

have a history of net losses, and we expect to incur net losses for the foreseeable future.

The project has not advanced to the commercial

production stage, and we have no history of earnings or cash flow from operations.

We expect to continue to incur net losses unless and

until such time the project commences commercial production and generates sufficient revenues to fund continuing operations.

The development

of our mineral properties to achieve production will require the commitment of substantial financial resources.

The amount and timing

of expenditures will depend on a number of factors, including the progress of ongoing exploration and development, the results of consultants’

analyses and recommendations, the rate at which operating losses are incurred, the process of obtaining required government permits and

approvals, responding to opposition to the project, including potential litigation, the availability and cost of financing, the participation

of our partners, and the execution of any sale or joint venture agreements with strategic partners.

These factors, and others, are beyond

There is no assurance that we will be profitable in the future.

have a limited property portfolio.

present, our only material mineral property is the interest that we hold through our subsidiary in the project.

Unless we acquire or

develop additional mineral properties, we will be solely dependent upon this property.

If no additional mineral properties are acquired

by us, any adverse development affecting our operations and further development at the project may have a material adverse effect on

our financial condition and results of operations.

are subject to NEPA review and may be unable to obtain or retain necessary permits, which could adversely affect our operations.

mining and exploration development activities are subject to extensive permitting requirements which can be costly to comply with and

involve extended timelines.

Specifically, we are subject to NEPA review, a federal process which is presently ongoing.

Formal review

under NEPA is extensive and involves several actions, including public scoping, coordination with cooperating agencies, the release of

environmental impact statements followed by public comment, potential administrative objections, and the issuance of a final record of

Delays in the NEPA process, such as we are unable to timely obtain a record of decision from the United States Forest Service

or fail to obtain requisite ancillary permits, may adversely impact our operations.

Additionally, to the extent that we are granted necessary

permits, we may be subject to a number of Project requirements or conditions including the installation or undertaking of programs to

safeguard protected species and their habitat, sites, or otherwise limit the impacts of our operations.

Previously obtained permits may

be suspended or revoked for a variety of reasons.

While we strive to comply with and conclude the NEPA review process, and obtain and

comply with all necessary permits and approvals, any failure to do so may have negative impacts upon our business or financial condition,

such as increased delays, curtailment of our operations, increased costs, implementation of mitigation or remediation requirements, the

potential for litigation or regulatory action, and damage to our reputation.

are subject to extensive environmental laws and regulations, where compliance failure may impact our operations.

mining, exploration, and development operations are subject to extensive environmental, health, and safety laws and regulations in the

jurisdictions in which we operate and include those relating to the discharge and remediation of materials in the environment, waste

management, and natural resource protection and preservation.

Numerous governmental authorities, such as the U.S.

Environmental Protection

Agency, and analogous state agencies, have the authority to enforce compliance with these laws and regulations and the permits issued

thereunder, oftentimes requiring difficult and costly response actions.

Certain environmental laws, such as CERCLA, impose strict, joint

and several liability for costs required to remediate and restore sites where hazardous substances have been stored or released, including

sites subject to legacy contamination.

We may be required to remediate contaminated properties currently owned and operated by us regardless

of whether such contamination resulted from our actions or from the conduct of others.

Additionally, claims for damages to persons or

property, including damages to natural resources, may result from the environmental, health, and safety impacts of our operations.

may incur substantial costs to maintain compliance with environmental, health, and safety laws and regulations and such costs could increase

if existing laws and regulations are revised or reinterpreted or if new laws or regulations become applicable to our operations.

to comply with these environmental, health, and safety laws and regulations may result in the imposition of restrictions on our operations,

administrative civil or criminal liabilities, injunctions, third-party property damage or personal injury claims, investigatory cleanup

or other remedial obligations, or other adverse effects on our business, financial condition, or operations.

Current and future legislative,

regulatory, and judicial action could result in changes to operating permits, material changes in operations, and increased capital and

operating expenditures, among others.

operations are also subject to extensive laws and regulations governing worker health and safety and require us to ensure our employees

receive adequate training and guidance to follow applicable environmental, health, and safety policies, procedures, and programs.

to comply with applicable legal requirements may cause us to incur significant legal liability, penalties, or fines, result in reputational

damage, and negatively impact our employee retention.

Our mines will be inspected on a regular basis by government regulators who may

issue orders and citations if they believe a violation of applicable mining health and safety laws has occurred.

In such cases, we may

be subject to fines, penalties, or sanctions, and our operations temporarily shut down.

Additionally, future changes in applicable laws

and regulations, including more rigorous enforcement, could have an adverse impact on operations and result in increased material expenditures

to achieve compliance.

operations, including permitting, may be subject to legal challenges which could result in adverse impacts to our business and financial

mining, exploration, and development operations, and the permits required for such activities, may be subject to legal challenges at

the international, federal, state, and local level by various parties.

Such legal challenges may allege non-compliance with laws and

challenges may result in adverse impacts to our planned operations such as increased defense costs, the performance of additional mitigation

and remedial activities, or significant delays to our project.

We may also be subject to more localized opposition, including efforts

by environmental groups, which could attract negative publicity or have an adverse impact on our reputation.

Additionally,

our project is located in a district with significant impacts from legacy mining operations prior to our acquisition of and tenure at

Pursuant to CERCLA, we may be subject to liability and remediation responsibilities as current owners of certain areas of

the sites under applicable law, consent decrees or similar agreements.

operations are subject to climate change risks.

change may result in various and presently unknown physical risks, such as the increased frequency or intensity of extreme weather events

or changes in meteorological and hydrological patterns that could adversely impact our business.

Such physical risks may result in damage

to our facilities causing our operations to temporarily slow down or come to a stop.

Moreover, the physical risks associated with climate

change could have financial implications for our business, such as increased capital or operating costs, and additional expenditures

to maintain or increase the resiliency of our facilities and implement contingency measures.

attention to ESG matters and conservation measures may adversely impact our business.

while we may create and publish voluntary disclosures regarding ESG matters from time to time, certain statements in those voluntary

disclosures may be based on hypothetical expectations and assumptions that may or may not be representative of current or actual risks

or events or forecasts of expected risks or events, including the costs associated therewith.

Mandatory ESG-related disclosure are also

emerging as an area where we may be, or may become, subject to required disclosures in certain jurisdictions, and any such mandatory

disclosures may similarly necessitate the use of hypothetical, projected or estimated data, some of which is not controlled by us and

is inherently subject to imprecision.

Disclosures reliant upon such expectations and assumptions are necessarily uncertain and may be

prone to error or subject to misinterpretation given the long timelines involved and the lack of an established single approach to identifying,

measuring and reporting on many ESG matters.

Additionally, while we may announce various voluntary ESG targets in the future, due to

our status as a development stage company, such targets are aspirational.

Also, we may not be able to meet such targets in the manner

or on such a timeline as initially contemplated and we cannot guarantee that such targets will improve our ESG profile, including, but

not limited to, as a result of unforeseen costs or technical difficulties associated with achieving such results.

Further, despite any

voluntary actions, we may receive pressure from certain investors, lenders, employees or other groups to adopt more aggressive ESG-related

targets or policies, but we cannot guarantee that we will be able to implement such targets because of potential costs or technical or

operational obstacles.

Furthermore, we could be criticized by various anti-ESG stakeholders for the scope of our ESG-related goals or

policies, our strategic choices regarding ESG matters as they may impact our operations now or in the future, or for any revisions to

the same, as well as initiatives we may pursue or any public statements we may make.

We could be subjected to negative responses by governmental

actors (such as anti-ESG legislation or retaliatory legislative or administrative treatment) or consumers (such as boycotts or negative

publicity campaigns), which could adversely affect our reputation, business, financial performance, market access and growth.

capital markets participants are increasingly using certain components of ESG as a factor in their assessments, which could impact

our cost of capital or access to financing.

There has also been an acceleration in investor demand for ESG investing opportunities,

and many institutional investors have committed to increasing the percentage of their portfolios that are allocated towards

ESG-focused investments.

As a result, there has been a proliferation of ESG-focused investment funds and market participants seeking

ESG-oriented investment products.

There has also been an increase in third-party providers of company ESG ratings and rankings, and

an increase in ESG-focused voting policies among proxy advisory firms, portfolio managers, and institutional investors.

organizations that provide information to investors on corporate governance and related matters have developed ratings processes for

evaluating companies on their approach to ESG matters.

Currently, there are no universal standards for such ratings, rankings and

voting policies, they often differ based on the provider and the data they prioritize, and they are continually changing.

such ratings, rankings and voting policies may be used by some investors to inform their investment and voting decisions.

Additionally, certain investors may use these ratings or rankings to benchmark companies against their peers, and if a company is

perceived as lagging, these investors may engage with companies to require improved ESG disclosure or performance.

Moreover, certain

members of the broader investment community may consider a company’s sustainability score rating or ranking as a reputational

or other factor in making an investment decision.

Consequently, unfavorable ESG ratings could lead to increased negative investor

sentiment toward us and could impact our stock price and access to and costs of capital.

Additionally, to the extent ESG matters

negatively impact our reputation, we may not be able to compete as effectively to recruit or retain employees, which may adversely

impact our business.

Furthermore, there has recently been a backlash from certain governments and investors against ESG funds and

investment practices has resulted in increased scrutiny and withdrawals from such funds.

Such backlash has also resulted in

“anti-ESG” focused activism and investment funds, which may result in additional strains on our resources.

unable to meet the often conflicting ESG standards or investment, lending, ratings, or voting criteria and policies set by these

parties, we may lose investors, investors may allocate a portion of their capital away from us, we may face increased ESG- or

anti-ESG-focused activism, our cost of capital may increase, and our reputation may also be negatively affected.

reputation, as well as our stakeholder relationships, could be adversely impacted as a result of, among other things, any failure to

meet our ESG plans or targets or stakeholder perceptions of statements made by us, our employees and executives, agents, or other third

parties or public pressure from investors or policy groups to change our policies.

Furthermore, public statements with respect to ESG

matters—for example, emission reduction goals, other environmental targets, or other commitments addressing certain social issues—are

becoming increasingly subject to heightened scrutiny from public and governmental authorities related to the risk of potential “greenwashing,”

, misleading information or false claims overstating potential ESG benefits.

We may face increased litigation risk from private

parties and governmental authorities related to our ESG efforts.

Additionally, any such alleged claims of greenwashing against us or

others in our industry could lead to negative sentiment and the diversion of investment.

To the extent that we are unable to respond

timely and appropriately to any negative publicity, our reputation could be harmed.

Damage to our overall reputation could have a negative

impact on our financial results and require additional resources to rebuild our reputation.

prices are subject to dramatic and unpredictable fluctuations.

Company expects to derive revenues from the sale of its mineral resource properties or from the extraction and sale of molybdenum, silver,

copper, and rhenium, and associated minerals.

The price of those commodities has fluctuated widely in recent years.

It is affected by

numerous factors beyond the Company’s control, including international, economic, and political trends, expectations of inflation,

currency exchange fluctuations, interest rates, global or regional consumptive patterns, speculative activities, and increased production

due to new extraction developments and improved extraction and production methods.

The effect of these factors on the price of base and

precious metals, and therefore the economic viability of any of the Company’s exploration properties and projects, cannot accurately

be predicted.

Company’s title to its mineral properties and its validity may be disputed in the future by others claiming title to all or part

of such properties.

validity of mining rights may, in certain cases, be uncertain and subject to being contested.

The Company’s mining rights, claims

and other land titles, particularly title to undeveloped properties, may be defective and open to being challenged by governmental authorities

and local communities.

Company’s properties consist of various mining concessions in the United States.

law, the concessions may be subject

to prior unregistered agreements or transfers, which may affect the validity of the Corporation’s ownership of such concessions.

A claim by a third party asserting prior unregistered agreements or transfer on any of the Company’s mineral properties, especially

where commercially viable mineral reserves have been located, could adversely result in the Company losing commercially viable mineral

Even if a claim is unsuccessful, it may potentially affect the Company’s current activities due to the high costs of

defending against such claims and its impact on senior management’s time.

If the Company loses a commercially viable mineral reserve,

such a loss could lower the Company’s revenues or cause it to cease operations if this mineral reserve represented all or a significant

portion of the Company’s operations at the time of the loss.

of the Company’s properties may be subject to the rights or the asserted rights of various community stakeholders.

of community stakeholders may also impact on the Company’s ability to explore, develop or, in potentially the future, operate its

mining properties.

In certain circumstances, consultation with such stakeholders may be required and the outcome may affect the Company’s

ability to explore, develop or operate its mining properties.

of the Company’s mineral rights consist of unpatented mining claims.

Unpatented mining claims present unique title risks due to

the rules for validity and the opportunities for third-party challenge.

These claims are also subject to legal uncertainty.

Company faces substantial competition within the mining industry from other mineral companies with much greater financial and technical

resources and the Company may not be able to effectively compete.

mineral resource industry is intensively competitive in all of its phases, and the Company competes with many companies possessing much

greater financial and technical research resources.

Competition is particularly intense with respect to the acquisition of desirable

undeveloped gold properties.

The principal competitive factors in the acquisition of such undeveloped properties include the staff and

data necessary to identify, investigate and purchase such properties, and the financial resources necessary to acquire and develop such

Competition could adversely affect the Company’s ability to advance the project or to acquire suitable prospects for

exploration in the future on terms it considers acceptable.

Increased competition could adversely affect the Company’s ability

to attract necessary capital funding or acquire an interest in additional properties.

Company depends on key personnel for critical management decisions and industry contacts but does not maintain key person insurance.

Company is dependent on a relatively small number of key personnel, the loss of any of whom could have an adverse effect on the operations

of the Company.

The Company’s success is dependent to a great degree on its ability to attract and retain highly qualified management

The loss of any such key personnel, through incapacity or otherwise, would require the Company to seek and retain other qualified

personnel and could compromise the pace and success of its exploration and permitting activities.

The Company does not maintain key person

insurance in the event of a loss of any such key personnel.

Company directors and officers also serve as officers and/or directors of other mining companies, which may give rise to conflicts.

Company directors and officers are also directors, officers or shareholders of other companies that are similarly engaged in the business

of acquiring, developing and exploiting natural resource properties.

Such associations may give rise to conflicts of interest from time

Directors and officers of the Company with conflicts of interest are subject to and are required to follow the procedures set

out in applicable corporate and securities legislation, regulations, rules and the Company’s policies.

Company’s business involves risks for which the Company may not be adequately insured, if it is insured at all.

During exploration and development of, and production from, mineral properties, certain risks, and in particular, unexpected or

unusual geological operating conditions including landslides, ground failures, fires, flooding and earthquakes may occur.

It is not always

possible to fully insure against such risks.

The Company does not currently have insurance against all such risks and may decide not

to take out insurance against all such risks as a result of high premiums or other reasons.

Should such liabilities arise, they could

reduce or eliminate any future profitability and result in increasing costs and a decline in the value of the securities of the Company.

Additionally,

the Company is not insured against most environmental risks.

Insurance against all environmental risks (including potential liability

for pollution or other hazards as a result of the disposal of waste products by third parties occurring as part of historic exploration

and production) has not been generally available to companies within the industry.

The Company periodically evaluates the cost and coverage

of the insurance that is available against certain environmental risks to determine if it would be appropriate to obtain such insurance.

Without such insurance, or with limited amounts of such insurance, and should the Company become subject to environmental liabilities,

the payment of such liabilities would reduce or eliminate its available funds or could exceed the funds the Company has to pay such liabilities

and could result in bankruptcy.

Should the Company be unable to fully fund the remedial cost of an environmental problem, it might be

required to enter into costly interim compliance measures pending completion of the required remedy.

shortage of supplies and equipment, or the inability to obtain such supplies and equipment when needed and at expected prices, could

adversely affect the Company’s ability to operate its business.

Company is dependent on various supplies and equipment to carry out its activities.

The shortage of such supplies, equipment and parts,

or the inability to obtain such supplies and equipment when needed, whether as a result of inflated costs, supply chain disruptions or

other reasons, could have a material adverse effect on the Company’s ability to carry out its activities and therefore have a material

adverse effect on the cost of doing business.

Related to Our Industry

exploration and development is a high risk, speculative business.

exploration and development is a speculative business, characterized by a high number of failures.

Substantial expenditures are required

to discover new deposits and to develop the infrastructure, mining and processing facilities at any site chosen for mining.

exploration and development also involves a high degree of risk, which even a combination of experience, knowledge and careful evaluation

may not be able to adequately mitigate.

Few properties that are explored are ultimately developed into producing mines, and there is

no assurance that commercial quantities of ore will be discovered on any of the Company’s exploration properties.

There is also

no assurance that, even if commercial quantities of ore are discovered, a mineral property will be brought into commercial production,

or if brought into production, that it will be profitable.

The discovery of mineral deposits is dependent upon a number of factors, including

the technical skill of the exploration personnel involved.

The commercial viability of a mineral deposit is also dependent upon, among

a number of other factors, it’s size, grade, proximity to infrastructure, current metal prices, and government regulations, including

regulations relating to required permits, royalties, allowable production, importing and exporting of minerals and environmental protection.

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

may prevent the Company from receiving an adequate return on invested capital.

In addition, depending on the type of mining operation

involved, several years can elapse from the initial phase of drilling until commercial operations are commenced.

Some ore reserves may

become unprofitable to develop if there are unfavorable long-term market price fluctuations in gold or other metals, or if there are

significant increases in operating or capital costs.

Most of the above factors are beyond the Company’s control, and it is difficult

to ensure that the exploration or development programs proposed by the Company will result in a profitable commercial mining operation.

Please also see, among other things, the risk factor found under the subheading “The Company’s future exploration and development

efforts may be unsuccessful” below.

exploration and development is subject to numerous industry operating hazards and risks, many of which are beyond the Company’s

control and any one of which may have an adverse effect on its financial condition and operations.

project, and any future operations in which the Company has a direct or indirect interest, will be subject to all the hazards and risks

normally incidental to resource companies and mining in general.

Environmental hazards, unusual or unexpected geological operating conditions,

such as rock bursts, structural cave-ins and landslides, fires, earthquakes and flooding, power outages, labor disruptions, industrial

accidents such as explosions, unexpected mining dilution, metallurgical and other processing issues, metal losses and periodic interruptions

due to inclement or hazardous weather conditions, and the inability to obtain suitable or adequate machinery, equipment or labor, are

some of the industry operating risks involved in the conduct of exploration programs and the operation of mines.

If any of these events

were to occur, they could cause injury or loss of life, environmental damage, operational delays, monetary losses and/or severe damage

to or destruction of mineral properties, production facilities or other properties.

As a result, the Company could be the subject of

a regulatory investigation, potentially leading to penalties and suspension of operations.

In addition, the Company may have to make

expensive repairs and could be subject to legal liability as an outcome of regulatory enforcement.

The occurrence of any of these operating

risks and hazards may have an adverse effect on the Company’s financial condition and operations, and correspondingly on the value

and price of the Company’s common shares.

Company may not be able to obtain insurance to cover these risks at affordable premiums or at all.

Insurance against certain environmental

risks, including potential liability for pollution or other hazards as a result of operations or other mining activities, is not generally

available to the Company or to other companies within the mining industry.

The Company may suffer a materially adverse effect on its

business if it incurs losses related to any significant events that are not covered by its insurance policies.

Please also see, among

other things, the risk factor found under the subheading “The Company’s business involves risks for which the Company may

not be adequately insured, if it is insured at all” above.

prices have fluctuated widely in the past and are expected to continue to do so in the future, which may adversely affect the amount

of revenues derived from future commercial production.

commercial feasibility of the project and the Company’s ability to arrange funding to conduct its planned exploration projects

is dependent on, among other things, the price of copper and other potential by-products.

Depending on the price to be received for any

minerals produced, the Company may determine that it is impractical to commence or continue commercial production.

A reduction in the

price of copper or other potential by-products may prevent the project from being economically mined or result in the write-off of assets

whose value is impaired as a result of low precious metals prices.

revenues, if any, are expected to be in large part derived from the future mining and sale of gold and other potential by-products or

interests related thereto.

The prices of these commodities fluctuate and are affected by numerous factors beyond the Company’s

control, including, among others:

International

economic and political conditions;

bank purchases and sales;

of inflation or deflation;

International

currency exchange rates;

or regional consumptive patterns;

of supply and demand;

production due to new mine developments;

production due to mine closures;

mining and production methods;

and costs of metal substitutes;

stock levels maintained by producers and others;

carrying costs.

effect of these factors on the price of copper and other potential by-products cannot be accurately predicted.

If the price of copper

and other potential by-products decreases, the value of the Company’s assets would be adversely affected, thereby adversely impacting

the value and price of the Company’s common shares.

the price of copper has recently been strong, there can be no assurance that copper prices will remain at such levels or be such that

the project, and any future operations in which the Company has a direct or indirect interest, will be mined at a profit.

Some credible

industry experts are predicting that copper will continue to increase in price during 2025 and the next several years.

However, other

credible industry experts expect that the price of copper has generally peaked during the recent pandemic and resulting economic crisis,

and that as economies slowly recover over the next few years, the price of gold will decrease and be worth much less per ounce than it

metal prices encourage mining exploration, development, and construction activity, which in the past has increased demand for and cost

of contract mining services and equipment.

in metal prices tend to encourage increases in mining exploration, development, and construction activities.

During past expansions,

demand for and the cost of contract exploration, development and construction services and equipment have increased as well.

demand for and cost of services and equipment could cause project costs to increase materially, resulting in delays if services or equipment

cannot be obtained in a timely manner due to inadequate availability, and increased potential for scheduling difficulties and cost increases

due to the need to coordinate the availability of services or equipment, any of which could materially increase project exploration,

development, or construction costs, result in project delays, or both.

There can be no assurance that increased costs may not adversely

affect the exploration and/or development of our mineral properties in the future.

financial markets can have a profound impact on the global economy in general and on the mining industry in particular.

industries, including the precious metal mining industry, are impacted by global market conditions.

Some of the key impacts of financial

market turmoil can include contraction in credit markets resulting in a widening of credit risk, devaluations and high volatility in

global and specifically mining equity markets, commodity, foreign exchange and precious metal markets, and a lack of market liquidity.

A slowdown in the financial markets or other economic conditions, including but not limited to, reduced consumer spending, increased

unemployment rates, deteriorating business conditions, inflation, deflation, volatile fuel and energy costs, increased consumer debt

levels, lack of available credit, lack of future financing, a prolonged recession, changes in interest rates and tax rates may adversely

affect the Corporation’s growth and profitability potential.

Specifically:

global credit/liquidity crisis, or a significant increase in interest rates, could impact the cost and availability of financing

and the Company’s overall liquidity;

volatility of gold and other potential by-product prices may impact the Company’s future revenues, profits and cash flow;

energy prices, commodity and consumables prices and currency exchange rates impact potential production costs;

devaluation and volatility of global stock markets impacts the valuation of the Company’s equity securities, which may impact

its ability to raise funds through the issuance of equity.

legal certainty about aspects of the 1872 Mining Law is being challenged in Federal Court.

changing legal environment and court rulings related to the use of unpatented lode mining claims now being reviewed in federal courts

may cause the Company to make modifications to its current claims management program and strategy.

July 31, 2019, the U.S.

District Court for the District of Arizona issued a decision vacating the Forest Service’s approval of

the plan of operations for the proposed Rosemont Mine.

See Center for Biological Diversity et al.

United States Fish and Wildlife

Service et al .

(the “ Rosemont ” case).

The District Court found that the Forest Service erred when it applied its

surface management regulations to approve the proposed mine’s tailings storage facility and waste rock dumps on National Forest

According to the District Court, the agency should have considered those facilities under its special use permit regulations.

The Forest Service made that error, according to the court, because it did not confirm under the Mining Law that the unpatented mining

claims under the ancillary facilities were “valid,” as defined by the court.

The outcome of the District Court’s reasoning

is that only activities on “valid” claims are regulated under the Forest Service mining regulations, and ancillary facilities

require a special use permit.

decision was appealed and on May 12, 2022, a split Ninth Circuit panel remanded the case back to the Forest Service for such further

proceedings as it deems appropriate, including application of 36 CFR 228 subpart A to Rosemont’s plan of operation, guided by

the Court’s ruling that Section 612 of the Surface Resources and Multiple Use Act of 1955 grants no rights beyond those

granted by the 1872 Mining Law.

The majority opinion expressly refrained from further interpretation regarding the application of

the 36 CFR 228A, 36 CFR 251 or other Forest Service regulations in advance of the Forest Service further considering and developing

the project record regarding the specifics of the Rosemont plan of operations.

In December 2022, the Rosemont defendant announced it

would not appeal the Ninth Circuit’s decision.

Company closely followed the Rosemont proceedings and is following other Mining Law litigation currently pending in the United

States Court of Appeals for the District of Columbia.

During the pendency of the Rosemont proceedings, the Company directed a thorough

analysis of its claims management program to support the Project Plan of Restoration and Operations.

Notwithstanding that neither the

validity of the 36 CFR 228 subpart A regulations was challenged in the Rosemont case nor their application to approval of the

Rosemont plan of operations were reviewed by the federal courts, the Company’s claims management program and strategy was adjusted

during the years ended December 31, 2022 and December 31, 2023 relinquishing 53 of the Company’s unpatented lode mining claims

and re-staking with 205 unpatented mill sites over areas non-mineral in character and suitable for mill sites should a development decision

Related to Our Common Shares

requirements of being a public company in the United States listed on the OTC market, including compliance with the reporting requirements

of the Exchange Act, the requirements of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”), may strain our resources, increase

our costs, and require significant management time and resources.

a public company in the United States, we need to comply with federal and state laws, regulations and requirements, certain corporate

governance provisions of Sarbanes-Oxley, related regulations of the SEC and the requirements of the OTC markets.

These additional requirements

may strain our resources, increase our costs and require significant management time and resources.

Complying with these statutes, regulations

and requirements, occupies a significant amount of time of our Board of Directors (the “Board”) and management and increases

our costs and expenses, including an increased reliance on outside counsel and accountants.

We also prepare and distribute periodic public

reports in compliance with our obligations under the U.S.

federal securities laws.

activism, the current political environment and the current high level of government intervention and regulatory reform may lead to substantial

new regulations and disclosure obligations, which could then result in additional compliance costs and affect the manner in which we

operate our business.

Moreover, any new regulations or disclosure obligations may increase our legal and financial compliance costs and

may make some activities more time-consuming and costly.

while we generally must comply with Section 404 of Sarbanes-Oxley for our fiscal year ended January 31, 2025, we are not required to

have our independent registered public accounting firm attest to the effectiveness of our internal controls over financial reporting

until our first annual report subsequent to our ceasing to be an “emerging growth company” within the meaning of the Exchange

Once it is required to do so, our independent registered public accounting firm may issue a report that is adverse in the event

the independent registered public accounting firm concludes that there is one or more material weaknesses in the effectiveness of our

internal control over financial reporting.

Compliance with these requirements may strain our resources, increase our costs and use significant

management time and resources, and we may be unable to comply with these requirements in a timely or cost-effective manner.

as long as we are an “emerging growth company,” or a “smaller reporting company” we will not be required to comply

with certain reporting requirements that apply to some other public companies, and such reduced disclosure requirements may make our

Common Shares less attractive.

an “emerging growth company” as defined in the JOBS Act, we may take advantage of exemptions from certain disclosure requirements

applicable to other public companies that are not emerging growth companies.

We are an emerging growth company until the earliest of

(i) the last day of the fiscal year during which we have total annual gross revenues of $1.24 billion or more;

(ii) the last day of the

fiscal year following the fifth anniversary of the first sale of common equity securities pursuant to an effective registration statement

under the Securities Act;

(iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible

or (iv) the date on which we are deemed to be a “large accelerated filer” under the rules of the SEC.

so long as we remain an “emerging growth company,” we will not be required to, among others:

an auditor report on our internal control over financial reporting pursuant to Sarbanes-Oxley;

with any new requirements adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation or a supplement

to the auditor’s report providing additional information about our audit and our financial statements;

detailed compensation discussion and analysis in our filings under the Exchange Act and instead may provide a reduced level of disclosure

concerning executive compensation;

a non-binding stockholder advisory vote on executive compensation and stockholder approval of any “golden parachute”

payments not previously approved.

Notwithstanding

the above, we are also currently a “smaller reporting company,” meaning that we are not an investment company, an asset-backed

issuer, or a majority-owned subsidiary of a parent company that is not a smaller reporting company and have either:

(i) a public float

of less than $250.0 million, or (ii) annual revenues of less than $100.0 million during the most recently completed fiscal year and:

(A) no public float, or (B) a public float of less than $700.0 million.

In the event that we are still considered a “smaller reporting

company,” at such time we cease being an “emerging growth company,” the disclosure we will be required to provide in

our SEC filings will increase but will still be less than it would be if we were not considered either an “emerging growth company”

or a “smaller reporting company”.

Specifically, similar to “emerging growth companies,” “smaller reporting

companies” are able to provide simplified executive compensation disclosures in their filings;

are exempt from the provisions of

Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report

on the effectiveness of internal control over financial reporting;

and have certain other decreased disclosure obligations in their SEC

filings, including, among other things, only being required to provide two years of audited financial statements in annual reports.

disclosures in our SEC filings due to our status as an “emerging growth company” or “smaller reporting company”

may make it harder for investors to analyze the Company’s results of operations and financial prospects.

of these disclosure exemptions, some investors may find our common shares less attractive, which may result in a less active trading

market for our common shares, and our share price may be more volatile.

in the Company’s corporate charter documents could make an acquisition of the Company, which may be beneficial to its shareholders,

more difficult and may prevent attempts by the shareholders to replace or remove the Company’s current management and/or limit

the market price of the Common Shares.

addition, because the Board is responsible for appointing the members of the Corporation’s management team, these provisions may

frustrate or prevent any attempts by the Company’s shareholders to replace or remove current management by making it more difficult

for shareholders to replace members of the Board.

Among other things, these provisions include the following:

cannot amend the Company’s articles unless such amendment is approved by shareholders holding at least two-thirds of the votes

cast on the proposal;

Board may, without shareholder approval, issue first preferred shares and/or second preferred shares having any terms, conditions,

rights, preferences and privileges as the Board may determine;

must give advance notice to nominate directors in accordance with the Company’s advance notice policy.

Company has no history of paying dividends, does not expect to pay dividends in the immediate future and may never pay dividends.

incorporation, neither the Company nor any of its subsidiaries have paid any cash or other dividends on its common shares, and the Company

does not expect to pay such dividends in the foreseeable future, as all available funds will be invested primarily to finance its mineral

exploration programs.

Company will need to raise additional capital through the sale of its securities or other interests, resulting in potential for significant

dilution to the existing shareholders and, if such funding is not available, the Company’s operations would be adversely affected.

Company has limited financial resources and has financed its activities primarily through the sale of the Company’s securities,

such as common shares and convertible notes.

The Company expects that it will need to continue its reliance on the sale of its securities

for future financing, including that required to complete the permitting process or begin construction, resulting in dilution to existing

shareholders.

sales of the Company’s common shares into the public market by holders of the Company’s options and warrants may lower the

market price, which may result in losses to the Company’s shareholders.

of substantial amounts of the Company’s common shares into the public market by shareholders, The Company’s officers or directors

or pursuant to the exercise of options or warrants, or even the perception by the market that such sales may occur, may lower the market

price of the Corporation’s common shares.

Risks Related to Capital Structure

are required to develop and maintain proper and effective internal controls over financial reporting.

We may not complete our analysis

of our internal controls over financial reporting in a timely manner, or these internal controls may not be determined to be effective,

which may adversely affect investor confidence in us and, as a result, the value of our common stock.

are required, pursuant to Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness

of our internal controls over financial reporting for the fiscal year ending January 31, 2025.

This assessment will need to include disclosure

of any material weaknesses identified by our management in our internal controls over financial reporting.

Additionally, we are required

to disclose changes made in our internal controls and procedures on a quarterly basis.

However, as long as we are an emerging growth company, or a smaller reporting company that is a non-accelerated filer, our independent registered

public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant

to Section 404(b).

At such time this attestation will be required, our independent registered public accounting firm may issue a report

that is adverse in the event the independent registered public accounting firm concludes that there is one or more material weaknesses

in the effectiveness of our internal control over financial reporting.

Our remediation efforts may not enable us to avoid a material

weakness in the future.

We may need to undertake various actions, such as implementing new internal controls and procedures and hiring

additional accounting or internal audit staff.

we are unable to assert that our internal controls over financial reporting are effective, or if our independent registered public accounting

firm is unable to express an opinion on the effectiveness of our internal controls to the extent required, we could lose investor confidence

in the accuracy and completeness of our financial reports, which could cause the price of our common stock to decline, and we may be

subject to investigation or sanctions by the SEC.

securities or industry analysts do not continue to publish research or reports about our business, or if they issue an adverse or misleading

opinion regarding our stock, our stock price and trading volume could decline.

trading market for our common stock is influenced by the research and reports that securities or industry analysts publish about us or

our business.

If analysts who cover us downgrade our common stock or publish inaccurate or unfavorable research about our business model

or our stock performance, or if our results of operations fail to meet the expectations of analysts, the price of our common stock would

likely decline.

If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, we could lose visibility

in the financial markets, which in turn might cause the price of our common stock and trading volume to decline.

security vulnerabilities, data breaches, and cyber-attacks could compromise proprietary or otherwise sensitive information or disrupt

operations, which could adversely affect the Company’s business, reputation, operations, and stock price.

systems and other technologies, including those related to the Company’s financial and operational management, and its technical

and environmental data, are an integral part of the Company’s business activities.

Network and information systems related events,

such as phishing attacks, computer hacking, cyber-attacks, computer viruses, worms or other destructive or disruptive software, process

breakdowns, denial of service attacks, lost or misplaced data, programming errors, scams, burglary, human error, misdirected wire transfers,

other malicious activities or any combination of the foregoing.

We may also be adversely affected by power outages, natural disasters,

terrorist attacks, or other similar events which could result in damages to the Company’s property, equipment and data.

also could result in significant expenditures to repair or replace damaged property or information systems and/or to protect them from

similar events in the future.

have experienced cybersecurity incidents but have not suffered any material adverse impacts to our business and operations as a result

of such incidents.

No security measure is infallible.

Our facilities and systems, and those of our third-party service providers, have

been subject to certain cybersecurity incidents and are vulnerable to future adverse events.

We may also identify previously undiscovered

instances of security breaches or bad actors with present access to our systems.

addition, as a general matter, the frequency and magnitude of cyber-attacks is increasing, and attackers have become more sophisticated.

Cyber-attacks are similarly evolving and include without limitation use of malicious software, surveillance, credential stuffing, spear

phishing, social engineering, use of deepfakes ( i.e.

, highly realistic synthetic media generated by artificial intelligence),

attempts to gain unauthorized access to data, and other electronic security breaches that could lead to disruptions in critical systems,

unauthorized release of confidential or otherwise protected information and corruption of data.

The Corporation may be unable to anticipate,

detect or prevent future attacks, particularly as the methodologies used by attackers change frequently or are not recognizable until

We may also be unable to investigate or remediate incidents as attackers are increasingly using techniques and tools designed

to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence.

any security breaches such as misappropriation, misuse, leakage, falsification, accidental release or loss of information contained in

the Company’s information technology systems including personnel and other data that could damage its reputation, trigger reporting

or other requirements under material contracts and require the Company to expend significant capital and other resources to remedy any

such security breach.

Insurance held by the Company may mitigate losses, however, in any such events or security breaches, such insurance

coverage may not be sufficient to cover any consequent losses or otherwise adequately compensate the Company for any disruptions to its

business that may result, including loss or disruption of a material contract resulting from such breach.

Insurance coverage may also

be entirely unavailable.

The occurrence of any such events or security breaches could have a material adverse effect on the business

of the Company.

In particular, a cybersecurity incident resulting in a security breach or failure to identify a security threat could

disrupt our business and could result in the loss of sensitive, confidential information or other assets, as well as an inability to

complete transactions, litigation including individual claims or class actions, regulatory enforcement, violation of privacy or securities

laws and regulations, and remediation costs, all of which could materially impact our reputation, operations, or financial performance.

can be no assurance that these events and/or security breaches will not occur in the future or not have an adverse effect of the business,

reputation, results of operations, and financial condition of the Company.

may experience dilution of your ownership interests because of the future issuance of additional shares of Common Stock or other securities

that are convertible into or exercisable for Common Stock or preferred stock.

the future, the Company may issue authorized but previously unissued equity securities, resulting in the dilution of the ownership interests

of present stockholders.

The Company is authorized to issue an aggregate of 500,000,000 shares of Common Stock and 10,000,000 shares

of preferred stock, 200 of which are designated Series A Convertible Non-Voting Preferred Stock.

Additional shares of Common Stock or

other securities that are convertible into or exercisable for Common Stock may be issued in connection with hiring or retaining employees,

future acquisitions, future sales of securities for capital raising purposes, or for other business purposes.

The future issuance of

any such additional shares of Common Stock may create downward pressure on the trading price of Common Stock.

could face significant penalties for our failure to comply with the terms of our outstanding convertible notes.

convertible notes contain positive and negative covenants and customary events of default including requiring us in many cases to timely

file SEC reports.

In the event we are unable to perform our obligations under the convertible notes, or make timely payment, we could

face significant penalties and/or liquidated damages and/or the conversion price of such notes could be adjusted downward significantly,

all of which could have a material adverse effect on our results of operations and financial condition, or cause any investment in the

Company to decline in value or become worthless.

As of the date of this prospectus, we have not defaulted on the convertible notes.

Company does not have a class of securities registered under Section 12 of the Exchange Act.

Until it does, or the Company becomes subject

to Section 15(d) of the Exchange Act, it will be a “voluntary filer.”

Company is not currently required under Section 13 or Section 15(d) of the Exchange Act to file periodic reports with the SEC.

in the past voluntarily elected to file some or all of these reports to ensure that sufficient information about it is publicly available

to its stockholders and potential investors.

Until the Company becomes subject to the reporting requirements under the Exchange Act,

it is a “voluntary filer” and is currently considered a non-reporting issuer under the Exchange Act.

The Company will not

be required to file reports under Section 13(a) or 15(d) of the Exchange Act until the earlier to occur of:

(i) the registration of a

class of securities under Section 12 of the Exchange Act, which would be required if the Company lists a class of securities on a national

securities exchange or if it meets the size requirements set forth in Section 12(g) of the Exchange Act, or which it may voluntarily

elect to undertake at an earlier date;

or (ii) the effectiveness of a registration statement under the Securities Act, relating to Common

Until the Company becomes subject to the reporting requirements under either Section 13(a) or 15(d) of the Exchange Act, it is

not subject to the SEC’s proxy rules, and large holders of its capital stock will not be subject to beneficial ownership reporting

requirements under Sections 13 or 16 of the Exchange Act and their related rules.

As a result, the Company’s stockholders and potential

investors may not have available to them as much or as robust information as they may have if and when it becomes subject to those requirements.

In addition, if the Company does not register under Section 12 of the Exchange Act, and remain a “voluntary filer”, it could

cease filing annual, quarterly or current reports under the Exchange Act.

of Common Stock are subject to the “penny stock” rules of the SEC, and the trading market in the Company’s securities

is limited, which makes transactions in its stock cumbersome and may reduce the value of an investment in its stock.

15g-9 under the Exchange Act establishes the definition of a “penny stock,” for the purposes relevant to the Company, as

any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject

to certain exceptions.

For any transaction involving a penny stock, unless exempt, the rules require:

(a) that a broker or dealer approve

a person’s account for transactions in penny stocks;

and (b) the broker or dealer receive from the investor a written agreement

to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

order to approve a person’s account for transactions in penny stocks, the broker or dealer must:

(a) obtain financial information

and investment experience objectives of the person;

and (b) make a reasonable determination that the transactions in penny stocks are

suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the

risks of transactions in penny stocks.

broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the Commission relating

to the penny stock market, which, in highlight form:

(a) sets forth the basis on which the broker or dealer made the suitability determination;

and (b) that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

Generally, brokers

may be less willing to execute transactions in securities subject to the “penny stock” rules.

This may make it more difficult

for investors to dispose of shares of Common Stock and may cause a decline in the market value of the Company’s stock.

also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions

payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies

available to an investor in cases of fraud in penny stock transactions.

Finally, monthly statements have to be sent disclosing recent

price information for the penny stock held in the account and information on the limited market in penny stocks.

the Company does not intend to pay any cash dividends on its Common Stock, its stockholders will not be able to receive a return on their

shares unless they sell them.

Company intends to retain any future earnings to finance the development and expansion of its business.

The Company does not anticipate

paying any cash dividends on share of Common Stock in the foreseeable future.

Unless the Company pays dividends, its stockholders will

not be able to receive a return on their shares unless they sell them.

The Company cannot assure its stockholders that they will be able

to sell shares when they desire to do so.

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