| ORGANIZATION, BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – ORGANIZATION, BUSINESS AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Description of Business On July 27, 2016, Jupiter Gold Corporation
("Jupiter Gold" or the "Company") was incorporated under the laws of the Republic of the Marshall Islands. Concurrently, Brazil
Minerals, Inc. ("Brazil Minerals"), a U.S. corporation, exchanged its 99.99% ownership in Mineração Jupiter Ltda ("MJL"),
a Brazilian company, for 4,000,000 shares of Jupiter Gold's common stock. Brazil Minerals held an approximate 35.4% interest in
the Company as of December 31, 2019. The Company has 100%-ownership to several
gold projects in development and in exploratory stages aggregating over 154,000 acres
in Brazil. It also Basis of Presentation The consolidated financial statements of the
Company have been prepared in accordance with generally accepted accounting principles ("GAAP") of the United States of America
and are expressed in United States dollars. For the years ended December 31, 2019, 2018 and 2017, the consolidated financial statements
include the accounts of the Company and its 99.99% owned subsidiary, Mineração Jupiter Ltda. All material intercompany accounts and transactions
have been eliminated in consolidation. Use of Estimates The preparation of financial statements in
conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingencies at the date of the financial statements and the reported amount of revenues and expenses
during the reporting period. Actual results may differ from those estimates. Going Concern The consolidated financial statements have
been prepared on a going concern basis which contemplates the realization of assets and the settlement of liabilities in the normal
course of business. The Company has limited working capital, has incurred losses since its inception, and has not yet generated
material revenues from the sale of its products or services. These factors create substantial doubt about the Company's ability
to continue as a going concern. The consolidated financial statements do not include any adjustment that might be necessary if
the Company is unable to continue as a going concern. The ability of the Company to continue as
a going concern is dependent on the Company generating cash from its operations, the sale of its stock and/or obtaining debt financing.
During the year ended December 31, 2019, the Company funded operations primarily through the sale of equity securities. Management
plans to fund its capital requirements and ongoing operations from the sale of gold and minerals recovered from mining areas that
the Company expects will become operational during 2020. Management intends to cover any operating losses by selling its equity
securities and obtaining debt financing. There can be no assurance the Company will be successful in these efforts. Fair Value of Financial Instruments Jupiter Gold follows the guidance of Accounting
Standards Codification ("ASC") Topic 820 – Fair Value Measurement and Disclosure. Fair value is defined as the exit price,
or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants as of the measurement date. The guidance also establishes a hierarchy for inputs used in measuring fair value that
maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs
be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed
based on market data obtained from sources independent of Jupiter Gold. Unobservable inputs are inputs that reflect Jupiter Gold's
assumptions about the factors market participants would use in valuing the asset or liability. The guidance establishes three
levels of inputs that may be used to measure fair value: Level 1. Observable inputs such as quoted
prices in active markets; Level 2. Inputs, other than the quoted
prices in active markets, that are observable either directly or indirectly; and Level 3. Unobservable inputs in which
there is little or no market data, which require the reporting entity to develop its own assumptions. As of December 31, 2019, Jupiter Gold did
not have any level 2 or 3 assets or liabilities. Jupiter Gold's financial instruments consist
of cash and cash equivalents, accounts payable, and accrued expenses. The carrying amount of these financial instruments approximates
fair value due to either length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed
in these consolidated financial statements. Cash and Cash Equivalents The Company considers all highly liquid instruments
purchased with a maturity of three months or less to be cash equivalents to the extent that the funds are not being held for investment
purposes. Funds held in Brazilian banks are insured up to 250,000 Brazilian Real (approximately $62,024 based on the December
31, 2019 exchange rate). Property and Equipment Property and equipment are stated at cost.
Major improvements and betterments are capitalized. Maintenance and repairs are expensed as incurred. Depreciation is computed
using the straight-line method over the estimated useful life. At the time of retirement or other disposition of property and
equipment, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in
the statements of operations as other gain or loss, net. The diamond and gold processing plant and
other machinery are depreciated over an estimated useful life of ten years; vehicles are depreciated over an estimated life of
five years; and computer and other office equipment over an estimated useful life of three years. Right of Use Assets and Lease Liabilities In February 2016, the FASB issued ASU No.
2016-02, "Leases" (ASC 842). The standard requires lessees to recognize almost all leases on the balance sheet as a ROU asset
and a lease liability and requires leases to be classified as either an operating or a finance type lease. The standard excludes
leases of intangible assets or inventory. The standard became effective for the Company beginning January 1, 2019. The Company
adopted ASC 842 using the modified retrospective approach, by applying the new standard to all leases existing at the date of
initial application. Results and disclosure requirements for reporting periods beginning after January 1, 2019 are presented under
ASC 842, while prior period amounts have not been adjusted and continue to be reported in accordance with our historical accounting
under ASC 840. The Company elected the package of practical expedients permitted under the standard, which also allowed the Company
to carry forward historical lease classifications. The Company also elected the practical expedient related to treating lease
and non-lease components as a single lease component for all equipment leases as well as electing a policy exclusion permitting
leases with an original lease term of less than one year to be excluded from the ROU assets and lease liabilities. Under ASC 842, the Company determines if an
arrangement is a lease at inception. Right-of-Use ("ROU") assets and liabilities are recognized at commencement date based on
the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that
are fixed and determinable at the time of commencement. As most of the Company's leases do not provide an implicit rate, the Company
estimated the incremental borrowing rate in determining the present value of lease payments. The ROU asset also includes any lease
payments made prior to commencement and is recorded net of any lease incentives received. The Company lease terms may include
options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. The adoption did not impact the Company's
beginning retained earnings, or prior year consolidated statements of income and statements of cash flows as the Company does
not have any operating leases that are material in term or expense. Mineral Properties Costs of exploration, carrying and retaining
unproven mineral lease properties are expensed as incurred. Mineral property acquisition costs, including licenses and lease payments,
are capitalized. Impairment losses are recorded on mineral properties used in operations when indicators of impairment are present
and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amount. The Company
did not recognize any impairment losses related to mineral properties held during the years ended December 31, 2019, 2018 and
2017. For intangible assets purchased in a business
combination, the estimated fair values of the assets received are used to establish their recorded values. For intangible assets
acquired in a non-monetary exchange, the estimated fair values of the assets transferred (or the estimated fair values of the
assets received, if more clearly evident) are used to establish their recorded values, unless the values of neither the assets
received nor the assets transferred are determinable within reasonable limits, in which case the assets received are measured
based on the carrying values of the assets transferred. Valuation techniques consistent with the market approach, income approach
and/or cost approach are used to measure fair value. Intangible assets consist of mineral rights held by MJL and hold a recorded
value of $2,044, the cost of fees paid to the Brazilian national mining department. These rights are held in perpetuity provided
the Company remains in compliance with various government regulations and industry requirements. Impairment of Long-Lived Assets For long-lived assets, such as property and
equipment and intangible assets subject to amortization, Jupiter Gold continually monitors events and changes in circumstances
that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances
are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets
will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying
amount of those assets, Jupiter Gold recognizes an impairment loss based on the excess of the carrying amount over the fair value
of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell. Revenue Recognition The Company generates revenue from the sale
of gold and other minerals excavated from its modular gold recovery plant located in a mining concession in Brazil. On January 1, 2018, the Company adopted ASC
Topic 606, Revenue from Contracts with Customers ("ASC 606"), using the modified retrospective method applied to those contracts
which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under
ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under
ASC 605. The consolidated financial statements were not materially impacted as a result of the application of Topic 606 compared
to Topic 605. The Company recognizes revenue under ASC 606,
Revenue from Contracts with Customers. The core principle of the new revenue standard is that a company should recognize revenue
to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company
expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:
Step 1: Identify the contract with the customer
Step 2: Identify the performance obligations in
the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance
obligations in the contract
Step 5: Recognize revenue when the company satisfies
a performance obligation In order to identify the performance obligations
in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised
good or service that is distinct. A performance obligation meets ASC 606's definition of a "distinct" good or service (or bundle
of goods or services) if both of the following criteria are met:
The customer can benefit from the good or service
either on its own or together with other resources that are readily available to the customer
The entity's promise to transfer the good or service
to the customer is separately identifiable from other promises in the contract If a good or service is not distinct, the
good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct. The transaction price is the amount of consideration
to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration
promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction
price, an entity must consider the effects of all of the following:
Variable consideration
Constraining estimates of variable consideration
The existence of a significant financing component
in the contract
Noncash consideration
Consideration payable to a customer Variable consideration is included in the
transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized
will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The transaction price is allocated to each
performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance
obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate. Stock-Based Compensation The Company records stock-based compensation
in accordance with ASC Topic 718, Compensation - Stock Compensation. ASC 718 requires companies to measure compensation cost for
stock-based employee compensation at fair value at the grant date and recognize the expense over the employee's requisite service
period. Under ASC 718, volatility is based on the historical volatility of our stock or the expected volatility of the stock of
similar companies. The expected life assumption is primarily based on historical exercise patterns and employee post-vesting termination
behavior. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect
at the time of grant. The Company utilizes the Black-Scholes option-pricing
model, which was developed for use in estimating the fair value of options. Option-pricing models require the input of highly
complex and subjective variables including the expected life of options granted and the expected volatility of our stock price
over a period equal to or greater than the expected life of the options. Because changes in the subjective assumptions can materially
affect the estimated value of our employee stock options, it is management's opinion that the Black-Scholes option-pricing model
may not provide an accurate measure of the fair value of our employee stock options. Although the fair value of employee stock
options is determined in accordance with ASC Topic 718 using an option-pricing model, that value may not be indicative of the
fair value observed in a willing buyer/willing seller market transaction. On June 20, 2018, the FASB issued ASU 2018-07
which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under the ASU, most of
the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees.
Equity classified share-based payments for employees are fixed at the time of grant. Equity-classified nonemployee share-based
payment awards are measured at the grant date of the award which is the same as share-based payments for employees. The Company
adopted the requirements of the new rule as of January 1, 2019, the effective date of the new guidance. Foreign Currency Jupiter Gold's subsidiary, MJL, uses its local
currency as its functional currency. Resulting translation gains or losses are recognized as a component of accumulated other
comprehensive income. Transaction gains or losses related to balances denominated in a currency other than the functional currency
are recognized in the consolidated statements of operations. Basic Earnings (Loss) Per Share The Company computes loss per share in accordance
with ASC Topic 260, Earnings per Share, which requires presentation of both basic and diluted earnings per share on the face of
the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted
average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common
shares outstanding during the period. As of December 31, 2019, the Company's potentially dilutive securities relate to common
stock issuable in connection with options. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. Recent Accounting Pronouncements In February 2020, the FASB issued ASU 2020-02,
Financial Instruments-Credit Losses (Topic 326) and Leases (Topic 842) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting
Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic
842), which amends the effective date of the original pronouncement for smaller reporting companies. ASU 2016-13 and its amendments
will be effective for the Company for interim and annual periods in fiscal years beginning after December 15, 2022. The Company
believes the adoption will modify the way the Company analyzes financial instruments, but it does not anticipate a material impact
on results of operations. The Company is in the process of determining the effects adoption will have on its consolidated financial
statements We have reviewed other recent accounting pronouncements
issued to the date of the issuance of these consolidated financial statements, and we do not believe any of these pronouncements
will have a material impact on the Company. |
