UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
For
the quarterly period ended
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
For the transition period from ____________ to ____________
Commission
File Number
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of | (IRS Employer | |
| incorporation or organization) | Identification No.) |
(Address of principal executive offices, including zip code)
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| The
|
Indicate
by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit
and post such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or, an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company,” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |
| ☒ | Smaller reporting company | |||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No
As of July 31, 2025, there were outstanding shares of the registrant’s common stock.
TABLE OF CONTENTS
| 2 |
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical fact contained in this Quarterly Report are forward-looking statements, including without limitation, statements regarding current expectations, as of the date of this Quarterly Report, about our future results of operations and financial position, our ability to effectively process our minerals and achieve commercial grade at scale; risks and hazards inherent in the mining business (including risks inherent in exploring, developing, constructing and operating mining projects, environmental hazards, industrial accidents, weather or geologically related conditions); uncertainty about our ability to obtain required capital to execute our business plan; our ability to hire and retain required personnel; labor relations; changes in the market prices of lithium and lithium products and demand for such products; geopolitical uncertainties, including tariffs, trade restrictions and other components of U.S. and global trade policy; the uncertainties inherent in exploratory, developmental and production activities, including risks relating to permitting, zoning and regulatory delays related to our projects; uncertainties inherent in the estimation of lithium resources. These statements involve known and unknown risks, uncertainties and other important factors that may cause actual results, performance, or achievements to differ materially from any future results, performance or achievement expressed or implied by these forward-looking statements.
In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential,” or “continue” or the negative of these terms or other similar expressions Factors that could cause future results to materially differ from the recent results or those projected in forward-looking statements include, but are not limited to: unprofitable efforts resulting from the failure to discover mineral deposits or the discovery of mineral deposits that are insufficient in quantity and quality to return a profit from production; market fluctuations; government regulations, including regulations relating to permitting, royalties, allowable production, importing and exporting of minerals, and environmental protection; competition; the loss of services of key personnel; unusual or infrequent weather phenomena, litigation, sabotage, government or other interference in the maintenance or provision of infrastructure as well as general economic conditions, geopolitical tensions and trade policies.
The forward-looking statements in this Quarterly Report are based largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report and are subject to a number of important factors that could cause actual results to differ materially from those in the forward-looking statements, including the factors described under the sections in this Quarterly Report titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other of our filings made with the Securities and Exchange Commission (the “SEC”). Additional information regarding risk factors that may affect us is included in our Annual Report on Form 10-K for fiscal year ended December 31, 2024 (the “2024 Annual Report”) filed with the SEC on March 14, 2025. The risk factors contained in our 2024 Annual Report are updated by us from time to time in Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other filings that we make with the SEC.
You should read this Quarterly Report and the documents that we reference in this Quarterly Report completely and with the understanding that our actual future results may be materially different from what we expect. Given these uncertainties, we caution you not to place undue reliance on these forward-looking statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.
| 3 |
PART I - FINANCIAL INFORMATION
Item 1 FINANCIAL STATEMENTS
ATLAS LITHIUM CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, 2025 and December 31, 2024
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable | ||||||||
| Inventories | ||||||||
| Taxes recoverable | ||||||||
| Derivative assets | ||||||||
| Prepaid and other current assets | ||||||||
| Total current assets | ||||||||
| Taxes recoverable | ||||||||
| Property and equipment, net | ||||||||
| Intangible assets, net | ||||||||
| Right of use assets - operating leases, net | ||||||||
| Other assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Derivative liabilities | ||||||||
| Convertible Debt | ||||||||
| Operating lease liabilities | ||||||||
| Other current liabilities | ||||||||
| Total current liabilities | ||||||||
| Convertible Debt | ||||||||
| Operating lease liabilities | ||||||||
| Deferred consideration from royalties sold | ||||||||
| Other noncurrent liabilities | ||||||||
| Total liabilities | ||||||||
| Stockholders’ Equity: | ||||||||
| Series A preferred stock, $ par value. shares authorized; share issued and outstanding as of June 30, 2025 and December 31, 2024 | ||||||||
| Common stock, $ par value. and shares authorized as of June 30, 2025 and December 31, 2024, respectively and and shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Cumulative Adjustment of the Valuation of Fin. Instruments | ( | ) | ||||||
| Accumulated deficit | ( | ) | ( | |||||
| Total Atlas Lithium Co. stockholders’ equity | ||||||||
| Non-controlling interest | ||||||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
| 4 |
ATLAS LITHIUM CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
For the Three and Six Months Ended June 30, 2025 and 2024
| Three months ending June 30 | Six months ending June 30 | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Gross revenues | ||||||||||||||||
| Sales deductions | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net revenue | ||||||||||||||||
| Cost of revenue | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Gross profit (loss) | ( | ) | ( | ) | ||||||||||||
| Operating expenses | ||||||||||||||||
| General and administrative expenses | ||||||||||||||||
| Stock-based compensation | ||||||||||||||||
| Exploration | ||||||||||||||||
| Other operating expenses | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other expense (income) | ||||||||||||||||
| Other expense (income) | ( | ) | ||||||||||||||
| Fair value adjustments, net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Finance costs | ||||||||||||||||
| Total other expense | ||||||||||||||||
| Loss before provision for income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income taxes | ||||||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss attributable to non-controlling interest | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss attributable to Atlas Lithium Corporation stockholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Basic and diluted loss per share | ||||||||||||||||
| Net loss per share attributable to Atlas Lithium Corporation common stockholders | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Weighted-average number of common shares outstanding: | ||||||||||||||||
| Basic and diluted | ||||||||||||||||
| Comprehensive loss: | ||||||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Other comprehensive results | ||||||||||||||||
| Comprehensive loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Comprehensive loss attributable to noncontrolling interests | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Comprehensive loss attributable to Atlas Lithium Corporation stockholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
| 5 |
ATLAS LITHIUM CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
For the Three Months Ended June 30, 2025 and 2024
| Series A Preferred Stock | Common Stock | Additional Paid-in | Accumulated Other Comprehensive | Cumulative Adjustment of the Valuation of Fin. | Accumulated | Non controlling | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||
| Shares | Value | Shares | Value |
Capital |
Loss | Instruments |
Deficit |
Interests | (Deficit) | |||||||||||||||||||||||||||||||
| Balance, March 31, 2024 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||||||||||
| Issuance of common stock in connection with sales | - | |||||||||||||||||||||||||||||||||||||||
| made under privante offerings | ||||||||||||||||||||||||||||||||||||||||
| Stock based compensation | - | |||||||||||||||||||||||||||||||||||||||
| Change in foreign currency translation | - | - | ||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Balance, June 30, 2024 | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||||||||||
| Issuance of common stock in connection with sales made | - | |||||||||||||||||||||||||||||||||||||||
| under private offerings | ||||||||||||||||||||||||||||||||||||||||
| Exercise of warrants | - | |||||||||||||||||||||||||||||||||||||||
| Stock based compensation | - | |||||||||||||||||||||||||||||||||||||||
| Adjustment of the Valuation of Fin. Instruments | - | - | ||||||||||||||||||||||||||||||||||||||
| Other changes in Noncontrolling interest | - | - | ( | ) | ||||||||||||||||||||||||||||||||||||
| Change in foreign currency translation | - | - | ||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||||||||||
For the Six Months Ended June 30, 2025 and 2024
| Series A Preferred Stock | Common Stock | Additional Paid-in | Accumulated Other Comprehensive | Cumulative Adjustment of the Valuation of Fin. | Accumulated | Non controlling | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||
| Shares | Value | Shares | Value |
Capital |
Loss | Instruments |
Deficit |
Interests | (Deficit) | |||||||||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||||||||||
| Issuance of common stock in connection with sales | - | |||||||||||||||||||||||||||||||||||||||
| made under privante offerings | ||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock in exchange for consulting, | - | |||||||||||||||||||||||||||||||||||||||
| professional and other services | ||||||||||||||||||||||||||||||||||||||||
| Stock based compensation | - | |||||||||||||||||||||||||||||||||||||||
| Change in foreign currency translation | - | - | ||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Balance, June 30, 2024 | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||||||||||
| Issuance of common stock in connection with sales made | - | |||||||||||||||||||||||||||||||||||||||
| under private offerings | - | |||||||||||||||||||||||||||||||||||||||
| Exercise of warrants | - | |||||||||||||||||||||||||||||||||||||||
| Stock based compensation | - | |||||||||||||||||||||||||||||||||||||||
| Adjustment of the Valuation of Fin. Instruments | - | - | ||||||||||||||||||||||||||||||||||||||
| Other changes in Noncontrolling interest | - | - | ( | ) | ||||||||||||||||||||||||||||||||||||
| Change in foreign currency translation | - | - | ||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||||||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
| 6 |
ATLAS LITHIUM CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 2025 and 2024
| Six months ending June 30 | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities of continuing operations: | ||||||||
| Net loss | $ | ( | ) | ( | ) | |||
| Adjustments to reconcile net loss to cash used in operating activities: | ||||||||
| Stock based compensation and services | ||||||||
| Depreciation and amortization | ||||||||
| Interest expense | ||||||||
| Unwinding of non-current liabilities | ||||||||
| Fair value adjustments | ( | ) | ( | ) | ||||
| Other non cash expenses | ( | ) | ||||||
| Gain/loss on FOREX transactions | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Inventories and accounts receivable | ( | ) | ||||||
| Taxes recoverable | ( | ) | ||||||
| Prepaid and other current assets | ( | ) | ||||||
| Accounts payable and accrued expenses | ||||||||
| Other noncurrent assets and liabilities | ( | ) | ( | ) | ||||
| Net cash provided (used) by operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Acquisition of capital assets | ( | ) | ( | ) | ||||
| Capitalized Exploration costs | ( | ) | ( | ) | ||||
| Increase in intangible assets | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Net proceeds from sale of common stock | ||||||||
| Proceeds from sale of subsidiary common stock to noncontrolling interests | ||||||||
| Cash used in payment of debt | ( | ) | ( | ) | ||||
| Leases payments | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||
| Effect of exchange rates on cash and cash equivalents | ||||||||
| Net increase (decrease) in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents at beginning of period | ||||||||
| Cash and cash equivalents at end of period | $ | |||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
| 7 |
ATLAS LITHIUM CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION, BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Description of Business
Atlas Lithium Corporation (together with its subsidiaries “Atlas Lithium,” the “Company,” the “Registrant,” “we,” “us,” or “our”) was incorporated under the laws of the State of Nevada, on December 15, 2011. The Company changed its management and business on December 18, 2012, to focus on mineral exploration in Brazil.
Basis of Presentation and Principles of Consolidation
The
unaudited interim financial information presented in the financial statements has been prepared in accordance with accounting principles generally accepted in the United
States of America (“U.S. GAAP”), consistent in all material respects with those applied in our 2024 Form 10-K, and are expressed
in United States dollars. The information included in this Form 10-Q should be read in conjunction with the consolidated financial statements
and accompanying notes included in our 2024 Form 10-K. For the period ended June 30, 2025 the condensed consolidated financial statements
include the accounts of the Company; (i) its
All material intercompany accounts and transactions have been eliminated in consolidation.
Business Segment
The Company has one reportable segment: mining. The mining segment is composed of several mining projects, being all of them located in Brazil. Currently the Company has projects in development phase, with special focus to the Neves Lithium Project, and generates revenue solely from its operating Quartzite project. The other mining projects are in exploration phase.
The accounting policies of the mining segment are the same as those described in the summary of significant accounting policies.
The chief operating decision maker (CODM) of the
mining segment is the Company’s chief executive officer. The CODM regularly reviews the revenue, significant expenses
categories – including exploration and evaluation costs and capitalized expenses – and general and administrative
expenses. The significant expenses (including capitalized expenses) on which the CODM relies are those that are reported on the
condensed consolidated balance sheet and statements of operations and comprehensive loss. Total segment assets as of June 30, 2025, were $
All of the long-lived assets are located in
Brazil and revenues were exclusively generated by the Company’s Quartzite operations. For the six-month period ended June 30, 2025, the Company had 4 customers accounting for more than 10% of the Company’s
revenue each (the combination of them represented
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles 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 materially from those estimates.
Recent Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new pronouncements other than those described in our 2024 Form 10-K that have been issued that might have a material impact on its financial position or results of operations.
| 8 |
ATLAS LITHIUM CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – COMPOSITION OF CERTAIN FINANCIAL STATEMENT ITEMS
Inventories
Inventories as of June 30, 2025, and December 31, 2024, are comprised of the following:
| June 30, 2025 | December 31, 2024 | |||||||
| Materials and supplies | ||||||||
| Quartzite blocks and slabs | ||||||||
| Total | ||||||||
Materials and supplies consists primarily of feedstock intended for use in the Company’s production processes related to lithium operations.
Quartzite inventories June 30, 2025 only contain slabs produced through the cutting and polishing of natural quartzite. Slabs are actively sold in the market and classified as finished goods.
Property and Equipment
The following table sets forth the components of the Company’s property and equipment as of June 30, 2025 and December 31, 2024:
| June 30, 2025 | December 31, 2024 | |||||||||||||||||||||||
| Accumulated | Net Book | Accumulated | Net Book | |||||||||||||||||||||
| Cost | Depreciation | Value | Cost | Depreciation | Value | |||||||||||||||||||
| Capital assets subject to depreciation: | ||||||||||||||||||||||||
| Computers and office equipment | ( | ) | $ | $ | ( | ) | $ | |||||||||||||||||
| Machinery and equipment | ( | ) | ( | ) | ||||||||||||||||||||
| Facilities | ( | ) | ( | ) | ||||||||||||||||||||
| Land | ||||||||||||||||||||||||
| Prepaid Assets (CIP) | ||||||||||||||||||||||||
| Mining rights | ||||||||||||||||||||||||
| Exploration costs | ||||||||||||||||||||||||
| Total fixed assets | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | ||||||||||||||
Exploration costs such as drilling, development and related costs are either classified as exploration and charged to operations as incurred, or capitalized, such as to assist with mine planning within a reserve area. Whether to capitalize an exploration cost or incur an expense also depends on whether the drilling or development costs relate to an ore body that has been determined to be commercially mineable and whether the expenditure relates to a probable future benefit to be generated singly or in combination with other assets. The basis of the mineral interest is amortized on a units-of-production basis.
Intangible Assets
Intangible
assets consist of the cost of software (implementation of SAP enterprise resource planning software, as well as other software). The
carrying value of these intangible assets as of June 30, 2025 and December 31, 2024 were $
Accounts Payable and Accrued Expenses
| June 30, 2025 | December 31, 2024 | |||||||
| Trade payables | $ | |||||||
| Payroll and social charges | ||||||||
| Taxes payable | ||||||||
| Total | $ | $ | ||||||
| 9 |
ATLAS LITHIUM CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – COMPOSITION OF CERTAIN FINANCIAL STATEMENT ITEMS (CONTINUED)
Leases
Finance Leases
For the reporting period ended June 30, 2025, no financial leases meeting the criteria outlined in ASC 842 have been identified.
Operating Leases
Right of use (“ROU”) assets and lease liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the lease term. When the rate implicit to the lease cannot be readily determined, we utilize our incremental borrowing rate in determining the present value of the future lease payments. The ROU asset includes any lease payments made and lease incentives received prior to the commencement date. Operating lease ROU assets also include any cumulative prepaid or accrued rent when the lease payments are uneven throughout the lease term. The ROU assets and lease liabilities may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. The ROU and lease liabilities are primarily related to the Company’s offices in Belo Horizonte and Araçuaí and Geology sheds leased from third parties.
The
lease agreements have terms between two to
| Lease liabilities at December 31, 2024 | $ | |||
| Increase/Decrease | $ | |||
| Unwinding of lease liabilities | $ | |||
| Lease payments | $ | ( | ) | |
| Foreign exchange | ||||
| Lease liabilities at June 30, 2025 | $ | |||
| Current portion | $ | |||
| Non-current portion | $ |
The maturity of the lease liabilities (contractual undiscounted cash flows) is presented in the table below:
| Less than one year | $ | |||
| Year 2 | $ | |||
| Year 3 | $ | |||
| Year 4 | $ | |||
| Total contractual undiscounted cash flows | $ |
| 10 |
ATLAS LITHIUM CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – COMPOSITION OF CERTAIN FINANCIAL STATEMENT ITEMS (CONTINUED)
Convertible Debt
| June 30, 2025 | December 31, 2024 | |||||||
| Due to Nanyang Investment Management Pte Ltd | ||||||||
| Due to Jaeger Investments Pty Ltd | ||||||||
| Due to Modha Reena Bhasker | ||||||||
| Due to Clipper Group Limited | ||||||||
| Total convertible debt | $ | $ | ||||||
| Current portion | $ | $ | ||||||
| Non-current portion | $ | $ | ||||||
On
November 7, 2023, the Company entered into a convertible note purchase agreement (the “Convertible Note Purchase Agreement”)
with Jaeger Investments Pty Ltd, an entity controlled by Mr. Martin Rowley, and other investors to raise up to $
| - | Maturity date: |
| - | Principal repayment terms: due on maturity; |
| - | Interest rate: |
| - | Interest payment terms: due semiannually in arrears until maturity, unless converted or redeemed earlier and payable at the election of the holder in cash, in shares of common stock, or in any combination thereof; |
| - | Conversion right: the holder retains a right to convert all or any portion of the note into shares of the Company’s common stock at the Conversion Price up until the maturity date; and |
| - | Conversion price: US$ |
| - | Redemption right: the Company
shall vest a right to redeem the convertible notes if and when |
On
November 7, 2023, we issued $
In
the three and six months ended June 30, 2025, the Company recorded $
Derivative Liabilities
| June 30, 2025 | December 31, 2024 | |||||||
| Derivative assets | ||||||||
| Derivative assets - Non-Deliverable Forward | ||||||||
| Total derivative assets | ||||||||
| Derivative liabilities | ||||||||
| Derivative liability – conversion feature on the convertible debt | ||||||||
| Derivative liability – restricted stock awards | ||||||||
| Derivative liability - Non-Deliverable Forward | ||||||||
| Total derivative liabilities | $ | $ | ||||||
| 11 |
ATLAS LITHIUM CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – COMPOSITION OF CERTAIN FINANCIAL STATEMENT ITEMS (CONTINUED)
a) Derivative liability – embedded conversion feature on convertible debt
On November 7, 2023, the Company issued convertible promissory notes to Jaeger Investments Pty Ltd and other investors. In accordance with FASB ASC 815, the conversion feature of the convertible debt was determined to be an embedded derivative. As such, it was bifurcated from the host debt liability and was recognized as a derivative liability in the consolidated balance sheets. The derivative liability is measured at fair value through profit or loss.
At
December 31, 2024, the fair value of the embedded conversion feature was determined to be $
| Value cap | Value floor | |||||||
| Measurement date | December 31, 2024 | December 31, 2024 | ||||||
| Shares to be issued in case of conversion | ||||||||
| Stock price at fair value measurement date | $ | $ | ||||||
| Conversion price | $ | $ | ||||||
| Expected volatility | % | % | ||||||
| Risk-free interest rate | % | % | ||||||
| Dividend yield | % | % | ||||||
| Expected term (years) | ||||||||
At
June 30, 2025, the fair value of the embedded conversion feature was determined to be $
| Value cap | Value floor | |||||||
| Measurement date | June 30, 2025 | June 30, 2025 | ||||||
| Shares to be issued in case of conversion | ||||||||
| Stock price at fair value measurement date | $ | $ | ||||||
| Conversion price | $ | $ | ||||||
| Expected volatility | % | % | ||||||
| Risk-free interest rate | % | % | ||||||
| Dividend yield | % | % | ||||||
| Expected term (years) | ||||||||
In the Black-Scholes collar option pricing models, the expected volatilities were based on historical volatilities of the securities of the Company and its trading peers, and the risk-free interest rates were determined based on the prevailing rates at the grant date for U.S. Treasury Bonds with a term equal to the expected term of the instrument being valued.
In
the three and six months ended June 30, 2025, the Company recognized a $
| 12 |
ATLAS LITHIUM CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – COMPOSITION OF CERTAIN FINANCIAL STATEMENT ITEMS (CONTINUED)
b) Derivative liability – other stock incentives
The employment agreement of Igor Tkachenko, a Vice President of the Company, dated September 30, 2023, provides for the issuance of shares of the Company’s common stock based on us achieving certain market capitalization milestones. As of June 30, 2025, the Company’s obligations under this employment agreement contemplates the issuance of additional shares of the Company’s common stock in five tranches, each representing % of the Company’s common stock outstanding at the time of vesting, with an expiry date of December 31, 2026 and market vesting conditions as follows:
| - | Tranche 3: when the Company achieves a $ million market capitalization |
| - | Tranche 4: when the Company achieves a $ million market capitalization |
| - | Tranche 5: when the Company achieves a $ million market capitalization |
| - | Tranche 6: when the Company achieves a $ million market capitalization |
| - | Tranche 7: when the Company achieves a $ billion market capitalization |
In accordance with FASB ASC 815, these RSU awards were classified as a liability, measured at fair value through profit or loss, and compensation expense is recognized over the expected term.
As at December 31, 2024, Tranche 3, Tranche 4, Tranche 5, Tranche 6 and Tranche 7 remain outstanding and unvested, and the total fair value of these outstanding rights to receive restricted stock was $, as measured using a Monte Carlo Simulation with the following ranges of assumptions: the Company’s stock price on the December 31, 2024 measurement date, expected dividend yield of %, expected volatility between % and %, risk-free interest rate between a range of % to %, and an expected term of years. The expected volatilities were based on historical volatilities of the securities of the Company and its trading peers, and the risk-free interest rates were determined based on the prevailing rates at the grant date for U.S. Treasury Bonds with a term equal to the expected term of the award being valued.
As at June 30, 2025, Tranche 3, Tranche 4, Tranche 5, Tranche 6 and Tranche 7 remain outstanding and unvested, and the total fair value of these outstanding rights to received restricted stock was $, as measured using a Monte Carlo Simulation with the following ranges of assumptions: the Company’s stock price on the June 30, 2025 measurement date, expected dividend yield of %, expected volatility between % and %, risk-free interest rate between a range of % to %, and an expected term of months. The expected volatilities were based on historical volatilities of the securities of the Company and its trading peers, and the risk-free interest rates were determined based on the prevailing rates at the grant date for U.S. Treasury Bonds with a term equal to the expected term of the award being valued.
c) Derivative asset - Non-Deliverable Forward
Atlas Brazil, a subsidiary of Atlas Lithium, is exposed to foreign-currency exchange-rate fluctuations in the normal course of business because a portion of its expenses are paid in Brazilian reais (BRL). To mitigate this exposure, Atlas Brazil utilizes non-deliverable forward foreign-exchange contracts (“NDFs”), which are designed to offset changes in cash flow attributable to currency exchange movements.
The Company applies hedge accounting in accordance with U.S. GAAP (ASC 815). As a result, these derivative instruments are designated and qualify as cash flow hedges, with the entire gain or loss on the derivative initially recorded in Other Comprehensive Income (OCI). These amounts remain deferred in OCI and are subsequently reclassified into earnings in the same income statement line item as the hedged item when it affects earnings.
Atlas Lithium actively monitors the derivative portfolio of its subsidiary monthly to assess financial results and cash flow implications. These contracts are used strictly for risk management purposes, and neither Atlas Brazil nor Atlas Lithium engage in speculative foreign-exchange transactions. Additionally, these contracts do not contain any credit-risk-related contingent features.
As of June 30, 2025, the fair value of outstanding NDF contracts was recorded as Derivative assets on the balance sheet.
For the period ended June 30, 2025:
| ● | Unrealized gains from NDF contracts recognized in Other Comprehensive Income (OCI): $ | |
| ● | Amount reclassified into
Finance Costs (Revenue): $( |
| 13 |
ATLAS LITHIUM CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following table summarizes the non-deliverable forward foreign exchange contracts that remain open as of June 30, 2025:
| Dates | Derivative Financial | Total Notional | FX rate | Total Notional | Settlement | |||||||||||||
| Subsidiary | Entered Into | Instrument | Amounts (USD) | (BRL/USD) | Amounts (BRL) | Dates (Range) | ||||||||||||
| $ | ||||||||||||||||||
| $ | ||||||||||||||||||
NOTE 3 – DEFERRED OTHER INCOME
On
May 2, 2023, the Company and Atlas Brazil entered into a Royalty Purchase Agreement (the “Purchase Agreement”) with Lithium
Royalty Corp., a Canadian company listed on the Toronto Stock Exchange (“LRC”). The transaction contemplated under the Purchase
Agreement closed simultaneously on May 2, 2023, whereby Atlas Brazil sold to LRC in consideration for $
NOTE 4 – OTHER NONCURRENT LIABILITIES
Other
noncurrent liabilities are comprised of tax refinancing programs at our operating subsidiaries located in Brazil and provision for contingencies.
The balance of these non-current liabilities as of June 30, 2025, and December 31, 2024, amounted to $
NOTE 5 – STOCKHOLDERS’ EQUITY
Authorized Stock
As of December 31, 2024 and June 30, 2025, the Company had authorized shares of common stock, with a par value of $ per share.
On
November 22, 2024, we entered into an At the Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co.,
LLC (“Wainwright”) with respect to an at the market offering program, under which we may, from time to time in our sole discretion,
issue and sell through Wainwright, acting as agent, up to $
During
the three and six months ended June 30, 2025, we sold and shares, respectively, under the ATM Agreement, generating
net proceeds of $
Series A Preferred Stock
On
December 18, 2012, we filed with the SOS a Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock
(the “Series A Preferred Stock”) to designate one share of a new series of preferred stock. The Certificate of Designations,
Preferences and Rights of Series A Convertible Preferred Stock provides that for so long as Series A Preferred Stock is issued and outstanding,
the holders of Series A Preferred Stock shall vote together as a single class with the holders of our common stock, with
| 14 |
ATLAS LITHIUM CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 – STOCKHOLDERS’ EQUITY (CONTINUED)
Six Months Ended June 30, 2024 Transactions
During
the six months ended June 30, 2024, the Company issued
new shares of Common Stock, including (i)
shares issued to an accredited investor for gross proceeds of $
Six Months Ended June 30, 2025 Transactions
During the six months ended June 30, 2025, the Company issued an aggregate of shares of its Common Stock, as follows:
| Nature | Shares | |||
| Shares issued in connection with stock-based compensation | ||||
| Sales of common stock (ATM process) | (*) | |||
| Total | ||||
| (*) |
Common Stock Options
During the six months ended June 30, 2025 and 2024, the Company granted options to purchase Common Stock to officers and directors. The options were valued using the Black-Scholes option pricing model with the following ranges of assumptions:
| June 30, 2025 | June 30, 2024 | |||||||
| Expected volatility | % – | % | % – | % | ||||
| Risk-free interest rate | % - | % | % – | % | ||||
| Stock price on date of grant | $ | – $ | $ | – $ | ||||
| Dividend yield | % | % | ||||||
| Expected term | year | to years | ||||||
| 15 |
ATLAS LITHIUM CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 – STOCKHOLDERS’ EQUITY (CONTINUED)
Changes in common stock options for the six months ended June 30, 2025 and 2024 were as follows:
| Number of Options Outstanding and Vested | Weighted Average Exercise Price | Remaining Contractual Life (Years) | Aggregated Intrinsic Value | |||||||||||||
| Outstanding and vested, January 1, 2025 | $ | $ | ||||||||||||||
| Issued (1) | ||||||||||||||||
| Outstanding and vested, June 30, 2025 | $ | |||||||||||||||
| Number of Options Outstanding and Vested | Weighted Average Exercise Price | Remaining Contractual Life (Years) | Aggregated Intrinsic Value | |||||||||||||
| Outstanding and vested, January 1, 2024 | $ | $ | ||||||||||||||
| Issued (2) | ||||||||||||||||
| Outstanding and vested, June 30, 2024 | $ | $ | ||||||||||||||
| 1) | |
| 2) |
During three and six months ended June 30, 2025, the Company recorded $ and $ in stock-based compensation expense from common stock options in the condensed consolidated statements of operations and comprehensive loss ($ and $, during the three and six months ended June 30, 2024).
Common Stock Purchase Warrants
Common stock purchase warrants are accounted for as equity in accordance with ASC 480, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, Distinguishing Liabilities from Equity.
During the six months ended June 30, 2025, the Company issued common stock purchase warrants to certain investors in connection with the Company’s equity financings. The common stock purchase warrants were valued using the Black-Scholes option pricing model with the following ranges of assumptions:
| June 30, 2025 | ||||
| Expected volatility | % - % | |||
| Risk-free interest rate | % - % | |||
| Stock price on date of grant | $ | - $ | ||
| Dividend yield | % | |||
| Expected term | years | |||
Changes in common stock purchase warrants for the six months ended June 30, 2025 were as follows:
| Number of Warrants Outstanding and Vested | Weighted Average Exercise Price | Weighted Average Contractual Life (Years) | Aggregated Intrinsic Value | |||||||||||||
| Outstanding and vested, January 1, 2025 | $ | $ | ||||||||||||||
| Warrants Issued (1) | $ | |||||||||||||||
| Outstanding and vested, June 30, 2025 | $ | $ | ||||||||||||||
| 1) |
During the six months ended June 30, 2024, the Company did not issue any common stock purchase warrants.
| 16 |
ATLAS LITHIUM CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 – STOCKHOLDERS’ EQUITY (CONTINUED)
During the three and six months ended June 30, 2025, the Company recorded the following as a result of the common stock purchase warrant activity: $ and $ in stock-based compensation expense in the condensed consolidated statements of operations and comprehensive loss ($ and $, during the three and six months ended June 30, 2024)
Restricted Stock Units (“RSUs”)
Restricted stock units (“RSUs”) are granted by the Company to its officers, consultants and directors of the Company as a form of stock-based compensation. The RSUs are granted with varying immediate-vesting, time-vesting, performance-vesting, and market-vesting conditions as tailored to each recipient. Each RSU represents the right to receive one share of the Company’s common stock immediately upon vesting.
| Number of RSUs Outstanding | ||||
| Outstanding at January 1, 2025 | ||||
| Granted (1) | ||||
| Vested (2) | ( | ) | ||
| Forfeited (3) | ( | ) | ||
| Outstanding at June 30, 2025 | ||||
| Number
of RSUs Outstanding |
||||
| Outstanding at January 1, 2024 | ||||
| Granted (4) | ||||
| Vested (5) | ( |
) | ||
| Expired or cancelled (6) | ( |
) | ||
| Outstanding at June 30, 2024 | ||||
| 1) | |
| 2) | |
| 3) | |
| 4) | |
| 5) | |
| 6) |
During the three and six months ended June 30, 2025, the Company recorded $ and $ in stock-based compensation expense from the Company’s RSU activity in the period ($ and $ during the three and six months ended June 30, 2024).
Other stock incentives measured at fair value through profit or loss
As
of June 30, 2025, the Company had certain other outstanding obligations to issue shares of the Company’s common stock in the
event certain market conditions are met pursuant to an officer’s employment agreement, as further disclosed in the
‘Derivative liabilities’ section above. These were designated as liability-classified awards and are measured at fair
value through profit or loss. As of June 30, 2025, the Company recognized a $
| 17 |
ATLAS LITHIUM CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6 – COMMITMENTS AND CONTINGENCIES
Commitments
The following table summarizes certain of Atlas’s contractual obligations at June 30, 2025:
| Less than | More than | |||||||||||||||||||
| Total | 1 Year | 1-3 Years | 3-5 Years | 5 Years | ||||||||||||||||
| Lithium processing plant construction (1) | $ | $ | $ | $ | $ | |||||||||||||||
| Total | ||||||||||||||||||||
| (1) |
Please see commitments related to Leases in Note 2.
NOTE 7 – RELATED PARTY TRANSACTIONS
Related party transactions are recorded at the exchange amount transacted as agreed between the Company and the related party. All the related party transactions have been reviewed and approved by the Board.
The Company’s related parties include:
| Martin Rowley | ||
| Jaeger Investments Pty Ltd (“Jaeger”) | ||
| RTEK International DMCC (“RTEK”) | ||
| Mitsui & Co., Ltd. |
Technical Services Agreement
In July 2023, we entered into a technical service agreement (“Technical Services Agreement”) with RTEK pursuant to which RTEK agreed to provide us certain mining engineering, planning and business development services. Messrs. Nicholas Rowley and Brian Talbot are the founders and principals of RTEK. On March 31, 2024, the Technical Services Agreement was amended and restated (the “Amended and Restated RTEK Agreement”) to reflect that part of the compensation originally scheduled to be paid to RTEK was allocated as compensation for Mr. Talbot in connection with his appointment as director and officer. Any unvested RSUs shall immediately vest in the event of a Change in Control (as defined in our 2023 Equity Incentive Plan).
On August 16, 2024, the parties further amended and restated the Technical Services Agreement (the “Second A&R RTEK Agreement”) in order to, among other things:
On March 12, 2025, RTEK delivered a letter to the Company (the “RTEK Notice”) purporting to terminate the Second A&R RTEK Agreement due to the Company’s alleged repudiation of its obligations under the agreement. The Company firmly disagrees with such allegation and at that time regarded the agreement as in effect.
On March 20, 2025, the Company notified RTEK that it was terminating the agreement due to RTEK’s failure and inability to perform several of the services required under the agreement, including the timely delivery of a certain updated study, RTEK’s material breach of the exclusivity provisions of the Agreement, as well as several breaches to the other terms of the Second A&R RTEK Agreement.
The Company does not believe that it will incur any early termination penalties as a result of its termination of the Second A&R RTEK Agreement.
| 18 |
ATLAS LITHIUM CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7 – RELATED PARTY TRANSACTIONS (CONTINUED)
Convertible Note Purchase Agreement
In
November 2023, the Company entered into a Convertible Note Purchase Agreement with Jaeger, relating to the issuance to Jaeger along with other experienced lithium investors, of convertible
promissory notes with an aggregate total principal amount of $
The related parties outstanding amounts and expenses as of June 30, 2025 and December 31, 2024 are shown below:
| June 30, 2025 | December 31, 2024 | |||||||||||||||
| Accounts Payable / Debt | Expenses / Payments | Accounts Payable / Debt | Expenses / Payments | |||||||||||||
| RTEK International DMCC | $ | $ | $ | $ | ||||||||||||
| Jaeger Investments Pty Ltd. | $ | $ | $ | $ | ||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
In the course of preparing condensed consolidated financial statements, we eliminate the effects of various transactions conducted between Atlas and its subsidiaries and among the subsidiaries.
Atlas Critical Minerals Corporation
During the six months ended June 30, 2025, Atlas Critical Minerals was party to the following stock-based compensation transactions with related parties of the Company:
Pursuant
to the amended and restated employment agreement between Atlas Critical Minerals and Mr. Fogassa, dated June 26, 2024, Atlas Critical
Minerals issued shares of its common stock to Mr. Fogassa during the six months ended June 30, 2025, representing
Atlas
Critical Minerals issued shares
of common stock of Atlas Critical Minerals to officers and directors of the Company at a weighted average price of $ per
share in settlement of $
| 19 |
ATLAS LITHIUM CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8 – RISKS AND UNCERTAINTIES
Currency Risk
The Company operates primarily in Brazil which exposes it to currency risks. The Company’s business activities may generate intercompany receivables or payables that are in a currency other than the functional currency of the Company. Changes in exchange rates from the time the activity occurs to the time payments are made may result in the Company receiving either more or less in local currency than the local currency equivalent at the time of the original activity.
The Company’s condensed consolidated financial statements are denominated in U.S. dollars. Accordingly, changes in exchange rates between the applicable foreign currency and the U.S. dollar affect the translation of each foreign subsidiary’s financial results into U.S. dollars for purposes of reporting in the condensed consolidated financial statements. The Company’s foreign subsidiaries translate their financial results from the local currency into U.S. dollars in the following manner: (a) income statement accounts are translated at average exchange rates for the period; (b) balance sheet asset and liability accounts are translated at end of period exchange rates; and (c) equity accounts are translated at historical exchange rates. Translation in this manner affects the shareholders’ equity account referred to as the foreign currency translation adjustment account. This account exists only in the foreign subsidiaries’ U.S. dollar balance sheets and is necessary to keep the foreign subsidiaries’ balance sheets in agreement.
NOTE 9 – SUBSEQUENT EVENTS
In accordance with FASB ASC 855-10 Subsequent Events, we have analyzed our operations subsequent to June 30, 2025 to the date these condensed consolidated financial statements were issued, and we have determined that there are no material subsequent events to disclose in these condensed consolidated financial statements.
| 20 |
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the notes to those financial statements included in Item 1 of this Quarterly Report and our consolidated financial statements and notes thereto and related Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Form 10-K”).
This Quarterly Report includes forward-looking statements that are subject to risks, uncertainties and other factors described in the section entitled “Risk Factors” in Item 1.A. of Part II of this Report that could cause actual results could differ materially from those anticipated in these forward-looking statements. Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the future.
Overview
Atlas Lithium Corporation (“Atlas Lithium”, the “Company”, “we”, “us”, or “our” refer to Atlas Lithium Corporation and its consolidated subsidiaries) is a mineral exploration and development company with lithium projects and multiple lithium exploration properties. In addition, we own exploration properties in other battery minerals, including nickel, copper, rare earths, graphite, and titanium. Our current focus is the development from exploration to active mining of our hard-rock lithium project located in the state of Minas Gerais in Brazil at a well-known pegmatitic district in Brazil, which has been denominated by the government of Minas Gerais as “Lithium Valley.” We intend to mine and then process our lithium-containing ore to produce lithium concentrate (also known as spodumene concentrate), a key ingredient for the battery supply chain.
We own 53,942 hectares (539 km2) for lithium in 95 mineral rights (2 in pre-mining concession stage, 85 in exploration stage, and 8 in pre-exploration stage). We believe that we hold the largest portfolio of exploration properties for lithium in Brazil among publicly listed companies.
In addition to our lithium exploration activities, as of June 30, 2025, we also own approximately 30.11% of the shares of common stock of Atlas Critical Minerals Corporation (formerly known as Jupiter Gold Corporation), which trades on the OTC QB operated by OTC Markets Group, Inc. under the symbol JUPGF. Atlas Critical Minerals Corporation (“Atlas Critical Minerals”) is an exploration stage company focused on the exploration and development of mineral rights relating to certain critical minerals such as rare earths, copper, graphite, nickel, iron, gold and quartzite. The results of operations of Atlas Critical Minerals are consolidated in our financial statements under generally accepted accounting principles in the U.S. (“U.S. GAAP”). On November 19, 2024, Atlas Critical Minerals consummated a merger with our majority-owned subsidiary, Apollo Resources Corporation, with Atlas Critical Minerals continuing its corporate existence as the surviving corporation (the “Merger”). For more information about the Merger, please refer to our 2024 Form 10-K.
Operational Update
During the second quarter, SGS Canada Inc. (“SGS”) completed most of the work related to our Definitive Feasibility Study (“DFS”) which was eventually issued on July 30, 2025, and is included in this quarterly report as Exhibit 96.1. The DFS demonstrates robust project economics that positions our Neves Project as a potentially highly profitable lithium project with an after-tax internal rate of return of 145%, with a payback period of 11 months. The Neves Project also benefits from an attractive low capital expenditure cost of core implementation items of $57 million. The DFS supports our expectation of being able to produce an average of 146,000 tons per annum of lithium concentrate over an approximate 7-year initial life of mine. Expansion of life of mine is expected as additional mining pits are granted environmental permits in the future. Critically, our projected cash costs of $489 per ton of produced product will position us in the lowest quartile of global lithium producers. Overall, these strong economics underscore our strategic advantage in Brazil’s Lithium Valley and validate our path to production.
During the second quarter, the official gazette of the government of Brazil, Diário Oficial da União, published the granting by Brazil’s Ministry of Mines and Energy to us of mining concession status (“Portaria de Lavra”) with respect to our lithium mineral right number 833.356/2007 with a size of 1,536.45 hectares. This particular mineral right contains most of the currently discovered mineralized lithium ore bodies within our Neves Project. This development represents a significant milestone as a mining concession constitutes the highest-level title of ownership for a mineral right in Brazil. In broad terms, it provides ownership of the mineral right in perpetuity and grants the right to mine the substance for which it was issued (in this case, lithium) without volume limitations, provided that customary periodic reporting requirements under the Brazilian mining code and any other applicable regulations are satisfied.
During the second quarter, we successfully transported the 141 containers and 10 bulk items which form our modular dense media separation lithium processing plant to a secure location within the state of Minas Gerais where it awaits transport to the Neves Project site and assembly.
| 21 |
Results of Operations
The Six Months Ended June 30, 2025, Compared to the Six Months Ended June 30, 2024
Net loss for the six months ended June 30, 2025 totaled $16.4 million, compared to net loss of $23.1 million during the six months ended June 30, 2024. The decrease is mainly due to:
| ● | The absence of exploration cost expenses in the six months ended June 30, 2025, compared to $3.2 million in the six months ended June 30, 2024, as a result of the commencement of capitalizing exploration expenses due to the conclusion of a preliminary economic assessment of the Neves Project in the second quarter of 2024. |
| ● | A decrease of approximately $5.4 million in stock-based compensation expense compared to the six months ended June 30, 2024, corresponding to a reduced fair value of the instruments issued due to the decreased trading price of the Company’s common stock compared to the six months ended June 30, 2024, partially offset by an increase in the number of instruments issued in the six months ended June 30, 2025 compared to the comparable period in 2024;; |
| ● | The above-mentioned decreases were partially offset by an increase in General and Administrative expenses of approximately $1.6 million compared to the six months ended June 30, 2024, primarily due to: (i) a $1.7 million increase in payroll expenses ($2.9 million in 2025 compared to $1.2 million in 2024) driven by team expansion as our Neves project progresses; and (ii) higher service costs related to marketing and investor relations activities of $0.9 million ($1.2 million in 2025 compared to $0.3 million in 2024). These increases were partially offset by a reduction of approximately $1.0 million in third-party service expenses in 2025, as a higher volume of such services had been contracted in 2024 to support project planning activities; |
Liquidity and Capital Resources
As of June 30, 2025, we had cash and cash equivalents of $13.9 million and working capital of $7.9 million.
Net cash used in operating activities totaled $8.3 million for the six months ended June 30, 2025, compared to $11.3 million for the six months ended June 30, 2024, representing a decrease of $3.0 million or 26%. This decrease was primarily driven by the commencement of capitalizing exploration expenses, which resulted in a $3.2 million positive impact to net cash used in operating activities, added by an increase in accounts payable of $1.0 million compared to the six months ended June 30, 2024. The decrease was partially offset by an increase of $1.6 million in general and administrative expenses, mainly due to team expansion and higher service costs related to marketing activities.
| 22 |
Net cash used in investing activities totaled $6.3 million for the six months ended June 30, 2025, compared to net cash used of $16.8 million during the six months ended June 30, 2024, representing a decrease in cash used of $10.4 million or 63%. The decrease primarily reflects:
| ● | A decrease of $9.2 million in the payments made in connection with the acquisition of our lithium processing plant ($4.7 million in 2025, compared to $13.9 million in 2024) due to the finalization of the fabrication process in 2025; | |
| ● | The capitalization of exploration costs incurred during the six months ended June 30, 2025 of $1.5 million. ($2.4 for the six months ended June 30, 2024); and | |
| ● | Reduction of $0.3 million relating to the acquisition of intangible assets: $nil in the three months ended June 30, 2025, compared to $0.3 million for the same period of 2024 due to the implementation of SAP enterprise resource planning software. |
Net cash provided by financing activities totaled $12.9 million for the six months ended June 30, 2025, compared to $nil during the six months ended June 30, 2024, representing an increase in cash provided of $12.9 million or 100%. The increase is due to the following financing activities that occurred during the six months ended June 30, 2025:
| ● | The sale of an aggregate of 2,468,502 shares of our common stock pursuant to the ATM Agreement for proceeds of $11.9 million, net of commissions and fees; | |
| ● | Net proceeds of $1.411,900 arising from the sale of shares of Atlas Critical Minerals, a consolidated subsidiary of the Company and; | |
| ● | Debt repayments of $322,330 and $84,034 in connection with lease obligations during the period. |
We have historically incurred net operating losses and have not yet generated material revenues from the sale of products or services. As a result, our primary sources of liquidity have been derived through proceeds from the sales of our equity and the equity of one of our subsidiaries. As of June 30, 2025, we had cash and cash equivalents of $13.9 million and working capital of $7.9 million, compared to cash and cash equivalents $15.5 million and working capital of $10.6 million as of December 31, 2024. We believe our cash and equivalents will be sufficient to meet our working capital and capital expenditure requirements for a period of at least twelve months from the date of these financial statements. However, our future short- and long-term capital requirements will depend on several factors, including but not limited to, the rate of our growth, our ability to identify areas for mineral exploration and the economic potential of such areas, the exploration and other drilling campaigns needed to verify and expand our mineral resources, the successful installation of our lithium processing facilities, and our ability to attract talent. To the extent that our current resources are insufficient to satisfy our cash requirements, we may need to seek additional equity or debt financing. If the needed financing is not available, or if the terms of financing are less desirable than we expect, we may be forced to scale back our existing operations and growth plans, which could have an adverse impact on our business and financial prospects and could raise substantial doubt about our ability to continue as a going concern.
Currency Risk
We operate primarily in Brazil, which exposes us to currency risks. Our business activities may generate intercompany receivables or payables that are in a currency other than the functional currency of the entity. Changes in exchange rates from the time the activity occurs to the time payments are made may result in it receiving either more or less in local currency than the local currency equivalent at the time of the original activity.
Our condensed consolidated financial statements are denominated in U.S. dollars. Accordingly, changes in exchange rates between the applicable foreign currency and the U.S. dollar affect the translation of each foreign subsidiary’s financial results into U.S. dollars for purposes of reporting in the condensed consolidated financial statements. Our foreign subsidiaries translate their financial results from the local currency into U.S. dollars in the following manner: (a) income statement accounts are translated at average exchange rates for the period; (b) balance sheet asset and liability accounts are translated at end of period exchange rates; and (c) equity accounts are translated at historical exchange rates. Translation in this manner affects the shareholders’ equity account referred to as the foreign currency translation adjustment account. This account exists only in the foreign subsidiaries’ U.S. dollar balance sheets and is necessary to keep the foreign subsidiaries’ balance sheets in agreement.
| 23 |
Critical Accounting Policies and Estimates
The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States of American (“U.S. GAAP”). There have been no significant changes to the critical accounting estimates disclosed in our 2024 Form 10-K.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information to be reported under this Item is not required of smaller reporting companies.
Item 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Principal Executive Officer and Principal Financial Officer, has evaluated the design, operation, and effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that as of June 30, 2025, our disclosure controls and procedures were effective at a reasonable assurance level.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting that occurred in the quarter ended June 30, 2025 that materially affected, or would be reasonably likely to materially affect, our internal control over financial reporting.
Limitations of the Effectiveness of Controls and Procedures
In designing and evaluating the disclosure controls and procedures and internal control over financial reporting, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance that the information required to be disclosed in reports filed or submitted pursuant to the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to management, including its Principal Executive Officer and Principal Financial Officer as appropriate, to allow timely decisions regarding required disclosure. In addition, the design of disclosure controls and procedures and internal control over financial reporting must reflect the fact that there are resource constraints and that management is required to apply judgement in evaluating the benefits of possible controls and procedures relative to their costs.
| 24 |
PART II OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
In the ordinary course of business, we may periodically become subject to legal proceedings and claims arising in connection with ongoing business activities from time to time. The results of litigation and claims cannot be predicted with certainty, and unfavorable resolutions are possible and could materially affect our results of operations, cash flows or financial position. In addition, regardless of the outcome, litigation could have an adverse impact on us because of defense costs, diversion of management attention and resources and other factors.
Based on information readily available, as of the end of the period covered by this Quarterly Report on Form 10-Q, there are no pending legal proceedings that, in the opinion of management, are likely to result in a material adverse effect on our financial position, results of operations or cash flows.
Item 1A. RISK FACTORS
Investing in our common stock involves a high degree of risk. You should carefully consider the information in this Quarterly Report, including our financial statements and the related notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as any additional risk factors that may be described in our other filings with the SEC from time to time, including our Annual Report on Form 10-K for fiscal year ended December 31, 2024, before deciding whether to invest in our securities. The occurrence of any of the risks, the events or developments described below could harm our business, financial condition, operating results, and growth prospects. In such an event, the market price of our common stock could decline, and you may lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations. You should consider carefully the risks and uncertainties included in this Quarterly Report and elsewhere in our Annual Report and other SEC filings before you decide to invest in our common stock.
Tariffs, trade restrictions and other changes in international trade policy could adversely affect our business, financial condition and results of operations.
Beginning in the second quarter of 2025, sweeping new U.S. tariffs were announced, and in response, several countries have imposed, or threatened to impose, reciprocal tariffs on imports from the U.S. and other retaliatory measures. Various modifications and delays to the U.S. tariffs have been announced, further changes are expected to be made in the future, and the details and effects remain uncertain.
In early July 2025, President Trump threatened to impose a 50% tariff on any and all Brazilian products imported to the U.S., separate from any sectoral tariffs, effective August 1, and ordered the Office of the U.S. Trade Representative to initiate an analysis into Brazil’s trade practices under Section 301 of the Trade Act of 1974. In response, Brazilian President Lula issued a presidential decree implementing the Economic Reciprocity Act, which would allow Brazil to take countermeasures against the U.S. On July 30, 2025, President Trump signed an Executive Order increasing the existing 10% tariff on U.S. imports from Brazil to 50%, effective August 6, 2025, although several categories of products were excluded. It is uncertain at this time what retaliatory measures may be taken by Brazil or how an escalating trade war between the U.S. and Brazil may affect the Company’s business and growth prospects.
Additionally, in April 2025, President Trump issued an executive order instructing the U.S. Department of Commerce to initiate an analysis under Section 232 of the Trade Expansion Act of 1962 to evaluate the national security risks from imports of processed critical minerals and their derivative products, which was initiated later that month. Following the Section 232 analysis, it is possible that sectoral tariffs on certain critical mineral imports to the U.S., including lithium, other import restrictions or other non-trade actions may be implemented by the Trump Administration.
The current trade environment continues to be dynamic, and the ultimate impact remains uncertain and will depend on several factors, including whether additional or incremental U.S. tariffs or other measures are announced, ultimately imposed or changed, to what extent other countries implement tariffs or other retaliatory measures in response, and the overall magnitude and duration of these measures. If disputes and conflicts further escalate, actions by governments in response could be significantly more severe and restrictive. Any of the foregoing could materially adversely harm our business and growth prospects. Trade barriers and other governmental action related to tariffs or international trade agreements around the world have the potential to decrease demand for our minerals and adversely impact the markets in which we are contractually obligated to sell our products and plan to operate. In addition, uncertainty and rapid changes in global trade policy may continue to result in general macroeconomic volatility. Our ability to mitigate the impacts of such trade policies on our business will be limited, and there can be no assurances that such mitigation efforts would be successful. As such, any changes in legislation and government policy by the U.S., China or other critical producers or consumers of critical minerals may have a material a direct or indirect adverse effect on our business.
The economic viability of our Neves Project has several risks and uncertainties, notwithstanding the Definitive Feasibility Study supports a commercially viable project.
Feasibility studies, including the Definitive Feasibility Study related to the Neves Project, are used to determine the economic viability of a mineral deposit, including estimated capital and operating costs. While these studies are based on the best information available to us for the level of study, we cannot be certain that actual costs will not significantly exceed the estimated cost. It is not uncommon for commercial mining operations to experience unexpected costs, problems, and delays during construction, commissioning and start-up. Any of these factors or those listed below could result in changes to our estimated capital and operating expenditures, and the expected economic returns of the Neves Project.
-a significant, prolonged decrease in the market price of lithium;
-significant delays, reductions, or stoppages in operating activities;
-construction delays, procurement issues and workforce sourcing;
-significant shortages of adequate and skilled labor or a significant increase in labor costs;
-more stringent regulatory or environmental, health or safety laws and more stringent regulatory or environmental, health or safety laws and regulations; and
-general economic and political conditions, such as recessions, interest rates, inflation and acts of war or terrorism.
Our future lithium production activities may change as a result of any one or more of these risks and uncertainties. We cannot assure you that any of our activities will result in achieving and maintaining the estimated net present value or internal rate of return as set forth in the Definitive Feasibility Study.
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
We consummated the following sales of unregistered securities during the three months ended June 30, 2025, which sales were exempt from registration under the Securities Act upon reliance on Section 4(a)(2) thereof:
| ● | On May 5, 2025, we issued 5,750 shares of our common stock to a consultant in exchange for consulting and professional services. |
Item 3. DEFAULTS UPON SENIOR SECURITIES
None.
Item 4. MINE SAFETY DISCLOSURES
None.
Item 5. OTHER INFORMATION
On June 13, 2025, Mr. Fogassa, our Chief Executive Officer and Chairman, entered into a written plan for the potential future sale of up to 300,000 shares of our common stock that is intended to satisfy the conditions of Rule 10b5-1(c) under the Exchange Act, with such plan starting in September 2025 and expiring in March 2026.
On June 13, 2025, Mr. Roger Noriega, our Board Member, entered into a written plan for the potential future sale of up to 50,000 shares of our common stock that is intended to satisfy the conditions of Rule 10b5-1(c) under the Exchange Act, with such plan starting in September 2025 and expiring in March, 2026.
| 25 |
Item 6. EXHIBITS
(a) Exhibits
* Filed herewith.
** Furnished herewith.
| 26 |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Atlas Lithium Corporation
| Signature | Title | Date | ||
| /s/ Marc Fogassa | Chief Executive Officer (Principal Executive Officer) | August 04, 2025 | ||
| Marc Fogassa | and Chairman of the Board | |||
| /s/ Tiago Miranda | Chief Financial Officer (Principal Financial and | August 04, 2025 | ||
| Tiago Miranda | Accounting Officer) |
| 27 |