UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

 

For the quarterly period ended March 31, 2025

 

☐	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 001-41552

 

ATLAS LITHIUM CORPORATION

(Exact name of registrant as specified in its charter)

 

Nevada		39-2078861
(State or other jurisdiction of		(IRS Employer
incorporation or organization)		Identification No.)

 

Rua Antonio de Albuquerque, 156 – 17th Floor

Belo Horizonte, Minas Gerais, Brazil, 30.112-010

(Address of principal executive offices, including zip code)

 

(833) 661-7900

(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
Common Stock, $0.001 par value		ATLX		The Nasdaq Capital Market

 

Securities registered pursuant to Section 12(g) of the Act: None

 

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. Yes ☒ No ☐

 

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). Yes ☒ No ☐

 

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	☐
Non-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 May 8, 2025, there were outstanding 17,837,204 shares of the registrant’s common stock.

 

DOCUMENTS INCORPORATED BY REFERENCE: None.

 

 

 

TABLE OF CONTENTS

 

		Page
Cautionary Note Regarding Forward-Looking Statements		3
PART I - FINANCIAL INFORMATION		4
Item 1.	Financial Statements	4
	Condensed Consolidated Balance Sheets as of March 31, 2025 (Unaudited) and December 31, 2024	4
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended March 31, 2025 and 2024 (Unaudited)	5
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2025 and 2024 (Unaudited)	6
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2025 and 2024 (Unaudited)	7
	Notes to the Condensed Consolidated Financial Statements (Unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures.	24
PART II - OTHER INFORMATION		25
Item 1.	LEGAL PROCEEDINGS	25
Item 1A.	RISK FACTORS	25
Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	25
Item 3.	DEFAULTS UPON SENIOR SECURITIES	25
Item 4.	MINE SAFETY DISCLOSURES	25
Item 5.	OTHER INFORMATION	25
Item 6.	Exhibits	26
Signatures		27

 

 

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.

 

 

PART I - FINANCIAL INFORMATION

 

Item 1 FINANCIAL STATEMENTS

 

ATLAS LITHIUM CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

March 31, 2025 and December 31, 2024

 

		March 31,				December 31,
		2025				2024
		(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents		$	14,000,031			$	15,537,476
Accounts receivable			48,994				47,682
Inventories			417,776				492,812
Taxes recoverable			35,844				29,431
Derivative assets			66,785				-
Prepaid and other current assets			107,806				134,983
Total current assets			14,677,236				16,242,384
Taxes recoverable			1,916,822				1,704,994
Property and equipment, net			43,170,531				38,855,071
Intangible assets, net			377,145				399,773
Right of use assets - operating leases, net			486,752				499,605
Other assets			171,059				152,781
Total assets		$	60,799,545			$	57,854,608
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses		$	5,829,640			$	5,001,664
Derivative liabilities			65,030				462,638
Convertible Debt			242,192				81,918
Operating lease liabilities			153,649				134,300
Other current liabilities			8,962				8,084
Total current liabilities			6,299,473				5,688,604
Convertible Debt			9,833,501				9,807,883
Operating lease liabilities			327,718				312,918
Deferred consideration from royalties sold			20,000,000				20,000,000
Other noncurrent liabilities			49,151				33,962
Total liabilities			36,509,843				35,843,367
Stockholders’ Equity:
Series A preferred stock, $0.001 par value. 1 shares authorized; 1 share issued and outstanding as of March 31, 2025 and December 31, 2024			1				1
Common stock, $0.001 par value. 200,000,000 and 200,000,000 shares authorized as of March 31, 2025 and December 31, 2024, respectively and 17,498,904 and 16,014,742 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively			17,499				16,015
Additional paid-in capital			176,665,848				166,110,916
Accumulated other comprehensive loss			(171,661	)			(179,990	)
Cumulative Adjustment of the Valuation of Fin. Instruments			76,395				(278,820	)
Accumulated deficit			(152,953,340	)			(144,410,340	)
Total Atlas Lithium Co. stockholders’ equity			23,634,742				21,257,782
Non-controlling interest			654,960				753,459
Total stockholders’ equity			24,289,702				22,011,241
Total liabilities and stockholders’ equity		$	60,799,545			$	57,854,608

 

The accompanying notes are an integral part of the condensed consolidated financial statements.

 

 

ATLAS LITHIUM CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)

For the Three Months Ended March 31, 2025 and 2024

 

		2025				2024
		Three months ending March 31
		2025				2024
Gross revenues			36,425				212,757
Sales deductions			(11,250	)			(26,050	)
Net revenue			25,175				186,707
Cost of revenue			(87,850	)			(102,067	)
Gross profit / (loss)			(62,675	)			84,640
Operating expenses
General and administrative expenses			4,916,258				3,251,754
Stock-based compensation			4,830,170				6,840,122
Exploration			-				3,170,983
Other operating expenses			14,454				3,601
Total operating expenses			9,760,882				13,266,460
Loss from operations			(9,823,557	)			(13,181,820	)
Other expense (income)
Other expense			963				2,982
Fair value adjustments, net			(41,633	)			(187,489	)
Finance costs			430,700				186,883
Total other expense			390,030				2,376
Loss before provision for income taxes			(10,213,587	)			(13,184,196	)
Income taxes			-				-
Net loss			(10,213,587	)			(13,184,196	)
Loss attributable to non-controlling interest			(1,196,630	)			(220,729	)
Net loss attributable to Atlas Lithium Corporation stockholders		$	(9,016,957	)		$	(12,963,467	)
Basic and diluted loss per share
Net loss per share attributable to Atlas Lithium Corporation common stockholders		$	(0.55	)		$	(1.02	)
Weighted-average number of common shares outstanding:
Basic and diluted			16,501,815				12,769,383
Comprehensive loss:
Net loss		$	(10,213,587	)		$	(13,184,196	)
Other comprehensive results			462,269				70,026
Comprehensive loss			(9,751,318	)			(13,114,170	)
Comprehensive loss attributable to noncontrolling interests			(1,097,906	)			(27,918	)
Comprehensive loss attributable to Atlas Lithium Corporation stockholders		$	(8,653,412	)		$	(13,086,252	)

 

The accompanying notes are an integral part of the condensed consolidated financial statements.

 

 

ATLAS LITHIUM CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)

For the Three Months Ended March 31, 2025 and 2024

 

																										Cumulative
		Series A Preferred Stock								Common Stock								Additional  Paid-in				Accumulated Other Comprehensive				Adjustment of the Valuation of				Accumulated				Noncontrolling				Total Stockholders’ Equity
		Shares				Value				Shares				Value				Capital				Loss				Fin. Instruments				Deficit				Interests				(Deficit)
Balance, December 31, 2023			1			$	1				12,763,581			$	12,764			$	110,195,978			$	(138,829	)		$	-			$	(102,822,123	)		$	427,302			$	7,675,093
Issuance of common stock in exchange for consulting, professional and other services			-				-				6,000				6				105,091				-				-				-				-				105,097
Stock based compensation			-				-				-				-				6,102,428				-				-				-				124,505				6,226,933
Change in foreign currency translation			-				-				-				-				-				70,026				-				-				68,305				138,331
Net loss			-				-				-				-				-				-				-				(12,963,467	)			(220,729	)			(13,184,196	)
Balance, March 31, 2024			1			$	1				12,769,581			$	12,770			$	116,403,497			$	(68,803	)		$	-			$	(115,785,590	)		$	399,384			$	961,259
																										Cumulative
		Series A Preferred Stock								Common Stock								Additional  Paid-in				Accumulated Other Comprehensive				Adjustment of the Valuation of				Accumulated				Noncontrolling				Total Stockholders’ Equity
		Shares				Value				Shares				Value				Capital				Loss				Fin. Instruments				Deficit				Interests				(Deficit)
Balance, December 31, 2024			1			$	1				16,014,742			$	16,015			$	166,110,916			$	(179,990	)		$	(278,820	)		$	(144,410,340	)		$	753,459			$	22,011,241
Balance			1			$	1				16,014,742			$	16,015			$	166,110,916			$	(179,990	)		$	(278,820	)		$	(144,410,340	)		$	753,459			$	22,011,241
Issuance of common stock in connection with sales made under private offerings			-				-				1,169,751				1,170				6,653,280				-				-				-				464,000				7,118,449
Exercise of warrants											-				-				-				-				-				-				-				-
Stock based compensation			-				-				314,411				314				3,901,652				-				-				-				1,009,364				4,911,330
Adjustment of the Valuation of Fin. Instruments			-				-				-				-				-				-				355,216				-				-				355,216
Other changes in Noncontrolling interest			-				-				-				-				-				-				-				473,957				(473,957	)			-
Change in foreign currency translation			-				-				-				-				-				8,329				-				-				98,724				107,053
Net loss			-				-				-				-				-				-				-				(9,016,957	)			(1,196,630	)			(10,213,587	)
Balance, March 31, 2025			1			$	1				17,498,904			$	17,499			$	176,665,848			$	(171,661	)		$	76,395			$	(152,953,340	)		$	654,960			$	24,289,702
Balance			1			$	1				17,498,904			$	17,499			$	176,665,848			$	(171,661	)		$	76,395			$	(152,953,340)			$	654,960			$	24,289,702

 

The accompanying notes are an integral part of the condensed consolidated financial statements.

 

 

ATLAS LITHIUM CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

For the Three Months Ended March 31, 2025 and 2024

 

		2025				2024
		Three months ending March 31
		2025				2024
Cash flows from operating activities of continuing operations:
Net loss		$	(10,213,587	)			(13,184,196	)
Adjustments to reconcile net loss to cash used in operating activities:
Stock-based compensation and services			4,830,170				6,840,202
Depreciation and amortization			74,175				31,912
Loss on inventories revaluation			65,556				-
Interest expense			160,274				202,691
Unwinding of non-current liabilities			33,190				-
Fair value adjustments			(41,633	)			(187,489	)
Other non-cash expenses			(4,110	)			-
Gain/loss on FOREX transactions			239,377				-
Changes in operating assets and liabilities:
Inventories and accounts receivable			25,336				(21,889	)
Taxes recoverable			(81,894	)			39,825
Deposits and advances			29,455				(30,769	)
Accounts payable and accrued expenses			473,926				237,726
Other noncurrent assets and liabilities			6,188				(31,277	)
Net cash used by operating activities			(4,403,577	)			(6,103,264	)
Cash flows from investing activities:
Acquisition of capital assets			(3,177,228	)			(5,855,859	)
Capitalized exploration costs			(1,035,362	)			-
Increase in intangible assets			-				(199,676	)
Net cash used in investing activities			(4,212,590	)			(6,055,535	)
Cash flows from financing activities:
Net proceeds from sale of common stock			6,654,450				-
Proceeds from sale of subsidiary common stock to noncontrolling interests			464,000				-
Cash used in payment of debt			-				-
Lease payments			(40,438	)			-
Net cash provided by financing activities			7,078,012				-
Effect of exchange rates on cash and cash equivalents			710				138,337
Net decrease in cash and cash equivalents			(1,537,445	)			(12,020,462	)
Cash and cash equivalents at beginning of the period			15,537,476				29,549,927
Cash and cash equivalents at end of the period		$	14,000,031				17,529,465

 

The accompanying notes are an integral part of the condensed consolidated financial statements.

 

 

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 condensed consolidated financial statements have 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 March 31, 2025 the condensed consolidated financial statements include the accounts of the Company; (i) its 100% owned subsidiary Atlas Lithium Limited and its subsidiary Atlas Litio Brasil Ltda (“Atlas Brazil”); (ii) its 100% owned subsidiary Athena Mineral Resources Corporation and its subsidiary Athena Litio Ltda; (iii) its 100% owned subsidiary Brazil Mineral Resources Corporation and its subsidiary Atlas Recursos Minerais; (iv) its 30.51% equity interest in Atlas Critical Minerals Corporation (“Atlas Critical Minerals”) and its subsidiaries Mineração Apollo Ltda., Mineração Duas Barras Ltda. (“MDB”), RST Recursos Minerais Ltda. (“RST”) and Mineração Jupiter Ltda. We have concluded that Atlas Critical Minerals and its subsidiaries are variable interest entities (“VIE”) in accordance with applicable accounting standards and guidance. As such, the accounts and results of Atlas Critical Minerals and their subsidiaries have been included in our condensed consolidated financial statements.

 

All material intercompany accounts and transactions have been eliminated in consolidation.

 

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 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 that have been issued that might have a material impact on its financial position or results of operations.

 

 

ATLAS LITHIUM CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 2 – COMPOSITION OF CERTAIN FINANCIAL STATEMENT ITEMS

 

Inventories

 

Inventories as of March 31, 2025, and December 31, 2024, are comprised of the following:

 SCHEDULE OF INVENTORIES

		March 31, 2025				December 31, 2024
Inventory in transit			321,085				321,085
Quartzite blocks and slabs			162,247				171,727
Loss on inventories revaluation			(65,556	)			-
Total			417,776				492,812

 

Inventory in transit consists primarily of feedstock intended for use in the Company’s production processes related to lithium operations.

 

Quartzite inventories include blocks and slabs produced through the cutting and polishing of natural quartzite. Both blocks and slabs are actively sold in the market and are therefore classified as finished goods.

 

Inventories are measured at the lower of cost or net realizable value (NRV). As of March 31, 2025, an inventory write-down of $65,556 was recorded to adjust the carrying value of certain quartzite blocks to their estimated NRV. The NRV adjustment was recognized in the condensed consolidated statements of operations under cost of revenue for the three-month period ended March 31, 2025.

 

Property and Equipment

 

The following table sets forth the components of the Company’s property and equipment as of March 31, 2025 and December 31, 2024:

 

SCHEDULE OF PROPERTY AND EQUIPMENT

		March 31, 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			29,045				(1,318	)			27,727			$	10,616			$	(165	)		$	10,451
Machinery and equipment			195,092				(9,099	)			185,993				184,824				(4,024	)			180,800
Facilities			15,645				(598	)			15,047				14,508				(191	)			14,317
Land			4,210,828				-				4,210,828				4,144,470				-				4,144,470
Prepaid Assets (CIP)			26,542,827				-				26,542,827				23,449,896				-				23,449,896
Mining rights			6,655,771				-				6,655,771				6,558,161				-				6,558,161
Exploration costs			5,532,338				-				5,532,338				4,496,976				-				4,496,976
Total fixed assets		$	43,181,546			$	(11,015	)		$	43,170,531			$	38,859,451			$	(4,381	)		$	38,855,071

 

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 March 31, 2025 and December 31, 2024 were $377,145 and $399,773, respectively.

 

Accounts Payable and Accrued Expenses

SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

		March 31, 2025				December 31, 2024
Trade payables		$	5,560,549				4,779,903
Payroll and social charges			209,224				157,191
Taxes payable			59,867				64,571
Total		$	5,829,640			$	5,001,664

 

 

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 March 31, 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 commercial offices with third parties.

 

The lease agreements have terms between two2 to five years and the liability was measured at the present value of the lease payments discounted using interest rates with a rate of 6.5%, which was determined to be the Company’s incremental borrowing rate. The continuity of the lease liabilities is presented in the table below:

 

SCHEDULE OF OPERATING LEASE LIABILITY

Lease liabilities at December 31, 2024		$	447,218
Increase/Decrease		$	32,150
Unwinding of lease liabilities		$	7,571
Lease payments		$	(40,438	)
Foreign exchange			34,866
Lease liabilities at March 31, 2025		$	481,367
Current portion		$	153,649
Non-current portion		$	327,718

 

The maturity of the lease liabilities (contractual undiscounted cash flows) is presented in the table below:

 

SCHEDULE OF CONTRACTUAL UNDISCOUNTED CASH FLOWS

Less than one year		$	179,771
Year 2		$	164,420
Year 3		$	85,681
Year 4		$	85,681
Year 5			21,420
Total contractual undiscounted cash flows		$	536,973

 

 

ATLAS LITHIUM CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 2 – COMPOSITION OF CERTAIN FINANCIAL STATEMENT ITEMS (CONTINUED)

 

Convertible Debt

SCHEDULE OF CONVERTIBLE DEBT

		March 31, 2025				December 31, 2024
Due to Nanyang Investment Management Pte Ltd			6,045,402				5,933,866
Due to Jaeger Investments Pty Ltd			2,015,158				1,977,979
Due to Modha Reena Bhasker			1,007,567				988,978
Due to Clipper Group Limited			1,007,566				988,978
Total convertible debt		$	10,075,693			$	9,889,801
Current portion		$	242,192			$	81,918
Non-current portion		$	9,833,501			$	9,807,883

 

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 $20,000,000 in proceeds through the issuance of convertible promissory notes with the following key terms:

 

-	Maturity date: 36 months as from the date of issuance;
-	Principal repayment terms: due on maturity;
-	Interest rate: 6.5% per annum;
-	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$28.225/share
-	Redemption right: the Company shall vest a right to redeem the convertible notes if and when (i) twelve months have passed since the loan origination and (ii) the volume weighted average price exceeded 125% of the conversion price for 5 trading days within a 20-day trading period. However, if the Company notifies the holder of its election to redeem the convertible note, the holder may then convert immediately at the conversion price.

 

On November 7, 2023, we issued $10,000,000 in convertible promissory notes under the terms of the November 7, 2023, Convertible Note Purchase Agreement, and there were no other purchases and sales of the convertible promissory notes pursuant to the November 7, 2023 Convertible Note Purchase Agreement. On the date of issuance, we received $10,000,000 in cash proceeds and recorded (i) a $9,688,305 convertible debt liability and (ii) a $311,695 conversion feature derivative liability in our consolidated statement of financial position, as further disclosed below. In the three months ended March 31, 2025, the Company recorded $160,274 in interest expense and $25,619 in accretion expense in the condensed consolidated statement of operations and comprehensive loss ($164,024 and $25,903, in the three months ended March 31, 2024).

 

Derivative Liabilities

SCHEDULE OF DERIVATIVE LIABILITIES

		March 31, 2025				December 31, 2024
Derivative assets
Derivative assets - Non-Deliverable Forward			66,785				-
Total derivative assets			66,785				-
Derivative liabilities
Derivative liability – conversion feature on the convertible debt			24,677				66,310
Derivative liability – restricted stock awards			40,353				121,512
Derivative liability - Non-Deliverable Forward			-				274,816
Total derivative liabilities		$	65,030			$	462,638

 

 

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 $66,310 using a Black-Scholes collar option pricing model with the following assumptions:

 

SCHEDULE OF FAIR VALUE EMBEDDED CONVERSION PRICING MODEL ASSUMPTION

		Value cap				Value floor
Measurement date		December 31, 2024				December 31, 2024
Shares to be issued in case of conversion			354,297				354,297
Stock price at fair value measurement date		$	6.3300			$	6.3300
Conversion price		$	28.2250			$	35.2813
Expected volatility			115.64	%			115.64	%
Risk-free interest rate			4.25	%			4.25	%
Dividend yield			0.00	%			0.00	%
Expected term (years)			1.85				1.85

 

At March 31, 2025, the fair value of the embedded conversion feature was determined to be $24,677 using a Black-Scholes collar option pricing model with the following assumptions:

 

		Value cap				Value floor
Measurement date		March 31, 2025				March 31, 2025
Shares to be issued in case of conversion			354,297				354,297
Stock price at fair value measurement date		$	5.1700			$	5.1700
Conversion price		$	28.2250			$	35.2813
Expected volatility			95.36	%			95.36	%
Risk-free interest rate			3.89	%			3.89	%
Dividend yield			0.00	%			0.00	%
Expected term (years)			1.61				1.61

 

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 months ended March 31, 2025, the Company recognized a $41,633 gain on changes in fair value of financial instruments in the condensed consolidated statement of operations and comprehensive loss ($187,489, in the three months ended March 31, 2024).

 

 

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 March 31, 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 0.2% 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 $400 million market capitalization
-	Tranche 4: when the Company achieves a $500 million market capitalization
-	Tranche 5: when the Company achieves a $600 million market capitalization
-	Tranche 6: when the Company achieves a $800 million market capitalization
-	Tranche 7: when the Company achieves a $1.0 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 $315,189, 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 0%, expected volatility between 71.2% and 82.3%, risk-free interest rate between a range of 5.09% to 5.48%, and an expected term of 2.5 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 March 31, 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 $87,479, as measured using a Monte Carlo Simulation with the following ranges of assumptions: the Company’s stock price on the March 31, 2025 measurement date, expected dividend yield of 0%, expected volatility between 63,5% and 81.8%, risk-free interest rate between a range of 3.89% to 4.62%, and an expected term of 3 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 liability - 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 March 31, 2025, the fair value of outstanding NDF contracts was recorded as Derivative assets on the balance sheet.

 

For the period ended March 31, 2025:

 

	●	Unrealized gains/losses from NDF contracts recognized in Other Comprehensive Income (OCI): $76,395
	●	Amount reclassified into Finance Costs (Revenue): $(7,708)

 

The following table summarizes the non-deliverable forward foreign exchange contracts that remain open as of March 31, 2025:

 SCHEDULE OF NON DELIVERABLE FORWARD EXCHANGE CONTRACTS

Dates

Derivative Financial

Total Notional

FX rate

Total Notional

Settlement

Subsidiary

Entered Into

Instrument

Amounts (USD)

(BRL/USD)

Amounts (BRL)

Dates (Range)

Atlas Litio Brasil Ltda

November, 2024

Forward foreign exchange contracts (USD/BRL)

$

2,750,000

5.97

16,415,700

15-Apr-2025 - 15-Sep-2025

 

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 $20,000,000 in cash, a royalty interest equaling 3% of the gross revenue (the “Royalty”) to be received by Atlas Brazil from the sale of products from certain 19 mineral rights and properties that are located in Brazil and held by Atlas Brazil.

 

On the same day, Atlas Brazil and LRC entered into a Gross Revenue Royalty Agreement (the “Royalty Agreement”) pursuant to which Atlas Brazil granted LRC the Royalty and undertook to calculate and make royalty payments on a quarterly basis commencing from the first receipt of the sales proceeds with respect to the products from the Property. The Royalty Agreement contains other customary terms, including but not limited to, the scope of the gross revenue, Atlas Brazil’s right to determine operations, and LRC’s information and audit rights. Under the Royalty Agreement, Atlas Brazil also granted LRC an option to purchase additional royalty interests with respect to certain additional Brazilian mineral rights and properties on the same terms and conditions as the Royalty, at a total purchase price of $5,000,000.

 

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 March 31, 2025, and December 31, 2024, amounted to $49,151 and $33,962, respectively.

 

 

ATLAS LITHIUM CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 5 – STOCKHOLDERS’ EQUITY

 

Authorized Stock

 

As of December 31, 2024 and March 31, 2025, the Company had 200,000,000 authorized shares of common stock, with a par value of $0.001 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 $25.0 million of shares of our common stock. The issuance and sale of our common stock under the ATM Agreement are made pursuant to a prospectus supplement, dated November 22, 2024, to our registration statement on Form S-3, filed with the U.S. Securities and Exchange Commission (the “SEC”) on August 25, 2023, which was declared effective on September 18, 2023.

 

During the three months ended March 31, 2025, we sold 1,169,751 shares under the ATM Agreement for proceeds of $6.6 million, net of commissions and fees.

 

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 the holders of Series A Preferred Stock being entitled to 51% of the total votes on all such matters regardless of the actual number of shares of Series A Preferred Stock then outstanding, and the holders of common stock are entitled to their proportional share of the remaining 49% of the total votes based on their respective voting power. The one outstanding share of our Series A Preferred Stock has been held by our Chief Executive Officer and Chairman, Mr. Fogassa since December 18, 2012.

 

 

ATLAS LITHIUM CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 5 – STOCKHOLDERS’ EQUITY (CONTINUED)

 

Three Months Ended March 31, 2024 Transactions

 

During the three months ended March 31, 2024, the Company issued 6,000 shares of Common Stock in settlement of restricted stock units that vested in the period.

 

Three Months Ended March 31, 2025 Transactions

 

During the three months ended March 31, 2025, the Company issued an aggregate of 1,484,162 shares of its Common Stock, as follows:

SUMMARY OF AGGREGATE COMMON STOCK SHARES ISSUED

Nature		Shares
Shares issued in connection with stock-based compensation			314,411
Sales of common stock (ATM process)			1,169,751	(*)
Total			1,484,162

 

(*)	1,169,751 shares of Common Stock were sold through the ATM Agreement for proceeds of $6.6 million, net of commissions and fees.

 

Common Stock Options

 

During the three months ended March 31, 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:

 

SCHEDULE OF BLACK-SCHOLES OPTION PRICING MODEL

		March 31, 2025				March 31, 2024
Expected volatility			84,01% – 84.01	%			145.69% – 191.10	%
Risk-free interest rate			4.57% - 4.57	%			3.78% – 4.79	%
Stock price on date of grant		$	6.97 – $6.97			$	31.28 – $31.28
Dividend yield			0.00	%			0.00	%
Expected term			1 years				1 to 5 years

 

 

ATLAS LITHIUM CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 5 – STOCKHOLDERS’ EQUITY (CONTINUED)

 

Changes in common stock options for the three months ended March 31, 2025 and 2024 were as follows:

 

SCHEDULE OF COMMON STOCK OUTSTANDING

		Number of Options Outstanding and Vested				Weighted Average Exercise Price				Remaining Contractual Life (Years)				Aggregated Intrinsic Value
Outstanding and vested, January 1, 2025			40,667			$	0.2041				3.44			$	776,864
Issued (1)			439,996				0.0077
Outstanding and vested, March 31, 2025			480,663			$	0.0243				4.88				2,473,327

 

		Number of Options Outstanding and Vested				Weighted Average Exercise Price				Remaining Contractual Life (Years)				Aggregated Intrinsic Value
Outstanding and vested, January 1, 2024			50,667			$	15.9474				2.15			$	1,228,972
Issued (2)			429,996				0.0077
Outstanding and vested, March 31, 2024			480,664			$	1.6879				8.41			$	7,488,784

 

1)	In the three months ended March 31, 2025, 439,996 common stock options were issued with a grant date fair value of $3,066,772.
2)	In the three months ended March 31, 2024, 429,996 common stock options were issued with a grant date fair value of $13,447,502.

 

During three months ended March 31, 2025, the Company recorded $804,047 in stock-based compensation expense from common stock options in the condensed consolidated statements of operations and comprehensive loss ($3,315,822, during the three months ended March 31, 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 three months ended March 31, 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:

 

SCHEDULE OF WARRANT ASSUMPTION

		March 31, 2025
Expected volatility			85.43% - 85.43%
Risk-free interest rate			4.54% - 4.54%
Stock price on date of grant		$	6.45 - $6.45
Dividend yield			0.00%
Expected term			2 years

 

Changes in common stock purchase warrants for the three months ended March 31, 2025 were as follows:

 

SCHEDULE OF WARRANT ACTIVITY

		Number of Warrants Outstanding and Vested				Weighted Average Exercise Price				Weighted Average Contractual Life (Years)				Aggregated Intrinsic Value
Outstanding and vested, January 1, 2025			16,668			$	10.4999				0.79			$	-
Warrants Issued (1)			75,000			$	8.1250
Outstanding and vested, March 31, 2025			91,668			$	8.5568				1.84			$	-

 

 

1)	The warrants issued in the three months ended March 31, 2025 had a total grant date fair value of $200,981.

 

During the three months ended March 31, 2024, the Company did not issue any common stock purchase warrants.

 

 

ATLAS LITHIUM CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 5 – STOCKHOLDERS’ EQUITY (CONTINUED)

 

During the three months ended March 31, 2025, the Company recorded the following as a result of the common stock purchase warrant activity: $200,981 in stock-based compensation expense in the condensed consolidated statements of operations and comprehensive loss ($nil, during the three months ended March 31, 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.

 

Changes in RSUs for the three months ended March 31, 2025 and March 31, 2024 were as follows:

 

SCHEDULE OF CHANGE IN RESTRICTED STOCK UNITS

		Number of RSUs Outstanding
Outstanding at January 1, 2025			572,476
Granted (1)			310,911
Vested (2)			(319,911	)
Forfeited (3)			(5,000	)
Outstanding at March 31, 2025			558,476

 

		Number of RSUs Outstanding
Outstanding at January 1, 2024		1,040,017
Granted (4)			6,000
Vested (5)			(6,000	)
Expired or cancelled (6)			(10,000	)
Outstanding at March 31, 2024			1,030,017

 

1)	In the three months ended March 31, 2025, 310,911 RSUs were granted to officers and consultants of the Company, with a total grant date fair value of $1,748,315 as measured at an average $5.62/share trailing to the date the RSU was granted, as follows: (i) 295,911 RSUs which immediately vested upon grant and (ii) 15,000 RSUs with time-based vesting of four years.
2)	In the three months ended March 31, 2025, 319,911 RSUs vested and were settled through the issuance of 319,911 shares of common stock.
3)	In the three months ended March 31, 2025, 5,000 RSUs were forfeited upon termination of employment and service agreements with former executives and consultants of the Company.
4)	6,000 RSUs vested immediately upon grant and were issued with a total grant date fair value of $105,097 as measured at $17.52/share using the Company’s 20-day volume weighted average price trailing to the date the RSU was granted.
5)	6,000 RSUs vested and were settled through the issuance of 6,000 shares of common stock.
6)	10,000 RSUs were cancelled without vesting because the performance conditions for vesting were not met.

 

During the three months ended March 31, 2025, the Company recorded $2,896,938 in stock-based compensation expense from the Company’s RSU activity in the period ($2,891,703 during the three months ended March 31, 2024).

 

Other stock incentives measured at fair value through profit or loss

 

As of March 31, 2025, the Company had certain other outstanding obligations to issue shares of the Company’s common stock in case some markets 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 March 31, 2025, the Company recognized a $40,353 derivative liability and would have been obligated to issue 160,145 shares of common stock pursuant to these other stock incentives had the conditions of such stock incentives been met (December 31, 2024: recognized a $513,757 derivative liability relating to 127,535 shares of common stock that the Company would have been obligated to issue had the conditions of the stock incentives been met).

 

 

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 March 31, 2025 (in thousands):

 

SCHEDULE OF CONTRACTUAL OBLIGATIONS

						Less than												More than
		Total				1 Year				1-3 Years				3-5 Years				5 Years
Lithium processing plant construction (1)		$	1,138,911			$	1,138,911			$	-			$	-			$	-
Total			1,138,911				1,138,911				-				-				-

 

(1)	Lithium processing plant construction obligations are related to agreements with suppliers contracted for the construction of the processing plant, with the majority of payments due upon delivery.

 

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:

SCHEDULE OF RELATED PARTIES

Martin Rowley		Martin Rowley was a senior advisor to us; his service terminated on August 16, 2024. In 2023, we entered into a Convertible Note Purchase Agreement with Martin Rowley relating to the issuance to Martin Rowley along with other experienced lithium investors. Martin Rowley is the father of Nicholas Rowley, a former officer.
Jaeger Investments Pty Ltd (“Jaeger”)		Jaeger Investments Pty Ltd is a corporation in which senior advisor, Mr. Rowley, is a controlling shareholder.
RTEK International DMCC (“RTEK”)		RTEK International DMCC is a corporation in which Nicholas Rowley and Brian Talbot, a former officer and director, are controlling shareholders.
Mitsui & Co., Ltd.		Mitsui & Co., Ltd. is a non-controlling shareholder of the Company.

 

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. Under the terms of the Amended and Restated RTEK Agreement, we issued RTEK RSUs for (i) 75,000 (seventy-five thousand) fully paid shares of our common stock vesting on the successful completion of certain performance criteria outlined in the Amended and Restated R-TEK Agreement; RSUs for 100,000 (one hundred thousand) fully paid shares of our common stock vesting upon completion of other identified performance criteria; and RSUs for 100,000 (one hundred thousand) fully paid shares of our common stock vesting upon on the delivery of a working plant as defined in the Amended and Restated RTEK Agreement. 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: (i) revise and amend the Stage Two Budget and revise the terms of service with respect to the Phase Two Services (each, as described in the Second A&R RTEK Agreement); (ii) form an operations committee tasked with ensuring progress toward our goals under such agreement; and (iii) issue to RTEK additional RSUs with aggregate value of up to $5.0 million, subject to RTEK’s achievement of certain milestones and performance criteria.

 

On March 12, 2025, RTEK delivered a letter to the Company (the “RTEK Notice”) purporting to terminate the 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 Agreement.

 

The Company does not believe that it will incur any early termination penalties as a result of its termination of the Agreement.

 

 

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 Investments Pty Ltd., an entity controlled by Mr. Rowley, relating to the issuance to Jaeger Investments Pty Ltd., along with other experienced lithium investors, of convertible promissory notes with an aggregate total principal amount of $10.0 million, accruing interest at a rate of 6.5% per annum. Pursuant to the Convertible Note Purchase Agreement, Jaeger Investments Pty Ltd. purchased an aggregate of $1,967,503.0 of the Notes. The Notes will mature in November 2026.

 

The related parties outstanding amounts and expenses as of March 31, 2025 and December 31, 2024 are shown below:

 

SCHEDULE OF RELATED PARTIES OUTSTANDING AMOUNT AND EXPENSES

		March 31, 2025								December 31, 2024
		Accounts Payable / Debt				Expenses / Payments				Accounts Payable / Debt				Expenses / Payments
RTEK International DMCC		$	-			$	29,294			$	-			$	2,844,549
Jaeger Investments Pty Ltd.		$	2,015,158			$	32,055			$	1,977,979			$	130,358
Total		$	2,015,158			$	61,349			$	1,977,979			$	2,974,907

 

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 three months ended March 31, 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 1,333,469 shares of its common stock to Mr. Fogassa during the three months ended March 31, 2025, representing 4% of Atlas Critical Mineral’s total outstanding common stock as of January 1, 2025.

 

Atlas Critical Minerals issued 144,125 shares of common stock of Atlas Critical Minerals to officers and directors of the Company at a weighted average price of $0.82 per share in settlement of $118,520 in salaries and fees owed to such officers and directors.

 

 

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 March 31, 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.

 

 

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 March 31, 2025, we also own approximately 30.51% of the shares of common stock of Atlas Critical Minerals Corporation (formerly known as Jupiter Gold Corporation), which trades on the OTC Pink Marketplace 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

 

In January 2025, we hired a Project Manager Officer and Vice President of Engineering with decades of experience in multi-billion dollar project design and implementation in the mining industry in Brazil.

 

In February 2025, our modular dense media separation (“DMS”) lithium processing plant, newly manufactured in South Africa and designed to produce up to 150,000 tons of lithium concentrate per annum (“tpa”), was shipped by cargo vessel to Brazil, arriving in early March 2025. The shipment consisted of 141 containers and ten bulk items comprising all components for assembly of our DMS plant; two additional containers with spare parts are expected to be shipped later in 2025. Our DMS plant represents a cornerstone of our Neves Project, designed to deliver high-quality lithium concentrate to the global market for electric vehicles (“EVs”) and renewable energy storage systems. With worldwide lithium demand growing, we are positioned to emerge as a key contributor to the sustainable energy transition. This milestone marks a significant step in our progression toward becoming the next lithium producer in Brazil’s resource-rich Lithium Valley.

 

During the first quarter of 2025, we made significant progress towards the advance of our Definitive Feasibility Study (“DFS”) in partnership with SGS Canada Inc. (“SGS”), a globally recognized testing, inspection, and certification company as that we engaged to prepare the DFS. The primary author of the forthcoming DFS, a senior member of SGS, is a “qualified person” for lithium under the definition of Item 1300 of Regulation S-K. During the first quarter of 2025, we also made significant progress on the application process towards permitting additional mining pit areas. As previously reported, since October 2024 we have obtained all permits needed to assemble our DMS plant, mine certain of our mining pit areas, process such material in our plant, and sell any produced commercial lithium concentrate.

 

 

Results of Operations

 

The Three Months Ended March 31, 2025, Compared to the Three Months Ended March 31, 2024

 

Net loss for the three months ended March 31, 2025 totaled $10.2 million, compared to net loss of $13.2 million during the three months ended March 31, 2024. The decrease is mainly due to:

 

	●	An increase in General and administrative expenses of approximately $1.7 million compared to the three months ended March 31, 2024, primarily due to: (i) $1.3 million increase in payroll expenses ($2.1 million in 2025 compared to $0.7 million in 2024) driven by team expansion as our Das Neves project progresses; and (ii) higher service costs related to marketing and investor relation activities of $0.5 million ($0.7 million in 2025 compared to $0.2 million in 2024);
	●	A decrease of approximately $2.0 million in stock-based compensation expense compared to the three months ended March 31, 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 three months ended March 31, 2024, partially offset by an increase in the number of instruments issued in the three months ended March 31, 2025 compared to the comparable period in 2024; and
	●	The absence of exploration cost expenses in the three months ended March 31, 2025, compared to $3.2 million in the three months ended March 31, 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.

 

Liquidity and Capital Resources

 

As of March 31, 2025, we had cash and cash equivalents of $14.0 million and working capital of $8.3 million.

 

Net cash used by operating activities totaled $4.4 million for the three months ended March 31, 2025, compared to net cash used of $6.1 million during the three months ended March 31, 2024, representing a decrease of $1.7 million. The decrease in net cash used by operating activities was mainly due to commencement of capitalizing exploration expenses, resulting in a $3.2 million positive impact to net cash used by operating activities, partially offset by an increase in general and administrative expenses of $1.7 million due to team expansion and service costs related to marketing activities.

 

 

Net cash used in investing activities totaled $4.2 million for the three months ended March 31, 2025, compared to net cash used of $6.1 million during the three months ended March 31, 2024, representing a decrease in cash used of $1.9 million or 30%. The increase reflects essentially:

 

	●	A decrease of $2.6 million in the payments made in connection with the acquisition of our lithium processing plant ($3.1 million in 2025, compared to $5.8 million in 2024) due to the finalization of the fabrication process in 2025;
	●	The capitalization of exploration costs incurred during the three months ended March 31, 2025 of $1.0 million. ($nil for the three months ended March 31, 2024); and
	●	Reduction of $0.2 million relating to the acquisition of intangible assets: $nil in the three months ended March 31, 2025, compared to $0.2 million for the same period of 2024 due to the implementation of SAP enterprise resource planning software.

 

Net cash provided by financing activities totaled $7.1 million for the three months ended March 31, 2025, compared to $nil during the three months ended March 31, 2024, representing an increase in cash provided of $7.1 million or 100%. The increase is due to the following financing activities that occurred during the three months ended March 31, 2025:

 

	●	The sale of an aggregate of 1,169,751 shares of our common stock pursuant to the ATM Agreement for proceeds of $6.6 million, net of commissions and fees.
	●	Net proceeds of $464,000 arising from the sale of shares of Atlas Critical Minerals, a consolidated subsidiary of the Company.

 

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 March 31, 2025, we had cash and cash equivalents of $14.0 million and working capital of $8.3 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.

 

 

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”). Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financial statements.

 

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 March 31, 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 March 31, 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.

 

 

PART II OTHER INFORMATION

 

Item 1. LEGAL PROCEEDINGS

 

None material.

 

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.

 

Materials and products imported into the EU, the United States and other countries are subject to import duties. In addition, we cannot predict whether future Brazilian, U.S. or international laws, regulations, trade remedy actions or international agreements may impose additional duties or other restrictions on exports of minerals from Brazil. In recent periods, the U.S. government has announced and, in particular following the U.S. presidential election in November 2024, may continue to announce, various import tariffs on goods imported from certain trade partners, such as the EU and China, which have resulted, and may continue to result, in reciprocal tariffs on goods exported from the United States to such trade partners. For example, on April 2, 2025, the Trump Administration announced sweeping global tariffs, which has resulted in a period of considerable volatility, trade negotiations and consideration of retaliatory trade measures. Then, on April 23, 2025, the U.S. Department of Commerce started an analysis under Section 232 of the Trade Expansion Act of 1962 (“Section 232”) to evaluate the national security impacts of reliance on foreign imports of critical minerals. Such analysis may result in the imposition of tariffs on certain critical mineral imports to the U.S., including lithium. We are unable to predict whether such tariffs would be directed primarily at China, as the global leader of critical mineral exports, or whether exporters of critical minerals from Brazil, including the Company, would be impacted. An escalating global trade war, including tariffs under Section 232 or other trade policies, such as trade restrictions between the United States and China or retaliatory trade measures by global policymakers, could 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 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 adverse effect on our business.

 

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

We consummated the following sales of unregistered securities during the three months ended March 31, 2025, which sales were exempt from registration under the Securities Act upon reliance on Section 4(a)(2) thereof:

 

●	On January 1, 2025, we issued 40,000 common stock options to certain of our directors as director compensation, consisting of 10,000 common stock options to each of the following: Amb. Roger Noriega, Ms. Cassiopeia Olson, Mr. Rodrigo Menck, and Mr. Stephen R. Petersen.
●	On January 29, 2025, we issued 75,000 common stock purchase warrants to certain investors in connection with the Company’s equity financing activities.

 

Item 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

Item 4. MINE SAFETY DISCLOSURES

 

None.

 

Item 5. OTHER INFORMATION

 

None.

 

 

Item 6. EXHIBITS

 

(a) Exhibits

 

Exhibit Number		Description
31.1*		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**		Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*		Inline XBRL Instance Document
101.SCH*		Inline XBRL Taxonomy Extension Schema Document
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

* Filed herewith.

** Furnished herewith.

 

 

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)		May 9, 2025
Marc Fogassa		and Chairman of the Board
/s/ Tiago Miranda		Chief Financial Officer (Principal Financial and		May 9, 2025
Tiago Miranda		Accounting Officer)