SEC Form 10-Q filed by Atlas Lithium Corporation
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
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(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
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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.
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 May 4, 2026, 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, 2025 (the “2025 Annual Report”) filed with the SEC on March 04, 2026. The risk factors contained in our 2025 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.
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PART I - FINANCIAL INFORMATION
Item 1 FINANCIAL STATEMENTS
ATLAS LITHIUM CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, 2026 and December 31, 2025
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (UNAUDITED) | ||||||||
| 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 | ||||||||
| Operating lease liabilities | ||||||||
| Deferred consideration from royalties sold | ||||||||
| Other noncurrent liabilities | ||||||||
| Total liabilities | ||||||||
| Stockholders’ Equity: | ||||||||
| Series A preferred stock, $ par value. share authorized; share issued and outstanding as of March 31, 2026 and December 31, 2025 | ||||||||
| Common stock, $ par value. and shares authorized as of March 31, 2026 and December 31, 2025, respectively and and shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Cumulative Adjustment of the Valuation of Fin. Instruments | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Atlas Lithium Corporation 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 (UNAUDITED)
For the Three Months Ended March 31, 2026 and 2025
| Three months ending March 31 | ||||||||
| 2026 | 2025 | |||||||
| Gross revenues | ||||||||
| Sales deductions | ( | ) | ( | ) | ||||
| Net revenue | ||||||||
| Cost of revenue | ( | ) | ( | ) | ||||
| Gross profit / (loss) | ( | ) | ||||||
| Operating expenses | ||||||||
| General and administrative expenses | ||||||||
| Stock-based compensation | ||||||||
| Other operating expenses | ( | ) | ||||||
| Total operating expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other expense (income) | ||||||||
| Other expense | ( | ) | ||||||
| Fair value adjustments, net | ( | ) | ( | ) | ||||
| Finance costs (revenues) | ( | ) | ||||||
| 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 (UNAUDITED)
For the Three Months Ended March 31, 2026 and 2025
| Series A Preferred Stock | Common Stock | Additional Paid-in | Accumulated Other Comprehensive | Cumulative Adjustment of the Valuation of Fin. | Accumulated | Noncontrolling | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||
| Shares | Value | Shares | Value | Capital | Loss | Instruments | Deficit | Interests | (Deficit) | |||||||||||||||||||||||||||||||
| 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, March 31, 2025 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||||||||||
| Series A Preferred Stock | Common Stock | Additional Paid-in | Accumulated Other Comprehensive | Cumulative Adjustment of the Valuation of Fin. | Accumulated | Noncontrolling | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||
| Shares | Value | Shares | Value | Capital | Loss | Instruments | Deficit | Interests | (Deficit) | |||||||||||||||||||||||||||||||
| Balance, December 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, March 31, 2026 | $ | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
| 6 |
ATLAS LITHIUM CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Three Months Ended March 31, 2026 and 2025
| Three months ending March 31 | ||||||||
| 2026 | 2025 | |||||||
| 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 | ||||||||
| Loss on inventories revaluation | ||||||||
| Lease expenses | ||||||||
| 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 | ( | ) | ||||||
| Deposits and advances | ( | ) | ||||||
| Accounts payable and accrued expenses | ( | ) | ||||||
| Other noncurrent assets and liabilities | ( | ) | ||||||
| Net cash used by operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Acquisition of capital assets | ( | ) | ( | ) | ||||
| Capitalized exploration costs | ( | ) | ( | ) | ||||
| 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 | ||||||||
| Lease payments | ( | ) | ( | ) | ||||
| Net cash provided by financing activities | ||||||||
| Effect of exchange rates on cash and cash equivalents | ||||||||
| Net decrease in cash and cash equivalents | ( | ) | ( | ) | ||||
| Cash and cash equivalents at beginning of the period | ||||||||
| Cash and cash equivalents at end of the 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 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 2025 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 2025 Form 10-K. For the period ended March 31, 2026 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
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 March 31, 2026, were $
All of the long-lived assets are located in Brazil and for the three-month period ended March 31, 2026, revenues were exclusively generated by the Company’s Iron ore project. For the three-month period ended March 31, 2026, the Company had one customer accounting for 100% of the Company’s revenue. The other mining projects are in exploration phase.
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.
Foreign Currency
Until December 31, 2025, with the exception of Atlas Litio Brasil Ltda (“Atlas Brazil”), our foreign subsidiaries (all based in Brazil) used a local currency (Brazilian Reais) as the functional currency. Resulting translation gains or losses were recognized as a component of accumulated other comprehensive income. The Company determined that, as of January 1, 2026, the U.S. dollar is the currency of the primary economic environment in which the Brazilian subsidiaries operate.
Effective January 1, 2026, the Company’s foreign subsidiaries changed their functional currency from Brazilian Reais to U.S. Dollars due to a shift in the underlying economic facts and circumstances affecting the subsidiaries’ operations and financing activities. In particular, our subsidiary Atlas Critical Minerals listed on the Nasdaq Capital Market and commenced trading on Nasdaq on January 9, 2026. As a result of such listing and the attendant access to U.S. capital markets, the U.S. Dollar is the primary currency through which we and our Brazilian subsidiaries expect to raise any additional capital.
In accordance with Accounting Standards Notification (“ASC”) 830, the change in functional currency was accounted for prospectively from the date of change. As a result:
| ● | assets and liabilities were translated into the new functional currency using exchange rates as of the date of change; | |
| ● | nonmonetary assets and liabilities were translated at historical exchange rates (the effective date of the change is considered for the translation of existing nonmonetary assets and liabilities); and | |
| ● | cumulative translation adjustments previously recorded in accumulated other comprehensive income were not reversed. |
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 2025 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
Property and Equipment
The following table sets forth the components of the Company’s property and equipment as of March 31, 2026 and December 31, 2025:
| March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||
| 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.
Accounts Payable and Accrued Expenses
| March 31, 2026 | December 31, 2025 | |||||||
| 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 March 31, 2026, 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 assets and lease liabilities are primarily related to the Company’s offices in Belo Horizonte and Araçuaí, as well as facilities for drilling core storage leased from third parties.
The
lease agreements have terms between two
to
| Lease liabilities on December 31, 2025 | $ | |||
| Increase/Decrease | $ | |||
| Unwinding of lease liabilities | $ | |||
| Lease payments | $ | ( | ) | |
| Foreign exchange | ||||
| Lease liabilities on March 31, 2026 | $ | |||
| 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 | $ | |||
| Year 5 | ||||
| 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
| March 31, 2026 | December 31, 2025 | |||||||
| Due to Nanyang Investment Management Pte Ltd | ||||||||
| Due to Nicholas James Rowley | ||||||||
| Due to Modha Reena Bhasker | ||||||||
| Due to Clipper Group Limited | ||||||||
| Total convertible debt | $ | $ | ||||||
| Current portion | $ | $ | ||||||
| Non-current portion | $ | $ | ||||||
On November 7, 2023, we entered into a convertible note purchase agreement
(the “November 2023 Convertible Note Agreement”) with 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 the 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 $
Derivative Liabilities
| March 31, 2026 | December 31, 2025 | |||||||
| 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 Mr. Martin Rowley and other investors. In accordance with Financial Accounting and Standards Board (“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.
On
December 31, 2025, the fair value of the embedded conversion feature was determined to be $
| Value cap | Value floor | |||||||
| Measurement date | December 31, 2025 | December 31, 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) | ||||||||
On
March 31, 2026, the fair value of the embedded conversion feature was determined to be $
| Value cap | Value floor | |||||||
| Measurement date | March 31, 2026 | March 31, 2026 | ||||||
| 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 months ended March 31, 2026, 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 March 31, 2026, 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 March 31, 2026, 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 March
31, 2026 measurement date of $, expected dividend yield of
c) Derivative liability - Non-Deliverable Forward
Our Brazilian subsidiaries are exposed to foreign-currency exchange-rate fluctuations in the normal course of business because a portion of their expenses are paid in Brazilian reais (BRL). To mitigate this exposure, these subsidiaries utilize non-deliverable forward foreign-exchange contracts (“NDFs”), which are designed to offset changes in cash flows 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 subsidiaries on a monthly basis to assess financial results and cash flow implications. These contracts are used strictly for risk management purposes, and none of our Brazilian subsidiaries engage in speculative foreign-exchange transactions. Additionally, these contracts do not contain any credit-risk-related contingent features.
As of March 31, 2026, the fair value of outstanding NDF contracts was recorded as Derivative assets on the balance sheet.
For the period ended March 31, 2026:
| ● | the
Company had unrealized gains/(losses) from NDF contracts recognized in Other Comprehensive Income (OCI) of $ | |
| ● | the
Company reclassified $ |
The following table summarizes the non-deliverable forward foreign exchange contracts that remain open as of March 31, 2026:
| Subsidiary | Dates Entered Into | Derivative Financial Instrument | Total Notional Amounts (USD) | FX rate (BRL/USD) | Total Notional Amounts (BRL) | Settlement Dates (Range) | ||||||||||||
| $ | ||||||||||||||||||
| $ | ||||||||||||||||||
| 13 |
ATLAS LITHIUM CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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 19 mineral rights and properties that are located in Brazil and held by Atlas Brazil. Deferred income recognized will be charged to profit and loss on a units-of-sale basis in accordance with the sales of the spodumene produced in mineral rights objective of the Purchase Agreement.
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 payment 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.
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, 2026, and December 31, 2025, amounted to $
NOTE 5 – STOCKHOLDERS’ EQUITY
Authorized Stock
As of December 31, 2025 and March 31, 2026, 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 $
On August 22, 2025, we filed a
registration statement on Form S-3 with the SEC on August 22, 2025, which was declared effective on August 28, 2025 (the “2025
Form S-3”). Following the effectiveness of the 2025 Form S-3, the issuance and sale of additional shares of our common stock
pursuant to the ATM Agreement have and will be made under the 2025 Form S-3, including the base prospectus and the sales agreement
prospectus contained therein (as each may be supplemented or amended), for so long as the 2025 FormS-3 remains effective. The 2025
Form S-3 permits the sale of up to $
During
the three months ended March 31, 2026, we sold
shares under the ATM Agreement and the 2025 Form
S-3, for proceeds of $
Series A Preferred Stock
On
December 18, 2012, we filed with the Nevada Secretary of State 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,
| 14 |
ATLAS LITHIUM CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 – STOCKHOLDERS’ EQUITY (CONTINUED)
Three Months Ended March 31, 2025 Transactions
During the three months ended March 31, 2025, the Company issued an aggregate of shares of Common Stock, as follows:
| Nature | Shares | |||
| Shares issued in connection with stock-based compensation | ||||
| Sales of common stock (ATM process) | (*) | |||
| Total | ||||
| (*) |
Three Months Ended March 31, 2026 Transactions
During the three months ended March 31, 2026, 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 three months ended March 31, 2026 and 2025, 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:
| March 31, 2026 | March 31, 2025 | |||||||
| Expected volatility | % – | % | % – | % | ||||
| Risk-free interest rate | % – | % | % – | % | ||||
| Stock price on date of grant | $ | – | $ | – | ||||
| Dividend yield | % | % | ||||||
| Expected term | years | years | ||||||
| 15 |
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, 2026 and 2025 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, 2026 | $ | |||||||||||||||
| Issued (1) | ||||||||||||||||
| Exercised | ( | ) | ||||||||||||||
| Outstanding and vested, March 31, 2026 | $ | |||||||||||||||
Number of Options Outstanding and Vested | Weighted Average Exercise Price | Remaining Contractual Life (Years) | Aggregated Intrinsic Value | |||||||||||||
| Outstanding and vested, January 1, 2025 | $ | $ | ||||||||||||||
| Issued (2) | ||||||||||||||||
| Outstanding and vested, March 31, 2025 | $ | |||||||||||||||
| 1) | |
| 2) |
During three months ended March 31, 2026, the Company recorded $ in stock-based compensation expense from common stock options in the condensed consolidated statements of operations and comprehensive loss ($, during the three months ended March 31, 2025).
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, 2026, the Company did not issue common stock purchase warrants. When issued the common stock purchase warrants are valued using the Black-Scholes option pricing model with the following ranges of assumptions:
| March 31, 2026 | December 31, 2025 | |||||||
| Expected volatility | n/a | % - | ||||||
| Risk-free interest rate | n/a | % - | ||||||
| Stock price on date of grant | $ | n/a | $ | - | ||||
| Dividend yield | n/a | % - | ||||||
| Expected term | n/a | - Years | ||||||
Changes in common stock purchase warrants for the three months ended March 31, 2026 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, 2026 | $ | |||||||||||||||
| Warrants Issued | - | - | ||||||||||||||
| Outstanding and vested, March 31, 2026 | $ | |||||||||||||||
| 16 |
ATLAS LITHIUM CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 – STOCKHOLDERS’ EQUITY (CONTINUED)
During the three months ended March 31, 2026, the Company did not record any stock-based compensation expense related to common stock purchase warrant activity in the condensed consolidated statements of operations and comprehensive loss ($, during the three months ended March 31, 2025)
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 on January 1, 2026 | ||||
| Granted (1) | ||||
| Vested (2) | ( | ) | ||
| Forfeited | ||||
| Outstanding on March 31, 2026 | ||||
| 1) | |
| 2) |
During the three months ended March 31, 2026, the Company recorded $ in stock-based compensation expense from the Company’s RSU activity in the period ($ during the three months ended March 31, 2025).
Other stock incentives measured at fair value through profit or loss
As
of March 31, 2026, 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 March
31, 2026, 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 Lithium’s contractual obligations at March 31, 2026:
| 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
The related party transactions are recorded at the exchange amount transacted as agreed between us and the related party. All the related party transactions have been reviewed and approved by the board of directors.
Our related parties include:
Mitsui & Co. Ltd.
Mitsui & Co., Ltd. is a non-controlling shareholder of the Company. In the course of preparing condensed consolidated financial statements, we eliminate the effects of various transactions conducted between Atlas Lithium and its subsidiaries and among the subsidiaries.
On March 28, 2024, the Company entered into a Securities
Purchase Agreement with Mitsui, pursuant to which the Company agreed to issue and sell to Mitsui, and Mitsui agreed to purchase from the
Company shares of the Company’s common stock for an aggregate subscription amount of $
On March 28, 2024, in connection with the closing of the Mitsui Registered Offering, the Company entered into an Investor Rights Agreement with Mitsui (the “Investor Rights Agreement”). The Investor Rights Agreement provides Mitsui with certain rights, including without limitation anti-dilution rights to maintain its proportionate ownership percentage in future issuances of the Company’s common stock or equity-linked securities (subject to certain exceptions), visitation rights to the Company’s properties, information and access rights including quarterly management presentations and meetings with the Company’s senior management, and provisions regarding the Company’s dividend policy. The Investor Rights Agreement automatically terminates upon certain events including if Mitsui’s beneficial ownership falls below 5% of the Company’s outstanding shares or upon the occurrence of a material transaction as defined in the Investor Rights Agreement.
On March 27, 2024, in connection with the closing
of the Mitsui Registered Offering,
Atlas Critical Minerals Corporation
In
January 2026, Atlas Critical Minerals successfully completed an underwritten public offering (the “Offering”) of shares
of its common stock at a public offering price of US$ per
share. In addition, the underwriters fully exercised their over-allotment option, contributing an additional
shares to the Offering total, resulting in total gross proceeds of approximately US$
| 18 |
ATLAS LITHIUM CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7 – RELATED PARTY TRANSACTIONS (CONTINUED)
The proceeds are expected to be used to advance exploration and development activities on Atlas Critical Minerals’ mineral properties in Brazil and for general working capital purposes.
Concurrently with the offering, Atlas Critical Minerals received approval for the listing of its common shares on the Nasdaq Capital Market. Atlas Critical Minerals’ common stock commenced trading on Nasdaq on January 9, 2026, under the ticker symbol “ATCX”.
In the three months period ended March 31, 2026, 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 (the “Fogassa ACM Agreement”), Atlas Critical Minerals issued shares of its common stock to Mr. Fogassa during the quarter ended March 31, 2026, including (i) shares of common stock representing of Atlas Critical Mineral’s total outstanding common stock as of January 1, 2026; and (ii) shares of common stock representing % of the performance incentive, calculated as % of the increase in Atlas Critical Minerals’ net assets between December 31, 2024 and December 31, 2025.
On October 30, 2025, Atlas Critical Minerals entered into an employment
agreement with Igor Tkachenko, our Vice President of Corporate Strategy, for Mr. Tkachenko to serve as Atlas Critical Minerals’
Vice President of Corporate Strategy, effective February 1, 2026 (the “Tkachenko ACM Agreement”). The Tkachenko ACM Agreement
shall continue until March 1, 2028, subject to renewal by mutual consent. Pursuant to the Tkachenko ACM Agreement, Mr. Tkachenko received time-based restricted stock units (“RSUs”) of Atlas Critical
Minerals with value equivalent to $
In addition to the securities issued pursuant to the Fogassa ACM Agreement
and the Tkachenko ACM Agreement, during the three months ended March 31, 2206, Atlas Critical Minerals issued
restricted stock units and shares of common stock of Atlas Critical Minerals to officers and directors
thereof at a weighted average price of $ per share in settlement of
$
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.
NOTE 9 – SUBSEQUENT EVENTS
In accordance with FASB ASC 855-10 Subsequent Events, we have analyzed our operations subsequent to March 31, 2026 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.
| 19 |
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, 2025 (the “2025 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 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 continued advancement of our hard-rock lithium project in Minas Gerais, Brazil toward active mining. The project is located within a well-known lithium-bearing pegmatitic district designated by the state government 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.
In 2025, we received our dense media separation lithium processing plant (the “DMS Plant”), which was designed to produce approximately 150,000 tons of lithium concentrate per annum (“tpa”). 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.
We believe that we hold the largest portfolio of exploration properties for lithium in Brazil among publicly listed companies.
Operational Update
During the first quarter of 2026, we continued to advance our flagship Neves Project toward production while achieving several important strategic and corporate milestones. Work items related to project implementation continued to progress, with particular emphasis on finalizing the project management framework that the Company will utilize to oversee construction execution and the coordination of third party service providers.
On April 27, 2026, we announced that four key operational partners had been selected for the implementation of the Neves Project after a process that lasted several months in which multiple qualified firms participated in a competitive selection process led by our technical team. Contracts were awarded based on a comprehensive evaluation of relevant criteria, including technical experience, proven performance, quality, and cost efficiency. Each awarded contract was finalized at or below the budget projections outlined in our Definitive Feasibility Study (DFS). Each of these four companies brings a strong track record of performance and deep experience in Brazil’s mining sector.
| ● | Promon Engenharia – Responsible for completing multiple detailed engineering components for the Neves Project. Founded in 1960, Promon has delivered more than 2,700 projects and has notable experience in lithium project development in Brazil. |
| ● | TSX Engineering – Appointed to oversee and manage project implementation for the Neves Project. Founded in 2019, TSX Engineering brings extensive expertise in the mining sector, including capital expenditure and cost management, project planning & controls, and risk management. |
| ● | Cerne Construções – Engaged under an Engineering, Procurement, and Construction (EPC) contract for the design and construction of the Neves Project’s administrative and operational facilities. Founded in 1989, Cerne offers modular construction solutions and broad experience in mining infrastructure. |
| ● | RETC Infraestrutura – Responsible for earthworks and civil construction activities for the Neves Project. The RETC team brings over 40 years of combined experience delivering complex industrial projects across Brazil. |
In addition to the key firms mentioned above, our technical team is rapidly advancing the selection of additional operational partners during the second quarter of 2026 for remaining scopes of the Neves Project implementation, as detailed in the DFS.
On January 9, 2026, the common stock of our subsidiary Atlas Critical Minerals Corporation (“Atlas Critical Minerals”) commenced trading on the Nasdaq Capital Market under the ticker symbol “ATCX,” which we announced by press release on January 14, 2026. Atlas Critical Minerals controls more than 218,000 hectares of mineral rights in Brazil, with projects in rare earths, titanium, graphite, uranium, including a revenue-generating iron ore operation that commenced shipments in late 2025. Atlas Lithium Corporation currently holds an approximate 20% ownership stake in Atlas Critical Minerals, which we believe provides our shareholders with diversified exposure to a broader portfolio of critical minerals while allowing our management team to maintain its focus on advancing the Neves Project. More details about Atlas Critical Minerals are available on its website at www.atlascriticalminerals.com and in its filings with the Securities and Exchange Commission.
On April 2, 2026, we announced that our 100%-owned Neves Project had been named in the Joint Fact Sheet for Japan-U.S. Critical Minerals Project Cooperation (the “Joint Fact Sheet”), released on March 20, 2026 by Japan’s Ministry of Economy, Trade, and Industry (“METI”) together with the Ministry of Foreign Affairs of Japan (“MOFA”). The Neves Project is the only Brazil-based lithium project named in the Joint Fact Sheet, which states that the Government of Japan and the Government of the United States are considering financial support for the purpose of development of the Neves Project. The Joint Fact Sheet followed the U.S.-Japan Critical Minerals Investment Ministerial held on March 14, 2026 in Tokyo, as well as the summit held between Japan’s Prime Minister, Sanae Takaichi, and U.S. President, Donald Trump, on March 19, 2026. This recognition builds upon our existing strategic partnership with Mitsui & Co., Ltd., which made a US$30 million strategic investment in Atlas Lithium common shares in March 2024 and entered into an offtake agreement for the purchase of lithium concentrate from the Neves Project.
On April 7, 2026, we announced the appointment of Admiral Flávio Augusto Viana Rocha, a former Cabinet member of the Brazilian Government, to our board of directors as an independent director. Admiral Rocha is a distinguished Brazilian leader with over 43 years of experience in strategy, governance, logistics, and international relations, including official government missions to more than 50 countries. From 2020 to 2022, he held the Minister-level position of Chief of the Secretariat for Strategic Affairs of the Presidency of Brazil, where he led the development of Brazil’s National Long-Term Policy and National Strategic Agenda, including the National Energy Policy. We believe Admiral Rocha’s experience will be valuable as we continue to advance the Neves Project and strengthen our position within the global critical minerals landscape.
Market Update
Lithium market conditions continued to improve during the first quarter of 2026, supported by accelerating growth in the energy storage systems (“ESS”) segment — particularly for grid-scale applications and power for data centers — alongside continued robust demand for electric vehicles worldwide. These demand drivers were reinforced by ongoing supply disruptions, including production constraints impacting Chinese lepidolite operations and export restrictions affecting Zimbabwean spodumene producers, which together tightened global supply availability. These dynamics created a favorable backdrop for the continued improvement in lithium prices observed during the quarter. Consistent with this environment, we have received written indications of interest from several parties seeking to secure long-term supply arrangements for our future lithium concentrate production.
| 20 |
Results of Operations
The Three Months Ended March 31, 2026, compared to the Three Months Ended March 31, 2025
Net loss for the three months ended March 31, 2026 totaled $16.5 million, compared to net loss of $10.2 million during the three months ended March 31, 2025. The increase in net loss is mainly due to:
| ● | An increase in General and administrative expenses of approximately $5.9 million compared to the three months ended March 31, 2025, primarily due to: (i) $2.0 million increase in payroll expenses driven by an increase in the contractual bonus paid to our chief executive officer in 2026 compared to 2025 due to the achievement of certain milestones and by the increase of operational activities related to the preparation for the project implementation; and (ii) $3.5 million due to the higher third-party contractor costs as the Company’s activities expanded as a result of the preparation for the project implementation; | |
| ● | An increase of approximately $1.2 million in stock-based compensation expenses compared to the three months ended March 31, 2025, resulting primarily from Atlas Critical Minerals incurring $2.1 million in stock-based compensation expenses in 2026 compared to $1.0 million in 2025, a $1.1 million increase. The increase is due to the fact that Atlas Critical Minerals issued 263,480 shares in 2026 compared to 142,033 shares issued in 2025, as well as the increase of Atlas Critical Minerals’ stock price increase during the period ($12.36 as of January 1, 2026, compared to $8.40 as of January 1, 2025), which is the basis for the instruments’ fair value calculation. | |
| ● | Those effects are partially offset by an improvement in finance costs (revenues) of $0.7 million compared to the three months ended March 31, 2025, mainly due to: |
| ■ | Higher proceeds generated from hedge contracts (NDFs) settled during the period due the appreciation of Brazilian Reais against U.S. dollars ($0.3 million in 2026 compared to nil in 2025); | |
| ■ | Higher proceeds from short-term investments due to the higher cash position in 2026 ($0.2 million in 2026 compared to $0.1 million in 2025); and | |
| ■ | Lower foreign exchanges expenses arising from accounts payable and receivables in currencies other than U.S. dollars ($0.1 million in 2026 compared to $0.2 million in 2025). |
Liquidity and Capital Resources
As of March 31, 2026, we had cash and cash equivalents of $34.4 million and working capital of $21.9 million.
Net cash used by operating activities totaled $10.6 million for the three months ended March 31, 2026, compared to net cash used of $4.4 million during the three months ended March 31, 2025, representing an increase of $6.2 million. The increase in net cash used by operating activities was mainly due to higher general and administrative expenses. See the section entitled “Results of Operations” above.
| 21 |
Net cash used by investing activities totaled $1.3 million for the three months ended March 31, 2026, compared to net cash used of $4.2 million during the three months ended March 31, 2025, representing a decrease in cash used of $2.9 million. The increase is essentially driven by:
| ● | A decrease of $1.9 million in the acquisition of capital assets ($1.2 million in 2026, compared to $3.1 million in 2025). The decrease is mainly explained by the payments made in connection with the logistics to bring our lithium processing plant from South Africa to Brazil in 2025, a one-time event; | |
| ● | The reduction of our exploration activities incurred during the three months ended March 31, 2026, since our current focus is on preparation for the implementation of the Neves Project and its revenue generation, consisting of $0.1 million of expenditures compared to $1.0 million for the three months ended March 31, 2025. |
Net cash provided by financing activities totaled $10.4 million for the three months ended March 31, 2026, compared to $7.1 million during the three months ended March 31, 2025, representing an increase in cash provided of $3.3 million. The increase is due to the following:
| ● | Net proceeds of $9.6 million arising from the sale of shares of Atlas Critical Minerals, a consolidated subsidiary of the Company, as a result of such company’s capital raise in connection with the listing of its common stock in the Nasdaq Capital Market ($0.5 million for the three months ended March 31, 2025); | |
| ● | Partially offset by lower sales of our common stock pursuant to the ATM Agreement for proceeds of $0.9 million, net of commissions and fees ($6.7 million for the three months ended March 31, 2025). |
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. 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.
| 22 |
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.
Foreign Currency
Until December 31, 2025, with the exception of Atlas Brazil, our foreign subsidiaries (all based in Brazil) used a local currency (Brazilian Reais) as the functional currency. Resulting translation gains or losses were recognized as a component of accumulated other comprehensive income. The Company determined that, as of January 1, 2026, the U.S. dollar is the currency of the primary economic environment in which the Brazilian subsidiaries operate.
Effective January 1, 2026, the Company’s foreign subsidiaries changed their functional currency from Brazilian Reais to U.S. Dollars due to a shift in the underlying economic facts and circumstances affecting the subsidiaries’ operations and financing activities. In particular, our subsidiary Atlas Critical Minerals listed on the Nasdaq Capital Market and commenced trading on the Nasdaq on January 9, 2026. As a result of such listing and the attendant access to U.S. capital markets, the U.S. Dollar is the primary currency through which we and our Brazilian subsidiaries expect to raise any additional capital.
In accordance with ASC 830, the change in functional currency was accounted for prospectively from the date of change. As a result:
| ● | assets and liabilities were translated into the new functional currency using exchange rates as of the date of change; | |
| ● | nonmonetary assets and liabilities were translated at historical exchange rates (the effective date of the change is considered for the translation of existing nonmonetary assets and liabilities); and | |
| ● | cumulative translation adjustments previously recorded in accumulated other comprehensive income were not reversed. |
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, 2026, 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, 2026 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.
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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, 2025, 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.
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, 2026, which sales were exempt from registration under the Securities Act upon reliance on Section 4(a)(2) thereof:
| ● | On January 1, 2026, 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 23, 2026, we issued 10,000 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
None.
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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. |
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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 7, 2026 | ||
| Marc Fogassa | and Chairman of the Board | |||
| /s/ Tiago Miranda | Chief Financial Officer (Principal Financial and | May 7, 2026 | ||
| Tiago Miranda | Accounting Officer) |
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