Atlas Lithium (ATLX) - 2025 Q2 - Quarterly Report

Report Overview Company Information and Filing Details Atlas Lithium Corporation, a smaller reporting company, filed its Form 10-Q for the quarter ended June 30, 2025 - Filing Type: Quarterly Report on Form 10-Q for the period ended June 30, 2025[2][3] - Registrant: ATLAS LITHIUM CORPORATION, incorporated in Nevada[4] Filer Status | Status | Value | | :-------------------- | :---- | | Large accelerated filer | ☐ | | Accelerated filer | ☐ | | Non-accelerated filer | ☒ | | Smaller reporting company | ☒ | | Emerging growth company | ☐ | - Common Stock Outstanding: 19,582,473 shares as of July 31, 2025[6] Cautionary Note Regarding Forward-Looking Statements The report contains forward-looking statements subject to significant risks that could cause actual results to differ materially - Forward-looking statements are covered by safe harbor provisions and involve known and unknown risks, uncertainties, and important factors that may cause actual results to differ materially[10] - Factors that could cause future results to materially differ include unprofitable exploration efforts, market fluctuations, government regulations, competition, loss of key personnel, and general economic conditions[11] - Readers are cautioned not to place undue reliance on these statements, and the company does not plan to publicly update or revise any forward-looking statements[13] PART I - FINANCIAL INFORMATION Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements for the periods ended June 30, 2025 and 2024 Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheet Highlights | Metric | June 30, 2025 | December 31, 2024 | Change | | :-------------------------------- | :------------ | :---------------- | :----- | | Total assets | $63,316,494 | $57,854,608 | +$5,461,886 | | Total liabilities | $37,073,178 | $35,843,367 | +$1,229,811 | | Total stockholders' equity | $26,243,316 | $22,011,241 | +$4,232,075 | | Cash and cash equivalents | $13,864,963 | $15,537,476 | -$1,672,513 | | Property and equipment, net | $45,319,972 | $38,855,071 | +$6,464,901 | Condensed Consolidated Statements of Operations and Comprehensive Loss Condensed Consolidated Statements of Operations and Comprehensive Loss Highlights | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net revenue | $31,805 | $182,788 | $56,980 | $374,108 | | Gross profit (loss) | $(18,223) | $91,002 | $(80,898) | $180,256 | | Total operating expenses | $6,104,233 | $9,637,166 | $15,865,115 | $22,903,626 | | Loss from operations | $(6,122,456) | $(9,546,164) | $(15,946,013) | $(22,723,370) | | Net loss attributable to Atlas Lithium Corporation stockholders | $(5,559,233) | $(9,171,360) | $(14,576,190) | $(22,134,827) | | Basic and diluted loss per share | $(0.31) | $(0.67) | $(0.84) | $(1.61) | Condensed Consolidated Statements of Changes in Stockholders' Equity Stockholders' Equity Changes (Six Months Ended June 30) | Metric | June 30, 2025 | June 30, 2024 | | :------------------------------------- | :------------ | :------------ | | Total Stockholders' Equity | $26,243,316 | $27,762,191 | | Common Stock Issued | 2,827,544 shares | 2,061,111 shares | | Additional Paid-in Capital | $183,186,939 | $151,964,718 | | Net Loss | $(16,493,267) | $(23,137,504) | - Issuance of common stock in connection with private offerings contributed significantly to additional paid-in capital[20][22] Condensed Consolidated Statements of Cash Flows Condensed Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30) | Metric | 2025 | 2024 | Change | | :------------------------------------- | :------------ | :------------ | :----- | | Net cash used in operating activities | $(8,306,993) | $(11,292,221) | +$2,985,228 | | Net cash used in investing activities | $(6,290,362) | $(16,777,111) | +$10,486,749 | | Net cash provided by financing activities | $12,923,132 | $30,140,298 | -$17,217,166 | | Cash and cash equivalents at end of period | $13,864,963 | $32,267,730 | -$18,402,767 | Notes to the Condensed Consolidated Financial Statements NOTE 1 – Organization, Business and Summary of Significant Accounting Policies - Atlas Lithium Corporation, incorporated in Nevada, focuses on mineral exploration in Brazil, with a special focus on the Neves Lithium Project[26][29] - The company's financial statements are prepared under U.S. GAAP and consolidate its 100% owned subsidiaries and Atlas Critical Minerals Corporation (30.11% equity, consolidated as a variable interest entity)[27] - The company operates as a single reportable segment: mining, with revenue currently generated solely from its Quartzite project, while other mining projects are in the exploration phase[29][32] NOTE 2 – Composition of Certain Financial Statement Items Inventories Composition | Category | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Materials and supplies | $395,445 | $321,085 | | Quartzite blocks and slabs | $49,805 | $171,727 | | Total | $445,250 | $492,812 | Property and Equipment, Net | Category | June 30, 2025 Net Book Value | December 31, 2024 Net Book Value | | :-------------------- | :--------------------------- | :------------------------------- | | Total fixed assets | $45,319,972 | $38,855,071 | - Intangible assets, net (primarily software) decreased to $354,516 as of June 30, 2025, from $399,773 at December 31, 2024[38] Accounts Payable and Accrued Expenses | Category | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Trade payables | $6,317,257 | $4,779,903 | | Payroll and social charges | $260,818 | $157,191 | | Taxes payable | $25,578 | $64,571 | | Total | $6,603,653 | $5,001,664 | - Operating lease liabilities totaled $469,119 as of June 30, 2025, with a current portion of $168,667 and a non-current portion of $300,452[42] Convertible Debt | Creditor | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Due to Nanyang Investment Management Pte Ltd | $5,964,780 | $5,933,866 | | Due to Jaeger Investments Pty Ltd | $1,988,283 | $1,977,979 | | Due to Modha Reena Bhasker | $994,130 | $988,978 | | Due to Clipper Group Limited | $994,130 | $988,978 | | Total convertible debt | $9,941,323 | $9,889,801 | | Current portion | $81,918 | $81,918 | | Non-current portion | $9,859,405 | $9,807,883 | - Convertible debt has a 6.5% interest rate, 36-month maturity, and a conversion price of US$28.225/share[47] Derivative Assets and Liabilities | Category | June 30, 2025 | December 31, 2024 | | :------------------------------------- | :------------ | :---------------- | | Derivative assets - Non-Deliverable Forward | $427,222 | $0 | | Total derivative assets | $427,222 | $0 | | Derivative liability – conversion feature on convertible debt | $7,070 | $66,310 | | Derivative liability – restricted stock awards | $11,350 | $121,512 | | Derivative liability - Non-Deliverable Forward | $0 | $274,816 | | Total derivative liabilities | $18,420 | $462,638 | NOTE 3 – Deferred Other Income - On May 2, 2023, Atlas Brazil sold a 3% royalty interest from 19 mineral rights to Lithium Royalty Corp for $20,000,000 in cash[60] - Deferred income will be recognized in profit and loss on a units-of-sale basis in accordance with the sales of spodumene produced[60] NOTE 4 – Other Noncurrent Liabilities - Other noncurrent liabilities, primarily tax refinancing programs and provisions for contingencies, amounted to $31,425 as of June 30, 2025 (down from $33,962 at December 31, 2024)[61] NOTE 5 – Stockholders' Equity - The Company has 200,000,000 authorized shares of common stock ($0.001 par value)[62] - During the six months ended June 30, 2025, 2,468,502 shares of common stock were sold through an At the Market (ATM) Agreement, generating net proceeds of $11.9 million[64][68] - One share of Series A Preferred Stock is outstanding, held by the CEO, granting 51% of total votes[65] - In the six months ended June 30, 2025, 439,996 common stock options were issued with a grant date fair value of $3,066,772, resulting in $1,570,740 in stock-based compensation expense[70] - 75,000 common stock purchase warrants were issued in the six months ended June 30, 2025, with a total grant date fair value of $200,981[72][74] - During the six months ended June 30, 2025, 351,042 Restricted Stock Units (RSUs) were granted, and 379,042 RSUs vested, leading to $3,389,533 in stock-based compensation expense[76][77][79] - A derivative liability of $11,350 was recognized as of June 30, 2025, for other stock incentives tied to market capitalization milestones for an officer[78] NOTE 6 – Commitments and Contingencies Contractual Obligations (June 30, 2025) | Obligation | Total | Less than 1 Year | 1-3 Years | 3-5 Years | More than 5 Years | | :------------------------------------- | :------------ | :--------------- | :-------- | :-------- | :---------------- | | Lithium processing plant construction | $1,335,700 | $1,335,700 | $0 | $0 | $0 | - Lease commitments are detailed in Note 2[81] NOTE 7 – Related Party Transactions - Related parties include Jaeger Investments Pty Ltd (controlled by a former senior advisor) and RTEK International DMCC (controlled by former officers/directors)[83] - The Technical Services Agreement with RTEK International DMCC was terminated by the Company on March 20, 2025, due to alleged non-performance and breaches, with no expected early termination penalties[85][86][87] - Jaeger Investments Pty Ltd purchased $1,967,503 of convertible promissory notes from the Company in November 2023[88] Related Party Outstanding Amounts and Expenses (June 30, 2025) | Related Party | Accounts Payable / Debt | Expenses / Payments (Six Months) | | :------------------------ | :---------------------- | :----------------------------- | | RTEK International DMCC | $0 | $29,294 | | Jaeger Investments Pty Ltd. | $1,988,283 | $64,467 | | Total | $1,988,283 | $93,761 | - Atlas Critical Minerals Corporation issued 1,365,387 shares to Mr Fogassa and 438,168 shares to other officers/directors for services[90][91] NOTE 8 – Risks and Uncertainties (Currency Risk) - The Company operates primarily in Brazil, exposing it to currency risks from intercompany receivables/payables and the translation of foreign subsidiary financial results into U.S dollars[92][93] - Changes in exchange rates affect the translation of income statement accounts (average rates), balance sheet assets/liabilities (end-of-period rates), and equity accounts (historical rates), impacting the foreign currency translation adjustment[93] NOTE 9 – Subsequent Events - No material subsequent events were identified between June 30, 2025, and the date the condensed consolidated financial statements were issued[94] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial condition, operational results, and focus on lithium exploration in Brazil Overview - Atlas Lithium Corporation is a mineral exploration and development company focused on hard-rock lithium projects in Brazil's 'Lithium Valley', aiming to produce spodumene concentrate[98] - The company owns 53,942 hectares for lithium in 95 mineral rights in Brazil, representing the largest portfolio among publicly listed companies[99] - Atlas Critical Minerals Corporation, an exploration stage company focused on other critical minerals, is consolidated due to Atlas Lithium's 30.11% equity interest[100] Operational Update - SGS Canada Inc completed the Definitive Feasibility Study (DFS) for the Neves Project, demonstrating robust project economics[101] Neves Project DFS Key Economics | Metric | Value | | :------------------------------------- | :---------------- | | After-tax Internal Rate of Return (IRR) | 145% | | Payback Period | 11 months | | Capital Expenditure (core implementation) | $57 million | | Average Lithium Concentrate Production | 146,000 tons per annum | | Initial Life of Mine | ~7 years | | Projected Cash Costs | $489 per ton | - Brazil's Ministry of Mines and Energy granted a mining concession ('Portaria de Lavra') for a key mineral right within the Neves Project, providing perpetual ownership[102] - The modular dense media separation lithium processing plant was successfully transported to Minas Gerais for assembly[103] Results of Operations - Net loss for the six months ended June 30, 2025, decreased to $16.4 million, compared to $23.1 million for the same period in 2024[104] - The decrease in net loss was mainly due to the absence of exploration cost expenses (capitalized in 2025 vs $3.2 million expensed in 2024) and a $5.4 million decrease in stock-based compensation expense[106] - Partially offsetting the decrease was a $1.6 million increase in General and Administrative expenses, driven by a $1.7 million increase in payroll and $0.9 million in marketing activities[106] Liquidity and Capital Resources - As of June 30, 2025, the company had cash and cash equivalents of $13.9 million and working capital of $7.9 million[104][108] - Net cash used in operating activities decreased by $3.0 million (26%) to $8.3 million for the six months ended June 30, 2025, primarily due to capitalized exploration expenses and increased accounts payable[105] - Net cash used in investing activities decreased by $10.4 million (63%) to $6.3 million, reflecting lower payments for the lithium processing plant and capitalized exploration costs[107][111] - Net cash provided by financing activities increased to $12.9 million, driven by $11.9 million from common stock sales via the ATM Agreement and $1.4 million from subsidiary common stock sales[107][111] - The company believes current cash and equivalents are sufficient for at least twelve months but may require additional equity or debt financing for future growth and project development[108] Currency Risk - Operations primarily in Brazil expose the company to currency risks from intercompany transactions and the translation of foreign subsidiary financial results into U.S dollars[109][110] - Changes in exchange rates affect the translation of income statement accounts (average rates), balance sheet assets and liabilities (end-of-period rates), and equity accounts (historical rates), impacting the foreign currency translation adjustment account[110] Critical Accounting Policies and Estimates - The company's financial statements are prepared in accordance with U.S GAAP[112] - There have been no significant changes to the critical accounting estimates disclosed in the 2024 Form 10-K[112] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, this disclosure is not required - This item is not required for smaller reporting companies[113] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes - Disclosure controls and procedures were evaluated and deemed effective at a reasonable assurance level as of June 30, 2025[114] - No material changes in internal control over financial reporting occurred in the quarter ended June 30, 2025[115] - Management acknowledges that controls provide only reasonable assurance due to inherent limitations and resource constraints[116] PART II - OTHER INFORMATION Item 1. LEGAL PROCEEDINGS The company reports no pending legal proceedings expected to have a material adverse effect - No pending legal proceedings are likely to result in a material adverse effect on the company's financial position, results of operations, or cash flows[119] Item 1A. RISK FACTORS Key investment risks include potential U.S tariffs on Brazilian minerals and uncertainties in the Neves Project's viability - Investing in the company's common stock involves a high degree of risk[120] - New U.S tariffs and trade restrictions on Brazilian products (e.g, a threatened 50% tariff) and potential sectoral tariffs on critical mineral imports could adversely affect the company's business[121][122][123][124] - The economic viability of the Neves Project, despite a supportive Definitive Feasibility Study, faces risks such as significant, prolonged decreases in lithium market prices, operational delays, and more stringent regulations[125][126][127][128] Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS The company issued 5,750 unregistered shares to a consultant for services, exempt under Section 4(a)(2) - On May 5, 2025, 5,750 shares of common stock were issued to a consultant in exchange for consulting and professional services[129] - These sales were exempt from registration under Section 4(a)(2) of the Securities Act[129] Item 3. DEFAULTS UPON SENIOR SECURITIES The company reported no defaults upon senior securities - No defaults upon senior securities were reported[130] Item 4. MINE SAFETY DISCLOSURES The company reported no mine safety disclosures - No mine safety disclosures were reported[131] Item 5. OTHER INFORMATION The CEO and a Board Member entered into Rule 10b5-1(c) plans for potential future sales of common stock - On June 13, 2025, CEO Mr Fogassa entered into a Rule 10b5-1(c) plan for the potential sale of up to 300,000 shares of common stock[132] - On the same date, Board Member Mr Roger Noriega entered into a Rule 10b5-1(c) plan for the potential sale of up to 50,000 shares of common stock[133] - Both plans are intended to satisfy Rule 10b5-1(c) conditions, with sales starting in September 2025 and expiring in March 2026[132][133] Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including certifications and technical reports - Key exhibits include the 2023 Stock Incentive Plan, CEO and CFO certifications, and the S-K 1300 Technical Report Summary for the Neves Lithium Project (Exhibit 96.1)[134] Signatures The report is duly signed by the Chief Executive Officer and Chief Financial Officer on August 04, 2025 - The report was signed by Marc Fogassa (Chief Executive Officer and Chairman of the Board) and Tiago Miranda (Chief Financial Officer) on August 04, 2025[139]