SEC Form 10-K filed by Atlas Lithium Corporation
UNITED STATES
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DOCUMENTS
INCORPORATED BY REFERENCE:
TABLE OF CONTENTS
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MARKET INFORMATION
This Annual Report contains certain industry and market data that were obtained from third-party sources, such as industry surveys and industry publications, including, but not limited to, publications by Benchmark Mineral Intelligence, Bloomberg LP, Fastmarkets Global Limited, S&P Global Market Intelligence, and the U.S. Department of the Interior. This Annual Report also contains other industry and market data, including market sizing estimates, growth and other projections and information regarding our competitive position, prepared by our management on the basis of such industry sources and our management’s knowledge of and experience in the industry and markets in which we operate (including management’s estimates and assumptions relating to such industry and markets based on that knowledge). Our management has developed its knowledge of such industry and markets through its experience and participation in these markets.
In addition, industry surveys and industry publications generally state that the information they contain has been obtained from sources believed to be reliable but that the accuracy and completeness of such information is not guaranteed and that any projections they contain are based on a number of significant assumptions. Forecasts, projections and other forward-looking information obtained from these sources involve risks and uncertainties and are subject to change based on various factors, including those discussed in the section “Forward-Looking Statements” below. You should not place undue reliance on these statements.
FORWARD LOOKING STATEMENTS
This Annual 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 Annual Report are 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. However, the absence of these terms does not mean that the statement is not a forward-looking statement. Forward-looking statements in this Annual Report include, without limitation, statements regarding: our current expectations for our future results of operations and financial position; the planned development of our processing facility and our production capabilities; the advancement and development of the Minas Gerais Lithium Project; our ability to effectively process minerals and achieve commercial grade at scale; whether any exploration targets will ultimately be developed into mineral reserves; the timing and amount of any future production; 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); our ability to realize the benefits of our transactions with Mitsui & Co., Ltd; uncertainty about our ability to obtain required capital to execute our business plan and repay our obligations as they come due; volatility in the market prices of lithium and lithium products and demand for such products; the impact of U.S. tariffs on Brazilian imports, including the imposition of reciprocal tariffs or other retaliatory trade measures; geopolitical conflicts and military actions, including the ongoing conflict between the United States and Iran and associated risks to global markets, including energy markets; the potential success or positive outlook regarding any exploratory, developmental and production activities; our ability to obtain permits or otherwise comply with legal and regulatory requirements related to our projects and activities; and our ability to find and retain technical employees and consultants. 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.
The forward-looking statements in this Annual Report are based on our current expectations, beliefs 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 Annual 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, therefore you should not unduly rely on these statements. Factors that could cause future results to materially differ from those projected, anticipated or expected in forward-looking statements include, but are not limited to: unprofitable efforts resulting not only from the failure to discover mineral deposits, but also from finding mineral deposits that, though present, are insufficient in quantity and quality to return a profit from production; market fluctuations; government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals, including tariffs or other trade barriers, and environmental protection; competition; the loss of services of key personnel; unusual or infrequent weather phenomena, sabotage, government or other interference in the maintenance or provision of infrastructure as well as general economic conditions; and the factors described under the sections in this Annual Report titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
You should read this Annual Report and the documents that we reference in this Annual Report completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary 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
Item 1. Business.
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 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 addition to our lithium exploration activities, we also own approximately 28.06% of the shares of common stock of Atlas Critical Minerals Corporation (Nasdaq: ATCX) (formerly known as Jupiter Gold Corporation, “Atlas Critical Minerals”), as of December 31, 2025. 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. On January 9, 2026, Atlas Critical Minerals commenced trading on the Nasdaq Capital Market under the ticker symbol “ATCX”. 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”).
Minas Gerais Lithium Project
The Minas Gerais Lithium Project (“MGLP”) comprises 85 mineral rights totaling approximately 468 km2, representing our most material property. In particular, we are focused on the Neves Project (as defined below), which is a part of MGLP. The Neves Project is depicted in Figure 1.
Figure 1: Neves Project mineral rights.
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We are primarily focused on advancing and developing our hard-rock lithium project located in the state of Minas Gerais, Brazil. Our Minas Gerais Lithium Project is currently our largest undertaking and primary focus. This project is located in northeastern Minas Gerais, Brazil along the Eastern Brazilian Pegmatite Province (“EBP”) that extends more than 850 kilometers across eastern Minas Gerais. The EBP has been surveyed by the Brazilian Geological Survey and is known for the presence of hard rock formations known as pegmatites which contain lithium-bearing minerals such as spodumene and petalite. Pegmatites are igneous bodies derived during the final stages of crystallization of a larger parent igneous intrusion, most commonly a granitic rock. They are distinctive for their very coarse-grained crystalline texture, and in some instances, complex composition with unusual minerals and rare elements. Commercially productive lithium mineralization along the EBP is centered around the Araçuaí mining district, which is host to the majority of Brazil’s commercial lithium production and reported mineral reserves.
Because of the region’s long mining history, basic local infrastructure near our mineral properties ranges from adequate to robust, with access to hydroelectric power and water supplies, and a well-established road network with direct access to commercial ports. Basic goods and services, industrial suppliers and a skilled and semi-skilled labor force are also generally available from the surrounding communities where we operate.
Since initiating exploration at MGLP in early 2021, we have confirmed the widespread presence of hard-rock lithium-bearing pegmatites across our property portfolio.
We believe that we can increase our value by continuing our exploration work and quantification of our lithium mineralization, as well as by expanding our exploration campaign to new, high-potential areas within our portfolio of mineral rights. Our commercial goal is to enter production of lithium concentrate, a product which is highly sought after in the battery supply chain.
In 2025, we received our modular dense media separation lithium processing plant (“DMS Plant”), which was manufactured in South Africa. It was designed to produce approximately 150,000 tons of lithium concentrate per annum (“tpa”).
Our DMS Plant represents a cornerstone of our Neves Project, and was designed to deliver high-quality lithium concentrate to the global market for electric vehicles (EVs) and renewable energy storage systems (ESS). 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 fourth quarter of 2025, we made strong progress in the procurement process for the project tasks and other contracted work (collectively referred to herein as “work items”) needed for the implementation of the Neves Project. Examples of such work items include assembly of our dense media separation plant and earth works. We have generally received multiple competing bids for each of the relevant work items, including 19 bids for one work item. Our supplier selection criteria are based on technical qualification and experience, and with these conditions met, then best price and terms.
Geology
The EBP is considered to be one of the world’s largest geologic belts of granite and related pegmatite intrusive bodies, encompassing more than 150,000 km2 and with more than 90% of the belt located in eastern Minas Gerais. Pegmatites are igneous rocks that form during the final stages of a granitic magma’s crystallization. They are readily identifiable by their exceptionally coarse crystalline texture, with individual crystals averaging one centimeter or more in size. Most pegmatites have a simple mineral composition common to granitic rocks, however some may also contain lithium minerals of commercial interest such as spodumene which can contain up to 3.73% Li (8.03% Li2O2), and petalite with up to 2.09% Li (4.50% Li2O2).
The MGLP area encompasses multiple areas of mineralized pegmatites, in general occurring as series of sub-parallel elongate tabular bodies, referred to as ‘pegmatite dike swarms,’ hosted in metamorphic shists. Individual pegmatite bodies range from several meters to more than 50 meters thick and from tens of meters up to approximately one kilometer in lateral strike length. They are primarily composed of minerals such as quartz, feldspar and mica, with localized concentrations of spodumene and petalite. Individual feldspar and spodumene crystals can reach up to two meters in length but typically are more homogeneously distributed and range in size from one to a few centimeters in length.
Neves Project
At our Neves Project, the focus is on the delineation of the four confirmed pegmatite bodies with spodumene mineralization, designated as Anitta 1 through 4. Complementing the four confirmed mineralized pegmatites are six new and promising target areas designated by our geology team within our Neves Project.
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Figure 2: Neves Project location within Lithium Valley.
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Through geological mapping and soil geochemistry work, six promising exploration targets have been identified within the Neves Project, as shown in the map below.
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Raw Materials
We do not have any material dependence on any raw materials or raw material supplier. All of the raw materials that we need are available from numerous suppliers and at market-driven prices.
Government Regulation
Mining Regulation and Compliance
Mining regulation in Brazil is carried out by the National Mining Agency (“ANM”), a federal entity with offices in each state in Brazil. We are required to file for exploration licenses for each mineral right that we own with the ANM office of the state in which such mineral right is located. The applications for such licenses must contain, among other things, a project for the exploration work to be undertaken. If approved, we have three years (subject to extension to up to an additional three years) to conduct exploration activities in accordance with the approved plan and prove the existence of the mineral and quantify a deposit. Once exploration is completed, ANM requires a final exploration report which, if approved, allows for the application of an extraction license. Extractions requests require detailed economic viability studies. We have been issued exploration licenses for our key areas for lithium. We believe that we maintain a good relationship with ANM.
Environmental Regulation and Compliance
Environmental regulation in Brazil is carried out by state-level agencies, which may have multiple offices, including one for each region of the state. For each mineral right that we own, after sufficient exploration work has been conducted, we can apply for operational permitting towards mining by filing any such paperwork with the local office of the environmental agency that has the applicable geographical jurisdiction. We believe that we maintain a good relationship with the offices of the environmental agency and believe that our methods of monitoring are adequate for our current needs.
On October 26, 2024, we received the operating license for our Neves Project in the state of Minas Gerais, Brazil, following the completion of the environmental permitting and licensing process.
On August 14, 2025, the Minas Gerais state agency responsible for permitting applications issued an extensive technical report recommending approval of the Company’s expansion permit application.
The current environmental regulations state that for the duration of mining operations and for a period of five years after all mining operations have ceased, we would still be required to perform any necessary recuperation work.
Environmental, Social and Governance
We are committed to Environmental, Social, and Corporate Governance (“ESG”) causes. We believe that our efforts make a difference in the communities in which we operate. The list below highlights our recent initiatives to develop the communities in which we operate:
Support with donations of machines and equipment for works carried out by local governments:
| ○ | Use of our water truck for the works to improve access to local communities; | |
| ○ | Improvements in the Neves community pavement; | |
| ○ | Use of our earth moving equipment for a mobile phone tower in the community of Neves; | |
| ○ | Use of our water truck for supplying communities and wetting roads; | |
| ○ | Donation of asphalt emulsion to improve main roads in Araçuaí; | |
| ○ | Donation of new water pipes to replace old pipes in communities surrounding the access route to the development; and | |
| ○ | Supply of culverts for drainage work in access roads used by the community and the development. |
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Road improvements and gravel:
| ○ | Improving road access to a municipal school and the São José das Neves community; | |
| ○ | Improving road access to Comunidade Cardoso´s hill; | |
| ○ | Improving road access to Neves Community; |
Infrastructure
| ○ | Construction of accommodation for teachers at the Calhauzinho Community State School; | |
| ○ | Construction of the sidewalk, accessibility ramp, recreation yard and improvement of the canteen at the municipal school of the São José das Neves community; | |
| ○ | Construction of the support house, kitchen and courtyard of the São José das Neves Community Church; | |
| ○ | Renovation and painting of the São José das Neves Community Church in partnership with the outsourced company Eco Sondagens; | |
| ○ | Construction/revitalization of 14 small water storage dams for local residents; |
Professional development
| ○ | Developed trainee plan for the inclusion of women students in the mining technician course; | |
| ○ | Agreement with Instituto Técnico Educacional Polivalente de Araçuaí-ITEP to offer internship positions at Atlas to the institution’s best students; | |
| ○ | o Partnership with SESI/SENAI/FIEMG to offer technical and professional courses using rooms on the 1st floor of our building in Araçuaí for face-to-face classes after it becomes operational; |
Social
| ○ | Donation of basic food baskets to the Association of Parents and Friends of Exceptional Children of Araçuaí; | |
| ○ | Organization of a Christmas charity event for children from Neves, São José das Neves, Calhauzinho and Aguada Nova with distribution of gifts and sneakers for the children; | |
| ○ | Sponsorship of traditional festivals in the communities of Neves, São José das Neves; and | |
| ○ | Sponsorship of a local organization focused on developing social programs and including children in sports, offering classes in Araçuaí and other municipalities in the Jequitinhonha Valley. |
Our current efforts are focused on hiring workers from communities near our project areas. Many of these communities have high levels of unemployment, and we believe that we are making a positive contribution by hiring local personnel at wages that are above the regional monthly wages.
Form and Year of Organization
We were incorporated in the State of Nevada on December 15, 2011, under the name Flux Technologies, Corp. From inception until December 18, 2012, we were focused on the software business, which business was discontinued. We operated with the name “Brazil Minerals, Inc.” until September 26, 2022, when we changed our name to “Atlas Lithium Corporation.” In January 2023, we completed a public offering of shares of our common stock and on January 10, 2023 began trading on the Nasdaq Capital Market under the ticker symbol “ATLX.”
Available Information
We maintain a website at www.atlas-lithium.com. We make available free of charge, through the Public Filings section of the Investors tab on our website, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after such material is electronically filed with, or furnished to, the Securities and Exchange Commission (the “SEC”). The information on our website is not, and shall not be deemed to be, a part hereof or incorporated into this or any of our other filings with the SEC.
In addition, the SEC maintains a website at www.sec.gov which contains reports, proxy and information statements filed electronically by us with the SEC.
Employees
As of the date of this Annual Report, we have 64 employees, out of which 75% are unionized, with certain employees represented by a private federation of employees in the extractive industries of the state of Minas Gerais (the “Employee Federation”) and the remainder represented by a labor union. Representation by the Employee Federation is legally mandatory for all extractive enterprises with respect to their non-management workers under labor laws. We have collective bargaining agreements adopted by the Employee Federation and labor union since March 2024 and December 2025, respectively, which set forth standard working conditions and employee benefits. We believe that we maintain a good relationship with our employees, the federation and the labor union.
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Item 1A. Risk Factors.
RISK FACTORS
Investing in our common stock involves a high degree of risk. You should carefully consider the risks described below, as well as the other information in this Annual Report, including our financial statements and the related notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” 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 summarized and set forth in detail below and elsewhere in this Annual Report before you decide to invest in our common stock.
Summary of Risk Factors
Below is a summary of the principal factors that make an investment in our common stock speculative or risky. This summary does not address all of the risks that we face. We encourage you to carefully review the full risk factors contained in this Report in their entirety for additional information regarding the material factors that make an investment in our securities speculative or risky. The primary categories by which we classify risks include those related to: (i) our business, (ii) regulatory and industry, (iii) country and currency, (iv) our common stock, and (v) world events. Set forth below within each of these categories is a summary of the principal factors that make an investment in our common stock speculative or risky.
Business Risks
| ● | Risks Related to the Assembly, Commissioning, and Operation of Our DMS Plant | |
| ● | Our future performance is difficult to evaluate because we have a limited operating history. |
| ● | We have a history of losses and expect to continue to incur losses in the future. |
| ● | We are an exploration stage company, and there is no guarantee that our properties will result in the commercial extraction of mineral deposits. |
| ● | Because the probability of an individual prospect ever having reserves is not known, our properties may not contain any reserves, and any funds spent on exploration and evaluation may be lost. |
| ● | We face risks related to mining, exploration, plant assembly, and mine construction, if warranted, on our properties. | |
| ● | Labor disruptions and a rise in labor costs could impact on our business, financial condition and results of operations. |
| ● | We are subject to the effects of changing prices. | |
| ● | Our long-term success will depend ultimately on our ability to achieve and maintain profitability and to develop positive cash flow from our mining activities. |
| ● | We depend on our ability to successfully access the capital and financial markets. Any inability to access the capital or financial markets may limit our ability to fund our ongoing operations, execute our business plan or pursue investments that we may rely on for future growth. |
| ● | Our quarterly and annual operating and financial results and our revenue are likely to fluctuate significantly in future periods. |
| ● | Our ability to manage growth will have an impact on our business, financial condition and results of operations. |
| ● | Our operations and projects are subject to a range of transitional and physical risks related to climate change. | |
| ● | Our operations and projects are subject to a range of risks related to transitioning the business to meet regulatory, societal and investor expectations for operating in a low-carbon economy. |
| ● | We are vulnerable to concentration risks because our operations are currently exclusive to Brazil. |
| ● | We depend upon Mr. Marc Fogassa, our Chief Executive Officer and Chairman. |
| ● | Our growth will require new personnel, which we will be required to recruit, hire, train and retain. |
| ● | A portion of our workforce is represented by labor unions and therefore subject to collective bargaining agreements. | |
| ● | Certain of our officers may be in a position of conflict of interest. |
| ● | We have historically relied on third-party consultants and their inability to perform timely and in compliance with their contractual obligations can adversely impact our business operations. |
| ● | Our Reliance on Third Party Consultants and Contractors Has and Could Continue to Adversely Affect Our Operations, Cost Structure, and Competitive Position |
| ● | Adverse developments affecting the financial services industry, including events or concerns involving liquidity, defaults or non-performance by financial institutions or transactional counterparties, could adversely affect our business, financial condition or results of operations. | |
| ● | We may be unable to hire and retain the third-party contractors upon which we rely, including for drilling and construction of the lithium processing plant. | |
| ● | We are dependent upon information technology and operational technology systems, which are subject to disruption, damage, failure or cybersecurity attacks and risks associated with implementation, upgrade, operation and integration. |
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Regulatory and Industry Risks
| ● | The mining industry subjects us to several risks. |
| ● | Our operations are, and our mineral projects will be subject to, significant government regulations, including environmental laws and regulations. |
| ● | We are required to obtain government permits in order to conduct development and mining operations, a process which is often costly and time-consuming. |
| ● | Compliance with environmental regulations and litigation based on environmental regulations could require significant expenditures. |
| ● | Mining operations face substantial health and safety regulations. |
| ● | Mineral prices are subject to unpredictable fluctuations. | |
| ● | The development of non-lithium battery technologies could adversely affect us. | |
| ● | The growth potential of lithium markets is uncertain. | |
| ● | Demand and market prices for lithium will greatly affect the value of our investment in our lithium resources and our future revenues and profitability generally. | |
| ● | We are dependent upon the continued recognition of and validity of the title to our mineral rights, and preserving title may be costly. | |
| ● | Changes in public policies and legislative initiatives could materially affect our business and prospects |
Country and Currency Risks
| ● | Substantially all of our assets are located in Brazil and substantially all of our revenue will be derived from our operations in Brazil. | |
| ● | Our ability to execute our business plan depends primarily on the continuation of a favorable mining environment in Brazil and our ability to freely sell our minerals. |
| ● | The perception of Brazil by the international community may affect us. |
| ● | Exposure to foreign exchange fluctuations and capital controls may adversely affect our costs, earnings and the value of some of our assets. |
Common Stock Risks
| ● | Our common stock price has been and may continue to be volatile, and you could lose all or part of your investment. |
| ● | We do not intend to pay regular future dividends on our common stock and thus stockholders must look to appreciation of our common stock to realize a gain on their investments. |
| ● | We may seek to raise additional funds, finance acquisitions, or develop strategic relationships by issuing equity securities. Any future issuances of equity will dilute your ownership. |
| ● | Our Series A Preferred Stock (as defined below), which has been held by Mr. Fogassa since 2012 has the effect of concentrating voting control over us in Mr. Fogassa, our Chief Executive Officer and Chairman. Due to Mr. Fogassa’s control of greater than 50% of our voting securities, we are deemed a “controlled company” under the rules of Nasdaq. |
| ● | Our Chief Executive Officer and Chairman has substantial influence over us as a result of his voting control and his interests may not be aligned with the interests of our other stockholders, which may discourage, delay or prevent a change in our control, which could deprive our stockholders of an opportunity to receive a premium for their securities. |
| ● | Sales of a substantial number of shares of our common stock by our stockholders in the public market could cause our stock price to fall. |
| ● | Costs as a result of operating as a public company are significant, and our management is required to devote substantial time to compliance with our public company responsibilities and corporate governance practices. |
| ● | Our internal control over financial reporting may not meet the standards required by Section 404 of the Sarbanes-Oxley Act, and failure to achieve and maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act, could have a material adverse effect on our business and share price. |
World Events Risks
| ● | Tariffs and other changes in international trade policy could adversely affect our business, financial condition and the results of operations. | |
| ● | Natural disasters or the emergence of a new pandemic may adversely affect our business. | |
| ● | An escalation of the current war in Ukraine and the ongoing conflict in the Middle East, coupled with the international policy of the new U.S. presidential administration or the emergence of conflict elsewhere may adversely affect our business. |
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Business Risks
Risks Related to the Assembly, Commissioning, and Operation of Our DMS Plant
Our DMS Plant was manufactured in South Africa to our specifications by a third-party contractor which delegated certain work to subcontractors. The disassembled plant was shipped to Brazil mostly in containers with some bulk items as well and is currently in storage at a secure facility in Minas Gerais state. While we believe the assembly of the DMS Plant will be successful and that it will operate as expected, there are material risks associated with the assembly, commissioning, and ongoing operation of the DMS Plant.
Assembly of the DMS Plant will require us to retain employees or contractors with the necessary expertise, including project management and construction supervision services. Such personnel may not be readily available when needed or on terms favorable to us. Although we have strengthened our internal capabilities through the appointment of a Project Management Officer and Vice President of Engineering with experience from significant mining projects in Brazil, we continue to depend on certain consultants and contractors for specific technical requirements. Any inability to retain qualified contractors or their failure to perform in accordance with their agreements could result in delays in our ability to execute on our business plan and adversely affect the value of our common stock.
We may incur delays or cost overruns in assembling the DMS Plant and achieving the readiness of such processing facility to commence production. Potential causes of delay include, without limitation: the discovery of unusual or unexpected conditions during assembly; industrial accidents or equipment malfunctions; labor shortages, disputes, or work stoppages; permitting or regulatory delays; weather conditions or natural disasters; supply chain disruptions affecting the delivery of necessary equipment or materials; and the unavailability of suitable machinery, equipment, or skilled labor. Additionally, litigation by third parties such as non-governmental organizations could interfere with the permitting process or cause delays in project development.
If assembly of the DMS Plant requires longer than expected due to component damage, labor issues, contractor performance issues, or other factors, we could incur additional costs associated with extended storage, increased labor, or procurement of replacement parts. We cannot provide any assurance that the assembly will be completed on schedule or within budget.
Once assembled, operation of the DMS Plant will incur ongoing operating costs and our financial position and results of operations may be materially impacted if we are unable to fund such expenses and if our production costs are higher than the revenues from the sale of our lithium products. Equipment malfunctions or breakdowns during the term of operation could require us to incur substantial repair or replacement costs, potentially resulting in production downtimes and business interruption. We may face difficulty timely finding spare machines or parts to fix broken equipment. Additionally, fluctuations in the cost of fuel, power, materials, and supplies could result in increases in operating costs beyond our initial estimates.
Our future performance is difficult to evaluate because we have a limited operating history.
Investors should evaluate an investment in us considering the uncertainties encountered by mineral exploration companies. Although we were incorporated in 2011, we began to implement our current business strategy in 2018, which is primarily focused on the exploration of strategic minerals. We have generated limited revenues from operations and our cash flow needs have been financed through equity and debt issuances and not through cash flows derived from our operations. As a result, we have little historical financial and operating information available to help you evaluate and predict our future performance. In addition, advancing our projects will require significant capital and time, and we are subject to all of the risks associated with developing and establishing new mining operations and business enterprises as further described in these risk factors. There can be no assurance that our efforts will be successful or that we will ultimately be able to attain profitability.
We have a history of losses and expect to continue to incur losses in the future.
We have incurred losses in each of the past three years, have negative cash flow from operating activities, have had limited revenues and expect to continue to incur losses in the future.
We have an accumulated deficit of approximately $171.6 million as of December 31, 2025. We expect to continue to incur losses unless and until such time as our projects or properties acquired in the future enter into commercial production and generate sufficient revenues to fund continuing operations and we are able to develop at least one economic deposit. If we are unable to generate cash flows from our operations, we will not be able to earn profits and may be unable to continue operations. At this early stage of our operation, we also expect to face the risks, uncertainties, expenses and difficulties encountered by companies at the mineral exploration stage. We cannot be sure that we will be successful in addressing these risks and uncertainties and our failure to do so could have a materially adverse effect on our financial condition.
There is uncertainty regarding our ability to implement our business plan and to grow our operations with our existing financial resources without additional financing. Our ability to implement our business plan is dependent on us generating cash from operations, the sale of our common stock and/or obtaining debt financing. Historically, we have funded our operations through the issuance of debt and equity securities. Management’s plan is to fund our capital requirements and ongoing operations through the generation of revenue from our mining operations and projects, and until such time that we generate such revenue, to fund operations by selling our equity securities, including our common stock, or common stock in Atlas Critical Minerals that we own, entering into royalty agreements for the future sales of minerals or off-take agreements related to future sales of negotiated quantities of minerals, and obtaining debt financing. For example, on March 28, 2024, we entered into a Securities Purchase Agreement with Mitsui & Co., Ltd. (“Mitsui”), pursuant to which we agreed to sell to Mitsui 1,871,250 shares of our common stock for aggregate net proceeds of $29.6 million. In connection with such agreement, our subsidiary Atlas Litio Brasil Ltda (“Atlas Brazil”) entered into an Offtake and Sales Agreement pursuant to which Atlas Brazil agreed to sell and deliver to the Investor, and the Investor agreed to purchase and take delivery of, (i) the spot quantity of fifteen thousand (15,000) dry metric tons of Atlas Brazil’s product, and, subject to the fulfillment of certain conditions precedent, (ii) up to sixty thousand (60,000) dry metric tons of Atlas Brazil’s product for each year, up to a total of three hundred thousand (300,000) dry metric tons.
There is no assurance that we will be successful in implementing our business plan or that we will be able to generate sufficient cash from operations, sell securities or borrow funds on favorable terms or at all. Our inability to generate significant revenue or obtain additional financing could have a material adverse effect on our ability to fully implement our business plan and grow our business.
We are an exploration stage company, and there is no guarantee that our properties will result in the commercial extraction of mineral deposits.
We are engaged in the business of exploring and developing mineral properties with the intention of locating economic deposits of minerals. An economic deposit is a mineral property which can be reasonably expected to generate profits upon extraction and commercialization of its minerals after considering all costs involved. Our property interests are in the exploration stage. Accordingly, it is unlikely that we will realize profits in the short term, and we also cannot assure you that we will realize profits in the medium to long term. Any profitability in the future from our business will be dependent upon the development of at least one economic deposit and most likely further exploration and development of other economic deposits, each of which is subject to numerous risks, including all of the risks associated with developing and establishing new mining operations and business enterprises, such as:
| ● | completion of studies to verify reserves and commercial viability, including the ability to find sufficient ore reserves to support a commercial mining operation; |
| ● | the timing and cost, which can be considerable, of further exploration, preparing studies, permitting and construction of infrastructure, mining and processing facilities; |
| ● | the availability and costs of drill equipment, exploration personnel, skilled labor, and mining and processing equipment, if required; |
| ● | the availability and cost of appropriate smelting and/or refining arrangements, if required; |
| ● | compliance with stringent environmental and other governmental approval and permit requirements; |
| ● | the availability of funds to finance exploration, development, and construction activities, as warranted; |
| ● | potential opposition from non-governmental organizations, local groups or local inhabitants that may delay or prevent development activities; |
| ● | potential increases in exploration, construction, and operating costs due to changes in the cost of fuel, power, materials, and supplies; and |
| ● | potential shortages of mineral processing, construction, and other facilities related supplies. |
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Further, we cannot assure you that, even if an economic deposit of minerals is located, any of our property interests can be commercially mined. The exploration and development of mineral deposits involves a high degree of financial risk over a significant period which may not be mitigated or eliminated by careful evaluation, experience and/or knowledge of management. While the discovery of additional ore-bearing deposits may result in rewards, few properties which are explored are ultimately developed into producing mines. Significant expenses may be required to establish reserves by drilling and constructing mining and processing facilities at a particular site. It is impossible to ensure that our current exploration programs will result in profitable commercial mining operations. The profitability of our operations will be, in part, related to the cost and success of our exploration and development programs which may be affected by several factors, such as the factors set forth under the heading “We face risks related to mining, exploration and mine construction, if warranted, on our properties” below. Additional expenditures are required to establish reserves which are sufficient to commercially mine and to construct, complete and install mining and processing facilities in those properties that are mined and developed.
In addition, exploration-stage projects like ours have no operating history upon which to base estimates of future operating costs and capital requirements. Exploration project items, such as any future estimates of reserves, metal recoveries or cash operating costs will to a large extent be based upon the interpretation of geologic data, obtained from a limited number of drill holes and other sampling techniques, as well as future studies. Actual operating costs and economic returns of all exploration projects may materially differ from the costs and returns estimated, and accordingly our financial condition, results of operations, and cash flows may be negatively affected.
Because the probability of an individual prospective mineral deposit ever having reserves is not known, and any funds spent on exploration and evaluation may be lost if our properties may not contain any reserves.
We are an exploration stage company, and we have no “reserves.” A mineral reserve is defined in Regulation S-K Item 1300 as an estimate of tonnage and grade or quality of “indicated mineral resources” and “measured mineral resources” (as those terms are defined in Regulation S-K 1300) that, in the opinion of a “qualified person” (as defined in Regulation S-K Item 1300), can be the basis of an economically viable project. We cannot assure you about the existence of economically extractable mineralization at this time, nor about the quantity or grade of any mineralization we may have found. Because the probability of an individual prospect ever having reserves is uncertain, any funds spent on evaluation and exploration may be lost and our properties may not contain any reserves. Even if we confirm reserves on our properties, any quantity or grade of reserves we indicate must be considered as estimates only until such reserves are mined. We do not know with certainty that economically recoverable minerals exist on our properties. In addition, the quantity of any reserves may vary depending on commodity prices. Any material change in the quantity or grade of reserves may affect the economic viability of our properties. Further, our lack of established reserves means that we are uncertain about our ability to generate revenue from our operations.
Even if we do eventually discover a mineral reserve on one or more of our properties, there can be no assurance that they can be developed into producing mines and that we can extract those minerals. Both mineral exploration and development involve a high degree of risk, and few mineral properties that are explored are ultimately developed into producing mines.
Exploration activities require significant amounts of capital that may not be recovered and may exceed our budget.
Mineral exploration activities are subject to many risks, including the risk that no commercially productive or extractable resources will be encountered. There can be no assurance that our activities will ultimately lead to an economically feasible project or that we will recover all or any portion of our investment. Mineral exploration often involves unprofitable efforts, including drilling operations that ultimately do not further exploration efforts. Despite our efforts to budget such costs, the cost of minerals exploration is often uncertain, and cost overruns are common. Substantial expenditures are required to establish reserves through drilling, to develop processes to extract the ore and, in the case of new properties, to develop the extraction and processing facilities and infrastructure at any site chosen for extraction. Although benefits may be derived from the discovery of a major deposit, we cannot provide any assurance that any such deposit will be commercially viable or that we will be able to obtain the funds required for development on a timely basis. Drilling and exploration operations may be curtailed, delayed or cancelled as a result of numerous factors, many of which are beyond our control, including title problems, weather conditions, protests, compliance with governmental requirements, including permitting issues, and shortages or delays in the delivery of equipment and services. While we believe we have sufficient resources to fund our operations for the next twelve months, an increase in our drilling campaigns to keep pace with positive findings of potential economic deposits may require us to raise additional capital which, if not available on reasonable terms, may cause us to curtail our operations and impair our ability to become profitable.
We face risks related to mining, exploration, plant assembly and mine construction, if warranted, on our properties.
Our level of profitability, if any, in future years will depend to a great degree on whether our exploration-stage properties can be brought into production. We cannot provide any assurances that the current and future exploration programs and/or studies on our existing properties will establish reserves. Whether it will be economically feasible to extract a mineral depends on a number of factors, including, but not limited to: the particular attributes of the deposit, such as size, grade and proximity to infrastructure; drilling costs; mineral prices; mining, processing and transportation costs; the willingness of lenders and investors to provide project financing; labor costs and possible labor strikes; and governmental regulations, including, without limitation, regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting materials, foreign exchange, environmental protection, employment, worker safety, transportation, and reclamation and closure obligations. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in us receiving an inadequate return on invested capital. Assembly of our lithium processing plant, or any other facility, will require us to retain employees or contractors with the necessary technical expertise, which may not be readily available when we need it or on terms favorable to us. We may incur delays or cost overruns in assembling our lithium processing plant and achieving the readiness of such processing facility to commence production. Once assembled, operation of the lithium processing plant will require significant ongoing operating costs, and our financial position and results of operations may be materially impacted if we are unable to fund such expenses.
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Labor disruptions and a rise in labor costs could impact our business, financial condition and results of operations.
Approximately 58% of our workforce is unionized. We may experience labor shortages and work stoppages due to localized or industry strikes. A prolonged work stoppage or strike by unionized employees could increase costs and affect our ability to conduct our research, development or production activities. In addition, upon the expiration of existing collective bargaining agreements, we may not reach new agreements, or such agreements may not be on terms satisfactory to us.
If we are unable to negotiate acceptable collective bargaining agreements, we may become subject to union-initiated work stoppages, including strikes. In addition, additional groups of employees may seek union representation in the future.
An increase in labor costs could adversely affect our results of operations. Most of the factors affecting labor costs are beyond our control and we may not be able to offset increased labor costs. A shortage of qualified employees, inflationary pressure on wages, increases in minimum wages or union-agreed wages in any of the jurisdictions in which we operate could increase labor costs and have a material and adverse effect on our business, financial condition and results of operations.
We are subject to the effects of changing prices.
Inflation rates have been relatively low and stable over the previous three decades; however, inflation rates rose significantly between 2021 and 2024. Although inflation rates have stabilized at a moderate level, future economic shocks, such as those due to tariffs and trade wars, could increase inflation levels going forward. We bear the costs of operating and maintaining our assets, including labor and material costs as well as drilling and exploration costs. Although we may be able to reduce some of our exposure to price increases through the prices we charge, competitive market pressures may affect our ability to pass along price adjustments, which may result in reductions in our operating margins and cash flows in the future.
Our long-term success will depend ultimately on our ability to achieve and maintain profitability and to develop positive cash flow from our mining activities.
Our long-term success, including the recoverability of the carrying values of our assets, and our ability to continue with exploration, development and commissioning and mining activities on our existing projects or to acquire additional projects, depends ultimately on our ability to achieve and maintain profitability and to develop positive cash flow from our operations by establishing ore bodies that contain commercially recoverable minerals and to develop these into profitable mining activities. We cannot assure you that any ore body that we extract mineralized materials from will result in achieving and maintaining profitability and developing positive cash flow.
We depend on our ability to successfully access the capital and financial markets. Any inability to access the capital or financial markets may limit our ability to fund our ongoing operations, execute our business plan or pursue investments that we may rely on for future growth and could result in the failure of our business.
We need, and for the foreseeable future will continue to need, additional equity or debt financing beyond our existing cash to maintain and expand our operations. Until commercial production is achieved from one of our larger projects, we will continue to incur operating and investing net cash outflows associated with, among other items, maintaining and possibly acquiring additional exploration properties and undertaking exploration activities. As a result, we rely on access to capital markets as a source of funding for our capital and operating requirements. We cannot assure you that such additional funding will be available to us on satisfactory terms, or at all.
In order to finance our current operations and future capital needs, we will require additional funds through the issuance of additional equity and/or debt securities or other financing facilities. Depending on the type and the terms of any financing we pursue, stockholders’ rights and the value of their investment in our shares could be reduced. Any additional equity financing will dilute shareholdings, and new or additional debt financing, if available, may involve restrictions on financing and operating activities. For example, during the year ended December 31, 2025, we issued an aggregate of 10,127,566 shares of our common stock in capital raising transactions, including (i) 7,627,566 shares sold pursuant to an At the Market Offering Agreement, and (ii) 2,500,000 shares sold to certain institutional investors in a registered direct offering. In addition, if we issue secured debt securities, the holders of the debt would have a claim to our assets that would be prior to the rights of stockholders until the debt is paid. Interest on such debt securities would increase costs and negatively impact operating results.
There is, however, no guarantee that we will be able to secure any additional funding or be able to secure funding which will provide us with sufficient funds to meet our objectives, which may adversely affect our business and financial position. The global decline in economic conditions, geopolitical instability, and other macroeconomic factors, including inflation, interest rate and foreign currency rate fluctuations, and volatility in capital markets could negatively impact our business, financial condition, and results of operations, including our ability to raise capital. If we are unable to obtain additional financing, as needed, at competitive rates, our ability to fund our current operations and implement our business plan and strategy will be affected, and we would be required to reduce the scope of our operations and scale back our exploration, development and mining programs. If such an inability to obtain financing persists, such measures could include eliminating operations or even seeking reorganization, in which case the holders of our securities could lose a substantial part or all of their investment.
Our quarterly and annual revenue, operating results and financial results are likely to fluctuate significantly in future periods.
Our quarterly and annual revenue, operating results and financial results are difficult to predict and may fluctuate significantly from period to period based on activities related to our exploration projects. For example, for the year ended December 31, 2025, costs associated with our stock based compensation were significantly lower than in prior years, which contributed to a substantial decrease to our net loss for the year as compared to the prior year. Our revenues, if any, net loss and results of operations may also fluctuate as a result of a variety of factors that are outside our control including, but not limited to, lack of sufficient working capital, equipment malfunction and breakdowns, inability to timely find spare machines or parts to fix the broken equipment, regulatory or licensing delays, deteriorations in our labor relations, changes in the prices of commodities or in the cost of our key inputs, currency fluctuations and severe weather phenomena.
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Our ability to manage growth will have an impact on our business, financial condition and results of operations.
Future growth may place strains on our financial, technical, operational and administrative resources and cause us to rely more on project partners and independent contractors, potentially adversely affecting our financial position and results of operations. Our ability to grow will depend on several factors, including:
| ● | our ability to successfully complete our exploration activities and develop existing projects; | |
| ● | our ability to identify new projects; | |
| ● | our ability to continue to retain and attract skilled personnel; | |
| ● | our ability to maintain or enter into relationships with project partners and independent contractors; | |
| ● | the results of our exploration programs; | |
| ● | the market prices for our minerals; | |
| ● | our access to capital; | |
| ● | our ability to enter into agreements for the sale of our minerals; | |
| ● | our ability to obtain and maintain requisite licenses and permits; | |
| ● | global demand for lithium; | |
| ● | the global trade environment and the existence of trade barriers such as tariffs or sanctions; | |
| ● | volatility resulting from international conflicts or geopolitical tensions; | |
| ● | natural or man-made disasters and severe climate or weather events; | |
| ● | government policies with respect to climate change and natural resource conservation; and | |
| ● | fluctuations in inflation and currency exchange rates. |
We may not be successful in upgrading our technical, operational and administrative resources or increasing our internal resources sufficiently to provide certain of the services currently provided by third parties, and we may not be able to maintain or enter into new relationships with project partners and independent contractors on financially attractive terms, if at all. Our inability to achieve or manage growth may materially and adversely affect our business, results of operations and financial condition.
Our operations and projects are subject to a range of transitional and physical risks related to climate change.
We believe that climate change has the potential to impact on the regions and sites in which we operate, as well as the surrounding communities. Long-term potential physical climate risks include, but are not limited to, higher temperature in all regions, higher intensity storm events in all regions, impacts to annual precipitation depending upon the latitude and proximity of the site to oceans.
Physical risks related to extreme weather events such as extreme precipitation, flooding, longer wet or dry seasons, flooding and drought conditions, increased temperatures, sea level rise, landslides, mine flooding, landslides, wildfires or brushfires, or more severe storms may have financial implications for the business. In particular, the effects of changes in rainfall and intensities, water shortages and changing storm patterns have from time to time adversely impacted, and may in the future adversely impact, our costs, production levels and financial performance.
There is also the potential for disruption to transport routes associated with the distribution of our products. For example, essential roads for entering in our mine sites, may be subject to a risk of flooding due to the potential for an increase in average temperatures, which may be related to climate change. Severe storm events can also result in unpermitted off-site discharges, slope instability, mine pit erosion and structural failures, tailings storage facility overtopping and other impacts, including water storage and treatment facility capacity considerations. Extended dry seasons or unseasonal dry conditions could exacerbate dust generation from operating activities that may require additional controls for continued operation or result in compliance breaches. Changing climatic conditions may also affect the likelihood of meeting closure success criteria and require adjustments to mine site rehabilitation and closure plans. The higher potential for extreme heat conditions may affect equipment efficiency.
Such events can temporarily slow or halt operations due to physical damage to assets, reduced worker productivity for safety protocols on site related to extreme temperatures or lightening events, worker aviation and bus transport to or from the site, and local or global supply route disruptions that may limit transport of essential materials, chemicals and supplies, which could have an adverse impact on our results of operations and financial position. Additional financial impacts could include increased capital or operating costs to increase water storage and treatment capacity, obtain or develop maintenance and monitoring technologies, increase resiliency of facilities and establish supplier climate resiliency and contingency plans.
An increase in frequency and duration of extreme weather conditions can be followed by extended power outages. Energy disruptions can have an adverse impact on our results of operations and financial position due to production delays or additional costs to ensure business continuity through reliable sources of on-site power generation. Energy transmission and supply may be impacted by wildfires, which may interrupt electrical power transmission lines to mine sites, and that may pose risks to on-site facilities and energy generators, fuel dispensing systems and supplies. In jurisdictions that rely on purchased hydroelectric power, such as in Brazil, extreme drought and extended dry seasons may impact the electric utility’s water supplies needed to generate hydroelectric power purchased by the mine to run operations, which would result in higher costs and/or limit energy availability for continuity of operations as well as impact our environmental systems and processes.
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Our operations and projects are subject to a range of risks related to transitioning the business to meet regulatory, societal and investor expectations for operating in a low-carbon economy.
Climate change and the transition to a low-carbon economy is expected to impact on our operations in a number of ways. Mining activities are an energy and fuel intensive business, currently resulting in a significant carbon footprint. Transitioning to a low-carbon economy will require significant investment and may entail extensive policy, legal, technology, and market changes to address mitigation and adaptation requirements related to climate change. Depending on the nature, speed, focus and jurisdiction of these changes, transition risks may pose varying levels of financial and reputational risk to the business.
A number of governments or governmental bodies, including Brazil, have introduced or are contemplating regulatory changes in response to the potential impacts of climate change that are viewed as the result of emissions from the combustion of carbon-based fuels.
Policy and regulatory risk related to actual and proposed changes in climate- and water-related laws, regulations and taxes developed to regulate the transition to a low-carbon economy may result in increased costs for our operations and our suppliers, including increased energy, capital equipment, environmental monitoring and reporting and other costs to comply with such regulations. Regulatory uncertainty may cause us to incur higher costs and lower economic returns than originally estimated for new development projects and operations, including closure reclamation obligations.
The development and deployment of technological improvements or innovations will be required to support the transition to a low-carbon economy, which could result in write-offs and early retirement of existing assets, increased costs to adopt and deploy new practices and processing including planning and design for mines, development of alternative power sources, site level efficiencies and other capital investments. Our investments in these technologies may also expose us to legal, operational and reputational and other risks. The pace of development of such technologies may be inadequate, such technologies may be insufficient, and we may not be able to deploy such technologies at a commercial scale.
There will be varied and complex market impacts due to climate change and the transition to a low-carbon economy. There will be shifts in supply and demand for certain commodities, products and services in connection with evolving consumer and investor sentiments. Market perceptions of the mining sector, and, in particular, the role that certain metals will or will not play in the transition to a low-carbon economy remains uncertain. Potential financial impacts may include reduced investment in certain minerals due to shifts in investor sentiment, increased production costs due to changing input prices, re-pricing of land valuation and assets, potential cost increases by insurers and lenders, and potential increases in taxation of the mining and metals sector.
Should the mining and metals sector not respond quickly enough to meeting globally accepted science-based reductions required to mitigate the long-term impacts of climate change, industry members may be subject to an increased risk of future climate litigation. Over time, litigation may also apply to other resource intensive sectors that fail to set and/or meet long-term reduction targets. While we are not currently subject to any lawsuits related to climate, no assurances can be provided that similar suits will not be brought in the future.
There is currently no generally accepted global definition (legal, regulatory or otherwise) of, nor market consensus as to what criteria qualify as, “green,” “social,” “sustainable” or “sustainability-linked” (and, in addition, the requirements of any such label may evolve from time to time), and therefore no assurance is or can be given that we will meet any or all investor expectations.
We are vulnerable to concentration risks because our operations are currently exclusive to Brazil.
Our exploration and mining activities are currently entirely located in Brazil. Because of our geographic concentration, our operations are more vulnerable to local economic downturns and adverse project-specific risks than those of larger, more diversified companies.
We are dependent upon information technology and operational technology systems, which are subject to disruption, damage, failure or cybersecurity attacks and risks associated with implementation, upgrade, operation and integration.
Our business operations rely heavily on technology platforms and systems to manage and optimize our diverse mining assets. These systems are critical to ensuring safety, operational efficiency, cost management, and meeting environmental, social, and governance (ESG) objectives. However, the increasing sophistication of cybersecurity threats, coupled with the adoption of emerging technologies such as artificial intelligence (AI), automation, and cloud-based platforms, poses important risks to our operations, financial performance, and reputation.
Our systems, as well as those of our third-party service providers, vendors, and partners, face a wide range of cybersecurity threats, including: Ransomware, malware, and phishing schemes targeting critical systems and sensitive data; unauthorized access and breaches affecting intellectual property, financial information, and operational data; vulnerabilities introduced through supply chain dependencies and third-party security weaknesses; human error, design flaws, and system misconfigurations.
The adoption of new technologies and the adoption of remote and flexible work arrangements enhances our operational capabilities but introduces additional risks. AI, for example, has the potential to improve efficiency and safety, it also presents unique vulnerabilities, including algorithmic biases that could lead to inaccurate decisions or unintended outcomes; data integrity risks, such as manipulation or corruption of datasets used to train AI systems; unauthorized access or exploitation of AI-powered systems, potentially compromising operations or sensitive data.
Additionally, the increased interconnectivity of automated and cloud-based systems and increase of remote workforce expands our cyber-attack surface, requiring heightened vigilance and advanced security measures.
Our cybersecurity measures, including the use of muti-factor authentication, data encryption, and firewall use, among other technologies, are intended to protect our technology platforms and address risks associated cybersecurity threats, including those stemming from the implementation of emerging technologies. While these efforts are designed to align with industry’s best practices, no system can eliminate all risks, especially given the pace of technological advancement and the evolving nature and increased frequency of cyber threats. In addition, we do not carry specific cybersecurity insurance to help mitigate such costs due to increased premiums and limited market availability. For additional information about steps we have taken to enhance our cybersecurity, please see “Item 1C. Cybersecurity.”
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Therefore, a successful cyberattack or other cybersecurity incident could result in future production and operational downtimes, data corruption, and unauthorized disclosure of sensitive information. Any material breaches, disruptions, or loss of business-critical information, our systems and procedures for preparing and protecting against such attempts and mitigating such risks may prove to be insufficient against future attacks. These events may subject us to significant expenses, remediation costs, disputes, financial losses, regulatory actions or investigations, litigation, reputational harm, and delays in the deployment of critical technologies, that could result in damages, material fines and penalties, and harm to our reputation, any of which could have a significant effect on our financial condition, results of operations, liquidity, and cash flows. The risks associated with the implementation of emerging technologies, if not effectively mitigated, could undermine the benefits of these advancements and impact our competitive position.
In addition, we are subject to various legislation, regulations, directives and guidelines from federal, state, local and foreign agencies, that are intended to strengthen cybersecurity measures required for information and operational technology, and that apply to the collection, use, retention, protection, disclosure, transfer and other processing of personal information. Failure to comply with any of applicable legal requirements could result in enforcement action against us, including fines, which could harm our reputation and have a significant effect on our financial condition, results of operations, liquidity, and cash flows.
We depend upon Marc Fogassa, our Chief Executive Officer and Chairman.
Our existing operations and continued future development are largely dependent upon the personal efforts and continued performance of Mr. Marc Fogassa, our Chief Executive Officer and Chairman and principal stockholder. The loss of the services of Mr. Fogassa would have a material adverse effect on our business and prospects. We maintain key-man life insurance on the life of Mr. Fogassa. If we were to lose Mr. Fogassa, we may not be able to find appropriate replacements on a timely basis and our financial condition and results of operations could be materially adversely affected. Although Mr. Fogassa spends the vast majority of his time with us and is highly active on a daily basis in our management, he does not devote his full time and attention to Atlas Lithium. Mr. Fogassa also currently serves as Chief Executive Officer and Chairman of Atlas Critical Minerals.
Our growth will require new personnel, which we will be required to recruit, hire, train and retain.
Our ability to recruit and assimilate new personnel will be critical to our performance. We will be required to recruit additional personnel and to train, motivate and manage employees, and our inability to successfully do so will adversely affect our plans.
We expect significant growth in the number of our employees if we determine that a mine at any of our properties is commercially feasible, we are able to raise sufficient funding and we elect to develop the property. This growth will place substantial demands on us and our management. Our ability to assimilate new personnel will be critical to our performance. We will be required to recruit additional personnel and to train, motivate and manage employees. We will also have to adopt and implement new systems in all aspects of our operations. This will be particularly critical in the event we decide not to use contract miners on any of our properties. We have no assurance that we will be able to recruit the personnel required to execute our programs or to manage these changes successfully.
A portion of our workforce is represented by labor unions and therefore subject to collective bargaining agreements.
Our operations are dependent upon the efforts of our employees and, consequently, our maintenance of good relationships with our employees. Due to union activities or other employee actions, we could experience labor disputes, work stops or other disruptions in production, exploration or other business activities that could adversely affect us.
A portion of our workforce is represented by labor unions, as mandated under Brazilian law, and are therefore be subject to collective bargaining agreements, and if we are unable to enter into new agreements or renew existing agreements before they expire, our workers subject to collective bargaining agreements could engage in strikes or other labor actions that could materially disrupt our ability to conduct our operations.
We cannot predict the outcome of future negotiations of collective bargaining agreements covering existing or potential future employees.
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Certain officers and directors may be in a position of conflict of interest.
Mr. Marc Fogassa, our Chief Executive Officer and Chairman, also serves as chief executive officer and chairman of Atlas Critical Minerals. Rodrigo Menck, one of our directors, serves as the chief financial officer of Atlas Critical Minerals. We have partial equity ownership in Atlas Critical Minerals. There exists the possibility that one or more of these individuals, or others, may in the future be in a position of conflict of interest, where their interests may not be aligned with the interests of our other stockholders, and they may from time to time be incentivized to take certain actions that benefit the interests of Atlas Critical Minerals and that our other stockholders do not view as being in their interest as investors in us.
We have historically relied on third-party consultants and their inability to perform timely and in compliance with their contractual obligations can adversely impact our business operations.
We have historically relied on third-party technical consultants for various aspects of our MGLP development. While in 2025 we have strengthened our internal capabilities through the appointment of a Project Management Officer and Vice President of Engineering, who brings experience from multibillion-dollar mining projects in Brazil, we continue to depend on certain consultants for specific technical requirements. Also, there is significant competition for the services of these consultants in Brazil. Given this dependency, the consultants’ potential delivery of inadequate technical materials, or non-compliance with their contractual obligations, inclusive of exclusivity provisions, exposes us to significant operational and financial risks.
Our Reliance on Third-Party Consultants and Contractors Has and Could Continue to Adversely Affect Our Operations, Cost Structure, and Competitive Position
We rely on third-party consultants, contractors, and service providers to perform critical functions across our operations, [including geological and metallurgical analysis, mine planning, engineering, construction, environmental and permitting support, logistics, and specialized technical services]. Many of these activities require highly specialized expertise, regulatory familiarity, and operational experience that is difficult to source or replace on short notice.
These third parties may not perform their services in accordance with contractual requirements, applicable laws and regulations, or industry standards, or may lack the technical expertise, personnel, or financial resources necessary to execute complex or mission-critical work. Any failure by a third-party consultant or contractor to perform as expected, meet project timelines, or comply with contractual or regulatory obligations—including as a result of breach, insolvency, labor constraints, or competing priorities—could result in project delays, increased costs, operational disruptions, reduced production, or the inability to advance or maintain mining operations as planned. Current high levels of demand for talent in our industry present challenges in attracting and retaining qualified technical personnel with the necessary specialized knowledge.
In addition, our agreements with third-party consultants and contractors may limit our remedies or ability to recover damages in the event of nonperformance or breach, and disputes may be costly, time-consuming, and uncertain in outcome. In Brazil, suitable alternative providers can be limited or unavailable, further increasing our exposure to performance failures and constraining our ability to mitigate adverse impacts.
Because the mining industry is highly competitive and capital-intensive, delays, cost overruns, or operational inefficiencies arising from third-party performance issues could place us at a competitive disadvantage relative to peers with greater in-house capabilities, more reliable contractor relationships, or superior access to technical resources. Such events could impair our ability to meet production targets, execute growth or expansion plans, respond to market conditions, or maintain customer and stakeholder confidence, and could materially and adversely affect our business, financial condition, results of operations, and long-term competitive position.
Adverse developments affecting the financial services industry, including events or concerns involving liquidity, defaults or non-performance by financial institutions or transactional counterparties, could adversely affect our business, financial condition or results of operations.
Events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems. We regularly maintain cash balances at third-party financial institutions in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limit. The FDIC took control and was appointed receiver of Silicon Valley Bank and New York Signature Bank on March 10, 2023, and March 12, 2023, respectively, and JPMorgan Chase Bank assumed all deposits and substantially all assets of First Republic Bank on May 1, 2023. We did not have any direct exposure to Silicon Valley Bank, New York Signature Bank or First Republic Bank. However, if other banks and financial institutions enter receivership or become insolvent in the future in response to financial conditions affecting the banking system and financial markets, our ability to access our existing cash, cash equivalents and investments, or access funding sources and other credit arrangements in amounts adequate to finance or capitalize our current and projected future business operations may be threatened and could have a material adverse effect on our business and financial condition.
In addition, investor concerns regarding the U.S. or international financial systems could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us to acquire financing on acceptable terms or at all. Any decline in available funding or access to our cash and liquidity resources could, among other risks, adversely impact on our ability to meet our operating expenses, financial obligations or fulfill our other obligations, result in breaches of our contractual obligations or result in violations of federal or state wage and hour laws. Any of these impacts, or any other impact resulting from the factors described above or other related or similar factors not described above, could have material adverse impacts on our liquidity and our business, financial condition or results of operations.
We may be unable to hire and retain the third-party contractors upon which we rely, including for drilling and construction of the lithium processing plant.
We have and will have agreements with consultants to provide services for us, including with respect to drilling and construction services. Each of these contractors performs functions that require the services of persons in high demand in the industry and these persons may or may not always be available when needed based on their status as contractors or at affordable prices. The implementation of our business plan and our exploration activities may be impaired if we are not able to retain or afford our significant contractors or if they do not perform in accordance with their agreements and the failure to conduct our exploration and construction activities could result in delays in our ability to execute on our business plan will could have an adverse effect on the value of our common stock.
Regulatory and Industry Risks
The mining industry subjects us to several risks.
In our operations, we are subject to the significant risks normally encountered in the mining industry, such as:
| ● | the discovery of unusual or unexpected geological formations; | |
| ● | accidental fires, floods, earthquakes or other natural disasters; | |
| ● | unplanned power outages and water shortages; | |
| ● | controlling water and other similar mining hazards; | |
| ● | industrial and mining accidents; | |
| ● | operating labor disruptions and labor disputes; | |
| ● | the ability to obtain suitable or adequate machinery, equipment, or labor; | |
| ● | our liability for pollution or other hazards; and | |
| ● | other known and unknown risks involved in the conduct of exploration and operation of mines. |
These hazardous activities pose significant management challenges and could result in loss of life, a mine shutdown, damage to or destruction of our properties and surrounding properties, production facilities or equipment, production delays or business interruption.
Our operations and mineral projects are subject to significant government regulations, including extensive environmental laws and regulations.
Mining activities in Brazil are subject to extensive federal, state, and local laws and regulations governing environmental protection, natural resources, prospecting, development, production, post-closure reclamation costs, taxes, labor standards and occupational health and safety laws and regulations, including mine safety, toxic substances and other matters. The costs we will incur to comply with such laws and regulations are expected to substantially increase once we progress from exploration activities to mining and production operations as is our intention. We also will be subject to periodic inspections by governmental authorities, which could result in fines, penalties or other actions by such authorities, any of which could have a material adverse effect on our future operations. In addition, changes in such laws and regulations, or more restrictive interpretations of current laws and regulations by governmental authorities, could result in unanticipated capital expenditures, expenses, or restrictions on, or suspensions of our operations and delays in the development of our properties.
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Our exploration, development, mining and processing operations are subject to extensive laws and regulations governing land use and the protection of the environment, which generally apply to air and water quality, protection of endangered, protected or other specified species, hazardous waste management and reclamation. We have made, and expect to make in the future, significant expenditures to comply with such laws and regulations. Compliance with these laws and regulations imposes substantial costs and burdens, and can cause delays in obtaining, or failure to obtain, government permits and approvals which may adversely impact our closure processes and operations.
Increased global attention or regulation of consumption of water by industrial activities, as well as water quality discharge, and on restricting the use of cyanide and other hazardous substances in processing activities could similarly have an adverse impact on our results of operations and financial position due to increased compliance and input costs.
We are required to obtain governmental permits in order to conduct development and mining operations, a process which is often costly, time-consuming and subject to the interference of third parties.
We are required to obtain and renew governmental permits for our exploration activities and, prior to developing or mining any mineralization that we discover, we will be required to obtain new governmental permits. Obtaining and renewing governmental permits is a complex, costly and time-consuming process. The timeliness and success of permitting efforts are contingent upon many variables not within our control, including the interpretation of permit approval requirements administered by the applicable permitting authority. We may not be able to obtain or renew permits that are necessary for our planned operations or the cost and time required to obtain or renew such permits may exceed our expectations. Any unexpected delays or costs associated with the permitting process could delay the exploration, development or operation of our properties, which in turn could materially adversely affect our future revenues and profitability. In addition, key permits and approvals may be revoked or suspended or may be changed in a manner that adversely affects our activities.
Obtaining the necessary government permits involves numerous jurisdictions, public hearings and possibly costly undertakings.
In addition, our ability to successfully obtain key permits and approvals to explore for, develop, operate and expand operations will likely depend on our ability to undertake such activities in a manner consistent with the creation of social and economic benefits in the surrounding communities, which may or may not be required by law. Our ability to obtain permits and approvals and to successfully operate in particular communities may be adversely affected by real or perceived detrimental events associated with our activities.
Private parties, such as environmental activists, frequently attempt to intervene in the permitting process and to persuade regulators to deny necessary permits or seek to overturn permits that have been issued. For example, on August 14, 2025, the Minas Gerais state agency responsible for permitting applications issued an extensive technical report recommending approval of the Company’s expansion permit application (“Expansion Application”) filed in November 2024. On August 28, 2025, a civil action related to the Company’s Expansion Application was filed by N’Golo (the “NGO”), a non-governmental organization known for filing claims against mining projects, having filed 35 such claims in the last six years. The action was filed in the federal court located in Teofilo Otoni, Brazil, alleging that the Company did not conduct a consultation with Girau, a traditional community (the “Community”). Prior to the Expansion Application, the Company had retained a team of six experts including an anthropologist and a social scientist to consult with the Community and therefore the Company believes the NGO’s action is without merit. On May 9, 2024, the State of Minas Gerais issued a technical report stating that the Company had satisfied the consultation requirements with the Community. Additionally, in an affidavit dated September 3, 2025, the Community repudiated the NGO claim with the president of the Community association and a large number of its members stating that: (i) the NGO had never visited the Community and does not represent the wishes of the Community; and (ii) the Company had consulted with the Community. Based on currently available information, the Company does not expect this proceeding to prevent the approval of the Expansion Application.
On December 17, 2025, we filed a criminal complaint in a state criminal court in Belo Horizonte, Minas Gerais, Brazil, against the president and legal counsel of the NGO in connection with statements made by the organization that contained false and misleading information regarding matters related to our Expansion Application and consultation with the Community. On February 12, 2026, a state district attorney reviewed the complaint and referred it to a criminal court, which accepted the complaint on February 23, 2026. The matter remains pending. We intend to pursue this matter vigorously but there can be no assurance as to the outcome of these proceedings.
Compliance with environmental regulations and litigation based on environmental regulations could require significant expenditures.
Environmental regulations mandate, among other things, the maintenance of air and water quality standards, and the rules on land development and reclamation. They also set forth limitations on the generation, transportation, storage, and disposal of solid and hazardous waste. Environmental legislation is evolving in a manner that may require stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects, and a heightened degree of responsibility for mining companies and their officers, directors and employees. In connection with our current exploration activities or with our prior mining operations, we may incur environmental costs that could have a material adverse effect on our financial condition and results of operations. Any failure to remedy an environmental problem could require us to suspend operations or enter into interim compliance measures pending completion of the required remedy.
Moreover, government authorities and private parties may bring lawsuits based upon damage to property and injury to persons resulting from the environmental, health and safety impacts of prior and current operations, including operations conducted by other mining companies many years ago at sites located on properties that we currently own or formerly owned. These lawsuits could lead to the imposition of substantial fines, remediation costs, penalties and other civil and criminal sanctions. We cannot assure you that any such law, regulation, enforcement or private claim would not have a material adverse effect on our financial condition, results of operations or cash flows.
Mining operations face substantial health and safety regulations.
Mining operations are subject to extensive and complex laws and regulations governing worker health and safety and failure to comply with applicable legal requirements can result in substantial penalties. Future changes in applicable laws, regulations, permits and approvals or changes in their enforcement or regulatory interpretation could substantially increase costs to achieve compliance, leading to the revocation of existing or future exploration or mining rights or otherwise have an adverse impact on our results of operations and financial position.
In addition to potential government restrictions and regulatory fines, penalties or sanctions, our ability to operate (including the effect of any impact on our workforce) and thus, our results of operations and our financial position (including because of potential related fines and sanctions), could be adversely affected by accidents, injuries, fatalities or events detrimental (or perceived to be detrimental) to the health and safety of our employees, the environment or the communities in which we operate.
Mineral prices are subject to unpredictable fluctuations.
Portions of our revenues may come from the extraction and sale of minerals. Our level of profitability, if any, in future years will depend to a great degree on the prices of minerals set by global markets. The price of minerals may fluctuate widely and is affected by numerous factors beyond our control, including international, economic and political trends, expectations of inflation, currency exchange fluctuations, interest rates, global or regional consumptive patterns, speculative activities, increased production due to new extraction developments and improved extraction and production methods and technological changes in the markets for the end products. The effect of these factors on the price of minerals, and therefore the economic viability of any of our exploration properties, cannot accurately be predicted.
The development of non-lithium battery technologies could adversely affect us.
The development and adoption of new battery technologies that rely on inputs other than lithium compounds could significantly impact our prospects and future revenues. Current and next generation high energy density batteries for use in electric vehicles rely on lithium compounds as a critical input. Alternative materials and technologies are being researched with the goal of making batteries lighter, more efficient, faster charging and less expensive, and some of these could be less reliant on lithium compounds. We cannot predict which new technologies may ultimately prove to be commercially viable and on what time horizon. Commercialized battery technologies that use no, or significantly less, lithium could materially and adversely impact on our prospects and future revenues.
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The growth potential of lithium markets is uncertain.
Our lithium business will be significantly dependent on the development and adoption of new applications for lithium batteries and the growth in demand for plug-in hybrid electric vehicles and battery electric vehicles. As such, our business results will inherently depend on the decarbonization of the global economy. To the extent that such development, adoption, decarbonization and growth do not occur in the volume and/or manner that we contemplate, including for reasons described under the heading “The development of non-lithium battery technologies could adversely affect us,” above, the long-term growth in the markets for lithium products may be adversely affected, which would have a material adverse effect on our business, financial condition and operating results.
Demand and market prices for lithium will greatly affect the value of our investment in our lithium resources and our future revenues and profitability generally.
Our ability to successfully develop our lithium resources and generate a return on investment will be affected by changes in the demand for and market price of lithium-based end products. The market price of these products can fluctuate and is affected by numerous factors beyond our control, primarily world supply and demand. Such external economic factors are influenced by changes in international investment patterns, global economic activity and growth, the unknown geopolitical consequences of the war between Ukraine and Russia, conflicts in the Middle East, including the ongoing war involving the United States, Israel and Iran, and macro-economic circumstances. We may be unable to effectively mitigate fluctuations in the price of lithium products, and high volatility or declines in lithium prices could have a material and adverse effect on our ability to generate revenues and our future profitability generally.
We are dependent on the continued recognition of and validity of the title to our mineral rights, and preserving title may be costly.
We rely on the continued validity of our mineral rights to each of our mineral properties. Any challenge to the title to our mineral rights would proceed as a petition to ANM, and such a challenge would be costly. In addition, ANM has the authority to determine the boundaries of mineral rights in Brazil, which is normally done to accommodate new and unforeseen events, including, by way of example, the passage of a new electric grid or the creation of a new environmental preserve. Depending on the number of mineral rights impacted, any change in the boundaries of our mineral rights could potentially affect a given project. In the event of a successful challenge to ANM that we are not the rightful owner of a mineral right that is currently titled to us, or a change in the boundaries of our mineral rights, such successful challenge or alteration of boundaries may have a material adverse effect on our planned operations, and result in significant financial losses that affect our business as a whole.
Changes in public policies and legislative initiatives could materially affect our business and prospects.
There has been substantial debate in the United States and abroad in the context of environmental and energy policies affecting climate change, the outcome of which could have a positive or negative influence on our prospects for growing our business. The new U.S. presidential administration favors traditional energy technologies and our future prospects could be adversely affected if renewable technologies are either (i) disfavored in any new laws or regulations pursued by the new U.S. presidential administration, or (ii) not included among those technologies identified in any final laws or regulations as favoring renewable technologies, or not included in state plans to reduce carbon emissions, and therefore not entitled to the benefits of such laws, regulations, or plans. For example, on January 20, 2025, President Trump issued Executive Order 14151, Unleashing American Energy, which encouraged energy exploration and production on federal lands and waters, directed the federal government to eliminate rules and incentives favoring electric vehicles, and paused the disbursement of grants and loans under the Inflation Reduction Act and the Infrastructure Investment and Jobs Act.
Country and Currency Risks
Substantially all of our assets are located in Brazil and substantially all of our revenues will be derived from our operations in such country. Accordingly, our results of operations will be subject, to a significant extent, to the economic, political and legal policies, developments and conditions in Brazil.
The economic, political and social conditions, as well as government policies, of Brazil could affect our business. Economic growth could be uneven, both geographically and among various sectors of the economy and such growth may not be sustained in the future. If in the future Brazil’s economy experiences a downturn or grows at a slower rate than expected, there may be less demand for spending in certain industries. A decrease in demand for spending in certain industries could materially and adversely affect our ability to become profitable.
Our ability to execute our business plan depends primarily on the continuation of a favorable mining environment in Brazil and our ability to freely sell our minerals.
Mining operations in Brazil are heavily regulated. Concurrently, the Brazilian government has taken an active role in supporting the development of its domestic rare earths mining and processing industry, including, without limitation, by allocating financial resources to finance important mineral projects, including rare earths. Such government support is of material importance to the Company and the emerging Brazilian rare earths industry due to, among other factors, the presence of established foreign industry leaders and nations, such as China, which aggressively support their rare earths industry. Any significant change in mining legislation or other changes in Brazil’s current mining environment may slow down or alter our business prospects. Further, countries in which we may wish to sell our mined minerals may impose special taxes, tariffs, or otherwise place limits and controls on consumption of our mined minerals, including tariffs or trade restrictions imposed by the new U.S. presidential administration.
The perception of Brazil by the international community may affect us.
Brazil’s political environment and its environmental policies, in particular the preservation of the Amazon rain forest, are continuously scrutinized by the global media. If Brazil’s political environment, regulations or policies are, or are perceived to be, inadequate, unfavorable or hostile by foreign customers or investors, we may lose the interest of investor groups or potential buyers of our minerals, which will have a negative impact on us.
Exposure to foreign exchange fluctuations and capital controls may adversely affect our costs, earnings and the value of some of our assets.
Our reporting currency is the U.S. dollar; however, we conduct our business in Brazil utilizing the Brazilian real. A large portion of our operating expenses are incurred in Brazilian real. An appreciation of the Brazilian real against the U.S. dollar would increase our costs in U.S. dollar terms. Our consolidated financials are directly impacted by movements in the Brazilian real to U.S. dollar exchange rate.
While not expected, Brazil may choose to adopt measures to restrict the entry of U.S. dollars or the repatriation of capital across borders. These measures would have a number of negative effects on us, reducing the immediately available capital that we could otherwise deploy for investment opportunities or the payment of expenses, and the ability to repatriate any profits.
Common Stock Risks
Our stock price may be volatile, and you could lose all or part of your investment.
The trading price of our common stock may fluctuate substantially and will depend on several factors, including those described in this “Risk Factors” section, many of which are beyond our control and may not be related to our operating performance. These fluctuations could cause you to lose all or part of your investment in our securities. Factors that could cause fluctuations in the trading price of our common stock include:
| ● | results from our exploration and/or project development efforts; | |
| ● | changes to our industry, including demand and regulations; | |
| ● | actions by our competitors or other industry participants; | |
| ● | failure to achieve commercial extraction of mineral deposits from any of our properties; | |
| ● | absence of any reserves contained within our properties, and loss of any funds spent on exploration and evaluation; | |
| ● | our ability to compete successfully against current and future competitors; |
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| ● | competitive pricing pressures; | |
| ● | our ability to obtain working capital financing as required; | |
| ● | additions or departures of key personnel; | |
| ● | sales of our common stock; | |
| ● | our ability to execute our business plan; | |
| ● | operating results that fall below expectations; | |
| ● | any major change in our management; | |
| ● | changes in accounting standards, procedures, guidelines, interpretations or principals; and | |
| ● | economic, geo-political and other external factors, particularly relating to global trade barriers or tariffs and developments within the country of Brazil. |
In addition, the stock market in general has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies. Broad market and industry factors, including actions by and the results of operations of our competitors, as well as general economic, political and market conditions such as recessions or interest rate changes, may seriously affect the market price of our common stock, regardless of our actual operating performance.
Securities class action litigations have often been instituted in the past against companies who have experienced volatility of the market prices of their securities during and following periods of volatility in the overall market. Litigation of this type, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources. Any adverse determination in any such litigation or any amounts paid to settle any such actual or threatened litigation could require us to make significant payments.
We do not intend to pay regular future dividends on our common stock and thus stockholders must look for appreciation of our common stock to realize a gain on their investments.
We have never paid a dividend, and we do not have any plans to pay dividends in the foreseeable future. Our future dividend policy is within the discretion of our Board of Directors and will depend upon various factors, including future earnings, if any, our capital requirements and general financial condition, and other factors. Accordingly, stockholders must look solely to appreciation of our common stock to realize a gain on their investment. This appreciation may not occur or may occur only over a longer timeframe, and is contingent upon, among other factors, our ability to raise additional capital, continue developing and then commercializing our mineral projects.
We will seek to raise additional funds, finance acquisitions, or develop strategic relationships by issuing securities that would dilute your ownership.
Until we have achieved profitability, we intend to finance our operations through the issuance of equity and/or debt securities or other financings. Issuing equity securities will reduce the percentage ownership of our existing stockholders. Furthermore, any newly issued securities could have rights, preferences, and privileges senior to those of our existing common stock. Moreover, any issuances by us of equity securities may be at or below the prevailing market price of our stock and in any event will have a dilutive impact on the ownership interest of existing common stockholders, which could cause the market price of our common stock to decline. We may also raise additional funds through the incurrence of debt or the issuance or sale of other securities or instruments senior to our common stock. The holders of any debt securities or instruments that we may issue could have rights superior to the rights of our common stockholders.
To grow our business and remain competitive, we may also require additional capital from time to time through the issuance of debt or the issuance or sale of other securities or instruments senior to our common stock for our daily operation. Our ability to obtain additional capital is subject to a variety of uncertainties, including:
| ● | our market position and competitiveness in our industry; | |
| ● | our ability to prove reserves in each of our properties and, ultimately, commence commercial extraction on each of our properties; | |
| ● | our future profitability, overall financial condition, results of operations and cash flows; and | |
| ● | economic, political and other conditions in the U.S., Brazil and other international jurisdictions. |
We may be unable to obtain additional capital in a timely manner or on acceptable terms or at all. In addition, our future capital needs and other business reasons could require us to sell additional equity or debt securities or obtain a credit facility. The sale of additional equity or equity-linked securities could dilute our stockholders. The incurrence of indebtedness would result in increased debt service obligations and could result in operating and financing covenants that would restrict our operations or our ability to pay dividends to our stockholders.
Our Series A Preferred Stock has the effect of concentrating voting control over us in Marc Fogassa, our Chief Executive Officer and Chairman, and as a result, he has substantial influence over our company and his interests may not be aligned with the interests of our other stockholders, which may discourage, delay or prevent a change in control of our company, which could deprive our stockholders of an opportunity to receive a premium for their securities.
One share of our Series A Convertible Preferred Stock (“Series A Preferred Stock”) is issued and outstanding, which has been held since 2012 by Mr. Marc Fogassa, our Chief Executive Officer and Chairman. The Certificate of Designations, Preferences and Rights of our 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 matters regardless of the actual number of shares of Series A Preferred Stock then outstanding, and the holders of common stock and any other class or series of capital stock entitled to vote with the common stock being entitled to their proportional share of the remaining 49% of the total votes based on their respective voting power. As a result, Mr. Fogassa has the ability to decisively influence all matters requiring stockholder approval, including decisions regarding mergers, consolidations and the sale of all or substantially all of our assets, election of directors and other significant corporate actions, and holders of our common stock have a limited ability to impact on our operations and activities. This concentration of ownership may discourage, delay or prevent a change in our control, which could deprive our stockholders of an opportunity to receive a premium for their shares as part of any contemplated sale of us and may reduce the price of our common stock.
We are deemed a “controlled company” under the rules of Nasdaq and therefore qualify for exemptions from certain governance requirements under the rules of the Nasdaq.
As a result of his ownership since 2012 of the one issued and outstanding share of our Series A Preferred Stock, Mr. Fogassa, our Chief Executive Officer and Chairman, holds more than 50% of our voting securities, and as such, we are a “controlled company” under the rules of Nasdaq and may elect not to comply with certain corporate governance requirements, including the requirement (i) to have a compensation committee composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; (ii) that our nominations committee be composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities, or if no such committee exists, that our director nominees be selected or recommended by independent directors constituting a majority of the board of director’s independent directors in a vote in which only independent directors participate; and (iii) for an annual performance evaluation of the nominations and compensation committees. We do not take advantage of any of these exemptions but may do so in the future. Our status as a controlled company could make our common stock less attractive to some investors or otherwise harm our stock price.
Sales of a substantial number of shares of our common stock by our stockholders in the public market could cause our stock price to fall.
Sales of a substantial number of shares of our common stock in the public market or the perception that these sales might occur could significantly reduce the market price of our common stock and impair our ability to raise adequate capital through the sale of additional equity securities. We are unable to predict the effect that such sales may have on the prevailing market price of our common stock.
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The costs of operating as a public company are significant, and our management is required to devote substantial time to compliance with our public company responsibilities and corporate governance practices.
As a public company, we incur significant legal, accounting and other expenses that private companies do not incur. The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of the Nasdaq Capital Market, and other applicable securities rules and regulations impose various requirements on public companies. Our management and other personnel will devote a substantial amount of time to compliance with these requirements. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. We cannot predict or estimate the amount of additional costs we will incur as a public company or the specific timing of such costs.
Our internal control over financial reporting may not meet the standards required by Section 404 of the Sarbanes-Oxley Act, and failure to achieve and maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act, could have a material adverse effect on our business and share price.
Our management is required to report on the effectiveness of our internal control over financial reporting. The rules governing the standards that must be met for our management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation.
Although management has determined our internal control over financial reporting is effective as of December 31, 2025, we cannot assure you that there will not be material weaknesses or significant deficiencies in our internal control over financial reporting in the future. Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report on our financial condition, results of operations or cash flows. If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines we have a material weakness or significant deficiency in our internal control over financial reporting once that firm begins our Section 404 reviews, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could decline, and we could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities. Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to capital markets.
Risks Related to World Events
Tariffs 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 or specific or broad trade remedy actions or international agreements may impose additional duties or other restrictions on exports of minerals from Brazil. Any such changes in legislation and government policy may have a material adverse effect on our business. For example, 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. In February 2026, the U.S. Supreme Court struck down certain of the U.S. presidential administration’s tariffs as exceeding the executive’s statutory authority, and it remains unclear how the administration may shift its trade policies in response to the ruling. For example, following the ruling, the U.S. administration immediately imposed a new 10% global tariff under a different statute that permits tariffs up to 15% for 150 days. An escalating global trade war, including between the United States and China, 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.
Natural disasters may adversely affect our business.
Natural disasters, including the emergence of a new pandemic, may adversely affect our business. Such events, including hurricanes, earthquakes, floods, wildfires, and health emergencies, could disrupt our operations or those of our third party suppliers, damage our facilities, or affect our supply chains. For example, in the recent past, the spread of COVID-19 caused public health officials in both Brazil and the U.S. to recommend precautions to mitigate the spread of the virus, especially as to international travel. In addition, certain states and municipalities in both countries enacted quarantine and “shelter-in-place” regulations and at times required non-essential businesses to close. There is no certainty that future natural disasters or a new pandemic will not result in similar restrictions being imposed. It is unclear how such events and any resulting restrictions would contribute to a general slowdown in the global economy or otherwise affect our business.
An escalation of the war in Ukraine and conflicts in the Middle East, coupled with the international policy of the new U.S. presidential administration or the emergence of conflict elsewhere may adversely affect our business.
Global markets have experienced, and may continue to experience, volatility and disruption following the escalation of geopolitical tensions, including the ongoing war in Ukraine, the new U.S. presidential administration’s internal policy agenda, recent conflicts in the Middle East, rising tensions between China and Taiwan, the relationship between China and the United States, and other sources of geopolitical uncertainty and instability. The length and impact of these ongoing military and economic conflicts is highly unpredictable. Such geopolitical events, terrorist or other attacks, wars (or threatened wars) or international hostilities may lead to armed conflict or acts of terrorism in other parts of the world, which in turn may contribute to further economic instability in the global financial markets and international commerce. While much uncertainty remains regarding the global impacts of the war in Ukraine and conflict in the Middle East, it is possible that such tensions could adversely affect our business, financial condition, results of operation and cash flows. Furthermore, it is possible that third parties, such as our customers and suppliers, may be impacted by these conflicts, which could adversely affect our operations. These uncertainties could also adversely affect our ability to obtain additional financing on terms acceptable to us or at all.
Item 1B. Unresolved Staff Comments.
None.
Item 1C. Cybersecurity
We currently manage our cybersecurity risk through practices that are applicable to all users of our information technology and information assets, including our employees and contractors. We notify these users of expectations regarding acceptable use of our information systems and alert them to potential sources of cybersecurity threats. We use a combination of technology and monitoring to prevent security incidents. The technologies we utilize for cybersecurity monitoring across our information technology environment are designed to prevent, detect and minimize cybersecurity attacks, as well as alert management of such attacks.
We implemented and adopted several technologies to increase our cybersecurity defenses, including an Enterprise Resource Planning solution, a data control and backup solution, security in data access control (single sign-on and multi factor authentication), and data encryption. We also have a firewall installed in all our facilities.
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In
the last three years, we have
Item 2. Properties.
Lithium Projects
Our lithium projects are listed in the following table.
| Mineral | Name | Location in Brazil | Aggregate Mineral Rights Area | |||
| Lithium | Minas Gerais Lithium Project | State of Minas Gerais | 468 km2 | |||
| Lithium | Other Brazil Lithium Project | States of Paraíba, Rio Grande do Norte, and Tocantins | 71 km2 |
For additional information about our lithium projects, please see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation—Overview.”
Other Critical Minerals
Our other critical minerals properties are listed in the following table.
| Mineral(s) | Name | Location in Brazil | Aggregate Mineral Rights Area | |||
| Nickel | Nickel Properties | States of Goiás and Piauí | 449 km2 | |||
| Copper | Copper Properties | States of Bahia and Piauí | 251 km2 | |||
| Rare Earths | Rare Earths Properties | States of Bahia, Goiás, and Tocantins | 121 km2 | |||
| Titanium | Titanium Properties | State of Minas Gerais | 69 km2 | |||
| Graphite | Graphite Properties | State of Minas Gerais | 39 km2 |
All the critical mineral properties are held by our wholly owned subsidiary Brazil Minerals Resources Corporation (“BMR”).
On December 19, 2024, we entered into an Option Agreement (the “Option Agreement”) with Atlas Critical Minerals, pursuant to which we sold to Atlas Critical Minerals an option to buy 100% of our equity interests in BMR (the “Option”). As consideration for the Option, Atlas Critical Minerals will issue to us 797,957 shares of its common stock, representing $500,000 divided by a value per share of $0.6266.
The Option is exercisable within 12 months of Atlas Critical Minerals’ filing of a Form F-1 with the SEC, which took place on September 15, 2025. If the Option is exercised, we and Atlas Critical Minerals shall enter into a definitive purchase agreement for the purchase of BMR pursuant to which Atlas Critical Minerals shall pay us total consideration of $8,000,000, which at our discretion shall be in the form of cash, shares of Atlas Critical Minerals’ common stock, or a combination of cash and shares. If Atlas Critical Minerals exercises the Option, in addition to the $8,000,000 consideration, we shall be entitled to a perpetual royalty of one point five percent (1.5%) of the revenues resulting from the mineral rights owned by BMR as of the date of the Option Agreement.
Item 3. Legal Proceedings.
We are not a party to any material legal proceedings.
Item 4. Mine Safety Disclosures.
Not applicable.
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PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market Information and Current Stockholders
Since January 10, 2023, our common stock has been trading on the Nasdaq Capital Market LLC (“Nasdaq”) under the symbol “ATLX.” As of March 3, 2026, there were 117 holders of record of our common stock, which does not include beneficial owners for whom CEDE & Co. or others act as nominees. As of November 19, 2025, we had 22,124 non-objecting beneficial owners as provided to us by Broadridge Financial Solutions.
Dividends
We have not paid any cash dividends since our inception and do not expect to declare any cash dividends in the foreseeable future.
Recent Sales of Unregistered Securities
In addition to the sales of unregistered securities previously disclosed in our Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, we did not consummate any sales of unregistered securities during the fiscal year ended December 31, 2025.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
Neither we nor any affiliated purchaser or anyone acting on our behalf or on behalf of an affiliated purchaser made any purchases of shares of our common stock during the year ended December 31, 2025.
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Item 6. [Reserved]
Not applicable.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation.
The following discussion of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and the notes to those financial statements appearing elsewhere in this Annual Report.
This discussion and analysis below include forward-looking statements that are subject to risks, uncertainties and other factors described in the “Risk Factors” section that could cause actual results could differ materially from those anticipated in these forward- looking statements as a result of various factors. Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the future. We caution you to read the “Forward Looking Statements” section of our Annual Report.
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 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.
However, there can be no assurance that we will have the necessary capital resources to develop such a facility or, if developed, that we will reach the production capacity necessary to commercialize our products and with the quality needed to meet market demand.
All our mineral projects and properties are located in Brazil, a well-established mining jurisdiction. Our mineral rights include approximately:
| ● | 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); | |
| ● | 44,913 hectares (449 km2) for nickel in 29 mineral rights (23 in exploration stage, and 6 in pre-exploration stage); | |
| ● | 25,050 hectares (251 km2) for copper in 13 mineral rights (12 in exploration stage, and 1 in pre-exploration stage); | |
| ● | 12,144 hectares (121 km2) for rare earths in 7 mineral rights, all in exploration stage; | |
| ● | 6,927 hectares (69 km2) for titanium in 5 mineral rights, all in exploration stage; | |
| ● | 3,910 hectares (39 km2) for graphite in 2 mineral rights, all in exploration stage; | |
| ● | 1,030 hectares (10 km2) for gold mineral rights, all in exploration stage. |
We believe that we hold the largest portfolio of exploration properties for lithium and other battery minerals in Brazil among publicly listed companies.
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Operational Update
During the fourth quarter of 2025, we made substantial progress in the procurement process for the project tasks and other contracted work (collectively referred to herein as “work items”) needed for the implementation of the Neves Project. Examples of such work items include assembly of our dense media separation plant and earth works. We have generally received multiple competing bids for each of the relevant work items, including 19 bids for one work item. Our supplier selection criteria are based on technical qualification and experience, and with these conditions met, then best price and terms.
On December 22, 2025, we announced that we had entered the final stage of contracting project management and construction supervision services. This engagement will support the integrated management and oversight of project construction activities. The scope includes planning, coordination, monitoring, and control of all activities required for project execution, ensuring compliance with schedule, cost, scope, quality, safety, and overall performance objectives. Our selection process included extensive due diligence on five firms with proven experience in delivering projects of similar scope and complexity. Multiple technical and commercial interactions were conducted to thoroughly assess and identify the most suitable partner for the Neves Project; evaluation parameters focused on technical excellence, track record in Brazilian mining projects, project management methodology, systems and tools, as well as the qualifications and experience of the proposed technical team.
On January 9, 2026, the Company’s subsidiary Atlas Critical Minerals Corporation (“Atlas Critical Minerals”), commenced trading on the Nasdaq Capital Market under the ticker symbol “ATCX.” Atlas Critical Minerals has projects in rare earths, graphite, uranium, and iron ore. 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.
Since the beginning of 2026, we have received written indications of interest from multiple parties to purchase our future lithium concentrate production. Following a period of lower lithium prices, we have observed increased interest from potential customers in securing long-term supply arrangements. We believe that both the continued global growth in electric vehicle adoption now coupled with demand from energy storage systems for data centers provide a healthy environment for lithium.
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Results of Operations
Fiscal Year Ended December 31, 2025, Compared to Fiscal Year Ended December 31, 2024
After a trial mining period in the second half of 2023, one of our subsidiaries commenced ongoing operations at its quartzite quarry in 2024. Our gross margin of $265,694 was generated from the sales of 551 m3 of unprocessed blocks of quartzite and 905 m2 of processed slabs produced by our subsidiary’s quartzite operation. We generated limited revenues in year ended on December 31, 2025 because we paused production of quartzite blocks and slabs in first half of 2025 to effect modifications to our operations and address certain identified issues, including the adoption of an updated drainage plan for the quarry. We have retained an engineering firm to prepare an updated drainage plan and expect to resume operations during the second half of 2026.
Operating expenses for the year ended December 31, 2025, totaled $31,592,273, compared to operating expenses of $44,123,939 during the year ended December 31, 2024, representing a reduction of 28.4%. The decrease was mostly due to the $16.0 million reduction in stock-based compensation and $3.0 million reduction in exploration costs, offset by the $6.7 million increase in general and administrative expenses, as detailed below:
| ● | An increase in general and administrative expenses of approximately $6.7 million during the period, primarily due to: (i) an increase in payroll expenses of $1.9 million directly related to increase of operational activities related to the preparation for the project implementation; (ii) $3.1 million due to higher investor relations expenses and (iii) $2.1 million due to increased third-party contractor costs as the Company’s activities expanded as a result of the preparation for the project implementation; | |
| ● | A decrease of approximately $16.0 million in stock-based compensation expense compared to the year ended December 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 2024; and | |
| ● | $3.0 million reduction in exploration costs 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. |
Other expenses for the year ended December 31, 2025 totaled $67,875 compared to $1,338,370 during the year ended December 31, 2024, representing a decrease of 94.9%, driven by the derecognition of a $1.3 million asset relating to the premium paid for an option to acquire two mining rights in Governador Valadares, Minas Gerais, and the corresponding recognition of a $1.3 million expense. We decided not to exercise such option and derecognized the amount recorded for the premium occurred because the results of geological studies did not achieve the expected results. The assets subject to the option are unrelated to the Company’s Das Neves Project.
As a result, we incurred a net loss attributable to our stockholders of $28,110,592, or $1.54 per share, for the year ended December 31, 2025, compared to a net loss attributable to our stockholders of $42,241,196, or $2.91 per share, during the year ended December 31, 2024.
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Liquidity and Capital Resources
As of December 31, 2025, we had cash and cash equivalents of $35,935,104 and net working capital of $23,066,924.
Net cash used by operating activities totaled $22,166,692 for the year ended December 31, 2025, compared to net cash used of $18,784,844 during the year ended December 31, 2024, representing an increase in cash used of $3,381,848, or 18.00%. The variation in net cash used by operating activities was mainly due to:
| ● | An increase of approximately $6.7 million in General and administrative expenses due to the growth of our personnel, infrastructure and the costs related to our operational permit relating to our Neves Project as we move towards revenue-generating operations. As a result, we had more expenditures such as employee compensation and the costs of third-party service providers such as technical consultants; and |
| ● | A decrease of approximately $3.0 million in Exploration costs due to the commencement of capitalization of exploration expenses. |
Net cash used in investing activities totaled $8,959,390 for the year ended December 31, 2025, compared to net cash used of $27,344,436 during the year ended December 31, 2024, representing a decrease in cash used in investing activities of $ 18,385,046, or 67.24%. The variation in net cash used in investing activities was mainly due to:
| ● | A decrease of $16.4 million in the payments made in connection with the acquisition of our lithium processing plant ($6.1 million in 2025, compared to $22.4 million in 2024) due to the finalization of the fabrication process in 2025; |
| ● | A decrease of $1.6 million in capitalized exploration costs incurred during the year ended December 31, 2025 as a result of the reduction in the drilling activities in 2025 compared to 2024 ($2.9 million in 2025 and $4.5 million in 2024); and |
| ● | Decrease of $0.4 million in the acquisition of intangible assets represented by the implementation of SAP done in 2024. |
Net cash provided by financing activities totaled $51,523,029 for the year ended December 31, 2025, compared to $32,131,672 during the year ended December 31,2024, representing an increase in cash provided of $19,391,357, or 60.35%. We completed the following financing activities in 2025:
| ● | During the year ended December 31, 2025, we sold (i) 7,627,566 shares under the ATM Agreement for proceeds of $ 41.7 million ($1.3 million net proceeds in 2024), and (ii) 2,500,000 shares to certain institutional investors in a registered direct offering for proceeds of $10 million ($30 million in 2024); and |
| ● | In 2025, net proceeds of $2.5 million were generated from the sale of shares of Atlas Critical Minerals, a consolidated subsidiary of the Company. In 2024, the proceeds from the sale of shares of the subsidiary totaled $1.0 million. |
The consolidated financial statements have been prepared on a going concern basis. We have historically incurred net operating losses and have not yet received material revenues from the sale of products or services. As a result, our primary source of liquidity has been the proceeds from the sale of our equity. As of December 31, 2025, we had cash and cash equivalents of $35,935,104 and net working capital of $23,066,924, compared to cash and cash equivalents $15,537,476 and a working capital of $10,553,780 as of December 31, 2024. We believe our cash on hand will be sufficient to meet our working capital and capital expenditure requirements for a period of at least twelve months. 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 types of processing facilities we would need to install to obtain commercial-ready products, and the ability to attract talent to manage our different areas of endeavor. 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.
We currently have no off-balance sheet arrangements.
Offtake and Sales Agreement from Mitsui
As further described in “Note 7 – Related Party Transactions,” the Company has entered into an Offtake and Sales Agreement with Mitsui pursuant to which Mitsui has agreed to purchase a spot quantity of 15,000 dry metric tons of product and, subject to the satisfaction of certain conditions, to purchase a minimum of 60,000 dry metric tons per year for a period of five years commencing with the first year of such shipments, or until an aggregate of 300,000 dry metric tons has been delivered, if later.
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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 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 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 Polices 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 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.
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.
Exploration Stage Company
The accompanying financial statements have been prepared in accordance with generally accepted accounting principles related to accounting and reporting by exploration stage companies. An exploration stage company is one in which planned principal operations have not commenced or if its operations have commenced, there has been no significant revenues there from.
Trade Receivables
Trade receivables represent amounts to be received from clients due to the sale of quartzite and iron ore products. We recognize a trade receivable following the recognition of revenue when control of a product is transferred to the customer, and we have an unconditional right to receive payment for such product.
The receivable is initially recognized at fair value, which usually corresponds to the price of the transaction (invoice), and such receivable is subsequently assessed to determine the recoverability of the amounts as of each balance sheet date.
Inventories
We value our inventories in accordance with Accounting Standards Codification (“ASC”) 330, Inventory (“ASC 330”), which requires that inventories be valued at the lower of cost or market. The cost of inventories is determined using the weighted average cost method.
Property and Equipment
Property and equipment are stated at cost, net of accumulated depreciation. Major improvements and betterments are capitalized. Maintenance and repairs are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful life. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the statements of operations as other gain or loss, net.
The processing plant and other machinery are depreciated over an estimated useful life of ten years; vehicles are depreciated over an estimated life of five years; and computers and other office equipment are depreciated over an estimated useful life of five years.
Mineral Properties
Costs of exploration, carrying and retaining unproven mineral lease properties are expensed as incurred, up to the stage at which the commercial and economic feasibility of the mineral properties are proved. After the feasibility is determined, exploration costs are capitalized as incurred.
Mineral property acquisition costs, including licenses and lease payments, are capitalized. Although we have taken steps to verify title to mineral properties in which we have an interest, these procedures do not guarantee our rights. Such properties may be subject to prior agreements or transfers and title may be affected by undetected defects.
Impairment losses are recorded on mineral properties used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amount. As of December 31, 2025, and 2024, we did not recognize any impairment losses related to mineral properties held.
Proceeds received on the sale of interests in exploration and evaluation assets are credited to the incurred exploration and evaluation expenditures, with any excess included in operations. Write-downs due to impairment in value are charged to profit or loss.
Mineral properties are amortized throughout the life of the property based on a units-of-production method.
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Impairment of Intangible Assets with Indefinite Useful Lives
We account for intangible assets in accordance with Accounting Standards Codification (“ASC”) 350, Intangibles – Goodwill and Other (“ASC 350”). ASC 350 requires that intangible assets with indefinite useful lives no longer be amortized but instead be evaluated for impairment at least annually. On an annual basis, in the fourth quarter of the fiscal year, we review our intangible assets with indefinite useful lives for impairment by first assessing qualitative factors to determine whether the existence of events or circumstances makes it more-likely-than-not that the fair value of an intangible asset is less than its carrying amount. If it is determined that it is more-likely-than-not that the fair value of an intangible asset is less than its carrying amount, the intangible asset is further tested for impairment by comparing the carrying amount to its estimated fair value using a discounted cash flow. Impairment, if any, is measured as the amount by which an indefinite-lived intangible asset’s carrying amount exceeds its fair value.
Application of impairment tests requires significant management judgment, including the determination of fair value of each indefinite-lived intangible asset. Judgment applied when performing the qualitative analysis includes consideration of macroeconomic, industry and market conditions, overall financial performance of the entity, composition, or strategy changes affecting the recoverability of asset groups. Judgments applied when performing the quantitative analysis include estimating future cash flows, determining appropriate discount rates and making other assumptions. Changes in these judgments, estimates and assumptions could materially affect the determination of fair value for each indefinite-lived intangible asset.
Impairment of Long-Lived Assets
For long-lived assets, such as property and equipment and intangible assets subject to amortization, we continually monitor events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, we assess the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, we recognize an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.
Variable Interest Entities
We determine at the inception of each arrangement whether an entity in which we hold an investment or in which we have other variable interests in is considered a variable interest entity. We consolidate VIEs when we are the primary beneficiary. The primary beneficiary of a VIE is the party that meets both of the following criteria: (1) has the power to make decisions that most significantly affect the economic performance of the VIE; and (2) has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the VIE. Periodically, we assess whether any changes in the interest or relationship with the entity affect the determination of whether the entity is still a VIE and, if so, whether we are the primary beneficiary. If we are not the primary beneficiary in a VIE, we account for the investment under the equity method or cost method in accordance with the applicable GAAP.
We have concluded that Atlas Critical Minerals and its subsidiaries are VIEs in accordance with applicable accounting standards and guidance; and although the operations of Atlas Critical Minerals are independent of ours, because our Chief Executive Officer and Chairman, Mr. Fogassa, is also the controlling shareholder of Atlas Critical Minerals, we may be considered to have power to direct the activities that are most significant to Atlas Critical Minerals. Therefore, we concluded that we are the primary beneficiary of Atlas Critical Minerals.
Stock-Based Compensation
We measure and record stock-based compensation expense in accordance with ASC Topic 718 for share-based payments related to stock options, restricted stock, and performance-based awards granted to certain directors, employees and consultants. ASC 718 requires companies to measure compensation cost for stock-based employee compensation at fair value at the grant date and recognize the expense over the employee’s requisite service period. Under ASC 718, volatility is based on the historical volatility of our stock or the expected volatility of the stock of similar companies. The expected life assumption is primarily based on historical exercise patterns and employee post-vesting termination behavior. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant.
The fair value of stock options and performance awards without a market condition is estimated at the date of grant using the Black-Scholes option-pricing model. The fair value of restricted stock awards and stock options with a market condition is estimated at the date of grant, using the Monte Carlo Simulation model. The fair value of restricted stock awards with a required lock-up period without a market condition is estimated at the date of grant, using the Hull-White Lattice (binomial) model. The Black-Scholes, Monte Carlo Simulation, and Hull-White Lattice valuation models incorporate assumptions as to stock price volatility, the expected life of options or awards, a risk-free interest rate, illiquidity discount, and dividend yield. In valuing our stock options, significant judgment is required in determining the expected volatility of our common stock and the expected life that individuals will hold their stock options prior to exercising. Expected volatility for stock options is based on the historical and implied volatility of our common stock while the volatility for restricted stock awards with a market condition is based on the historical volatility of our own stock and the stock of companies within our defined peer group.
Because changes in the subjective assumptions can materially affect the estimated value of our employee stock options, it is management’s opinion that the valuation models may not provide an accurate measure of the fair value of our stock options, restricted stock and performance-based awards. Although the fair value of stock options and restricted stock awards is determined in accordance with ASC Topic 718, that value may not be indicative of the fair value observed in a willing buyer/willing seller market transaction.
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Foreign Currency
With the exception of Atlas Lítio Brasil Ltda, our foreign subsidiaries use a local currency as the functional currency. Resulting translation gains or losses are recognized as a component of accumulated other comprehensive income. Transaction gains or losses related to balances denominated in a currency other than the functional currency are recognized in the consolidated statements of operations.
Recent Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The amendments in this update require disclosure, in the notes to financial statements, of specified information about certain costs and expenses. The amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. We will analyze the impacts of this update in the upcoming years and anticipate that we will not adopt the update early.
In November 2024, the FASB issued ASU 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments. The Board issued this update to improve the relevance and consistency in application of the induced conversion guidance in Subtopic 470-20, Debt— Debt with Conversion and Other Options. The amendments in this update clarify the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. The amendments in this update are effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted for all entities that have adopted the amendments in Update 2020-06. Management does not expect this new guidance to have any impact on our consolidated financial statements.
In May 2025, the FASB issued ASU 2025-03, Business Combinations and Consolidation — Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity. The amendments in this Update require an entity involved in an acquisition transaction effected primarily by exchanging equity interests when the legal acquiree is a VIE that meets the definition of a business to consider the factors in paragraphs 805-10-55-12 through 55-15 to determine which entity is the accounting acquirer. The amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. The Company will analyze the impacts of this update in the upcoming years and anticipate that it will not adopt the update early.
In May 2025, the FASB issued ASU 2025-04, Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer. The amendments in this update revise the master glossary definition of the term performance condition for share-based consideration payable to a customer. The revised definition incorporates conditions (such as vesting conditions) that are based on the volume or monetary amount of a customer’s purchases (or potential purchases) of goods or services from the grantor (including over a specified period of time). The revised definition also incorporates performance targets based on purchases made by other parties that purchase the grantor’s goods or services from the grantor’s customers. The revised definition of the term performance condition cannot be applied by analogy to awards granted to employees and nonemployees in exchange for goods or services to be used or consumed in the grantor’s own operations. The amendments in this update are effective for all entities for annual reporting periods (including interim reporting periods within annual reporting periods) beginning after December 15, 2026. Early adoption is permitted for all entities. Management does not expect this new guidance to have any impacts on the Company’s consolidated financial statements.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments in this update provide (1) all entities with a practical expedient and (2) entities other than public business entities with an accounting policy election when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606, as follows:
1. Practical expedient. In developing reasonable and supportable forecasts as part of estimating expected credit losses, all entities may elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset.
2. Accounting policy election. An entity other than a public business entity that elects the practical expedient is permitted to make an accounting policy election to consider collection activity after the balance sheet date when estimating expected credit losses.
The amendments will be effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Management does not expect this new guidance to have material impacts on the Company’s consolidated financial statements.
In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606) — Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract. The amendments in this update exclude from derivative accounting nonexchange-traded contracts with underlying that are based on operations or activities specific to one of the parties to the contract. However, this scope exception does not apply to (1) variables based on a market rate, market price, or market index, (2) variables based on the price or performance of a financial asset or financial liability of one of the parties to the contract, (3) contracts (or features) involving the issuer’s own equity that are evaluated under the guidance in Subtopic 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, and (4) call options and put options on debt instruments. The amendments in this update are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted. Management does not expect this new guidance to have material impacts on the Company’s consolidated financial statements.
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In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815) — Hedge Accounting Improvements. The amendments in this update clarify certain aspects of the guidance on hedge accounting and to address several incremental hedge accounting issues arising from the global reference rate reform initiative. For public business entities, the amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim periods within those annual reporting periods. Management does not expect this new guidance to have material impacts on the Company’s consolidated financial statements.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270) — Narrow-Scope Improvements. The amendments in this update clarify interim disclosure requirements and the applicability of Topic 270. The amendments in this update are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. The Company will analyze the impacts of this Update in the upcoming years and anticipate that it will not adopt the update early.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
The information to be reported under this Item is not required of smaller reporting companies.
Item 8. Financial Statements and Supplementary Data.
Our financial statements, including the notes thereto, together with the report from our independent registered public accounting firm are presented beginning at page F-1.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
(a) Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and our principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of December 31, 2025. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures, which are designed to provide 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 to allow timely decisions regarding required disclosure, were effective as of the end of the period covered by this report.
| 32 |
(b) Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting.
Our internal control over financial reporting is a process designed by, or under the supervision of, our principal executive and financial officer and effected by our Board of Directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States. Our internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the consolidated financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Our management performed an assessment of the effectiveness of our internal control over financial reporting at December 31, 2025, utilizing the criteria described in the “Internal Control — Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. The objective of this assessment was to determine whether our internal control over financial reporting was effective as of December 31, 2025.
Based on the management’s assessment, we have concluded that our internal control over financial reporting was effective as of December 31, 2025.
No Attestation Report
This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Since we are a smaller reporting company, our report is not subject to attestation by our registered public accounting firm pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002. As a result, this Annual Report contains only our report on internal controls.
(c) Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting during the year ended December 31, 2025, which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
(d) Limitations of the Effectiveness of Internal Controls
The effectiveness of our system of internal control over financial reporting is subject to certain limitations, including the exercise of judgment in designing, implementing and evaluating the control system, the assumptions used in identifying the likelihood of future events, and the inability to completely eliminate fraud and misconduct. As a result, there can be no assurance that our internal control over financial reporting will detect all errors or fraud. However, our control systems have been designed to provide reasonable assurance of achieving their objectives.
Item 9B. Other Information.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
| 33 |
PART III
Item 10. Directors, Executive Officers and Corporate Governance.
Information about our executive officers and directors, including our Audit Committee and Audit Committee financial experts and the procedures by which shareholders can recommend director nominees, and our executive officers will be in our definitive Proxy Statement for our 2026 Annual Meeting of Shareholders, which will be filed within 120 days of the end of 2025 (2026 Proxy Statement) and is incorporated in this Form 10-K by reference.
Code of Business Conduct and Ethics
We adopted a written code of business conduct and ethics that applies to our directors, officers, and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions and agents and representatives, including consultants. We intend to disclose future amendments to such the code, or any waivers of its requirements, applicable to any principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions or our directors on our website. The code can be found on our website at www.atlas-lithium.com/our-team/corporate-governance/.
Insider Trading Policy
We maintain an Insider Trading Policy that applies to all of our directors, officers, employees and related individuals, which we believe is reasonably designed to promote compliance with applicable insider trading laws, rules and regulations and listing standards. The Insider Trading Policy is filed as Exhibit 19.1 to this annual report on Form 10-K.
Item 11. Executive Compensation.
Information relating to our executive officer and director compensation and the compensation committee of the Board will be in the 2026 Proxy Statement and is incorporated in this Form 10-K by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
Information relating to security ownership of certain beneficial owners of our common stock, the security ownership of our management and our equity compensation plans will be in the 2026 Proxy Statement and is incorporated in this Form 10-K by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Information regarding certain relationships and related transactions and director independence will be in the 2026 Proxy Statement and is incorporated in this Form 10-K by reference.
Item 14. Principal Accounting Fees and Services.
Information regarding principal accountant fees and services will be in the 2026 Proxy Statement and is incorporated in this Form 10-K by reference.
| 34 |
PART IV
Item 15. Exhibits, Financial Statement Schedules
| (a) | Documents filed as part of this report. | |
| (i) | Financial Statements - see Item 8. Financial Statements and Supplementary Data | |
| (ii) | Financial Statement Schedules – None | |
| (Financial statement schedules have been omitted either because they are not applicable, not required, or the information required to be set forth therein is included in the financial statements or notes thereto.) | ||
| (iii) | Report of Independent Registered Public Accounting Firm. | |
| (iv) | Notes to Financial Statements. | |
| (b) | Exhibits | |
| The exhibits listed on the accompanying Exhibit Index are filed as part of this Annual Report. | ||
| 35 |
ATLAS LITHIUM CORPORATION.
TABLE OF CONTENTS
DECEMBER 31, 2025
| F-1 |
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Atlas Lithium Corporation (ATLX)
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Atlas Lithium Corporation (ATLX) and its subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related statements of operations and comprehensive loss, changes in stockholders’ equity, and cash flows for each of the two years in the period ended December 31, 2025 and 2024, and the related notes (collectively referred to as the “Consolidated financial statements”). In our opinion, based on our audit, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024 and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025 and 2024 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.
For,
We have served as the Company’s auditor since 2024
Place:
Date: March 4, 2026
| F-2 |
ATLAS LITHIUM CORPORATION
CONSOLIDATED BALANCE SHEETS
December 31, 2025 and December 31, 2024
| December 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Trade receivable | ||||||||
| Inventories | ||||||||
| Taxes recoverable | ||||||||
| Derivative assets | ||||||||
| Prepaid and other current assets | ||||||||
| Total current assets | ||||||||
| Taxes recoverable | ||||||||
| Property and equipment, net | ||||||||
| Intangible assets, net | ||||||||
| Right of use assets - operating leases, net | ||||||||
| Other assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Derivative liabilities | ||||||||
| Convertible Debt | ||||||||
| Operating lease liabilities | ||||||||
| Other current liabilities | ||||||||
| Total current liabilities | ||||||||
| Convertible Debt | ||||||||
| Operating lease liabilities | ||||||||
| Deferred consideration from royalties sold | ||||||||
| Other noncurrent liabilities | ||||||||
| Total liabilities | ||||||||
| Stockholders’ Equity: | ||||||||
| Series A preferred stock, $ par value. share authorized; share issued and outstanding as of December 31, 2025 and December 31, 2024 | ||||||||
| Common stock, $ par value. and shares authorized as of December 31, 2025 and December 31, 2024, respectively and and shares issued and outstanding as of December 31, 2025 and December 31, 2024, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Cumulative Adjustment of the Valuation of Fin. Instruments | ( | ) | ||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Atlas Lithium Co. stockholders’ equity | ||||||||
| Non-controlling interest | ||||||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of the consolidated financial statements.
| F-3 |
ATLAS LITHIUM CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
For the Twelve Months Ended December 31, 2025 and 2024
| Twelve months ending December 31 | ||||||||
| 2025 | 2024 | |||||||
| Gross revenues | $ | $ | ||||||
| Sales deductions | $ | ( | ) | $ | ( | |||
| Net revenue | $ | $ | ||||||
| Cost of revenue | $ | ( | ) | $ | ( | |||
| Gross profit | $ | ( | ) | $ | ||||
| Operating expenses | ||||||||
| General and administrative expenses | ||||||||
| Stock-based compensation | ||||||||
| Exploration | ||||||||
| Other operating expenses | ||||||||
| Total operating expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other expense (income) | ||||||||
| Other expense (income) | ||||||||
| Fair value adjustments, net (income) | ( | ) | ( | ) | ||||
| Finance costs (revenue) | ( | ) | ||||||
| Total other expense | ) | |||||||
| Loss before 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 | $ | ( | ) | $ | ( | ) | ||
| Foreign currency translation adjustment | ( | ) | ||||||
| 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 consolidated financial statements.
| F-4 |
ATLAS LITHIUM CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
For the Twelve Months Ended December 31, 2025 and 2024
| 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, 2023 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | | |||||||||||||||||||||||||||
| Issuance of common stock in connection with sales made under private offerings | - | |||||||||||||||||||||||||||||||||||||||
| Issuance of common stock in exchange for consulting, professional and other services | - | |||||||||||||||||||||||||||||||||||||||
| 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, December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||||||||||
| 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 public 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, December 31, 2025 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||||||||||
The accompanying notes are an integral part of the consolidated financial statements.
| F-5 |
ATLAS LITHIUM CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Twelve Months Ended December 31, 2025 and 2024
| Twelve months ended | Twelve months ended | |||||||
| December 2025 | December 2024 | |||||||
| Cash flows from operating activities of continuing operations: | ||||||||
| Net loss | $ | ( | ) | ( | ) | |||
| Adjustments to reconcile net loss to cash used in operating activities: | ||||||||
| Stock-based compensation and services | ||||||||
| Depreciation and amortization | ||||||||
| Lease expenses | ||||||||
| Interest expense | ||||||||
| Derivative liabilities | ||||||||
| Fair value adjustments | ( | ) | ( | ) | ||||
| Write off property and equipment | ||||||||
| Other non-cash expenses | ( | ) | ( | ) | ||||
| Gain/loss on FOREX transactions | ||||||||
| Unwinding of non-current liabilities | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Inventories and trade receivable | ( | ) | ||||||
| Taxes recoverable | ( | ) | ||||||
| Deposits and advances | ( | ) | ( | ) | ||||
| Accounts payable | ( | ) | ||||||
| Other noncurrent liabilities | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Acquisition of capital assets | ( | ) | ( | ) | ||||
| Capitalized Exploration costs | ( | ) | ( | ) | ||||
| Increase in intangible assets | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Net proceeds from sale of common stock | ||||||||
| Net proceeds from sale of common stock of subsidiaries | ||||||||
| Leases payments | ( | ) | ( | ) | ||||
| Cash used in payment of debt | ( | ) | ( | ) | ||||
| Net cash provided by financing activities | ||||||||
| Effect of exchange rates on cash and cash equivalents | ( | ) | ||||||
| Net increase (decrease) in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents at beginning of period | ||||||||
| Cash and cash equivalents at end of period | $ | |||||||
The accompanying notes are an integral part of the consolidated financial statements.
| F-6 |
ATLAS LITHIUM CORPORATION
NOTES TO THE 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.
Segment reporting
The Company has one reportable segment: mining. The mining segment derives revenue in Brazil by mining, beneficiating and selling material mined from the Company’s several mining rights. Currently the Company generates revenue solely from two operating projects: Quartzite and Iron Ore. The other mining projects are in exploration phase.
The accounting policies of the mining segment are the same as those described in the summary of significant accounting policies.
The chief operating decision maker (“CODM”) of the mining segment is the Company’s chief executive officer. The CODM regularly reviews the revenue, significant expenses categories, including exploration and evaluation costs, and 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 December 31, 2025, were $
All of the Company’s revenue and long-lived assets are located in Brazil. For the year ended December 31, 2025, the Company had four customers accounting for more than 10% of the Company’s revenue each (the four customers collectively represented 88% of revenue).
Basis of Presentation and Principles of Consolidation
The
consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States
of America (“U.S. GAAP”) and are expressed in United States dollars. For the years ended December 31, 2025 and 2024, the
consolidated financial statements include the accounts of the Company; (i) its
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
We have implemented all new accounting pronouncements that are in effect and that may impact our financial statements and do not believe that there are any other new pronouncements that have been issued that might have a material impact on our financial position or results of operations except as noted below:
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The amendments in this update require disclosure, in the notes to financial statements, of specified information about certain costs and expenses. The amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. We will analyze the impacts of this update in the upcoming years, and we do not anticipate adopting the update early.
In November 2024, the FASB issued ASU 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments. FASB issued this update to improve the relevance and consistency in application of the induced conversion guidance in Subtopic 470-20, Debt— Debt with Conversion and Other Options. The amendments in this update clarify the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. The amendments in this update are effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted for all entities that have adopted the amendments in Update 2020-06. Management does not expect this new guidance to have any impact on our consolidated financial statements.
In May 2025, the FASB issued ASU 2025-03, Business Combinations and Consolidation — Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity. The amendments in this update require an entity involved in an acquisition transaction effected primarily by exchanging equity interests when the legal acquiree is a VIE that meets the definition of a business to consider the factors in paragraphs 805-10-55-12 through 55-15 to determine which entity is the accounting acquirer. The amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. The Company will analyze the impacts of this update in the upcoming years and anticipate that it will not adopt the Update early.
In May 2025, the FASB issued ASU 2025-04, Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer. The amendments in this update revise the Master Glossary definition of the term performance condition for share-based consideration payable to a customer. The revised definition incorporates conditions (such as vesting conditions) that are based on the volume or monetary amount of a customer’s purchases (or potential purchases) of goods or services from the grantor (including over a specified period of time). The revised definition also incorporates performance targets based on purchases made by other parties that purchase the grantor’s goods or services from the grantor’s customers. The revised definition of the term performance condition cannot be applied by analogy to awards granted to employees and nonemployees in exchange for goods or services to be used or consumed in the grantor’s own operations. The amendments in this update are effective for all entities for annual reporting periods (including interim reporting periods within annual reporting periods) beginning after December 15, 2026. Early adoption is permitted for all entities. Management does not expect this new guidance to have any impacts on the Company’s consolidated financial statements.
| F-7 |
In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments in this update provide (1) all entities with a practical expedient and (2) entities other than public business entities with an accounting policy election when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606, as follows:
1. Practical expedient. In developing reasonable and supportable forecasts as part of estimating expected credit losses, all entities may elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset.
2. Accounting policy election. An entity other than a public business entity that elects the practical expedient is permitted to make an accounting policy election to consider collection activity after the balance sheet date when estimating expected credit losses.
The amendments will be effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Management does not expect this new guidance to have material impacts on the Company’s consolidated financial statements.
In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606) — Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract. The amendments in this update exclude from derivative accounting nonexchange-traded contracts with underlying that are based on operations or activities specific to one of the parties to the contract. However, this scope exception does not apply to (1) variables based on a market rate, market price, or market index, (2) variables based on the price or performance of a financial asset or financial liability of one of the parties to the contract, (3) contracts (or features) involving the issuer’s own equity that are evaluated under the guidance in Subtopic 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, and (4) call options and put options on debt instruments. The amendments in this update are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted. Management does not expect this new guidance to have material impacts on the Company’s consolidated financial statements.
In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815) — Hedge Accounting Improvements. The amendments in this update clarify certain aspects of the guidance on hedge accounting and to address several incremental hedge accounting issues arising from the global reference rate reform initiative. For public business entities, the amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim periods within those annual reporting periods. Management does not expect this new guidance to have material impacts on the Company’s consolidated financial statements.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270) — Narrow-Scope Improvements. The amendments in this update clarify interim disclosure requirements and the applicability of Topic 270. The amendments in this update are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. The Company will analyze the impacts of this update in the upcoming years and anticipate that it will not adopt the update early.
| F-8 |
Fair Value of Financial Instruments
We follow the guidance of Accounting Standards Codification (“ASC”) Topic 820 – Fair Value Measurement and Disclosure. Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of us. Unobservable inputs are inputs that reflect our assumptions about the factors market participants would use in valuing the asset or liability. The guidance establishes three levels of inputs that may be used to measure fair value:
Level 1. Observable inputs such as quoted prices in active markets.
Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
As of December 31, 2025, and 2024, our derivative liabilities were considered a level 2 liability. See Note 2 for a discussion regarding the determination of the fair market value. We do not have any level 3 assets or liabilities.
Our financial instruments consist of cash and cash equivalents, accounts receivable, taxes recoverable, prepaid and other current assets, accounts payable, debt, related party notes and other payables, derivative instruments, other noncurrent liabilities and accrued expenses. The carrying amount of these financial instruments approximates fair value due to either length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these consolidated financial statements.
Cash and Cash Equivalents
We
consider all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents to the extent that the
funds are not being held for investment purposes. Our bank accounts are deposited in FDIC insured institutions. Funds held in U.S. banks
are insured up to $
Trade Receivable
Trade receivable are customer obligations due under normal trade terms which are recorded at net realizable value. We establish an allowance for doubtful accounts based on management’s assessment of the collectability of trade receivables. A considerable amount of judgment is required in assessing the amount of the allowance. We make judgments about the creditworthiness of each customer based on ongoing credit evaluations and monitor current economic trends that might impact the level of credit losses in the future. If the financial condition of the customers were to deteriorate, resulting in their inability to make payments, a specific allowance will be required.
Recovery of bad debt amounts previously written off is recorded as a reduction of bad debt expense in the period the payment is collected. If our actual collection experience changes, revisions to our allowance may be required. After all attempts to collect a receivable have failed, the receivable is written off against the allowance.
Inventories
We value our inventories in accordance with ASC 330 - Inventory, which requires that inventories be valued at the lower of cost or market. The cost of inventories is determined using the weighted average cost method.
Taxes Recoverable
We record a receivable for value added taxes recoverable from Brazilian authorities on goods and services purchased by our Brazilian subsidiaries. These taxes are recoverable through various methods, including via cash refund or as a credit against payroll, supplier withholding taxes, or other taxes payable.
Property and Equipment
Property and equipment are stated at cost, net of accumulated depreciation. Major improvements and betterments are capitalized. Maintenance and repairs are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful life. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the statements of operations as other gain or loss, net.
| F-9 |
The
processing plant and other machinery are depreciated over an estimated useful life of
Mineral Properties and Mineral Rights
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.
Proceeds received on the sale of interests in exploration and evaluation assets are credited to the incurred exploration and evaluation expenditures, with any excess included in operations. Write-downs due to impairment in value are charged to profit or loss.
Impairment losses are recorded on mineral properties used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amount. As of December 31, 2025, and 2024, we did not recognize any impairment losses related to mineral properties held.
Mineral properties are amortized throughout the life of the property based on an units-of-production method.
Intangible Assets
For intangible assets purchased in a business combination, the estimated fair values of the assets received are used to establish their recorded values. For intangible assets acquired in a non-monetary exchange, the estimated fair values of the assets transferred (or the estimated fair values of the assets received, if more clearly evident) are used to establish their recorded values, unless the values of neither the assets received nor the assets transferred are determinable within reasonable limits, in which case the assets received are measured based on the carrying values of the assets transferred. Valuation techniques consistent with the market approach, income approach and/or cost approach are used to measure fair value. Intangible assets consist of software acquired.
Impairment of Intangible Assets with Indefinite Useful Lives
We account for intangible assets in accordance with Accounting Standards Codification (“ASC”) 350, Intangibles – Goodwill and Other (“ASC 350”). ASC 350 requires that intangible assets with indefinite useful lives no longer be amortized but instead be evaluated for impairment at least annually. On an annual basis, in the fourth quarter of the fiscal year, management reviews intangible assets with indefinite useful lives for impairment by first assessing qualitative factors to determine whether the existence of events or circumstances makes it more-likely-than-not that the fair value of an intangible asset is less than its carrying amount. If it is determined that it is more-likely-than-not that the fair value of an intangible asset is less than its carrying amount, the intangible asset is further tested for impairment by comparing the carrying amount to its estimated fair value using a discounted cash flow. Impairment, if any, is measured as the amount by which an indefinite-lived intangible asset’s carrying amount exceeds its fair value.
Application of impairment tests requires significant management judgment, including the determination of fair value of each indefinite-lived intangible asset. Judgment applied when performing the qualitative analysis includes consideration of macroeconomic, industry and market conditions, overall financial performance of the entity, composition, or strategy changes affecting the recoverability of asset groups. Judgments applied when performing the quantitative analysis include estimating future cash flows, determining appropriate discount rates and making other assumptions. Changes in these judgments, estimates and assumptions could materially affect the determination of fair value for each indefinite-lived intangible asset.
| F-10 |
Impairment of Long-Lived Assets
For long-lived assets, such as property and equipment and intangible assets subject to amortization, we continually monitor events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, we assess the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, we recognize an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.
Variable Interest Entities
We determine at the inception of each arrangement whether an entity in which we hold an investment or in which we have other variable interests in is considered a variable interest entity. We consolidate VIEs when we are the primary beneficiary. The primary beneficiary of a VIE is the party that meets both of the following criteria: (1) has the power to make decisions that most significantly affect the economic performance of the VIE; and (2) has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the VIE. Periodically, we assess whether any changes in the interest or relationship with the entity affect the determination of whether the entity is still a VIE and, if so, whether we are the primary beneficiary. If we are not the primary beneficiary in a VIE, we account for the investment under the equity method or cost method in accordance with the applicable GAAP.
We have concluded that Atlas Critical Minerals and its subsidiaries are VIEs in accordance with applicable accounting standards and guidance; and although the operations of Atlas Critical Minerals are independent of us, through governance rights, we have the power to direct the activities that are most significant to Atlas Critical Minerals. Therefore, we concluded that we are the primary beneficiary of Atlas Critical Minerals.
Revenue Recognition
We recognize revenue under ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). The core principle of the new revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:
| ● | Step 1: Identify the contract with the customer | |
| ● | Step 2: Identify the performance obligations in the contract | |
| ● | Step 3: Determine the transaction price |
| F-11 |
| ● | Step 4: Allocate the transaction price to the performance obligations in the contract | |
| ● | Step 5: Recognize revenue when the company satisfies a performance obligation |
In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met:
| ● | The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer | |
| ● | The entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct). |
The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all of the following:
| ● | Variable consideration | |
| ● | Constraining estimates of variable consideration | |
| ● | The existence of a significant financing component in the contract | |
| ● | Non-cash consideration | |
| ● | Consideration payable to a customer |
Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.
The transaction price is allocated to each performance obligation on a relatively standalone selling price basis.
The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate.
| F-12 |
Costs of Goods Sold
Included within costs of goods sold are costs of production such as diesel fuel, labor, and transportation.
Stock-Based Compensation
We measure and record stock-based compensation expenses in accordance with ASC Topic 718 for share-based payments related to stock options, restricted stock, and performance-based awards granted to certain directors, employees and consultants. ASC 718 requires companies to measure compensation cost for stock-based employee compensation at fair value at the grant date and recognize the expense over the employee’s requisite service period. Under ASC 718, volatility is based on the historical volatility of our stock or the expected volatility of the stock of similar companies. The expected life assumption is primarily based on historical exercise patterns and employee post-vesting termination behavior. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant.
The fair value of stock options and performance awards without a market condition is estimated, at the date of grant, using the Black-Scholes option-pricing model. The fair value of restricted stock awards and stock options with a market condition is estimated, at the date of grant, using the Monte Carlo Simulation model. The fair value of restricted stock awards with a required lock-up period without a market condition is estimated at the date of grant, using the Hull-White Lattice (binomial) model. The Black-Scholes, Monte Carlo Simulation, and Hull-White Lattice valuation models incorporate assumptions as to stock price volatility, the expected life of options or awards, a risk-free interest rate, illiquidity discount, and dividend yield. In valuing our stock options, significant judgment is required in determining the expected volatility of our common stock and the expected life that individuals will hold their stock options prior to exercising. Expected volatility for stock options is based on the historical and implied volatility of our common stock while the volatility for restricted stock awards with a market condition is based on the historical volatility of our own stock and the stock of companies within our defined peer group.
Because changes in the subjective assumptions can materially affect the estimated value of our employee stock options, it is management’s opinion that the valuation models may not provide an accurate measure of the fair value of our stock options, restricted stock and performance-based awards. Although the fair value of stock options and restricted stock awards is determined in accordance with ASC Topic 718, that value may not be indicative of the fair value observed in a willing buyer/willing seller market transaction.
Debt
In accordance with ASC 470, Debt (“ASC 470”) we record our Convertible Notes at the aggregate principal amount, less discount. We amortize the debt discount over the life of the convertible notes as an additional non-cash interest expense utilizing the effective interest method. Refer to Note 2 for additional information.
Derivative Instruments
We evaluate our convertible debt, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with Topic 480 of the FASB ASC and Topic 815 of the FASB Accounting Standards Codification. The result of this accounting treatment is that the fair value of the embedded derivative, if required to be bifurcated, is marked-to-market at each balance sheet date and recorded as a liability. The change in fair value is recorded in the Statement of Operations as a component of other income or expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity.
| F-13 |
In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument.
The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities will be classified in the balance sheet as current or non-current based on whether net-cash settlement of the derivative instrument is expected within 12 months of the balance sheet date.
Foreign Currency
With the exception of Atlas Litio Brasil Ltda, our foreign subsidiaries use a local currency as the functional currency. Resulting translation gains or losses are recognized as a component of accumulated other comprehensive income. Transaction gains or losses related to balances denominated in a currency other than the functional currency are recognized in the consolidated statements of operations.
Income Taxes
We account for income taxes in accordance with ASC Topic 740, Income Taxes. ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. As of December 31, 2025, and 2024, our deferred tax assets had a full valuation allowance.
Under
ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained
in a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is
On
December 22, 2017, the United States enacted the Tax Cuts and Jobs Act (“TCJA”), which instituted fundamental changes to
the taxation of multinational corporations, including a reduction the U.S. corporate income tax rate to
The TCJA also requires a one-time transition tax on the mandatory deemed repatriation of the cumulative earnings of certain of our foreign subsidiaries as of December 31, 2017. To determine the amount of this transition tax, we must determine the amount of earnings generated since inception by the relevant foreign subsidiaries, as well as the amount of non-U.S. income taxes paid on such earnings, in addition to potentially other factors. We believe that no such tax will be due since our Brazilian subsidiaries have, when required, paid taxes locally and that they have incurred a cumulative operating deficit since inception.
| F-14 |
We compute loss per share in accordance with ASC Topic 260, Earnings per Share, which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period.
Other Comprehensive Income
Other comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources, other than net income and including foreign currency translation adjustments.
Leases
Contractual arrangements are assessed at inception to determine if they represent or contain a lease. Right-of-use (“ROU”) assets related to operating leases are separately reported in the Consolidated Balance Sheets. Separate current and non-current liabilities for operating and finance leases are reported on the Consolidated Balance Sheets.
Operating and finance lease 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 incremental borrowing rate is derived from information available at the lease commencement date and represents the rate of interest that we would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. 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.
NOTE 2 – COMPOSITION OF CERTAIN FINANCIAL STATEMENT ITEMS
Property and Equipment
The following table sets forth the components of our property and equipment as of December 31, 2025, and 2024:
| December 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 | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||
| Machinery and equipment | ( | ) | ( | ) | ||||||||||||||||||||
| Facilities | ( | ) | ( | ) | ||||||||||||||||||||
| Land | ||||||||||||||||||||||||
| Prepaid Assets (CIP) | ||||||||||||||||||||||||
| Mining rights | ( | ) | ||||||||||||||||||||||
| Exploration costs | ||||||||||||||||||||||||
| Total fixed assets | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||
| F-15 |
For
the years ended December 31, 2025, and 2024, we recorded depreciation expense of $
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 Liabilities
December 31, 2025 | December 31, 2024 | |||||||
| Trade payables | $ | $ | ||||||
| Payroll and social charges | ||||||||
| Taxes payable | ||||||||
| Total | $ | $ | ||||||
Leases
Finance Leases
For the reporting period ended December 31, 2025 and 2024, 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
| Lease liabilities on January 1, 2025 | $ | |||
| Additions | $ | |||
| Accretion | $ | |||
| Lease payments | $ | ( | ) | |
| Foreign exchange | ||||
| Lease liabilities on December 31, 2025 | $ | |||
| Current portion | $ | |||
| Non-current portion | $ |
The maturity of the lease liabilities (contractual undiscounted cash flows) is presented in the table below:
| Less than one year | $ | |||
| Year 2 | $ | |||
| Year 3 | $ | |||
| Year 4 | $ | |||
| Year 5 | $ | |||
| Total contractual undiscounted cash flows | $ |
| F-16 |
Convertible Debt
| December
31, 2025 | December
31, 2024 | |||||||
| Due to Nanyang Investment Management Pte Ltd | ||||||||
| Due to Jaeger Investments Pty Ltd | ||||||||
| Due to Modha Reena Bhasker | ||||||||
| Due to Clipper Group Limited | ||||||||
| Total convertible debt | $ | $ | ||||||
| Current portion | $ | $ | ||||||
| Non-current portion | $ | $ | ||||||
On
November 7, 2023, we entered into a convertible note purchase agreement (“November 7, 2023, Convertible Note Agreement”)
with 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 our 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 our common stock at the Conversion Price up until the maturity date; and |
| - | Conversion
price: US$ |
| - | Redemption
right: we retain the right to redeem the convertible notes if and when |
On
November 7, 2023, we issued $
Derivative Liabilities
| December 31, 2025 | December 31, 2024 | |||||||
| Derivative assets | ||||||||
| Derivative assets - Non-Deliverable Forward | $ | $ | ||||||
| Total derivative assets | ||||||||
| Derivative liabilities | ||||||||
| Derivative liability – conversion feature on the convertible debt | ||||||||
| Derivative liability – restricted stock awards | ||||||||
| Derivative liability - Non-Deliverable Forward | ||||||||
| Total derivative liabilities | $ | $ | ||||||
a) Derivative liability – embedded conversion feature on convertible debt
On November 7, 2023, we issued convertible promissory notes to Martin Rowley and other investors as further disclosed in Note 2. 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 statement of financial position. The derivative liability is measured at fair value through profit or loss.
| F-17 |
On
December 31, 2024, the fair value of the embedded conversion feature was determined to be $
| Value cap | Value floor | |||||||
| Measurement date | December 31, 2024 | December 31, 2024 | ||||||
| Number of options | ||||||||
| Stock price at fair value measurement date | $ | $ | ||||||
| Exercise price | $ | $ | ||||||
| Expected volatility | % | % | ||||||
| Risk-free interest rate | % | % | ||||||
| Dividend yield | % | % | ||||||
| Expected term (years) | ||||||||
At
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) | ||||||||
In the Black-Scholes collar option pricing models, the expected volatilities were based on historical volatilities of our and our peers’ securities, 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 year ended December 31, 2025, we recognized a $
b) Derivative liability – restricted stock unit (“RSU”) awards
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 December 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 % 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 we achieve a $ million market capitalization |
| - | Tranche 4: when we achieve a $ million market capitalization |
| - | Tranche 5: when we achieve a $ million market capitalization |
| - | Tranche 6: when we achieve a $ million market capitalization |
| - | Tranche 7: when we achieve 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.
| F-18 |
As
of September 30, 2023, the grant date fair value of these awards was $
As at December 31, 2025, Tranche 3, Tranche 4, Tranche 5, Tranche 6 and Tranche 7 remain outstanding and unvested, and the total fair value of these restricted stock awards outstanding was $, as measured using a Monte Carlo Simulation with the following ranges of assumptions: our common stock price on the December 31, 2025 measurement date, expected dividend yield of %, expected volatility of %, risk-free interest rate between a range of %, and an expected term . The expected volatilities were based on historical volatilities of the securities of the Company and of our 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 Litio, a subsidiary of Atlas Lithium, is exposed to foreign-currency exchange-rate fluctuations in the normal course of business considering that portion of expenses are in Brazilian reais (BRL). To mitigate this exposure, the subsidiary 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 the subsidiary nor Atlas Lithium engages in speculative transactions. Additionally, these contracts do not contain any credit-risk-related contingent features.
As of December 31, 2025, the fair value of outstanding NDF contracts was recorded as Derivative Assets on the balance sheet.
For the year ended December 31, 2025:
| ● | Unrealized
gains/losses from NDF contracts recognized in Other Comprehensive Income (OCI): $ | |
| ● | Amount
reclassified into Finance Costs (Revenue): $ |
The following table summarizes the non-deliverable forward foreign exchange contracts that remain open as of December 31, 2025:
| Subsidiary | Dates Entered into | Derivative Financial Instrument | Total Notional Amounts (USD) | FX rate (BRL/USD) | Total Notional Amounts (BRL) | Settlement Dates (Range) | ||||||||||||
| $ | ||||||||||||||||||
| $ | ||||||||||||||||||
| F-19 |
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 $
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 costs as of December 31, 2025, and 2024 amounted to $
NOTE 5 – STOCKHOLDERS’ EQUITY
Authorized Stock and Amendments
As of December 31, 2024, and December 31, 2025, we 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 shares of our common stock
through Wainwright, acting as agent. The issuance and sale of our common stock under the ATM Agreement were made pursuant to a prospectus
supplement, dated November 22, 2024, to our registration statement on Form S-3, filed with the SEC on August 25, 2023, which was declared
effective on September 18, 2023 (the “2023 Form S-3”). Sales under the ATM Agreement and the 2023 Form S-3 were completed
in September 2025 upon the sale of an aggregate of $
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 Form
S-3 remains effective. The 2025 Form S-3 permits the sale of up to $
During
the year ended December 31, 2025, we sold shares
of our common stock pursuant to the ATM Agreement, the 2023 Form S-3 and the 2025 Form S-3, generating gross proceeds of $
Series A Preferred Stock
On
December 18, 2012, we filed with the SOS a Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock
(the “Series A Preferred Stock”) to designate one share of a new series of preferred stock. The Certificate of Designations,
Preferences and Rights of Series A Convertible Preferred Stock provides that for so long as Series A Preferred Stock is issued and outstanding,
| F-20 |
Year Ended December 31, 2025, Transactions
During the year ended December 31, 2025, the Company issued an aggregate of shares of its common stock, as follows:
| Nature | Shares | |||
| Shares issued in connection with stock-based compensation | ||||
| Sales of common stock pursuant to the ATM Agreement | (*) | |||
| Sales of common stock pursuant to the Registered Direct Offering | ||||
| Total | ||||
| (*) |
Year Ended December 31, 2024, Transactions
During
the year ended December 31, 2024, we issued an aggregate of new shares of our common stock, including (i) shares
issued to Mitsui & Co. Ltd. (“Mitsui”) for gross proceeds of $
2023 Stock Incentive Plan
On May 25, 2023, the Board approved the 2023 Stock Incentive Plan (the “Plan”) which enables the grant of stock options, stock appreciation rights, restricted stock, performance shares, stock unit awards, other stock-based awards, and performance-based cash awards, each of which may be granted separately or in tandem with other awards. The number of shares of our common stock issuable pursuant to Plan was shares. On May 28, 2025, the Board of Directors approved, and our majority stockholders ratified and confirmed the amendment of the 2023 Stock Incentive Plan to increase the shares of common stock reserved for issuance under the plan from to .
For a description of the 2023 Stock Incentive Plan, please refer to Exhibit 10.1.
| F-21 |
Common Stock Options
During the years ended December 31, 2025, and 2024, we granted options to purchase common stock to officers, consultants and directors. The options were valued using the Black-Scholes option pricing model with the following ranges of assumptions:
| December
31, 2025 | December
31, 2024 | |||||||
| Expected volatility | % - | % | % – | % | ||||
| Risk-free interest rate | % - | % | % – | % | ||||
| Stock price on date of grant | $ | $ | ||||||
| Dividend yield | % | % | ||||||
| Expected term | - Years | - years | ||||||
Changes in common stock options for the years ended December 31, 2025, and 2024 were as follows:
| Number of Options Outstanding and Vested | Weighted Average Exercise Price | Remaining Contractual Life (Years) | Aggregated Intrinsic Value | |||||||||||||
| Outstanding and vested, January 1, 2025 | ||||||||||||||||
| Issued (1) | ||||||||||||||||
| Exercised (2) | ( | ) | ||||||||||||||
| Expired | ||||||||||||||||
| Forfeited | ||||||||||||||||
| Cancelled | ||||||||||||||||
| Outstanding and vested, December 31, 2025 | ||||||||||||||||
| Number of Options Outstanding and Vested | Weighted Average Exercise Price | Remaining Contractual Life (Years) | Aggregated Intrinsic Value | |||||||||||||
| Outstanding and vested, January 1, 2024 | $ | $ | ||||||||||||||
| Issued (3) | ||||||||||||||||
| Exercised (4) | ( | ) | ||||||||||||||
| Expired | ||||||||||||||||
| Forfeited | ||||||||||||||||
| Cancelled | ( | ) | ||||||||||||||
| Outstanding and vested, December 31, 2024 | $ | $ | ||||||||||||||
| 1) | |
| 2) |
| 3) | |
| 4) |
| F-22 |
During the year ended December 31, 2025, we recorded $ in stock-based compensation expense from common stock options in the consolidated statements of operations and comprehensive loss ($ during the year ended December 31, 2024).
Common Stock Purchase Warrants
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 year ended December 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:
| December
31, 2025 | ||||
| Expected volatility | % - | % | ||
| Risk-free interest rate | % - | % | ||
| Stock price on date of grant | $ | - | ||
| Dividend yield | % - | % | ||
| Expected term | - Years | |||
Changes in common stock purchase warrants for the years ended December 31, 2025, and 2024 were as follows:
| Number of Options Outstanding and Vested | Weighted Average Exercise Price | Remaining Contractual Life (Years) | Aggregated Intrinsic Value | |||||||||||||
| Outstanding and vested, January 1, 2025 | $ | - | $ | |||||||||||||
| Issued | ||||||||||||||||
| Exercised (1) | ||||||||||||||||
| Expired (2) | ( | ) | ||||||||||||||
| Forfeited | ||||||||||||||||
| Cancelled | ||||||||||||||||
| Outstanding and vested, December 31, 2025 | $ | $ | ||||||||||||||
| Number of Options Outstanding and Vested | Weighted Average Exercise Price | Remaining Contractual Life (Years) | Aggregated Intrinsic Value | |||||||||||||
| Outstanding and vested, January 1, 2024 | $ | $ | ||||||||||||||
| Warrants Issued | ||||||||||||||||
| Warrants Exercised (3) | ( | ) | ||||||||||||||
| Warrants Expired (4) | ( | ) | ||||||||||||||
| Warrants Forfeited | ||||||||||||||||
| Warrants Cancelled (4) | ( | ) | ||||||||||||||
| Outstanding and vested, December 31, 2024 | $ | $ | ||||||||||||||
| 1) | |
| 2) | |
| 3) | |
| 4) |
Restricted Stock Units
Restricted stock units (“RSUs”) are granted by us to our 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 our common stock immediately upon vesting.
| F-23 |
| Number
of RSUs Outstanding | ||||
| Outstanding at January 1, 2025 | ||||
| Granted (1) | ||||
| Vested (2) | ( | ) | ||
| Forfeited (3) | ( | ) | ||
| Cancelled (4) | ( | ) | ||
| Outstanding at December 31, 2025 | ||||
| Number
of Options Outstanding and Vested | ||||
| Outstanding January 1, 2024 | ||||
| Granted (1) | ||||
| Vested (2) | ( | ) | ||
| Expired | ||||
| Forfeited (3) | ( | ) | ||
| Cancelled (4) | ( | ) | ||
| Outstanding December 31, 2024 | ||||
| 1) | |
| 2) | |
| 3) | |
| 4) |
During the year ended December 31, 2025, we recorded $ stock-based compensation expense from our RSU activity in the period ($ during the year ended December 31, 2024). As of December 31, 2025, there were RSUs outstanding (December 31, 2024: RSUs outstanding).
Other stock incentives measured at fair value through profit or loss
As
of December 31, 2025, we had certain other outstanding obligations to issue shares of our 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 December 31,
2025, we recognized a $
| F-24 |
NOTE 6 – COMMITMENTS AND CONTINGENCIES
The following table summarizes certain of Atlas’s contractual obligations on December 31, 2025:
| Total | Less than 1 Year | 1-3 Years | 3-5 Years | More than 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. |
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.
| F-25 |
Mitsui & Co. Ltd.
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 $ million at a per share purchase price of $. The transaction closed in connection with a registered offering under the Company's registration statement on Form S-3 (No. 333-274223) (the “Mitsui Registered Offering”).
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, our subsidiary Atlas Brazil and Mitsui entered into an Offtake and Sales Agreement, pursuant to which Atlas Brazil agreed to sell and deliver to the Mitsui, and Mitsui agreed to purchase and take delivery of, (i) the spot quantity of fifteen thousand (15,000) dry metric tons of Atlas Brazil’s product, and, subject to the fulfillment of certain conditions precedent, (ii) up to sixty thousand (60,000) dry metric tons of Atlas Brazil’s product for each year, up to a total of three hundred thousand (300,000) dry metric tons.
Atlas Critical Minerals Corporation
During the year ended December 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 shares
of its common stock to Mr. Fogassa during the year ended December 31, 2025 representing
Atlas
Critical Minerals issued restricted stock units and shares of common stock (not including the shares mentioned in the
above paragraph) of Atlas Critical Minerals to officers and directors of the Company at a weighted average price of
$ per share in settlement of $
NOTE 8 – RISKS AND UNCERTAINTIES
Currency Risk
We operate primarily in Brazil which exposes it 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 us receiving either more or less in local currency than the local currency equivalent at the time of the original activity.
Our 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 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.
NOTE 9 - SUBSEQUENT EVENTS
In accordance with FASB ASC 855-10 Subsequent Events, we have analyzed our operations subsequent to December 31, 2025 to the date these consolidated financial statements were issued, and have determined that we do not have any material subsequent events to disclose in these consolidated financial statements.
| F-26 |
EXHIBIT INDEX
| 36 |
Item 16. Form 10-K Summary
We have elected not to provide a summary.
| 37 |
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 | ||
| Date: March 4, 2026 | By: | /s/ Marc Fogassa |
| Marc Fogassa | ||
| Chief Executive Officer | ||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
| Signature | Title | Date | ||
| /s/ Marc Fogassa | Chief Executive Officer (Principal Executive Officer) | March 4, 2026 | ||
| Marc Fogassa | and Chairman of the Board | |||
| /s/ Tiago Miranda | Chief Financial Officer | March 4, 2026 | ||
| Tiago Miranda | (Principal Financial and Accounting Officer) | |||
| /s/ Roger Noriega | Director | March 4, 2026 | ||
| Ambassador Roger Noriega | ||||
| /s/ Cassiopeia Olson | Director | March 4, 2026 | ||
| Cassiopeia Olson, Esq. | ||||
| /s/ Stephen Peterson | Director | March 4, 2026 | ||
| Stephen Peterson, CFA | ||||
| /s/ Rodrigo Menck | Director | March 4, 2026 | ||
| Rodrigo Menck |
| 38 |