# Atlas Lithium Corp: Form 10-Q for the period ended Sep 30, 2023

- Company: [Atlas Lithium Corp](/companies/atlx.md) (CIK 1540684)
- Form: 10-Q
- Filed: 2023-10-20
- Accepted by EDGAR: Oct 20, 2023, 16:00 ET
- Period: 2023-09-30
- Accession: 0001493152-23-037830
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1540684/000149315223037830/form10-q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1540684/000149315223037830/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2023-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Operating income | 3 months, 2023-07-01 to 2023-09-30 | −$11.4m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2023-01-01 to 2023-09-30 | −$25.4m | us-gaap:OperatingIncomeLoss |
| Net income | 3 months, 2023-07-01 to 2023-09-30 | −$11.3m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2023-01-01 to 2023-09-30 | −$24.4m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2023-07-01 to 2023-09-30 | −$1.09 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2023-01-01 to 2023-09-30 | −$2.76 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2023-07-01 to 2023-09-30 | −$1.09 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2023-01-01 to 2023-09-30 | −$2.76 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2023-07-01 to 2023-09-30 | 10,363,991 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2023-01-01 to 2023-09-30 | 8,818,972 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2023-01-01 to 2023-09-30 | $3.3m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2023-09-30 | $22.9m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2023-09-30 | $22.9m | us-gaap:AssetsCurrent |
| Total assets | at 2023-09-30 | $29.1m | us-gaap:Assets |
| Current liabilities | at 2023-09-30 | $2.6m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2023-09-30 | $22.7m | us-gaap:Liabilities |
| Shareholders' equity | at 2023-09-30 | $6.5m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 25,825 characters.

The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and the notes to those financial statements appearing elsewhere in this 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.

### Overview

Atlas Lithium Corporation 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, rare earths, graphite, and titanium. Our current focus is the development from exploration to active mining of our hard-rock lithium project located in the state of Minas Gerais in Brazil at a well-known, premier pegmatitic district in Brazil, which has been recently denominated by the government of Minas Gerais as “Lithium Valley”. We intend to mine and then process our lithium-containing ore to produce lithium concentrate (also known as spodumene concentrate), a key ingredient for the battery supply chain.

We are in the initial planning stages of planning to develop and own 100% of a processing facility capable of producing 300,000 tons of lithium concentrate annually. However, there can be no assurance that we will have the necessary capital resources to develop such 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 of our mineral projects and properties are located in Brazil and our mineral rights portfolio for battery minerals includes approximately 75,542 acres (306 km2) for lithium in 61 mineral rights, 137,883 acres for nickel (558 km2) in 37 mineral rights, 30,009 acres (121 km2) for rare earths in seven mineral rights, 22,050 acres (89 km2) for titanium in seven mineral rights, and 13,766 acres (56 km2) for graphite in three mineral rights. We believe that we hold the largest portfolio of exploration properties for battery minerals in Brazil, a premier and well-established mining jurisdiction.

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 (“MGLP”) is our largest project and consists of 54 mineral rights spread over 59,275 acres (240 km2) and predominantly located within the Brazilian Eastern Pegmatitic Province which 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.

We believe that we can increase our value by the acceleration of our exploratory work and quantification of our lithium mineralization. Our initial commercial goal is to be able to enter production of lithium concentrate, a product which is highly sought after in the battery supply chain for electric vehicles.

We also have 100%-ownership of early-stage projects and properties in other minerals that are needed in the battery supply chain and high technology applications such as nickel, rare earths, graphite, and titanium. We believe that the shift from fossil fuels to battery power may yield long-term opportunities for us not only in lithium but also in such other minerals.

Additionally, we have 100%-ownership of several mining concessions for gold and diamonds, two of which also include industrial sand. As our lithium properties became our corporate focus, we stopped alluvial gold and diamond exploration efforts in 2018 and the sale of our industrial sand in 2022.

In addition to these projects, we own 45.11% of the shares of common stock of Apollo Resources, a private company primarily focused on the development of its initial iron mine.

We also own approximately 27.42% of the shares of common stock of Jupiter Gold, a company focused on the exploration of two gold projects and a quartzite mine, and whose common stock are quoted on the OTCQB marketplace under the symbol “JUPGF.” The quartzite mine started operations in June 2023.

Apollo Resources and Jupiter Gold have not generated any revenues to date. The results of operations from both Apollo Resources and Jupiter Gold are consolidated in our financial statements under U.S. GAAP.”

### Operational Update

#### Exploration Campaign

Our ongoing drilling campaign is delineating the lithium resources of our 100%-owned Neves Project, a cluster of four lithium mineral rights within MGLP. Our current geological team is comprised of 13 geologists, eleven of which are employed full-time. To support the work of our geologists we have 25 full-time field and support technicians and machinery operators. Our geological team and our exploration campaign is supervised by Volodymyr Myadzel, Ph.D., a Qualified Person for lithium as such term is defined in Subpart 1300 of Regulation S-K promulgated by the Commission (“Regulation S-K 1300”).

We have engaged SGS Canada Inc. (“SGS”), and, in particular, their geologist Marc-Antoine Laporte, a Qualified Person for lithium under Regulation S-K 1300, to produce a mineral resource estimate report (the “Maiden Resource Report”) for our Neves Project in accordance with Regulation S-K 1300. Mr. Laporte is the author of mineral resource reports for two other companies which have hard-rock lithium projects in Lithium Valley, the general area where our Neves Project is located, and has worked on lithium properties in Lithium Valley since 2017. Mr. Laporte visited our Neves Project between May 4 and May 6, 2023. The Maiden Resource Report is expected to be completed during the first quarter of 2024.

The Maiden Resource Report will update and replace our previously filed SLR International Corporation’s technical report summary entitled “S-K 1300 Technical Report Summary on the Das Neves Lithium Project” (the “Initial Exploration Report”), with an effective date of August 10, 2022, and a signature date of August 31, 2022. The Initial Exploration Report presented recommendations to us on further steps necessary for the delineation of the lithium resources at our Neves Project. At the time of the Initial Exploration Report, we had one drill on site and 1,213 meters drilled in total. Currently, we have 10 active drills operating and have drilled, as of September 30, 2023, an aggregate of 58,497 meters. The current drilling campaign pace is approximately 7,500 meters drilled per month.

At our Neves Project, our current focus is drilling within and around our flagship pegmatite, “Anitta,” a 2.3-kilometer formation which remains open along strike and at depth, and has been proven to contain spodumene, a key lithium-bearing mineral.

#### Drilling Campaign Highlights (drill holes in numerical sequence)

|  |  |
| --- | --- |
| DHAB-11B: | 1.57% Li2O over 13.1m from 74.0m to 87.1m, which includes: |
|  | 2.25% Li2O over 4.0m from 76.7m to 80.8m, and |
|  | 2.00% Li2O over 3.1m from 84.0m to 87.1m |
| DHAB-12: | 1.35% Li2O over 5.02m from 83.41m to 88.43m |
| DHAB-15: | 1.40% Li2O over 15.0m from 60.5m to 75.5m, which includes: |
|  | 1.83% Li2O over 5.0m from 66.5m to 71.5m |

4

|  |  |
| --- | --- |
| DHAB-18: | 1.01% Li2O over 9.95m from 82.66m to 92.61m, which includes: |
|  | 2.17% Li2O over 3.0m from 86.55m to 89.55m |
| DHAB-21: | 1.33% Li2O over 8.8m from 50.0m to 58.8m |
| DHAB-39B: | 1.00% Li2O over 9.1m from 107.4m to 116.6m |
|  | 1.48% Li2O over 9.0m from 119.2m to 128.2m |
| DHAB-41: | 1.09% Li2O over 22.2m from 83.0m to 105.2m, which includes: |
|  | 1.72% Li2O over 4.0m from 94.0m to 98.0m |
| DHAB-44: | 1.30% Li2O over 17.9m from 141.81m to 159.71m, which includes: |
|  | 1.88% Li2O over 9.0m from 150.0m to 159.0m |
| DHAB-47: | 2.80% Li2O over 9.87m from 54.18m to 64.05m |
| DHAB-57: | 1.46% Li2O over 13.0m from 92.2m to 105.2m |
| DHAB-64: | 1.08% Li2O over 10.6m from 119.5m to 130.1m |
|  | 1.26% Li2O over 11.0m from 132.1m to 143.1m, which includes: |
|  | 2.09% Li2O over 5.0m from 135.1m to 140.1m |
| DHAB-68: | 1.36% Li2O over 25.43m from 54.15m to 79.58m, which includes: |
|  | 2.02% Li2O over 6.5m from 54.15m to 60.15m, |
|  | 4.40% Li2O over 0.55m from 60.15m to 60.70m, and |
|  | 1.89% Li2O over 5.0m from 71.5m to 76.5m |
| DHAB-70: | 1.16% Li2O over 14.85m from 43.75m to 58.60m |
|  | 1.20% Li2O over 2.4m from 78.31m to 80.72m |
| DHAB-74: | 1.01% Li2O over 8.74m from 137.26m to 146.00m |
| DHAB-77: | 1.08% Li2O over 3.2m from 65.8m to 69.0m |
|  | 1.46% Li2O over 14.0m from 70.0m to 84.0m, which includes: |
|  | 2.04% Li2O over 5.0m from 70.01m to 75.0m |
| DHAB-85: | 1.18% Li2O over 47.0m from 7.0m to 54.0m, which includes: |
|  | 2.12% Li2O over 7.0m from 13.0m to 20.0m, and |
|  | 1.88% Li2O over 9.0m from 150.0m to 159.0m |

|  |  |
| --- | --- |
| DHAB-104: | 1.47% Li2O over 95.20 meters, which includes: |
|  | 2.26% Li2O over 2.7m from 97.9m to 100.6m, 1.71% Li2O over 3.2m from 103.4m to 106.6m, 2.19% Li2O over 5.1m from 127.0m to 132.1m, 1.95% Li2O over 13.7m from 137.3m to 151.0m, 2.10% Li2O over 14.6m from 155.0m to 169.6m, and 2.31% Li2O over 9.1m from 176.2m to 185.3m |

5

|  |  |
| --- | --- |
| DHAB-144: | 1.73% Li2O over 8.0 meters, from 153.0m to 161.0m, which includes: |
|  | 2.18% Li2O over 3.0m from 154.0m to 157.0m |

|  |  |
| --- | --- |
| DHAB-145EX: | 2.53% Li2O over 11.50 meters from 242.55m to 254.00m, which includes: |
|  | 3.34% Li2O over 7.0m from 244.0m to 251.0m |

|  |  |
| --- | --- |
| DHAB-160: | 1.82% Li2O over 25.0 meters, which includes: |
|  | 2.17% Li2O over 8.0m from 217.0m to 225.0m, and 2.86% Li2O over 8.0m from 225.0m to 233.0m |

|  |  |
| --- | --- |
| DHAB-162: | 1.48% Li2O over 30.0 meters from 186.0m to 217.0m, which includes: |
|  | 2.03% Li2O over 5.0m from 207.0m to 212.0m, and 3.73% Li2O over 5.0m from 212.0m to 217.0m 1.58% Li2O over 9.0 meters, from 240.0m to 249.0m which includes: 1.86% Li2O over 4.0m from 240.0m to 244.0m |

|  |  |
| --- | --- |
| DHAB-178EX: | 1.17% Li2O over 35.2 meters from 235.0 to 278.2m, which includes: 1.50% Li2O over 7.0m from 250.0m to 257.0m, |
|  | 2.05% Li2O over 9.0m from 260.0m to 269.0m, and 1.92% Li2O over 3.0m from 269.0m to 272.0m |
| DHAB-181: | 1.35% Li2O over 8.0 meters from 263.0m to 272.2m, which includes: 2.11% Li2O over 3.5m from 263.0m to 266.5m |

|  |  |
| --- | --- |
| DHAB-185: | 2.06% Li2O over 6.3 meters from 8.0m to 14.3m, which includes: 5.23% Li2O over 1.1m from 9.2m to 10.3m, 3.19% Li2O over 4.3 meters from 16.7m to 21.0m, 1.75% Li2O over 5.8 meters from 38.0m to 43.8m, and 1.75% Li2O over 5.4 meters from 54.8m to 60.2m |
| DHAB-187: | 1.58% Li2O over 6.0 meters from 172.0m to 178.0m |

|  |  |
| --- | --- |
| DHAB-190: | 1.43% Li2O over 12.15 meters from 139.20m to 151.35m, which includes: 1.80% Li2O over 2.9 meters from 139.20m to 142.10m, and 2.37 Li2O over 1.41% meters from 148m to 149.41m |
| DHAB-200: | 1.46%Li2O over 27.83 meters from 64.52 m to 92.35m, which includes: 2.18%Li2O over 5 meters from 67m to 72m, and 2.05%Li2O over 4 meters from 86.40m to 90.40m |
|  | 1.87%Li2O over 11 meters from 196.5m to 207.50m, which includes: 2.68%Li2O over 4 meters from 196.50m to 200.5m, and 2.23%Li2O over 2 meters from 202.50m to 204.50m |
| DHAB-206: | 1.84%Li2O over 4.42 meters from 181m to 185.42m |
| DHAB-208: | 1.61%Li2O over 18 meters from 67.56m to 85.56m, which includes: 2.20%Li2O over 3.99 meters from 67.56m to 71.55m, and 1.66%Li2O over 5.71 meters from 190.39m to 196.10m |
| DHAB-211: | 1.80%Li2O over 6.73 meters from 158.92m to 165,65m, 1.36%Li2O over 3.78 meters from 170.03m to 173,81m 1.66%Li2O over 3.77 meters from 229.53 to 233,30m. |
| DHAB-214: | 1.97%Li2O over 5 meters from 145.25m to 150,25m, 2.12%Li2O over 21 meters from 159.25m to 179,25m, which includes: 3.07%Li2O over 3 meters from 176.25m to 179,25m. |
| DHAB-220: | 1.58%Li2O over 7 meters from 203.88m to 210.88m |

6

Our drilling and sampling follow strict best practices established under QA/QC protocols. All lithium samples are analyzed at SGS-Geosol, the premier analytical laboratory used by reputable mining companies in Brazil. Normally geochemical results are obtained from SGS-Geosol three weeks after submission of the samples for analysis.

#### Metallurgical Report

On April 24, 2023, we announced the receipt of the metallurgical report (the “Metallurgical Report”) from SGS for studies performed over several months on a representative ore sample from our Neves Project. The Metallurgical Report showed that a very high grade of 7.22% was achieved for heavy liquid separation. Commercial-grade lithium concentrate was obtained from our representative sample using standard dense media separation, a gravity-based approach which does not use any harmful chemicals or flotation. The Metallurgical Report also showed final lithium concentrate grading of 6.04% Li2O with only 0.53% Fe2O3, and a lithium recovery of 70%. Our desired target was the production of concentrate grading 6.0% Li2O with less than 1.0% Fe2O3, and these targets were exceeded. SGS has been providing testing and analytical services to the mining industry since 1941 and has earned the reputation as a leading provider of metallurgical services.

The Metallurgical Report will become a chapter in the Maiden Resource Report described above. The Metallurgical Report also allows SGS to begin work towards a Preliminary Economic Assessment of the Neves Project which is a technical study expected to be issued after the Maiden Resource Report.

#### Business Development

#### Mitsui & Co., Ltd.

On January 18, 2023, we announced that we had signed a Memorandum of Understanding (“MOU”) with Mitsui & Co., Ltd. (“Mitsui”) with respect to Mitsui’s potential interest in acquiring the right to purchase our future lithium concentrate production. Mitsui is one of the world’s most diversified comprehensive trading, investment, and service enterprises. Headquartered in Tokyo, Japan, Mitsui maintains a global network of 128 offices in 63 countries and regions.

In general terms, the MOU contemplates potential funding from Mitsui to us of up to $65 million (the “Offtake Funding”), in tranches and subject to the achievement of specific milestones acceptable to Mitsui, that would give Mitsui the right to buy up to 100% of our future production from our planned plant with output capacity of 150,000 tons of lithium concentrate per year (the “Plant”). The Offtake Funding would be primarily used by us for the construction of the Plant. Lithium concentrate produced by the Plant would then be available for purchase by Mitsui at a price generally based on the then-prevailing market price. The MOU is non-binding and non-exclusive for both companies. During the three months ending September 30, 2023, we continued to engage in discussions with Mitsui regarding progress toward achieving the milestones set forth in the MOU.

#### Lithium Royalty Corp.

On May 2, 2023, we and Atlas Litio Brasil Ltda. (the “Company Subsidiary”), entered into a Royalty Purchase Agreement (the “Purchase Agreement”) with Lithium Royalty Corp., a Canadian company listed on the Toronto Stock Exchange (“LRC”), whereby the Company Subsidiary sold to LRC in consideration for $20,000,000 in cash, a royalty interest equaling 3% of the future gross revenue (the “Royalty”) to be received by the Company Subsidiary from the sale of products from certain 19 mineral rights and properties that are located in Brazil and held by the Company Subsidiary.

On the same day, the Company Subsidiary and LRC entered into a Gross Revenue Royalty Agreement (the “Royalty Agreement”) pursuant to which the Company Subsidiary 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, the Company Subsidiary’s right to determine operations, and LRC’s information and audit rights. Under the Royalty Agreement, the Company Subsidiary also granted LRC an option to purchase additional royalty interest with respect to certain additional Brazilian mineral rights and properties on the same terms and conditions as the Royalty, at a total purchase price of $5,000,000.

The principals at LRC are known for their experience in the lithium industry. As part of LRC’s due diligence, Mr. Ernie Ortiz, LRC’s President and CEO, visited our Neves Project between April 5, 2023, and April 7, 2023.

### Results of Operations

#### The Three Months Ended September 30, 2023, Compared to the Three Months ended September 30, 2022

Net loss attributable to Atlas Lithium Corporation stockholders for the three months ended September 30, 2023, totaled $11,279,475 compared to a net loss of $1,028,192 during the three months ended September 30, 2022. The increase in loss is mainly due to:

- Higher general and administrative expenses in the period due to legal fees, traveling expenses and the cost of D&O insurance for the quarter;
- Increased compensation costs related to the increase in employee headcount and bonus paid to management;
- Stock-based compensation increase due to the increase in our common stock share price and new members of the management team;
- Higher exploration expenses for the period due the execution of the drilling program on our 100% owned Minas Gerais Lithium Project.

#### Nine Months Ended September 30, 2023 Compared to the Nine Months ended September 30, 2022

Net loss attributable to Atlas Lithium Corporation stockholders for the nine months ended September 30, 2023, totaled $24,372,062, compared to a net loss of $2,430,698 during the nine months ended September 30, 2022. The increase in loss is mainly due to

- Higher general and administrative expenses in the period due to approximately $1,030,000 in non-recurring transaction costs associated with our Offering in January 2023 in connection with the listing of our common stock on the Nasdaq Capital Market., including increased legal fees, travelling and D&O insurance expenses.
- Higher compensation costs due to the increase in employee headcount and bonus paid to management
- Stock-based compensation increase due to the increase in our common stock share price and new members of the management team; and
- Higher exploration expenses for the period due the execution of the drilling program on our 100% owned Minas Gerais Lithium Project.

### Liquidity and Capital Resources

As of September 30, 2023, we had cash and cash equivalents of $22,857,357 and net working capital, including cash, of $20,280,909.

Net cash provided by operating activities totaled $3,314,979 for the nine months ended September 30, 2023, compared to net cash used of $258,293 during the nine months ended September 30, 2022, representing an increase of $3,573,272 or 1,383%. The increase in net cash generated by operating activities was mainly due to:

- Royalty sale of 3% of the gross revenue for $20,000,000. (refer to discussion in Note 3);
- Increase of our lithium exploration program costs of $11,633,434
- Nasdaq listing, non-recurrent expenses of approximately $1,030,000;
- Increase in compensation expenses due to the increase of management and exploration teams.

Net cash used in investing activities totaled $1,521,977 for the nine months ended September 30, 2023, compared to net cash used of $2,573,826 during the nine months ended September 30, 2022, representing a reduction in cash used of $1,051,849 or 41% due to purchases of intangible assets that occurred in the first nine months of 2022

Net cash provided by financing activities totaled $20,822,531 for the nine months ended September 30, 2023, compared to $3,188,736 during the nine months ended September 30, 2022, representing an increase in cash provided of $17,633,795 or 553%. The increase is mainly due to:

- The Offering that closed on January 12, 2023, with aggregate gross proceeds of $4,657,500.
- Execution of a Securities Purchase Agreement with two investors, pursuant to which we agreed to issue and sell to the Investors in a Regulation S private placement an aggregate of 640,000 restricted shares of our common stock, par value $0.001 per share. The purchase price for the Shares was $6.25 per share, for total gross proceeds of $4,000,000.
- The sale, during the three months ended June 30, 2023, of an aggregate of 192,817 shares of our common stock to Triton Funds, L.P for total gross proceeds of $1,675,797 pursuant to a Common Stock Purchase Agreement entered between us and Triton Funds, LP
- The sale during the three months ended September 30, 2023, of an aggregate of 526,317 shares of our common stock to four investors (the “Investors”) for total gross proceeds of $10,000,023 pursuant to a Private Placement Agreement entered between us and the Investors.

For further information on the transactions mentioned above, please refer to Note 5 – stockholders´ equity.

We have historically incurred net operating losses and have not yet received material revenues from the sale of products or services.

Our primary sources of liquidity have been derived through proceeds from the (i) issuance of debt and (ii) sales of our equity and the equity of one of our subsidiaries and (iii) sale of royalty interest. For example, on January 12, 2023, we completed a firm underwritten public offering of 776,250 shares of our common stock (which includes the shares subject to the over-allotment option, exercised by the underwriter in full), for aggregate gross proceeds of $4,657,500 (prior to deducting any underwriting discounts, commissions, and other offering expenses). On January 30, 2023, and on July 18, 2023, we raised an aggregate of $4 million and $10 million, respectively, in gross proceeds from the sale of our common stock in transaction exempt under Regulation S of the Securities Act of 1933, as amended (the “Securities Act”). Lastly, on May 2, 2023, in connection with entering into the Royalty Purchase Agreement, the Company received a cash payment of $20,000,000 (see discussion in Note 3 related to the Royalty Purchase Agreement). 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 through September 2024.

On August 25, 2023, we filed a Registration Statement on Form S-3 with the Commission, which was amended on September 8, 2023 and declared effective on September 18, 2023 (the “Shelf Registration Statement”). The Shelf Registration Statement, which includes a base prospectus, is a source of liquidity that allows us at any time to offer an aggregate of up to $75,000,000 of common stock and/or preferred stock in one or more offerings. Unless otherwise specified in a prospectus supplement accompanying the base prospectus, we would use the net proceeds from the sale of any securities offered pursuant to the Shelf Registration Statement for general corporate purposes, including the development and commercialization of our products, general and administrative expenses, and working capital and capital expenditures.

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 business activities. To the extent that our current resources are insufficient to satisfy our cash requirements, we may need to seek additional equity or debt financing. If the needed financing is not available, or if the terms of financing are less desirable than we expect, we may be forced to scale back our existing operations and growth plans, which could have an adverse impact on our business and financial prospects and could raise substantial doubt about our ability to continue as a going concern.

### Currency Risk

Information pertaining to currency risk can be found in “Item 1. Financial Statements, Note 7. Risks and Uncertainties,” to the interim consolidated financial statements, and is incorporated by reference herein

We currently have no off-balance sheet arrangements.

### Critical Accounting Policies and Estimates

Our financial instruments consist of cash and cash equivalents and accrued expenses. The carrying amount of these financial instruments is approximate of fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in our financial statements. If our estimate of the fair value is incorrect on September 30, 2023, it could negatively affect our financial position and liquidity and could result in our having understated our net loss.

### Recent Accounting Pronouncements

Our consolidated financial statements are prepared in accordance with U.S. GAAP. Our significant accounting policies are described in Note 1 of the financial statements. We have reviewed all recent accounting pronouncements issued to the date of the issuance of these financial statements, and we do not believe any of these pronouncements will have a material impact on us.

## Controls and procedures

As filed, 7,098 characters.

(a) Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Principal Executive Officer and Principal Financial Officer, has evaluated the design, operation, and effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that as of September 30, 2023, our disclosure controls and procedures were effective at a reasonable assurance level.

(b) Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred in the quarter ended September 30, 2023, that materially affected, or would be reasonably likely to materially affect, our internal control over financial reporting.

(d) Limitations of the Effectiveness of Controls and Procedures

In designing and evaluating the disclosure controls and procedures and internal control over financial reporting, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance that the information required to be disclosed in reports filed or submitted pursuant to the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Commission, and that such information is accumulated and communicated to management, including its Principal Executive Officer and Principal Financial Officer as appropriate, to allow timely decisions regarding required disclosure. In addition, the design of disclosure controls and procedures and internal control over financial reporting must reflect the fact that there are resource constrains and that management is required to apply judgement in evaluating the benefits of possible controls and procedures relative to their costs.

### PART II OTHER INFORMATION

### FORWARD LOOKING STATEMENTS

This Quarterly Report contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act. All statements other than statements of historical fact contained in this Quarterly Report are forward-looking statements, including without limitation, statements regarding current expectations, as of the date of this Quarterly Report, about our future results of operations and financial position; our ability to effectively process our minerals and achieve commercial grade at scale; risks and hazards inherent in the mining business (including risks inherent in exploring, developing, constructing and operating mining projects, environmental hazards, industrial accidents, weather or geologically related conditions); our ability to derive any financial success from the Memorandum of Understanding entered into with Mitsui & Co., Ltd. in December 2022; uncertainty about our ability to obtain required capital to execute our business plan; uncertainties inherent in budgeting, including budgets relating to our mineral exploration activities and our ability to realize a return on funds committed to exploration and evaluation; our ability to hire and retain required personnel; changes in the market prices of lithium and lithium products and demand for such products; the uncertainties inherent in exploratory, developmental and production activities, including risks relating to permitting, zoning and regulatory delays related to our projects; and uncertainties inherent in the estimation of lithium resources and commercial viability of mineral deposits. These statements involve known and unknown risks, uncertainties and other important factors that may cause actual results, performance, or achievements to differ materially from any future results, performance or achievement expressed or implied by these forward-looking statements.

In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential”, or “continue” or the negative of these terms or other similar expressions Factors that could cause future results to materially differ from the recent results or those projected in forward-looking statements include, but are not limited to: unprofitable efforts resulting 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, and environmental protection; competition; the loss of services of key personnel, including our Chairman and Chief Executive Officer, Marc Fogassa; unusual or infrequent weather phenomena, sabotage, government or other interference in the maintenance or provision of infrastructure as well as general economic conditions, geopolitical events; availability of capital; Atlas Lithium’s ability to maintain its competitive position; manipulative attempts by short sellers to drive down our stock price; and dependence on key management.

The forward-looking statements in this Quarterly Report are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report and are subject to a number of important factors that could cause actual results to differ materially from those in the forward-looking statements, including the factors described under the section in this Quarterly Report titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as factors described under the section titled “Risk Factors” in each of our Quarterly Reports on Form 10-Q for the quarter ended March 31,2023 and our Form 10-K for the fiscal year ended December 31, 2022 and other filings we make with the Commission. Therefore, you should not place undue reliance on these forward-looking statements.

You should read this Quarterly Report and the documents that we reference in this Quarterly Report completely and with the understanding that our actual future results may be materially different from what we expect. 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.

## Risk factors

As filed, 239 characters.

There have been no material changes to the Risk Factors described in Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022 and our Quarterly Report in Form 10-Q for the quarter ended March 31, 2023.

Filed Oct 20, 2023.
Source: SEC EDGAR, the filing index for accession 0001493152-23-037830. Last ingested by Listed: Nov 6, 2026, 16:41 ET. No prices; not investment advice.