# Atlas Lithium Corp: Form 10-Q/A for the period ended Jun 30, 2024

- Company: [Atlas Lithium Corp](/companies/atlx.md) (CIK 1540684)
- Form: 10-Q/A
- Filed: 2024-11-08
- Accepted by EDGAR: Nov 8, 2024, 21:43 ET
- Period: 2024-06-30
- Accession: 0001493152-24-044309
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1540684/000149315224044309/form10-qa.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1540684/000149315224044309/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Cost of revenue | 3 months, 2024-04-01 to 2024-06-30 | $91.8k | us-gaap:CostOfRevenue |
| Cost of revenue | 6 months, 2024-01-01 to 2024-06-30 | $193.9k | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2024-04-01 to 2024-06-30 | $91.0k | us-gaap:GrossProfit |
| Gross profit | 6 months, 2024-01-01 to 2024-06-30 | $180.3k | us-gaap:GrossProfit |
| Operating income | 3 months, 2024-04-01 to 2024-06-30 | −$9.5m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2024-01-01 to 2024-06-30 | −$22.7m | us-gaap:OperatingIncomeLoss |
| Interest expense | 6 months, 2024-01-01 to 2024-06-30 | $444.0k | us-gaap:InterestExpense |
| Income tax | 3 months, 2024-04-01 to 2024-06-30 | $6.2k | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2024-01-01 to 2024-06-30 | $10.8k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-04-01 to 2024-06-30 | −$9.2m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2024-01-01 to 2024-06-30 | −$22.1m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-04-01 to 2024-06-30 | −$0.67 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2024-01-01 to 2024-06-30 | −$1.61 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-04-01 to 2024-06-30 | −$0.67 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2024-01-01 to 2024-06-30 | −$1.61 | us-gaap:EarningsPerShareBasic |
| Operating cash flow | 6 months, 2024-01-01 to 2024-06-30 | −$11.3m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 6 months, 2024-01-01 to 2024-06-30 | $14.0m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2024-06-30 | $32.3m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-06-30 | $32.6m | us-gaap:AssetsCurrent |
| Total assets | at 2024-06-30 | $63.2m | us-gaap:Assets |
| Current liabilities | at 2024-06-30 | $5.5m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2024-06-30 | $35.4m | us-gaap:Liabilities |
| Shareholders' equity | at 2024-06-30 | $27.2m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 13,216 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 included in Item 1 of this Quarterly Report on Form 10-Q (this “Quarterly Report”) and our consolidated financial statements and notes thereto and related Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2023

This Quarterly Report includes forward-looking statements that are subject to risks, uncertainties and other factors described in the section entitled “Risk Factors” in Item 1.A. of Part II of this Report that could cause actual results could differ materially from those anticipated in these forward-looking statements. Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the future.

### Overview

Atlas Lithium Corporation (“Atlas Lithium”, the “Company”, “we”, “us”, or “our” refer to Atlas Lithium Corporation and its consolidated subsidiaries) is a mineral exploration and development company with a developing lithium project and multiple lithium exploration properties. In addition, we own exploration properties in other battery minerals, including nickel, copper, rare earths, graphite, and titanium. Our current focus is the development from exploration to future active mining of our hard-rock lithium project located in the state of Minas Gerais in Brazil at a well-known pegmatitic district in Brazil, which has been denominated by the government of Minas Gerais as “Lithium Valley.” We intend to mine and then process our lithium-containing ore to produce lithium concentrate (also known as spodumene concentrate), a key ingredient for the battery supply chain.

We are building a modular plant targeted at producing up to 150,000 tons of lithium concentrate per annum (“tpa”) in what we describe as Phase I. We plan on adding additional modules to the plant with the intent of doubling its production capacity to up to 300,000 tpa in Phase II. 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 our mineral projects and properties are located in Brazil, a well-established mining jurisdiction. Our lithium properties include approximately 53,942 hectares (539 km2) divided in 95 mineral rights (2 in pre-mining concession stage, 85 in exploration stage, and 8 in pre-exploration stage).

In addition, we also have a few additional lithium mineral rights that are in the process of being acquired and not yet titled in our name.

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”) consists of 85 mineral rights spread over approximately 468 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. Our primary area of focus is the Neves Project, which is part of MGLP. The Neves Project has been drilled extensively and presents spodumene-bearing deposits amenable to open pit mining, with generation of ore material that can be processed by dense media separation technique to yield lithium concentrate, a commercial product within the battery supply chain.

We own approximately 47.58% 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 22.30% of the shares of common stock of Jupiter Gold, a company with an operating quartzite quarry and gold projects in exploration phase, the common stock of which is quoted on the OTCQB marketplace under the symbol “JUPGF.”

The results of operations from both Apollo Resources and Jupiter Gold are consolidated in our financial statements under U.S. GAAP.

### Operational Update

During the second quarter of 2024, Atlas Lithium achieved important milestones across several key operational areas including:

- Geotechnical drilling program in the Neves Project advanced to approximately 80% completion as of June 30, 2024, with full completion expected by end of August 2024. This program provides crucial data for mine planning and design.
- Metallurgical studies for both Anitta 2 and Anitta 3 deposits within the Neves Project were successfully completed.
- The core components of the modular dense media separation (DMS) lithium processing plant underwent trial assembly and are in the process of being packaged for shipment. Atlas Lithium has designed its processing plant as a series of compact, preassembled modules, an approach that appears to have never before been used for lithium processing in Brazil. This modular configuration reduces the plant’s physical footprint compared to traditional designs. It will also enable more efficient transportation, installation, and commissioning.
- SAP enterprise software was successfully installed. In June 2024, Apollo Resources received from the state regulatory authority a 10-year license to mine its iron ore property in the Iron Quadrangle region of Minas Gerais, Brazil. In July 2024, a U.S. company ordered polished quartzite slabs from Jupiter Gold’s quartzite production. Such slabs are expected to be shipped in August 2024, marking the first sale of polished quartzite slabs from Jupiter Gold as an exporter.

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### Results of Operations

### The Six Months Ended June 30, 2024, compared to the Six Months ended June 30, 2023

Net loss for the six months ended June 30, 2024, totaled $23,137,504, compared to net loss of $13,862,249 during the six months ended June 30, 2023. The increase is mainly due to:

|  |  |
| --- | --- |
| ● | After a trial mining period in the second half of 2023, Jupiter Gold started its continuing operations at its quartzite quarry in 2024. The gross margin of $180,256 was generated from the sales of 269 m3 of unprocessed blocks of quartzite from its own production. Considering the start of operations in 2024, there was no gross margin generation in the six months ended June 30, 2023. |
| ● | Higher general and administrative expenses of approximately $3.4 million in the period primarily due to increased costs of labor and consultants related to technical services, increased legal fees relating to transactions consummated during the quarter and other third-party costs; |
| ● | An increase of approximately $7.8 million in stock-based compensation expense compared to the prior period, reflecting bonus for the members of the management team eligible for stock-based compensation; and |
| ● | Higher finance costs of approximately $0.7 million for the period mainly due to interest expenses related to convertible notes issued in November 2023. |
| ● |  |

### Liquidity and Capital Resources

As of June 30, 2024, we had cash and cash equivalents of $32,267,730 and working capital of $27,067,961.

Net cash used by operating activities totaled $11,292,221 for the six months ended June 30, 2024, compared to net cash provided of $11,033,491 during the six months ended June 30, 2023, representing a variation in the cash flow from operating activities of $22,325,715. The variation in net cash used /provided by operating activities was mainly due to:

- In the six months ended June 30, 2023, the Company received $20,000,000 arising from the one-time royalty sale with no matchable transaction in 2024 as explained in Note 3.
- Increase of approximately $3,500,000 in general and administrative expenses due to the increase in the Company’s structure as it moves towards operations. As a result of that the Company had more expenditures with employees’ compensation and costs with third parties service providers such as technical consultants;

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Net cash used in investing activities totaled $16,777,111 for the six months ended June 30, 2024, compared to net cash used of $1,929,812 during the six months ended June 30, 2023, representing an increase in cash used of $14,847,299 or 769%. The increase reflects the payments made in connection with the acquisition of the components of our lithium processing plant and capitalized exploration costs.

Net cash provided by financing activities totaled $30,140,298 for the six months ended June 30, 2024, compared to $10,675,118 during the six months ended June 30, 2023, representing an increase in cash provided of $19,465,180 or 182%. The increase is mainly due to the following financing activities that occurred during the six months ended June 30, 2023:

- The sale of an aggregate of 1,871,250 shares of our common stock to Mitsui in a private placement (the “Private Placement”). The gross proceeds from the Private Placement were $30.0 million.

For further information on the transaction mentioned above, please refer to note 7 – related parties transactions.

We have historically incurred net operating losses and have not yet generated material revenues from the sale of products or services. As a result, our primary sources of liquidity have been derived through proceeds from the (i) sales of our equity and the equity of one of our subsidiaries, and (ii) issuance of convertible debt. As of June 30, 2024, we had cash and cash equivalents of $32,267,730 and working capital of $27,067,091, compared to cash and cash equivalents $29,549,927 and a working capital of $23,809,637 as of December 31, 2023. We believe our cash and cash and equivalents will be sufficient to meet our working capital and capital expenditure requirements for a period of at least twelve months from the date of these financial statements. However, our future short- and long-term capital requirements will depend on several factors, including but not limited to, the rate of our growth, our ability to identify areas for mineral exploration and the economic potential of such areas, the exploration and other drilling campaigns needed to verify and expand our mineral resources, the successful installation of our lithium processing facilities, and 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.

### 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 Policies and Estimates

The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States of American (“U.S. GAAP”). Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financial statements.

## Controls and procedures

As filed, 3,080 characters.

### Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Principal Executive Officer and Principal Financial Officer, has evaluated the design, operation, and effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act as of June 30, 2024. In designing and evaluating our disclosure controls and procedures, 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 must reflect the fact that there are resource constraints, and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs. On the basis of that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that as a result of the material weakness in internal controls over financial reporting, described in our Amendment No. 1 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed on Form 10-K/A with the SEC on November 8, 2024 (the “Form 10-K/A”), our disclosure controls and procedures were not effective as of June 30, 2024.

### Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred in the quarter ended June 30, 2024, that materially affected, or would be reasonably likely to materially affect, our internal control over financial reporting.

### Limitations of the Effectiveness of Controls and Procedures

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

## Risk factors

As filed, 1,239 characters.

*Investing in our common stock involves a high degree of risk. You should carefully consider the information in this Quarterly Report, including our financial statements and the related notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as any additional risk factors that may be described in our other filings with the SEC from time to time, including our Annual Report on Form 10-K for fiscal year ended December 31, 2023, and our quarterly report on Form 10-Q for the period ended March 31, 2024, before deciding whether to invest in our securities. The occurrence of any of the risks, the events or developments described below could harm our business, financial condition, operating results, and growth prospects. In such an event, the market price of our common stock could decline, and you may lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations. You should consider carefully the risks and uncertainties included in this Quarterly Report and elsewhere in our Annual Report and other SEC filings before you decide to invest in our common stock.*

Filed Nov 8, 2024.
Source: SEC EDGAR, the filing index for accession 0001493152-24-044309. Last ingested by Listed: Oct 24, 2026, 15:13 ET. No prices; not investment advice.