Atlas Lithium Corp: Form 10-Q for the period ended Jun 30, 2026

The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the notes to those financial statements included in Item 1 of this Quarterly Report and our consolidated financial statements and notes thereto and related Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2025 as amended (the “2025 Form 10-K”).

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

Overview

Atlas Lithium is a mineral development company implementing its first mine and processing facility at its 100%-owned Neves Project, our material mineral property. In addition, Atlas Lithium owns multiple lithium exploration properties. Furthermore, through our approximately 20% ownership interest in Atlas Critical Minerals Corporation (“Atlas Critical Minerals”, Nasdaq: ATCX), a separate publicly traded company, we have exposure to other critical minerals, including rare earths, titanium, graphite, and uranium. Our current focus is the continued advancement of the Neves Project, our hard-rock lithium project in the Lithium Valley area of Minas Gerais state in Brazil, toward active mining. 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 energy storage system and electric vehicle battery supply chain.

We have disclosed mineral resources and mineral reserves for the Neves Project based on our technical report summary, effective May 15, 2025, as updated on June 16, 2026 (see Exhibit 96.1 to our 2025 Form 10-K/A).

We believe that we hold the largest portfolio of exploration properties for lithium in Brazil among publicly listed companies.

Operational Update

During the second quarter of 2026, we continued to advance our flagship Neves Project toward production while achieving several important strategic, operational, and corporate milestones. As described in further detail below, we obtained additional global recognition for the Neves Project, further strengthened our Board of Directors, contracted key execution partners, participated in leading industry conferences, and received an expansion permit for the project, as described below.

On April 2, 2026, we announced that the Neves Project had been named in the Joint Fact Sheet for Japan-U.S. Critical Minerals Project Cooperation (the “Joint Fact Sheet”), released on March 20, 2026 by Japan’s Ministry of Economy, Trade, and Industry together with the Ministry of Foreign Affairs of Japan. The Neves Project is the only Brazil-based lithium project named in the Joint Fact Sheet, which followed the U.S.-Japan Critical Minerals Investment Ministerial held on March 14, 2026 in Tokyo, as well as the summit held between Japan’s Prime Minister, Sanae Takaichi, and U.S. President, Donald Trump, on March 19, 2026.

On April 7, 2026, we announced the appointment of Admiral Flávio Augusto Viana Rocha, a former Cabinet member of the Brazilian Government, to our Board of Directors as an independent director. Admiral Rocha is a distinguished Brazilian leader with over 43 years of experience in strategy, governance, logistics, and international relations, including official government missions to more than 50 countries. From 2020 to 2022, he held the Minister-level position of Chief of the Secretariat for Strategic Affairs of the Presidency of Brazil, where he led the development of Brazil’s National Long-Term Policy and National Strategic Agenda, including the National Energy Policy.

On April 27, 2026, we announced the engagement of key operational partners for the implementation of the Neves Project, selected through a competitive process led by our technical team. Each awarded contract was finalized at or below the budget projections outlined in our Definitive Feasibility Study (the “DFS”). The selected partners included Promon Engenharia, responsible for completing multiple detailed engineering components; TSX Engineering, appointed to oversee and manage project implementation; Cerne Construções, engaged under an Engineering, Procurement, and Construction (EPC) contract for the design and construction of the project’s administrative and operational facilities; and RETC Infraestrutura, responsible for earthworks and civil construction activities. Each of these firms brings a strong track record of performance and deep experience in Brazil’s mining sector.

On May 18, 2026, we announced the engagement of Alfa Engenharia (“Alfa”) as the specialized electromechanical assembly contractor for the Neves Project. The scope of work awarded to Alfa encompasses the complete assembly of the project’s processing plant, from the crushing systems through to final product processing and dispatch, including the installation of all mechanical, electrical, instrumentation, and automation systems required for plant operations. As with our previously announced execution partners, the contract with Alfa was finalized at or below the budget projections outlined in the DFS. Our processing plant, fully-paid and 100%-owned by us, and which had previously been transported to Brazil, is ready for assembly, and Alfa’s selection provides the expertise necessary for this endeavor.

During the second quarter of 2026, members of our senior management participated in several leading industry conferences to raise the profile of the Atlas Lithium and Brazil’s emerging critical minerals sector. On June 9-10, 2026, our Chairman and Chief Executive Officer, Marc Fogassa, delivered a conference-wide address titled “The Growing Role of Brazilian Critical Minerals in Securing Global Supply” at Benchmark Giga USA 2026, held at the Ronald Reagan Building and International Trade Center in Washington, D.C. On June 17-18, 2026, Mr. Fogassa delivered the Strategic Keynote Presentation, “Lithium in Brazil: Building a Competitive Industry,” opening the 3rd Brazil Lithium & Critical Minerals Summit 2026 in Belo Horizonte, Minas Gerais, Brazil. These engagements reflect our continued efforts to strengthen relationships with industry stakeholders and to position us within global critical minerals supply chains.

On June 29, 2026, we announced that we had received the expansion permit for our Neves Project, a significant milestone in our disciplined journey toward production. Permitting is widely regarded as one of the greatest challenges in mining, and the additional permit followed comprehensive technical studies that confirmed the Neves Project’s minimal environmental impact, as well as the strong relationships we have built with our local communities in the Jequitinhonha Valley. With the expansion permit in hand, we are positioned to advance implementation of the Neves Project towards production.

Market Update

Lithium market conditions remained constructive during the second quarter of 2026. Lithium prices remained well above the lows seen in mid-2025. We believe demand continues to be supported by durable, long-term trends, including accelerating growth in the energy storage systems (“ESS”) segment — particularly for grid-scale applications and for data centers supporting the expansion of artificial intelligence — alongside continued adoption of electric vehicles worldwide. While the lithium market remains subject to price volatility and evolving supply and demand dynamics, we believe that our anticipated position among the lowest-cost lithium producers globally should provide meaningful margin protection across a range of pricing environments. Consistent with these conditions and our continued progress toward production, we have received written indications of interest from several parties seeking to secure long-term supply arrangements for our future lithium concentrate production. The level of interest may be subject to then current industry supply and demand scenario.

Results of Operations

The Three Months Ended June 30, 2026, Compared to the Three Months Ended June 30, 2025

Net loss for the three months ended June 30, 2026 totaled $11.5 million, compared to net loss of $6.3 million during the three months ended June 30, 2025. The increase is mainly due to:

• An increase in General and Administrative expenses of approximately $5.0 million compared to the three months ended June 30, 2025, primarily due to: (i) higher payroll expenses due to the increasing operational activities related to project implementation; and (ii) a $4.2 million increase in third-party service costs, including legal consultants, incurred to support the completion of the environmental permitting process and preliminary project implementation activities.
• Stock-based compensation expense increased by approximately $0.5 million compared to the three months ended June 30, 2025, primarily due to the issuance of 196,839 shares of our common stock to Mitsui & Co. Ltd. as payment for advisory services provided to the Company, compared to no such shares issued in 2025. This increase was partially offset by the lower fair value of other equity instruments issued during 2026 compared to 2025, primarily due to the lower market price of the Company’s common stock at the beginning of the year, when the majority of these instruments were issued. The costs of these instruments are recognized throughout the vesting period, impacting the three-month period ended on June 30, 2026 and 2025.
• Those effects are partially offset by an improvement in finance costs (revenues) of $0.5 million compared to the three months ended June 30, 2025, mainly due to:
• Higher proceeds generated from hedge contracts (NDFs) settled during the period due the appreciation of Brazilian Reais against U.S. dollars ($0.2 million in 2026 compared to $0.1 million in 2025);
• Higher proceeds from short-term investments due to the higher cash position in 2026 ($0.3 million in 2026 compared to $0.2 million in 2025); and
• Lower foreign exchanges expenses arising from accounts payable and receivables in currencies other than U.S. dollars (nil in 2026 compared to $0.2 million in 2025).

The Six Months Ended June 30, 2026, Compared to the Six Months Ended June 30, 2025

Net loss for the six months ended June 30, 2026 totaled $28.0 million, compared to net loss of $16.5 million during the six months ended June 30, 2025. The increase is mainly due to:

• An increase in General and Administrative expenses of approximately $11 million compared to the six months ended June 30, 2025, primarily due to: (i) higher payroll expenses due to the increasing operational activities related to project implementation added by a higher bonus paid to our Chief Executive Officer in 2026 compared to 2025 in accordance with the terms of his employment agreement ; and (ii) a $7.9 million increase in third-party service costs, including legal consultants, incurred to support the completion of the environmental permitting process and preliminary project implementation activities.
• An increase of approximately $1.7 million in stock-based compensation expense compared to the six months ended June 30, 2025, primarily due to:
• $1.0 million from our subsidiary Atlas Critical Minerals. The increase was mainly driven by a higher number of equity awards granted in 2026 (246,480, compared to 148,627 in 2025) and higher grant-date fair values, as a substantial portion of the 2026 awards was granted during the first quarter when the Company’s share price was higher ($12.36 as of January 1, 2026, compared to $8.40 as of January 1, 2025).
• $0.7 million from the Company primarily related to: (i) the higher bonus paid to our Chief Executive Officer in 2026 compared to 2025 in accordance with the terms of his employment agreement; (ii) the issuance of 196,839 shares of our common stock to Mitsui & Co. Ltd as payment for advisory services provided to the Company (nil issued in 2025); (iii) offset by the lower fair value of other instruments issued in 2026 compared to 2025 due to the lower price of the Company’s share in the beginning of the year, when the majority of the instruments are issued ($4.38 in 2026 and $7.19 in 2025).
• Those effects are partially offset by an improvement in finance costs (revenues) of $1.2 million compared to the six months ended June 30, 2025, mainly due to:
• Higher proceeds generated from hedge contracts (NDFs) settled during the period due the appreciation of Brazilian Reais against U.S. dollars ($0.5 million in 2026 compared to $0.1 million in 2025);
• Higher proceeds from short-term investments due to the higher cash position in 2026 ($0.5 million in 2026 compared to $0.3 million in 2025); and
• Lower foreign exchanges expenses arising from accounts payable and receivables in currencies other than U.S. dollars ($0.1 million in 2026 compared to $0.4 million in 2025).

Liquidity and Capital Resources

As of June 30, 2026, we had cash and cash equivalents of $36.1 million and working capital of $22.1 million.

Net cash used by operating activities totaled $18.2 million for the six months ended June 30, 2026, compared to net cash used of $8.3 million during the six months ended June 30, 2025, representing an increase of $9.9 million. The increase in net cash used by operating activities was mainly due to higher general and administrative expenses offset by better financial results. Please refer to section “Results of Operations” above.

Net cash used in investing activities totaled $2.0 million for the six months ended June 30, 2026, compared to net cash used of $6.3 million during the six months ended June 30, 2025, representing a decrease in cash used of $4.3 million or 68%. The decrease primarily reflects:

• A decrease of $3.0 million in the payments made in connection with the acquisition of our lithium processing plant ($1.7 million in 2026, compared to $4.7 million in 2025) mainly explained by the payments made in connection with the logistics to bring our lithium processing plant from South Africa to Brazil in 2025, a one-time event;
• A decrease of $1.3 million in capitalization of exploration/development costs incurred during the six months ended June 30, 2026 due to the reduction in the development activities in 2026 ($0.2 million in 2026, compared to $1.5 for the six months ended June 30, 2025);

Net cash provided by financing activities totaled $20.4 million for the six months ended June 30, 2026, compared to $12.9 million during the six months ended June 30, 2025, representing an increase in cash provided of $7.5 million or 58%. The increase is due to the following financing activities that occurred during the six months ended June 30, 2026:

• Net proceeds of $9.6 million from the sale of shares of Atlas Critical Minerals, a consolidated subsidiary of the Company, in connection with its capital raise associated with the listing of its common stock on the Nasdaq Capital Market, compared to net proceeds of $1.4 million during the same period in 2025, partially offset by;
• Net proceeds of $11.3 million, after commissions and fees, from the sale of an aggregate of 2,185,197 shares of the Company’s common stock pursuant to the ATM Agreement, compared to net proceeds of $11.9 million from the sale of 2,468,502 shares under the ATM Agreement during the same period in 2025; and
• Debt repayments of $322,330 and $169,692 in connection with lease obligations during the period, compared to $322,330 and $84,033 in 2025 respectively.

We have historically incurred net operating losses and have not yet generated material revenues from the sale of products or services. As a result, our primary sources of liquidity have been derived through proceeds from the sales of our equity and the equity of one of our subsidiaries. We believe our cash and equivalents will be sufficient to meet our working capital and capital expenditure requirements for a period of at least twelve months from the date of these financial statements. However, our future short- and long-term capital requirements will depend on several factors, including but not limited to, the rate of our growth, our ability to identify areas for mineral exploration and the economic potential of such areas, the exploration and other drilling campaigns needed to verify and expand our mineral resources and reserves, the successful installation of our lithium processing facilities and availability of reserves at the estimated volume and grade, and our ability to attract talent. To the extent that our current resources are insufficient to satisfy our cash requirements, we may need to seek additional equity or debt financing. If the needed financing is not available, or if the terms of financing are less desirable than we expect, we may be forced to scale back our existing operations and growth plans, which could have an adverse impact on our business and financial prospects and could raise substantial doubt about our ability to continue as a going concern.

Currency Risk

We operate primarily in Brazil, which exposes us to currency risks. Our business activities may generate intercompany receivables or payables that are in a currency other than the functional currency of the entity. Changes in exchange rates from the time the activity occurs to the time payments are made may result in it receiving either more or less in local currency than the local currency equivalent at the time of the original activity.

Our condensed consolidated financial statements are denominated in U.S. dollars.

Critical Accounting Policies and Estimates

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

Foreign Currency

Until December 31, 2025, with the exception of Atlas Brazil, our subsidiaries based in Brazil used a local currency (Brazilian Reais) as the functional currency. Resulting translation gains or losses were recognized as a component of accumulated other comprehensive income. The Company determined that, as of January 1, 2026, the U.S. dollar is the currency of the primary economic environment in which the Brazilian subsidiaries operate.

Effective January 1, 2026, the Company’s Brazilian subsidiaries changed their functional currency from Brazilian Reais to U.S. Dollars due to a shift in the underlying economic facts and circumstances affecting the subsidiaries’ operations and financing activities. In particular, our subsidiary Atlas Critical Minerals listed on the Nasdaq Capital Market and commenced trading on the Nasdaq on January 9, 2026. As a result of such listing and the attendant access to U.S. capital markets, the U.S. Dollar is the primary currency through which we and our Brazilian subsidiaries expect to raise any additional capital.

In accordance with ASC 830, the change in functional currency was accounted for prospectively from the date of change. As a result:

• assets and liabilities were translated into the new functional currency using exchange rates as of the date of change;
• nonmonetary assets and liabilities were translated at historical exchange rates (the effective date of the change is considered for the translation of existing nonmonetary assets and liabilities); and
• cumulative translation adjustments previously recorded in accumulated other comprehensive income were not reversed.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Principal Executive Officer and Principal Financial Officer, has evaluated the design, operation, and effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that as of June 30, 2026, our disclosure controls and procedures were effective at a reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred in the quarter ended June 30, 2026 that materially affected, or would be reasonably likely to materially affect, our internal control over financial reporting.

Limitations of the Effectiveness of Controls and Procedures

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

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 Amended Annual Report on Form 10-K for fiscal year ended December 31, 2025, before deciding whether to invest in our securities. The occurrence of any of the risks, the events or developments described below could harm our business, financial condition, operating results, and growth prospects. In such an event, the market price of our common stock could decline, and you may lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations. You should consider carefully the risks and uncertainties included in this Quarterly Report and elsewhere in our Amended Annual Report and other SEC filings before you decide to invest in our common stock.