What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-03-14 compared with 2024-03-27 · 294 added, 462 removed, 154 unchanged (83% of the section changed)

18 unchanged sentences

lithium concentrate (also known as spodumene concentrate), a key ingredient for the battery supply chain.

are building a modular plant targeted at producing 150,000 tons of lithium concentrate per annum (“tpa”) in what we describe

We plan on adding additional modules to the plant with the intent of doubling its production capacity to 300,000 tpa in Phase

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.

modular dense media separation (DMS) lithium processing plant was manufactured in South Africa.

It was designed to produce 150,000

tons of lithium concentrate per annum (“tpa”).

The manufacturing process of the DMS plant

was concluded in the end of 2024 and the plant was successfully shipped to Brazil.

The shipment, consisting of 141 containers and 10

bulk items, departed the Port of Durban, South Africa, on February 2, 2025, and arrived in Brazil, Port of Santos, on March 7,

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.

This milestone marks a

significant step in our progression toward becoming the next lithium producer in Brazil’s resource-rich Lithium Valley.

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.

our mineral projects and properties are located in Brazil, a well-established mining jurisdiction.

14 unchanged sentences

for gold mineral rights, all in exploration stage.

In addition, we also have a few additional mineral

rights in the process of being acquired and not yet titled in our name.

We believe that we hold the largest portfolio of exploration properties

for lithium and other battery minerals in Brazil.

are primarily focused on advancing and developing our hard-rock lithium project located in the state of Minas Gerais, Brazil.

Minas Gerais Lithium Project (“MGLP”) is our largest project and consists of 85 mineral rights spread over approximately

468 km 2 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.

believe that we can increase our value by continuing of our exploratory 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.

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.

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, copper, 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.

addition to these projects, we own 58.71% of the shares of common stock of Apollo Resources, a private company primarily focused on the

development of its initial iron mine.

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 preliminary operations in June 2023.

The results of operations from both Apollo Resources and Jupiter

Gold are consolidated in our financial statements under U.S.

Exploration Campaign

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 16 geologists, all of whom are full-time employees.

To support the

work of our geologists we have 13 full-time field and support technicians and machinery operators, as well as 3 trainee technicians

and over 19 field assistants.

Our geological team and our exploration campaign is supervised by James Abson, a Qualified Person for

lithium as such term is defined in Subpart 1300 of Regulation S-K promulgated by the SEC (“Regulation S-K 1300”).

Abson was appointed as our Chief Geology Officer in October 2023 and has over 29 years of diverse experience in mining

and mineral exploration.

Abson’s leadership, our technical team adopted a systematic approach to exploration of additional potential

target areas within the Neves Project.

These efforts involve geological mapping, sampling of historical artisanal mining sites and exposed

pegmatites to analyze potassium-rubidium ratios, as well as soil sampling using both XRF and ICP testing for both LCT pathfinders and

Geophysical surveys, including magnetics, are used when warranted to pinpoint additional pegmatite deposits and related structures.

Deep trenching of anomalous areas is used to identify and confirm lithium-cesium-tantalum (LCT) pegmatites and estimate width, strike,

dip and mineralization prior to drilling.

Finally, scout drilling is aimed at testing the highest priority pegmatite targets that appear

widest and most mineralized.

Within Neves Project area, four confirmed pegmatite bodies with spodumene mineralization were identified

(designated as Anitta 1 through 4) with six other target areas remaining open to further exploration.

beyond the Neves Project area, our regional exploration is now centered on the other mineral rights for lithium within the broader

Minas Gerais Lithium Project (“MGLP”), a large footprint of 468 km 2 of lithium mineral claims, many of which are located in Brazil’s Lithium Valley, a well-known hard-rock lithium district.

A specialized exploration geology team has

been assembled to initiate reconnaissance work across this wider land package.

Initial efforts involve LiDAR and geological mapping

with a specific focus on historical artisanal mining sites, sampling of known and previously identified pegmatites, as well as

first-pass soil sampling lines and geophysics to identify anomalies.

This phased approach has systematically advanced regional

prospecting across our mineral rights in MGLP with a number of targets generated for further exploration by our exploration team.

We believe that

we hold the largest portfolio of exploration properties for lithium and other battery minerals in Brazil among publicly listed companies.

early October 2024, we announced the discovery of spodumene-rich pegmatites in our Salinas Project area (the “Salinas

Project”), located approximately 60 miles north of our flagship Neves Project.

The Salinas Project spans 388 hectares

(approximately 959 acres) and is situated just five miles east of Latin Resources’ Colina Project, a significant lithium

Our technical team had completed soil geochemistry and LIDAR geological mapping with favorable results and began pursuing

further geological and geophysical studies prior to initiating a drilling campaign.

Given the positive data collected by us and

current market dynamics, the Salinas Project area has emerged as a prime candidate for our future growth plans, though commencing

production at our Neves Project area remains our highest priority.

October 25, 2024, a voting board comprised of twelve representatives from the local civil society and government unanimously

approved our operational permit application for our Neves Project.

permit was formally issued and published in the official gazette of the Minas Gerais government on October 26, 2024.

The permit authorizes

us to assemble and operate our lithium processing plant, process mined ore from one of our deposits at the facility, and sell the lithium

concentrate that it produces.

This key development came after an extensive technical review process by regulatory agencies that began

with our initial permit application on September 1, 2023.

The triphasic permit obtained by us is the most expeditious licensing modality

available as it encompasses the initial, installation, and operating licenses all within this same issued authorization (known as “LP/LI/LO”

in the local regulatory terminology).

November 2024, we outlined our medium to long-term regional growth strategy within Brazil’s Lithium Valley (“LV”),

locally known as the Jequitinhonha River Valley.

We announced that we had assembled Brazil’s largest portfolio of lithium mineral

rights among publicly listed companies, with three key projects spanning the major lithium-mineralized zones:

the Neves Project in southern

LV, our flagship development which has recently been permitted and is advancing toward production;

the Clear Project in central LV, encompassing

470 acres situated 3.8 miles from Sigma Lithium’s mine, where detailed geological mapping has resulted in the discovery of two

pegmatites and completed soil sampling revealed a substantial northeast-southwest trending lithium anomaly;

and the Salinas Project in

northern LV, spanning 2,070 acres with natural spodumene outcrops located 4.7 miles from Latin Resources Ltd.

Our strategic

approach prioritizes the Neves Project for initial production while simultaneously advancing exploration at the Clear and Salinas Projects.

December 2024, we strengthened our leadership team with two strategic appointments aimed at accelerating our production readiness.

Queiroz joined as Project Management Officer and Vice President of Engineering, bringing over 20 years of experience managing complex,

large-scale mining projects.

His most recent role was as General Manager of Planning and Management at Bamin, a unit of Eurasian Resources

Group, where he successfully led the strategic planning of several projects over US$3 billion, including an integrated iron ore mining

project encompassing mining operations, processing plant, railway, and ocean port facilities.

Additionally, we expanded our global presence

by appointing Lili Wu as Head of Business Development for Asia.

Based in Beijing, Ms.

Wu brings extensive knowledge and network in the

lithium and battery materials industries, with prior roles at InsightWoo and IHS Markit (now part of S&P Global).

Her appointment

is particularly strategic as China’s electric vehicle sales demonstrated 51% year-over-year growth as of November 2024.

February 2025, we achieved a significant milestone with the successful

shipment of our modular dense media separation (DMS) lithium processing plant from South Africa to Brazil.

The shipment, consisting of

141 containers and 10 bulk items, departed the Port of Durban on February 2, 2025, and arrived at the Port of Santos, Brazil, on March 7, 2025.

The newly manufactured processing facility is fully paid and wholly owned by us and a cornerstone of our Neves

Project, is designed to deliver high-quality lithium concentrate to the global market for electric vehicles (EVs) and renewable energy

storage systems.

The plant incorporates cutting-edge and environmentally conscious design features, including a compact, modular design

for efficient transportation and installation, optimized physical footprint to minimize environmental impact while ensuring high operational

efficiency, advanced water conservation through internal recycling systems, and sustainable tailings management using dry-stacking technology

that eliminates the need for tailings dams.

This development marked another critical step in our progression toward becoming the next

lithium producer in Brazil’s resource-rich Lithium Valley.

We believe that our operations in Brazil’s Lithium Valley will

benefit from significant strategic advantages, including competitive production costs and high-quality spodumene, positioning us well

to meet demand for premium-grade lithium concentrate, particularly from Asian markets where electric vehicle adoption continues to accelerate.

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.

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.

Laporte visited our Neves Project between May 4 and May 6, 2023.

On March 19, 2024, our Board appointed Brian Talbot to serve as director on the Board, effective as of April 1, 2024.

In addition to joining the Board, Mr.

was also appointed by the Board as our Chief Operating Officer (“COO”), effective as of April 1, 2024.

In his capacity as

Talbot will be responsible for both the Company’s development of its lithium mine and processing plant as well as all of

its lithium exploration geology program.

Talbot is a qualified person for lithium as such a term is defined in Item 1300 of Regulation

Talbot has an extensive track record as a technical

and operational leader throughout his career with over 30 years of experience in mining operations.

In particular, he has extensive experience

in DMS (dense media separation) plant development and operation.

Most recently, Mr.

Talbot was employed by RTEK International DMCC (“RTEK”),

a consulting firm that advises lithium developers and producers.

From July 2022 to September 2023, Mr.

Talbot was the Chief Operating

Officer at Sigma Lithium Corporation (“Sigma Lithium”), a Canadian lithium producer with operations in Brazil.

At Sigma Lithium,

he oversaw the development of that company’s flagship Grota do Cirilo project from construction through commissioning and operations.

From 2017 to 2022, Mr.

Talbot held positions as General Manager and Head of Australian Operations at Galaxy Resources, now part of Arcadium

Lithium PLC, one of the world’s largest fully integrated lithium companies.

While at Galaxy Resources, Mr.

Talbot was instrumental

in increasing the production at Mt.

Cattlin (a hard-rock lithium mine in Ravensthorpe, Western Australia) which resulted in record production.

From 2015 to 2017, Mr.

Talbot was at Bikita Minerals in Zimbabwe, which owns and operates the longest running hard-rock lithium mine in

Talbot holds a bachelor’s degree in chemical engineering with Honors from the University of Witwatersrand, South

Please refer to Part III, Item 10, for further information on Mr.

geological soil sampling anomalies discovered at our Anitta 1 location have determined that such ore body is larger than initially

A decision was made to extend drilling of the Anitta 1 pegmatite to the east, with several drill holes already yielding

further significant and shallow additional spodumene intersects with lithium mineralization confirmed by ultraviolet light testing

while the geochemical test results are still pending.

We expect that these results will add further volume to the Anitta 1 deposit

size, and, most importantly, the lithium-bearing material appears to be relatively close to the surface to permit eventual open pit

Under Brian Talbot’s leadership as incoming Chief Operating Officer, the exploration plans for our lithium tenements

will be focused to support our early revenue strategy.

Core sample from recent drilling at Anitta

Anitta 1 sample illuminated by ultraviolet light and

showing spodumene mineralization.

As of December 31, 2023, we had drilled an aggregate

of 72,899 meters.

Early-Revenue

December 4, 2023, we announced implementing an early-revenue strategy.

With the well-delineated initial Anitta pegmatites, positive

metallurgical test work and well-advanced mining and environmental permits Atlas Lithium’s technical team opted to expedite

the production timeline for its 100%-owned Neves Project.

This early-revenue strategy targets initial “Phase I” production

of spodumene concentrate by the fourth quarter of 2024, ramping up to “Phase II” production in mid-2025.

The early-revenue Phase I

plant is expected to have a maximum capacity of 150,000 tons per annum of spodumene concentrate.

We intend to deploy compacted

modular dense media separation (DMS) technology together with contracting the crushing and mining operations.

The total capital

expenditures, including the initial production and ramp-up is estimated at $49.5 million, which includes the modular DMS plants,

tailings management module for dry stacked tailings;

engineering, procurement, construction management costs;

earthworks and civils;

site access upgrade, mining preparation and pre-strip, commissioning and ramp-up.

The fabrication of the DMS modules, tailing

management module, and associated materials handling equipment is advancing.

On February 26, 2024, we announced

that the fabrication of the DMS modules, tailing management module, and associated materials handling equipment is progressing on

schedule, with delivery to Brazil expected in Q2 2024 and first commissioning and production of high-quality, environmentally

sustainable lithium concentrate anticipated in Q4 2024.

The manufacturing orders were placed by us in December 2023.

By condensing

components into modules with significantly reduced footprint and weight versus recent DMS plants, Atlas Lithium plans to streamline

installation and commissioning.

For example, whereas fully assembled traditional DMS facilities commonly weigh 250-300 tons, the

Company’s modular plant is predicted to weigh only approximately 41 tonnes.

Modular DMS construction and preassembly are well

advanced on the primary 100 tons per hour (tph) module and the secondary 50 tph module.

We plan to carry out a full pre-assembly and

testing of these two modules before they are shipped to Brazil.

We engaged CDM Group as engineering contractor and construction

coordinator and ADP Marine & Modular for plant manufacturing, with both of these firms located in South Africa.

manufacturing facility located in South Africa has recently been visited by our technical team and photographs of parts completed

and in progress of our modular DMS lithium processing plant under construction can be seen in Figures 3-5 below.

Figures 6-8 depict

3-D model views of our planned modular DMS lithium processing plant.

Our modular DMS lithium processing plant under construction.

View of part of our DMS lithium processing plant under construction.

View of part of our modular DMS lithium processing plant under construction.

View of 3-D model of our planned DMS lithium processing plant.

Additional view of 3-D model of our planned DMS lithium processing plant.

Additional view of 3-D Model of our planned DMS lithium processing plant.

Campaign Highlights (drill holes sorted by location)

below are the results from our ongoing Neves Project drilling campaign, which include certain results obtained after December 31, 2023.

Li2O over 9.1m from 107.4m to 116.6m

1.48% Li2O over 9.0m from 119.2m to 128.2m

Li2O over 17.9m from 141.8m to 159.7m

1.88% Li2O over 9.0m from 150.0m to 159.0m

Li2O over 15.0m from 60.5m to 65.5m

1.83% Li2O over 5.0m from 66.5m to 71.5m

Li2O over 13.1m from 74.0m to 87.1m

2.25% Li2O over 4.0m from 76.7m to 80.8m

2.00% Li2O over 3.1m from 84.0m to 87.1m

Li2O over 11.0m from 247.0m to 258.0m

1.32% Li2O over 2.1m from 261.7m to 263.8m

Li2O over 3.2m from 65.8m to 69.0m

1.46% Li2O over 14.0m from 70.0m to 84.0m

2.04% Li2O over 5.0m from 70.0m to 75.0m

Li2O over 73.85m from 210.0m to 283.8m

1.34%Li2O over 21.0m from 211.0m to 232.0m

2.18%Li20 over 17.0m from 237.0m to 254.0m

Li2O over 17.4m from 136.0 to 153.4m

1.75% Li2O over 3.8m from 139.2 to 143.0m

Li2O over 77.1m from 179.0m to 256.1m

2.71% Li2O over 14.0m from 219.1 to 233.1m

Li2O over 14.9m from 43.8m to 58.6m

1.20% Li2O over 2.4m from 78.3m to 80.7m

Li2O over 11.2m from 95.4m to 106.6m

2.26% Li2O over 2.7m from 97.9m to 100.6m

1.71% Li2O over 3.2m from 103.4m to 106.6m

1.51% Li2O over 84.0m from 113.8 to 197.8m

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

2.31% Li2O over 9.1m from 176.2m to 185.3m

Li2O over 47.0m from 7.0m to 54.0m

2.12% Li2O over 7.0m from 13.0m to 20.0m

2.23% Li2O over 10.0m from 24.0m to 34.0m

1.39% Li2O over 4.0m from 40.0m to 44.0m

Li2O over 19.7m from 114.4m to 134.0m

Li2O over 25.4m from 54.2m to 79.6m

2.02% Li2O over 6.5m from 54.2m to 60.2m

4.40% Li2O over 0.6m from 60.2m to 60.7m

1.89% Li2O over 5.0m from 71.5m to 76.5m

Li2O over 9.9m from 54.2m to 64.1m

Li2O over 12.55 m from 29.15m to 47.70m

1.96% Li2O over 3.40 m from 126.60m to 130.00m

Li2O over 6.0 m from 205.4m to 211.4m

2.23% Li2O over 17.8 m from 216.1m to 233.9m

2.71% Li2O over 14.0 m from 219.1m to 233.1m

Li2O over 11.60 m from 152.60m to 164.20m

Li2O over 56.4m from 7.0m to 63.4m

2.10% Li2O over 6.2m from 8.1m to 140.3m

3.16% Li2O over 4.3m from 16.7m to 21.0m

Li2O over 10.6m from 144.25m to 154.85m

1.70% Li2O over 26.55m from 158.25m to 184.8m

2.12% Li2O over 20.0m from 159.25m to 179.25m

Li2O over 14.89m from 158.92m to 173.81m

1.49% Li2O over 4.6m from 228.7m to 233.3m

Li2O over 42.88 m from 133.12m to176.00m

1.20% Li2O over 9.65 m from 223.35m to 233.00m

Li2O over 9.72m from 201.886m to 211.6m

Li2O over 6.2m from 179.2 to 283.42

Li2O over 27.8m from 64.5m to 92.4m

1.49% Li2O over 15.0m from 192.5m to 207.5m

Li2O over 47.00 m from 59.00m to 106.00m

Li2O over 16.00 m from 114.00m to 130.00m

Li2O over 20.90 m from 82.00m to102.90m

1.70% Li2O over 9.00 m from 162.00m to 171.00m

Li2O over 18.0m from 67.56m to 85.56m

1.61% Li2O over 5.71m from 190.39m to 196.1m

Li2O over 6.30 m from 101.85m to 108.35m

Li2O over 7.63 m from 79.37m to 87.00m

drilling and sampling follow strict best practices established under industry-standard quality assurance and quality

control protocols.

All lithium samples are analyzed at SGS-Geosol, an established analytical laboratory used by mining

companies in Brazil.

Normally geochemical results are obtained from SGS-Geosol three weeks after submission of the samples for

Metallurgical

April 24, 2023, we announced the receipt of the metallurgical report (the “Metallurgical Report”) from SGS-Geosol 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

The Metallurgical Report also showed final lithium concentrate grading of 6.04% Li 2 O with only 0.53%

Fe 2 O 3 , and a lithium recovery of 70%.

Our desired target was the production of concentrate grading 6.0%

Li 2 O with less than 1.0% Fe 2 O 3 , and these targets were exceeded.

Metallurgical Report will become a chapter in the Maiden Resource Report described above.

The Metallurgical Report also allows SGS-Geosol 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.

Development Update

January 18, 2023, we announced that we had signed a non-binding, non-exclusive Memorandum of Understanding (“MOU”) with Mitsui

(“Mitsui”) with respect to Mitsui’s potential interest in acquiring the right to purchase our future

lithium concentrate production.

In November 2023, we entered into the Chengxin and Yahua agreements, described below, at which time we

ceased discussions with Mitsui regarding a potential offtake arrangement as contemplated by the MOU.

We have continued discussions with

Mitsui regarding other possible strategic opportunities and/or partnerships.

Royalty Corp.

Royalty Agreement

May 2, 2023, our 99.9% owned subsidiary, Atlas Litio Brasil Ltda.

(“Atlas Brasil”), entered into a written agreement

pursuant to which it sold a royalty interest equaling 3% of the future gross revenue from the sale of products from certain 19

mineral rights and properties owned by Atlas Brasil and located in Brazil, to Lithium Royalty Corp., a Canadian company listed on the

Toronto Stock Exchange (“LRC”), for $20,000,000 in cash.

The royalty will be calculated, and royalty payment will be made, on a quarterly basis commencing

from the first receipt of the sales proceeds with respect to the products.

Atlas Brasil also granted LRC an option to purchase

additional royalty interests with respect to certain additional Brazilian mineral rights and properties on the same terms and conditions, at a total purchase price of $5,000,000.

and Yahua Agreements

November 29, 2023, we entered into Offtake and Sales Agreements (the “Offtake Agreements”) with each of Sichuan Yahua

Industrial Group Co., Ltd.

and Sheng Wei Zhi Yuan International Limited, a subsidiary of Shenzhen Chengxin Lithium Group Co., Ltd.,

pursuant to which we agreed, for a period of five years, to sell to each of the buyers 60,000 dry metric tons of lithium concentrate

per year, subject to our ability to increase or decrease such quantity by up to ten percent (10%) each year.

The price for the

lithium concentrate is determined according to a formula as set forth in the Offtake Agreements.

Each of the buyers agreed to invest

$5 million into shares of our common stock at $29.77, and when we receive final permits, to invest an additional $20 million as

offtake pre-payment for future deliveries of the lithium concentrate after we obtain customary licenses.

Each pre-payment amount

will be used to offset the buyer’s future payment obligations under the Offtake Agreements.

to produce a definitive feasibility study (as such term is defined under Regulation S-K Item 1300) with respect to our Neves Project.

We expect such study to be completed

around mid-year 2025.

of Operations

Year Ended December 31, 2024, Compared to Fiscal Year Ended December 31, 2023

for the year ended December 31, 2023, totaled $0, compared to revenue of $6,765 during the year ended December 31, 2022, representing

a decrease of 100%.

Revenue in 2022 was comprised solely of sales of industrial sand that we mined in one of our mineral rights.

sand is a residual business line, as we are primarily focused on our lithium exploration program.

In December 2022, we ceased

operations of our industrial sand business line.

of goods sold for the year ended December 31, 2023, totaled $0, as compared to cost of goods sold of $63,548 during the year ended December

31, 2022, representing a decrease of 100%.

Cost of goods sold is primarily comprised of labor, fuel, repairs and maintenance on our mining

The cost of goods sold in 2022 related to industrial sand production.

loss for the year ended December 31, 2023, totaled $0, compared to gross loss of $56,783 during the year ended December 31, 2022, representing

decrease of 100%.

expenses for the year ended December 31, 2023, totaled $42,588,044, compared to operating expenses of $5,446,984 during the year

ended December 31, 2022, representing an increase of 682%.

The increase was mostly due to increases in general and administrative

expenses, stock-based compensation expense and exploration expenses, as described below.

and administrative expenses increased by 278%, from $2,722,197 for the year ended December 31, 2022, to $10,303,340 for the year

ended December 31, 2023, mainly due to:

approximately

$1,030,000 in non-recurring transaction costs associated with our public offering in January 2023 in connection with the listing

of our common stock on the Nasdaq Capital Market.,

compensation costs due to the increase in employee headcount approximately of $1,940,000,

increased legal fees of approximately of

consulting expenses approximately $1,950,000.

compensation expense for the year ended December 31, 2023, was $15,609,698, compared to $2,269,566 in the prior year, an increase

The increase was primarily due to the increase in the market price of our common stock and an increase in stock-based

compensation awarded to new members of our management team.

expenses for the year ended December 31, 2023, were $16,553,830, compared to $0 for the year ended December 31, 2022.

The increase was primarily due to increased exploration activities related to the execution of the drilling program on our 100%

owned Minas Gerais Lithium Project.

Other expense (income) for the year ended

December 31, 2023, totaled a net $45,876, compared to $155,812 during the year ended December 31, 2022, representing a

decrease of other expense of 71%.

The decrease is mainly due to non-cash fair value adjustments and interest received from cash deposits

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 m 3 of unprocessed blocks of quartzite and

905 m 2 of processed slabs produced by our subsidiary’s quartzite operation.

By comparison, there was no gross margin

generation in the year ended December 31, 2023.

expenses for the year ended December 31, 2024, totaled $44,123,939, compared to operating expenses of $42,106,732 during the year ended

December 31, 2023, representing an increase of 4,8%.

The increase was mostly due to increases in general and administrative expenses

and stock-based compensation expense, offset by a reduction in exploration expenses, as detailed below:

Higher general and administrative

expenses of approximately $5.7 million during the period, primarily due to:

(i) an increase in technical service costs of $2.4 million

($4.3 million in 2024 compared to $1.9 million in 2023), directly related to engineering and planning activities;

(ii) higher third-party

service costs, mainly related to the process to obtain the operational permit for the Neves Project, totaling $1.8 million ($2.8

million in 2024 compared to $0.4 million in 2023);

and (iii) a $1.5 million increase in payroll expenses ($2 million in 2024 compared

to $0.5 million in 2023) driven by team expansion as the project progresses;

An increase of

approximately $10 million in stock-based compensation expense compared to the prior period, reflecting contractual obligations to

members of the management team eligible for stock-based compensation with a different vesting profile compared to 2023.

of the instruments issued fully vested during the year, compared to 40% of similar instruments issued in 2023;

A decrease in exploration

costs due to a reduction in exploratory drilling activities in 2024 and the commencement of the capitalization of exploration expenses

($4.5 million from April to December 2024 and Nil in 2023) 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,

2024 totaled $1,338,370 compared to $194,175 during the year ended December 31, 2023, representing an increase of 589%, 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.

a result, we incurred a net loss attributable to our stockholders of $42,241,196, or $2.97 per share, for the year ended December 31,

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and Capital Resources

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

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 December 31, 2023, we had cash and cash equivalents of $29,549,927

and working capital of $24,044,931, compared to cash and cash equivalents $280,525 and a working capital deficit of $2,452,553 as of

December 31, 2022.

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 March 2025.

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.

cash used in operating activities totaled $5,029,318 for the year ended December 31, 2023, compared to net cash used of $1,480,530

during the year ended December 31, 2022, representing an increase in cash used of $3,548,788, or 240%.

The increase was primarily

due to the net loss in the period offset by proceeds from the sale of future royalties.

of December 31, 2024, we had cash and cash equivalents of $15,537,476 and net working capital of $12,258,774.

cash used by operating activities totaled $18,784,844 for the year ended December 31, 2024, compared to net cash used of $5,962,602 during

the year ended December 31, 2023, representing an increase in cash used of $12,822,242, or 215%.

The variation in net cash used by operating

activities was mainly due to:

the year ended December 31, 2023, we received $20 million of deferred consideration from royalty sold arising from the one-time

royalty sale to Lithium Royalty Corp.

with no similar transaction in 2024, as explained in Note 3;

increase of approximately $5.7 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.

a result, we had more expenditures such as employee compensation and the costs of third parties service providers such as technical

decrease of approximately $13.4 million in Exploration costs due to a reduction in drilling activities in 2024 and the commencement

of capitalization of exploration expenses.

cash used in investing activities totaled $27,344,436 for the year ended December 31, 2024, compared to net cash used of $7,970,172 during

the year ended December 31, 2023, representing an increase in cash used of $19,374,264, or 243%.

The increase is mainly due to cash advances for the lithium processing plant construction during 2023.

The variation in net cash used by investing

activities was mainly due to:

Increase of approximately

$13.3 million due to cash advances the manufacturing of the DMS plant during 2024

The capitalization of exploration

costs incurred since April 2024 of approximately $4.5 million

Increase in the acquisition

of intangible assets represented by the implementation of SAP

cash provided by financing activities totaled $32,131,672 for the year ended December 31, 2024, compared to $43,156,759 during the year

ended December 31, 2022, representing an increase in cash provided of $36,712,328, or 815%.

The increase is due to net proceeds from

the sales of common stock of $31,214,660 and from the issuance of convertible debt in the amount of $10,000,024, as described below under

Financing Activities.

currently have no off-balance sheet arrangements.

On January 12, 2023, we completed our 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, we raised an aggregate of $4 million in gross proceeds from the sale of 640,000 shares of its common stock in transaction

exempt under Regulation S of the Securities Act.

On July 18, 2023, we consummated a transaction with four investors, pursuant to which we agreed to issue and sell to the investors in a

Regulation S private placement an aggregate of 526,317 restricted shares of our common stock.

The purchase price for

the shares was $19.00 per share, for total gross proceeds of $10,000,023.

On November 7, 2023, we

issued convertible promissory notes with an aggregate total principal amount of $20,000,000, accruing interest at a rate of 6.5% per

annum, in a private placement in reliance upon the exemption from registration provided by Regulation D under the Securities

The notes are convertible into shares of our

common stock at the option of the holders at any time up until the maturity date at a conversion price of $28.224 per share.

notes will mature on November 24, 2026.

ended December 31, 2023, representing a decrease in cash provided of $11,025,087, or 26%.

We completed the following financing activities

On March 28, 2024, we entered

into a Securities Purchase Agreement with Mitsui to issue 1,871,250 shares of our common stock in a registered direct offering for

total gross proceeds of $30,000,000.

Net proceeds were approximately $29.6 million after deducting offering expenses.

On November 22, 2024, we

entered into two securities purchase agreements with certain accredited investors pursuant to which we agreed to sell and issue 167,954

shares of its common stock, to each of the investors in a registered direct offering at a purchase price of $29.77 per share.

gross proceeds from the registered offering were $10,000,000.

Additionally, during the

2023, we sold an aggregate of 192,817 shares of common stock to Triton Funds, LP for total gross proceeds of

$1,675,797 pursuant to a Common Stock Purchase Agreement (the “CSPA”) entered into between us and Triton

Funds, LP, dated February 26, 2021.

entered into an At The Market Offering Agreement with H.C.

Wainwright & Co., LLC for the issuance of up $25.0 million of shares

of our common stock (the “ATM Agreement”).

During the year ended December 31, 2024, we sold 191,723 shares

under the ATM Agreement for proceeds of $1.3 million, net of commissions and fees.

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, 2024, we had cash and cash equivalents of $15,537,476 and net working capital

of $12,258,774, compared to cash and cash equivalents $29,549,927 and a working capital deficit of $23,809,637 as of December 31, 2023.

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

currently have no off-balance sheet arrangements.

Offtake and Sales Agreements

December 2023, we entered into Offtake and Sales Agreements with each of Sichuan Yahua Industrial Group Co., Ltd.

and Sheng Wei Zhi

Yuan International Limited, a subsidiary of Shenzhen Chengxin Lithium Group Co., Ltd., pursuant to which we agreed, for a period of

five (5) years, to sell to each buyer 60,000 dry metric tonnes of lithium concentrate (the “Product”) per year, subject

to our authority to increase or decrease such quantity by up to ten percent (10%) each year.

Each of the buyers agreed that upon the

Company reaching certain milestones, including the obtaining of customary licenses, to pre-pay to the Company $20.0 million (each, a

“Pre-Payment Amount”) for future deliveries of the Product after we obtain customary licenses.

Each Pre-Payment Amount

when made will be used to offset against such buyers’ future payment obligations for the Product.

27, 2024, In connection with the closing of a registered offering of our common stock to Mitsui (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.

more information about the Mitsui Registered Offering, please see “Note 7 – Related Party Transactions.

operate primarily in Brazil, which exposes us to currency risks.

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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.

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.

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.

prepared in accordance with U.S.

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.

preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates

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or if its operations have commenced, there has been no significant revenues there from.

receivables represent amounts to be received from clients due to the sale of quartzite 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.

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.

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

and Equipment

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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 computer and other office equipment over an estimated useful life of five years.

of exploration, carrying and retaining unproven mineral lease properties are expensed 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 it

has 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.

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

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

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.

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, 2023, and 2022, we did not

recognize any impairment losses related to mineral properties held.

As of December 31, 2024, and 2023, we did

not recognize any impairment losses related to mineral properties held.

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.

properties are amortized throughout the life of the property based on a units-of-production method.

of Intangible Assets with Indefinite Useful Lives

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overall financial performance of the entity, composition, or strategy changes affecting the recoverability of asset groups.

applied when performing the quantitative analysis includes estimating future cash flows, determining appropriate discount rates and making

applied when performing the quantitative analysis include estimating future cash flows, determining appropriate discount rates and making

other assumptions.

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we account for the investment under the equity method or cost method in accordance with the applicable GAAP.

have concluded that Apollo Resources, Jupiter Gold and their subsidiaries are VIEs in accordance with applicable accounting standards

have concluded that Atlas Critical Minerals and its subsidiaries are VIEs in accordance with applicable accounting standards

and guidance;

and although the operations of Apollo Resources and Jupiter Gold are independent of ours, because our chief executive officer,

Marc Fogassa, is also the controlling shareholder of both Apollo Resources and Jupiter Gold, we may be considered to have power to direct

the activities that are most significant to Apollo Resources and Jupiter Gold.

Therefore, we concluded that we are the primary beneficiary

of both Apollo Resources and Jupiter Gold.

and records stock-based compensation expense in accordance with ASC Topic 718 for share-based payments related to stock options,

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.

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

Treasury yield curve in effect at the time of grant.

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.

fair value of stock options and performance awards without a market condition is estimated at the date of grant using the Black-Scholes

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determining the expected volatility of our common stock and the expected life that individuals will hold their stock options prior to

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.

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.

Net foreign currency transaction losses included in our consolidated

statements of operations were negligible for all periods presented.

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.

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

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.

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.

Net foreign currency transaction losses included

in our consolidated statements of operations were negligible for all periods presented.

Accounting Pronouncements

Standards Updates Adopted

March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04

(“ASU 2020-04”), Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting,

which provides optional guidance for a limited period of time to ease the potential burden on accounting for contract modifications caused

by reference rate reform.

In January 2021, ASU 2021-01, Reference Rate Reform (Topic 848):

Scope was issued which broadened the scope

of ASU 2020-04 to include certain derivative instruments.

In December 2022, ASU 2022-06, Reference Rate Reform (Topic 848):

of the Sunset Date of Topic 848, was issued which deferred the sunset date of ASU 2020-04.

The guidance is effective for all entities

as of March 12, 2020, through December 31, 2024.

The guidance may be adopted over time as reference rate reform activities occur and should

be applied on a prospective basis.

has been no significant effect that may impact its financial statements and does not believe that there are any other new pronouncements

that have been issued that might have a material impact on its financial position or results of operations.

Standards Updates to Become Effective in Future Period

August 2023, the FASB issued ASU 2023-05, Business Combinations - Joint Venture Formations (Subtopic 805-60):

Recognition and Initial

Measurement, which clarifies the business combination accounting for joint venture formations.

The amendments in the ASU seek to reduce

diversity in practice that has resulted from a lack of authoritative guidance regarding the accounting for the formation of joint ventures

in separate financial statements.

The amendments also seek to clarify the initial measurement of joint venture net assets, including

businesses contributed to a joint venture.

August 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-05,

Business Combinations - Joint Venture Formations (Subtopic 805-60):

Recognition and Initial Measurement, which clarifies the business

combination accounting for joint venture formations.

The amendments in the ASU seek to reduce diversity in practice that has resulted

from a lack of authoritative guidance regarding the accounting for the formation of joint ventures in separate financial statements.

The amendments also seek to clarify the initial measurement of joint venture net assets, including businesses contributed to a joint

The guidance is applicable to all entities involved in the formation of a joint venture.

amendments are effective for all joint venture formations with a formation date on or after January 1, 2025.

Early adoption and retrospective

application of the amendments are permitted.

We do not expect adoption of the new guidance to have a material impact on our consolidated

financial statements and disclosures.

November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, amending reportable

segment disclosure requirements to include disclosure of incremental segment information on an annual and interim basis.

Among the disclosure

enhancements are new disclosures regarding significant segment expenses that are regularly provided to the chief operating decision-maker

and included within each reported measure of segment profit or loss, as well as other segment items bridging segment revenue to each

reported measure of segment profit or loss.

The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15,

2023, and for interim periods within fiscal years beginning after December 15, 2024, and are applied retrospectively.

Early adoption

is permitted.

We are currently evaluating the impact of this update on our consolidated financial statements and disclosures.

December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvement to Income Tax Disclosures, amending income tax disclosure

requirements for the effective tax rate reconciliation and income taxes paid.

The amendments in ASU 2023-09 are effective for fiscal

years beginning after December 15, 2024, and are applied prospectively.

The amendments are effective for all

joint venture formations with a formation date on or after January 1, 2025.

Early adoption and retrospective application of the amendments

are permitted.

We are currently evaluating the impact of this update on our consolidated financial statements and disclosures.

We do not expect the adoption of the new guidance to have a material impact on our consolidated financial statements and disclosures.

December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvement to Income Tax Disclosures, amending income tax

disclosure requirements for the effective tax rate reconciliation and income taxes paid.

The amendments in ASU 2023-09 are effective

for fiscal years beginning after December 15, 2024, and are applied prospectively.

Early adoption and retrospective application of

the amendments are permitted.

We do not expect the adoption of the new guidance to have a material impact on our consolidated

financial statements and disclosures.

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.

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.

Quantitative and Qualitative Disclosures About Market Risk.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis