What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-04 compared with 2025-03-14 · 220 added, 250 removed, 198 unchanged (70% of the section changed)

9 unchanged sentences

Annual Report.

Lithium Corporation (“Atlas Lithium”, the “Company”, “we”, “us”, or “our”

refer to Atlas Lithium Corporation and its consolidated subsidiaries) is a mineral exploration and development company with lithium projects

and multiple lithium exploration properties.

In addition, we own exploration properties in other battery minerals, including nickel,

copper, rare earths, graphite, and titanium.

Our current focus is the development from exploration to active mining of our hard-rock

lithium project located in the state of Minas Gerais in Brazil at a well-known 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.

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.

Lithium is a mineral exploration and development company with lithium projects and multiple lithium exploration properties.

addition, we own exploration properties in other battery minerals, including nickel, copper, rare earths, graphite, and titanium.

Our current focus is the continued advancement of our hard-rock lithium project in Minas Gerais, Brazil toward active mining.

project is located within a well-known lithium-bearing pegmatitic district designated by the state government as “Lithium Valley.” We intend to mine and then process our lithium-containing ore to produce lithium

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

2025, we received our DMS Plant, which was designed to produce approximately 150,000 tons of lithium concentrate per annum (“tpa”).

Our DMS Plant represents a cornerstone of our Neves Project, designed to deliver high-quality lithium concentrate to the global

market for electric vehicles (EVs) and renewable energy storage systems.

With worldwide lithium demand growing, we are positioned to

emerge as a key contributor to the sustainable energy transition.

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.

Our mineral rights include approximately:

53,942 hectares (539 km 2 )

for lithium in 95 mineral rights (2 in pre-mining concession stage, 85 in exploration stage, and 8 in pre-exploration stage);

44,913 hectares (449 km 2 )

for nickel in 29 mineral rights (23 in exploration stage, and 6 in pre-exploration stage);

25,050 hectares (251 km 2 )

for copper in 13 mineral rights (12 in exploration stage, and 1 in pre-exploration stage);

12,144 hectares (121 km 2 )

for rare earths in 7 mineral rights, all in exploration stage;

6,927 hectares (69 km 2 )

for titanium in 5 mineral rights, all in exploration stage;

3,910 hectares (39 km 2 )

for graphite in 2 mineral rights, all in exploration stage;

1,030 hectares (10 km 2 )

for gold mineral rights, all in exploration stage.

We believe that

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

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.

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.

hectares (539 km 2 ) for lithium in 95 mineral rights (2 in pre-mining concession stage, 85 in exploration stage, and 8

in pre-exploration stage);

hectares (449 km 2 ) for nickel in 29 mineral rights (23 in exploration stage, and 6 in pre-exploration stage);

hectares (251 km 2 ) for copper in 13 mineral rights (12 in exploration stage, and 1 in pre-exploration stage);

hectares (121 km 2 ) for rare earths in 7 mineral rights, all in exploration stage;

hectares (69 km 2 ) for titanium in 5 mineral rights, all in exploration stage;

hectares (39 km 2 ) for graphite in 2 mineral rights, all in exploration stage;

hectares (10 km 2 ) for gold mineral rights, all in exploration stage.

believe that we hold the largest portfolio of exploration properties for lithium and other battery minerals in Brazil among publicly

listed companies.

During the fourth quarter of 2025, we

made substantial progress in the procurement process for the project tasks and other contracted work (collectively referred to

herein as “work items”) needed for the implementation of the Neves Project.

Examples of such work items include assembly

of our dense media separation plant and earth works.

We have generally received multiple competing bids for each of the relevant

work items, including 19 bids for one work item.

Our supplier selection criteria are based on technical qualification and

experience, and with these conditions met, then best price and terms.

On December 22, 2025, we announced that

we had entered the final stage of contracting project management and construction supervision services.

This engagement will support the

integrated management and oversight of project construction activities.

The scope includes planning, coordination, monitoring, and control

of all activities required for project execution, ensuring compliance with schedule, cost, scope, quality, safety, and overall performance

Our selection process included extensive due diligence on five firms with proven experience in delivering projects

of similar scope and complexity.

Multiple technical and commercial interactions were conducted to thoroughly assess and identify the most

suitable partner for the Neves Project;

evaluation parameters focused on technical excellence, track record in Brazilian mining projects,

project management methodology, systems and tools, as well as the qualifications and experience of the proposed technical team.

On January 9, 2026, the Company’s

subsidiary Atlas Critical Minerals Corporation (“Atlas Critical Minerals”), commenced trading on the Nasdaq Capital Market

under the ticker symbol “ATCX.” Atlas Critical Minerals has projects in rare earths, graphite, uranium, and iron ore.

details about Atlas Critical Minerals are available on its website at www.atlascriticalminerals.com and in its filings with the Securities

and Exchange Commission.

Since the beginning of 2026, we have received written indications of interest from

multiple parties to purchase our future lithium concentrate production.

Following a period of lower lithium prices, we have observed increased interest from potential customers in securing long-term supply arrangements.

We believe that both the continued global growth in

electric vehicle adoption now coupled with demand from energy storage systems for data centers provide a healthy environment for

of Operations

Year Ended December 31, 2025, Compared to Fiscal Year Ended December 31, 2024

a trial mining period in the second half of 2023, one of our subsidiaries commenced ongoing operations at its quartzite

quarry in 2024.

a trial mining period in the second half of 2023, one of our subsidiaries commenced ongoing operations at its quartzite quarry in

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

We generated limited revenues in year ended

on December 31, 2025 because we paused production of quartzite blocks and slabs in first half of 2025 to effect

modifications to our operations and address certain identified issues, including the adoption of an updated

drainage plan for the quarry.

We have retained an engineering firm to prepare an updated drainage plan and expect to resume

operations during the second half of 2026.

expenses for the year ended December 31, 2025, totaled $31,592,273, compared to operating expenses of $44,123,939 during the year

ended December 31, 2024, representing a reduction of 28.4%.

The decrease was mostly due to the $16.0 million reduction in stock-based compensation and $3.0 million reduction in exploration costs, offset by

the $6.7 million increase in general and administrative

expenses, as detailed below:

increase in general and administrative expenses of approximately $6.7 million during the period, primarily due to:

(i) an increase

in payroll expenses of $1.9 million directly related to increase of operational activities related to the preparation for the

project implementation;

(ii) $3.1 million due to higher investor relations expenses and (iii) $2.1 million due to increased

third-party contractor costs as the Company’s activities expanded as a result of the preparation for the project implementation;

A decrease of approximately $16.0 million in stock-based compensation expense compared to the year ended December

31, 2024, corresponding to a reduced fair value of the instruments issued due to the decreased trading price of the Company’s common

stock compared to 2024;

$3.0 million reduction in exploration costs as a result of the commencement of capitalizing exploration expenses

due to the conclusion of a preliminary economic assessment of the Neves Project in the second quarter of 2024.

expenses for the year ended December 31, 2025 totaled $67,875 compared to $1,338,370 during the year ended December 31, 2024, representing

a decrease of 94.9%, driven by the derecognition of a $1.3 million asset relating to the premium paid for an option to acquire two

mining rights in Governador Valadares, Minas Gerais, and the corresponding recognition of a $1.3 million expense.

We decided not to exercise

such option and derecognized the amount recorded for the premium occurred because the results of geological studies did not achieve the

expected results.

The assets subject to the option are unrelated to the

Company’s Das Neves Project.

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 $28,110,592, or $1.54 per share, for the year ended December 31,

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of December 31, 2025, we had cash and cash equivalents of $35,935,104 and net working capital of $23,066,924.

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

cash used by operating activities totaled $22,166,692 for the year ended December 31, 2025, compared to net cash used of $18,784,844

during the year ended December 31, 2024, representing an increase in cash used of $3,381,848, or 18.00%.

The variation in net cash used

by operating activities was mainly due to:

increase of approximately $6.7 million in General and administrative expenses due to the growth of our personnel, infrastructure and

the costs related to our operational permit relating to our Neves Project as we move towards revenue-generating operations.

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

decrease of approximately $3.0 million in Exploration costs due to 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 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 used in investing activities totaled $8,959,390 for the year ended December 31, 2025, compared to net cash used of $27,344,436

during the year ended December 31, 2024, representing a decrease in cash used in investing activities of $ 18,385,046, or 67.24%.

The variation in net cash used in investing activities was mainly due to:

A decrease of $16.4 million in the payments made in

connection with the acquisition of our lithium processing plant ($6.1 million in 2025, compared to $22.4 million in 2024) due to the finalization

of the fabrication process in 2025;

A decrease of $1.6 million in capitalized exploration costs incurred during the year ended December 31, 2025 as a

result of the reduction in the drilling activities in 2025 compared to 2024 ($2.9 million in 2025 and $4.5 million in 2024);

of $0.4 million in the acquisition of intangible assets represented by the implementation of SAP done in 2024.

cash provided by financing activities totaled $51,523,029 for the year ended December 31, 2025, compared to $32,131,672 during the year

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

ended December 31,2024, representing an increase in cash provided of $19,391,357, or 60.35%.

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 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.

During the year ended December 31, 2025, we sold (i) 7,627,566 shares under the ATM Agreement for proceeds of $ 41.7 million ($1.3

million net proceeds in 2024), and (ii) 2,500,000 shares

to certain institutional investors in a registered direct offering for proceeds of $10 million ($30 million in

In 2025, net proceeds of $2.5 million were generated

from the sale of shares of Atlas Critical Minerals, a consolidated subsidiary of the Company.

In 2024, the proceeds from the sale of shares

of the subsidiary totaled $1.0 million.

consolidated financial statements have been prepared on a going concern basis.

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As of December 31, 2025, we had cash and cash equivalents of $35,935,104 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

of $23,066,924, compared to cash and cash equivalents $15,537,476 and a working capital of $10,553,780 as of December 31, 2024.

our cash on hand will be sufficient to meet our working capital and capital expenditure requirements for a period of at least twelve

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.

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.

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.

and Sales Agreement from Mitsui

As further described in “Note 7 – Related Party Transactions, ” the

Company has entered into an Offtake and Sales Agreement with Mitsui pursuant to which Mitsui has agreed to purchase a spot quantity of

15,000 dry metric tons of product and, subject to the satisfaction of certain conditions, to purchase a minimum of 60,000 dry metric

tons per year for a period of five years commencing with the first year of such shipments, or until an aggregate of 300,000 dry metric

tons has been delivered, if later.

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

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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.

receivables represent amounts to be received from clients due to the sale of quartzite and iron ore products.

We recognize a trade

receivable following the recognition of revenue when control of a product is transferred to the customer, and we have an

unconditional right to receive payment for such product.

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

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

and Equipment

7 unchanged sentences

processing plant and other machinery are depreciated over an estimated useful life of ten years;

vehicles are depreciated over an

estimated life of five years;

and computers and other office equipment are depreciated over an estimated useful life of five

vehicles are depreciated over an estimated

life of five years;

and computers and other office equipment are depreciated over an estimated useful life of five years.

of exploration, carrying and retaining unproven mineral lease properties are expensed as incurred, up to the stage at which the commercial

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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.

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

48 unchanged sentences

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

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

and guidance;

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

and although the operations of Atlas Critical Minerals are independent of ours, because our Chief Executive Officer and Chairman, Mr.

Fogassa, is also the controlling

shareholder of Atlas Critical Minerals, we may be considered to have power to direct the activities that are most significant to Atlas

Critical Minerals.

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.

29 unchanged sentences

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.

the exception of Atlas Lítio Brasil Ltda, our foreign subsidiaries use a local currency as the functional currency.

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.

Accounting Pronouncements

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.

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 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

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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.

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):

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Management does not expect this new guidance to have any impact on our consolidated financial statements.

In May 2025, the FASB issued ASU 2025-03, Business

Combinations and Consolidation — Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity.

The amendments

in this Update require an entity involved in an acquisition transaction effected primarily by exchanging equity interests when the legal

acquiree is a VIE that meets the definition of a business to consider the factors in paragraphs 805-10-55-12 through 55-15 to determine

which entity is the accounting acquirer.

The amendments in this update are effective for annual reporting periods beginning after December

15, 2026, and interim reporting periods within those annual reporting periods.

The Company will analyze the impacts of this update in

the upcoming years and anticipate that it will not adopt the update early.

In May 2025, the FASB issued

ASU 2025-04, Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606):

Clarifications to

Share-Based Consideration Payable to a Customer.

The amendments in this update revise the master glossary definition of the term performance

condition for share-based consideration payable to a customer.

The revised definition incorporates conditions (such as vesting conditions)

that are based on the volume or monetary amount of a customer’s purchases (or potential purchases) of goods or services from the

grantor (including over a specified period of time).

The revised definition also incorporates performance targets based on purchases made

by other parties that purchase the grantor’s goods or services from the grantor’s customers.

The revised definition of the

term performance condition cannot be applied by analogy to awards granted to employees and nonemployees in exchange for goods or services

to be used or consumed in the grantor’s own operations.

The amendments in this update are effective for all entities for annual

reporting periods (including interim reporting periods within annual reporting periods) beginning after December 15, 2026.

Early adoption

is permitted for all entities.

Management does not expect this new guidance to have any impacts on the Company’s consolidated financial

In July 2025, the FASB issued ASU 2025-05, Financial

Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets.

The amendments in this update provide (1) all entities with a practical expedient and (2) entities other than public business entities with an accounting

policy election when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions

accounted for under Topic 606, as follows:

Practical expedient.

In developing

reasonable and supportable forecasts as part of estimating expected credit losses, all entities may elect a practical expedient that assumes

that current conditions as of the balance sheet date do not change for the remaining life of the asset.

Accounting policy election.

An entity other than a public business entity that elects the practical expedient is permitted to make an accounting policy election to

consider collection activity after the balance sheet date when estimating expected credit losses.

The amendments will be effective for annual reporting

periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods.

Management does not expect

this new guidance to have material impacts on the Company’s consolidated financial statements.

In September 2025, the FASB issued ASU 2025-07, Derivatives

and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606) — Derivatives Scope Refinements and Scope Clarification

for Share-Based Noncash Consideration from a Customer in a Revenue Contract.

The amendments in this update exclude from derivative accounting

nonexchange-traded contracts with underlying that are based on operations or activities specific to one of the parties to the contract.

However, this scope exception does not apply to (1) variables based on a market rate, market price, or market index, (2) variables based

on the price or performance of a financial asset or financial liability of one of the parties to the contract, (3) contracts (or features)

involving the issuer’s own equity that are evaluated under the guidance in Subtopic 815-40, Derivatives and Hedging—Contracts

in Entity’s Own Equity, and (4) call options and put options on debt instruments.

The amendments in this update are effective for

all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting

Early adoption is permitted.

Management does not expect this new guidance to have material impacts on the Company’s consolidated

financial statements.

In November 2025, the FASB issued ASU 2025-09, Derivatives

and Hedging (Topic 815) — Hedge Accounting Improvements.

The amendments in this update clarify certain aspects of the guidance on

hedge accounting and to address several incremental hedge accounting issues arising from the global reference rate reform initiative.

For public business entities, the amendments in this update are effective for annual reporting periods beginning after December 15, 2026,

and interim periods within those annual reporting periods.

Management does not expect this new guidance to have material impacts on the

Company’s consolidated financial statements.

In December 2025, the FASB issued ASU 2025-11, Interim

Reporting (Topic 270) — Narrow-Scope Improvements.

The amendments in this update clarify interim disclosure requirements and the

applicability of Topic 270.

The amendments in this update are effective for interim reporting periods within annual reporting periods

beginning after December 15, 2027.

The Company will analyze the impacts of this Update in the upcoming years and anticipate that it will

not adopt the update early.

Quantitative and Qualitative Disclosures About Market Risk.

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What changed 10-K

Item 7. Management’s Discussion and Analysis