Atlas Lithium Corporation — Q3 2022 Form 10-Q
Reporting period: Three and nine months ended September 30, 2022. The company, formerly Brazil Minerals, Inc., changed its name on September 26, 2022. Amounts below are in U.S. dollars unless stated otherwise.
Business context
Atlas is a Brazil-focused, exploration-stage mineral company developing hard-rock lithium properties in Minas Gerais, alongside rights for other battery metals. It reported no mineral reserves and had not yet generated material revenue from products or services. Its small revenue was from industrial sand, described as a residual business line. The consolidated statements also include variable-interest entities Apollo Resources and Jupiter Gold.
Financial performance and liquidity
| Metric | Q3 2022 | Q3 2021 | Nine months 2022 | Nine months 2021 |
|---|---|---|---|---|
| Revenue | $3,301 | $2,984 | $6,145 | $9,088 |
| Gross loss | $24,233 | $24,398 | $57,587 | $65,388 |
| Operating expenses | $1,247,694 | $707,335 | $3,064,305 | $2,560,171 |
| Net loss attributable to Atlas stockholders | $1,028,192 | $619,139 | $2,430,698 | $2,161,835 |
- Revenue was immaterial relative to costs; gross losses continued. The filing reports loss per share as $0.00, reflecting rounding.
- Q3 operating expenses rose 76%, principally from public-company general and administrative costs and higher officer and director compensation. Nine-month expenses rose 20% for similar reasons.
- At September 30, cash was $418,263, current assets $461,564, and current liabilities $2,937,224; management reported a working-capital deficit of $2,475,660. Total liabilities were $2,962,435, including $2,480,725 payable for mineral rights. Related-party notes and other payables were $14,785.
- For the first nine months, operating cash outflow was $258,293, investing outflow $2,573,826, and financing inflow $3,188,736. The operating cash outflow was substantially lower than 2021, while investing outflow increased, primarily reflecting additions to mining-right intangibles. Financing included $2,613,736 of common-stock proceeds and $575,000 from subsidiary stock sales.
- Mining-right intangible assets increased to $4,829,276 from $1,302,440 at year-end 2021. Total stockholders’ equity was $2,595,939, versus $456,866 at year-end.
Material changes, outlook and risks
- Q3 work focused on continued drilling in the Neves Area. Atlas published an initial independent technical report summary for Neves, prepared under Regulation S-K 1300.
- The company said two large companies had approached it about lithium supply, with discussions ongoing; it cautioned there was no assurance of orders. After quarter-end, it hired lithium-processing and strategic-development executives and began metallurgical studies. It also continued working toward a possible Nasdaq Capital Market uplisting. No quantified production, revenue, or financing guidance was provided.
- Management stated that limited working capital, recurring losses, and lack of material operating revenue raise substantial doubt about Atlas’s ability to continue as a going concern. Plans rely on operations, equity or debt financing, and potentially selling holdings in Apollo Resources or Jupiter Gold; success is not assured.
- Key risks include exploration failure or uneconomic deposits, commodity and market fluctuations, Brazilian regulation and environmental requirements, infrastructure and weather disruption, competition, and foreign-currency movements. The company reported no material legal proceedings, no off-balance-sheet arrangements, and no material change to previously disclosed risk factors.
- Common shares issued increased during the period through private offerings and a stock issuance for mining rights. The filing also reports 421,271,661 outstanding common-stock options and warrants at September 30. One Series A preferred share carries 51% of total voting power while outstanding. Management concluded disclosure controls and internal control over financial reporting were effective as of September 30.
Important facts for investors to verify
- Funding runway, expected cash needs, and whether Atlas can raise capital or otherwise address the stated going-concern uncertainty.
- Neves drilling results, the technical report’s assumptions and limitations, and progress toward defining an economically viable resource and production plan.
- Terms and status of lithium-supply discussions, and the cost, timing, and results of metallurgical studies.
- The mineral-rights payable balance, related payment obligations, and the basis for the substantial increase in mining-right intangible assets.
- Share-count and dilution disclosures: the balance sheet reports 3,654,524,113 common shares at September 30, while the cover reports 371,304,113 shares outstanding as of October 31. The filing text does not explain this difference; verify the share-count basis and any intervening corporate action.