COBA 10-K & 10-Q changes, risk factors and insider trading

For the fiscal years ended December 31, 20242025 and 2023,2024, we reported net losses of $882,574$3,263,140 and $1,292,742,$882,574, respectively, however, $1,881,082 of the 2025 loss was related to a one-time, non-cash charge for impairment of mining concessions, and negative cash flow from operating activities of $791,706$1,146,473 and $929,418,$718,275, respectively. As of December 31, 2024,2025, we had an aggregate accumulated deficit of $33,382,812.$36,645,952. We expect our operating operating expenses to significantly increase over the next several years as we expand our operations and infrastructure, both domestically and internationally, and hire additional personnel. We anticipate that we will continue to report losses and negative cash flow. Our management has concluded that our historical recurring losses from operations and negative cash flows from operations as well as our dependence on private equity and other financings raise substantial doubt about our ability to continue as a going concern and our auditor has included an explanatory paragraph relating to our ability to continue as a going concern in its audit report for the fiscal years ended December 31, 20242025 and 2023. 2024.

We anticipate that our expenses over the next twelve (12) months will be approximately $1,332,000$4,848,000 for the full implementation of our business plan including light exploration, investment in net smelter royalties, research and development expenses, general & administrative expenses, and working capital and general corporate purposes.purposes, including the costs associated with any potential uplisting to a national securities exchange and registration of a public offering. There can be no assurance that we will pursue an uplisting, nor any assurance that if we do, it will be successful. Any such effort would require us to meet initial listing standards, which may include minimum stock price, stockholders’ equity, distribution requirements, and corporate governance standards. Failure to qualify for listing or delays in doing so will result in higher costs and may affect our ability to continue our operations. We can also provide no assurance that we can secure additional capital and/or if we are able to, if they will have favorable terms. Based on our current cash on hand, we may be delayed or forced to cease operations within 12 months unless we are able to raise approximately $530,000.$2,400,000.

On December 31, 2024,2025, we had a cash balance of approximately $331,309,$2,772,082, a working capital surplus of approximately $434,587,$2,793,881, and an accumulated deficit of approximately $33,382,812.$36,645,952. In JanuaryJune 2025, we received an additional $747,443$83,502 of cash from $73,431additional of subscriptions receivable and $674,012 of additional issuances of Series B Convertible Preferred Stock at $0.45 per share. share.Then in December 2025, we received an additional $3,000,000 of cash from issuances of common stock at $0.50 per share, which after reduction for direct and incremental costs of $247,500 associated with the raise, equated to $2,752,500 of net proceeds. Even if we are able to generate substantial revenues and reduce operating expenses, we may need to raise additional capital. In order to continue operating, we may need to obtain additional financing, either through borrowings, private offerings, public offerings, or some type of business combination, such as a merger, or buyout, and there can be no assurance that we will be successful in such pursuits. We may be unable to acquire the additional funding necessary to continue operating. Accordingly, if we are unable to generate adequate cash from operations, and if we are unable to find sources of funding, it may be necessary for us to sell one or more lines of business or all or a portion of our assets, enter into a business combination, or reduce or eliminate operations. These possibilities, to the extent available, may be on terms that result in significant dilution to our shareholders or that result in our shareholders losing all of their investment in our company.investment.

If we are able to raise additional capital, we do not know what the terms of any such capital raising would be. In addition, any future sale of our equity securities would dilute the ownership and control of your shares and could be at prices substantially below prices at which our shares currently trade. If we are unable to raise capital it could require us to significantly curtail or terminate our operations. We may seek to increase our cash reserves through the sale of additional equity or debt securities. The sale of convertible debt securities, such as the Series B Convertible Preferred Stock sold during December 2024 to January 2025, or additional equity securities could result in additional and potentially substantial dilution to our shareholders. The incurrence of indebtedness would result in increased debt service obligations and could result in operating and financing covenants that would restrict our operations and liquidity. In addition, our ability to obtain additional capital on acceptable terms is subject to a variety of uncertainties. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all. Any failure to raise additional funds on favorable terms could have a material adverse effect on our liquidity and financial condition.

Global pandemics have caused, and may continue to cause, disruptions in regional economies and the world economy and financial and commodity markets in general. For example, the transmission of COVID-19 and efforts to contain its spread have resulted in international, national and local border closings, travel restrictions, significant disruptions to business operations, supply chains and customer activity and demand, service cancellations, workforce reductions and other changes, significant challenges in healthcare service provision and delivery, mandated closures and quarantines, as well as considerable general concern and uncertainty, all of which have negatively affected the economic environment and may in the future have further and larger impacts.environment. The full extent of the impact of future global pandemics on the economy is not known at this time and it is not known what measures will be implemented by governmental authorities in the future and how long these measures, or the measures currently in effect, will be in place. For instance, the COVID-19 global pandemic and efforts to reduce its spread led to a significant decline of economic activity and significant disruption and volatility in global markets. Additionally, COVID-19it disrupted the capital markets world-wide and prices of materials, including cobalt prices. We cannot at this time predict the timing and duration of future global pandemics or the impact of government regulations that might be imposed in response to such global pandemics; however,nonetheless, any such pandemics may have a material adverse effect on our business, financial position, results of operations and cash flows.

As part of our continuing business business strategy, we may make acquisitions of, or investments in, mining concessions, companies or technologies that complement our current products, products, enhance our market coverage, technical capabilities or production capacity, or offer growth opportunities. While we are actively pursuing pursuing several adjacent acquisition opportunities in the La Cobaltera project area and broader San Juan district and would also give consideration consideration to other acquisition opportunities, such as the NeoRe rare earth elements project in Southern Chile, even if outside the adjacent area or the core district, we do not have specificconcrete timetables for these plans, however, they may occur within the current calendar plansyear andor wesoon after. We cannot be certain that we will be able to identify suitable acquisition or investment candidates for sale at reasonable prices prices.or be able to close on such opportunities, if they exist.

Changes in exchange rates between between foreign currencies and the U.S. Dollar will affect the recorded levels of our assets, liabilities, net sales, cost of goods sold and operating margins and could result in exchange losses. Our results of operations may be adversely affected by any volatility in currency exchange exchange rates and our ability to manage effectively our currency transaction and translation risks. The Chilean peso has generally declined in in value over the past couple of years, however, the Chilean peso has generally increased in value since the beginning of 2025, similar to the period from July 2022 to July 2023, and we currently do not hedge foreign currency risks associated with the Chilean peso due to the the limited availability and high cost of suitable derivative instruments.

As of AprilMarch 2,31, 2025,2026, we had two 3 full-time employees and 1three part-time employee.employees. A number of our future employees will be employed in countries in which employment laws laws provide greater bargaining or other rights to employees than the laws of the United States. Such employment rights will require us to to work collaboratively with the legal representatives of the employees to effect any changes to labor arrangements. For example, most employees employees in Chile are represented by a union that must approve any changes in conditions of employment, including salaries and benefits and staff changes, and may impede efforts to restructure our workforce. Other similar companies have had to negotiate wage increases for employees employees with the union because of inflation in South American countries and Chilean Cobalt may have to do so in the future, which is typical for all companies with unions in Chile.

As with all enterprise information information systems, our information technology systems could be penetrated by outside parties intent on extracting information, corrupting information, information, or disrupting business processes. Our systems, which contain critical information about our business (including intellectual property property and confidential information of our customers, vendors and employees), have in the past been, and likely will in the future be, subject to unauthorized access attempts. Unauthorized access could disrupt our business operations and could result in failures or interruptions interruptions in our computer systems and in the loss of assets (including our intellectual property and confidential business information), which could harm our competitive position, reduce the value of our investment in research and development and other strategic initiatives or otherwise have a material adverse effect on our business, financial condition or results of operations. In addition, breaches of our security measures or the accidental loss, inadvertent disclosure, or unapproved dissemination of proprietary information or sensitive or confidential information about the company,us, our employees, our vendors, or our customers, could result in litigation, violations of various data privacy regulations in some jurisdictions, and also potentially result in liability to us. This could damage our reputation, or otherwise harm our business, financial condition, or results of operations, and the devotion of additional resources to the security of our information technology systems in the future could significantly increase the cost of doing business.

From time to time, we may license license or otherwise obtain certain intellectual property rights from third partiesthird-parties and we endeavor to do so on terms favorable to us. However, However, we may not be able to license or otherwise obtain intellectual property rights on such terms or at all, which could have a material adverse adverse effect on our ability to create a competitive advantage and create innovative solutions for our customers, which will adversely affect affect our net sales and our relationships with our customers.

As a result of becoming a public company, we are obligated to develop and maintain proper and effective internal control over financial reporting. We may not complete our analysis of our internal control over financial reporting in a timely manner, or these internal controls may not be determined to be effective, which may adversely affect investor confidence in our companyus and, as a result, the value of our common stock.

Neither our directors nor our our executive officers will be required to manage the Company as their sole and exclusive function and they may have other business interests and may engage in other activities in addition to those relating to the Company,us, provided that such activities do not compete with theour business of the Company or otherwise breach their agreements with the Company.us. We are dependent on our directors and executive officers to successfully operate our Company. Their other business interests and activities could divert time and attention from operating our business.

Natural disasters and other adverse adverse weather and climate conditions, COVID-19,pandemics, public health crises, political crises, terrorist attacks, war and other political instability instability or other unexpected events could disrupt our operations, damage one or more of our locations, or prevent short- or long-term access to one or more of our locations. Our projects are located in the vicinity of disaster zones, including flood and earthquake zones in Chile. Such locations may be the target of terrorist or other attacks. Although we believe we are adequately insured with respect to all of our consolidated operations, there are certain types of losses that we do not insure against because they are either uninsurable or not insurable on commercially reasonable terms. Should an uninsured event or a loss in excess of our insured limits occur, we could lose some or all of the capital invested in, and anticipated future revenues from, the affected locations, and we may nevertheless continue to be subject to obligations related to those locations.

RegulatoryRisks andRelated Governmentalto RisksEnvironmental Factors

We are subject to extensive federal, federal, state, local, and foreign environmental and safety laws, regulations, directives, rules and ordinances concerning, among other things, things, employee health and safety, the composition of our planned products, the discharge of pollutants into the air and water, the management and disposal of hazardous substances and wastes, the usage and availability of water, the cleanup of contaminated properties (including the federal Comprehensive Environmental Response, Compensation and Liability Act, commonly known as CERCLA or Superfund, in the U.S., and similar foreign and state laws) and the reclamation of our future mine extraction operations and certain other assets at the end of their useful life. In addition, our future production facilities will require numerous operating permits. Due to the nature of these requirements and changes in our planned operations, we may incur substantial capital and operating costs, which may have a material adverse effect on our results of operations. TheWe Companycurrently doesdo not currently have any production facilities in place as these are all in the future planning stages stages at this time and accordingly, thewe Company hashave not yet started the permit process in respect to such planned production facilities.

In the ordinary course of business business we are required to obtain and renew governmental permits for our current limited operations at our projects. We will also need additional additional governmental permits to accomplish our long-term plans to mine cobaltcobalt, copper and copperrare earth elements under plans yet to be developed. Obtaining or renewing the necessary governmental permits is a complex and time-consuming process involving costly undertakings by us. The duration and success of our efforts to obtain and renew permits are contingent upon many variables not within our control, including the interpretation of applicable requirements implemented by the permitting authority and intervention by third parties in any required environmental review. We may not be able to obtain or renew permits that are necessary on a timely basis or at all, and the cost to obtain or renew permits may exceed our estimates. Failure to comply with the terms of our permits may result in injunctions, fines, suspension or revocation of permits and other penalties. We can provide no assurance that we have been, or will at all times be, in full compliance with all of the terms of our permits or that we have all required permits. The costs and delays associated with compliance with these permits and with the permitting process could alter all or a portion of any mine plan we may propose in the future, delay or stop us from proceeding with the development of our projects or increase the costs of development or production, any or all of which may materially and/or adversely affect our business, prospects, results of operations, financial condition and liquidity.

The following discussion and analysis of the financial financial condition and results of operations of Chilean Cobalt Corp. (“Chilean Cobalt” and “C3”) and including itsour subsidiaries, subsidiaries, the (collectively, the “Company”) should be read in conjunction with our consolidated financial statements and the accompanying notes thereto included elsewhere in this Annual Report on Form 10-K. References in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to “us,” “we,” “our,” and similar terms refer to the Company. This Annual Report on Form 10-K includes forward-looking statements, as that term is defined in the federal securities laws, laws, based upon current expectations that involve risks and uncertainties, such as plans, objectives, expectations and intentions. Actual results results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of of factors. Words such as “anticipate,” “estimate,” “plan,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions are used to identify forward-looking statements. We caution you that these statements are not guarantees of future performance or events and are subject to a number of uncertainties, risks and other influences, many of which are beyond our control, which may influence the accuracy of the statements and the projections upon which the statements are based. Reference is made to “Risk FactorsFactors,”, which are included elsewhere in this Annual Report on Form 10-K.

We have not generated revenues to date. Our limited operations have included the formation of theour Company and itsour wholly-owned subsidiary Baltum Mineria SpA,Baltum, oversight of cobalt exploration activities, business development activities and sustainability framework development activities. These limited operations have been funded by capital raised through the issuance of our common stock, preferred stock, and debt. From December 4, 2017 through April 2, 2025, we raised a total of $31,309,545 from accredited investors through the issuance of our common stock, preferred stock, and debt. This total does not include the $56,272 of stock-based compensation inferred by the issuance of 216,429 shares for the retainer for services provided by Collingwood Capital Partners AG at $0.26 per share on March 19, 2024 or any other non-cash amounts for other stock-based compensation, dividends paid-in-kind or similar.

Our monthly “burn rate,” the amount of expenses we expect to incur on a monthly basis, is approximately $111,000$404,000 for a total of $1,332,000$4,848,000 for the following 12 months. We have relied and will continue to rely on capital raised from third parties to fund operations during the upcoming 12 months and we have plans to potentially raise an additional $5,000,000 and then possibly $20,000,000 or more in the2026, secondpotentially halfas part of thean year.uplisting to a national securities exchange. We expect to be able to further our acquisition and exploration plans, if we are successful in raising the anticipated working capital. However, there can be no assurance that we will be successful in securing additional capital, timely or at all, and if we are able to if there will be favorable terms.

For the years ended December 31, 2024 2025 and 2023,2024, we generated no revenues and reported net losses of $882,574$3,263,140 and $1,292,742,$882,574, respectively, however, $1,882,082 of the 2025 loss was related to a one-time, non-cash charge for impairment of mining concessions, and negative cash flow from operating activities of $791,706$1,146,473 and $929,418,$718,275, respectively. Our management has concluded that our historical recurring losses from operations and negative cash flows from operations as well as our dependence on securing private equity and other financings raise substantial doubt about our ability to continue as a going concern and our auditor has included an explanatory paragraph relating to our ability to continue as a going concern in its audit reports for the fiscal years ended December 31, 20242025 and 2023. 2024. As noted in our audited financial statements included elsewhere in this Annual Report on Form 10-K, we had an accumulated stockholders’ deficit of approximately $33,382,812$36,645,952 and recurring losses from operations as of December 31, 2024.2025. See “Risk Factors - We have a history of operating losses and our management has concluded that factors raise substantial doubt about our ability to continue as a going concern and our auditor has included an explanatory paragraph relating to our ability to continue as a going concern in its audit report for the fiscal years ended December 31, 20242025 and 2023.2024.”

In order to complete our plan of operations during the next 12 months, we estimate that approximately $1,332,000$4,848,000 in funds will be required. In order to pursue our strategic priorities of progressing mining rights acquisition and consolidation, along with both brownfield and greenfield exploration on existing and expected to be acquired mining concessions, and having a longer operational runway, we will require raising at least $4,000,000$2,400,000 to $5,000,000.$3,500,000. To complete mining rights acquisition and consolidation will require substantially more funding. The source of such funds is anticipated to come from private placementsconsideration of ouran uplisting to a national securities exchange along with consideration of a concurrent public offering of $20,000,000 or more as discussed in the Overview above. There is no guarantee that we will be able to raise such funds or that we will be able to uplist to a national securities exchange. If we fail to raise the amounts we require, we may not be able to fully carry out our plan of operations. Assuming that we are able to raise the amounts discussed above, we believe we can satisfy our cash requirements during the next 12 months and begin tofully implement our business plan.plan over that period.

For the next twelve (12) months, we we intend to implement our business plan as follows:

We have board authorization for up to a $5,000,000 private raise and there are another 677,775 shares of Series B Convertible Preferred Stock that are authorized and could be issued to raise additional capital for meeting the requirements of our 12-month business plan. However, any major acquisition and the underlying funding source would need to be approved at the board level as a prerequisite to closing. In addition, we are seeking to secure a source of financing to fund our exploration and development efforts within our mining concessions that comprise our La Cobaltera and El Cofre cobalt-copper projectprojects, as well as to complete or at least further our progress toward acquiring a rare earth elements project in south-central Chile in association with NeoRe SpA. In addition, there are other mining concessions we are evaluating within the San Juan District in northern Chile.Chile that would require funding to acquire them. These funding efforts include a potential debt fundingdebt-related package of up to $317,400,000 pursuant to a June 4, 20242024, further extended, non-binding letter of interest we received from the Export-Import Bank of the United States. There can be no assurance that a private raise or debt financing, when instituted can occur as planned or at all. Our future is dependent upon our ability to obtain further financing, the successful execution of our business plan, securing favorable off-take agreements, and achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments. There are no assurances that we will be able to obtain further funds required for our continued operations. Even if additional financing is available, it may not be available on terms we find favorable. favorable. At this time, there are no anticipated sources of additional funds in place. Failure to secure the needed additional financing will have an adverse effect on our ability to remain in business.

We have primarily financed our operations through the sale of unregistered equity. As of December 31, 2024,2025, our Companywe had cash totaling $331,309$2,772,082 current assets totaling $469,156 $2,844,313 and total assets of $472,114.$2,847,271. We had total liabilities of $34,569$50,432 (all current) and positive working capital of $434,587.$2,793,881. We also had Stockholders’ equity of $437,545.$2,796,839.

Net cash used in operating activities activities was $929,418$718,275 for the year ended December 31, 20232024 versus net cash used in operating activities of $791,706$1,146,473 for the year ended December 31, 2024.2025. The decrease in cash flow usedprovided inby operating activities was primarily due to lowersignificantly contractorhigher mining concession patent fees due to changes in Chilean mining laws and due to having over twice the hectarage to register in 2025, due to acquisition of El Cofre and additional La Cobaltera mining concessions, in addition to higher employee compensation and taxes, based on the hiring in 2025 of a new chief sustainability officer and executive vice president of exploration, higher mineral exploration costs, due to the AI pilot studies conducted in 2025, higher professional services costs inrelated 2024 compared to 2023an forindependent strategicDigbee contractors,ESG legalassessment, and otherhigher professionaladvertising and servicemarketing providers.and Inregulatory addition,and mineralfiling exploration costs were paidfees in the previous year,2025, compared to no costs in this area for the current year.2024. Each of these factors and other nominal variances contributed to the $137,712$428,198 decrease in net cash usedprovided inby operations for the current year compared to the previous year.

Net cash used in investment activities activities was $0 for the year ended December 31, 20232024 versus net cash used in investment activities of $0 for the year endedand December 31, 2024. 2025. There were no changes in cash flow used in investment activities between years.

Based uponGiven our working capital of $434,587$2,793,881, thatwhich is less thanexceeds our current year cash used in operating activities of $791,706,$1,146,473, however, due to our NeoRe rare earth project funding toward a net smelter return royalty asset and the potential for future project acquisition and our consideration of an uplisting to a national securities exchange, we expect our next twelve (12) month cash used in operating activities and investing activities to exceed our working capital. Based on that and our accumulated deficit of ($33,382,812$36,645,952), as of December 31, 2024,2025, we require additional equity and/or debt financing to continue our operations. WhileConcurrent with any strategy to uplist to a national securities exchange, we would didneed subsequentlyto receive $674,012raise in$20,000,000 proceedsor for issuance of an additional 1,497,805 shares of preferred stock in January 2025, this funding still isn’t necessarily expectedmore to cover our plancash needs, however, there can be no guarantee that we’ll be able to meet any uplisting criteria and/or successfully raise capital through a private or public offering of operationsour forcommon the next year.stock. These conditions raise substantial doubt about our ability to continue as a going concern for at least one year from the date of this filing. As a result of the foregoing factors, together with our recurring losses from operations and negative cash flows since inception, our independent registered public accounting firm included an explanatory paragraph relating to our ability to continue as a going concern in its report on our audited consolidated financial statements for the fiscal years ended December 31, 20242025 and 2023.2024.

In addition, if we are unable to generate adequate cash from operations, and if we are unable to find sources of funding, it may be necessary for us to sell all or a portion of our assets, enter into a business combination, or reduce or eliminate operations. These possibilities, to the extent available, may be on terms that result in significant dilution to our shareholders or that result in our shareholders losing all of their investment in our Company.investment.

TheOur Company’s management has evaluated all the recently issued accounting pronouncements through the filing date of thesethis financialAnnual Report on Form 10-K statements and does not believe that any of these pronouncements will have a material impact on the Company’sour current financial position and results of operations.

The following discussion and analysis of the financial condition and results of operations of Chilean Cobalt Corp. (“Chilean Cobalt” and including its subsidiaries, collectively, the “Company”) should be read in conjunction with our condensed consolidated financial statements and the accompanying notes thereto included elsewhere in this Quarterly Report on Form 10-Q. References in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to “us,” “we,” “our,” and similar terms refer to the Company. This Quarterly Report on Form 10-Q includes forward-looking statements, as that term is defined in the federal securities laws, based upon current expectations that involve risks and uncertainties, such as plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors. Words such as “anticipate,” “estimate,” “plan,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions are used to identify forward-looking statements. We caution you that these statements are not guarantees of future performance or events and are subject to a number of uncertainties, risks and other influences, many of which are beyond our control, which may influence the accuracy of the statements and the projections upon which the statements are based. Reference is made to “Risk Factors”, which are included in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“Commission”) on MarchJune 31,30, 2026, as the same may be amended from time to time.

We are a critical materials exploration exploration and development company focused on the La Cobaltera and El Cofre cobalt-copper projects, located in the San Juan District in northern Chile, one of the world’s few known primary cobalt districts. We have a deliberate focus on building a dynamic and sustainable business business with an emphasis on applying leading environmental stewardship, social engagement, and corporate governance practices to its strategy. La Cobaltera and El Cofre are a district-scale opportunity across Chilean Cobalt’s 6,377 hectares of 100% owned and unencumbered mining property situated in the San Juan District in northern Chile (Atacama Region III), a historic mining district with numerous past-producing mines and excellent infrastructure and accessibility. The project includes copper oxide and cobalt-copper oxide and sulphide resources with evidence of gold at depth across several known exploration and development targets district-wide.

Our principal business activities since incorporation have been the assessment, acquisition and consolidation of mining concessions; the exploration of the potential cobalt-copper resources resources within the concessions, including geophysics, geochemistry, drilling, IP surveys and AI pilot studies; developing an accelerated phased phased implementation plan to generate revenue as quickly as possible; establishing off-take and downstream refining relationships; developing and advancing our ESG strategy; building our board of directors, management team, and governance systems; and raising capital.

Our commercial priorities are are to have funding lined up to allow for timely development, when appropriate, and to put in place the necessary downstream processing relationships. relationships. Related to funding for development, efforts include a potentialnew debt-relatedapplication package of up to $317,400,000 pursuant tofor a June 4, 2024, and further extended, non-binding letter of interest (“LOI”) we received from with the Export-Import Bank of the United States.States (“EXIM Bank”), that was approved for potential debt-related financing of up to $375.0 million on August 4, 2026, with an effective date of August 13, 2026, and an expiration date of August 14, 2027. This new LOI replaced the originally approved LOI of up to $317.4 million pursuant to a June 4, 2024, and further extended LOI that was recently not renewed. Under EXIM Bank’s published guidelines, LOI’s are limited to a single twelve-month extension, for a maximum of two years. There can be no assurance that EXIM Bank will provide financing under the LOI as it does not represent a financing commitment. Financing is contingent on an application for financing being submitted to EXIM by the Company followed by a standard due diligence process conducted by EXIM prior to any financing commitment. Whereas, related to the downstream processing objectives, we envision a three-way strategic partnership between the Company, Glencore and US Strategic Metals (“USSM”) to establish an Americas-centric cobalt and copper supply chain, connecting Chilean Cobalt’s La Cobaltera and El Cofre cobalt-copper projects in Chile with USSM’s integrated critical minerals processing site in Missouri, USA - which may include development of a dedicated processing line for our concentrate at USSM’s site. Our partnership with USSM and Glencore is expected to strengthen United States critical minerals supply chains while intended providingto support development of a sustainable and traceable source of raw materials for the growing domestic lithium-ion battery manufacturing capacity and high-performance metal alloy markets.

We are committed to building a mature, transparent, and continuously improving ESG framework that supports responsible development and long-term value creation. Responsible-sourcing and ESG-assurance frameworks such as IRMA and Digbee increasingly shape the expectations of downstream customers, investors, and supply-chain partners. In 2025, the board of directors approved the adoption of the Digbee and IRMA ESG frameworks, and we completed our first independent Digbee ESG assessment in July 2025. We continue to strengthen our governance and ESG systems, including the board of directors’ adoption in principle of a new governance framework in March 2026, which is intended to support enhanced oversight,oversight and disclosure readiness, and our consideration of an uplisting to a national securities exchange in 2026.readiness.

From December 4, 2017 through MayAugust 20,14, 2026, we raised a total of $36,645,547 from accredited investors through the issuance of our common stock, preferred stock, and and debt, net of $247,500 of direct and incremental costs of equity raising. This total does not include the $56,272 of stock-based compensation inferred by the issuance of 216,429 shares for the retainer for services provided by Collingwood Capital Partners AG at $0.26 per share on March 19, 2024, the $1,890,000 of stock-based expenditures inferred by the issuance of 4,500,000 shares for 3,742 hectares of full exploitation mining concessions acquired from Cobalt Chile SpA at $0.42 per share on September 12, 20252025, capitalized direct costs of equity issuances (see Footnote 4. Other assets, the Equity Raising Activities section) or any other non-cash amounts for other stock-based compensation, dividends paid-in-kind or similar.

Our monthly “burn rate,” the amount of expenses we expect to incur on a monthly basis, is approximately $406,000$197,000 for a total of $4,872,000$2,364,000 for the following 12 months.months, which excludes expenses related to major exploration activities and project and concession acquisitions. We have relied and will continue to rely on capital raised from third parties to fund operations during the upcoming 12 months and plan to potentially raise additional funds in private offerings or a public offering along with a potential concurrent uplisting to a national securities exchange.offering. We expect to be able to further our acquisition and exploration plans, if we are successful in raising the anticipated working capital. However, there can be no assurance that we will be successful in securing additional capital, timely timely or at all, and if we are able to if there will be favorable terms.

For the years ended December December 31, 2025 and 2024, we generated no revenues and reported net losses of $3,263,140 and $882,574, respectively, however, $1,882,082 of the 2025 loss was related to a one-time, non-cash charge for impairment of mining concessions, and negative cash flow from operating activities of $1,146,473 and $718,275, respectively. For the three-monthssix-months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025, we reported net losses of $328,367$730,176 and $334,298,$644,809, respectively, and negative cash flow from operating activities of $425,782$710,044 and $271,221, $561,860, respectively. Our management has concluded that our historical recurring losses from operations and negative cash flows from operations as well as our dependence on securing private equity and other financings raise substantial doubt about our ability to continue as a going concern and our auditor has included an explanatory paragraph relating to our ability to continue as a going concern in its audit reports for the fiscal years ended December 31, 2025 and 2024. As noted in our unaudited financial statements included elsewhere in this Quarterly Report on Form 10-Q, we had an accumulated stockholders’ deficit of approximately $36,974,319 and recurring losses from operations as of March 31, 2026. See the risk factor in our Annual Report on Form 10-K titled, “Risk Factors - We have a history of operating losses and our management has concluded that factors raise substantial doubt about our ability to continue as a going concern and our auditor has included an explanatory paragraph relating to our ability to continue as a going concern in its audit reports for the fiscal years ended December 31, 2025 and 2024. As noted in our unaudited financial statements included elsewhere in this Quarterly Report on Form 10-Q, we had an accumulated stockholders’ deficit of approximately $37,376,128 and recurring losses from operations as of June 30, 2026. See the risk factor in our Annual Report on Form 10-K titled, “Risk Factors - We have a history of operating losses and our management has concluded that factors raise substantial doubt about our ability to continue as a going concern and our auditor has included an explanatory paragraph relating to our ability to continue as a going concern in its audit report for the fiscal years ended December 31, 2025 and 2024.”

In order to complete our plan of operations during the next 12 months, we estimate that approximately $4,872,000$2,364,000 in funds will be required. In order to pursue our strategic priorities of progressing mining rights acquisition and consolidation and a potential uplisting to a national exchange,consolidation, along with both brownfield and greenfield exploration and having a longer operational runway, we will require raisingno atfurther leastfunding. $900,000 to $1,500,000. To complete mining rights acquisition and consolidation along with drilling and feasibility assessments will require substantially more funding. The source of such funds is anticipated to come from private offerings and/or a public offering with a potential concurrent uplisting to a national securities exchange.offering. There is no guarantee that we will be able to raise such funds or that we will be able to uplist to a national securities exchange.funds. If we fail to raise the amounts we require, we may not be able to fully carry out our plan of operations.

We are seeking to secure a source of financing to fund our exploration and development efforts within our mining concessions that comprise our La Cobaltera and El Cofre cobalt-copper projects, as well as to complete or at least further our progress toward acquiring a rare earth elements project in south-central Chile in association with NeoRe SpA. In addition, there are other mining concessions we are evaluating within the San Juan District in northern Chile that would require funding to acquire them. These funding efforts include a new application for an EXIM Bank LOI, that was approved for potential debt-related package financing of up to $317,400,000$375.0 million on August 4, 2026, with an effective date of August 13, 2026, and an expiration date of August 14, 2027. This new LOI replaced the originally approved LOI of up to $317.4 million pursuant to a June 4, 2024, further extended,extended non-bindingLOI letterwith EXIM Bank that was recently not renewed. Under EXIM Bank’s published guidelines, LOI’s are limited to a single twelve-month extension for a maximum of interesttwo we received from the Export-Import Bank of the United States.years. There can be no assurance that EXIM Bank will provide financing under the LOI as it does not represent a financing commitment. Financing is contingent on an application for financing being submitted to EXIM by the Company followed by a standard due diligence process conducted by EXIM prior to any financing commitment. There can be no assurance that a private raise or debt financing, when instituted can occur as planned or at all. Our future is dependent upon our ability to obtain further financing, the successful execution of our business plan, securing favorable off-take agreements, and achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments. There are no assurances that we will be able to obtain further funds required for our continued operations. Even if additional financing is available, it may not be available on terms we find favorable. At this time, there are no anticipated sources of additional funds in place. Failure to secure the needed additional financing will have an adverse effect on our ability to remain in business.

Exploration and development expense. Our exploration and development costs are incurred during the exploration and development of mining sites. The costs incurred in the three-monthsthree and six-months ended MarchJune 31,30, 2026 were related to geological and exploration labor deployed during our twoone site visit in the three-month period and our three site visits in the six-month period. The exploration leveraged the improvements from the value-added outputs from our prior year artificial intelligence trials and lead to further development of our geographic information system (“GIS”). Trench sampling was performed in the El Cofre project areas to further the exploration and geological understanding of that opportunity.

Results of Operations – Three-Months Ended MarchJune 31,30, 2026 Compared Compared to the Three-Months Ended MarchJune 31,30, 2025

Operating losses for the three-months ended MarchJune 31,30, 2026, compared to MarchJune 31,30, 2025, were lowerhigher due primarily to the higher explorationpatent fee costs to Baltum, but also in part to higher advertising and in-countrymarketing travelcosts, expenses forlegal expense, site visitsvisit conductedand sampling costs, in theaddition currentto period,higher notregulatory experiencedand infiling costs, travel expense and other business expense, but somewhat offset by higher interest income, all impacts when compared to the same period for the previous year, along with slightly higher professional services costs comparatively between periods, however, these effects were more than offset by the interest and miscellaneous income received in this period, compared to lesser in the same period for the previous year, which resulted in a lowerhigher overall net loss.

We have primarily financed our operations through the sale of unregistered equity. As of MarchJune 31,30, 2026, we had cash totaling $1,867,693$3,024,044, current assets totaling $2,095,253$3,203,482 and total assets of $2,581,809.$4,801,389. As of MarchJune 31,30, 2026, we had total liabilities of $64,369,$129,184, all current, positive working capital of $2,030,884,$3,074,298, and stockholders’ equity of $2,517,440.$4,672,205.

Sources and Uses of Cash for the Three-MonthsSix-Months Ended MarchJune 31,30, 2026 and 2025 The following table summarizes our cash flows for the three-monthssix-months ended MarchJune 31,30, 20252026 and 2026.2025.

Net cash used in operating activities was $271,221$710,044 for the three-monthssix-months ended MarchJune 31,30, 20252026 versus net cash used in operating activities of $425,782$561,860 for the three-monthssix-months ended MarchJune 31,30, 2026.2025. The decrease in cash from the increase in cash flow used in operating activities was primarily due to higher prepaids fromprepaid cash for higher patent charges in the current period compared to the same period in the previous year, along with higher explorationsite costsvisit costs, advertising and marketing andexpenses, travel relatedexpenses, toand explorationslightly higher employee compensation and benefits, which were partially offset by higher amounts of legal expense in accounts payable and lower tax and accounting expenses in the current period compared to none in the previous year, combined to higher professional services costs comparatively between periods. These impacts were slightly muted by miscellaneous income received in the current period compared to none in the same period for the previous year. Each of these factors along with nominal impacts from various other expense areas contributed to the $154,561$148,184 higher use in net cash for operations in the current period compared to the same period in the previous year.

Net cash used in investment activities was $-0-$1,530,992 for the three-monthssix-months ended MarchJune 31,30, 20252026 versus net cash used in investment activities of $483,598$-0- for the three-monthssix-months ended MarchJune 31,30, 2026.2025. The increase in cash used in investment activities was driven entirelyprimarily by the contributions to NeoRe toward a net smelter return royalty and the potential for eventual acquisition of the NeoRe rare earth project. However, approximately one-third of the cash was used toward the acquisition of additional mining concessions in the La Cobaltera project area in continuing to work towards consolidation of the district.

Net cash provided by financing activities of $747,443$2,490,130 in the three-monthssix-months ended MarchJune 31,30, 2026, which included an aggregate of $2,500,000 proceeds from the sale of an aggregate 1,562,500 shares of common stock at $1.60 per share, and offset by cash paid toward direct costs for equity issuances, capitalized pending the closing of the associated issuances, versus net cash provided by financing activities of $830,945 in the six-months ended June 30, 2025, which included an aggregate of $747,443$830,945 proceeds forfrom the sale of an aggregate 1,497,805 1,683,365 shares of preferred stock for $674,012 $757,514 in cash and $73,431 of subscriptions receivable received in the period,period versusfrom netprior cash providedyear by financing activities of $-0- in the three-months ended March 31, 2026.issuances.

Based upon our working capital of $2,030,884$3,074,298 compared to our $425,782$710,044 cash used in operating activities year-to-date through MarchJune 31,30, 2026, that annualized would equate to cash used in operating activities of $1,703,128,$1,420,088, combined with anticipated additional investing activities toward the funding of the NeoRe Project and the acquisition of mining concessions in the La Cobaltera project area, which ismay reasonably close toexceed our existing working capital, coupled with our accumulated deficit of $36,974,319$37,376,128 from continuingcontinued existence without generation of revenues, as of MarchJune 31,30, 2026, we require additional equity and/or debt financing to continue our operations. These conditions raise substantial doubt about our ability to continue as a going concern for at least one year from the date of this filing. As a result of the foregoing factors, together with our recurring losses from operations and negative cash flows since inception, our independent registered public accounting firm included an explanatory paragraph relating to our ability to continue as a going concern in its report on our audited consolidated financial statements for the fiscal years ended December 31, 2025 and 2024 and as footnoted in our unaudited quarterly condensed consolidated financial statements for the quarters ended March 31,June 30, 2026 and 2025.