x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended |
¨ | Transition report under section 13 or 15(d) of the Exchange Act |
For the transition period from | to |
Commission File Number | 000-31380 |
APPLIED MINERALS, |
(Exact name of registrant as specified in its charter) |
Delaware | 82-0096527 | |
(State or other jurisdiction of incorporation or organization) | (I. R. S. Employer Identification No.) | |
1200 Silver City Road, PO Box 432, Eureka, UT | 84628 | |
(Address of principal executive offices) | (Zip Code) |
(Issuer’s Telephone Number, Including Area Code) |
Large Accelerated Filer | ¨ | Accelerated Filer | ¨ | Non-accelerated Filer | ¨ | Smaller Reporting Company | x |
Emerging growth company | ¨ |
Page(s) | ||||
Item 1. | Consolidated Financial Statements | |||
2 |
September 30, 2021 | December 31, 2020 | March 31, 2022 | December 31, 2021 | |||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
ASSETS | ||||||||||||||||
Current Assets | ||||||||||||||||
Cash | $ | 206,090 | $ | 669,560 | $ | 50,096 | $ | 74,253 | ||||||||
Accounts receivable | 24,255 | 67,557 | 19,909 | 34,309 | ||||||||||||
Deposits and prepaid expenses | 32,093 | 190,698 | 114,817 | 161,999 | ||||||||||||
Total Current Assets | 262,438 | 927,815 | 184,822 | 270,561 | ||||||||||||
Land | 500,000 | 500,000 | 500,000 | 500,000 | ||||||||||||
Operating lease right-of-use asset | 55,790 | 136,308 | ||||||||||||||
Finance lease right-of-use asset | 45,704 | 0 | ||||||||||||||
Operating lease right-of-use assets | - | 28,111 | ||||||||||||||
Finance lease right-of-use | 39,882 | 42,821 | ||||||||||||||
Other Assets | ||||||||||||||||
Deposits | 336,296 | 336,184 | 336,359 | 336,328 | ||||||||||||
Total Other Assets | 336,296 | 336,184 | 336,359 | 336,328 | ||||||||||||
TOTAL ASSETS | $ | 1,200,228 | $ | 1,900,307 | $ | 1,061,063 | $ | 1,177,821 | ||||||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||||||||||
Current Liabilities | ||||||||||||||||
Accounts payable and accrued liabilities | $ | 2,828,971 | $ | 2,632,156 | $ | 3,289,919 | $ | 3,017,454 | ||||||||
Paycheck Protection Program Loan | 264,472 | 223,075 | ||||||||||||||
PIK Note interest accrual | 457,822 | 365,121 | 464,690 | 372,028 | ||||||||||||
Current portion of notes payable | 0 | 133,081 | 263,745 | 112,835 | ||||||||||||
Current portion of finance lease liabilities | 11,811 | 0 | 12,159 | 11,986 | ||||||||||||
Current portion of operating lease liabilities | 57,737 | 111,236 | - | 29,085 | ||||||||||||
Total Current Liabilities | 3,620,813 | 3,464,669 | 4,030,513 | 3,543,388 | ||||||||||||
Long-Term Liabilities | ||||||||||||||||
PIK Notes payable, net of $783,561 and $1,082,988 debt discount, respectively | 46,468,582 | 45,235,990 | ||||||||||||||
PIK Notes payable, net of $577,289 and $681,102 debt discount, respectively | 47,372,645 | 47,004,480 | ||||||||||||||
Deferred revenue | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | ||||||||||||
Finance lease liabilities | 33,893 | 0 | ||||||||||||||
Operating lease liabilities | 0 | 29,085 | ||||||||||||||
Finance lease liability | 27,723 | 30,835 | ||||||||||||||
Total Long-Term Liabilities | 47,502,475 | 46,265,075 | 48,400,368 | 48,035,315 | ||||||||||||
TOTAL LIABILITIES | 51,123,288 | 49,729,744 | 52,430,881 | 51,578,703 | ||||||||||||
Stockholders’ Deficit | ||||||||||||||||
Preferred stock, $0.001 par value, 10,000,000 shares authorized, and 257,136 and 128,000 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively | 257 | 128 | ||||||||||||||
Common stock, $0.001 par value, 700,000,000 shares authorized, and 204,736,762 and 183,938,549 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively (134,336,317 reserved in Treasury) | 204,743 | 183,939 | ||||||||||||||
Preferred stock, $0.001 par value, 10,000,000 shares authorized, and 187,000 and 262,000 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively | 187 | 262 | ||||||||||||||
Common stock, $0.001 par value, 700,000,000 shares authorized, and 252,563,747 and 217,655,150 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively (211,913,925 reserved in Treasury) | 252,562 | 217,654 | ||||||||||||||
Additional paid-in capital | 74,594,281 | 74,008,636 | 74,798,477 | 74,686,581 | ||||||||||||
Accumulated deficit prior to the exploration stage | (20,009,496 | ) | (20,009,496 | ) | (20,009,496 | ) | (20,009,496 | ) | ||||||||
Accumulated deficit during the exploration stage | (104,712,845 | ) | (102,012,644 | ) | (106,411,548 | ) | (105,295,883 | ) | ||||||||
Total Stockholders’ Deficit | (49,923,060 | ) | (47,829,437 | ) | (51,369,818 | ) | (50,400,882 | ) | ||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | 1,200,228 | $ | 1,900,307 | $ | 1,061,063 | $ | 1,177,821 |
3 |
For the Three Months Ended September 30 | For the Nine Months Ended September 30 | For the Three Months Ended March 31, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | 2022 | 2021 | |||||||||||||||||||
REVENUES | $ | 360,815 | $ | 222,204 | $ | 1,099,980 | $ | 518,272 | $ | 78,045 | $ | 273,672 | ||||||||||||
OPERATING EXPENSES: | ||||||||||||||||||||||||
Production costs | 434,225 | 396,301 | 1,315,350 | 846,338 | 133,336 | 462,166 | ||||||||||||||||||
Exploration costs | 47,866 | 56,909 | 175,715 | 144,588 | 243,470 | 51,590 | ||||||||||||||||||
General and administrative | 443,503 | 501,178 | 1,244,975 | 1,936,301 | 405,378 | 389,523 | ||||||||||||||||||
Total Operating Expenses | 925,594 | 954,388 | 2,736,040 | 2,927,227 | 782,184 | 903,279 | ||||||||||||||||||
Operating Loss | (564,779 | ) | (732,184 | ) | (1,636,060 | ) | (2,408,955 | ) | (704,139 | ) | (629,607 | ) | ||||||||||||
OTHER INCOME (EXPENSES): | ||||||||||||||||||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||||||||||
Interest expense, net (including amortization of deferred financing cost and debt discount) | (474,579 | ) | (463,462 | ) | (1,401,878 | ) | (1,363,330 | ) | (471,898 | ) | (463,897 | ) | ||||||||||||
Change in fair value | - | (23,000 | ) | - | (23,000 | ) | ||||||||||||||||||
Gain on forgiveness of PPP loan | - | - | 223,075 | - | ||||||||||||||||||||
Other income, net | 20,308 | 54,855 | 114,662 | 1,355,205 | 60,372 | 247,546 | ||||||||||||||||||
Total Other (Expenses) | (454,271 | ) | (431,607 | ) | (1,064,141 | ) | (31,125 | ) | ||||||||||||||||
Total Other (Expense) Income | (411,526 | ) | (216,351 | ) | ||||||||||||||||||||
NET LOSS | $ | (1,019,050 | ) | $ | (1,163,791 | ) | $ | (2,700,201 | ) | $ | (2,440,080 | ) | ||||||||||||
Net Loss | $ | (1,115,665 | ) | $ | (845,958 | ) | ||||||||||||||||||
Deemed dividend on Series B Convertible preferred stock | (112,525 | ) | (23,187 | ) | (225,137 | ) | (23,187 | ) | ||||||||||||||||
Deemed dividend on Series B Convertible Preferred Stock | - | (60,738 | ) | |||||||||||||||||||||
Net Loss Attributable to Common Shareholders | $ | (1,131,575 | ) | $ | (1,186,978 | ) | $ | (2,925,338 | ) | $ | (2,463,267 | ) | ||||||||||||
NET LOSS ATTIBUTABLE TO COMMON SHAREHOLDERS | $ | (1,115,665 | ) | $ | (906,696 | ) | ||||||||||||||||||
Net Loss Per Common Share (Basic and Diluted) | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.02 | ) | $ | (0.01 | ) | ||||||||||||
Net Loss Per Common Share – Basic and Diluted | $ | (0.01 | ) | $ | (0.00 | ) | ||||||||||||||||||
Weighted Average Common Shares Outstanding (Basic and Diluted) | 199,138,961 | 175,638,549 | 194,202,348 | 175,616,195 | ||||||||||||||||||||
Weighted Average Common Shares Outstanding – Basic and Diluted | 222,601,842 | 188,243,263 |
4 |
Three Months Ended | ||||||||||||||||||||||||||||||||
Common Stock Shares | Common Stock Amount | Preferred Stock Shares | Preferred Stock Amount | Additional Paid-in Capital | Accumulated Deficit Prior to Exploration Stage | Accumulated Deficit During Exploration Stage | Total Stockholders’ Deficit | |||||||||||||||||||||||||
Balance, June 30, 2021 | 195,105,088 | $ | 195,105 | 176,136 | $ | 176 | $ | 74,256,128 | $ | (20,009,496 | ) | $ | (103,693,795 | ) | $ | (49,251,882 | ) | |||||||||||||||
Shares issued in private placement | 0 | 0 | 176,000 | 176 | 199,824 | 0 | 0 | 200,000 | ||||||||||||||||||||||||
Beneficial conversion feature on Convertible Series B Preferred Stock | - | 0 | - | 0 | 112,525 | 0 | 0 | 112,525 | ||||||||||||||||||||||||
Deemed dividend from beneficial conversion feature on Convertible Series B Preferred Stock | - | 0 | - | 0 | (112,525 ) | 0 | 0 | (112,525) | ||||||||||||||||||||||||
Shares issued for conversion of preferred stock | 9,638,661 | 9,638 | (95,000 | ) | (95 | ) | (8,843 | ) | - | - | 700 | |||||||||||||||||||||
Stock option compensation expense | - | 0 | - | 0 | 147,172 | 0 | 0 | 147,172 | ||||||||||||||||||||||||
Net Loss | - | 0 | - | 0 | 0 | 0 | (1,019,050 | ) | (1,019,050 | ) | ||||||||||||||||||||||
Balance, September 30, 2021 | 204,743,749 | $ | 204,743 | 257,136 | $ | 257 | $ | 74,594,281 | $ | (20,009,496 | ) | $ | (104,712,845 | ) | $ | (49,923,060 | ) | |||||||||||||||
Balance, June 30, 2020 | 175,638,549 | $ | 175,639 | 0 | 0 | $ | 73,786,404 | $ | (20,009,496 | ) | $ | (100,001,222 | ) | $ | (46,048,675 | ) | ||||||||||||||||
Shares issued in private placement | - | - | 128,000 | $ | 128 | 124,872 | - | - | 125,000 | |||||||||||||||||||||||
Beneficial conversion feature on Convertible Series B Preferred Stock | - | 0 | - | 0 | 23,187 | 0 | 0 | 23,187 | ||||||||||||||||||||||||
Deemed dividend from beneficial conversion feature on Convertible Series B Preferred Stock | - | 0 | - | 0 | (23,187 | ) | 0 | 0 | (23,187 | ) | ||||||||||||||||||||||
Stock option compensation expense | - | 0 | - | 0 | 3,899 | 0 | 0 | 3,899 | ||||||||||||||||||||||||
Net Loss | - | 0 | - | 0 | 0 | 0 | (1,163,791 | ) | (1,163,791 | ) | ||||||||||||||||||||||
Balance, September 30, 2020 | 175,638,549 | $ | 175,639 | 128,000 | $ | 128 | $ | 73,915,175 | $ | (20,009,496 | ) | $ | (101,165,013 | ) | $ | (47,083,567 | ) |
Nine Months Ended | ||||||||||||||||||||||||||||||||
Common Stock Shares | Common Stock Amount | Preferred Stock Shares | Preferred Stock Amount | Additional Paid-in Capital | Accumulated Deficit Prior to Exploration Stage | Accumulated Deficit During Exploration Stage | Total Stockholders’ Deficit | |||||||||||||||||||||||||
Balance, December 31, 2020 | 183,938,939 | $ | 183,939 | 128,000 | $ | 128 | $ | 74,008,636 | $ | (20,009,496 | ) | $ | (102,012,644 | ) | $ | (47,829,437 | ) | |||||||||||||||
Shares issued for conversion of preferred stock | 15,805,934 | 15,805 | (223,000 | ) | (223 | ) | (7,202 | ) | - | - | 8,380 | |||||||||||||||||||||
Shares issued in private placement | 0 | 0 | 352,136 | $ | 352 | 384,648 | 0 | 0 | 385,000 | |||||||||||||||||||||||
Beneficial conversion feature on Convertible Series B Preferred Stock | - | 0 | - | 0 | 225,137 | 0 | 0 | 225,137 | ||||||||||||||||||||||||
Deemed dividend from beneficial conversion feature on Convertible Series B Preferred Stock | - | 0 | - | 0 | (225,137 | ) | 0 | 0 | (225,137 | ) | ||||||||||||||||||||||
Shares issued for cashless options exercise | 3,836,475 | 3,836 | - | - | (3,836 | ) | - | - | 0 | |||||||||||||||||||||||
Shares issued in lieu of bonus | 1,162,791 | 1,163 | - | - | 56,977 | - | - | 58,140 | ||||||||||||||||||||||||
Stock option compensation expense | - | 0 | - | 0 | 155,058 | 0 | 0 | 155,058 | ||||||||||||||||||||||||
Net Loss | - | 0 | - | 0 | 0 | 0 | (2,700,201 | ) | (2,700,201 | ) | ||||||||||||||||||||||
Balance, September 30, 2021 | 204,743,749 | $ | 204,743 | 257,136 | $ | 257 | $ | 74,594,281 | $ | (20,009,496 | ) | $ | (104,712,845 | ) | $ | (49,923,060 | ) | |||||||||||||||
Balance, December 31, 2019 | 175,513,549 | $ | 175,514 | 0 | 0 | $ | 73,774,766 | $ | (20,009,496 | ) | $ | (98,724,933 | ) | $ | (44,784,149 | ) | ||||||||||||||||
Shares issued to note holder | 125,000 | 125 | 0 | 0 | 1,125 | 0 | 0 | 1,250 | ||||||||||||||||||||||||
Shares issued in private placement | - | - | 128,000 | $ | 128 | 124,872 | - | - | 125,000 | |||||||||||||||||||||||
Beneficial conversion feature on Convertible Series B Preferred Stock | - | - | - | - | 23,187 | - | - | 23,187 | ||||||||||||||||||||||||
Deemed dividend from beneficial conversion feature on Convertible Series B Preferred Stock | - | - | - | - | (23,187 | ) | - | - | (23,187 | ) | ||||||||||||||||||||||
Stock option compensation expense | - | 0 | - | 0 | 14,412 | 0 | 0 | 14,412 | ||||||||||||||||||||||||
Net Loss | - | 0 | - | 0 | 0 | 0 | (2,440,080 | ) | (2,440,080 | ) | ||||||||||||||||||||||
Balance, September 30, 2020 | 175,638,549 | $ | 175,639 | 128,000 | $ | 128 | $ | 73,915,175 | $ | (20,009,496 | ) | $ | (101,165,013 | ) | $ | (47,083,567 | ) |
For the Nine Months Ended | ||||||||
September 30, | ||||||||
2021 | 2020 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net loss | $ | (2,700,201 | ) | $ | (2,440,080 | ) | ||
Adjustments to reconcile net loss to net cash used in operations: | ||||||||
Depreciation | 4,869 | 0 | ||||||
Amortization of discount – notes payable | 0 | 3,568 | ||||||
Amortization of discount - PIK Notes | 299,426 | 284,107 | ||||||
Amortization of deferred financing costs | 0 | 41,930 | ||||||
Accrued interest on PIK Notes | 1,036,691 | 1,026,249 | ||||||
Stock based compensation expense | 213,199 | 14,412 | ||||||
Non-cash lease expense | 80,518 | 474 | ||||||
Change in fair value | 0 | 23,000 | ||||||
Stock issued for interest | 8,379 | 0 | ||||||
Gain on f orgiveness of PPPloan | (223,075 | ) | 0 | |||||
Change in operating assets and liabilities: | ||||||||
Operating lease liabilities | (82,584 | ) | 0 | |||||
Accounts receivable | 43,302 | (43,475 | ) | |||||
Deposits and prepaids | 158,493 | 260,371 | ||||||
Accounts payable and accrued liabilities | 187,151 | 969,099 | ||||||
Net cash (used in) provided by operating activities | (973,832 | ) | 139,655 | |||||
Cash Flows from Financing Activities: | ||||||||
Payments on finance lease liability | (6,029 | ) | 0 | |||||
Proceeds from notes payable | 0 | 113,750 | ||||||
Proceeds from Paycheck Protection Program Loan | 264,472 | 223,075 | ||||||
Payments on notes payable | 0 | (371,625 | ) | |||||
Proceeds from private placement | 385,000 | 0- | ||||||
Payments on insurance financing | (133,081 | ) | (208,731 | ) | ||||
Net cash provided by (used in) financing activities | 510,362 | (118,531 | ) | |||||
Net change in cash | (463,470 | ) | 21,124 | |||||
Cash at beginning of period | 669,560 | 52,793 | ||||||
Cash at end of period | $ | 206,090 | $ | 73,917 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid for interest | $ | 6,037 | $ | 3,739 | ||||
Cash paid for income taxes | $ | 0 | $ | 0 | ||||
Supplemental disclosure of non-cash financing activity: | ||||||||
Capitalization of ROU asset and finance lease liability | $ | 51,733 | $ | 0 | ||||
Deemed dividend on convertible Preferred Stock Series B due to BCF | $ | 225,137 | $ | 23,187 | ||||
Accrued PIK interest paid through issuance of PIK Notes | $ | 943,990 | $ | 750,580 | ||||
Stock issued for cashless options exercised | $ | 3,836 | $ | 0 | ||||
Common stock issued to note holders for financing cost | $ | 0 | $ | 1,250 |
Common Stock Shares | Common Stock Amount | Preferred Stock Shares | Preferred Stock Amount | Additional Paid-in Capital | Accumulated Deficit Prior to Exploration Stage | Accumulated Deficit During Exploration Stage | Total Stockholders’ Deficit | |||||||||||||||||||||||||
Balance, December 31, 2021 | 217,655,150 | $ | 217,654 | 262,000 | $ | 262 | $ | 74,686,581 | $ | (20,009,496 | ) | $ | (105,295,883 | ) | $ | (50,400,882 | ) | |||||||||||||||
Shares issued upon conversion of Series B Preferred Stock | 20,164,153 | 20,164 | (75,000 | ) | (75 | ) | (20,089 | ) | - | - | - | |||||||||||||||||||||
Shares issued as part of settlement of liability | 4,444,444 | 4,444 | - | - | 49,334 | - | - | 53,778 | ||||||||||||||||||||||||
Issuance of shares of common stock for debt issuance cost | 300,000 | 300 | - | - | 1,440 | - | - | 1,740 | ||||||||||||||||||||||||
Issuance of shares of common stock for consulting services | 10,000,000 | 10,000 | - | - | 60,000 | - | - | 70,000 | ||||||||||||||||||||||||
Stock based compensation expense | - | - | - | - | 21,211 | - | - | 21,211 | ||||||||||||||||||||||||
Net Loss | - | - | - | - | - | - | (1,115,665 | ) | (1,115,665 | ) | ||||||||||||||||||||||
Balance, March 31, 2022 | 252,563,747 | $ | 252,562 | 187,000 | $ | 187 | $ | 74,798,477 | $ | (20,009,496 | ) | $ | (106,411,548 | ) | $ | (51,369,818 | ) | |||||||||||||||
Balance, December 31, 2020 | 183,938,549 | $ | 183,939 | 128,000 | $ | 128 | $ | 74,008,636 | (20,009,496 | ) | (102,012,644 | ) | (47,829,437 | ) | ||||||||||||||||||
Shares issued on conversion of preferred stock | 6,167,273 | 6,167 | (128,000 | ) | (128 | ) | 1,641 | - | - | 7,680 | ||||||||||||||||||||||
Shares issued in private placement | - | - | 95,000 | 95 | 99,905 | - | - | 100,000 | ||||||||||||||||||||||||
Beneficial conversion feature on Convertible Series B Preferred Stock | - | - | - | - | 60,738 | - | - | 60,738 | ||||||||||||||||||||||||
Deemed dividend from beneficial conversion feature on Convertible Series B Preferred Stock | - | - | - | - | (60,738 | ) | - | - | (60,738 | ) | ||||||||||||||||||||||
Shares issued for cashless exercise of options | 3,836,475 | 3,836 | - | - | (3,836 | ) | - | - | - | |||||||||||||||||||||||
Shares issued to employee in lieu of bonus | 1,162,791 | 1,163 | - | - | 56,977 | - | - | 58,140 | ||||||||||||||||||||||||
Stock option compensation expense | - | - | - | - | 3,943 | - | - | 3,943 | ||||||||||||||||||||||||
Net Loss | - | - | - | - | - | - | (845,948 | ) | (845,948 | ) | ||||||||||||||||||||||
March 31, 2021 | 195,105,088 | $ | 195,105 | 95,000 | $ | 95 | $ | 74,167,266 | $ | (20,009,496 | ) | $ | (102,858,602 | ) | $ | (48,505,632 | ) |
For the Three Months Ended | ||||||||
March 31, | ||||||||
2022 | 2021 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net loss | $ | (1,115,665 | ) | $ | (845,958 | ) | ||
Adjustments to reconcile net loss to net cash used in operations: | ||||||||
Depreciation | 8,782 | - | ||||||
Amortization of discount - PIK Notes | 103,813 | 98,501 | ||||||
Accrued interest on PIK Notes | 314,907 | 350,433 | ||||||
Stock issued for settlement of liability | 53,778 | - | ||||||
Stock-based compensation expense | 91,211 | 62,083 | ||||||
Non-cash lease expense | 28,111 | 26,430 | ||||||
Dividend | - | 7,680 | ||||||
Forgiveness of PPP Fund | - | (223,075 | ) | |||||
Change in operating assets and liabilities: | ||||||||
Accounts receivable | 14,400 | 32,687 | ||||||
Deposits and prepaids | 47,151 | 57,143 | ||||||
Operating lease liabilities | (29,085 | ) | (26,548 | ) | ||||
Financing lease liabilities | (2,754 | ) | - | |||||
Accounts payable and accrued liabilities | 314,573 | 20,370 | ||||||
Net cash (used in) operating activities | (170,778 | ) | (440,254 | ) | ||||
Cash Flows from Financing Activities: | ||||||||
Proceeds from notes payable | 200,000 | - | ||||||
Proceeds from Paycheck Protection Program Loan | - | 264,472 | ||||||
Proceeds from Private Placement | - | 100,000 | ||||||
Payments on financing lease liability | (6,029 | ) | - | |||||
Payments on notes payable | (4,379 | ) | - | |||||
Payments on insurance financing | (42,971 | ) | (49,906 | ) | ||||
Net cash provided by financing activities | 146,621 | 314,566 | ||||||
Net change in cash | (24,157 | ) | (125,688 | ) | ||||
Cash at beginning of period | 74,253 | 669,560 | ||||||
Cash at end of period | $ | 50,096 | $ | 543,872 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid for interest | $ | 2,312 | $ | 4,395 | ||||
Cash paid for income taxes | $ | - | $ | - | ||||
Supplemental disclosure of non-cash financing activity: | ||||||||
Accrued PIK interest paid through issuance of PIK Notes | $ | 265,813 | $ | 408,807 | ||||
Deemed dividend on convertible Preferred Stock Series B due to BCF | $ | - | $ | 60,738 | ||||
Common s tock issued for cashless options exercised | $ | - | $ | 3,836 | ||||
Common stock issued upon conversion of Series B Preferred Stock | $ | 20,164 | $ | - | ||||
Common stock issued to note holders for financing cost | $ | 1,740 | $ | - |
6 |
7 |
9 |
Estimated | ||||
Useful Life | ||||
Building and Building Improvements | 5–40 | |||
Mining equipment | 2–7 | |||
Office and shop furniture and equipment | 3–7 | |||
Vehicles | 5 |
10 |
11 |
12 |
13 |
14 |
Supplemental cash flow information related to leases: | Three months ended September 30, 2021 | Nine months ended September 30, 2021 | Three months ended March 31, 2022 | |||||||||
Operating leases liabilities | $ | (28,227 | ) | $ | (82,584 | ) | ||||||
Operating cash flows paid for operating leases | $ | 29,085 | ||||||||||
Non-cash lease expense | $ | 27,253 | $ | 80,518 | $ | 28,111 |
Supplemental balance sheet information related to leases: | As of September 30, 2021 | |||
Operating lease Right-of-use assets | $ | 55,790 | ||
Current portion of operating lease liabilities | $ | 57,737 | ||
Long-term operating lease liabilities | 0 | |||
Total operating lease liabilities | $ | 57,737 | ||
Weighted average remaining operating lease term | 0.50 years | |||
Weighted average discount rate | 6 | % |
2021 (remaining three months) | $ | 29,376 | ||
2022 | 29,376 | |||
Total lease payments | 58,752 | |||
Less: imputed interest | (1,015 | ) | ||
Total lease liabilities | $ | 57,737 |
Supplemental cash flow information related to leases: | Three months ended September 30, 2021 | Nine months ended September 30, 2021 | ||||||
Finance cash flows from finance lease | $ | (4,001 | ) | $ | (6,029 | ) | ||
Operating cash flows from finance lease | $ | 2,995 | $ | 4,869 |
Supplemental cash flow information related to leases: | Three months ended March 31, 2022 | |||
Finance cash flows used in finance lease | $ | (2,754 | ) | |
Operating cash flows from finance lease | $ | 2,754 |
Supplemental balance sheet information related to leases: | As of March 31, 2022 | |||
Finance lease Right-of-use assets | $ | 39,882 | ||
Current portion of finance lease liability | $ | 12,159 | ||
Long-term finance lease liability | 27,723 | |||
Total finance lease liability | $ | 39,882 | ||
Weighted average remaining operating lease term | 3.08 years | |||
Weighted average discount rate | 6 | % |
Supplemental balance sheet information related to leases: | As of September 30, 2021 | |||
Finance lease Right-of-use assets | $ | 45,704 | ||
Current portion of finance lease liability | $ | 11,811 | ||
Long-term finance lease liability | 33,893 | |||
Total finance lease liability | $ | 45,704 | ||
Weighted average remaining financing lease term | 3.54 years | |||
Weighted average discount rate | 6 | % |
15 |
2021 (remaining three months) | $ | 3,525 | ||||||
2022 | 14,099 | $ | 10,574 | |||||
2023 | 14,099 | 14,099 | ||||||
2024 | 14,099 | 14,099 | ||||||
2025 | 4,700 | 4,700 | ||||||
Total lease payments | 50,522 | 43,472 | ||||||
Less: imputed interest | (4,818 | ) | (3,590 | ) | ||||
Total lease liabilities | $ | 45,704 | $ | 39,882 | ||||
Less: current portion | (12,159 | ) | ||||||
Noncurrent lease liabilities | $ | 27,723 |
September 30, 2021 | December 31, 2020 | March 31, 2022 | December 31, 2021 | |||||||||||||
Cash Bond (Mine Permit deposit) | $ | 297,128 | $ | 297,016 | $ | 297,191 | $ | 297,160 | ||||||||
Office Lease Security Deposit | 39,168 | 39,168 | 39,168 | 39,168 | ||||||||||||
Total | $ | 336,296 | $ | 336,184 | $ | 336,359 | $ | 336,328 |
September 30, 2021 | December 31, 2020 | March 31, 2022 | December 31, 2021 | |||||||||||||
Note payable to insurance companies, payable $1,839 - $15,124 monthly, (a) | $ | 0 | $ | 133,081 | ||||||||||||
Note payable to insurance companies, payable $1,780 and $12,804 monthly, (a) | $ | 69,865 | $ | 112,835 | ||||||||||||
Promissory note (b) | $ | 73,260 | $ | - | ||||||||||||
Loan payable (c) | $ | 120,620 | $ | |||||||||||||
0 | 133,081 | $ | 263,745 | $ | 112,835 | |||||||||||
Less: Current Portion | 0 | (133,081 | ) | $ | (263,745 | ) | $ | (112,835 | ) | |||||||
Notes Payable, Long-Term Portion | $ | 0 | $ | 0 | $ | - | $ | - |
(a) | in November |
(b) | In January 2022, the Company entered into a promissory note agreement for $90,000, including an original issue discount of 16.7% resulting in net proceeds of $75,000. The annual interest rate is 10%. Principal and interest is due to the lender in seven equal monthly payments of $14,142.50 commencing on June 24, 2022 until the promissory note is paid in full no later than January 24, 2023. In the event of default, the lender will have the right to convert the outstanding principal and interest into stock at a price equal to ninety (90) percent of the lowest trading price over a ten (10) day trading period immediately prior to the date of conversion. As part of entering into the promissory note agreement, the Company issued 300,000 restricted shares of common stock under the lender. |
(c) | In March 2022, the Company entered into a loan payable with a lender for $125,000. Payment of the loan includes one installment of $1,215.19 followed by seventy-nine (79) weekly installments of $2,025.32 totaling $165,000. The lender has been provided a security interest in certain inventory and equipment. Excluded is the Company’s Alpine mill and related equipment. |
16 |
Key Terms | Series 2023 Notes | Series A Notes | |||
Inception Date | 08/01/2013 | 11/03/2014 | |||
Cash Received | $10,500,000 | $12,500,000 | |||
Principal (Initial Liability) | $10,500,000 | $19,848,486 | |||
Maturity (Term) | Matures on August 1, 2023, but convertible into shares of the Company’s common stock at the discretion of the holder or by the Company based on the market price of the Company’s stock; | Matures on May 1, 2023 but extends to August 1, 2023 if the Series 2023 Notes are still outstanding. Convertible into shares of the Company’s common stock at the discretion of the holder or by the Company based on the market price of the Company’s stock; | |||
Exercise Price | $0.56, adjusted downward based on anti-dilution provisions/downround protection | $0.34, adjusted downward based on anti-dilution provisions/down-round protection; | |||
Stated Interest | 10% per annum through December 14, 2017, 3% per annum thereafter, due semiannually; | 10% per annum through December 14, 2017, 3% per annum thereafter, due semiannually; | |||
Derivative Liability | $2,055,000 established at inception due to the existence of down-round protection; revalued every quarter using Monte Carlo model. | $9,212,285 established at inception due to existence of down-round protection; revalued every quarter using a Monte Carlo model. |
Key Terms | Series 2023 Notes | Series A Notes | ||
Inception Date | 08/01/2013 | 11/03/2014 | ||
Cash Received | $10,500,000 | $12,500,000 | ||
Principal (Initial Liability) | $10,500,000 | $19,848,486 | ||
Maturity (Term) | Matures on August 1, 2023, but convertible into shares of the Company’s common stock at the discretion of the holder or by the Company based on the market price of the Company’s stock; | Matures on May 1, 2023 but extends to August 1, 2023 if the Series 2023 Notes are still outstanding. Convertible into shares of the Company’s common stock at the discretion of the holder or by the Company based on the market price of the Company’s stock; | ||
Exercise Price | $0.51, as adjusted downward based on anti-dilution provisions/down - round protection | $0.30, as adjusted downward based on anti-dilution provisions/down-round protection; | ||
Stated Interest | 10% per annum through December 14, 2017, 3% per annum thereafter, due semiannually; | 10% per annum through December 14, 2017, 3% per annum thereafter, due semiannually; |
Series 2023 Notes | Series A Notes | Total | ||||||||||
PIK Note Payable, Gross | $ | 18,025,635 | $ | 29,924,299 | $ | 47,949,934 | ||||||
Less: Discount | - | (577,289 | ) | (577,289 | ) | |||||||
PIK Note Payable, Net | $ | 18,025,635 | $ | 29,347,010 | $ | 47,372,645 |
17 |
Series 2023 Notes | Series A Notes | Total | Series 2023 Notes | Series A Notes | Total | |||||||||||||||||||
PIK Note Payable, Gross | $ | 17,763,275 | $ | 29,488,868 | $ | 47,252,143 | $ | 17,759,822 | $ | 29,925,760 | $ | 47,685,582 | ||||||||||||
Less: Discount | 0 | (783,561 | ) | (783,561 | ) | - | (681,102 | ) | (681,102 | ) | ||||||||||||||
PIK Note Payable, Net | $ | 17,763,275 | $ | 28,705,307 | $ | 46,468,582 | $ | 17,759,822 | $ | 29,244,658 | $ | 47,004,480 |
Series 2023 Notes | Series A Notes | Total | ||||||||||
PIK Note Payable, Gross | $ | 17,249,430 | $ | 29,069,548 | $ | 46,318,978 | ||||||
Less: Discount | 0 | (1,082,988 | ) | (1,082,988 | ) | |||||||
PIK Note Payable, Net | $ | 17,249,430 | $ | 27,986,560 | $ | 45,235,990 |
● | Maturity : May 1, 2023. |
● | Exercise Price : $0.40 per share and will be adjusted from time to time pursuant anti-dilution provisions. |
● | Stated Interest : 10% payable semi-annually in arrears through December 14, 2017, 3% payable semi-annually in arrears thereafter. |
● | Liquidated Damages : The Company is required to pay the noteholders 1% of the principal amount of the Series A Notes if a Registration statement is not filed and effective within 90 days of the inception date (and further damages for every 30 days thereafter). |
● | The number of shares issuable under the Notes may be affected by the anti-dilution provisions of the Notes. The antidilution provisions adjust the Exercise Price of the Notes in the event of stock dividends and splits, issuance below the market price of the common stock, issuances below the conversion price of the Notes, pro rata distribution of assets, rights plans, tender offers, and exchange offers. |
18 |
19 |
20 |
21 |
Shares Issuable | Shares Issuable upon Exercise of Outstanding Warrants | Weighted Average Exercise Price | ||||||||||||||
upon Exercise of | Weighted Average | |||||||||||||||
Outstanding Warrants | Exercise Price | |||||||||||||||
Outstanding at January 1, 2021 | 24,619,623 | $ | 0.16 | |||||||||||||
Outstanding at December 31, 2021 | 11,000,000 | $ | 0.10 | |||||||||||||
Issued | 0 | 0 | - | - | ||||||||||||
Exercised | 0 | 0 | - | |||||||||||||
Forfeited | (13,619,623 | ) | 0.22 | - | - | |||||||||||
Outstanding at September 30, 2021 | 11,000,000 | $ | 0.10 | |||||||||||||
Outstanding at March 31, 2022 | 11,000,000 | $ | 0.10 |
Warrants Outstanding and Exercisable | |||||||||||||||||
Shares Issuable | Weighted Average | ||||||||||||||||
upon Exercise of | Remaining | Weighted Average | |||||||||||||||
Exercise Price | Outstanding Warrants | Contractual Life (years) | Exercise Price | ||||||||||||||
$ | 0.10 | 11,000,000 | 1.20 | $ | 0.10 | ||||||||||||
11,000,000 | 1.20 | $ | 0.10 |
Warrants Outstanding and Exercisable | |||||||||||||||||
Shares Issuable | Weighted Average | ||||||||||||||||
upon Exercise of | Remaining | Weighted Average | |||||||||||||||
Exercise Price | Outstanding Warrants | Contractual Life (years) | Exercise Price | ||||||||||||||
$ | 0.10 | 11,000,000 | 0.71 | $ | 0.10 | ||||||||||||
11,000,000 | 0.71 | $ | 0.10 |
22 |
Shares Issued | Weighted | Shares Issued Upon Exercise of Options | Weighted Average Exercise Price | |||||||||||||
Upon Exercise of | Average | |||||||||||||||
Options | Exercise Price | |||||||||||||||
Outstanding at December 31, 2020 | 56,661,515 | $ | 0.28 | |||||||||||||
Outstanding at December 31, 2021 | 52,790,845 | $ | 0.25 | |||||||||||||
Granted | 9,450,000 | 0.03 | - | - | ||||||||||||
Exercised | (9,528,689 | ) | 0.06 | - | - | |||||||||||
Forfeited | (3,791,981 | ) | 0.63 | (2,904,653 | ) | 0.83 | ||||||||||
Outstanding at September 30, 2021 | 52,790,845 | $ | 0.24 | |||||||||||||
Outstanding at March 31, 2022 | 49,886,192 | $ | 0.21 |
23 |
Options Outstanding | Options Exercisable | |||||||||||||||||||||||
Range of per share exercise price | Shares | Weighted average remaining contractual life | Per share weighted average exercise price | Shares | Weighted average remaining contractual life | Per share weighted average exercise price | ||||||||||||||||||
$0.02 - $0.03 | 9,450,000 | 4.75 | $ | 0.03 | 4,750,000 | 4.75 | $ | 0.03 | ||||||||||||||||
$0.04 - $0.08 | 28,959,881 | 6.19 | $ | 0.06 | 28,959,881 | 6.19 | $ | 0.06 | ||||||||||||||||
$0.10 - $0.84 | 10,338,904 | 1.80 | $ | 0.46 | 10,338,904 | 1.80 | $ | 0.46 | ||||||||||||||||
$1.10 - $1.90 | 4,042,060 | 1.45 | $ | 1.63 | 4,042,060 | 1.45 | $ | 1.63 | ||||||||||||||||
52,790,845 | 4.58 | $ | 0.24 | 48,090,845 | 4.53 | $ | 0.34 |
Options Outstanding | Options Exercisable | |||||||||||||||||||||||
Range of per share exercise price | Shares | Weighted average remaining contractual life (years) | Per share weighted average exercise price | Shares | Weighted average remaining contractual life (years) | Per share weighted average exercise price | ||||||||||||||||||
$0.03 - $0.08 | 38,409,881 | 5.16 | $ | 0.05 | 36,834,881 | 5.20 | $ | 0.05 | ||||||||||||||||
$0.10 - $0.84 | 7,434,251 | 1.67 | 0.33 | 7,434,251 | 1.67 | 0.33 | ||||||||||||||||||
$1.10 - $1.66 | 4,042,060 | 0.71 | 1.57 | 4,042,060 | 0.71 | 1.57 | ||||||||||||||||||
49,886,192 | 4.28 | $ | 0.21 | 48,311,192 | 4.28 | $ | 0.23 |
24 |
25 |
26 |
27 |
Three Months Ended September 30, | Variance | |||||||||||||||
2021 | 2020 | $ | % | |||||||||||||
REVENUES | $ | 360,815 | $ | 222,204 | $ | 138,611 | 62 | % | ||||||||
OPERATING EXPENSES: | ||||||||||||||||
Production costs | 434,225 | 396,301 | 37,924 | 10 | % | |||||||||||
Exploration costs | 47,866 | 56,909 | (9,043 | ) | (16 | )% | ||||||||||
General and administrative | 443,503 | 501,178 | (57,675 | ) | (12 | )% | ||||||||||
Total Operating Expenses | 925,594 | 954,388 | (28, 974 | ) | (3 | )% | ||||||||||
Operating Loss | (564,779 | ) | (732,184 | ) | (167,405 | ) | (23 | )% | ||||||||
OTHER (EXPENSE) INCOME: | ||||||||||||||||
Interest expense, net (including amortization of deferred financing cost and debt discount) | (474,579 | ) | (463,462 | ) | 11,117 | 2 | % | |||||||||
Change in fair value | - | (23,000 | ) | (23,000 | ) | (100 | )% | |||||||||
Gain on forgiveness of PPP loan | - | - | - | - | % | |||||||||||
Other income, net | 20,308 | 54,855 | (34,547 | ) | (63 | )% | ||||||||||
Total Other (Expense) | (454,271 | ) | (431,607 | ) | 22,664 | 5 | % | |||||||||
NET LOSS | $ | (1,019,050 | ) | $ | (1, 163 ,791 | ) | $ | (1 44 ,741 | ) | (1 2 | )% |
Three Months Ended March 31, | Variance | |||||||||||||||
2022 | 2021 | $ | % | |||||||||||||
REVENUES | $ | 78,045 | $ | 273,672 | $ | (195,627 | ) | (71 | )% | |||||||
OPERATING EXPENSES: | ||||||||||||||||
Production costs | 133,336 | 462,166 | (328,830 | ) | (71 | )% | ||||||||||
Exploration costs | 243,470 | 51,590 | 191,880 | 372 | % | |||||||||||
General and administrative | 405,378 | 389,523 | 15,855 | 4 | % | |||||||||||
Total Operating Expenses | 782,184 | 903,279 | (121,095 | ) | (13 | )% | ||||||||||
Operating Loss | (704,139 | ) | (629,607 | ) | 74,532 | 12 | % | |||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||
Interest expense, net, including amortization of deferred financing cost and debt discount | (471,898 | ) | (463,897 | ) | 8,001 | 2 | % | |||||||||
Other income, net | 60,372 | 247,546 | (187,174 | ) | (76 | )% | ||||||||||
Total Other Expense, net | (411,526 | ) | (216,351 | ) | 195,175 | 90 | % | |||||||||
NET (LOSS) | (1,115,665 | ) | (845,958 | ) | 269,707 | 32 | % |
Nine Months Ended September 30, | Variance | |||||||||||||||
2021 | 2020 | $ | % | |||||||||||||
REVENUES | $ | 1,099,980 | $ | 518,272 | $ | 581,708 | 112 | % | ||||||||
OPERATING EXPENSES: | ||||||||||||||||
Production costs | 1,315,350 | 846,338 | 469,012 | 55 | % | |||||||||||
Exploration costs | 175,715 | 144,588 | 31,127 | 22 | % | |||||||||||
General and administrative | 1,244,975 | 1,936,301 | (691,326 | ) | (36 | )% | ||||||||||
Total Operating Expenses | 2,736,040 | 2,927,227 | (191,187 | ) | (7 | )% | ||||||||||
Operating Loss | (1,636,060 | ) | (2,408,955 | ) | (772,895 | ) | (32 | )% | ||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||
Interest expense, net (including amortization of deferred financing cost and debt discount) | (1,401,878 | ) | (1,363,330 | ) | 38,548 | 3 | % | |||||||||
Change in fair value | - | (23,000 | ) | (23,000 | ) | (100 | )% | |||||||||
Gain on forgiveness of PPP loan | 223,075 | - | 223,075 | - | % | |||||||||||
Other income, net | 114,662 | 1,355,205 | (1,017,468 | ) | (75 | )% | ||||||||||
Total Other Income (Expense) | (1,064,141 | ) | (31,125 | ) | (1,033,016 | ) | 3,189 | % | ||||||||
NET LOSS | $ | (2,700,201 | ) | $ | (2,440,080 | ) | $ | (260,121 | ) | 11 | % |
29 |
30 |
31 |
Exhibit Number | Description of Exhibit | |
101.INS | XBRL Instance | |
101.SCH | XBRL Taxonomy Extension Schema | |
101.CAL | XBRL Taxonomy Extension Calculation | |
101.DEF | XBRL Taxonomy Extension Definition | |
101.LAB | XBRL Taxonomy Extension Labels | |
101.PRE | XBRL Taxonomy Extension Presentation | |
XBRL | Information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections. |
APPLIED MINERALS, INC. | ||
Dated: , 2022 | /s/ | |
By: Christopher T. Carney | ||
Chief Executive Officer | ||
Dated: , 2022 | /s/ CHRISTOPHER T. CARNEY | |
By: Christopher T. Carney | ||
Chief Financial Officer |