X0303 4 2010-10-21 0 0000008328 Applied Minerals, Inc. AMNL 0001414860 IBS CAPITAL LLC ONE INTERNATIONAL PLACE SUITE 2401 BOSTON MA 02110 1 0 1 0 0001415021 IBS TURNAROUND FUND (QP) (A LTD PARTNERSHIP) ONE INTERNATIONAL PLACE STE 2410 BOSTON MA 02110 0 0 1 0 Common Stock 16584837 I See Notes 1 and 2. 10% PIK-Election Covertible Notes 1 Common Stock 500000 2 I See Notes 1 and 3. 10% PIK-Election Covertible Notes 1 2010-10-21 4 P 0 2 A Common Stock 1000000 2 I See Notes 1 and 4. IBS Capital LLC ("IBS Capital") is the general partner of The IBS Turnaround (QP) Fund (A Limited Partnership) ("QP Fund") and The IBS Turnaround Fund (A Limited Partnership) ("LP Fund"). IBS Capital LLC is the investment adviser of The IBS Opportunity Fund (BVI), Ltd. ("Opportunity Fund"). As of October 21, 2010: (i) the QP Fund holds 9,240,082 shares; (ii) the LP Fund holds 4,267,480 shares; and (iii) the Opportunity Fund holds 3,077,275 shares. The transactions reported in Table II do not affect the number of shares beneficially owned by the reporting persons. Pursuant to a series of note issuances, on May 18, 2010, the issuer issued to each of the QP Fund and the LP Fund a 10% PIK-Election Convertible Note (collectively, the "May 2010 $1.00 Notes," each, a "May 2010 $1.00 Note") on substantially the same terms and conditions. The 500,000 shares of Common Stock into which outstanding amounts are convertible under the May 2010 $1.00 Notes include: (i) 260,000 shares into which amounts payable under a May 2010 $1.00 Note by the issuer to the QP Fund are convertible and (ii) 240,000 shares into which amounts payable under a May 2010 $1.00 Note by the issuer to the LP Fund are convertible. The principal amount of the May 2010 $1.00 Note issued to the QP Fund was $260,000 and the principal amount of the May 2010 $1.00 Note issued to LP Fund was $240,000. Pursuant to a series of note issuances, on October 21, 2010, the issuer issued to each of the QP Fund and the LP Fund a 10% PIK-Election Convertible Note (collectively, the "October 2010 $1.00 Notes," each, an "October 2010 $1.00 Note") on substantially the same terms and conditions. The 1,000,000 shares of Common Stock into which outstanding amounts are convertible under the October 2010 $1.00 Notes include: (i) 650,000 shares into which amounts payable under a October 2010 $1.00 Note by the issuer to the QP Fund are convertible and (ii) 350,000 shares into which amounts payable under a October 2010 $1.00 Note by the issuer to the LP Fund are convertible. The principal amount of the October 2010 $1.00 Note issued to the QP Fund was $650,000 and the principal amount of the October 2010 $1.00 Note issued to LP Fund was $350,000. The May 2010 $1.00 Notes and October 2010 $1.00 Notes shall be referred to collectively as the "Notes," each, a "Note." The Notes have a maturity date of December 15, 2018. At the noteholder's option, amounts outstanding under a Note may be converted into Common Stock at any time after the issuer has authorized sufficient shares to convert such amounts outstanding into Common Stock at the conversion price (the "Conversion Price") of $1.00 per share. The amount outstanding under a Note shall be mandatorily converted into Common Stock of the issuer at the Conversion Price on the earliest date that is one year after the Note's date of issuance when each of the following conditions have been satisfied: (i) the issuer's authorization of a sufficient number of shares to convert amounts outstanding under all of the notes in the series into Common Stock; (ii) the average closing bid or market price of Common Stock for the preceding five days being in excess of the Conversion Price; and (iii) either (a) the issuer has filed a registration statement for the resale the number of shares of Common Stock into which the outstanding amount under a Note is convertible or (b) the shares are resalable under Rule 144. IBS Capital LLC, by David A. Taft, Manager 2010-10-25 IBS TURNAROUND FUND (QP) (A LTD PARTNERSHIP) By IBS Capital LLC, Its General Partner, David A. Taft, Manager 2010-10-25