Note 8 - Options and Warrants to Purchase Common Stock

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Options And Warrants To Purchase Common Stock [Text Block]

NOTE

8

- OPTIONS AND WARRANTS TO PURCHASE COMMON STOCK

Outstanding Stock Warrants

A summary of the status of the warrants outstanding and exercisable at

March

31,

2017

is presented below:

		Warrants Outstanding and Exercisable
Exercise Price		Number Outstanding		Weighted Average Remaining Contractual Life (years)		Weighted Average Exercise Price
$	0.25		3,283,283		4.25	$	0.25
$	1.15		461,340		4.05	$	1.15
			3,744,623		4.25	$	0.36

During

2016,

warrants to acquire

3,283,283

shares of common stock at an exercise price of

$0.25

per share were issued in connection with the private placement of common stock.

No

warrants were issued during the

first

quarter of

2017.

During

2016,

warrants to acquire

267,769

shares of common stock expired.

The intrinsic value of the outstanding warrants at

March

31,

2017

was

$0.

Outstanding Stock Options

On

November

20,

2012,

the shareholders of the Company approved the adoption of the Applied Minerals, Inc.

2012

Long-Term Incentive Plan (“LTIP”) and the Short-Term Incentive Plan (“STIP”) and the performance criteria used in setting performance goals for awards intended to be performance-based. Under the LTIP,

8,900,000

shares are authorized for issuance. The STIP does not refer to a particular number of shares under the LTIP, but would use the shares authorized in the LTIP for issuance under the STIP. The CEO, the CFO, and named executive officers, and directors, among others are eligible to participate in the LTIP and STIP. Prior to the adoption of the LTIP and STIP, stock options were granted under individual arrangements between the Company and the grantees, and approved by the Board of Directors.

The fair value of each of the Company's stock option awards is estimated on the date of grant using the Black-Scholes option-pricing model that uses the assumptions noted in the table below. Expected volatility is based on an average of historical volatility of the Company's common stock. The risk-free interest rate for periods within the contractual life of the stock option award is based on the yield curve of a

zero

-coupon U.S. Treasury Bond on the date the award is granted with a maturity equal to the expected term of the award.

A summary of the status and changes of the options granted under stock option plans and other agreements for the

first

quarter of

2017

is as follows:

	March 31, 2017
			Weighted		Weighted Average
			Average		Remaining
	Shares		Exercise Price		Contractual Life*
Outstanding at beginning of period		21,277,479	$	0.87		4.26
Outstanding at end of period		21,277,479	$	0.87		4.19
Exercisable at end of period		20,540,796	$	0.88		4.11

* Measured in years

During the

three

months ended

March

31,

2017,

no

options to purchase the Company's stock were granted.

Compensation expense of

$50,104

and

$126,982

has been recognized for the vested options for the

three

months ended

March

31,

2017

and

2016,

respectively. The aggregate intrinsic value of the outstanding options at

March

31,

2017

was

$0.

At

March

31,

2017,

there was

$95,889

of unamortized compensation expense for unvested options which is expected to be recognized over the next

1.52

years on a weighted average basis.