10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2018

☐ 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, INC.

(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.)
55 Washington Street - Suite 301, Brooklyn, NY	11201
(Address of principal executive offices)	(Zip Code)

(212) 226-4265

(Issuer’s Telephone Number, Including Area Code)

Former name, former address, and former fiscal year, if changed since last report

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES  ☒ NO ☐

 Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller-reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☐	Accelerated Filer	☐	Non-accelerated Filer	☐	Smaller Reporting Company	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to ☒Section 13(a) of the Exchange Act.

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES ☐ NO ☒

The number of shares of the registrant’s common stock, $0.001 par value per share, outstanding as of August 20, 2018 was 175,513,549.

DOCUMENTS INCORPORATED BY REFERENCE: None.

APPLIED MINERALS, INC.

(An Exploration Stage Company)

SECOND QUARTER 2018 REPORT ON FORM 10-Q

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
		Page(s)
Item 1.	Condensed Consolidated Financial Statements	3
	Condensed Consolidated Balance Sheets as of June 30, 2018 (unaudited) and December 31, 2017	3
	Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2018 and 2017 (unaudited)	4
	Condensed Consolidated Statements of Stockholders’ Deficit for the Six Months Ended June 30, 2018 (unaudited)	5
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2018 and 2017 (unaudited)	6
	Notes to the Condensed Consolidated Financial Statements (unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	27
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	28
Item 1A	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3.	Defaults Upon Senior Securities	28
Item 4.	Mine Safety Disclosures	28
Item 5.	Other Information	28
Item 6.	Exhibits	29
	Signatures	30

PART I. FINANCIAL INFORMATION

APPLIED MINERALS, INC.

(An Exploration Stage Mining Company)

CONSOLIDATED BALANCE SHEETS

	June 30,			December 31,
	2018			2017
	(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	441,249		$	47,652
Accounts receivable		4,492			27,265
Deposits and prepaid expenses		90,953			205,922
Total Current Assets		536,694			280,839
Property and Equipment, net		2,157,429			2,802,391
Other Assets - Deposits		253,176			240,934
TOTAL ASSETS	$	2,947,299		$	3,324,164
LIABILITIES AND STOCKHOLDERS’ (DEFICIT)
Current Liabilities
Accounts payable and accrued liabilities	$	797,724		$	963,609
PIK Note interest accrual		338,741			57,334
Current portion of notes payable		66,415			212,134
Total Current Liabilities		1,202,880			1,233,077
Long-Term Liabilities
PIK Notes payable, net of debt discount of $6,941,703 at June 30, 2018 and $9,755,832 at December 31, 2017, respectively		35,955,200			33,244,605
PIK Note derivative liability		8,748,518			2,047,264
Deferred Rent		7,286			0
Total Long-Term Liabilities		44,711,004			35,291,869
TOTAL LIABILITIES		45,913,884			36,524,946
Stockholders’ (Deficit)
Preferred stock, $0.001 par value, 10,000,000 shares authorized, none issued and outstanding		- 0 -			-0 -
Common stock, $0.001 par value, 400,000,000 shares authorized, 173,638,549 and 140,763,549 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively		173,639			140,764
Additional paid-in capital		73,748,653			71,152,311
Accumulated deficit prior to the exploration stage		(20,009,496	)		(20,009,496	)
Accumulated deficit during the exploration stage		(96,879,381	)		(84,484,361	)
Total Stockholders’ (Deficit)		(42,966,585	)		(33,200,782	)
TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT)	$	2,947,299		$	3,324,164

The accompanying notes are an integral part of these consolidated financial statements.

3

APPLIED MINERALS, INC.

(An Exploration Stage Mining Company)

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
REVENUES	$	92,438		$	1,357,413		$	138,085		$	2,152,695
OPERATING EXPENSES:
Production costs		184,875			827,413			356,461			1,712,294
Exploration costs		55,132			111,949			111,093			257,459
General and administrative		875,909			486,810			2,074,955			1,473,438
Depreciation expense		321,818			328,980			644,962			659,765
Total Operating Expenses		1,437,734			1,755,152			3,187,471			4,102,956
Operating Loss		(1,345,296	)		(397,739	)		(3,049,386	)		(1,950,261	)
OTHER (EXPENSE):
Interest expense, net, including amortization of deferred financing cost and debt discount		(578,904	)		(2,242,956	)		(3,120,955	)		(4,316,150	)
(Loss) gain on revaluation of PIK Note derivative		1,601,423			741,117			(6,578,504	)		1,636,841
Other income, net		3,738			24,132			353,824			25,684
Total Other (Expense)		1,026,257			(1,477,707	)		(9,345,635	)		(2,653,625	)
NET LOSS	$	(319,039	)	$	(1,875,446	)	$	(12,395,021	)	$	(4,603,886	)
Net Loss Per Share (Basic and Diluted)	$	(0.00	)	$	(0.02	)	$	(0.08	)	$	(0.04	)
Weighted Average Shares Outstanding (Basic and Diluted)		161,874,813			108,715,747			153,860,925			108,664,930

The accompanying notes are an integral part of these consolidated financial statements.

4

APPLIED MINERALS, INC.

(An Exploration Stage Mining Company)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

(Unaudited)

	Common Stock
	Shares		Amount		Additional Paid-In Capital		Accumulated Deficit Prior to Exploration Stage			Accumulated Deficit During Exploration Stage			Total Stockholders’ Deficit
Balance, December 31, 2017		140,763,549	$	140,764	$	71,152,311	$	(20,009,496	)	$	(84,484,360	)	$	(33,200,781	)
Shares issued for consulting services		1,500,000		1,500		58,500		- 0 -			- 0 -			60,000
Shares and warrants issued in private placements		29,375,000		29,375		1,555,625		- 0 -			- 0 -			1,585,000
Shares issued for warrant exercise		2,000,000		2,000		78,000		- 0 -			- 0 -			80,000
Stock option compensation expense		- 0 -		- 0 -		904,217		- 0 -			- 0 -			904,217
Net Loss		- 0 -		- 0 -		- 0 -		- 0 -			(12,395,021	)		(12,395,021	)
Balance, June 30, 2018		173,638,549	$	173,639	$	73,748,653	$	(20,009,496	)	$	(96,879,381	)	$	(42,966,585	)

The accompanying notes are an integral part of these consolidated financial statements.

5

APPLIED MINERALS, INC.

(An Exploration Stage Mining Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Six Months Ended
	June 30,
	2018			2017
Cash Flows from Operating Activities:
Net loss	$	(12,395,021	)	$	(4,603,886	)
Adjustments to reconcile net loss to net cash used in operations:
Depreciation		644,962			659,765
Amortization of discount - PIK Notes		2,298,435			2,302,092
Amortization of deferred financing costs		45,502			3,750
Non-cash interest on PIK Notes		770,815			2,007,329
Stock issued for director fees		- 0 -			9,000
Stock issued for consulting services		60,000			- 0 -
Stock based compensation expense		904,217			113,811
(Gain) loss on revaluation of PIK Note derivative		6,578,504			(1,636,841	)
Other		-0-			1,000
Change in operating assets and liabilities:
Accounts receivable		22,773			263,446
Other current receivables		- 0 -			16,801
Deposits and prepaids		102,727			217,957
Accounts payable and accrued liabilities		(158,600	)		162,468
Net cash used in operating activities		(1,125,686	)		(483,308	)
Cash Flows From Investing Activities
Purchases of property and equipment		-0-			(41,323	)
Net cash used in investing activities		-0-			(41,323	)
Cash Flows From Financing Activities:
Payments on notes payable		(145,717	)		(163,156	)
Proceeds from sale of common stock		1,585,000			- 0 -
Proceeds from exercise of options or warrants		80,000			- 0 -
Net cash provided by (used in) financing activities		1,519,283			(163,156	)
Net change in cash and cash equivalents		393,597			(687,787	)
Cash and cash equivalents at beginning of period		47,652			1,049,880
Cash and cash equivalents at end of period	$	441,249		$	362,093
Supplemental disclosure of cash flow information:
Cash paid for interest	$	6,206		$	2,743
Supplemental disclosure of noncash financing activity:
Accrued PIK interest paid through issuance of PIK Notes		366,658		$	1,967,131

The accompanying notes are an integral part of these consolidated financial statements.

6

APPLIED MINERALS, INC.

(An Exploration Stage Mining Company)

Notes to the Consolidated Financial Statements

NOTE 1– ORGANIZATION AND DESCRIPTION OF BUSINESS

Applied Minerals, Inc. (the “Company” or “Applied Minerals” or “we” or “us”) (OTCQB: AMNL) owns the Dragon Mine in central Utah. From the mine we extract, process, or have processed by a third party, halloysite clay and iron oxide for sale to a range of end markets. We market the minerals directly and through distributors and also under a profit-sharing arrangement with the Kaolin business unit of BASF Corp. (“BASF”).

We also engage in research and development and frequently work collaboratively with potential customers, consultants, distributors, and BASF to process and enhance our halloysite clay products to improve the performance of existing and new products.

Our halloysite clay, which we market under the DRAGONITE™ trade name, is an aluminosilicate mineral with a hollow tubular shape. DRAGONITE can utilize halloysite’s morphology, high surface area, and reactivity to add significant functionality to a number of applications such as, but not limited to, reinforcement additives for polymer composites, flame retardant additives for polymers, catalysts, controlled release carriers for paints and coatings, strength reinforcement additives for cement, concrete, mortars and grouts, advanced ceramics, rheology additives for drilling fluids, environmental remediation media, and carriers of agricultural agents.  The Company sells its halloysite products at negotiated prices.

Our iron oxide, which we market under the AMIRON™ trade name, is a high purity product. We have sold it on an exclusive basis to one customer at a negotiated price for use in an oilfield application and we are continuing to offer AMIRON to that customer on an exclusive basis.  Currently, we are not selling AMIRON™ to customers on a continuing basis for use in any other application.

The Company is classified as an “exploration stage” company for purposes of Industry Guide 7 of the U.S. Securities and Exchange Commission (“SEC”) Under Industry Guide 7, companies engaged in significant mining operations are classified into three categories, referred to as “stages” - exploration, development, and production. Exploration stage includes all companies that do not have established reserves in accordance with Industry Guide 7. Such companies are deemed to be “in the search for mineral deposits.” Notwithstanding the nature and extent of development-type or production-type activities that have been undertaken or completed, a company cannot be classified as a development or production stage company unless it has established reserves in accordance with Industry Guide 7.

In 2017, we entered into a tolling agreement with BASF under which BASF will process the Company’s halloysite product, utilizing a water-based system. The BASF system is capable of eliminating impurities, such as iron oxide, and chemically treating the surface of halloysite to achieve desired functionality.

We have a mineral processing plant with a capacity of up to 45,000 tons of mineralization per annum for certain applications.  The plant is currently dedicated to processing its halloysite products. 

Additionally, the Company has a second processing facility with a capacity of up to 10,000 tons per annum. This smaller plant is currently dedicated to processing the Company’s halloysite.  This smaller plant processes halloysite using a dry-based, micronizing system. This dry-based system does not eliminate impurities, such as iron oxide, as effectively as a water-based system but is useful in situations where the removal of impurities is not necessary.

For the foreseeable future, the Company expects to utilize a commercial-sized crusher to process its iron oxide to satisfy any sales of its AMIRON product.

For the six months ended June 30, 2018, the Company’s two largest customers accounted for approximately 63% of total revenue and at June 30, 2018 amounts owed by the Company’s two largest customers represented 0% of accounts receivable.

Exploration Agreement

On December 22, 2017, the Company and Continental Mineral Claims, Inc. (“CMC”) entered into an Exploration Agreement with Option to Purchase (“Agreement”). The Company granted to CMC the exclusive right and option to enter upon and conduct mineral exploration activities (the “Exploration License”) for Metallic Minerals on the Company’s Dragon Mine mine site in Utah (the “Mining Claims”).  Metallic Minerals are defined to include minerals with a high specific gravity and metallic luster, such as gold, silver, lead, copper, zinc, molybdenum, titanium, tungsten, uranium, tin, iron, etc., but shall exclude any such Metallic Minerals that are intermingled within any economically-recoverable, non-metallic mineral deposits located at or above an elevation of 5,590 feet above sea level. Non-metallic minerals include clay and iron oxide, the minerals mined by the Company.  The Company believes that all economic recoverable non-metallic mineral deposits are well above 5,590 feet above sea level. The Exploration License is for a period of ten years.

In consideration of the Exploration License CMC has paid the Company $350,000 and will pay it $150,000 on or before the first anniversary of the Exploration License, $250,000 on or before each subsequent anniversary during the Exploration License term following the first anniversary of the Effective Date of this Agreement, unless the Exploration License is terminated earlier by CMC by exercising the option or failing to make the required payment for the Exploration License.

7

CMC may exercise the option at any time during the Exploration License term. Upon exercise of the Option and the completion of the closing, CMC shall acquire 100% of the Metallic Rights within the Mining Claims from the Company, subject to the terms and conditions of the Agreement.

The consideration to be paid by CMC to the Company after exercising the option for the acquisition of the Metallic Rights shall be payable as follows: $3,000,000; and, CMC shall grant to the Company a five percent (5%) Net Profits Interest (“NPI”) royalty over the Metallic Minerals produced from the Mining Claims.  The NPI royalty shall be initially capped at $20,000,000 (the “NPI Cap”). The NPI Cap shall be subject to reduction in the event the Company elects to take the Share Contribution, as set forth below.

Upon exercise of the option, the Company shall retain the all rights and title to (1) the surface interest (with exception of those rights associated with the Metallic Rights), and (2) all non-metallic minerals (expressly including all industrial minerals including clays and iron oxides). 

It is anticipated that CMC will acquire rights similar to the Metallic Rights with respect to contiguous and nearly properties and such rights will be contributed to a new company formed or designated by CMC to own and operate CMC’s Tintic District project, which would involve the Metallic rights and similar rights regarding adjacent or nearby properties (“PubCo”) that intends to go public.

8

The Company shall have the right, at its sole election, to convert a portion of its NPI royalty interest into $2,000,000 worth of shares in PubCo up to a maximum of Two Percent (2%) net value of PubCo (the “Share Contribution”), through a reduction of the NPI Cap. The Company shall make the determination whether to take the Share Contribution or not, and so notify CMC, within ninety (90) days, of the completion (and delivery to the Company) of a feasibility study by CMC for the Tintic District project.  If the Company elects not to take the Share Contribution, the Company’s NPI royalty shall remain unchanged, including the NPI Cap, which will remain at $20,000,000.

The Agreement contains protections in favor of the Company against unreasonable interference of its current and future mining operations by CMC. CMC may not do anything that may, at the Company’s determination, adversely impact the Company’s Mining Operations.  “Mining Operations” shall mean the activities incident to mineral extraction, permitting, and any operations by CMC or the Company relating to the removal of minerals, respectively, that are or may reasonably be conducted on the Mining Claims, including the exploration for, and development, active mining, removing, producing and selling of any minerals, including the Metallic Minerals.  The Agreement states that the parties understand that the Company is willing to enter into the Agreement only if it is assured that CMC will not have any right to unreasonably interfere with the Company’s current mining operations and possible future Mining Operations on the Mining Claims.

There are no assurances that CMC will exercise its option to purchase 100% of the Metallic Rights.

NOTE 2 - LIQUIDITY AND BASIS OF PRESENTATION

The Company has a history of recurring losses from operations and the use of cash in operating activities. For the six months ended June 30, 2018, the Company’s net loss was $12,395,021 and cash used in operating activities was $1,125,686. As of June 30, 2018, the Company had current assets of $536,694 and current liabilities of $1,202,880 of which $338,741 was accrued PIK Note interest likely to be paid in additional PIK Notes. The Company’s current liabilities also include (i) $63,537 of accrued management bonus payable as determined by the Company’s Audit Committee, (ii) $59,810 of a note payable related to the financing of the Company’s D&O and G/L policies, (iii) $159,310 of payables to a compounder for which it has agreed to satisfy in halloysite product and (iv) $156,200 of disputed accrued expenses for which the Company believes it has a statute of limitations defense.

Based on the Company’s current cash usage expectations, management believes it will not have sufficient liquidity to fund its operations through August 20, 2019. Further, management cannot provide any assurance that it is probable that the Company will be successful in accomplishing any of its plans to raise debt or equity financing or generate additional product sales. Collectively these factors raise substantial doubt regarding the Company’s ability to continue as going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded assets amounts and classification of liabilities that might be necessary should the Company not be able to continue as a going concern.

Management believes that in order for the Company to meet its obligations arising from normal business operations through August 20, 2019 that the Company requires (i) additional capital either in the form of a private placement of common stock or debt and/or (ii) additional sales of its products that will generate sufficient operating profit and cash flows to fund operations.  Without additional capital or additional sales of its products, the Company’s ability to continue to operate will be limited.

NOTE 3– BASIS OF REPORTING AND SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited condensed consolidated financial statements of Applied Minerals, Inc. have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.

In the opinion of management, these interim unaudited condensed consolidated financial statements contain all of the adjustments of a normal and recurring nature which are considered necessary for a fair presentation of the financial position of the Company and the results of its operations and cash flows for the periods presented. The results of operations for the three and six months ended June 30, 2018 are not necessarily indicative of the operating results for the entire year. These financial statements should be read in conjunction with the financial statements and related disclosures for the year ended December 31, 2017, included in the Annual Report of Applied Minerals, Inc. on Form 10-K/A filed with the SEC on August 14, 2018.

The accompanying interim unaudited condensed consolidated financial statements reflect the application of certain significant accounting policies as described below and elsewhere in these notes. The Company’s significant accounting policies and estimates remain unchanged from those detailed in the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2017.

9

Exploration-Stage Company

Effective January 1, 2009, the Company was, and still is, classified as an exploration company because the existence of proven or probable reserves at the Company’s Dragon Mine property have not been demonstrated and no significant revenue has been earned from the mine. Under the SEC’s Industry Guide 7, a mining company is considered an exploration stage company until it has declared mineral reserves determined in accordance with the guide and staff interpretations thereof.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Applied Minerals, Inc. and its inactive subsidiary, which holds 100 acres of timber and mineral property in northern Idaho.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. In these consolidated financial statements, the warrant and PIK note derivative liabilities, stock compensation, impairment of long-lived assets and valuation allowance on income taxes involve extensive reliance on management’s estimates. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents include all highly liquid investments with a maturity of three months or less. The Company minimizes its credit risk by investing its cash and cash equivalents, which sometimes exceed federally insured limits with major financial institutions located in the United States with a high credit rating.

Receivables

Trade receivables are reported at outstanding principal amounts, net of an allowance for doubtful accounts.

Management evaluates the collectability of receivable account balances to determine the allowance, if any. Management considers the other party’s credit risk and financial condition, as well as current and projected economic and market conditions, in determining the amount of the allowance. Receivable balances are written off when management determines that the balance is uncollectable. No allowance was required at June 30, 2018 and December 31, 2017.

Property and Equipment

Property and equipment are carried at cost net of accumulated depreciation and amortization. Depreciation and amortization is computed on the straight-line method over the estimated useful lives of the assets, or the life of the lease, whichever is shorter, as follows:

	Estimated
	Useful Life (years)
Building and Building Improvements		5	–	40
Mining equipment		2	–	7
Office and shop furniture and equipment		3	–	7
Vehicles			5

Depreciation expense for the three months ended June 30, 2018 and 2017 totaled $321,818, and $328,980, respectively, and for the six months ended June 30, 2018 and 2017 totaled $644,962 and $659,765, respectively.

Impairment of Long-lived Assets

The Company periodically reviews the carrying amounts of long-lived assets to determine whether current events or circumstances warrant adjustment to such carrying amounts. Long-lived assets are tested for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. When such events occur, the Company compares the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset to its carrying amount. If this comparison indicates that there is an impairment, the amount of the impairment is typically calculated using discounted expected future cash flows where observable fair values are not readily determinable. Considerable management judgment is necessary to estimate the fair value of assets. Assets to be disposed of are carried at the lower of their financial statement carrying amount or fair value, less cost to sell. The Company has determined that there was no impairment of its long-lived assets as of June 30,2018 and 2017.

10

Revenue Recognition

Revenue includes sales of halloysite clay and iron oxide during 2017 and is recognized when title passes to the buyer and when collectability is reasonably assured. Title passes to the buyer based on terms of the sales contract. Product pricing is determined based on negotiated contractual arrangements with the Company’s customers.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued guidance on revenue recognition, which provides a single, comprehensive revenue recognition model for all contracts with customers and supersedes most existing revenue recognition guidance.  The main principle under this guidance is that an entity should recognize revenue at the amount it expects to be entitled to in exchange for the transfer of goods or services to customers.  The Company identified the predominant changes to its accounting policies resulting from the application of this guidance and quantified the impact on its consolidated financial statements.  The cumulative effect of the initial adoption of this guidance did not have any significant impact on the Company’s consolidated financial statements as the Company did not have any significant customer contracts in place at December 31, 2017.  The Company adopted this guidance on January 1, 2018. For 2018, revenue is recognized when control over the product transfers to the customer.

Mining Exploration and Development Costs

Land and mining property are carried at cost. The Company expenses prospecting and mining exploration costs. At the point when a property is determined to have proven and probable reserves, subsequent development costs will be capitalized and will be charged to operations using the units-of-production method over proven and probable reserves. Upon abandonment or sale of a mineral property, all capitalized costs relating to the specific property are written off in the period abandoned or sold and a gain or loss is recognized.

11

Income taxes

The Company uses an asset and liability approach which results in the recognition of deferred tax liabilities and assets for the expected future tax consequences or benefits of temporary differences between the financial reporting basis and the tax basis of assets and liabilities, as well as operating loss and tax credit carry forwards, using enacted tax rates in effect in the years in which the differences are expected to reverse.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of its deferred tax assets will not be realized. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. A full valuation allowance has been provided for the Company’s net deferred tax assets as it is more likely than not that they will not be realized.

Authoritative guidance provides that the tax effects from an uncertain tax position taken or expected to be taken in a tax return can be recognized in our financial statements only if the position is more likely than not of being sustained on audit based on the technical merits of the position. As of December 31, 2no benefit from uncertain tax positions was recognized in our financial statements. The Company has elected to classify interest and/or penalties related to income tax matters in income tax expense.

Stock Options and Warrants

The Company follows ASC 718 (Stock Compensation) and 505-50 (Equity-Based Payments to Non-employees), which provide guidance in accounting for share-based awards exchanged for services rendered and requires companies to expense the estimated fair value of these awards over the requisite service period. The Company instituted a formal long-term and short-term incentive plan on November 20, 2012, which was approved by its shareholders. Prior to that date, we did not have a formal equity plan, but all equity grants, including stock options and warrants, were approved by our Board of Directors. We determine the fair value of the stock-based compensation awards granted to non-employees as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. If the fair value of the equity instruments issued is used, it is measured using the stock price and other measurement assumptions as of the earlier of either of (1) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty’s performance is complete. Beginning in the quarter ended June 30, 2013 the Company began using the simplified method to determine the expected term for any options granted because the Company did not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. The Company previously utilized the contractual term as the expected term.

Environmental Matters

Expenditures for ongoing compliance with environmental regulations that relate to current operations are expensed or capitalized as appropriate. Expenditures resulting from the remediation of existing conditions caused by past operations that do not contribute to future revenue generations are expensed. Liabilities are recognized when environmental assessments indicate that remediation efforts are probable and the costs can be reasonably estimated.

Estimates of such liabilities are based upon currently available facts, existing technology and presently enacted laws and regulations taking into consideration the likely effects of inflation and other societal and economic factors, and include estimates of associated legal costs. These amounts also reflect prior experience in remediating contaminated sites, other companies’ clean-up experience and data released by The Environmental Protection Agency or other organizations. Such estimates are by their nature imprecise and can be expected to be revised over time because of changes in government regulations, operations, technology and inflation. Recoveries are evaluated separately from the liability and, when recovery is assured, the Company records and reports an asset separately from the associated liability.

Based upon management’s current assessment of its environmental responsibilities, it does not believe that any reclamation or remediation liability exists at June 30, 2018.

Recent Issued Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued guidance on revenue recognition, which provides a single, comprehensive revenue recognition model for all contracts with customers and supersedes most existing revenue recognition guidance.  The main principle under this guidance is that an entity should recognize revenue at the amount it expects to be entitled to in exchange for the transfer of goods or services to customers.  The Company identified the predominant changes to its accounting policies resulting from the application of this guidance and quantified the impact on its consolidated financial statements.  The cumulative effect of the initial adoption of this guidance did not have any significant impact on the Company’s consolidated financial statements as the Company did not have any significant customer contracts in place at December 31, 2017.  The Company adopted this guidance on January 1, 2018.

In February 2016, the FASB issued ASU 2016-02 (“Topic 842”) new accounting guidance for leases, which supersedes previous lease guidance. Under this guidance, for all leases with terms in excess of one year, including operating leases, the Company will be required to recognize on its balance sheet a lease liability and a right-of-use asset representing its right to use the underlying asset for the lease term. The new guidance retains a distinction between finance leases and operating leases and the classification criteria is substantially similar to previous guidance. Additionally, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed. The guidance is effective for the Company beginning January 1, 2019. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

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NOTE 4– PROPERTY AND EQUIPMENT

The following is a summary of property, plant, and equipment – at cost, less accumulated depreciation:

	March 31,			December 31,
	2018			2017
Land	$	500,000		$	500,000
Land improvements		171,122			171,122
Buildings		3,129,519			3,129,519
Mining equipment		1,784,115			1,784,115
Milling equipment		2,841,726			2,841,726
Laboratory equipment		607,716			607,716
Office equipment		70,529			70,529
Vehicles		150,810			150,810
		9,255,537			9,255,537
Less: Accumulated depreciation		(7,098,108	)		(6,453,146	)
Total	$	2,157,429		$	2,802,391

NOTE 5– FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS

ASC Topic 820,Fair Value Measurement and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. This topic also establishes a fair value hierarchy, which requires classification based on observable and unobservable inputs when measuring fair value. The fair value hierarchy distinguishes between assumptions based on market data (observable inputs) and an entity’s own assumptions (unobservable inputs). The hierarchy consists of three levels:

● Level 1– Quoted prices in active markets for identical assets and liabilities;

● Level 2– Inputs other than level one inputs that are either directly or indirectly observable; and

● Level 3– Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use.

Liabilities measured at fair value on a recurring basis are summarized as follows at June 30, 2018:

	Fair value measurement using inputs
	Level 1		Level 2		Level 3
Financial instruments:
Series 2023 Note Derivative	$	-0-	$	-0-	$	748,417
Series A Note Derivative	$	-0-	$	-0-	$	8,000,101

The following table summarizes the activity during the six months ended June 2018 and 2017 for financial instruments at fair value using Level 3:

Balance at December 31, 2017	$	2,047,264	Balance at December 31, 2016	$	2,176,552
Issuance of additional Series 2023 Notes		- 0 -	Issuance of additional Series 2023 Notes		25,038
Issuance of additional Series A Notes		122,750	Issuance of additional Series A Notes		- 0 -
Net unrealized gain (loss) included in operations		6,578,504	Net unrealized gain (loss) included in operations		(1,636,841	)
Balance at June 30, 2018	$	8,748,518	Balance at June 30, 2017	$	564,749

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The recorded value of certain financial assets and liabilities, which consist primarily of cash and cash equivalents, receivables, and accounts payable and accrued expenses approximate their fair value at March 31, 2018 and December 31, 2017 based upon the short-term nature of the assets and liabilities. Based on borrowing rates currently available to the Company for loans with similar terms, and the remaining short-term period outstanding, the carrying value of notes payable other than PIK notes approximate fair value. The estimated fair value of the PIK Notes Payable was $12,842,158 and $11,395,208 at June 30, 2018 and December 31, 2017 (Level 3), respectively.

For the Company's warrant and PIK note derivative liabilities, Level 3 fair value hierarchy was estimated using a Monte Carlo Model using the following assumptions:

Series 2023 Note derivative liability	Fair Value Measurements
	Using Inputs
	June 30,			December 31,
	2018			2017
Market price and estimated fair value of stock	$	0.17		$	0.05
Exercise price (1)	$	0.59		$	0.59
Term (years)		5.08			5.58
Dividend yield		-0-			-0-
Expected volatility		130.4	%		115.3	%
Risk-free interest rate		2.73	%		2.24	%

(1) Exercise price is reflective of amended Series 2023 Notes issued in December 2017 as discussed in Note 8.

Series A Note derivative liability	Fair Value Measurements
	Using Inputs
	June 30,			December 31,
	2018			2017
Market price and estimated fair value of stock	$	0.17		$	0.05
Exercise price (1)	$	0.40		$	0.40
Term (years)		5.09			5.58
Dividend yield		-0-			-0-
Expected volatility		130.4	%		115.3	%
Risk-free interest rate		2.73	%		2.24	%

(1) Exercise price is reflective of amended Series A Notes issued in December 2017 as discussed in Note 7.

NOTE 6 - NOTES AND LEASES PAYABLE

Notes payable at June 30, 2018 and December 31, 2017:

	June 30,			December 31,
	2018			2017
Note payable for equipment, payable $1,339 monthly, including interest (a)	$	6,605		$	13,073
Note payable to insurance companies, payable $5,045 - $17,959 monthly, (b) and (c)		59,810			199,061
		66.415			212,134
Less: Current Portion		(66,415	)		(212,134	)
Notes Payable, Long-Term Portion	$	- 0 -		$	- 0 -

(a) On October 31, 2014, the Company purchased mining equipment for $65,120 by paying deposit and issuing a note in the amount of $57,900 with an interest rate of 5.2%. The note is collateralized by the mining equipment with payments of $1,339 for 48 months, which started on November 30, 2014.

(b) The Company signed a note payable with an insurance company dated October 17, 2016 for liability insurance, payable in monthly installments, including interest ranging from 2.6% - 4.15%

(c) The Company signed a note payable with an insurance company dated October 17, 2017 for liability insurance, payable in monthly installments, including interest ranging from 3.1% - 5.78%

During the three months ended June 30, 2018 and 2017, the Company's interest payments totaled $705 and $1,216, respectively. During the six months ended June 30, 2018 and 2017, the Company’s interest payments totaled $6,206 and $2,743, respectively.

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NOTE 7– CONVERTIBLE DEBT (PIK NOTES)

The Company raised $23 million of financing through the issuance of two series of Paid-In-Kind (“PIK”)-Election Convertible Notes in 2013 (“Series 2023 Notes”) and 2014 (“Series A Notes”). The original terms of the Series A Notes included among other things: (i) a maturity of November 1, 2018 with an option to extend to November 1, 2019, (ii) a stated interest rate of 10% paid semi-annually and (iii) a conversion price of $0.90, adjusted downward based on an anti-dilution provision. The original terms of the Series 2023 Notes included among other things: (i) a maturity of August 1, 2023, (ii) a stated interest rate of 10% paid semi-annually and (iii) a conversion price of $1.40, adjusted downward based on an anti-dilution provision. On December 14, 2017, an amendment agreement, entered into between the Company and the holders of the Series A Notes and Series 2023 Notes, went into effect. The agreement resulted in changes to certain terms of the Series A and Series 2023 Notes. The key terms of the Series A and Series 2023 Notes, as amended, are highlighted in the table below: 

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	$0.59, adjusted downward based on anti-dilution provisions/downround protection		$0.40, 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

As of June 30, 2018, the liability components of the PIK Notes on the Company’s balance sheet are listed in the following table:

	Series 2023 Notes			Series A Notes			Total
PIK Note Payable, Gross	$	16,152,402		$	27,214,693		$	43,367,095
Less: Discount		(1,453,542	)		(5,488,161	)		(6,941,703	)
Less: Deferred Financing Cost		(201,756	)		(268,436	)		(470,192	)
PIK Note Payable, Net	$	14,497,104		$	21,548,096		$	35,955,200
PIK Note Derivative Liability	$	748,417		$	8,000,101		$	8,748,518

 As of December 31, 2017, the liability components of the PIK Notes on the Company’s balance sheet are listed in the following table:

	Series 2023 Notes			Series A Notes			Total
PIK Note Payable, Gross	$	16,090,721		$	26,909,716		$	43,000,437
Less: Discount		(1,538,299	)		(7,701,839	)		(9,240,138	)
Less: Deferred Financing Cost		(221,280	)		(294,414	)		(515,694	)
PIK Note Payable, Net	$	14,331,142		$	18,913,463		$	33,244,605
PIK Note Derivative Liability	$	163,634		$	1,883,630		$	2,047,264

Series A Notes (Amended)

On November 3, 2014 (“Issue Date”), the Company issued, in a private placement pursuant to investment agreements, $19,848,486 principal amount of 10% PIK-Election Convertible Notes due 2018 ("Series A Notes") in exchange for $12,500,000 in cash and the cancellation of previously-issued warrants held by one investor.

The original terms of the Series A Notes included among other things: (i) a maturity of November 1, 2018 with an option to extend to November 1, 2019, (ii) a stated interest rate of 10% paid semi-annually and (iii) a conversion price of $0.90, adjusted downward based on an anti-dilution provision. 

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At June 30, 2018, the fair value of the Series A Note Derivative was estimated to be $8,000,101. During the three and six months ended June 30, 2018, the Company amortized $80,142 and $2,239,656, respectively of debt discount and deferred financing cost relating to the Series A Notes Payable and issued additional PIK Notes of $304,977 in lieu of cash interest payments, increasing the Series A Notes Payable carrying value to $21,458,096 as of June 30, 2018.

At December 31, 2017, the fair value of the Series A Note Derivative was estimated to be $1,883,630, which includes the value of the derivative related to the additional PIK Notes issued in May and November 2017 for the semi-annual interest payments due and the additional notes issued in December, 2017. During the year ended December 31, 2017, the Company amortized $5,808,294 of debt discount and deferred financing cost relating to the Series A Notes Payable and issued additional PIK Notes in lieu of interest payments of $2,797,836, increasing the Series A Notes Payable carrying value to $26,909,721 as of December 31, 2017.

As of June 30, 2018, the Company was in compliance with the covenants of the Series A Notes.

Series 2023 Notes (Amended)

In August 2013, the Company received $10,500,000 of financing through the private placement of 10% mandatory convertible Notes due 2023 ("Series 2023 Notes"). The principal amount of the Notes is due on maturity. The Company can elect to pay semi-annual interest on the Series 2023 Notes with additional PIK Notes containing the same terms as the Series 2023 Notes, except interest will accrue from issuance of such notes. The Company can also elect to pay interest in cash. In February, 2017 and August, 2017, the Company issued $703,550 and $738,728, respectively, in additional Series 2023 Notes to the holders to pay the semi-annual interest. Additionally, on December 14, 2017, the Company issued $577,439 of additional 2023 Notes, which represented the accrued interest of the Series 2023 Notes on the day on which the terms of the Series 2023 Notes were effectively amended.

The original terms of the Series 2023 Notes included among other things: (i) a maturity of August 1, 2023, (ii) a stated interest rate of 10% paid semi-annually and (iii) a conversion price of $1.40, adjusted downward based on an anti-dilution provision. 

At June 30, 2018, the fair value of the Series 2023 Note Derivative was estimated to be $748,417, which includes the value of the derivative related to additional PIK Notes issued in February 2018. During the three and six months ended June 30, 2018, the Company amortized $50,115 and $104,281, respectively of debt discount and deferred financing cost relating to the Series 2023 Notes Payable and issued additional PIK Notes of $61,681 in lieu of cash interest payments, increasing the Series 2023 Notes Payable carrying value to $14,497,104 as of June 30, 2018.

At December 31, 2017, the fair value of the Series 2023 Note Derivative was estimated to be $163,634, which includes the value of the derivative related to additional PIK Notes issued in February and August 2016 for the semi-annual interest payments due and the additional notes issued in December, 2017. During the year ended December 31, 2017, the Company amortized $200,360 of debt discount and deferred financing cost relating to the Series 2023 Notes Payable and issued additional PIK Notes of $2,019,717 in lieu of cash interest payments, increasing the Series 2023 Notes Payable carrying value to $16,090,721 as of December 31, 2017. As part of the amendment agreement, the holders of the Series 2023 Notes received warrants to purchase 3,720,000 million shares of common stock at $0.10 per share. The Black Scholes value of these warrants totaled $224,290.

As of June 30, 2018, the Company was in compliance with the covenants of the Series 2023 Notes.

NOTE 8– STOCKHOLDERS’ EQUITY

Preferred Stock

The Company is authorized to issue 10,000,000 shares of noncumulative, non-voting, nonconvertible preferred stock, $0.001 par value per share. At June 30, 2018 and December 31, 2017, no shares of preferred stock were outstanding.

Common Stock

On December 7, 2017, stockholders of the Company approved to increase the authorized shares of common stock from 250,000,000 to 400,000,000 shares, $0.001 par value per share. At June 30, 2018 and December 31, 2017, 173,638,549 and 140,763,549 shares were issued and outstanding, respectively.

2018

During the six months ended June 30, 2018 the Company issued (i) 1,500,000 shares of common stock at a price of $0.04 per share to a consultant for investor relation services to be performed, (ii) 17,375,000 shares of common stock at a price of $0.04 per share, (iii) 3,000,000 shares of common stock at a price of $0.05 per share, (iv) 1,000,000 shares of common stock at a price of $0.10 per share, (v) 2,000,000 shares of common stock at a price of $0.04 per share upon the exercise of a warrant to purchase shares of common stock, and (vi) 8,000,000 units, (one unit consisting of one share of common stock and one warrant to purchase one share of common stock at a price of $0.15) at a price of $0.08 per unit.

2017

During 2017, the Company issued: (i) 250,000 shares of common stock, at a price of $0.36 per share, to directors; (ii) 26,500,000 units, (one unit consisting of one share of common stock and one warrant to purchase 0.25 shares of common stock at a price of $0.04 per unit; (iii) 2,275,000 units, at a price of $0.04 per unit, as payment for fees associated with a private placement of stock and (iv) 3,1250,000 shares of common stock, at a price of $0.04 per share, upon the exercise of warrants to purchase common stock.

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NOTE 9– OPTIONS AND WARRANTS TO PURCHASE COMMON STOCK

Outstanding Stock Warrants

A summary of the status and changes of the warrants issued for the six months ended 2018:

	Shares Issuable upon exercise of
	upon Exercise of			Weighted Average
	Outstanding Warrants			Exercise Price
Outstanding at January 1, 2018		18,813,373		$	0.14
Issued		8,000,000		$	0.15
Exercised		(2,000,000	)	$	0.04
Forfeited		--			--
Outstanding at June 30, 2018		24,813,373		$	0.15

A summary of the status of the warrants outstanding and exercisable at June 30, 2018 is presented below:

		Warrants Outstanding and Exercisable
		Shares Issuable		Weighted Average
		upon Exercise of		Remaining		Weighted Average
Exercise Price		Outstanding Warrants		Contractual Life (years)		Exercise Price
$	1.15		461,340		2.8	$	1.15
$	0.25		3,283,283		3.0	$	0.25
$	0.04		2,068,750		4.3	$	0.04
$	0.10		11,000,000		4.5	$	0.10
$	0.15		8,000,000		3.0	$	0.15
			24,813,373		5.2	$	0.15

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.

In May, 2016, the Company adopted the 2016 Long-Term Incentive Plan (“2016 LTIP”). The number of shares of common stock for issuance or for reference purposes subject to the 2016 LTIP was 2,000,000.

On December 7, 2016, the stockholders of the Company approved the 2016 Incentive Plan. The purpose of the 2016 Incentive Plan is to enhance the profitability and value of the Company for the benefit of its stockholders by enabling the Company to offer eligible employees, consultants, and non-employee directors incentive awards in order to attract, retain and reward such individuals and strengthen the mutuality of interests between such individuals and the Company’s stockholders. The aggregate number of shares of Common Stock that may be issued or used for reference purposes under the 2016 Incentive Plan or with respect to which awards may be granted may not exceed 15,000,000 shares, which may be either (i) authorized and unissued Common Stock or (ii) Common Stock held in or acquired for the treasury of the Company.

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The Compensation Committee of the Company Board of Directors has full authority to administer and interpret the 2016 Incentive Plan, to grant awards under the 2016 Incentive Plan, to determine the persons to whom awards will be granted, to determine the types of awards to be granted, to determine the terms and conditions of each award, to determine the number of shares of Common Stock to be covered by each award and to make all other determinations in connection with the 2016 Incentive Plan and the awards thereunder as the Committee, in its sole discretion, deems necessary or desirable.

On December 14, 2017, the Board of Directors approved the 2017 Incentive Plan (“2017 IP”). Forty million (40,000,000) shares of Common Stock are subject to the 2017 IP.

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.

The significant assumptions relating to the valuation of the Company's options granted during the six months ended June 30, 2018 were as follows on a weighted average basis:

Dividend Yield		0%
Expected Life (in years)	2.48	–	2.96
Expected Volatility	163.73%	–	177.59%
Risk Free Interest Rate	2.54%	–	2.62%

A summary of the status and changes of the options granted under stock option plans and other agreements during the six months ended June 30, 2018:

	Shares Issuable			Weighted
	Upon Exercise of			Average
	Options			Exercise Price
Outstanding at December 31, 2017		57,057,768		$	0.36
Granted		4,224,999		$	0.11
Exercised		--			--
Forfeited		(232,645	)		1.36
Outstanding at June 30, 2018		61,050,122		$	0.34

During the six months ended June 30, 2018, the Company granted 4,224,999 options to purchase the Company’s common stock with a weighted average exercise price of $0.11. The options vest monthly through June, 2019.

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A summary of the status of the options outstanding at June 30, 2018 is presented below:

Options Outstanding					Options Exercisable
Number Outstanding	Weighted Average Remaining Contractual Life (years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
35,322,222		9.34	$	0.06		26,697,225	$	0.06
545,289		9.48	$	0.075		408,968	$	0.075
377,777		4.93	$	0.11		69,444	$	0.11
3,000,000		4.61	$	0.12		1,000,000	$	0.12
500,000		3.13	$	0.16		500,000	$	0.16
81,395		5.64	$	0.21		81,395	$	0.21
100,000		2.22	$	0.22		100,000	$	0.22
1,066,155		2.87	$	0.24		1,066,155	$	0.24
2,087,500		4.29	$	0.25		2,087,500	$	0.25
35,595		4.79	$	0.27		35,595	$	0.27
474,815		5.86	$	0.28		474,815	$	0.28
234,506		4.64	$	0.285		234,506	$	0.285
81,522		2.56	$	0.30		81,522	$	0.30
200,000		6.63	$	0.66		200,000	$	0.66
150,000		6.61	$	0.68		150,000	$	0.68
7,233,277		0.50	$	0.70		7,233,277	$	0.70
488,356		6.89	$	0.73		488,356	$	0.73
3,104,653		3.65	$	0.83		3,104,653	$	0.83
975,000		5.95	$	0.84		975,000	$	0.84
300,000		5.14	$	1.10		300,000	$	1.10
300,000		4.99	$	1.15		300,000	$	1.15
115,000		2.74	$	1.35		115,000	$	1.35
300,000		3.90	$	1.55		300,000	$	1.55
3,077,060		4.39	$	1.66		3,077,060	$	1.66
900,000		3.14	$	1.90		900,000	$	1.90
61,050,122		6.82	$	0.34		49,980,471	$	0.40

On December 14, 2017, the Company’s management was granted performance-based options to purchase 27.5 million shares of the Company’s common stock at $0.06 per share. The options expire on December 13, 2027. At December 31, 2017, the first fifty percent (50%) of the performance-based options vested as management was able to (i) close the sale of an aggregate of $600,000 of units (consisting of a share of common stock of the Company and a warrant to buy 0.25 of a share of common stock of the Company) at $0.04 per unit and (ii) establish toll processing arrangements with two toll processors of halloysite that, in management’s good faith belief, can process halloysite to the Company’s specifications. An additional twenty-five percent (25%) of the performance-based options vested on February 1, 2018 when management generated $900,000 of additional cash proceeds through (i) the sale of common stock and (ii) the licensing of a right to explore the Dragon Mine property for certain precious metals. The vesting of the remaining 8.3%, 8.3% and 8.4% of the performance-based options occurs when (i) EBITDA is positive over a twelve-month period, (ii) EBITDA is at or greater than $2 million over a twelve-month period and (iii) EBITDA is at or greater than $4 million over a twelve-month period, respectively. At June 30, 2018, the achievement of the performance targets was not deemed probable.

Compensation expense of $192,299 and $775,299 has been recognized for the vested options for the three and six months ended June 30, 2018. The aggregate intrinsic value of the outstanding options at June 30, 2018 was $4,114,914. At June 30, 2018, (i) $442,520 of unamortized compensation expense for time-based unvested options will be recognized over the next 0.53 years on a weighted average basis; and (ii) $354,750 of unamortized compensation expense for performance-based unvested options will be recognized as the achievement of the performance targets becomes probable.

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NOTE 10 - PER SHARE DATA

The computation of basic earnings (loss) per share of common stock is based on the weighted average number of shares outstanding during the year. The computation of diluted earnings per common share is based on the weighted average number of shares outstanding during the year plus the common stock equivalents that would arise from the exercise of stock options and warrants outstanding under the treasury method and the average market price per share during the year as well as the conversion of notes. At June 30, 2018, the weighted average shares outstanding excluded options to purchase 61,050,122 shares of common stock of the Company, warrants to purchase 24,813,373 shares of common stock of the Company and 94,413,680, shares of common stock of the Company issuable upon the conversion of notes because their effect would be anti-dilutive. At June 30, 2017, the weighted average shares outstanding excluded options to purchase 21,897,479 shares of common stock of the Company, warrants to purchase 3,744,623 shares of common stock of the Company and 40,677,826 shares of common stock of the Company issuable upon the conversion of notes payable because their effect would be anti-dilutive.

NOTE 11– COMMITMENTS AND CONTINGENCIES

Office Lease

On January 1, 2017, the Company moved its headquarters to a temporary location. The Company paid a monthly rent of $6,000 through March 31, 2017 for the temporary office. On April 1, 2017, the Company entered into a 5-year lease agreement for permanent office space. At June 30, 2018, the Company’s total monthly office rental payments, due through March 31, 2022, was $442,997. As June 30, 2018, $53,766 of total rent payments are due through December 31, 2018, $163,998 of total rent payments are due through December 31, 2019, $277,518 of total rental payments are due through December 31, 2020, $394,452 of total rent payments are due through December 31, 2021 and $423,828 of total rent payments are due through March 31, 2022.

NOTE 12 – SUBSEQUENT EVENTS

During July 2018, the Company sold 1,875,000 shares of common stock at $0.08 per share to two investors in private transactions. The investors were also issued warrants to purchase 1,875,000 shares of stock with an exercise price of $0.15 per share.

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ITEM 2     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-looking Statements

This Quarterly Report on Form 10-Q contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are based on our current expectations, assumptions, estimates and projections about our business and our industry. Words such as "believe," "anticipate," "expect," "intend," "plan," "will," "may," and other similar expressions identify forward-looking statements. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements.

Overview

Applied Minerals, Inc. (the “Company” or “Applied Minerals” or “we” or “us”) (OTCQB: AMNL) owns the Dragon Mine in central Utah. From the mine we extract, process, or have processed by a third party, halloysite clay and iron oxide for sale to a range of end markets. We market the minerals directly and through distributors and also under a profit-sharing arrangement with the Kaolin business unit of BASF Corp. (“BASF”).

We also engage in research and development and frequently work collaboratively with potential customers, consultants, distributors, and BASF to process and enhance our halloysite clay products to improve the performance of existing and new products.

Our halloysite clay, which we market under the DRAGONITE™ trade name, is an aluminosilicate mineral with a hollow tubular shape. DRAGONITE can utilize halloysite’s morphology, high surface area, and reactivity to add significant functionality to a number of applications such as, but not limited to, reinforcement additives for polymer composites, flame retardant additives for polymers, catalysts, controlled release carriers for paints and coatings, strength reinforcement additives for cement, concrete, mortars and grouts, advanced ceramics, rheology additives for drilling fluids, environmental remediation media, and carriers of agricultural agents.  The Company sells its halloysite products at negotiated prices.

Our iron oxide, which we market under the AMIRON™ trade name, is a high purity product. We have sold it on an exclusive basis to one customer at a negotiated price for use in an oilfield application and we are continuing to offer AMIRON to that customer on an exclusive basis.  Currently, we are not selling AMIRON™ to customers on a continuing basis for use in any other application.

The Company is classified as an “exploration stage” company for purposes of Industry Guide 7 of the U.S. Securities and Exchange Commission (“SEC”) Under Industry Guide 7, companies engaged in significant mining operations are classified into three categories, referred to as “stages” - exploration, development, and production. Exploration stage includes all companies that do not have established reserves in accordance with Industry Guide 7. Such companies are deemed to be “in the search for mineral deposits.” Notwithstanding the nature and extent of development-type or production-type activities that have been undertaken or completed, a company cannot be classified as a development or production stage company unless it has established reserves in accordance with Industry Guide 7.

In 2017, we entered into a tolling agreement with BASF under which BASF will process the Company’s halloysite product, utilizing a water-based system. The BASF system is capable of eliminating impurities, such as iron oxide, and chemically treating the surface of halloysite to achieve desired functionality.

We have a mineral processing plant with a capacity of up to 45,000 tons of mineralization per annum for certain applications.  The plant is currently dedicated to processing its halloysite products. 

Additionally, the Company has a second processing facility with a capacity of up to 10,000 tons per annum. This smaller plant is currently dedicated to processing the Company’s halloysite.  This smaller plant processes halloysite using a dry-based, micronizing system. This dry-based system does not eliminate impurities, such as iron oxide, as effectively as a water-based system but is useful in situations where the removal of impurities is not necessary.

For the foreseeable future, the Company expects to utilize a commercial-sized crusher to process its iron oxide to satisfy any sales of its AMIRON product.

For the six months ended June 30, 2018, the Company largest customers account for approximately 36% of total revenue and at June 30, 2018 amounts owed by the Company’s largest customer represented 0% of accounts receivable.

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Critical Accounting Policies and Estimates

A complete discussion of our critical accounting policies and estimates is included in our Form 10-K/A for the year ended December 31, 2017. There have been no material changes in our critical accounting policies and estimates during the six-month period ended June 30, 2018 compared to the disclosures on Form 10-K/A for the year ended December 31, 2017. 

Recent Accounting Pronouncements

See NOTE 3 – BASIS OF REPORTING AND SIGNIFICANT ACCOUNTING POLICIES

Three Months Ended June 30, 2018 Compared to Three Months Ended June 30, 2017

Results of Operations

The following sets forth, for the periods indicated, certain components of our operating earnings, including such data stated as percentage of revenues:

	Three Months Ended June 30,						Variance
	2018			2017			Amount			%
REVENUES	$	92,438		$	1,357,413		$	(1,264,975	)		(93	%)
OPERATING EXPENSES:
Production costs		184,875			827,413			(642,538	)		(78	%)
Exploration costs		55,132			111,949			(56,817	)		(51	%)
General and administrative		875,909			486,810			389,099			80	%
Depreciation expense		321,818			328,980			(7,162	)		(2	%)
Total Operating Expenses		1,437,734			1,755,152			(317,418	)		(18	%)
Operating Loss		(1,345,296	)		(397,739	)		(947,557	)		238	%
OTHER INCOME (EXPENSE):
Interest expense, net, including amortization of deferred financing cost and debt discount		(578,904	)		(2,242,956	)		1,664,052			(74	%)
Gain on revaluation of PIK Note derivative		1,601,423			741,117			860,306			116	%
Other income, net		3,738			24,132			(20,394	)		(85	%)
Total Other Income (Expense)		1,026,257			(1,477,707	)		2,503,964			(169	%)
NET LOSS	$	(319,039	)	$	(1,875,446	)	$	1,556,407			(83	%)

Revenue for the three months ended June 30, 2018 totaled $92,438, compared to $1,357,413 for the same period in 2017, a decrease of $1,264,975 or 93%. Sales of DRAGONITE during the three months ended June 30, 2018 totaled $92,438, a decline of $602,254 or 87% when compared to the same period in 2017. Sales of AMIRON during the three months ended June 30, 2018 totaled $0, a decline of $662,688 when compared to the same period in 2017.

The decrease in total sales was driven primarily by the absence of sales of AMIRON to one customer during the three months ended June 30, 2018. In December, 2015 the Company entered into an agreement to supply one customer its AMIRON iron oxide for use as a catalyst. The agreement required the Company to deliver $5 million of AMIRON to the customer through June, 2017. During the three months ended June 30, 2018, the Company sold no AMIRON to the above-referenced customer compared to $676,344 of AMIRON sold to the customer during the same period in 2017.

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The $602,254 decrease in sales of DRAGONITE during the three months ended June 30, 2018 was driven primarily by a $326,040 decrease in sales to a manufacturer of specialty molecular sieves, a $154,890 decrease in sales to one of the Company’s distributor, a $138,000 decrease in sales to a compounder for use as a nucleating agent and a $45,000 decrease in sales to manufacturer of molecular sieves who is currently developing an advanced molecular sieve using DRAGONITE. The decline in sales of DRAGONITE during the period was partially offset by $36,000 of sales to a large manufacturer of gardening and landscape equipment, a $10,000 increase in sales to a producer of ceramic clay bodies, an $8,678 increase in sales to a manufacturer of flame retardant products who is expected to commercialize a flame retardant product using DRAGONITE during the latter half of 2018 and $6,339 of sales to two companies focused on testing DRAGONITE as a nucleating agent.

Total operating expenses for the three months ended June 30, 2018 were $1,437,734 compared to $1,755,152 of operating expenses incurred during the same period in 2017, a decrease of $317,418 or 18%. The decrease in operating expense, when compared to the same period in 2017, was driven primarily by a decline in production costs of $643,248 or 78% and a decline in exploration costs of $56,107, or 50%, partially offset by an increase in general and administrative expense of $389,099 or 80%.

Production costs include those operating expenses which management believes are directly related to the mining and processing of the Company’s iron oxide and halloysite minerals, which result in the production of its AMIRON and DRAGONITE products for commercial sale. Production costs include, but are not limited to, wages and benefits of employees who mine material and who work in the Company’s milling operations, energy costs associated with the operation of the Company’s two mills, the cost of mining and milling supplies and the cost of the maintenance and repair of the Company’s mining and milling equipment. Wages and energy are the two largest components of the Company’s production costs.

Production costs incurred during the three months ended June 30, 2018 totaled $184,875 compared to $827,413 of production costs incurred during the same period in 2017. The decrease of $642,538 was driven primarily by a general decline in production activity at the mine during the three months ended June 30, 2018 compared to the same period in 2017. The decline in production activity during the current period was driven primarily by the fulfillment, in June 2017, of an agreement entered into by the Company to supply a customer with $5.0 million of AMIRON. The larger components of the decline in production costs included a $280,664 or 78% decline in wage expense, the absence of $144,389 of costs related to the compounding of a DRAGONITE-loaded masterbatch by a toll processor, a $69,417, or 96%, decline in propane and equipment rental costs, a $50,671 or 93% decline in freight costs, a $39,065 or 60% decline in utilities expense, and a $35,221 decline in Utah workers’ compensation expense due to a dividend payment received from the companies Utah workers’ compensation policy.

Exploration costs include operating expenses incurred at the Dragon Mine that are not directly related to production activities. Exploration costs incurred during the three months ended June 30, 2018 were $55,132 compared to $111,949 of incurred during the same period in 2017, a decrease of $56,817 or 51%. The decrease was driven primarily a reduction in general activity at the Dragon Mine property.

General and administrative expenses incurred during the three months ended June 30, 2018 totaled $875,909 compared to $486,810 of expense incurred during the same period in 2017, an increase of $389,099 or 80%. The Company’s selling and administrative expenses are associated primarily with its New York operations.

The $375,888 increase in general and administrative expense was driven primarily by a $456,003 increase in equity-based compensation expense for officers, directors and consultants resulting primarily from the vesting of performance-based options granted to officers in 2017 and options granted to directors in 2017 in lieu of quarterly cash fees for their services through June 2018. The increase in equity-based compensation expense was partially offset by a $36,210 reversal of expense related to an office security deposit, a $33,305, or 61%, decline travel and entertainment expense and a $10,448, or 32%, decrease on office rent expense.

Operating loss incurred during the three months ended June 30, 2018 was $1,345,296, an increase of $947,557 or 238%, when compared to the same period in 2017. The increase in operating loss during the quarter was due to a 93% decrease in revenue and a 80% increase in general and administrative expense, partially offset by a 78% decrease in production expense and a 50% decrease in exploration expense.

Total other income incurred during the three months ended June 30, 2018 was $1,026,257, decrease in other expense of $2,503,964, or 169%, compared to the same period in 2017. The decline in total other expense during the period was driven by a $1,664,052, or 74%, decrease in interest expense incurred due to the restructuring of the terms of the Company’s outstanding PIK Notes and an $860,306, or 116%, increase in the gain on the revaluation of the PIK Note derivative liability due to a decrease in the value of the Company’s common stock.

Net Loss for the three-month period ending June 30, 2018 was $319,039, a reduction of $1,556,047 or 83%, when compared to the same period in 2017. The decrease in net loss was due primarily to a $2,503,963 decrease in other expense and a $317,418 decrease in operating expense, partially offset by a $1,264,975 decrease in revenue.

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Six Months Ended June 30, 2018 Compared to Six Months Ended June 30, 2017

Results of Operations

The following sets forth, for the periods indicated, certain components of our operating earnings, including such data stated as percentage of revenues:

	Six Months Ended June 30,						Variance
	2018			2017			Amount			%
REVENUES	$	138,085		$	2,152,695		$	(2,014,610	)		(94	%)
OPERATING EXPENSES:
Production costs		356,461			1,712,294			(1,355,833	)		(79	%)
Exploration costs		111,093			257,459			(146,366	)		(57	%)
General and administrative		2,074,955			1,473,438			601,517			41	%
Depreciation expense		644,962			659,765			(14,803	)		(2	)%
Total Operating Expenses		3,187,471			4,102,956			(915,485	)		(22	%)
Operating Loss		(3,049,386	)		(1,950,261	)		(1,099,125	)		56	%
OTHER INCOME (EXPENSE):
Interest expense, net, including amortization of deferred financing cost and debt discount		(3,120,955	)		(4,316,150	)		1,195,195			(28	%)
Gain (loss) on revaluation of PIK Note derivative		(6,578,504	)		1,636,841			(8,215,345	)		(502	%)
Other income (expense)		353,824			25,684			328,140			1,278	%
Total Other Expense		(9,345,635	)		(2,653,625	)		(6,692,010	)		252	%
NET LOSS	$	(12,395,021	)	$	(4,603,886	)	$	(7,791,135	)		169	%

Revenue generated during the six months ended June 30, 2018 was $138,085, compared to $2,152,695 of revenue generated during the same period in 2017, a decrease of $2,014,610 or 94%. Sales of DRAGONITE during the period totaled $138,085, a decline of $675,578, or 83%, compared to the same period in 2017. Sales of AMIRON during the period totaled $0, a decline of $1,339,032, or 100%, compared to the same period in 2017.

The decline of sales of DRAGONITE was driven primarily by a $383,240 decline in sales to a manufacture of specialty molecular sieves, a $196,801 decline in sales to a distributor of DRAGONITE, a $138,000 decline in sales to a compounder who uses DRAGONITE as a nucleating agent for resins and a $45,000 decline in sales to a manufacturer molecular sieves who is currently developing an advanced molecular sieve using DRAGONITE. The declines were partially offset by a $36,000 increase in sales to a large manufacturer of gardening and landscape equipment, a $13,600 increase in sales to a leading manufacturer of ceramic bodies, an $11,092 increase in sales to an Asia-based distributor, a $10,678 increase in sales to a manufacturer of flame retardant products who will commercialize a product utilizing DRAGONITE during the latter half of 2018, $9,150 of sales to three companies evaluating DRAGONITE as a nucleating agent and a $6,019 increase in sales to a distributor of DRAGONITE samples to research facilities.

The decline in the sales of AMIRON was due to the fulfillment by the Company of a 5-year, $5.0 million take-or-pay supply agreement in June 2017. The agreement required the Company to supply $5.0 million of AMIRON to one customer over an 18-month period beginning late December 2015. The customer may order additional volume of AMIRON through December 2020.

Total operating expenses for the six months ended June 30, 2018 were $3,187,471 compared to $4,102,956 of operating expenses incurred during the same period in 2017, a decrease of $915,485 or 22%. The decline in operating costs was driven primarily by a decline of $1,356,533 in production costs and a $145,666 decline in exploration costs, partially offset by an increase of $601,517 in general and administrative costs.

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Production costs include those operating expenses which management believes are directly related to the mining and processing of the Company’s iron oxide and halloysite minerals, which result in the production of its AMIRON and DRAGONITE products for commercial sale. Production costs include, but are not limited to, wages and benefits of employees who mine material and who work in the Company’s milling operations, energy costs associated with the operation of the Company’s two mills, the cost of mining and milling supplies and the cost of the maintenance and repair of the Company’s mining and milling equipment. Wages and energy are the two largest components of the Company’s production costs.

Production costs incurred during the six months ended June 30, 2018 were $356,461 compared to $1,712,294 of costs incurred during the same period in 2017, a decrease of $1,355,833 or 79%. The decrease in costs was driven primarily by lower production activity at the Dragon Mine due to the fulfillment of the 5-year, $5.0 million supply agreement. The primary components of the decline in production costs during the period included $682,544 of lower wage, wage-related, workers’ compensation and healthcare expense, $228,833 of lower propane, utility and mining materials costs, and $174,178 of lower equipment maintenance, repair and rentals costs. The reduction in production costs was also driven by the elimination of $177,400 of costs related to the toll manufacturing of a DRAGONITE-loaded masterbatch for a customer and an $82,296 decrease in freight costs related to the elimination of the shipment of certain products, which occurred during the same period in 2017.

Exploration costs incurred during the six months ended June 30, 2018 were $111,793 compared to $257,459 incurred during the same period in 2017, a decrease of $146,666 or 57%. Exploration costs are associated with the Company’s activities at its Dragon Mine location, excluding costs directly associated with production. The decline was driven primarily by a decline in non-production related wages and benefits incurred during the period.

The Company’s general and administrative expenses are associated primarily with its New York operations. General and administrative expenses incurred during the six months ended June 30, 2018 totaled $2,074,955 compared to $1,473,438 of expense incurred during the same period in 2017, an increase of $601,517 or 41%. The increase was driven primarily by a $766,305 increase in equity-based compensation granted primarily to the vesting of options granted to certain executives and directors during the latter half of 2017.  The increase in equity-based compensation expense was partially offset by a $91,091 decrease in wage and wage-related expense and a $64,763 decrease in travel and entertainment expense.

Operating loss incurred during the six months ended June 30, 2018 was $3,049,386 compared to a loss of $1,950,261 incurred during the same period in 2017, an increase of $1,099,125 or 56%. The increase in operating loss during the quarter was due to a 94% decrease in revenue and a 41% increase in general and administrative expense, partially offset by a 79% decrease in production costs and a 57% decrease in exploration costs.

Total other expense during the six months ended June 30, 2018 totaled $9,345,635, an increase of $6,692,010 or 252%. The increase in other expense was driven primarily by an $6,578,504 loss realized on the revaluation of the PIK Note derivative liability compared to a $1,636,801 gain realized during the same period in 2017, partially offset by a decrease in interest expense of $1,195,195 due to a restructuring of the Company’s Series A and Series 2023 Notes and an increase in other income of $328,140 comprised primarily of lease income earned during the three months ended March 31, 2018.

Net Loss for the six-month period ending June 30, 2018 was $12,395,021 compared to a loss of $4,603,886 incurred during the same period in 2017, an increase of $7,791,135 or 169%. The increase in net loss was driven primarily by a $2,014,610 decrease in total revenue and a $6,692,010 increase in total other expense, partially offset by a $915,485 decrease in operating expense.

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LIQUIDITY AND CAPITAL RESOURCES 

The Company has a history of recurring losses from operations and the use of cash in operating activities. For the six months ended June 30, 2018, the Company’s net loss was $12,395,021 and cash used in operating activities was $1,125,686. As of June 30, 2018, the Company had current assets of $536,694 and current liabilities of $1,202,880 of which $338,741 was accrued PIK Note interest likely to be paid in additional PIK Notes. The Company’s current liabilities also include (i) $63,537 of accrued management bonus payable as determined by the Company’s Audit Committee, (ii) $59,810 of a note payable related to the financing of the Company’s D&O and G/L policies, (iii) $159,310 of payables to a compounder for which it has agreed to satisfy in halloysite product and (iv) $156,200 of disputed accrued expenses for which the Company believes it has a statute of limitations defense.

Based on the Company’s current cash usage expectations, management believes it will not have sufficient liquidity to fund its operations through August 20, 2019. Further, management cannot provide any assurance that it is probable that the Company will be successful in accomplishing any of its plans to raise debt or equity financing or generate additional product sales. Collectively these factors raise substantial doubt regarding the Company’s ability to continue as going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded assets amounts and classification of liabilities that might be necessary should the Company not be able to continue as a going concern.

Management believes that in order for the Company to meet its obligations arising from normal business operations through August 20, 2019 that the Company requires (i) additional capital either in the form of a private placement of common stock or debt and/or (ii) additional sales of its products that will generate sufficient operating profit and cash flows to fund operations.  Without additional capital or additional sales of its products, the Company’s ability to continue to operate will be limited.

Cash used in operating activities during the six months ended June 30, 2018 was $1,125,686 compared to $483,308 during the same period in 2017, an increase of $642,378 or 133%. Cash used in operating activities during 2018 before adjusting for changes in operating assets and liabilities was $1,053,695, $90,284 less than the comparable period in 2017.

Cash used in investing activities during the six months ended June 30, 2018 was $0 compared to $41,323 during the same period in 2017.

Cash provided by financing activities during the six months ended June 30, 2018 was $1,519,283 compared to $163,156 of cash used during the same period in 2017. The $1,682,439 increase in cash generated during the period was due primarily to $1,585,000 of proceeds generated from the sale of common stock of the Company and $80,000 of proceeds from the exercise of warrants to purchase shares of common stock of the Company.

Total assets at June 30, 2018 were $2,947,299 compared to $3,324,164 at December 31, 2017, a decrease of $376,865 due primarily to the depreciation of the book value of the Company’s property and equipment. Total liabilities were $45,913,885 at June 30, 2018, compared to $36,524,946 at December 31, 2017. The increase in total liabilities was due primarily to a $6,701,254 increase in the balance of the PIK Note derivative liability and a $2,710,595 increase in the PIK Note balance.

ISSUANCE OF CONVERTIBLE DEBT

For information with respect to issuance of convertible debt, see Note 8 of Notes to Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report.

Off-Balance Sheet Arrangements

There are no off-balance sheet arrangements between the Company and any other entity that have, or are reasonable likely to have, a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors.

The following table summarizes our contractual obligations as of June 30, 2018 that requires us to make future cash payments:

	Payment due by period
	Total		< 1 year		1 – 3 years		3 – 5 years		> 5 years
Contractual Obligations:
Rent obligations	$	422,997	$	108,339	$	226,530	$	88,128	$	- 0 -
Total	$	422,997	$	108,339	$	226,530	$	88,128	$	- 0 -

ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We have no exposure to fluctuations in interest rates, foreign currencies, or other factors.

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ITEM 4.     CONTROLS AND PROCEDURES

As required by Rule 13a-15(b) of the Securities Exchange Act of 1934 (the “Exchange Act”), our management, including our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter covered by this quarterly report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) were, as of the end of the fiscal quarter covered by this quarterly report, effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

As required by Rule 13a-15(d) under the Exchange Act, our management, including our Chief Executive Officer and Chief Financial Officer, has evaluated our internal controls over financial reporting to determine whether any changes occurred during the quarter covered by this quarterly report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Based on that evaluation, there has been no such change during the quarter covered by this report.

We have identified material weaknesses in our internal control over financial reporting. If we fail to develop or maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud. As a result, current and potential stockholders could lose confidence in our financial reporting, which could harm our business and the trading price of our stock.

During the preparation of our consolidated financial statements for the year ended December 31, 2017, we and our independent registered public accounting firm, identified deficiencies in our internal control over financial reporting, as defined in the standards established by the Public Company Accounting Oversight Board. Management determined the control deficiencies constitute material weaknesses in our internal control over financial reporting.

The existence of a material weakness could result in errors in our financial statements, cause us to fail to meet our reporting obligations and cause investors to lose confidence in our reported financial information, leading to a decline in the trading price of our stock.

Management has identified the following material weaknesses, which have caused management to conclude that as of June 30, 2018, our internal controls over financial reporting were not effective at the reasonable assurance level:

*	Insufficient segregation of duties, oversight of work performed and lack of compensating controls in our finance and accounting functions due to limited personnel; and
*	We lack a sufficient process for periodic financial reporting and review of financial reports and statements.

Management is currently interviewing a number of consultants one of which it will engage to assist it in improving its internal controls.

Notwithstanding the existence of these material weaknesses in our internal control over financial reporting, the management believes that the consolidated financial statements included in this Form 10-Q fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.

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PART II.     OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS

As of the date of this report, there is no pending or threatened litigation. We may become involved in or subject to, routine litigation, claims, disputes, proceedings and investigations in the ordinary course of business, could have a material adverse effect on our financial condition, cash flows or results of operations.

ITEM 1A.  RISK FACTORS.

Except for the below, there were no additions or material changes to the Company’s risk factors disclosed in Item 1A of Part I in the Company’s 2017 Annual Report on Form 10-K/A.

ITEM 2.     UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During January, 2018 the Company issued 1,500,000 shares of common stock to a consultant at a price of $0.04 per share.

During February, 2018 the Company sold 3,625,000 shares of common stock at a price of $0.04 per share. The proceeds from the sale were used to fund working capital.

During March, 2018 the Company sold 3,000,000 shares of common stock at a price of $0.05 per share. The proceeds from the sale were used to fund working capital.

During March, 2018 the Company sold 1,0000,000 shares of common stock at a price of $0.10 per share. The proceeds from the sale were used to fund working capital.

During March a shareholder exercised warrants to purchase 500,000 shares of stock at $0.04 per share. The proceeds from the exercise of the warrants were used to fund working capital.

During April and May 2018, the Company sold 13,750,000 shares of common stock at a price of $0.04 per share. The proceeds from the sale were used to fund working capital.

During June 2018, the Company sold 8,000,000 units at a price of $0.08 per unit. Each unit consists of one share of common stock and one warrant to purchase one share of common stock at a price of $0.15. The proceeds from the sale were used to fund working capital.

ITEM 3.     DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4.     MINE SAFETY DISCLOSURES

The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and this Item is included in Exhibit 95 to this Form 10-Q.

ITEM 5.     OTHER INFORMATION

None.

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ITEM 6.     EXHIBITS

(a) Exhibits.

The following exhibits are included in this report:

Exhibit Number	Description of Exhibit
31.1	Certification pursuant to Rule 13a-14 of the Securities Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, of the Principal Executive Officer
31.2	Certification pursuant to Rule 13a-14 of the Securities Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, of the Principal Financial Officer
32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of the Principal Executive Officer
32.2	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of the Principal Financial Officer
95	Mine Safety Disclosure

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.

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SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	APPLIED MINERALS, INC.
Dated: August 20, 2018	/s/ ANDRE ZEITOUN
	By: Andre Zeitoun
	Chief Executive Officer
Dated: August 20, 2018	/s/ CHRISTOPHER T. CARNEY
	By: Christopher T. Carney
	Chief Financial Officer

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EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

RULE 13A-14 OF THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Andre Zeitoun, certify that:

1. I have reviewed this Form 10-Q of Applied Minerals, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 22, 2018	By:	/s/ ANDRE ZEITOUN
		Andre Zeitoun
		Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

RULE 13A-14 OF THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Christopher T. Carney, certify that:

1. I have reviewed this Form 10-Q of Applied Minerals, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 20, 2018	By:	/s/ CHRISTOPHER T. CARNEY
		Christopher T. Carney
		Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Applied Minerals, Inc. (the “Company”) on Form 10-Q for the period ending June 30, 2018 as filed with the Securities and Exchange Commission on the date hereof, I, Andre Zeitoun, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: August 20, 2018	By:	/s/ ANDRE ZEITOUN
		Andre Zeitoun
		Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Applied Minerals, Inc. (the “Company”) on Form 10-Q for the period ending June 30, 2018 as filed with the Securities and Exchange Commission on the date hereof, I, Christopher T. Carney, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: August 20, 2018	By:	/s/ CHRISTOPHER T. CARNEY
		Christopher T. Carney
		Chief Financial Officer

EX-95

Exhibit 95

During the second calendar quarter of 2018:

(i)   The total number of violations of mandatory health or safety standards that could significantly and substantially contribute to the cause and effect of a coal or other mine safety or health hazard under section 104 of the Federal Mine Safety and Health Act of 1977 (30 U.S.C. 814) for which the operator received a citation from the Mine Safety and Health Administration: 0

(ii)   The total number of orders issued under section 104(b) of such Act (30 U.S.C. 814(b)): 0

(iii)  The total number of citations and orders for unwarrantable failure of the mine operator to comply with mandatory health or safety standards under section 104(d) of such Act (30 U.S.C. 814(d)): 0

(iv)  The total number of flagrant violations under section 110(b)(2) of such Act (30 U.S.C. 820(b)(2)): 0

(v)   The total number of imminent danger orders issued under section 107(a) of such Act (30 U.S.C. 817(a)): 0

(vi)  The total dollar value of proposed assessments from the Mine Safety and Health Administration under such Act (30 U.S.C. 801 et seq.): $0

(vii) The total number of mining-related fatalities: 0

(2) A list of coal or other mines, of which the registrant or a subsidiary of the registrant is an operator, that received written notice from the Mine Safety and Health Administration of:

(i)  A pattern of violations of mandatory health or safety standards that are of such nature as could have significantly and substantially contributed to the cause and effect of coal or other mine health or safety hazards under section 104(e) of such Act (30 U.S.C. 814(e)); or (ii) The potential to have such a pattern: 0

(3) Any pending legal action before the Federal Mine Safety and Health Review Commission involving such coal or other mine: 1

1. Contests of citations and orders referenced in Subpart B of 29 CFR part 2700: 0;

2. Contests of proposed penalties referenced in Subpart C of 29 CFR part 2700: 0;

3. Complaints for compensation referenced in Subpart D of 29 CFR part 2700: 0;

4. Complaints of discharge, discrimination or interference referenced in Subpart E of 29 CFR part 2700: 0;

5. Applications for temporary relief referenced in Subpart F of 29 CFR part 2700: 0; and

6. Appeals of judges' decisions or orders to the Federal Mine Safety and Health Review Commission referenced in Subpart H of 29 CFR part 2700: 0

XML

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Aug. 20, 2018
Document Information [Line Items]
Entity Registrant Name	Applied Minerals, Inc.
Entity Central Index Key	0000008328
Trading Symbol	amnl
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		175,513,549
Document Type	10-Q
Document Period End Date	Jun. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2
Amendment Flag	false

XML

Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Current Assets
Cash and cash equivalents	$ 441,249	$ 47,652
Accounts receivable	4,492	27,265
Deposits and prepaid expenses	90,953	205,922
Total Current Assets	536,694	280,839
Property and Equipment, net	2,157,429	2,802,391
Other Assets - Deposits	253,176	240,934
TOTAL ASSETS	2,947,299	3,324,164
Current Liabilities
Accounts payable and accrued liabilities	797,724	963,609
PIK Note interest accrual	338,741	57,334
Current portion of notes payable	66,415	212,134
Total Current Liabilities	1,202,880	1,233,077
Long-Term Liabilities
PIK Notes payable, net of debt discount of $6,941,703 at June 30, 2018 and $9,755,832 at December 31, 2017, respectively	35,955,200	33,244,605
PIK Note derivative liability	8,748,518	2,047,264
Deferred Rent	7,286	0
Total Long-Term Liabilities	44,711,004	35,291,869
TOTAL LIABILITIES	45,913,884	36,524,946
Stockholders’ (Deficit)
Preferred stock, $0.001 par value, 10,000,000 shares authorized, none issued and outstanding	0	0
Common stock, $0.001 par value, 400,000,000 shares authorized, 173,638,549 and 140,763,549 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively	173,639	140,764
Additional paid-in capital	73,748,653	71,152,311
Accumulated deficit prior to the exploration stage	(20,009,496)	(20,009,496)
Accumulated deficit during the exploration stage	(96,879,381)	(84,484,361)
Total Stockholders’ (Deficit)	(42,966,585)	(33,200,782)
TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT)	$ 2,947,299	$ 3,324,164

XML

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
PIK Notes payable, debt discount	$ 6,941,703	$ 9,755,832
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	400,000,000	400,000,000
Common stock, shares issued (in shares)	173,638,549	140,763,549
Common stock, shares outstanding (in shares)	173,638,549	140,763,549

XML

Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
REVENUES	$ 92,438	$ 1,357,413	$ 138,085	$ 2,152,695
OPERATING EXPENSES:
Production costs	184,875	827,413	356,461	1,712,294
Exploration costs	55,132	111,949	111,093	257,459
General and administrative	875,909	486,810	2,074,955	1,473,438
Depreciation expense	321,818	328,980	644,962	659,765
Total Operating Expenses	1,437,734	1,755,152	3,187,471	4,102,956
Operating Loss	(1,345,296)	(397,739)	(3,049,386)	(1,950,261)
OTHER (EXPENSE):
Interest expense, net, including amortization of deferred financing cost and debt discount	(578,904)	(2,242,956)	(3,120,955)	(4,316,150)
Other income, net	3,738	24,132	353,824	25,684
Total Other (Expense)	1,026,257	(1,477,707)	(9,345,635)	(2,653,625)
NET LOSS	$ (319,039)	$ (1,875,446)	$ (12,395,021)	$ (4,603,886)
Net Loss Per Share (Basic and Diluted) (in dollars per share)	$ 0	$ (0.02)	$ (0.08)	$ (0.04)
Weighted Average Shares Outstanding (Basic and Diluted) (in shares)	161,874,813	108,715,747	153,860,925	108,664,930
PIK Note Derivative Liability [Member]
OTHER (EXPENSE):
(Loss) gain on revaluation of PIK Note derivative	$ 1,601,423	$ 741,117	$ (6,578,504)	$ 1,636,841

XML

Consolidated Statements of Stockholders' Equity (Deficit) (Unaudited) - 6 months ended Jun. 30, 2018 - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit Prior to Exploration Stage [Member]	Accumulated Deficit During Exploration Stage [Member]	Total
Balance (in shares) at Dec. 31, 2017	140,763,549
Balance at Dec. 31, 2017	$ 140,764	$ 71,152,311	$ (20,009,496)	$ (84,484,360)	$ (33,200,781)
Shares issued for consulting services (in shares)	1,500,000				1,500,000
Shares issued for consulting services	$ 1,500	58,500	0	0	$ 60,000
Stock Issued During Period, Shares, New Issues	29,375,000
Shares and warrants issued in private placements	$ 29,375	1,555,625	0	0	1,585,000
Shares issued for warrant exercise (in shares)	2,000,000
Shares issued for warrant exercise	$ 2,000	78,000	0	0	80,000
Stock option compensation expense	0	904,217	0	0	904,217
Net Loss	$ 0	0	0	(12,395,021)	(12,395,021)
Balance (in shares) at Jun. 30, 2018	173,638,549
Balance at Jun. 30, 2018	$ 173,639	$ 73,748,653	$ (20,009,496)	$ (96,879,381)	$ (42,966,585)

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Cash Flows from Operating Activities:
Net loss	$ (12,395,021)	$ (4,603,886)
Adjustments to reconcile net loss to net cash used in operations:
Depreciation	644,962	659,765
Amortization of discount - PIK Notes	2,298,435	2,302,092
Amortization of deferred financing costs	45,502	3,750
Non-cash interest on PIK Notes	770,815	2,007,329
Stock issued for director fees	0	9,000
Stock issued for consulting services	60,000	0
Stock based compensation expense	904,217	113,811
(Gain) loss on revaluation of PIK Note derivative	6,578,504	(1,636,841)
Other	0	1,000
Change in operating assets and liabilities:
Accounts receivable	22,773	263,446
Other current receivables	0	16,801
Deposits and prepaids	102,727	217,957
Accounts payable and accrued liabilities	(158,600)	162,468
Net cash used in operating activities	(1,125,686)	(483,308)
Cash Flows From Investing Activities
Purchases of property and equipment	0	(41,323)
Net cash used in investing activities	0	(41,323)
Cash Flows From Financing Activities:
Payments on notes payable	(145,717)	(163,156)
Proceeds from sale of common stock	1,585,000	0
Proceeds from exercise of options or warrants	80,000	0
Net cash provided by (used in) financing activities	1,519,283	(163,156)
Net change in cash and cash equivalents	393,597	(687,787)
Cash and cash equivalents at beginning of period	47,652	1,049,880
Cash and cash equivalents at end of period	441,249	362,093
Supplemental disclosure of cash flow information:
Cash paid for interest	6,206	2,743
Supplemental disclosure of noncash financing activity:
Accrued PIK interest paid through issuance of PIK Notes	$ 366,658	$ 1,967,131

XML

Note 1 - Organization and Description of Business

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

NOTE

1–

ORGANIZATION AND DESCRIPTION OF BUSINESS

Applied Minerals, Inc. (the “Company” or “Applied Minerals” or “we” or “us”) (OTCQB: AMNL) owns the Dragon Mine in central Utah. From the mine we extract, process, or have processed by a

third

party, halloysite clay and iron oxide for sale to a range of end markets. We market the minerals directly and through distributors and also under a profit-sharing arrangement with the Kaolin business unit of BASF Corp. (“BASF”).

We also engage in research and development and frequently work collaboratively with potential customers, consultants, distributors, and BASF to process and enhance our halloysite clay products to improve the performance of existing and new products.

Our halloysite clay, which we market under the DRAGONITE™ trade name, is an aluminosilicate mineral with a hollow tubular shape. DRAGONITE can utilize halloysite’s morphology, high surface area, and reactivity to add significant functionality to a number of applications such as, but

not

limited to, reinforcement additives for polymer composites, flame retardant additives for polymers, catalysts, controlled release carriers for paints and coatings, strength reinforcement additives for cement, concrete, mortars and grouts, advanced ceramics, rheology additives for drilling fluids, environmental remediation media, and carriers of agricultural agents.  The Company sells its halloysite products at negotiated prices.

Our iron oxide, which we market under the AMIRON™ trade name, is a high purity product. We have sold it on an exclusive basis to

one

customer at a negotiated price for use in an oilfield application and we are continuing to offer AMIRON to that customer on an exclusive basis.  Currently, we are

not

selling AMIRON™ to customers on a continuing basis for use in any other application.

The Company is classified as an “exploration stage” company for purposes of Industry Guide

7

of the U.S. Securities and Exchange Commission (“SEC”) Under Industry Guide

7,

companies engaged in significant mining operations are classified into

three

categories, referred to as “stages” - exploration, development, and production. Exploration stage includes all companies that do

not

have established reserves in accordance with Industry Guide

7.

Such companies are deemed to be “in the search for mineral deposits.” Notwithstanding the nature and extent of development-type or production-type activities that have been undertaken or completed, a company cannot be classified as a development or production stage company unless it has established reserves in accordance with Industry Guide

7.

In

2017,

we entered into a tolling agreement with BASF under which BASF will process the Company’s halloysite product, utilizing a water-based system. The BASF system is capable of eliminating impurities, such as iron oxide, and chemically treating the surface of halloysite to achieve desired functionality

.

We have a mineral processing plant with a capacity of up to

45,000

tons of mineralization per annum for certain applications.  The plant is currently dedicated to processing its halloysite products. 

Additionally, the Company has a

second

processing facility with a capacity of up to

10,000

tons per annum. This smaller plant is currently dedicated to processing the Company’s halloysite.  This smaller plant processes halloysite using a dry-based, micronizing system. This dry-based system does

not

eliminate impurities, such as iron oxide, as effectively as a water-based system but is useful in situations where the removal of impurities is

not

necessary.

For the foreseeable future, the Company expects to utilize a commercial-sized crusher to process its iron oxide to satisfy any sales of its AMIRON product.

For the

six

months ended

June 30, 2018,

the Company’s

two

largest customers accounted for approximately

63%

of total revenue and at

June 30, 2018

amounts owed by the Company’s

two

largest customers represented

0%

of accounts receivable.

Exploration Agreement

On

December 22, 2017,

the Company and Continental Mineral Claims, Inc. (“CMC”) entered into an Exploration Agreement with Option to Purchase (“Agreement”). The Company granted to CMC the exclusive right and option to enter upon and conduct mineral exploration activities (the “Exploration License”) for Metallic Minerals on the Company’s Dragon Mine mine site in Utah (the “Mining Claims”).  Metallic Minerals are defined to include minerals with a high specific gravity and metallic luster, such as gold, silver, lead, copper, zinc, molybdenum, titanium, tungsten, uranium, tin, iron, etc., but shall exclude any such Metallic Minerals that are intermingled within any economically-recoverable, non-metallic mineral deposits located at or above an elevation of

5,590

feet above sea level. Non-metallic minerals include clay and iron oxide, the minerals mined by the Company.  The Company believes that all economic recoverable non-metallic mineral deposits are well above

5,590

feet above sea level. The Exploration License is for a period of

ten

years.

In consideration of the Exploration License CMC has paid the Company

$350,000

and will pay it

$150,000

on or before the

first

anniversary of the Exploration License,

$250,000

on or before each subsequent anniversary during the Exploration License term following the

first

anniversary of the Effective Date of this Agreement, unless the Exploration License is terminated earlier by CMC by exercising the option or failing to make the required payment for the Exploration License.

CMC

may

exercise the option at any time during the Exploration License term. Upon exercise of the Option and the completion of the closing, CMC shall acquire

100%

of the Metallic Rights within the Mining Claims from the Company, subject to the terms and conditions of the Agreement.

The consideration to be paid by CMC to the Company after exercising the option for the acquisition of the Metallic Rights shall be payable as follows:

$3,000,000;

and, CMC shall grant to the Company a

five

percent (

5%

) Net Profits Interest (“NPI”) royalty over the Metallic Minerals produced from the Mining Claims.  The NPI royalty shall be initially capped at

$20,000,000

(the “NPI Cap”). The NPI Cap shall be subject to reduction in the event the Company elects to take the Share Contribution, as set forth below.

Upon exercise of the option, the Company shall retain the all rights and title to (

1

) the surface interest (with exception of those rights associated with the Metallic Rights), and (

2

) all non-metallic minerals (expressly including all industrial minerals including clays and iron oxides). 

It is anticipated that CMC will acquire rights similar to the Metallic Rights with respect to contiguous and nearly properties and such rights will be contributed to a new company formed or designated by CMC to own and operate CMC’s Tintic District project, which would involve the Metallic rights and similar rights regarding adjacent or nearby properties (“PubCo”) that intends to go public.

The Company shall have the right, at its sole election, to convert a portion of its NPI royalty interest into

$2,000,000

worth of shares in PubCo up to a maximum of Two Percent (

2%

) net value of PubCo (the “Share Contribution”), through a reduction of the NPI Cap. The Company shall make the determination whether to take the Share Contribution or

not,

and so notify CMC, within

ninety

(

90

) days, of the completion (and delivery to the Company) of a feasibility study by CMC for the Tintic District project.  If the Company elects

not

to take the Share Contribution, the Company’s NPI royalty shall remain unchanged, including the NPI Cap, which will remain at

$20,000,000.

The Agreement contains protections in favor of the Company against unreasonable interference of its current and future mining operations by CMC. CMC

may

not

do anything that

may,

at the Company’s determination, adversely impact the Company’s Mining Operations.  “Mining Operations” shall mean the activities incident to mineral extraction, permitting, and any operations by CMC or the Company relating to the removal of minerals, respectively, that are or

may

reasonably be conducted on the Mining Claims, including the exploration for, and development, active mining, removing, producing and selling of any minerals, including the Metallic Minerals.  The Agreement states that the parties understand that the Company is willing to enter into the Agreement only if it is assured that CMC will

not

have any right to unreasonably interfere with the Company’s current mining operations and possible future Mining Operations on the Mining Claims.

There are

no

assurances that CMC will exercise its option to purchase

100%

of the Metallic Rights.

XML

Note 2 - Liquidity and Basis of Presentation

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Liquidity [Text Block]

NOTE

2

- LIQUIDITY AND BASIS OF PRESENTATION

The Company has a history of recurring losses from operations and the use of cash in operating activities. For the

six

months ended

June 30, 2018,

the Company’s net loss was

$12,395,021

and cash used in operating activities was

$1,125,686.

As of

June 30, 2018,

the Company had current assets of

$536,694

and current liabilities of

$1,202,880

of which

$338,741

was accrued PIK Note interest likely to be paid in additional PIK Notes. The Company’s current liabilities also include (i)

$63,537

of accrued management bonus payable as determined by the Company’s Audit Committee, (ii)

$59,810

of a note payable related to the financing of the Company’s D&O and G/L policies, (iii)

$159,310

of payables to a compounder for which it has agreed to satisfy in halloysite product and (iv)

$156,200

of disputed accrued expenses for which the Company believes it has a statute of limitations defense.

Based on the Company’s current cash usage expectations, management believes it will

not

have sufficient liquidity to fund its operations through

August 20, 2019.

Further, management cannot provide any assurance that it is probable that the Company will be successful in accomplishing any of its plans to raise debt or equity financing or generate additional product sales. Collectively these factors raise substantial doubt regarding the Company’s ability to continue as going concern. These financial statements do

not

include any adjustments to the recoverability and classification of recorded assets amounts and classification of liabilities that might be necessary should the Company

not

be able to continue as a going concern.

Management believes that in order for the Company to meet its obligations arising from normal business operations through

August 20, 2019

that the Company requires (i) additional capital either in the form of a private placement of common stock or debt and/or (ii) additional sales of its products that will generate sufficient operating profit and cash flows to fund operations.  Without additional capital or additional sales of its products, the Company’s ability to continue to operate will be limited.

XML

Note 3 - Basis of Reporting and Significant Accounting Policies

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Significant Accounting Policies [Text Block]

NOTE

3–

BASIS OF REPORTING AND SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited condensed consolidated financial statements of Applied Minerals, Inc. have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do

not

include all of the information and footnotes required by GAAP for complete financial statements.

In the opinion of management, these interim unaudited condensed consolidated financial statements contain all of the adjustments of a normal and recurring nature which are considered necessary for a fair presentation of the financial position of the Company and the results of its operations and cash flows for the periods presented. The results of operations for the

three

and

six

months ended

June 30, 2018

are

not

necessarily indicative of the operating results for the entire year. These financial statements should be read in conjunction with the financial statements and related disclosures for the year ended

December 31, 2017,

included in the Annual Report of Applied Minerals, Inc. on Form

10

-K/A filed with the SEC on

August 14, 2018.

The accompanying interim unaudited condensed consolidated financial statements reflect the application of certain significant accounting policies as described below and elsewhere in these notes. The Company’s significant accounting policies and estimates remain unchanged from those detailed in the Company’s Annual Report on Form

10

-K/A for the year ended

December 31, 2017.

Exploration-Stage Company

Effective

January 1, 2009,

the Company was, and still is, classified as an exploration company because the existence of proven or probable reserves at the Company’s Dragon Mine property have

not

been demonstrated and

no

significant revenue has been earned from the mine. Under the SEC’s Industry Guide

7,

a mining company is considered an exploration stage company until it has declared mineral reserves determined in accordance with the guide and staff interpretations thereof.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Applied Minerals, Inc. and its inactive subsidiary, which holds

100

acres of timber and mineral property in northern Idaho.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. In these consolidated financial statements, the warrant and PIK note derivative liabilities, stock compensation, impairment of long-lived assets and valuation allowance on income taxes involve extensive reliance on management’s estimates. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents include all highly liquid investments with a maturity of

three

months or less. The Company minimizes its credit risk by investing its cash and cash equivalents, which sometimes exceed federally insured limits with major financial institutions located in the United States with a high credit rating.

Receivables

Trade receivables are reported at outstanding principal amounts, net of an allowance for doubtful accounts.

Management evaluates the collectability of receivable account balances to determine the allowance, if any. Management considers the other party’s credit risk and financial condition, as well as current and projected economic and market conditions, in determining the amount of the allowance. Receivable balances are written off when management determines that the balance is uncollectable.

No

allowance was required at

June 30, 2018

and

December 31, 2017.

Property and Equipment

Property and equipment are carried at cost net of accumulated depreciation and amortization. Depreciation and amortization is computed on the straight-line method over the estimated useful lives of the assets, or the life of the lease, whichever is shorter, as follows:

	Estimated
	Useful Life (years)
Building and Building Improvements		5	–	40
Mining equipment		2	–	7
Office and shop furniture and equipment		3	–	7
Vehicles			5

Depreciation expense for the

three

months ended

June 30, 2018

and

2017

totaled

$321,818,

and

$328,980,

respectively, and for the

six

months ended

June 30, 2018

and

2017

totaled

$644,962

and

$659,765,

respectively.

Impairment of Long-lived Assets

The Company periodically reviews the carrying amounts of long-lived assets to determine whether current events or circumstances warrant adjustment to such carrying amounts. Long-lived assets are tested for recoverability whenever events or changes in circumstances indicate that its carrying amount

may

not

be recoverable. When such events occur, the Company compares the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset to its carrying amount. If this comparison indicates that there is an impairment, the amount of the impairment is typically calculated using discounted expected future cash flows where observable fair values are

not

readily determinable. Considerable management judgment is necessary to estimate the fair value of assets. Assets to be disposed of are carried at the lower of their financial statement carrying amount or fair value, less cost to sell. The Company has determined that there was

no

impairment of its long-lived assets as of

June

30,2018

and

2017.

Revenue Recognition

Revenue includes sales of halloysite clay and iron oxide during

2017

and is recognized when title passes to the buyer and when collectability is reasonably assured. Title passes to the buyer based on terms of the sales contract. Product pricing is determined based on negotiated contractual arrangements with the Company’s customers.

In

May 2014,

the Financial Accounting Standards Board (“FASB”) issued guidance on revenue recognition, which provides a single, comprehensive revenue recognition model for all contracts with customers and supersedes most existing revenue recognition guidance.  The main principle under this guidance is that an entity should recognize revenue at the amount it expects to be entitled to in exchange for the transfer of goods or services to customers.  The Company identified the predominant changes to its accounting policies resulting from the application of this guidance and quantified the impact on its consolidated financial statements.  The cumulative effect of the initial adoption of this guidance did

not

have any significant impact on the Company’s consolidated financial statements as the Company did

not

have any significant customer contracts in place at

December 31, 2017. 

The Company adopted this guidance on

January 1, 2018.

For

2018,

revenue is recognized when control over the product transfers to the customer.

Mining Exploration and Development Costs

Land and mining property are carried at cost. The Company expenses prospecting and mining exploration costs. At the point when a property is determined to have proven and probable reserves, subsequent development costs will be capitalized and will be charged to operations using the units-of-production method over proven and probable reserves. Upon abandonment or sale of a mineral property, all capitalized costs relating to the specific property are written off in the period abandoned or sold and a gain or loss is recognized.

Income taxes

The Company uses an asset and liability approach which results in the recognition of deferred tax liabilities and assets for the expected future tax consequences or benefits of temporary differences between the financial reporting basis and the tax basis of assets and liabilities, as well as operating loss and tax credit carry forwards, using enacted tax rates in effect in the years in which the differences are expected to reverse.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than

not

that some portion or all of its deferred tax assets will

not

be realized. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. A full valuation allowance has been provided for the Company’s net deferred tax assets as it is more likely than

not

that they will

not

be realized.

Authoritative guidance provides that the tax effects from an uncertain tax position taken or expected to be taken in a tax return can be recognized in our financial statements only if the position is more likely than

not

of being sustained on audit based on the technical merits of the position. As of

December 31,

2no

benefit from uncertain tax positions was recognized in our financial statements. The Company has elected to classify interest and/or penalties related to income tax matters in income tax expense.

Stock Options and Warrants

The Company follows ASC

718

(Stock Compensation) and

505

-

50

(Equity-Based Payments to Non-employees), which provide guidance in accounting for share-based awards exchanged for services rendered and requires companies to expense the estimated fair value of these awards over the requisite service period. The Company instituted a formal long-term and short-term incentive plan on

November 20, 2012,

which was approved by its shareholders. Prior to that date, we did

not

have a formal equity plan, but all equity grants, including stock options and warrants, were approved by our Board of Directors. We determine the fair value of the stock-based compensation awards granted to non-employees as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. If the fair value of the equity instruments issued is used, it is measured using the stock price and other measurement assumptions as of the earlier of either of (

1

) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (

2

) the date at which the counterparty’s performance is complete. Beginning in the quarter ended

June 30, 2013

the Company began using the simplified method to determine the expected term for any options granted because the Company did

not

have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. The Company previously utilized the contractual term as the expected term.

Environmental Matters

Expenditures for ongoing compliance with environmental regulations that relate to current operations are expensed or capitalized as appropriate. Expenditures resulting from the remediation of existing conditions caused by past operations that do

not

contribute to future revenue generations are expensed. Liabilities are recognized when environmental assessments indicate that remediation efforts are probable and the costs can be reasonably estimated.

Estimates of such liabilities are based upon currently available facts, existing technology and presently enacted laws and regulations taking into consideration the likely effects of inflation and other societal and economic factors, and include estimates of associated legal costs. These amounts also reflect prior experience in remediating contaminated sites, other companies’ clean-up experience and data released by The Environmental Protection Agency or other organizations. Such estimates are by their nature imprecise and can be expected to be revised over time because of changes in government regulations, operations, technology and inflation. Recoveries are evaluated separately from the liability and, when recovery is assured, the Company records and reports an asset separately from the associated liability.

Based upon management’s current assessment of its environmental responsibilities, it does

not

believe that any reclamation or remediation liability exists at

June 30, 2018.

Recent Issued Accounting Pronouncements

In

May 2014,

the Financial Accounting Standards Board (“FASB”) issued guidance on revenue recognition, which provides a single, comprehensive revenue recognition model for all contracts with customers and supersedes most existing revenue recognition guidance.  The main principle under this guidance is that an entity should recognize revenue at the amount it expects to be entitled to in exchange for the transfer of goods or services to customers.  The Company identified the predominant changes to its accounting policies resulting from the application of this guidance and quantified the impact on its consolidated financial statements.  The cumulative effect of the initial adoption of this guidance did

not

have any significant impact on the Company’s consolidated financial statements as the Company did

not

have any significant customer contracts in place at

December 31, 2017. 

The Company adopted this guidance on

January 1, 2018.

In

February 2016,

the FASB issued ASU

2016

-

02

(“Topic

842”

) new accounting guidance for leases, which supersedes previous lease guidance. Under this guidance, for all leases with terms in excess of

one

year, including operating leases, the Company will be required to recognize on its balance sheet a lease liability and a right-of-use asset representing its right to use the underlying asset for the lease term. The new guidance retains a distinction between finance leases and operating leases and the classification criteria is substantially similar to previous guidance. Additionally, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have

not

significantly changed. The guidance is effective for the Company beginning

January 1, 2019.

The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

XML

Note 4 - Property and Equipment

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

NOTE

4–

PROPERTY AND EQUIPMENT

The following is a summary of property, plant, and equipment – at cost, less accumulated depreciation:

	March 31,			December 31,
	2018			2017
Land	$	500,000		$	500,000
Land improvements		171,122			171,122
Buildings		3,129,519			3,129,519
Mining equipment		1,784,115			1,784,115
Milling equipment		2,841,726			2,841,726
Laboratory equipment		607,716			607,716
Office equipment		70,529			70,529
Vehicles		150,810			150,810
		9,255,537			9,255,537
Less: Accumulated depreciation		(7,098,108	)		(6,453,146	)
Total	$	2,157,429		$	2,802,391

XML

Note 5 - Fair Value Measurements and Financial Instruments

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Fair Value Disclosures [Text Block]

NOTE

5–

FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS

ASC Topic

820,

Fair Value Measurement and Disclosures

, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. This topic also establishes a fair value hierarchy, which requires classification based on observable and unobservable inputs when measuring fair value. The fair value hierarchy distinguishes between assumptions based on market data (observable inputs) and an entity’s own assumptions (unobservable inputs). The hierarchy consists of

three

levels:

● Level 1– Quoted prices in active markets for identical assets and liabilities;

● Level 2– Inputs other than level one inputs that are either directly or indirectly observable; and

● Level 3– Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use.

Liabilities measured at fair value on a recurring basis are summarized as follows at

June 30, 2018:

	Fair value measurement using inputs
	Level 1		Level 2		Level 3
Financial instruments:
Series 2023 Note Derivative	$	-0-	$	-0-	$	748,417
Series A Note Derivative	$	-0-	$	-0-	$	8,000,101

The following table summarizes the activity during the

six

months ended

June 

2018

and

2017

for financial instruments at fair value using Level

3:

Balance at December 31, 2017	$	2,047,264	Balance at December 31, 2016	$	2,176,552
Issuance of additional Series 2023 Notes		- 0 -	Issuance of additional Series 2023 Notes		25,038
Issuance of additional Series A Notes		122,750	Issuance of additional Series A Notes		- 0 -
Net unrealized gain (loss) included in operations		6,578,504	Net unrealized gain (loss) included in operations		(1,636,841	)
Balance at June 30, 2018	$	8,748,518	Balance at June 30, 2017	$	564,749

The recorded value of certain financial assets and liabilities, which consist primarily of cash and cash equivalents, receivables, and accounts payable and accrued expenses approximate their fair value at

March 31, 2018

and

December 31, 2017

based upon the short-term nature of the assets and liabilities. Based on borrowing rates currently available to the Company for loans with similar terms, and the remaining short-term period outstanding, the carrying value of notes payable other than PIK notes approximate fair value. The estimated fair value of the PIK Notes Payable was

$12,842,158

and

$11,395,208

at

June 30, 2018

and

December 31, 2017 (

Level

3

), respectively.

For the Company's warrant and PIK note derivative liabilities, Level

3

fair value hierarchy was estimated using a Monte Carlo Model using the following assumptions:

Series 2023 Note derivative liability	Fair Value Measurements
	Using Inputs
	June 30,			December 31,
	2018			2017
Market price and estimated fair value of stock	$	0.17		$	0.05
Exercise price (1)	$	0.59		$	0.59
Term (years)		5.08			5.58
Dividend yield		-0-			-0-
Expected volatility		130.4	%		115.3	%
Risk-free interest rate		2.73	%		2.24	%

(

1

) Exercise price is reflective of amended Series

2023

Notes issued in

December 2017

as discussed in Note

8.

Series A Note derivative liability	Fair Value Measurements
	Using Inputs
	June 30,			December 31,
	2018			2017
Market price and estimated fair value of stock	$	0.17		$	0.05
Exercise price (1)	$	0.40		$	0.40
Term (years)		5.09			5.58
Dividend yield		-0-			-0-
Expected volatility		130.4	%		115.3	%
Risk-free interest rate		2.73	%		2.24	%

(

1

) Exercise price is reflective of amended Series A Notes issued in

December 2017

as discussed in Note

7.

XML

Note 6 - Notes and Leases Payable

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Debt Disclosure [Text Block]

NOTE

6

 - NOTES AND LEASES PAYABLE

Notes payable at

June 30, 2018

and

December 31, 2017:

	June 30,			December 31,
	2018			2017
Note payable for equipment, payable $1,339 monthly, including interest (a)	$	6,605		$	13,073
Note payable to insurance companies, payable $5,045 - $17,959 monthly, (b) and (c)		59,810			199,061
		66.415			212,134
Less: Current Portion		(66,415	)		(212,134	)
Notes Payable, Long-Term Portion	$	- 0 -		$	- 0 -

(a) On October 31, 2014, the Company purchased mining equipment for $65,120 by paying deposit and issuing a note in the amount of $57,900 with an interest rate of 5.2%. The note is collateralized by the mining equipment with payments of $1,339 for 48 months, which started on November 30, 2014.

(b) The Company signed a note payable with an insurance company dated October 17, 2016 for liability insurance, payable in monthly installments, including interest ranging from 2.6% - 4.15%

(c) The Company signed a note payable with an insurance company dated October 17, 2017 for liability insurance, payable in monthly installments, including interest ranging from 3.1% - 5.78%

During the

three

months ended

June 30, 2018

and

2017,

the Company's interest payments totaled

$705

and

$1,216,

respectively. During the

six

months ended

June 30, 2018

and

2017,

the Company’s interest payments totaled

$6,206

and

$2,743,

respectively.

XML

Note 7 - Convertible Debt (PIK Notes)

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Convertible Debt [Text Block]

NOTE

7–

CONVERTIBLE DEBT (PIK NOTES)

The Company raised

$23

million of financing through the issuance of

two

series of Paid-In-Kind (“PIK”)-Election Convertible Notes in

2013

(“Series

2023

Notes”) and

2014

(“Series A Notes”). The original terms of the Series A Notes included among other things: (i) a maturity of

November 1, 2018

with an option to extend to

November 1, 2019, (

ii) a stated interest rate of

10%

paid semi-annually and (iii) a conversion price of

$0.90,

adjusted downward based on an anti-dilution provision. The original terms of the Series

2023

Notes included among other things: (i) a maturity of

August 1, 2023, (

ii) a stated interest rate of

10%

paid semi-annually and (iii) a conversion price of

$1.40,

adjusted downward based on an anti-dilution provision. On

December 14, 2017,

an amendment agreement, entered into between the Company and the holders of the Series A Notes and Series

2023

Notes, went into effect. The agreement resulted in changes to certain terms of the Series A and Series

2023

Notes. The key terms of the Series A and Series

2023

Notes, as amended, are highlighted in the table below:

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	$0.59, adjusted downward based on anti-dilution provisions/downround protection		$0.40, 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

As of

June 30, 2018,

the liability components of the PIK Notes on the Company’s balance sheet are listed in the following table:

	Series 2023 Notes			Series A Notes			Total
PIK Note Payable, Gross	$	16,152,402		$	27,214,693		$	43,367,095
Less: Discount		(1,453,542	)		(5,488,161	)		(6,941,703	)
Less: Deferred Financing Cost		(201,756	)		(268,436	)		(470,192	)
PIK Note Payable, Net	$	14,497,104		$	21,548,096		$	35,955,200
PIK Note Derivative Liability	$	748,417		$	8,000,101		$	8,748,518

 As of

December 31, 2017,

the liability components of the PIK Notes on the Company’s balance sheet are listed in the following table:

	Series 2023 Notes			Series A Notes			Total
PIK Note Payable, Gross	$	16,090,721		$	26,909,716		$	43,000,437
Less: Discount		(1,538,299	)		(7,701,839	)		(9,240,138	)
Less: Deferred Financing Cost		(221,280	)		(294,414	)		(515,694	)
PIK Note Payable, Net	$	14,331,142		$	18,913,463		$	33,244,605
PIK Note Derivative Liability	$	163,634		$	1,883,630		$	2,047,264

Series A Notes (Amended)

On

November 3, 2014 (

“Issue Date”), the Company issued, in a private placement pursuant to investment agreements,

$19,848,486

principal amount of

10%

PIK-Election Convertible Notes due

2018

("Series A Notes") in exchange for

$12,500,000

in cash and the cancellation of previously-issued warrants held by

one

investor.

The original terms of the Series A Notes included among other things: (i) a maturity of

November 1, 2018

with an option to extend to

November 1, 2019, (

ii) a stated interest rate of

10%

paid semi-annually and (iii) a conversion price of

$0.90,

adjusted downward based on an anti-dilution provision. 

At

June 30, 2018,

the fair value of the Series A Note Derivative was estimated to be

$8,000,101.

During the

three

and

six

months ended

June 30, 2018,

the Company amortized

$80,142

and

$2,239,656,

respectively of debt discount and deferred financing cost relating to the Series A Notes Payable and issued additional PIK Notes of

$304,977

in lieu of cash interest payments, increasing the Series A Notes Payable carrying value to

$21,458,096

as of

June 30, 2018.

At

December 31, 2017,

the fair value of the Series A Note Derivative was estimated to be

$1,883,630,

which includes the value of the derivative related to the additional PIK Notes issued in

May

and

November 2017

for the semi-annual interest payments due and the additional notes issued in

December, 2017.

During the year ended

December 31, 2017,

the Company amortized

$5,808,294

of debt discount and deferred financing cost relating to the Series A Notes Payable and issued additional PIK Notes in lieu of interest payments of

$2,797,836,

increasing the Series A Notes Payable carrying value to

$26,909,721

as of

December 31, 2017.

As of

June 30, 2018,

the Company was in compliance with the covenants of the Series A Notes.

Series

2023

Notes (Amended)

In

August 2013,

the Company received

$10,500,000

of financing through the private placement of

10%

mandatory convertible Notes due

2023

("Series

2023

Notes"). The principal amount of the Notes is due on maturity. The Company can elect to pay semi-annual interest on the Series

2023

Notes with additional PIK Notes containing the same terms as the Series

2023

Notes, except interest will accrue from issuance of such notes. The Company can also elect to pay interest in cash. In

February, 2017

and

August, 2017,

the Company issued

$703,550

and

$738,728,

respectively, in additional Series

2023

Notes to the holders to pay the semi-annual interest. Additionally, on

December 14, 2017,

the Company issued

$577,439

of additional

2023

Notes, which represented the accrued interest of the Series

2023

Notes on the day on which the terms of the Series

2023

Notes were effectively amended.

The original terms of the Series

2023

Notes included among other things: (i) a maturity of

August 1, 2023, (

ii) a stated interest rate of

10%

paid semi-annually and (iii) a conversion price of

$1.40,

adjusted downward based on an anti-dilution provision. 

At

June 30, 2018,

the fair value of the Series

2023

Note Derivative was estimated to be

$748,417,

which includes the value of the derivative related to additional PIK Notes issued in

February 2018.

During the

three

and

six

months ended

June 30, 2018,

the Company amortized

$50,115

 and

$104,281,

respectively of debt discount and deferred financing cost relating to the Series

2023

Notes Payable and issued additional PIK Notes of

$61,681

in lieu of cash interest payments, increasing the Series

2023

Notes Payable carrying value to

$14,497,104

as of

June 30, 2018.

At

December 31, 2017,

the fair value of the Series

2023

Note Derivative was estimated to be

$163,634,

which includes the value of the derivative related to additional PIK Notes issued in

February

and

August 2016

for the semi-annual interest payments due and the additional notes issued in

December, 2017.

During the year ended

December 31, 2017,

the Company amortized

$200,360

of debt discount and deferred financing cost relating to the Series

2023

Notes Payable and issued additional PIK Notes of

$2,019,717

in lieu of cash interest payments, increasing the Series

2023

Notes Payable carrying value to

$16,090,721

as of

December 31, 2017.

As part of the amendment agreement, the holders of the Series

2023

Notes received warrants to purchase

3,720,000

million shares of common stock at

$0.10

per share. The Black Scholes value of these warrants totaled

$224,290.

As of

June 30, 2018,

the Company was in compliance with the covenants of the Series

2023

Notes.

XML

Note 8 - Stockholders' Equity

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

NOTE

8–

STOCKHOLDERS’ EQUITY

Preferred Stock

The Company is authorized to issue

10,000,000

shares of noncumulative, non-voting, nonconvertible preferred stock,

$0.001

par value per share. At

June 30, 2018

and

December 31, 2017,

no

shares of preferred stock were outstanding.

Common Stock

On

December 7, 2017,

stockholders of the Company approved to increase the authorized shares of common stock from

250,000,000

to

400,000,000

shares,

$0.001

par value per share. At

June 30, 2018

and

December 31, 2017,

173,638,549

and

140,763,549

shares were issued and outstanding, respectively.

2018

During the

six

months ended

June 30, 2018

the Company issued (i)

1,500,000

shares of common stock at a price of

$0.04

per share to a consultant for investor relation services to be performed, (ii)

17,375,000

shares of common stock at a price of

$0.04

per share, (iii)

3,000,000

shares of common stock at a price of

$0.05

per share, (iv)

1,000,000

shares of common stock at a price of

$0.10

per share, (v)

2,000,000

shares of common stock at a price of

$0.04

per share upon the exercise of a warrant to purchase shares of common stock, and (vi)

8,000,000

units, (

one

unit consisting of

one

share of common stock and

one

warrant to purchase

one

share of common stock at a price of

$0.15

) at a price of

$0.08

per unit.

2017

During

2017,

the Company issued: (i)

250,000

shares of common stock, at a price of

$0.36

per share, to directors; (ii)

26,500,000

units, (

one

unit consisting of

one

share of common stock and

one

warrant to purchase

0.25

shares of common stock at a price of

$0.04

per unit; (iii)

2,275,000

units, at a price of

$0.04

per unit, as payment for fees associated with a private placement of stock and (iv)

3,1250,000

shares of common stock, at a price of

$0.04

per share, upon the exercise of warrants to purchase common stock.

XML

Note 9 - Options and Warrants to Purchase Common Stock

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Options And Warrants To Purchase Common Stock [Text Block]

NOTE

9–

OPTIONS AND WARRANTS TO PURCHASE COMMON STOCK

Outstanding Stock Warrants

A summary of the status and changes of the warrants issued for the

six

months ended

2018:

	Shares Issuable upon exercise of
	upon Exercise of			Weighted Average
	Outstanding Warrants			Exercise Price
Outstanding at January 1, 2018		18,813,373		$	0.14
Issued		8,000,000		$	0.15
Exercised		(2,000,000	)	$	0.04
Forfeited		--			--
Outstanding at June 30, 2018		24,813,373		$	0.15

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

June 30, 2018

is presented below:

		Warrants Outstanding and Exercisable
		Shares Issuable		Weighted Average
		upon Exercise of		Remaining		Weighted Average
Exercise Price		Outstanding Warrants		Contractual Life (years)		Exercise Price
$	1.15		461,340		2.8	$	1.15
$	0.25		3,283,283		3.0	$	0.25
$	0.04		2,068,750		4.3	$	0.04
$	0.10		11,000,000		4.5	$	0.10
$	0.15		8,000,000		3.0	$	0.15
			24,813,373		5.2	$	0.15

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.

In

May, 2016,

the Company adopted the

2016

Long-Term Incentive Plan (

“2016

LTIP”). The number of shares of common stock for issuance or for reference purposes subject to the

2016

LTIP was

2,000,000.

On

December 7, 2016,

the stockholders of the Company approved the

2016

Incentive Plan. The purpose of the

2016

Incentive Plan is to enhance the profitability and value of the Company for the benefit of its stockholders by enabling the Company to offer eligible employees, consultants, and non-employee directors incentive awards in order to attract, retain and reward such individuals and strengthen the mutuality of interests between such individuals and the Company’s stockholders. The aggregate number of shares of Common Stock that

may

be issued or used for reference purposes under the

2016

Incentive Plan or with respect to which awards

may

be granted

may

not

exceed 

15,000,000

shares, which

may

be either (i) authorized and unissued Common Stock or (ii) Common Stock held in or acquired for the treasury of the Company.

The Compensation Committee of the Company Board of Directors has full authority to administer and interpret the

2016

Incentive Plan, to grant awards under the

2016

Incentive Plan, to determine the persons to whom awards will be granted, to determine the types of awards to be granted, to determine the terms and conditions of each award, to determine the number of shares of Common Stock to be covered by each award and to make all other determinations in connection with the

2016

Incentive Plan and the awards thereunder as the Committee, in its sole discretion, deems necessary or desirable.

On

December 14, 2017,

the Board of Directors approved the

2017

Incentive Plan (

“2017

IP”). Forty million (

40,000,000

) shares of Common Stock are subject to the

2017

IP.

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.

The significant assumptions relating to the valuation of the Company's options granted during the

six

months ended

June 30, 2018

were as follows on a weighted average basis:

Dividend Yield		0%
Expected Life (in years)	2.48	–	2.96
Expected Volatility	163.73%	–	177.59%
Risk Free Interest Rate	2.54%	–	2.62%

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

six

months ended

June 30, 2018:

	Shares Issuable			Weighted
	Upon Exercise of			Average
	Options			Exercise Price
Outstanding at December 31, 2017		57,057,768		$	0.36
Granted		4,224,999		$	0.11
Exercised		--			--
Forfeited		(232,645	)		1.36
Outstanding at June 30, 2018		61,050,122		$	0.34

During the

six

months ended

June 30, 2018,

the Company granted

4,224,999

options to purchase the Company’s common stock with a weighted average exercise price of

$0.11.

The options vest monthly through

June, 2019.

A summary of the status of the options outstanding at

June 30, 2018

is presented below:

Options Outstanding					Options Exercisable
Number Outstanding	Weighted Average Remaining Contractual Life (years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
35,322,222		9.34	$	0.06		26,697,225	$	0.06
545,289		9.48	$	0.075		408,968	$	0.075
377,777		4.93	$	0.11		69,444	$	0.11
3,000,000		4.61	$	0.12		1,000,000	$	0.12
500,000		3.13	$	0.16		500,000	$	0.16
81,395		5.64	$	0.21		81,395	$	0.21
100,000		2.22	$	0.22		100,000	$	0.22
1,066,155		2.87	$	0.24		1,066,155	$	0.24
2,087,500		4.29	$	0.25		2,087,500	$	0.25
35,595		4.79	$	0.27		35,595	$	0.27
474,815		5.86	$	0.28		474,815	$	0.28
234,506		4.64	$	0.285		234,506	$	0.285
81,522		2.56	$	0.30		81,522	$	0.30
200,000		6.63	$	0.66		200,000	$	0.66
150,000		6.61	$	0.68		150,000	$	0.68
7,233,277		0.50	$	0.70		7,233,277	$	0.70
488,356		6.89	$	0.73		488,356	$	0.73
3,104,653		3.65	$	0.83		3,104,653	$	0.83
975,000		5.95	$	0.84		975,000	$	0.84
300,000		5.14	$	1.10		300,000	$	1.10
300,000		4.99	$	1.15		300,000	$	1.15
115,000		2.74	$	1.35		115,000	$	1.35
300,000		3.90	$	1.55		300,000	$	1.55
3,077,060		4.39	$	1.66		3,077,060	$	1.66
900,000		3.14	$	1.90		900,000	$	1.90
61,050,122		6.82	$	0.34		49,980,471	$	0.40

On

December 14, 2017,

the Company’s management was granted performance-based options to purchase

27.5

million shares of the Company’s common stock at

$0.06

per share. The options expire on

December 13, 2027.

At

December 31, 2017,

the

first

fifty

percent (

50%

) of the performance-based options vested as management was able to (i) close the sale of an aggregate of

$600,000

of units (consisting of a share of common stock of the Company and a warrant to buy

0.25

of a share of common stock of the Company) at

$0.04

per unit and (ii) establish toll processing arrangements with

two

toll processors of halloysite that, in management’s good faith belief, can process halloysite to the Company’s specifications. An additional

twenty-five

percent (

25%

) of the performance-based options vested on

February 1, 2018

when management generated

$900,000

of additional cash proceeds through (i) the sale of common stock and (ii) the licensing of a right to explore the Dragon Mine property for certain precious metals. The vesting of the remaining

8.3%,

8.3%

and

8.4%

of the performance-based options occurs when (i) EBITDA is positive over a

twelve

-month period, (ii) EBITDA is at or greater than

$2

million over a

twelve

-month period and (iii) EBITDA is at or greater than

$4

million over a

twelve

-month period, respectively. At

June 30, 2018,

the achievement of the performance targets was

not

deemed probable.

Compensation expense of

$192,299

and

$775,299

has been recognized for the vested options for the

three

and

six

months ended

June 30, 2018.

The aggregate intrinsic value of the outstanding options at

June 30, 2018

was

$4,114,914.

At

June 30, 2018, (

i)

$442,520

of unamortized compensation expense for time-based unvested options will be recognized over the next

0.53

years on a weighted average basis; and (ii)

$354,750

of unamortized compensation expense for performance-based unvested options will be recognized as the achievement of the performance targets becomes probable.

XML

Note 10 - Per Share Data

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Earnings Per Share [Text Block]

NOTE

10

 - PER SHARE DATA

The computation of basic earnings (loss) per share of common stock is based on the weighted average number of shares outstanding during the year. The computation of diluted earnings per common share is based on the weighted average number of shares outstanding during the year plus the common stock equivalents that would arise from the exercise of stock options and warrants outstanding under the treasury method and the average market price per share during the year as well as the conversion of notes. At

June 30, 2018,

the weighted average shares outstanding excluded options to purchase

61,050,122

shares of common stock of the Company, warrants to purchase

24,813,373

shares of common stock of the Company and

94,413,680,

shares of common stock of the Company issuable upon the conversion of notes because their effect would be anti-dilutive. At

June 30, 2017,

the weighted average shares outstanding excluded options to purchase

21,897,479

shares of common stock of the Company, warrants to purchase

3,744,623

shares of common stock of the Company and

40,677,826

shares of common stock of the Company issuable upon the conversion of notes payable because their effect would be anti-dilutive.

XML

Note 11 - Commitments and Contingencies

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

NOTE

11–

COMMITMENTS AND CONTINGENCIES

Office Lease

On

January 1, 2017,

the Company moved its headquarters to a temporary location. The Company paid a monthly rent of

$6,000

through

March 31, 2017

for the temporary office. On

April 1, 2017,

the Company entered into a

5

-year lease agreement for permanent office space. At

June 30, 2018,

the Company’s total monthly office rental payments, due through

March 31, 2022,

was

$442,997.

As

June 30, 2018,

$53,766

of total rent payments are due through

December 31, 2018,

$163,998

of total rent payments are due through

December 31, 2019,

$277,518

of total rental payments are due through

December 31, 2020,

$394,452

of total rent payments are due through

December 31, 2021

and

$423,828

of total rent payments are due through

March 31, 2022.

XML

Note 12 - Subsequent Events

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Subsequent Events [Text Block]

NOTE

12

 – SUBSEQUENT EVENTS

During

July 2018,

the Company sold

1,875,000

shares of common stock at

$0.08

per share to

two

investors in private transactions. The investors were also issued warrants to purchase

1,875,000

shares of stock with an exercise price of

$0.15

per share.

XML

Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Exploration Stage Company [Policy Text Block]

Exploration-Stage Company

Effective

January 1, 2009,

the Company was, and still is, classified as an exploration company because the existence of proven or probable reserves at the Company’s Dragon Mine property have

not

been demonstrated and

no

significant revenue has been earned from the mine. Under the SEC’s Industry Guide

7,

a mining company is considered an exploration stage company until it has declared mineral reserves determined in accordance with the guide and staff interpretations thereof.

Consolidation, Policy [Policy Text Block]

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Applied Minerals, Inc. and its inactive subsidiary, which holds

100

acres of timber and mineral property in northern Idaho.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. In these consolidated financial statements, the warrant and PIK note derivative liabilities, stock compensation, impairment of long-lived assets and valuation allowance on income taxes involve extensive reliance on management’s estimates. Actual results could differ from those estimates.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents

Cash and cash equivalents include all highly liquid investments with a maturity of

three

months or less. The Company minimizes its credit risk by investing its cash and cash equivalents, which sometimes exceeds FDIC limits, with major financial institutions located in the United States with a high credit rating.

Receivables, Policy [Policy Text Block]

Receivables

Trade receivables are reported at outstanding principal amounts, net of an allowance for doubtful accounts.

Management evaluates the collectability of receivable account balances to determine the allowance, if any. Management considers the other party’s credit risk and financial condition, as well as current and projected economic and market conditions, in determining the amount of the allowance. Receivable balances are written off when management determines that the balance is uncollectable.

No

allowance was required at

June 30, 2018

and

December 31, 2017.

Property, Plant and Equipment, Policy [Policy Text Block]

Property and Equipment

Property and equipment are carried at cost net of accumulated depreciation and amortization. Depreciation and amortization is computed on the straight-line method over the estimated useful lives of the assets, or the life of the lease, whichever is shorter, as follows:

	Estimated
	Useful Life (years)
Building and Building Improvements		5	–	40
Mining equipment		2	–	7
Office and shop furniture and equipment		3	–	7
Vehicles			5

Depreciation expense for the

three

months ended

June 30, 2018

and

2017

totaled

$321,818,

and

$328,980,

respectively, and for the

six

months ended

June 30, 2018

and

2017

totaled

$644,962

and

$659,765,

respectively.

Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]

Impairment of Long-lived Assets

The Company periodically reviews the carrying amounts of long-lived assets to determine whether current events or circumstances warrant adjustment to such carrying amounts. Long-lived assets are tested for recoverability whenever events or changes in circumstances indicate that its carrying amount

may

not

be recoverable. When such events occur, the Company compares the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset to its carrying amount. If this comparison indicates that there is an impairment, the amount of the impairment is typically calculated using discounted expected future cash flows where observable fair values are

not

readily determinable. Considerable management judgment is necessary to estimate the fair value of assets. Assets to be disposed of are carried at the lower of their financial statement carrying amount or fair value, less cost to sell. The Company has determined that there was

no

impairment of its long-lived assets as of

June

30,2018

and

2017.

Revenue Recognition, Policy [Policy Text Block]

Revenue Recognition

Revenue includes sales of halloysite clay and iron oxide during

2017

and is recognized when title passes to the buyer and when collectability is reasonably assured. Title passes to the buyer based on terms of the sales contract. Product pricing is determined based on negotiated contractual arrangements with the Company’s customers.

In

May 2014,

the Financial Accounting Standards Board (“FASB”) issued guidance on revenue recognition, which provides a single, comprehensive revenue recognition model for all contracts with customers and supersedes most existing revenue recognition guidance.  The main principle under this guidance is that an entity should recognize revenue at the amount it expects to be entitled to in exchange for the transfer of goods or services to customers.  The Company identified the predominant changes to its accounting policies resulting from the application of this guidance and quantified the impact on its consolidated financial statements.  The cumulative effect of the initial adoption of this guidance did

not

have any impact on the Company’s consolidated financial statements as the Company did

not

have any significant customer contracts in place at

December 31, 2017. 

The Company adopted this guidance on

January 1, 2018.

For

2018,

revenue is recognized when control over the product transfers to the customer.

Exploitation Costs, Policy [Policy Text Block]

Mining Exploration and Development Costs

Land and mining property are carried at cost. The Company expenses prospecting and mining exploration costs. At the point when a property is determined to have proven and probable reserves, subsequent development costs will be capitalized and will be charged to operations using the units-of-production method over proven and probable reserves. Upon abandonment or sale of a mineral property, all capitalized costs relating to the specific property are written off in the period abandoned or sold and a gain or loss is recognized.

Income Tax, Policy [Policy Text Block]

Income taxes

The Company uses an asset and liability approach which results in the recognition of deferred tax liabilities and assets for the expected future tax consequences or benefits of temporary differences between the financial reporting basis and the tax basis of assets and liabilities, as well as operating loss and tax credit carry forwards, using enacted tax rates in effect in the years in which the differences are expected to reverse.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than

not

that some portion or all of its deferred tax assets will

not

be realized. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. A full valuation allowance has been provided for the Company’s net deferred tax assets as it is more likely than

not

that they will

not

be realized.

Authoritative guidance provides that the tax effects from an uncertain tax position taken or expected to be taken in a tax return can be recognized in our financial statements only if the position is more likely than

not

of being sustained on audit based on the technical merits of the position. As of

December 31,

2no

benefit from uncertain tax positions was recognized in our financial statements. The Company has elected to classify interest and/or penalties related to income tax matters in income tax expense.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

Stock Options and Warrants

The Company follows ASC

718

(Stock Compensation) and

505

-

50

(Equity-Based Payments to Non-employees), which provide guidance in accounting for share-based awards exchanged for services rendered and requires companies to expense the estimated fair value of these awards over the requisite service period. The Company instituted a formal long-term and short-term incentive plan on

November 20, 2012,

which was approved by its shareholders. Prior to that date, we did

not

have a formal equity plan, but all equity grants, including stock options and warrants, were approved by our Board of Directors. We determine the fair value of the stock-based compensation awards granted to non-employees as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. If the fair value of the equity instruments issued is used, it is measured using the stock price and other measurement assumptions as of the earlier of either of (

1

) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (

2

) the date at which the counterparty’s performance is complete. Beginning in the quarter ended

June 30, 2013

the Company began using the simplified method to determine the expected term for any options granted because the Company did

not

have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. The Company previously utilized the contractual term as the expected term.

Environmental Costs, Policy [Policy Text Block]

Environmental Matters

Expenditures for ongoing compliance with environmental regulations that relate to current operations are expensed or capitalized as appropriate. Expenditures resulting from the remediation of existing conditions caused by past operations that do

not

contribute to future revenue generations are expensed. Liabilities are recognized when environmental assessments indicate that remediation efforts are probable and the costs can be reasonably estimated.

Estimates of such liabilities are based upon currently available facts, existing technology and presently enacted laws and regulations taking into consideration the likely effects of inflation and other societal and economic factors, and include estimates of associated legal costs. These amounts also reflect prior experience in remediating contaminated sites, other companies’ clean-up experience and data released by The Environmental Protection Agency or other organizations. Such estimates are by their nature imprecise and can be expected to be revised over time because of changes in government regulations, operations, technology and inflation. Recoveries are evaluated separately from the liability and, when recovery is assured, the Company records and reports an asset separately from the associated liability.

Based upon management’s current assessment of its environmental responsibilities, it does

not

believe that any reclamation or remediation liability exists at

June 30, 2018.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Issued Accounting Pronouncements

In

May 2014,

the Financial Accounting Standards Board (“FASB”) issued guidance on revenue recognition, which provides a single, comprehensive revenue recognition model for all contracts with customers and supersedes most existing revenue recognition guidance.  The main principle under this guidance is that an entity should recognize revenue at the amount it expects to be entitled to in exchange for the transfer of goods or services to customers.  The Company identified the predominant changes to its accounting policies resulting from the application of this guidance and quantified the impact on its consolidated financial statements.  The cumulative effect of the initial adoption of this guidance did

not

have any significant impact on the Company’s consolidated financial statements as the Company did

not

have any significant customer contracts in place at

December 31, 2017. 

The Company adopted this guidance on

January 1, 2018.

In

February 2016,

the FASB issued ASU

2016

-

02

(“Topic

842”

) new accounting guidance for leases, which supersedes previous lease guidance. Under this guidance, for all leases with terms in excess of

one

year, including operating leases, the Company will be required to recognize on its balance sheet a lease liability and a right-of-use asset representing its right to use the underlying asset for the lease term. The new guidance retains a distinction between finance leases and operating leases and the classification criteria is substantially similar to previous guidance. Additionally, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have

not

significantly changed. The guidance is effective for the Company beginning

January 1, 2019.

The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

XML

Note 3 - Basis of Reporting and Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2018

Notes Tables

Property, Plant and Equipment [Table Text Block]

	Estimated
	Useful Life (years)
Building and Building Improvements		5	–	40
Mining equipment		2	–	7
Office and shop furniture and equipment		3	–	7
Vehicles			5

XML

Note 4 - Property and Equipment (Tables)

6 Months Ended

Jun. 30, 2018

Notes Tables

Property, Plant, And Equipment, Carrying Value [Table Text Block]

	March 31,			December 31,
	2018			2017
Land	$	500,000		$	500,000
Land improvements		171,122			171,122
Buildings		3,129,519			3,129,519
Mining equipment		1,784,115			1,784,115
Milling equipment		2,841,726			2,841,726
Laboratory equipment		607,716			607,716
Office equipment		70,529			70,529
Vehicles		150,810			150,810
		9,255,537			9,255,537
Less: Accumulated depreciation		(7,098,108	)		(6,453,146	)
Total	$	2,157,429		$	2,802,391

XML

Note 5 - Fair Value Measurements and Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2018

Notes Tables

Fair Value, Liabilities Measured on Recurring Basis [Table Text Block]

	Fair value measurement using inputs
	Level 1		Level 2		Level 3
Financial instruments:
Series 2023 Note Derivative	$	-0-	$	-0-	$	748,417
Series A Note Derivative	$	-0-	$	-0-	$	8,000,101

Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

Balance at December 31, 2017	$	2,047,264	Balance at December 31, 2016	$	2,176,552
Issuance of additional Series 2023 Notes		- 0 -	Issuance of additional Series 2023 Notes		25,038
Issuance of additional Series A Notes		122,750	Issuance of additional Series A Notes		- 0 -
Net unrealized gain (loss) included in operations		6,578,504	Net unrealized gain (loss) included in operations		(1,636,841	)
Balance at June 30, 2018	$	8,748,518	Balance at June 30, 2017	$	564,749

Schedule of Share-based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions [Table Text Block]

Series 2023 Note derivative liability	Fair Value Measurements
	Using Inputs
	June 30,			December 31,
	2018			2017
Market price and estimated fair value of stock	$	0.17		$	0.05
Exercise price (1)	$	0.59		$	0.59
Term (years)		5.08			5.58
Dividend yield		-0-			-0-
Expected volatility		130.4	%		115.3	%
Risk-free interest rate		2.73	%		2.24	%

Series A Note derivative liability	Fair Value Measurements
	Using Inputs
	June 30,			December 31,
	2018			2017
Market price and estimated fair value of stock	$	0.17		$	0.05
Exercise price (1)	$	0.40		$	0.40
Term (years)		5.09			5.58
Dividend yield		-0-			-0-
Expected volatility		130.4	%		115.3	%
Risk-free interest rate		2.73	%		2.24	%

XML

Note 6 - Notes and Leases Payable (Tables)

6 Months Ended

Jun. 30, 2018

Notes Tables

Schedule of Debt [Table Text Block]

	June 30,			December 31,
	2018			2017
Note payable for equipment, payable $1,339 monthly, including interest (a)	$	6,605		$	13,073
Note payable to insurance companies, payable $5,045 - $17,959 monthly, (b) and (c)		59,810			199,061
		66.415			212,134
Less: Current Portion		(66,415	)		(212,134	)
Notes Payable, Long-Term Portion	$	- 0 -		$	- 0 -

XML

Note 7 - Convertible Debt (PIK Notes) (Tables)

6 Months Ended

Jun. 30, 2018

Notes Tables

Debt Instrument Redemption [Table Text Block]

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	$0.59, adjusted downward based on anti-dilution provisions/downround protection		$0.40, 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

Convertible Debt [Table Text Block]

	Series 2023 Notes			Series A Notes			Total
PIK Note Payable, Gross	$	16,152,402		$	27,214,693		$	43,367,095
Less: Discount		(1,453,542	)		(5,488,161	)		(6,941,703	)
Less: Deferred Financing Cost		(201,756	)		(268,436	)		(470,192	)
PIK Note Payable, Net	$	14,497,104		$	21,548,096		$	35,955,200
PIK Note Derivative Liability	$	748,417		$	8,000,101		$	8,748,518

	Series 2023 Notes			Series A Notes			Total
PIK Note Payable, Gross	$	16,090,721		$	26,909,716		$	43,000,437
Less: Discount		(1,538,299	)		(7,701,839	)		(9,240,138	)
Less: Deferred Financing Cost		(221,280	)		(294,414	)		(515,694	)
PIK Note Payable, Net	$	14,331,142		$	18,913,463		$	33,244,605
PIK Note Derivative Liability	$	163,634		$	1,883,630		$	2,047,264

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Note 9 - Options and Warrants to Purchase Common Stock (Tables)

6 Months Ended

Jun. 30, 2018

Notes Tables

Schedule of Warrants or Rights [Table Text Block]

	Shares Issuable upon exercise of
	upon Exercise of			Weighted Average
	Outstanding Warrants			Exercise Price
Outstanding at January 1, 2018		18,813,373		$	0.14
Issued		8,000,000		$	0.15
Exercised		(2,000,000	)	$	0.04
Forfeited		--			--
Outstanding at June 30, 2018		24,813,373		$	0.15

Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block]

		Warrants Outstanding and Exercisable
		Shares Issuable		Weighted Average
		upon Exercise of		Remaining		Weighted Average
Exercise Price		Outstanding Warrants		Contractual Life (years)		Exercise Price
$	1.15		461,340		2.8	$	1.15
$	0.25		3,283,283		3.0	$	0.25
$	0.04		2,068,750		4.3	$	0.04
$	0.10		11,000,000		4.5	$	0.10
$	0.15		8,000,000		3.0	$	0.15
			24,813,373		5.2	$	0.15

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

Dividend Yield		0%
Expected Life (in years)	2.48	–	2.96
Expected Volatility	163.73%	–	177.59%
Risk Free Interest Rate	2.54%	–	2.62%

Share-based Compensation, Stock Options, Activity [Table Text Block]

	Shares Issuable			Weighted
	Upon Exercise of			Average
	Options			Exercise Price
Outstanding at December 31, 2017		57,057,768		$	0.36
Granted		4,224,999		$	0.11
Exercised		--			--
Forfeited		(232,645	)		1.36
Outstanding at June 30, 2018		61,050,122		$	0.34

Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block]

Options Outstanding					Options Exercisable
Number Outstanding	Weighted Average Remaining Contractual Life (years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
35,322,222		9.34	$	0.06		26,697,225	$	0.06
545,289		9.48	$	0.075		408,968	$	0.075
377,777		4.93	$	0.11		69,444	$	0.11
3,000,000		4.61	$	0.12		1,000,000	$	0.12
500,000		3.13	$	0.16		500,000	$	0.16
81,395		5.64	$	0.21		81,395	$	0.21
100,000		2.22	$	0.22		100,000	$	0.22
1,066,155		2.87	$	0.24		1,066,155	$	0.24
2,087,500		4.29	$	0.25		2,087,500	$	0.25
35,595		4.79	$	0.27		35,595	$	0.27
474,815		5.86	$	0.28		474,815	$	0.28
234,506		4.64	$	0.285		234,506	$	0.285
81,522		2.56	$	0.30		81,522	$	0.30
200,000		6.63	$	0.66		200,000	$	0.66
150,000		6.61	$	0.68		150,000	$	0.68
7,233,277		0.50	$	0.70		7,233,277	$	0.70
488,356		6.89	$	0.73		488,356	$	0.73
3,104,653		3.65	$	0.83		3,104,653	$	0.83
975,000		5.95	$	0.84		975,000	$	0.84
300,000		5.14	$	1.10		300,000	$	1.10
300,000		4.99	$	1.15		300,000	$	1.15
115,000		2.74	$	1.35		115,000	$	1.35
300,000		3.90	$	1.55		300,000	$	1.55
3,077,060		4.39	$	1.66		3,077,060	$	1.66
900,000		3.14	$	1.90		900,000	$	1.90
61,050,122		6.82	$	0.34		49,980,471	$	0.40

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Note 1 - Organization and Description of Business (Details Textual)		6 Months Ended
	Dec. 22, 2017 USD ($)	Jun. 30, 2018 T
CMC [Member]
Exploration Agreement, Payments Upon Expiration of Due Diligence Period	$ 350,000
Exploration Agreement, Payments on or Before First Anniversary of Effective Date of Agreement	150,000
Exploration Agreement, Payments on or Before Each Subsequent Anniversary of Effective Date During Exploration License Term	$ 250,000
Exploration Agreement, Option to Purchase, Percentage of Metallic Rights	100.00%
Exploration Agreement, Option to Purchase, Consideration	$ 3,000,000
Exploration Agreement, Option to Purchase, Percentage of Net Profits Interest Royalty Granted	5.00%
Exploration Agreement, Option to Purchase, NPI Royalty Cap	$ 20,000,000
Exploration Agreement, NPI Royalty Interest Converted to Shares of Properties, Value	$ 2,000,000
Exploration Agreement, NPI Royalty Interest Converted to Shares of Properties, Percentage, Maximum	2.00%
Customer Concentration Risk [Member] | Sales Revenue, Net [Member]
Number of Major Customers		2
Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | Two Largest Customers [Member]
Concentration Risk, Percentage		63.00%
Customer Concentration Risk [Member] | Accounts Receivable [Member]
Number of Major Customers		2
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Two Largest Customers [Member]
Concentration Risk, Percentage		0.00%
AMIRON Products [Member]
Mineral Processing Plant, Annual Capacity | T		45,000
Halloysite Resource [Member] | Maximum [Member]
Mineral Processing Plant, Annual Capacity | T		10,000

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Note 2 - Liquidity and Basis of Presentation (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Net Income (Loss) Attributable to Parent, Total	$ (319,039)	$ (1,875,446)	$ (12,395,021)	$ (4,603,886)
Net Cash Provided by (Used in) Operating Activities, Total			(1,125,686)	$ (483,308)
Assets, Current, Total	536,694		536,694		$ 280,839
Liabilities, Current, Total	1,202,880		1,202,880		1,233,077
Accrued Bonuses, Current	63,537		63,537
Notes Payable, Current, Total	66,415		66,415		$ 212,134
Accounts Payable to Compounder	159,310		159,310
Current Liabilities [Member]
Disputed Accrued Expenses	156,200		156,200
Financing of D&O and G/L Policies [Member]
Notes Payable, Current, Total	59,810		59,810
Payment in Kind (PIK) Note [Member]
Interest Payable	$ 338,741		$ 338,741

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Note 3 - Basis of Reporting and Significant Accounting Policies (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Allowance for Doubtful Accounts Receivable, Ending Balance	$ 0	$ 0	$ 0	$ 0
Depreciation, Total	$ 321,818	$ 328,980	644,962	659,765
Asset Impairment Charges, Total			$ 0	$ 0
Unrecognized Tax Benefits, Ending Balance					$ 0

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Note 3 - Basis of Reporting and Significant Accounting Policies - Property and Equipment (Details)	6 Months Ended
	Jun. 30, 2018
Building and Building Improvements [Member] | Minimum [Member]
Property, Plant and Equipment, Useful Life (Year)	5 years
Building and Building Improvements [Member] | Maximum [Member]
Property, Plant and Equipment, Useful Life (Year)	40 years
Mining Equipment [Member] | Minimum [Member]
Property, Plant and Equipment, Useful Life (Year)	2 years
Mining Equipment [Member] | Maximum [Member]
Property, Plant and Equipment, Useful Life (Year)	7 years
Furniture and Fixtures [Member] | Minimum [Member]
Property, Plant and Equipment, Useful Life (Year)	3 years
Furniture and Fixtures [Member] | Maximum [Member]
Property, Plant and Equipment, Useful Life (Year)	7 years
Vehicles [Member]
Property, Plant and Equipment, Useful Life (Year)	5 years

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Note 4 - Property and Equipment - Property, Plant, and Equipment (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017	Oct. 31, 2014
Property, Plant and Equipment, Gross	$ 9,255,537	$ 9,255,537
Less: Accumulated depreciation	(7,098,108)	(6,453,146)
Total	2,157,429	2,802,391
Land [Member]
Property, Plant and Equipment, Gross	500,000	500,000
Land Improvements [Member]
Property, Plant and Equipment, Gross	171,122	171,122
Building [Member]
Property, Plant and Equipment, Gross	3,129,519	3,129,519
Mining Equipment [Member]
Property, Plant and Equipment, Gross	1,784,115	1,784,115	$ 65,120
Milling Equipment [Member]
Property, Plant and Equipment, Gross	2,841,726	2,841,726
Laboratory Equipment [Member]
Property, Plant and Equipment, Gross	607,716	607,716
Office Equipment [Member]
Property, Plant and Equipment, Gross	70,529	70,529
Vehicles [Member]
Property, Plant and Equipment, Gross	$ 150,810	$ 150,810

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Note 5 - Fair Value Measurements and Financial Instruments (Details Textual) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Payment in Kind (PIK) Note [Member] | Fair Value, Inputs, Level 3 [Member]
Convertible Debt, Fair Value Disclosures	$ 12,842,158	$ 11,395,208

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Note 5 - Fair Value Measurements and Financial Instruments - Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Series 2023 PIK Note Derivative Liability [Member]
Derivative liability	$ 748,417	$ 163,634
Series 2023 PIK Note Derivative Liability [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Derivative liability	0
Series 2023 PIK Note Derivative Liability [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Derivative liability	0
Series 2023 PIK Note Derivative Liability [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Derivative liability	748,417
Series A PIK Note Derivative Liability [Member]
Derivative liability	8,000,101	$ 1,883,630
Series A PIK Note Derivative Liability [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Derivative liability	0
Series A PIK Note Derivative Liability [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Derivative liability	0
Series A PIK Note Derivative Liability [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Derivative liability	$ 8,000,101

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Note 5 - Fair Value Measurements and Financial Instruments - Derivatives Measured at Fair Value (Details) - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Balance, beginning	$ 2,047,264	$ 2,176,552
Net unrealized gain (loss) included in operations	6,578,504	(1,636,841)
Balance, ending	8,748,518	564,749
Series 2023 PIK Note Derivative Liability [Member] | Fair Value, Inputs, Level 3 [Member]
Issuance of additional Series 2023 Notes	0	25,038
Series A PIK Note Derivative Liability [Member] | Fair Value, Inputs, Level 3 [Member]
Issuance of additional Series 2023 Notes	$ 122,750	$ 0

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Note 5 - Fair Value Measurements and Financial Instruments - Valuation Assumptions (Details) - Fair Value, Inputs, Level 3 [Member]		Jun. 30, 2018 $ / shares	Dec. 31, 2017 $ / shares
Series 2023 PIK Note Derivative Liability [Member]
Market price and estimated fair value of stock (in dollars per share)		$ 0.17	$ 0.05
Series 2023 PIK Note Derivative Liability [Member] | Measurement Input, Exercise Price [Member]
Measurment input	[1]	0.59	0.59
Series 2023 PIK Note Derivative Liability [Member] | Measurement Input, Expected Term [Member]
Measurment input		5.08	5.58
Series 2023 PIK Note Derivative Liability [Member] | Measurement Input, Expected Dividend Rate [Member]
Measurment input		0	0
Series 2023 PIK Note Derivative Liability [Member] | Measurement Input, Price Volatility [Member]
Measurment input		130.4	115.3
Series 2023 PIK Note Derivative Liability [Member] | Measurement Input, Risk Free Interest Rate [Member]
Measurment input		2.73	2.24
Series A PIK Note Derivative Liability [Member]
Market price and estimated fair value of stock (in dollars per share)		$ 0.17	$ 0.05
Series A PIK Note Derivative Liability [Member] | Measurement Input, Exercise Price [Member]
Measurment input	[2]	0.4	0.4
Series A PIK Note Derivative Liability [Member] | Measurement Input, Expected Term [Member]
Measurment input		5.09	5.58
Series A PIK Note Derivative Liability [Member] | Measurement Input, Expected Dividend Rate [Member]
Measurment input		0	0
Series A PIK Note Derivative Liability [Member] | Measurement Input, Price Volatility [Member]
Measurment input		130.4	115.3
Series A PIK Note Derivative Liability [Member] | Measurement Input, Risk Free Interest Rate [Member]
Measurment input		2.73	2.24

[1] Exercise price is reflective of amended Series 2023 Notes issued in December 2017 as discussed in Note 8.

[2] Exercise price is reflective of amended Series A Notes issued in December 2017 as discussed in Note 8.

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Note 6 - Notes and Leases Payable (Details Textual) - USD ($)		3 Months Ended		6 Months Ended
	Oct. 31, 2014	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017	Oct. 17, 2017	Oct. 17, 2016
Property, Plant and Equipment, Gross, Ending Balance		$ 9,255,537		$ 9,255,537		$ 9,255,537
Debt Instrument, Periodic Payment, Interest		705	$ 1,216	6,206	$ 2,743
Note Payable, Mining Equipment, Purchased in October 2014 [Member]
Debt Instrument, Face Amount	$ 57,900
Debt Instrument, Interest Rate, Stated Percentage	5.20%
Debt Instrument, Periodic Payment, Total	$ 1,339
Debt Instrument, Term	4 years
Note Payable Insurance Company 1 [Member] | Minimum [Member]
Debt Instrument, Interest Rate, Stated Percentage								2.60%
Note Payable Insurance Company 1 [Member] | Maximum [Member]
Debt Instrument, Interest Rate, Stated Percentage								4.15%
Note Payable Insurance Company 2 [Member] | Minimum [Member]
Debt Instrument, Interest Rate, Stated Percentage							3.10%
Note Payable Insurance Company 2 [Member] | Maximum [Member]
Debt Instrument, Interest Rate, Stated Percentage							5.78%
Mining Equipment [Member]
Property, Plant and Equipment, Gross, Ending Balance	$ 65,120	$ 1,784,115		$ 1,784,115		$ 1,784,115

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Note 6 - Notes and Leases Payable - Summary of Note Payable (Details) - USD ($)		Jun. 30, 2018	Dec. 31, 2017
Note payable for equipment, payable $1,339 monthly, including interest (a)		$ 66.415	$ 212,134
Less: Current Portion		(66,415)	(212,134)
Notes Payable, Long-Term Portion		0	0
Note Payable Mining Equipment [Member]
Note payable for equipment, payable $1,339 monthly, including interest (a)	[1]	6,605	13,073
Note Payable Insurance Company [Member]
Note payable for equipment, payable $1,339 monthly, including interest (a)	[2],[3]	$ 59,810	$ 199,061

[1] On October 31, 2014, the Company purchased mining equipment for $65,120 by paying deposit and issuing a note in the amount of $57,900 with an interest rate of 5.2%. The note is collateralized by the mining equipment with payments of $1,339 for 48 months, which started on November 30, 2014.

[2] The Company signed a note payable with an insurance company dated October 17, 2016 for liability insurance, payable in monthly installments, including interest ranging from 2.6% - 4.15%

[3] The Company signed a note payable with an insurance company dated October 17, 2017 for liability insurance, payable in monthly installments, including interest ranging from 3.1% - 5.78%

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Note 6 - Notes and Leases Payable - Summary of Note Payable (Details) (Parentheticals) - Note Payable Insurance Company [Member] - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Minimum [Member]
Note payable, monthly payment	$ 5,045	$ 5,045
Maximum [Member]
Note payable, monthly payment	$ 17,959	$ 17,959

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Note 7 - Convertible Debt (PIK Notes) (Details Textual) - USD ($)			1 Months Ended		3 Months Ended	6 Months Ended		12 Months Ended	24 Months Ended
	Dec. 14, 2017	Nov. 03, 2014	Aug. 31, 2017	Feb. 28, 2017	Jun. 30, 2018	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017	Dec. 31, 2014	Dec. 31, 2013	Aug. 01, 2013
Paid-in-Kind Interest						$ 770,815	$ 2,007,329
Class of Warrant or Right, Number of Securities Called by Warrants or Rights					24,813,373	24,813,373		18,813,373
Class of Warrant or Right, Exercise Price of Warrants or Rights					$ 0.15	$ 0.15		$ 0.14
Warrants Issued to Series 2023 Notes Holders [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights								3,720,000
Class of Warrant or Right, Exercise Price of Warrants or Rights								$ 0.10
Warrants and Rights Outstanding								$ 224,290
Series A PIK Note Derivative Liability [Member]
Derivative Liability, Fair Value, Gross Liability, Total					$ 8,000,101	$ 8,000,101		1,883,630
Series 2023 PIK Note Derivative Liability [Member]
Derivative Liability, Fair Value, Gross Liability, Total					748,417	748,417		163,634
Series A Notes [Member]
Debt Instrument, Interest Rate, Stated Percentage		10.00%
Debt Instrument, Convertible, Conversion Price		$ 0.40
Debt Instrument, Face Amount		$ 19,848,486
Series 2023 Notes [Member]
Debt Instrument, Interest Rate, Stated Percentage		10.00%
Debt Instrument, Convertible, Conversion Price		$ 0.59
Debt Instrument, Face Amount		$ 10,500,000
Payment in Kind (PIK) Note [Member]
Proceeds from Convertible Debt									$ 23,000,000
Payment in Kind (PIK) Note [Member] | Series A Notes [Member]
Proceeds from Convertible Debt		$ 12,500,000
Debt Instrument, Interest Rate, Stated Percentage		10.00%							10.00%
Debt Instrument, Convertible, Conversion Price		$ 0.90							$ 0.90
Debt Instrument, Face Amount		$ 19,848,486
Amortization of Debt Issuance Costs and Discounts, Total					80,142	2,239,656		5,808,294
Debt Instrument, Increase, Accrued Interest						304,977		2,797,836
Convertible Notes Payable, Total					21,458,096	21,458,096		26,909,721
Payment in Kind (PIK) Note [Member] | Series 2023 Notes [Member]
Debt Instrument, Interest Rate, Stated Percentage										10.00%	10.00%
Debt Instrument, Convertible, Conversion Price										$ 1.40
Debt Instrument, Face Amount											$ 10,500,000
Amortization of Debt Issuance Costs and Discounts, Total								200,360
Debt Instrument, Increase, Accrued Interest					50,115	61,681		2,019,717
Convertible Notes Payable, Total					$ 14,497,104	$ 14,497,104		$ 16,090,721
Paid-in-Kind Interest	$ 577,439		$ 738,728	$ 703,550

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Note 7 - Convertible Debt (PIK Notes) - Terms of Debt (Details)	Nov. 03, 2014 USD ($) $ / shares
Series 2023 Notes [Member]
Inception Date	Aug. 01, 2013
Cash Received	$ 10,500,000
Principal (Initial Liability)	$ 10,500,000
Maturity (Term)	Aug. 01, 2023
Exercise Price (in dollars per share) | $ / shares	$ 0.59
Stated Interest	10.00%
Derivative Liability	$ 2,055,000
Series A Notes [Member]
Inception Date	Nov. 03, 2014
Cash Received	$ 12,500,000
Principal (Initial Liability)	$ 19,848,486
Maturity (Term)	May 01, 2023
Exercise Price (in dollars per share) | $ / shares	$ 0.40
Stated Interest	10.00%
Derivative Liability	$ 9,212,285

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Note 7 - Convertible Debt (PIK Notes) - Convertible Debt PIK Notes (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017	Nov. 03, 2014
Less: Discount	$ (6,941,703)	$ (9,755,832)
Series 2023 Notes [Member]
Derivative Liability			$ 2,055,000
Series A Notes [Member]
Derivative Liability			$ 9,212,285
Payment in Kind (PIK) Note [Member]
PIK Note Payable, Gross	43,367,095	43,000,437
Less: Discount	(6,941,703)	(9,240,138)
Less: Deferred Financing Cost	(470,192)	(515,694)
PIK Note Payable, Net	35,955,200	33,244,605
Derivative Liability	8,748,518	2,047,264
Payment in Kind (PIK) Note [Member] | Series 2023 Notes [Member]
PIK Note Payable, Gross	16,152,402	16,090,721
Less: Discount	(1,453,542)	(1,538,299)
Less: Deferred Financing Cost	(201,756)	(221,280)
PIK Note Payable, Net	14,497,104	14,331,142
Derivative Liability	748,417	163,634
Payment in Kind (PIK) Note [Member] | Series A Notes [Member]
PIK Note Payable, Gross	27,214,693	26,909,716
Less: Discount	(5,488,161)	(7,701,839)
Less: Deferred Financing Cost	(268,436)	(294,414)
PIK Note Payable, Net	21,548,096	18,913,463
Derivative Liability	$ 8,000,101	$ 1,883,630

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Note 8 - Stockholders' Equity (Details Textual) - $ / shares	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017	Dec. 07, 2017	Dec. 06, 2017
Preferred Stock, Shares Authorized	10,000,000	10,000,000
Preferred Stock, Par or Stated Value Per Share	$ 0.001	$ 0.001
Preferred Stock, Shares Outstanding, Ending Balance	0	0
Common Stock, Shares Authorized	400,000,000	400,000,000	400,000,000	250,000,000
Common Stock, Par or Stated Value Per Share	$ 0.001	$ 0.001	$ 0.001
Common Stock, Shares, Issued, Total	173,638,549	140,763,549
Stock Issued During Period, Shares, Issued for Services	1,500,000
Shares Issued, Price Per Share	$ 0.04
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 0.15	$ 0.14
Stock Issued During Period, Shares, in Lieu of Payment for Fees Associated with Private Placement		2,275,000
Stock Issued During Period, in Lieu of Payment for Fees Associated with Private Placement, Price Per Share		$ 0.04
Stock Issued During Period, Shares, Warrant Exercised		3,125,000
Stock Issued During Period, Warrant Exercised, Exercise price		$ 0.04
Common Stock, Shares, Outstanding, Ending Balance	173,638,549	140,763,549
Director [Member]
Stock Issued During Period, Shares, Issued for Services		250,000
Shares Issued, Price Per Share		$ 0.36
Sale of Stock, One [Member]
Shares Issued, Price Per Share	$ 0.04
Stock Issued During Period, Shares, New Issues	17,375,000
Sale of Stock, Two [Member]
Shares Issued, Price Per Share	$ 0.05
Stock Issued During Period, Shares, New Issues	3,000,000
Sale of Stock, Three [Member]
Shares Issued, Price Per Share	$ 0.10
Stock Issued During Period, Shares, New Issues	1,000,000
Sale of Stock, Four [Member]
Shares Issued, Price Per Share	$ 0.04
Stock Issued During Period, Shares, New Issues	2,000,000
Private Placement [Member]
Shares Issued, Price Per Share	$ 0.15
Stock Issued During Period, Shares, New Issues	8,000,000	26,500,000
Convertible Units, Number of Warrants Called by Each Unit	1	1
Convertible Units, Number of Common Shares Called by Each Unit	1	1
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right	1	0.25
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 0.08	$ 0.04

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Note 9 - Options and Warrants to Purchase Common Stock (Details Textual)		3 Months Ended	6 Months Ended
	Dec. 14, 2017 USD ($) $ / shares $ / item shares	Jun. 30, 2018 USD ($)	Jun. 30, 2018 USD ($) $ / shares shares	Feb. 01, 2018 USD ($)	Dec. 07, 2016 shares	May 31, 2016 shares	Nov. 20, 2012 shares
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | shares			4,224,999
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ / shares			$ 0.11
Price Per Unit | $ / item	0.04
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value		$ 4,114,914	$ 4,114,914
Warrants In Connection with Units [Member]
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | shares	0.25
Performance-based Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | shares	27,500,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ / shares	$ 0.06
Performance-based Options [Member] | Share-based Compensation Award, Tranche One [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage	50.00%
Performance-based Options, Vesting Feature, Close Sale of Units, Amount	$ 600,000
Performance-based Options [Member] | Share-based Compensation Award, Tranche Two [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage	25.00%
Performance-based Options, Vesting Feature, Additional Cash Proceeds				$ 900,000
Performance-based Options [Member] | Share-based Compensation Award, Tranche Three [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage	8.30%
Performance-based Options, Vesting Feature, EBITDA, Positive Period	1 year
Performance-based Options [Member] | Share-based Compensation Award, Tranche Four [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage	8.30%
Performance-based Options, Vesting Feature, EBITDA, Minimum Value Over 12 Month Period	$ 2,000,000
Performance-based Options [Member] | Share-based Compensation Award, Tranche Five [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage	8.40%
Performance-based Options, Vesting Feature, EBITDA, Minimum Value Over 12 Month Period	$ 4,000,000
Employee Stock Option [Member]
Allocated Share-based Compensation Expense, Total		192,299	775,299
Time-based Unvested Options [Member]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options		442,520	$ 442,520
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition			193 days
Performance-based Unvested Options [Member]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options		$ 354,750	$ 354,750
LTIP [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | shares							8,900,000
2016 LTIP [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | shares						2,000,000
Incentive Plan 2016 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | shares					15,000,000
2017 IP [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | shares	40,000,000

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Note 9 - Options and Warrants to Purchase Common Stock - Summary of the Status and Changes of the Warrants (Details)	6 Months Ended
	Jun. 30, 2018 $ / shares shares
Outstanding at begin of year, warrant (in shares) | shares	18,813,373
Outstanding at begin of year, warrant, weighted average price (in dollars per share) | $ / shares	$ 0.14
Issued, warrant (in shares) | shares	8,000,000
Issued, warrant, weighted average price (in dollars per share) | $ / shares	$ 0.15
Exercised, warrant (in shares) | shares	(2,000,000)
Exercised, warrant, weighted average price (in dollars per share) | $ / shares	$ 0.04
Forfeited, warrant (in shares) | shares
Forfeited, warrant, weighted average price (in dollars per share) | $ / shares
Outstanding at end of year, warrant (in shares) | shares	24,813,373
Outstanding at end of year, warrant, weighted average price (in dollars per share) | $ / shares	$ 0.15

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Note 9 - Options and Warrants to Purchase Common Stock - Summary of the Status of the Warrants Outstanding (Details) - $ / shares	6 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Warrants Outstanding and Exercisable Shares Issuable upon Exercise of Outstanding Warrants (in shares)	24,813,373
Warrants Outstanding and Exercisable Weighted Average Remaining Contractual Life (Year)	5 years 73 days
Warrants Outstanding and Exercisable Weighted Average Exercise Price (in dollars per share)	$ 0.15	$ 0.14
Exercise Price 1 [Member]
Warrants Outstanding and Exercisable Shares Issuable upon Exercise of Outstanding Warrants (in shares)	461,340
Warrants Outstanding and Exercisable Weighted Average Remaining Contractual Life (Year)	2 years 292 days
Warrants Outstanding and Exercisable Weighted Average Exercise Price (in dollars per share)	$ 1.15
Exercise Price 2 [Member]
Warrants Outstanding and Exercisable Shares Issuable upon Exercise of Outstanding Warrants (in shares)	3,283,283
Warrants Outstanding and Exercisable Weighted Average Remaining Contractual Life (Year)	3 years
Warrants Outstanding and Exercisable Weighted Average Exercise Price (in dollars per share)	$ 0.25
Exercise Price 3 [Member]
Warrants Outstanding and Exercisable Shares Issuable upon Exercise of Outstanding Warrants (in shares)	2,068,750
Warrants Outstanding and Exercisable Weighted Average Remaining Contractual Life (Year)	4 years 109 days
Warrants Outstanding and Exercisable Weighted Average Exercise Price (in dollars per share)	$ 0.04
Exercise Price 4 [Member]
Warrants Outstanding and Exercisable Shares Issuable upon Exercise of Outstanding Warrants (in shares)	11,000,000
Warrants Outstanding and Exercisable Weighted Average Remaining Contractual Life (Year)	4 years 182 days
Warrants Outstanding and Exercisable Weighted Average Exercise Price (in dollars per share)	$ 0.10
Exercise Price 5 [Member]
Warrants Outstanding and Exercisable Shares Issuable upon Exercise of Outstanding Warrants (in shares)	8,000,000
Warrants Outstanding and Exercisable Weighted Average Remaining Contractual Life (Year)	3 years
Warrants Outstanding and Exercisable Weighted Average Exercise Price (in dollars per share)	$ 0.15

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Note 9 - Options and Warrants to Purchase Common Stock - Significant Assumptions Relating to the Valuation of Stock Options (Details) - Employee Stock Option [Member]	6 Months Ended
	Jun. 30, 2018
Dividend Yield	0.00%
Minimum [Member]
Expected Life (in years) (Year)	2 years 175 days
Expected Volatility	163.73%
Risk Free Interest Rate	2.54%
Maximum [Member]
Expected Life (in years) (Year)	2 years 350 days
Expected Volatility	177.59%
Risk Free Interest Rate	2.62%

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Note 9 - Options and Warrants to Purchase Common Stock - Summary of the Status and Changes of the Options Granted Under the Stock Option Plans and Other Agreements (Details)	6 Months Ended
	Jun. 30, 2018 $ / shares shares
Outstanding at December 31, 2017 (in shares) | shares	57,057,768
Outstanding at December 31, 2017 (in dollars per share) | $ / shares	$ 0.36
Granted (in shares) | shares	4,224,999
Granted (in dollars per share) | $ / shares	$ 0.11
Exercised (in shares) | shares
Exercised (in dollars per share) | $ / shares
Forfeited (in shares) | shares	(232,645)
Forfeited (in dollars per share) | $ / shares	$ 1.36
Outstanding at June 30, 2018 (in shares) | shares	61,050,122
Outstanding at June 30, 2018 (in dollars per share) | $ / shares	$ 0.34

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Note 9 - Options and Warrants to Purchase Common Stock - Summary of the Status of the Options Outstanding (Details)	6 Months Ended
	Jun. 30, 2018 $ / shares shares
Options outstanding, number outstanding (in shares) | shares	61,050,122
Options outstanding, weighted average remaining contractual life (Year)	6 years 299 days
Options outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 0.34
Options exercisable, number exercisable (in shares) | shares	49,980,471
Options exercisable, weighted average exercise price (in dollars per share) | $ / shares	$ 0.40
Exercise Price 1 [Member]
Options outstanding, number outstanding (in shares) | shares	35,322,222
Options outstanding, weighted average remaining contractual life (Year)	9 years 124 days
Options outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 0.06
Options exercisable, number exercisable (in shares) | shares	26,697,225
Options exercisable, weighted average exercise price (in dollars per share) | $ / shares	$ 0.06
Exercise Price 2 [Member]
Options outstanding, number outstanding (in shares) | shares	545,289
Options outstanding, weighted average remaining contractual life (Year)	9 years 175 days
Options outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 0.075
Options exercisable, number exercisable (in shares) | shares	408,968
Options exercisable, weighted average exercise price (in dollars per share) | $ / shares	$ 0.075
Exercise Price 3 [Member]
Options outstanding, number outstanding (in shares) | shares	377,777
Options outstanding, weighted average remaining contractual life (Year)	4 years 339 days
Options outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 0.11
Options exercisable, number exercisable (in shares) | shares	69,444
Options exercisable, weighted average exercise price (in dollars per share) | $ / shares	$ 0.11
Exercise Price 4 [Member]
Options outstanding, number outstanding (in shares) | shares	3,000,000
Options outstanding, weighted average remaining contractual life (Year)	4 years 222 days
Options outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 0.12
Options exercisable, number exercisable (in shares) | shares	1,000,000
Options exercisable, weighted average exercise price (in dollars per share) | $ / shares	$ 0.12
Exercise Price 5 [Member]
Options outstanding, number outstanding (in shares) | shares	500,000
Options outstanding, weighted average remaining contractual life (Year)	3 years 47 days
Options outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 0.16
Options exercisable, number exercisable (in shares) | shares	500,000
Options exercisable, weighted average exercise price (in dollars per share) | $ / shares	$ 0.16
Exercise Price 6 [Member]
Options outstanding, number outstanding (in shares) | shares	81,395
Options outstanding, weighted average remaining contractual life (Year)	5 years 233 days
Options outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 0.21
Options exercisable, number exercisable (in shares) | shares	81,395
Options exercisable, weighted average exercise price (in dollars per share) | $ / shares	$ 0.21
Exercise Price 7 [Member]
Options outstanding, number outstanding (in shares) | shares	100,000
Options outstanding, weighted average remaining contractual life (Year)	2 years 80 days
Options outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 0.22
Options exercisable, number exercisable (in shares) | shares	100,000
Options exercisable, weighted average exercise price (in dollars per share) | $ / shares	$ 0.22
Exercise Price 8 [Member]
Options outstanding, number outstanding (in shares) | shares	1,066,155
Options outstanding, weighted average remaining contractual life (Year)	2 years 317 days
Options outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 0.24
Options exercisable, number exercisable (in shares) | shares	1,066,155
Options exercisable, weighted average exercise price (in dollars per share) | $ / shares	$ 0.24
Exercise Price 9 [Member]
Options outstanding, number outstanding (in shares) | shares	2,087,500
Options outstanding, weighted average remaining contractual life (Year)	4 years 105 days
Options outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 0.25
Options exercisable, number exercisable (in shares) | shares	2,087,500
Options exercisable, weighted average exercise price (in dollars per share) | $ / shares	$ 0.25
Exercise Price 10 [Member]
Options outstanding, number outstanding (in shares) | shares	35,595
Options outstanding, weighted average remaining contractual life (Year)	4 years 288 days
Options outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 0.27
Options exercisable, number exercisable (in shares) | shares	35,595
Options exercisable, weighted average exercise price (in dollars per share) | $ / shares	$ 0.27
Exercise Price 11 [Member]
Options outstanding, number outstanding (in shares) | shares	474,815
Options outstanding, weighted average remaining contractual life (Year)	5 years 313 days
Options outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 0.28
Options exercisable, number exercisable (in shares) | shares	474,815
Options exercisable, weighted average exercise price (in dollars per share) | $ / shares	$ 0.28
Exercise Price 12 [Member]
Options outstanding, number outstanding (in shares) | shares	234,506
Options outstanding, weighted average remaining contractual life (Year)	4 years 233 days
Options outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 0.285
Options exercisable, number exercisable (in shares) | shares	234,506
Options exercisable, weighted average exercise price (in dollars per share) | $ / shares	$ 0.285
Exercise Price 13 [Member]
Options outstanding, number outstanding (in shares) | shares	81,522
Options outstanding, weighted average remaining contractual life (Year)	2 years 204 days
Options outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 0.30
Options exercisable, number exercisable (in shares) | shares	81,522
Options exercisable, weighted average exercise price (in dollars per share) | $ / shares	$ 0.30
Exercise Price 14 [Member]
Options outstanding, number outstanding (in shares) | shares	200,000
Options outstanding, weighted average remaining contractual life (Year)	6 years 229 days
Options outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 0.66
Options exercisable, number exercisable (in shares) | shares	200,000
Options exercisable, weighted average exercise price (in dollars per share) | $ / shares	$ 0.66
Exercise Price 15 [Member]
Options outstanding, number outstanding (in shares) | shares	150,000
Options outstanding, weighted average remaining contractual life (Year)	6 years 222 days
Options outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 0.68
Options exercisable, number exercisable (in shares) | shares	150,000
Options exercisable, weighted average exercise price (in dollars per share) | $ / shares	$ 0.68
Exercise Price 16 [Member]
Options outstanding, number outstanding (in shares) | shares	7,233,277
Options outstanding, weighted average remaining contractual life (Year)	182 days
Options outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 0.70
Options exercisable, number exercisable (in shares) | shares	7,233,277
Options exercisable, weighted average exercise price (in dollars per share) | $ / shares	$ 0.70
Exercise Price 17 [Member]
Options outstanding, number outstanding (in shares) | shares	488,356
Options outstanding, weighted average remaining contractual life (Year)	6 years 324 days
Options outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 0.73
Options exercisable, number exercisable (in shares) | shares	488,356
Options exercisable, weighted average exercise price (in dollars per share) | $ / shares	$ 0.73
Exercise Price 18 [Member]
Options outstanding, number outstanding (in shares) | shares	3,104,653
Options outstanding, weighted average remaining contractual life (Year)	3 years 237 days
Options outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 0.83
Options exercisable, number exercisable (in shares) | shares	3,104,653
Options exercisable, weighted average exercise price (in dollars per share) | $ / shares	$ 0.83
Exercise Price 19 [Member]
Options outstanding, number outstanding (in shares) | shares	975,000
Options outstanding, weighted average remaining contractual life (Year)	5 years 346 days
Options outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 0.84
Options exercisable, number exercisable (in shares) | shares	975,000
Options exercisable, weighted average exercise price (in dollars per share) | $ / shares	$ 0.84
Exercise Price 20 [Member]
Options outstanding, number outstanding (in shares) | shares	300,000
Options outstanding, weighted average remaining contractual life (Year)	5 years 51 days
Options outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 1.10
Options exercisable, number exercisable (in shares) | shares	300,000
Options exercisable, weighted average exercise price (in dollars per share) | $ / shares	$ 1.10
Exercise Price 21 [Member]
Options outstanding, number outstanding (in shares) | shares	300,000
Options outstanding, weighted average remaining contractual life (Year)	4 years 361 days
Options outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 1.15
Options exercisable, number exercisable (in shares) | shares	300,000
Options exercisable, weighted average exercise price (in dollars per share) | $ / shares	$ 1.15
Exercise Price 22 [Member]
Options outstanding, number outstanding (in shares) | shares	115,000
Options outstanding, weighted average remaining contractual life (Year)	2 years 270 days
Options outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 1.35
Options exercisable, number exercisable (in shares) | shares	115,000
Options exercisable, weighted average exercise price (in dollars per share) | $ / shares	$ 1.35
Exercise Price 23 [Member]
Options outstanding, number outstanding (in shares) | shares	300,000
Options outstanding, weighted average remaining contractual life (Year)	3 years 328 days
Options outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 1.55
Options exercisable, number exercisable (in shares) | shares	300,000
Options exercisable, weighted average exercise price (in dollars per share) | $ / shares	$ 1.55
Exercise Price 24 [Member]
Options outstanding, number outstanding (in shares) | shares	3,077,060
Options outstanding, weighted average remaining contractual life (Year)	4 years 142 days
Options outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 1.66
Options exercisable, number exercisable (in shares) | shares	3,077,060
Options exercisable, weighted average exercise price (in dollars per share) | $ / shares	$ 1.66
Exercise Price 25 [Member]
Options outstanding, number outstanding (in shares) | shares	900,000
Options outstanding, weighted average remaining contractual life (Year)	3 years 51 days
Options outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 1.90
Options exercisable, number exercisable (in shares) | shares	900,000
Options exercisable, weighted average exercise price (in dollars per share) | $ / shares	$ 1.90

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Note 10 - Per Share Data (Details Textual) - shares	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Employee Stock Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	61,050,122	21,897,479
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	24,813,373	3,744,623
Convertible Debt Securities [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	94,413,680	40,677,826

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Note 11 - Commitments and Contingencies (Details Textual)	Jun. 30, 2018 USD ($)
Operating Leases Monthly Rent	$ 6,000
Lessee, Finance Lease, Term of Contract	5 years
Operating Leases, Future Minimum Payments Due, Total	$ 442,997
Operating Leases, Future Minimum Payments, Remainder of Fiscal Year	53,766
Operating Leases, Future Minimum Payments, Due in Two Years	163,998
Operating Leases, Future Minimum Payments, Due in Three Years	277,518
Operating Leases, Future Minimum Payments, Due in Four Years	394,452
Operating Leases, Future Minimum Payments, Due in Five Years	$ 423,828

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Note 12 - Subsequent Events (Details Textual) - $ / shares	1 Months Ended	6 Months Ended	12 Months Ended
	Jul. 31, 2018	Jun. 30, 2018	Dec. 31, 2017
Shares Issued, Price Per Share		$ 0.04
Class of Warrant or Right, Number of Securities Called by Warrants or Rights		24,813,373	18,813,373
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 0.15	$ 0.14
Subsequent Event [Member] | Investor Warrants [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	1,875,000
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 0.15
Private Placement [Member]
Stock Issued During Period, Shares, New Issues		8,000,000	26,500,000
Shares Issued, Price Per Share		$ 0.15
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 0.08	$ 0.04
Private Placement [Member] | Subsequent Event [Member]
Stock Issued During Period, Shares, New Issues	1,875,000
Shares Issued, Price Per Share	$ 0.08