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OPTIONS AND WARRANTS TO PURCHASE COMMON STOCK
 9 Months Ended
Sep. 30, 2020
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
NOTE 10 – OPTIONS AND WARRANTS TO PURCHASE COMMON STOCK
 
Outstanding Stock Warrants
 
A summary of the status and changes of the warrants issued for the nine months ended September 30, 2020:
 
  
Shares Issuable
    
  
upon Exercise of
  
Weighted Average
 
  
Outstanding Warrants
  
Exercise Price
 
       
Outstanding at January 1, 2020
  
26,688,373
  
$
0.15
 
Issued
  
-
   
-
 
Exercised
  
-
     
Forfeited
  
-
   
-
 
Outstanding at September 30, 2020
  
26,688,373
  
$
0.15
 
 
At September 30, 2020, the intrinsic value of the outstanding warrants was $0.
 
A summary of the status of the warrants outstanding and exercisable at September 30, 2020 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
   
0.58
  
$
1.15
 
$
0.25
   
3,283,283
   
0.74
  
$
0.25
 
$
0.04
   
2,068,750
   
1.93
  
$
0.04
 
$
0.10
   
11,000,000
   
2.20
  
$
0.10
 
$
0.15
   
9,875,000
   
0.73
  
$
0.15
 
     
26,688,373
   
1.43
  
$
0.15
 

 
On August 10, 2020, due to the variable conversion feature on convertible note payable
, see note 6(b), the Company adopted a sequencing policy and determined that the warrants with fixed exercise price were excluded from derivative consideration.


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. 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 Company did not grant any stock option awards during the nine months ended September 30, 2020.
 
A summary of the status and changes of the options granted under stock option plans and other agreements during the nine months ended September 30, 2020:
 
  
Shares Issued
  
Weighted
 
  
Upon Exercise of
  
Average
 
  
Options
  
Exercise Price
 
       
Outstanding at December 31, 2019
  
60,676,568
  
$
0.26
 
Granted
  
-
   
-
 
Exercised
  
-
   
-
 
Forfeited
  
(100,000)
   
0.22
 
Outstanding at September 30, 2020
  
60,576,568
  
$
0.26
 
 
A summary of the status of the options outstanding at September 30, 2020 is presented below:
 
  
Options Outstanding
  
Options Exercisable
 
 Range of
per share
exercise
price
 
Shares
  
Weighted
average
remaining
contractual
life
  
Per share
weighted
average
exercise
price
  
Shares
  
Weighted
average
remaining
contractual
life
  
Per share
weighted
average
exercise
price
 
$0.04 - $0.08
  
42,403,623
   
6.93
  
$
0.06
   
34,861,956
   
6.91
  
$
0.06
 
$0.10 - $0.84
  
13,230,885
   
2.19
   
0.42
   
13,230,885
   
2.19
   
0.42
 
$1.10 - $1.90
  
4,942,060
   
1.97
   
1.63
   
4,942,060
   
1.97
   
1.63
 
                         
   
60,576,568
   
5.49
  
$
0.26
   
53,034,901
   
5.27
  
$
0.29
 
 
Compensation expense of $3,899 and $14,412 was recognized for vested options for the three and nine months ended September 30, 2020. The aggregate intrinsic value of the outstanding options at September 30, 2020 was $0. At September 30, 2020, (i) $19,625 of unamortized compensation expense for time-based unvested options will be recognized over the next 1.26 years on a weighted average basis; (ii) $223,105 of unamortized compensation expense for performance-based unvested options will be recognized if the performance targets are achieved.
 
On August 18, 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 August 18, 2027. On November 1, 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 January 18, 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 September 30, 2020, management, based on its financial expectations for 2020, did not consider the vesting of the remaining 25% of the option grant to be probable.