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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the quarterly period ended |
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Transition report under section 13 or 15(d) of the Exchange Act |
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For the transition period from |
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to |
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Commission File Number |
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(Exact name of registrant as specified in its charter) |
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(State or other jurisdiction of incorporation or organization) |
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(I. R. S. Employer Identification No.) |
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(Address of principal executive offices) |
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(Zip Code) |
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(Issuer’s Telephone Number, Including Area Code) |
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Large Accelerated Filer |
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Accelerated Filer |
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Smaller Reporting Company |
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Emerging growth company |
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Page(s) |
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Item 1. |
Consolidated Financial Statements |
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2 |
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June 30, 2022 |
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December 31, 2021 |
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(unaudited) |
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ASSETS |
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Current Assets |
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Cash |
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$ |
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$ |
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Accounts receivable |
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Deposits and prepaid expenses |
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Total Current Assets |
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Land |
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Operating lease right-of-use asset |
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Finance lease right-of-use asset |
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Other Assets |
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Deposits |
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Total Other Assets |
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TOTAL ASSETS |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS’ DEFICIT |
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Current Liabilities |
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Accounts payable and accrued liabilities |
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$ |
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$ |
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PIK Note interest accrual |
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Current portion of notes payable |
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Current portion of finance lease liabilities |
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Current portion of operating lease liabilities |
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Total Current Liabilities |
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Long-Term Liabilities |
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PIK Notes payable, net of $ |
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Deferred revenue |
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Finance lease liabilities |
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Total Long-Term Liabilities |
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TOTAL LIABILITIES |
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Stockholders’ Deficit |
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Preferred stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated deficit prior to the exploration stage |
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( |
) |
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( |
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Accumulated deficit during the exploration stage |
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( |
) |
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( |
) |
Total Stockholders’ Deficit |
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( |
) |
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( |
) |
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TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT |
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$ |
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3 |
For the Three Months Ended June 30 | For the Six Months Ended June 30 | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
REVENUES | $ | $ | $ | $ | ||||||||||||
OPERATING EXPENSES: | ||||||||||||||||
Production costs | ||||||||||||||||
Exploration costs | ||||||||||||||||
General and administrative | ||||||||||||||||
Total Operating Expenses | ||||||||||||||||
Operating Loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
OTHER INCOME (EXPENSES): | ||||||||||||||||
Interest expense, net (including amortization of deferred financing cost and debt discount) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Other income, net | ||||||||||||||||
Total Other (Expenses) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
NET LOSS | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
Net Loss Per Common Share (Basic and Diluted) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
Weighted Average Common Shares Outstanding (Basic and Diluted) |
4 |
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Three Months Ended |
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Common Stock Shares |
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Common Stock Amount |
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Preferred Stock Shares |
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Preferred Stock Amount |
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Additional Paid-in Capital |
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Accumulated Deficit Prior to Exploration Stage |
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Accumulated Deficit During Exploration Stage |
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Total Stockholders’ Deficit |
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Balance, March 31, 2022 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
( |
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Shares issued upon conversion of Series B Preferred Stock |
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( |
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$ |
( |
) |
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( |
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- |
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- |
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- |
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Beneficial conversion feature on Series B Preferred Stock |
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- |
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- |
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- |
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- |
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- |
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- |
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Deemed dividend from beneficial conversion feature on Series B Preferred Stock |
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- |
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- |
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- |
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- |
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( |
) |
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- |
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- |
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( |
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Shares of Series B Preferred Stock issued to Geneva Roth |
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- |
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- |
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- |
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- |
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Stock option compensation expense |
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- |
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- |
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- |
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- |
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- |
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- |
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Net Loss |
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- |
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- |
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- |
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- |
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- |
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- |
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( |
) |
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( |
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Balance, June 30, 2022 |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
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$ |
( |
) |
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Balance, March 31, 2021 |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
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$ |
( |
) |
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Shares issued in private placement |
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- |
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- |
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- |
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- |
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Beneficial conversion feature on Series B Preferred Stock |
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- |
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- |
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- |
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- |
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- |
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- |
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Deemed dividend from beneficial conversion feature on Series B Preferred Stock |
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- |
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- |
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- |
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- |
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( |
) |
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- |
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- |
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( |
) |
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Stock compensation expense |
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- |
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- |
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- |
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- |
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- |
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- |
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Net Loss |
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- |
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- |
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- |
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- |
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- |
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- |
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( |
) |
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( |
) |
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Balance, June 30, 2021 |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
5 |
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Six Months Ended |
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Common Stock Shares |
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Common Stock Amount |
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Preferred Stock Shares |
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Preferred Stock Amount |
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Additional Paid-in Capital |
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Accumulated Deficit Prior to Exploration Stage |
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Accumulated Deficit During Exploration Stage |
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Total Stockholders’ Deficit |
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Balance, December 31, 2021 |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
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$ |
( |
) |
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Shares issued for conversion of Series B Preferred Stock |
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( |
) |
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( |
) |
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( |
) |
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- |
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- |
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- |
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Shares issued as part of liability settlement |
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- |
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- |
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- |
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- |
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Issuance of shares for debt issuance cost |
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- |
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- |
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- |
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- |
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Issuance of shares of common stock for consulting services |
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- |
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- |
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- |
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- |
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Beneficial conversion feature on Series B Preferred Stock |
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- |
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- |
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- |
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- |
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- |
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- |
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||||||||||||||||||||||||||||||
Deemed dividend from beneficial conversion feature on Series B Preferred Stock |
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- |
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- |
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- |
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- |
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( |
) |
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- |
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- |
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( |
) |
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Shares of Series B Preferred Stock issued to Geneva Roth |
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- |
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- |
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- |
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- |
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Stock option compensation expense |
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- |
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- |
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- |
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- |
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- |
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- |
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Net Loss |
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- |
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- |
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- |
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- |
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- |
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- |
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( |
) |
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( |
) |
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||||||||||||||||||||||||||||||
Balance, June 30, 2022 |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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||||||||||||||||||||||||||||||
Balance, December 31, 2020 |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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Shares issued for conversion of Series B Preferred Stock |
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( |
) |
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( |
) |
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- |
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- |
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Shares issued in private placement |
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- |
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- |
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- |
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- |
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||||||||||||||||||||||||||||||
Beneficial conversion of Series B Preferred Stock |
|
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- |
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- |
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- |
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- |
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- |
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- |
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Deemed dividend from beneficial conversion feature on Series B Preferred Stock |
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- |
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- |
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- |
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- |
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( |
) |
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- |
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- |
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( |
) |
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Shares issued upon cashless exercise of options |
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- |
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- |
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( |
) |
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- |
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- |
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- |
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Shares issued for employee bonus |
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- |
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- |
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- |
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- |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock option compensation expense |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
|
||||||||||||||||||||||||||||||
Balance, June 30, 2021 |
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
6 |
|
|
For the Six Months Ended |
|
|||||
|
|
June 30, |
|
|||||
|
|
2022 |
|
|
2021 |
|
||
|
|
|
|
|
|
|
||
Cash Flows from Operating Activities: |
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile net loss to net cash used in operations: |
|
|
|
|
|
|
|
|
Depreciation of finance lease |
|
|
|
|
|
|
|
|
Amortization of debt discount |
|
|
|
|
|
|
|
|
Amortization of discount - PIK Notes |
|
|
|
|
|
|
|
|
Accrued interest on PIK Notes |
|
|
|
|
|
|
|
|
Stock issued for settlement liability |
|
|
|
|
|
|
|
|
Stock based compensation expense |
|
|
|
|
|
|
|
|
Non-cash lease expense |
|
|
|
|
|
|
|
|
Stock issued for interest |
|
|
|
|
|
|
|
|
Forgiveness of PPP Fund |
|
|
|
|
|
|
( |
) |
Change in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
|
|
|
|
( |
) |
Deposits and prepaids |
|
|
|
|
|
|
|
|
Operating lease liabilities |
|
|
( |
) |
|
|
( |
) |
Financing lease liabilities |
|
|
( |
) |
|
|
|
|
Accounts payable and accrued liabilities |
|
|
|
|
|
|
|
|
Net cash (used in) provided by operating activities |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities: |
|
|
|
|
|
|
|
|
Payment on finance lease liability |
|
|
( |
) |
|
|
( |
) |
Proceeds from notes payable |
|
|
|
|
|
|
|
|
Proceeds from Paycheck Protection Program loan |
|
|
|
|
|
|
|
|
Payments on notes payable |
|
|
( |
) |
|
|
- |
|
Proceeds from private placement |
|
|
|
|
|
|
|
|
Payments on insurance financing |
|
|
( |
) |
|
|
( |
) |
Net cash provided by (used in) financing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
Cash at beginning of period |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash at end of period |
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
|
|
Cash paid for interest |
|
$ |
|
|
|
$ |
|
|
Cash paid for income taxes |
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of non-cash financing activity: |
|
|
|
|
|
|
|
|
Capitalization of ROU asset and finance lease liability |
|
$ |
|
|
|
$ |
|
|
Boral settlement payable |
|
$ |
|
|
|
$ |
|
|
Deemed dividend on Series B Preferred Stock due to BCF |
|
$ |
|
|
|
$ |
|
|
Accrued PIK interest paid through issuance of PIK Notes |
|
$ |
|
|
|
$ |
|
|
Stock issued for cashless options exercised |
|
$ |
|
|
|
$ |
|
|
Common stock issued upon conversion of Series B Preferred Stock |
|
$ |
|
|
|
$ |
|
|
7 |
8 |
9 |
|
|
Estimated |
|
|
|
|
Useful Life (years) |
|
|
Building and Building Improvements |
|
|
|
|
Mining equipment |
|
|
|
|
Office and shop furniture and equipment |
|
|
|
|
Vehicles |
|
|
|
|
10 |
11 |
12 |
Supplemental cash flow information related to leases: |
|
Three months ended June 30, 2022 |
|
|
Six months ended June 30, 2022 |
|
||
|
|
|
|
|
|
|
||
Finance cash flows from finance lease |
|
$ |
( |
) |
|
$ |
( |
) |
Operating cash flows from finance lease |
|
$ |
|
|
|
$ |
|
|
|
Supplemental balance sheet information related to leases: |
|
As of June 30, 2022 |
|
|
|
|
|
|
|
Finance lease Right-of-use assets |
|
$ |
|
|
|
|
|
|
|
Current portion of finance lease liability |
|
$ |
|
|
Long-term finance lease liability |
|
|
|
|
Total finance lease liability |
|
$ |
|
|
|
|
|
|
|
Weighted average remaining operating lease term |
|
|
|
|
Weighted average discount rate |
|
|
|
% |
2022 (remaining six months) |
|
$ |
|
|
2023 |
|
|
|
|
2024 |
|
|
|
|
2025 |
|
|
|
|
Total lease payments |
|
|
|
|
Less: imputed interest |
|
|
( |
) |
Total lease liabilities |
|
$ |
|
|
|
|
June 30, 2022 |
|
|
December 31, 2021 |
|
||
Cash Bond (Mine Permit deposit) |
|
$ |
|
|
|
$ |
|
|
Office Lease Security Deposit |
|
|
|
|
|
|
|
|
Total |
|
$ |
|
|
|
$ |
|
|
13 |
June 30, 2022 | December 31, 2021 | |||||||
Note payable to insurance companies, payable $ | $ | $ | ||||||
Promissory note (b) | $ | $ | ||||||
Loan payable (c) | $ | $ | ||||||
$ | $ | |||||||
Less: Current Portion | $ | ( | ) | $ | ( | ) | ||
Notes Payable, Long-Term Portion | $ | $ |
(a) | In October 2021, the Company entered into two notes payable with interest rates of |
(b) | In January 2022, the Company entered into a promissory note agreement for $ |
(c) | In March 2022, the Company entered into a loan payable with a lender for $ l ling $The lender has been provided a security interest in certain inventory and equipment. Excluded is the Company’s Alpine mill and related equipment . |
14 |
Key Terms |
|
Series 2023 Notes |
|
Series A Notes |
Inception Date |
|
|
|
|
Cash Received |
|
$ |
|
$ |
Principal (Initial Liability) |
|
$ |
|
$ |
Maturity (Term) |
|
Matures on |
|
Matures on |
Exercise Price |
|
$ |
|
$ |
Stated Interest |
|
|
|
|
|
|
Series 2023 Notes |
|
|
Series A Notes |
|
|
Total |
|
|||
PIK Note Payable, Gross |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Less: Discount |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
PIK Note Payable, Net |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
15 |
|
|
Series 2023 Notes |
|
|
Series A Notes |
|
|
Total |
|
|||
PIK Note Payable, Gross |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Less: Discount |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
PIK Note Payable, Net |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
● |
Maturity : May 1, 2023. |
● |
Exercise Price : $0.40 per share and will be adjusted from time to time pursuant anti-dilution provisions. |
● |
Stated Interest : 10% payable semi-annually in arrears through December 14, 2017, 3% payable semi-annually in arrears thereafter. |
● |
Liquidated Damages : The Company is required to pay the noteholders 1% of the principal amount of the Series A Notes if a Registration statement is not filed and effective within 90 days of the inception date (and further damages for every 30 days thereafter). |
● |
The number of shares issuable under the Notes may be affected by the anti-dilution provisions of the Notes. The antidilution provisions adjust the Exercise Price of the Notes in the event of stock dividends and splits, issuance below the market price of the common stock, issuances below the conversion price of the Notes, pro rata distribution of assets, rights plans, tender offers, and exchange offers. |
16 |
17 |
18 |
|
|
Shares Issuable |
|
|
|
|
||
|
|
upon Exercise of |
|
|
Weighted Average |
|
||
|
|
Outstanding Warrants |
|
|
Exercise Price |
|
||
|
|
|
|
|
|
|
||
Outstanding at December 31, 2021 |
|
|
|
|
|
$ |
|
|
Issued |
|
|
|
|
|
|
|
|
Exercised |
|
|
|
|
|
|
- |
|
Forfeited |
|
|
|
|
|
|
|
|
Outstanding at June 30, 2022 |
|
|
|
|
|
$ |
|
|
|
|
Warrants Outstanding and Exercisable |
|
||||||||||||||
|
|
Shares Issuable |
|
|
Weighted Average |
|
|
|
|
||||||||
|
|
upon Exercise of |
|
|
Remaining |
|
|
Weighted Average |
|
||||||||
Exercise Price |
|
Outstanding Warrants |
|
|
Contractual Life (years) |
|
|
Exercise Price |
|
||||||||
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
19 |
|
|
Shares Issued Upon Exercise of Options |
|
|
Weighted Average Exercise Price |
|
||
|
|
|
|
|
|
|
||
Outstanding at December 31, 2021 |
|
|
|
|
|
$ |
|
|
Granted |
|
|
|
|
|
|
|
|
Exercised |
|
|
|
|
|
|
|
|
Forfeited |
|
|
( |
) |
|
|
|
|
Outstanding at June 30, 2022 |
|
|
|
|
|
$ |
|
|
20 |
|
|
Options Outstanding |
|
|
Options Exercisable |
|
||||||||||||||||||
Range of per share exercise price |
|
Shares |
|
|
Weighted average remaining contractual life (years) |
|
|
Per share weighted average exercise price |
|
|
Shares |
|
|
Weighted average remaining contractual life (years) |
|
|
Per share weighted average exercise price |
|
||||||
$ |
|
|
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
21 |
22 |
23 |
|
|
Three Months Ended June 30, |
|
|
Variance |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
$ |
|
|
% |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
REVENUES |
|
$ |
106,105 |
|
|
$ |
465,493 |
|
|
$ |
(359,388 |
) |
|
|
(77 |
)% |
|
|
|
|
|||||||||||||
OPERATING EXPENSES: |
|
|
|
|||||||||||||
Production costs |
|
|
177,959 |
|
|
|
418,959 |
|
|
|
(241,000 |
) |
|
|
(58 |
)% |
Exploration costs |
|
|
6,543 |
|
|
|
76,259 |
|
|
|
(69,716 |
) |
|
|
(91 |
)% |
General and administrative |
|
|
335,728 |
|
|
|
411,949 |
|
|
|
(76,221 |
) |
|
|
(19 |
)% |
|
|
|
|
|||||||||||||
Total Operating Expenses |
|
|
520,230 |
|
|
|
907,167 |
|
|
|
(386,937 |
) |
|
|
(43 |
)% |
Operating Loss |
|
|
(414,125 |
) |
|
|
(441,674 |
) |
|
|
(27,549 |
) |
|
|
(6 |
)% |
OTHER (EXPENSE) INCOME: |
|
|
|
|||||||||||||
Interest expense, net (including amortization of deferred financing cost and debt discount) |
|
|
(480,717 |
) |
|
|
(463,402 |
) |
|
|
17,315 |
|
|
|
4 |
% |
Other income, net |
|
|
121,046 |
|
|
|
69,883 |
|
|
|
51,163 |
|
|
|
73 |
% |
|
|
|
|
|||||||||||||
Total Other (Expense) |
|
|
(359,671 |
) |
|
|
(393,519 |
) |
|
|
(33,848 |
) |
|
|
(9 |
)% |
|
|
|
|
|||||||||||||
NET LOSS |
|
$ |
(773,796 |
) |
|
$ |
(835,193 |
) |
|
$ |
(61,397 |
) |
|
|
(7 |
)% |
24 |
25 |
|
|
Six Months Ended June 30, |
|
|
Variance |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
$ |
|
|
% |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
REVENUES |
|
$ |
184,150 |
|
|
$ |
739,165 |
|
|
$ |
(555,015 |
) |
|
|
(75 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production costs |
|
|
311,295 |
|
|
|
881,125 |
|
|
|
(569,830 |
) |
|
|
(65 |
)% |
Exploration costs |
|
|
250,013 |
|
|
|
127,849 |
|
|
|
122,164 |
|
|
|
96 |
% |
General and administrative |
|
|
741,106 |
|
|
|
801,472 |
|
|
|
(60,366 |
) |
|
|
(8 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating Expenses |
|
|
1,302,414
|
|
|
|
1,810,446 |
|
|
|
(508,032
|
) |
|
|
(28 |
)% |
Operating Loss |
|
|
(1,118,264
|
) |
|
|
(1,071,281 |
) |
|
|
46,983
|
|
|
|
4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME (EXPENSE): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net (including amortization of deferred financing cost and debt discount) |
|
|
(952,615
|
) |
|
|
(927,299 |
) |
|
|
25,316
|
|
|
|
3 |
% |
Other income, net |
|
|
181,418
|
|
|
|
317,429 |
|
|
|
(136,011
|
) |
|
|
(43 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Other Income (Expense) |
|
|
(771,197
|
) |
|
|
(609,870 |
) |
|
|
161,327
|
|
|
|
26 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS |
|
$ |
(1,889,461
|
) |
|
$ |
(1,681,151 |
) |
|
$ |
208,310
|
|
|
|
12 |
% |
26 |
27 |
28 |
29 |
30 |
|
|
APPLIED MINERALS, INC. |
|
|
|
Dated: August 22, 2022 |
|
/s/ CHRISTOPHER T. CARNEY |
|
|
By: Christopher T. Carney |
|
|
Chief Executive Officer |
|
|
|
Dated: August 22, 2022 |
|
/s/ CHRISTOPHER T. CARNEY |
|
|
By: Christopher T. Carney |
|
|
Chief Financial Officer |
31 |