Applied Minerals, Inc. - Annual Report: 2007 (Form 10-K)

 

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[X]	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

ATLAS MINING COMPANY
(Exact name of registrant as specified in its charter)
Idaho		82-0096527
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

110 Greene Street – Ste 1101, New York, NY			10012
(Address of principal executive offices)			(Zip Code)
	(208) 556-1181
	Issuer's telephone number, including area code

YES

NO

X

YES

NO

X

YES

NO

X

Large Accelerated Filer

Accelerated Filer

X

Non-accelerated Filer

Smaller Reporting Company

YES

NO

X

	PART I	Page(s)
Item 1.	Business	2 – 6
Item 1A.	Risk Factors	7 – 9
Item 1B.	Unresolved Staff Comments	9
Item 2.	Properties	10 – 11
Item 3.	Legal Proceedings	12 – 13
Item 4.	Submission of Matters to a Vote of Securities Holders	13
	PART II
Item 5.	Market Price for the Registrant’s Common Equity, Related Stockholders Matters and Issuer Purchases of Equity Securities	14 – 16
Item 6.	Selected Financial Data	16
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operation	17 – 25
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 8.	Financial Statements and Supplementary Data	26
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	27
Item 9A.	Controls and Procedures	27 – 31
Item 9B.	Other Information	32
	PART III
Item 10.	Directors and Executive Officers and Corporate Governance	33 – 34
Item 11.	Executive Compensation	35– 36
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	37
Item 13.	Certain Relationships and Related Transactions, and Director Independence	38
Item 14.	Principal Accounting Fees and Services	39
	PART IV
Item 15.	Exhibits, Financial Statement Schedules and Reports on Form 8-K	F-1 to F-42

·	The only revenues from operations during 2007 and 2008 were generated by the Company’s Contract Mining operations.  Those operations were discontinued and shut down permanently on December 31, 2008 and are not expected to be restarted;

·	Operations at the Dragon Mine were suspended in October 2007 and remained suspended throughout 2008; and

·	The following persons are no longer with the Company:

i.	all persons who were directors as of December 31, 2007;

ii.	all other persons who were directors at times prior thereto who are referred to in the narrative portions of this report,

iii.	the persons (there were two) who served as president and CEO of the Company at any time during 2007; and

iv.	the person who was president and CEO of Nano Clay & Technologies, Inc., our subsidiary, during 2007.

·

Because the disclosure in this report makes certain statements as to conditions and beliefs of, and information available to, the Company and management during the period covered by this report and because the management during 2007 has been replaced, it has been necessary for us to make certain assumptions as to what were the Company’s or the Board of Directors’ conditions, beliefs and information as of December 31, 2007 and prior thereto.

HISTORY AND DEVELOPMENT OF THE COMPANY

 

 

	Section of the Coeur d’Alene Mining District	Estimated Acres
	Atlas Mine	540 acres fee simple and patented
		180 unpatented
	Sierra Trapper Creek	80 acres patented
	Aulback, Section 6 & 7	100 acres patented
	Sierra Silver, Woodland Park & Nine Mile	60 acres patented
		80 acres mineral rights
	L & N Claims	108 acres patented
	Park Copper & Gold	99 acres patented

 

1.	Our making available to NaturalNano a portion of our supply of unprocessed clay at the Dragon Mine, and;

 

2.	A commitment by NaturalNano to process the clay at its expense, including an agreement by NaturalNano to provide, at its expenses, technical, financial and operating support to provide a particle separation and sizing process at the Dragon Mine site.

 

 

 

 

 

ITEM 5.

MARKET PRICE FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDERS MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Year 2007										Year 2006
		High				Low				High				Low
First Quarter		$	2.08			$	1.54			$	1.49			$	0.90
Second Quarter		$	2.98			$	1.81			$	1.94			$	1.37
Third Quarter		$	2.92			$	1.65			$	2.44			$	1.71
Fourth Quarter		$	1.70			$	0.53			$	1.98			$	1.33

Equity Compensation Plan Information
As of December 31, 2007
			Number of securities to be issued upon exercise of outstanding options, warrants, and rights				Weighted-average exercise price of outstanding options, warrants and rights				Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
			(a)				(b)				(c)
Equity compensation plans approved by security holders				- 0 -				- 0 -				N/A
Equity compensation plans	Incentive Stock Option Plan			- 0 -				- 0 -				(1	)
not approved by security holders	Stock Option Plan			2,688,577			$	0.66				(1	)
Total				2,688,577			$	0.66

On January 3, 2007, we issued 40,000 shares of common stock to two investors for $20,000 for the redemption of outstanding warrants.

On January 9, 2007, we issued 1,481,482 shares of common stock for $2,000,001 for exercise of a subscription agreement.

Also on January 9, 2007, we issued 230,000 shares of common stock for $115,000 for the redemption of outstanding warrants.

On January 12, 2007, we issued 3,430 shares of common stock for $858 for the redemption of an outstanding warrant.

On January 29, 2007, we issued 50,000 shares of common stock for $35,000 for the redemption of an outstanding warrant.

On April 9, 2007, we issued 4,592 shares of common stock for $8,633 per an agreement.

On April 27, 2007, we issued 1,000 shares of common stock in exchange for $2,000 worth of stock in the minority interest.

On July 11, 2007, we issued 833,330 shares of common stock for $149,999 for the exercise of stock options.

On July 26, 2007, we issued 251,426 shares of common stock for $45,257 for the exercise of stock options.

ITEM 6.

SELECTED FINANCIAL DATA

 

 

 

 

 

 

 

 

 

 

·

During the period beginning in 2002 and ending in early 2006, approximately 30 million shares of common stock were issued in violation of the federal securities laws, including the registration provisions of Section 5 of the Securities Act of 1933.  The violations involved (a) misuse of SEC Registration Form S-8, a short form registration form for compensatory issuances to certain officers, directors, employees and consultants (approximately 16 million shares were issued under Form S-8), (b) transfer of 9.9 million shares to related parties and affiliates that were purportedly sold under our Registration Statement on SEC Registration Form SB-2 and subsequent resales without compliance with the plan of distribution contained in our SB-2, and (c) grants of at least 2.8 million shares purportedly made pursuant to the exemption from registration set forth in Section 4(2) of the Securities Act.  These issuances are discussed in more detail in the following three paragraphs.

·

Between 2002 and 2006, we issued approximately 16 million shares of our common stock that were purportedly issued under our registration statements on Form S-8.  A review of these issuances revealed that approximately 14.6 million of these shares, with an aggregate market value of approximately $3.6 million (based upon the closing sale price per share on the apparent dates of issuance), were issued to individuals and entities that were ineligible to receive shares registered on Form S-8 because, among other reasons, these individuals or entities provided us with capital raising or stock promotion services and/or did not provide any bona fide consulting services to us.  In addition, some such issuances and other issuances also may have been in excess of the number of shares we had registered on Form S-8 at the time of issuance.  Many of the shares were issued in violation of the Atlas’ 2002 Consultant Stock Plan.  Certain shares were issued to family members of our then CEO, Mr. Jacobson, and such transactions appear to have been, among other things, director conflict of interest transactions which did not receive proper approval from the Board of Directors.

·

In 2003, we registered for sale on SEC Registration Form SB-2 ten million shares of common stock at a fixed price of $0.10 per share on a self-underwritten basis.  Purportedly, to avoid filing a post-effective amendment to update the disclosure in the registration statement, we issued 9.9 million shares to related parties and affiliates.  In 2003 and 2004, these shares were provided to third parties for resale and resales were apparently made at times when the market price was greater than $0.10.  Only after such resales did we ultimately receive cash payments in the aggregate of approximately $805,000 for these shares, which is less than the $990,000 that would be expected.

·

In 2003, we issued 2.8 million restricted shares for supposed services purportedly in reliance on the private placement exemption from registration set forth in Section 4(2) of the Securities Act.  However, we did not determine whether the recipients satisfied a condition of the exemption (that is, that the recipients took with the intent to resell only pursuant to an effective registration statement or an exemption from registration).  In some cases, we instructed our transfer agent to transfer these shares prior to the applicable holding period under Rule 144, which is an exemption from registration.  1.4 million of these shares were issued to a family member of Mr. Jacobson and this transaction appears to have been, among other things, a director conflict of interest transaction that did not receive proper authorization from the Board of Directors.

·	The Special Committee also determined that we did not properly record compensation expenses associated with the vesting of certain stock options granted to our former officers.

·	The Special Committee has determined that Mr. Jacobson was primarily responsible for the securities law violations set forth above.

·

The Special Committee also discovered transactions between us and our wholly- or partly-owned subsidiaries or related entities, including stock issuances to those entities that violated Section 5 of the Securities Act and inter-company loans with those entities that appear to have been conflict-of-interest transactions entered into without proper corporate authorization or business purpose.

·

The Special Committee has determined that the accounting treatment of the $250,000 received from NaturalNano as revenue in 2004 was incorrect.  However, the Special Committee has also determined that the treatment of such funds as proposed in the October 9, 2007 press release was also incorrect.  The Special Committee believes that during the two-year term of the contract the $250,000 should have been treated as a deposit and, after the expiration of the contract in 2006, the entire $250,000 should have been recognized as other income.

·

The Special Committee determined that in 2004 Mr. Jacobson received options to purchase 3.5 million shares of Atlas common stock in violation of the Company’s existing stock option plans.  The options had an exercise price below the market price of the common stock on the date of the grant, which violated the terms of the plan under which they were granted. The Company did not properly account for the compensation expenses related to the grant.

·	The Special Committee found no evidence of accounting irregularities with respect to fixed asset ownership and long-term liabilities.

·	Our internal controls over financial reporting and disclosure controls contained material weaknesses that led to inadequate and inaccurate disclosures.

·	There were inaccurate statements in press releases released by us including a press release dated November 28, 2006 that contained inaccurate statements regarding the production capabilities and activities at the Dragon Mine.

 

 

 

 

·	In June 2008, Mr. Jacobson resigned as an officer and director.

·	As a result of Mr. Jacobson’s resignation, our Board now consists of a majority of independent directors.  As of the date of this report, the board has only one non-independent director.

·	In July 2008, we hired Michael Lyon as interim Chief Executive Officer until December 31, 2008 who brought more than 35 years of experience in finance, operations, law and strategic planning in a variety of businesses.

·	We hired experienced securities and disclosure counsel.

·

We named Morris D. Weiss as Chief Restructuring Officer.  His duties include oversight and management of litigation and property dispositions, other than Dragon Mine, which we intend to operate, advising the Board as to other restructuring matters and such other matters as may be assigned to him by the Board.

·

We dismissed Chisholm, Bierwolf & Nilson, LLC (“Chisholm”) as independent auditors and retained PMB Helin Donovan LLP (“PMB”) as independent auditors for the purposes of auditing the financial statements for the years ended December 31, 2006 and December 31, 2007, performing other audit procedures on the financial statements for the year ended December 31, 2005 and 2004 and reviewing financial statements for the first quarter 2007 and 2006, the second quarter 2007 and 2006, and third quarter 2007 and 2006.

 

·	We appointed David A. Taft as a director.

 

·

We entered into a Management Agreement with Material Advisors LLC, a management services company (“Manager”) to perform or engage others, including Andre Zeitoun, a principal of Manager, Chris Carney and Eric Basroon (“Management Personnel”), to perform senior management services including such services as are customarily provided by a chief executive officer but not (unless otherwise agreed) services customarily provided by a chief financial officer.

 

·	We appointed Andre Zeitoun as President and Chief Executive Officer and as a director of Company effective January 1, 2009.  Mr. Zeitoun is compensated by Material Advisors LLC.

 

·	We appointed Christopher Carney as interim Chief Financial Officer effective February 17, 2009.  Mr. Carney is compensated by Material Advisors LLC.

 

·	We have adjusted prior period balances for corrections of errors to properly reflect accounting for the valuation for stock options, related party transactions, impairment of securities available for sale and valuation of common stock issued for services.

 

ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 

 

 

1.	internal controls necessary to develop reliable financial statements did not exist; or

 

 

2.	information has come to its attention which made the accountant unwilling to rely on management's representations, or unwilling to be associated with the financial statements prepared by management; or

 

 

3.

the scope of the audit should be expanded significantly, or information has come to its attention that it had concluded will, or if further investigated might, materially impact the fairness or reliability of a previously issued audit report or the underlying financial statements, or the financial statements issued or to be issued covering the fiscal period(s) subsequent to the date of the most recent audited financial statements (including information that might preclude the issuance of an unqualified audit report)

 

i.	Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

ii.	Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

iii.	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.

i.

The lack segregation of duties in the period-end financial reporting process.  The Company has historically had limited accounting staff and minimal operating revenue and as such, all accounting and financial reporting operations are performed by one individual. This individual is the only employee with any significant knowledge of generally accepted accounting principles and is the only individual in charge of the general ledger (including the preparation of routine and non-routine journal entries and journal entries involving accounting estimates), the preparation of account reconciliations, the selection of accounting principles, and the preparation of interim and annual financial statements (including consolidation entries and footnote disclosures) in accordance with generally accepted accounting principles.  In addition, the lack of more than one person with significant knowledge of generally accepted accounting principles has resulted in ineffective oversight and monitoring of the work performed by the employee.

ii.

The lack of an effective period-end financial statement closing process.  There is no formal guidance or checklist of procedures to facilitate the accounting period end closing process.  Also, general ledger accounting reconciliations, other than cash accounts are not formally performed or documented and, in some cases, subsidiary records supporting general ledger balances are not effectively maintained.  In addition, analytical reviews of financial and operational results are not consistently performed on a formal basis or documented.

iii.	The lack of adequate board oversight has provided management the opportunity to both override the controls that governed the Company’s normal course business activities and execute transactions without necessary board approval.

i.	The institution of certain personnel changes that will result in an appropriate segregation of duties in the period-end financial reporting process.

ii.	The implementation of procedures and controls governing the period-end financial statement closing process.

iii.	The creation of an independent, qualified and active Board of Directors that includes a financial expert.

Ø

The lack segregation of duties in the period-end financial reporting process.  The Company has historically had limited accounting staff and minimal operating revenue and as such, all accounting and financial reporting operations are performed by one individual. This individual is the only employee with any significant knowledge of generally accepted accounting principles and is the only individual in charge of the general ledger (including the preparation of routine and non-routine journal entries and journal entries involving accounting estimates), the preparation of account reconciliations, the selection of accounting principles, and the preparation of interim and annual financial statements (including consolidation entries and footnote disclosures) in accordance with generally accepted accounting principles.  In addition, the lack of more than one person with significant knowledge of generally accepted accounting principles has resulted in ineffective oversight and monitoring of the work performed by the employee.

Ø

The lack of an effective period-end financial statement closing process.  There is no formal guidance or checklist of procedures to facilitate the accounting period end closing process.  Also, general ledger accounting reconciliations, other than cash accounts are not formally performed or documented, and in some cases, subsidiary records supporting general ledger balances are not effectively maintained.  In addition, analytical reviews of financial and operational results are not consistently performed on a formal basis or documented.

Ø	The lack of adequate board oversight has provided management the opportunity to both override the controls that governed the Company’s normal course business activities and execute transactions without necessary board approval.

Name	Age*	Position
William T. Jacobson	61	Chairman of the Board, Chief Executive Officer, President, Director
Jack Harvey	86	Director
Ronald Price	59	Director
Barbara Suveg	36	Interim Corporate Secretary

																			Non-
																			Equity
																			Incentive
																			Plan
											Stock				Option				Compen-				Non-
Name and			Salary				Bonus				Awards				Awards				sation				Qual-
Principal Position	Year		($)				($)				($)				($)				($)				ified
William Jacobson	2007		$	177,083			$	- 0 -			$	- 0 -			$	- 0 -			$	- 0 -			$	- 0 -
President, CEO (1)	2006			120,000				- 0 -				30,000				- 0 -				- 0 -				- 0 -
Robert L. Dumont	2007			124,538				- 0 -				685,000				(0	)			- 0 -				- 0 -
President, CEO (2) (3)
Ronald Price	2007			167,708				51,975				- 0 -				- 0 -				- 0 -				- 0 -
Director (Atlas),	2006			118,750				- 0 -				- 0 -				58,466				- 0 -				- 0 -
President, CEO
Nano Clay
Technologies, Inc.
Barbara Suveg	2007			132,283				- 0 -				- 0 -				- 0 -				- 0 -				- 0 -
Interim Corporate Secretary, Accountant (4)
Ronald Short	2007			121,713				- 0 -				- 0 -				- 0 -				- 0 -				- 0 -
Operations	2006			66,644				14,000				- 0 -				- 0 -				- 0 -				- 0 -
Manager
Contract Mining
Division

(1)	Mr. Jacobson was Chairman at all times during 2007, but not CEO, President, or an employee during the period from July 9, 2007 to November 30, 2007.  His employment agreement was in effect at all times.

(2)	Mr. Dumont served as President and CEO from July 9, 2007 until November 28, 2007.

(3)

Mr. Dumont entered into a three year employment agreement dated July 9, 2007.  The employment agreement called for an annual salary of $300,000, the grant of options to purchase 2.5 million shares of common stock at $2.74 per share, 1 million of which vested on the grant date, and an award of 500,000 shares of common stock, 250,000 of which vested on the award date.  No options were exercised and no certificates for the 250,000 vested shares of common stock were issued.  Mr. Dumont resigned on November 28, 2007.  We treated Mr. Dumont’s voluntary resignation as a breach of his employment agreement and we recognized no amounts for financial statement reporting purposes in accordance with SFAS 123(R) with respect to the option grants, the stock award is recorded as a liability.

(4)

Ms. Suveg entered into an employment contract dated August 8, 2007.  The employment contract called for the grant of options to purchase 250,000 shares of common stock at $2.41 per share, 100,000 of which vested on the grant date.  No options were exercised.  Ms. Suveg resigned as CFO on November 13, 2007.  We treated Ms. Suveg’s voluntary resignation as a breach of her employment agreement and we recognized no amounts for financial statement reporting purposes in accordance with SFAS 123(R) with respect to the option grants.

		Number of Securities Underlying Unexercised Options				Number of Securities Underlying Unexercised Options				Equity Incentive Plan Awards: Number of Securities Uncerlying Unexercised Unearned				Option Exercise			Option		Number of Shares or Units of Stock That Have Not				Market Value of Shares or Units of Stock That Have Not				Equity Incentive Plan Awards: Number of Shares or Units of Stock That Have Not				Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not
			(#	)			(#	)		Options				Price			Expiration		Vested				Vested				Vested				Vested
Name		Exercisable				Unexercisable					(#	)		($)			Date			(#	)		($)					(#	)		($)
William Jacobson			688,577				1,000,000				- 0 -			$	0.18		6/27/008			1,000,000			$	800,000				- 0 -			$	- 0 -
Robert Dumont (1)
Ronald Price			750,000				250,000				- 0 -			$	1.46		1/14/11			250,000				200,000				- 0 -				- 0 -
Barbara Suveg (2)
Ronald Short			N/A				N/A				N/A				N/A		N/A			N/A				N/A				N/A				N/A

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

		Number of Shares of		Percentage of Common
		Common Stock		Stock Beneficially
Name and Address (1)		Beneficially Owned (2)		Owned
William T. Jacobson (3) (4)		3,320,083		6.10%
John Harvey (4)		- 0 -		0%
Ronald R. Price (3) (4)		60,500		*
Barbara Suveg (3)		100		*
All Officers and Directors as a Group		3,390,183		6.25%
IBS Capital LLC (5)		9,689,082		17.89%
* Less than 1%

(1)

Unless otherwise indicated, the address of the persons named in this column is c/o Atlas Mining Company, P O Box 968, Osburn, Idaho 83849.

(2)

Included in this calculation are shares deemed beneficially owned by virtue of the individual's right to acquire them within 60 days of the date of this report that would be required to be reported pursuant to Rule 13d-3 of the Securities Exchange Act of 1934.

(3)

Executive Officer.

(4)

Director.

(5)

IBS Capital LLC, Two International Place, 24th Floor, Boston, Massachusetts 02110, is the beneficial owner of shares held by funds it manages by virtue of the right to vote and dispose of the securities.  One fund, the IBS Turnaournd Fund (QP) (A Limited Partnership), owned 11.56% of outstanding shares at December 31, 2007.

						Chisholm,								Chisholm,
		PMB Helin				Bierwolf and				PMB Helin				Bierwolf and
		Donovan LLC				Nilson, LLC				Donovan LLC				Nilson, LLC
		December 31, 2007				December 31, 2006				December 31, 2006				December 31, 2006
Audit Fees (1)		$	48,912			$	9,608			$	139,375			$	48,537
Audit-Related Fees			- 0 -				- 0 -				- 0 -				- 0 -
Tax Fees (2)			- 0 -				- 0 -				- 0 -				- 0 -
All Other Fees (3)			- 0 -				- 0 -				- 0 -				- 0 -
Total		$	48,912			$	9,608			$	139,375			$	48,537

(1)

Fees for audit services billed or expected to be billed relating to fiscal 2007 consisted of (a) audit of our financial statements, (b) reviews of our quarterly financial statements, statutory and regulatory audits, consents and other services related to SEC matters, (c) audit of our internal control over financial reporting with the objective of obtaining reasonable assurance about whether effective control over financial reporting was maintained in all material respects, and (d) attestation of management’s assessment of internal control, as required by the Sarbanes-Oxley Act of 2002, Section 404.  These fees were pre-approved by the Board of Directors.

(2)	Tax fees represent the aggregate fees paid for professional services, principally including fees for tax compliance and tax advice.

(3)

All other fees represent the aggregate fees paid for products and services that are not included in the “Audit fees,” “Audi-related fees,” and “Tax fees” sections.  The Board of Directors has considered whether the provision of non-audit services is compatible with maintaining the principal registered public accounting firm’s independence.

	Page
Report of Independent Registered Public Accounting Firm	F-1
Financial Statements:
Consolidated Balance Sheets as of December 31, 2007 and 2006 (restated)	F-2 – F-3
Consolidated Statement of Operations and Comprehensive Loss for Years Ended December 31, 2007 and 2006 (restated)	F-4 – F-5
Consolidated Statement of Shareholders’ Equity for the Years Ended December 31, 2007 and 2006 (restated)	F-6
Consolidated Statement of Cash Flows for Years Ended December 31, 2007 and 2006 (restated)	F-7 – F-8
Notes to Consolidated Financial Statements	F-9– F-43

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ATLAS MINING COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
		December 31,				December 31,
		2007				2006
						Restated
Current Assets
Cash and cash equivalents		$	1,210,621			$	217,102
Accounts receivable (net of allowance of $0)			911,710				876,355
Accounts receivable – related party			1,618				11,139
Investments – available for sale			4,886				3,794
Advances			1,054				618
Mining supplies			40,544				2,000
Deposits and prepaids			396,217				169,623
Total Current Assets			2,566,650				1,280,631
Property and Equipment
Land and tunnels			1,062,499				1,076,299
Land improvements			91,835				83,987
Buildings			551,383				291,214
Mining equipment			1,485,936				972,060
Milling equipment			886,982				586,979
Laboratory equipment			75,968				74,174
Office furniture and equipment			37,962				1,300
Vehicles			236,530				150,952
Less:  Accumulated depreciation			(724,102	)			(408,145	)
Total Property and Equipment			3,704,993				2,828,820
TOTAL ASSETS		$	6,271,643			$	4,109,451
The accompanying notes are an integral part of these consolidated financial statements.

ATLAS MINING COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
		December 31,				December 31,
		2007				2006
						Restated
Current Liabilities
Accounts payable and accrued liabilities		$	803,752			$	486,973
Stock awards payable			280,000				- 0 -
Current portion of notes payable			111,571				123,588
Current portion of leases payable			153,064				141,816
Total Current Liabilities			1,348,387				752,377
Long-Term Liabilities
Long-term portion of notes payable			9,481				39,035
Long-term portion of leases payable			344,356				90,446
Total Long-Term Liabilities			353,837				129,481
TOTAL LIABILITIES			1,702,224				881,858
Commitments and Contingencies
Minority Interest			52,415				52,415
Stockholders’ Equity
Preferred stock, $1.00 par value, 10,000,000
shares authorized, noncumulative, nonvoting,
nonconvertible, none issued or outstanding			- 0 -				- 0 -
Common stock, no par value, 60,000,000
shares authorized, 54,173,594 and
51,278,334 shares issued and outstanding
at December 31, 2007 and 2006, respectively			19,108,111				16,087,361
Accumulated deficit			(14,589,101	)			(12,907,385	)
Accumulated other comprehensive loss			(2,006	)			(4,798	)
Total Stockholders’ Equity			4,517,004				3,175,178
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY		$	6,271,643			$	4,109,451
The accompanying notes are an integral part of these consolidated financial statements.