Texas Mineral Resources (TMRC) 10-Q 14 Jan 16 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Nov. 30, 2015	Jan. 11, 2016
Document And Entity Information
Entity Registrant Name	Texas Rare Earth Resources Corp.
Entity Central Index Key	1,445,942
Document Type	10-Q
Document Period End Date	Nov. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--08-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		45,115,516
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2,016

BALANCE SHEETS

BALANCE SHEETS - USD ($)	Nov. 30, 2015	Aug. 31, 2015
CURRENT ASSETS
Cash and cash equivalents	$ 563,267	$ 2,938
Prepaid expenses and other current assets	35,841	27,420
Total current assets	599,108	30,358
Property and equipment, net	39,171	47,352
Mineral properties	1,753,447	1,738,447
Deposits	29,710	29,710
TOTAL ASSETS	2,421,436	1,845,867
CURRENT LIABILITIES
Accounts payable and accrued liabilities	244,134	127,172
Accounts payable - related party	242,296	111,064
Current portion of note payable	370,845	370,845
Total current liabilities	$ 857,275	$ 609,081
Note payable - net of current portion and discount
Total liabilities	$ 857,275	$ 609,081
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS EQUITY
Preferred stock, par value $0.001; 10,000,000 shares authorized, no shares issued and outstanding as of November 30, 2015 and August 31, 2015, respectively
Common stock, par value $0.01; 100,000,000 shares authorized, 41,368,015 and 41,368,015 shares issued and outstanding as of November 30, 2015 and August 31, 2015, respectively	$ 413,681	$ 413,681
Additional paid-in capital	32,715,902	32,106,023
Accumulated deficit	(31,565,422)	(31,282,918)
Total shareholders equity	1,564,161	1,236,786
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY	$ 2,421,436	$ 1,845,867

BALANCE SHEETS (Parenthetical)

BALANCE SHEETS (Parenthetical) - $ / shares	Nov. 30, 2015	Aug. 31, 2015
BALANCE SHEETS [Abstract]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	41,368,015	41,368,015
Common stock, shares outstanding	41,368,015	41,368,015

STATEMENTS OF OPERATIONS

STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended
	Nov. 30, 2015	Nov. 30, 2014
OPERATING EXPENSES
Exploration costs	$ 4,848	$ 66,074
General and administrative expenses	273,308	307,719
Total operating expenses	278,156	373,793
LOSS FROM OPERATIONS	(278,156)	(373,793)
OTHER INCOME (EXPENSE)
Interest and other income	55	206
Interest and other expense	(4,403)	(3,750)
Total other income (expense)	(4,348)	(3,544)
NET LOSS	$ (282,504)	$ (377,337)
Net loss per share:
Basic and diluted net loss per share	$ (0.01)	$ (0.01)
Weighted average shares outstanding:
Basic and diluted	41,368,015	37,036,916

STATEMENTS OF CASH FLOWS

STATEMENTS OF CASH FLOWS - USD ($)	3 Months Ended
	Nov. 30, 2015	Nov. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (282,504)	$ (377,337)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense	8,181	10,282
Stock based compensation	47,879	47,880
Changes in current assets and liabilities:
Prepaid expenses and other assets	(8,421)	35,251
Accounts payable and accrued expenses	116,962	$ (30,963)
Accounts payable related party	131,232
Net cash provided by (used in) operating activities	13,329	$ (314,887)
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in mineral properties	$ (15,000)	$ (15,160)
Purchase of fixed assets
Net cash provided by (used in) investing activities	$ (15,000)	$ (15,160)
CASH FLOWS FROM FINANCING ACTIVITIES
Units subscribed	562,000
Net cash provided by (used in) financing activities	562,000
NET CHANGE IN CASH AND CASH EQUIVALENTS	560,329	$ (330,047)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	2,938	387,841
CASH AND CASH EQUIVALENTS, END OF PERIOD	563,267	$ 57,794
SUPPLEMENTAL INFORMATION
Interest paid	$ 4,404
Taxes paid

BASIS OF PRESENTATION

BASIS OF PRESENTATION	3 Months Ended
	Nov. 30, 2015
BASIS OF PRESENTATION [Abstract]
BASIS OF PRESENTATION	NOTE 1 – BASIS OF PRESENTATION The accompanying unaudited interim financial statements of Texas Rare Earth Resources Corp. (“we”, “us”, “our”, the “Corporation”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in our annual report on Form 10-K, for the year ended August 31, 2015, dated November 30, 2015 as filed with the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year ended August 31, 2015 as reported in our annual report on Form 10-K, have been omitted. The financial statements have been prepared on a going concern basis which assumes the Company will not be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred losses since inception resulting in an accumulated deficit of $ 31,565,422

MINERAL PROPERTIES

MINERAL PROPERTIES	3 Months Ended
	Nov. 30, 2015
MINERAL PROPERTIES [Abstract]
MINERAL PROPERTIES	NOTE 2 – MINERAL PROPERTIES September 2011 Lease On September 2, 2011, we entered into a new mining lease with the Texas General Land Office covering Sections 7 and 18 of Township 7, Block 71 and Section 12 of Block 72, covering approximately 860 acres at Round Top Mountain in Hudspeth County, Texas. The mining lease issued by the Texas General Land Office gives us the right to explore, produce, develop, mine, extract, mill, remove, and market beryllium, uranium, rare earth elements, all other base and precious metals, industrial minerals and construction materials and all other minerals excluding oil, gas, coal, lignite, sulfur, salt, and potash. The term of the lease is nineteen years so long as minerals are produced in paying quantities. Under the lease, we will pay the State of Texas a lease bonus of $ 142,518 44,718 97,800 500,000 Thereafter, we will pay the State of Texas a production royalty equal to eight percent ( 8 61/4 Thereafter, assuming production of paying quantities has not been obtained, we may pay additional delay rental fees to extend the term of the lease for successive one (1) year periods pursuant to the following schedule: Per Acre Amount Total Amount September 2, 2013 – 2014 $ 50 $ 44,718 September 2, 2015 – 2019 $ 75 $ 67,077 September 2, 2020 – 2024 $ 150 $ 134,155 September 2, 2025 – 2029 $ 200 $ 178,873 In August 2015, we paid a delay rental to the State of Texas in the amount of $ 67,077 November 2011 Lease On November 1, 2011, we entered into a mining lease with the State of Texas covering 90 acres, more or less, of land that we purchased in September 2011 near our Round Top site. The deed was recorded with Hudspeth County on September 16, 2011. Under the lease, we paid the State of Texas a lease bonus of $ 20,700 50,000 8 6 1/4 If production of paying quantities of minerals has not been obtained on or before November 1, 2012, we may pay the State of Texas a delay rental to extend the term of the lease in an amount equal to $ 4,500 Per Acre Amount Total Amount November 1, 2013-2014 $ 50 $ 4,500 November 1, 2015 – 2019 $ 75 $ 6,750 November 1, 2020 – 2024 $ 150 $ 13,500 November 1, 2025 – 2029 $ 200 $ 18,000 In August 2015, we paid a delay rental to the State of Texas of $ 6,750 March 2013 Lease On March 6, 2013, we entered into a lease assignment (the “Lease Assignment Agreement”) with Southwest Range & Wildlife Foundation, Inc., a Texas non-profit corporation (the “Foundation”), pursuant to which the Foundation agreed to assign to us a surface lease identified with the State of Texas as Surface Lease SL20040002 (the “West 500,000 1,063,830 0.01 45,000 October 2014 Surface Option In October 2014, we executed an agreement with the Texas General Land Office securing the option to purchase the surface rights covering the potential Round Top project mine and plant areas. The option to purchase the surface rights covers approximately 5,670 acres over the mining lease and the additional acreage adequate to site all potential heap leaching and processing operations as currently anticipated by the Company. We may exercise the option for all or part of the option acreage at any time during the sixteen year primary term of the mineral lease. The option can be kept current by an annual payment of $ 10,000

NOTE PAYABLE

NOTE PAYABLE	3 Months Ended
	Nov. 30, 2015
NOTE PAYABLE [Abstract]
NOTE PAYABLE	NOTE 3 – NOTE PAYABLE In relation to the Foundation lease discussed in Note 2 the Company recorded a note payable for an amount for the initial $ 45,000 9 45,000 5 364,852 On August 26, 2015 we issued promissory notes to two individuals for $ 40,000 80,000 80,000 0.20 56,766 23,234 1.49 198 0.00 five

SHAREHOLDERS' EQUITY

SHAREHOLDERS' EQUITY	3 Months Ended
	Nov. 30, 2015
SHAREHOLDERS EQUITY [Abstract]
SHAREHOLDERS' EQUITY	NOTE 4 – SHAREHOLDERS' EQUITY Capital Stock Our authorized capital stock consists of 100,000,000 0.01 10,000,000 0.001 All shares of common stock have equal voting rights and, when validly issued and outstanding, are entitled to one non-cumulative vote per share in all matters to be voted upon by shareholders. The shares of common stock have no pre-emptive, subscription, conversion or redemption rights and may be issued only as fully paid and non-assessable shares. Holders of the common stock are entitled to equal ratable rights to dividends and distributions with respect to the common stock, as may be declared by our Board of Directors (our “Board”) out of funds legally available. In the event of a liquidation, dissolution or winding up of the affairs of the Corporation, the holders of common stock are entitled to share ratably in all assets remaining available for distribution to them after payment or provision for all liabilities and any preferential liquidation rights of any preferred stock then outstanding. We have 41,368,015 During the period ended November 30, 2015 the Company received $ 562,000

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	3 Months Ended
	Nov. 30, 2015
RELATED PARTY TRANSACTIONS [Abstract]
RELATED PARTY TRANSACTIONS	NOTE 5 – RELATED PARTY TRANSACTIONS The Company had accounts payable to related parties in the amount of $ 242,296 The Company rents office space on a month to month basis of $ 1,600

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	3 Months Ended
	Nov. 30, 2015
SUBSEQUENT EVENTS [Abstract]
SUBSEQUENT EVENTS	NOTE 6 – SUBSEQUENT EVENTS On December 7, 2015, we closed a private placement (the “ Offering Units ”) Subscriber Subscribers 659,500 0.01 Common Share Warrant one Warrant Share 0.35 In connection with the Offering, we entered into Subscription Agreements (collectively, the “ Subscription Agreements 3,297,500 0.20 The sale and issuance of the Units, the Common Shares, the Warrants and the Warrant Shares issuable upon the conversion or exercise therein were issued or will be issued pursuant to the exemption from registration under the U.S. Securities Act of 1933, as amended, in reliance on Section 4(a)(2) thereof and Rule 506 of Regulation D promulgated thereunder as a transaction by an issuer not involving a public offering, in which the investors are accredited and have acquired the securities for investment purposes only and not with a view to or for sale in connection with any distribution thereof. Such securities may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Note Settlement Agreements In connection with our offering of Units, on December 7, 2015, we entered into two separate note settlement agreements with Leo E Mindel Non-GST Exempt Family Trust and Sunny Mindel (collectively, the “ Holders Note Settlement Agreements 40,000 November 24, 2015 Note 200,000 Settlement Agreement In connection with the offering of Units, on December 7, 2015, we entered into a settlement agreement (the “ Settlement Agreement Southwest Lease Agreement 45,000 45,000 10,000 50,000 Incentive Stock Options On January 8, 2016, the Compensation Committee awarded incentive stock options to members of the board to purchase shares of the Company's common stock ranging from 5,000 250,000 0.20 he Committee also repriced all outstanding management and Board of Director stock options to $0.20 per share.

MINERAL PROPERTIES (Tables)

MINERAL PROPERTIES (Tables)	3 Months Ended
	Nov. 30, 2015
Lease One [Member]
Schedule of Future Minimum Lease Payments	Per Acre Amount Total Amount September 2, 2013 – 2014 $ 50 $ 44,718 September 2, 2015 – 2019 $ 75 $ 67,077 September 2, 2020 – 2024 $ 150 $ 134,155 September 2, 2025 – 2029 $ 200 $ 178,873
Lease Two [Member]
Schedule of Future Minimum Lease Payments	Per Acre Amount Total Amount November 1, 2013-2014 $ 50 $ 4,500 November 1, 2015 – 2019 $ 75 $ 6,750 November 1, 2020 – 2024 $ 150 $ 13,500 November 1, 2025 – 2029 $ 200 $ 18,000

BASIS OF PRESENTATION (Details)

BASIS OF PRESENTATION (Details) - USD ($)	Nov. 30, 2015	Aug. 31, 2015
BASIS OF PRESENTATION [Abstract]
Accumulated deficit	$ (31,565,422)	$ (31,282,918)

MINERAL PROPERTIES (Narrative)

MINERAL PROPERTIES (Narrative) (Details) - USD ($)	1 Months Ended
	Aug. 31, 2015	Oct. 31, 2014	Mar. 06, 2013	Nov. 01, 2011	Sep. 02, 2011	Nov. 30, 2015
Common stock, par value	$ 0.01					$ 0.01
Surface Lease [Member] | Lease Contracts [Member]
Periodic payment		$ 10,000
Texas General Land Office - Hudspeth County, TX [Member] | September 2011 Mineral Properties Lease [Member]
Lease bonus					$ 142,518
Lease bonus paid					44,718
Lease bonus due upon filing of supplemental plan of operations to conduct mining					97,800
Minimum advance royalty due upon sale of minerals					$ 500,000
Production royalty of market value of uranium and fissionable materials					8.00%
Production royalty of market value of other minerals					6.25%
Delay rental paid	$ 67,077
State of Texas - Hudspeth County, TX [Member] | November 2011 Mineral Properties Lease [Member]
Lease bonus paid				$ 20,700
Minimum advance royalty due upon sale of minerals				$ 50,000
Production royalty of market value of uranium and fissionable materials				8.00%
Production royalty of market value of other minerals				6.25%
Delay rental paid	$ 6,750
State of Texas - Hudspeth County, TX [Member] | November 2011 Mineral Properties Lease [Member] | Lease Contracts [Member]
Periodic payment				$ 4,500
Southwest Range and Wildlife Foundation, Inc. [Member] | Surface Lease [Member]
Cash paid for lease assignment			$ 500,000
Shares issued for lease			1,063,830
Common stock, par value			$ 0.01
Southwest Range and Wildlife Foundation, Inc. [Member] | Surface Lease [Member] | Lease Contracts [Member]
Periodic payment			$ 45,000

MINERAL PROPERTIES (Schedule of

MINERAL PROPERTIES (Schedule of Future Minimum Lease Payments) (Details)	Nov. 30, 2015USD ($)
September 2, 2013 - 2014 [Member]
Per Acre Amount	$ 50
Total Lease Amount	44,718
September 2, 2015 - 2019 [Member]
Per Acre Amount	75
Total Lease Amount	67,077
September 2, 2020 - 2024 [Member]
Per Acre Amount	150
Total Lease Amount	134,155
September 2, 2025 - 2029 [Member]
Per Acre Amount	200
Total Lease Amount	178,873
November 1, 2013 - 2014 [Member]
Per Acre Amount	50
Total Lease Amount	4,500
November 1, 2015 - 2019 [Member]
Per Acre Amount	75
Total Lease Amount	6,750
November 1, 2020 - 2024 [Member]
Per Acre Amount	150
Total Lease Amount	13,500
November 1, 2025 - 2029 [Member]
Per Acre Amount	200
Total Lease Amount	$ 18,000

NOTE PAYABLE (Details)

NOTE PAYABLE (Details) - USD ($)	1 Months Ended	3 Months Ended
	Aug. 31, 2015	Nov. 30, 2015
Debt Instrument [Line Items]
Current portion of note payable	$ 370,845	$ 370,845
Note payable - net of current portion and discount
Proceeds from loan payable	$ 80,000
Foundation Lease Note [Member]
Debt Instrument [Line Items]
Periodic payment		$ 45,000
Interest rate		5.00%
Note payable face amount		$ 364,852
Debt term		9 years
Foundation Lease Note [Member] | Defaulted Debt [Member]
Debt Instrument [Line Items]
Periodic payment		$ 45,000
Promissory Note One [Member]
Debt Instrument [Line Items]
Maturity date	Nov. 24, 2015
Proceeds from loan payable	$ 40,000
Promissory Note Two [Member]
Debt Instrument [Line Items]
Maturity date	Nov. 24, 2015
Proceeds from loan payable	$ 40,000
Promissory Notes [Member]
Debt Instrument [Line Items]
Number of shares called by warrants	80,000
Warrants, exercise price	$ 0.20
Fair value of debt	$ 56,766
Fair value of warrants, recorded in APIC	$ 23,234
Expected life	5 years
Expected volatility	198.00%
Risk-free interest rate	1.49%
Expected dividend yield	0.00%

SHAREHOLDERS' EQUITY (Details)

SHAREHOLDERS' EQUITY (Details) - USD ($)	3 Months Ended
	Nov. 30, 2015	Aug. 31, 2015
SHAREHOLDERS EQUITY [Abstract]
Common stock, shares authorized	100,000,000	100,000,000
Common stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, par value	$ 0.001	$ 0.001
Common stock, shares outstanding	41,368,015	41,368,015
Proceeds from private placement	$ 562,000

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details) - USD ($)	3 Months Ended
	Nov. 30, 2015	Aug. 31, 2015
RELATED PARTY TRANSACTIONS [Abstract]
Accounts payable - related party	$ 242,296	$ 111,064
Monthly rent paid to director	$ 1,600

SUBSEQUENT EVENTS (Details)

SUBSEQUENT EVENTS (Details) - USD ($)	Dec. 07, 2015	Jan. 14, 2016	Jan. 08, 2016	Nov. 30, 2015	Aug. 31, 2015
Subsequent Event [Line Items]
Proceeds from private placement				$ 562,000
Common stock, par value				$ 0.01	$ 0.01
Subsequent Event [Member]
Subsequent Event [Line Items]
Proceeds from private placement	$ 659,500
Common stock, par value	$ 0.01
Warrants per unit	1
Warrants, exercise price	$ 0.35
Note amount	$ 40,000
Exercise price of options granted			$ 0.20
Subsequent Event [Member] | Lower Range [Member]
Subsequent Event [Line Items]
Options granted			5,000
Subsequent Event [Member] | Upper Range [Member]
Subsequent Event [Line Items]
Options granted			250,000
Subsequent Event [Member] | Lease Contracts [Member]
Subsequent Event [Line Items]
Number of shares called by warrants	50,000
Note amount	$ 10,000
Periodic payment	$ 45,000
Subsequent Event [Member] | Subscription Agreement [Member]
Subsequent Event [Line Items]
Number of shares called by warrants	3,297,500
Warrants per unit	200,000
Warrants, exercise price	$ 0.20
Maturity date	Nov. 24, 2015
Subsequent Event [Member] | Subscription Agreement [Member] | Defaulted Debt [Member]
Subsequent Event [Line Items]
Periodic payment		$ 45,000