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EX-31 - Texas Mineral Resources Corp.ex31-1.htm
EX-32 - Texas Mineral Resources Corp.ex32-1.htm
EX-32 - Texas Mineral Resources Corp.ex32-2.htm
EX-31 - Texas Mineral Resources Corp.ex31-2.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
100 F Street NE
Washington, D.C. 20549
 
FORM 10-Q/A

(Amendment #2)
 
[X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended February 28, 2011
 
OR
 
[  ]
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from ________ to ________
 
Commission File Number: 0-53482
 
Texas Rare Earth Resources Corp.
(Exact name of registrant as specified in its charter)
 
Nevada, United States
87-0294969
(State or other jurisdiction of incorporation or organization) (IRS Employer Identification Number)
 
304 Inverness Way South, Suite 365, Englewood, Colorado 80112
(Address of principal executive offices)
 
(303) 597-8737
(Issuer’s telephone number)
 
3 Riverway, Suite 1800, Houston, Texas 77056
(Former Address of principal executive offices)


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 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 [X ] 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 [X]
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one).

Large accelerated filer  [  ]
Accelerated filer  [  ]
Non-accelerated filer  [  ]
Smaller reporting company  [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [ ]  No [X]

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of June 20, 2011, the registrant had 34,455,009 shares of common stock, par value $0.01per share, outstanding.

 
 

 
Explanatory Note
 
On November 1, 2010, the Company entered into a 24 month institutional public relations retainer agreement with Sunrise Securities Corp (“Sunrise”) for variously described services over a two year period as described in Note 4 to the Financial Statements.   Pursuant to the agreement, the Company issued Sunrise five-year options to purchase 250,000 shares at $1.60 per share and 250,000 shares at $5.00 per share, the fair value of which on the measurement date was determined by management to be $960,000.  The Company has measured the options issued to Sunrise in accordance with ASC 505-50-30-14 & 15.  The Company has determined the measurement date of these options to be at the beginning of the agreement.  The Company is filing amendment #2 to this Form 10-Q to reflect that the issuance of these options should be recognized as an immediate expense during the six months ended February 28, 2011 consistent with ASC 505-50-25. 
 
Additionally as described in Note 4 to the Financial Statements, on February 16, 2011, the Company entered into a director’s agreement whereby the director received an option to purchase 60,000 of the Company’s common stock, exercisable upon the date of grant.  The Company is amending this filing to reflect the entire fair value of $150,000 as an immediate expense for the three month period ending February 28, 2011 in accordance with FASB ASC 718.
 
See Note 7 to the Financial Statements.









 
 
 

 
Table of Contents

     
 
Part I
Page
     
Item 1
Financial Statements (restated)
4
Item 2
Management’s Discussion and Analysis of Financial Condition and Results of Operations
14
Item 3
Quantitative and Qualitative Disclosures About Market Risk
17
Item 4
Controls and Procedures
17
     
 
Part II
 
Item 1
Legal Proceedings
19
Item 2
Unregistered Sales of Equity Securities and Use of Proceeds
19
Item 3
Defaults upon Senior Securities
20
Item 4
(Removed and Reserved)
20
Item 5
Other Information
20
Item 6
Exhibits
20
     
Signatures
21




 
 
 
 

 
Texas Rare Earth Resources Corp
 
(Formerly Standard Silver Corporation)
 
BALANCE SHEETS
 
             
   
February 28, 2011
   
August 31, 2010
 
   
(Unaudited)
(Restated)
       
ASSETS
           
             
CURRENT ASSETS
           
Cash & cash equivalents
  $ 4,076,014     $ 74,434  
Prepaid expenses and other current assets
    14,775       -  
Total current assets
    4,090,789       74,434  
                 
Property and equipment, net
    24,093       26,559  
Mineral properties
    55,075       44,539  
                 
TOTAL ASSETS
  $ 4,169,957     $ 145,532  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY
               
                 
CURRENT LIABILITIES
               
    Accounts payable and accrued liabilities
  $ 71,115     $ 20,624  
    Notes and interest payable to related parties
    -       90,448  
   Total current liabilities
    71,115       111,072  
                 
COMMITMENTS AND CONTINGENCIES
               
                 
SHAREHOLDERS' EQUITY
               
Preferred stock, par value $0.001; 10,000,000 shares authorized, no
               
      shares issued and outstanding as of February 28, 2011 and
               
      August 31, 2010
    -       -  
Common stock, par value $0.01; 100,000,000 shares authorized,
               
   27,581,260 and 23,670,260 issued and outstanding as of
               
   February 28, 2011 and August 31, 2010, respectively
    275,813       236,703  
   Additional paid-in capital
    6,782,494       1,220,391  
   Accumulated deficit
    (2,959,465 )     (1,422,634
   Total shareholders' equity
    4,098,842       34,460  
                 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
  $ 4,169,957     $ 145,532  
                 
The accompanying notes are an integral part of these financial statements.
 

 
-4-

 
TEXAS RARE EARTH RESOURCES CORP
 
(Formerly Standard Silver Corporation)
 
UNAUDITED STATEMENTS OF OPERATIONS
 
                         
   
Six Months ended February 28,
   
Three Months ended February 28,
 
   
(Restated)
2011
   
2010
   
(Restated)
2011
   
2010
 
                         
OPERATING EXPENSES
                       
   Exploration costs
  $ 118,818     $ 30,000     $ 71,723     $ 18,000  
   General & administrative expenses
    1,420,176       347,933       397,541       300,881  
                                 
Total operating expenses
    1,538,994       377,933       469,264       318,881  
                                 
LOSS FROM OPERATIONS
    (1,538,994 )     (377,933 )     (469,264 )     (318,881
                                 
OTHER (INCOME) EXPENSE
                               
Interest and other income
    (3,339 )     (66 )     (2,562 )     (32
Interest expense
    1,176       6,842       441       4,816  
                                 
Total other (income) expense
    (2,163 )     6,776       (2,121 )     4,784  
                                 
NET LOSS
  $ (1,536,831 )   $ (384,709 )   $ (467,143 )   $ (323,665
                                 
Net loss per share:
                               
    Basic and diluted net loss per share
  $ (0.06 )   $ (0.02 )   $ (0.02 )   $ (0.01
                                 
Weighted average shares outstanding:
                               
   Basic and diluted
    24,973,926       23,251,835       25,756,090       23,400,121  
                                 
The accompanying notes are an integral part of these financial statements.
 
 
 
-5-

 
Texas Rare Earth Resources Corp
(formerly Standard Siver Corporation)
UNAUDITED STATEMENT OF STOCKHOLDERS' EQUITY
For the six months ended February 28, 2011
                                           
                           
Additional
             
   
Preferred stock
   
Common Stock
   
Paid-in
   
Accumulated
       
   
Shares
   
Amount
   
Shares
   
Amount
   
Capital
   
Deficit
   
Total
 
                                           
Balance at August 31, 2010 - Audited
    -     $ -       23,670,260     $ 236,703     $ 1,220,391     $ (1,422,634 )   $ 34,460  
                                                         
Shares issued for services recognized in
                                                       
  prior period
    -       -       61,000       610       (610 )     -       -  
                                                         
Common stock issued for prior period proceeds
              131,250       1,313       (1,313 )     -       -  
                                                         
Shares issued for prior period compensation
    -       -       300,000       3,000       (3,000 )     -       -  
                                                         
Shares issued for services (Sunrise Securities)
    -       -       30,000       300       38,250       -       38,550  
                                                         
Option expense related to services (restated)
    -       -       -       -       1,110,000       -       1,110,000  
                                                         
Common stock issued for cash
                    3,388,750       33,887       4,801,926       -       4,835,813  
                                                         
Cash paid for placement fees
    -       -       -               (383,150 )     -       (383,150 )
                                                         
Net Loss (restated)
    -       -       -       -       -       (1,536,831 )     (1,536,831 )
                                                         
                                                         
Balance at February 28, 2011
    -     $ -       27,581,260     $ 275,813     $ 6,782,494     $ (2,959,465 )   $ 4,098,842  
                                                         
The accompanying notes are an integral part of these financial statements
 
 
-6-

 
 
TEXAS RARE EARTH RESOURCES CORP
 
(Formerly Standard Silver Corporation)
 
UNAUDITED STATEMENTS OF CASH FLOWS
 
             
   
Six Months Ended February 28,
 
   
(Restated)
2011
   
2010
 
             
CASH FLOWS FROM OPERATING ACTIVITIES
       
Net loss
 
$
(1,536,831
)
 
$
(384,709
)
Adjustment to reconcile net loss to net cash
               
   used in operating activities:
               
Stock based compensation
   
1,148,550
     
262,500
 
Depreciation expense
   
2,466
     
1,362
 
Changes in current assets and liabilities:
               
Prepaid expenses
   
(14,775
)
   
-
 
Accounts payable and accrued expenses
   
33,043
     
4,944
 
Net cash used in operating activities
   
(367,547
)
   
(115,903
)
                 
CASH FLOWS FROM INVESTING ACTIVITIES
               
 Investment in mineral properties
   
(10,536
)
   
(2,418
)
 Purchase of  fixed assets
   
-
     
(28,329
)
Net cash used in investing activities
   
(10,536
)
   
(30,747
)
                 
CASH FLOWS FROM FINANCING ACTIVITIES
               
Proceeds from sale of common stock and exercise of warrants
   
4,835,813
     
322,500
 
Commissions paid
   
(383,150
)
   
-
 
Repayment of notes payable to related parties
   
(73,000
)
   
-
 
Net cash provided by financing activities
   
4,379,663
     
322,500
 
NET CHANGE IN CASH
   
4,001,580
     
175,850
 
CASH, BEGINNING OF PERIOD
   
74,434
     
-
 
CASH, END OF PERIOD
 
$
4,076,014
   
$
175,850
 
                 
                 
SUPPLEMENTAL INFORMATION
               
    Interest paid
 
$
18,846
   
$
-
 
    Taxes paid
 
$
-
   
$
-
 
    Issuance of 131,250 shares of common stock for cash previously received
 
$
1,313
   
$
-
 
    Issuance of 61,000 shares of common stock for services previously recorded
 
$
610
   
$
-
 
Issuance of 300,000 shares of common stock for director compensation
         
      previously recorded
 
$
3,000
   
$
-
 
                 
The accompanying notes are an integral part of these financial statements.
 

 
-7-

 
Texas Rare Earth Resources Corp
(formerly Standard Silver Corporation)
Notes to Interim Financial Statements
February 28, 2011
(Unaudited)

NOTE 1 – SUMMARY OF ACCOUNTING POLICIES

The accompanying unaudited interim financial statements of Texas Rare Earth Resources Corp. (the "Company") (formerly Standard Silver 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 the Company's Form 10-K, dated August 31, 2010, 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 August 31, 2010 as reported in Form 10-K, have been omitted.

NOTE 2 – RELATED PARTY TRANSACTIONS

The Company had periodically received cash advances from the Company’s officers and relatives of the Company’s officers to fund operations.  The advances accrued interest at rates ranging from five percent (5%) to six percent (6%) per annum. In December 2010, the notes payable principal balance of $73,000 plus accrued interest for these advances was paid in full.

NOTE 3 – INVESTMENTS

In August 2010, we entered into a 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 twenty years so long as minerals are produced in paying quantities.

Under the lease, we will pay the State of Texas a lease bonus of $197,800, $35,000 of which was paid upon the execution of the lease, $65,000 of which will be due when we submit our initial plan of operations to conduct exploration, and $97,800 of which will be due when we submit a supplemental plan of operations to conduct mining.  Upon the sale of minerals removed from Round Top, we will pay the State of Texas a $500,000 minimum advance royalty.  Thereafter, we will pay the State of Texas a production royalty equal to eight percent (8%) of the market value of uranium and other fissionable materials removed and sold from Round Top and six and one quarter percent (6 ¼%) of the market value of all other minerals removed and sold from Round Top.

If production of paying quantities of minerals has not been obtained on or before August 17, 2011, we may pay the State of Texas a delay rental to extend the term of the lease in an amount equal to $44,718.  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
 
August 17, 2012 – 2014
 
$
50
   
$
44,718
 
August 17, 2015 – 2019
 
$
75
   
$
67,077
 
August 17, 2019 – 2024
 
$
150
   
$
134,155
 
August 17, 2025 – 2029
 
$
200
   
$
178,873
 
 
 
-8-

 
NOTE 4 – CAPITAL STOCK

The Company’s authorized capital stock consists of 100,000,000 shares of common stock, with a par value of $0.01 per share, and 10,000,000 preferred shares with a par value of $0.001 per share.

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 the Board of Directors out of funds legally available.  In the event of a liquidation, dissolution or winding up of the affairs of the Company, 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.

The Company received cash proceeds from the sale of its common stock and the exercise of Class A Warrants and Class B Warrants to purchase common stock during the six months ended February 28, 2011 as follows:

Description
Shares of Common Stock Issued
Cash Proceeds Received
2009-2010 Private Placement (issuances occurred in quarter ended November 30, 2010)(1)
 
 
1,132,500
 
 
$453,000
Exercise of Class A & B Warrants issued in connection with 2009 – 2010 Private Placement (issuances occurred in quarter ended February 28, 2011)(1)
 
 
 
656,250
 
 
 
382,813
January 2011 Private Placement (issuance occurred in quarter ended February 28, 2011)(2)
 
 
1,600,000
 
 
4,000,000
Total shares of common stock issued and cash proceeds received from sale of common stock and from the exercise of Class A & B Warrants during the six months ended February 28, 2011(3)
 
 
 
 
3,388,750
 
 
 
 
$4,835,813

(1) See “2009-2010 Private Placement” below.
(2) See “January 2011 Private Placement” below.
(3) Does not include an aggregate of 391,000 shares of common stock issued for services rendered during the six months ended February 28, 2011.  See “Other Equity Issues” below.

2009 – 2010 Private Placement

Between October 2009 and November 2010, the Company raised cash proceeds of $905,500 through the issuance of 2,263,750 shares of common stock and the issuance of Class A Warrants to purchase 2,263,750 shares of common stock and Class B Warrants to purchase 1,131,875 shares of common stock.  Of the $905,500 cash proceeds raised for this private placement, $452,500 was raised prior to September 1, 2010 and $453,000, representing the sale of 1,132,500 shares of common stock, was raised in September through November 2010. The final closing of this private placement was January 10, 2011.

During the six months ended February 2011, the Company issued 131,250 shares to two investors in connection with our 2009 – 2010 Private Placement that were paid for in a prior period.

In January 2011, Class A Warrants to purchase 62,500 shares of the Company’s common stock and Class B warrants to purchase 31,250 shares of the Company’s common stock were exercised by an investor, resulting in $31,250 of proceeds being raised by the Company for the Class A warrants and $23,438 of proceeds being raised by the Company for the Class B Warrants.  Total proceeds to the Company as a result of the Class A and Class B Warrant exercise was $54,688.  In February 2011, Class A Warrants to purchase 375,000 shares of the Company’s common stock and Class B Warrants to purchase 187,500 shares of the Company’s common stock were exercised by an investor, resulting in $187,500 of proceeds being raised by the Company for the Class A Warrants and $140,625 of proceeds being raised by the Company for the Class B Warrants. Total proceeds to the Company as a result of the Class A and Class B Warrant exercise was $328,125.  The shares of common stock issued upon exercise of the  Class A and Class B Warrants by these two investors was 437,500 and 218,750, respectively (a total of 656,250 shares of common stock), resulting in $382,813 of total cash proceeds to the Company.

 
-9-

 
January 2011 Private Placement

Between January and February 2011, we entered into a series of transactions with accredited investors pursuant to which we sold an aggregate of 1,600,000 shares of our common stock and five year warrants to purchase up to 1,600,000 shares of common stock, exercisable at $2.50 per share, for gross proceeds of $4,000,000. The Company has determined these warrants to have an approximate relative fair value of $950,000 using a Black-Scholes model.

As additional consideration for the purchase of the shares and warrants, the Company issued to the investors an option for 120 days from the date of investment to purchase up to 6,400,000 shares of common stock at $2.50 per share with 100% warrant coverage through the issuance of warrants to purchase up to 6,400,000 shares of common stock at an exercise price of $2.50 per share. The Company has determined these options have an approximate relative fair value of $2,250,000 using a Black-Scholes model.

The Company paid $65,150 in legal fees associated with the issuance of the shares associated with the January 2011 Private Placement.

The Company paid cash commissions of $318,000 and issued five year warrants to purchase up to 305,000 shares of its common stock at an exercise price of $2.50 per share in connection with the sale of its securities in the January 2011 Private Placement. The Company has determined these warrants to have an approximate fair value of $900,000 using a Black-Scholes model.

The Black-Scholes pricing model was used to estimate the fair value of the 1,600,000 and 305,000 warrants issued during the period, using the assumptions of a risk free interest rate of 1.1%, dividend yield of 0%, volatility of 404%, and an expected life of 5 years.

The Black-Scholes pricing model was used to estimate the fair value of the 6,400,000 warrants issued during the period, using the assumptions of a risk free interest rate of 1.1%, dividend yield of 0%, volatility of 265%, and an expected life of 4 months.
 
Other Equity Issues

In September 2010, the Company issued 300,000 common shares to a director for compensation recorded in the prior year at a fair value on the date of grant of $249,000.

During the quarter ended November 30, 2010, the Company issued 61,000 shares of common stock to two external consultants as payment for services performed in a prior period.

In November 2010, the Company entered into a non-exclusive investment banking agreement with Sunrise Securities Corp. (“Sunrise”) pursuant to which it agreed to pay a sales commission with respect to certain financings effected, or alternative transactions entered into, by the Company through introductions by Sunrise.  The Company agreed to pay Sunrise a monthly fee of 5,000 shares of restricted common stock beginning in November 2010.  The Company has issued 30,000 shares totaling $38,550 of expense from November through February related to this fee.

In November 2010, the Company also entered into a 24 month institutional public relations retainer agreement with Sunrise Financial Group, Inc., (“SFG”), an affiliate of Sunrise, pursuant to which it agreed to issue SFG five-year options to purchase 250,000 shares at $1.60 per share and 250,000 shares at $5.00 per share, with certain demand registration rights.  The Black-Scholes pricing model was used to estimate the fair value of the 500,000 options, assuming a risk free interest rate of 1.1%, dividend yield of 0%, volatility of 425%, and an expected life of 5 years.  The Company has determined these options to have an approximate fair value of $960,000, which was recognized as an immediate expense during the six months ended February 28, 2011.

In January 2011, we entered into a finders agreement with Aspenwood Capital (“Aspenwood”) under which Aspenwood would introduce potential investors to the Company.  The Company agreed to pay up to a 10% cash fee and to issue a five year warrant to purchase up to 10% of the number of shares sold to investors introduced to the Company by Aspenwood at an exercise price equal to 100% of the equity purchase price.  The warrant may be exercised on a cashless basis at any time subsequent to August 31, 2011 in the event the Company does not maintain an effective registration statement on file with the SEC.  The Company has paid $25,000 under this agreement as of June 20, 2011.
 
 
-10-

 
NOTE 4 – CAPITAL STOCK (Continued)

In February 2011, the Company entered into a Director’s agreement with General Gregory Martin pursuant to which the Company issued to General Martin 5-year options to purchase 60,000 shares of the Company’s common stock at $2.50 per share as compensation for serving as a member of the Company’s board of directors.  The Black-Scholes pricing model was used to estimate the fair value of the 60,000 options issued during the period to this director, using the assumptions of a risk free interest rate of 1.1%, dividend yield of 0%, volatility of 421%, and an expected life of 5 years. The Company has determined these options to have an approximate fair value of $150,000.  General Martin’s award immediately vests on the grant date and were awarded for services as a nonemployee director acting in his role as a member of the board of directors. Therefore, the Company has recorded the entire amount of this award on the grant date as an immediate expense for the three month period ending February 28, 2011 in accordance with FASB ASC 718.

NOTE 5 – CONTINGENCIES AND COMMITMENTS

Registration Rights

In connection with the 2009-2010 Private Placement, the Company entered into certain registration rights agreements.  Key provisions of these registration rights are as follows:

·
Equity instruments subject to registration rights:

o  
The 1,132,500 shares of the Company’s common stock issued under the 2009-2010 Private Placement are subject to registration rights;

o  
The shares underlying the Class A Warrants, expiring December 31, 2011, entitle the holders to purchase 1,132,500 shares of common stock;
 
 
Term – The Company is required to file a registration statement covering the resale of the shares of common stock and shares of common stock underlying the warrants by February 9, 2011, and the registration is required to be deemed effective by the Securities and Exchange Commission (SEC) on or before the 150 th calendar day after the filing of such registration statement.  The initial registration was filed February 8, 2011.

·
Events requiring transfer of consideration – Failure of the Company to file a registration statement by February 9, 2011 and/or the registration statement not deemed effective by the SEC on or before the 150 th  calendar day after the filing of such registration statement. The initial registration was filed February 8, 2011.

·
 
Settlement alternatives – There are no alternative settlement arrangements.
 
·
Maximum potential amount of consideration – In the event that transfer of consideration is required under the registration rights agreement, the Company is obligated to issue, as liquidated damages on a pro-rata basis to the subject investors, approximately 290,000 shares for each month, or pro-rated for a period less than one month, the registration is late up to a maximum of approximately 1,450,000 shares.

·
Liability – Management estimates that transfer of consideration will not be required.  Accordingly, the Company has not accrued a liability related to the registration rights agreements.

In connection with the January 2011 Private Placement, the Company entered into certain registration rights agreements.  Key provisions of these registration rights are as follows:

·
Equity instruments subject to registration rights:

o  
800,000 shares of the Company’s common stock issued under the January 2011 Private Placement are subject to registration rights;

o  
The shares underlying the warrants, expiring December 31, 2011, which entitle the holders to purchase 800,000 shares of common stock.

 
-11-

 
NOTE 5 – CONTINGENCIES AND COMMITMENTS (CONTINUED)

·
Term – The Company is required to file a registration statement covering the resale of the shares of common stock and shares of common stock underlying the warrants by February 9, 2011, and the registration is required to be deemed effective by the SEC on or before the 150 th  calendar day after the filing of such registration statement.

·
Events requiring transfer of consideration – Failure of the Company to file a registration statement by February 9, 2011 and/or the registration statement not deemed effective by the SEC on or before the 150 th  calendar day after the filing of such registration statement.

·
Settlement alternatives – There are no alternative settlement arrangements.

·
Maximum potential amount of consideration – In the event that transfer of consideration is required under the registration rights agreement, the Company is obligated to issue, as liquidated damages, a number of shares of common stock equal to ten percent of the shares of common stock purchased by the respective investors and issued upon the exercise of the warrants for a 30-day period or pro-rated for a period less than one month.  However, in no event shall that amount exceed five times the first month’s liquidated damages amount.
 
·
Liability – Management estimates that transfer of consideration will not be required.  Accordingly, the Company has not accrued a liability related to the registration rights agreements.

NOTE 6 – SUBSEQUENT EVENTS

In May and June 2011, certain investors participating in the January 2011 Private Placement exercised their options and were issued an aggregate of 6,240,000 shares of common stock and five-year warrants to purchase up to 6,240,000 shares of common stock, exercisable at $2.50 per share, resulting in aggregate gross proceeds to the Company of $15,600,000.  In connection with the option exercises, the Company paid sales commissions of $872,000 in cash and issued five-year warrants to purchase up to 1,192,000 shares of common stock at an exercise price of $2.50 per share.

In June 2011, SFG exercised a warrant to purchase 250,000 shares on a cashless basis resulting in the issuance of 175,000 shares of common stock.

In June 2011, certain investors exercised Class A Warrants to purchase 302,500 shares of common stock for cash proceeds of $151,250 and Class B Warrants to purchase 141,250 shares of common stock for cash proceeds of $105,938.

In May 2011, the Company issued 15,000 shares of restricted common stock to a consulting firm for investment banking services.

In May 2011, the Company issued a five-year option to purchase 175,000 shares of common stock at a purchase price of $4.15 per share to a director as director’s compensation for his appointment as non-executive Chairman of the Board.

In May 2011, the Company entered into a three-year employment agreement with its new chief executive officer.  The Company granted a 10-year option to purchase 2,500,000 shares of the Company’s common stock at an exercise price of $2.50 per share as a part of his employment arrangement.

In May 2011, the Company entered into 1-year agreement with a company to provide investor relations services.  As a part of the agreement, the Company issued the consulting firm a 3-year option to purchase 200,000 shares of the Company’s common stock at an exercise price of $3.75 per share.  The options vest monthly over the term of the agreement.

In April 2011, the Company issued a five-year option to purchase 60,000 shares of common stock at a purchase price of $4.00 per share to a director as director’s compensation.

In April 2011, the Company issued a five year option to purchase up to 90,000 shares of common stock at an exercise price of $4.70 to a director as directors compensation. The option vests 1/3 each year, with 30,000 shares vesting immediately upon the issuance of the option, and the remaining 60,000 vesting equally on the second and third anniversary following the issuance date.

In March 2011, the Company issued a five-year option to purchase 150,000 shares of common stock at a purchase price of $2.50 per share to a director as director’s compensation.
 
 
-12-

 
NOTE 6 – SUBSEQUENT EVENTS (Continued)

In March 2011, the Company issued a five-year option to purchase 60,000 shares of common stock at a purchase price of $2.50 per share to a director as director’s compensation.

In March 2011, we granted to our chief financial officer, as a part of his employment arrangement, a five year option to purchase up to 400,000 shares of our common stock at an exercise price of $2.50 per share. These options vest 1/36 each month provided he is employed by the Company on the vesting dates.

NOTE 7 – RESTATEMENT OF FINANCIAL STATEMENTS

The Company has restated its financial results as of and for the three and six months ended February 28, 2011.  The restatement includes the following adjustments:

1. On November 1, 2010, the Company entered into a 24 month institutional public relations retainer agreement with Sunrise for variously described services over a two year period as described in Note 4 to the Financial Statements.   Pursuant to the agreement, the Company issued Sunrise five-year options to purchase 250,000 shares at $1.60 per share and five-year options to purchase 250,000 shares at $5.00 per share, the fair value of which on the measurement date was determined by management to be $960,000. The Company is filing amendment #2 to its Form 10-Q to reflect that the issuance of these options should be recognized as an immediate expense during the six months ended February 28, 2011 consistent with ASC 505-50-25, specifically 25-7. 

2.          Additionally as described in Note 4 to the Financial Statements, on February 16, 2011, the Company entered into a director’s agreement whereby the director received an option to purchase 60,000 of the Company’s common stock, exercisable upon the date of grant.  The Company is amending its Form 10-Q filing to reflect the entire fair value of $150,000 as an immediate expense for the three month period ending February 28, 2011 in accordance with FASB ASC 718.

 A summary of the significant effects of the restatement are presented below:

   
As originally
             
   
amended
   
Change
   
As restated
 
                   
February 28, 2011 unaudited balance sheet
                 
Cash and cash equivalents
   
4,076,014
             
4,076,014
 
                         
Additional paid in capital
   
5,838,744
     
943,750
     
6,782,494
 
Accumulated deficit
   
2,015,715
     
943,750
     
2,959,465
 
                         
Statement of Operations for the six months ended February 28, 2011
                 
General & administrative expenses
   
476,426
     
943,750
     
1,420,176
 
Net loss
   
(593,081
)
   
(943,750
   
(1,536,831
)
Net loss per share - basic and diluted
   
(0.02
)
   
(0.04)
     
(0.06
)
                         
Statement of Operations for the three months ended February 28, 2011
                 
General & administrative expenses
   
373,791
     
23,750
     
397,541
 
Net loss
   
(443,393
)
   
23,750
     
(467,143
)
                         
                         
Statement of Cash Flows for the six months ended February 28, 2011
                 
Cash flows from operating activities:
                       
Net loss
   
(593,081
)
   
943,750
     
(1,536,831
)
Stock issued for services
   
204,800
     
943,750
     
1,148,550
 

 
-13-

 
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Cautionary statement regarding forward-looking statements

In this Quarterly Report on Form 10-Q/A, unless the context requires otherwise, references to “Texas Rare Earth Resources Corp,” “we,” “our” or “us” refer to Texas Rare Earth Resources Corp.

This Quarterly Report on Form 10-Q/A contains forward-looking statements that represent our beliefs, projections and predictions about future events or our future performance. You can identify forward-looking statements by terminology such as “may,” “will,” “would,” “could,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue” or the negative of these terms or other similar expressions or phrases. These forward-looking statements are necessarily subjective and involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance or achievements or industry results to differ materially from any future results, performance or achievement described in or implied by such statements. Factors that may cause actual results to differ materially from expected results described in forward-looking statements include, but are not limited to: our ability to secure sufficient capital to implement our business plans; our ability to maintain appropriate relations with unions and employees; environmental laws, regulations and permits affecting our business, directly and indirectly, including, among others, those relating to mine reclamation and restoration, climate change, emissions to the air and water and human exposure to hazardous substances used, released or disposed of by us and uncertainties associated with unanticipated geological conditions related to mining.
 
Any forward-looking statement you read in this Quarterly Report on Form 10-Q/A reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, operating results, growth strategy and liquidity. You should not place undue reliance on these forward-looking statements because such statements speak only as to the date when made. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future, except as otherwise required by applicable law.
 
The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included herein.
 
This Quarterly Report on Form 10-Q/A may also contain statistical data and estimates we obtained from industry publications and reports generated by third parties. Although we believe that the publications and reports are reliable, we have not independently verified their data.

Overview and Organizational History
 
We were incorporated in the State of Nevada in 1970 as Standard Silver Corporation.  In July, 2004, our Articles of Incorporation were amended and restated to increase the number of shares of common stock to 25,000,000, and in March 2007, we affected a 1-for-2 reverse stock split.  In September, 2008, we amended and restated our Articles of Incorporation to allow the increase of the number of shares of common stock from 25,000,000 to 100,000,000, and to authorize an additional 10,000,000 shares of preferred stock, to be issued at management’s discretion.  In September 2010 amended our Amended and Restated Articles of Incorporation to change our name from Standard Silver Corporation to Texas Rare Earth Resources Corp.

We are a mining company engaged in the business of the acquisition and development of mineral properties.  We currently hold a twenty year lease, executed in August 2010, to explore and develop an 860 acre rare earth uranium-beryllium prospect located in Hudspeth County, Texas known as “Round Top” and prospecting permits covering an adjacent 9,345 acres.  We also hold prospecting permits on certain other mineral properties located in Texas and New Mexico.  We are currently not evaluating any additional prospects, and intend to focus the primarily on the development of our Round Top rare earth prospect.  We currently have limited operations and have not established that our Round Top property contains any proven reserves or probable reserves.  The strategic necessity of developing rare earth resources, the compelling fundamentals of uranium and the future potential for beryllium in the nuclear fuel cycle all present what we believe to be excellent opportunities for us.

We intend to (i) conduct a geologic, and radiometric study of the surface of the rhyolite to define areas where beryllium, rare earth minerals and thorium are concentrated in fractures, breccias or magmatic segregations, and to understand the distribution of uranium in this rock (ii) conduct radiation and geologic mapping underground to better define the distribution and habit of occurrence of the uranium, (iii) re-log drill samples that are stored on the property with emphasis on uranium and rare metal distribution (iv) conduct a sampling and laboratory examination program to determine the precise mineralogy of the rare elements in the rhyolite and (v) use these results to develop a drill program to test higher grade rare earth targets deeper in the rhyolite.

We currently do not have any producing properties and consequently, we have no current operating income or cash flow and have not generated any revenues.  Further exploration will be required before a final evaluation as to the economic and practical feasibility of any of the properties is determined.  We plan to raise additional capital to exploit current projects, including Round Top, and to acquire, evaluate, and develop new properties.
 
 
-14-

 
Between 2003 and 2007, our operations were minimal.  In 2007 we acquired (i) interests in two mineral properties, the Old Hadley and the Macho Mines, located in southwestern New Mexico, (ii) a 28.5% interest in La Cañada Mining and Exploration LLC (“La Cañada”), (iii) the King Mine located in Boise County, Idaho, and (iv) rights to lease the Round Top Beryllium Deposit (“Round Top Deposit”) located in Hudspeth County, Texas.  In June 2008, the Old Hadley and Round Top Deposit mines were assigned to La Cañada in exchange for La Cañada’s commitment to finance and develop the assigned properties.  In September 2008, La Cañada assigned these two mines back to us.  In October 2009, La Cañada redeemed our 28.5% interest.  In January 2009, the Company relinquished all of its rights to the King Mine.

Results of Operations

Quarters ended February 28, 2011 (as restated) and 2010

General & Revenue

We had no operating revenues during the six months (“six month period”) and three months (“three month period”) ended February 28, 2011 and 2010. We are not currently profitable.  As a result of ongoing operating losses, we had an accumulated deficit of $2,959,465 as of February 28, 2011.

Operating expenses and resulting losses from Operations.

We incurred exploration costs for the six month period ended February 28, 2011 and 2010 in the amount of approximately $119,000 and $30,000, respectively, and approximately $72,000 and $18,000 for the three month period ended February 28, 2011 and 2010, respectively.  These expenditures were primarily related to outside geological consulting and sampling services relating to our Round Top project.

Our general and administrative (“G&A”) expenses for the six month period ended February 28, 2011 and 2010 were approximately $1,420,000 and $348,000, respectively.  Our G&A expenses for the six month period ended February 28, 2011 included approximately $1,050,000 for public relations fees, of which $998,000 of this amount was stock compensation for services; approximately $130,000 for fees paid to auditors and other professionals associated with the audits and reviews of our financial statements and a registration statement; and $52,000 for other outside professional services.  The remainder of our G&A expenses for the six month period ended February 28, 2011 were working capital and corporate expenditures.  Our G&A expenses for the six month period ended February 28, 2010 were primarily related to the audits of our financial statements and approximately $263,000 in stock-based compensation to a director and other professional consultants.

Our G&A expenses for the three month period ended February 28, 2011 and 2010 were approximately $398,000 and $301,000, respectively.  Our G&A expenses for the three month period ended February 28, 2011 included approximately $56,000 for public relations fees, of which approximately $28,800 of this amount was stock compensation for services; approximately $106,000 for fees paid to auditors and other professionals associated with the audits and reviews of our financial statements and a registration statement; and $52,000 for other outside professional services.  The remainder of our G&A expenses for the three month period ended February 28, 2011 were working capital and corporate expenditures.  Our G&A expenses for the three month period ended February 28, 2010 were primarily related to the audits of our financial statements and approximately $249,000 in stock-based compensation to a director.

We accrued interest expense on related party notes payable in the amount of $1,200 and $7,000 for the six month period ended February 28, 2011 and 2010, respectively, and $1,000 and $5,000 for the three month period ended February 28, 2011 and 2010, respectively.  In December 2010, the notes payable principal balance of $73,000 and accrued interest for the advances to certain officers were paid in full.

Our net loss for the six-month period ended February 28, 2011 and 2010 was approximately $1,540,000 and $385,000, respectively.  Our net loss for the three-month period ended February 28, 2011 and 2010 was approximately $467,000 and $324,000, respectively.

 
-15-

 
Liquidity and Capital Resources

As of February 28, 2011, we had a working capital surplus of approximately $4,020,000, resulting primarily from our January 2011 Private Placement.  We believe that we have sufficient capital to fund our planned operation through the end of calendar year 2011.  During the six month period ending February 28, 2011, we invested $10,536 in mineral properties.  We purchased transportation and facilities equipment for our Round Top property in the approximate amount of $28,000 during the six month period ended February 28, 2010.

Over the next twelve to eighteen months we plan to conduct significant geological studies, sampling and drilling at our Round Top property.  The timing of these expenditures is dependent upon a number of factors, including the availability of drilling contractors. We estimate these expenditures will total approximately $2,200,000 for exploration costs, $150,000 relating to the approval of our initial plan of operations and permitting fees, $170,000 in capital expenditures, and approximately $1,325,000 in general and administrative expenditures.

Our exploration costs are estimated to be approximately $2,200,000, and our timeline includes (i) conducting and interpreting an airborne geophysical survey planned for the third quarter of this fiscal year, (ii) drilling approximately 12,000 feet and the collection of approximately 5,000 samples that will be ongoing through January 2012, (iii) metallurgical analysis of these samples that will take place during this timeframe, (iv) onsite contract geological services that will be ongoing through February 2012, and (v) ongoing other expenditures over the next twelve months that are necessary to accomplish our exploration efforts.  There is no assurance that we will be able to complete these activities in the timeframe set forth above, or at all. Our airborne geophysical survey was completed in June 2011 and we are awaiting its interpretation.

We estimate that we will incur approximately $150,000 in expenditures to file our initial plan of operations with the State of Texas and to acquire necessary permits.  Our initial plan of operations was approved in April 2011 and triggered an additional one time property cost of $65,000.  We will be required to pay a $45,000 lease payment to the State of Texas in August 2011 for our Round Top project.  We estimate that in July 2011 we will be required to pay a $20,000 permitting and compliance fee to the Texas Railroad Commission, and in September and October 2011, we will be required to pay approximately $20,000 for prospecting permits to the State of Texas for our Round Top project.  The estimated timeframe for these payments, including the amounts, may change.

Our capital expenditures for the next twelve months are estimated to be $170,000, which will include the following:  (i) in July and August 2011, we intend to spend approximately $75,000 to purchase transportation equipment and to construct a field office; (ii) in September 2011 we intend to purchase ventilation equipment for our Round Top project for approximately $10,000, and (iii) approximately $75,000 for additional office and field equipment necessary to carry out our operations. The remaining $10,000 will be spent on other miscellaneous equipment necessary for us to conduct our exploration.  The estimated timeframe for these payments, including the amounts, may change.

We have estimated that our general and administrative expenditures, which will be spent ratably over the next twelve months, to total approximately $1,325,000.  Payroll, payroll taxes, benefits and associated travel for four employees is estimated to be $520,000 over this period of time.  We estimate that we will incur professional fees of approximately $120,000 over the next twelve months.  These fees will be primarily associated with the audit and reviews of our financial statements and Exchange Act filings, which will occur after each quarter end and after our fiscal year end.  We estimate that we will incur approximately $600,000 for professional fees associated with the assistance of the management and supervision of our field operations.  The remainder of our general and administrative expenditures totaling $85,000 will be spent on items necessary for us to conduct our general business affairs.  Our exploration activities will be carried out by our geologic staff and such qualified outside contractors as is necessary. We have an office/lab trailer at the site.  We will expand these facilities as the project develops.     We believe that we have sufficient capital to fund operations and exploration activity on our Round Top prospect through the end of calendar year 2011.  We will, however, need to raise additional funding subsequent to calendar year 2011 to continue our exploration and development activities.

 
-16-

 
 
As of the date hereof, the Company is not able to quantify the amount of capital needed to fund its working capital needs after calendar 2011, nor is it able to quantify the amount of capital needed to develop the Round Top project. The amount of capital will be dependent upon the Company’s business strategy to exploit the Round Top project.  The Company intends to raise additional working capital through best efforts debt or equity financing, as we have no firm commitments for equity capital investments to any established credit facility.  No assurance can be given that additional financing will be available, on terms acceptable to the Company.  The Company’s viability is contingent upon its ability to receive external financing.  Failure to obtain sufficient working capital may result in management resorting to the sale of assets or otherwise curtailing operations.
 
Recent Financings

Between October 2009 and November 2010, the Company raised $905,500 through the issuance of 2,263,750 shares of common stock and the issuance of Class A Warrants to purchase 2,263,750 shares of common stock and Class B Warrants to purchase 1,131,875 shares of common stock.   Between November 2010 and January 2011, Class A Warrants to purchase 437,500 shares were exercised, and Class B Warrants to purchase 218,750 shares were exercised, resulting in $382,813 of proceeds being raised by the Company.  The final closing of this private placement was January 10, 2011.

Between January and February 2011, we entered into a series of transactions with accredited investors pursuant to which we sold an aggregate of 1,600,000 shares of our common stock and five year warrants to purchase up to 1,600,000 shares of common stock, exercisable at $2.50 per share, for gross proceeds of $4,000,000.   As additional consideration for the purchase of the shares and warrants, the Company issued to the investors an option for 120 days from the date of investment to purchase up to 6,400,000 shares of common stock at $2.50 per share with 100% warrant coverage through the issuance of warrants to purchase up to 6,400,000 shares of common stock at an exercise price of $2.50 per share. The Company intends to use proceeds from this financing to fund working capital needs for the balance of calendar 2011. The Company paid cash commissions of $318,000 and issued five year warrants to purchase up to 305,000 shares of its common stock at an exercise price of $2.50 per share in connection with the sale of its securities in the January 2011 Private Placement. The Company has determined these warrants to have an approximate fair value of $900,000 using a Black-Scholes model.

In May and June 2011, certain investors participating in the January 2011 Private Placement exercised their options and were issued an aggregate of 6,240,000 shares of common stock and five-year warrants to purchase up to 6,240,000 shares of common stock, exercisable at $2.50 per share, resulting in aggregate gross proceeds to the Company of $15,600,000.  In connection with the option exercises, the Company paid sales commissions of $872,000 in cash and issued five-year warrants to purchase up to 1,192,000 shares of common stock at an exercise price of $2.50 per share.

In June 2011, certain investors exercised 302,500 of their $0.50 Class A Warrants and 141,250 of their $0.75 Class B Warrants associated with the Company’s 2009 Private Placement, for total proceeds to the Company of $257,188.  Proceeds from the Class A Warrants exercised were $151,250 and proceeds from the Class B warrants exercised were $105,938.
 
Item 3.  Quantitative and Qualitative Disclosures About Market Risk

As smaller reporting company, as defined by Rule 229.10(f)(1), we are not required to provide the information required by this Item.

Item 4. Controls and Procedures

(A) Evaluation of Disclosure Controls and Procedures
 
The Company maintains disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized, accumulated and communicated to the Company’s management, including its Chief Executive Officer ("CEO") and the Company’s Interim Chief Financial Officer ("CFO"), as appropriate, to allow timely decisions regarding required disclosure.
 
As of the end of the period covered by this report, the Company's management carried out an evaluation, under the supervision and with the participation of the Company's CEO and CFO, of the effectiveness of the design and operation of the Company's system of disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on the material weaknesses described herein, the Company's CEO and CFO has concluded that the Company's disclosure controls and procedures were not effective, as of the date of that evaluation, for the purposes of recording, processing, summarizing and timely reporting of material information required to be disclosed in reports filed by the Company under the Exchange Act.

Because of its size, the Company did not have the resources necessary to hire full-time accounting personnel.  On December 1, 2010, the Company hired a full-time CFO and employs the services of a contract bookkeeper. Because of the structure of our staff, we have a failure to maintain effective controls over the selection, application and monitoring of our accounting policies to assure that certain complex equity transactions are accounted for in accordance with generally accepted accounting principles.
 
 
-17-

 
Material Weaknesses Identified
 
We had significant deficiencies constituting material weaknesses as defined by the standards of the Public Company Accounting Oversight Board.

The material weaknesses identified were the lack of segregation of duties necessary to maintain proper checks and balances between functions and the lack of procedures to properly account for non-routine transactions.

The absence of qualified full time accounting personnel was a contributing factor to the problems identified. The specific circumstances giving rise to the weaknesses include utilizing the services of contract accountants on a part time basis in the absence of internal accounting personnel.
 
(B) Changes in Internal Controls over Financial Reporting
 
In connection with the evaluation of the Company's internal controls during the Company's last fiscal quarter covered by this report required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, the Company's CEO and CFO has determined that there were no changes to the Company's internal controls over financial reporting that have materially affected, or are reasonably likely to materially effect, the Company's internal controls over financial reporting.

 
 
 
 
 
 
 
 
 
 
 
-18-

 
PART II.  OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table describes all securities we issued during the period covered by this report without registering the securities under the Securities Act.

Date
Description
Number
Purchaser
Proceeds
($)
Consideration
Exemption
(A)
January 2011
Common Stock
740,000
Private Placement Investors (9)
1,850,000
Cash
4(2)
January 2011
Warrants
3,700,000
Private Placement Investors (9)
-
Issued as part of placement
4(2)
January 2011
Options
2,960,000
Private Placement Investors (9)
-
Issued as part of placement
4(2)
January 2011
Common Stock
562,500
John C. Tumazos
328,125
Cash
4(2)
January 2011
Common Stock
93,750
Paul Lewis
54,688
Cash
4(2)
January 2011
Common Stock
30,000
Sunrise Securities Corp.
-
Services rendered
4(2)
February 2011
Common Stock
860,000
Private Placement Investors (5)
2,150,000
Cash
4(2)
February 2011
Warrants
4,300,000
Private Placement Investors (5)
-
Issued as part of placement
4(2)
February 2011
Options
3,440,000
Private Placement Investors (5)
-
Issued as part of placement
4(2)
February 2011
Common Stock
118,750
Private Placement Investors (2)
47,500
Cash
4(2)
February 2011
Options
500,000
Sunrise Securities Corp.
-
Services rendered
4(2)
February 2011
Warrants
305,000
Brokers
-
Services rendered/commissions
4(2)
February 2011
Options
60,000
Director
-
Services rendered
4(2)

(A)  With respect to sales designated by “Sec. 4(2),” these shares were issued pursuant to the exemption from registration contained in to Section 4(2) of the Securities Act of 1933 as privately negotiated, isolated, non-recurring transactions not involving any public offer or solicitation. Each purchaser represented that such purchaser’s intention to acquire the shares for investment only and not with a view toward distribution. We requested our stock transfer agent to affix appropriate legends to the stock certificate issued to each purchaser and the transfer agent affixed the appropriate legends. Each purchaser was given adequate access to sufficient information about us to make an informed investment decision. Except as otherwise set forth in this Quarterly Report on Form 10-Q/A, none of the securities were sold through an underwriter and accordingly, there were no underwriting discounts or commissions involved.

 
 
-19-

 
Item 3. Defaults upon Senior Securities

Not applicable.

Item 4. (Removed and Reserved)

Item 5. Other Information

None.
 
Item 6.  Exhibits

The following exhibits are attached hereto or are incorporated by reference:
 
Exhibit Number
Description
 
3.1
Amended and Restated Bylaws (filed as Exhibit 3.1 to the Form 10 filed with the SEC on October 10, 2008)
3.2
Amended and Restated Articles of Incorporation (filed as Exhibit 3.2 to the Form 10 filed with the SEC on October 10, 2008)
3.3
Amendment to Articles of Incorporation (filed as Exhibit 3.3 to the Form 10-K for the fiscal year ended August 31, 2008 filed with the SEC on February 8, 2011)
4.1
Form of Common Stock Certificate (filed as Exhibit 4.1 to the Form 10-K for the fiscal year ended August 31, 2008 filed with the SEC on February 8, 2011)
10.1*
Stock Option Plan (filed as Exhibit 10.1 to the Form 10 filed with the SEC on October 10, 2008)
10.2
Lease (filed as Exhibit 10.2 to the Form 10-K for the fiscal year ended August 31, 2008 filed with the SEC on February 8, 2011)
10.3
Form of Class A Warrant (filed as Exhibit 10.3 to the Form 10-K for the fiscal year ended August 31, 2008 filed with the SEC on February 8, 2011)
10.4
Form of Class B Warrant (filed as Exhibit 10.4 to the Form 10-K for the fiscal year ended August 31, 2008 filed with the SEC on February 8, 2011)
10.5
Form of Registration Rights Agreement (filed as Exhibit 10.5 to the Form 10-K for the fiscal year ended August 31, 2008 filed with the SEC on February 8, 2011)
10.6*
Director’s Agreement (filed as Exhibit 10.6 to the Form 10-K for the fiscal year ended August 31, 2008 filed with the SEC on February 8, 2011)
10.7
Form of Subscription Agreement for January 2011 Investment (filed as Exhibit 10.7 to the Form 10-K for the fiscal year ended August 31, 2008 filed with the SEC on February 8, 2011)
10.8
Form of Warrant for January 2011 Investment (filed as Exhibit 10.8 to the Form 10-K for the fiscal year ended August 31, 2008 filed with the SEC on February 8, 2011)
10.9
Form of Registration Rights Agreement for January 2011 Investment (filed as Exhibit 10.9 to the Form 10-K for the fiscal year ended August 31, 2008 filed with the SEC on February 8, 2011)
10.10
Shareholders’ Agreement (filed as Exhibit 10.10 to the Form 10-K for the fiscal year ended August 31, 2008 filed with the SEC on February 8, 2011)
10.11*
Director’s Agreement for General Martin (filed as Exhibit 10.1 to the Form 8-K filed with the SEC on February 23, 2011)
31.1(1)
Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a)
31.2(1)
Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a)
32.1(1)
Certification of Chief Executive Officer Pursuant to Section 18 U.S.C. Section 1350, adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2(1)
Certification of Chief Financial Officer Pursuant to Section 18 U.S.C. Section 1350, adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

* Management contract or compensatory plan or arrangement.

(1)
Filed as an exhibit to the Form 10-Q for the quarter ended February 28, 2011 filed with the SEC on June 24, 2011.
 
 
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Signatures

Pursuant to 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.

TEXAS RARE EARTH RESOURCES CORP.

Date: June 23, 2011

/s/ K. Marc LeVier
K. Marc LeVier, duly authorized officer
and Principal Executive Officer
 

Date: June 23, 2011

/s/ Wm. Chris Mathers
Wm. Chris Mathers, Principal Financial Officer




 
 
 
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