UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q

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

For the quarterly period ended August 31, 2014

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________________to ______________________

Commission file number 000-53462

TIERRA GRANDE RESOURCES INC.
(Exact name of registrant as specified in its charter)

     33 Richardson Street, Level 1
West Perth, Western Australia 6005
Australia
(Address of principal executive offices)

     +61 8 9384 6835
(Registrant’s telephone number including area code)

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was require 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 (of for such shorter period that the registrant was required to submit and post such files).
Yes  [ X ]  No  [   ]

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 definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

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

As of October 14, 2014, the registrant’s outstanding common stock consisted of 107,019,712 shares.

TABLE OF CONTENTS

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PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

Tierra Grande Resources Inc.
August 31, 2014

Index

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Tierra Grande Resources Inc.
Consolidated Balance Sheets
(Unaudited)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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Tierra Grande Resources Inc.
Consolidated Statements of Expenses
(Unaudited)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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Tierra Grande Resources Inc.
Consolidated Statements of Cash Flows
(Unaudited)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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Tierra Grande Resources Inc.
Notes to the Consolidated Financial Statements
(Unaudited)

The Company was incorporated in the State of Nevada on April 4, 2006. The Company’s principal business is the acquisition and exploration of mineral properties. Effective April 10, 2013, the Company changed its name from Buckingham Exploration Inc. to Tierra Grande Resources Inc. On August 9, 2010, the Company incorporated 0887717 B.C. Ltd., a wholly-owned subsidiary in British Columbia, Canada. On February 28, 2013, the Company acquired a 100% interest in Tierra Grande Resources, S.A.C. (“Tierra”), a company incorporated in Peru, in consideration for $10.

These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has not generated revenues since inception and has not paid any dividends and is unlikely to pay dividends or generate earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. As at August 31, 2014, the Company has working capital of $25,763 and an accumulated deficit of $9,300,267. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

As at August 31, 2014, the Company had $34,370 cash in the bank. The Company requires a minimum of $200,000 to proceed with their plan of operations over the next twelve months. If they achieve less than the full amount of financing that they require they will scale back planned exploration activities and day to day operations in order to reduce exploration expenses and general and administrative expenses to a level appropriate to the financial resources available. There can be no assurance that the Company will be able to raise sufficient funds to pay the expected operating expenses for the next twelve months.

The unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Securities and Exchange Commission (“SEC”) Form 10-Q. They do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Therefore, these unaudited interim consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended May 31, 2014, included in the Company’s Annual Report on Form 10-K filed on September 15, 2014 with the SEC.

The financial statements included herein are unaudited; however, they contain all normal recurring accruals and adjustments that, in the opinion of management, are necessary to present fairly the Company’s financial position at August 31, 2014, and the results of its operations and cash flows for the three months ended August 31, 2014 and 2013. The results of operations for the three months ended August 31, 2014, are not necessarily indicative of the results to be expected for future quarters or the full year.

The accompanying unaudited interim consolidated financial statements include the accounts of Tierra Grande Resources Inc. and its wholly owned subsidiaries 0887717 B.C. Ltd. and Tierra Grande Resources, S.A.C. All significant intercompany balances and transactions have been eliminated in the consolidation.

On August 31, 2014, the Company issued an aggregate of 4,250,000 shares of common stock with a fair value of $25,925 to certain directors, officers and employees for agreeing to act as directors, officers or employees of the Company.

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Tierra Grande Resources Inc.
Notes to the Consolidated Financial Statements
(Unaudited)

Common stock issued during the three months ended August 31, 2014:

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Cautionary Statement Regarding Forward-Looking Information

The statements in this quarterly report that are not reported financial results or other historical information are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. These statements appear in a number of different places in this report and can be identified by words such as “estimates”, “projects”, “expects”, “intends”, “believes”, “plans”, or their negatives or other comparable words. Also look for discussions of strategy that involve risks and uncertainties. Forward-looking statements include, among others, statements regarding our business plans and availability of financing for our business.

You are cautioned that any such forward-looking statements are not guarantees and may involve risks and uncertainties. Our actual results may differ materially from those in the forward-looking statements due to risks facing us or due to actual facts differing from the assumptions underlying our estimates. Some of these risks and assumptions include those set forth in reports and other documents we have filed with or furnished to the United States Securities and Exchange Commission (“SEC”). We advise you that these cautionary remarks expressly qualify in their entirety all forward-looking statements attributable to us or persons acting on our behalf. Unless required by law, we do not assume any obligation to update forward-looking statements based on unanticipated events or changed expectations. However, you should carefully review the reports and other documents we file from time to time with the SEC.

Presentation of Information

As used in this quarterly report, the terms "we", "us", "our" and the “Company” mean Tierra Grande Resources Inc. and its subsidiaries, unless the context requires otherwise.

All dollar amounts in this quarterly report refer to US dollars unless otherwise indicated.

Overview

We were incorporated as a Nevada company on April 4, 2006. We have been engaged in the acquisition and exploration of mineral properties since our inception. We have not generated any revenues and have incurred losses since inception.

We currently own a 100% interest in the Dome mineral properties, located in the Province of British Columbia, Canada. In addition, we own a 100% interest in two mineral properties known as the Byng and Tramp claims also located in the Province of British Columbia, Canada, which we plan to dispose. We have conducted limited exploration work on our mineral properties and none of our properties has been determined to contain any mineral resources or reserves of any kind.

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Our strategy is to identify, acquire and advance assets that present near term cash-flow with the emphasis on creating early cash flow to enable our company to consider other projects.

In July 2013, we entered into a Letter of Intent to acquire the Buldibuyo Gold Project in Peru, South America. We subsequently entered into an updated Letter of Intent to acquire the project in May 2014. It was our intention to acquire 100% of the gold project, which has produced high grade ore in the past, and had engaged in some due diligence to qualify expectations and timelines. However, despite the execution of the Letter of Intent and numerous attempts to accommodate the vendors, the vendors failed to deliver essential information to us required to conduct a thorough technical and legal due diligence on the project and associated holding companies and, accordingly, we terminated negotiations to acquire the project in July 2014.

We continue reviewing what we believe to be opportunities with potential in Peru through our strategic alliance with ExploAndes S.A.C. (“ExploAndes”). ExploAndes is a leading firm of geology consultants and project logistics managers located in Peru assisting in the identification, assessment and advancement of projects in South America. ExploAndes has a proven track record of delivering professional services to the South American mining industry from mineral project review and assessment to project management.

We expect our strategic alliance with ExploAndes to lead to potential opportunities in South America in line with our strategy. In that regard, in February 2013, we acquired all of the outstanding shares of Tierra Grande Resources S.A.C., a Peruvian company, through which we plan to conduct operations in South America.

We have also entered a strategic alliance with Mining Plus Pty Ltd (“Mining Plus”), a leading firm of mining and geoscience consultants with offices in Australia, Canada and Peru, to assist in the identification, assessment and advancement of projects. We expect the alliance with Mining Plus to lead to other potential opportunities in line with our strategy. Via the strategic alliance with Mining Plus, we have ready access to over 50 seasoned mining industry professionals to assist in the potential advancement of projects.

See our Annual Report on Form 10-K for the year ended May 31, 2014 for more information regarding our business.

Our plan of operations for the next 12 months is to seek out, acquire, explore and potentially advance one or more projects with an emphasis on creating early cash flow for our business, whether by way of acquisition of full ownership, joint venture or other acceptable structure. We also plan to dispose of the Byng and Tramp claims and may conduct a small exploration project on our Dome mineral claims. In the event we consider a project worth pursuing, we expect we will require approximately $200,000 to conduct due diligence on the project and additional funds in the event we proceed with its acquisition. As at August 31, 2014, we had cash of $34,370 and working capital of $25,763 and will require significant financing to pursue our exploration plans. There can be no assurance that we will obtain the required financing, on terms acceptable to us or at all. In the event we are unable to obtain the required financing, we may be required to pursue other alternatives such as the sale of our company. An investment in our securities involves significant risks, our business may fail and you could lose your entire investment.

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Results of Operations

The following discussion and analysis of our results of operations and financial condition for the three months ended August 31, 2014 should be read in conjunction with our unaudited interim consolidated financial statements and related notes included in this report, as well as our most recent annual report on Form 10-K for the year ended May 31, 2014 filed with the SEC.

Three Months Ended August 31, 2014 Compared to Three Months Ended August 31, 2013

Lack of Revenues

We have earned no revenues and have sustained operational losses since our inception on April 4, 2006 to August 31, 2014. As of August 31, 2014, we had an accumulated deficit of $9,300,267. We anticipate that we will not earn any revenues during the current fiscal year.

Expenses

Our total expenses increased to $75,271 for the three months ended August 31, 2014 from $26,059 for the three months ended August 31, 2013 due to an overall increase in our operations. General and administrative expenses increased to $36,119 in the three months ended August 31, 2014 from $20,623 in the three months ended August 31, 2013, and professional fees increased to $39,152 in the three months ended August 31, 2014 from $5,436 in the three months ended August 31, 2013, as we started on our review of the Buldibuyo Gold Project in Peru.

Net Loss

For the three months ended August 31, 2014, we recognized a net loss of $75,271, compared to $26,059 for the three months ended August 31, 2013.

Liquidity and Capital Resources

As of August 31, 2014, we had cash of $34,370, working capital of $25,763, total assets of $34,370, total liabilities of $8,607 and an accumulated deficit of $9,300,267.

Financing Activities

We have funded our operations primarily by a combination of private placements, advances from related parties and loans. During the three months ended August 31, 2014, financing activities provided cash of $70,000, compared to $0 in the three months ended August 31, 2013, from the sale of our common stock.

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Operating Activities

Operating activities used cash of $68,736 for the three months ended August 31, 2014, compared to $16,585 for the three months ended August 31, 2013. A decrease in accounts payable and accrued liabilities used cash of $19,390 in the three months ended August 31, 2014, compared to an increase in same providing cash of $9,263 in the prior period.

Investing Activities

Investing activities did not use any cash in the three months ended August 31, 2014 or 2013.

We expect that our total expenses will increase over the next year as we increase our business operations. We do not anticipate generating any revenues over the next year. Our plan of operations for the next 12 months is to seek out, acquire, explore and potentially advance one or more projects with an emphasis on creating early cash flow for our business, whether by way of acquisition of full ownership, joint venture or other acceptable structure. We also plan to dispose of the Byng and Tramp claims and may conduct a small exploration project on our Dome mineral claims. In the event we consider a project worth pursuing, we expect we will require approximately $200,000 to conduct due diligence on the project and additional funds in the event we proceed with its acquisition. As at August 31, 2014, we had cash of $34,370 and working capital of $25,763 and will require significant financing to pursue our exploration plans.

There can be no assurance that we will obtain the required financing, on terms acceptable to us or at all. In the event we are unable to obtain the required financing, we may be required to pursue other alternatives such as the sale of our company. An investment in our securities involves significant risks, our business may fail and you could lose your entire investment.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

Going Concern

Our consolidated financial statements for the period ended August 31, 2014 have been prepared on a going concern basis and Note 2 to the statements identifies issues that raise substantial doubt about our ability to continue as a going concern. Our consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

We have not generated any revenues, have achieved losses since our inception, and rely upon the sale of our common stock and loans from related and other parties to fund our operations. We do not anticipate generating any revenues in the foreseeable future, and if we are unable to raise equity or secure alternative financing, we may not be able to pursue our plans and our business may fail.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

ITEM 4. CONTROL AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

In connection with the preparation of this report, an evaluation was carried out by our principal executive officer and principal financial officer of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of August 31, 2014. Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management to allow timely decisions regarding required disclosures.

Based on that evaluation, and the material weaknesses outlined below, our principal executive officer and principal financial officer concluded, as of the end of the period covered by this report, that our disclosure controls and procedures were not effective in recording, processing, summarizing and reporting information required to be disclosed, within the time periods specified in the SEC’s rules and forms, and that such information may not be accumulated and communicated to our principal executive officer and principal financial officer to allow timely decisions regarding required disclosures.

A material weakness is a deficiency, or combination of deficiencies, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Based on the assessment of the effectiveness of disclosure controls and procedures as of August 31, 2014, the following deficiencies were identified:

1. Lack of proper segregation of duties due to limited personnel.

2. Lack of a formal review process that includes multiple levels of review.

3. Lack of adequate policies and procedures for accounting for financial transactions.

Management is currently evaluating remediation plans for the above control deficiencies. In light of these control deficiencies, management concluded that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the company’s disclosure controls or internal controls.

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Changes in Internal Control

During the quarter ended August 31, 2014, there were no other changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

We are not a party to any pending material legal proceedings and are not aware of any material legal proceedings threatened against us or of which our property is the subject. None of our directors, officers or affiliates: (i) are a party adverse to us in any legal proceedings, or (ii) have an adverse interest to us in any legal proceedings.

ITEM 1A. RISK FACTORS.

Not required.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES.

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

None.

ITEM 5. OTHER INFORMATION.

On October 13, 2014, we appointed Andrew Gasmier as interim Chief Financial Officer of our company in place of Allister Blyth, who resigned as Chief Financial Officer of our company for personal reasons. Mr. Gasmier currently serves as our President and Chief Executive Officer. There were no disagreements between our company and Mr. Blyth relating to our operations, policies or practices. A description of the business experience of Mr. Gasmier, and related party transactions and other information relating to Mr. Gasmier and our company is provided in our Annual Report on Form 10-K for the year ended May 31, 2014 filed with the SEC.

ITEM 6. EXHIBITS.

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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.

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