x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the fiscal year ended August 31, 2012
|
||
OR
|
||
o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
87-0294969
|
(State of other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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539 El Paso Avenue
|
|
Sierra Blanca, Texas
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79851
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(Address of Principal Executive Offices)
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(Zip Code)
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Page
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||
Glossary of Terms
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4
|
|
Cautionary Notice Regarding Forward-Looking Statements
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6
|
|
Part I
|
||
Item 1
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Business
|
7
|
Item 1A
|
Risk Factors
|
13
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Item 1B
|
Unresolved Staff Comments
|
23
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Item 2
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Properties
|
23
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Item 3
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Legal Proceedings
|
28
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Item 4
|
Mine Safety Disclosure
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28
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Part II
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||
Item 5
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
28
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Item 6
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Selected Financial Data
|
29
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Item 7
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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29
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Item 7A
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Quantitative and Qualitative Disclosures About Market Risk
|
35
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Item 8
|
Financial Statements and Supplementary Data
|
F-1
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Item 9
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Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
|
36
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Item 9A
|
Controls and Procedures
|
36
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Item 9B
|
Other Information
|
36
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Part III
|
||
Item 10
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Directors, Executive Officers and Corporate Governance
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36
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Item 11
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Executive Compensation
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36
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Item 12
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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36
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Item 13
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Certain Relationships and Related Transactions and Director Independence
|
37
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Item 14
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Principal Accountant Fees and Services
|
37
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Item 15
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Exhibits, Financial Statement Schedules
|
37
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Signatures
|
39
|
|
GLOSSARY OF TERMS
|
|
Alteration
|
Any physical or chemical change in a rock or mineral subsequent to its formation.
|
Breccia
|
A rock in which angular fragments are surrounded by a mass of fine-grained minerals.
|
Concession
|
A grant of a tract of land made by a government or other controlling authority in return for stipulated services or a promise that the land will be used for a specific purpose.
|
Core
|
The long cylindrical piece of a rock, about an inch in diameter, brought to the surface by diamond drilling.
|
Diamond drilling
|
A drilling method in which the cutting is done by abrasion using diamonds embedded in a matrix rather than by percussion. The drill cuts a core of rock, which is recovered in long cylindrical sections.
|
Drift
|
A horizontal underground opening that follows along the length of a vein or rock formation as opposed to a cross-cut which crosses the rock formation.
|
Exploration
|
Work involved in searching for ore, usually by drilling or driving a drift.
|
Exploration expenditures
|
Costs incurred in identifying areas that may warrant examination and in examining specific areas that are considered to have prospects that may contain mineral deposit reserves.
|
Grade
|
The average assay of a ton of ore, reflecting metal content.
|
Host rock
|
The rock surrounding an ore deposit.
|
Intrusive
|
A body of igneous rock formed by the consolidation of magma intruded into other rocks, in contrast to lavas, which are extruded upon the surface.
|
Lode
|
A mineral deposit in solid rock.
|
Ore
|
The naturally occurring material from which a mineral or minerals of economic value can be extracted profitably or to satisfy social or political objectives. The term is generally but not always used to refer to metalliferous material, and is often modified by the names of the valuable constituent; e.g., iron ore.
|
Ore body
|
A continuous, well-defined mass of material of sufficient ore content to make extraction economically feasible.
|
Mine development
|
The work carried out for the purpose of opening up a mineral deposit and making the actual ore extraction possible.
|
Mineral
|
A naturally occurring homogeneous substance having definite physical properties and chemical composition, and if formed under favorable conditions, a definite crystal forms.
|
Mineralization
|
The presence of minerals in a specific area or geological formation.
|
Mineral reserve
|
That part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination. Reserves are customarily stated in terms of “Ore” when dealing with metalliferous minerals.
|
Probable (Indicated) reserves
|
Reserves for which quantity and grade and/or quality are computed from information similar to that used for proven (measured) reserves, but the sites for inspection, sampling, and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven (measured) reserves, is high enough to assume continuity between points of observation.
|
Prospect
Proven (Measured) reserves
|
A mining property, the value of which has not been determined by exploration.
Reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or quality are computed from the results of detailed sampling and (b) the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well-established.
|
Tonne
|
A metric ton which is equivalent to 2,200 pounds.
|
Trend
|
A general term for the direction or bearing of the outcrop of a geological feature of any dimension, such as a layer, vein, ore body, or fold.
|
Unpatented mining claim
|
A parcel of property located on federal lands pursuant to the General Mining Law and the requirements of the state in which the unpatented claim is located, the paramount title of which remains with the federal government. The holder of a valid, unpatented lode-mining claim is granted certain rights including the right to explore and mine such claim.
|
Vein
|
A mineralized zone having a more or less regular development in length, width, and depth, which clearly separates it from neighboring rock.
|
·
|
the progress, potential and uncertainties of our 2012-2013 rare-earth exploration program at our Round Top Project (the “Round Top Project”);
|
·
|
the success of getting the necessary permits for future drill programs and future project exploration;
|
·
|
expectations regarding the ability to raise capital and to continue our exploration plans on its properties; and
|
·
|
plans regarding anticipated expenditures at the Round Top Project.
|
·
|
risks associated with our history of losses and need for additional financing;
|
·
|
risks associated with our limited operating history;
|
·
|
risks associated with our properties all being in the exploration stage;
|
·
|
risks associated with our lack of history in producing metals from our properties;
|
·
|
risks associated with a shortage of equipment and supplies;
|
·
|
risks associated with our need for additional financing to develop a producing mine, if warranted;
|
·
|
risks associated with our exploration activities not being commercially successful;
|
·
|
risks associated with ownership of surface rights at our Round Top Project;
|
·
|
risks associated with increased costs affecting our financial condition;
|
·
|
risks associated with a shortage of equipment and supplies adversely affecting our ability to operate;
|
·
|
risks associated with mining and mineral exploration being inherently dangerous;
|
·
|
risks associated with mineralization estimates;
|
·
|
risks associated with changes in mineralization estimates affecting the economic viability of our properties;
|
·
|
risks associated with uninsured risks;
|
·
|
risks associated with mineral operations being subject to market forces beyond our control;
|
·
|
risks associated with fluctuations in commodity prices;
|
·
|
risks associated with permitting, licenses and approval processes;
|
·
|
risks associated with the governmental and environmental regulations;
|
·
|
risks associated with future legislation regarding the mining industry and climate change;
|
·
|
risks associated with potential environmental lawsuits;
|
·
|
risks associated with our land reclamation requirements;
|
·
|
risks associated with rare earth and beryllium mining presenting potential health risks;
|
·
|
risks related to title in our properties
|
·
|
risks related to competition in the mining and rare earth elements industries;
|
·
|
risks related to economic conditions;
|
·
|
risks related to our ability to manage growth;
|
·
|
risks related to the potential difficulty of attracting and retaining qualified personnel;
|
·
|
risks related to our dependence on key personnel;
|
·
|
risks related to our United States Securities and Exchange Commission (the “SEC”) filing history; and
|
·
|
risks related to our securities.
|
·
|
potential ground water supply on GLO land in Red Light Draw;
|
·
|
associated easements for the project;
|
·
|
additional leasing of land as maybe reasonably necessary for the development of leased minerals; and
|
·
|
use of an existing railroad spur.
|
Per Acre Amount
|
Total Amount
|
|||||||
August 17, 2013 – 2014
|
$
|
50
|
$
|
44,718
|
||||
August 17, 2015 – 2019
|
$
|
75
|
$
|
67,077
|
||||
August 17, 2020 – 2024
|
$
|
150
|
$
|
134,155
|
||||
August 17, 2025 – 2029
|
$
|
200
|
$
|
178,873
|
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
|
Fiscal Year 2013
|
High
|
Low
|
||||||
Quarter ended November 30, 2012 (through November 1, 2012)
|
$
|
0.46
|
$
|
0.29
|
||||
Fiscal Year 2012
|
High
|
Low
|
||||||
Quarter ended August 31, 2012
|
$
|
0.80
|
$
|
0.30
|
||||
Quarter ended May 31, 2012
|
$
|
1.35
|
$
|
0.27
|
||||
Quarter ended February 29,2012
|
$
|
2.00
|
$
|
1.11
|
||||
Quarter ended November 30, 2011
|
$
|
2.55
|
$
|
1.50
|
||||
Fiscal Year 2011
|
High
|
Low
|
||||||
Quarter ended August 31, 2011
|
$
|
8.20
|
$
|
1.80
|
||||
Quarter ended May 31, 2011
|
$
|
10.00
|
$
|
2.85
|
||||
Quarter ended February 28, 2011
|
$
|
3.99
|
$
|
2.70
|
||||
Quarter ended November 30, 2010
|
$
|
3.05
|
$
|
0.65
|
||||
Fiscal Year 2010
|
High
|
Low
|
||||||
Quarter ended August 31, 2010
|
$
|
1.02
|
$
|
0.25
|
||||
Quarter ended May 31, 2010
|
$
|
0.99
|
$
|
0.55
|
||||
Quarter ended February 28, 2010
|
$
|
1.05
|
$
|
0.36
|
||||
Quarter ended November 30, 2009
|
$
|
1.08
|
$
|
0.37
|
||||
Plan Category
|
(a)
Number of Securities to be Issued Upon the Exercise of Outstanding Options and Warrants
|
(b)
Weighted-Average Exercise Price of Outstanding Options and Warrants
|
(c)
Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
|
Equity compensation plans approved by stockholders
|
3,875,000
|
$1.53
|
3,125,000
|
Equity compensation plans not approved by stockholders
|
--
|
N/A
|
--
|
Total
|
3,875,000
|
$1.53
|
3,125,000
|
Date
|
Description
|
Number
|
Purchaser
|
Proceeds
($)
|
Consideration
|
Exemption
(A)
|
|
December 2011/January 2012
|
Common Stock –
Exercise of warrants
|
1,943,749
|
Private Placement Investors
|
1,103,124
|
Cash
|
4(2)
|
|
(A)
|
With respect to sales designated by “Section 4(2),” these shares were issued pursuant to the exemption from registration contained in to Section 4(2) of the Securities Act 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. None of the securities were sold through an underwriter and accordingly, there were no underwriting discounts or commissions involved.
|
Per Acre Amount
|
Total Amount
|
|||||||
September 2, 2012 – 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
|
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
|
ASC 820 also describes three levels of inputs that may be used to measure fair value:
|
||
•
|
Level 1: Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities traded in active markets.
|
|
•
|
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
|
|
•
|
Level 3: Inputs that are generally unobservable. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value.
|
LBB & ASSOCIATES LTD., LLP
|
10260 Westheimer Road, Suite 310
|
Houston, TX 77042
|
Phone: (713) 800-4343 Fax: (713) 456-2408
|
TEXAS RARE EARTH RESOURCES CORP.
|
||||||||||||||||||||||||||||
STATEMENTS OF SHAREHOLDERS' EQUITY
|
||||||||||||||||||||||||||||
FOR THE YEARS ENDED AUGUST 31, 2012 and 2011
|
||||||||||||||||||||||||||||
Additional | Total | |||||||||||||||||||||||||||
Preferred stock
|
Common Stock
|
Paid-in
|
Accumulated
|
Shareholders’
|
||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Equity
|
||||||||||||||||||||||
Balance at August 31, 2010
|
- | - | 23,670,260 | $ | 236,703 | $ | 1,220,391 | $ | (1,422,634 | ) | $ | 34,460 | ||||||||||||||||
Shares issued for prior year compensation
|
- | - | 361,000 | 3,610 | (3,610 | ) | - | - | ||||||||||||||||||||
Shares issued for cash
|
- | - | 10,340,000 | 103,401 | 20,665,536 | - | 20,768,937 | |||||||||||||||||||||
Shares issued for services
|
- | - | 225,000 | 2,250 | 1,178,796 | - | 1,181,046 | |||||||||||||||||||||
Common stock options issued to officers and directors
|
- | - | - | - | 3,412,059 | - | 3,412,059 | |||||||||||||||||||||
Cash paid for placement fees
|
- | - | - | - | (1,655,150 | ) | - | (1,655,150 | ) | |||||||||||||||||||
Net loss
|
- | - | - | - | - | (7,020,114 | ) | (7,020,114 | ) | |||||||||||||||||||
Balance as of August 31, 2011
|
- | - | 34,596,260 | 345,964 | 24,818,022 | (8,442,748 | ) | 16,721,238 | ||||||||||||||||||||
Shares issued for services
|
- | - | 10,000 | 100 | 19,100 | - | 19,200 | |||||||||||||||||||||
Shares issued for cash
|
- | - | 1,943,749 | 19,437 | 1,083,687 | - | 1,103,124 | |||||||||||||||||||||
Options issued to Officers and Directors
|
- | - | - | - | 3,341,875 | - | 3,341,875 | |||||||||||||||||||||
Net loss
|
- | - | - | - | - | (14,374,600 | ) | (14,374,600 | ) | |||||||||||||||||||
Balance as of August 31, 2012
|
- | - | 36,550,009 | $ | 365,501 | $ | 29,262,684 | $ | (22,817,348 | ) | $ | 6,810,837 |
•
|
Level 1: Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities traded in active markets.
|
|
•
|
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
|
|
•
|
Level 3: Inputs that are generally unobservable. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value.
|
August 31, 2012
|
August 31, 2011
|
|||||||
Furniture &office equipment
|
$
|
111,582
|
$
|
90,959
|
||||
Vehicles
|
105,299
|
68,290
|
||||||
Computers & software
|
56,176
|
31,792
|
||||||
Field equipment
|
73,953
|
50,451
|
||||||
Total cost basis
|
347,010
|
241,492
|
||||||
Less: Accumulated depreciation
|
(96,101
|
)
|
(23,973
|
)
|
||||
Property and equipment, net
|
$
|
250,909
|
$
|
217,519
|
Per Acre Amount
|
Total Amount
|
|||||||
August 17, 2013 – 2014
|
$
|
50
|
$
|
44,718
|
||||
August 17, 2015 – 2019
|
$
|
75
|
$
|
67,077
|
||||
August 17, 2020 – 2024
|
$
|
150
|
$
|
134,155
|
||||
August 17, 2025 – 2029
|
$
|
200
|
$
|
178,873
|
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
|
2012
|
2011
|
|||||||
Loss before income taxes
|
$ | (14,374,600 | ) | $ | (7,020,114 | ) | ||
Income tax benefit computed at statutory rates
|
$ | (4,887,364 | ) | $ | (2,386,839 | ) | ||
Increase in valuation allowance
|
3,701,883 | 1,226,000 | ||||||
Non-deductible stock compensation
|
1,136,237 | 1,160,000 | ||||||
Permanent differences, nondeductible expenses
|
4,771 | 2,680 | ||||||
Other
|
44,473 | (1,841 | ) | |||||
Tax benefit
|
$ | - | $ | - |
Deferred tax assets (liability)
|
2012
|
2011
|
||||||
Net operating loss carryfowards
|
$ | 2,248,448 | $ | 952,157 | ||||
Stock compensation
|
1,136,237 | 1,160,000 | ||||||
Assets, exploration cost, depreciation and amortization
|
2,843,950 | 414,595 | ||||||
Utilization of net operating loss carryforwards
|
- | - | ||||||
Less: valuation allowance
|
(6,228,635 | ) | (2,526,752 | ) | ||||
Net deferred tax assets
|
$ | - | $ | - |
Description - 2011
|
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
(1)
|
1,236,250 | 715,938 | ||||||
January 2011 Private Placement (issuance occurred in quarter ended February 28, 2011)
(2)
|
1,600,000 | 4,000,000 | ||||||
Exercise of options issued in January 2011 Private Placement
|
6,240,000 | 15,600,000 | ||||||
Net offering costs
|
- | (1,655,150 | ) | |||||
Total shares of common stock issued and net cash proceeds received from sale of common stock and from the exercise of Warrants during the twelve months
(3)
|
10,208,750 | $ | 19,113,788 |
Description - 2012
|
Shares of Common Stock Issued
|
Cash Proceeds Received
|
||||||
Exercise of Class A & B Warrants issued in connection with 2009 – 2010 Private Placement
(1)
|
1,943,749 | $ | 1,103,124 | |||||
Total shares of common stock issued and net cash proceeds received from sale of common stock and from the exercise of Warrants during the twelve months
(3)
|
1,943,749 | $ | 1,103,124 |
August 31, 2011
|
||||
Expected dividend yield
|
0
|
%
|
||
Risk-free interest rate
|
1.1
|
%
|
||
Expected volatility
|
404
|
%
|
||
Expected warrant life (in years)
|
5.00
|
Expiry Date
|
Exercise Price
|
August 31, 2012
|
||||||
January 31, 2016
|
$
|
2.50
|
1,600,000
|
August 31, 2011
|
||||
Expected dividend yield
|
0
|
%
|
||
Risk-free interest rate
|
1.1
|
%
|
||
Expected volatility
|
380
|
%
|
||
Expected warrant life (in years)
|
5.00
|
Expiry Date
|
Exercise Price
|
August 31, 2012
|
||||||
June 30, 2016
|
$
|
2.50
|
6,240,000
|
·
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
|
·
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
|
·
|
provide reasonable assurance regarding prevention or timely detections of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
|
Documents filed as part of this Annual Report on Form 10-K or incorporated by reference:
|
(1)
|
The consolidated financial statements are listed on the “Index to Financial Statements” in Item 8.
|
(2)
|
Financial Statement Schedules (omitted because the Company is a smaller reporting issuer).
|
10.16
|
Summary of Dan Gorski Employment Arrangement incorporated by reference to Exhibit 10.16 of our Amendment No. 2 to its Registration Statement on Form S-1 (333-172116) filed with the SEC on May 25, 2011
|
10.17
|
Summary of Wm. Chris Mathers Employment Arrangement incorporated by reference to Exhibit 10.17 of our Amendment No. 2 to its Registration Statement on Form S-1 (333-172116) filed with the SEC on May 25, 2011
|
10.18
|
Summary of Stanley Korzeb Employment Arrangement incorporated by reference to Exhibit 10.18 of our Amendment No. 2 to its Registration Statement on Form S-1 (333-172116) filed with the SEC on May 25, 2011
|
10.19
|
Employment Agreement by and between the Company and Marc LeVier, incorporated by reference to Exhibit 10.1 of our Form 8-K filed with the SEC on May 9, 2011.
|
10.20
|
Director’s Agreement by and between the Company and Jim Graham, incorporated by reference to Exhibit 10.2 of our Form 8-K filed with the SEC on May 9, 2011.
|
10.21
|
Option Agreement for Wm. Chris Mathers incorporated by reference to Exhibit 10.21 of our Amendment No. 2 to its Registration Statement on Form S-1 (333-172116) filed with the SEC on May 25, 2011.
|
10.22
|
Form of Directors Option Agreement incorporated by reference to Exhibit 10.22 of our Amendment No. 2 to its Registration Statement on Form S-1 (333-172116) filed with the SEC on May 25, 2011.
|
10.23
|
Form of Registration Rights Agreement for May/June option exercises, incorporated by reference to Exhibit 10.12 of our Form 10-Q for the period ended May 31, 2011 filed with the SEC on July 15, 2011.
|
10.24
|
Denver Colorado Facilities Lease, incorporated by reference to Exhibit 10.13 of our Form 10-Q for the period ended May 31, 2011 filed with the SEC on July 15, 2011.
|
10.25(1)
|
Employment Agreement between the Company and Anthony Garcia date August 11, 2011
|
10.26
|
Director Appointment Agreement dated February 2, 2012, incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed with the SEC on February 6, 2012
|
10.27
|
Separation Agreement and Release between the Company and Marc LeVier incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the SEC on July 24, 2012
|
10.28(1)
|
Severance, Waiver and Release Agreement between the Company and Anthony Garcia dated September 14, 2012
|
10.29(1)
|
Supplemental Agreement between the Company and Christopher Mathers dated September 26, 2012
|
31.1(1)
|
Certification of the Chief Executive Officer pursuant to Rule 13a-14 of the Exchange Act.
|
31.2(1)
|
Certification of the Chief Financial Officer pursuant to Rule 13a-14 of the Exchange Act.
|
32.1(1)
|
Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2(1)
|
Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101.INS(2) (3)
|
XBRL Instance Document
|
101.SCH(2) (3)
|
XBRL Taxonomy Extension — Schema
|
101.CAL(2) (3)
|
XBRL Taxonomy Extension — Calculations
|
101.DEF(2) (3)
|
XBRL Taxonomy Extension — Definitions
|
101.LAB(2) (3)
|
XBRL Taxonomy Extension — Labels
|
101.PRE(2) (3)
|
XBRL Taxonomy Extension — Presentations
|
(1)
|
Filed herewith
|
(2)
|
Submitted Electronically Herewith. Attached as Exhibit 101 to this report are the following formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Statements of Income/(Loss) and Comprehensive Income/(Loss) for the year ended August 31, 2012 and 2011, (ii) Consolidated Balance Sheets at August 31, 2012 and 2011, (iii) Consolidated Statements of Cash Flows for the year ended August 31, 2012 and 2011, and (iv) Notes to Consolidated Financial Statements
|
(3)
|
Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended or Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability.
|
Signature
|
Capacity
|
Date
|
/s/ Daniel E Gorski
Daniel E Gorski
|
Chief Executive Officer, Principal Executive Officer and Director
|
November 15, 2012
|
/s/ Wm. Chris Mathers
Wm. Chris Mathers
|
Chief Financial Officer and Principal Financial and Accounting Officer
|
November 15, 2012
|
/s/ John Tumazos
John Tumazos
|
Chairman of the Board
|
November 15, 2012
|
/s/ Anthony Marchese
Anthony Marchese
|
Director
|
November 15, 2012
|
/s/ Cecil C Wall
Cecil C Wall
|
Director
|
November 15, 2012
|
/s/ Philip Goodell
Philip Goodell
|
Director
|
November 15, 2012
|
/s/ Nicholas Pingitore
Nicholas Pingitore
|
Director
|
November 15, 2012
|
/s/ James R Wolfe
James R Wolfe
|
Director
|
November 15, 2012
|
A.
|
Employee’s Termination of Employment, and Acknowledgement Regarding Return of Property.
On August 31, 2012, Employee’s employment with the Company terminated.
|
|
B.
|
Employee’s Confidentiality and Non-Disparagement Obligations.
|
C.
|
Consideration for Employee.
Employee acknowledges and agrees that as of the date that Employee executes this Agreement, Employee has already been paid for: that portion of Employee’s salary earned through the date of Employee’s termination of employment, Employee’s unused but accrued vacation time, if any; any approved expense reimbursements; and any amount accrued and arising from Employee’s participation in, or benefits accrued under any employee benefit plans, programs or arrangements, which amounts (if any) have been paid in accordance with the terms and conditions of such employee benefit plans, programs or arrangements. Employee further acknowledges and agrees that (i) any and all stock options granted to employee shall expire, terminate, and be forfeited as of the date of termination (August 31, 2012), notwithstanding the vested or unvested nature of Employee’s stock options as of such date, or any post-termination exercise period that may otherwise be permitted under the terms and conditions of Employee’s stock option grant documentation, and (ii) no further payments or items of value of any kind are due to Employee, except as expressly provided below in this Section.
|
D.
|
Violation of Agreement
. If Employee breaches this Agreement, Employee agrees that such breach will cause the Company damage and that such damages will be difficult to ascertain; therefore, Employee agrees that upon any such breach, the Company shall have the right to immediately stop payment of any consideration described in Section C, above. Nothing contained herein shall be construed as prohibiting the Company or the Company Releasees from pursuing any other remedies available to them in the event of a breach by Employee, including any equitable remedies that may be available to the Company or the Company Releasees.
|
E.
|
Full General Release and Waiver of Claims by Employee.
Employee agrees that the foregoing consideration represents settlement in full of all outstanding obligations owed to Employee by the Company or any of its direct or indirect subsidiaries or affiliates or all affiliated companies, together with any of their current and former officers, directors, managers, employees, agents, investors, attorneys, shareholders, administrators, benefit plans, plan administrators, insurers, trustees, divisions, and subsidiaries and predecessor and successor corporations and assigns (collectively, the “Company Releasees”). Except as to the obligations of the Company arising under this Agreement, Employee, on Employee’s own behalf and on behalf of any of Employee’s companies, entities, heirs, family members, executors, agents, and assigns, hereby and forever releases the Company and the Company Releasees from, and agrees not to sue concerning, or in any manner to institute, prosecute, or pursue, any claim, complaint, duty, obligation, or cause of action relating to any matters of any kind, whether presently known or unknown, suspected or unsuspected, that Employee may possess against the Company or any of the Company Releasees arising from any omissions, acts, facts, or damages that have occurred at any time whatsoever up until and including the date that Employee executes this Agreement,
|
F.
|
Reservation of Employee’s Rights.
This Agreement does not waive or release any rights Employee may have for unemployment or worker’s compensation or any other rights that Employee cannot waive or release pursuant to the law.
|
|
G.
|
Severability.
If any provision of this Agreement is declared by any court of competent jurisdiction to be invalid for any reason, such invalidity shall not affect the remaining provisions of this Agreement, which shall be fully severable, and given full force and effect.
|
H.
|
Governing Law and Venue.
This Agreement shall be construed in accordance with the laws of the State of Colorado. Any dispute regarding, relating to or arising under this Agreement or the facts giving rise to the Agreement shall be litigated in Colorado, and Employee expressly agrees to the personal and subject matter jurisdiction of the state and federal courts in Colorado.
|
I.
|
Entire Agreement.
Employee and the Company understand and agree that this Agreement contains all the agreements between the Company and Employee relating to Employee’s employment with and termination by the Company. Any other prior agreement or agreements between Employee and the Company (including but not limited to the Company’s affiliates) are expressly extinguished, declared null and void or of no further legal effect by virtue of this Agreement.
|
J.
|
ACKNOWLEDGEMENTS.
Employee specifically acknowledges and agrees that by entering into this Agreement and in exchange for the consideration described in Section C above, including the Severance Pay, to which Employee otherwise would not be entitled, Employee is waiving and releasing any and all rights and claims that Employee may have arising from the Age Discrimination in Employment Act, as amended, which have arisen on or before the date of execution of this Agreement.
|
|
1.
|
Employee has read and understands this Agreement and is entering this Agreement knowingly and voluntarily.
|
|
2.
|
Employee understands and agrees that, by signing this Agreement, Employee is giving up any right to file any legal proceedings (
i.e.
, lawsuits) against the Company or the Company Releasees arising on or before the date of the Agreement. Employee is not waiving (or giving up) rights or claims that may arise after the date the Agreement is executed or that Employee cannot waive or release pursuant to the law.
|
|
3.
|
EMPLOYEE IS HEREBY ADVISED IN WRITING BY THIS AGREEMENT TO CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS AGREEMENT. EMPLOYEE REPRESENTS THAT THIS AGREEMENT HAS BEEN FULLY EXPLAINED BY THE EMPLOYEE’S ATTORNEY, OR THAT EMPLOYEE HAS WAIVED CONSULTATION WITH AN ATTORNEY, CONTRARY TO THE COMPANY’S RECOMMENDATION.
|
|
4.
|
Employee understands and agrees that Employee has had forty-five (45) days from the day Employee received this Agreement, not counting the day upon which Employee received it, to consider whether Employee wishes to sign this Agreement. Employee further acknowledges that if Employee signs this Agreement before the end of the forty-five (45) day period, it will be Employee’s personal, voluntary decision to do so and Employee has not been pressured to make a decision sooner.
|
|
5.
|
Employee further understands that Employee may revoke (that is, cancel) this Agreement for any reason within seven (7) calendar days after signing it. Employee agrees that the revocation will be in writing and hand-delivered or mailed to the Company. If mailed, the revocation must arrive at the Company within the seven (7) day period, properly addressed to Texas Rare Earth Resources Corp, Att’n: Wm Chris Mathers Chief Financial Officer, 304 Inverness Way South, Suite 365, Englewood, CO 80112. Employee understands that Employee will not receive any Severance Pay under this Agreement if Employee revokes it, and in any event, Employee will not receive any Severance Pay until after the seven (7) day revocation period has expired.
|
|
6.
|
If Employee does not sign and return this Agreement to Company by the 45
th
day after Employee’s date of termination, this Agreement shall be null and void, and the offer set forth herein shall be withdrawn as of such day.
|
|
7.
|
Employee has been advised and understands as follows:
|
|
a.
|
The eligibility factors for the Company’s severance program, the class, unit, or group of individuals covered by such program, and any time limits applicable to such program are as follows:
|
|
i.
|
The Company selected eligible individuals for this program based on the Company’s desire to close or significantly downsize its Denver office as a result of its current staffing needs and other financial considerations.
|
|
ii.
|
The job titles and ages of the employees in the Denver office selected for the program are:
|
K.
|
No Application.
Employee hereby agrees that Employee will not apply for an employment position or a contractor position with the Company or Company Releasees in the future and that no such applications are pending as of the effective date of this Agreement.
|
L.
|
Cooperation
.
Employee agrees to cooperate with and assist the Company with any investigation, lawsuit, arbitration, or other proceeding to which the Company is subjected. Employee will make Employee available for preparation for, and attendance of, hearings, proceedings or trial, including pretrial discovery and trial preparation. Employee further agrees to perform all acts and execute any documents that may be necessary to carry out the provisions of this Section L.
|
EMPLOYEE
|
|
|
|
DATED
: 9/14/2012
|
/s/ Anthony Garcia
|
|
Anthony Garcia
|
|
|
TEXAS RARE EARTH RESOURCES CORP
|
|
|
|
|
|
DATED
: 9/14/2012
|
/s/ Daniel E Gorski
|
By:
Daniel E Garski
|
|
Its:
Chief Executive Officer
|
A.
|
Effective February 15, 2011, the Company and Employee entered into an employment agreement (the “
Employment Agreement
”) governing the terms and conditions of Employee’s employment as Chief Financial Officer of the Company.
|
B.
|
The Company and Employee now wish to establish a framework under the Employment Agreement for Employee’s expected departure from the Company at the end of calendar year 2012.
|
1.
|
The Employment Agreement shall remain in full force and effect and shall be unamended, except as specifically set forth herein.
|
2.
|
Employee shall continue to perform his services to the Company in accordance with the standards set forth in the Employment Agreement through December 31, 2012. Such services shall include, but are not limited to, performing his day-to-day job duties and using his reasonable best efforts to (i) create a smooth transition to any successor to Employee, (ii) sublet the Company’s office space in Denver, Colorado, and (iii) perform such other duties as may be assigned to Employee in accordance with Section 3 of the Employment Agreement.
|
3.
|
In addition to, and not in limitation of, the foregoing, Employee shall complete the following tasks prior to December 31, 2012:
|
|
(i)
|
Preparation and timely filing of Form S-1 for the Company.
|
|
(ii)
|
Timely completion of the annual financial audit of the Company for FY 2012.
|
|
(iii)
|
Preparation and timely filing of Form 10-K for the Company for FY 2012.
|
|
(iv)
|
Timely completion of all required Sarbanes-Oxley compliance items due on or prior to December 31, 2012.
|
|
(v)
|
Preparation and timely completion of the Company’s Annual Report for FY 2012.
|
4.
|
In the event Employee satisfies the requirements set forth in Sections 2 and 3 above, the Company shall terminate Employee’s employment with the Company in accordance with Section 8(c)(i) of the Employment Agreement (i.e. for reasons other than Misconduct or Disability) on January 1, 2013, and Employee shall, upon satisfaction of the terms and conditions of the Employment Agreement (including the requirement to timely sign a binding release of claims), be entitled to severance payments and benefits pursuant to Section 8(c)(i) of the Employment Agreement as a result of such termination. The parties agree that the cash severance amount due pursuant to Section 8(c)(i) of the Employment Agreement as of January 1, 2013 shall be $240,000.
|
5.
|
Upon executing this Agreement, Employee acknowledges and agrees that the change in the composition of the Company’s Board between July 15
th
and August 3
rd
does not qualify as a “Corporate Change,” (as defined in the Employment Agreement), and that Employee may not terminate his employment for “Good Reason” under Section 8(e) of the Employment Agreement based on such change in Board composition.
|
6.
|
Upon executing this Agreement, the Company acknowledges and agrees that “Misconduct,” as previously defined in Section 8(c)(ii) of the Agreement, shall mean (A) the continued failure by Employee to substantially perform his duties with the Company (other than any such failure resulting from Employee’s incapacity due to physical or mental illness or any such actual or anticipated failure after the issuance of a Notice of Termination by Employee for Good Reason), after a written demand for substantial performance is delivered to Employee by the Board, which demand specifically identifies the manner in which the Board believes that Employee has not substantially performed his duties, and the Employee fails to cure such failure within fifteen (15) days after receipt of such demand, (B) Employee’s conviction for the commission of a felony, or (C) any action or inaction by the Employee that is materially injurious to the Company and that involves fraud, embezzlement, theft, or similar dishonesty by Employee.
|
1.
|
I have reviewed this Annual Report on Form 10-K of Texas Rare Earth Resources Corp.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
1.
|
I have reviewed this Annual Report on Form 10-K of Texas Rare Earth Resources Corp.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|