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STATES**\n\n**SECURITIES AND\nEXCHANGE COMMISSION**\n\n**Washington, D.C.\n20549**\n\n \n\n**FORM 10-Q**\n\n \n\n☒\n**QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**\n\n \n\n**For the quarterly period ended May 31, 2026**\n\n \n\n**OR**\n\n \n\n☐\n**TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**\n\n** **\n\n**For the transition period from**                    **to**                  \n\n \n\nCommission file number: **000-53482**\n\n \n\n**TEXAS MINERAL\nRESOURCES CORP.**\n\n(Exact Name of Registrant as Specified in its Charter)\n\n \n\n**Delaware**\n \n**87-0294969**\n\n(State of other jurisdiction of incorporation or organization)\n \n(I.R.S. Employer Identification No.)\n\n \n \n \n\n**527 21st Street**\n\n**#44**\n\n \n \n\n**Galveston, Texas**\n \n**77550**\n\n(Address of Principal Executive Offices)\n \n(Zip Code)\n\n** **\n\n**(915) 369-2133**\n\n(Registrant’s Telephone Number, including\nArea Code)\n\n \n\n(Former Name, Former Address and Former Fiscal\n\nYear, if Changed Since Last Report)\n\n \n\nSecurities registered under Section 12(b) of the\nExchange Act: None\n\n \n\nIndicate by check mark whether the registrant\n(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months\n(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements\nfor the past 90 days. Yes ☒ No ☐\n\n \n\nIndicate by check mark whether the registrant\nhas submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding\n12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No\n☐\n\n \n\nIndicate by check mark whether the registrant\nis a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.\nSee the definitions of “large accelerated filer,” “accelerated filer” and “smaller\nreporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.\n\n \n\n☐\nLarge accelerated filer\n☐\nAccelerated filer\n\n☐\nNon-accelerated filer\n☒\nSmaller reporting company\n\n☐\nEmerging growth\n \n \n\n \n\nIf an emerging growth company, indicate by check\nmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting\nstandards provided pursuant to Section 13(a) of the Exchange Act. ☐\n\n \n\nIndicate by check mark whether the Registrant\nis a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No\n☒\n\n \n\nNumber of shares of issuer’s common stock\noutstanding as of June 30, 2026: 88,339,693.\n\n \n\n \n\n \n\n \n\n \n\n** **\n\n**Table of Contents**\n\n \n\n \n**Part I**\n**Page**\n\n[Item 1](#tmrc10qa001)\n \n[Financial Statements (Unaudited)](#tmrc10qa001)\n1\n\n[Item 2](#tmrc10qa002)\n \n[Management’s Discussion and Analysis of Financial Condition and Results of Operations](#tmrc10qa002)\n11\n\n[Item 3](#tmrc10qa003)\n \n[Quantitative and Qualitative Disclosures About Market Risk](#tmrc10qa003)\n24\n\n[Item 4](#tmrc10qa004)\n \n[Controls and Procedures](#tmrc10qa004)\n24\n\n \n[**Part II**](#tmrc10qa005)\n \n\n[Item 1](#tmrc10qa006)\n \n[Legal Proceedings](#tmrc10qa006)\n25\n\n[Item 1A.](#tmrc10qa007)\n \n[Risk Factors](#tmrc10qa007)\n25\n\n[Item 2](#tmrc10qa008)\n \n[Unregistered Sales of Equity Securities and Use of Proceeds](#tmrc10qa008)\n26\n\n[Item 3](#tmrc10qa009)\n \n[Defaults upon Senior Securities](#tmrc10qa009)\n26\n\n[Item 4](#tmrc10qa010)\n \n[Mine Safety Disclosures](#tmrc10qa010)\n27\n\n[Item 5](#tmrc10qa011)\n \n[Other Information](#tmrc10qa011)\n27\n\n[Item 6](#tmrc10qa012)\n \n[Exhibits](#tmrc10qa012)\n28\n\n \n \n \n \n\n[Signatures](#tmrc10qa013)\n31\n\n \n\n \n\n \n\n \n\nTEXAS MINERAL RESOURCES CORP.\n\nCONSOLIDATED BALANCE SHEETS\n\n(Unaudited)\n\n \n\n  \nMay 31, \nAugust 31,\n\n  \n2026 \n2025\n\nASSETS \n  \n \n\n  \n  \n \n\nCURRENT ASSETS \n    \n   \n\nCash and cash equivalents \n$2,606,393  \n$590,350 \n\nPrepaid expenses and other current assets \n 63,050  \n 41,460 \n\n  \n    \n   \n\nTotal current assets \n 2,669,443  \n 631,810 \n\n  \n    \n   \n\nRestricted investment \n 38,766  \n 38,766 \n\nMineral properties, net \n 490,606  \n 490,606 \n\n  \n    \n   \n\nTOTAL ASSETS \n$3,198,815  \n$1,161,182 \n\n  \n    \n   \n\nLIABILITIES AND SHAREHOLDERS' EQUITY \n    \n   \n\n  \n    \n   \n\nCURRENT LIABILITIES \n    \n   \n\nAccounts payable and accrued liabilities \n$171,352  \n$50,400 \n\nNotes payable, related party \n 75,000  \n 75,000 \n\n  \n    \n   \n\nTotal current liabilities and liabilities \n 246,352  \n 125,400 \n\n  \n    \n   \n\nCOMMITMENTS AND CONTINGENCIES \n    \n   \n\n  \n    \n   \n\nSHAREHOLDERS' EQUITY \n    \n   \n\nPreferred stock, par value $0.001; 10,000,000 shares \n    \n   \n\nauthorized, no shares issued and oustanding \n    \n   \n\nas of May 31, 2026 and August 31, 2025 \n —    \n —   \n\nCommon stock, par value $0.01; 100,000,000 shares \n    \n   \n\nauthorized, 88,339,693 and 78,855,273 shares \n    \n   \n\nissued and oustanding as of May 31, 2026 \n    \n   \n\nand August 31, 2025, respectively \n 883,397  \n 788,553 \n\nAdditional paid-in capital \n 49,541,198  \n 45,357,513 \n\nAccumulated deficit \n (47,472,132) \n (45,110,284)\n\n  \n    \n   \n\nTotal shareholders' equity \n 2,952,463  \n 1,035,782 \n\n  \n    \n   \n\nTOTAL LIABILITIES AND SHAREHOLDERS' EQUITY \n$3,198,815  \n$1,161,182 \n\n \n\n \n\n \n\nThe accompanying notes are an integral part of these interim consolidated financial statements.\n\n 1 \n\n \n\n \n\nTEXAS MINERAL RESOURCES CORP.\n\nCONSOLIDATED STATEMENTS OF OPERATIONS\n\nFor the Nine and Three Months Ended May 31, 2026 and 2025\n\n(Unaudited)\n\n  \n    \n    \n    \n   \n\n  \nNine Months Ended \nThree Months Ended\n\n  \n2026 \n2025 \n2026 \n2025\n\n  \n  \n  \n  \n \n\nOPERATING EXPENSES \n    \n    \n    \n   \n\nExploration costs \n$25,564  \n$281,387  \n$6,047  \n$255,650 \n\nGeneral and administrative expenses \n 1,886,433  \n 661,394  \n 1,343,870  \n 250,000 \n\n  \n    \n    \n    \n   \n\nTotal operating expenses \n 1,911,997  \n 942,781  \n 1,349,917  \n 505,650 \n\n  \n    \n    \n    \n   \n\nLOSS FROM OPERATIONS \n (1,911,997) \n (942,781) \n (1,349,917) \n (505,650)\n\n  \n    \n    \n    \n   \n\nOTHER INCOME (EXPENSE) \n    \n    \n    \n   \n\nInterest expense \n —    \n (346,858) \n —    \n (307,433)\n\nChange in value of equity securities \n (484,097) \n —    \n 15,768  \n —   \n\nOther income \n 34,246  \n 14,950  \n 19,422  \n 9,444 \n\n  \n    \n    \n    \n   \n\nTotal other income (expense) \n (449,851) \n (331,908) \n 35,190  \n (297,989)\n\n  \n    \n    \n    \n   \n\nNET LOSS \n$(2,361,848) \n$(1,274,689) \n$(1,314,727) \n$(803,639)\n\n  \n    \n    \n    \n   \n\nNet loss per share: \n    \n    \n    \n   \n\nBasic and diluted net loss per share \n$(0.03) \n$(0.02) \n$(0.01) \n$(0.01)\n\n  \n    \n    \n    \n   \n\nWeighted average shares outstanding: \n    \n    \n    \n   \n\nBasic and diluted \n 83,572,625  \n 74,707,698  \n 88,251,871  \n 74,955,649 \n\n \n\n \n\nThe accompanying notes are an integral part of these interim consolidated financial statements.\n\n \n\n 2 \n\n \n\n \n\nTEXAS MINERAL RESOURCES CORP.\n\nCONSOLIDATED STATEMENTS OF CASHFLOWS\n\nFor the Nine Months Ended May 31, 2026 and 2025\n\n(Unaudited)\n\n \n\n  \n2026 \n2025\n\nCASH FLOWS FROM OPERATING ACTIVITIES \n    \n   \n\nNet loss \n$(2,361,848) \n$(1,274,689)\n\nAdjustments to reconcile net loss to net cash used \n    \n   \n\n  in operating activities: \n    \n   \n\nStock based compensation \n 168,399  \n 183,839 \n\nAccretion of debt discount \n —    \n 346,858 \n\nChange in value of equity securities \n 484,097  \n —   \n\nChanges in current assets and liabilities: \n    \n   \n\nPrepaid expenses and other current assets \n (21,590) \n 18,645 \n\nAccounts payable and accrued liabilities \n 120,952  \n 16,630 \n\n  \n    \n   \n\nNet cash used in operating activities \n (1,609,990) \n (708,717)\n\n  \n    \n   \n\nCASH FLOWS FROM INVESTING ACTIVITIES \n    \n   \n\nProceeds from sale of equity securities \n 2,996,033  \n —   \n\nPurchases of restricted investment \n —    \n (37,600)\n\n  \n    \n   \n\nNet cash (provided by) used in investing activities \n 2,996,033  \n (37,600)\n\n  \n    \n   \n\n  \n    \n   \n\nCASH FLOWS FROM FINANCING ACTIVITIES \n    \n   \n\nProceeds from exercise of stock options and warrants \n 630,000  \n —   \n\nProceeds from convertible notes and detachable warrants \n —    \n 1,098,000 \n\n  \n    \n   \n\nNet cash provided by financing activities \n 630,000  \n 1,098,000 \n\n  \n    \n   \n\nNET CHANGE IN CASH AND CASH EQUIVALENTS \n 2,016,043  \n 351,683 \n\nCASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD \n 590,350  \n 428,197 \n\n  \n    \n   \n\nCASH AND CASH EQUIVALENTS, END OF PERIOD \n$2,606,393  \n$779,880 \n\n  \n    \n   \n\nSUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION \n    \n   \n\n  \n    \n   \n\nInterest paid \n$—    \n$—   \n\n  \n    \n   \n\nTaxes paid \n$—    \n$—   \n\n  \n    \n   \n\nNON-CASH INVESTING AND FINANCING ACTIVITIES \n    \n   \n\n  \n    \n   \n\nMineral properties acquired under notes \n    \n   \n\n  payable, related party \n$—    \n$75,000 \n\n  \n    \n   \n\nIssuance of detachable warrants and discount on \n    \n   \n\n  convertible notes \n$—    \n$746,133 \n\n  \n    \n   \n\nContribution of marketable equity securities \n$3,480,130  \n$746,133 \n\n \n\n \n\nThe accompanying notes are an integral part of these interim consolidated financial statements.\n\n \n\n 3 \n\n \n\n \n\nTEXAS MINERAL RESOURCES CORP.\n\nCONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY\n\nFor the Nine Months Ended May 31, 2026 and 2025\n\n(Unaudited)\n\n \n\n  \n  \n  \n  \n  \nAdditional \n  \n \n\n  \nPreferred Stock \nCommon stock \nPaid-in \nAccumulated \n \n\n  \nShares \nAmount \nShares \nAmount \nCapital \nDeficit \nTotal\n\n  \n  \n  \n  \n  \n  \n  \n \n\nBalance at August 31, 2025 \n —    \n$—    \n 78,855,273  \n$788,553  \n$45,357,513  \n$(45,110,284) \n$1,035,782 \n\n  \n    \n    \n    \n    \n    \n    \n   \n\nStock based compensation \n —    \n —    \n 123,132  \n 1,231  \n 85,769  \n —    \n 87,000 \n\nCommon stock issued upon cashless exercise of options \n —    \n —    \n 257,407  \n 2,574  \n (2,574) \n —    \n —   \n\nCommon stock issued upon exercise of options and \n    \n    \n    \n    \n    \n    \n   \n\nwarrants \n    \n    \n 2,100,000  \n 21,000  \n 609,000  \n —    \n 630,000 \n\nNet loss \n —    \n —    \n —    \n —    \n —    \n (245,787) \n (245,787)\n\n  \n    \n    \n    \n    \n    \n    \n   \n\nBalance at November 30, 2025 \n —    \n —    \n 81,335,812  \n 813,358  \n 46,049,708  \n (45,356,071) \n 1,506,995 \n\n  \n    \n    \n    \n    \n    \n    \n   \n\nStock based compensation \n —    \n —    \n 111,729  \n 1,117  \n 80,282  \n —    \n 81,399 \n\nCommon stock issued upon cashless exercise of \n    \n    \n    \n    \n    \n    \n   \n\noptions and warrants \n —    \n —    \n 6,768,571  \n 67,686  \n (67,686) \n —    \n —   \n\nContribution of marketable equity securities \n —    \n —    \n —    \n —    \n 3,480,130  \n —    \n 3,480,130 \n\nNet loss \n —    \n —    \n —    \n —    \n —    \n (801,334) \n (801,334)\n\n  \n    \n    \n    \n    \n    \n    \n   \n\nBalance at February 28, 2026 \n —    \n —    \n 88,216,112  \n 882,161  \n 49,542,434  \n (46,157,405) \n 4,267,190 \n\n  \n    \n    \n    \n    \n    \n    \n   \n\nCommon stock issued as payment of accrued director's \n    \n    \n    \n    \n    \n    \n   \n\nfees \n —    \n —    \n 123,581  \n 1,236  \n (1,236) \n —    \n —   \n\nNet loss \n —    \n —    \n —    \n —    \n —    \n (1,314,727) \n (1,314,727)\n\n  \n    \n    \n    \n    \n    \n    \n   \n\nBalance at May 31, 2026 \n —    \n$—    \n 88,339,693  \n$883,397  \n$49,541,198  \n$(47,472,132) \n$2,952,463 \n\n  \n    \n    \n    \n    \n    \n    \n   \n\n  \n    \n    \n    \n    \n    \n    \n   \n\nBalance at August 31, 2024 \n —    \n$—    \n 74,343,826  \n$743,439  \n$43,297,421  \n$(43,177,031) \n$863,829 \n\n  \n    \n    \n    \n    \n    \n    \n   \n\nCommon stock issued for services \n —    \n —    \n 244,599  \n 2,446  \n 50,391  \n —    \n 52,837 \n\nNet loss \n —    \n —    \n —    \n —    \n —    \n (229,097) \n (229,097)\n\n  \n    \n    \n    \n    \n    \n    \n   \n\nBalance at November 30, 2024 \n —    \n —    \n 74,588,425  \n 745,885  \n 43,347,812  \n (43,406,128) \n 687,569 \n\n  \n    \n    \n    \n    \n    \n    \n   \n\nCommon stock issued for services \n —    \n —    \n 244,599  \n 2,446  \n 48,224  \n —    \n 50,670 \n\nIssuance of detachable warrants \n —    \n —    \n —    \n —    \n 746,133  \n —    \n 746,133 \n\nNet loss \n —    \n —    \n —    \n —    \n —    \n (241,953) \n (241,953)\n\n  \n    \n    \n    \n    \n    \n    \n   \n\nBalance at February 29, 2025 \n —    \n —    \n 74,833,024  \n 748,331  \n 44,142,169  \n (43,648,081) \n 1,242,419 \n\n  \n    \n    \n    \n    \n    \n    \n   \n\nCommon stock and stock options issued for services \n —    \n —    \n 197,922  \n 1,979  \n 78,353  \n —    \n 80,332 \n\nNet loss \n —    \n —    \n —    \n —    \n —    \n (803,639) \n (803,639)\n\n  \n    \n    \n    \n    \n    \n    \n   \n\nBalance at May 31, 2025 \n —    \n$—    \n 75,030,946  \n$750,310  \n$44,220,522  \n$(44,451,720) \n$519,112 \n\n \n\n \n\nThe accompanying notes are an integral part of these interim consolidated financial statements.\n\n \n\n 4 \n\n \n\n \n\n \n\n \n\n**Texas Mineral Resources Corp.**\n\n**Notes to Interim Consolidated Financial Statements**\n\n**May 31, 2026**\n\n**(Unaudited)**\n\n**NOTE 1 – GENERAL**\n\n \n\n*Exploration-Stage Company*\n\n \n\nSince January 1, 2009, Texas Mineral Resources\nCorp. (“we”, “us”, “our”, the “Company”) has been classified as an “exploration\nstage” company for purposes of Regulation S-K Item 1300 of the U.S. Securities and Exchange Commission (“SEC”). Under\nSEC Regulation S-K Item 1300, companies engaged in significant mining operations are classified into three categories, referred to as\n“stages” - exploration, development, and production. Exploration stage includes all companies that do not have established\nreserves in accordance with Item 1300. Such companies are deemed to be “in the search for mineral deposits.” Notwithstanding\nthe nature and extent of development-type or production-type activities that have been undertaken or completed, a company cannot be classified\nas a development or production stage company unless it has established reserves in accordance with Item 1300.\n\n \n\n*Basis of Presentation*\n\n \n\nThe accompanying unaudited interim consolidated\nfinancial statements of Texas Mineral Resources Corp. have been prepared in accordance with accounting principles generally accepted in\nthe United States of America and the rules of the SEC, and should be read in conjunction with the audited financial statements and notes\nthereto contained in our annual report on Form 10-K, for the year ended August 31, 2025, dated November 28, 2025, as filed with the SEC.\nIn the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial\nposition and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim\nperiods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would\nsubstantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year ended August 31,\n2025, as reported in our annual report on Form 10-K, have been omitted.\n\n \n\n*Principles of Consolidation*\n\n \n\nThe consolidated financial statements include\nthe accounts of Texas Mineral Resources Corp., its wholly-owned subsidiary Standard Silver Corp. and its proportionate interest in the\nassets, liabilities, and operations of Round Top Mountain Development Company, LLC (“Round Top” or “RTMD”). All\nsignificant intercompany balances and transactions have been eliminated.\n\n \n\n*Going Concern*\n\n \n\nThese financial statements have been prepared\nassuming that the Company will continue as a going concern. The Company has an accumulated deficit from inception through May 31, 2026,\nof approximately $47,472,000 and has yet to achieve profitable operations, and projects further losses in the development of its business.\n\n \n\nAt May 31, 2026, the Company had a working capital\nsurplus of approximately $2,423,000, however the Company’s ability to continue as a going concern is dependent upon its ability\nto generate profitable operations in the future and/or obtain the necessary financing to meet its obligations and repay its liabilities\narising from normal business operations when they come due. These financial statements do not include any adjustments to the amounts and\nclassifications of assets and liabilities that may be necessary should we be unable to continue as a going concern.\n\n \n\nWe do not have sufficient cash on hand to fund\nour portion of the Round Top budget, being our portion of the Round Top cash calls, during our current fiscal year. We believe we have\nsufficient capital to fund our estimated general and administrative expenses through August 31, 2026. Failure by the Company to fund required\ncash calls to Round Top during the twelve-month period from the issuance date of these interim financial statements would result in dilution\nto its membership interest in Round Top, which is 18.271% at May 31, 2026. Accordingly, the Company may be required to raise additional\ncapital to fund its Round Top cash call obligations and there can be no assurance that the Company will be able to raise the necessary\ncapital to fund its cash calls if it elects not to dilute its membership interest in lieu of funding the cash calls. Based on these factors,\nthere is substantial doubt as to the Company’s ability to continue as a going concern for a period of twelve months from the issuance\ndate of these interim financial statements.\n\n* *\n\n 5 \n\n \n\n**Texas Mineral Resources Corp.**\n\n**Notes to Interim Consolidated Financial Statements**\n\n**May 31, 2026**\n\n**(Unaudited)**\n\n* *\n\n*Segment Reporting*\n\n \n\nIn accordance with ASC Topic 280 - “Segment\nReporting (ASC 280)” the Company has determined that it has a single operating and reporting segment. As a result, the Company’s\nsegment accounting policies are the same as described herein and the Company does not have any material intra-segment sales and transfers\nof assets. The Company’s Chief Operating Decision Maker (“CODM”) is the Chief Executive Officer (the “CEO”).\nThe CEO, with the Chief Financial Officer, assesses the performance and makes operating decisions of the Company on a consolidated basis,\nbased on the Company’s net increase/decrease in shareholder’s equity resulting from operations (“net income”/“net\nloss”). Company assets are not reviewed by the CODM at a different asset level or category, but at the consolidated level. As the\nCompany’s operations are comprised of a single operating segment, the segment assets are reflected on the accompanying Consolidated\nBalance Sheets as “total assets” and the significant segment expenses are listed on the accompanying Consolidated Statements\nof Operations.\n\n \n\n**NOTE 2 – MERGER AGREEMENT**\n\n \n\nAs previously announced\nin an 8-K filing with the SEC on March 5, 2026, the Company entered into an Agreement and Plan of Merger dated March 4, 2026 (“Merger\nAgreement”) with USAR, Hamer Merger Sub, Inc., a wholly owned subsidiary of USAR (“Merger Sub 1”), and Hamer Merger\nSub, LLC, a wholly owned subsidiary of USAR (“Merger Sub 2”). Pursuant to the Merger Agreement, the Company will enter into\na series of mergers with Merger Sub 1 and Merger Sub 2 that will result in the business of the Company being held by a wholly owned subsidiary\nof USAR, and the common stock of the Company being converted into the right to receive the merger consideration described below (“Transaction”).\n\n \n\nThe Merger Agreement\nprovides that, among other things and upon the terms and subject to the conditions found in the Merger Agreement, the following steps\nwill occur as part of a single integrated transaction on the closing date of the Merger (“Closing”).\n\n \n\n \n(a)\nMerger Sub 1 will merge with and into the Company (the “First Merger”), the separate existence of Merger Sub 1 will cease, and the Company will be the surviving corporation of the First Merger and a wholly owned subsidiary of USAR;\n\n \n \n \n\n \n(b)\nthe surviving corporation of the First Merger will merge with and into Merger Sub 2 (the “Second Merger”), the separate existence of that surviving corporation will cease, and Merger Sub 2 will be the surviving company of the Second Merger and a wholly owned subsidiary of USAR that holds all of the assets of the Company;\n\n \n \n \n\n \n(c)\nall of the issued and outstanding shares of Company common stock prior to the effective time of the First Merger will be converted into the right to receive a fraction of a share of common stock of USAR determined as described below; and\n\n \n \n \n\n \n(d)\nUSAR will issue to the holders of Company common stock an aggregate of 3,823,328 shares of USAR common stock pro rata according to the number of shares of Company common stock owned.\n\n \n\nUnder the Merger Agreement,\neach share of Company common stock that is issued and outstanding immediately prior to the effective time of the First Merger (excluding\nany shares of Company common stock as to which dissenters’ rights have been properly exercised and shares of Company common stock\nowned by USAR, the Company or any of their respective direct or indirect wholly owned subsidiaries) shall automatically be converted into\nthe right to receive that portion of a validly issued, fully paid and nonassessable share of USAR common stock equal to the quotient obtained\nby dividing (a) 3,823,328 by (b) the aggregate number of shares of Company common stock outstanding on a fully diluted basis\nat the effective time of the First Merger.\n\n \n\nOur board of directors\nhas approved and declared advisable the Merger Agreement and the Transaction and resolved to recommend that our stockholders approve the\nMerger Agreement, the Transaction and related matters.\n\n \n\nIn connection with the execution of the Merger\nAgreement, the Company and USAR entered into a voting and support agreement (each, a “Voting and Support Agreement”) with\neach member of the Company’s board of directors and each of the Company’s executive officers. Pursuant to the Voting and Support\nAgreements, among other things, all of the Company’s directors and executive officers agreed to vote all of their shares of Company\ncommon stock in favor of the various proposals related to the Transaction and the Merger Agreement and any other matters necessary or\nreasonably requested by USAR for consummation of the Transaction and against any action reasonably expected to impede, delay or materially\nand adversely affect the Transaction.\n\n \n\n 6 \n\n \n\nThe Merger Agreement contains customary representations,\nwarranties and covenants as well as conditions to Closing. One of the Closing conditions is that the Carlisle mine and related real estate\nis transferred to Mr. Gorski at or prior to Closing in consideration for the cancellation and discharge of the $75,000 promissory note\nowed by the Company to Mr. Gorski. Additionally, the Merger Agreement provides for termination rights and sets forth a termination fee\nequal to $3,250,000 owed by the Company to USAR under certain circumstances.\n\n** **\n\n**NOTE 3 – JOINT VENTURE ARRANGEMENTS**\n\n \n\nThe Company accounts for its interest in RTMD\nusing the proportionate consolidation method, which is an exception available to entities in the extractive industries, thereby recognizing\nits pro-rata share of the assets, liabilities, and operations of RTMD in the appropriate classifications in the financial statements.\n\n \n\n**NOTE 4 – MINERAL PROPERTIES**\n\n \n\nThe following discussion under “*RTMD\nMineral Properties*” provides a history of the ownership and obligations of the Round Top Project, of which we, as of May 31,\n2026, held a 18.271% proportionate interest and USA Rare Earth, Inc. (“USAR”) held an 81.729% proportionate interest.\n\n \n\n*RTMD Mineral Properties*\n\n \n\nAugust 2010 Lease\n\n \n\nOn August 17, 2010, the Company executed a new\nmining lease with the Texas General Land Office covering Sections 7 and 18 of Township 7, Block 71 and Section 12 of Block 72, covering\napproximately 860 acres at Round Top Mountain in Hudspeth County, Texas. The mining lease issued by the Texas General Land Office provides\nfor the right to explore, produce, develop, mine, extract, mill, remove, and market rare earth elements, all other base and precious metals,\nindustrial minerals and construction materials and all other minerals excluding oil, gas, coal, lignite, sulfur, salt, and potash. The\nterm of the lease is nineteen years and so long thereafter as minerals are produced in paying quantities.\n\n \n\nUnder the terms of the lease, Round Top is obligated\nto pay the State of Texas a total lease bonus of $142,518. The Company paid $44,718 upon the execution of the lease, and Round Top will\nbe required to pay the remaining $97,800 upon submission of a supplemental plan of operations to conduct mining. Upon the sale of any\nminerals removed from the Round Top Project, Round Top will pay the State of Texas a $500,000 minimum advance royalty. Thereafter, if\npaying quantities of minerals are obtained, Round Top will be required to pay the State of Texas a production royalty equal to eight percent\nof the market value of uranium and other fissionable materials removed and sold from the Round Top Project and six and one quarter percent\nof the market value of all other minerals removed and sold. If paying quantities have not been obtained, Round Top may pay additional\ndelay rental fees to extend the term of the lease for successive one (1) year periods pursuant to the following schedule:\n\n \n\n \n \n**Per Acre\nAmount**\n \n \n**Total\nAmount**\n \n\nSeptember 2, 2025 – 2029\n \n$ \n200\n \n \n$ \n178,873\n \n\n \n\nIn August 2025, Round Top paid the State of Texas\na delay rental to extend the term of the lease in an amount equal to $178,873. \n\n \n\n 7 \n\n \n\n**Texas Mineral Resources Corp.**\n\n**Notes to Interim Consolidated Financial Statements**\n\n**May 31, 2026**\n\n**(Unaudited)**\n\n \n\nNovember 2011 Lease\n\n \n\nOn November 1, 2011, the Company executed a mining\nlease with the State of Texas covering approximately 90 acres of land that is adjacent to the August 2010 Lease. Under the lease, the\nCompany paid the State of Texas a lease bonus of $20,700 upon the execution of the lease. Upon the sale of minerals removed from the Round\nTop Project, Round Top will be required to pay the State of Texas a $50,000 minimum advance royalty. Thereafter, if paying quantities\nof minerals are obtained, Round Top will be required to pay the State of Texas a production royalty equal to eight percent of the market\nvalue of uranium and other fissionable materials removed and sold from the Round Top Project and six and one quarter percent of the market\nvalue of all other minerals. If paying quantities have not been obtained, Round Top may pay additional delay rental fees to extend the\nterm of the lease for successive one (1) year periods pursuant to the following schedule:\n\n  \n\n \n \n**Per Acre\nAmount**\n \n \n**Total\nAmount**\n \n\nNovember 1, 2025 – 2029\n \n$ \n200\n \n \n$ \n18,000\n \n\n \n\nIn August 2025, Round Top paid the State of Texas\na delay rental to extend the term of the lease in an amount equal to $18,000.\n\n \n\nMarch 2013 Lease\n\n \n\nOn March 6, 2013, the Company purchased the surface\nlease at the Round Top Project, known as the West Lease, from the Southwest Wildlife and Range Foundation (since renamed the Rio Grande\nFoundation) for $500,000 cash and 1,063,830 shares of common stock valued at $500,000. The Company also agreed to support the Foundation\nthrough an annual payment of $45,000 for ten years to support conservation efforts within the Rio Grande Basin. The West Lease comprises\napproximately 54,990 acres. The purchase of the surface lease provides unrestricted surface access for the potential development and mining\nof the Round Top Project.\n\n \n\nOctober 2014 Surface Option and Water Lease\n\n \n\nOn October 29, 2014, the Company announced the\nexecution of agreements with the Texas General Land Office securing the option to purchase the surface rights covering the potential Round\nTop project mine and plant areas and, separately, a groundwater lease. The option to purchase the surface rights covers approximately\n5,670 acres over the mining lease. Round Top may exercise the option for all or part of the option acreage at any time during the sixteen-year\nprimary term of the mineral lease. The option can be maintained through annual payments of $10,000. The purchase price will be the appraised\nvalue of the surface at the time of option exercise. All annual payments have been made as of the date of this filing.\n\n \n\nThe ground water lease secures the right to develop\nthe ground water within a 13,120-acre lease area located approximately 4 miles from the Round Top deposit. The lease terms include an\nannual minimum production payment of $5,000 prior to production of water for the operation. After initiation of production Round Top will\npay $0.95 per thousand gallons or $20,000 annually, whichever is greater. This lease remains in effect so long as the mineral lease is\nin effect.\n\n \n\n*Other Mineral Properties*\n\n* *\n\nPotential Santa Fe Gold Corporation/Alhambra Project\n\n \n\nIn November 2021, the Company entered into a mineral\nexploration and option agreement with Santa Fe Gold Corporation (“Santa Fe”). Under the option agreement, the Company has\nthe right to pursue a joint venture arrangement with Santa Fe to jointly explore and develop a target silver property to be selected by\nthe Company among patented and unpatented mining claims held by Santa Fe within the Black Hawk Mining District in Grant County, New Mexico.\nCompletion of a joint venture agreement, if any, is subject to the successful outcome of a multi-phase exploration plan leading to a bankable\nfeasibility study to be undertaken in the near future by the Company and there can be no assurance that any joint venture agreement will\nbe completed. Under the contemplated terms of the proposed joint venture agreement, the Company would be project operator and initially\nown 50.5% of the joint venture while Santa Fe would initially own 49.5%. Additional terms of the joint venture are to be negotiated between\nthe Company and Santa Fe in the future.\n\n \n\n 8 \n\n \n\n**Texas Mineral Resources Corp.**\n\n**Notes to Interim Consolidated Financial Statements**\n\n**May 31, 2026**\n\n**(Unaudited)**\n\n  \n\nUnder the terms of the option agreement, the Company\nplans to conduct a district-wide evaluation among the patented and unpatented claims held by Santa Fe, as well as the area of interest,\nconsisting of geologic mapping, sampling, trenching, radiometric surveying, geophysics, drilling and/or other methods as warranted. Based\non the district-wide evaluation, the Company would designate a “project area or areas,” the size or sizes of which will be\ndecided at the time, and commence development work. The property covered in the option agreement is approximately 1,600 acres and covers\napproximately 75% of the Black Hawk Mining District. The area to be studied also includes a two-mile radius “area of interest.”\nThe term of the option is for so long as the Company continues to conduct exploration activities in the Project Area (although there can\nbe no assurance that the Company will continue to conduct exploration activities in any future period, due to lack of financial resources\nor otherwise) and can be exercised on 60 days’ notice to Santa Fe. During the term of the option and subject to limited exceptions,\nSanta Fe has agreed not to transfer any portion of its patented and unpatented mining claims within the Black Hawk Mining District without\ngranting the Company the right of first refusal.\n\n \n\nCarlise Mine\n\n \n\nIn December 2024, Dan Gorski, our chief executive\nofficer and a director, assigned all of his ownership interest in the Carlisle mine and related real estate to a wholly-owned subsidiary\nof the Company in consideration for a $75,000 promissory note, without interest, due and payable by the Company upon demand, secured by\nthe property conveyed. Mr. Gorski acquired this property for $75,000 in 2022. The Carlisle mine and related real estate consist of the\nfollowing:\n\n \n\n \n●\nCarlisle Millsite, patent No. 280, described as Section 12, township 17S, range 21W, comprising 5.00 acres, more or less;\n\n \n\n \n●\nHomestead Lode, patent No. 283, described as Section 12, township 17S, range 21W, comprising 17.91 acres, more or less;\n\n \n\n \n●\nColumbia Lode, patent No. 284, Described as Section 12, township 17S, range 21W, comprising 19.46 acres, more or less; and\n\n \n\n \n●\nCarlisle Lode, patent No. 279, described as Section 01, township 17S, range 21W, compromising 20.660 acres, more or less..\n\n \n\nSee Note 2 – Merger Agreement, for additional\ninformation.\n\n** **\n\n**NOTE 5 – RECLAMATION**\n\n \n\nIn connection with a Minimum Impact Exploration\nPermit No. GR094EM issued by the New Mexico Mining and Minerals Division, the Company was required to provide an irrevocable standby letter\nof credit as financial support for reclamation costs. As of both May 31, 2026 and August, 31, 2025, there were $38,766 of outstanding\nletters of credit. The Company has legally pledged a certificate of deposit in the amount of $38,766, which is included in non-current\nrestricted investments, for purposes of settling reclamation obligations that may become due.\n\n \n\n**NOTE 6 – SHAREHOLDERS’ EQUITY**\n\n \n\nThe Company’s authorized capital stock consists\nof 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\nper share.\n\n \n\nAll shares of common stock have equal voting rights\nand, when validly issued and outstanding, are entitled to one non-cumulative vote per share in all matters to be voted upon by shareholders.\nShares of common stock have no pre-emptive, subscription, conversion or redemption rights and may be issued only as fully paid and non-\nassessable shares. Holders of common stock are entitled to equal ratable rights to dividends and distributions with respect to the common\nstock, as may be declared by the Company’s Board of Directors (the “Board”) out of funds legally available. In the event\nof a liquidation, dissolution or winding up of the affairs of the Company, the holders of common stock are entitled to share ratably in\nall assets remaining available for distribution to them after payment or provision for all liabilities and any preferential liquidation\nrights of any preferred stock then outstanding.\n\n \n\n 9 \n\n \n\n**Texas Mineral Resources Corp.**\n\n**Notes to Interim Consolidated Financial Statements**\n\n**May 31, 2026**\n\n**(Unaudited)**\n\n \n\nIn February 2025, pursuant to the closing of $1,098,000\nof debt financing in accordance with loan agreements, the Company issued unsecured promissory notes in the principal amount of $1,098,000\n(which notes were converted in full into 3,660,000 shares of common stock in August 2025) and, as additional consideration for effecting\nthe loans, the Company issued five-year warrants to purchase an aggregate of up to 10,980,000 shares of common stock. During the nine\nmonths ended May 31, 2026, (i) holders exercised warrants to purchase 2,100,000 shares of the Company’s common stock at an\nexercise price of $0.30 per share (resulting in the Company receiving aggregate cash consideration of $630,000) and (ii)  holders\nof warrants to purchase 8,880,000 shares of common stock exercised these warrants on a cashless, net issuance exercise basis and were\nissued 6,187,472 shares of common stock. As of May 31, 2026, no warrants issued in connection with the February 2025 transaction remain\noutstanding.\n\n \n\nBecause the warrants were previously classified\nwithin shareholders’ equity, the exercises (both on a cash and cashless basis) did not result in the recognition of any gain or\nloss in the Company’s consolidated statements of operations. The exercises were recorded as increases to common stock and additional\npaid-in capital.\n\n \n\nOn October 15, 2025, the Company issued an aggregate\nof 123,132 shares of common stock related to director fees earned and expensed during the year ended August 31, 2025.\n\n \n\nDuring the quarter ended November 30, 2025, a\ntotal of 500,000 common stock options were exercised on a cashless basis into 257,407 shares of common stock. The common stock options\nhad exercise prices of $1.31.\n\n \n\nDuring the quarter ended November 30, 2025, the\nCompany recognized stock compensation and a corresponding charge to additional paid-in capital in the amount of $87,000 for director’s\nfees earned during the quarter. The Company issued the related 111,729 shares of common stock in January 2026.\n\n \n\nIn February, 2026, the Company entered into an\noption redemption-exchange agreement with a consultant whereby the consultant’s options to purchase 340,000 shares of Company common\nstock at an exercise price of $1.97 per share, issued by the Company to a consultant in accordance with a consulting agreement dated August\n31, 2013, as subsequently amended, were redeemed in full by the Company in exchange for the issuance by the Company of 45,250 shares of\nCompany common stock.\n\n \n\nDuring the quarter ended February 28, 2026, the\nCompany recognized stock compensation and a corresponding charge to additional paid-in capital in the amount of $81,399 for director’s\nfees earned during the quarter. The Company issued the related 123,581 shares of common stock in March 2026.\n\n \n\n**NOTE 7 – RELATED PARTIES**\n\n \n\nIn December 2024, the Company acquired an ownership\ninterest in the Carlisle mine and related real estate from Dan Gorski, the Company’s chief executive officer and a director, in\nconsideration for a promissory note in the amount of $75,000. See Note 2 – Merger Agreement and Note 3 – Mineral Properties,\nfor additional information.\n\n \n\nOn January 12, 2026, Mr. Gorski (chief executive\nofficer and director of the Company) assigned to the Company 157,686 shares of USAR common stock that were previously issued by USAR to\nMr. Gorski, originally as an award of incentive units granted by USAR to Mr. Gorski in May 2020 and subsequently such award of incentive\nunits automatically converted into USAR common stock in connection with the closing of the USAR business combination in March 2025 (“Business\nCombination”), for his personal services rendered with respect to advancing the Round Top project. These shares of USAR common stock,\nwhen issued to Mr. Gorski as an award of incentive units in May 2020, had nominal value. As the result of USAR completing its Business\nCombination, its shares of common stock commenced trading on The Nasdaq Stock Market LLC and, as such, the market value of the USAR shares\ntransferred to the Company by Mr. Gorski, based on that closing price on the date the shares were actually received by the Company (a\nlevel 1 input), was approximately $3,480,000 and was recorded as additional paid-in capital. On March 10, 2026, the Company sold its 157,686\nshares of USAR common stock, assigned by Mr. Gorski to the Company on January 12, 2026, for total net proceeds of $2,996,033.\n\n** **\n\n 10"}