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 November 30, 2013

[  ] 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)

Cnr Stirling Hwy & Fairlight St.
Mosman Park, Western Australia 6012
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 January 17, 2014, the registrant’s outstanding common stock consisted of 92,769,712 shares.

TABLE OF CONTENTS

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PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

Tierra Grande Resources Inc.
(An Exploration Stage Company)
November 30, 2013

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

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

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

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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. We owned an option to acquire a 100% interest in the Lady Ermalina mineral properties, located in the Province of British Columbia, Canada, which has expired. As the Byng and Tramp claims are located adjacent to the Lady Ermalina claims, we plan to dispose of our interest in these properties going forward. 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.

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

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We continue reviewing what we believe to be opportunities with potential in Peru, South America 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 development 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.

In July 2013, we entered into a Letter of Intent to acquire the Buldibuyo Gold Project in Peru. The Buldibuyo Gold Project offers us the opportunity to deliver near term gold production and cash flow. It is our intention to acquire 100% of the gold project, which has produced high grade ore in the past. With support from our strategic relationships and personnel in Peru, we are currently engaged in due diligence to qualify future expectations and timelines.

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 development 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 development of projects.

See our Annual Report on Form 10-K for the year ended May 31, 2013 for more information regarding our business.

Our plan of operations for the next 12 months is to continue to seek out, acquire, explore and potentially develop 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. We anticipate we will require approximately $5 million to carry out our plans over the next 12 months. As of November 30, 2013, we had cash of $132,178 and working capital of $56,568 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, our business may fail. An investment in our securities involves significant risks and you could lose your entire investment.

Results of Operations

The following discussion and analysis of our results of operations and financial condition for the three and six months ended November 30, 2013 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, 2013 filed with the SEC.

Three Months Ended November 30, 2013 Compared to Three Months Ended November 30, 2012

Lack of Revenues

We have earned no revenues and have sustained operational losses since our inception on April 4, 2006 to November 30, 2013. As of November 30, 2013, we had an accumulated deficit of $9,136,864. We anticipate that we will not earn any revenues during the current fiscal year as we are an exploration stage company.

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Expenses

From April 4, 2006 (date of inception) to November 30, 2013, our total expenses were $4,026,411 comprised of $733,356 in professional fees, $252,140 in mineral property costs and $3,040,915 in general and administrative expenses.

Our total expenses increased to $94,251 for the three months ended November 30, 2013 from $53,054 for the three months ended November 30, 2012 mainly due to higher mineral property costs. Mineral property costs increased to $65,009 for the three months ended November 30, 2013 from $7,106 for the three months ended November 30, 2012 primarily due to our review of the Buldibuyo Gold Project in Peru. In that regard, professional fees for the three months ended November 30, 2013 increased to $18,416 from $10,402 in the prior period. However, general and administrative expenses decreased to $10,826 in the current period from $35,546 in the prior period, primarily resulting from a reduction in overall operating expenses in the current period.

Net Loss

For the three months ended November 30, 2013, we recognized a net loss of $94,251, compared to $53,054 for the three months ended November 30, 2012.

Six Months Ended November 30, 2013 Compared to Six Months Ended November 30, 2012

Lack of Revenues

We have earned no revenues and have sustained operational losses since our inception on April 4, 2006 to November 30, 2013. As of November 30, 2013, we had an accumulated deficit of $9,136,864. We anticipate that we will not earn any revenues during the current fiscal year as we are an exploration stage company.

Expenses

Our total expenses decreased to $120,310 for the six months ended November 30, 2013 from $240,557 for the six months ended November 30, 2012 mainly due to lower general and administrative expenses. General and administrative expenses decreased to $31,449 in the current period from $202,297 in the prior period, primarily resulting from a reduction in overall operating expenses in the current period. In that regard, professional fees for the six months ended November 30, 2013 decreased to $23,852 from $31,154 in the prior period. However, mineral property costs increased to $65,009 for the six months ended November 30, 2013 from $7,106 for the six months ended November 30, 2012 primarily due to our review of the Buldibuyo Gold Project in Peru.

Net Loss

For the six months ended November 30, 2013, we recognized a net loss of $120,310, compared to $240,557 for the six months ended November 30, 2012.

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Liquidity and Capital Resources

As of November 30, 2013, we had cash of $132,178, working capital of $56,568, total assets of $139,151, total liabilities of $75,910 and an accumulated deficit of $9,136,864.

Financing Activities

We have funded our operations primarily by a combination of private placements, advances from related parties and loans. From April 4, 2006 (date of inception) to November 30, 2013, financing activities provided cash of $5,686,053, primarily from the sale of our common stock and loans.

During the six months ended November 30, 2013, financing activities provided cash of $140,000, compared to $30,000 in the six months ended November 30, 2012, from the sale of our common stock.

Operating Activities

Operating activities used cash of $47,805 for the six months ended November 30, 2013, compared to $336,139 for the six months ended November 30, 2012. An increase in accounts payable and accrued liabilities provided cash of $72,327 in the six months ended November 30, 2013, compared to a decrease in same using cash of $87,667 in the prior period. A decrease in prepaid expenses and other current assets used cash of $300 in the current period, compared to $100 in the prior period. A decrease in advances used cash of $0 in the current period, compared to $55,504 in the prior period. An increase in other receivables used cash of $0 in the current period, compared to $1,413 in the prior period. An increase in amounts due to/from related parties provided cash of $0 in the current period, compared to $2,450 in the prior period.

Investing Activities

Investing activities used cash of $0 in the six months ended November 30, 2013, compared to $1,273 in the prior period relating to the purchase of property and equipment.

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 continue to seek out, acquire, explore and potentially develop 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. We anticipate we will require approximately $5 million to carry out our plans over the next 12 months. As at November 30, 2013, we had cash of $132,178 and working capital of $56,568 and will require significant financing to pursue our exploration plans.

There can be no assurance that we will obtain any additional financing, on terms acceptable to us or at all. In the event we are unable to obtain the required financing, our business may fail. An investment in our securities involves significant risks 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.

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Going Concern

Our consolidated financial statements for the period ended November 30, 2013 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.

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 November 30, 2013. 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 November 30, 2013, the following deficiencies were identified:

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

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2. Lack of a formal review process that includes multiple levels of review, resulting in adjustments related to related party other receivable.

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.

Changes in Internal Control

During the quarter ended November 30, 2013, 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 2. UNREGISTERED SALES OF EQUITY SECURITIES.

On November 28, 2013, we completed the sale of 14,000,000 shares of common stock at a price of $0.01 per share, for gross proceeds of approximately $140,000, to certain off-shore investors each of whom acquired the securities for investment purposes.

The sale of our securities to off-shore investors was made pursuant to the exemption from the registration requirements of the United States Securities Act of 1933, as amended, provided by Rule 903 of Regulation S in an offshore transaction to non-U.S. persons, no directed selling efforts were made and offering restrictions were implemented, within the meaning of Rule 902 of Regulation S.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None.

ITEM 5. OTHER INFORMATION.

None.

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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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