SHAREHOLDERS’ EQUITY

12 Months Ended

Aug. 31, 2025

NOTE 8 – SHAREHOLDERS’ EQUITY

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

All shares of common stock have equal voting rights and, when validly issued and outstanding, are entitled to one non-cumulative vote per share in all matters to be voted upon by shareholders. Shares of common stock have no pre-emptive, subscription, conversion or redemption rights and may be issued only as fully paid and non-assessable shares. Holders of common stock are entitled to equal ratable rights to dividends and distributions with respect to the common stock, as may be declared by the Company’s Board of Directors (the “Board”) out of funds legally available. In the event of a liquidation, dissolution or winding up of the affairs of the Company, the holders of common stock are entitled to share ratably in all assets remaining available for distribution to them after payment or provision for all liabilities and any preferential liquidation rights of any preferred stock then outstanding.

Following is an analysis of common stock issuances during the years ended August 31, 2025 and 2024:

Issuances during the fiscal year ended August 31, 2025

In October 2024, we issued 244,599 shares of Common Stock related to director fees earned and expensed during the year ended August 31, 2024.

During the year ended August 31, 2025, the Company issued 606,848 shares of common stock valued at a market value of $175,373, as payment for director fees. In addition, the Company recognized stock compensation and a corresponding charge to additional paid-in capital in the amount of $85,700 for director’s fees earned during the quarter ended August 31, 2025. The Company issued the related 123,132 shares of Common Stock in October 2025.

On August 12, 2025, the Company issued 3,660,000 shares of Common Stock upon conversion of its convertible notes payable. See Note 6, Convertible Notes Payable, for additional discussion.

In connection with the loan agreements dated February 10, 2025, the Company issued warrants that are exercisable, at any time on or prior to February 10, 2030, to purchase an aggregate of 8,480,000 shares of Common Stock at a purchase price of $0.30 per share. The Company has granted piggy-back registration rights with respect to the resale of the shares of Common Stock underlying the warrants and, commencing on February 10, 2026, if the resale of the underlying shares may not be effected pursuant to an effective resale registration statement, the warrants provide for a net issuance exercise.

In connection with the loan agreements dated February 18, 2025, the Company issued warrants that are exercisable, at any time on or prior to February 10, 2030, to purchase an aggregate of 2,500,000 shares of Common Stock at a purchase price of $0.30 per share. The Company has granted piggy-back registration rights with respect to the resale of the shares of Common Stock underlying the warrants and, commencing on February 10, 2026, if the resale of the underlying shares may not be effected pursuant to an effective resale registration statement, the warrants provide for a net issuance exercise.

The warrants were determined to be a separate unit of account from the convertible notes based on an evaluation of the contractual terms of the convertible notes and the warrant agreements. As a result, amount were allocated to the convertible notes and the warrants using the relative fair value method at the date of issuance. At issuance, the fair value of the warrants and convertible notes totaled approximately $3,500,000 and $1,600,000, respectively. The proceeds assigned to the warrants totaling $746,133 was recognized as additional paid-in capital and a corresponding discount on the convertible notes. The fair values of the warrants as of the issuance date were determined using the Black-Scholes option pricing model and the following assumptions:

Risk-free interest rate	4.34% - 4.40%
Expected dividend yield	0.00%
Expected term in years	5.00
Expected volatility	89.86%

There were 10,980,000 warrant shares issued and outstanding as of August 31, 2025. See Note 6 – Convertible Notes Payable for further discussion of the warrants and Note 10 – Subsequent Events for warrants exercised subsequent to August 31, 2025.

Issuances during the fiscal year ended August 31, 2024

In October 2023, the Company issued 56,547 shares of common stock to directors for fees earned and expensed during the year ended August 31, 2023.

During the year ended August 31, 2024, the Company issued 509,017 shares of common stock valued at a market value of $152,845, as payment for director fees. In addition, the Company recognized stock compensation and a corresponding charge to additional paid-in capital in the amount of $52,833 for director’s fees earned during the quarter ended August 31, 2024. The Company issued the related 244,599 shares of common stock in October 2024.

During the year ended August 31, 2024, the holder of 50,000 common stock options were exercised for total cash consideration of $11,000. The exercise price of the common stock options was $0.22 per share.

Options

The following table sets forth certain information as of August 31, 2025 and 2024 concerning common stock that may be issued upon the exercise of options issued under the Amended 2008 Plan and outside of the Amended 2008 Plan (all options are fully vested and exercisable at August 31, 2025 and 2024):

Schedule of options

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
Outstanding, vested and exercisable at		1,030,000		$	0.80		2.79	$	693,300
Options granted		120,000			1.97		—		—
Options exercised		(50,000	)		0.22		—		—
Options cancelled/forfeited/expired		(180,000	)		0.45		—		—

Options vested and exercisable at August 31, 2024		920,000			1.06		3.25		784,476
Options granted		—			—		—		—
Options exercised		—			—		—		—
Options cancelled forfeited/expired		(100,000	)		0.22		—		—

Options vested and exercisable at August 31, 2025	$	820,000		$	1.16		2.59	$	—

In September 2008, the Board adopted the 2008 Stock Option Plan (the “2008 Plan”), which was approved by the Company’s shareholders and provided 2,000,000 shares available for grant. In 2011, 2012, and 2016, the Board adopted amendments to the 2008 Plan, approved by the shareholders, that increased the shares available for issuance under the 2008 Plan by a total of 7,000,000 shares (as amended, the “Amended 2008 Plan”). No further securities are eligible to be issued pursuant to the Amended 2008 Plan.

During the year ended August 31, 2025, the Company did not grant any stock options.

During the year ended August 31, 2024, the Company granted a total of 120,000 non-qualified, non-plan stock options, with a fair value of $39,075 on the date of grant, to a consultant. The fair value of the options was determined using the Black-Scholes option-pricing model. The weighted average assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 4.00%, (ii) estimated volatility of 202% (iii) dividend yield of 0.00% and (iv) expected life of all options of 5 years. The Company recognized the full $39,075 as compensation expense during the year ended August 31, 2024.

Warrants

Warrant activity for the years ended August 31, 2025 and 2024 was as follows:

Schedule of warrants

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (In Years)		Aggregate Intrinsic Value
Outstanding and exercisable at August 31, 2023		—	$	—		—	$	—
Warrants granted		—		—		—		—
Warrants exercised		—		—		—		—
Warrants cancelled/forfeited/expired		—		—		—		—
Outstanding and exercisable at August 31, 2024		—		—		—		—
Warrants granted		10,980,000		0.30		4.5		—
Warrants exercised		—		—		—		—
Warrants cancelled forfeited/expired		—		—		—		—
Outstanding and exercisable at August 31, 2025		10,980,000	$	0.30		4.5	$	9,442,800

- Definition

The entire disclosure for equity.

+ References

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+ Details

Texas Mineral Resources Corp. 10-K