BIOXYTRAN, INC - Quarter Report: 2011 March (Form 10-Q)

f10q0311_usrareearth.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the Quarter ended March 31, 2011

Commission File Number: 333-154912

U.S. RARE EARTH MINERALS, INC

(Formerly known as U.S. Natural Nutrients & Minerals, Inc)

(Exact name of registrant as specified in its charter)

Nevada		26-2797630
(State or jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

6460 Medical Center St. Suite 230 Las Vegas, NV		89148
(Address of principal executive offices)		(Zip code)

(702) 888-1450, ext 281

(Registrant’s telephone number, including area code)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months and (2) has been subject to such filing requirements for the past 90 days.

Yes T No £

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files); Yes T 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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	£		Accelerated Filer	£
Non-Accelerated Filer	£		Smaller Reporting Company	T

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

There were 65,328,975 shares of common stock outstanding as of May 13, 2011.

TABLE OF CONTENTS

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	Page
PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS	3
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	8
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	11
ITEM 4A (T). CONTROLS AND PROCEDURES	11

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS	13
ITEM 1A. RISK FACTORS	13
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	13
ITEM 3. DEFAULTS UPON SENIOR SECURITIES	13
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	13
ITEM 5. OTHER INFORMATION	13
ITEM 6. EXHIBITS	13
SIGNATURES	14

PART I – FINANCIAL INFORMATION

ITEM 1. INTERIM FINANCIAL STATEMENTS

U.S. RARE EARTH MINERALS, INC

(Formerly known as U.S. Natural Nutrients & Minerals, Inc)

(A DEVELOPMENT STAGE COMPANY)

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31,			December 31,
	2011			2010
	(Unaudited)			(Audited)
ASSETS

CURRENT ASSETS
Cash	$	78,269		$	22,755
Note Receivable		200			200
Inventory		8,471			7,487
Total current assets		86,940			30,442

Property and Equipment, Net		86,337			50,289

Total assets		173,277			80,731

LIABILITIES AND STOCKHOLDERS' EQUITY(DEFICIT)

CURRENT LIABILITIES
Accounts payable and accrued expenses	$	64,512		$	69,615
10% Series A Senior (non-subordinated) debentures		25,000			40,000
Loan payable, current		25,000			-
Total current liabilities		114,512			109,615

Loans payable - long term		-			25,000
Loan payable - related party		-			2,132
Total liabilities		114,512			136,747

STOCKHOLDERS' EQUITY(DEFICIT)
Common stock: $0.001 par value; 300,000,000 authorized,
21,239,661 and 11,474,779 shares issued and outstanding
as of March 31, 2011 and December 31, 2010, respectively		21,486			11,474
Additional paid-in capital		1,401,174			569,649
Accumulated deficit during the development stage		(1,363,895	)		(637,139	)
Total stockholders' equity(deficit)		58,765			(56,016	)

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY(DEFICIT)	$	173,277		$	80,731

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

U.S. RARE EARTH MINERALS, INC

(Formerly known as U.S. Natural Nutrients & Minerals, Inc)

(A DEVELOPMENT STAGE COMPANY)

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(UNAUDITED)

	Three Months						From inception
	March 31,			March 31,			June 9, 2008 to
	2011			2010			March 31, 2011

REVENUES	$	7,931		$	2,758		$	24,062
Cost of goods sold		1,983			690			6,016
		5,948			2,068			18,046


General, selling and administrative expenses		728,734			76,304			1,366,228

Operating Loss		(722,786	)		(74,236	)		(1,348,182	)

Other income (expense):
Interest income		-			536			1,843
Interest expense		(3,970	)		(2,965	)		(17,556	)
		(3,970	)		(2,429	)		(15,713	)
Net Loss	$	(726,756	)	$	(76,665	)	$	(1,363,895	)

Net loss per common share - basic and diluted	$	(0.04	)	$	(0.01	)

Weighted average of common shares outstanding		19,650,555			6,059,668

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

U.S. RARE EARTH MINERALS, INC

(Formerly known as U.S. Natural Nutrients & Minerals, Inc)

(A DEVELOPMENT STAGE COMPANY)

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(UNAUDITED)

							From inception
	March 31,			March 31,			June 9, 2008 to
	2011			2010			March 31, 2011
Cash Flows from Operating Activities:
Net Loss	$	(726,756	)	$	(76,665	)	$	(1,363,895	)
Depreciation		4,541			-			7,952
Stock for services		673,750			7,500			936,655
Accretion of debt premium and interest		-			724			2,869
Contributed capital to COGS		-			690			690
Expenses paid by stockholder contribution		-			(8,475	)		5,807
Adjustments to reconcile net loss to net cash
used by operating activities:
Changes in assets and liabilities:
Decrease notes receivable		-			(8,036	)
Decrease prepaids		-			4,602			2,487
Decrease inventory		(984	)		-			(8,470	)
Increase accounts payable and accrued expenses		(5,103	)		46,942			79,526

Net cash used in operating activities	$	(54,552	)	$	(24,933	)	$	(336,379	)
Cash flows used in Investing Activities:
Capital expenditures		(40,589	)		-			(94,289	)

Net cash used in investing activities		(40,589	)		-			(94,289	)

Cash flows from Financing Activities:
Proceeds from Convertible debt		-			-			15,000
Proceeds from Series A Debentures		-			-			52,250
Payment of loan payable and debentures		(17,132	)		-			(29,132	)
Proceeds from Loans payable		-			-			39,000
Proceeds from Loan payable, related party		-			-			2,232
Common stock issued for cash		160,787			22,747			429,587
Net cash provided by financing activities		150,655			22,747			508,937

Net increase (decrease) in cash		55,514			(2,186	)		78,269
Cash, beginning of year		22,755			5,727			-
Cash, end of year	$	78,269		$	3,541		$	78,269

Cash paid for:
Interest	$	-		$	504		$	1,337
Supplemental schedule of non-cash investing and Financing Activities
Loan payable, related party reclassified as loan payable	$	-		$	-		$	100
Loan reclassified to accounts payable	$	-		$	-		$	2,000
Loan receivable reclassified to accounts payable	$	-		$	-		$	15,721
Series A Debentures reclassified to Convertible Debenture	$	-		$	-		$	5,000
Common stock issued for intangible - customer list	$	-		$	-		$	25,000
Common stock issued for convertible debt, debentures	$	-		$	-		$	30,000
Warrants issued for prepaid consulting services	$	-		$	-		$	24,750
Stock payable issued	$	-		$	25,000		$	65,500
Contributed capital by shareholder, used to pay expenses	$	-		$	8,475		$	5,807

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

U.S. RARE EARTH MINERALS, INC.

(Formerly known as U.S. Natural Nutrients & Minerals, Inc)

(A DEVELOPMENT STAGE COMPANY)

CONDENSED NOTES TO FINANCIAL STATEMENTS

(UNAUDITED)

Note 1. Basis of Presentation and Organization and Significant Accounting Policies

Basis of Presentation and Organization

Basis of Presentation

The accompanying financial statements have been prepared on substantially the same basis as the audited financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2010. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the Securities and Exchange Commission (SEC) rules and regulations regarding interim financial statements. All amounts included herein related to the condensed financial statements as of March 31, 2011 and the three months ended March 31, 2011 and 2010 are unaudited and should be read in conjunction with the audited financial statements and the notes there to included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

In the opinion of management, the accompanying financial statements include all necessary adjustments for the fair presentation of the Company’s financial position, results of operations and cash flows. The results of operations for the interim periods presented are not necessarily indicative of the operating results to be expected for any subsequent interim period or for the full fiscal year ending December 31, 2011.

U.S. Rare Earth Minerals, Inc. (Formerly U.S. Natural Nutrients and Minerals, Inc.) was incorporated in the state of Nevada on June 9, 2008.

The Company currently has limited operations and, in accordance with Financial Accounting Standard Board Codification (“FASB ASC”) Development Stage Entities topic. The Company has been in the development stage since its formation and has realized minimal revenues from its operations.

As used in these Notes to the Financial Statements, the terms the "Company", "we", "us", "our" and similar terms refer to U. S. Rare Earth Minerals, Inc. (Formerly U.S. Natural Nutrients and Minerals, Inc.)

Basis of Financial Statement Presentation

The accompanying unaudited condensed financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in accordance with such rules and regulations. The information furnished in the interim condensed financial statements includes normal recurring adjustments and reflects all adjustments, which, in the opinion of management, are necessary for a fair presentation of such financial statements. Although management believes the disclosures and information presented are adequate to make the information not misleading, these interim condensed financial statements should be read in conjunction with the Company's most recent audited financial statements and notes thereto included in its December 31, 2010 Annual Report on Form 10-K. Operating results for the period ended March 31, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011.

Going Concern

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. To date, the Company generated minimal revenue, is considered a development stage company, has experienced recurring net operating losses, had a net loss of $726,756 for the three months ended March 31, 2011, and a working capital deficiency of $27,572 at March 31, 2011. These factors raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty. We will need to raise funds or implement our business plan to continue operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital sufficient to meet its minimal operating expenses by seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually begin operations in accordance with our business plan. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Note 2. Common Stock

The Company’s authorized preferred stock is 50,000,000 with a $0.001 par value and common stock is 300,000,000 common shares with $0.001 par value.

There were 65,328,975 shares of common stock outstanding as of May 13, 2011.

On April 12, 2011, the Company announced that the board of directors approved a 3 for 1 forward split of the shares of common stock issued and outstanding effective May 2, 2011.

Note 3.Subsquent Events

On April 12, 2011, the Company announced that the board of directors voted to change the name of the company to U.S. Rare Earth Minerals, Inc. Also on April 12, 2011, the Company announced that the board of directors voted to approve a forward split of the common stock of the Company 3 for 1, effective May 2, 2011. On April 21, 2011, the Company confirmed this name change with the Financial Industry Regulatory Authority “FINRA”.

Note 4. Officers and Directors Compensation

Paul Hait, Chairman and Dennis Cullison, President were each awarded shares of unregistered common stock of the Company by the Board of Directors of the Company to compensate each of them for all of their past services to the Company and for all of the services to be rendered by them to the Company for calendar year of 2011. Paul Hait received 2,250,000 shares, Dennis Cullison received 2,500,000 shares. Our corporate counsel, received 2,000,000 shares for all past unpaid and for all day to day legal services to be performed during 2011 to the Company. A consultant to the Company, received 2,000,000 shares for significant administrative services for past unpaid services and for future administrative services to be provided by him for 2011 to the Company. Such distribution of shares of unregistered common stock of the Company shall be in lieu of any salary or bonus or cash payment for services and is in full consideration of all services provided to the Company by each of said persons in full consideration for all services to be rendered to the Company for calendar year 2011. The Company is unable to pay currently said persons with money for their significant services to the Company and therefore since said persons are willing to accept unregistered common stock subject to certain restrictions which are set forth hereinafter, which will restrict the sale of said unregistered common stock, the Company has agreed with each of said parties to issue them the aforementioned number of shares. The issuance of said shares shall, in addition to the usual legend set forth on the shares indicating that they have not been registered pursuant to the Securities Act of 1933, there shall also be an additional restrictive legend which shall provide that the “shares represented by such certificate may not be sold or transferred prior to June 30, 2012, except in the event that the Company is sold or there is a transfer of control of the Company before said date; and provided that the shares may be transferred or sold to an immediate family member for estate planning purposes or otherwise but any such transfer to an immediate family member shall not affect or change the restrictions set forth herein and other than that one time transfer to an immediate family member no other transfers by such immediate family member will be permitted.” The shares to be issued shall be in lieu of any salary or other compensation for services rendered to the Company by each of the four persons during calendar year 2011.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION

The following discussion should be read in conjunction with our unaudited financial statements and the notes thereto.

Forward-Looking Statements

This quarterly report contains forward-looking statements and information relating to us that are based on the beliefs of our management as well as assumptions made by, and information currently available to, our management. When used in this report, the words "believe," "anticipate," "expect," "estimate," “intend”, “plan” and similar expressions, as they relate to us or our management, are intended to identify forward-looking statements. These statements reflect management's current view of us concerning future events and are subject to certain risks, uncertainties and assumptions, including among many others: a general economic downturn; a downturn in the securities markets; federal or state laws or regulations having an adverse effect on proposed transactions that we desire to effect; Securities and Exchange Commission regulations which affect trading in the securities of "penny stocks," and other risks and uncertainties. Should any of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this report as anticipated, estimated or expected. All forward-looking statements attributable to us are expressly qualified in their entirety by the foregoing cautionary statement.

Overview

U.S. Rare Earth Minerals, Inc. (Formerly U.S. Natural Nutrients and Minerals, Inc.) (the “Company”), primary focus is on sales and distribution of certain products derived from the Company’s mining activities relating to natural mineral deposits commonly known as Calcium Montmorillonite. These activities will be carried out through a web-based and distributor-based sales program directed at agricultural, animal and human uses of the product.

The Company plans to sell additional shares of unregistered common stock to raise money additional operating capital. There is no guarantee the Company will be successful in selling additional shares to raise funds for additional operating capital, or if successful, it will raise the desired amount or be on terms and conditions which are beneficial to the Company.

Plan of Operation

The Company contemplates marketing and selling the product extracted in the mining process under the name “Exceleriteâ”. The Company believes that Exceleriteâ may have broad applications for plants, animals and humans. Specifically, the Company believes that by adding Exceleriteâ back into the soil, household and commercial farmers are replacing what has been lost by the use of man-made fertilizers over hundreds of years. Farmers using Exceleriteâ are seeing higher yields and larger and more nutritious crops. In addition, studies suggest that animals whose feed is supplemented with Exceleriteâ grow healthier and produce more. The naturally chelated nutrients and minerals in Exceleriteâ may enhance the production of enzymes. Without enzymes living things cannot build protein and other vital processes. BioMultimin, a supplement form of Exceleriteâ, is believed to rejuvenate the health of the human body in many ways. In addition to its natural supply of 78 essential nutrients and minerals, its ionic charge removes toxins as it works through the digestive tract.

The Company intends to market the product through various channels including but not limited to direct distribution, sales through third-party distributors and sales through the Company’s website. The Company has also undertaken to develop a network of distributors, both in the United States and internationally. Two of the Company’s directors, Paul Hait and Dennis Cullison, have been marketing the product to agricultural customers in Oregon and throughout the United States. Mr. Cullison has also devoted substantial focus on the marketing of a human supplement utilizing the product named “Micro-Nutrilite” and Biomultimin.

RESULTS OF OPERATIONS

The following table shows the financial data of the consolidated statements of operations of the Company for the three-months ended March 31, 2011 and 2010.

THREE-MONTHS ENDED MARCH 31, 2011 COMPARED TO THREE-MONTHS ENDED MARCH 31, 2010.

	March 31,			March 31,
Results of Operations	2011			2010			$ Change			% Change
Revenue	$	7,931		$	2,758		$	5,173			188	%
Cost of sales		(1,983	)		(690	)		(1,293	)		(187	%)
		5,948			2,068			3,880			188	%
General and administrative expenses		(728,734	)		(76,304	)		(652,430	)		(855	%)
Operating loss	$	(722,786	)	$	(74,236	)	$	(648,550	)		(874	%)

During the three months ended March 31, 2011, we recognized expenses of $728,734 an increase of 855% from the three months ended March 31, 2010. Professional and legal fees of approximately $316,610 were incurred in relation to the preparation, review, and filing of our financial statements with the Securities and Exchange Commission. Other professional fees consisted of clerical and start-up fees necessary to develop our business and investigate new business plans which resulted in our change of focus as of October 2009.

LIQUIDITY AND CAPITAL RESOURCES

	March 31,		December 31,
	2011		2010		$ Change			% Change
Cash	$	78,269	$	22,755	$	55,514			244	%
Accounts payable and accrued expenses	$	64,512	$	69,615	$	(5,103	)		(7	%)
Total current liabilities	$	114,512	$	109,615	$	4,897			(4	%)
Cash proceeds from the sale of common stock	$	127,287	$	136,900	$	(9,613	)		(7	%)

As of March 31, 2011, cash and cash equivalents totaled $78,269. This cash position was the result of a result of net cash provided by financing activities in the amount of $150,655, offsetting net cash used in operating activities in the amount of $54,552.

We believe that the level of financial resources is a significant factor for our future development, and accordingly we may choose at any time to raise capital through private debt or equity financing to strengthen its financial position, facilitate growth and provide us with additional flexibility to take advantage of business opportunities. While we are presently considering a limited private offering of our securities, we do not have immediate plans to have a public offering of our common stock and there is no guarantee that any such offering would be successful or be completed on terms which are beneficial to the Company.

CRITICAL ACCOUNTING POLICIES

In presenting our financial statements in conformity with generally accepted accounting principles, we are required to make estimates and assumptions that affect the amounts reported therein. Several of the estimates and assumptions we are required to make relate to matters that are inherently uncertain as they pertain to future events. However, events that are outside of our control cannot be predicted and, as such, they cannot be contemplated in evaluating such estimates and assumptions. If there is a significant unfavorable change to current conditions, it could result in a material adverse impact to our consolidated results of operations, financial position and liquidity. We believe that the estimates and assumptions we used when preparing our financial statements were the most appropriate at that time. Presented below are those accounting policies that we believe require subjective and complex judgments that could potentially affect reported results. However, the majority of our businesses operate in environments where we pay a fee for a service performed, and therefore the results of the majority of our recurring operations are recorded in our financial statements using accounting policies that are not particularly subjective, nor complex.

Revenue Recognition

Revenue from the sale of product obtained from our mining contractor is recognized when ownership passes to the purchaser at which time the following conditions are met:

i) persuasive evidence that an agreement exists;

ii) the risks and rewards of ownership pass to the purchaser including delivery of the product;

iii) the selling price is fixed and determinable; or,

iv) collectively is reasonably assured.

Stock Based Compensation

Stock based compensation is accounted for using the Equity-Based Payments to Non-Employee Topic of the FASB ASC, which establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments. We determine the value of stock issued at the date of grant. We also determine at the date of grant the value of stock at fair market value or the value of services rendered (based on contract or otherwise) whichever is more readily determinable.

Shares issued to employees are expensed upon issuance.

If the Company issues stock for services which are performed over a period of time, the Company capitalizes the value paid in the equity section of the Company’s financial statements as it’s a non-cash equity transaction. The Company accretes the expense to stock based compensation expense on a monthly basis for services rendered within the period.

We use the fair value method for equity instruments granted to non-employees and will use the Black-Scholes model for measuring the fair value of options, if issued. The stock based fair value compensation is determined as of the date of the grant or the date at which the performance of the services is completed (measurement date) and is recognized over the vesting periods.

Going Concern

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

ITEM 4T. INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers and effected by the Company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that:

·	Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

As of March 31, 2011, management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control--Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") and SEC guidance on conducting such assessments. Based on that evaluation, they concluded that, during the period covered by this report, such internal controls and procedures may not be effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.

The matter involving internal controls and procedures that our management considered may be a material weakness under the standards of the COSO was the lack of a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside directors on our board of directors, resulting in the potential for ineffective oversight in the establishment and monitoring of required internal controls and procedures. The aforementioned material weakness was identified by our Chief Executive Officer in connection with the review of our financial statements as of March 31, 2011.

Management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

Management’s Remediation Initiatives

In an effort to remediate the identified material weakness and other deficiencies and enhance our internal controls, we have initiated, or plan to initiate, the following series of measures:

Management believes that the appointment of one or more outside directors, who shall be appointed to a fully-functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on our Board.

We anticipate that these initiatives will be at least partially, if not fully, implemented by December 31, 2011. Additionally, we plan to test our updated controls and remediate our deficiencies by December 31, 2011.

Changes in internal controls over financial reporting

There was no change in our internal controls over financial reporting that occurred during the period covered by this report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

There are no legal proceedings which are pending or have been threatened against us or any of our officers, directors or control persons of which management is aware.

ITEM 1A. RISK FACTORS.

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES

Except as disclosed herein or as disclosed on Form 10K filed by the Company for the period ended December 31, 2010 or the Company’s Registration Statement on Form S-1, we have not sold any of our securities in a private placement transaction or otherwise during the past three years.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

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

The name change and forward stock split were approved by consent of the shareholders owning a majority of the outstanding common stock of the Company

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS

Exhibit No.		Description

31.1		Certification of Chief Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Chief Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Principal Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

	U.S. RARE EARTH MINERALS, INC (Formerly known as U.S. Natural Nutrients & Minerals, Inc)

Dated: May 13, 2011	By:	/s/ Paul Hait
		Paul Hait
		Chief Executive Officer and Director


Dated: May 13, 2011	By:	/s/ Dennis Cullison
		Dennis Cullison
		Principle Financial Officer, President and Director