UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________
FORM 10-Q
_______________
(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended November 30, 2012
or
o 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: 333-149552
TUCANA LITHIUM CORP.
(Exact name of registrant as specified in charter)
| NEVADA | ||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employee Identification No.) |
3651 Lindell Rd. Suite D155
Las Vegas, NV, 89103
(Address of Principal Executive Offices)
_______________
1-800-854-7970
(Registrants telephone number, including area code)
_______________
Not Applicable
(Former Name or Former Address if Changed Since Last Report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
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 (or for such shorter period that the registrant was required to submit and post such files). Yes o No x
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company filer. See definition of “large accelerated filer,” “accelerated filer” and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
| Large Accelerated Filer o | Accelerated Filer o |
| Non-Accelerated Filer o (Do not check if a smaller reporting company) | Smaller Reporting Company x |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
Indicate the number of shares outstanding of each of the issuer’s classes of common stock. As of January 18, 2013, the registrant had 66,435,908 shares of common stock issued and outstanding.
TUCANA LITHIUM CORP. AND SUBSIDIARIES
FORM 10-Q
November 30, 2012
INDEX
PART I-- FINANCIAL INFORMATION
| Item 1. | Consolidated Financial Statements | F-1 - F-9 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 1 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 6 |
| Item 4. | Controls and Procedures | 6 |
PART II-- OTHER INFORMATION
| Item 1 | Legal Proceedings | 7 |
| Item 1A. | Risk Factors | 7 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 7 |
| Item 3. | Defaults Upon Senior Securities | 7 |
| Item 4. | Mine Safety Disclosures | 7 |
| Item 5. | Other Information | 7 |
| Item 6. | Exhibits | 8 |
SIGNATURE
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
This Annual Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “anticipate,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.
We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Quarterly Report on Form 10-Q and include information concerning possible or assumed future results of our operations, including statements about potential acquisition or merger targets; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts.
These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of the Quarterly Report on Form 10-Q. All subsequent written and oral forward-looking statements concerning other matters addressed in this Quarterly Report on Form 10-Q and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Quarterly Report on Form 10-Q.
Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.
USE OF CERTAIN DEFINED TERMS
Except as otherwise indicated by the context, references in this report to “we,” “us,” “our,” “our Company,” “the Company”, or “Tucana Lithium” are to the combined business of Tucana Lithium Corp. and its consolidated subsidiary, Tucana Exploration Inc..
In addition, unless the context otherwise requires and for the purposes of this report only
| ● | “Exchange Act” refers to the Securities Exchange Act of 1934, as amended; |
| ● | “SEC” refers to the United States Securities and Exchange Commission; |
| ● | “Securities Act” refers to the Securities Act of 1933, as amended; |
PART I – FINANCIAL INFORMATION
| Item 1. | Financial Statements |
TUCANA LITHIUM CORP. AND SUBSIDIARIES
CONTENTS
| PAGE | F-2 | CONSOLIDATED BALANCE SHEETS AS OF NOVEMBER 30, 2012 (UNAUDITED) AND AS OF AUGUST 31, 2012 (AUDITED). |
| PAGE | F-3 | CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS FOR THE THREE MONTHS ENDED NOVEMBER 30, 2012 AND 2011 AND FOR THE PERIOD JUNE 5, 2003 (INCEPTION) TO NOVEMBER 30, 2012 (UNAUDITED). |
| PAGE | F-4 | CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED NOVEMBER 30, 2012 AND 2011 AND FOR THE PERIOD JUNE 5, 2003 (INCEPTION) TO NOVEMBER 30, 2012(UNAUDITED). |
| PAGE | F-5 – F-9 | NOTES TO FINANCIAL STATEMENTS. |
F-1
TUCANA LITHIUM CORP. AND SUBSIDIARIES
(An Exploration Stage Company)
CONSOLIDATED BALANCE SHEETS AS OF
(Expressed in United States Dollars)
30 November 2012 | 31 August 2012 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash | $ | 1,406 | $ | 11,191 | ||||
| Prepaid and sundry | 20,597 | 11,129 | ||||||
| Total Current Assets | 22,003 | 22,320 | ||||||
| Long Term Assets | ||||||||
| Mineral property claims | 133,108 | 133,108 | ||||||
| Equipment | 903 | 958 | ||||||
| Total Long Term Assets | 134,011 | 134,066 | ||||||
| Total Assets | $ | 156,014 | $ | 156,386 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | 35,339 | $ | 32,539 | ||||
| Convertible notes payable | 116,155 | 111,330 | ||||||
| Advances from a related party | - | - | ||||||
| Total Liabilities | 151,494 | 143,869 | ||||||
| Stockholders' Equity | ||||||||
Capital stock, $0.001 par value; Authorized 200,000,000; Issued and outstanding 59,360,869 (31 August 2012 - 59,360,869) | 59,361 | 59,361 | ||||||
| Shares to be issued | 42,284 | - | ||||||
| Additional paid-in capital | 1,731,010 | 1,731,010 | ||||||
| Accumulated other comprehensive loss | (9,527 | ) | (9,540 | ) | ||||
| Deficit accumulated during the development stage | (1,818,608 | ) | (1,768,314 | ) | ||||
| Total Stockholders' Equity | 4,520 | 12,517 | ||||||
| Total Liabilities and Stockholders' Equity | $ | 156,014 | $ | 156,386 |
The accompanying notes are an integral part of these consolidated financial statements.
F-2
TUCANA LITHIUM CORP. AND SUBSIDIARIES
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Expressed in United States Dollars)
For The Three Months Ended 30 November 2012 | For The Three Months Ended 30 November 2011 | For The Period From Inception (5 June 2003) to 30 November 2012 | ||||||||||
| EXPENSES | ||||||||||||
| Professional fees | 40,628 | 48,355 | 1,038,957 | |||||||||
| Exploration (recovery) | (3,783) | 2,466 | 115,723 | |||||||||
| Advertising and promotion | 1,256 | 2,024 | 10,437 | |||||||||
| Telecommunications | 1,281 | 1,203 | 11,914 | |||||||||
| Rent and occupancy costs | 1,913 | 1,938 | 12,773 | |||||||||
| Office and general | 2,502 | 126 | 15,720 | |||||||||
| Interest and bank charges | 6,442 | 306 | 16,711 | |||||||||
| Depreciation | 55 | - | 175 | |||||||||
| TOTAL OPERATING EXPENSES | 50,294 | 56,418 | 1,222,410 | |||||||||
| LOSS FROM OPERATIONS | (50,294 | ) | (56,418 | ) | (1,222,410 | ) | ||||||
| Interest and other income | (126) | 15,604 | ||||||||||
| Impairment of mineral property claims | - | - | (451,870 | ) | ||||||||
| Impairment of convertible note receivable | - | - | (23,621 | ) | ||||||||
| LOSS FROM CONTINUING OPERATIONS BEFORE TAX | (50,294 | ) | (56,544 | ) | (1,682,297 | ) | ||||||
| Income tax | - | - | - | |||||||||
| LOSS FROM CONTINUING OPERATIONS | (50,294) | (56,544) | (1,682,297 | ) | ||||||||
| LOSS FROM DISCONTINED OPERATIONS, NET OF TAX | - | (3,645) | (136,311 | ) | ||||||||
| NET LOSS | $ | (50,294 | ) | $ | (60,189 | ) | $ | (1,818,608 | ) | |||
| OTHER COMPREHENSIVE LOSS FROM CONTINUING OPERATIONS | ||||||||||||
| Foreign currency translation adjustment | 13 | 1,244 | ||||||||||
| TOTAL COMPREHENSIVE LOSS | $ | (50,281 | ) | $ | (58,945 | ) | ||||||
| NET LOSS PER SHARES - BASIC AND DILUTED | $ | (0.00 | ) | $ | (0.00 | ) | ||||||
| WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED | 56,983,073 | 54,764,861 | ||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-3
TUCANA LITHIUM CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in United States Dollars)
For The Three Months Ended 30 November 2012 | For The Three Months Ended 30 November 2011 | For The Period From Inception (5 June 2003) to 30 November 2012 | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||
| Net loss | $ | (50,294 | ) | $ | (60,189 | ) | $ | (1,818,608 | ) | |||
| Less: Loss from discontinued operations, net of tax expense | - | 3,645 | 136,311 | |||||||||
| Loss from continuing operations | (50,294 | ) | (56,544 | ) | (1,682,297 | ) | ||||||
| Items not affecting cash | ||||||||||||
| Depreciation | 55 | - | 175 | |||||||||
| Accretion expense on convertible notes payable | 4,825 | - | 10,455 | |||||||||
| Impairment of mineral property claims | - | - | 451,870 | |||||||||
| Impairment of convertible note receivable | - | - | 23,621 | |||||||||
| Loss on disposal of assets | - | - | 2,762 | |||||||||
| Issuance/to be issued of common stock for services | - | 18,000 | 119,000 | |||||||||
| Issuance of common stock for rental | - | - | 3,500 | |||||||||
| Write off of deferred offering costs | - | - | 120,000 | |||||||||
| Change in prepaid and sundry | (9,468 | ) | (18,750) | (20,597 | ) | |||||||
| Change in accounts payable and accrued liabilities | 2,800 | (2,578 | ) | 35,339 | ||||||||
| Net cash used in operating activities from continuing operations | (52,082 | ) | (59,872 | ) | (936,172 | ) | ||||||
| Net cash used in operating activities from discontinued operations | - | (2,524 | ) | (114,257 | ) | |||||||
| CASH FLOWS USED IN OPERATING ACTIVITIES | (52,082 | ) | (62,396 | ) | (1,050,429 | ) | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||
| Acquisition of mineral property claims | - | (8,215) | (14,978 | ) | ||||||||
| Disposition of equipment | - | - | 4,462 | |||||||||
| Acquisition of equipment | - | - | (30,124 | ) | ||||||||
| CASH FLOWS USED IN INVESTING ACTIVITIES | - | (8,215 | ) | (40,640 | ) | |||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||
| Convertible notes receivable | - | - | (21,978 | ) | ||||||||
| Proceeds from convertible note payable | - | - | 141,040 | |||||||||
| Repayment of convertible notes payable | - | - | (163,550 | ) | ||||||||
| Advances (to) from a related party | (165 | ) | 125,000 | |||||||||
| Issuance of common stock, net of commissions | 42,284 | 5,000 | 1,018,165 | |||||||||
| CASH FLOWS PROVIDED BY FINANCING ACTIVITIES | 42,284 | 4,835 | 1,098,677 | |||||||||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH | 13 | 896 | (6,202 | ) | ||||||||
| NET (DECREASE) INCREASE IN CASH | (9,785 | ) | (64,880) | 1,406 | ||||||||
| CASH, BEGINNING OF PERIOD | 11,191 | 86,876 | - | |||||||||
| CASH, END OF PERIOD | $ | 1,406 | $ | 21,996 | $ | 1,406 | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-4
TUCANA LITHIUM CORP. AND SUBSIDIARIES
(An Exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD FROM THE DATE OF INCEPTION (5 JUNE 2003) TO 30 NOVEMBER 2012
(Expressed in United States Dollars)
(Unaudited)
| 1. | ORGANIZATION AND NATURE OF OPERATIONS |
Tucana Lithium Corp., formerly named Oteegee Innovations Inc. and formerly named Pay By The Day Holdings Inc., (the “Company”) was incorporated in August 2007 in the State of Nevada. On 22 March 2010, the Company filed a certificate of amendment to the Company’s articles of incorporation with the Nevada Secretary of State changing the Company’s name to Oteegee Innovations, Inc. On 3 May 2011, the Company filed a certificate of amendment to amend the articles of incorporation with the Nevada Secretary of State changing the Company’s name to Tucana Lithium Corp.
On 31 August 2007 the Company entered into a share exchange agreement with Pay By The Day Company Inc., an Ontario Corporation incorporated in June 2003 (“PBTD”), whereby PBTD became a wholly owned subsidiary of the Company. On 11 May 2012, the Company entered into a stock purchase agreement with Jordan Starkman, Chief Executive Officer and the sole director of the Company, pursuant to which, Mr. Starkman acquired all of the issued and outstanding common shares of the Company’s wholly-owned subsidiary Pay By The Day Company Inc. (“PBTD”). Upon sale of PBTD, no gain or loss was recognized since PBTD is dormant with limited transactions.
On 22 February 2011, the Company incorporated a company in the State of Wyoming named Tucana Exploration Inc. (“Tucana”). Tucana is a wholly owned subsidiary of the Company.
The Company is primarily engaged in exploration for lithium deposits at the Abigail Lithium Property in the James Bay region of Quebec, Canada.
The Company operates under the web-site address www.tucanalithium.com and www.tucanaexploration.com.
F-5
| 2. | BASIS OF PRESENTATION |
The accompanying unaudited consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended 30 November 2012 are not necessarily indicative of the results that may be expected for the year ending 31 August 2013. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the year ended 31 August 2012.
The accompanying consolidated financial statements of the Company include the accounts of Tucana Lithium Corp. and its wholly owned subsidiary, Tucana. Inter-company balances and transactions have been eliminated upon consolidation.
The Company is considered to be in the development stage as defined in Accounting Standards Codification (“ASC”) 915, Development Stage Entities. The Company has devoted substantially all of its efforts to business planning and development by means of raising capital for operations. The Company has also not realized any significant revenues. Among the disclosures required by ASC 915 are that the Company's financial statements be identified as those of a development stage company, and that the statements of operations and comprehensive loss, stockholders' equity and cash flows disclose activity since the date of the Company's inception.
| 3. | GOING CONCERN |
These consolidated financial statements have been prepared assuming the Company will continue on a going-concern basis. The Company has incurred losses since inception and the ability of the Company to continue as a going-concern depends upon its ability to develop profitable operations and to continue to raise adequate financing. Management is actively targeting sources of additional financing to provide continuation of the Company’s operations. In order for the Company to meet its liabilities as they come due and to continue its operations, the Company is solely dependent upon its ability to generate such financing. The Company is actively seeking financing to fully execute the next phase of the Company’s exploration campaign and future acquisitions. Any capital raised will be through either a private placement or a convertible debenture and will result in the issuance of common shares from the Company’s authorized capital. The Company believes it can satisfy minimum cash requirements for the next twelve months with either an equity financing, convertible debenture or if needed, a loan from our director, Jordan Starkman.
There can be no assurance that the Company will be able to continue to raise funds, in which case the Company may be unable to meet its obligations. Should the Company be unable to realize its assets and discharge its liabilities in the normal course of business, the net realizable value of its assets may be materially less than the amounts recorded in these consolidated financial statements.
The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.
| 4. | SIGNIFICANT ACCOUNTING POLICIES |
Recent Accounting Pronouncements
The Company recently adopted an accounting standard update regarding how entities test goodwill for impairment. This accounting standard update is intended to reduce the cost and complexity of the annual goodwill impairment test by providing entities an option to perform a qualitative assessment to determine whether further impairment testing is necessary. This update impacts testing steps only and therefore the adoption did not have an effect on the Company’s consolidated financial statements.
F-6
In July 2012, an accounting standard update was issued regarding the testing of indefinite-lived intangible assets for impairment. This update is intended to reduce the cost and complexity of testing indefinite-lived intangible assets for impairment by providing entities with an option to perform a qualitative assessment to determine is not expected to have an effect on the Company’s consolidated financial statements.
| 5. | DISCONTINUED OPERATIONS |
On 11 May 2012, the Company entered into a stock purchase agreement with Jordan Starkman, Chief Executive Officer and the sole director of the Company, pursuant to which, Mr. Starkman acquired all of the issued and outstanding common shares of the Company’s wholly-owned subsidiary PBTD. Upon sale of PBTD, no gain or loss was recognized since PBTD had limited transactions.
The operating results and cash flows of PBTD are reflected as discontinued operations in the consolidated financial statements for all periods presented. Although net earnings are not affected, the Company has reclassified the results from the discontinued operations in the comparative periods presented.
| 6. | CONVERTIBLE NOTES PAYABLE |
On 16 May 2012, the Company issued a one-year convertible note payable in the amount of $125,000. The convertible note payable matures in twelve months, is unsecured, bears interest at 4% per annum and interest accrues and is payable in cash upon maturity or repayment of the principal prior to the date of maturity, provided that the elected conversion to common shares does not occur. At any time or times on or before 16 May 2013, the note holder shall be entitled to convert any portion of the outstanding and unpaid amount, including accrued interest, into fully paid and non-assessable shares of common stock at a conversion price of $0.025 per common share. In accordance with ASC 470-20, Debt with Conversions and Other Options, the Company has identified a beneficial conversion feature imbedded within this convertible debenture. Accordingly, the Company recognized $6,800 which is equal to the fair value of the imbedded beneficial conversion feature and was deducted from the proceeds of issuance and was attributed to additional paid-in capital. The beneficial conversion feature will be amortized over the term to maturity. Accretion expense of $1,700 was recognized for the three months ended 30 November 2012 (three months ended 30 November 2011 – Nil) and is presented within interest expense on the consolidated statement of operations.
The Company paid $12,500 in commissions related to raising the above mentioned proceeds which were reduced from the liability component of the debentures and are being amortized over the term to maturity. Accretion expense of $3,125 was recognized for the three months ended 30 November 2012 (2011 – Nil) and is presented within professional fees on the consolidated statement of operations.
| 7. | MINERAL CLAIMS |
The Company's main exploration focus is the Abigail Lithium Property located in the James Bay region of Quebec, Canada. As of 30 November 2012 the property consists of 177 map-designated cells totaling approximately 9,400 hectares. In addition, the Company holds 12 map-designated cells just north of the Abigail property named Lac Kame and 25 map-designated cells named EM-1. Combined the Lac Kame property and EM-1 total 966 hectares.
The Abigail Lithium Property was initially acquired for a cost of $550,000 on December 2, 2010 and was made up of 222 map-designated cells covering 11,844 hectares and having claims which expired in May 2012. These claims are covered by NTS sheets 320/12 and 320/13. In addition, the Company is subject to a 3% net smelter returns royalty on any commercial production from mineral deposits on this property.
F-7
In December 2011, the Company acquired an additional 83 claims which are contiguous to the initial 222 claim units. The claims are registered under the name of the Company’s wholly owned subsidiary, Tucana. The claims are made up of 83 map-designated cells totaling 4,439 hectares with 82 claims covered by NTS sheets 32O12 and 1 claim covered by NTS sheets 32N09. The cost of acquiring the claims was $8,215. The claims will expire in November 2013 and exploration work of $100,000 will be required upon renewal. The Company secured the additional claims based upon the magnetic and gradiometric airborne survey released by the Quebec Ministry of Natural Resources in September 2011.
In March 2012, the Company renewed 71 mineral claims on the Abigail property based upon the exploration work reported in the summer of 2011. The cost of renewing the claims was $3,763. These claims will expire between April and May 2014 and exploration work in the amount of $84,000 will be required upon renewal. In addition, the Company has dropped 85 mineral claims located on the northern perimeter of the property. The Company's decision was based upon the results from the exploration program in the summer 2011 and a review of the airborne magnetic survey. Due to these circumstances, the Company evaluated the recoverability of the mineral claims and recognized an impairment loss of $451,870 on the mineral property claims for the year ended 31 August 2012.
In May 2012, the Company entered into an asset purchase agreement (“Lac Kame and EM-1 Purchase Agreement”) to acquire a 100% interest in two mining properties known as the Lac Kame and EM-1 both located in the James Bay, Quebec region of Canada. The two properties are covered by NTS sheets 32O13. The properties are made up of 37 map-designated cells totaling 1,961 hectares. The claims will expire in November 2013 and exploration work in the amount of $44,000 will be required upon renewal. In addition, pursuant to the Lac Kame and EM-1 Purchase Agreement, the Company agreed to an additional payment of $50,000 and the issuance of 1,000,000 shares to the selling group if and when the Company spends a total of $1,000,000, an additional payment of $100,000 and the issuance of 1,000,000 if and when the Company spends $2,500,000, and an additional payment of $150,000 and the issuance of 1,000,000 shares if and when the Company spends a total of $5,000,000 on the acquired properties. The amount of spending by the Company on the acquired properties is deemed as an index of any previously unidentified and additional value of the properties. The Company also agreed to pay the selling group a 3% net smelter royalty on any commercial producing mineral deposit from the acquired properties. The Company's main interest with the newly acquired claims will be magnetic anomalies for kimberlite based upon the airborne magnetic survey released in October 2011. The Company paid $3,000 in cash and issued 2,000,000 shares of common stock at a price of $0.01 per share in connection with the acquisition of the Lac Kame and EM-1 properties.
| 8. | RELATED PARTY TRANSACTIONS |
The transactions with related parties were in the normal course of operations and were measured at the exchange value which represented the amount of consideration established and agreed to by the parties. Related party transactions not disclosed elsewhere in these consolidated financial statements are as follows:
Advances from a related company controlled by Jordan Starkman, the sole director of the Company are non-interest bearing, unsecured and due on demand.
Consulting fees paid to Mr. Starkman for the three months ended 30 November 2012 were $7,500 (three months ended 30 November 2011 – Nil).
As disclosed in note 1, on 11 May 2012, Mr. Starkman acquired all the shares of common stock of Pay By The Day Company Inc. from the Company. Upon sale of PBTD, no gain or loss was recognized since PBTD had limited transactions.
| 9. | CAPITAL STOCK |
On 20 September 2012, the Company agreed to issue 1,944,080 shares of common stock at $0.025 per share in exchange for cash of $48,602. These shares will be issued in the next quarter. The Company paid $4,860 in commissions and $1,458 in legal expenses related to raising the above mentioned private placements and has accordingly been deducted from Shares to be issued as presented on the consolidated balance sheet.
F-8
| 10. | CONTINGENCIES |
In accordance with the Abigail Purchase Agreement, the Company will also owe to the selling group of the Abigail Property the following contingent payments:
| ● | After spending a total amount of $2,500,000 on the property, $250,000 and an additional 1,000,000 shares of the Company’s common stock shall be delivered to the selling group. |
| ● | After spending a total amount of $5,000,000 on the property, a further $250,000 and 1,000,000 shares of the Company’s common stock shall be delivered to the selling group. |
| ● | If a feasibility study is put in place an additional $250,000 and 1,000,000 shares of the Company’s common stock shall be delivered to the selling group. |
| ● | If a bankable feasibility is put in place a further $500,000 and 2,000,000 shares of the Company’s common stock shall be delivered to the selling group. |
In accordance with the Lac Kame and EM-1 Purchase Agreement, the Company will also owe to the selling group of the properties the following contingent payments:
| ● | After spending a total amount of $1,000,000 on the property, $50,000 and an additional 1,000,000 shares of the Company’s common stock shall be delivered to the selling group. |
| ● | After spending a total amount of $2,500,000 on the property, a further $100,000 and 1,000,000 shares of the Company’s common stock shall be delivered to the selling group. |
| ● | After spending a total amount of $5,000,000 on the property, a further $150,000 and 1,000,000 shares of the Company’s common stock shall be delivered to the selling group. |
If the Company reaches commercial production, it is also subject to a 3% net smelter returns royalty payable to the selling groups in the Abigail Purchase Agreement and the Lac Kame EM-1 Purchase Agreement.
| 11. | SUPPLEMENTAL CASH FLOW INFORMATION |
During the three months ended 30 November 2012 and 2011 and for the period from inception to 30 November 2012, there was no interest or taxes paid by the Company.
| 12. | SUBSEQUENT EVENT |
On 9 January 2013, the $125,000 convertible note payable, as discussed in note 6, including accrued interest of $3,274 were converted into 5,130,959 shares of common stock at price of $0.025 per share.
On 9 January 2013, the Company issued 1,944,080 shares of common stock at $0.025 per share for the cash payment of $48,602.
F-9
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.
The Company has incurred losses since inception and the ability of the Company to continue as a going-concern depends upon its ability to raise adequate financing and develop profitable operations. Management is actively targeting sources of additional financing to provide continuation of the Company’s operations. In order for the Company to meet its liabilities as they come due and to continue its operations, the Company is solely dependent upon its ability to generate such financing.
The Company is actively seeking financing for its current projects. The Company is optimistic that the financing will be secured and the going concern risk will be removed. We are in discussions with various parties and believe a successful financing is likely. Any capital raised will be through either a private placement and will result in the issuance of shares of common stock from the Company’s authorized capital.
Plan of Operation
Abigail Lithium Property
The Company's main exploration target in 2013 is expected to be the Abigail Lithium Property (the “Property”) situated within and adjacent to Nemaska Exploration's Whabouchi Lithium discovery (as referenced in the Form 8-K filed with the SEC on December 3, 2010). The Property is located in a gneissic formation between the Lac des Montagnes volcano-sedimentary belt and the Champion Lake granitoids. The principal exploration target for the Property is lithium-bearing spodumene and the Property is on strike with the high-grade spodumene-bearing pegmatite located on the Whabouchi property. The Property is underlain by the same gneissic formation that hosts the Lac Arques SW pegmatite showings with 1,189 ppm Th and 563 ppm U3O8. Magmatic NI-Cu type deposit associated with ultramafic intrusions may also be found. The Whabouchi spodumene-bearing pegmatite is located in a low magnetic anomaly on the flank of a medium magnetic high. A high magnetic anomaly located about one km north of the Whabouchi pegmatite can be interpreted as an ultramafic intrusion. An airborne survey over the Property could lead to the discovery of the same magnetic signature and help locate pegmatite and ultramafic intrusions of the Whabouchi and Nisk-1 type. In addition, the Property is easily accessible with year round roads, electrical power intersecting the Property from the town of Nemaska, cell phone service throughout the region, and a local airport in the town of Nemaska.
Nemaska's Whabouchi deposit continues to confirm high-grade channel samples illustrating the width of the main mineralized zone. Furthermore, Nemaska has recently announced it is partnering with Chengdu Tianqi. Tianqi isthe largest lithium battery material provider in China that uses spodumene concentrate as its raw material to produce lithium carbonate and has extensive expertise in lithium products. This relationship validates Nemaska's deposit and signals the strong potential for their lithium assets in the James Bay region.
On June 13, 2011, the Company entered into a geological and management services agreement (the “Exploration Agreement”) with Nemaska Exploration Inc. (“Nemaska”) to coordinate and execute the Company’s Summer 2011 exploration program. The exploration campaign was led by geologist Yves Caron. Mr. Caron is currently Vice-President Exploration for both Nemaska Exploration and Monarques Resources and has been a member of the Ordre des Gйologues du Quйbec since 2001. The Exploration Agreement term which was for a period of six months has expired and the Company is currently negotiating to renew the contract at a future date.
Nemaska provided exploration services to the Company subject to the schedule of fees below.
| Position | Cost per day | |||
| Sr. consultant - QP services | $ | 1000 | ||
| Project manager – i.t. geologist | $ | 600 | ||
| Student geologist | $ | 450 | ||
| Geologist assistant | $ | 350 | ||
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The Company had committed to an initial exploration work budget of a minimum of $300,000 to commence no later than May 16, 2011. The Company announced on June 27, 2011 it started its first phase of the exploration campaign on the Property. The program commence date was delayed due to poor weather conditions in the region. The program was carried out with a team of six people including two geologists and four technicians under a service agreement with Nemaska Exploration. The work program covered geological reconnaissance of approximately 2,500 hectares, mostly in the central and north part of the property. In addition, the Company focused its efforts on the same geological corridor east of the Whabouchi lithium deposit consisting of twelve kilometers on the same geological trend. The purpose of the exploration program was mainly to locate mineralized pegmatites, but also any other kind of economic mineralization. The Company has completed its geological and prospecting program on approximately 15% of the Property for approximately $175,000, following the budgeted schedule listed below.
On September 19, 2011 the Company obtained the airborne magnetic survey for the Property from the Ministry of Natural Resources in Quebec. The airborne survey encompasses the entire Property covered by NTS Sheets 32O12 and 32O13 in the Lac Des Montagnes and Lac Abigail region of Quebec. The airborne survey will locate the ultramafic intrusions if they exist, the basalt and/or ultramafic remnants, the contrast between the gneiss and Champion Lake granitoids and, if the magnetic contrast with the encasing rocks is strong enough, the pregmatites. The Company believes the airborne survey is a critical step in the development of the Property. The Company had budgeted $150,000 for the survey, and fortunately was able to obtain the report from the Ministry of Natural Resources at a zero cost base. The Company retained the services of Donald Theberge, a professional engineer, to fulfill a Canadian NI43-101 report on its field operations, and to review the survey in respect to the planning of Phase II (discussed in details below) of the Company's exploration campaign. The Nemaska report in conjunction with the airborne survey has allowed the Company to prepare a plan and budget for Phase II of the exploration campaign on the Property. Phase II of the exploration campaign will involve a geological survey and prospecting program covering the targets to be defined by the airborne survey.
On November 4, 2011, the Company received the NI 43-101 report (the “Report”) summarizing the analysis of the airborne survey and containing the details and results from the Nemaska exploration campaign in June 2011. The reconnaissance geology program was carried out on the property by Nemaska Exploration Inc. on behalf of the Company. More than 2,000 GPS points were recorded and 39 samples were taken and analyzed. Samples were mainly taken from pegmatites, but also from granitoid, gabbro, basalts and diab ases. Samples were taken where mineralization was seen or suspected, like pegmatite and rusted and/or silicified zones, and when sulphides were observed. Samples were analyzed by ALS Minerals, located at 1322, rue Harricana, Val-d’Or (Quйbec). Two grab samples returned slightly anomalous results. The first, numbered 18070, is from a pegmatite visually containing 1% Mo, which returned 292 ppm Mo and 466 ppm Rb. The second, numbered 18005, is from a pink pegmatite and returned 151.5 ppm Nb, 24 ppm Sm and 147.5 ppm Ta.
No drilling has been done by Tucana since it purchased the Property. According to the NI 43-101 report, the magnetic/gradiometric airborne survey released in September 2011, observed at least three families of magnetic lineaments. The first is oriented at about 070 °, and outlines the north boundary of the Lac des Montagnes volcanic belt. The second is oriented at approximately 040 ° and is located in the paragneiss. The third is oriented NW/SE and has been mapped in the field as a regional diabase dyke. At this point, the most interesting magnetic feature is the magnetic lineament located on the south part of the property, which seems to outline the north boundary of the volcanic belt. In 1987, Westmin detected several Dighem EM anomalies along this lineament, but did not follow up. This horizon can be fertile, mainly for sulphide-type mineralization.
The Company believes the Property has good potential for both rare earths in pegmatites and for sulphide deposits in volcanics. In addition, the airborne survey has found magnetic anamalies for kimberlite targets. Several kimberlite targets were discovered in the immediate vicinity of the Property, from one to three kilometers to the north/west of the Property. On May 11, 2012, the Company entered into an Asset Purchase Agreement to acquire 37 mining claims relevant to these kimberlite targets.
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To fully explore the potential of the Property, a two-phase program is recommended. It is described in the proposed budget shown below:
| Phase I (Compilation, geophysical and geological surveys and sampling with 2000 m of drilling) |
| Work | Quantity | Unit | Unit Cost | Total | ||||||||||||||||
| Compilation of the EM Input (SDBJ) and Dighem (2007) anomalies (location of anomalies and interpretation) | $ | 10,000 | ||||||||||||||||||
| Line cutting (cut every 100 m and picketed every 25 m) on the main coincident Mag and EM anomalies. Provision of 125 km | 125 | km | $ | 550 | $ | 68,750 | ||||||||||||||
| Ground geophysics, EM (MaxMin) and Mag | 125 | km | $ | 350 | $ | 43,750 | ||||||||||||||
| Geology and prospecting on the cut lines and on the north part of the property (including room and board, transportation, etc.) | $ | 100,000 | ||||||||||||||||||
| Stripping, trenching and sampling, all inclusive | $ | 50,000 | ||||||||||||||||||
| Drilling on the target to be defined ($225/m, all inclusive) | 2,000 | m | $ | 225 | $ | 460,000 | ||||||||||||||
| Report update, NI 43-101 and for statutory purposes | $ | 10,000 | ||||||||||||||||||
| Contingency, estimated at 10% | ||||||||||||||||||||
| TOTAL PHASE I | $ | 805,750 | ||||||||||||||||||
| Phase II | ||||||||||||||||||||
| Provision of 5,000 m of drilling to test the targets defined during Phase I | 5,000 | m | $ | 225 | $ | 1,125,000 | ||||||||||||||
| Report update, NI 43-101 and for statutory purposes | $ | 12,000 | ||||||||||||||||||
| Contingency, estimated at 10% | $ | 113,700 | ||||||||||||||||||
| TOTAL PHASE II | $ | 1,250,700 | ||||||||||||||||||
| TOTAL PHASE I AND II | $ | 2,056,450 | ||||||||||||||||||
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In December 2011, the Company staked an additional 83 claims in the James Bay region of Quebec. The claims are 100% owned by the Company and registered in the name of Tucana's subsidiary, Tucana Exploration Inc. The property is made up of 83 map-designated cells totaling 4,439 hectares with 82 claims covered by NTS sheets 32O12 and 1 claim covered by NTS sheets 32N09. The cost of staking the claims was $8,215. The claims will expire in November 2013 and exploration work in the amount of $100,000 will be required upon renewal. The Company secured the additional claims based upon the NI 43-101 technical report and the magnetic and gradiometric airborne survey released by the Quebec Ministry of Natural Resources in September 2011. The Lac des Montagnes formation is the most fertile rock in this area for massive sulfides, and it is the same kind of volcano-sedimentary belt you would find in the Rouyn-Noranda and Val d'Or area yet more metamorphosed. The gradiometric magnetic survey shows magnetic anomalies are present on the property and should be further investigated.
In March 2012, the Company renewed 71 mineral claims on the Abigail property based upon the exploration work reported in the summer of 2011. These claims will expire between April and May 2014 and exploration work in the amount of $84,000 will be required upon renewal. In addition, the Company has dropped 85 mineral claims located on the northern perimeter of the property. The Company's decision was based upon the results from the exploration program in the summer 2011 and a review of the airborne magnetic survey. The majority of the claims are located in the Lac des Montagnes volcano-sedimentary formation, and its immediate surrounding area. This is the most fertile ground in the area, and resembles the Abitibi greenstone volcano-sedimentary formations. The Company believes it has kept the most promising portion of the Abigail property based upon the geology reports. The Property now consists of 220 map-designated cells totaling approximately 11,400 hectares within and adjacent to Nemaska Lithium's Whabouchi discovery.
In March 2012, the Company also retained the services of Gestion SDM Inc. to represent the Company and manage all of the Company's mineral claims with the Department of Natural Resources in Quebec.
The Company believes the Report facilitates further development of the Property and will utilize such report to plan and coordinate the next phase of the Company's exploration program. The Company is currently negotiating financing in the amount of $1,000,000 to further explore the Property. The Company will review the survey, and begin to coordinate and plan Phase II of the exploration campaign once the funds are secured. Any capital raised will be through either a private placement or a convertible debenture and will result in the issuance of common shares from the Company’s authorized capital.
Lac Kame and EM-1Properties
In addition to the Abigail Property, the Company closed an Lac Kame and EM-1 Purchase Agreement to acquire a One Hundred (100%) interest in two mining properties known as the Lac Kame and EM-1 both located in the James Bay, Quebec region of Canada. It is covered by NTS sheets 32O13. The property is made up of 37 map-designated cells totaling 1,961 hectares. The claims will expire in November 2013 and exploration work in the amount of $44,000 will be required upon renewal. The Company's main interest with the newly acquired claims will be magnetic anomalies for kimberlite based upon the airborne magnetic survey released in October 2011. The Company plans on raising an addition $150,000 to commence an initial exploration campaign designed to discover the precise location of drill test targets identified by the aireborne electromagnetic (EM) data. Each identified target will be surveyed with ground EM instruments to insure that the character of the anomaly is consistent with known kimberlites.
Spin-Out PBTD Segment
On May 11, 2012, the Company entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with (i) Pay By The Day Company Inc., a Ontario corporation and a wholly owned subsidiary of the Company (“Pay By The Day”); and (ii) Jordan Starkman, Chief Executive Officer and the sole director of the Company and President of the Subsidiary (“Starkman”), pursuant to which, Starkman acquired all of the issued and outstanding common shares of Pay By The Day, and in exchange, Starkman assumed and agreed to pay, perform and discharge any and a all the liabilities and obligations of Pay By The Day (the “Spin-out”). The Company has divested its interest and will no longer operate and own as a wholly owned subsidiary Pay By The Day Company Inc.
Recent Development
Since July 2012, the Company has engaged in discussions with the relevant parties to acquire three gold properties located in Nevada, United States. As of this report, no definitive agreement has been signed and there is no guarantee in any aspect that this potential acquisition will be completed.
Results of Operations for the three months ended November 30, 2012 compared to the three months ended November 30, 2011
Continuing operations
We currently have no known mineral reserves and have not generated any revenue from our mining activities.
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For the period from inception through November 30, 2012, our operating expenses and loss from continuing operation were $1,222,410, and our net loss from continued operations was $1,818,608.
Operating expenses for the three months ended November 30, 2012 were $50,294 compared to $56,418 for the three months ended November 30, 2011. Operating expenses during the three months ended November 30, 2012 compared to the three months ended November 30, 2011 was primarily attributed to professional fees and management fees. Professional fees and management fees for the three months ended November 30, 2012 were $40,628 and $48,355 for the three months ended November 30, 2011. These fees paid in the three months ended November 30, 2012 were attributable to legal, accounting, consulting, and auditing services related to quarterly and audit filings. In addition, advisory services, public/investor relations relating to the Company’s current operation and future planned corporate acquisitions were responsible for the professional and management fees. The exploration costs for the three months ended November 30, 2012 was nil and $2,466 for the three months ended November 30, 2011. The Company didn’t have any exploration activity during the three months ended November 30, 2012. The decrease in exploration costs was due to the lack of financing required to complete Phase I of the exploration campaign.
Net loss was $50,294 for the three months ended November 30, 2012 and $60,189 for the three months ended November 30, 2011. Professional fees relating to advisory services for the Company’s current operations and future planned corporate actions contributed to the net loss in the three months ended November 30, 2012.
During the quarter ending November 30, 2012 and 2011, we had no provision for income taxes due to the net operating losses incurred.
Liquidity and Capital Resources
As of November 30, 2012 we had a cash balance of $1,406 and a working capital deficit of $129,491.
The Company raised approximately $42,284, net of commissions, from the issuance of shares of common stock of the Company during the three months ended November 30, 2012. The proceeds were used to fund operating activities of $50,294. Our current cash will be used to fund the Company’s operations and costs associated with the Property, and any additional claims acquired as discussed above in our Plan of Operations.
The Company is actively seeking financing in the amount of $1,000,000 to fully execute the next phase of the Company’s exploration campaign in accordance with the NI 43-101 and future acquisitions. Any capital raised will be through either a private placement or a convertible debenture and will result in the issuance of common shares from the Company’s authorized capital. The Company is optimistic that the financing will be secured and our going concern risk will be removed.
We anticipate that our fixed costs made up of legal & accounting and general & administrative expenses for the next twelve months will total approximately $45,000. Legal and accounting expenses of $35,000 represents the minimum funds needed to sustain operations. The $35,000 will be financed through the Company’s cash on hand, additional financing, net sales and if needed, advances from our director, Jordan Starkman. Currently there is no firm loan commitment in place between the Company and Jordan Starkman.
We believe we can satisfy our cash requirements for the next twelve months with our cash balances and if needed an additional loan from our sole director, Jordan Starkman. However, completion of our plan of operations is subject to attaining adequate revenue and adequate financing. We cannot assure investors that adequate revenues will be generated from our mining properties. In the absence of our projected revenues, we may be unable to proceed with our plan of operations. Even without adequate revenues within the next twelve months, we still anticipate being able to continue with our present activities, but we may require financing to achieve our growth and exploration goals.
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We do not anticipate the purchase or sale of any significant equipment. We also do not expect any significant additions to the number of employees, unless financing is raised. The foregoing represents our best estimate of our cash needs based on current planning and business conditions. The exact allocation, purposes and timing of any monies raised in subsequent private financings may vary significantly depending upon the exact amount of funds raised and required, and our progress with the execution of our business plan.
In the event we are not successful in reaching our initial revenue targets or operational goals, additional funds may be required, and we may not be able to proceed with our business plan for the development and exploration of our mining targets. Should this occur, we would likely seek additional financing to support the continued operation of our business. We anticipate that depending on market conditions and our plan of operations, we may incur operating losses in the foreseeable future. Therefore, our auditors have raised substantial doubt about our ability to continue as a going concern. We will need approximately $1,000,000 to aggressively pursue and implement our business plan’s exploration campaign.
Off-Balance Sheet Arrangements
We do not have any outstanding derivative financial instruments, off-balance sheet guarantees, interest rate swap transactions or foreign currency contracts.
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Not required for Smaller Reporting Companies.
| Item 4. | Controls and Procedures |
Evaluation of disclosure controls and procedures
Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s principal executive officer and principal financial officer of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures were not effective as of November 30, 2012, due to the material weaknesses identified below.
In the course of management's assessment, we have identified the following material weaknesses in internal control over financial reporting:
| - | Segregation of Duties – As a result of limited resources, we did not maintain proper segregation of incompatible duties, namely the lack of an audit committee, an understaffed financial and accounting function, and the need for additional personnel to prepare and analyze financial information in a timely manner and to allow review and on-going monitoring and enhancement of our controls. The effect of the lack of segregation of duties potentially affects multiple processes and procedures. |
| - | Maintenance of Current Accounting Records – We may from time to time fail to maintain our records that in reasonable detail accurately and fairly reflect the transactions of the Company. This weakness specifically affects the payments and purchase cycle and therefore we failed to maintain effective internal controls over the completeness and cut off of accounts payable, expenses and other capital transactions. |
| - | Application of GAAP – We did not maintain effective internal controls relating to the application of generally accepted accounting principles in accounting for transactions in a foreign currency. |
It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Changes in internal control over financial reporting. There have been no changes in our internal control over financial reporting that occurred during the quarter covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
| Item 1. | Legal Proceedings. |
To the best of our knowledge, there are no material pending legal proceedings to which we are a party or of which any of our property is the subject.
| Item 1A. | Risk Factor |
Not required for Smaller Reporting Company.
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
On 9 January 2013, the Company issued 5,130,959 shares of its common stock to a holder of a convertible note upon conversion of the principal amount of $125,000 and accrued interest of $3,274, at price of $0.025 per share.
On 9 January 2013, the Company issued 1,944,080 shares of its common stock to an investor for cash at $0.025 per share.
The above issued shares were offered and sold in a private transaction in reliance upon exemptions from registration pursuant to Section 4(2) of the Securities Act. Our reliance on Section 4(2) of the Securities Act was based upon the following factors: (a) the issuance of the securities was an isolated private transaction by us which did not involve a public offering; (b) there were only a limited number of offerees; (c) there were no subsequent or contemporaneous public offerings of the securities by us; (d) the securities were not broken down into smaller denominations; and (e) the negotiations for the sale of the stock took place directly between the offerees and us.
| Item 3. | Defaults Upon Senior Securities. |
None
| Item 4. | Mine Safety Disclosures |
Not applicable.
| Item 5. | Other Information. |
None
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| Item 6. | Exhibits |
| 31.1 | Certification of Principal Executive Officer and Principal Financial Officer of the Registrant pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 32.1+ | Certification of Principal Executive Officer and Principal Financial Officer of the Registrant pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
| 101* | Interactive Data File (Form 10-Q for the quarterly period ended November 30, 2012 furnished in XBRL). |
+In accordance with SEC Release 33-8238, Exhibit 32.1 is being furnished and not filed.
*Furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise not subject to liability under these sections.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, there unto duly authorized.
| Tucana Lithium Corp. | |||
| By: | /s/ Jordan Starkman | ||
| Jordan Starkman | |||
President and Secretary (Duly Authorized Officer, Principal Executive Officer and Principal Financial Officer) | |||
| Date: January 18, 2013 | |||
Pursuant to the requirements of 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.
| Name | Title | Date | ||
/s/ Jordan Starkman | President, Secretary, and | January 18, 2013 | ||
| Jordan Starkman | Chairman of the Board of Directors (Principal Executive Officer and Principal Financial Officer) |
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