UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended December 31, 2002
-----------------
[ ] Transition Report pursuant to 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period to
------------------ --------------------
Commission File Number 001-31669
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TARI INC.
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(Exact name of small Business Issuer as specified in its charter)
Nevada 98-0339560
- --------------------------------- -----------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
700 West Pender Street, Suite 802, Vancouver, B.C., Canada V6C 1G8
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(Address of principal executive offices)
(604) 685-3317
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Registrant's telephone number, including area code
9 Langton Close Woking, Surrey, England
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(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities 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
State the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date: 3,890,000 shares of $0.001 par value
common stock outstanding as of February 24, 2004.
TARI INC.
(A Pre-exploration Stage Company)
INTERIM FINANCIAL STATEMENTS
December 31, 2002 and March 31, 2002
(Stated in US Dollars)
(Unaudited)
---------
TARI INC.
(A Pre-exploration Stage Company)
INTERIM BALANCE SHEETS
December 31, 2002 and March 31, 2002
(Stated in US Dollars)
(Unaudited)
-----------
(Unaudited) (Audited)
ASSETS December 31, March 31
------ 2002 2002
---- ----
Current
Cash $ 28,819 $ -
============ ============
LIABILITIES
-----------
Current
Bank indebtedness $ - $ 39
Accounts payable and accrued liabilities 4,255 12,827
Due to related party 4,655 1,830
------------ ------------
8,910 14,696
------------ ------------
STOCKHOLDERS' EQUITY (DEFICIENCY)
---------------------------------
Preferred stock, $0.001 par value
10,000,000 shares authorized, none outstanding
Common stock, $0.001 par value
100,000,000 shares authorized
2,500,000 shares issued 2,500 2,500
Stock subscriptions 55,000 -
Additional paid-in capital 22,500 22,500
Deficit accumulated during the pre-exploration stage ( 60,091) ( 39,696)
------------ ------------
19,909 ( 14,696)
------------ -------------
$ 28,819 $ -
============ ============
SEE ACCOMPANYING NOTES
TARI INC.
(A Pre-exploration Stage Company)
INTERIM STATEMENTS OF OPERATIONS
for the three and nine months ended December 31, 2002
and 2001 and for the period May 2, 2001
(Date of Incorporation) to December 31, 2002
(Stated in US Dollars)
(Unaudited)
----------
May 2, May 2, 2001
Three months ended Nine months 2001(Date of (Date of Incor-
ended Incorporation)to poration) to
December 31, December 31, December 31, December 31,
2002 2001 2002 2001 2002
---- ---- ---- ---- ----
Expenses
Audit and accounting $ 975 $ 3,833 $ 4,587 $ 5,307 $ 11,120
fees
Bank charges 65 47 188 125 382
Consulting fees 7,000 1,000 10,000 5,000 15,000
Incorporation costs - - - 900 900
Legal fees 2,359 1,545 2,359 21,601 23,960
Office expenses - 200 - 267 268
Mineral lease costs - 1,500 - 3,056 5,200 8,256
(Note 3)
Transfer agent and - - 205 - 205
filing fees
------------- ------------- ------------- ------------- -------------
Net loss for the period $ 11,899 $ 6,625 $ 20,395 $ 38,400 $ 60,091
------------- ------------- ------------- ------------- -------------
Loss per share $ 0.00 $ 0.00 $ 0.01 $ 0.02
============= ============= ============= =============
Weighted average number of shares
outstanding 2,500,000 2,500,000 2,500,000 2,500,000
============= ============= ============= =============
SEE ACCOMPANYING NOTES
TARI INC.
(A Pre-exploration Stage Company)
INTERIM STATEMENTS OF CASH FLOWS
for the three and nine months ended December 31, 2002
and 2001 and for the period May 2, 2001
(Date of Incorporation) to December 31, 2002
(Stated in US Dollars)
(Unaudited)
---------
May 2, 2001 May 2, 2001
(Date of (Date of Incor-
Nine months ended Incorpo-ration) to poration) to
December 31, December 31, December 31,
2002 2001 2002
---- ---- ----
Cash Flows from Operating Activities
Net loss for the period $ ( 20,395) $ ( 38,400) $ ( 60,091)
Change in non-cash working capital balances
related to operations
Accounts payable and accrued liabilities ( 8,572) 13,101 4,255
Due to related party 2,825 330 4,655
--------------- ---------------- --------------
( 26,142) ( 24,969) ( 51,181)
--------------- ---------------- --------------
Cash Flows from Financing Activities
Stock subscriptions received 55,000 - 55,000
Capital stock issued - 25,000 25,000
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55,000 25,000 80,000
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Increase in cash during the period 28,858 31 28,819
Cash (bank indebtedness), beginning of the period ( 39) - -
--------------- ---------------- --------------
Cash, end of the period $ 28,819 $ 31 $ 28,819
=============== ================ ==============
Supplemental disclosure of cash flow
information
Cash paid for:
Interest $ - $ - $ -
=============== ================ ==============
Income taxes $ - $ - $ -
=============== ================ ==============
SEE ACCOMPANYING NOTES
TARI INC.
(A Pre-exploration Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
for the period May 2, 2001 (Date of Incorporation) to December 31, 2002
(Stated in US Dollars)
(Unaudited)
---------
Deficit
Accumulated
Common Shares Additional During the
------------------------ Paid-in Share Pre-exploration
Number Par Value Capital Subscriptions Stage Total
------ --------- ------- ------------- ----- -----
Capital stock issued pursuant to 2,500,000 $ 2,500 $ 22,500 $ - $ - $ 25,000
an offering memorandum for cash
- - at $0.01
Net loss for the period ended
March 31, 2002 - - - - ( 39,696) ( 39,696)
--------- ----------- ---------- ----------- ---------- ----------
Balance, as at March 31, 2002 2,500,000 2,500 22,500 - ( 39,696) ( 14,696)
Stock subscription received - - - 55,000 - 55,000
Net loss for the nine month period
ended December 31, 2002 - - - - ( 20,395) ( 20,395)
--------- ----------- ---------- ----------- ---------- ----------
Balance, as at December 31, 2002 2,500,000 $ 2,500 $ 22,500 $ 55,000 $ ( 60,091) $ 19,909
========= =========== ========== =========== ========== ==========
SEE ACCOMPANYING NOTES
TARI INC.
(A Pre-exploration Stage Company)
NOTES TO THE INTERIM FINANCIAL STATEMENTS
for the period May 2, 2001 (Date of Incorporation) to December 31, 2002
(Stated in US Dollars)
(Unaudited)
---------
Note 1 Interim Reporting
-----------------
While information presented in the accompanying interim financial
statements is unaudited, it includes all adjustments which are, in
the opinion of management, necessary to present fairly the
financial position, results of operations and cash flows for the
interim period presented. All adjustments are of a normal
recurring nature. It is suggested that these interim financial
statements be read in conjunction with the Company's March 31,
2002 financial statements.
Note 2 Continuance of Operations
-------------------------
The financial statements have been prepared using generally
accepted accounting principles in the United States of America
applicable for a going concern which assumes that the Company will
realize its assets and discharge its liabilities in the ordinary
course of business. The Company has accumulated losses of $60,091
since its commencement. Its ability to continue as a going concern
is dependent upon the ability of the Company to obtain the
necessary financing to meet its obligations and pay its
liabilities arising from normal business operations when they come
due.
Note 3 Commitments
-----------
a) Mining Lease
By a lease agreement effective May 15, 2001 and amended on
April 5, 2002 and November 1, 2002, the Company was granted
the exclusive right to explore and mine the SF resource
property located in Storey County of the State of Nevada. The
term of this lease is for 20 years, renewable for an
additional 20 years so long as the conditions of the lease are
met. Minimum payments and performance commitments are as
follows:
TARI INC.
(A Pre-exploration Stage Company)
NOTES TO THE INTERIM FINANCIAL STATEMENTS
for the period May 2, 2001 (Date of Incorporation) to December 31, 2002
(Stated in US Dollars)
(Unaudited)
---------
Note 3 Commitments - (cont'd)
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a) Mining Lease - (cont'd)
Minimum Advance Royalty Payments:
The owner shall be paid a royalty of 4% of the net smelter
returns from all production. In respect to this royalty,
the company is required to pay minimum advance royalty
payments of the following:
- $5,000 upon execution (paid)
- $1,250 on or before May 15, 2002 (paid)
- $1,500 on or before November 15, 2002 (paid)
- $7,250 on or before April 15, 2003
- $15,000 on May 15, 2003
- $20,000 on May 15, 2004
- $25,000 on May 15, 2005
- $50,000 on May 15, 2006 and thereafter
The Company can reduce the net smelter return royalty to
0.5% by payment of a buy-out price of $5,000,000. Advance
royalty payments made to the date of the buy-out will be
applied to reduce the buy-out price.
Performance Commitment:
In the event that the Company terminates the lease after
June 1, of any year it is required to pay all federal and
state mining claim maintenance fees for the next
assessment year. The Company is required to perform
reclamation work on the property as required by federal
state and local law for disturbances resulting from the
Company's activities on the property.
b) Initial Public Offering
The Company has filed a SB-2 registration statement, which includes an
initial public offering of 2,500,000 common shares at $0.05 per share. At
December 31, 2002, the Company had received $55,000 in subscriptions and an
additional $9,500 was received subsequent to December 31, 2002.
Item 2. Management's Discussion and Analysis or Plan of Operation
FORWARD LOOKING STATEMENTS
This quarterly report contains forward-looking statements that involve risks and
uncertainties. We use words such as anticipate, believe, plan, expect, future,
intend and similar expressions to identify such forward-looking statements. You
should not place too much reliance on these forward-looking statements. Our
actual results are likely to differ materially from those anticipated in these
forward-looking statements for many reasons, including the risks faced by us
described in this Risk Factors section and elsewhere in this quarterly report.
Plan of Operation
Our plan of operation for the twelve months following the date of this report is
to complete the recommended phase one exploration program on the SP project in
which we hold a leasehold interest. We anticipate that this program will cost us
$89,000.
In January 2004, we amended our mineral claims agreement regarding the SP
Project located in Storey County Nevada. We paid the lessor of the property
$2,000 upon execution of the agreement. In order to keep the lease in good
standing, we must pay the lessor $5,000 by July 9, 2004, $10,000 by January 9,
2005, and $50,000 per year thereafter.
In addition, we anticipate spending $10,000 on professional fees and $12,000 on
administrative expenses.
Total expenditures over the next 12 months are therefore expected to be
$126,000. Our cash on hand at December 31, 2002 was $28,819. Accordingly, we
will need to raise additional funds in order to complete the recommended
exploration program on the SP project and meet our other expected expenses. We
do not currently have any arrangements for raising additional funding.
On January 9, 2004, the Company reached an agreement with
Results of Operations for Nine-Month Period Ended December 31, 2002
We incurred a net loss of $20,395 for the nine-month period ended December 31,
2002, as compared to a loss of $38,400 in the same period in 2001. The decrease
in net loss was primarily due to a reduction in legal fees. For the period ended
December 31, 2001, we incurred legal fees of $21,601 in connection with the
filing and amendment of our registration statement on Form SB-2. At quarter end,
we had cash on hand of $28,819. Our liabilities at the same date totalled $8,910
and consisted of accounts payable of $4,255 and $4,655 due to our president.
ITEM 3. Controls and Procedures
Our principal executive officer and principal financial officer has concluded
that the effectiveness of our controls and procedures (as defined in
ss.240.13a-14(c) and 240.15d-14(c)), as of December 31, 2003 are sufficient.
There have been no changes in internal controls in the previous period.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not a party to any pending legal proceeding. Management is not
aware of any threatened litigation, claims or assessments.
Item 2. Changes in Securities
Subsequent to the nine-month period ended December 31, 2002, we completed our
initial public offering by selling a total of 1,390,000 shares of common stock
in our capital at $0.05 each for gross proceeds of $69,500.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Report on Form 8-K
31.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002
32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002
There were no reports filed on Form 8-K during the three-month period ended
December 31, 2002.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Tari Inc.
/s/ Theodore Tsagkaris
---------------------------
Theodore Tsagkaris
President, Secretary, Treasurer
Chief Executive Officer and
Director
(Principal Executive Officer,
Principal Financial Officer and
Principal Accounting Officer)
Dated: February 24, 2004
Exhibit 31.1
CERTIFICATION
I, Theodore Tsagkaris, President and Chief Executive Officer of Tari Inc.,
certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Tari Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. I am responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the small business issuer and I have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the small business issuer, including
its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this quarterly
report is being prepared;
b) designed such internal control over financial reporting, or caused
such disclosure control and procedures to be designed under our
supervision, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting
principles;
c) evaluated the effectiveness of the small business issuer's disclosure
controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as
of the end of the period covered by this quarterly report based on
such evaluation; and
d) disclosed in this quarterly report any change in the small business
issuer's internal control over financial reporting that occurred
during the small business issuer's most recent fiscal quarter that has
materially affected, or is reasonably likely to materially affect, the
small business issuer's internal control over financial reporting; and
5. I have disclosed, based on my most recent evaluation of internal controls
over financial reporting, to the small business issuer's auditors and the
audit committee of the small business issuer's board of directors (or
persons performing the equivalent functions):
(a) all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the small business issuer's ability
to record, process, summarize and reporting financial information; and
(b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the small business issuer's
internal control over financial reporting.
Date: February 24, 2004 /s/ Theodore Tsagkaris
------------------------------
Theodore Tsagkaris
President, C.E.O. and Director
(Principal Executive Officer)
Exhibit 31.2
CERTIFICATION
I, Theodore Tsagkaris, Secretary, Treasurer and Chief Financial Officer of
Tari Inc., certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Tari Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. I am responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal contrl over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the small business issuer and I have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the small business issuer, including
its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this quarterly
report is being prepared;
b) designed such internal control over financial reporting, or caused
such disclosure control and procedures to be designed under our
supervision, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting
principles;
c) evaluated the effectiveness of the small business issuer's disclosure
controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as
of the end of the period covered by this quarterly report based on
such evaluation; and
d) disclosed in this quarterly report any change in the small business
issuer's internal control over financial reporting that occurred
during the small business issuer's most recent fiscal quarter that has
materially affected, or is reasonably likely to materially affect, the
small business issuer's internal control over financial reporting; and
5. I have disclosed, based on my most recent evaluation of internal controls
over financial reporting, to the small business issuer's auditors and the
audit committee of the small business issuer's board of directors (or
persons performing the equivalent functions):
(a) all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the small business issuer's ability
to record, process, summarize and reporting financial information; and
(b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the small business issuer's
internal control over financial reporting.
Date: February 24, 2004 /s/ Theodore Tsagkaris
------------------------------
Theodore Tsagkaris
Secretary, Treasurer & C.F.O.
(Principal Financial Officer
and Principal Accounting
Officer)
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Tari Inc. (the "Company") on Form
10-QSB for the period ended December 31, 2002 as filed with the Securities and
Exchange Commission on the date hereof (the "Report"), the undersigned, in the
capacities and on the dates indicated below, hereby certifies pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that to his knowledge:
1. The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of
the Company.
Date: February 24, 2004
/s/ Theodore Tsagkaris
- ------------------------------
Theodore Tsagkaris
President, C.E.O. and Director
(Principal Executive Officer)
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Tari Inc. (the "Company") on Form
10-QSB for the period ended December 31, 2002 as filed with the Securities and
Exchange Commission on the date hereof (the "Report"), the undersigned, in the
capacities and on the dates indicated below, hereby certifies pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that to his knowledge:
1. The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents,in all material
respects, the financial condition and results of operations of the
Company.
Date: February 24, 2004
/s/ Theodore Tsagkaris
- ------------------------------
Theodore Tsagkaris
Secretary, Treasurer & C.F.O.
(Principal Financial Officer
and Principal Accounting Officer)