-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OEhMT74DrNeFUiuz1y8chQwvcONLHOsFj9rF+hdgLHbaU2YuQrGCrRG+CiCjnN4E p7vXkPsPL0vbkbl2e1yNUQ== 0001085037-04-000819.txt : 20040804 0001085037-04-000819.hdr.sgml : 20040804 20040803183551 ACCESSION NUMBER: 0001085037-04-000819 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20040630 FILED AS OF DATE: 20040804 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TUSCANY MINERALS LTD CENTRAL INDEX KEY: 0001128790 STANDARD INDUSTRIAL CLASSIFICATION: MINING, QUARRYING OF NONMETALLIC MINERALS (NO FUELS) [1400] IRS NUMBER: 980335259 STATE OF INCORPORATION: NV FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-32981 FILM NUMBER: 04949694 BUSINESS ADDRESS: STREET 1: 2060 GISBY STREET CITY: WEST VAN COUVER BC BUSINESS PHONE: 6049264300 MAIL ADDRESS: STREET 1: 2060 GISBY STREET CITY: WEST VAN COUVER BC 10QSB 1 f10qsb063004.htm FORM 10-QSB FOR QUARTER ENDED JUNE 30, 2004

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-QSB

[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2004

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

  For the transition period from _______________ to _______________

  Commission file number 000-32981

Tuscany Minerals, Ltd.
(Exact name of small business issuer as specified in its charter)


Nevada

98-0335259
(State or other jurisdiction of incorporation or
                  organization) 		(I.R.S. Employer Identification No.)


2060 Gisby Street, West Vancouver, British Columbia Canada V7V 4N3
(Address of principal executive offices)




604.926.4300
(Issuer's telephone number)


Not Applicable
(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 Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.      Yes [X]     No [ ]

2

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:

12,538,000 common shares issued and outstanding as at August 3, 2004.

Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]

PART I

Item 1. Financial Statements

Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.

It is the opinion of management that the interim financial statements for the quarter ended June 30, 2004 include all adjustments necessary in order to ensure that the financial statements are not misleading.

3

TUSCANY MINERALS, LTD.
(An Exploration Stage Company)

INTERIM FINANCIAL STATEMENTS

JUNE 30, 2004
(Unaudited)
(Stated in U.S. Dollars)

4

TUSCANY MINERALS, LTD.
(An Exploration Stage Company)

INTERIM BALANCE SHEET
(Unaudited)
(Stated in U.S. Dollars)

JUNE 30
2004
 DECEMBER 31
2003
ASSETS

            
Current  
     Cash   $ 747   $ 639  
LIABILITIES

  
Current  
     Accounts payable and accrued liabilities   $ 59,700   $ 56,718  
     Notes payable and accrued interest payable (Note 4)    36,349    24,218  
     Promissory note and accrued interest payable (Note 5)    210,427    202,585  
     306,476    283,521  


STOCKHOLDERS' DEFICIENCY

  
Capital Stock  
     Authorized:  
       100,000,000 Common shares, par value $0.001 per share  


     Issued and outstanding:		  
         12,538,000 Common shares    12,538    12,538  


     Additional paid-in capital		    63,462    63,462  


Deficit Accumulated During The Exploration Stage		    (381,444 )  (358,601 )


Cumulative Translation Adjustment		    (285 )  (281 )
     (305,729 )  (282,882 )
    $ 747   $ 639  

5

TUSCANY MINERALS, LTD.
(An Exploration Stage Company)

INTERIM STATEMENT OF
(Unaudited)
(Stated in U.S. Dollars)

THREE MONTHS ENDED
JUNE 30		 SIX MONTHS ENDED
JUNE 30		 PERIOD FROM
DATE OF
ORGANIZATION
OCTOBER 5
2000 TO
JUNE 30
2004
 2003
 2004
 2003
 2004
Expenses                        
     Office and sundry   $ 124   $ 45   $ 179   $ 134   $ 2,207  
     Consulting    -    --    -    --    3,193  
     Professional fees    4,124    2,253    7,177    5,533    72,557  
     Oil and gas property  
     exploration expenditures    -    --    (2,971 )  --    202,686  
     Mineral property option payment    -    --    -    --    3,428  
     Mineral property exploration  
     expenditure    -    --    -    --    8,500  
     Filing and stock transfer fees    25    --    641    25    2,724  
     Management fee    2,250    2,250    4,500    4,500    32,250  
     Interest    4,593    266    8,972    438    16,766  
     Travel & business development    539    15,104    4,345    18,686    37,133  
Net Loss For The Period   $ 11,655   $ 19,918   $ 22,843   $ 29,316   $ 381,444  
Basic And Diluted Loss Per Share  
    $ (0.01 ) $ (0.01 ) $ (0.01 ) $ (0.01 )    
Weighted Average Number Of Shares  
Outstanding    12,538,000    12,538,000    12,538,000    12,538,000      
Comprehensive Income  
     Net loss for the period   $ (11,655 ) $ (19,918 ) $ (22,843 ) $ (29,316 ) $ (381,444 )
     Foreign currency translation  
     adjustment    (2 )  50    (4 )  (39 )  (285 )
Total Comprehensive Loss   $ (11,657 ) $ (19,868 ) $ (22,847 ) $ (29,355)$    (381,729 )

6

TUSCANY MINERALS, LTD.
(An Exploration Stage Company)

STATEMENT OF CASH FLOWS
(Unaudited)
(Stated in U.S. Dollars)

THREE MONTHS ENDED
JUNE 30		 SIX MONTHS ENDED
JUNE 30		 PERIOD FROM
DATE OF
ORGANIZATION
OCTOBER 5
2000 TO
JUNE 30

2004
 2003
 2004
 2003
 2004
Cash Flows From Operating Activity                        
     Net loss for the period   $ (11,655 ) $ (19,918 ) $ (22,843 ) $ (29,316 ) $ (381,444 )


Adjustments To Reconcile Net Loss To		  
Net Cash Used By Operating Activity  
     Accounts payable and accrued  
     liabilities    (3,773 )  15,720    2,982    18,162    59,700  
     Accrued interest payable    4,593    -    8,972    -    8,972  
     (10,834 )  (4,198 )  (10,888 )  (11,154 )  (312,771 )
Cash Flows From Financing Activity  
     Share subscriptions    -    -    -    -    76,000  
     Promissory note payable    -    -    -    -    202,585  
     Notes payable    11,000    4,767    11,000    11,939    35,218  
     11,000    4,767    11,000    11,939    313,803  
Effect Of Exchange Rate Changes On  
Cash    (2 )  50    (4 )  39    (285 )
(Decrease) Increase In Cash    164    619    108    824    747  
Cash, Beginning Of Period    583    552    639    347    -  
Cash, End Of Period   $ 747   $ 1,171   $ 747   $ 1,171   $ 747  

7

TUSCANY MINERALS, LTD.
(An Exploration Stage Company)

NOTES TO INTERIM FINANCIAL STATEMENTS

JUNE 30, 2004
(Unaudited)
(Stated in U.S. Dollars)

1. BASIS OF PRESENTATION

  The unaudited interim financial statements as of June 30, 2004 included herein have been prepared without audit 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 United States generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. It is suggested that these financial statements be read in conjunction with the December 31, 2003 audited financial statements and notes thereto.

2. NATURE OF OPERATIONS

    a)      Organization

  The Company was incorporated in the State of Nevada, U.S.A., on October 5, 2000.

    b)      Development Stage Activities

  The Company is a development stage, independent natural gas and oil company engaged in the exploration, development and acquisition of natural gas and oil properties in the United States. The Company’s entry into the natural gas and oil business began on June 2003 with the acquisition of a working interest in a re-entry of a natural gas well. During September 2003, the re-entry work on the natural gas well was abandoned and the Company entered into an agreement to terminate the well acquisition agreement. The exploration costs incurred to September 30, 2003 has been charged to operations. Prior to this, the Company was engaged in the acquisition and exploration of mining properties.

    c)      Going Concern

  The accompanying financial statements have been prepared assuming the Company will continue as a going concern.

  As shown in the accompanying financial statements, the Company has incurred a net loss of $381,444 for the period from October 5, 2000 (inception) to June 30, 2004, and has no sales. The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of its mineral properties. Management has plans to seek additional capital through a private placement and public offering of its common stock. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

8

TUSCANY MINERALS, LTD.
(An Exploration Stage Company)

NOTES TO INTERIM FINANCIAL STATEMENTS

JUNE 30, 2004
(Unaudited)
(Stated in U.S. Dollars)

3. SIGNIFICANT ACCOUNTING POLICIES

  The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgement.

  The financial statements have, in management’s opinion, been properly prepared within reasonable limits of materiality and within the framework of the significant accounting policies summarized below:

    a)      Oil and Gas Properties

  The Company follows the successful efforts method of accounting for oil and gas exploration and production activities. Acquisition costs, development costs and successful exploration costs are capitalized. Exploratory dry hole costs, lease rental, and geological and geophysical costs are charged to expenses as incurred. Producing properties are depleted by the units-of-production method based on estimated proved reserves. Oil and gas properties are written down when determined to be impaired and written off upon expiration or surrender.

    b)      Mineral Property Option Payments and Exploration Costs

  The Company expenses all costs related to the maintenance and exploration of mineral claims in which it has secured exploration rights prior to establishment of proven and probable reserves. To date, the Company has not established the commercial feasibility of its exploration prospects, therefore, all costs have been expensed.

    c)      Joint Ventures

  All exploration and production activities are conducted jointly with others and, accordingly, the accounts reflect only the Company’s proportionate interest in such activities.

    d)      Use of Estimates

  The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses for the reporting period. Actual results could differ from these estimates.

9

TUSCANY MINERALS, LTD.
(An Exploration Stage Company)

NOTES TO INTERIM FINANCIAL STATEMENTS

JUNE 30, 2004
(Unaudited)
(Stated in U.S. Dollars)

3.     SIGNIFICANT ACCOUNTING POLICIES (Continued)

    e)      Foreign Currency Translation

  The Company's functional currency is the U.S. dollar. Transactions in foreign currency are translated into U.S. dollars as follows:

i)       monetary items at the rate prevailing at the balance sheet date;
ii)      non-monetary items at the historical exchange rate;
iii)     revenue and expense at the average rate in effect during the applicable accounting period.


    f)      Income Taxes

  The Company has adopted Statement of Financial Accounting Standards No. 109 –“Accounting for Income taxes” (SFAS 109). This standard requires the use of an asset and liability approach for financial accounting, and reporting on income taxes. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized.

    g)      Loss Per Share

  The Company computes loss per share in accordance with SFAS No. 128 – “Earnings Per Share”. Under the provisions of SFAS No. 128, basic loss per share is computed using the weighted average number of common stock outstanding during the periods. Diluted loss per share is computed using the weighted average number of common and potentially dilutive common stock outstanding during the period. As the Company generated net losses in the period presented, the basic and diluted loss per share is the same as any exercise of options or warrants would anti-dilutive.

4. NOTES PAYABLE AND ACCRUED INTEREST PAYABLE

  Notes payable are unsecured, payable on demand, and bear interest at 8% per annum. $16,656 of the notes payable are due to an associated company with a common director.

10

TUSCANY MINERALS, LTD.
(An Exploration Stage Company)

NOTES TO INTERIM FINANCIAL STATEMENTS

JUNE 30, 2004
(Unaudited)
(Stated in U.S. Dollars)

5. PROMISSORY NOTE AND ACCRUED INTEREST PAYABLE

  The promissory note bears interest at 8% per annum and is repayable in full on January 28, 2004. The Company entered into a loan extension agreement whereby the expiry date was extended to July 28, 2004 with a balloon payout payment of $25,000 in addition to accrued interest.

6. RELATED PARTY TRANSACTION

  The Company paid a management fee of $4,500 (2003 — $4,500) to a company controlled by a director. The management services are on a month to month basis at $750 per month.

11

Item 2.     Management’s Discussion and Analysis and Plan of Operation.

FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors”, that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our consolidated financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our consolidated financial statements and the related notes that appear elsewhere in this quarterly report.

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars. All references to “CDN$” refer to Canadian dollars and all references to “common shares” refer to the common shares in our capital stock.

As used in this quarterly report, the terms “we”, “us” and “our” mean Tuscany Minerals, Ltd.

General Overview

We were incorporated on October 5, 2000 under the laws of the state of Nevada. We are an exploration stage company that has to date been engaged in the acquisition and exploration of mineral and oil and gas properties.

We formerly owned an option to acquire an interest in the mineral claim known as “Holy Cross mineral claim.” We were unable to maintain our interest in this mineral claim due to our inability to raise financing to pursue exploration of the mineral claim. Subsequent to our losing our interest in this mineral claim, we entered into negotiations with a Texas based group of investors for the acquisition of targeted producing oil and gas properties.

On June 19, 2003, we entered into an agreement to participate in the re-entry of a natural gas well in the Tennessee Colony East (Rodessa) Field located in Anderson County, Texas, and the connection of the well to a pipeline. During fiscal 2003, we conducted a drilling program to re-enter the well with the objective of commencing production from the well. The re-entry program was not successful and we determined to abandon the well. Subsequent to abandonment, we entered into an agreement with the party who controls a 11/12 interest in the well regarding the abandonment of the well.

Our current plan of operations is to seek out the acquisition of an interest in a prospective or existing mineral property or a prospective or producing oil and gas property or other oil and gas resource related projects. We have not entered into any definitive agreements to date for an acquisition in any new property and there is no assurance that we will be able to enter into any definitive agreements. We anticipate that any further drilling program or any new acquisition will require that we raise additional financing. There is no assurance that we would be able to achieve the financing necessary to enable us to pursue our plan of operations.

12

LNR No. 1 Well

We entered into an agreement on June 19, 2003 to participate in the re-entry of a natural gas well in the Tennessee Colony East (Rodessa) Field located in Anderson County, Texas, and the connection of the well to a pipeline. The execution of the agreement followed our negotiations with a Texas based group of independent oil and gas operators for the acquisition of targeted producing and prospective gas properties.

The well is known as the LNR No. 1 Well and is located on 527.23 acres of property in Anderson County, Texas. We entered into an agreement with an arms-length party who controls 11/12ths of the undivided mineral interest in the property. Production from the property was subject to required payments of royalties and overriding royalty interests totaling no more than 25% of the production from the property.

Under the terms of the agreement, we agreed to pay for two-thirds (66.66%) of 11/12ths of the costs attributable to re-entering, completing and connecting the LNR No. 1 Well to a pipeline. The remaining one-third (33.33%) of the 11/12ths was to be paid for by an independent operating company that would also carry out the development work on the well. The agreement also provided that we would pay $30,250 for leasehold costs up front in respect of leasehold costs. In consideration for this undertaking, we were to receive a 50% working interest in the well, subject to the 25% royalty interests. This interest represents a six-sixteenths (6/16th) net revenue interest in the well.

We undertook a re-entry drilling program on the well in our third quarter with the objective of commencing gas production from the well. The objective of the re-entry program was to re-enter the well, drill out the remaining cement plugs, re-perforate the targeted Rodessa formation and flow test the well. Our proportionate share of the cost of the drilling and re-entry program was $192,350. The drilling program was not successful due to difficulties encountered in gaining access to the targeted Rodessa formation. As a result of these difficulties, we determined to abandon the drilling program at the end of September 2003.

We entered into an agreement with Jerry H. Clay, the party controlling an 11/12 interest in the well, regarding the abandonment of the well. We conveyed to Mr. Clay our interest in the well, subject to a right to participate in the drilling of a new well on the lands, and Mr. Clay agreed to assume all liabilities associated with plugging and abandoning the well.

We plan to continue to pursue negotiations for acquisitions of interests in additional prospective gas properties or other oil and gas resource related projects. There is no assurance that we will be able to finance the acquisition of an interest in any additional well or finance its participation in any operating agreement for the placing of any prospective gas well into production.

PLAN OF OPERATIONS AND CASH REQUIREMENTS

Our current plan of operations is to either to (i) commence a further attempt to re-enter the well if a new and acceptable method of drilling can be found; or (ii) acquire an interest in a new prospective or existing mineral property or a prospective or producing gas property. We have not entered into any definitive agreements to date for an acquisition in any new property and there is no assurance that we will be able to enter into any definitive agreements. We anticipate that any further drilling program or any new acquisition will require that we raise additional financing. We presently do not have any arrangements in place for financing. There is no assurance that we will be able to achieve the financing necessary to enable us to pursue our plan of operations. As we have minimal capital, it is unlikely that we will be able to acquire an interest in more than one property. In addition, even if we are able to acquire an interest in a mineral property or an oil and gas property and achieve the necessary funding, there is no assurance that any revenues would be generated by us or that revenues generated would be sufficient to provide a return to investors.

We currently have no employees, other than our sole officer, Mr. J. Stephen Barley, a director and our president, secretary and treasurer, and we do not expect to hire any employees in the foreseeable future. We presently conduct our business through agreements with consultants and arms-length third parties.

We anticipate that we will incur the following expenses over the next twelve months:

13

1. $25,000 in connection with our targeting, evaluating and negotiating potential mineral exploration or oil and gas properties;

2. $10,000 for operating expenses, including professional legal and accounting expenses associated with our becoming a reporting issuer under the Securities Exchange Act of 1934;

3. $9,000 for consulting fees to be paid pursuant to our management agreement with C.H.M. Consulting Inc. for its management services and the services of Mr. Barley.

In addition, we will incur further expenses if we are successful in entering into an agreement to acquire an interest in a prospective or existing mineral property or a prospective or producing oil or gas property. In addition to the acquisition cost, we will require further funds to carry out a development program on the property. It is not possible to estimate these funding requirements until such time as we are able to enter into a definitive agreement to acquire an interest in a property.

Accordingly, we require a minimum of approximately $44,000 to proceed with our plan of operations over the next twelve months, exclusive of any acquisition or development costs. This amount may increase if we are required to carry out due diligence investigations of any prospective property or if the costs of negotiating acquisition agreements are greater than anticipated. As we had cash in the amount of $747 and a working capital deficit in the amount of $305,680 as of June 30, 2004, we do not have sufficient working capital to enable us to carry out our stated plan of operations for the next twelve months. We plan to complete private placement sales of our common stock in order to raise the funds necessary to pursue our plan of operations and to fund our working capital deficit in order to enable us to pay our accounts payable and accrued liabilities. We currently do not have any arrangements in place for the completion of any private placement financings and there is no assurance that we will be successful in completing any private placement financings.

Liquidity And Capital Resources

We had cash of $747 as of June 30, 2004 compared to cash of $639 as of December 31, 2003. We had a working capital deficit of $305,680 as of June 30, 2004 compared to working capital deficit of $282,882 as of December 31, 2003. The majority of the deficit is due to a promissory note and accrued interest of $210,427, which, with a further payment of $25,000, became due and payable on July 28, 2004. We are currently negotiating a further extension for the repayment of the promissory note.

We financed our operations during our first and second quarter through borrowing additional funds for working capital.

We will require additional financing in order to enable us to proceed with our plan of operations, as discussed above under Plan of Operations. In addition, we anticipate that we will require a minimum of approximately $44,000 over the next twelve months to pay for our ongoing expenses. These expenses include management expenses payable to C.H.M. Consulting and professional fees associated with our being a reporting company under the Securities Exchange Act of 1934. These cash requirements are in excess of our current cash and working capital resources. Accordingly, we will require additional financing in order to continue operations and to repay our accrued liabilities. We have no arrangements in place for any additional financing and there is no assurance that we will achieve the required additional funding. There is no assurance that any party will advance additional funds to us in order to enable us to sustain our plan of operations or to repay our liabilities.

We have not purchased or sold any plant or significant equipment and do not expect to do so in the foreseeable future.

Due to the uncertainty of our ability to meet our current operating and capital expenses, in their report on the annual consolidated financial statements for the year ended December 31, 2003 and the financial statements of our subsidiary for the year ended December 31, 2003, our independent auditors included an explanatory paragraph regarding concerns about our ability to continue as a going concern.

14

There is substantial doubt about our ability to continue as a going concern as the continuation of our business is dependent upon successful and sufficient market acceptance of our current service offerings and any new service offerings that we may introduce, the continuing successful development of our service offerings and related technologies, and, finally, achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

Employees

We currently have no employees, other than our sole officer, Mr. J. Stephen Barley, a director and our president, secretary and treasurer, and we do not expect to hire any employees in the foreseeable future. We presently conduct our business through agreements with consultants and arms-length third parties.

APPLICATION OF CRITICAL ACCOUNTING POLICIES

We have adopted Statement of Financial Accounting Standards No. 109 –“Accounting for Income taxes” (SFAS 109). This standard requires the use of an asset and liability approach for financial accounting, and reporting on income taxes. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized.

We compute loss per share in accordance with SFAS No. 128 – “Earnings Per Share”. Under the provisions of SFAS No. 128, basic loss per share is computed using the weighted average number of common stock outstanding during the periods. Diluted loss per share is computed using the weighted average number of common and potentially dilutive common stock outstanding during the period. As we generated net losses in the period presented, the basic and diluted loss per share is the same as any exercise of options or warrants would anti-dilutive

RISK FACTORS

Much of the information included in this quarterly report includes or is based upon estimates, projections or other “forward-looking statements”. Such forward-looking statements include any projections or estimates made by us and our management in connection with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions, or other future performance suggested herein. We undertake no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of such statements.

Such estimates, projections or other “forward-looking statements” involve various risks and uncertainties as outlined below. We caution readers of this quarterly report that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other “forward-looking statements”. In evaluating us, our business and any investment in our business, readers should carefully consider the following factors.

We have had negative cash flows from operations and if we are not able to obtain further financing our business operations may fail.

We had cash in the amount of $747 and a working capital deficit of $305,680 as of June 30, 2004. We currently do not have any operations and we have no income. Our business plan calls for significant expenses in connection with the acquisition of a new prospective mineral or prospective oil and/or gas property. Our acquisition of an interest in a new property will be subject to our achieving the financing necessary for us to acquire the interest. We will also require additional financing in order to carry out exploration or production of any property in which we are able to acquire an interest. We will require additional financing to sustain our business operations in view of the fact that we will incur the cost of acquisition and additional development prior to achieving revenues. We do not currently have any arrangements for financing and we can provide no assurance to investors that we will be able to find such financing if required. Obtaining additional financing would be subject to a number of factors, including market prices for minerals and oil and gas, investor acceptance of our prospective property, and investor sentiment. These factors may make the timing, amount, terms or conditions of additional financing unavailable to us. The most likely source of future funds presently available to us is through the sale of equity capital. Any sale of share capital will result in dilution to existing shareholders.

15

Because there is no assurance that we will generate revenues, we face a high risk of business failure.

We do not have an interest in any business or revenue generating properties. We were incorporated in October 2000 and to date have been involved primarily in organizational activities and the acquisition and exploration of mineral and oil and gas properties in which we no longer have an interest. We have not earned any revenues as of the date of this quarterly report and have never been profitable. Prior to our being able to generate revenues, we will incur increased operating expenses without realizing any revenues. We therefore expect to incur significant losses into the foreseeable future. We recognize that if we are unable to generate significant revenues from our activities, we will not be able to earn profits or continue operations. There is no history upon which to base any assumption as to the likelihood that we will prove successful, and we can provide investors with no assurance that we will generate any operating revenues or ever achieve profitable operations. If we are unsuccessful in addressing these risks, our business will most likely fail.

Because of the speculative nature of exploration of natural resource properties, there is substantial risk that our business will fail.

We can provide investors with no assurance that any new property that we acquire an interest in will contain commercially exploitable reserves of minerals or oil and gas. Exploration for natural resources is a speculative venture necessarily involving substantial risk. The expenditures to be made by us in the exploration of properties in which we may acquire an interest may not result in the discovery of commercial quantities of minerals and oil and gas. Hazards such as unusual or unexpected geological formations and other conditions are involved in mineral and oil and gas exploration and often result in unsuccessful exploration efforts. We may also become subject to liability for pollution, cave-ins or hazards against which we cannot insure or against which we may elect not to insure. The payment of such liabilities may have a material adverse effect on our financial position.

Even if we discover commercial reserves, we may not be able to successfully obtain commercial production.

Even if we are successful in acquiring an interest in a property that has proven commercial reserves of minerals or oil and gas, we will require additional funds in order to place the property into commercial production. We can provide no assurance to investors that we will be able generate revenues from any property that we may acquire that may be shown to possess commercial reserves of minerals or oil and gas.

If we are unable to hire and retain key personnel, we may not be able to implement our business plan and our business will fail.

Our success will be largely dependent on our ability to hire highly qualified personnel. This is particularly true in highly technical businesses such as mineral and oil and gas exploration. These individuals may be in high demand and we may not be able to attract the staff we need. In addition, we may not be able to afford the high salaries and fees demanded by qualified personnel, or may lose such employees after they are hired. Currently, we have not hired any key personnel. Our failure to hire key personnel when needed would have a significant negative effect on our business.

Because our sole executive officer does not have formal training specific to the technicalities of mineral or oil and gas exploration, there is a higher risk our business will fail.

While Mr. Stephen Barley, our sole executive officer and a director, has experience managing a mineral exploration company, he does not have formal training as a geologist or in the technical aspects of management of a mineral or oil and gas exploration company. Accordingly, we will have to rely on the technical services of others trained in appropriate areas. If we are unable to contract for the services of such individuals, it will make it difficult and maybe impossible to pursue our business plan. There is thus a higher risk of business failure.

16

Because our sole executive officer has other business interests, he may not be able or willing to devote a sufficient amount of time to our business operations, causing our business to fail

Mr.     Barley presently spends approximately 15% of his business time on business management services for our company. While Mr. Barley presently possesses adequate time to attend to our interests, it is possible that the demands on Mr. Barley from his other obligations could increase with the result that he would no longer be able to devote sufficient time to the management of our business. In addition, Mr. Barley may not possess sufficient time for our business if the demands of managing our business increased substantially beyond current levels. Competing demands on Mr. Barley’s business time may cause Mr. Barley to have differing interests in approving significant corporate transactions than other stockholders.

If a market for our common stock does not develop, stockholders may be unable to sell their shares.

There is currently a limited market for our common stock and we can provide no assurance to investors that a market will develop. We cannot provide investors with any assurance that a public market will materialize. If a market for our common stock does not develop, then investors may not be able to re-sell the shares of our common stock that they have purchased and may lose all of their investment.

Penny stock rules will limit the ability of our stockholders to sell their stock.

The Securities and Exchange Commission has adopted regulations which generally define “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors”. The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.

NASD sales practice requirements may also limit a stockholder’s ability to buy and sell our stock.

In addition to the “penny stock” rules described above, the NASD (National Association of Securities Dealers Inc.) has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, the NASD believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The NASD requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for its shares.

17

Item 3. Controls and Procedures

As required by Rule 13a-15 under the Exchange Act, we have carried out an evaluation of the effectiveness of the design and operation of our company’s disclosure controls and procedures as of the end of the period covered by this quarterly report, being June 30, 2004. This evaluation was carried out under the supervision and with the participation of our company’s management, including our company’s president and chief executive officer. Based upon that evaluation, our company’s president and chief executive officer concluded that our company’s disclosure controls and procedures are effective as at the end of the period covered by this report. There have been no significant changes in our company’s internal controls or in other factors, which could significantly affect internal controls subsequent to the date we carried out our evaluation.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our company’s reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our company’s reports filed under the Exchange Act is accumulated and communicated to management, including our company’s president and chief executive officer as appropriate, to allow timely decisions regarding required disclosure.

Part II — OTHER INFORMATION

Item 1. Legal Proceedings.

We know of no material, active or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

Item 2. Changes in Securities.

Recent Sales of Unregistered Securities

None.

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 Reports on Form 8-K.

Reports of Form 8-K

None.

18

Exhibit Number/Description

Exhibit
Number		 Description of Exhibit

3.1
Articles of Incorporation (1)

3.2
Bylaws, as amended (1)

4.1
Share Certificate (1)

10.1
Management Agreement with C.H.M. Consulting, Inc. dated December 1, 2000 (1)

10.2
Letter Agreement dated June 19, 2003 between the Company and Jerry H. Clay (2)

10.3
Letter Agreement dated December 31, 2003 between the Company and Jerry H. Clay (3)

14.1
Code of Ethics (4)

31.1*
Certification of Principal Executive Officer and Principal Financial Officer filed pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.

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

(1) Previously filed with the Securities and Exchange Commission as an exhibit to the our Form SB-2 Registration Statement, as amended, originally filed on June 25, 2001.

(2) Previously filed as an exhibit to a Current Report filed on Form 8-K on July 3, 2003.

(3) Previously filed as an exhibit to our Quarterly Report filed on Form 10-QSB on November 14, 2003.

(4) Previously filed as an Exhibit to our Annual Report filed on Form 10-KSB on March 30, 2004.

*Filed herewith

19

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the registrant and in the capacities and on the dates indicated.

By: /s/ J. Stephen Barley

J. Stephen Barley, President, Secretary and Treasurer
(Principal Executive Officer, Principal Financial Officer
and Principal Accounting Officer
Date: August 3, 2004

EX-31 2 c302f10qsb063004.htm

CERTIFICATIONS

I, J. Stephen Barley, certify that:

1.     I have reviewed this quarterly report on Form 10-QSB of Tuscany Minerals, Ltd.;

2.     Based on my knowledge, this quarterly report does not contain any untrue statement of a 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 small business issuer 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)) 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)         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

c)         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.

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 report 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: August 3, 2004

/s/ J. Stephen Barley
J. Stephen Barley, President, Secretary, and Treasurer
(Principal Executive Officer and Principal Financial Officer)

EX-32 3 c906f10qsb063004.htm

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

The undersigned, J. Stephen Barley, President, Secretary and Treasurer of Tuscany Minerals, Ltd., hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)     the Quarterly Report on Form 10-QSB of Tuscany Minerals, Ltd. for the quarterly period ended June 30, 2004 (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 Tuscany Minerals, Ltd.

Dated: August 3, 2004

/s/ J. Stephen Barley
J. Stephen Barley
President, Secretary and Treasurer
(Principal Executive and Principal Financial Officer)

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Tuscany Minerals, Ltd. and will be retained by Tuscany Minerals, Ltd. and furnished to the Securities and Exchange Commission or its staff upon request.

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