RIMROCK GOLD CORP. - FORM 10-K

Attached files

file	filename
EX-31.1 - CERTIFICATION - RIMROCK GOLD CORP.	f10k2011ex31i_tucana.htm
EX-32.1 - CERTIFICATION - RIMROCK GOLD CORP.	f10k2011ex32i_tucana.htm

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

x ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended August 31, 2011

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to __________

Commission File No. 333-149552

TUCANA LITHIUM CORP.

(Name of small business issuer in its charter)

NEVADA

(State or other jurisdiction of

incorporation or organization)

(IRS Employer Identification No.)

3651 Lindell Rd. Suite #D155

Las Vegas, NV

89103

(Address of principal executive offices)

(Zip Code)

1-800-854-7970

(Registrant’s telephone number, including area code)

Securities registered under Section 12(b) of the Exchange Act:

Title of each class registered: None

Name of each exchange on which registered: None

Securities registered under Section 12(g) of the Exchange Act:

Common Stock, par value $.001

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x

Indicate by check mark whether the registrant (1) has 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 registrant 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 o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference Part III of this Form 10-K or any amendment to this Form 10-K. 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. See the definitions 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 (Do not check if a smaller reporting company)	o	Smaller reporting company	x

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

As of August 31, 2011, the registrant had 54,824,202 shares issued and outstanding, respectively.

Documents Incorporated by Reference:

None.

TABLE OF CONTENTS

PART I		1
ITEM 1.	BUSINESS	1
ITEM 1A	RISK FACTORS	13
ITEM 1B	UNRESOLVED STAFF COMMENTS	18
ITEM 2.	PROPERTIES	18
ITEM 3.	LEGAL PROCEEDINGS	18
ITEM 4.	(REMOVED & RESERVED)	18
PART II		19
ITEM 5.	MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES	19
ITEM 6.	SELECTED FINANCIAL DATA	19
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	20
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	20
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	F
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES	26
ITEM 9A.	CONTROLS AND PROCEDURES	26
PART III		28
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	28
ITEM 11.	EXECUTIVE COMPENSATION	29
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	30
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	30
ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	31
PART IV		31
ITEM 15.	EXHIBITS AND SIGNATURES	31

USE OF CERTAIN DEFINED TERMS

Except as otherwise indicated by the context, references in this report to “we,” “us,” “our,” “our Company,” or “the Company” are to the combined business of Tucana Lithium Corp. and its consolidated subsidiaries.

PART I

ITEM 1. BUSINESS

General

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 August 31, 2007 we entered into a share exchange agreement with Pay By The Day Company Inc., an Ontario Corporation incorporated in June 2003 (“PBTD” or “Pay By The Day”), whereby PBTD became our wholly owned subsidiary. PBTD commenced operations in July 2003 and at the time of the share exchange agreement the sole owner of PBTD was Jordan Starkman, the Company’s sole officer and director. Our business office is located at 3651 Lindell Rd. Suite #D155, Las Vegas, NV 89103. Our telephone number is 1-800-854-7970.

On March 12, 2010, the Company entered into a non-binding letter of intent (“Letter of Intent”) with Grail Semiconductor, Inc. (“Grail”), to acquire all of the assets of Grail. As a result of entering into the Letter of Intent, on March 22, 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 April 7, 2010, the Company effected a 1 for 10 forward split of its issued and outstanding common stock. The Company’s issued and outstanding common shares were increased from 1,539,000 to 15,390,000. The Company also increased its authorized common shares from 100,000,000 to 200,000,000.

On July 6, 2010, the Company closed a share exchange agreement with Oteegee International Holdings Limited, a company incorporated in Hong Kong (“Oteegee”). Pursuant to the share exchange agreement, the Company issued 61,647,250 shares of common stock pending the close of the share exchange agreement in exchange for 4,000 common shares representing 40% of Oteegee.

On August 20, 2010, the Company received a notice of termination of the Letter of Intent with Grail, and as a result, the Company cancelled the 61,647,250 of its common shares issued to Oteegee. The Letter of Intent was terminated due to the Company’s inability to raise preliminary funding during the due diligence period of the Letter of Intent. In accordance with the Letter of Intent, the Company is entitled to convert its advances to Grail into equity of Grail.

On December 2, 2010 the Company closed an Asset Purchase Agreement (the “Agreement”) with Alain Champagne and other parties (the “Selling Group”) to acquire a One Hundred (100%) interest in the Abigail Lithium Project located in the James Bay, Quebec region of Canada (the “Property”). It is covered by NTS sheets 320/12 and 320/13. The Property is made up of 222 map-designated cells totaling 11,844 hectares. Pursuant to the Agreement, on December 7, 2010 the Company issued a total of 15,000,000 shares of common stock plus committed to an additional payment of $250,000 in cash with $100,000 payable 90 days from the closing of the Agreement and $150,000 payable 180 days from the closing of the Agreement. In addition, the Company agreed to a minimum initial exploration work budget 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.

In March 2011, the Company issued 5,000,000 shares of common stock at $0.02 per share reflecting the first payment of $100,000 for the Property. On May 15, 2011, the Company issued a 10% Convertible Debenture with a principal amount of $150,000 (the “Debenture”) to Alain Champagne (the “Holder”). The Debenture is due twelve months from the date of issuance. Additionally, the Holder is entitled to convert, at any time, until the Debenture is paid in full, all or any part of the principal plus accrued interest into shares of the Company’s common stock at a per share conversion price of $0.15. On May 24, 2011 the Company repaid $100,000 and on June 25, 2011 the Company paid off the balance of $50,000 fulfilling all the obligations to the Selling Group for the purchase price of the Property. In July 2011, the Ministry of Natural Resources transferred all mining claims into the name of Tucana Exploration Inc., a company incorporated in the State of Wyoming on February 22, 2011 (“Tucana”). Tucana is a 100% wholly owned subsidiary of the Company.

On May 3, 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.

After spending a total amount of $2,500,000 on the Project, the Seller Group will receive an additional 1,000,000 shares of the Company’s common stock and an additional cash payment of $250,000. After spending a total amount of $5,000,000 on the Project, the Seller Group will receive an additional 1,000,000 shares of the Company’s common stock and an additional cash payment of $250,000. If a feasibility study is put in place an additional 1,000,000 shares and $250,000 will be delivered to the Seller Group, and if a bank feasibility is put in place a further 2,000,000 shares and $500,000 cash will be delivered to the Seller Group. The Company has also agreed to pay the Selling Group a 3% royalty on any commercial producing mineral deposit.

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.

The Company will operate both PBTD and Tucana as wholly owned subsidiaries. The Company operates under the web-site address www.tucanalithium.com with its two web-site addresses as www.paybytheday.com and www.tucanaexploration.com.

Lithium Industry

The market for lithium is still small and relatively restricted. Lithium is a key component in existing battery technology, particularly for portable electronics applications. The lithium sector has been further stimulated with the need to develop more environmentally friendly transportation choices. A combination of rising gasoline prices and environmentally-conscious consumers further spurred the hybrid and electric vehicle sector in 2009, culminating in a US government stimulus package directed at the lithium battery and electric vehicle sector in 2009.

Lithium is a light, highly reactive metal with uses in a variety of industrial applications including ceramics, lubricants and pharmaceuticals. The fastest growing market for lithium is as lithium carbonate for use in batteries, including those in cell phones, computers and new generations of electric and hybrid vehicles. The supply of lithium necessary to produce lithium carbonate can come from two principal sources: (1) brines containing high concentrations of lithium and other elements; and (2) the mineral spodumene, which is usually concentrated in pegmatite deposits. Lithium from spodumene is in silicate form and following mining and production of a concentrate, requires processing to be converted to lithium carbonate. The Company believes that lithium demand will grow as its value as a preferred battery material is fully realized.

The Company is still driven in its belief in technology and is looking to stay in the vertical technology space. Our growth will continue with a focus in the commodity supply side starting with the Property. Lithium is a viable entry point into the mining sector due to its diverse range of end uses. This environmentally benign metal is the established power for literally billions of applications. We consider the battery market, primarily for hybrid and electric vehicles and as storage batteries for wind and solar power plants, as its target market. Lithium ion batteries have become the rechargeable battery of choice for the makers of cell phones, laptop computers, power tools, and hybrid cars. Lithium dominates the battery market because of its relatively lighter weight and energy density three times that of its nickel metal hydride competitor. As well, it recharges faster, lasts longer and operates in temperatures well below freezing. In addition, the future of lithium lies in the global demand for environmentally friendly plug-in electric cars. In the US, 300,000+ hybrid cars were sold last year and as a further spur to the market, the US government has pledged US$27.4 billion in loans/grants to electric vehicle and lithium battery markets.

Operations of Pay By The Day

The Company uses “Pay By The Day” or “PBTD” branding as a basic premise of our business model with a primary focus on direct sales of Computer Products and Consumer Electronics. Our name is a reflection of today’s demanding financing environment. We are a one-stop shop for our customers who may have limited access to capital and a need or desire to purchase our product offerings.

In addition, PBTD in August 2003 through ordinary business dealings acquired the web-site addresses and the 1-800 numbers for The Buck A Day Company Inc. The Buck A Day Company went bankrupt in 2003, and PBTD was able to launch its business operation and generate a steady flow of applications of approximately 50 applications per week for the first 2 years of operation from the Buck A Day Company’s 1-800 numbers and web site addresses.

PBTD has recognized the sales and profit potential of selling Computer Products and Consumer Electronics to customers that may want or need to use credit facilities to make their purchases. These products include desktop and laptop computers, TV’s, cameras, video games, iPods, and audio equipment. Our goal is to be a key player in the sale of Computer Products and Consumer Electronics directly to consumers through a targeted multi-media direct marketing approach. PBTD’s primary success will come from consumers desire to purchase products through a variety of financing options and payments starting at “a dollar a day”.

PBTD’s targeted multi-media direct marketing approach involves a combination of both television commercials and print advertisements in selected communities that fit our target market. Our primary concentration is rural communities lacking big box retailers and customers who are not price conscious.

PBTD has sold computer systems and negotiated financing for customers all across Canada. PBTD finances the transactions through either a third party finance service provider, or PBTD finances the purchase internally requiring a down payment. PBTD currently has a steady flow of applications for financing of computers and consumer electronics from our past advertising campaigns, however our approval rates have declined over the past 2 years. All applications received by PBTD are for financing purposes. When the application is submitted by the customer, there is no specification as to who is to provide the financing. The Company’s first resort is to have the application approved by our 3rd party finance provider, however if declined, PBTD will attempt to finance the transaction internally. Currently, PBTD receives approximately 5-7 applications per week.

PBTD CreditPlus offers products and information that will improve credit worthiness for our target group through PBTD’s own internal Secured Credit Card and PBTD’s internal financing. PBTD CreditPlus Secured Credit Card is operational and we have had customers apply. The applications received and the inquiries into the program stem from the PBTD web site. However, we currently have no customers signed up to the program and we have no security deposits being held in trust.

The majority of our revenue is derived from the products sold to customers as opposed to credit services. These products are sold and financed either through PBTD’s third party finance service provider, financed internally through PBTD requiring a down payment, or purchased on the PBTD CreditPlus Secured Card. Our profits are derived from the markup on the products sold. We have had a number of customers enquire and apply for the CreditPlus card, however, we currently do not have any accounts open and we have never had a customer make a purchase on the CreditPlus card. We have been increasing the number of transactions financed internally due to the difficulties in approving customers for credit through our third party finance service provider. In order to limit our exposure on transactions financed internally, PBTD requires a down payment on the products purchased. The down payment will cover the majority of our purchase price and we finance the balance owing at an attractive 0% interest rate.

PBTD’s mission is to become a key competitor in the direct sale of Computer Products and Consumer Electronics, while PBTD’s CreditPlus division desires to become one of Canada’s leading marketer and provider of Secured Credit Card options for customers who wish to establish or re-establish credit history. Given the Canadian marketplace for secured credit card products we believe there is a significant opportunity for Pay By The Day to capture a large percentage of the market. The 6 major Canadian financial institutions offering secured products require a minimum security deposit of $1,000. Additionally, there are only 3 financial institutions in Canada who promote secured credit cards as a way to rebuild credit. Home Trust requires a $1,000 deposit, People’s Trust has the secured MasterCard program requiring a $500 deposit, and Capital One who we consider to be the largest player in Canada, requires a minimum security deposit of $75. A large portion of consumers who wish to establish or re-establish credit history do not necessarily have $1,000 or want to tie up $1,000 for a secured credit card. We believe having a lower security deposit option of $200 provides an attractive option to these individuals, and is the basis for our belief that we will be able to compete with the other financial institutions offering a similar product.

Our concept consists of the following components:

Company: To create a well respected and recognized brand in the sale of computers and consumer electronics on a financing basis. The company will also be a means for customers with poor credit rating to improve their credit rating by the repayment of financing provided to them by PBTD Computers. Product: To sell only top quality brand name merchandise.

Economic: To operate the company on a sound financial basis of profitable growth, increasing value for stockholders, and creating career opportunities and financial rewards for our employees.

PBTD Computers Operation

Typical Revenue Producing Transaction:

A customer’s first experience with us is generally when they call our toll free number in response to one of our marketing campaigns. Our primary sales efforts are directed towards customers who contact us as a result of our marketing campaigns. Our secondary sales efforts are made throughout bound sales calls from our offices. Customers are also able to come to our office and pick up their purchases.

Once customer contact has been established, a credit application is filled out. Credit applications are either filled out online or over the telephone. Each application is carefully screened prior to being forwarded to our third party service provider for financing, where it is processed in order to review the customer’s credit history. We attempt to collect as much information as possible to determine the credit worthiness of the customers in order to ensure a high approval rate with our financing service provider and to minimize unnecessary credit checks on our customers. PBTD’s screening process consists of evaluating the finance companies parameters for approval. We view the content on the application and follow up with a phone call to the customer to verify income and income source. We also verify if the applicant rents or owns a home, whether the applicant has collections, credit cards, or judgments against them. Our third party finance service provider prefers applicants who have steady work history as opposed to a social assisted income, owners and not renters as renters are too transient, some form of existing credit, and limited defaults on file. However, our 3rd party finance provider is willing to grant approvals and make exceptions on a case by case basis. For example, the applicant may have limited credit history but has a relatively secure steady income, or the applicant may be on social assistance but owns their own home. If we feel the chances of approval are low, we do not run an Equifax report and we do not forward the application on for financing. After gathering the additional information and if we feel there could be an approval, we run the Equifax report and send it along with the application to our third party finance service provider. Once we decide to forward an application to our financing provider, the customer is either approved or declined for financing.

Declined customers have the option of paying by money order, certified check, cash or credit card. The customer also has the option of choosing our internal “Pay By The Day” credit program through which they are automatically approved upon providing us with a 50% down payment with the remainder of their payments spread out over a 12 month term. This is a completely internal financing program and requires no outside financing assistance. These customers will also be given the opportunity to receive the PBTD CreditPLUS Secured card.

For customers that are approved for financing by our service provider, the service provider underwrites the credit. Approved applications are extended a pre-determined level of credit ranging from $1,000 -$5,000 through our third party finance service provider. Our company’s success will depend on our ability to generate a high volume of credit worthy customers who will be approved for credit by our third party finance service provider. The more approved applications we have, the greater the opportunity for us to complete a sale of our products. There are no fees paid to PBTD from our third party finance service provider on the financing of computers and consumer electronics. The third party finance service provider simply provides the service of underwriting the credit for our customers and providing us with the opportunity to make a sale.

The fundamental concept of our business involves the granting of credit by either our third party finance service provider or by PBTD internally. Our relationship with our third party finance service provider is one that will hopefully expedite our growth process by providing a seamlessly easy application process with a high probability of customer approval rates. They have the ability to finance both A and B level credit on a Conditional Sales Contract program or a 3 year lease contract A Conditional Sales Contract is commonly known as buying on an installment plan and requires the giving of a promissory note for the purchase price under the contract. It is a type of agreement to sell whereby a seller retains title to the goods sold and delivered to a purchaser until full payment has been made. A conditional buyer has the right of possession of the goods so long as the terms and conditions of the agreement are met. A Conditional Sales Contract is similar to a lease contract except at the end of the term the buyer obtains ownership of the goods as soon as the final payment to the seller is made.

We receive 100% of the transaction amount on “A” credit deals and due to the added risk for “B” credit customers, the payout is 90% of the transaction amount. For example, if the purchase amount is $1,000, our third party service provider pays us 100% of the $1,000 for an “A” credit customer. If the customer has “B” level credit then the payout amount to us is 90% of the $1,000 transaction amount. There is no recourse on transactions rated as an “A” credit deal, however PBTD has 1st payment recourse on “B” credit deals. Once the customer has made their 1st payment, PBTD is no longer liable for the sale amount. We currently have no exposure at this point in time. We are currently being funded on deals once the merchandise has been shipped from our facilities and the customer acknowledges receipt of goods. We currently have a 3-5 hour turnaround time for approvals or declines. PBTD is not related to any of our service providers except for the relationships described.

The Company’s business operation relies upon a third party service provider to approve for credit and finance PBTD’s customer’s purchases. If PBTD encounters difficulty in obtaining customer credit approvals for financing, the company’s business will suffer. Due to the company’s increasing difficulty in obtaining credit approvals, the company has reached an agreement with Tanner Financial Services Inc. in July 2008 to accept and process PBTD customer applications. We believe the relationship with Tanner Financial will increase our approval rates leading to increased sales, as they are a more aggressive lender willing to take on additional risk by financing A, B, and C level credit customers. The terms and conditions of the agreement with Tanner Financial are the same as previous 3rd party finance providers. Furthermore, the company has turned to self-financing and has financed new/off-lease desktop computers and laptops, and consumer electronics for customers willing to put down 50% of the total purchase price of their order. The main selling features and the attractiveness of the PBTD financing route is the 0% interest rate and the reporting of the trade to Equifax on a monthly basis, allowing the customers who can afford the 50% down to rebuild or reestablish credit history. The key component is the 50% down payment, and we realize this financing option is not for everybody. The 50% down payment can translate into a $200-$500 down payment which is significant for customers who wish to pay for purchases on a payment plan and for those who cannot afford to make purchases at their local store.

We believe we can continue the operation of financing merchandise internally with a limited amount of capital because the 50% down payment required by the customer covers the majority of the cost of the merchandise. PBTD has limited its exposure and risk in case of default by the customer, and there is limited capital required to finance these purchases. As PBTD raises additional capital, the company will on a case-by-case basis determine if additional risk is warranted based on the customer’s credit rating.

Once approved by our third party service providers for financing, our customers are sent all the necessary documentation and instructions on what identification they are to provide us with in order to finalize the deal. We deal primarily through facsimile transmission. In general a customer must provide us with the following information:

· All documents signed and dated

· A copy of a void check from their financial institution (for automatic withdrawals)

· A copy of picture identification, front and back (driver’s license, passport, etc.)

· A copy of proof of residence (phone bill, utility bill, etc.)

Once we receive the information by fax, we consider the deal to be finalized. The information is sent to our finance service provider. The shipment is shipped via Purolator or Fed-Ex and our financing service provider forwards funds to us immediately upon delivery of the shipment. While we always send a self addressed stamped envelope to our clients and request the original documents to be sent back as soon as possible, the deal is considered done upon receipt of client information in any form.

Potential customers who call while our sales staff are unavailable are tracked by a call capture system which allows us to contact the customer from the downloaded phone numbers. Our internal sales staff will use its best efforts to return such calls immediately.

We market and sell brand name merchandise directly to consumers utilizing a multi-media approach through television, print media, radio and web based marketing efforts. All advertising campaigns utilize toll free phone numbers for direct consumer response while also promoting our web site (www.paybytheday.com). Our advertising campaigns are broad based across Canada with emphasis on our primary product, with delivery right to our customers’ front door, and with no money down.

The Call Centre

We collect leads through calls that come into our office as a result of our multi-media advertising campaigns. We also make outbound calls to individuals in targeted demographic groups throughout Canada. All inbound and outbound calls are executed by PBTD staff and are not outsourced. By utilizing our existing staff and phone system we eliminate the additional costs associated with outsourcing. If additional staff are needed, PBTD’s back end database allows for easy access from any computer at anytime. We can arrange for staff to work from home, place calls from their own phone, and email the necessary documents to the customer from home thereby eliminating additional expenses.

PBTD CreditPlus Secured Credit Card

Typical Revenue Producing Transaction:

A customer’s first experience with us is generally when they call our toll free number in response to one of our marketing campaigns. We use Television and Print for most of our advertising. Our primary sales efforts are directed towards customers who contact us as a result of our marketing campaigns. Our secondary sales efforts are made through outbound sales calls from our offices to previously declined applicants. We have accumulated thousands of applications from customers that did not qualify for traditional financing but would be ideal candidates for the PBTD CreditPlus program. Customers are also able to come to our office to inquire and sign up for PBTD CreditPlus program.

Once customer contact has been established, a credit application is filled out either over the phone, on-line, or the customer can mail in the application. For those customers seeking a Secured MasterCard, the customer fills out a People’s Trust application with PBTD’s reference number on it. The application is forwarded to People’s Trust and processed by them for a MasterCard. If the customer proceeds with People’s Trust, PBTD receives a $25 referral fee per approved applicant. To date no fees from People’s Trust have been earned. The minimum credit limit for People’s Trust is $500.00.

Through the CreditPlus program, a credit check is usually not required. If the customer wishes to view his/her credit report, we steer them to our web site that has a link to Equifax. Equifax pays PBTD a small fee on customers self-administered credit checks generated from the PBTD web site. To date we have earned minimal fees from Equifax.

Technically, everyone who applies for the CreditPlus card is approved except for applicants who are bankrupt and have not been discharged. Once approved internally, our customers are sent all the necessary documentation and instructions on what they are to provide us with in order to finalize the application process. The application must be signed by the customer and sent back to us with their security deposit. The security deposit is the customer's credit limit with PBTD. The minimum credit limit for the CreditPlus program is $200. This limit allows for easy access to the program yet the product selection is limited to the lower priced consumer electronics such as iPods, cordless phones, and any other item under $200 only offered by PBTD. If a product sells for more than the customer's credit limit, the customer can still use their CreditPlus account by paying the difference upfront, otherwise the customer is not eligible. We accept a personal cheque, money order, or on the application the customer can fill out the Pre-Authorized Payment section and PBTD has the ability to debit their account on the day specified on the application. Once the security deposit has been received, we process the application and the customer receives their introduction package containing the PBTD CreditPLUS account number, the Disclosure Statement and Cardholder Agreement, and an overview of our product selection highlighting the monthly promotion. The customer’s security deposit is held in an interest bearing account with interest (currently 1.5%) payable annually. The security deposit is 100% refundable assuming the customer's account has a $0 balance.

PBTD currently has a relationship with the two major credit bureaus in Canada. Once the customer’s file has been set-up internally, PBTD will report to Equifax all customer account information, and update each file on a monthly basis.

In light of the ease of applying for the PBTD CreditPlus program, PBTD has had customers apply for the program but currently has no active customers on file. PBTD has encountered a few obstacles in the conversion from applicant to customer because the card can only be used at PBTD. The card is an internal card much like a department store's credit card and differs significantly from a typical credit card (VISA/MasterCard) that can be used in all accepting locations. This limitation is discouraging for our applicants, and to alleviate this problem PBTD is currently in discussions to attach a debit card feature to the card in order to increase the programs attractiveness. The purpose of the debit card function is to allow for cash advances to take place instantly while providing the user with instant access to purchases at any location with a debit card terminal. This will increase the use of the card while accomplishing the main goal of rebuilding credit. In addition, PBTD has lacked the capital to aggressively advertise and market the program. This translates into very few inquiries and applications, and the only inquiries are generated from the PBTD web site.

In order for PBTD to still take advantage of the customers who have applied for the PBTD CreditPlus card and decided to not pursue the program, PBTD decided to form a relationship with People’s Trust’s Secured MasterCard program. This is an alternative option for rebuilding credit with the attractiveness of the card being a MasterCard. As mentioned previously, our relationship with People’s Trust ends upon the payment of $25 to PBTD for every approved applicant. There are no additional fees paid to PBTD and People’s Trust is under no obligation to pay us a fee on its future business with the applicant. To date no fees from People’s Trust have been earned.

Products to Purchase:

Currently, PBTD customers inform staff as to what products they are interested in and PBTD sources the product for the customer. PBTD will have an on-line product catalogue consisting of over a hundred different products ranging from $20-$1500. We will have many products available for sale under $100 to accommodate the customers with an available credit limit below $200. This online catalogue is not operational at this time. PBTD will only offer brand name merchandise from IBM, Sony, Panasonic, Black and Decker, Kitchen Aid and others. The product spectrum will consist of computers, electronics ranging from X-Box to DVD players to hand held PDA’s to cordless phones. We will also carry small kitchen appliances, giftware, toys, and other household items. The idea is to give the customer as much of a selection as possible to entice the customer to proceed with the PBTD internal card rather than the People’s Trust Secured MasterCard. If the customers feel they can purchase most of their purchases through PBTD and do without the convenience of a MasterCard, we should achieve a higher closure rate. For the customers without access to our on-line catalogue we will have a smaller version of our offering that will be mailed to the customers. When purchases are made through our sales representatives the client must provide the password listed on the account. i.e. Mother’s maiden name. All purchases will be shipped by Purolator or Fed-Ex. All shipping charges are added to the cost of the product. Statements will be sent monthly along with product listings, specials and other promotions.

The company does not have any existing licensing agreements or arrangements with any manufacturer mentioned above. All products desired by PBTD customers are sourced and purchased at the best price through wholesalers or retailers. PBTD has realized that the big box retailers are usually the cheapest source for computer and consumer electronics and for the most part when big box retailers put products on sale, these prices are generally cheaper than the company’s cost through regular suppliers like Supercom. We do not compete on price and our prices are higher than most local retailers. The concept is being able to purchase the product desired while making easy monthly payments for that product.

Used and Refurbished Computers and Computer Components

We have formed a relationship and have an account with Imported Brands of Toronto, Ontario to supply us with Used and Refurbished computers. In addition, Imported Brands has the ability to warehouse and ship off-lease IBM Computers on our behalf to our customers. Used computers will be offered as an option to individuals that fail to meet the criteria for financing through Tanner Financial Services Inc. and for those customers that choose to purchase lower priced systems that fall below the minimum financing threshold. We do not have any contracts with Imported Brands nor do we need a contract with any supplier.

New Computers

Pay By The Day has created a relationship and has an account with Supercom of Richmond Hill, Ontario to be supplied with IBM/Lenovo Computer Systems and Peripherals. The brand recognition of IBM products and the infrastructure of Supercom, IBM Canada’s largest distributor, are an ideal fit for Pay By The Day. Supercom is capable of handling all shipping details and will temporarily warehouse computers for Pay By The Day. We are currently discussing credit terms with Supercom and will have an agreement in place by the next fiscal quarter. When supply is low with Supercom, we have arranged for alternative supply through other distributors including Ingram Micro, Lenovo directly, and ALC Micro. We do not have any contracts with Supercom or any other supplier, nor do we require a contract from any supplier.

Electronic Equipment

We currently purchase our electronics through wholesalers and retailers in Canada or retailers in the U.S. because of the lower cost base and the strength of the Canadian dollar. We deal with and sell only recognizable and well-established brand name products. Sony, Samsung, and JVC boast an extensive selection of products primarily in consumer audio and video, offering digital cameras, Camcorders, Televisions, DVD players and complete Audio Systems.

Credit Limit:

The credit limit for the PBTD CreditPlus program will always be set at the security deposit amount. The customer can put down as little as $200, or as much as $2,500. The customer can increase the limit on the card by sending additional funds to PBTD and clearly indicating that they are requesting a credit line increase. If an overpayment is made but a request is not made to have the credit limit raised, the available credit will increase temporarily, but the credit limit will remain the same. The customer may make purchases up to the limit of the PBTD card or they can use their card to make cash advances by calling PBTD. The PBTD card is a revolving line of credit. As the customer uses the card, they are continually borrowing against their line of credit and repaying it. The amount of credit available at any time will vary depending on the current outstanding balance.

Cash Advances:

Customers in need of a cash advance may request one by calling PBTD customer service. Customers must have made at least 3 payments prior to any cash advance. We only make cash advances available for a minimum of $100.00. There is a cash advance fee of $8 charged on the customer’s next billing statement. We are currently negotiating with InterCash Canada to implement a debit card feature on our PBTD CreditPlus card that will allow for an easier transfer of cash and increase the marketability of the card.

Payments:

The minimum monthly payment is 5% of the outstanding balance or $20, whichever is greater. Customers are required to pay at least the minimum monthly payment on the statement by the statement due date. The security deposit will not be used to pay off balances except in default. Payments can be made by mailing a cheque or money order directly to PBTD with the enclosed envelope provided with the statement. The customer may also provide PBTD with their banking information for a direct debit to their account for the payment amount.

Refunds and Card Cancellation:

Deposits are held as long as the account with PBTD remains open. A written request is required for a refund. A request for withdrawal of the Security Deposit will be treated as a request to terminate the Agreement and cancel the Account with all of its rights and privileges. After the debt is paid in full we will return the remaining balance of the Security Deposit plus any earned interest.

Revenue Stream:

PBTD’s revenue stream is currently 100% generated from the sale of computers and consumer electronics. The revenue is derived from the markup of products sold. There is no fee paid to PBTD from our third party finance service provider. PBTD gets paid the transaction amount financed by the third party finance service provider, and there are no additional fees paid to PBTD on subsequent purchases financed by the third party service providers outside of PBTD.

For the PBTD CreditPlus program, there is a one-time set up fee of $99 charged to the customer on their first statement. There is a monthly service charge of $7.50 that will provide PBTD with recurring revenue. In addition, PBTD will generate additional revenue from customer purchases on the PBTD CreditPlus card. The revenue generated is derived from the markup of products purchased by the customer.

We offer a 0% interest rate on our internal financing as well as on the CreditPlus program. We believe the 0% interest will be attractive to the customers as we want to help them and not bury them with high interest rates. The 0% interest is also a very powerful sales tool. Almost all lenders have interest rates in the low to mid twenties. We are the first to introduce 0% interest. In lieu of the interest rate charges, we will have a monthly late fee of $5 that will be added to the customer’s next monthly statement. Each customer has a 3-day grace period after which the late charge is applied. Other applicable fees include a $35 NSF. Through the People’s Trust MasterCard program, they will pay us a $25 referral fee for every approved application. There are no additional fees paid to PBTD from People’s Trust subsequent to the $25 referral fee on applicant approval, and there are no fees paid on customer credit purchases made through People’s Trust. The relationship with People’s Trust ends upon payment to PBTD for the approved application.

Competition

We compete based on our ability to market and sell products to individuals and small businesses who, in order to purchase our products, require credit with no down payment and low monthly payments. Our primary competitive advantage is actually a service rather than a product. We help our customers find financing. In selling Computer Products and Consumer Electronics, we face significant competition. We consider the retail channel competition to be primarily price driven, whereas we have found the direct channel provides us with greater margins, less competition and greater growth opportunities.

In Canada, our biggest competitors in the area of phone and web computer sales are Dell Computers and MDG Canada. Nationwide Computer and Consumer Electronics retailers include Best Buy, Circuit City, and the Future Shop which are our retail channel competition.

There are three companies in Canada pursuing the Secured Credit Card business: Capital One, People's Trust, and Home Trust. The main problem with People’s Trust and Home Trust is the minimum credit limit is $500 and $1,000 respectively. We believe customers with poor credit live pay check to pay check and it would be extremely difficult for one to come up with a security deposit that large. Capital One is the main contender who actively pursues bankrupt individuals and they will take on customers with a security deposit as low as $75. The main advantage in this space is that it is wide open. The Canadian market is considerably different from the US market. In the US, there are 150-200 different companies and banks offering Secured Credit Card products. The three companies in Canada do not aggressively advertise to a large audience, and we believe our future TV advertising campaign will build tremendous brand name recognition.

Competitive Advantage

We believe that the direct marketing approach to the sale of Computer Products and Consumer Electronics is very different to that of traditional retailing. Traditional retailers sell to consumers that are significantly more price-conscious. We compete based on our ability to market and sell products to individuals who are less price-conscious and require credit and low monthly payments to make their purchases. These low monthly payments are extremely important to consumers who do not have the resources to make large cash purchases and do not have access to or have used up other credit made available to them.

We have recognized a strong demand for our products in rural and remote areas where access to traditional retailers is limited. We intend to capitalize on this market by offering various products with “right to the customer’s front door” delivery.

Market

Our marketplace is nationwide across Canada with a planned expansion to the US market once we have penetrated the Canadian market. Based on previous direct marketing experience, we are targeting specific communities and demographic groups throughout Canada. Our advertising focus is placed on rural communities throughout Canada. These areas include the Northern portions of Canadian provinces, East Coast provinces and Western provinces. Our typical customer profile will be that of an individual with an acceptable credit history but insufficient funds to buy our products outright or one who chooses not to pay for the full amount at the time of purchase.

Customer Profile

Our typical customer will have the following profile:

·	Average income $30,000 Per Annum

·	65% Rent their homes, 35% Own their homes

·	Employed at their job 3-5 years

Age 25+

This profile is one that will generate the highest approval rate and one that we expect on a more consistent basis in the future once we begin to advertise/market the program more aggressively.

Long Term Objectives

Over the long term, we believe that the Pay By The Day business model can be exported throughout the world. We are currently researching markets in the United States and the United Kingdom. For the PBTD CreditPlus program, our goal is to have our own branded secured and unsecured MasterCard.

Revenue Breakdown

Over the course of the last 5 years we have realized that sales are generated in the following manner:

1. Approximately 25% from inquiries to our toll-free numbers.

2. 70% internet application based orders

3. 5% from outbound sales calls and prospecting

The closure rate from telephone enquiries tends to be higher than internet based applications primarily due to the customer being proactive and taking the initiative to apply.

PBTD currently generates all of its revenue from the sale of computer and consumer electronics financed through either a third party finance service provider or through PBTD’s own internal financing program at 0% interest. Currently, no revenue is generated from PBTD’s CreditPlus program or through the People’s Trust referral program.

Operations of Tucana

The Abigail Lithium Project is located in the James Bay, Quebec region and is made up of 222 map-designated cells totaling 11,844 hectares. It is covered by NTS sheets 320/12 and 320/13. The Property is situated in the north-eastern part of the Superior Province, which itself lies in the heart of the Canadian Shield. The Superior Province extends from Manitoba to Quebec, and is mainly made up of Archean rocks. The general metamorphism is at the greenschist facies, except in the vicinity of intrusive bodies, where it can go to the amphibolite-to-granulite facies.

The Property is located in a gneissic formation between the Lac des Montagnes volcano-sedimentary belt and the Champion Lake granitoids. The geological maps by Valiquette reveal the presence of basalt and/or amphibolite remnants in a gneissic formation intruded by granites.

Historical work done by the Quebec Ministry of Natural Resources can be summarized by two reports. The first is a description of the geology of the area accompanied by a geological map, and was released in 1975 as RG 158. This report outlined the geology of the whole area, including the Lac des Montagnes volcanic belt found on the south part of the property. The other survey was released in 2011 and consisted of an airborne magnetic/gradiometric survey that outlined several magnetic lineaments on the property. Only two mining companies can be considered to have performed historical work on the property, the SDBJ in 1981, with an EM-Input airborne survey, and Westmin from 1986 to 1988, with airborne Dighem survey and minor ground work, mainly prospection and VLF-EM survey. The Dighem survey revealed EM anomalies along a major magnetic lineament, which crosses the south part of the property. Up until now, no drill holes have been reported on the Property.

From a geological standpoint, the Property can be divided in two parts: north and south of the Route du Nord. The part north of Route du Nord is mainly underlain by paragneiss and diorites, with granite and granodiorites in the extreme north part of the property. Remnants of basaltic flows have been recognized in the paragneiss. This paragneiss is in fact made up of metamorphosed sediments and probably represents a Precambrian sedimentary basin. The part of the property south of the Route du Nord is mainly underlain by the Lac des Montagnes Formation, a metamorphosed greenstone belt composed of biotite, sillimanite and stauride-bearing schist. Ultramafic to felsic flows along with ultramafic intrusions can be recognized in places in the Lac des Montagnes Formation. A diabase dyke crosses the western part of the property in a NW/SE direction, and an unexplained circular magnetic structure is observed just to the SE of the property.

Mineralized zones have not been discovered or estimated on the property and no production has ever occurred on the Property, however recent work in the area has been performed by Golden Goose Resources outlined in Nisk-1 deposit, approximately 6.5 km to the SE of the Property. NI-43-101 compliant resources were evaluated by RSW, This deposit is now owed by Nemaska Exploration, who bought Golden Goose’s interest in all its claims in the James Bay area in 2009. In May 2010, Nemaska reported NI-43-101 resources estimated by Geostat System International on the Whabouchi property; this deposit contains Li2O and BeO and is located 1.5 km to the W of the Property.

The geology of the Property is relatively complex and unexplored. Five deposit types can be considered to guide exploration of the property; they are as follows:

● Lithium (spodumene)-bearing pegmatites

In 1962-63, a lithium occurrence was discovered in a pegmatite close to the boundary of the gneissic formation and the Lac des Montagnes belt, about 3 km west of the Property. Values of up to 2.34% Li2O, 0.13% BeO/6.4 m and 2.63% Li2O, 0.16% BeO/6.4 m in Hole 14891 and 1.44% Li2O over 83.2 m in Hole 24042 were reported in GM 57880 by Canico. Forty years later, Inco re-sampled the same pegmatite for its tantalum content and obtained 0.026% Ta over 1.0 m and 3.53% Li2O also over 1.0 m in channel samples. This spodumene4-bearing pegmatite is now owned by Nemaska Exploration Inc., and is known as the Whabouchi property. The resource estimate for Whabouchi deposit is given in the preceding item.

● Magmatic nickel sulphide deposits associated with an ultramafic intrusion

In 2008, Golden Goose produced an updated resource estimate for the Nisk-1 deposit (Lac Levac property), located about 7 km SE of the Property. The Nisk-1 deposit is located close to the boundary between the gneissic formation and the Lac des Montagnes belt. It is related to an ultramafic intrusion that cuts the surrounding rocks. Nisk-1 was described by Pierre Trudel, Eng, Ph.D.5, as a magmatic nickel sulphide deposit associated with an ultramafic intrusion. Known orebodies of this type are Voisey’s Bay (Labrador) and Lynn Lake (Manitoba). The NI 43-101 resource reported by Golden Goose is shown in Table 3.

TABLE 3:NISK-1 RESOURCE

Resource Category	Tonnes (millions)	Ni %	Cu %	Co %	Pd (g/t)	Pt (g/t)
Measured	1.255	1.09	0.56	0.07	1.11	0.2
Indicated	0.783	1	0.53	0.06	0.91	0.29
Inferred	1.053	0.81	0.32	0.06	1.06	0.5

● Volcanogenic Massive Sulphide (VMS) deposits

As the Property covers part of the Lac des Montagnes volcano-sedimentary formation, volcanogenic massive sulphide (VMS) type deposits associated with metamorphosed intermediate-to-felsic volcanics should be considered. Known examples of this type of deposit, albeit in less metamorphosed formations, are the Horne Mine in Rouyn-Noranda and the Matagami Lake Mine in Matagami.

● Uranium and associated elements in pegmatites

A uranium–thorium occurrence was discovered around 1978 in a pegmatite with 1,189 ppm ThO2 and 565 ppm U3O8, approximately 15 km ENE of the property in a pegmatite located within the same gneissic formation. It is identified on the map in Figure 6, “Property Geology and Diamond Drill Holes” as the Lac Arques SW occurrence.

● Chromite deposits

Since the early sixties, chromite occurrences have been known to occur in the Lac des Montagnes area, close to the SE shore of Lac des Montagnes, at the base of an ultramafic intrusion west of the Property. Over the years, Noranda, Inco, Canex Placer, SDBJ, Freewest and Muscocho Explorations have worked on these chromite showings. In 1978, SDBJ reported a grade of 30.87% Cr with 11.84% Fe in a grab sample, for a Cr/Fe ration of 2.6. In 1988, Freewest obtained 36.55% Cr in a chip sample, over a length of 1.05 m.

The Property is on strike with the spodumene-bearing pegmatite located on the Whabouchi property held by Nemaska Exploration Inc. 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 1 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.

The Property is easily accessible which greatly enhances the economics of the project, as “Route du Nord” crosses the south part of the Property. This road originates in the town of Chibougamou, approximately 280 km to the SSE, and leads to the village of Nemaska and the Route de la Baie-James. Due to the size of the Property, parts of the property must be accessed by boat, using the network of lakes and rivers, and by foot. Several parts of the Property will probably require helicopter support, being too isolated. There are no mining infrastructures on the property. Room and board are provided by CCDC Relais Routier Nemiscau, 23 km west of the Property. A Hydro-Quebec powerline has been built along the “Route du Nord” in the region of the Property, and the Nemiscau airport is located 20 km west of the property, serviced by Air Creebec and chartered flights. The village of Nemaska and the Relais Routier CCDC located respectively 35 and 15 km to the west of the Property may be used to house workers and service the Property. In addition, the Property is covered by the cellular networks.

The Company’s acquisition of the Property allows us to experience and prosper from the booming mining sector. Furthermore, we are fortunate to be situated beside Nemaska Exploration’s Whabouchi project. The Property is located 1.5 km west of Nemaska Exploration’s Whabouchi lithium project. The Whabouchi property has confirmed high grade spodumene concentrate, and has been ranked 1st in Canada and 3rd in the world amongst hard rock pegmatite projects being developed by researcher signumBOX.

We will seek to form strategic relationships with large technology companies for distribution of potentially all end products. The Company believes it is in the most opulent area for future growth and creating shareholder value.

Competition

We compete with other mineral resource exploration companies for financing and for the acquisition of new mineral properties. Many of the mineral resource exploration companies with whom we compete have greater financial and technical resources than those available to us. Accordingly, these competitors may be able to spend greater amounts on acquisitions of mineral properties of merit, on exploration of their mineral properties and on development of their mineral properties. In addition, they may be able to afford more geological expertise in the targeting and exploration of mineral properties. This competition could result in competitors having mineral properties of greater quality and interest to prospective investors who may finance additional exploration. This competition could adversely impact on our ability to finance further exploration and to achieve the financing necessary for us to develop our mineral properties.

Compliance with Governmental Regulation

We are committed to complying with and are, to our knowledge, in compliance with, all governmental and environmental regulations applicable to our company and our Property. Permits from a variety of regulatory authorities are required for many aspects of mine operation and reclamation. We cannot predict the extent to which these requirements will affect our company or our Property if we identify the existence of minerals in commercially exploitable quantities. In addition, future legislation and regulation could cause additional expense, capital expenditure, restrictions and delays in the exploration of our Property.

ITEM 1A. RISK FACTORS

Much of the information included in this annual report includes or is based upon estimates, projections or other “forward looking statements”. Such forward looking statements include any projections and 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.

Such estimates, projections or other “forward looking statements” involve various risks and uncertainties as outlined below. We caution the reader 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”.

We have a limited operating history that you can use to evaluate us, and the likelihood of our success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered by a small developing company.

We were incorporated in Nevada in August 2007. With the exception of $86,876 in cash, we have no significant financial resources and limited revenues to date. The likelihood of our success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered by a small developing company starting a new business enterprise and the highly competitive environment in which we will operate. Since we have a limited operating history, we cannot assure you that our business will be profitable or that we will ever generate sufficient revenues to meet our expenses and support our anticipated activities.

We will require financing to achieve our current business strategy and our inability to obtain such financing could prohibit us from executing our business plan and cause us to slow down our expansion of operations.

We will need to raise additional funds through public or private debt or sale of equity to achieve our current business strategy. Such financing may not be available when needed. Even if such financing is available, it may be on terms that are materially adverse to your interests with respect to dilution of book value, dividend preferences, liquidation preferences, or other terms. Our capital requirements to implement our business strategy will be approximately $800,000. Moreover, in addition to monies needed to continue operations over the next twelve months, we anticipate requiring additional funds in order to implement our plan of operations. No assurance can be given that such funds will be available or, if available, will be on commercially reasonable terms satisfactory to us. There can be no assurance that we will be able to obtain financing if and when it is needed on terms we deem acceptable.

If we are unable to obtain financing on reasonable terms, we could be forced to delay or scale back our plans for expansion. In addition, such inability to obtain financing on reasonable terms could have a material adverse effect on our business, operating results, or financial condition.

Our auditor has expressed substantial doubt as to our ability to continue as a going concern.

Based on our financial history since inception, our auditor has expressed substantial doubt as to our ability to continue as a going concern. For the year ended August 31, 2011 we have incurred a net loss of $449,021 and an accumulated deficit of $983,238. If we cannot generate sufficient revenues from our services, we may have to delay the implementation of our business plan.

We are subject to regulations relating to governmental anti money laundering procedures.

The Office of the Superintendent of Financial Institutions (OSFI) regulations regarding anti-money laundering procedures requires verification of client information with two pieces of identification prior to opening an account. Since this was done when the personal checking account was opened, we fulfill this requirement by only accepting personal checks. If an applicant is unable to provide a personal check to open an account, they may do so with a money order or cash providing the application is accompanied with a Verification of Identification form completed by a notary as well as copies of the identification that was physically seen by the notary. PBTD requires two pieces of identification issued by a Canadian Government agency, one of these must contain a photograph and signature.

Our future success is dependent, in part, on the performance and continued service of Jordan Starkman, our only officer. Without his continued service, we may be forced to interrupt or eventually cease our operations.

We are presently dependent to a great extent upon the experience, abilities and continued services of Jordan Starkman our only Officer and Director. We currently do not have an employment agreement with Mr. Starkman. The loss of his services could have a material adverse effect on our business, financial condition or results of operation.

We are selling our products in a highly competitive market and we are unsure as to whether or not there will be any consumer demand for our products.

Some of our competitors are much larger and better capitalized than we are. It may be that our competitors will better address the same market opportunities that we are addressing. These competitors, either alone or with collaborative partners, may succeed in developing business models that are more effective or have greater market success than our own. The Company is especially susceptible to larger manufacturers that invest more money in marketing. Moreover, the market for our products is large but highly competitive. There is little or no hard data that substantiates the demand for our products or how this demand will be segmented. It is possible that there will be low consumer demand for our products, or that interest in our products could decline or die out, which would cause us to be unable to sustain our operations. The availability of computers and other electronic goods at lower or more competitive prices may cause potential customers to purchase products elsewhere which would negatively impact our business.

Our business is subject to significant risks related to the credit markets in particular consumer lending and subprime credit seekers.

The tightening of the credit markets may significantly affect our ability to proceed with our business plan. The availability of funds for credit to consumers with less than perfect credit has been declining steadily. Consumers who previously were able to get subprime loans may not qualify for credit in today’s market because of higher credit standards. This may affect our business because fewer consumers will qualify to purchase our products.

Because of the speculative nature of exploration of mineral properties, we may never discover a commercially exploitable quantity of minerals, our business may fail and investors may lose their entire investment.

We are in the very early exploration stage and cannot guarantee that our exploration work will be successful, or that any minerals will be found, or that any production of minerals will be realized. The search for valuable minerals as a business is extremely risky. Substantial investment will be required to move the Company toward the production of minerals. This may require bringing in a partner to make the necessary investment, but there are no plans at this time for any form of partnership or merger. We can provide investors with no assurance that exploration on our properties will establish that commercially exploitable reserves of minerals exist on our property. Additional potential problems that may prevent us from discovering any reserves of minerals on our property include, but are not limited to, unanticipated problems relating to exploration and additional costs and expenses that may exceed current estimates. If we are unable to establish the presence of commercially exploitable reserves of minerals on our property our ability to fund future exploration activities will be impeded, we will not be able to operate profitably and investors may lose all of their investment in our company.

We have no known mineral reserves and we may not find any lithium and even if we find lithium it may not be in economic quantities. If we fail to find any lithium or if we are unable to find lithium in economic quantities, we will have to suspend operations.

We have no known mineral reserves. Additionally, even if we find lithium in sufficient quantity to warrant recovery it ultimately may not be recoverable. Finally, even if any lithium is recoverable, we do not know that this can be done at a profit. Failure to locate lithium in economically recoverable quantities will cause us to suspend operations.

Supplies needed for exploration may not always be available. If we are unable to secure exploration supplies we may have to delay our anticipated business operations.

Competition and unforeseen limited sources of supplies needed for our proposed exploration work could result in occasional spot shortages of supplies of certain products, equipment or materials. There is no guarantee we will be able to obtain certain products, equipment and/or materials as and when needed, without interruption, or on favorable terms. Such delays could affect our anticipated business operations and increase our expenses.

Because of the unique difficulties and uncertainties inherent in mineral exploration ventures, we face a high risk of business failure.

Potential investors should be aware of the difficulties normally encountered by new mineral exploration companies and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the exploration of the mineral properties that we plan to undertake. These potential problems include, but are not limited to, unanticipated problems relating to exploration, and additional costs and expenses that may exceed current estimates. The expenditures to be made by us in the exploration of the mineral claim may not result in the discovery of mineral deposits. Problems such as unusual or unexpected formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts. If the results of our exploration do not reveal viable commercial mineralization, we may decide to abandon our claims. If this happens, our business will likely fail.

The marketability of natural resources will be affected by numerous factors beyond our control which may result in us not receiving an adequate return on invested capital to be profitable or viable.

The marketability of natural resources which may be acquired or discovered by us will be affected by numerous factors beyond our control. These factors include market fluctuations in lithium pricing and demand, the proximity and capacity of natural resource markets and processing equipment, governmental regulations, land tenure, land use, regulation concerning the importing and exporting of mineral resources and environmental protection regulations. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in us not receiving an adequate return on invested capital to be profitable or viable.

Exploration and production activities are subject to certain environmental regulations which may prevent or delay the commencement or continuation of our operations.

In general, our exploration and production activities are subject to certain federal, state and local laws and regulations relating to environmental quality and pollution control. Such laws and regulations increase the costs of these activities and may prevent or delay the commencement or continuation of a given operation. Specifically, we may be subject to legislation regarding emissions into the environment, water discharges and storage and disposition of hazardous wastes. In addition, legislation has been enacted which requires well and facility sites to be abandoned and reclaimed to the satisfaction of state authorities. However, such laws and regulations are frequently changed and we are unable to predict the ultimate cost of compliance. Generally, environmental requirements do not appear to affect us any differently or to any greater or lesser extent than other companies in the industry.

Any change to government regulation/administrative practices may have a negative impact on our ability to operate and our profitability.

The business of mineral exploration and development is subject to substantial regulation under various countries’ laws relating to the exploration for, and the development, upgrading, marketing, pricing, taxation, and transportation of mineral resources and related products and other matters. Amendments to current laws and regulations governing operations and activities of mineral exploration and development operations could have a material adverse impact on our business. In addition, there can be no assurance that income tax laws, royalty regulations and government incentive programs related to the properties mineral exploration industry generally will not be changed in a manner which may adversely affect our progress and cause delays, inability to explore and develop or abandonment of these interests.

Permits, leases, licenses, and approvals are required from a variety of regulatory authorities at various stages of exploration and development. There can be no assurance that the various government permits, leases, licenses and approvals sought will be granted in respect of our activities or, if granted, will not be cancelled or will be renewed upon expiry. There is no assurance that such permits, leases, licenses, and approvals will not contain terms and provisions which may adversely affect our exploration and development activities.

Planned exploration, and if warranted, development and mining activities involve a high degree of risk.

We cannot assure you of the success of our planned operations. Exploration costs are not fixed, and resources cannot be reliably identified until substantial development has taken place, which entails high exploration and development costs. The costs of mining, processing, development and exploitation activities are subject to numerous variables which could result in substantial cost overruns. Mining for base or precious metals may involve unprofitable efforts, not only from dry properties, but from properties that are productive but do not produce sufficient net revenues to return a profit after accounting for mining, operating and other costs.

Our operations may be curtailed, delayed or cancelled as a result of numerous factors, many of which are beyond our control, including economic conditions, mechanical problems, title problems, weather conditions, compliance with governmental requirements and shortages or delays of equipment and services.

We do not insure against all risks associated with our business because insurance is either unavailable or its cost of coverage is prohibitive. The occurrence of an event that is not covered by insurance could have a material adverse effect on our financial condition.

The impact of government regulation could adversely affect our business.

Our business is subject to applicable domestic and foreign laws and regulations, including laws and regulations on taxation, exploration, and environmental and safety matters. Many laws and regulations govern the spacing of mines, rates of production, prevention of waste and other matters. These laws and regulations may increase the costs and timing of planning, designing, drilling, installing, operating and abandoning our mines and other facilities. In addition, our operations are subject to complex environmental laws and regulations adopted by domestic and foreign jurisdictions where we operate. We could incur liability to governments or third parties for any unlawful discharge of pollutants into the air, soil or water, including responsibility for remedial costs.

The submission and approval of environmental impact assessments may be required.

Environmental legislation is evolving in a manner which means stricter standards; enforcement, fines and penalties for noncompliance are more stringent. Environmental assessments of proposed projects carry a heightened degree of responsibility for companies and directors, officers and employees. The cost of compliance with changes in governmental regulations has a potential to reduce the profitability of operations.

Because the requirements imposed by these laws and regulations frequently change, we cannot assure you that laws and regulations enacted in the future, including changes to existing laws and regulations, will not adversely affect our business.

Decline in mineral prices may make it commercially infeasible for us to develop our property and may cause our stock price to decline.

The value and price of your investment in our common shares, our financial results, and our exploration, development and mining activities may be significantly adversely affected by declines in the price of minerals and other precious metals. Mineral prices fluctuate widely and are affected by numerous factors beyond our control such as interest rates, exchange rates, inflation or deflation, fluctuation in the value of the United States dollar and foreign currencies, global and regional supply and demand, and the political and economic conditions of mineral-producing countries throughout the world. The price of minerals fluctuates in response to many factors, which are beyond anyone’s prediction abilities. The prices used in making the estimates in our plans differ from daily prices quoted in the news media. Because mining occurs over a number of years, it may be prudent to continue mining for some periods during which cash flows are temporarily negative for a variety of reasons. Such reasons include a belief that the low price is temporary, and/or the expense incurred is greater when permanently closing a mine.

We may not have access to all of the supplies and materials we need to begin exploration, which could cause us to delay or suspend operations.

Competition and unforeseen limited sources of supplies in the industry could result in occasional spot shortages of supplies such as dynamite as well as certain equipment like bulldozers and excavators that we might need to conduct exploration. If we cannot obtain the necessary supplies, we will have to suspend our exploration plans until we do obtain such supplies.

The ability to successfully deploy our business model is heavily dependent upon United States’ and Canadian economic conditions.

The ability to successfully deploy our business model is heavily dependent upon the general state of the US and Canadian economy. We cannot assure you that favorable conditions will exist in the future. A general economic recession in the United States and Canada or a devaluation of the US Dollar and Canadian Dollar relative to the Euro could have a serious adverse economic impact on us and our ability to obtain funding and generate projected revenues.

There is no assurance of a public market or that the common stock will ever trade on a recognized exchange. Therefore, you may be unable to liquidate your investment in our stock.

There is no established public trading market for our common stock. Our shares are not and have not been listed or quoted on any exchange or quotation system. There can be no assurance that a market maker will agree to file the necessary documents with the National Association of Securities Dealers, which operates the OTC Electronic Bulletin Board, nor can there be any assurance that such an application for quotation will be approved or that a regular trading market will develop or that if developed, will be sustained. In the absence of a trading market, an investor may be unable to liquidate their investment.

The Financial Industry Regulatory Authority, or FINRA, has adopted sales practice requirements which may also limit a shareholder's ability to buy and sell our stock.

In addition to the "penny stock" rules described above, FINRA 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, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA 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.

We do not intend to pay dividends and there will thus be fewer ways in which you are able to make a gain on your investment.

We have never paid dividends and do not intend to pay any dividends for the foreseeable future. To the extent that we may require additional funding currently not provided for in our financing plan, our funding sources may prohibit the declaration of dividends. Because we do not intend to pay dividends, any gain on your investment will need to result from an appreciation in the price of our common stock. There will therefore be fewer ways in which you are able to make a gain on your investment.

Because the SEC imposes additional sales practice requirements on brokers who deal in shares of penny stocks, some brokers may be unwilling to trade our securities. This means that you may have difficulty reselling your shares, which may cause the value of your investment to decline.

Our shares are classified as penny stocks and are covered by Section 15(g) of the Securities Exchange Act of 1934 (the “Exchange Act”) which imposes additional sales practice requirements on brokers-dealers who sell our securities in this offering or in the aftermarket. For sales of our securities, broker-dealers must make a special suitability determination and receive a written agreement from you prior to making a sale on your behalf. Because of the imposition of the foregoing additional sales practices, it is possible that broker-dealers will not want to make a market in our common stock. This could prevent you from reselling your shares and may cause the value of your investment to decline.

We face risks related to compliance with corporate governance laws and financial reporting standards.

The Sarbanes-Oxley Act of 2002, as well as related new rules and regulations implemented by the Securities and Exchange Commission and the Public Company Accounting Oversight Board, require changes in the corporate governance practices and financial reporting standards for public companies. These new laws, rules and regulations, including compliance with Section 404 of the Sarbanes-Oxley Act of 2002 relating to internal control over financial reporting, referred to as Section 404, have materially increased our legal and financial compliance costs and made some activities more time-consuming and more burdensome.

Our common stock is considered a penny stock, which is subject to restrictions on marketability, so you may not be able to sell your shares.

If our common stock becomes tradable in the secondary market, we will be subject to the penny stock rules adopted by the Securities and Exchange Commission that require brokers to provide extensive disclosure to their customers prior to executing trades in penny stocks. These disclosure requirements may cause a reduction in the trading activity of our common stock, which in all likelihood would make it difficult for our stockholders to sell their securities.

Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system). 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 that provides information about penny stocks and the 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 broker-dealer must also 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 requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security that becomes subject to the penny stock rules. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in our securities, which could severely limit their market price and liquidity of our securities. These requirements may restrict the ability of broker-dealers to sell our common stock and may affect your ability to resell our common stock.

Other Risks

Trends, Risks and Uncertainties

We have sought to identify what we believe to be the most significant risks to our business, but we cannot predict whether, or to what extent, any of such risks may be realized nor can we guarantee that we have identified all possible risks that might arise. Investors should carefully consider all of such risk factors before making an investment decision with respect to our common stock.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

Employees

As of August 31, 2011, we had approximately 1 employee and 3 consultants to the Company.

ITEM 2. PROPERTIES

Our principal executive office location and mailing address is 3651 Lindell Rd. Suite #D155, Las Vegas, NV, 89103. Currently, this space is sufficient to meet our office and telephone facility needs; however, if we expand our business to a significant degree, we will have to find a larger space. In addition, the Company has facilities in Toronto, Ontario sufficient to sustain our office in Canada.

ITEM 3. LEGAL PROCEEDINGS

We are not presently parties to any litigation, nor to our knowledge and belief is any litigation threatened or contemplated.

ITEM 4. (REMOVED & RESERVED)

PART II

ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES

No Public Market for Common Stock

There is no established current public market for the shares of our common stock. A symbol was assigned for our securities so that our securities may be quoted for trading on the OTCQB under symbol TUCA. Minimal trading has occurred through the date of this Report. There can be no assurance that a liquid market for our securities will ever develop. Transfer of our common stock may also be restricted under the securities or blue sky laws of various states and foreign jurisdictions. Consequently, investors may not be able to liquidate their investments and should be prepared to hold the common stock for an indefinite period of time.

Holders

As of the August 31, 2011 statement, we had 52 active stockholders of our common stock.

Dividends

Since inception we have not paid any dividends on our common stock. We currently do not anticipate paying any cash dividends in the foreseeable future on our common stock, when issued pursuant to this offering. Although we intend to retain our earnings, if any, to finance the exploration and growth of our business, our Board of Directors will have the discretion to declare and pay dividends in the future.

Payment of dividends in the future will depend upon our earnings, capital requirements, and other factors, which our Board of Directors may deem relevant.

Recent Sales of Unregistered Securities

In June 2011, the Company received $5,250 in exchange for 125,000 shares of common stock at $0.042 per share. These shares were issued August 18, 2011.

In June 2011, the Company received $30,000 in exchange for 500,000 shares of common stock at $0.06 per share. These shares were issued June 24, 2011.

In June 2011, the Company received $50,000 in exchange for 500,000 shares of common stock at $0.10 per share. These shares were issued August 18, 2011.

In June 2011, the Company received $5,600 in exchange for 80,000 shares of common stock at $0.07 per share. These shares were issued August 18, 2011.

In June 2011, the Company received $66,000 in exchange for 1,100,000 shares of common stock at $0.06 per share. These shares were issued August 18, 2011.

In June 2011, the Company received $55,000 in exchange for 1,000,000 shares of common stock at $0.055 per share. These shares were issued August 18, 2011.

In June 2011, the Company received $65,000 in exchange for 1,300,000 shares of common stock at $0.05 per share. These shares were issued June 24, 2011.

The above proceeds will be used to fund the Company’s operations and costs associated with the Abigail property and any additional claims acquired as discussed in our Plan of Operations.

Equity Compensation Plan Information

None.

ITEM 6. SELECTED FINANCIAL DATA.

Not applicable.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our consolidated audited financial statements and the related notes that appear elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this annual report, particularly in the section entitled "Risk Factors" beginning on page 7 of this annual report.

Our consolidated audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

Plan of Operations for Tucana segment

The Company's main exploration target in 2011 will be the recently acquired Abigail Lithium Property (the “Property”) situated within and adjacent to Nemaska Exploration's Whabouchi Lithium discovery. 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 1 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 is the 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 Géologues du Québec since 2001. The Exploration Agreement term is for a period of six months and is subject to certain termination provisions described in the Exploration Agreement.

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

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 $150,000, falling below the budgeted schedule.

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 320/12 and 320/13 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 of the Company's exploration campaign. The Nemaska report in conjunction with the airborne survey will allow 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.

The initial budget to complete the Phase I work program on the Property is described below:

Airborne Magnetic and Electromagnetic Survey (125m line spacing):
Airborne survey, mob and demob, lump sum		20,000
Survey (Mag and VLF) 1,095km @ $73/km		79,935
Wait time, additional survey lines, ect		35,000
Contingency 12%		16,192
Total Airborne Survey	$	151,127

Geological Survey and Prospecting:
Geological survey, 2 geologists, 2 helpers, room and board, helicopter support if needed, assays, all inclusive for approximately 45 days		135,000
Contingency 12%		16,200
Total Geological Survey	$	151,200
Total Airborne and Geological	$	302,327

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 diabases. 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 (Québec). 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, observe 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 November 9, 2011, the Company entered into a letter of intent to secure the purchase of these kimberlite targets.

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

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. 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.

Plan of Operation for PBTD Segment

The Company will continue to operate Pay By The Day and its promotion of PBTD CreditPlus in conjunction with the Company’s mining operations. The promotion of PBTD CreditPlus is contingent upon the Company successfully obtain financing and will begin with the production of a new 30 second direct response commercials. The campaign will be nationwide with multiple station coverage. We are currently in discussions with a Canadian based media company to produce an infomercial that will air on stations across Ontario. The cost of producing and airing the infomercial is approximately $20,000. We expect the profits generated from the infomercial campaign to fund additional air time slots. PBTD anticipates the production of the infomercial and commercial to begin 6-8 months once the financing is obtained. We produced two 30 second spot commercials in 2004 that aired Canada wide with a focus on Northern Ontario and all of Alberta. The new television advertising campaign will be initiated with the guidance of an advertising agency. We determine the areas of interest and the agency provides us with various rates, time slots available, and the stations catering to our focus area.

We plan to hire 2-3 additional sales people plus 1 administrative staff member. The hiring of additional staff will take place once the funds are raised to advertise more aggressively. Depending on the number of incoming calls to us and the success of the advertising campaign, we may also be required to upgrade our phone system and upgrade our current database to allow for easier access to customer files. Currently, management is able to process applications and handle the incoming calls with our current resources.

The fundamental concept of our business involves the granting of credit by either our third party finance service provider or by PBTD internally. Our relationship with our third party finance service provider is one that will hopefully expedite our growth process by providing an easy application process with a high probability of customer approval rates. They have the ability to finance both A and B level credit on a Conditional Sales Contract program or a 3 year lease contract. A Conditional Sales Contract is commonly known as buying on an installment plan and requires the giving of a promissory note for the purchase price under the contract. It is a type of agreement to sell whereby a seller retains title to the goods sold and delivered to a purchaser until full payment has been made. A conditional buyer has the right of possession of the goods so long as the terms and conditions of the agreement are met. A Conditional Sales Contract is similar to a lease contract except at the end of the term the buyer obtains ownership of the goods as soon as the final payment to the seller is made.

We receive 100% of the transaction amount on “A” credit deals and due to the added risk for “B” credit customers, the payout is 90% of the transaction amount. For example, if the purchase amount is $1,000, our third party service provider pays us 100% of the $1,000 for an “A” credit customer. If the customer has “B” level credit then the payout amount to us is 90% of the $1,000 transaction amount. There is no recourse on transactions rated as an “A” credit deal, however we have 1st payment recourse on “B” credit deals. Once the customer has made there 1st payment, we are no longer liable for the sale amount. We currently have no exposure at this point in time. We are currently being funded on deals once the merchandise has been shipped from our facilities and the customer acknowledges receipt of goods. We currently have a 3-5 hour turnaround time for approvals or declines. We are not related to any of our service providers except for the relationships described.

Our business operation relies upon a third party service provider to approve for credit and finance our customer’s purchases. If we encounter difficulty in obtaining customer credit approvals for financing, the company’s business will suffer. Due to our difficulty in obtaining credit approvals, we have reached an agreement with Tanner Financial Services Inc. in July 2008 to accept and process our customer applications.

We believe the relationship with Tanner Financial will increase our approval rates leading to increased sales, as they are a more aggressive lender willing to take on additional risk by financing A, B, and C level credit customers. The terms and conditions of the agreement with Tanner Financial are the same as previous 3rd party finance providers. Furthermore, the company has turned to self-financing and has financed new/off-lease desktop computers and laptops, and consumer electronics for customers willing to put down 50% of the total purchase price of their order. The main selling features and the attractiveness of our financing route is the 0% interest rate and the reporting of the trade to Equifax on a monthly basis, allowing the customers who can afford the 50% down to rebuild or reestablish credit history. The key component is the 50% down payment, and we realize this financing option is not for everybody. The 50% down payment can translate into a $200-$500 down payment which is significant for customers who wish to pay for purchases on a payment plan and for those who cannot afford to make purchases at their local store.

We believe we can continue the operation of financing merchandise internally with a limited amount of capital because the 50% down payment required by the customer covers the majority of the cost of the merchandise. We have limited our exposure and risk in case of default by the customer, and there is limited capital required to finance these purchases. As we raise additional capital, we will on a case-by-case basis determine if additional risk is warranted based on the customer’s credit rating.

Results of Operations for the years ended August 31, 2011 and 2010

Revenue for the fiscal year ended August 31, 2011 was $425 compared to $4,322 for fiscal year end August 31, 2010. The revenue was generated from the sale of computer and consumer electronics financed through PBTD.

Operating Expenses for the year ended August 31, 2011 were $498,636 compared to $263,969 for the year ended August 31, 2010. The increase in operating expenses during the year ended August 31, 2011 compared to the year ended August 31, 2010 is primarily attributed to $93,067 in exploration costs and $379,633 in professional fees related to the acquisition of the Property. The Company’s professional fees mainly consisted of consulting fees, accounting, audit and legal fees related to the acquisition.

Loss from operations was $498,211 for year ended August 31, 2011 and $261,997 for year ended August 31, 2010.

Net loss was $498,394 for year ended August 31, 2011 and $267,389 for year ended August 31, 2010. The increase in operating expenses was the sole contributing factor for the increased loss during the period.

During the years ending August 31, 2011 and 2010, we had no provision for income taxes due to the net operating losses incurred.

We currently have no known mineral reserves and have generated no revenue from our mining activities.

All of our sales consist of computer and electronic products financed through our internal financing program. The profit is generated from the margins on the products sold. We charge 0% interest on our internal financing and CreditPlus card, and we do not have any interest charges revenue. Service fees revenue from our CreditPlus Card is nil. We expect to generate service fees revenue once our CreditPlus advertising campaign begins.

We have experienced a dramatic decrease in sales from fiscal year August 31, 2005 to August 31, 2011. Our slow growth and decrease in sales is attributed to the difficulty in effectively approving customer credit applications. We have also been affected by the current credit market conditions and as a result approval rates have decreased due to the poor credit quality of customers applying for credit.

If our 3rd party finance providers increase the criteria for credit approvals or its parameters for credit approvals, the increased restriction on credit approvals will make customer applications more difficult to finance. In this situation, it is uncertain if we will be able to continue to finance customer‘s purchases through our third party service provider. We may have to enter into additional agreements with multiple 3rd party finance providers, or increase the number of transactions financed internally. Our decrease in sales from inception to date is also attributed to the lack of advertising dollars to fully market PBTD and our offerings. In addition, over the past two years there has been a significant drop in the selling prices of computers and consumer electronics making these goods easily accessible at local retailers without the need for customer financing. Furthermore, the dramatic drop in retail prices of computers and consumer electronics has reduced our profit margins.

Liquidity and Capital Resources

As of August 31, 2011 we had a cash balance of $86,876 and a working capital surplus of $93,377.

The Company raised approximately $810,553, net of commissions, from the issuance of shares of common stock of the Company during the year ended August 31, 2011. The proceeds were used to fund operating activities of $560,167 and also the repayment of convertible notes payable which were issued to finance the acquisition of mineral claims. 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 the going concern risk will be removed. We are in discussions with various parties and believe a successful financing is likely.

In the event the Company is not successful in completing its obligations pursuant to the Agreement, the Company will continue with its prior business model and plan of operation. Our liquidity and capital requirements for our current business plan is discussed below.

We anticipate that our fixed costs made up of legal & accounting and general & administrative expenses for the next twelve months will total approximately $30,000. Legal and accounting expenses of $25,000 represents the minimum funds needed to sustain operations. The $25,000 will be financed through the Company’s cash on hand, additional financing, net sales and if needed, and/or advances from our director, Jordan Starkman. Currently there is no firm loan commitment between the Company and Jordan Starkman in place.

Operations of Pay By The Day segment

We are currently seeking funding for our planned expansion and would like to raise a minimum of $200,000 in order to aggressively promote and advertise our brand and CreditPlus program. To achieve our goals, a large portion of the funds raised will be invested in advertising. Our success is contingent upon our customers seeing our ads and calling our 1-800 phone number. There is a distinct correlation between the number of dollars invested in advertising and the number of sales made. The proceeds raised will also be used to fund a greater portion of transactions through our internal financing program. We expect to raise additional funds within the next 6-8 months. A private placement is the most likely scenario for the company to achieve success in raising additional funds for its operations. There are no discussions with any parties at this point in time for additional funding; however, we will attempt to discuss our business plan with various brokers in the US.

We believe we can satisfy our cash requirements for the next twelve months with our expected revenues 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. We cannot assure investors that adequate revenues will be generated. 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 profit, revenue, and growth goals.

We anticipate that our operational, and general & administrative expenses for the next 12 months will total approximately $25,000. The $25,000 will be financed through our anticipated sales of approximately $10,000 plus if needed, an advance from our sole director, Jordan Starkman. 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 our progress with the execution of our business plan.

In the event we are not successful in reaching our initial revenue targets, additional funds may be required, and we may not be able to proceed with our business plan for the development and marketing of our core services. 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 $200,000 to aggressively pursue and implement our growth goals through advertising.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are subject to certain market risks, including changes in interest rates and currency exchange rates. We have not undertaken any specific actions to limit those exposures.

ITEM 8. FINANCIAL STATEMENTS

TUCANA LITHIUM CORP. AND SUBSIDIARIES

(A Development Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS

31 AUGUST 2011 AND 2010

CONTENTS

	Page
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	F-1
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Balance Sheets	F-2
Consolidated Statements of Operations and Comprehensive Loss	F-3
Consolidated Statements of Stockholders' Equity (Deficit)	F-4
Consolidated Statements of Cash Flows	F-5
Notes to the Consolidated Financial Statements	F-6 – F-13

F-

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Tucana Lithium Corp. and subsidiaries

We have audited the accompanying consolidated balance sheets of Tucana Lithium Corp. and subsidiaries (a Development Stage Company) as of 31 August 2011 and 2010 and the related consolidated statements of operations and comprehensive loss, stockholders’ equity (deficit) and cash flows for the years ended 31 August 2011 and 2010 and for period from the date of inception (5 June 2003) to 31 August 2011. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of internal control over financial reporting. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement preparation.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Tucana Lithium Corp. and subsidiaries (a Development Stage Company) as of 31 August 2011 and 2010, and the results of its operations and comprehensive loss, cash flows and changes in stockholders’ equity (deficit) for the years ended 31 August 2011 and 20010 and for period from the date of inception (5 June 2003) to 31 August 2011, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company has significant operating losses, is in the development stage with no established source of revenue and is dependent on its ability to raise capital from stockholders or other sources to sustain operations, which raise substantial doubt about its ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ DNTW Chartered Accountants, LLP

Licensed Public Accountants

Markham, Canada

14 December 2011

F-1

TUCANA LITHIUM CORP. AND SUBSIDIARIES

(A Development Stage Company)

CONSOLIDATED BALANCE SHEETS

AS OF

(Expressed in United States Dollars)

	31 August 2011		31 August 2010
ASSETS
Current Assets
Cash	$	86,876	$	84
Convertible notes receivable		-		21,978
Prepaid and sundry		5,840		-
Total Current Assets		92,716		22,062
Long Term Assets
Mineral property claims		550,000		-
Equipment		1,161		3,213
Total Long Term Assets		551,161		3,213
Total Assets	$	643,877	$	25,275

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts payable and accrued liabilities	$	18,818	$	77,988
Convertible notes payable		3,939		18,540
Advances from stockholder		-		828
Advances from related party		203		5,000
Total Liabilities		22,960		102,356

Stockholders' Equity (Deficit)
Capital stock, $0.001 par value; Authorized 200,000,000; Issued and outstanding 54,464,200 (31 August 2010 - 15,390,000)		54,464			15,390
Additional paid-in capital		1,633,229			396,760
Accumulated other comprehensive loss		(34,166	)		(5,014	)
Common stock issuable		-			50,000
Deficit accumulated during the development stage		(1,032,610	)		(534,217	)
Total Stockholders' Equity (Deficit)		620,917			(77,081	)
Total Liabilities and Stockholders' Equity (Deficit)	$	643,877		$	25,275

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

F-2

TUCANA LITHIUM CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

FOR THE YEARS ENDED 31 AUGUST 2011 AND 2010 AND FOR THE PERIOD FROM THE DATE OF INCEPTION (5 JUNE 2003) TO 31 AUGUST 2011

(Expressed in United States Dollars)

	For the Year Ended 31 August 2011			For the Year Ended 31 August 2010			For the Period from Inception (5 June 2003) to 31 August 2011

SALES		425			4,322			384,786
COST OF GOODS SOLD		-			2,350			265,934
GROSS PROFIT		425			1,972			118,852

EXPENSES
Professional fees		379,633			249,083			895,512
Exploration		93,067			-			93,067
Advertising and promotion		8,971			2,399			43,293
Telecommunications		5,120			4,638			41,449
Rent and occupancy costs		3,000			450			31,132
Office and general		2,342			2,040			37,948
Interest and bank charges		2,218			2,226			21,001
Vehicle		1,048			123			2,158
Bad debts		-			-			9,774
Depreciation		3,237			3,010			20,876
TOTAL OPERATING EXPENSES		498,636			263,969			1,196,210
LOSS FROM OPERATIONS		(498,211	)		(261,997	)		(1,077,358	)
Foreign exchange (loss) gain		(183	)		(218	)		18,659
Interest income		-			-			11,821
Realized loss on disposal of available-for-sale securities		-			(5,174	)		(2,096	)
Gain on extinguishment of debt		-			-			19,126
Loss on disposal of assets		-			-			(2,762	)
NET LOSS	$	(498,394	)	$	(267,389	)	$	(1,032,610	)
Foreign currency translation adjustment		(5,530	)		(2,367	)
Unrealized loss on convertible note receivable and available-for-sale securities, net of tax		(23,621	)		4,809
COMPREHENSIVE LOSS	$	(527,545	)	$	(264,947	)
LOSS PER WEIGHTED NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED	$	(0.02	)	$	(0.02	)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED		31,402,603			12,181,233

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

F-3

TUCANA LITHIUM CORP. AND SUBSIDIARIES

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

FOR THE PERIOD FROM THE DATE OF INCEPTION (5 JUNE 2003) TO 31 AUGUST 2011

(Expressed in United States Dollars)

	Common Stock
	Shares		Amount		Additional Paid In Capital			Common Stock Issuable			Accumulated Other Comprehensive Loss			Deficit Accumulated During The Development Stage			Total Stockholders' Deficit
Opening Balance
Issuance of common stock at inception		2,000,000	$	2,000	$	(1,800	)										$	200
Foreign currency translation												(109	)					(109	)
Net loss															(1,257	)		(1,257	)
Balance, 31 August 2003		2,000,000		2,000		(1,800	)					(109	)		(1,257	)		(1,166	)
Foreign currency translation												(505	)					(505	)
Net loss															(5,825	)		(5,825	)
Balance, 31 August 2004		2,000,000		2,000		(1,800	)					(614	)		(7,082	)		(7,496	)
Foreign currency translation												(504	)					(504	)
Net loss															(5,810	)		(5,810	)
Balance, 31 August 2005		2,000,000		2,000		(1,800	)					(1,118	)		(12,892	)		(13,810	)
Foreign currency translation												8,200						8,200
Net loss															(18,388	)		(18,388	)
Balance, 31 August 2006		2,000,000		2,000		(1,800	)					7,082			(31,280	)		(23,998	)
Issuance of common stock for cash		500,000		500		(450	)											50
Unrealized loss on available-for-sale securities, net of taxes												(2,815	)					(2,815	)
Foreign currency translation												(12,682	)					(12,682	)
Net loss															(16,945	)		(16,945	)
Balance, 31 August 2007		2,500,000	$	2,500	$	(2,250	)				$	(8,415	)	$	(48,225	)	$	(56,390	)
Issuance of common stock for cash		3,590,000		3,590		32,310												35,900
Issuance of common stock for services		100,000		100		900												1,000
Unrealized loss on available-for-sale securities, net of taxes												(1,994	)					(1,994	)
Foreign currency translation												3,926						3,926
Net loss															(94,389	)		(94,389	)
Balance, 31 August 2008		6,190,000	$	6,190	$	30,960					$	(6,483	)	$	(142,614	)	$	(111,947	)
Issuance of common stock for services		1,000,000		1,000		49,000												50,000
Foreign currency translation												(973	)					(973	)
Net loss															(124,214	)		(124,214	)
Balance, 31 August 2009		7,190,000	$	7,190	$	79,960					$	(7,456	)	$	(266,828	)	$	(187,134	)
Issuance of common stock for conversion of notes payable		6,000,000		6,000		114,000												120,000
Issuance of common stock for cash		2,000,000		2,000		73,000												75,000
Issuance of common stock for accounts payable		200,000		200		9,800												10,000
Issuance of common stock for consulting services									50,000									50,000
Foreign currency translation												2,442						2,442
Forgiveness of advances from related party						120,000												120,000
Net loss															(267,389	)		(267,389	)
Balance, 31 August 2010		15,390,000	$	15,390	$	396,760		$	50,000		$	(5,014	)	$	(534,217	)	$	(77,081	)
Issuance of common stock for mineral claims		20,000,000		20,000		380,000												400,000
Issuance of common stock for cash, net of commissions		16,474,200		16,474		794,079												810,553
Issuance of common stock for accounts payable		2,000,000		2,000		48,000			(50,000	)								-
Issuance of common stock for debt conversion		600,000		600		14,390												14,990
Unrealized loss on convertible notes receivable															(23,621	)		(23,621	)
Foreign currency translation												(5,530	)					(5,530	)
Net loss															(498,394	)		(498,394	)
Balance, 31 August 2011		54,464,200	$	54,464	$	1,633,229		$	-		$	(34,166	)	$	(1,032,610	)	$	620,917

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

F-4

TUCANA LITHIUM CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED 31 AUGUST 2011 AND 2010 AND FOR THE PERIOD FROM THE DATE OF INCEPTION (5 JUNE 2003) TO 31 AUGUST 2011

(Expressed in United States Dollars)

	For the Year Ended 31 August 2011			For the Year Ended 31 August 2010			For the Period from Inception (5 June 2003) to 31 August 2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(498,394	)	$	(267,389	)	$	(1,032,610	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		3,237			3,010			20,876
Loss on disposal of assets		-			-			2,762
Issuance of common stock for services		-			50,000			101,000
Write off of deferred offering costs		-			120,000			120,000
Changes in operating assets and liabilities:
Convertible notes receivable		-			(21,978	)		(21,978	)
Accounts payable and accrued liabilities		(59,170	)		32,200			18,818
CASH FLOWS USED IN OPERATING ACTIVITIES		(554,327	)		(84,157	)		(791,132	)
CASH FLOWS FROM INVESTING ACTIVITIES
Available-for-sale securities		-			15			-
Disposition of equipment		-			-			4,462
Acquisition of equipment		(918	)		-			(28,994	)
CASH FLOWS PROVIDED USED IN INVESTING ACTIVITIES		(918	)		15			(24,532	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from convertible note payable		10,000			18,540			28,540
Advances (to) from stockholder		(6,668	)		135			(6,668	)
Advances (to) from related party		(4,797	)		(11,683	)		125,000
Repayment of convertible notes payable		(160,000	)		-			(160,000	)
Issuance of common stock, net of commissions		810,553			75,000			921,503
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES		649,088			60,014			908,375
EFFECT OF EXCHANGE RATE CHANGES ON CASH		(7,051	)		(2,608	)		(5,835	)
UNREALIZED LOSS ON AVAILABLE-FOR-SALE SECURITIES, NET OF TAX		-			4,809			-
NET INCREASE IN CASH		86,792			51			86,876
CASH, BEGINNING OF YEAR		84			33			-
CASH, END OF YEAR	$	86,876		$	84		$	86,876

	For the Year Ended 31 August 2011			For the Year Ended 31 August 2010			For the Period from Inception (5 June 2003) to 31 August 2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(498,394	)	$	(267,389	)	$	(1,032,610	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		3,237			3,010			20,876
Loss on disposal of assets		-			-			2,762
Issuance of common stock for services		-			50,000			101,000
Write off of deferred offering costs		-			120,000			120,000
Changes in operating assets and liabilities:
Convertible notes receivable		-			(21,978	)		(21,978	)
Prepaid and sundry		(5,840	)		-			(5,840	)
Accounts payable and accrued liabilities		(59,170	)		32,200			18,818
CASH FLOWS USED IN OPERATING ACTIVITIES		(560,167	)		(84,157	)		(796,972	)
CASH FLOWS FROM INVESTING ACTIVITIES
Available-for-sale securities		-			15			-
Disposition of equipment		-			-			4,462
Acquisition of equipment		(918	)		-			(28,994	)
CASH FLOWS PROVIDED USED IN INVESTING ACTIVITIES		(918	)		15			(24,532	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from convertible note payable		10,000			18,540			28,540
Advances (to) from stockholder		(828	)		135			(828	)
Advances (to) from related party		(4,797	)		(11,683	)		125,000
Repayment of convertible notes payable		(160,000	)		-			(160,000	)
Issuance of common stock, net of commissions		810,553			75,000			921,503
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES		654,928			60,014			914,215
EFFECT OF EXCHANGE RATE CHANGES ON CASH		(7,051	)		(2,608	)		(5,835	)
UNREALIZED LOSS ON AVAILABLE-FOR-SALE SECURITIES, NET OF TAX		-			4,809			-
NET INCREASE IN CASH		86,792			51			86,876
CASH, BEGINNING OF YEAR		84			33			-
CASH, END OF YEAR	$	86,876		$	84		$	86,876

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

F-5

TUCANA LITHIUM CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED 31 AUGUST 2011 AND 2010 AND FOR THE PERIOD FROM THE DATE OF INCEPTION (5 JUNE 2003) TO 31 AUGUST 2011

(Expressed in United States Dollars)

1.	NATURE OF OPERATIONS AND ORGANIZATION

On 12 March 2010, the Company entered into a non-binding letter of intent (“Letter of Intent”) with Grail Semiconductor, Inc. (“Grail”), to acquire all of the assets of Grail. As a result of entering into the Letter of Intent, 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 7 April 2010, the Company effected a 1 for 10 forward split of its issued and outstanding common stock. The Company’s issued and outstanding common shares were increased from 1,539,000 to 15,390,000. The Company also increased its authorized common shares from 100,000,000 to 200,000,000.

On 6 July 2010, the Company closed a share exchange agreement with Oteegee International Holdings Limited, a company incorporated in Hong Kong (“Oteegee”). Pursuant to the share exchange agreement, the Company issued 61,647,250 shares of common stock pending the close of the share exchange agreement in exchange for 4,000 common shares representing 40% of Oteegee.

On 20 August 2010, the Company received a notice of termination of the Letter of Intent with Grail, and as a result, the Company cancelled the 61,647,250 of its common shares issued to Oteegee. The Letter of Intent was terminated due to the Company’s inability to raise preliminary funding during the due diligence period of the Letter of Intent. In accordance with the Letter of Intent, the Company is entitled to convert its advances to Grail into equity of Grail.

On 2 December 2010 the Company closed an Asset Purchase Agreement (the “Agreement”) with Alain Champagne and other parties (the “Selling Group”) to acquire a One Hundred (100%) interest in the Abigail Lithium Project located in the James Bay, Quebec region of Canada (the “Property”) for a total costs of $550,000. The Property is covered by NTS sheets 320/12 and 320/13. The Property is made up of 222 map-designated cells totaling 11,844 hectares. The claims expire between January 2011 and May 2012.

Pursuant to the Agreement, on 7 December 2010 the Company issued a total of 15,000,000 shares of common stock plus committed to an additional payment of $250,000 in cash with $100,000 payable 90 days from the closing of the Agreement and $150,000 payable 180 days from the closing of the Agreement. The Company has also agreed to pay the Selling Group a 3% royalty on any commercial producing mineral deposit. In addition, the Company agreed to a minimum initial exploration work budget of $300,000 to commence no later than 16 May 2011. The Company announced on 27 June 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.

In March 2011, the Company issued 5,000,000 shares of common stock at $0.02 per share reflecting the first payment of $100,000 for the Property. On 15 May 2011, the Company issued a 10% Convertible Debenture with a principal amount of $150,000 (the “Debenture ”) to Alain Champagne (the “Holder”). The Debenture is due twelve months from the date of issuance. Additionally, the Holder is entitled to convert, at any time, until the Debenture is paid in full, all or any part of the principal plus accrued interest into shares of the Company’s common stock at a per share conversion price of $0.15. On 24 May 2011 the Company repaid $100,000 and on 25 June 2011 the Company paid off the balance of $50,000 fulfilling all the obligations to the Selling Group for the purchase price of the Property. In July 2011, the Ministry of Natural Resources transferred all mining claims into the name of Tucana Exploration Inc., a company incorporated in the State of Wyoming on 22 February 2011 (“Tucana”). Tucana is a 100% wholly owned subsidiary of the Company.

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.

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. 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 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 dated November 4, 2011 (the “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 found 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

F-6

2.	BASIS OF PRESENTATION

The accompanying consolidated financial statements of the Company include the accounts of Tucana Lithium Corp. and its wholly owned subsidiaries, Pay By The Day Inc. and Tucana Exploration Inc. 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 (deficit) 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 in the amount of $1,000,000 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 is optimistic that the financing will be secured. We are in discussions with various parties and believe a successful financing is likely. The Company believes it can satisfy minimum cash requirements of $30,000 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.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting policies of the Company are in accordance with accounting principles generally accepted in the United States of America. Presented below are those policies considered particularly significant:

Mineral Property Claims and Exploration Costs

Costs of exploration, carrying and retaining unproven mineral property claims are expensed as incurred. Acquisition of mineral property claims are capitalized including licenses and lease payments. Although the Company has taken steps to verify title to mineral property claims in which it has an interest, these procedures do not guarantee the Company's title. Such properties may be subject to prior agreements or transfers and title may be affected by undetected defects. Impairment losses are recorded on mineral property claims used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amount.

F-7

Revenue Recognition

The Company's revenue recognition policies are in compliance with ASC 605, Revenue Recognition. Revenue from sales to customers are recognized at the date a formal arrangement exists, the price is fixed and determinable, the goods are shipped to the customer and no other significant obligation of the Company exists and collectability is reasonably assured.

Cash and Cash Equivalents

Cash and cash equivalents consist of commercial accounts and interest-bearing bank deposits and are carried at cost, which approximates current value. Items are considered to be cash equivalents if the original maturity is three months or less.

Fair Value of Financial Instruments

The Company measures its financial assets and liabilities in accordance with the requirements of ASC 820, Fair Value Measurements and Disclosures. ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information

Foreign Translation Adjustment

The accounts of the Company’s foreign subsidiaries whose functional currency is the Canadian dollar, were translated into United States dollars in accordance with the provisions of ASC 830, Foreign Currency Matters. In accordance with the provisions of ASC 830, transaction gains and losses on these assets and liabilities are included in the determination of income for the relevant periods. Adjustments resulting from the translation of the consolidated financial statements from their functional currencies to United States dollars are accumulated as a separate component of accumulated other comprehensive income (loss) and have not been included in the determination of income for the relevant periods.

Income Taxes

The Company accounts for income taxes pursuant to ASC 740, Income Taxes. Deferred tax assets and liabilities are recorded for differences between the financial statements and tax basis of the assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is recorded for the amount of income tax payable or refundable for the period increased or decreased by the change in deferred tax assets and liabilities during the period.

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. These estimates are reviewed periodically, and, as adjustments become necessary, they are reported in earnings in the period in which they become known. The estimates on depreciation were based on the estimated useful lives of the Company's assets. Any estimates during the period have had an immaterial effect on earnings.

F-8

Earnings or Loss Per Share

The Company accounts for earnings per share pursuant ASC 260, Earnings per Share, which require disclosure on the financial statements of “basic” and “diluted” earnings (loss) per share. Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the year. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding plus common stock equivalents (if dilutive) related to stock options and warrants for each year.

There were no dilutive financial instruments for the year ended 31 August 2011 and 2010 or for the period from inception (5 June 2003) to 31 August 2011.

Comprehensive Income

The Company follows the guidance in ASC 220, Comprehensive Income. ASC 220 establishes standards for the reporting and presentation of comprehensive income and its components in a full set of consolidated financial statements. Comprehensive income is presented in the statements of changes in stockholders' equity (deficit), and consists of unrealized gains (losses) on available for sale marketable securities and foreign currency translation adjustments. ASC 220 requires only additional disclosures in the consolidated financial statements and does not affect the Company's financial position or results of operations.

Cost of Goods Sold

Costs of goods sold are recognized at the date the goods are shipped to the customer and are matched with revenues.

Credit Card Security Deposits

Upon receipt of a credit card security deposit, the Company establishes a separate account in Trust and establishes an offsetting liability. Any interest earned on the security deposit would be repayable to the customer and recorded as a liability to the Company as interest accrues.

Advertising and Marketing Costs

Advertising and marketing costs are expensed as incurred.

Equipment

Equipment is stated at cost less accumulated depreciation. Depreciation, based on the estimated useful lives of the assets, is provided using the under noted annual rates and methods:

Furniture and fixtures	20% declining balance
Computer	30% declining balance

Stock-Based Compensation

The Company accounts for Stock-Based Compensation in accordance with ASC 718, Compensation – Stock Compensation. ASC 718 establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity ’ s equity instruments or that may be settled by the issuance of those equity instruments. ASC 718 focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions. ASC 718 requires that the compensation cost relating to share-based payment transactions be recognized in the consolidated financial statements. That cost is measured based on the fair value of the equity or liability instruments issued.

F-9

Impairment of Long-Lived Assets

In accordance with ASC 360, Property and Equipment, long-lived assets to be held and used are analyzed for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. The Company evaluates annually at year end whether events and circumstances have occurred that indicate possible impairment. If there are indications of impairment, the Company uses future undiscounted cash flows of the related asset or asset grouping over the remaining life in measuring whether the assets are recoverable. In the event such cash flows are not expected to be sufficient to recover the recorded asset values, the assets are written down to their estimated fair value. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value of asset less cost to sell.

Recent Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. ASU No. 2011-04 does not require additional fair value measurements and is not intended to establish valuation standards or affect valuation practices outside of financial reporting. The ASU is effective for interim and annual periods beginning after 15 December 2011. The Company will adopt the ASU as required. The ASU will affect the Company’s fair value disclosures, but will not affect the Company’s results of operations, financial condition or liquidity.

In June 2011, the FASB issued ASU No. 2011-05, Presentation of Comprehensive Income. The ASU eliminates the option to present the components of other comprehensive income as part of the statement of changes in shareholders’ equity, and instead requires consecutive presentation of the statement of net income and other comprehensive income either in a continuous statement of comprehensive income or in two separate but consecutive statements. ASU No. 2011-05 is effective for interim and annual periods beginning after 15 December 2011. The Company will adopt the ASU as required. The Company does not expect ASU No. 2011-05 to have a material effect on the Company’s results of operations, financial condition or liquidity.

In September 2011, the FASB issued ASU No. 2011-08, Testing Goodwill for Impairment, an update to existing guidance on the assessment of goodwill impairment. This update simplifies the assessment of goodwill for impairment by allowing companies to consider qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount before performing the two-step impairment review process. It also amends the examples of events or circumstances that would be considered in a goodwill impairment evaluation. The amendments are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after 15 December 2011. Early adoption is permitted. The Company does not expect ASU No. 2011-08 to have a material effect on the Company’s results of operations, financial condition or liquidity.

Other recent accounting pronouncements issued by the FASB and the SEC did not or are not believed by management to have a material impact on the Company's present or future consolidated financial statements.

EQUIPMENT

The components of equipment were as follows:

	Cost		Accumulated Depreciation		Net 2011		Net 2010
Furniture and equipment	$	3,711	$	(2,931)	$	780	$	1,272
Computer		16,025		(15,644)		381		1,941
	$	19,736	$	(18,575)	$	1,161	$	3,213

F-10

6.	MINERAL CLAIMS

On 2 December 2010 the Company closed the Agreement with the Selling Group to acquire a One Hundred (100%) interest in the Property for a total cost of $550,000. The Property is covered by NTS sheets 320/12 and 320/13. The Property is made up of 222 map-designated cells totaling 11,844 hectares. The claims expire between January 2011 and May 2012.

In March 2011, the Company issued 5,000,000 shares of common stock at $0.02 per share reflecting the first payment of $100,000 for the Property. On 15 May 2011 the Company issued the Debenture of $150,000 fulfilling all the obligations to the Selling Group for the purchase price of the Property. The Debenture was repaid May and June of 2011. In July 2011, the Ministry of Natural Resources transferred all mining claims into the name of Tucana, a 100% wholly owned subsidiary of the Company.

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. 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 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 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 found in the Rouyn-Noranda and Val d’Or area, yet more metamorphosed. The gradiometric magnetic survey shows magnetic anomalies are present on the claims and should be further investigated.

7.	CONVERTIBLE NOTES RECEIVABLE

In accordance with a Letter of Intent entered into on 12 March 2010, the Company provided advances for administrative and other organizational expenses to Grail, which were required to close the acquisition of the assets of Grail. The advances are non-interest bearing and secured by convertible notes to equity of Grail. If a closing does not occur, the notes will convert to equity according to the terms of the respective note, and such conversion will be the sole recourse of the Company for all such expenditures. On 20 August 2010, the Company received a notice of termination of the Letter of Intent with Grail Semiconductor. As of the date of this report, the notes have not been converted into equity of Grail.

The convertible notes receivable were determined to have a fair value of Nil and therefore an unrealized loss of $23,612 has been recorded as of 31 August 2011.

F-11

8.	ADVANCES (TO) FROM STOCKHOLDER

The advances (to) from stockholder were from the sole director and shareholder, Jordan Starkman. The amount is non-interest bearing, unsecured and due on demand. The carrying value of the advances approximates the market value due to the short term maturity of the financial instruments.

9.	CONVERTIBLE NOTES PAYABLE

In September 2009 the Company issued a one year $120,000 convertible note payable in exchange for future consulting services relating to raising financing for the Company, accordingly these amounts have been recorded as deferred offering costs. The convertible note payable matures in twelve months, is unsecured, bears interest at 6% 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 1 September 2010, the note holder shall be entitled to convert any portion of the outstanding and unpaid amount into fully paid and nonassessable shares of common stock at a conversion price of $0.02 per common share. On 20 January 2010 the note payable was converted to 6,000,000 shares in the Company at $0.02 per share.

In May 2010 the Company issued a one-year convertible note payable in the amount of $14,990. The convertible note payable matures in twelve months, is unsecured, bears interest at 5% 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 26 May 2011, the note holder shall be entitled to convert any portion of the outstanding and unpaid amount into fully paid and non-assessable shares of common stock at a conversion price of $0.75 per common share. On 16 April 2011 the note payable was converted to 600,000 shares in the Company at $0.025 per share.

In August 2010 the Company issued a one-year convertible note payable in the amount of $3,550. The convertible note payable matures in twelve months, is unsecured, bears interest at 5% 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 11 August 2011, the note holder shall be entitled to convert any portion of the outstanding and unpaid amount into fully paid and non-assessable shares of common stock at a conversion price of $0.10 per common share.

In November 2010 the Company issued a one year convertible note payable in the amount of $10,000. The convertible note payable matures in twelve months, is unsecured, bears interest at 5% 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 29 November 2011, the note holder shall be entitled to convert any portion of the outstanding and unpaid amount into fully paid and non-assessable shares of common stock at a conversion price of $0.05 per common share. On 17 May 2011 the note payable was fully paid off in cash.

On 15 May 2011 the Company issued a one year convertible note payable in the amount of $150,000. The convertible note payable matures in twelve months, is unsecured, bears interest at 10% 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 15 May 2012, the note holder shall be entitled to convert any portion of the outstanding and unpaid amount into fully paid and non-assessable shares of common stock at a conversion price of $0.15 per common share. On 24 May 2011 the Company repaid $100,000 and on 25 June 2011 the Company paid off the balance of $50,000.

10.	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 the spouse of Jordan Starkman, the sole director of the Company for the year ended 31 August 2011 were $25,000 (year ended 31 August 2010 - $4,700).

F-12

11.	CAPITAL STOCK

During fiscal 2003, the Company completed non-brokered private placements of 2,000,000 shares of common stock for proceeds of $200.

During fiscal 2007, the Company completed non-brokered private placements of 500,000 shares of common stock for proceeds of $50.

During fiscal 2008, the Company issued 100,000 shares of common stock for legal services rendered at $0.01 per share.

During fiscal 2008, the Company issued 3,590,000 shares of common stock for cash at $0.01 per share.

In August 2009 the company issued 1,000,000 shares of common stock for consulting services rendered at $0.05 per share.

In January 2010 a $120,000 note payable was converted to 6,000,000 shares of common stock in the Company at a price of $0.02 per share.

In January 2010 the Company issued 2,000,000 shares of common stock for cash at $0.0375 per share.

In February 2010 the Company issued 200,000 shares of common stock in settlement of accounts payable at $0.05 per share.

On 7 April 2010, the Company affected a 1 for 10 forward split of its issued and outstanding common stock. The Company’s issued and outstanding common shares were increased from 1,539,000 to 15,390,000. All references in the financial statements to the number of shares outstanding and per share amounts of the Company’s common stock have been restated retroactively to reflect the effect of the stock split for all periods presented. The Company also increased its authorized common shares from 100,000,000 to 200,000,000.

During the year ended 31 August 2010, the Company recorded $50,000 for consulting services rendered in exchange for common shares to be issued. On 1 March 2011, the Company issued 2,000,000 shares of common stock at a price of $0.025 per share in settlement of these services.

In May 2010 the Company issued a one-year convertible note payable in the amount of $14,990. On 16 April 2011 the note payable was converted to 600,000 shares of common stock of the Company at $0.025 per share.

In December 2010, pursuant to the Agreement, the Company issued 15,000,000 shares of common stock at $0.02 per share to the Selling Group to acquire a 100% interest in the Property. On 1 March 2011, the Company issued an additional 5,000,000 shares of common stock at a price of $0.02 per share reflecting payment of $100,000 towards the Property. The shares issued in connection with the Property acquisition were based on the fair market value of the stock on the date of issuance.

During the year ended 31 August 2011, the Company issued 16,474,200 shares of common stock for total gross proceeds of $891,551 from various issuances in prices ranging from $0.03 to $0.11 per share. The Company paid $80,998 in commissions related to raising these proceeds and has accordingly been deducted from additional paid-in capital. The net proceeds from these issuances were $810,553.

F-13

12.	CONTINGENCIES

In accordance with the Agreement, the Company will also owe to the Selling Group 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.

13.	SUPPLEMENTAL CASH FLOW INFORMATION

During the periods ended 31 August 2011 and 2010 and for the period from inception to 31 August 2011, there were no interest or taxes paid by the Company.

In January 2010 a $120,000 note payable was converted to 6,000,000 shares of common stock in the Company at a price of $0.02 per share.

In February 2010 the Company issued 200,000 shares of common stock for accounts payable at $0.05 per share.

14.	INCOME TAXES

The Company has income tax losses available to be applied against future years income as a result of the losses incurred since inception. However, due to the losses incurred in the period and expected future operating results, management determined that it is more likely than not that the deferred tax asset resulting from the tax losses available for carryforward will not be realized through the reduction of future income tax payments. Accordingly a 100% valuation allowance has been recorded for income tax losses available for carryforward.

15.	SUBSEQUENT EVENTS

On 5 September 2011, the Company received $5,000 in exchange for 100,000 shares of common stock at $0.05 per share. These shares are expected to be issued in the next quarter.

On 15 September 2011, the Company issued 360,000 shares of common stock at $0.05 per share for consulting services.

On 9 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.

Subsequent to the year end, the Company entered into a rental agreement for a period of two years commencing September 1, 2011. The Company paid $12,000 in cash and will deliver to the lessor shares of common stock worth $3,500 to fulfill payment for the entire term of the lease.

F-14

16.	FINANCIAL INSTRUMENTS

Foreign Currency Risk

The Company is exposed to currency risks due to the potential variation of the currencies in which it operates. Principal currencies include the United States dollar and Canadian dollar. We monitor our foreign currency exposure regularly to minimize our foreign currency risk exposure.

Equities Price Risk

Equity investments are subject to market price risk. We monitor our equity holdings regularly to maximize the overall effectiveness of our equity risk exposure.

Concentration of Credit Risk

The Company does not have significant off-balance-sheet risk or credit concentration. The Company maintains cash with major financial institutions. From time to time, the Company may have funds on deposit with commercial banks that exceed federally insured limits. Management does not consider this to be a significant risk.

Liquidity Risk

The Company is exposed to liquidity risk as its continued operations are dependent upon obtaining additional capital or achieving profitable operations to satisfy its liabilities as they come due.

Fair Values

The Company's financial instruments consist of cash, accounts payable and accrued liabilities, convertible notes receivable and payable, advances from stockholder and advances from related party. Unless otherwise noted, it is management's opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. The fair value of these financial instruments approximate their carrying values due to the short-term maturity of these instruments.

F-15

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Our accountant is DNTW Chartered Accountants, LLP . We do not presently intend to change accountants. At no time have there been any disagreements with such accountants regarding any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure.

ITEM 9A. 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 Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) (the Company’s principal financial and accounting 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 CEO and CFO concluded that the Company’s disclosure controls and procedures are not effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

Report of Management on Internal Control over Financial Reporting

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Our internal control system was designed to, in general, provide reasonable assurance to the Company’s management and board regarding the preparation and fair presentation of published financial statements, but because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement to the Company's annual or interim financial statements will not be prevented or detected.

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 – 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.

We are in the continuous process of improving our internal control over financial reporting in an effort to eliminate these material weaknesses through improved supervision and training of our staff, but additional effort is needed to fully remedy these deficiencies. Management has engaged a Certified Public Accountant as a consultant to assist with the financial reporting process in an effort to mitigate some of the identified weaknesses. The Company is still in its development stage and intends on hiring the necessary staff to address the weaknesses once full operations have commenced.

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management's report in this annual report.

Changes in internal controls

No change in our system of internal control over financial reporting occurred during the period covered by this report, fourth quarter of the fiscal year ended August 31, 2011 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

We have one Director and Officer as follows:

Name	Age	Positions and Offices Held

Jordan Starkman	41	President, Secretary & Director

JORDAN STARKMAN, 41, President. Mr. Starkman brings over fifteen years experience in sales, financial consulting, and investor and client relations to the Pay By The Day team. He is a co-founder of Pay By the Day and was VP Operations prior to becoming President in January 2006. Prior to joining Pay By The Day, Jordan was a sales person from January 2002 to February 2003 at The Buck A Day Company, an Ontario based direct sales company focused on sales of computers and consumer electronics. Jordan has an extensive background in finance and business development. He worked for 10 years as an independent consultant for various publicly traded companies responsible for initiating new business and developing long-term relationships with customers. Jordan also holds a BA in Statistics from the University of Western Ontario. In addition, Jordan is the President of ECash, Inc. and Health Advance Inc.

Term of Office

Our directors are appointed for a one-year term to hold office until the next annual general meeting of our stockholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.

All officers and directors listed above will remain in office until the next annual meeting of our stockholders, and until their successors have been duly elected and qualified. There are no agreements with respect to the election of Directors. We have not compensated our Directors for service on our Board of Directors, any committee thereof, or reimbursed for expenses incurred for attendance at meetings of our Board of Directors and/or any committee of our Board of Directors. Officers are appointed annually by our Board of Directors and each Executive Officer serves at the discretion of our Board of Directors. We do not have any standing committees. Our Board of Directors may in the future determine to pay Directors’ fees and reimburse Directors for expenses related to their activities.

None of our Officers and/or Directors have filed any bankruptcy petition, been convicted of or been the subject of any criminal proceedings or the subject of any order, judgment or decree involving the violation of any state or federal securities laws within the past five (5) years.

Audit Committee

We do not have a standing audit committee of the Board of Directors. Management has determined not to establish an audit committee at present because of our limited resources and limited operating activities do not warrant the formation of an audit committee or the expense of doing so. We do not have a financial expert serving on the Board of Directors or employed as an officer based on management’s belief that the cost of obtaining the services of a person who meets the criteria for a financial expert under Item 401(e) of Regulation S-B is beyond its limited financial resources and the financial skills of such an expert are simply not required or necessary for us to maintain effective internal controls and procedures for financial reporting in light of the limited scope and simplicity of accounting issues raised in its financial statements at this stage of its development.

Certain Legal Proceedings

No director, nominee for director, or executive officer of the Company has appeared as a party in any legal proceeding material to an evaluation of his ability or integrity during the past five years.

Compliance With Section 16(A) Of The Exchange Act.

Section 16(a) of the Exchange Act requires the Company’s officers and directors, and persons who beneficially own more than 10% of a registered class of the Company’s equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission and are required to furnish copies to the Company. To the best of the Company’s knowledge, any reports required to be filed were timely filed in fiscal year ended August 31, 2011.

Code of Ethics

None.

ITEM 11. EXECUTIVE COMPENSATION

Compensation of Executive Officers

The following summary compensation table sets forth all compensation awarded to, earned by, or paid to the named executive officers paid by us during the fiscal years ended August 31, 2011 in all capacities for the accounts of our executives, including the Chief Executive Officer (CEO) and Chief Financial Officer (CFO):

SUMMARY COMPENSATION TABLE

Name and Principal Position	Year	Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Non-Qualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Totals ($)

Jordan Starkman President, Secretary &	2011	$	0		0		0		0		0		0		0	$	0
Director	2010	$	0		0		0		0		0		0		0	$	0
		$	0		0		0		0		0		0		0	$	0

Employment Agreements

We do not have any employment agreements in place with our sole officer and director.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth each person known by us to be the beneficial owner of five percent or more of the Company's Common Stock, all directors individually and all directors and officers of the Company as a group. Except as noted, each person has sole voting and investment power with respect to the shares shown.

Name and Address of Beneficial Owner	Amount of Beneficial Ownership (2)	Percentage of Class (2)

Jordan Starkman (1)	2,065,980	3.80%
3651 Lindell Rd. Suite #D155
Las Vegas, NV 89103

Alain Champagne 4584 St Denis #303 Montreal, QC H2J 2L3	7,000,000	12.85%
Therese Proulx 90 Rue Cloutier Vald’Or, QC J9P 4K9	3,000,000	5.50%
Richard Robillard 5346 Des Ormeaux St Montreal, QC H1K2X1	3,000,000	5.50%
Scott Rupert 142 Galland Cres Edmonton, AB	3,000,000	5.50%
All directors and executive officers as a group	2,065,980	3.80%

(1) The person listed is an officer and/or director of the Company.
(2) Based on 54,464,202 shares of common stock issued and outstanding as of August 31, 2011.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

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 the spouse of Jordan Starkman, the sole director of the Company for the year ended 31 August 2011 were $25,000 (year ended 31 August 2010 - $4,700).

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees

For the Company’s fiscal year ended August 31, 2011, we were billed approximately $20,000 for professional services rendered for the audit of our financial statements.

Tax Fees

For the Company’s fiscal year ended August 31, 2011, we were not billed for professional services rendered for tax compliance, tax advice, and tax planning.

All Other Fees

The Company did not incur any other fees related to services rendered by our principal accountant for the fiscal year ended August 31, 2011.

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 thereunto duly authorized.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

a) Documents filed as part of this Annual Report

1. Consolidated Financial Statements

2. Financial Statement Schedules

3. Exhibits

31.1	Rule 13a-14(a)/ 15d-14(a) Certification of Chief Executive Officer and Chief Financial Officer
32.1	Section 1350 Certification of Chief Executive Officer and Chief Financial Officer

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, Chief Executive Officer Chairman of the Board of Directors Chief Financial Officer, Controller, Principal Accounting Officer

		Date: December 14, 2011

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, Chief Executive Officer,	December 14, 2011
Jordan Starkman	Chairman of the Board of Directors Chief Financial Officer, Controller, Principal Accounting Officer

Attached files

RIMROCK GOLD CORP. Reports

Also read