Edgar Filing: Tornado Gold International Corp

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

FORM 10-QSB
(Mark One)

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the quarterly period ended June 30, 2004

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ________________ to _______________

000-50146
(Commission file number)

TORNADO GOLD INTERNATIONAL CORP.
--------------------------------
(Exact name of small business issuer as specified in its charter)

NEVADA 94-3409645
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)

3841 AMADOR WAY, RENO, NEVADA 89502
(Address of principal executive offices)

(775) 827-2324
--------------
(Issuer's telephone number)

NUCOTEC, INC.
(Former name, former address and former fiscal year, if changed
since last report)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]

The number of shares of common stock outstanding as of August 13, 2004 was
6,600,000.

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

PART I. FINANCIAL INFORMATION

TORNADO GOLD INTERNATIONAL CORP.
Index

Page
Number
------

PART I. FINANCIAL INFORMATION 2

Item 1. Financial Statements 2

Balance Sheet as of June 30, 2004 (unaudited) 3

Statements of Operations for the
six months ended June 30, 2004 and 2003 (unaudited) 4

Statements of Cash Flows for the
six months ended June 30, 2004 and 2003 (unaudited) 5

Notes to Financial Statements (unaudited) 6-7

Item 2. Management's Discussion and Analysis or Plan of Operations 14

Item 3. Controls and Procedures 16

PART II. OTHER INFORMATION 21

Item 1. Legal Proceedings 21

Item 2. Change in Securities and Small Business Issuer
Purchases of Equity Securities 21

Item 3. Defaults Upon Senior Securities 22

Item 4. Submission of Matters to a Vote of Security Holders 22

Item 5. Other Information 22

Item 6. Exhibits and Reports on Form 8-K 23

SIGNATURES 23

CERTIFICATIONS 24-25

ITEM 1. FINANCIAL STATEMENTS

TORNADO GOLD INTERNATIONAL CORP.
(formerly Nucotec, Inc.)

BALANCE SHEET

JUNE 30,
2004
----------------
(unaudited)
ASSETS

CURRENT ASSETS
Cash and cash equivalents $ 87,957
Prepaid expenses and other current assets 9,567
----------------
TOTAL CURRENT ASSETS 97,524

MINING ASSETS 81,283
----------------
TOTAL ASSETS $ 178,807
================

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
Accounts payable, including $4,418 to related party $ 7,116
Notes payable, including accrued interest of $19,825 894,825
----------------
TOTAL CURRENT LIABILITIES 901,941
----------------

COMMITMENTS AND CONTINGENCIES -

STOCKHOLDERS' DEFICIT
Common stock; $0.001 par value; 10,000,000 shares
authorized; 6,600,000 shares issued and outstanding 6,600
Additional paid-in capital 7,988
Accumulated deficit (737,722)

----------------
TOTAL STOCKHOLDERS' DEFICIT (723,134)
----------------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 178,807
================

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

TORNADO GOLD INTERNATIONAL CORP.
(FORMERLY NUCOTEC, INC.)

STATEMENTS OF OPERATIONS

THREE MONTHS ENDED SIX MONTHS ENDED
---------------------------- ----------------------------
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
2004 2003 2004 2003
------------- ------------ ------------- ------------
(unaudited) (unaudited) (unaudited) (unaudited)

NET REVENUE $ - $ - $ - $ -

OPERATING EXPENSES

Mining exploration expenses 9,988 - 9,988 -

General and administrative expenses 53,321 24,145 94,351 48,872
------------- ------------ ------------- ------------

63,309 24,145 104,339 48,872
------------- ------------ ------------- ------------

LOSS FROM OPERATIONS (63,309) (24,145) (104,339) (48,872)
------------- ------------ ------------- ------------
LOSS FROM OPERATIONS
Mining exploration expenses 9,988 - 9,988 -
General and administrative expenses 53,321 24,145 94,351 48,872
------------- ------------ ------------- ------------

OTHER INCOME (EXPENSE)
Interest expense (16,121) - (21,665) -
------------- ------------ ------------- ------------
TOTAL OTHER INCOME (EXPENSE) (16,121) - (21,665) -
------------- ------------ ------------- ------------

LOSS BEFORE PROVISION FOR INCOME TAXES
AND DISCONTINUED OPERATIONS (79,430) (24,145) (126,004) (48,872)

PROVISION FOR INCOME TAXES - - - -
------------- ------------ ------------- ------------
NET LOSS FROM CONTINUING OPERATIONS (79,430) (24,145) (126,004) (48,872)
------------- ------------ ------------- ------------

DISCONTINUED OPERATONS:
Income (loss) from operations of discontinued operations - 424 871 (5,142)
------------- ------------ ------------- ------------
- 424 871 (5,142)
------------- ------------ ------------- ------------

NET LOSS $ (79,430) $ (23,721) $ (125,133) $ (54,014)
============= ============ ============= ============

NET LOSS PER SHARE - BASIC AND DILUTED
Continuing operations $ (0.01) $ (0.00) $ (0.00) $ (0.00)
Discontinued operations - (0.00) (0.00) (0.00)
------------- ------------ ------------- ------------
$ (0.01) $ (0.00) $ (0.00) $ (0.00)
============= ============ ============= ============
WEIGHTED AVERAGE COMMON EQUIVALENT
SHARES OUTSTANDING - BASIC AND DILUTED 6,600,000 303,800,000 135,604,396 303,800,000
============= ============ ============= ============

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

TORNADO GOLD INTERNATIONAL CORP.
(formerly Nucotec, Inc.)

STATEMENTS OF CASH FLOWS

SIX MONTHS ENDED
--------------------------------------
JUNE 30, JUNE 30,
2004 2003
---------------- ------------------
(unaudited) (unaudited)

CASH FLOW FROM OPERATING ACTIVITIES:
Net loss from continuing operations $ (126,004) $ (48,872)
Adjustment to reconcile net loss to net cash
used in operating activities:
Net income (loss) from discontinued operations 871 (5,142)
Value of options granted for services 4,540
Changes in:
Accounts receivable 52 58
Inventory 680 -
Prepaid expenses and other current assets (9,567) 202
Accounts payable and accrued expenses 24,812 28,560

---------------- ------------------
Net cash used in operating activities (104,616) (25,194)
---------------- ------------------

CASH FLOW FROM INVESTING ACTIVITIES:
Purchase of mining claims (81,283) -

---------------- ------------------
Net cash used in investing activities (81,283) -
---------------- ------------------

CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from notes payable 875,000 -
Proceeds from notes payable, related party - 25,000
Payment on note payable, related party (42,500) -
Repurchase of shares of common stock (570,000) -
Proceeds from issuance of common stock 10,000 -
Transfer of Salty's Warehouse, Inc's cash
balance at date of disposition (6,068) -

---------------- ------------------
Net cash provided by financing activities 266,432 25,000
---------------- ------------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 80,533 (194)

CASH AND CASH EQUIVALENTS, Beginning of period 7,424 10,113
---------------- ------------------

CASH AND CASH EQUIVALENTS, End of period $ 87,957 $ 9,919
================ ==================

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Interest paid $ - $ -
================ ==================
Income taxes paid $ - $ -
================ ==================

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

TORNADO GOLD INTERNATIONAL CORP.
(formerly Nucotec, Inc.)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 1 - ORGANIZATION

Tornado Gold International Corp (formerly Nucotec, Inc.) was incorporated in the
state of Nevada on October 8, 2001. On July 7, 2004, the name of the company was
officially changed to Tornado Gold International Corp. (the "Company"). Prior to
the plan of reorganization (see Note 2 below) on March 19, 2004, the Company and
its subsidiary, Salty's Warehouse, Inc. sold various home and automobile
electronic equipment, computer accessories and supplies. The Company is
currently investing in mining properties for future development and production
(See Note 3).

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Interim Financial Statements

The unaudited financial statements have been prepared by the "Company, pursuant
to the rules and regulations of the Securities and Exchange Commission. The
information furnished herein reflects all adjustments (consisting of normal
recurring accruals and adjustments) which are, in the opinion of management,
necessary to fairly present the operating results of the respective periods
presented. Certain information and footnote disclosures normally present in
annual financial statements prepared in accordance with accounting principles
generally accepted in the United States of America have been omitted pursuant to
such rules and regulations. These financial statements should be read in
conjunction with the audited financial statements and footnotes for the year
ended December 31, 2003 included in the Company's Annual Report on Form 10-KSB.
The operating results of the Company on a semi-annual and quarterly basis may
not be indicative of the Company's operating results for the entire year

Basis of Presentation

The accompanying financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America, which
contemplate continuation of the Company as a going concern. The Company has no
established source of material revenue, has incurred a net loss for the six
months ended June 30, 2004 from continuing operations of $126,004, and at June
30, 2004 had a negative working capital of $804,417 and had a stockholders'
deficit of $723,722. These conditions raise substantial doubt as to the
Company's ability to continue as a going concern. These financial statements do
not include any adjustments that might result from the outcome of this
uncertainty. These financial statements do not include any adjustments relating
to the recoverability and classification of recorded asset amounts, or amounts
and classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.

Management plans to take the following steps that it believes will be sufficient
to provide the Company with the ability to continue in existence:

o The Company plans to raise additional operating funds through equity
or debt financing. There is no assurance that the Company will be able
to arrange for financing and has not, to date, had any substantive
discussions with any third parties regarding such financing.

o In March 2004, the Company borrowed $650,000 from an unrelated third
party, which was used to redeem the shares of the Company's former
management. This loan matures on July 5, 2004 when the full principal
and accrued interest becomes due. Subsequent to June 30, 2004, the
due date was extended to January 5, 2005.

o In April 2004, the Company borrowed $225,000 from an unrelated third
party to use as working capital. This loan and accrued interest are
due upon demand.

Plan of Reorganization

On March 19, 2004, Earl T. Shannon, Steven W. Hudson, and Scott W. Bodenweber
agreed to redeem 255,510,000 (5,110,200 pre-split) of their shares of the
Company's common stock in exchange for all of the Company's shares of Salty's
Warehouse, Inc. (the "Transfer"). Earl T. Shannon, Steven W. Hudson, and Scott
W. Bodenweber agreed to redeem 45,890,000 (917,800 pre-split) of their shares of
the Company's common stock in exchange for $570,000 (the "Sale"). The $570,000
was paid on March 19, 2004. As a condition to these transactions, Messrs.
Shannon, Hudson, and Bodenweber have resigned as officers of the Company. Earl
W. Abbott has been appointed President, Chief Financial Officer and Secretary of
the Company. In addition, Mr. Abbott, Carl A. Pescio and Stanley B. Keith have
collectively purchased 4,200,000 shares (84,000 pre-split shares) of common
stock from the Company for $10,000. Mr. Abbott, Mr. Pescio and Mr. Keith
replaced Messrs. Shannon, Hudson and Bodenweber on the Board of Directors of the
Company.

Cash and Cash Equivalents

For purpose of the statements of cash flows, the Company considers cash and cash
equivalents to include all stable, highly liquid investments with maturities of
three months or less.

Use of Estimates

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

Fair Value of Financial Instruments

Pursuant to SFAS No. 107, "Disclosures About Fair Value of Financial
Instruments", the Company is required to estimate the fair value of all
financial instruments included on its balance sheets as of June 30, 2004. The
Company considers the carrying value of such amounts in the financial statements
to approximate their face value.

Stock Split

On April 19, 2004, the Company authorized a 50:1 stock split. The accompanying
financial statements have been retroactively restated to present the effect of
this stock split.

Stock Options

SFAS No. 123, "Accounting for Stock-Based Compensation," establishes and
encourages the use of the fair value based method of accounting for stock-based
compensation arrangements under which compensation cost is determined using the
fair value of stock-based compensation determined as of the date of grant and is
recognized over the periods in which the related services are rendered. The
statement also permits companies to elect to continue using the current
intrinsic value accounting method specified in Accounting Principles Board
("APB") Opinion No. 25,"Accounting for Stock Issued to Employees," to account
for stock-based compensation. The Company has elected to use the intrinsic value
based method and has disclosed the pro forma effect of using the fair value
based method to account for its stock-based compensation. The Company uses the
fair value method for options granted to non-employees. If the Company had
elected to recognize compensation expense based upon the fair value at the grant
date for awards under the Stock Option Plan consistent with the methodology
prescribed by SFAS No. 123, the Company's net loss and loss per share would be
reduced to the pro forma amounts indicated below for the six-months ended June
30, 2004 and 2003:

2004 2003
-------------- ---------------
Net loss
As reported $ (125,133) $ (54,014)
Compensation recognized under APB 25 - -
Compensation recognized under SFAS 123 - (425,000)
-------------- ---------------
Pro forma $ (125,133) $ (479,014)
============== ===============

Basic and diluted loss per common share
As reported $ (0.00) $ (0.00)
Pro forma $ (0.00) $ (0.00)

The fair value for these options was estimated at the date of grant using a
Black-Scholes option pricing model with the following weighted-average
assumptions for 2003: risk-free interest rate of 5.5%; dividend yields of 0%;
volatility factors of the expected market price of the Company's common stock of
50%; and a weighted average expected life of the option of 10 years.

This option valuation model requires input of highly subjective assumptions.
Because the Company's employee stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion, the existing model does not necessarily provide a reliable single
measure of fair value of its employee stock options.

In March 2004, the Company issued 3,000,000 (60,000 pre-split) options to former
employees of the Company. The fair value for these options was estimated to be
$4,540 and has been recorded as an expense in the accompanying statement of
operations. The fair value was estimated using a Black-Scholes option pricing
model with the following weighted-average assumptions: risk-free interest rate
of 5.5%; dividend yields of 0%; volatility factors of the expected market price
of the Company's common stock of 50%; and a weighted average expected life of
the option of 10 years, respectively.

Recently Issued Accounting Pronouncements

In December 2003, the Securities and Exchange Commission ("SEC") issued Staff
Accounting Bulletin ("SAB") No. 104, "Revenue Recognition." SAB 104 supersedes
SAB 101, "Revenue Recognition in Financial Statements." SAB 104's primary
purpose is to rescind accounting guidance contained in SAB 101 related to
multiple element revenue arrangements, superseded as a result of the issuance of
EITF 00-21, "Accounting for Revenue Arrangements with Multiple Deliverables."
Additionally, SAB 104 rescinds the SEC's Revenue Recognition in Financial

Statements Frequently Asked Questions and Answers ("the FAQ") issued with SAB
101 that had been codified in SEC Topic 13, Revenue Recognition. Selected
portions of the FAQ have been incorporated into SAB 104. While the wording of
SAB 104 has changed to reflect the issuance of EITF 00-21, the revenue
recognition principles of SAB 101 remain largely unchanged by the issuance of
SAB 104, which was effective upon issuance. The adoption of SAB 104 did not
impact the financial statements.

Loss Per Share

The Company reports earnings (loss) per share in accordance with SFAS No. 128,
"Earnings per Share." Basic earnings (loss) per share is computed by dividing
income (loss) available to common shareholders by the weighted average number of
common shares available. Diluted earnings (loss) per share is computed similar
to basic earnings (loss) per share except that the denominator is increased to
include the number of additional common shares that would have been outstanding
if the potential common shares had been issued and if the additional common
shares were dilutive. Diluted earnings (loss) per share has not been presented
since the effect of the assumed conversion of options and warrants to purchase
common shares would have an anti-dilutive effect. The only potential common
shares as of June 30, 2004 and 2003 were 3,000,000 (60,000 pre-split) and
125,000,000 (2,500,000 pre-split), respectively, stock options which have been
excluded from the computation of diluted net loss per share because the effect
would have been anti-dilutive.

NOTE 3 - MINING CLAIMS

On May 31, 2004, the Company entered into four agreements with a company wholly
owned by Mr. Carl Pescio ("Pescio"), a Director of the Company, to lease four
mining properties. Terms of the leases are as follows:

a) HMD Property

Schedule of lease payments:

Due Date Amount

June 5, 2004 $ 15,000
Feb 5, 2005 $ 22,500
Feb 5, 2006 $ 30,000
Feb 5, 2007 $ 37,500
Feb 5, 2008 $ 50,000
Feb 5, 2009 $ 62,500
Feb 5, 2010 $ 75,000
Feb 5, 2011 and each
year thereafter until
production commences $100,000

Upon completion of a bankable feasibility study and payments totaling
$105,000, the Company will own 100% of the property subject to a
continuing production royalty of 4%. Once the $105,000 is paid, all
subsequent payments will convert into advance minimum royalty payments
that are deductible against the 4% production royalty due. A 1% royalty
is also due Pescio on production on property consisting of a 2 mile
circumference surrounding the leased property.

The Company will pay additional land acquisition and filling fees on
the property. The Company is committed to drill 5,000 feet on the
property in each year commencing on or before September 1, 2006 and
continuing until the completion of the feasibility study. Excess
footage drilled in any year will be carried forward to subsequent
years. The Company has the option to pay Pescio $10 per foot committed
to and not drilled.

Prior to the completion of the feasibility study, the Company has the
right to purchase 2% of the 4% production royalty for $1,500,000 for
each percentage point. The Company also has the option to purchase 50%
of the 1% royalty for $500,000.

The Company shall be responsible for all environmental liabilities and
reclamation costs it creates and indemnifies Pescio against any such
claims or obligations. The Company can terminate the lease at any time
by giving 30 days notice provided that there are no outstanding
environmental or reclamation liabilities and that all lease and
production royalty payments are current.

The Company paid the first lease payment of $15,000 on June 1, 2004.

b) NT Green Property

Schedule of lease payments:

Due Date Amount

The Company paid the first lease payment of $15,000 on June 1, 2004.

c) Goodwin Hill Property

Schedule of lease payments:

Due Date Amount

The Company paid the first lease payment of $15,000 on June 1, 2004.

d) Wilson Peak Property

Schedule of lease payments:

Due Date Amount

The Company paid the first lease payment of $15,000 on June 1, 2004.

e) Other

During the quarter ended June 30, 2004, the Company incurred and
additional $21,283 for filing fees pertaining to the above claims.

NOTE 4 - NOTES PAYABLE, RELATED PARTIES

Notes payable, related parties consisted of $85,000 in notes payable to former
officers of the Company as follows: $15,000 originally due on October 18, 2003,
$25,000 is due on April 30, 2004; $30,000 is due on August 8, 2004; $7,500 is
due on November 13, 2004; and $7,500 is due on December 2, 2004. All the notes
bear interest at 10% per annum. On March 19, 2004, the Company paid $42,500 as
full settlement of these outstanding notes payable, related parties and accrued
interest. As a result of this transaction, the Company has recognized a gain on
extinguishments of debt of $49,309, which has been recorded directly to
stockholders' deficit since this settlement was with related parties.

NOTE 5 - NOTES PAYABLE

On March 5, 2004, the Company borrowed $650,000 from an unrelated third party.
Under the terms of the promissory note, interest accrues at an annual rate of 8%
per annum with principal and accrued interest due and payable on July 5, 2004.
Subsequent to June 30, 2004, the due date of the $650,000 note has been extended
to January 5, 2005. In addition, on April 27, 2004 the Company borrowed an
additional $225,000 from the same unrelated third party pursuant to a promissory
note, which bears interest at the rate of

NOTE 6 - STOCKHOLDERS' DEFICIT

In March 2004, Mr. Earl W. Abbott, Carl A. Pescio and Stanley B. Keith (the new
management of the Company) collectively purchased 4,200,000 shares (84,000
pre-split shares) of common stock from the Company for $10,000. The payment for
these shares was received in April 2004.

NOTE 7 - DISCONTINUED OPERATIONS

On March 19, 2004, Earl T. Shannon, Steven W. Hudson, and Scott W. Bodenweber
agreed that 255,510,000 (5,110,200 pre-split) of their shares of the Company
will be redeemed by the Company in exchange for all of the Company's shares of
Salty's Warehouse, Inc. As a result of this transaction, the operations of
Salty's has been shown as a discontinued operation in the accompanying financial
statements.

Salty's revenues were $1,415 and $3,337 the period starting January 1, 2004 to
March 19, 2004, and for the six months ended June 30, 2003, respectively. The
results of operations of Salty's have been reported separately as discontinued
operations.

Actual net income (loss) of Salty's during the period from January 1, 2004
through March 19, 2004 and the six months ended June 30, 2003 was $871 and
($5,142), respectively. The gain on the disposition of Salty's was $1,418, which
has been recorded directly to stockholders' deficit since this was a transaction
among related parties.

The following is a summary of the net assets of Salty's at March 19, 2004:

March 19, 2004
----------------
Assets:
Cash $ 6,068
----------------
Total assets $ 6,068
----------------

Liabilities:
Accounts payable $ 1,371
Accrued expenses 1,005
----------------
Total liabilities $ 2,376
----------------

Net assets of discontinued operations $ 3,692
================

The gain on the disposition of Salty's of $1,418 was calculated as the
difference in the value of the stock returned of $5,110 and the net assets of
Salty's of $3,692.

NOTE 8 - RELATED PARTY TRANSACTIONS

a) As discussed in Note 3, the Company entered into agreements with a
company owned by Mr. Carl Pescio, a Director of the Company, to acquire
mining claims.

b) During the quarter ended June 30, 2004, the Company incurred
consulting fees for services rendered by Mr. Earl Abbott, the Company's
President totaling $11,768 of which $4,708 related to mining
exploration and the remaining $7,060 related to was charged to general
administrative activities.

c) Also during the same quarter, the Company incurred consulting fees
for services rendered by a company wholly owned by Mr. Stanley Keith, a
Director of the Company, totaling $3,325 of which $2,450 related to
mining exploration and the remaining $875 related to was charged to
general administrative activities.

NOTE 9 - SUBSEQUENT EVENTS

On July 7, 2004, the Company changed it name to Tornado Gold International Corp.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

This following information specifies certain forward-looking statements of
management of the company. Forward-looking statements are statements that
estimate the happening of future events are not based on historical fact.
Forward-looking statements may be identified by the use of forward-looking
terminology, such as "may", "shall", "could", "expect", "estimate",
"anticipate", "predict", "probable", "possible", "should", "continue", or
similar terms, variations of those terms or the negative of those terms. The
forward-looking statements specified in the following information have been
compiled by our management on the basis of assumptions made by management and
considered by management to be reasonable. Our future operating results,
however, are impossible to predict and no representation, guaranty, or warranty
is to be inferred from those forward-looking statements.

The assumptions used for purposes of the forward-looking statements specified in
the following information represent estimates of future events and are subject
to uncertainty as to possible changes in economic, legislative, industry, and
other circumstances. As a result, the identification and interpretation of data
and other information and their use in developing and selecting assumptions from
and among reasonable alternatives require the exercise of judgment. To the
extent that the assumed events do not occur, the outcome may vary substantially
from anticipated or projected results, and, accordingly, no opinion is expressed
on the achievability of those forward-looking statements. No assurance can be
given that any of the assumptions relating to the forward-looking statements
specified in the following information are accurate, and we assume no obligation
to update any such forward-looking statements.

CRITICAL ACCOUNTING POLICY AND ESTIMATES.

Our Management's Discussion and Analysis of Financial Condition and Results of
Operations section discusses our financial statements, which have been prepared
in accordance with accounting principles generally accepted in the United States
of America. The preparation of these financial statements requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. On an on-going basis,
management evaluates its estimates and judgments, including those related to
revenue recognition, carrying amount of mining claims, and contingencies and
litigation. Management bases its estimates and judgments on historical
experience and on various other factors that are believed to be reasonable under
the circumstances, the results of which form the basis for making judgments
about the carrying value of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates under
different assumptions or conditions. The most significant accounting estimates
inherent in the preparation of our financial statements include estimates as to
the appropriate carrying value of certain assets and liabilities which are not
readily apparent from other sources, primarily the recoverability of the amount
reported for mining claims.

OVERVIEW

We were incorporated in Nevada on October 8, 2001 in order to serve as a holding
company for Salty's Warehouse, Inc. On March 19, 2004, pursuant to a Plan of
Reorganization and Acquisition, we acquired 255,510,000 (5,110,200 pre-split)
shares of our common stock from Earl T. Shannon and Steven W. Hudson in exchange
for 80 shares of common stock of Salty's Warehouse, Inc. As a result of this
transaction, we no longer own Salty's Warehouse, Inc. We have returned the
255,510,000 (5,110,200 pre-split) shares of our common stock.

We are undertaking a different business focus under our new management, which is
the identification, acquisition and resale of properties exhibiting the
potential for gold mining operations by others. As of May 31, 2004, we entered
into agreements to acquire interests in certain mining properties in Nevada
from Pescio Exploration, which is owned by Carl Pescio, one of our directors.

LIQUIDITY AND CAPITAL RESOURCES

We had cash and cash equivalents totaling $87,957 as of June 30, 2004 and
prepaid expenses and other current assets of $9,567 as of that date, making our
total current assets $97,524. We also had mining assets of $81,283, making our
total assets were $178,807 as of June 30, 2004. We believe that our available
cash and cash equivalents are not sufficient to pay our day-to-day expenditures.
However, our officers and directors have committed to pay our day-to-day
expenses so that we are able to continue operations until we are able to obtain
additional funding through other sources at levels to implement our business
plan.

As of June 30, 2004, we had current liabilities of $901,941 which were
represented by $7,116 in accounts payable, and $894,825 in notes payable. We had
commitments as of June 30, 2004 to make payments on our mining claims as
described in Note 3 of our financial statements.

On April 30, 2003, we borrowed a total of $25,000 from Earl T. Shannon and
Steven W. Hudson ($12,500 from each), pursuant to promissory notes requiring us
to repay the principal and interest accrued at the rate of 10% on April 30,
2004. On August 8, 2003, we borrowed a total of $30,000 from Earl T. Shannon and
Steven W. Hudson ($15,000 from each), pursuant to promissory notes requiring us
to repay the principal and interest accrued at the rate of 10% on August 8,
2004. On November 12, 2003, we borrowed $7,500 from Earl T. Shannon, one of our
officers and directors at the time, pursuant to a promissory note requiring us
to repay the principal and interest accrued at the rate of 10% on November 12,
2004. On December 1, 2003, we borrowed $7,500 from Steven W. Hudson, one of our
officers and directors at the time, pursuant to a promissory note requiring us
to repay the principal and interest accrued at the rate of 10% on December 1,
2004. All of these notes and accrued interest were settled on March 19, 2004 for
$42,500. The gain on the settlement of these notes and accrued interest of
$49,309 has been recorded directly to stockholders' deficit.

As of June 30, 2004 we had a net working capital deficit of $804,417 as compared
to $88,158 as of December 31, 2003. In March 2004, we borrowed $650,000 from an
unrelated third party pursuant to a promissory note due July 5, 2004 that bears
interest at 8% per annum. Subsequently, the due date was extended to January 5,
2005. In addition, on April 27, 2004 we borrowed an additional $225,000 from the
same unrelated third party pursuant to a promissory note, which bears interest
at the rate of 8% per annum and is due upon demand. On March 19, 2004, we made a
payment of $42,500 to certain note holders, who were our former officers, and
they agreed to forgive the remaining aggregate sum of $42,500, plus accrued
interest that was due to them. Also in March 2004, we redeemed 45,890,000
(917,800 pre-split) of the shares owned by our outgoing management in exchange
for $570,000.

Net cash used for operating activities was $104,616 for the six months ended
June 30, 2004 compared to $25,194 for the six months ended June 30, 2003. As of
June 30, 2004, we have cash of $87,957 and prepaid expenses and other current
assets of $9,567. Since we have no current source of revenue, our only source of
cash is from the sale of debt or equity instruments.

Due to numerous economic and competitive risks, any or all of which may have a
material adverse impact upon our operations, there can be no assurance that we
will be able to successfully generate significant revenues or achieve a level of
profits which will permit us to stay in business. In March 2004, we had a change
of management under which we are undertaking a different business focus, which
is the identification and acquisition of potential gold mining properties for
resale to others. However, due to the change in our business plan, we plan to
raise additional capital which we hope will be sufficient to fund all or our
general and administrative expenses for the next twelve months.

RESULTS OF OPERATIONS

Three Months Ended June 30, 2004 Compared to Three Months Ended June 30, 2003

NET REVENUE - We have realized no revenues for the three months ended June 30,
2004. We will be unable to generate revenues until we obtain the necessary
financing to develop these mining claims for possible production or resale and
to acquire other producing properties.

EXPENSES - For the three months ended June 30, 2004, our total operating
expenses were $63,309 of which $9,988 were specifically related to mining
exploration, and $16,121 in interest expense, making our net loss for the three
month period ending June 30, 2004 a total of $79,430. This is in comparison to
our operating expenses of $24,145 for the three months ended June 30, 2003,
income from operations of discontinued operations of $424, making our net loss
$23,721. Our expenses for the three months ended June 30, 2004 are higher than
those for the same period ended in 2003, which is due to the transition to our
new business plan. In March 2004, we underwent a change of management; our prior
management received our former operating subsidiary, and our new management is
in the process of acquiring interests in properties exhibiting the potential for
mining operations as part of our new business plan, which accounts for the
changes in our operating expenses. We anticipate that we will continue to incur
significant general and administrative expenses, but hope to generate income as
we acquire property interests, perform our geological analyses and transfer
those property interests to others.

Six Months Ended June 30, 2004 Compared to Six Months Ended June 30, 2003

NET REVENUE - We have realized no revenues for the three months ended June 30,
2004. We will be unable to generate revenues until we begin our contemplated
operations which the identification, acquisition and resale of properties
exhibiting the potential for gold mining operations by others.

EXPENSES - For the six months ended June 30, 2004, our total operating expenses
were $104,339, of which $9,988 were specifically related to mining exploration,
and $21,665 in interest expense, and $871 in income from operations of
discontinued operations, making our net loss for the six month period ending
June 30, 2004 a total of $125,133. This is in comparison to our operating
expenses of $48,872 for the six months ended June 30, 2003, loss from operations
of discontinued operations of $5,142, making our net loss $54,014. Our losses
and expenses in for the six months ended June 30, 2004 are higher than those for
the same period ended in 2003, which is due to the transition to our new
business plan as described herein. We anticipate that we will continue to incur
significant general and administrative expenses, but hope to generate income as
we acquire property interests, perform our geological analyses and transfer
those property interests to others.

Mining Claims. The properties we hold claims to are described below:

NTGREEN GOLD PROPERTY

The NTGreen gold property is located in central Lander County, Nevada about 30
miles southwest of the town of Battle Mountain. The property is connected with
Battle Mountain via an interstate highway, paved roads, good gravel roads, and
finally a system of unimproved, dirt roads. We hold a total of 12 unpatented
lode mining claims in the form of an option agreement with the claimant, Carl
Pescio, one of our directors. All of the claims are recorded with the Lander
County Recorder and filed with the Bureau of Land Management. We must make
annual rental payments of $140 per claim to the BLM and Lander County before
September 1 of each year to keep the claims current. We must also make
escalating advance royalty payments to Mr. Pescio to maintain the option
agreement, beginning with $22,500 on or before February 5, 2005 and rising to
$100,000 by February 5, 2011. We must perform a work commitment of 5,000 feet of
drilling by September 1, 2006 followed by an annual work commitment of 5,000
feet of drilling until the completion of a bankable feasibility. Excess footage
may be carried over from year to year and an option to pay $10 per foot not
drilled may be exercised. The property is subject to a 4% net smelter royalty
that may be bought down to a 2% net smelter royalty by the payment of $1,500,000
per one percent.

Upper Paleozoic sedimentary rocks are exposed in an erosional window beneath
Tertiary volcanic rocks. The Paleozoic rocks exhibit the characteristics of
gold-bearing rocks in the nearby Cortez mining district where Placer Dome Mining
Company is mining several large gold ore deposits between 4 and 8 miles from the
NTGreen property. One of Placer Dome's major mines, the Pipeline Mine, is
traversed by a fault structure that continues onto the NTGreen property. Placer
Dome reported the area that includes the NTGreen property and their own active
mines and exploration properties contains a "gold endowment of at least 34
million ounces". Placer Dome is a former operator of the NTGreen property, but
no data from their exploration work is in our hands. Low levels of gold as well
as associated trace elements are documented from the property by limited surface
sampling done by Mr. Pescio.

The NTGreen property is undeveloped and no reserves or resources are known. No
mining or other mineral development is known to have been performed on the
property. Carl Pescio did only limited work on the property and no work has been
done by us. Indications are that an extensive gold system is present on the
property that may have significant economic potential. We plan to conduct
exploration work in the form of geological, geochemical, and geophysical studies
to develop drill targets. Drilling will investigate these targets. Discovery of
potentially economic gold values we believe will be followed by development of a
reserve and, eventually, mining.

GOODWIN HILL GOLD PROPERTY

The Goodwin Hill gold property is located in east central Lander County, Nevada
about 60 miles south of the town of Battle Mountain and about 20 miles northeast
of the town of Austin. A good gravel county road, connecting to Battle Mountain
and Austin, traverses the property. We hold a total of 92 unpatented lode mining
claims in the form of an option agreement with the claimant, Carl Pescio. All of
the claims are recorded with the Lander County Recorder and filed with the
Bureau of Land Management. We must make annual rental payments of $140 per claim
to the BLM and Lander County before September 1 of each year to keep the claims
current. We must also make escalating advance royalty payments to Mr. Pescio to
maintain the option agreement, beginning with $22,500 on or before February 5,
2005 and rising to $100,000 by February 5, 2011. We must perform a work
commitment of 5,000 feet of drilling by September 1, 2006 followed by an annual
work commitment of 5,000 feet of drilling until the completion of a bankable
feasibility. Excess footage may be carried over from year to year and an option
to pay $10 per foot not drilled may be exercised. The property is subject to a
4% net smelter royalty that may be bought down to a 2% NSR net smelter royalty
by the payment of $1,500,000 per one percent.

The property is centered on a small hill of Paleozoic limestone surrounded by
alluvium recent gravels that obscure the basement rocks. Geophysical studies by
Kennecott Mining Company, the former operator, have reportedly indicated that
the basement rocks are at a shallow depth beneath the gravels in some areas on
the property. The limestone outcrop is along the northeast projection of a
dome-like feature that exposes Paleozoic rocks of the lower plate of the Roberts
Mountains Thrust Fault. These rocks are known to be the host rocks for very
large gold deposits 25 to 45 miles to northeast in the Carlin and Cortez mining
districts. Igneous rocks that are believed to by the source of gold intrude an
altered siltstone that is exposed just to the south of the property. Work by the
previous operator, Kennecott has reportedly encountered low level gold and
elevated levels of arsenic and other trace elements known to be associated with
gold. Shallow drilling in the gravels over the geophysically determined shallow
basement rocks reportedly encountered low level gold and associated elements in
the basement rocks.

The property is undeveloped and no reserves or resources are known. No mining or
other mineral development is known to have been performed on the property. No
exploration work has been done to date by the Carl Pescio or by Tornado Gold
International. However, an extensive gold system is reportedly indicated by the
work of Kennecott that may have significant economic potential. We plan to
conduct exploration work in the form of geological, geochemical, and geophysical
studies are planned to develop drill targets. Drilling will investigate these
targets. If we discover potentially economic gold values we believe the property
will be ready for development of a reserve and, eventually, mining.

WILSON PEAK GOLD PROPERTY

The Wilson Peak property is located in Elko County, Nevada about 70 miles north
of the town of Elko and about 20 miles north of the town of Tuscarora. Paved
highways connect to a good gravel county road that traverses the property. We
hold a total of 61 unpatented lode mining claims in the form of an option
agreement with the claimant, Carl Pescio, one of our directors. All of the
claims are recorded with the Lander County Recorder and filed with the Bureau of
Land Management. We must make annual rental payments of $140 per claim to the
BLM and Lander County before September 1 of each year to keep the claims
current. We must also make escalating advance royalty payments to Mr. Pescio to
maintain the option agreement, beginning with $22,500 on or before February 5,
2005 and rising to $100,000 by February 5, 2011. We must perform a work
commitment of 5,000 feet of drilling by September 1, 2006 followed by an annual
work commitment of 5,000 feet of drilling until the completion of a bankable
feasibility. Excess footage may be carried over from year to year and an option
to pay $10 per foot not drilled may be exercised. The property is subject to a
4% net smelter royalty that may be bought down to a 2% net smelter royalty by
the payment of $1,500,000 per one percent.

The property is on the west flank of the Bull Run Mountains and covers an area
of Tertiary volcanic rocks containing elevated gold values extending for a
length of at least 2 miles. This area has been investigated by previous
operators, including Newmont Mining Company, Teck Resources, Euro-Nevada Mining
Corporation, and Freeport-McMoRan Gold Company. These previous operators
performed surface sampling and drilling. In addition to elevated gold values,
associated trace elements such as arsenic and mercury are present in elevated
amounts.

The Wilson Peak property is undeveloped and no reserves or resources are known.
No mining or other mineral development is known to have been performed on the
property. Carl Pescio did no work on the property and no work has been done by
us. Indications are that an extensive gold system is present on the property
that may have significant economic potential. We plan to conduct exploration
work in the form of geological, geochemical, and geophysical studies to develop
drill targets. Drilling will investigate these target. If we discover
potentially economic gold values on the property, we believe the property will
then be ready for the development of a reserve and, eventually, mining.

HMD GOLD PROPERTY

The HMD gold property is located in Eureka County, Nevada, about 30 miles
southwest of the town of Carlin. An interstate highway, paved roads and good
gravel roads connect the property with Carlin. We hold a total of 32 unpatented
lode mining claims in the form of an option agreement with the claimant, Carl
Pescio, one of our directors. All of the claims are recorded with the Lander
County Recorder and filed with the Bureau of Land Management. We must make
annual rental payments of $140 per claim to the BLM and Lander County before
September 1 of each year to keep the claims current. We must also make
escalating advance royalty payments to Mr. Pescio to maintain the option
agreement, beginning with $22,500 on or before February 5, 2005 and rising to
$100,000 by February 5, 2011. We must perform a work commitment of 5,000 feet of
drilling by September 1, 2006 followed by an annual work commitment of 5,000
feet of drilling until the completion of a bankable feasibility. Excess footage
may be carried over from year to year and an option to pay $10 per foot not
drilled may be exercised. The property is subject to a 4% net smelter royalty
that may be bought down to a 2% net smelter royalty by the payment of $1,500,000
per one percent.

The HMD property is within a geologic feature called the Northern Nevada Rift,
that also contains such active projects as the operating Ken Snyder Mine at
Midas and the Ivanhoe Project being developed by Hecla Mining Company. Recently
mined deposits along the Northern Nevada Rift include the Mule Canyon Mine,
about 1 million ounces of gold pre-mining resource, 20 miles to the northwest
and the Buckhorn Mine, about 500,000 ounces of gold pre-mining resource, 10
miles to the southeast. Near the range front of the Cortez Range, the property
covers a distinct vein of quartz along a fault structure. The structure can be
followed for a length of at least one mile and is probably more extensive under
gravel cover. The vein is more than 50 feet thick in places along the structure.
Shallow drilling by previous operators, including Homestake Mining Company,
reportedly encountered significant intervals of subeconomic gold and surface
samples reportedly contain as much as 0.1 ounces gold per ton.

The property is undeveloped and no reserves or resources are known. No mining or
other mineral development is known to have been performed on the property. No
exploration work has been done to date by Carl Pescio or by Tornado Gold
International. However, an extensive gold system is reportedly indicated by the
work done by Homestake that may have significant economic potential. We plan to
conduct exploration work in the form of geological, geochemical, and geophysical
studies to develop drill targets. Drilling will investigate these targets. We
hope to discover potentially economic gold values, which we believe will be
followed by development of a reserve and, eventually, mining.

OUR PLAN OF OPERATION FOR THE NEXT TWELVE MONTHS

As a result of the disposition of Salty's on March 19, 2004, we have no ongoing
revenue-generating operations.

We are now undertaking a different business focus under our new management,
which is the identification and acquisition of properties exhibiting the
potential for gold mining operations by others. During the quarter ended June
30, 2004, we have acquired $81,283 in mining assets.

On March 5, 2004 we borrowed $650,000 from an unrelated third party due on July
5, 2004 at an annual interest rate of 8%. Subsequent to June 30, 2004, the due
date of this $650,000 note has been extended to January 5, 2005. On April 27,
2004, we borrowed $225,000 from the same unrelated third party due and payable
on demand; this note also accrues interest at an annual rate of 8%.

We have cash of $87,957 as of June 30, 2004. We believe we do not have adequate
funds to satisfy our working capital requirements for the next twelve months.
Our forecast for the period for which our financial resources will be adequate
to support our operations involves risks and uncertainties and actual results
could fail as a result of a number of factors. We may need to raise additional
capital to expand our operations. In the event that we experience a shortfall in
our capital, we intend to pursue capital through public or private financing as
well as borrowings and other sources, such as our officers and directors. We
cannot guaranty that additional funding will be available on favorable terms, if
at all. If adequate funds are not available, then our ability to expand our
operations may be significantly hindered. If adequate funds are not available,
we believe that our officers and directors will contribute funds to pay for our
expenses to achieve our objectives over the next twelve months. Our belief that
our officers and directors will pay our expenses is based on the fact they own
approximately 70% of our outstanding common stock. We believe that our officers
and directors will continue to pay our expenses as long as they maintain their
ownership of our common stock. Therefore, we have not contemplated any plan of
liquidation in the event that we do not generate revenues.

We are not currently conducting any research and development activities, other
than investigating properties to acquire. We do not anticipate conducting such
activities in the near future. In the event that we expand our customer base,
then we may need to hire additional employees or independent contractors as well
as purchase or lease additional equipment.

OFF-BALANCE SHEET ARRANGEMENTS

We are not currently conducting any research and development activities, other
than investigating properties to acquire. In the event that we expand our
operations, then we may need to hire additional employees or independent
contractors as well as purchase or lease equipment.

ITEM 3. CONTROLS AND PROCEDURES

As required by SEC rules, we have evaluated the effectiveness of the design and
operation of our disclosure controls and procedures at the end of the period
covered by this report. This evaluation was carried out under the supervision
and with the participation of our management, including our principal executive
officer and principal financial officer. Based on this evaluation, these
officers have concluded that the design and operation of our disclosure controls
and procedures are effective. There were no changes in our internal control over
financial reporting or in other factors that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.

Our disclosure controls and procedures are designed to ensure that information
required to be disclosed by us in the reports that we file or submit under the
Exchange Act is recorded, processed, summarized and reported, within the time
periods specified in the SEC's rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed by us in the reports that we
file under the Exchange Act is accumulated and communicated to our management,
including principal executive officer and principal financial officer, as
appropriate, to allow timely decisions regarding required disclosure.

Part II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None

ITEM 2. CHANGES IN SECURITIES AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY
SECURITIES

On April 13, 2004, our Board of Directors approved a 50 for 1 stock split of our
issued and outstanding common stock which was effectuated through a dividend of
49 shares for each share of common stock outstanding as of the record date. Our
intent of the stock split is to increase the marketability and liquidity of our
common stock and hopefully increase the value of our common stock. The dividend
was payable on April 27, 2004 for shareholders of record on April 26, 2004.
After the split, the total number of our issued and outstanding shares of common
stock was 6,600,000 shares. Our common stock will continue to be $0.001 par
value. Fractional shares were rounded upward.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

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

On May 12, 2004, shareholders holding a majority of our outstanding common stock
approved by written consent in lieu of a meeting on May 12, 2004, our change in
name from Nucotec, Inc. to Tornado Gold International Corp., in accordance with
the relevant sections of the Nevada Revised Statutes. The name change became
effective on July 7, 2004 with the filing of a Certificate of Amendment to
Articles of Incorporation with the Nevada Secretary of State. Our purpose in
changing our name was to reflect a change in our business focus.

ITEM 5. OTHER INFORMATION

None during the reporting period covered by this report. However, on July 13,
2004, we filed a Current Report on Form 8-K announcing that on July 7, 2004, we
changed our name from Nucotec, Inc. to Tornado Gold International Corp., as
described above.

On July 23, 2004, we filed a preliminary Information Statement on Schedule 14C
regarding our upcoming increase in authorized common stock from ten million
(10,000,000) shares to one hundred million (10,000,000) shares. The increase in
authorized common stock was approved on July 20, 2004, by unanimous approval of
our Board of Directors. In addition, our officers and directors who hold a
majority of our issued and outstanding common stock, approved the increase in
authorized common stock by written consent in lieu of a meeting on July 20,
2004, in accordance with the relevant sections of Nevada Revised Statutes. The
increase in authorized common stock will not be effective until we amend our
Articles of Incorporation by filing a Certificate of Amendment to our Articles
of Incorporation with the Nevada Secretary of State. We intend to file the
Certificate of Amendment twenty days after a definitive Information Statement is
first mailed to our shareholders. We hope that such a change will increase the
total value of the corporation to our investors and better position us to take
advantage possible future financings and acquisition opportunities, and other
corporate purposes as the board of directors determines in its discretion to be
in the best interest of the corporation, and which may include future stock
splits, stock dividends or other distributions, future financings, acquisitions
and stock options and other equity benefits under employee benefit plans. On
August 2, our definitive Information Statement on Schedule 14C was filed.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

REGULATION EXHIBIT
S-B NUMBER

3.1 Articles of Incorporation (1)
3.2 Bylaws (1)
10.1 Plan of Reorganization and Acquisition, dated May 10, 2002 (1)
10.2 Yahoo! Store Merchant Service Agreement (1)
10.3 Promissory Note for Steven W. Hudson, executed October 18, 2002 (1)
10.4 Promissory Note for Earl T. Shannon, executed October 18, 2002 (1)
10.5 Commission Agreement with International Yacht Collection, dated
May 11, 2000 (1)
10.6 Promissory Note for Steven W. Hudson, executed October 18, 2002 (1)
10.7 Promissory Note for Earl T. Shannon, executed October 18, 2002 (1)
31 Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
and Chief Financial Officer of the Company
32 Section 906 Certification by Chief Executive Officer and Chief
Financial Officer

(1) Incorporated by reference from our Registration Statement on Form SB-2,
filed on September 11, 2002, as amended (Registration No. 333-99443)

(b) Reports on Form 8-K

(1) On April 14, 2004, we filed a Current Report on Form 8-K announcing that on
April 1, 2004, Earl W. Abbott, Carl A. Pescio and Stanley B. Keith have
taken their positions on our Board of Directors, the date that was ten days
after the Schedule 14f-1 was mailed to our shareholders. Mr. Abbott is also
our president, chief financial officer and secretary.

(2) On April 27, 2004, we filed a Current Report on Form 8-K announcing that on
April 13, 2004, our Board of Directors approved a 50 for 1 stock split of
our issued and outstanding common stock which was effectuated through a
dividend of 49 shares for each share of common stock outstanding as of the
record date. Our intent of the stock split is to increase the marketability
and liquidity of our common stock and hopefully increase the value of our
common stock. The dividend was payable on April 27, 2004 for shareholders
of record on April 26, 2004. After the split, the total number of our
issued and outstanding shares of common stock totaled 6,600,000 shares. Our
common stock will continue to be $0.001 par value. Fractional shares were
rounded upward.

(3) On June 1, 2004, we filed a Current report on Form 8-K announcing that
effective May 27, 2004, we dismissed Stonefield Josephson, Inc. which
audited the our financial statements for the fiscal years ended December
31, 2003 and 2002, and engaged Jonathon P. Reuben, CPA to act as our
independent chartered accountants. On June 4, 2004, we amended that report
to include the exhibit required by Item 4.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

TORNADO GOLD INTERNATIONAL CORP.

August 13, 2004 By: /s/ Earl W. Abbott
-----------------------------------------
Earl W. Abbott
President, Chief Executive Officer, Chief Financial
Officer, Treasurer and Secretary