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EX-99.3 - 302 CFO CERTIFICATION - GOLD LAKES CORP.ex993_302cfocertification.htm
EX-99.4 - 906 CFO CERTIFICATION - GOLD LAKES CORP.ex994_906cfocertification.htm
EX-99.1 - 302 CEO CERTIFICATION - GOLD LAKES CORP.ex99_1302ceocertification.htm
EX-99.2 - 906 CEO CERTIFICATION - GOLD LAKES CORP.ex99_2906ceocertification.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K

 

(x) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES ACT OF 1934

 

For the fiscal year ended July 31, 2013

 

( ) TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

  For the transaction period from August 1, 2012 to July 31, 2013

 

  Commission File Number:   333-145879

 

SIGA RESOURCES, INC.
(Exact name of registrant as specified in charter)

 

Nevada 74-3207964
State or other jurisdiction of incorporation or organization (I.R.S. Employee I.D. No.)

 

123 West Nye, Carson City, Nevada 89706
(Address of principal executive offices) (Zip Code)

 

 Registrant’s telephone number   (281) 256-5417
 
Securities registered pursuant to Section 12(b) of the Act:

 

Title of each share Name of each exchange on which registered
None             None                                 

 

Securities registered pursuant to Section 12 (g) of the Act:  
   
None                         
(Title of Class)  

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act   [    ]  Yes   [X]  No

 

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

 

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 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.  [X]  Yes   [    ]  No

 

 

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§229.405 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  [    ] No

 

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 information statements incorporated by reference in Part III of this Form 10-K or any amendments to this Form 10-K   [    ]

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See definition of “large accelerated filer”, “accelerated filer” and “small reporting company” Rule 12b-2 of the Exchange Act.

 

Large accelerated filer   [   ]                                                                                         Accelerated filer                  [   ]

 

Non-accelerated filer     [   ]  (Do not check if a small reporting company)               Small reporting company   [X]

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)    Yes [  ]   No   [X]

 

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recent completed second fiscal quarter.

 

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

 

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date:

 

November 21, 2013: 45,105,000 common shares

 

DOCUMENTS INCORPORATED BY REFERENCE

 

Listed hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) Any annual report to security holders; (2) Any proxy or information statement; (3) Any prospectus filed pursuant to Rule 424 (b) or (c) under the Securities Act of 1933.   The listed documents should be clearly described for identification purposes.

 

 

 

 

 

 

 

 

 

 

 

 

 

Contents   4
PART 1   4
ITEM 1. BUSINESS   4
ITEM 1A. RISK FACTORS    5
ITEM 1B. UNRESOLVED STAFF COMMENTS    9
ITEM 2. PROPERTIES    9
ITEM 3. LEGAL PROCEEDINGS    13
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS    13
PART II    14
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASE OF EQUITY SECURITIES    14
ITEM 6. SELECTED FINANCIAL INFORMATION    14
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS    15
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK    19
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA    19
ITEM 9. CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE    19
ITEM 9A. CONTROLS AND PROCEDURES    19
ITEM 9A. (T) CONTROLS AND PROCEDURES    21
ITEM 9 B. OTHER INFORMATION    21
PART 111    21
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE    21
ITEM 11. EXECUTIVE COMPENSATION    23
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS    24
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE    26
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES    27
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES    28
SIGNATURES    30

 

 

 

PART 1

ITEM 1. BUSINESS

 

History and Organization

 

Siga Resources, Inc.(“Siga”, the “company” or “we”) was incorporated in the State of Nevada on January 18, 2007, and established a fiscal year end of July 31.  We do not have any subsidiaries or affiliated companies. We have one joint venture project on the Lucky Thirteen Claim.

 

We are a start-up; Exploration Stage Company engaged in the search for gold and related minerals and have not generated any operating revenues since inception.  We have not made our payments to secure our one claim called the Lucky 13 Claim located in Hope, British Columbia, where we have completed exploration and testing work to see whether or not we have an economic resource. We have an oral agreement extending our rights to this claim subject to the Company raising funding to make our payments. Since we are in a position of default the owner of the Lucky 13 Claim can cancel our claim and sell to another third party or develop the Lucky 13 Claim on his own without notification.

 

We have incurred losses since inception and we must raise additional capital to fund our operations.   There is no assurance we will be able to raise this capital or that if we raise the capital that the oral agreement to extend the payment terms will be honored.

 

There is no assurance that a commercially viable mineral deposit, a reserve, exists on our mineral claim or can be shown to exist until sufficient and appropriate exploration is done and a comprehensive evaluation of such work concludes economic and legal feasibility.   Such work could take many years of exploration and would require expenditure of very substantial amounts of capital, capital we do not currently have and may never be able to raise.

 

Our initial holding was a 100% interest in the Valolo Gold Claim located in the Republic of Fiji. Siga acquired the Valolo Claim for the sum of $5,000.

 

On October 14, 2010, we entered into an earn-in agreement with Touchstone Ventures Inc., a British Columbia Company, whereby it can earn an 80% interest in Touchstone Ventures Inc.’s wholly owned subsidiary company, Touchstone Precious Metals Inc., a British Columbia Company (“Touchstone”), by investing ten million Canadian dollars (CAD$10,000,000) for acquisition and development costs. Touchstone was unable to meet its obligations under the agreement due to the death of the owner and the agreement terminated.

 

Siga entered into a purchase agreement with Peter Osha on January 15, 2011 to earn a 100% interest in a placer gold project near Hope, British Columbia, Canada. Our investment is hereinafter referred to as the Lucky Thirteen Claim. Siga entered into a 50/50 joint venture on the lucky Thirteen Claim with Big Rock Resources Inc. on May 2011 and Siga and commenced evaluating the Lucky Thirteen Property as the operator of the Joint Venture until February 2012 when Big Rock Resources Inc. announced that it would be unable to complete the promised financing. We have been able to establish a verbal agreement with Peter Osha to extend.

 

As of the date of this Form 10K, we have abandoned the Valolo Claim nor do we intend to complete any exploration activities in the near future. We have spent through the joint venture approximately $400,000 on a work program on the Luck Thirteen Claim.

 

We have no full time employees and our management devotes a percentage of their time to the affairs of our Company. Our website is www.sigaresourcesinc.com

 

Our administrative office is located at PO Box 541182, Houston Texas 77254-1182.   Our telephone number is (281) 256-5417.

 

Presently our outstanding share capital is 45,105,000 common shares.   We have no other type of shares either authorized or issued.

 

 

 

Our previous auditors have expressed substantial doubt about our ability to continue as a going concern in their audit report attached to the financial statements dated July 31, 2012.  We have $nil cash as at July 31, 2013 and have liabilities of $183,830.  Since our inception we have incurred accumulated losses of $731,780.  We anticipate minimum operating expenses for the next twelve months of $258,875(refer to page 20).  It is extremely unlikely we will earn any revenue for a minimum of 5 years.  We do not have any employees either full or part time.

 

Siga is responsible for filing various forms with the United States Securities and Exchange Commission (the “SEC”) such as Form 10-K and Form 10-Qs.

 

The shareholders may read and copy any material filed by Siga with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, DC, 20549.   The shareholders may obtain information on the operations of the Public Reference Room by calling the SEC at 1-800-SEC-0330.   The SEC maintains an Internet site that contains reports, proxy and information statements, and other information which Siga has filed electronically with the SEC by assessing the website using the following address:   http://www.sec.gov .   

  

Planned Business

 

The following discussion should be read in conjunction with the information contained in the financial statements of Siga and the notes, which forms an integral part of the financial statements, which are attached hereto.

 

The financial statements mentioned above have been prepared in conformity with accounting principles generally accepted in the United States of America and are stated in United States dollars.

 

This Form 10-K also contains forward-looking statements that involve risks and uncertainties.  If any of the events or circumstances described in the following risks actually occurs, our business, financial condition, or results of operations could be materially adversely affected and the price of our common stock could decline on the OTC Bulletin Board (the “OTCBB”).

 

ITEM 1A. RISK FACTORS

 

Risks Associated with our Company:

 

1. Because our auditors have issued a going concern opinion and because our officers and directors will not loan any money to us, we may not be able to achieve our objectives and may have to suspend or cease exploration activity.

 

Our auditors' report on our 2012 financial statements expressed an opinion that substantial doubt exists as to whether we can continue as an ongoing business for the next twelve months. Because our officers and directors are unwilling to commit to loan or advance capital to us, we believe that if we do not raise additional capital through the issuance of treasury shares, we will be unable to conduct exploration activity and may have to cease operations and go out of business.

 

2. Because the probability of an individual prospect ever having reserves is extremely remote, in all probability our property does not contain any reserves, and any funds spent on exploration will be lost.

 

Because the probability of an individual prospect ever having reserves is extremely remote, in all probability our properties, the Lucky 13 Claim, does not contain any reserves, and any funds spent on exploration will be lost. If we cannot raise further funds as a result, we may have to suspend or cease operations entirely which would result in the loss of our shareholders’ investment. Similarly, our new Lucky Thirteen Claim calls for us to raise $10 million. If we do not raise these funds we will potentially lose our investment in this agreement, furthermore, the underlying claim may not contain any reserves, and any funds spent on exploration will be lost.

 

 

 

 

3.  We lack an operating history and have losses which we expect to continue into the future. As a result, we may have to suspend or cease exploration activity or cease operations.

 

We were incorporated in 2007, have not yet conducted any exploration activities and have not generated any revenues. We have an insufficient exploration history upon which to properly evaluate the likelihood of our future success or failure.  Our net loss from inception to July 31, 2013, the date of our most recent audited financial statements, is $731,780. Our ability to achieve and maintain profitability and positive cash flow in the future is dependent upon

 

  * Our ability to locate a profitable mineral property
  * Our ability to locate an economic ore reserve
  * Our ability to generate revenues
  * Our ability to reduce exploration costs.

 

Based upon current plans, we expect to incur operating losses in future periods. This will happen because there are expenses associated with the research and exploration of our mineral property. We cannot guarantee we will be successful in generating revenues in the future. Failure to generate revenues will cause us to go out of business.

 

4.  We have no known ore reserves. Without ore reserves we cannot generate income and if we cannot generate income we will have to cease exploration activity which will result in the loss of our shareholders’ investment.

 

We have no known ore reserves.  Even if we find gold mineralization we cannot guarantee that any gold mineralization   will be of sufficient quantity so as to warrant recovery. Additionally, even if we find gold mineralization   in sufficient quantity to warrant recovery, we cannot guarantee that the ore will be recoverable. Finally, even if any gold mineralization is recoverable, we cannot guarantee that this can be done at a profit. Failure to locate gold deposits in economically recoverable quantities will mean we cannot generate income.  If we cannot generate income we will have to cease exploration activity, which will result in the loss of our shareholders’ investment.

 

5.  If we don't raise enough money for exploration, we will have to delay exploration or go out of business, which will result in the loss of our shareholders’ investment.

 

We estimate that, with funding committed by our management combined, we do not have sufficient cash to continue operations for twelve months even if we only carry out Phase I of our planned exploration activity on the Lucky Thirteen Claim.  We are in the pre-exploration stage.  We need to raise additional capital to undertake Phase I.  We may not be able to raise additional funds.  If that occurs we will have to delay exploration or cease our exploration activity and go out of business which will result in the loss of our shareholders’ entire investment in our Company.

 

6.  Because we are small and do not have much capital, we must limit our exploration and as a result may not find an ore body. Without an ore body, we cannot generate revenues and our shareholders will lose their investment.

 

Any potential development of and production from our exploration property depends upon the results of exploration programs and/or feasibility studies and the recommendations of duly qualified engineers and geologists. Because we are small and do not have much capital, we must limit our exploration activity unless and until we raise additional capital.  Any decision to expand our operations on our exploration property will involve the consideration and evaluation of several significant factors including, but not limited to:

 

 

 

Costs of bringing the property into production including exploration preparation of production feasibility studies, and construction of production facilities;
Availability and cost of financing;
Ongoing costs of production;
Market prices for the minerals to be produced;
Environmental compliance regulations and restraints; and
Political climate and/or governmental regulations and controls.

 

Such programs will require very substantial additional funds. Because we may have to limit our exploration, we may not find an ore body, even though our property may contain mineralized material. Without an ore body, we cannot generate revenues and our shareholders will lose their entire investment in our Company.

 

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 exploration activity.

 

Competition and unforeseen limited sources of supplies in the industry could result in occasional spot shortages of supplies and certain equipment such as bulldozers and excavators that we might need to conduct exploration. We have not attempted to locate or negotiate with any suppliers of products, equipment or materials. We will attempt to locate products, equipment and materials as and when we are able to raise the requisite capital.  If we cannot find the products and equipment we need, we will have to suspend our exploration plans until we do find the products and equipment we need.

 

7. Because our officers and directors have other outside business activities and may not be in a position to devote all of their time to our exploration activity, our exploration activity may be sporadic which may result in periodic interruptions or suspensions of exploration .

 

Our one officer, our President currently devotes 90% of his available working time, approximately 50 hours per month, to our business.   Because our officers and directors have other outside business activities and may not be in a position to devote all of their time to our exploration activity, our exploration activity may be sporadic or may be periodically interrupted or suspended.   Such suspensions or interruptions may cause us to cease operations altogether and go out of business.

 

8.  Because mineral exploration and development activities are inherently risky, we may be exposed to environmental liabilities. If such an event were to occur it may result in a loss of your investment.

 

The business of mineral exploration and extraction involves a high degree of risk. Few properties that are explored are ultimately developed into production. At present, the Lucky Thirteen Claim, does not have a known body of commercial ore. Unusual or unexpected formations, formation pressures, fires, power outages, labor disruptions, flooding, explosions, cave-ins, landslides and the inability to obtain suitable or adequate machinery, equipment or labor are other risks involved in extraction operations and the conduct of exploration programs. We do not carry liability insurance with respect to our mineral exploration operations and we may become subject to liability for damage to life and property, environmental damage, cave-ins or hazards. Previous mining exploration activities may have caused environmental damage to the Lucky Thirteen Claim. It may be difficult or impossible to assess the extent to which such damage was caused by us or by the activities of previous operators, in which case, any indemnities and exemptions from liability may be ineffective. If the Lucky Thirteen Claim is found to have commercial quantities of ore, we would be subject to additional risks respecting any development and production activities. Most exploration projects do not result in the discovery of commercially mineable deposits of ore.  

 

9.  No matter how much money is spent on our Mineral Claim, the risk is that we might never identify a commercially viable ore reserve.

 

No matter how much money is spent over the years on the Lucky Thirteen Claim, we might never be able to find a commercially viable ore reserve.  Over the coming years, we could spend a great deal of money on the Lucky

 

 

Thirteen Claim without finding anything of value.  There is a high probability the Lucky Thirteen Claim do not contain any reserves so any funds spent on exploration will probably be lost.

 

10. Even with positive results during exploration, the Mining Claims might never be put into commercial production due to inadequate tonnage, low metal prices or high extraction costs.

 

We might be successful, during future exploration programs, in identifying a source of minerals of good grade but not in the quantity, the tonnage, required to make commercial production feasible.  If the cost of extracting any minerals that might be found on the Lucky Thirteen Claim is in excess of the selling price of such minerals, we would not be able to develop the Lucky Thirteen Claim.  Accordingly even if ore reserves were found on the Lucky Thirteen Claim, without sufficient tonnage we would still not be able to economically extract the minerals from the Lucky Thirteen Claim in which case we would have to abandon the Lucky Thirteen Claim and seek another mineral property to develop, or cease operations altogether.

 

11. We only have a verbal commitment to extend the payment terms to Peter Osha, the owner of the mineral rights of the Lucky 13 Claim.

 

We are in default by $500,000 in our payments to Peter Osha. As we are in default with our agreement with Peter Osha, Mr. Osha can cancel his agreement with us at any time.

 

12. Although Peter Osha has the mineral rights of the Lucky 13 Claim, another party owns the property on which the Lucky 13 Claim is located. There is no agreement between Peter Osha and the owner of the property. Consequently, even if minerals are discovered on the Lucky 13 Claim, we may not be able to access and develop the minerals.

 

Risks Associated with owning our Shares:

 

13. We anticipate the need to sell additional treasury shares in the future meaning that there will be a dilution to our existing shareholders resulting in their percentage ownership in the Company being reduced accordingly.

 

We expect that the only way we will be able to acquire additional funds is through the sale of our common stock.  This will result in a dilution effect to our shareholders whereby their percentage ownership interest in the Company is reduced.  The magnitude of this dilution effect will be determined by the number of shares we will have to issue in the future to obtain the funds required.

 

14 We have settled liabilities of the Company by entering into Convertible Debentures and Settlement Agreements which have a significant dilution effect on our shareholders.

 

We have entered into Convertible Debentures and Settlement Agreements with our creditors which could result in the issuance of 231,600,000 additional shares.  This will result in a dilution effect to our shareholders whereby their percentage ownership interest in the Company is reduced.  Further agreements could be entered into.

 

13.  Because our securities are subject to penny stock rules, you may have difficulty reselling your shares.

 

Our shares are "penny stocks" and are covered by Section 15(g) of the Securities Exchange Act of 1934 which imposes additional sales practice requirements on broker/dealers who sell the Company's securities including the delivery of a standardized disclosure document; disclosure and confirmation of quotation prices; disclosure of compensation the broker/dealer receives; and, furnishing monthly account statements. For sales of our securities, the

broker/dealer must make a special suitability determination and receive from its customer a written agreement prior to making a sale. The imposition of the foregoing additional sales practices could adversely affect a shareholder's ability to dispose of his stock.

 

 

 

Forward Looking Statements

 

In addition to the other information contained in this Form 10-K, it contains forward-looking statements which involve risk and uncertainties.  When used in this Form 10-K, the words “may”, “will”, “expect”, “anticipate”, “continue”, “estimate”, “project”, “intend”, “believe” and similar expressions are intended to identify forward-looking statements regarding events, conditions and financial trends that may affect our future plan of operations, business strategy, operating results and financial position.  Readers are cautioned that any forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties and that actual result could differ materially from the results expressed in or implied by these forward-looking statements as a result of various factors, many of which are beyond our control.  Any reader should review in detail this entire Form 10-K including financial statements, attachments and risk factors before considering an investment.

 

ITEM 1B. UNRESOLVED STAFF COMMENTS

 

There are no unresolved staff comments outstanding at the present time.

 

ITEM 2. PROPERTIES

 

Our mineral properties are:

 

The Lucky 13 Claim

 

On January 16, 2011, the Company entered into a Property Acquisition and Royalty Agreement with Peter Osha whereby the Company acquired Peter Osha’s Lucky Thirteen Placer Mining Property near Hope, British Columbia, Canada in exchange for $1.5 million Canadian plus a 3% net smelter royalty. (This agreement replaced the previously disclosed agreement dated September 24, 2010 between the company and Touchstone Precious Metals Inc.) Payments on the property are due as follows:

 

By or before January 15, 2011 *$10,000 Paid
By or before April 15, 2011 *40,000 Paid
By or before July 15, 2011 **50,000 Paid
By or before January 15, 2012 100,000 ***
By or before July 15, 2012 100,000 ***
By or before January 15, 2013 150,000 ***
By or before July 15, 2013 150,000 ***
By or before January 15, 2014 200,000  
By or before July 15, 2014 200,000  
By or before January 15, 2015 250,000  
By or before July 15, 2015 250,000  
Total $1,500,000  

 

*Paid by the Company

**Paid by Lucky 13 Mining Company Ltd.

*** Extended verbally by Peter Osha

 

On May 12, 2011, we entered into a Joint Venture with Big Rock Resources Ltd. (“Big Rock”) to jointly explore and develop the Lucky Thirteen Claims. Under the terms of the Joint Venture, a new corporation has been formed Lucky 13 Mining Company Ltd. (the “Joint Venture”) and we have assigned our interests in the Lucky 13 Claim to the Joint Venture. Big Rock provided initial exploration financing of $400,000 and was to provide additional financing of up to $8.5 million to complete the acquisition and to develop the property if so required. Big Rock failed to provide the funding as required and this agreement has been cancelled.

 

An evaluation plan and program has commenced but has been delayed due to the default in the financing under the Joint Venture.

 

 

 

The Claim is located in the New Westminster Mining Division, British Columbia, Map Number 092H:

 

Claim Name Area Tenure Type Tenure Number Expiry Date
Lucky Thirteen 168.157 ha Placer 523082 December 1, 2013

 

The Placer Claim is owned 100% by Mr. Peter Osha (B.C. Free Miner #120343) and the Claim is in Good Standing. 

 

Location and Access

 

The Lucky Thirteen Claim is located approximately 5 kilometers (3 miles) north of Hope British Columbia.  The area where the claim is located is an active mineral exploration and development region with heavy equipment and operators available for hire.  Hope provides all necessary amenities and supplies including, fuel, hardware, drilling companies and assay services.  Access to our Claim is via Trans Canada north from Hope.   Any electrical power that might be required in the foreseeable future could be supplied by BC Hydro grid.

 

The placer gravel bar that the claim covers is accessible by an existing logging road. The climate is mild year round with the rainy season falling from October to May.

 

Property Geology

 

The Lucky Thirteen claim is covered by Tertiary Gravels forming a stratified sequence of cobble and pebble gravels, sands and silts. The total thickness is unknown at this time.

 

Previous Exploration

 

The Lucky Thirteen has a history of exploration and minor production attempts going back to the mid 1850s. Most of this work was poorly documented until the past 3 decades and concentrated generally on free gold. A series of tests and assays by several operators including the current owner, from various areas and depths have established that the gravels are auriferous, and that the black sand concentrates contain gold and platinum group minerals that may be present in economic amounts.

 

Exploration Work – Plan of Operation Planned and Actual

 

The current plan of operations is to grid sample areas of the property by trenching and/or drilling. The grid was completed in August. The material recovered, sized and run through an on-site washing and recovery plant. So far 44 samples taken representatively are currently being assayed by Chemex Labs, North Vancouver, B.C. an Met-Soly Inc. of Langley B.C., with the information derived to be used to recommend specific mining areas, design the mining plan itself and determine most efficient recovery methods to be applied to the concentrates derived from the process.

 

The seismic survey; trenching and sample program; screen analysis; and assays; is designed to investigate depth to bedrock, sand and gravel strata, previous workings, and placer mineral continuity. All work will be conducted by local qualified independent professional engineers, mine operators, accountants and administrators.

 

 

 

Phase I Work Program Estimate

 

Placer Mineral Tenure #523082 Option Deposit 50,000 Completed
Placer Mineral Tenure # 523082 Claim to Lease 5,000 Completed
Seismic Survey Frontier GeoScience Ltd.- Russell Hillman P.Eng

33,380

 

On hold
Road Upgrade to CPR Track Triple O Contracting 10,000 Completed
CPR Track Crossing Triple O Contracting-CPR 10,000 Completed
Bonding & Insurance   10,000 Completed
Survey-12 Trenches (40' ea) 10' sample increments = 48 samples Triple O 36,000 Completed
48 Samples Processed Triple O Contracting 36,000 Completed
48 Assays   10,000 Underway
Pit Design P.Eng (Mining) 5,000 Underway
Process Design P.Eng (Metallurgical) 5,000 Underway
Contingency Reserve   189,620  
Work Program Budget Total   $ 400,000  

 

The Operational Budget reflects the current estimated Property Acquisition and Capital and Operating Costs to place the property into production at the earliest possible date. The operational budget detail may be modified as a result of the current recommended work program, however, no increase in estimated costs are anticipated.

 

Property Acquisition Budget Estimate

 

Property Acquisition  $1,500,000 
Operational Budget Estimate     
Road  $305,000 
Operating Equipment & Buildings   3,477,126 
Working Capital   517,290 
Professional Fees   225,584 
Operational Budget   2,475,000 
Total Required Capital  $8,500,000 

 

Bulk testing schedule

 

The following schedule was used to conduct the bulk sampling program on the Lucky Thirteen Property.

 

·The test program consists of a series trenches to a maximum depth of 40 feet
·Bulk samples are to be taken every 5 feet vertically
·All trenches will be backfilled upon completion of test.
·A washing and concentrating plant was set up near the excavation area and used to generate the samples under analysis.

 

The minimal overburden was removed and placed to the side of the test pits. Representative gravel material excavated from the trench was screened to different size fractions. The gravel samples were weighed and the information recorded. The concentrate captured was weighed and processed for minerals.

 

It is expected that in Phase I the gold content of the concentrates will be recovered by a gravity method. The remaining concentrates will be stored and retained for further analysis for other precious metals and by-products in Phase II of the Work Program.

 

Between each test the processing plant is washed down and cleaned up before the next test. The excavators will then backfill the finished trench doing the reclamation on a continuous basis.

 

 

 

Competitive Factors

 

The mining industry is highly fragmented. We are competing with many other exploration companies looking for gold. We are among the smallest exploration companies in existence and are an infinitely small participant in the mining business which is the cornerstone of the founding and early stage development of the mining industry. While we generally compete with other exploration companies, there is no competition for the exploration or removal of minerals from our claims. Readily available markets exist for the sale of gold. Therefore, we will likely be able to sell any gold that we are able to recover, in the event commercial quantities are discovered on the Lucky Thirteen Claim. The Lucky Thirteen Claim can produce commercially saleable gravels and decorative stone as part of the mining process. While valuable the gravel will have to be sold to an existing market and it is not possible to determine at the present time how large the gravel market for Lucky Thirteen products is. In order to mine the commercially saleable gravels and decorative stones, an agreement with the owner of the property on which the Lucky 13 Claim sits would have to be reached.

 

Government Regulation

 

Exploration activities are subject to various national, provincial, foreign and local laws and regulations in British Columbia and Canada, which govern prospecting, development, mining, production, exports, taxes, labor standards, occupational health, waste disposal, protection of the environment, mine safety, hazardous substances and other matters. We believe that we are in compliance in all material respects with applicable mining, health, safety and environmental statutes and the regulations passed there under in British Columbia and Canada.

 

Environmental Regulation

 

Our exploration activities are subject to various federal, provincial and local laws and regulations governing protection of the environment. These laws are continually changing and, as a general matter, are becoming more restrictive. Our policy is to conduct business in a way that safeguards public health and the environment. We believe that our exploration activities are conducted in material compliance with applicable laws and regulations. Changes to current local, state or federal laws and regulations in the jurisdictions where we operate could require additional capital expenditures and increased operating and/or reclamation costs. Although we are unable to predict what additional legislation, if any, might be proposed or enacted, additional regulatory requirements could render certain exploration activities uneconomic.

 

Employees

 

Initially, we intend to use the services of subcontractors for labor exploration work on our claim.  At present, we have no employees as such although each of our officers and directors devotes a portion of their time to the affairs of the Company.  None of our officers and directors has an employment agreement with us. We presently do not have pension, health, annuity, insurance, profit sharing or similar benefit plans; however, we may adopt such plans in the future. There are presently no personal benefits available to any employee.

 

As indicated above we will hire subcontractors on an as needed par time basis. Except for the agreement with Triple O Contracting for the initial test trenches, we have not entered into negotiations or agreements with any other potential subcontractors.  We do not intend to initiate negotiations or hire anyone until we are nearing the time of commencement of our mining development activities.

 

There are no permanent facilities, plants, buildings or equipment on our mineral claim.

 

Mineralization

The mineralization contained within the Lucky Thirteen is placer gold and heavy black sands derived from the erosion and subsequent re-deposition over many millennia, of material derived from the current and historic highlands above the Fraser River Drainage. The placer deposits were formed at the point where the erosional processes, (generally water borne but sometimes wind and mass wasting) lost the energy necessary to continue to

 

 

carry the material further down stream in the drainage system. The Fraser River has also caused continuing material movement in its annual cycles of varying flows.

   

Exploration

 

Exploration has been known in the area since the mid 1850s, but generally has not been via modern methods of mining, washing and concentration. The current work plan is the first known that will combine current state of the art extraction and processing methods to the auriferous gravels in the Lucky Thirteen area.

 

Adjacent Properties

 

There are possible expansions to the project properties in the general area but there is no current intent to add acreage to the project until the deposit is better evaluated.

 

Recommendations by

 

T.L. Sadlier-Brown, Professional Geologist (report completed in 2007)

 

Lucky 13 Joint Venture

 

On May 12, 2011, the Company entered into an agreement with Big Rock Resources Ltd., an Alberta company ("Big Rock"), whereby the two companies commenced developing the Lucky Thirteen gold placer project (the "Project") under a 50/50 joint venture agreement (the "JV Agreement"). Under the terms of the JV Agreement, Big Rock provided $400,000 in funds as follows:

 

Payment of $400,000 for the initial work program on the Project, payable as follows:

a.$50,000 by May 14, 2011;
b.$350,000 by May 31, 2011;

 

Big Rock Resources Ltd., has indicated that it cannot raise the balance of $8,500,000 for the cost of putting the Project into production, consequently, the joint venture with Big Rock has been cancelled.

 

Investment Policies

 

Siga does not have an investment policy at this time.  Any excess funds it has on hand will be deposited in interest bearing notes such as term deposits or short term money instruments. There are no restrictions on what the directors are able to invest.  

 

ITEM 3. LEGAL PROCEEDINGS

 

There are no legal proceedings to which we are a party or to which the Lucky Thirteen is subject, nor to the best of management’s knowledge are any material legal proceedings contemplated.

 

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

 

There has been no Annual General Meeting of Stockholders since our date of inception.  Management hopes to hold an Annual General Meeting of Stockholders during 2014.

 

 

PART II

 

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

 

Since inception, we have not paid any dividends on our common stock, and we do not anticipate that it will pay dividends in the foreseeable future.  As at July 31, 2013, we had 37 shareholders; two of these shareholders are an officer and director.

 

Option Grants and Warrants outstanding since Inception.

 

No stock options have been granted since our inception.

 

There are no outstanding warrants or conversion privileges for our shares.

 

ITEM 6. SELECTED FINANCIAL INFORMATION

 

The following summary financial data was derived from our financial statements.  This information is only a summary and does not provide all the information contained in our financial statements and related notes thereto.  You should read the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and related notes included elsewhere in this Form 10-K.

 

Operation Statement Data

 

         18-Jan-07
  For the year ended  For the year ended   (date of incorporation) to
  July 31, 2013  July 31, 2012   July 31, 2013
Exploration Costs  $—     $—     $15,331 
Interest Expense   13,925    1,750    15,675 
Net loss in unconsolidated equity method investment   —      —     $51,734 
General and Administrative   184,413    101,753    589,039 
Net loss  $198,338   $103,503   $671,780 
                
                
Weighted average shares outstanding (basic and fully diluted   45,105,000    45,035,521      
Net loss per share (basic and fully diluted)  $0.00   $0.00      

 

Balance Sheet Data

Cash and cash equivalent  $          Nil    $9,923   $      Nil 
Total assets  $          Nil    $9,923   $           Nil 
Total liabilities  $129,230   $105,015   $129,230 
Total Stockholders’ deficiency  $(129,230)  $(95,092)  $(129,230)
 

 

 

Our historical results do not necessary indicate results expected for any future periods.

 

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

 

Corporate Organization and History within the Last Three years

 

We were incorporated under the laws of the State of Nevada on January 18, 2007 under the name Siga Resources Inc.  We do not have any subsidiaries or affiliated companies. We have one potential project on the Lucky Thirteen Claim. The venture has to date defaulted on payments to keep the ownership in the Lucky Thirteen Claim intact. Consequently, we are at risk of losing our interests in the Lucky Thirteen Claim entirely. We have a verbal commitment by the owner of the Claim. The owner is in the position to renege on his verbal commitment without reprisal.

 

We have not been involved in any bankruptcy, receivership or similar proceedings since inception nor have we been party to a reclassification, merger, consolidation, or purchase or sale of a significant amount of assets not in the ordinary course of business.    We have no intention of entering into a corporate merger or acquisition.

 

Business Development since Inception

 

There is no historical financial information about us upon which to base an evaluation of our performance as an exploration corporation. We are a pre-exploration stage company and have not generated any revenues from our exploration activities. Further, we have not generated any revenues since our formation on January 18, 2007.  We cannot guarantee we will be successful in our exploration activities. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in the exploration of our properties, and possible cost overruns due to price and cost increases in services.

 

To become profitable and competitive, we must first secure our ownership interest in the Lucky Thirteen Claim by making the requisite payments, then we must invest in the exploration of the Lucky Thirteen Claim before we can start production of any minerals we may find. We must obtain equity or debt financing to provide the capital required to fully implement our phased exploration program.   We have no assurance that financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we will be unable to commence, continue, develop or expand our exploration activities. Even if available, equity financing could result in additional dilution to existing shareholders.

 

Our auditors have issued a going concern opinion. This means that our auditors believe there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. This is because we have not generated any revenues and no revenues are anticipated until we begin removing and selling minerals. Accordingly, we must raise cash from sources other than the sale of minerals found on the Lucky Thirteen Claim. That cash must be raised from other sources. Our only other source for cash at this time is investments by others in the Company.  We must raise cash to implement our planned exploration program if it is not funded by our joint venture partner and stay in business.

 

To meet our need for cash we must raise additional capital.  We have entered into a joint venture to raise the required capital to develop the Lucky Thirteen Claim which has been terminated. We will attempt to raise additional money through a private placement, public offering or through loans.  We have discussed this matter with our officers and directors. However, our officers and directors are unwilling to make any commitments to loan us any money at this time. At the present time, we have not made any arrangements to raise additional cash.  We require additional cash to continue operations.  Such operations could take many years of exploration and would require expenditure of very substantial amounts of money, money we do not presently have and may never be able to raise.   If we cannot raise it we will have to abandon our planned exploration activities and go out of business.

 

 

 

 

We estimate we will require $258,875 in cash over the next twelve months, including the cost of completing the exploration work for the Lucky Thirteen claim during that period.   For a detailed breakdown refer to “Liquidity and Capital Reserves”.

 

We may attempt to interest other companies to undertake exploration work on the Lucky Thirteen Claim through joint venture arrangement or even the sale of part of the Lucky Thirteen Claim.  Neither of these avenues has been pursued as of the date of this Form 10-K.

 

During the year we have no exploration work on the Lucky Thirteen Claim and we have terminated a joint venture in which the joint venture partner pays for 100% of the costs and receives 50% of the net profit as our joint venture partner has indicated that it will not be participating in the venture any further due to its inability to raise financing.

 

We do not intend to hire any employees at this time.

 

Trends

 

We are in the pre-explorations stage, have not generated any revenue and have no prospects of generating any revenue in the foreseeable future unless we place a property in production.  We are unaware of any known trends, events or  uncertainties that have had, or are reasonably likely to have, a material impact on our business or income, either in the long term of short term, other than as described  in this section or in ‘Risk Factors’ on page 5.

 

Critical Accounting Policies

 

Our discussion and analysis of our financial condition and results of operations, including the discussion on liquidity and capital resources, are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, management re-evaluates its estimates and judgments.

 

The going concern basis of presentation assumes we will continue in operation throughout the next fiscal year and into the foreseeable future and will be able to realize our assets and discharge our liabilities and commitments in the normal course of business. Certain conditions, discussed below, currently exist which raise substantial doubt upon the validity of this assumption. The financial statements do not include any adjustments that might result from the outcome of the uncertainty.

 

Liquidity and Capital Resources

 

As of July 31, 2013 our total assets were $Nil and our total liabilities were $183,830.

 

Not including the cost of completing the exploration phase of our Lucky Thirteen Claim, our non-elective expenses over the next twelve months, are expected to be as follows:

 

Expense  Ref.  Estimated
Amount
       
Accounting and audit   (i)    $7,500 
Edgar filing fees   (ii)     6,000 
Filing fees – Nevada; Securities of State   (ii)     375 
Office and general expenses   (iv)     61,000 
Estimated expenses for the next  twelve months        74,875 
           
Account payable as at July 31, 2013        183,830 
Cash required for the next twelve months       $258,875 

 

 

 

In order to continue to make property payments an additional $900,000 may be required during the year for property payments.

 

(i)           Accounting and audit

 

  We will have to continue to prepare consolidated financial statements for submission with the various 10-K and 10-Q as follows:

 

Period  Form  Accountant  Auditor  Amount
             
October 31, 2013   10-Q     1,500    —      1,500 
January 31, 2014   10-Q     1,500    —      1,500 
April 30, 2014   10-Q     1,500    —      1,500 
July 31, 2014   10-K     3,000    —      3,000 
Estimated total       $7,500   $—     $7,500 

 

(ii)           Edgar filing fees

 

  We will be required to file the annual Form 10-K estimated at $250 and the three Form 10-Qs at $250 each for a total cost of $1,000. Additional Form 8-K should cost an additional $1,000. The conversion costs to XBLR is estimated at $4,000.

 

(iii)           Filing fees in Nevada

 

  To maintain the Company in good standing in the State of Nevada an annual fee of approximately $375 has been paid to the Secretary of State.

 

(iv)           Office and general

 

  We have estimated a cost of approximately $25,000 for photocopying, printing, fax and delivery, travel, transfer agent and entertainment. Director Fees total $3,000 per month or $36,000. Total Office and General is estimated to be $61,000.

 

Our future operations are dependent upon our ability to obtain third party financing in the form of debt and equity and ultimately to generate future profitable operations or income from investments. As of July 31, 2013, we have not generated revenues, and have experienced negative cash flow from operations. We may look to secure additional funds through future debt or equity financings. Such financings may not be available or may not be available on reasonable terms.

 

 

 

Twelve months ended July 31, 2013 and 2012

 

Expense 

 

Reference

  Year ended
July 31, 2013
  Year ended
July 31, 2012
  Change
Accounting and auditing        22,050    22,080    (30)
Bank charges and interest        205    532    (327)
Consulting   (i)    172,000    9,000    163,000 
Management fees   (ii)    49,000    36,000    13,000 
Legal        —      6,817    (6,817)
Filing fees        —      4,665    (4,665)
News Releases        370    6,080    (5,710)
Office        —      430    (430)
Telephone        188    337    (149)
Interest   (iii)    13,925    1,750    12,175 
Transfer agent’s fees        —      1,653    (1,653)
Travel        600    14,159    (13,559)
TOTAL EXPENSES        258,338    103,503    154,835 

 

(i)           Consulting

 

During the year, one consultant, Norm Newsom was paid $120,000 as compensation for extensions from Peter Osha and providing consulting services to the Company. No formal extension documents were received from Peter Osha. Peter Osha was paid $50,000 for compensation for extending the terms of the Mineral Lease acquisition on Lucky 13. $2,000 was paid to the Markle group for providing edgarizing and news releases services. This has resulted in consulting fees increasing $163,000 over 2012 fees.

 

(iii)          Management fees

 

  For 8 months the Director was paid $5,000 per month. The previous Directors of the Company were paid $1,500 per month each during the 2012 year end until they resigned late in 2012. Consequently director fees increased $13,000 from 2013 over 2012.

 

(iv)          Interest

 

Interest increased to $13,925 due to the interest earned on the Convertible Notes of $11,600 the balance was for the interest on the note payable.

 

Balance Sheets

 

Total cash and cash equivalents, as of July 31, 2013 was $Nil and $9,923 as at July 31, 2012.  Our working capital deficiency as at July 31, 2013 was a $183,830 and as of July 31, 2012, $95,092.

 

Total stockholders’ deficiency as of July 31, 2013 was $183,830 and $95,092 as at July 31, 2012. Total shares outstanding as at July 31, 2013 and 2012 was 45,105,000.

 

 

 

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

 

Market Information

 

There are no common shares subject to outstanding options, warrants or securities convertible into common equity of our Company.

 

The number of shares subject to Rule 144 is 24,865,000

 

Presently, there are no shares being offered to the public and no shares have been offered pursuant to an employee benefit plan or dividend reinvestment plan.

 

Our shares are traded on the OTCBB.  Although the OTCBB does not have any listing requirements per se, to be eligible for quotation on the OTCBB, we must remain current in our filings with the SEC; being as a minimum Forms 10-Q and 10-K.  Securities already quoted on the OTCBB that become delinquent in their required filings will be removed following a 30 or 60 day grace period if they do not make their filing during that time.

 

In the future our common stock trading price might be volatile with wide fluctuations.  Things that could cause wide fluctuations in our trading price of our stock could be due to one of the following or a combination of several of them:

 

our variations in our operations results, either quarterly or annually;
   
trading patterns and share prices in other exploration companies which our shareholders consider similar to ours;
   
the exploration results on the Lucky Thirteen Claim, and
   
other events which we have no control over.

 

In addition, the stock market in general, and the market prices for thinly traded companies in particular, have experienced extreme volatility that often has been unrelated to the operating performance of such companies.  These wide fluctuations may adversely affect the trading price of our shares regardless of our future performance.  In the past, following periods of volatility in the market price of a security, securities class action litigation has often been instituted against such company.  Such litigation, if instituted, whether successful or not, could result in substantial costs and a diversion of management’s attention and resources, which would have a material adverse effect on our business, results of operations and financial conditions.

 

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 

The company had no independent accountant review the financials for this period, in accordance with Rule 3-11 of Regulation S-X.

 

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

 

Not applicable

  

ITEM 9A. CONTROLS AND PROCEDURES

 

Our management, on behalf of the Company, has considered certain internal control procedures as required by the Sarbanes-Oxley (“SOX”) Section 404 A which accomplishes the following:

 

 

 

Internal controls are mechanisms to ensure objectives are achieved and were under the supervision of the Company’s Chief Executive Officer, being Edwin Morrow, and Chief Financial Officer, being Robert Malasek until their withdrawal of services on November 7, 2012 and since then Bob Hogarth as President and Director. Good controls encourage efficiency, compliance with laws and regulations, sound information, and seek to eliminate fraud and abuse.

 

These control procedures provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with U.S. generally accepted accounting principles.

 

Internal control is "everything that helps one achieve one's goals - or better still, to deal with the risks that stop one from achieving one's goals."

 

Internal controls are mechanisms that are there to help the Company manage risks to success.

 

Internal controls is about getting things done (performance) but also about ensuring that they are done properly (integrity) and that this can be demonstrated and reviewed (transparency and accountability).

 

In other words, control activities are the policies and procedures that help ensure the Company’s management directives are carried out. They help ensure that necessary actions are taken to address risks to achievement of the Company’s objectives. Control activities occur throughout the Company, at all levels and in all functions. They include a range of activities as diverse as approvals, authorizations, verifications, reconciliations, reviews of operating performance, security of assets and segregation of duties.

 

As of July 31, 2013, the management of the Company assessed the effectiveness of the Company’s internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and SEC guidance on conducting such assessments.  Management concluded, during the year ended July 31, 2013, internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules.  Management realized there are deficiencies in the design or operation of the Company’s internal control that adversely affected the Company’s internal controls which management considers to be material weaknesses.

 

In the light of management’s review of internal control procedures as they relate to COSO and the SEC the following were identified:

 

·The Company’s Audit Committee does not function as an Audit Committee should since there is a lack of independent directors on the Committee,

 

·The Company has limited segregation of duties which is not consistent with good internal control procedures.

 

·The Company does not have a written internal control procedurals manual which outlines the duties and reporting requirements of the Directors and any staff to be hired in the future.  This lack of a written internal control procedurals manual does not meet the requirements of the SEC or good internal control.

 

·There are no effective controls instituted over financial disclosure and the reporting processes.

 

Management feels the weaknesses identified above, being the latter three, have not had any effect on the financial results of the Company. Management will have to address the lack of independent members on the Audit Committee and identify an “expert” for the Committee to advise other members as to correct accounting and reporting procedures.

 

 

 

The Company and its management will endeavor to correct the above noted weaknesses in internal control once it has adequate funds to do so.   By appointing independent members to the Audit Committee and using the services of an expert on the Committee will greatly improve the overall performance of the Audit Committee.   With the addition of other Board Members and staff the segregation of duties issue will be address and will no longer be a concern to management.  By having a written policy manual outlining the duties of each of the officers and staff of the Company will facilitate better internal control procedures.

 

Management will continue to monitor and evaluate the effectiveness of the Company’s internal controls and procedures and its internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.

 

ITEM 9A. (T) CONTROLS AND PROCEDURES

 

There were no changes in the Company’s internal controls or in other factors that could affect its disclosure controls and procedures subsequent to the Evaluation Date, nor any deficiencies or material weaknesses in such disclosure controls and procedures requiring corrective actions.

 

ITEM 9B. OTHER INFORMATION

 

There are no matters required to be reported upon under this Item.

 

PART 111

 

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 

Each of our Directors serves until his successor is elected and qualified. Each of our officers is elected by the Board of Directors to a term of one (1) year and serves until his successor is duly elected and qualified, or until he is removed from office. The Board of Directors has no nominating or compensation committees.

 

The name, address, age and position of our officers and directors is set forth below:

 

Name and Address Position(s ) Age
     

Bob Hogarth

123 West Nye, Carson City, NV, 897062

Chief Executive Officer, President

and Director (1)

67
     

 

  (1) Bob Hogarth and Richard W Markle were appointed a director on November 7, 2012 as, President and the Chief Executive Officer, and Secretary Treasurer, respectively on the same day. Mr. Markle has subsequently resigned.

 

The percentage of common shares beneficially owned, directly or indirectly, or over which control or direction are exercised by the directors and officers of our Company, collectively, is nil.

 

Background of officers and directors

 

BOB HOGARTH has been the President and Director of the Company since November 7, 2012. 

Mr Hogarth was the head professional golfer at the Royal Montreal Goff Course for the past 22 years,. Mr. Hogarth is a resident of Beaconsfield, Quebec.

 

 

 

Board of Directors

 

Below is a description of the Audit Committee of the Board of Directors.  The Charter of the Audit Committee of the Board of Directors sets forth the responsibilities of the Audit Committee. The primary function of the Audit Committee is to oversee and monitor the Company’s accounting and reporting processes and the audits of the Company’s financial statements.

 

Our audit committee is comprised of Bob Hogarth, our President and Chairman of the Audit Committee whom is not independent.   Mr. Hogarth cannot be considered an “audit committee financial expert” as defined in Item 401 of Regulation S-B.  .

 

Apart from the Audit Committee, the Company has no other Board committees.

 

Since inception on January 18, 2007, our Board has conducted its business entirely by consent resolutions and has not met, as such.

 

Significant Employees

 

We have not paid employees as such.  Our Officers and Directors fulfill many of the functions that would otherwise require Siga to hire employees or outside consultants.

 

We will have to engage the services of certain consultants to assist in continuation of the exploration of our previous mineral claims and to prepare a report on the Lucky Thirteen Claim.  Such consultant will responsible for hiring and supervising, the exploration work on the Company’s claims in the near future.  This individual will be responsible for the completion of the geological work and, therefore, will be an integral part of our operations although he or she will not be considered an employee either on a full time or part time basis.  This is because our exploration programs will not last more than a few weeks and once completed this individual will no longer be required.  We have not identified any individual who would work as a consultant for us.

  

Family Relationships

 

None

 

Involvement in Certain Legal Proceedings

 

To the knowledge of the Company, during the past five years, none of our directors or executive officers:

 

(1) has filed a petition under the federal bankruptcy laws or any state insolvency law, nor had a receiver, fiscal agent or similar officer appointed by the court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filings;

 

(2) was convicted in a criminal proceeding or named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);

 

(3) was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from or otherwise limiting, the following activities:

 

(i) acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, associated person of any of the foregoing, or as an investment advisor, underwriter, broker or dealer in securities, or as an affiliate person, director or employee of any investment company, or engaging in or continuing any conduct or practice in connection with such activity;

 

 

 

(ii) engaging in any type of business practice; or

 

(iii) engaging in any activities in connection with the purchase or sale of any security or commodity or in connection with any violation of federal or state securities laws or federal commodities laws;

 

(4) was the subject of any order, judgment, or decree, not subsequently reversed, suspended, or vacated, of any federal or state authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described above under this Item, or to be associated with persons engaged in any such activities;

 

(5) was found by a court of competent jurisdiction in a civil action or by the SEC to have violated any federal or state securities law, and the judgment in such civil action or finding by the SEC has not been subsequently reversed, suspended, or vacated.

 

(6) was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated.

   

ITEM 11. EXECUTIVE COMPENSATION

 

Compensation to our directors and officers was paid as follows:

 

Summary Compensation Table

 

   Long Term Compensation
   Annual Compensation  Awards  Payouts
(a)  (b)  (c)  (e)  (f)  (g)  (h)  (i)
Name and
Principal   position
  Year  Salary  Other
annual Comp.
($)
  Restricted
stock awards
($)
  Options/ SAR
(#)
  LTIP payouts
($)
  All other
compen sation
($)
                      
Bob Hogarth   

2013

2012

    

-0-

-0-

    

-0-

-0-

   -0-
-0-
   

-0-

-0-

    

-0-

-0-

    
                                
Richard W. Markle   2013    -0-    -0-   -0-
   -0-    -0-    
                                
Edwin G. Morrow
President, CEO
and Director
   

2011

2012

2013

    

-0-

-0-

-0-

 

    

16,500

16,000

4,500

   45,000
-0-
-0-
   

-0-

-0-

-0-

    

-0-

-0-

-0-

   -0-
-0-
-0-
                                
Robert Malasek
Secretary Treasurer, CFO
and Director
   

2011

2012

2013

    

-0-

-0-

-0-

 

    

16,500

16,000

4,500

   45,000
-0-
-0-
   

-0-

-0-

-0-

    

-0-

-0-

-0-

   -0-
-0-
-0-

 

 

 

 

 

Compensation of Directors

 

We have no standard arrangement to compensate directors for their services in their capacity as directors.  Directors are not paid for meetings attended.   All travel and lodging expenses associated with corporate matters are reimbursed by us, if and when incurred.

 

Consulting Agreements with Executive Officers and Directors

 

There is no consulting agreement with the Company’s director. He has paid himself $5,000 per month for 8 months. There were consulting agreements with both of the previous officers or directors. Under their respective agreements with Ed Morrow and Richard Malasek, the directors were to be paid $1,500 per month each and each received 100,000 shares upon entering into these agreements.

 

Stock Option Plan

 

We have never established any form of stock option plan for the benefit of our directors, officers or future employees.  We do not have a long-term incentive plan nor do we have a defined benefit, pension plan, profit sharing or other retirement plan.

 

Bonuses and Deferred Compensation

 

None

 

Compensation Pursuant to Plans

 

None

 

Pension Table

 

None

 

Termination of Employment

 

There are no compensatory plans or arrangements, including payments to be received from us, with respect to any person named in Summary of Compensation set out above which would in any way result in payments to any such person because of his resignation, retirement, or other termination of such person’s employment with us, or any change in control of us, or a change in the person’s responsibilities following a change in control of us.

 

Compliance with Section 16 (a) of the Exchange Act

 

We know of no director or officer, (“Reporting Person”) that failed to file any reports required to be furnished pursuant to Section 16(a).  We do not know whether the beneficial owner of more than ten percent of any class of equity securities of our stock registered pursuant to Section 12 (“Reporting Person”) has filed any reports required to be furnished pursuant to Section 16(a)

 

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

 

The following table sets forth, as at xx, 2011, the total number of shares owned beneficially by each of our directors, officers and key employees, individually and as a group, and the present owners of 5% or more of our total outstanding shares. The shareholders listed below have direct ownership of his shares and possesses sole voting and dispositive power with respect to the shares.

 

 

Title or Class  Name and Address of Beneficial Owner (1)  Amount of Beneficial    Ownership (2)  Percent of Class
              
Common  Arun Kumar   17,500,000    38.9%
Stock  #8 Nairal Rd., Raiwai,Suva, Fiji          
              
Common  Rohit Singh   8,750,000    19.4%
Stock  Narata, Nausori, GPO, Box 1004, Suva, Fiji          
              
Common Stock  Bob Hogarth   20,000    0.00%
   123 West Nye, Carson City, NV, 89706      
             
Common Stock  Greater than 5% shareholders as a Group(3 persons)   26,272,000    58.3%

 

 

 

 

(1) Unless otherwise noted, the security ownership disclosed in this table is of record and beneficial.

 

(2) Under Rule 13-d of the Exchange Act, shares not outstanding but subject to options, warrants, rights, conversion privileges pursuant to which such shares may be acquired in the next 60 days are deemed to be outstanding for the purpose of computing the percentage of outstanding shares owned by the person having such rights, but are not deemed outstanding for the purpose of computing the percentage for such other persons.  None of our officers or directors has options, warrants, rights or conversion privileges outstanding.

 

We do not know of any other shareholder who has more than 5 percent of the issued shares.

 

The number of shares under Rule 144 is 23,825,000.

 

Our two largest shareholders, Arun Kumar and Rohit Singh, own, collectively, 26,250,000 issued and outstanding shares of our common stock.   All except 1,750,000 of these shares are “restricted shares” as that term is defined in Rule 144 of the Rules and Regulations of the SEC promulgated under the Securities Act.  Under Rule 144, shares can be publicly sold, subject to volume restrictions and restrictions on the manner of sale, commencing one year after their acquisition.

 

There are no voting trusts or similar arrangements known to us whereby voting power is held by another party not named herein.  We know of no trusts, proxies, power of attorney, pooling arrangements, direct or indirect, or any other contract arrangement or device with the purpose or effect of divesting such person or persons of beneficial ownership of our common shares or preventing the vesting of such beneficial ownership.

 

Description of Our Securities

 

We have only common shares authorized and there are no preferred shares or other forms of shares.  Our authorized common stock consists of 500,000,000 shares of common stock, par value $0.001 per share.  The holders of our common stock:

 

- have equal ratable rights to dividends from funds legally available therefore, when, as, and if declared by our Board of Directors;

 

- are entitled to share ratably in all of our assets available for distribution upon winding up of our affairs; and

 

- do not have preemptive, subscription or conversion rights and there are no redemption or sinking fund provisions or rights; and

 

- are entitled to one non-cumulative vote per share on all matters on which shareholders may vote at all meetings of shareholders.

 

 

 

The shares of common stock do not have any of the following rights:

 

-           preference as to dividends or interest;

 

-           preemptive rights to purchase in new issues of shares;

 

-           preference upon liquidation; or

 

-           any other special rights or preferences.

 

All our shares of common stock now issued and outstanding are fully paid and non-assessable.

 

Convertible Securities

 

The shares are not convertible into any other securities.

 

Non-Cumulative Voting.

 

The holders of shares of our common stock do not have cumulative voting rights, which means that the holders of more than 50% of such outstanding shares, voting for the election of directors, can elect all of the directors to be elected, if they so choose.   In such event, the holders of the remaining shares will not be able to elect any of our directors.    

 

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

 

Transactions with Management and Others

 

Except as indicated below, there were no material transactions, or series of similar transactions, since our inception, or any currently proposed transactions, or series of similar transactions, to which Siga was or is to be a party, in which the amount involved exceeds $120,000, and in which any director or executive officer, or any security holder who is known by Siga to own of record or beneficially more than 5% of any class of Siga’s common stock, or any member of the immediate family of any of the foregoing persons, has an interest.

 

Indebtedness of Management

 

There were no material transactions, or series of similar transactions, since our inception, or any currently proposed transactions, or series of similar transactions, to which we are or are to be a part, in which the amount involved exceeded $120,000 and in which any director or executive officer, or any security holder who is known to us to own of record or beneficially more than 5% of the common shares of our capital stock, or any member of the immediate family of any of the foregoing persons, has an interest.

 

Conflicts of Interest

 

None of our officers and directors is a director or officer of any other company involved in the gold mining industry.  However, there can be no assurance such involvement in other companies in the mining industry will not occur in the future.  Such potential future involvement could create a conflict of interest.

 

To ensure that potential conflicts of interest are avoided or declared, the Board of Directors adopted, on January 19, 2007, a Code of Ethics for the Board of Directors (the “Code”).  Our Code embodies our commitment to such ethical principles and sets forth the responsibilities of us and its officers and directors to its shareholders, employees, customers, lenders and other organizations. Our Code addresses general business ethical principles and other relevant issues.

 

 

 

Transactions with Promoters

 

We do not have promoters and have no transactions with any promoters.

 

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

 

(1) Audit Fees

 

The aggregate fees billed by the independent registered accountants for the period ended July 31, 2013 for professional services for the review of the quarterly financial statements as at April 30, 2012; October 31, 2012; and January 31, 2013, annual financial statements as of July 31, 2012 and services that are normally provided by the accountants in connection with statutory and regulatory filings or engagements for those period years were as follows:  $1,550 for each of the quarters ended April 30, 2012; $2,000 for each of October 31, 2012 and January 31, 2013 and a $7,500 for the audit of July 31, 2012.

 

(2) Audit-Related Fees

 

The aggregate fees billed in each of the two periods mentioned above for assurance and related services by the principal accountants that are reasonably related to the performance of the audit or review of Siga’s financial statements and are not reported under Item 9 (e)(1) of Schedule 14A was NIL.

 

(3) Tax Fees

 

The aggregate fees billed in July 31, 2013 for professional services rendered by the principal accountants for tax compliance, tax advice, and tax planning was NIL.

 

(4) All Other Fees

 

During the period from inceptions to July 31, 2013 there were no other fees charged by the principal accountants other than those disclosed in (1) and (3) above.

 

(5) Audit Committee’s Pre-approval Policies

 

At the present time, there are not sufficient directors, officers and employees involved with us to make any pre-approval policies meaningful.  Once we have elected more directors and appointed directors and non-directors to the Audit Committee it will have meetings and function in a meaningful manner.

 

 

 

PART IV

 

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

 

Exhibits

 

The following exhibits are included as part of this report by reference:

 

3   Corporate Charter (incorporated by reference from Siga’s Registration Statement on Form SB-2 filed on September 5, 2007, Registration No. 333-145879)
     
    3 (i) Articles of Incorporation (incorporated by reference from Siga’s registration Statement on Form SB-2 filed on September 5, 2007, Registration No. 333-145879)
     
    3 (ii) By-laws (incorporated by reference from Siga’s Registration Statement on Form SB-2 filed on September 5, 2007, Registration No. 333-145879)
     
4   Stock Specimen (incorporated by reference from Siga’s Registration Statement on Form SB-2 filed on September 5, 2007, Registration No. 333-145879)
     
10.1   Transfer Agent and Registrar Agreement (incorporated by reference from Siga’s Registration Statement on Form SB-2 filed on September 5, 2007, Registration No. 333-145879)
     
10.2   Corporate Acquisition Agreement between Siga, Touchstone Ventures Ltd, and Touchstone Precious Metals,  Inc  dated September 24, 2010 (incorporated by reference from Siga’s Form 10K for the year ended July 31, 2010)
     
10.3   Letter Agreement dated May 15, 2010 between Peter Osha and Touchstone Precious Metals, Inc. regarding the Option to Purchase the Lucky Thirteen Claim from Peter Osha. (incorporated by reference from Siga’s Form 10K for the year ended July 31, 2010)
     
10.4   Extension Agreement dated October 14, 2010 between Peter Osha, Touchstone Ventures Ltd, Touchstone Precious Metals Inc., and Siga Resources Inc. (incorporated by reference from Siga’s Form 10Q for the Quarter ended October 31, 2010)
     
10.5   Property Acquisition and Royalty Agreement dated January 16, 2011 between Siga Resources Inc. and Peter Osha   (incorporated by reference from Siga’s Form 10Q for the Quarter ended January 31, 2011)
     
10.6   Joint Venture Agreement dated May 12, 2011 between Big Rock Resources Ltd. and Siga Resources Inc.  regarding the development of the Lucky Thirteen Claim. (incorporated by reference from Siga’s Form 8K filed May 14, 2011).
     
10.7   Letter of Intent dated June 14, 2011 between Montana Mining Company and Siga Resources Inc. regarding the acquisition of the Big Bear Claims 1-9 located in San Bernardino County, California (incorporated by reference from Siga’s Form 8K filed June20, 2011).
     
10.8   Revised Acquisition Agreement dated July 7, 2011 between Montana Mining Company and Siga Resources Inc. regarding the acquisition of the Big Bear Claims 1-9 located in San Bernardino County, California (incorporated by reference from Siga’s Form 8K filed July 12, 2011).
     
10.9   Joint Venture Agreement dated July 22, 2011 between Bentall Fairview Resources Ltd.. and Siga Resources Inc.  regarding the development of the Big Bear Claims. (incorporated by reference from Siga’s Form 8K filed July 22, 2011).
     
10.10   Property Acquisition and Royalty Agreement dated September 20, 2011 between Siga Resources Inc. and Laguna Finance Ltd. regarding the acquisition of the Moutauban Gold Tailing Claims located in near Quebec City, Canada (incorporated by reference from Siga’s Form 8K filed September 28, 2011)
     
33.0   XBRL Report

 

 

 

 

 

Financial Statements.   The following financial statements are included in this report:

 

Title of Document Page
   
   
Balance Sheets as at July 31, 2013 and 2012 31
   
Statement of Operations for years ended July 31, 2013 and 2012 and for the period from January 18, 2007 (date of inception) to July 31, 2013 32
   
Statement of Changes in Shareholders’ Deficiency for the period from January 18, 2007 (date of inception) to July 31, 2013 33
   
Statement of Cash Flows for years ended July 31, 2013 and 2012 and for the period ended January 18, 2007 (date of inception) to July 31, 2013 34
   
Notes to the Financial Statements 35

 

 

 

 

 

 

 

 

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, thereunto duly authorized.

 

SIGA RESOURCES, INC.

(Registrant)

 

 

By: /s/ BOB HOGARTH

Bob Hogarth

Chief Executive Officer,

President and Director

 

Date:  November 22, 2013

 

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

 

 

By: /s/ BOB HOGARTH

Bob Hogarth

Chief Executive Officer,

President and Director 

 

Date:  November 22, 2013

 

 

 

SIGA RESOURCES, INC.

(Exploration Stage Company)

BALANCE SHEETS

 

 

  July 31, 2013  July 31, 2012
ASSETS          
CURRENT ASSETS          
Cash  $—     $9,923 
           

TOTAL CURRENT ASSETS 

   —      9,923 
           
TOTAL ASSETS  $—     $9,923 
           
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY          
           
CURRENT LIABILITIES          
           
Accounts payable (including related party amounts of $27,883 and $18,035)  $158,255   $85,765 
Note payable   25,525    19,250 
Convertible notes payable, net of discounts of $127,600 and $0, respectively   —      —   
Settlements payable, net of discounts of $152,600 and $0, respectively   —      —   
           
Total Current Liabilities   183,830    105,015 
           
STOCKHOLDERS’ DEFICIENCY          
Common stock          
500,000,000 shares authorized, at $0.001 par value;          
45,105,000 and 45,025,000 shares issued and outstanding as of July 31, 2013 and 2012, respectively   45,105    45,105 
Capital in excess of par value   502,845    333,245 
Share Subscriptions received   —      —   
Deficit accumulated during the exploration stage   (731,780)   (473,442)
           
Total Stockholders’ Deficiency   (183,830)   (95,092)
           
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY  $—     $9,923 

 

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

 

SIGA RESOURCES, INC.

(Exploration Stage Company)

STATEMENT OF OPERATIONS

 

For the years ended July 31, 2013 and 2012 and for the period from

January 18, 2007 (date of inception) to July 31, 2013

(Unaudited)

 

  Year ended  18-Jan-07 (inception)
  31 July 2013  31 July 2012   to 31 July 2013
REVENUES  $—     $—     $—   
EXPENSES               
General and administrative   244,413    101,753    589,040 
Net loss in unconsolidated equity method investment   —      —      51,734 
Exploration costs   —      —      10,331 
Impairment loss on mineral claims   —      —      5,000 
TOTAL EXPENSES   244,413    101,753    656,105 
OTHER EXPENSE               
Interest expense   13,925    1,750    15,675 
NET LOSS  $(258,338)  $(103,503)  $(671,780)
NET LOSS PER COMMON SHARE               
Basic and diluted  $(0.00)  $(0.00)     
 
WEIGHTED AVERAGE OUTSTANDING SHARES
               
Basic and diluted   45,105,000    45,035,521      

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

 

 

 

 

 

 

 

 

 

 

 

 

SIGA RESOURCES, INC.
(Exploration Stage Company)
STATEMENT OF STOCKHOLDERS' DEFICIENCY
Period January 18, 2007 (date of inception) to July 31. 2013
   Common
Shares Issued
  Subscriptions Received  Common stock
Amount
  Capital in Excess of Par Value  Deficit accumulated during exploration stage  Total
Balance January 18, 2007   —     $—     $—     $—     $—     $—   
Issuance of common shares for cash – July 2007   43,785,000    —      43,785    (17,985)   —      25,800 
Capital contributions - non-cash expenses   —      —      —      8,700    —      8,700 
Net loss for the period January 18,2007 (date of inception) to July 31, 2007             

—  

         (22,659)   (22,659)
Balance as at July 31, 2007   43,785,000    —      43,785    (9,285)   (22,659)   11,841 
Capital contributions - non-cash expenses   —      —      —      17,400    —      17,400 
Net loss for the year ended July 31, 2008   —      —      —      —      (57,226)   (57,226)
Balance as at July 31, 2008   43,785,000    —      43,785    8,115    (79,885)   (27,985)
Capital contributions – non-cash expenses   —      —      —      17,400    —      17,400 
Net loss for the year ended July 31, 2009   —      —      —      —      (36,149)   (36,149)
Balance as at July 31, 2009   43,785,000    —      43,785    25,515    (116,034)   (46,734)
Capital contributions - non-cash expenses   —      —      —      13,050         13,050 
Net loss for the year ended July 31, 2010   —      —      —      —      (24,511)   (24,511)
Balance as at July 31, 2010   43,785,000    —      43,785    38,565    (140,545)   (58,195)
Share subscriptions received   —      20,000    —      —      —      20,000 
Shares issued for services   200,000    —      200    89,800         90,000 
Issuance of shares for cash, July 28, 2011   1,040,000    —      1,040    68,960    —      70,000 
Net loss July 31, 2011   —      —      —      —      (229,394)   (229,394)
Balance as at July 31, 2011   45,025,000    20,000    45,025    197,325    (369,939)   (107,589)
Shares issued for subscriptions received   80,000    (20,000)   80    19,920    —      —   
Debt discounts related to beneficial conversion features   —      —      —      116,000    —      116,000 
Net loss July 31, 2012                       (103,503)   (103,503)
 
Balance as at July 31, 2012
   45,105,000   $—     $45,105   $333,245   $(473,442)  $(95,092)
Debt discounts related to beneficial conversion features   —      —      —      169,600    —      169,600 
Net loss for the year ended July 31, 2012                       (258,338)   (258,338)
 
Balance as at July 31, 2012
   45,105,000   $—     $45,105   $502,845   $(721,780)  $(183,830)

 

 

 

SIGA RESOURCES, INC.

(Exploration Stage Company)

STATEMENT OF CASH FLOWS

For the years ended July 31, 2013 and 2012 and for the period from

January 18, 2007 (date of inception) to July 31, 2013

 

   Year ended  Year ended  January 18, 2007 to (inception)
   31 July 2013  31 July 2012  31 July 2013
CASH FLOWS FROM OPERATING ACTIVITIES:               
Net loss  $(258,338)  $(103,503)  $(671,780)
Adjustments to reconcile net loss to net cash used in operating activities:               
Equity loss on mining exploration   —      —      51,734 
Impairment loss on mineral claims   —      —      5,000 
Stock issued for consulting services   —      —      90,000 
Capital contributions – non-cash expenses   —      —      56,550 
Changes in accounts payable   72,490    6,986    103,655 
Net Cash Used in Operating Activities   (180,448)   (96,517)   (364,841)
                
CASH FLOWS FROM INVESTING ACTIVITIES:               
Investment in Mining Leases   —      —      (56,734)
Net Cash Used in Investing   —      —      (56,734)
 
CASH FLOWS FROM FINANCING ACTIVITIES
               
Promissory Notes   17,925    93,500    153,175 
Settlement Agreements   158,000    —      158,000 
Proceeds from issuance of common stock   —      —      115,800 
Net Cash Provided by Financing   170,525    93,500    421,575 
Net Increase (Decrease) in Cash   (9,923)   (3,017)   —   
Cash at Beginning of Period   9,923    12,940    —   
CASH AT END OF PERIOD  $—     $9,923   $—   
                
SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING ACTIVITIES:               
Stock issued for consulting services  $—     $—     $90,000 
Investment in Joint Venture  $—     $—     $51,734 
Accrued interest converted to notes payable  $17,925   $1,750   $19,675 
Accounts payable converted to notes payable  $40,000   $40,000   $40,000 
Accounts payable converted to settlements payable  $158,000   $—     $158,000 
Capital contributions – non-cash expenses  $—     $—     $38,565 

 

The accompanying notes are an integral part of these financial statements

 

SIGA RESOURCES, INC.

(Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

July 31, 2013

 

1. ORGANIZATION

 

The Company, Siga Resources Inc., was incorporated under the laws of the State of Nevada on January 18, 2007 with the authorized capital stock of 300,000,000 shares at $0.001 par value.  On April 30, 2008, the Secretary of State for Nevada approved an amendment to the Articles of Incorporation where the total number of shares of common stock was increased to 500,000,000 shares of common stock with a par value of $0.001 per share. The Company was organized for the purpose of acquiring and developing mineral properties.  

 

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Accounting Methods

 

The Company recognizes income and expenses based on the accrual method of accounting.

 

Dividend Policy

 

The Company has not yet adopted a policy regarding payment of dividends.

 

Basic and Diluted Net Income (loss) Per Share

 

Basic net income (loss) per share amounts are computed based on the weighted average number of shares actually outstanding.   Diluted net income (loss) per share amounts are computed using the weighted average number of common and common equivalent shares outstanding as if shares had been issued on the exercise of the common share rights unless the exercise becomes anti-dilutive and then the basic and diluted per share amounts are the same. As of July 31, 2013 the Company has 313,200,000 of common stock equivalents outstanding and 2012, the Company has 116,000,000 common stock equivalents outstanding, calculated using the if-converted method

 

Income Taxes

 

The Company utilizes the liability method of accounting for income taxes.  Under the liability method deferred tax assets and liabilities are determined based on differences between financial reporting and the tax bases of the assets and liabilities and are measured using the enacted tax rates and laws that will be in effect, when the differences are expected to be reversed.   An allowance against deferred tax assets is recorded, when it is more likely than not, that such tax benefits will not be realized.

 

Foreign Currency Translations

 

Part of the transactions of the Company were completed in Canadian dollars and have been translated to US dollars as incurred, at the exchange rate in effect at the time, and therefore, no gain or loss from the translation is recognized.  The functional currency is considered to be US dollars.

 

Revenue Recognition

 

Revenue is recognized on the sale and delivery of a product or the completion of a service provided.

 

Advertising and Market Development

 

The company expenses advertising and market development costs as incurred.

 

 

 

Financial Instruments

 

The carrying amounts of financial instruments are considered by management to be their fair value due to their short term maturities

 

Estimates and Assumptions

 

Management uses estimates and assumptions in preparing financial statements in accordance with general accepted accounting principles.  Those estimates and assumptions affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses.   Actual results could vary from the estimates that were assumed in preparing these financial statements.

 

Impairment of Long-lived Assets

 

The Company reviews and evaluates long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable.  The assets are subject to impairment consideration under ASC 360-10-35-17 if events or circumstances indicate that their carrying amounts might not be recoverable.  When the Company determines that an impairment analysis should be done, the analysis will be performed using rules of ASC 930-360-35, Asset Impairment, and 360-10-15-3 through 15-5, Impairment or Disposal of Long-Lived Assets

 

Mineral Property Acquisition and Exploration Costs

 

Mineral property acquisition costs are initially capitalized when incurred. These costs are then assessed for impairment when factors are present to indicate the carrying costs may not be recoverable. Mineral exploration costs are expensed when incurred.

 

Statement of Cash Flows

 

For the purposes of the statement of cash flows, the Company considers all highly liquid investments with a maturity of three months or less to be cash equivalents.

 

Environmental Requirements

 

At the report date environmental requirements related to the mineral claim acquired are unknown and therefore any estimate of any future cost cannot be made.

 

Reclassifications

 

Certain prior period amounts have been reclassified to conform with current period presentation.

 

Recent Accounting Pronouncements

 

The Company does not expect that the adoption of other recent accounting pronouncements will have a material impact on its financial statements.

 

3. ACQUISITION OF MINERAL CLAIMS

 

On March 11, 2007, the Company acquired the Valolo Gold Claim located in the Republic of Fiji for the consideration of $5,000 including a geological report.  The Valolo Gold Claim is located 10 miles east of the town of Korovou , Fiji.  The Company has abandoned this claim.

 

 

 

On January 16, 2011, the Company entered into a Property Acquisition and Royalty Agreement with Peter Osha whereby the Company will have acquired Peter Osha’s Lucky Thirteen Placer Mining Property (“Lucky Thirteen”) near Hope, British Columbia, Canada in exchange for $1.5 million Canadian plus a 3% net smelter royalty. Payments on the property are due as follows:

 

By or before January 15, 2011 *$10,000
By or before April 15, 2011 *40,000
By or before July 15, 2011 **50,000
By or before January 15, 2012 ***100,000
By or before July 15, 2012 ***100,000
By or before January 15, 2013 ***150,000
By or before July 15, 2013 ***150,000
By or before January 15, 2014 200,000
By or before July 15, 2014 200,000
By or before January 15, 2015 250,000
By or before July 15, 2015 250,000
Total $1,500,000

* Paid by the Company

** Paid by Lucky 13 Mining Company Ltd.

*** Not Paid. Peter Osha has verbally agreed to extend the Property Acquisition and Royalty Agreement. Peter Osha has the right to cancel this Agreement without notice.

 

On May 12, 2011, the Company entered into a joint venture agreement with Big Rock Resources Inc. whereby, the Company transferred its interest (and related payments due) in the Lucky Thirteen Mining Property to Lucky 13 Mining Company Ltd. This transfer provided the Company with a 50% ownership interest in Lucky 13 Mining Company Ltd. Per the joint venture agreement, Big Rock Resources Inc. has agreed to fund Lucky 13 Mining Company Ltd. to provide financing for exploration and for its mineral lease payments. Payments due from Big Rock

Resources Inc. to Lucky 13 Mining Company Ltd. are as follows:

 

1.Payment of $400,000 for the initial work program on the Project, payable as follows:
a.$50,000 by May 14, 2011, which was received;
b.$350,000 by May 31, 2011 which was received;
2.Payment of $8,500,000 for the cost of putting the Project into production. Lucky 13 Mining Company Ltd. is 50% owned by both Black Rock Resources Ltd. and the Company.

 

As indicated above, the Company transferred its interests in the Mining Claims to the Joint Venture with a cost basis of $51,734. The Company accounts for this Joint Venture using the equity method. For the time period May 12, 2011 to July 31, 2011, the joint venture reported a net loss of approximately $143,000. Accordingly, the Company recorded its share of those losses, but only up to the cost of its investment.

 

As of July 31, 2012, the Black Rock Resources Ltd. joint venture agreement was terminated by the Company due to non-performance.

 

4. RELATED PARTY TRANSACTIONS

 

Under consulting agreements executed in September 2010, two of the Company’s former directors were to be paid $1,500 per month. On November 15, 2012 both of these directors resigned. As of July 31, 2013 $27,883 ($29,398 – July 31, 2012) was due to these former directors (these amounts included minor travel expenses). On November 15, 2010, 200,000 shares were issued to the two former directors under the terms and conditions of their consulting agreements. These shares were valued at $90,000, which was the market value of the shares when issued.

 

 

 

5. CONVERTIBLE NOTES PAYABLE

 

On July 31, 2012, the Company converted $40,000 in accounts payable to a convertible promissory note. The note has a 10% per annum interest rate and a maturity date of July 31, 2013. On July 31, the Company converted $4,000 in accrued interest payable to the same convertible promissory note. The note is convertible into shares of the Company’s common stock at a conversion price of $0.001. Per ASC 470-50-40-10b, as this transaction added a substantive conversion feature to the debt, we have determined debt extinguishment accounting rules apply. However, as there was no difference between the reacquisition price and the net carrying amount of the old debt, no gain or loss was recorded. The Company did record a discount on the debt equal to the face value, in the amount of $40,000 in 2012 and $4,000 in 2013. This discount will be amortized to interest expense over the term of the debt, or one year.

 

On July 31, 2013, the Company converted $76,000 in advances to a convertible promissory note. The note has a 10% per annum interest rate and a maturity date of July 31, 2013. On July 31, the Company converted $7,600 in accrued interest payable to the same convertible promissory note. The note is convertible into shares of the Company’s common stock at a conversion price of $0.001. Per ASC 470-50-40-10b, as this transaction added a substantive conversion feature to the debt, we have determined debt extinguishment accounting rules apply. However, as there was no difference between the reacquisition price and the net carrying amount of the old debt, no gain or loss was recorded. The Company did record a discount on the debt equal to the face value, in the amount of $76,000 and $7,600 in 2013. This discount will be amortized to interest expense over the term of the debt, or one year.

 

6. SETTLEMENTS PAYABLE

 

On January 31, 2013, the Company has agreed to convert $50,000 payable to Peter Osha with shares valued at $0.001 if the Company. The invoice states that it is convertible into shares of the Company’s common stock at a conversion price of $0.001. Per ASC 470-50-40-10b, as this transaction added a substantive conversion feature to the debt, we have determined debt extinguishment accounting rules apply. However, as there was no difference between the reacquisition price and the net carrying amount of the old debt, no gain or loss was recorded. The Company did record a discount on the debt equal to the face value, in the amount of $50,000 in 2014. This discount will be amortized to interest expense over the term of the debt, or one year.

 

On January 31, 2013, the Company has agreed to convert $50,000 payable to Norm Newsom ha with shares valued at $0.001 if the Company. The invoice states that it is convertible into shares of the Company’s common stock at a conversion price of $0.001. Per ASC 470-50-40-10b, as this transaction added a substantive conversion feature to the debt, we have determined debt extinguishment accounting rules apply. However, as there was no difference between the reacquisition price and the net carrying amount of the old debt, no gain or loss was recorded. The Company did record a discount on the debt equal to the face value, in the amount of $50,000 in 2014. This discount will be amortized to interest expense over the term of the debt, or one year.

 

On June 30, 2013, the Company has agreed to convert $70,000 payable to Norm Newsom with shares valued at $0.001 of the Company The invoice states that it is convertible into shares of the Company’s common stock at a conversion price of $0.001. Per ASC 470-50-40-10b, as this transaction added a substantive conversion feature to the debt, we have determined debt extinguishment accounting rules apply. However, as there was no difference between the reacquisition price and the net carrying amount of the old debt, no gain or loss was recorded. The Company did record a discount on the debt equal to the face value, in the amount of $70,000 in 2014. This discount will be amortized to interest expense over the term of the debt, or one year. During the year, the Company has paid $12,000 on this payable, leaving the net amount convertible at $58,000.

 

7. NOTE PAYABLE

 

The Company received $17,500 under a promissory note agreement in July 2012. Per the note agreement, interest of $1,750 was accrued through July 31, 2013. An additional $4,000 was received under this Note in 2013. Interest and principal were due on September 15, 2012. The Company is currently in default on this note. Implied interest of $2,325 has been accrued on this Note.

 

 

 

8. CAPITAL STOCK

 

On July 28, 2011, the Company completed a private placement consisting of 1,000,000 shares for a total consideration of $60,000 and 40,000 shares for a total consideration of $10,000.

 

On June 14, 2012, the Company issued 80,000 shares of its common stock for the $20,000 cash it received under a share subscription agreement, in January 2011. The shares were issued June 13, 2012.

 

9. GOING CONCERN

 

The Company will need additional working capital to service its debt and to develop the mineral claims acquired, which raises substantial doubt about its ability to continue as a going concern.   Continuation of the Company as a going concern is dependent upon obtaining additional working capital and the management of the Company has developed a strategy, which it believes will accomplish this objective through additional equity funding, and long term financing, which will enable the Company to operate for the coming year.

 

10. INCOME TAXES

 

The Company’s deferred tax assets, valuation allowance, and change in valuation allowance are as follows (“NOL” denotes Net Operating Loss):

 

Period Ended  Estimated NOL Carry-Forward
$
  NOL expires  Estimated Tax Benefit from NOL
$
  Valuation Allowance
from NOL Benefit
$
  Net Tax Benefit
 2007    22,659    2027    7,704    (7,704)   —   
 2008    57,226    2028    19,456    (19,456)   —   
 2009    36,149    2029    12,291    (12,291)   —   
 2010    24,511    2030    8,334    (8,334)   —   
 2011    229,394    2031    77,994    (77,994)   —   
 2012    103,503    2032    35,191    (35,191)   —   
 2013    258,338    2033    87,835    (87,835)   —   
 Total    731,780        248,805   (248,805)   —   

 

The total valuation allowance as of July 31, 2013 was $248,805 which increased by $87,835 for the year ended July 31, 2013.

 

As of July 31, 2013 and 2012, the Company has no unrecognized income tax benefits. The Company’s policy for classifying interest and penalties associated with unrecognized income tax benefits is to include such items as tax expense. No interest or penalties have been recorded during the years ended July 31, 2013, and 2012 and no interest or penalties have been accrued as of July 31, 2013 and 2012.

 

The tax years from 2007 and forward remain open to examination by federal and state authorities due to net operating loss and credit carryforwards. The Company is currently not under examination by the Internal Revenue Service or any other taxing authorities.