UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K AMENDMENT #1
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES ACT OF 1934
For the fiscal year ended July 31, 2010
[ ] TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transaction period from August 1, 2009 to July 31, 2010
Commission File Number: 333-145879
SIGA RESOURCES, INC.
(Exact name of registrant as specified in charter)
Nevada 74-3207964
(State or other jurisdiction (I.R.S. Employee
of incorporation or organization) I.D. No.)
1002 Ermine Court
South Lake Tahoe, CA 96150
(Address of principal executive offices) (Zip Code)
(530) 577-4141
(Registrant's telephone number)
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:
Title of Class
--------------
None
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 (ss.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 (ss.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 [ ] Small reporting company [X]
(Do not check if a small reporting company)
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:
October 25, 2010: 43,785,000 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
PART 1........................................................................ 3
ITEM 1. BUSINESS........................................................ 3
ITEM 1A. RISK FACTORS.................................................... 4
ITEM 1B. UNRESOLVED STAFF COMMENTS....................................... 7
ITEM 2. PROPERTIES...................................................... 7
ITEM 3. LEGAL PROCEEDINGS...............................................15
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS...........15
PART II.......................................................................16
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASE OF EQUITY SECURITIES................16
ITEM 6. SELECTED FINANCIAL INFORMATION..................................16
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS
AND RESULTS OF OPERATIONS.......................................17
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.......22
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.....................23
ITEM 9. CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE........................................23
ITEM 9A. CONTROLS AND PROCEDURES.........................................23
ITEM 9A(T). CONTROLS AND PROCEDURES......................................24
ITEM 9B. OTHER INFORMATION...............................................25
PART 111......................................................................25
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE..........25
ITEM 11. EXECUTIVE COMPENSATION..........................................27
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS.................................29
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE....................................................31
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES..........................32
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.........................33
SIGNATURES...............................................................34
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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, affiliated companies or joint venture
partners.
We are a start-up, pre-exploration stage company engaged in the search for gold
and related minerals and have not generated any operating revenues since
inception. We have one claim call the Valolo Claim located in Fiji. On October
14, 2010 we announced an earn-in arrangement on a claim in Hope, British
Columbia. 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.
There is no assurance that a commercially viable mineral deposit, a reserve,
exists at 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 is 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. The
initial investment is for three hundred and five thousand Canadian dollars
(CAD$305,000) to determine and expand the known resource and provide other
information requisite to completing the projects' production design. Our
investment is hereinafter referred to as the Lucky Thirteen Claim.
As of the date of this Form 10K, we have not conducted any exploration work on
the Valolo Claim. We do not have funds sufficient to complete only Phase 1 of a
two-phase exploration program recommended for the Valolo Claim. It is our plan
to complete Phase I by no later than the late spring of 2011.
We have no full time employees and our management devotes a small percentage of
their time to the affairs of our Company.
Our administrative office is located at 1002 Ermine Court, South Lake Tahoe, CA.
Our telephone number is 530 577-4141.
Presently our outstanding share capital is 43,785,000 common shares. We have no
other type of shares either authorized or issued.
Our 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, 2010. We have no cash as at July 31, 2010 and have liabilities of
$58,195. Since our inception we have incurred accumulated losses of $140,544. We
anticipate minimum operating expenses for the next twelve months of $452,970
(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.
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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 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 .
Siga has no website at this time.
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 2010 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 property, the Valolo 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, 2010, the date of our most recent
audited financial statements, is $140,544. Our ability to achieve and maintain
profitability and positive cash flow in the future is dependent upon
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* 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.
5
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 suppliesand 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 A MAJORITY OF THEIR TIME TO OUR
EXPLORATION ACTIVITY, OUR EXPLORATION ACTIVITY MAY BE SPORADIC WHICH MAY
RESULT IN PERIODIC INTERRUPTIONS OR SUSPENSIONS OF EXPLORATION .
Our President will be devoting only 15% of his time, approximately 24 hours per
month, to our business. Our Chief Financial Officer and Secretary-Treasurer will
be devoting only approximately 10% of his time, or 16 hours per month to our
operations. As a consequence of the limited devotion of time to the affairs of
our Company expected from management, our business may suffer. For example,
because our officers and directors have other outside business activities and
may not be in a position to devote a majority 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 Valolo 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 Valolo 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 Valolo Claim is found
to have commercial quantities of ore, we would be subject to additional risks
respecting any development and production activities. Similar risks and
uncertainties and the consequent environmental liabilities are associated with
our Lucky Thirteen Claim. 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 Valolo Claim or 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
Valolo Claim and the Lucky Thirteen Claim without finding anything of value.
There is a high probability the Valolo Claim and 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.
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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 Valolo Claim or the Lucky Thirteen Claim is in excess
of the selling price of such minerals, we would not be able to develop the
Valolo Claim or the Lucky Thirteen Claim. Accordingly even if ore reserves were
found on the Valolo Claim or the Lucky Thirteen Claim, without sufficient
tonnage we would still not be able to economically extract the minerals from the
Valolo Claim or the Lucky Thirteen Claim in which case we would have to abandon
the Valolo Claim and/or the Lucky Thirteen Claim and seek another mineral
property to develop, or cease operations altogether.
RISKS ASSOCIATED WITH OWNING OUR SHARES:
11. 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.
12. 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:
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VALOLO CLAIM
With funds advanced by one of our directors we identified and acquired a mineral
property that we consider holds the potential to contain gold mineralization. On
March 1, 2007 we purchased, for $5,000, the Valolo Gold Claim (hereinafter the
"Valolo Claim") from The Valolo Group, LLC. an independent prospecting company
based in Fiji. The Valolo Claim is situated approximately 9 miles south of the
town of Korovou, on the island of Viti Levu, the largest and most populous
island in the Republic of Fiji.
In March 2007 we engaged Naresh Bhatt, P. Geol., to conduct a review and
analysis of the Valolo Claim and the previous exploration work undertaken on the
property and to recommend a mineral exploration program for the Valolo Claim.
Mr. Bhatt's report titled "Summary of Exploration on the Valolo Property,
Korovou, Fiji" dated March 11, 2007 (the "Bhatt Report") recommends a two-phase
exploration program for the Valolo Claim.
We raised $750 in initial seed capital on July 11, 2007 in order to provide some
working capital for the Company and we also closed, on July 31, 2007, a private
placement pursuant to Regulation S of the Securities Act of 1933, whereby
501,000 common shares were sold at the price of $0.05 per share to raise
$25,050.
We intend to undertake exploration work on the Valolo Claim. We are presently in
the pre-exploration stage and there is no assurance that mineralized material
with any commercial value exits on our property. We do not have any ore body and
have not generated any revenues from our operations. Our planned exploration
work is exploratory in nature. We are the registered and beneficial owner of a
100% interest in the Valolo Claim located in the Republic of Fiji.
The Valolo Claim covers an area of approximately 72.5 hectares (approximately
179 acres).
LOCATION AND ACCESS
The Valolo Claim is located approximately 15 kilometers (9 miles) south of
Korovou, Fiji. The area covered by the Claim is an active mineral exploration
and development region with plenty of heavy equipment and operators available
for hire. Korovou provides all necessary amenities and supplies including, fuel,
helicopter services, hardware, drilling companies and assay services. Access to
our Claim is via major highway west from Korovou. No water is required for the
purposes of our planned exploration work. No electrical power is required at
this stage of exploration. Any electrical power that might be required in the
foreseeable future could be supplied by gas powered portable generators.
The claim's terrain is rugged with elevations ranging from of 1,420 feet to
2,650 feet. Tropical mountain forests grow at lower elevations in the northeast
corner of the claim and good rock exposure is found along the peaks and ridges
in the eastern portion of the claim. The climate is mild year round with the
rainy season falling from May to October.
PROPERTY GEOLOGY
A belt of volcanic rocks, of the Savura Volcanic Group, underlies the property.
These volcanic rocks are exposed along a wide axial zone of a broad complex. The
presence of these rocks is on our property is relevant to us as gold
mineralization, at the nearby (approximately 20 miles to the west of our claim)
Nasoata Gold Mine, a past producer of gold in commercial quantities, is
generally concentrated within extrusive volcanic rocks (of the Savura Volcanic
Group) on the walls of large volcanic caldera.
The main igneous intrusions consist of `Medrausucu' or theoretic gabbros,
tonalities and tondjhemites.
Theoletic Gabbros, for example, are generally are a greenish or dark coloured
fine to coarse grained rock. Irregular shaped masses of so called "soda granite"
are seen in both sharp and gradational contact with the diorite. The different
phases of Medrausucu are exposed from north of the Valolo Gold Claim to just
8
east of the town of Korovou and are principal host rocks for gold veins at the
previously active Nasoata Gold Mine, approximately 20 kilometers away.
On a regional basis the area of Fiji in which the Valolo Claim is located is
notable for epi-thermal type gold deposits such as that exploited at the Nasoata
Gold Mine. While no mineralization has been reported for the area covered by the
Valolo Claim, structures and shear zones affiliated with mineralization on
adjacent properties pass through the claim.
PREVIOUS EXPLORATION
To our knowledge based on examination by our geologist of available records, no
detailed exploration has previously been undertaken on the area covered by the
Valolo Claim.
However, numerous showings of mineralization have been discovered in the area
and several prospects in the area have achieved significant gold production (an
aggregate of 1.11 million ounces of gold reported between 1956 and 2002) in the
past. The same rock units, of the Savura Volcanic Group that are found at those
mineral occurrences underlie our claim. The Bhatt' Report has concluded that
further exploration of the Valolo Claim is warranted.
No assurance, however, can be given that any mineralization will found on the
Valolo Claim.
PROPOSED EXPLORATION WORK - PLAN OF OPERATION
The Bhatt' Report recommends a phased exploration program to properly evaluate
the potential of the Valolo Claim. Mr. Bhatt is a registered member in good
standing of the Geological Society of Fiji. He is a graduate of University of
Queensland, Brisbane, Australia with both a Bachelor of Science degree, Geology
(1971) and a Master of Science (1975). Mr. Bhatt has practiced his profession as
a geologist for over 33 years. He visited our claim in March 2007.
We must conduct exploration to determine what minerals exist on our property and
whether they can be economically extracted and profitably processed. We plan to
proceed with exploration of the Valolo Claim by completing Phase I of the work
recommended in the Bhatt Report, in order to begin determining the potential for
discovering commercially exploitable deposits of gold on our claim.
We have not discovered any ores or reserves on the Valolo Claim, our sole
mineral property. Our planned Phase I work is exploratory in nature.
The Bhatt Report recommends a two-phase exploration program to properly evaluate
the potential of the claim. Phase I work will consist of geological mapping and
geophysical surveying. This will involve, among other things, establishing a
grid and the creation of maps showing all features of the terrain of our claim.
We will create an actual grid on the ground whereby items can be related one to
another more easily and with greater accuracy. When we map, we will actually
draw a scale map of the area and make notes on it as to the location where
anything (e.g. potential mineralization) was found that was of interest. In the
process we will also identify any showings which appear to warrant sampling,
i.e. any rock formations that appear to warrant our taking soil and rock samples
from the claims to a laboratory where a determination of the elemental make-up
of the sample and the exact concentrations of gold and other indicator minerals
can be made. We anticipate, based on the estimate contained in the Bhatt Report,
that Phase I work will cost approximately$10,900 (Fiji $17,800). The Valolo
Claim is located in a tropical climatic area so the claim can be worked year
round. We anticipate completing Phase I before the end of the late fall of 2010
or early spring of 2011.
Should Phase I results warrant further work, and provided we are able to raise
additional funds to undertake additional work on the Valolo Claim, we would
undertake the Phase II work recommended in the Bhatt' Report. The Phase II
geochemical and surface sampling work would be designed to compare the relative
concentrations of gold and other indicator minerals in samples so the results
from different samples can be compared in a more precise manner and plotted on a
map to evaluate their significance.
9
If an apparent mineralized zone(s) is identified and narrowed down to a specific
area by the Phase I & II work, we would then consider (again subject to our
ability to raise additional funds to do so) the feasibility of diamond drilling
selected targets to test the apparent mineralized zones. The cost of such a
program, assuming it is warranted, cannot be estimated at this time.
The recommended Phase II work is estimated to cost a further $13,860 (Fiji
$22,700). At this point we have funds available to complete Phase I only. We
will have to raise additional capital in order to carry out Phase II, work or
any other work beyond Phase I. Particularly since we have a limited operating
history, no reserves and no revenue, our ability to raise additional funds might
be limited. If we are unable to raise the necessary funds, we would be required
to suspend Siga's operations and liquidate our company. See, particularly, `Risk
Factors beginning on page 5.
There are no permanent facilities, plants, buildings or equipment on the Valolo
Claim.
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 Valolo Claims. There is
no ore body on the Valolo Claims.
GOVERNMENT REGULATION
Exploration activities are subject to various national, state, foreign and local
laws and regulations in Fiji, 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 Fiji.
ENVIRONMENTAL REGULATION
Our exploration activities are subject to various federal, state 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.
10
As indicated above we will hire subcontractors on an as needed basis. We have
not entered into negotiations or contracts with any of potential subcontractors.
We do not intend to initiate negotiations or hire anyone until we are nearing
the time of commencement of our planned exploration activities.
There are no permanent facilities, plants, buildings or equipment on our mineral
claim.
MINERALIZATION
No mineralization has been reported for the area of the property but structures
and shear zones affiliated with mineralization on adjacent properties pass
through it.
EXPLORATION
Previous exploration work has not included any attempt to drill the structure on
Valolo Claim. Records indicate that no detailed exploration has been completed
on the property.
ADJACENT PROPERTIES
The adjacent properties are cited as examples of the type of deposit that has
been discovered in the area and are not major facets to this report.
RECOMMENDATIONS BY MR. BHATT, PROFESSIONAL GEOLOGIST
A two phased exploration program to further delineate the mineralized system
currently recognized on Valolo Claim is recommended. The program would consist
of air photo interpretation of the structures, geological mapping, both
regionally and detailed on the area of the main showings, geophysical survey
using both magnetic and electromagnetic instrumentation in detail over the area
of the showings and in a regional reconnaissance survey and geochemical soil
sample surveying regionally to identify other areas on the claim that are
mineralized and in detail on the known areas of mineralization. The effort of
this exploration work is to define and enable interpretation of a follow-up
diamond drill program, so that the known mineralization and the whole property
can be thoroughly evaluated with the most up to date exploration techniques.
The proposed budget for the recommended work in FJD 40,500 (US $24,760) is as
follows:
Fijian U.S.
Dollars Dollars
------- -------
Phase I
-------
1. Geological mapping and Surveying 17,800 $10,900
------- -------
Total Phase I 17,800 $10,900
------- -------
Phase II
--------
1. Geochemical surveying and surface sampling
(includes sample collection and assaying) 22,700 $13,860
------- -------
Total Phase II 22,700 $13,860
------- -------
Total Exploration 40,500 $24,760
======= =======
11
We intend to complete Phase I exploration work on the Valolo Claim, our sole
property. No exact date has been determined for the commencement of exploration
work on the Valolo Claim.
Particularly since we have a limited operating history, no reserves and no
revenue, our ability to raise additional funds might be limited. If we are
unable to raise the necessary funds, we would be required to suspend Siga's
operations and liquidate our company.
There are no permanent facilities, plants, buildings or equipment on the Valolo
claim.
LUCKY THIRTEEN CLAIM
On September 24, 2010, the Company has 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. The initial investment is for three hundred and five thousand
Canadian dollars (CAD$305,000) to determine and confirm the resource and develop
other information requisite to completing the projects' production design.
We will earn 20% of the outstanding capital of TPM upon our subsequent advance
of CAD$200,000 to TPM; additional 20% will be earned upon receipt of mining
certificate by TPM and advances of a further $4,350,000 to TPM; and an
additional 40% upon advances of a further $5,145,000 to TPM. The overriding
royalties on the Luck 13 Claim are 3% net smelter. Prior to payment of $1.5
million by TPM to the $1.5 million owed to Peter Osha, the royalty rates are
Floating Rate Royalties determined by the price of gold such that when gold is
at $500/oz. the royalty rate is 5%; $750/oz. - 7.5%; and $1,000/oz - 10%.
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, 2010
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
12
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.
PROPOSED EXPLORATION WORK - PLAN OF OPERATION
The current plan of operations is to grid sample areas of the property by
trenching and/or drilling. The material recovered and sampled will be run
through an on-site washing and recovery plant. Samples taken representatively
will be assayed by qualified assay laboratories, with the information derived
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 #52082 Option Deposit $ 50,000
Placer Mineral Tenure #523082 Claim to Lease 5,000
Frontier GeoScience Ltd.
Seismic Survey Russell Hillman P.Eng 33,380
Road Upgrade to CPR Track Triple O Contracting 10,000
CPR Track Crossing Triple O Contracting-CPR 10,000
Bonding & Insurance 10,000
Survey-12 Trenches (40' ea) 10'
sample increments = 48 samples Triple O 36,000
48 Samples Processed Triple O Contracting 36,000
48 Assays 10,000
Pit Design P.Eng (Mining) 5,000
Process Design P.Eng (Metallurgical) 5,000
Contingency Reserve 94620
--------
DEVELOPMENT BUDGET TOTAL $305,000
========
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 $ 5,145,000
Operational Budget Estimate
Road 305,000
Operating Equipment & Buildings 3,477,126
Working Capital 517,290
Professional Fees 225,584
Operational Budget 4,555,000
-----------
TOTAL REQUIRED CAPITAL $10,000,000
===========
BULK TESTING SCHEDULE
The following is an estimate to conduct a bulk sampling program on the Lucky
Thirteen Property.
* The test program to consist of a series trenches to a maximum depth of
40 foot minimum.
* A bulk sample to be taken every 10 feet vertically
* All trenches will be backfilled upon completion of test.
13
* A screening plant will be set up near the excavation.
The overburden will be removed and placed elsewhere on the claim. All gravel
material excavated from the trench will be screened to different size fractions.
The gravel on each screen will be weighed and the information recorded. The
concentrate will be captured, weighed and processed for minerals. 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 screening plant will be washed down and cleaned up before
the next test is carried out. The screening plant is then moved forward and the
process is repeated. 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.
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 basis. We have
not entered into negotiations or contracts with any of potential subcontractors.
We do not intend to initiate negotiations or hire anyone until we are nearing
the time of commencement of our planned exploration activities.
There are no permanent facilities, plants, buildings or equipment on our mineral
claim.
14
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-Browm, PROFESSIONAL GEOLOGIST
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. Presently Siga does not have any cash.
ITEM 3. LEGAL PROCEEDINGS
There are no legal proceedings to which Siga is a party or to which the Valolo
Claim or 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 Siga's date of
inception. Management hopes to hold an Annual General Meeting of Stockholders
during 2011.
15
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASE OF EQUITY SECURITIES
Since inception, Siga has not paid any dividends on its common stock, and Siga
does not anticipate that it will pay dividends in the foreseeable future. As at
July 31, 2010, Siga had 37 shareholders; two of these shareholders are an
officer and director of Siga.
Option Grants and Warrants outstanding since Inception.
No stock options have been granted since Siga's inception.
There are no outstanding warrants or conversion privileges for Siga's 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 (date of
ended incorporation) to
31-Jul-10 31-Jul-10
----------- -----------
Impairment of mineral claim acquisition $ -- $ 5,000
General and Administrative 24,511 135,544
----------- -----------
Net loss from operations $ 24,511 $ 140,544
=========== ===========
Weighted average shares outstanding
(basic and fully diluted) 43,785,000
Net loss per share (basic and fully diluted) $ --
16
Balance Sheet Data
Cash and cash equivalent $ --
-----------
Total assets $ --
===========
Total liabilities $ 58,195
===========
Total Shareholders' deficiency $ (58,195)
===========
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
Siga was incorporated under the laws of the State of Nevada on January 18, 2007
under the name Siga Resources Inc. Siga does not have any subsidiaries,
affiliated companies or joint venture partners.
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 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 invest in the exploration of the
Valolo Claim and/or 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.
17
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 Valolo
Claim an/or 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 and
stay in business.
To meet our need for cash we must raise additional capital. 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 $45,018 in cash over the next twelve months,
including the cost of planned Phase I exploration work for the Valolo claim
during that period. We also anticipate that we will have to spend at least
CAD$305,000 on the Lucky Thirteen claim. We have no cash at the present time.
For a detailed breakdown refer to "Liquidity and Capital Reserves".
We have no plant or significant equipment to sell, nor are we going to buy any
plant or significant equipment during the next twelve months. We will not buy
any equipment until we have located a body of ore and we have determined it is
economical to extract the ore from the land.
We may attempt to interest other companies to undertake exploration work on the
Valolo Claim and/or the Lucky Thirteen Claim through joint venture arrangement
or even the sale of part of the Valolo Claim or the Lucky Thirteen Claim.
Neither of these avenues has been pursued as of the date of this Form 10-K.
Since we do not presently have the requisite funds, we may not be able to do the
work under Phase I of the recommended exploration program of the Valolo Claim or
the initial phase of the Lucky Thirteen Claim. We might have to consider a joint
venture partner. If we cannot find a joint venture partner and do not raise more
money, we will be unable to complete any work. If we are unable to finance
additional exploration activities, we do not know what we will do and we do not
have any plans to do anything else. We may have no alternative but to go out of
business.
We do not intend to hire any employees at this time. All of the work on the
Valolo Claim and the Lucky Thirteen Claim will be conducted by unaffiliated
independent contractors that we will hire. The independent contractors will be
responsible for surveying, geology, engineering, exploration, and excavation.
The geologists will evaluate the information derived from the exploration and
excavation and the engineers will advise us on the economic feasibility of
removing the mineralized material.
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. 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
18
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, 2010 our total assets were nil and our total liabilities were
$58,195.
Including the cost of completing the exploration phase of our Lucky Thirteen
Claim and the Valolo Claim, our non-elective expenses over the next twelve
months, are expected to be as follows:
Estimated
Expense Ref. Amount
------- ---- ------
Accounting and audit (i) $ 49,000
Edgar filing fees (ii) 2,000
Exploration costs (iii) 315,900
Filing fees - Nevada; Securities of State (iv) 375
Office and general expenses (v) 20,000
Transfer agent fees (vi) 5,000
--------
Estimated expenses for the next twelve months 392,275
--------
Account payable as at July 31, 2010 60,695
--------
Cash required for the next twelve months $452,970
========
(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, 2010 10-Q 9,000 1,000 10,000
January 31, 2011 10-Q 9,000 1,000 10,000
April 30, 2011 10-Q 9,000 1,000 10,000
July 31, 2011 10-K 9,000 10,000 19,000
------- ------- -------
Estimated total $36,000 $ 4,000 $49,000
======= ======= =======
19
(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.
(iii) Exploration costs
The projection of cash required over the next twelve months has assumed
that the recommended work program will be completed at an estimated cost
of $10,900. The Lucky Thirteen Claim has an initial budget of $305.000.
DEVELOPMENT BUDGET
TIME TO COMPLETE 90 DAYS Purpose
------------------------ -------
Placer Mineral Tenure #52082 Option Deposit $ 50,000
Placer Mineral Tenure # 523082 Claim to Lease 5,000
Seismic Survey Frontier Geoscience 33,380
Road Upgrade to CPR Track Triple O Contracting 10,000
CPR Track Crossing - Triple O Contracting & CPR 10,000
Bonding & Insurance 10,000
Survey-12 Trenches (40' ea) 10'
sample incr = 48 samples Triple O Contracting 36,000
48 Samples Processed Triple O Contracting 36,000
48 Assays 10,000
Pit Design P.Eng. Mining 5,000
Process Design P.Eng Metallurgic 5,000
Contingency Reserve 94,620
---------
DEVELOPMENT BUDGET TOTAL $ 305,000
=========
(iv) 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.
(v) Office and general
We have estimated a cost of approximately $20,000 for photocopying,
printing, fax and delivery, travel, and entertainment.
(vi) Transfer agent
The annual fee from Holladay Stock Transfer to act as transfer agent for
us is $5, 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, 2010, 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.
20
TWELVE MONTHS ENDED JULY 31, 2010 AND 2009 AND FOR THE PERIOD FROM JANUARY 18,
2007 (DATE OF INCEPTION) TO JULY 31, 2010.
We incurred accumulated net losses since inception of $140,544 as detailed in
the following table:
Twelve Months Twelve Months From inception
Ended Ended January 18, 2007 to
Expenses Ref. 31-Jul-10 31-Jul-09 31-Jul-10
-------- ---- --------- --------- ---------
Accounting and audit (i) $ 10,500 $ 15,546 $ 38,596
Bank charges -- 45 364
Consulting -- -- 17,000
Exploration costs -- -- 5,000
Filing fees -- -- 1,695
Incorporation costs -- -- 720
Legal -- -- 9,818
Management fees (ii) 9,000 12,000 39,000
Office (iii) 145 219 2,080
Rent (iv) 2,700 3,600 11,700
Telephone (v) 1,350 1,800 5,850
Transfer agent fees (vi) 816 2,690 5,823
Edgar zing (vii) -- 250 2,898
-------- -------- --------
Total $ 24,511 $ 36,150 $140,544
======== ======== ========
(i) Audit and Accounting
Auditing and accounting expense represents the cost of the preparation of
the financial statements for the year ended July 31, 2009, as well as for
the preparation and review of the financial statements for the three
months ended October 31, 2009, the six months ended January 31, 2010, and
the nine months ended April 30, 2010.
(ii) Management fees
The Company did not pay management fees but realizes there is a cost
associated with the directors managing the operations of our Company.
(iii) Office
Office expenses during the year were mainly for courier, postage, office
supplies, etc. in the amount of $145.
(iv) Rent
We accrued rent similar to management fees with an offsetting entry to
Capital in Excess of Par Value totalling $2,700.
21
(v) Telephone
Similar to management fees and rent noted above, we have accrued telephone
expense totalling $1,350 with an offsetting entry to Capital in Excess of
Par Value.
(vi) Transfer agent fees
The Company uses the services of Holladay Stock Transfer as its transfer
agent. During the fiscal year ended July 31, 2010 the company paid fees of
$816.
(vii) Edgarizing
There were no Edgarizing expenses during the year.
BALANCE SHEETS
Total cash and cash equivalents, as of July 31, 2010 and July 31, 2009, were
both $nil. Our working capital as at July 31, 2010 and July 31, 2009 were a
negative amount of $58,195 and a negative amount of $46,734 respectively.
Total shareholders' deficiency as of July 31, 2010 was $58,195 and $46,734 as at
July 31, 2009. Total shares outstanding as at July 31, 2010 were 43,785,000.
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 23, 625,000
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;
22
* the exploration results on the Valolo Claim and 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 financial statements attached to this Form 10-K for the year ended July 31,
2010 have been examined by our independent accountants, Madsen & Associates
CPA's Inc. and attached hereto.
ITEM 9. CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
During the year ended July 31, 2010, to the best of our knowledge, there have
been no disagreements with Madsen & Associates CPA's Inc. on any matters of
accounting principles or practices, financial statement disclosure, or audit
scope procedures, which disagreement if not resolved to the satisfaction of
Madsen & Associates CPA's Inc. would have caused them to make a reference in
connection with its report on the financial statements for the year.
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 are under
the supervision of the Company's Chief Executive Officer, being Arun Kumar, and
Chief Financial Officer, being Rohit Singh. 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
23
approvals, authorizations, verifications, reconciliations, reviews of operating
performance, security of assets and segregation of duties.
As of July 31, 2010, 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, 2010,
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
and the Board of Directors has not identified an "expert", one who is
knowledgeable about reporting and financial statements requirements,
to serve on the Audit 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.
24
ITEM 9B. OTHER INFORMATION
There are no matters required to be reported upon under this Item.
PART III
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
---------------- ----------- ---
Edwin G. Morrow Chief Executive Officer, 65
1002 Ermine Court, President and Director (1)
South Lake Tahoe, CA 96150
Robert Malasek Chief Financial Officer, 42
Alpenstr. 34a, 82393 Chief Accounting Officer,
IffeldorfGermany Secretary-Treasurer and
Director (2)
----------
(1) Edwin G Morrow was appointed a director on September 14, 2010, President
and the Chief Executive Officer on the same day.
(2) Robert Malasek became a director on September 28, 2010 and was appointed
Secretary Treasurer, Chief Financial Officer and Chief Accounting Officer
on the same day.
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
EDWIN MORROW has been the President and Director of the Company since September
14, 2010.
Mr. Morrow holds a Bachelor of Science in Geology from Mackay School of Mines,
University of Nevada, Reno, with post graduate study in finance and mineral
economics.
A registered Professional Geologist, Mr. Morrow is a member of the Society for
Mineral Exploration , has served on the Boards of Directors of several
Associations and companies and as an Council Member of the Mineral Industry
Advisory Board, University of Nevada, Mackay School of Mines.
Mr. Morrow has worked as an employee or consultant for over 35 years in
exploration, development and production in the natural resources area, in
multiple commodities. He has held line and executive positions with in the
mining and minerals industry with Sonoma Quicksilver, Utah International Inc,
InterPace Corporation, Federal Bentonite Corporation, Homestake Mining Company,
and Zaruma Resources Inc. (Laminco Resources Inc.). As part of his consulting
25
practice, Mr. Morrow has over 10 years experience in real estate management,
including planning, entitlement, permitting, engineering and construction
management.
ROBERT MALASEK has been a director and Secretary Treasurer of the Company since
Sept 28, 2010. Mr. Malasek currently serves as a consultant to a variety of
clients, including a number of public companies. He also is serving as the Chief
Financial Officer for Naturewell, Inc. to which he was appointed on August 15,
2006. Mr. Malasek had previously served as Controller for NatureWell, Inc. From
1987 until August 1999 Robert was employed with Starwood Hotel & Resorts
Worldwide, Inc. in a number of positions within the accounting department and
became Assistant Controller in 1998 until his departure in 1999. Mr. Malasek
received his Bachelor of Science in Accountancy from San Diego State University,
California in 1998.
None of our officers and directors work full time for our company. Mr. Morrow
spends approximately 40 hours a month on administrative and mining matters. Mr.
Morrow's time on Company affairs is expected to continue at this pace for the
foreseeable future. As Secretary Treasurer, Robert Malasek spends approximately
40 hours per month on corporate matters.
None of our directors is an officer or director of a company registered under
the Securities and Exchange Act of 1934.
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 Edwin Morrow, our President and Chairman of
the Audit Committee, and Robert Malasek our Chief Financial Officer and
Secretary Treasurer neither of whom are independent. Mr. Morrow cannot be
considered an "audit committee financial expert" as defined in Item 401 of
Regulation S-B. Mr. Malasek meet these qualifications.
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 the
exploration of our previous mineral claims and to prepare a report on the Valolo
Claim and 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
Our President and CEO and our Secretary Treasurer and CFO are unrelated.
26
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:
27
SUMMARY COMPENSATION TABLE
Long Term Compensation
-----------------------------------
Annual Compensation Awards Payouts
------------------------ ----------------------- ---------
Name and Restricted
Principal Other Annual Stock Options/* LTIP All Other
Position Year Salary Compensation($) Awarded($) SARs(#) Payouts($) Compensation($)
-------- ---- ------- -------------- ---------- ------- ---------- --------------
Arun Kumar 2008 -0- -0- -0- -0- -0- -0-
President, CEO 2009 -0- -0- -0- -0- -0- -0-
and Director 2010 -0- -0- -0- -0- -0- -0-
Rohit Singh 2008 -0- -0- -0- -0- -0- -0-
Secretary Treasurer, 2009 -0- -0- -0- -0- -0- -0-
CFO and Director 2010 -0- -0- -0- -0- -0- -0-
Edwin G. Morrow 2008 -0- -0- -0- -0- -0- -0-
President, CEO 2009 -0- -0- -0- -0- -0- -0-
and Director 2010 -0- -0- -0- -0- -0- -0-
Robert Malasek 2008 -0- -0- -0- -0- -0- -0-
Secretary Treasurer, 2009 -0- -0- -0- -0- -0- -0-
CFO and Director 2010 -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.
EMPLOYMENT AGREEMENTS WITH EXECUTIVE OFFICERS AND DIRECTORS
There are no employment agreements with any officers or directors.
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
28
COMPENSATION PURSUANT TO PLANS
None
PENSION TABLE
None
TERMINATION OF EMPLOYMENT
There are no compensatory plans or arrangements, including payments to be
received from Siga, 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 Siga, or any change in control of Siga, or a change in the
person's responsibilities following a change in control of Siga.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Siga knows of no director, officer, beneficial owner of more than ten percent of
any class of equity securities of Siga's registered pursuant to Section 12
("Reporting Person") that failed to file any reports required to be furnished
pursuant to Section 16(a). Neither Mr. Kumar and Mr. Singh have personally filed
any reports with the Section.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The following table sets forth, as at November 10, 2010, 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 Name and Address of Amount of Beneficial
Class Beneficial Owner (1) Ownership (2) Percent of Class
----- -------------------- ------------- ----------------
Common Arun Kumar 17,500,000 39.97%
Stock #8 Nairal Rd., Raiwai,
Suva, Fiji
Common Rohit Singh 8,750,000 19.98%
Stock Narata, Nausori, GPO,
Box 1004, Suva, Fiji
Common Greater than 5% 26,250,000 59.95%
Stock shareholders as a Group
(2 persons)
----------
(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.
29
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 23,625,000.
Our two largest shareholders, Arun Kumar and Rohit Singh, own, collectively,
26,250,000 issued and outstanding shares of our common stock. All 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 the assets of Siga available
for distribution upon winding up of the affairs of Siga; 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.
30
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. Our directors and officers have 60 percent
of the shares outstanding making it impossible for any shareholder or group of
shareholders to accumulate sufficient votes of shares from other shareholders to
change 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 inception of Siga, 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
inception of Siga, or any currently proposed transactions, or series of similar
transactions, to which Siga was or is 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 Siga to own of record or beneficially more than
5% of the common shares of Siga's capital stock, or any member of the immediate
family of any of the foregoing persons, has an interest.
CONFLICTS OF INTEREST
Ed Morrow is a director of Liberty Coal Energy Inc. in which he spends
approximately 10% of his time. Otherwise none of our officers and directors is a
director or officer of any other company involved in the 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"). Siga's Code embodies our commitment to such ethical
principles and sets forth the responsibilities of Siga 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
Siga does not have promoters and has no transactions with any promoters.
31
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, 2010 for professional services for the review of the
quarterly financial statements as at October 31, 2009, January 31, 2010 and
April 30, 2010, annual financial statements as of July 31, 2010 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: $500
for each of the quarters ended October 31, 2009, January 31, 2010 and April 30,
2010 and $3,500 for the audit of July 31, 2010.
(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, 2010 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, 2010 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 Siga to make any pre-approval policies meaningful. Once Siga has
elected more directors and appointed directors and non-directors to the Audit
Committee it will have meetings and function in a meaningful manner.
(6) Audit Hours Incurred
The principal accountants did not spend greater than 50 percent of the hours
spent on the accounting by Siga's internal accountant.
32
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 Annual Report on Form 10-K filed
on November 12, 2010, Registration No. 333-145879)
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
Annual Report on Form 10-K filed on November 12, 2010, Registration No.
333-145879)
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 Annual Report on
Form 10-K filed on November 12, 2010, Registration No. 333-145879)
FINANCIAL STATEMENTS
The following financial statements are included in this report:
Title of Document Page
----------------- ----
Report of Madsen & Associates, CPA's Inc. F-1
Balance Sheets as at July 31, 2010 and 2009 F-2
Statement of Operations for years ended July 31, 2010 and 2009 and for
the period from January 18, 2007 (date of inception) to July 31, 2010 F-3
Statement of Changes in Shareholders' Deficiency for the period from
January 18, 2007 (date of inception) to July 31, 2010 F-4
Statement of Cash Flows for years ended July 31, 2010 and 2009 and for
the period ended January 18, 2007 (date of inception) to July 31, 2010 F-5
Notes to the Financial Statements F-6
33
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/ Edwin G. Morrow
----------------------------------
Edwin Morrow
Chief Executive Officer,
President and Director
Date: February 9, 2011
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated
By: /s/ Edwin G. Morrow
-------------------------------
Edwin G. Morrow
Chief Executive Officer,
President and Director
Date: February 9, 2011
By: /s/ Robert Malasek
-------------------------------
Robert Malasek
Chief Financial Officer,
and Director
Date: February 9, 2011
34
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of Siga Resources, Inc.
(A Pre-Exploration Stage Company)
We have audited the accompanying balance sheets of Siga Resources, Inc. (a
Pre-Exploration Stage Company) (the Company) as of July 31, 2010 and 2009, and
the related statements of operations, changes in stockholders' deficiency, and
cash flows for each of the years in the two-year period ended July 31, 2010, and
for the period from January 18, 2007 (date of inception) to July 31, 2010. The
Company's management is responsible for these financial statements. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Siga Resources, Inc. (a
Pre-Exploration Stage Company) as of July 31, 2010 and 2009, and the results of
its operations and its cash flows for each of the years in the two-year period
ended July 31, 2010, and for the period from January 18, 2007 (date of
inception) to July 31, 2010, in conformity with accounting principles generally
accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company will need additional
working capital to service its debt and for its planned activity, which raises
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these matters are described in the notes to the financial
statements. These financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
/s/ Madsen & Associates CPA's, Inc.
----------------------------------------------
Madsen & Associates CPA's, Inc.
Salt Lake City, Utah
November 10, 2010
F-1
SIGA RESOURCES, INC.
(Pre-exploration Stage Company)
BALANCE SHEETS
July 31, July 31,
2010 2009
--------- ---------
ASSETS
CURRENT ASSETS
Cash $ -- $ --
--------- ---------
Total Current Assets $ -- $ --
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES
Accounts payable $ 58,195 $ 17,743
Accounts payable-related parties -- 28,991
--------- ---------
Total Current Liabilities 58,195 46,734
--------- ---------
STOCKHOLDERS' DEFICIENCY
Common stock
500,000,000 shares authorized, at $0.001 par value;
43,785,000 shares issued and outstanding (Note 6) 43,785 43,785
Capital in excess of par value 38,564 25,515
Deficit accumulated during the pre-exploration stage (140,544) (116,034)
--------- ---------
Total Stockholders' Deficiency (58,195) (46,734)
--------- ---------
$ -- $ --
========= =========
The accompanying notes are an integral part of these financial statements.
F-2
SIGA RESOURCES, INC.
(Pre-exploration Stage Company)
STATEMENTS OF OPERATIONS
For the years ended July 31, 2010 and 2009 and for the period
from January 18, 2007 (date of inception) to July 31, 2010
January 18, 2007 to
July 31, July 31, July 31,
2010 2009 2009
----------- ----------- -----------
REVENUES $ -- $ -- $ --
----------- ----------- -----------
EXPENSES
Impairment of mineral claim acquisition cost (Note 3) -- -- 5,000
Administrative 24,511 36,149 135,544
----------- ----------- -----------
NET LOSS $ 24,511 $ 36,149 $ 140,544
=========== =========== ===========
NET LOSS PER COMMON SHARE
Basic and diluted $ -- $ --
=========== ===========
WEIGHTED AVERAGE OUTSTANDING SHARES
Basic and fully diluted 43,785,000 43,785,000
=========== ===========
The accompanying notes are an integral part of these financial statements.
F-3
SIGA RESOURCES, INC.
(Pre-Exploration Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS'
DEFICIENCY Period January 18, 2007 (date of
inception) to July 31, 2010
Common Stock Capital in
------------------------ Excess of Par Accumulated
Shares Amount Value Deficit
------ ------ ----- -------
Balance January 18, 2007 -- $ -- $ -- $ --
Issuance of common shares for cash - July 11, 2007 26,250,000 26,250 (25,500) --
Issuance of common shares for cash - July 31, 2007 17,535,000 17,535 7,515 --
Capital contributions - non-cash expenses -- -- 8,700 --
Net operating loss for the period January 18,2007
(date of inception) to July 31, 2007 -- -- -- (22,659)
----------- ----------- ----------- -----------
Balance as at July 31, 2007 43,785,000 43,785 (9,285) (22,659)
Capital contributions - non-cash expenses -- -- 17,400 --
Net operating loss for the year ended July 31, 2008 -- -- -- (57,226)
----------- ----------- ----------- -----------
Balance as at July 31, 2008 43,785,000 43,785 8,115 (79,885)
Capital contributions - non-cash expenses -- -- 17,400 --
Net operating loss for the year ended July 31, 2009 -- -- -- (36,149)
----------- ----------- ----------- -----------
Balance as at July 31, 2009 43,785,000 43,785 25,515 (116,034)
Capital contributions - non-cash expenses -- -- 13,049
Net operating loss for the year ended July 31, 2010 (24,511)
----------- ----------- ----------- -----------
Balance as at July 31, 2010 43,785,000 $ 43,785 $ 38,564 $ (140,544)
=========== =========== =========== ===========
The accompanying notes are an integral part of these financial statements
F-4
SIGA RESOURCES, INC.
(Pre-exploration Stage Company)
STATEMENTS OF CASH FLOWS
For the years ended July 31, 2010 and 2009
and for the period from January 18, 2007 (date of inception)
to July 31, 2010
January 18, 2007 to
July 31, July 31, July 31,
2010 2009 2009
---------- ---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (24,511) $ (36,149) $ (140,544)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Capital contributions - non-cash expenses 13,049 17,400 56,550
Changes in accounts payable 7,000 5,667 24,743
---------- ---------- ----------
Net Cash Provided (Used) in Operations (4,462) (13,082) (59,251)
---------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES -- -- --
---------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Advances from related parties (4,461) 11,057 33,451
Proceeds from issuance of common stock -- -- 25,800
---------- ---------- ----------
(4,461) 11,057 59,251
---------- ---------- ----------
Net Increase (Decrease) in Cash (8,923) (2,025) --
Cash at Beginning of Year -- 2,025 --
---------- ---------- ----------
CASH AT END OF YEAR $ -- $ -- $ --
========== ========== ==========
SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING ACTIVITIES:
Capital contributions - non-cash expenses $ 13,049 $ 17,400 $ 56,550
========== ========== ==========
The accompanying notes are an integral part of these financial statements
F-5
SIGA RESOURCES, INC.
(Pre-exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
July 31, 2010
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 January 31, 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. At the report date mineral claims, with unknown reserves, had been
acquired. The Company has not established the existence of a commercially
minable ore deposit and therefore has not reached the exploration stage and is
considered to be in the pre-exploration stage.
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 any common share rights unless the exercise becomes antidilutive and
then only the basic per share amounts are shown in the report.
EVALUATION OF LONG-LIVED ASSETS
The Company periodically reviews its long term assets and makes adjustments, if
the carrying value exceeds fair value.
F-6
SIGA RESOURCES, INC.
(Pre-exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
July 31, 2010
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
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.
As of July 31, 2010, the Company had a net operating loss carry forward of
$140,544 for income tax purposes. The tax benefit of approximately $42,000 from
the loss carry forward has been fully offset by a valuation reserve because the
future tax benefit is undeterminable since the Company is unable to establish a
predictable projection of operating profits for future years. The losses begin
to expire in 2027.
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.
F-7
SIGA RESOURCES, INC.
(Pre-exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
July 31, 2010
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
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.
MINERAL PROPERTY COSTS
The Company is primarily engaged in the acquisition and exploration of mining
properties. Mineral property exploration costs are expensed as incurred. Mineral
property acquisition costs are initially capitalized when incurred. The Company
assesses the carrying costs for impairment at each fiscal quarter end. An
impairment is recognized when the sum of the expected undiscounted future cash
flows is less than the carrying amount of the mineral property. Impairment
losses, if any, are measured as the excess of the carrying amount of the mineral
property over its estimated fair value.
When it has been determined that a mineral property can be economically
developed as a result of establishing proven and probable reserves, the costs
then incurred to develop such property, are capitalized. Such costs will be
amortized using the units-of-production method over the estimated life of the
proven and probable reserves. If mineral properties are subsequently abandoned
or impaired, any capitalized costs will be charged to operations.
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 in the accompanying financial statements have been
reclassified to conform to the current period's presentation. These
reclassifications had no effect on the results of operations or financial
position for any period presented.
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.
F-8
SIGA RESOURCES, INC.
(Pre-exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
July 31, 2010
3. ACQUISITION OF MINERAL CLAIM
On March 11, 2007, the Company acquired the Valolo Claim located in the Republic
of Fiji for $5,000. The Valolo Claim is located 10 miles east of the town of
Korovou , Fiji. Under Fijian law, the claim remains in good standing as long as
the Company has an interest in it. There is no annual maintenance fee or minimum
exploration work required on the Claim but the Company is required to have a
mining license in order to keep the claim in good standing.
The acquisition costs have been impaired and expensed because there has been no
exploration activity nor has there been any reserve established and we cannot
currently project any future cash flows or salvage value for the coming year and
the acquisition costs might not be recoverable.
4. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES
Officers-directors have acquired 60% of the common stock issued, have made
advances to the Company of $33,452, and have made contributions to capital of
$56,550 in the form of noncash expenses. The advances from directors were
assigned to a third party on May 31, 2010.
5. CAPITAL STOCK
On July 11, 2007, the Company completed a private placement consisting of
26,250,000 post split common shares sold to directors and officers for a total
consideration of $750. On July 31, 2007, the Company completed a private
placement of 17,535,000 post split common shares for a total consideration
$25,050.
On January 16, 2008, the directors of the Company approved a resolution to
forward split the common share of the Company based on a 35 new shares for each
old share held by the shareholders ("Forward Split"). As a result of the Forward
Split the common shares increased from 1,251,000 common shares with a par value
of $0.001 per share to 43,785,000 common shares with a par value of $0.001 per
share. The 43,785,000 post split common shares are shown as split from the date
of inception.
6. GOING CONCERN
The Company intends to seek business opportunities that will provide a profit.
However, the Company does not have the working capital necessary to be
successful in this effort and to service its debt, 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
loans from related parties, and equity funding, which will enable the Company to
operate for the coming year.
F-9
SIGA RESOURCES, INC.
(Pre-exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
July 31, 2010
7. SUBSEQUENT EVENT
On September 24, 2010, the Company has 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. The initial investment is for three hundred and five thousand
Canadian dollars (CAD$305,000) to determine and confirm the resource and develop
other information requisite to completing the projects' production design.
The Company has evaluated subsequent events through November 10, 2010.
F-10