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SGAE > SEC Filings for SGAE > Form 10-Q on 9-Jan-2014All Recent SEC Filings

Show all filings for SIGA RESOURCES INC.

Form 10-Q for SIGA RESOURCES INC.


9-Jan-2014

Quarterly Report


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Corporate Organization and History within the Last Three years

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

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

Business Development since Inception

There is no historical financial information about us upon which to base an evaluation of our performance as an exploration corporation. We are an 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 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.

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

To meet our need for cash we must raise additional capital. We have entered into a joint venture to raise the required capital to develop the Lucky Thirteen Claim. 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 $237,804 in cash over the next twelve months, including the cost of completing the exploration work for the Lucky Thirteen claim during that period. For a detailed breakdown refer to "Liquidity and Capital Reserves".

Table of Contents 14

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

During the quarter we have done significant exploration work on the Lucky Thirteen Claim financed by our joint venture in which the joint venture partner pays for 100% of the costs and receives 50% of the net profit.

Since we do not presently have the requisite funds to explore and/or develop the Valolo Claim we may decide to attempt to sell this Claim. We do not intend to hire any employees at this time. All of the work on the Lucky Thirteen Claim has been conducted by independent contractors that we have hired. The independent contractors are have been under the direction of the Joint Ventured responsible for surveying, geology, engineering, exploration, and excavation. Our presidents along with independent experts are currently evaluating the information derived from the exploration and excavation activities, and the engineers will advise us on the economic feasibility of proceeding with gold and gravel extraction.

Trends

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

Critical Accounting Policies

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

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

Liquidity and Capital Resources

As of October 31, 2013 our total assets were $1,704 and our total liabilities were $166,455.

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

                                                                     Estimated
                            Expense                        Ref.       Amount

         Accounting and audit                               (i)     $  65,000
         Edgar filing fees                                 (ii)         6,000
         Filing fees - Nevada; Securities of State         (ii)           375
         Office and general expenses                       (iv)        61,000
         Estimated expenses for the next twelve months                132,375

         Account payable as at October 31, 2013                       166,455
         Cash required for the next twelve months                   $ 298,830

Table of Contents 15

Should the Joint Venture partner fail to fund the Lucky 13 Joint Venture, an additional $400,000 may be required to fund its Exploration Costs and Property Acquisition.

(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

             January 31, 2013     10-Q           9,000        3,000       12,000
             April 30, 2013       10-Q           9,000        3,000       12,000
             July 31, 2013        10-K           9,000       20,000       29,000
             October 31, 2013     10-Q           9,000        3,000       12,000
             Estimated total               $    36,000     $ 29,000     $ 65,000

(ii) Edgar filing fees

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

(iii) Filing fees in Nevada

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

(iv) Office and general

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

Our future operations are dependent upon our ability to obtain third party financing in the form of debt and equity and ultimately to generate future profitable operations or income from investments. As of July 31, 2012, 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.

Three months ended October 31, 2013 and 2012

                                                   3 months ended     3 months ended
       Expense                        Reference    Oct. 31, 2013      Oct. 31, 2012
       Accounting and auditing            (i)             12,550             13,575
       Bank charges and interest                              96                143
       Filing fees                                            -               1,000
       Legal                             (ii)                 -               2,817
       Management fees                  (iii)              9,000              9,000
       News Releases                     (iv)                260              4,445
       Office                                                187                203
       Transfer agent's fees                                  -                 305
       Travel                             (v)                 -              12,834
       TOTAL EXPENSES                                     22,093             44,322

Table of Contents 16

(i) Audit and Accounting

Auditing and accounting expense represents the cost of the preparation of the financial statements for the year ended July 31, 2013 and 2012, were expensed in Q1.

(ii) Legal

Legal costs were for opinions on the Lucky 13 joint venture in 2012

(iii) Management fees

In accordance with the consulting agreements entered into by the Company with its directors, Monthly consulting fees were paid at the rate of $1,500 per month for each director.

(iv) News Releases

Several news releases were issued during the last year at a cost of $4,445.

(v) Travel

The travel fees increased to $12,834 in Q1 2012. This increase was due to exploration activities by Lucky Thirteen incurring during the quarter near Hope British Columbia. No travel costs in 2013

Balance Sheets

Total cash and cash equivalents, as of October 31, 2013 was $1,704 and $12,940 as at July 31, 2013. Our working capital deficiency as at October 31, 2013 was a $164,751 and as of July 31, 2013, $117,589.

Total stockholders' deficiency as of October 31, 2013 was $117,186 and $95,092 as at July 31, 2013. Total shares outstanding as at October 31, 2013 and July 31, 2013 was 45,105,000.

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