PINX:VRCV Varca Ventures Inc Quarterly Report 10-Q Filing - 5/31/2012

Effective Date 5/31/2012

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


FORM 10-Q


[X]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended May 31, 2012


or


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


For the transition period from ______________ to ______________


Commission File Number 333-166548


VARCA VENTURES, INC.

(Exact name of registrant as specified in its charter)


NEVADA

98-0658381

(State or other jurisdiction of

incorporation or organization)

(IRS Employer Identification No.)


1630 Ringling Boulevard

Sarasota, FL  34236

(Address of principal executive offices)


(941) 951- 0787

(Registrant’s telephone number)



Check whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X]   No [  ]


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X]  No [  ]


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.


Large accelerated filer

[   ]

Accelerated filer

[   ]

Non-accelerated filer

[   ]

Smaller reporting company

[X]


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


The number of shares of registrant’s common stock, $0.0001 par value, outstanding as of  July 16, 2012 is 70,198,447 .





 




PART I - FINANCIAL INFORMATION

 

ITEM 1.

FINANCIAL STATEMENTS.

 

Varca Ventures, Inc. and Subsidiary

(An Exploration Stage Company)

Consolidated Balance Sheets

(Unaudited)


 

May 31,

 

February 29,

 

2012

 

2012

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

   Cash and cash equivalents

$

121,488

 

$

331,131

   Prepaid expenses

 

1,667

 

 

1,667

 

Total current assets

 

123,155

 

 

332,798

Mining properties and rights

 

792,499

 

 

791,190

Property and equipment, net of accumulated depreciation

 

 

 

 

 

   of $ 138,977 and $134,816,  respectively

 

41,211

 

 

45,372

Deposit for reclamation bonds

 

204,562

 

 

204,562

Total assets

$

1,161,427

 

$

1,373,922

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

Current liabilities:

 

 

 

 

 

   Accounts payable

$

606,369

 

$

610,167

   Accounts payable, related party

 

232,500

 

 

187,500

   Accrued liabilities

 

26,429

 

 

24,148

   Accrued interest, related parties

 

4,541

 

 

-

 

Total current liabilities

 

869,839

 

 

821,815

Long-term liabilities:

 

 

 

 

 

   Convertible notes payable, related party

 

200,000

 

 

-

   Notes payable, long-term

 

425,000

 

 

425,000

   Notes payable, related party

 

400,000

 

 

400,000

   Asset retirement obligation

 

204,562

 

 

204,562

 

Total long-term liabilities

 

1,229,562

 

 

1,029,562

Total liabilities

 

2,099,401

 

 

1,851,377

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ deficit:

 

 

 

 

 

Preferred stock, $0.0001 par value; 25,000,000 shares authorized, 0 shares issued and outstanding

 

-

 

 

-

Common stock, $0.0001 par value; 100,000,000 shares authorized, 70,198,447 shares issued and outstanding

 

7,020

 

 

7,020

Additional paid-in capital

 

6,018,179

 

 

5,635,109

Deficit accumulated during the exploration stage

 

(6,963,173)

 

 

(6,119,584)

Total stockholders’ deficit

 

(937,974)

 

 

(477,455)

Total liabilities and stockholders’ deficit

$

1,161,427

 

$

1,373,922




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



2



Varca Ventures, Inc. and Subsidiary

(An Exploration Stage Company)

Consolidated Statements of Operations

For the Three Months Ended May 31, 2012 and 2011 and For the Period

From October 5, 2005 (Inception) through May 31, 2012

(Unaudited)


 

For the Three Months Ended

 

For the Period from

October 05, 2005

(Inception) to

 

May 31, 2012

 

May 31, 2011

 

May 31, 2012

 

 

 

 

 

 

 

 

 

Revenues

$

-

 

$

-

 

$

-

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

  Exploration and development expenses

 

250,954

 

 

91,758

 

 

2,524,570

  Depreciation

 

4,161

 

 

4,819

 

 

113,848

  Impairment of property and equipment

 

-

 

 

-

 

 

25,129

  General and administrative

 

568,220

 

 

190,824

 

 

4,050,023

     Total operating expenses

 

823,335

 

 

287,401

 

 

6,713,570

 

 

 

 

 

 

 

 

 

Operating loss

 

(823,335)

 

 

(287,401)

 

 

(6,713,570)

 

 

 

 

 

 

 

 

 

Other Income (Expense)

 

 

 

 

 

 

 

 

  Interest income

 

384

 

 

973

 

 

6,112

  Interest expense

 

(20,638)

 

 

(38,993)

 

 

(255,715)

     Total other income (expense)

 

(20,254)

 

 

(38,020)

 

 

(249,603)

 

 

 

 

 

 

 

 

 

Net loss

$

(843,589)

 

$

(325,421)

 

$

(6,963,173)

Net loss per common share - basic and diluted

$

(0.01)

 

$

(0.01)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding during the period - basic and diluted

 

70,198,447

 

 

35,775,745

 

 

 





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




3




Varca Ventures, Inc. and Subsidiary

(An Exploration Stage Company)

Consolidated Statements of Cash Flows

Three Months Ended May 31, 2012 and 2011 and For the Period

From October 5, 2005 (Inception) through May 31, 2012

(Unaudited)


 

For the Three Months Ended

 

October 5, 2005

(Inception) through

 

May 31, 2012

 

May 31, 2011

 

May 31, 2012

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

  Net loss
  Adjustments to reconcile net loss to net cash

$

(843,589)

$

(325,421)

$

(6,963,173)

         provided by (used in) operating activities:

 

 

 

 

 

 

 

 

         Depreciation

4,161

4,819

113,848

         Impairment of property and equipment

-

-

25,129

         Stock- based compensation

383,070

-

1,294,215

         Stock issued for interest expense - related parties

-

-

45,070

         Stock issued for interest expense

-

1,839

30,158

         Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

           Prepaid expenses

 

-

 

 

-

 

 

333

           Accounts payable and accrued liabilities

 

(2,826)

 

 

110,234

 

 

865,078

           Accrued payable and accrued liabilities, related parties

 

49,541

 

 

(20,803)

 

 

237,041

    Net cash used in operating activities

 

(409,643)

 

 

(229,332)

 

 

(4,352,301)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

   Purchase of property and equipment

 

-

 

 

-

 

 

(158,188)

   Deposits paid for reclamation bonds

 

-

 

 

-

 

 

(142,869)

   Purchase of mining rights and property

 

-

 

 

(8,288)

 

 

(23,288)

   Cash acquired from reverse merger

 

-

 

 

-

 

 

207

    Net cash used in investing activities

 

-

 

 

(8,288)

 

 

(324,138)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

   Proceeds from notes payable

 

 

 

 

160,000

 

 

160,000

   Payments on notes payable

 

-

 

 

(6,000)

 

 

(182,000)

   Proceeds from notes payable - related party

 

-

 

 

-

 

 

400,000

   Proceeds from convertible notes payable

-

-

485,000

   Proceeds from convertible notes payable - related party

 

200,000

 

 

92,500

 

 

1,057,500

   Contributed capital

 

-

 

 

-

 

 

1,806,427

   Proceeds from issuance of common stock

 

-

 

 

20,000

 

 

1,071,000

    Net cash provided by financing activities

 

200,000

 

 

266,500

 

 

4,797,927

 

 

 

 

 

 

 

 

 

     Net increase (decrease) in cash

 

(209,643)

 

 

28,880

 

 

121,488

     Cash at beginning of period

 

331,131

 

 

5,037

 

 

-

     Cash at end of period

$

121,488

 

$

33,917

 

$

121,488




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




4




Varca Ventures, Inc. and Subsidiary

(An Exploration Stage Company)

Consolidated Statements of Cash Flows

Three Months Ended May 31, 2012 and 2011 and For the Period

From October 5, 2005 (Inception) through May 31, 2012

(Unaudited)



 

For the Three Months Ended

 

October 5, 2005

(Inception) through

 

May 31, 2012

 

May 31, 2011

 

May 31, 2012

SUPPLEMENTAL DISCLOSURES OF CASH

 

 

 

 

 

 

 

 

FLOW INFORMATION

 

 

 

 

 

 

 

 

Cash paid during the period for :

 

 

 

 

 

 

 

 

      Interest

$

20,638

 

$

5,525

 

$

113,493

      Income taxes

 

-

 

 

-

 

 

-

Noncash investing and financing transactions:

   Notes assumed for mining properties and rights

 

-

 

 

-

 

 

450,000

   Accounts payable assumed for mining properties and rights

 

-

 

 

-

 

 

20,000

   Note assumed for property and equipment

 

-

 

 

-

 

 

22,000

   Accrued liabilities converted into common stock

 

-

 

 

-

 

 

190,000

   Accrued interests converted into common stock

 

-

 

 

1,839

 

 

142,222

   Notes payable converted into common stock

 

-

 

 

32,500

 

 

1,380,283

   Issuance of redeemable preferred stock for mining rights

 

-

 

 

-

 

 

80,000

   Conversion of preferred stock

 

-

 

 

-

 

 

80,000

   Accrued but unpaid mining properties and rights

 

1,309

 

 

1,385

 

 

14,649

   Increase in mining properties and rights and asset retirement obligations

 

-

 

 

-

 

 

204,562

   Contributed capital for reclamation bonds

 

-

 

 

-

 

 

61,693

   Prepaid assets acquired and accrued liabilities assumed in reverse merger transaction

 

-

 

 

-

 

 

848





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




5



Varca Ventures, Inc. and Subsidiary
(An Exploration Stage Company)
Notes to the consolidated financial statements
May 31, 2012
(Unaudited)



NOTE 1 - BASIS OF PRESENTATION AND NATURE OF OPERATIONS


The accompanying unaudited interim consolidated financial statements of Varca Ventures, Inc. (“Varca”) and its subsidiary (collectively the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America and regulations of the United States Securities and Exchange Commission for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In management's opinion, all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation.  The interim results for the three months ended May 31, 2012 are not necessarily indicative of results for the full fiscal year.


The unaudited interim consolidated financial statements should be read in conjunction with the Company’s Report on Form 10-K filed with the SEC on May 29, 2012, which contains the audited consolidated financial statements and notes thereto for the year ended February 29, 2012.


NOTE 2 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Nature of Operations and  Merger


Varca Ventures, Inc. (“Varca”) was incorporated in the State of Nevada on January 19, 2010, and is an exploration stage mining company engaged in the acquisition and exploration of mineral properties. Varca’s wholly-owned subsidiary, Wildcat Mining Corporation (“Wildcat”) was incorporated in the State of Nevada on October 5, 2005 as a mining company engaged in the acquisition and exploration of mineral properties. Wildcat currently owns and leases several patented lode mining claims located in La Plata County, Colorado, which are known as the Idaho Property and the Mayday Property. The Company (defined as Varca and its wholly owned subsidiary Wildcat) has not generated any revenues to date and has focused its efforts on obtaining capital and regulatory permits necessary to begin mining operations.


On October 7, 2011, Varca completed a share exchange transaction (the “Share Exchange”) with Wildcat  pursuant to a Share Exchange Agreement dated October 7, 2011, by and among Varca, Wildcat and the stockholders of Wildcat (the “Share Exchange Agreement”).  

 

Under the terms of the Share Exchange Agreement, Varca acquired all of the issued and outstanding stock of Wildcat in exchange for 63,215,114 shares of common stock of Varca, and Wildcat became a wholly-owned subsidiary of Varca (the “Reverse Merger”). At the closing of the Share Exchange, each issued and outstanding share of common stock of Wildcat was converted into and exchanged for the right to receive one share of common stock of Varca, par value $0.0001 per share. There were no shares of preferred stock or stock options issued and outstanding by Wildcat as of the closing of the Share Exchange. Immediately prior to the Share Exchange, Varca had 13,600,000 shares of common stock issued and outstanding.


Simultaneously with the closing of the Share Exchange, Varca's sole officer and director surrendered 8,000,000 shares of Varca's common stock to Varca for cancellation. After giving effect to the Share Exchange, there were 68,815,114 issued and outstanding shares of Varca's common stock, of which the former stockholders of Wildcat owned approximately 92%. Each holder of a share of common stock of Varca is entitled to one vote per share.


As discussed above, in connection with the Reverse Merger, the former holders of Wildcat became the majority shareholders of Varca. The Reverse Merger was accounted for as a “Reverse Acquisition” in which Wildcat is deemed to be the accounting acquirer (“Acquirer”) and Varca is deemed to be the accounting acquiree (“Acquiree”). Consequently, the assets and liabilities and the historical operations reflected in the accompanying consolidated financial statements prior to the Reverse Merger are those of Wildcat and are recorded at the historical cost basis of Wildcat. The consolidated financial statements after completion of the Reverse Merger include the assets and liabilities of Wildcat and the Acquiree and the historical operations of Wildcat and the Acquiree and its subsidiary from the closing date of the Reverse Merger.



6




Basis of Presentation


The Company’s unaudited interim consolidated financial statements include all accounts of Varca and its subsidiary, Wildcat. All significant intercompany balances and transactions have been eliminated in consolidation.


Use of Estimates


Management uses estimates and assumptions in preparing these financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported revenues and expenses. Estimates that are significant to the financial statements include those with respect to the value of stock-based compensation and transactions and management’s assessment of any impairment associated with long-lived assets.  Actual results could differ from these estimates.  Significant estimates include the realizability of mining assets, amounts of obligations for future asset retirement obligations and the value of share based compensation.


Mineral Properties, Exploration and Development Costs


All exploration expenditures are expensed as incurred. Costs of acquisition of mineral rights and claims are capitalized upon acquisition.   Mine development costs incurred to develop new ore deposits, to expand the capacity of mines, or to develop mine areas substantially in advance of current production are also capitalized once proven and probable reserves exist and the property is determined to be a commercially mineable property. The Company is in the process of obtaining and securing required regulatory permits, the cost of which is expensed as incurred.  To determine if capitalized costs are in excess of their recoverable amount, periodic evaluation of the carrying value of capitalized costs are based upon expected future cash flows and/or estimated salvage value in accordance with ASC 360-10-35-15, Impairment or Disposal of Long-Lived Assets. As of May 31, 2012, the Company had recorded no impairment charges related to its mining properties and rights.  


Property and Equipment

 

Property and equipment are carried at cost, with depreciation provided on a straight-line basis over their estimated useful lives of 5 years. Expenditures for maintenance and repairs are charged to expense as incurred. Additions, major renewals and replacements that increase the property’s useful life are capitalized.  Property sold or retired, together with the related accumulated depreciation is removed from the appropriate accounts and the resulting gain or loss is included in net income (loss).


Deposit for Reclamation Bonds


The Company’s mining exploration and operations are subject to reclamation and remediation requirements.  Minimum standards have been established by various governmental agencies.  The Company is required to post bonds with the State of Colorado in an amount determined by the Division of Reclamation, Mining and Safety for reclamation of the Company’s mineral properties located within in the state.   The liability for reclamation is classified as noncurrent based on the expected timing of expenditures and the bonds are backed by restricted cash deposits.


Asset Retirement Obligation


The Company records asset retirement obligations in accordance with ASC 410-20, Asset Retirement Obligations, which addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated retirement costs. The standard applies to legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development and normal use of the asset. ASC 410-20 requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The fair value of the liability is added to the carrying amount of the associated asset and this additional carrying amount is depreciated over the life of the asset   The liability is typically accreted to fair value at the end of each period through charges to operating expenses; however, in instances where a  reclamation bond has been posted there is no accretion of the related liability.





7




Earnings Per Share Information


Basic earnings per share (“EPS”) is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS includes the potential dilutive effect of common stock equivalents and other instruments convertible into shares of the Company’s common stock outstanding during the period using the treasury stock method for any stock options or warrants, and the ‘if converted’ method for any convertible debt or convertible preferred stock.  In periods when losses are reported, which is the case for all periods presented in these financial statements, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive. As of May 31, 2012 and 2011, there were 1,552,252 potentially issuable shares.


Fair Value of Financial Instruments


The Company's financial instruments consist primarily of cash, accounts payables and notes payable.  The Company believes the carrying value of cash and accounts payable approximates fair value given their short-term nature.  The Company believes the carrying value of its notes payable approximates fair value due to their secured nature and the relatively short-term to maturity.


Reclassifications


Certain reclassifications have been made to amounts in prior periods to conform to the current period presentation. All reclassifications have been applied consistently to the periods presented.


Subsequent Events


The Company evaluated subsequent events through the date the financial statements are available to be issued for disclosure consideration.  


New Accounting Pronouncements


The Company does not expect that any recently issued accounting pronouncements will have a significant impact on the financial position, results of operations, or cash flows of the Company.


NOTE 3 - GOING CONCERN


In the course of the Company’s permitting approval and mining activities, the Company has sustained losses and expects such losses to continue unless and until the Company can achieve net operating revenues.  Future issuances of the Company’s equity or debt securities will be required in order for the Company to continue to finance its operations and continue as a going concern. The Company currently has no revenue from operations and has incurred cumulative net losses of $6,963,173 since its inception.

  

The Company expects to finance its operations primarily through its existing cash and future financings. However, there exists substantial doubt about the Company’s ability to continue as a going concern because it will be required to obtain additional capital in the future to continue its operations and there is no assurance that the Company will be able to obtain such capital, through equity or debt financings, or any combination thereof, whether on satisfactory terms or at all. Additionally, no assurance can be given that any such financing, if obtained, will be adequate to meet the Company’s ultimate capital needs and to support its growth. If adequate capital cannot be obtained on a timely basis and on satisfactory terms, the Company’s operations would be materially negatively impacted. The Company’s ability to complete additional offerings is dependent on the state of the debt and equity markets at the time of any proposed offering and such market’s reception of the Company and the offering terms. In addition, the Company’s ability to complete an offering may be dependent on the status of the Company’s business and permitting activities, which cannot be predicted.


The uncertainty about the Company’s ability to successfully resolve these factors raises substantial doubt about the Company's ability to continue as a going concern.  The financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which implies the Company will continue to meet its obligations and continue its operations for the next twelve months. Realization values may be substantially different from carrying values as shown and the Company’s financial statements do not include any adjustments relating to the recoverability or classification of recorded asset amounts or the amount and classification of liabilities that might be necessary if the Company is unable to continue as a going concern.



8




NOTE 4 - INVESTMENT IN MINING PROPERTIES AND RIGHTS


On February 8, 2011, James M. Clements, a former director and chairman of the board of directors of the Company, conveyed his rights to all mining claims and property interests in the California Mining District of La Plata County, Colorado (such property commonly known as the “Idaho Property”) for 40,000 shares of the Company’s Series A Preferred Stock valued at its stated value, or $80,000, and the Company’s assumption of an underlying note payable in the amount of $425,000 to an unrelated party.  The Series A Preferred Stock was converted into Wildcat’s common stock before the Share Exchange. In addition, the Company agreed to pay the note holder $20,000 loan modification fees and interest totaling $8,286 before March 21, 2011 and issued a $25,000 secured convertible note which is convertible into 12,500 shares of Series A Preferred Stock.  The Company capitalized a total of $550,000 related to the acquisition of the rights associated with the Idaho Property.


On June 1, 2006, the Company entered into a ten-year mining lease for patented mining claims and improvements for property interests in the Sneffels Mining District, Ouray County, Colorado (such property commonly known as the “Mayday Mine”).  The mining lease will be extended beyond ten years, for an indefinite period, as long as there is continuous mining, production and/or development on the site, with no lapse in activity for more than 365 consecutive days.  The lease agreement states that no work is required at the site during the first five years, and then a minimum amount must be spent for exploration, development, mining or related operations to benefit the mining properties.  Those amounts are $15,000 during the sixth year, $20,000 during the seventh year and $30,000 for each year thereafter.


The Mayday lease also accrues royalty payments in advance of production based on a formula which is adjusted by the United States Department of Labor Consumer Price Index for All Urban Consumers.  (“CPI-U”), with the base month of June, 2006.  The accrued royalty is $14,650 and $13,340 as of May 31, 2012 and February 29, 2012, respectively.  


The Company also has staked a mining claim on certain property covering 357 hectares (882.6 acres) located in the Similkameen Mining Division of British Columbia, Canada (“Varca Property”). This property consists of one claim held by Iqbal Boga, as trustee, under a Declaration of Trust dated February 2, 2010 in favor of Varca and is located about 140 kilometers east of Vancouver and 23 kilometers east-northeast of Hope, south central British Columbia.  Varca paid $300 to acquire the Varca Property.


The Company is presently in the exploration stage at the Idaho Property, Mayday Mine, and the Varca Property, and has not yet generated revenue from mining operations.


NOTE 5 - PROPERTY AND EQUIPMENT


The following is a summary of property and equipment:


 

Estimated

Useful Life

(years)

 

May 31, 2012

 

February 29, 2012

Machinery and equipment

5

 

$              156,044

 

$              156,044

Computer equipment

3

 

1,354

 

1,354

Vehicles

5

 

8,000

 

8,000

Furniture

5

 

14,790

 

14,790

 

 

 

180,188

 

180,188

Less:  accumulated depreciation and impairment

 

 

(138,977)

 

(134,816)

 

 

 

$                41,211

 

$                45,372


Depreciation expense totaled $4,161 and $4,819 for the three months ended May 31, 2012 and 2011 respectively.





9




NOTE 6 - DEBT


Related Party Convertible Notes


In November 2009, the Company issued a $100,000 secured convertible promissory note (the “November 2009 Note”) to an affiliate of an officer and director of the Company. On May 7, 2010, the holder of the November 2009 Note loaned an additional $100,000 to the Company. These notes were convertible into common shares at $0.075 per share. On May 21, 2010, this loan and the November 2009 Note, together with accrued interest of $6,690, were consolidated into a new note with a principal balance of $206,690 (the “May 2010 Note”).  The May 2010 Note was amended on February 14, 2011 to modify the conversion feature from being convertible into common stock at $0.075 per share to being convertible into Series A Preferred Stock at $0.50 per share. On October 5, 2011, the May 2010 Note, as amended, together with accrued interest of $34,724, was converted into 120,504 shares of Series A Preferred Stock and immediately following that conversion, the preferred shares were converted into 4,300,809 shares of common stock.


Also during the year ended February 28, 2011, the Company issued a series of secured convertible notes, as amended, for proceeds totaling $340,000 to certain officers, directors and affiliates of the Company (the “2011 Notes”). The 2011 Notes, as amended, were convertible into Series A Preferred Stock at $0.50 per share. On October 5, 2011, the 2011 Notes, together with accrued interest of $56,170, were converted into 197,091 shares of Series A Preferred Stock and immediately following that conversion, the preferred shares were converted into 7,034,257 shares of common stock.


In March 2011, the Company issued a series of convertible promissory notes for proceeds totaling $32,500 to certain officers and directors of the Company.  These notes were payable on demand and accrued interest at 12% per annum.  These notes were convertible into a total of 6.83% of total common shares outstanding on the date of conversion.  These notes were convertible at any time after two weeks from the date of the note into common shares.  The notes, together with accrued interest of $1,839 were converted into 2,452,827 shares of common stock in March 2011.


In May 2011, the Company issued a convertible promissory note totaling $60,000 to a director of the Company. The payment of principal and interest is personally guaranteed by James M. Clements, a director and shareholder in the Company, who has also pledged all of his shareholdings in the Company as security under the note agreement.  On October 5, 2011 the note, together with accrued interest of $3,140, was converted into 31,559 shares of Series A Preferred Stock and immediately following that conversion, the preferred shares were converted into 1,126,335 shares of common stock.


Third Party Convertible Notes Payable


In June 2010, the Company issued a total of $185,000 of secured convertible promissory notes (the “June Notes”) to six investors.  The June Notes were secured by all of the Company’s assets and accrued interest at 12% per annum.  The payment of principal and interest was personally guaranteed by Mr. Clements, who also pledged all of his shareholdings in the Company as security under the June Note agreements.   Principal and interest was originally due on May 21, 2011.  On October 5, 2011, the June Notes, together with accrued interest of $30,172, were converted into 107,185 shares of Series A Preferred Stock and immediately following that conversion, the preferred shares were converted into 3,825,457 shares of common stock.  


In February 2011, the Company issued a $25,000 secured convertible promissory note to an investor. The note was secured by all of the Company’s assets and accrued interest at 12% per annum.  The payment of principal and interest was personally guaranteed by Mr. Clements who also pledged all of his shareholdings in the Company as security under the note agreement.   Principal and interest was originally due on May 31, 2012.  On October 5, 2011, the note, together with accrued interest of $1,875, were converted into 13,429 shares of Series A Preferred Stock and immediately following that conversion, the preferred shares were converted into 479,278 shares of common stock.  


In May 2011, the Company issued a total of $300,000 of secured convertible promissory notes to three investors under the terms of its private debt offering memorandum dated February 11, 2011.   The debt bears interest at 12% per annum, is convertible into Series A Preferred Stock and matured on May 31, 2012. On October 5, 2011, the Notes, together with accrued interest of $14,300, were converted into 157,152 shares of Series A Preferred Stock and immediately following that conversion, the preferred shares were converted into 5,608,813 shares of common stock.





10




Third Party Notes Payable, Long-Term


During the fiscal year ended February 28, 2011, the Company assumed a $425,000 promissory note of a director and officer in connection with the assignment by that director and officer of certain mineral rights and claims to the Company.  The mineral rights and claims secure the promissory note.  Upon assumption by the Company, the terms of the promissory note were modified to provide for a 7.6% annual interest rate, monthly interest payments of $2,763 beginning April 2011 and the payment of principal, together with any accrued and unpaid interest, in full on the maturity date of February 22, 2014.  The modified terms also required the Company to make an initial payment to the lender of $8,286 in March 2011.  The Company paid the lender a total of $20,000 as consideration for the modification to the promissory note, which was capitalized as mining properties.


During the period from March through May 2011, the Company issued a series of five subordinated promissory notes totaling $160,000 to three individuals.  The debt accrued interest at 12% per annum and was due and payable on   November 30, 2011.  The loans were secured by a deed of trust on the Idaho Property and were second to that deed of trust dated November 29, 2006 in favor of the Old Idaho Mining Company.  The loans plus accrued interest of $12,520 were paid on November 30, 2011.


Related Party Notes Payable


In January 2012, the Company entered into a loan agreement with Sarasota Varca Associates, LLC, a company managed by one of the Company’s directors, and issued a subordinated note totaling $400,000. The note accrues interest at the rate of 12% per annum and is due on July 31, 2013. The Company also granted Sarasota a production royalty for 1% of the net proceeds received from a purchaser, smelter or other processing facility. The Company has the option to repay the entire principal amount of the note and all accrued and unpaid interest at any time prior to the maturity date upon payment of a penalty of 5% of the principal amount of the loan. The note, and any additional notes up to the aggregate principal amount of the loan, is secured by a deed of trust dated January 28, 2012. The deed of trust creates a subordinated security interest in certain lode mining claims constituting substantially all of the properties owned by the Company. The deed of trust also secures senior indebtedness having an outstanding principal balance of $425,000, payable in full as a balloon payment in February 2014.


At the note holder’s option, on or before the last trading day of any month, the note holder may elect on a monthly basis to receive interest payments in common stock in lieu of cash, The number of shares issued will be equal to the average of the closing price of the Company’s common stock for the ten trading days ending 5 trading days after the note holder’s election.  In the event the note holder does not elect to receive common stock in lieu of cash for the interest payment by the last trading day of each month, then five days after the election period, the Company will pay interest due on the note in cash and the note holder will no longer have the option to receive cash in lieu of common stock.


Related Party Convertible Note Payable


In June 2012, the Company entered into a loan agreement with Sarasota Varca II, LLC, a company managed by one of the Company’s directors, and issued a subordinated note totaling $600,000. In connection with execution of the loan agreement, the Company will receive proceeds in three installments of $200,000 each (totaling $600,000). The first installment was paid in May 2012, the second installment was paid in July 2012 and the remaining installment is payable on September 4, 2012. The note accrues interest at the rate of 10% per annum.  Interest is to be paid the earlier of: (i) within 30 days of receipt of net revenue from the Company’s mining operations at the real property interests located in La Plata County, Colorado (the “Site”) or (ii) no later than December 1, 2012 and continue monthly until the earlier of (a) December 1, 2013; or (b) 30 days after the date when all subsurface ore stockpiles at the Site have been removed and milled (“the Maturity Date”). The entire principal amount of the note and all accrued and unpaid interest thereon is due and payable in full on or before the Maturity Date.  The Company has the option to repay, without penalty, the entire principal amount of the Note and all accrued and unpaid interest at any time prior to the maturity date upon 45 days prior written notice. Under the terms of the note, Sarasota Varca II, LLC also has the option to be repaid in milled gold in lieu of cash, at a 20% discount from price offered by an independent mill, up to the principal amount of the note and accrued interest. Sarasota Varca II, LLC also has the option to convert part or all of the balloon payment due on the Maturity Date into shares of common stock of Varca at a conversion rate of $0.25 per share.





11




The Company also entered into a security agreement and a collateral assignment of permits and contract rights which grant a security interest in the following collateral: (a) the surface and subsurface ore stockpiles located at the Site as described in that certain overview for selected mineralized stockpiles on the Site by David Gonzales dated May 25, 2012; (b) all minerals from the west wall of the main stope of May Day Level 1 as described in that certain overview for potential precious metal mineralization and mine operations on the Site by David Gonzales dated May 31, 2012; and (c) all contracts and contract rights related to the Company’s mining operations. The Company also granted a perpetual non-participating production royalty deed of 1.5% of the net proceeds received from a purchaser, smelter or other processing facility on all minerals of every kind and character produced from all mining claims either owned or leased by the Company other than minerals contained in ore stockpiles that have been identified as of the date of the royalty deed.  


Third Party Notes Payable, Short-Term


During the year ended February 29, 2012, the Company repaid a promissory note in the amount of $10,000 due July 29, 2011.  


Scheduled maturities for all promissory notes are:


Period

 

Amount

 

 

 

Fiscal Year 2014

 

$          1,025,000

Total

 

 $          1,025,000   


NOTE 7 - COMMITMENTS AND CONTINGENCIES


The Company entered into a six-month office lease with base rent of $1,000 per month, commencing October 7, 2011. On April 1, 2012, the Company renewed the lease agreement to continue the office lease on a month to month basis. The Company has no other leases other than those described in Note 4.


Effective October 7, 2011, the Company entered into employment agreements with three officers wherein two officers accrue a base salary of $7,500 per month to be paid only when the Company is in production and is profitable. One officer is to be paid $5,000 in cash each month. As of May 31, 2012 and February 29, 2012, the Company has a payable to its officers of $232,500 and $187,500, respectively.


On November 4, 2011, Wildcat and R2, a Colorado engineering services firm entered into an agreement to settle an outstanding payable of $320,000 to R2 for past services. The agreement calls for an initial payment of $25,000 upon signing, which was paid on November 4, 2011, an additional payment of $15,000 if additional capital is raised in excess of $500,000; $10,000 per month for nine months (once the Company yields 75 ounces of minerals per month), and if the $15,000 additional payment conditional upon raising capital has not been paid, this amount will be due in two additional installments. In addition, 633,333 shares of restricted common stock, valued at $190,000, were issued for partial settlement. The total settlement amount, if all contingencies occur, including payments of cash and stock is $320,000.


On April 9, 2012, the United States Environmental Protection Agency (“EPA”) determined that the Company was in violation of section 301 of the Clean Water Act (“CWA”). Section 301 of the CWA prohibits the discharge of pollutants into waters of the United States except as in compliance with section 404 of the CWA. Section 404 authorizes the Unites States Army Corps of Engineers to issue permits allowing discharges of dredged or fill material into waters of the United States. The violations were the result of Company’s construction activities that took place in 2008. These activities discharged dredged or fill materials into water of the United States without authorization. The Order describes actions necessary for the Company to achieve compliance with sections 301 and 404 of the CWA.  The Company has responded to the EPA and, through its efforts to satisfy the requirements levied by the State of Colorado, Department of Natural Resources, Division of Reclamation, Mining and Safety (“CDRMS”). The Company is seeking approval from CDRMS and EPA to execute a remediation plan that will satisfy the requirements of the Order. There is the possibility of additional civil penalties and the Company is hopeful that its remediation efforts will satisfy the actions necessary to achieve compliance with the Order and avoid additional civil penalties. The Company is in the process of preparing a response to the EPA and does not expect the costs of the remediation effort or potential regulatory penalties to be significant.



12




From time to time, the Company may become involved in lawsuits and legal proceedings that arise in the ordinary course of business. The Company is currently not aware of any such legal proceedings or claims that could have, individually or in the aggregate, a material adverse effect on its business, financial condition, operating results, or cash flows.  


NOTE 8 - EQUITY


On October 6, 2011, the Company’s Board of Directors approved a 1 for 2 reverse stock split (the “Reverse Split”) of the Company’s common and preferred stock. All share and per share information has been retroactively adjusted to reflect the Reverse Split.


On October 7, 2011, Varca completed the Share Exchange with Wildcat pursuant to a Share Exchange Agreement, dated as of October 7, 2011.  Under the terms of the Share Exchange Agreement, Varca acquired all of the issued and outstanding stock of Wildcat in exchange for 63,215,114 shares of common stock of Varca, and Wildcat became a wholly-owned subsidiary of Varca. At the closing of the Share Exchange, each issued and outstanding share of common stock of Wildcat, par value $0.001 per share, was converted into and exchanged for the right to receive one share of common stock of Varca, par value $0.0001 per share. There were no shares of preferred stock or stock options issued and outstanding by Wildcat as of the closing of the Share Exchange. Immediately prior to the Share Exchange, Varca had 13,600,000 shares of common stock issued and outstanding. Simultaneously with the closing of the Share Exchange, Varca's sole officer and director surrendered 8,000,000 shares of Varca's common stock to Varca for cancellation. After giving effect to the Share Exchange, there were 68,815,114 issued and outstanding shares of Varca's common stock, of which the former stockholders of Wildcat own approximately 92%.


In addition to the shares issued in connection with the Share Exchange, during the year ended February 29, 2012, the Company issued 3,500,002 common shares for cash proceeds of $770,000; 24,827,777 shares of common stock through the conversion of $1,291,411 of debt and accrued interest; 1,427,620 shares of common stock through the conversion of preferred stock; 633,333 shares of common stock valued at $190,000 as part of a settlement of a payment with a vendor; and 750,000 shares of common stock valued at $879,000 to two vendors for services rendered.


NOTE 9 - STOCK COMPENSATION


On February 3, 2012, the Company adopted a 2012 Incentive Compensation Plan. The Plan allows for a total of 4,700,000 options to be granted.


The Company recognizes the fair value of share-based payments over the service or vesting periods of the awards. Compensation expense related to options granted totaled $383,070 and $0 for the three months ended May 31, 2012 and 2011, respectively, and $383,070 for the period from October 5, 2005 (inception) through May 31, 2012. Measured, but unrecognized stock-based compensation expense at May 31, 2012 was $1,125,004 which is expected to be recognized as expense by June 30, 2015.


Stock option activity and related information for the three months ended May 31, 2012 is as follows:


 

Number of Options

Weighted Average Exercise Price

Aggregate Intrinsic Value

Outstanding at February, 2012

-

$  -

$ -

Granted

4,100,000

0.37

 

Exercised

-

-

 

Forfeited

-

-

 

Outstanding at May 31, 2012

4,100,000

0.37

-

 

 

 

 

Vested at May 31, 2012

750,000

0.37

 


Outstanding options had $0 intrinsic value at May 31, 2012 due to the exercise price being greater than the value of the Company’s common stock at such date.


NOTE 10 - SUBSEQUENT EVENTS


In July 2012, the Company received the second $200,000 installment of a $600,000 note that the Company entered into with Sarasota Varca II, LLC (See Note 6).




13




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


Cautionary Note Regarding Forward Looking Statements


The information in this quarterly report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements involve risks and uncertainties, including statements regarding the Company’s capital needs, business strategy and expectations. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” the negative of such terms or other comparable terminology. Actual events or results may differ materially. In evaluating these statements, you should consider various factors, including the risks outlined from time to time, in other reports we file with the SEC. These factors may cause our actual results to differ materially from any forward-looking statement. We disclaim any obligation to publicly update these statements, or disclose any difference between our actual results and those reflected in these statements. The information constitutes forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995.


Overview


On October 7, 2011, the registrant Varca Ventures, Inc. ("Varca") completed a share exchange transaction (the "Share Exchange") with Wildcat Mining Corporation, a privately held company incorporated in the State of Nevada ("Wildcat") pursuant to a Share Exchange Agreement, dated as of October 7, 2011, by and among Varca, Wildcat and the stockholders of Wildcat (the "Share Exchange Agreement").  Unless otherwise indicated, or the context otherwise requires, the term "we," "us," "our" or "the Company" refer to Varca and its wholly-owned subsidiary, Wildcat, and their respective businesses following completion of the Share Exchange.


We reported this share exchange transaction on a Current Report on Form 8-K, which was filed with the U.S. Securities and Exchange Commission ("SEC") on November 2, 2011 (the "Report").  The disclosure in the Report included consolidated financial statements of Wildcat for the fiscal year ended February 28, 2011 and 2010 and for the three and six months ended August 31, 2011 and 2010.  The Report also included pro-forma financial statements of Varca and Wildcat as if the Share Exchange had occurred as of August 31, 2011.  


The following discussion of our financial condition, changes in financial condition, and results of operations should be read in conjunction with our unaudited interim financial statements from our inception (October 5, 2005) to May 31, 2012 and the three months ended May 31, 2012 and 2011, together with the notes thereto included in this Form 10-Q.    


Results of Operations


We did not earn any revenues for the three months ended May 31, 2012 or 2011 or for the period from inception on October 5, 2005 to May 31, 2012. We do not anticipate earning revenues until such time as we have entered into commercial production of our mineral properties. We are presently in the exploration stage of our business and we can provide no assurance that we will discover commercially exploitable levels of mineral resources on our properties, or if such resources are discovered, that we will enter into commercial production of our mineral properties.


For the three months ended May 31, 2012, we have incurred a total operating expense in the amount of $823,335 which mainly consists of $250,954 of exploration and development costs and $568,220 of general and administrative expense. Exploration and development efforts include water well drilling, engineering services in support of permit requirements, geo-tech drilling, portal wall stabilization, and site clean-up. For the three months ended May 31, 2011, we incurred operating expenses in the amount of $287,401, which is mainly comprised of $91,758 of exploration and development costs and $190,824 of general and administrative expense. Exploration and development efforts include engineering services in support of permit requirements.


We incurred total operating expenses in the amount of $6,713,570 from inception on October 5, 2005 through May 31, 2012.  These operating expenses consists mainly of exploration and development costs and general and administrative expenses.


For the three months ended May 31, 2012 and 2011, we have incurred total interest expense in the amount of $20,638  and $38,993 respectively. The decrease of interest expenses is mainly due to the decrease in outstanding interest bearing debt for the three month ended May 31, 2012 compared to the three months ended May 31, 2011.




14




Liquidity and Capital Resources


Cash flows used for operations were $409,643 during the three months ended May 31, 2012, compared to net cash used for operations of $229,332 during the prior year period. The increase in cash used in operations is primarily due to exploration and development activities to prepare the mining site for ore removal.


Net cash used in investing activities for the three months ended May 31, 2012 was $0, compared to net cash used in investing activities of $8,288 for the three months ended May 31, 2011. Generally, all costs of exploration and development of our properties are expensed until such time as we determine the properties have commercially mineable reserves.  Net cash used in investing activities for the three months ended May 31, 2011 was for the purchase of mining rights and properties.


Cash provided by financing activities was $200,000 and $266,500 for the three months ended May 31, 2012 and 2011, respectively. During the three months ended May 31, 2012, we received proceeds from related party convertible notes payable of $200,000. During the three months ended May 31, 2011, we received proceeds from notes and convertible notes of $160,000 from unrelated third parties, $92,500 from related parties and $20,000 from issuance of common stock.

As at May 31, 2012, we had a cash balance of $121,488 and a working capital deficit of $746,684.  


We are an exploration stage company with no revenues or operating activities. We will need additional funds to complete our business plan; without it our business will likely fail. We do not anticipate generating any revenue for the foreseeable future. When additional funds become required, the additional funding will come from equity financing from the sale of our common stock or sale of part of our interest in our mineral claim. Our ability to raise additional capital through either of these methods is unknown. The uncertainty about our ability to successfully obtain additional funding raises substantial doubt about our ability to continue as a going concern.


Going Concern Consideration


The report of our independent registered accounting firm for the period ended February 29, 2012 raises substantial doubt about our ability to continue as a going concern based on the absence of an established source of revenue, recurring losses from operations, and our need for additional financing in order to fund our operations in fiscal 2013.  


Off-Balance Sheet Agreements


As of May 31, 2012, we do not have any off balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.


ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURE ABOUT MARKET RISKS


Not required under Regulation S-K for “smaller reporting companies”.


ITEM 4. CONTROLS AND PROCEDURES.


Evaluation of Disclosure Controls and Procedures


We maintain disclosure controls and procedures to ensure that information required to be disclosed in the reports we file pursuant to the Exchange Act, are recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer to allow timely decisions regarding required disclosure based on the definition of “disclosure controls and procedures” in Rule 13a-15(e) of the Exchange Act. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can only provide a reasonable assurance of achieving the desired control objectives, and in reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.




15




We carried out an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report due to our inability to sufficiently segregate duties as a result of a small number of personnel in the Company and the fact that we do not have an audit committee in place.


Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as such term is defined in Exchange Act Rule 13a-15(f)) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



























16




PART II - OTHER INFORMATION


ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS


On April 9, 2012, we granted Incentive Stock Option awards to our officers, directors and employees covering an aggregate of 4,100,000 shares of common stock pursuant to our 2012 Incentive Compensation Plan.  The exercise price for each option is $0.37 per share.  Depending on the individual, options begin to vest in one year up to four years and all options expire in ten years from the date of issuance or three months from termination of employment.  Each of the stock option awards were made in reliance upon the exemption from the registration provisions of the Securities Act of 1933, as amended, set forth in Rule 701 promulgated thereunder in that the securities were offered and sold either pursuant to written compensatory benefit plans or contracts relating to compensation.


ITEM 6.  EXHIBITS.


Exhibit

 

Description

2.1

 

 Share Exchange Agreement, by and between Varca Ventures, Inc., Wildcat Mining Corporation and the sstockholders of Wildcat Mining Corporation, dated October 7, 2011 *

 

 

 

2.2

 

Plan of Share Exchange by and among Varca Ventures, Inc. and Wildcat Mining Corporation, dated October 7, 2011*

 

 

 

3.1

 

Articles of Incorporation **

 

 

 

3.2

 

Bylaws **

 

 

 

3.3

 

Articles of Exchange, filed with the Secretary of State of the State of Nevada on October 7, 2011*

 

 

 

10.1

 

Employment Agreement with Roger Tichenor, dated October 7, 2011*

 

 

 

10.2

 

Employment Agreement with Randall Oser, dated October 7, 2011*

 

 

 

10.3

 

Employment Agreement with Paul Serluco, dated October 7, 2011*

 

 

 

10.4

 

Consulting Services Agreement by and between Wildcat Mining Corporation, Greenberg Traurig, LLP and CLC Associated, Inc., dated April 14, 2011*

 

 

 

10.5

 

Consulting Services Agreement by and between Wildcat Mining Corporation, Greenberg Traurig, LLP and EnviroGroup Limited, dated August 2, 2011*

 

 

 

10.6

 

Consulting Services Agreement between Wildcat Mining Corporation and EIS Solutions, Inc., dated November 10, 2010*

 

 

 

10.7

 

Consulting Services Agreement by and between Wildcat Mining Corporation, Greenberg Traurig, LLP and Geosyntec Consultants, Inc., dated March 23, 2011*

 

 

 

10.8

 

Independent Contractor Services Agreement between Wildcat Mining Corporation and George Robinson, dated November 24, 2010*

 

 

 

10.9

 

Sale and Purchase Agreement between Wildcat Mining Corporation and James M. Clements dated, February 8, 2011*

 

 

 

10.10

 

Mining Deed granted by James M. Clements to Wildcat Mining Corporation, dated February 8, 2011 *

 

 

 

10.11

 

Recreation Easement granted by Wildcat Mining Corporation to Aaron & Sharon Taylor, dated      February 21, 2011*

 

 

 

10.12

 

Perpetual Non-Participating Production Royalty Deed granted by Wildcat Mining Corporation to Aaron & Sharon Taylor, dated February 21, 2011*

 

 

 

10.13

 

Promissory Note assumed by Wildcat Mining Corporation and payable to Old Idaho Properties, LLC, dated November 27, 2006*




17




10.14

 

Deed of Trust assumed by Wildcat Mining Corporation for the benefit of Old Idaho Properties, LLC, dated November 27, 2006*

 

 

 

10.15

 

Modification of Promissory Note and Deed of Trust executed by Wildcat Mining Corporation and Old Idaho Properties, LLC, effective as of February 24, 2010*

 

 

 

10.16

 

Mining Lease between Wildcat Mining Corporation and Fairview Land Corp., dated June 1, 2006*

 

 

 

10.17

 

Amendment and Ratification of Mining Lease between Wildcat Mining Corporation and Fairview Land Corp., dated June 1, 2006*

 

 

 

10.18

 

Loan Agreement for Subordinated Secured Promissory Notes of Wildcat Mining Corporation, dated   March 21, 2011*

 

 

 

10.19

 

First Amendment to Loan Agreement for Subordinated Secured Promissory Notes of Wildcat Mining Corporation, dated May 24, 2011*

 

 

 

10.20

 

Form of Subordinated Secured Promissory Note of Wildcat Mining Corporation*

 

 

 

10.21

 

Deed of Trust executed by Wildcat Mining Corporation for the benefit of the holders of Wildcat Mining Corporation's Subordinated Secured Promissory Notes, dated March 21, 2011*

 

 

 

10.22

 

Office Lease Agreement with JJR Ringling Enterprises, LLC, dated October 7, 2011*

 

 

 

10.23

 

Stockpile Royalty Agreement by and among Wildcat Mining Corporation and the investors party thereto, dated October 7, 2011*

 

 

 

10.24

 

Declaration of Trust for the benefit of Varca Ventures, Inc., dated February 10, 2010 (Incorporated herein by reference to Varca Ventures' Registration Statement on Form S-1 filed with the SEC on May 5, 2010)*

 

 

 

10.25

 

Settlement Agreement between Wildcat Mining Corporation R2 dated November 4, 2011***

 

 

 

10.26

 

Public Relations Agreement between Varca and American Business Writer dated November 8, 2011***

 

 

 

10.27

 

Loan Agreement by and between Varca Ventures, Inc., Wildcat Mining Corporation and Sarasota Varca Associates, LLC, dated January 28, 2012****

 

 

 

10.28

 

Subordinated Secured Promissory Note by and between Varca Ventures, Inc., Wildcat Mining Corporation and Sarasota Varca Associates, LLC, dated January 28, 2012****

 

 

 

10.29

 

Deed of Trust executed by Wildcat Mining Corporation for the benefit of Sarasota Varca Associates, LLC, dated January 28, 2012****

 

 

 

10.30

 

Perpetual Non-Participating Production Royalty Deed by and between Wildcat Mining Corporation and Sarasota Varca Associates, LLC, dated January 28, 2012****

 

 

 

10.31

 

2012 Incentive Compensation Plan *****

 

 

 

10.32

 

Loan Agreement by and between Varca Ventures, Inc., Wildcat Mining Corporation and Sarasota Varca LLC, dated June 22, 2012.******

 

 

 

10.33

 

Secured Promissory Note by and between Varca Ventures, Inc., Wildcat Mining Corporation and Sarasota Varca II LLC, dated June 22, 2012.******

 

 

 

10.34

 

Security Agreement executed by Varca Ventures, Inc. and Wildcat Mining Corporation on June 21, 2012. ******





18




10.35

 

Collateral Assignment of Permits and Contracts Rights executed by Varca Ventures, Inc. and Wildcat Mining Corporation, dated June 22, 2012. ******

 

 

 

10.36

 

Perpetual Non-Participating Production Royalty Deed executed by Wildcat Mining Corporation for the benefit of Sarasota Varca II LLC on June 21, 2012.******

 

 

 

31.1

 

Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*******

 

 

 

31.2

 

Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*******

 

 

 

32.1

 

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 *******

 

 

 

32.2

 

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 *******


_________________________


*

Incorporated herein by reference to Varca Ventures' Form 8-K filed with the SEC on November 2, 2011.

**

Incorporated herein by reference to Varca Ventures' Registration Statement on Form S-1 filed with the SEC    on May 5, 2010.

***

Incorporated herein by reference to Varca Ventures’ Quarterly Report on Form 10-Q for the fiscal quarter  ended November 30, 2011.

****

Incorporated herein by reference to Varca Ventures' Form 8-K filed with the SEC on February 2, 2012.

*****

Incorporated herein by reference to Varca Ventures’ Annual Report on Form 10-K for the fiscal year ended   February 29,2012.

******

Incorporated herein by reference to Varca Ventures' Form 8-K filed with the SEC on June 28, 2012.

*******

Filed herewith.











19




SIGNATURES

In accordance with the requirements 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.

 

VARCA VENTURES, INC.

 

(Registrant)

 

 

Dated: July 16, 2012

By:

/s/ Roger Tichenor

 

 

Roger Tichenor

 

 

Chief Executive Officer

 

 

(Principal Executive Officer)

 

 

 

 

 

 

Dated: July 16, 2012

By:

/s/ Paul Serluco

 

 

Paul Serluco

 

 

Chief Financial Officer

 

 

(Principal Financial and Accounting Officer)










20




ITEM 6.  EXHIBIT INDEX


Exhibit

 

Description

2.1

 

 Share Exchange Agreement, by and between Varca Ventures, Inc., Wildcat Mining Corporation and the sstockholders of Wildcat Mining Corporation, dated October 7, 2011 *

 

 

 

2.2

 

Plan of Share Exchange by and among Varca Ventures, Inc. and Wildcat Mining Corporation, dated October 7, 2011*

 

 

 

3.1

 

Articles of Incorporation **

 

 

 

3.2

 

Bylaws **

 

 

 

3.3

 

Articles of Exchange, filed with the Secretary of State of the State of Nevada on October 7, 2011*

 

 

 

10.1

 

Employment Agreement with Roger Tichenor, dated October 7, 2011*

 

 

 

10.2

 

Employment Agreement with Randall Oser, dated October 7, 2011*

 

 

 

10.3

 

Employment Agreement with Paul Serluco, dated October 7, 2011*

 

 

 

10.4

 

Consulting Services Agreement by and between Wildcat Mining Corporation, Greenberg Traurig, LLP and CLC Associated, Inc., dated April 14, 2011*

 

 

 

10.5

 

Consulting Services Agreement by and between Wildcat Mining Corporation, Greenberg Traurig, LLP and EnviroGroup Limited, dated August 2, 2011*

 

 

 

10.6

 

Consulting Services Agreement between Wildcat Mining Corporation and EIS Solutions, Inc., dated November 10, 2010*

 

 

 

10.7

 

Consulting Services Agreement by and between Wildcat Mining Corporation, Greenberg Traurig, LLP and Geosyntec Consultants, Inc., dated March 23, 2011*

 

 

 

10.8

 

Independent Contractor Services Agreement between Wildcat Mining Corporation and George Robinson, dated November 24, 2010*

 

 

 

10.9

 

Sale and Purchase Agreement between Wildcat Mining Corporation and James M. Clements dated, February 8, 2011*

 

 

 

10.10

 

Mining Deed granted by James M. Clements to Wildcat Mining Corporation, dated February 8, 2011 *

 

 

 

10.11

 

Recreation Easement granted by Wildcat Mining Corporation to Aaron & Sharon Taylor, dated      February 21, 2011*

 

 

 

10.12

 

Perpetual Non-Participating Production Royalty Deed granted by Wildcat Mining Corporation to Aaron & Sharon Taylor, dated February 21, 2011*

 

 

 

10.13

 

Promissory Note assumed by Wildcat Mining Corporation and payable to Old Idaho Properties, LLC, dated November 27, 2006*




21





10.14

 

Deed of Trust assumed by Wildcat Mining Corporation for the benefit of Old Idaho Properties, LLC, dated November 27, 2006*

 

 

 

10.15

 

Modification of Promissory Note and Deed of Trust executed by Wildcat Mining Corporation and Old Idaho Properties, LLC, effective as of February 24, 2010*

 

 

 

10.16

 

Mining Lease between Wildcat Mining Corporation and Fairview Land Corp., dated June 1, 2006*

 

 

 

10.17

 

Amendment and Ratification of Mining Lease between Wildcat Mining Corporation and Fairview Land Corp., dated June 1, 2006*

 

 

 

10.18

 

Loan Agreement for Subordinated Secured Promissory Notes of Wildcat Mining Corporation, dated   March 21, 2011*

 

 

 

10.19

 

First Amendment to Loan Agreement for Subordinated Secured Promissory Notes of Wildcat Mining Corporation, dated May 24, 2011*

 

 

 

10.20

 

Form of Subordinated Secured Promissory Note of Wildcat Mining Corporation*

 

 

 

10.21

 

Deed of Trust executed by Wildcat Mining Corporation for the benefit of the holders of Wildcat Mining Corporation's Subordinated Secured Promissory Notes, dated March 21, 2011*

 

 

 

10.22

 

Office Lease Agreement with JJR Ringling Enterprises, LLC, dated October 7, 2011*

 

 

 

10.23

 

Stockpile Royalty Agreement by and among Wildcat Mining Corporation and the investors party thereto, dated October 7, 2011*

 

 

 

10.24

 

Declaration of Trust for the benefit of Varca Ventures, Inc., dated February 10, 2010 (Incorporated herein by reference to Varca Ventures' Registration Statement on Form S-1 filed with the SEC on May 5, 2010)*

 

 

 

10.25

 

Settlement Agreement between Wildcat Mining Corporation R2 dated November 4, 2011***

 

 

 

10.26

 

Public Relations Agreement between Varca and American Business Writer dated November 8, 2011***

 

 

 

10.27

 

Loan Agreement by and between Varca Ventures, Inc., Wildcat Mining Corporation and Sarasota Varca Associates, LLC, dated January 28, 2012****

 

 

 

10.28

 

Subordinated Secured Promissory Note by and between Varca Ventures, Inc., Wildcat Mining Corporation and Sarasota Varca Associates, LLC, dated January 28, 2012****

 

 

 

10.29

 

Deed of Trust executed by Wildcat Mining Corporation for the benefit of Sarasota Varca Associates, LLC, dated January 28, 2012****

 

 

 

10.30

 

Perpetual Non-Participating Production Royalty Deed by and between Wildcat Mining Corporation and Sarasota Varca Associates, LLC, dated January 28, 2012****

 

 

 

10.31

 

2012 Incentive Compensation Plan *****

 

 

 

10.32

 

Loan Agreement by and between Varca Ventures, Inc., Wildcat Mining Corporation and Sarasota Varca LLC, dated June 22, 2012.******

 

 

 

10.33

 

Secured Promissory Note by and between Varca Ventures, Inc., Wildcat Mining Corporation and Sarasota Varca II LLC, dated June 22, 2012.******

 

 

 

10.34

 

Security Agreement executed by Varca Ventures, Inc. and Wildcat Mining Corporation on June 21, 2012. ******





22





10.35

 

Collateral Assignment of Permits and Contracts Rights executed by Varca Ventures, Inc. and Wildcat Mining Corporation, dated June 22, 2012. ******

 

 

 

10.36

 

Perpetual Non-Participating Production Royalty Deed executed by Wildcat Mining Corporation for the benefit of Sarasota Varca II LLC on June 21, 2012.******

 

 

 

31.1

 

Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*******

 

 

 

31.2

 

Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*******

 

 

 

32.1

 

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 *******

 

 

 

32.2

 

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 *******


_________________________


*

Incorporated herein by reference to Varca Ventures' Form 8-K filed with the SEC on November 2, 2011.

**

Incorporated herein by reference to Varca Ventures' Registration Statement on Form S-1 filed with the SEC    on May 5, 2010.

***

Incorporated herein by reference to Varca Ventures’ Quarterly Report on Form 10-Q for the fiscal quarter  ended November 30, 2011.

****

Incorporated herein by reference to Varca Ventures' Form 8-K filed with the SEC on February 2, 2012.

*****

Incorporated herein by reference to Varca Ventures’ Annual Report on Form 10-K for the fiscal year ended   February 29,2012.

******

Incorporated herein by reference to Varca Ventures' Form 8-K filed with the SEC on June 28, 2012.

*******

Filed herewith.












23



PINX:VRCV Varca Ventures Inc Quarterly Report 10-Q Filling

Varca Ventures Inc PINX:VRCV Stock - Get Quarterly Report SEC Filing of Varca Ventures Inc PINX:VRCV stocks, including company profile, shares outstanding, strategy, business segments, operations, officers, consolidated financial statements, financial notes and ownership information.

PINX:VRCV Varca Ventures Inc Quarterly Report 10-Q Filing - 5/31/2012
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