UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C.  20549







FORM
10-K










(Mark
One)


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


For the
Fiscal Year Ended March 31, 2010





 ̈
            TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
  ACT


For the
transition period from __________ to ___________





Commission
file number:  333-82580





SIGNATURE
EXPLORATION AND PRODUCTION CORP.


(Exact
name of registrant as specified in its charter)







Delaware
                (State
      or other Jurisdiction of
                Incorporation
      or Organization)
              
              59-3733133
                (IRS
      Employer I.D. No.)







3200
Southwest Freeway, Ste 3300


Houston,
TX 77027


Phone:
(888) 895-3594


Fax:
(888) 800-5918


(Address
and telephone number of


principal
executive offices)







Securities
registered under Section 12 (b) of the Exchange Act:





Title of each class
                      
                      Name of each exchange on which registeredNone
                      
                      None





Securities
registered under Section 12(g) of the Exchange Act:





$0.0001 Par Value Common
    StockTitle
      of Class





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




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




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
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   þ    No  ̈




Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment 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 smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer,” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.




Large
accelerated filer   ̈         Accelerated
filer  ̈


Non-accelerated
filer  ̈ 
        Smaller reporting
company  þ





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





The
aggregate market value of the voting stock held by non-affiliates of the
registrant on June 30, 2010, the last business day of the registrant’s most
recently completed first quarter, based on the closing price on that date of
$0.68 on the Over the Counter Bulletin Board, was approximately
$4,768,500.





Documents Incorporated by
Reference


None








SIGNATURE
EXPLORATION AND PRODUCTION CORP.


FORM
10-K




TABLE
OF CONTENTS




PART I
                
                
                1ITEM 1.
                DESCRIPTION
      OF BUSINESS
                1ITEM 1A.
                RISK
      FACTORS
                3ITEM 1B.
                UNRESOLVED
      STAFF COMMENTS
                7ITEM 2.
                PROPERTY
                7ITEM 3.
                LEGAL
      PROCEEDINGS
                7ITEM 4.
                SUBMISSIONS
      OF MATTERS TO A VOTE OF SECURITY HOLDERS
                7Part II
                
                
                7ITEM 5.
                MARKET
      FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
      PURCHASES OF EQUITY SECURITIES
                7ITEM 6.
                SELECTED
      FINANCIAL DATA
                12ITEM 7.
                MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANICAL CONDITION AND RESULTS OF
      OPERATION
                12ITEM 7A.
                QUANTITIATIVE
      AND QUILITATIVE DISCLOSERS ABOUT MARKET RISK
                16ITEM 8.
                FINANCIAL
      STATEMENTS
                16ITEM 9.
                CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURES
                16ITEM 9A.
                CONTROLS
      AND PROCEDURES
                17ITEM 9B.
                OTHER
      INFORMATION
                18PART III
                
                
                19ITEM 10.
                DIRECTORS,
      EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
                19ITEM 11.
                EXECUTIVE
      COMPENSATION
                19ITEM 12.
                SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS
                20ITEM 13.
                CERTAIN
      RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR
    INDEPENDENCE
                21ITEM 14.
                PRINCIPAL
      ACCOUNTANT FEES AND SERVICES
                21PART IV
                
                
                23ITEM 15.
                EXHIBITS
                23




ii


Forward
Looking Statements




This report contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”),
and Section 21E of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”). All statements other than statements of historical facts are
forward-looking statements. You can find many of these statements by looking for
words such as “believes,” “expects,” “anticipates,” “estimates,” “intends,” or
similar expressions used in this report.





These
forward-looking statements are subject to numerous assumptions, risks and
uncertainties. Factors which may cause our actual results, performance or
achievements to be materially different from any future results, performance or
achievements expressed or implied by us in those statements include, among
others, the following:





●
            the quality of our properties
      with regard to, among other things, the existence of reserves in economic
      quantities;


●
            uncertainties about the estimates
      of reserves;


●
            our ability to increase our
      production and oil and natural gas income through exploration and
      development;


●
            the number of well locations to
      be drilled and the time frame within which they will be
      drilled;


●
            the timing and extent of changes
      in commodity prices for natural gas and crude
  oil;


●
            domestic demand for oil and
      natural gas;


●
            drilling and operating
      risks;


●
            the availability of equipment,
      such as drilling rigs and transportation
  pipelines;


●
            changes in our drilling plans and
      related budgets;


●
            the adequacy of our capital
      resources and liquidity including, but not limited to, access to
      additional borrowing capacity;
and


●
            other factors discussed under
      Item 1A Risk Factors with the heading “Risks Related To Our
      Business”.





Because
such statements are subject to risks and uncertainties, actual results may
differ materially from those expressed or implied by the forward-looking
statements. You are cautioned not to place undue reliance on such statements,
which speak only as of the date of this report.





PART
I





ITEM
      1.
            DESCRIPTION
      OF BUSINESS




Company
Background




Our
company was incorporated in the State of Delaware on April 4, 2001, under the
name of “Flagstick Ventures, Inc.” On March 28, 2008, a majority of our
stockholders approved changing our name to Signature Exploration and Production
Corp. as our business model had changed to becoming an independent energy
company engaged in the acquisition and development of crude oil and natural gas
leases in the United States.  As of March 31, 2010, we have not yet
generated revenues or incurred expenses related to the energy
operations.





Our
common stock is quoted for trading on the OTC Bulletin Board under the symbol
SXLP.





Our
principal executive offices are located at 3200 Southwest Freeway, Suite 3300,
Houston, Texas, 77027. Our telephone number is (888) 898-3594.





Business
Strategy





We intend
to build our business through the acquisition of producing oil and natural gas
wells, interests and leases. Our strategy is to combine the secure and reliable
revenue source of non-operated interest from producing oil wells with the
potential of an oil and gas exploration project. We plan to purchase
non-operated interests, acquire a development stage exploration property and
carry out an exploration program on the acquired property.




Our
search for oil and gas leases or interests in leases has been directed towards
small and medium-sized oil and natural gas production companies and properties.
For our initial acquisitions, we are seeking lower risk property interests. In
building our portfolio of oil and gas interests, we intend to include
non-operated interests in producing wells and exploration interests in a
development stage oil and gas properties. As we continue to development our
portfolio of interests, we will search for properties and interests that have
the following qualities:




·
            at
      least developmental drilling in proven producing
  areas;


·
            significant
      additional production capacity through developmental drilling,
      recompletions and workovers;


·
            further
      developmental potential; and


·
            in
      some cases, ability to assume operatorship or appointment of a known
      operator with relevant experience in the
area.





Seasonality





The exploration for oil and natural gas
reserves depends on access to areas where operations are to be conducted.
Seasonal weather variations, including freeze-up and break-up affect access in
certain circumstances.  Natural gas is used principally as a heating fuel
and for power generation.  Accordingly, seasonal variations in weather
patterns affect the demand for natural gas.





Markets





We are
currently in the exploration stage and we have not generated revenues. We are
not producing oil or gas and we have no customers. The availability of a ready
market and the prices obtained for oil and gas produced depend on many factors,
including the extent of domestic production and imports of oil and gas, the
proximity and capacity of natural gas pipelines and other transportation
facilities, fluctuating demand for oil and gas, the marketing of competitive
fuels, and the effects of governmental regulation of oil and gas production and
sales.




A ready
market exists for domestic oil and gas through existing pipelines and
transportation of liquid products. Whether there exists an international market
depends upon the existence of international delivery systems and on political
and pricing factors.




1


Competition





The
strength of commodity prices has resulted in significantly increased industry
operating cash flows and has led to increased drilling activity.  This
has  increased  competition  for undeveloped
lands; skilled personnel; access  to  drilling rigs, service
rigs
and  other  equipment;  and  access  to
processing
and  gathering  facilities,  all  of  which  may  cause
drilling and operating costs to increase.  Some of our competitors are
larger than us and have substantially greater financial and marketing
resources.  In addition, some of our competitors may be able to secure
products and services from vendors on more favorable terms, offer a greater
product selection, and adopt more aggressive pricing policies than we
can.





Government
Regulation





Our
operations will be subject to various types of regulation at the federal, state
and local levels. Such regulation includes requiring permits for the drilling of
wells; maintaining bonding requirements in order to drill or operate wells;
implementing spill prevention plans; submitting notification and receiving
permits relating to the presence, use and release of certain materials
incidental to oil and gas operations; and regulating the location of wells, the
method of drilling and casing wells, the use, transportation, storage and
disposal of fluids and materials used in connection with drilling and production
activities, surface usage and the restoration of properties upon which wells
have been drilled, the plugging and abandoning of wells and the transporting of
production.




Our
operations will be also subject to various conservation matters, including the
regulation of the size of drilling and of spacing units or proration units, the
number of wells which may be drilled in each unit, and the unitization or
pooling of oil and gas properties. In this regard, some states allow the forced
pooling or integration of tracts to facilitate exploration while other states
rely on voluntary pooling of lands and leases, which may make it more difficult
to develop oil and gas properties. In addition, state conservation laws
establish maximum rates of production from oil and gas wells, generally limit
the venting or flaring of gas, and impose certain requirements regarding the
ratable purchase of production. The effect of these regulations is to limit the
amounts of oil and gas we may be able to produce from our wells and to limit the
number of wells or the locations at which we may be able to drill.




Operations
on properties in which we have an interest are subject to extensive federal,
state and local environmental laws that regulate the discharge or disposal of
materials or substances into the environment and otherwise are intended to
protect the environment. Numerous governmental agencies issue rules and
regulations to implement and enforce such laws, which are often difficult and
costly to comply with and which carry substantial administrative, civil and
criminal penalties and in some cases injunctive relief for failure to
comply.




Some
laws, rules and regulations relating to the protection of the environment may,
in certain circumstances, impose “strict liability” for environmental
contamination. These laws render a person or company liable for environmental
and natural resource damages, cleanup costs and, in the case of oil spills in
certain states, consequential damages without regard to negligence or fault.
Other laws, rules and regulations may require the rate of oil and gas production
to be below the economically optimal rate or may even prohibit exploration or
production activities in environmentally sensitive areas. In addition, state
laws often require some form of remedial action, such as closure of inactive
pits and plugging of abandoned wells, to prevent pollution from former or
suspended operations.




Legislation
has been proposed in the past and continues to be evaluated in Congress from
time to time that would reclassify certain oil and gas exploration and
production waste as hazardous waste. If such reclassification is successful, it
would make these wastes subject to much more stringent storage, treatment,
disposal and clean-up requirements, which could have a significant adverse
impact on operating costs. From time to time initiatives to further regulate the
disposal of oil and gas wastes are also proposed in certain states and may
include initiatives at the county, municipal and local government levels. These
various initiatives could have a similar adverse impact on operating
costs.




2




The
regulatory burden of environmental laws and regulations increases our cost and
risk of doing business and consequently affects our profitability. The federal
Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA,
also known as the “Superfund” law, imposes liability, without regard to fault,
on certain classes of persons with respect to the release of a “hazardous
substance” into the environment. These persons include the current or prior
owner or operator of the disposal site or sites where the release occurred and
companies that transported, disposed or arranged for the transport or disposal
of the hazardous substances found at the site. Persons who are or were
responsible for releases of hazardous substances under CERCLA may be subject to
joint and several liability for the costs of cleaning up the hazardous
substances that have been released into the environment and for damages to
natural resources. It is not uncommon for the federal or state government to
pursue such claims. The federal Environmental Protection Agency and various
state agencies continue to promulgate regulations that limit the disposal and
permitting options for certain hazardous and non-hazardous wastes.




It is
also not uncommon for neighboring landowners and other third parties to file
claims for personal injury or property or natural resource damages allegedly
caused by the release of hazardous substances into the environment.




Employees





We
currently have one employee, our CEO, Steven Weldon. He is not covered by a
collective bargaining agreement, nor have we experienced a strike or other
adverse work stoppage due to organized labor.




ITEM
      1A.
            RISK
      FACTORS




Risks Specific to Our
Company




We
have limited operating funds, and our ability to continue as a going concern is
dependent upon our ability to obtain additional capital to operate the
business.




We have
experienced net losses since April 4, 2001, which losses have caused an
accumulated deficit of approximately $4,993,000 as of March 31, 2010. In
addition, we have consumed net cash used in operating activities of
approximately $542,000 and $129,000 for the years ended March 31, 2010 and 2009,
respectively. We will require additional funds to sustain and expand our current
business, and to continue implementing our business plan. Our lack of sufficient
financing to implement our business plan, and our expectation to continue
operating losses for the foreseeable future raises substantial doubt about our
ability to continue as a going concern.




Our
independent auditors have expressed substantial doubt about our ability to
continue as a going concern, which may hinder our ability to obtain future
financing.





Our
independent registered certified public accounting firm has issued its report,
which includes an explanatory paragraph for going concern uncertainty on our
financial statements as of March 31, 2010. Our ability to continue as a going
concern is heavily dependent upon our ability to obtain additional capital to
sustain operations. Currently, we have no commitments to obtain additional
capital, and there can be no assurance that financing will be available in
amounts or on terms acceptable to us, if at all.





Since
we are in the early stage of development and have a limited operating history,
it may be difficult for you to assess our business and future
prospects.




We have
no history of revenues from oil and natural gas operations and have no
significant tangible assets. We have yet to generate positive earnings and there
can be no assurance that we will ever operate profitably. With this limited
operating history our company must be considered in the exploration stage. Our
success is significantly dependent on a successful acquisition, drilling,
completion and production program. Our operations will be subject to all the
risks inherent in the establishment of a developing enterprise and the
uncertainties arising from the absence of a significant operating history. We
may be unable to locate recoverable reserves or operate on a profitable basis.
We are in the exploration stage and potential investors should be aware of the
difficulties normally encountered by enterprises in the exploration stage. If
our business plan is not successful, and we are not able to operate profitably,
investors may lose some or all of their investment in our company.




3


We
will need additional capital, the availability of which is uncertain, to fund
our business and complete the implementation of our business plan.




We will
require additional financing in order to carry out our business plan. Such
financing may take the form of the issuance of common or preferred stock or debt
securities, or may involve bank financing. There can be no assurance that we
will obtain such additional capital on a timely basis, on favorable terms, or at
all. If we are unable to generate the required amount of additional capital, our
ability to meet our financial obligations and to implement our business plan may
be adversely affected.




As
we have incurred losses since inception, we are not now, nor will we be in the
foreseeable future, in a position to pay dividends on our issued and outstanding
stock.




We have
never declared or paid cash dividends on our capital stock and do not anticipate
paying any cash dividends in the foreseeable future. We currently intend to
retain all available funds and any future earnings for use in the operation and
expansion of our business.




Our
management may be unable to effectively integrate future acquisitions and to
manage our growth and we may be unable to fully realize any anticipated benefits
of these acquisitions.




Our
future results will depend in part on our success in implementing our growth and
acquisition strategy. Our ability to implement this strategy will be dependent
on our ability to identify, consummate and successfully assimilate acquisitions
on economically favorable terms. In addition, acquisitions involve a number of
special risks that could adversely affect our operating results, including the
diversion of management’s attention, failure to retain key acquired personnel,
risks associated with unanticipated events or liabilities, legal, accounting and
other expenses associated with acquisitions, some or all of which could increase
our operating costs, reduce our revenues and cause a material adverse effect on
our business, financial condition and results of operations. We have no
preliminary agreements or understandings to acquire or be acquired by a company
as of the date of this prospectus.




Risks Specific to Our
Industry




We
face strong competition from larger oil and gas companies, which could harm our
business and ability to operate profitably.




The
exploration and production of oil and gas business is highly competitive. Other
oil and gas companies will compete with us by bidding for exploration and
production licenses and other properties and services that we will need to
operate our business in the countries in which we expect to operate. This
competition is increasingly intense as prices of oil and natural gas on the
commodities markets have risen in recent years. Additionally, other companies
engaged in our line of business may compete with us from time to time in
obtaining capital from investors.




Oil and
gas properties have limited lives and, as a result, we may seek to replace and
expand our reserves through the acquisition of new properties. In addition,
there is a limited supply of desirable oil and gas lands available in North
America where we would consider conducting exploration and/or production
activities. The major oil and gas companies are often better positioned to
obtain the rights to exploratory acreage for which we may compete.




Competitors
include larger, foreign owned companies, which, in particular, may have access
to greater resources than us, may be more successful in the recruitment and
retention of qualified employees and may conduct their own refining and
petroleum marketing operations. These factors may give them a competitive
advantage. Oil and natural gas exploration and development activities are
dependent on the availability of drilling and related equipment, transportation,
power and technical support in the particular areas and our access to these
facilities may be limited due to high competition. Shortages and/or the
unavailability of necessary equipment or other facilities will impair our
activities, either by delaying our activities, increasing our costs or
otherwise.




We
may not be able to develop oil and gas reserves on an economically viable
basis.




To the
extent that we succeed in discovering oil and/or natural gas reserves at our
future properties, we are not sure that these reserves will be capable of
supporting production levels we project or in sufficient quantities to be
commercially viable. These risks are more acute in the early stages of
exploration. Our expenditures on exploration may not result in new discoveries
of oil or natural gas in commercially viable quantities. It is difficult to
project the costs of implementing an exploratory drilling program due to the
inherent uncertainties of drilling in unknown formations, the costs associated
with encountering various drilling conditions such as over pressured zones,
tools lost in the hole, changes in drilling plans and locations as a result of
prior exploratory wells or additional seismic data and interpretations
thereof.




4




We
may encounter operating hazards related to oil and gas exploration and
production, which may result in substantial losses to our business and your
investment.




We are
subject to operating hazards normally associated with the exploration and
production of oil and gas, including unexpected formations or pressures,
premature declines of reservoirs, blowouts, sour gas release, explosions,
craterings, pollution, earthquakes, labor disruptions, fires, pipeline ruptures,
oil spills, the invasion of water into producing formations and other
environmental hazards and risks. The occurrence of any such operating hazards
could result in substantial losses to us due to injury or loss of life and
damage to or destruction of oil and gas wells, formations, production facilities
or other properties, which could result in substantial losses to our
business.




Our
business is subject to environmental legislation and any changes in such
legislation could negatively affect our results of operations.





The oil
and gas industry is subject to many laws and regulations which govern the
protection of the environment, health and safety and the management,
transportation and disposal of hazardous substances. These laws and regulations
may require removal or remediation of pollutants and may impose civil and
criminal penalties for violations. Some of the laws and regulations authorize
the recovery of natural resource damages by the government, injunctive relief
and the imposition of stop, control, remediation and abandonment
orders.





The costs
arising from compliance with environmental and natural resource laws and
regulations may increase our costs of operations, as well as further restrict
our operations. If the costs of such compliance exceeds what we may have
budgeted for, our ability to earn revenues will be harmed. Any regulatory
changes that impose additional environmental restrictions or requirements on us
could adversely affect us through increased operating costs, which could have a
material adverse effect on our results of operations.





Any
oil and gas we may discover or produce may not be readily marketable at the time
of production, delaying our ability to generate meaningful revenue.





Crude
oil, natural gas, condensate and other oil and gas products are generally sold
to other oil and gas companies, government agencies and other industries.
Natural gas associated with oil production is often not marketable due to demand
or transportation limitations and is often flared at the producing well site.
Pipeline facilities do not exist in certain areas of exploration and, therefore,
any actual sales of discovered oil and gas might be delayed for extended periods
until such facilities are constructed.





Risks
Related to Our Securities





Our
common stock is subject to the “penny stock” rules of the SEC and the trading
market in our securities is limited, which makes transactions in our stock
cumbersome and may reduce the value of an investment in our stock.





The
Securities and Exchange Commission has adopted Rule 15g-9 which establishes the
definition of a "penny stock," for the purposes relevant to us, as any equity
security that has a market price of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to certain exceptions. For
any transaction involving a penny stock, unless exempt, the rules
require:





·
            that
      a broker or dealer approve a person's account for transactions in penny
      stocks; and





·
            the
      broker or dealer receives from the investor a written agreement to the
      transaction, setting forth the identity and quantity of the penny stock to
      be purchased.





In order
to approve a person's account for transactions in penny stocks, the broker or
dealer must:




5


·
            obtain
      financial information and investment experience objectives of
      the  person; and





·
            make
      a reasonable determination that the transactions in penny stocks are
      suitable for that person and the person has sufficient knowledge and
      experience in financial matters to be capable of evaluating the risks of
      transactions in penny stocks.





The
broker or dealer must also deliver, prior to any transaction in a penny stock, a
disclosure schedule prescribed by the Commission relating to the penny stock
market, which, in highlight form:





·
            sets
      forth the basis on which the broker or dealer made the suitability
      determination; and





·
            that
      the broker or dealer received a signed, written agreement from the
      investor prior to the transaction.





Generally,
brokers may be less willing to execute transactions in securities subject to the
"penny stock" rules. This may make it more difficult for investors to dispose of
our common stock and cause a decline in the market value of our
stock.





Disclosure
also has to be made about the risks of investing in penny stocks in both public
offerings and in secondary trading and about the commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and the rights and remedies available to an investor in cases of
fraud in penny stock transactions. Finally, monthly statements have to be sent
disclosing recent price information for the penny stock held in the account and
information on the limited market in penny stocks.




Future
sales of shares may adversely impact the value of our stock





We will
seek to raise additional capital through the sale of our common stock. Future
sales of our common stock could cause the market price of our common stock to
decline.





Possible
issuance of additional shares may impact the price of our stock





Our
Certificate of Incorporation authorizes the issuance of 250,000,000 shares of
common stock. Approximately 97% of our authorized common stock remains
un-issued. Our Board of Directors has the power to issue any or all of such
additional common stock without stockholder approval. Investors should be aware
that any stock issuances might result in a reduction of the book value or market
price, if any, of the then outstanding common stock. If we were to issue
additional common stock, such issuance will reduce proportionate ownership and
voting power of the other stockholders. Also, any new issuance of common stock
may result in a change of control.





Our
share price may be highly volatile.




The
market prices of equity securities of small companies have experienced extreme
price volatility in recent years not necessarily related to the individual
performance of specific companies. Factors such as announcements by us, or our
competitors concerning products, technology, governmental regulatory actions,
other events affecting healthcare companies generally and general market
conditions may have a significant impact on the market price of our shares and
could cause it to fluctuate substantially.





If
we complete future acquisitions, we may dilute existing stockholders by issuing
more of our common stock or we may incur expenses related to debt and goodwill,
which could reduce our earnings.




We may
issue equity securities in future acquisitions that could be dilutive to our
stockholders. We also may incur additional debt in future acquisitions. Interest
expense on debt incurred to fund our acquisitions may significantly reduce our
profitability. While goodwill and other intangible assets with indefinite lives
are not amortized to expense under generally accepted accounting principles, we
would be required to review all of these assets at regular intervals for
impairment and to charge an appropriate amount to expense when we identify
impairment. If we identify impairment and are required to write-off a
significant portion of our intangible assets at one time, then there could be a
material adverse impact on our stock price.


6





ITEM
      1B.
            UNRESOLVED
      STAFF COMMENTS





None





ITEM
      2.
            PROPERTY





Our
executive offices are located at 3200 Southwest Freeway, Ste 3300, Houston, TX
77027.





ITEM
      3.
            LEGAL
      PROCEEDINGS





The
Company is not a party to any pending legal proceedings nor is any of its
property subject to pending legal proceedings.





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





Not
Applicable




Part
II





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





Our
common stock is quoted on the OTC Bulletin Board under the symbol
"SXLP".





For the
periods indicated, the following table sets forth the high and low per share
intra-day sales prices per share of common stock. These prices represent
inter-dealer quotations without retail markup, markdown, or commission and may
not necessarily represent actual transactions.




For the
periods indicated, the following table sets forth the high and low per share
intra-day sales prices per share of common stock. These prices represent
inter-dealer quotations without retail markup, markdown, or commission and may
not necessarily represent actual transactions.




High ($)
                
                
                Low ($)Fiscal Year 2010Fourth
      Quarter
                
                $
                1.55
                
                
                $
                0.46Third
      Quarter
                
                $
                1.01
                
                
                $
                0.25Second
      Quarter
                
                $
                0.25
                
                
                $
                0.08First
      Quarter
                
                $
                1.10
                
                
                $
                0.05Fiscal
      Year 2009Fourth
      Quarter
                
                $
                0.19
                
                
                $
                0.05Third
      Quarter
                
                $
                0.19
                
                
                $
                0.10Second
      Quarter
                
                $
                0.51
                
                
                $
                0.19First
      Quarter
                
                $
                0.51
                
                
                $
                0.12




Dividends
and Dividend Policy




We have
never declared or paid cash dividends on our common stock and do not anticipate
paying any cash dividends on our common stock in the foreseeable future. We
currently intend to retain future earnings, if any, to finance the expansion of
our business and for general corporate purposes. We cannot assure you that we
will pay dividends in the future. Our future dividend policy is within the
discretion of our Board of Directors and will depend upon various factors,
including our results of operations, financial condition, capital requirements
and investment opportunities.




7




Recent
Sales of Unregistered Securities





February
2010 Convertible Notes and Warrants





On
February 10, 2010, Signature Exploration and Production Corp. (the "Company")
entered into two Convertible Note Agreements ("Notes") for a total of
$352,942.  The Company received aggregate proceeds of $200,000 on
$235,295 of debts reflecting a 15% original issue discount to the Note
holders.  The remaining balance of $117,647 is due upon the request of
the Company when the funds are needed for operations.  The aggregate
proceeds of the additional funds will be $100,000 reflecting a 15% original
issue discount to the Note holders.





The Notes
are due on February 10, 2011.  The note holders may convert any
portion of the Notes that are outstanding, whether such portion represents
principal or interest, into shares of common stock of the Company at a price
equal to $0.65. The Notes include an anti-dilution adjustment that may not be
adjusted below $0.01.





Simultaneously
with the issuance of these Notes, the Company issued to each Note holder a
5-year warrant (the "Warrant") to purchase 271,494 shares of common stock of the
Company.  The Warrant is exercisable at a price equal to $0.75 The
Warrants include an anti-dilution adjustment that may not be adjusted below
$0.01.





The note
holder will only be allowed to convert shares or exercise warrants or portion
thereof to the extent that, at the time of the conversion or exercise, the
conversion or exercise will not result in the note holder beneficially owning
more than 9.9% of the issued and outstanding common shares of the
Company.





Due to
the liquidity of the Company’s and investor ownership restrictions in theses
note and warrants, the Company chose to value these liabilities at fair market
value as discussed in Note 4.  The principle amount due on these notes
is $235,295, whereas, the Company’s aggregate fair value of the notes is $57,880
and the remaining $88,401 has been allocated to the derivative
liability.





January
2010 Convertible Notes and Warrants





On
January 13, 2010, Signature Exploration and Production Corp. (the "Company")
entered into two Convertible Note Agreements ("Notes") for a total of
$64,706.  The Company received aggregate proceeds of $55,000
reflecting a 15% original issue discount to the Note holders.





The Notes
are due on January 13, 2011.  The note holders may convert any portion
of the Notes that are outstanding, whether such portion represents principal or
interest, into shares of common stock of the Company at a price equal to $0.35.
The Notes include an anti-dilution adjustment that may not be adjusted below
$0.01.





Simultaneously
with the issuance of these Notes, the Company issued to each Note holder a
5-year warrant (the "Warrant") to purchase 92,437 shares of common stock of the
Company.  The Warrant is exercisable at a price equal to $0.50. The
Warrants include an anti-dilution adjustment that may not be adjusted below
$0.01.





The note
holder will only be allowed to convert shares or exercise warrants or portion
thereof to the extent that, at the time of the conversion or exercise, the
conversion or exercise will not result in the note holder beneficially owning
more than 9.9% of the issued and outstanding common shares of the
Company.





Due to
the liquidity of the Company’s and investor ownership restrictions in theses
note and warrants, the company chose to value these liabilities at fair market
value as discussed in Note 4.  The principle amount due on these notes
is $64,706, whereas, the Company’s aggregate fair value of the notes is $13,541
and the remaining $13,675 has been allocated to the derivative
liability.





December
2009 Convertible Notes and Warrants





On
December 7, 2009, Signature Exploration and Production Corp. (the "Company")
entered into two Convertible Note Agreements ("Notes") for a total of
$352,942.  The Company received aggregate proceeds of $300,000
reflecting a 15% original issue discount to the Note holders.


8





The Notes
are due on December 7, 2010.  The note holders may convert any portion
of the Notes that are outstanding, whether such portion represents principal or
interest, into shares of common stock of the Company at a price equal to $0.35.
The Notes include an anti-dilution adjustment that may not be adjusted below
$0.01.





Simultaneously
with the issuance of this Note, the Company issued to each Note holder a 5-year
warrant (the "Warrant") to purchase 504,203 shares of common stock of the
Company.  The Warrant is exercisable at a price equal to $0.50. The
Warrants include an anti-dilution adjustment that may not be adjusted below
$0.01.





The note
holder will only be allowed to convert shares or exercise warrants or portion
thereof to the extent that, at the time of the conversion or exercise, the
conversion or exercise will not result in the note holder beneficially owning
more than 9.9% of the issued and outstanding common shares of the
Company.





The
Company made a fair value election to account for the complete package of debt
and warrants as it provides the best indicator of the Company’s obligation
related to the transaction.  See Note 4.  The principle
amount due on these notes is $352,942, whereas, the Company’s aggregate fair
value of the notes is $187,054 and the remaining $189,974 has been allocated to
the derivative liability





Convertible
Notes from Shareholders





On
February 23, 2010 we modified promissory notes in the amount of $2,000, which
are now included in convertible debt. Interest has accrued on the outstanding
principal balance from February 6, 2008 at a rate of 10 percent per annum. The
note holder has the sole option of converting the principal and interest
represented by these notes into our common stock at a strike price equal to a
$0.01. The note holder will only be allowed to convert shares or portion thereof
to the extent that, at the time of the conversion, the conversion will not
result in the note holder beneficially owning more than 9.9% of the issued and
outstanding common shares of the Company.  The company recognized a
loss of $2,000 and $-0- on the loan modification as of March 31, 2010 and 2009,
respectively.





On
October 20, 2009, we modified promissory notes in the amount of $78,500, which
are now included in convertible debt. Interest has accrued on the outstanding
principal balance from January 13, 2009 at a rate of 10 percent per annum. The
note holder has the sole option of converting the principal and interest
represented by these notes into our common stock at a strike price equal to a
$0.01. The note holder will only be allowed to convert shares or portion thereof
to the extent that, at the time of the conversion, the conversion will not
result in the note holder beneficially owning more than 9.9% of the issued and
outstanding common shares of the Company.  The company recognized a
loss of $78,500 and $-0- on the loan modification as of March 31, 2010 and 2009,
respectively.





On
October 13, 2009, the Company entered into two Convertible Note Agreements for
$22,000 and $15,000. The notes will accrue interest at the rate of 10% per annum
and are due on October 13, 2010.  The note holders may convert any
portion of the notes that are outstanding, whether such portion represents
principal or interest, into shares of common stock of the Company at a price
equal to $0.01.  The company recognized $16,958 and $-0- of interest
expense as a result of this conversion feature as of March 31, 2010 and 2009,
respectively.





On August
27, 2009, we sold in a private placement, a promissory note in the amount of
$60,000 to an investor in exchange for a participation agreement in an oil and
gas prospect.  Interest has accrued on the outstanding principal
balance from August 27, 2009 at a rate of 10 percent per annum. The note holder
has the sole option of converting the principal and interest represented by this
note into our common stock at a strike price equal to a $0.01. This note was due
on November 20, 2009. The note holder will only be allowed to convert shares or
portion thereof to the extent that, at the time of the conversion, the
conversion will not result in the note holder beneficially owning more than 9.9%
of the issued and outstanding common shares of the Company.  The
company recognized $60,000 and $-0- of interest expense as a result of this
conversion feature as March 31, 2010 and 2009, respectively.  The
Company is currently in default on this note and related accrued
interest.  The investor can covert this debt to shares of the
Company’s common stock to satisfy these notes or make an immediate demand for
payment.  As of March 31, 2010, the investor has not made demands for
payment of this note.


9





On August
17, 2009, we sold in a private placement, a promissory note in the amount of
$18,000 to an investor in exchange for a land lease
agreement.  Interest has accrued on the outstanding principal balance
from August 17, 2009 at a rate of 10 percent per annum. The note holder has the
sole option of converting the principal and interest represented by this note
into our common stock at a strike price equal to a $0.01. This note was due on
November 20, 2009.  The note holder will only be allowed to convert
shares or portion thereof to the extent that, at the time of the conversion, the
conversion will not result in the note holder beneficially owning more than 9.9%
of the issued and outstanding common shares of the Company.   The
company recognized $18,000 and $-0- of interest expense as a result of this
conversion feature as of March 31, 2010 and 2009, respectively.  The
Company is currently in default on this note and related accrued
interest.  The investor can covert this debt to shares of the
Company’s common stock to satisfy these notes or make an immediate demand for
payment.  As of March 31, 2010, the investor has not made demands for
payment of this note.





On August
17, 2009, we sold in a private placement, a promissory note in the amount of
$18,000 to a stockholder in exchange for a land lease agreement. Interest has
accrued on the outstanding principal balance from August 17, 2009 at a rate of
10 percent per annum. The note holder has the sole option of converting the
principal and interest represented by this note into our common stock at a
strike price equal to a $0.01. This note was due on November 20,
2009.   The note holder will only be allowed to convert shares or
portion thereof to the extent that, at the time of the conversion, the
conversion will not result in the note holder beneficially owning more than 9.9%
of the issued and outstanding common shares of the Company.  The
company recognized $18,000 and $-0- of interest expense as a result of this
conversion feature as of March 31, 2010 and 2009, respectively.  The
Company is currently in default on this note and related accrued
interest.  The investor can covert this debt to shares of the
Company’s common stock to satisfy these notes or make an immediate demand for
payment.  As of March 31, 2010, the investor has not made demands for
payment of this note.





On March
4, 2009, we modified promissory notes in the amount of $202,500, which are now
included in convertible debt. Interest has accrued on the outstanding principal
balance from October 10, 2006 at a rate of 10 percent per annum. The note holder
has the sole option of converting the principal and interest represented by
these notes into our common stock at a strike price equal to a $0.01. The note
holder will only be allowed to convert shares or portion thereof to the extent
that, at the time of the conversion, the conversion will not result in the note
holder beneficially owning more than 9.9% of the issued and outstanding common
shares of the Company.  The Company converted $7,250 of these notes
into 725,000 shares of the Company’s common stock.  A balance of
$195,250 remains on these promissory notes. The Company is currently in default
on these notes and related accrued interest.  The note holders can
covert this debt to shares of the Company’s common stock to satisfy these
notes.  As of March 31, 2010, no stockholders have made demands for
payment of these loans.





During
2007, we sold in private placements, promissory notes totaling $50,000 to a
stockholder.  Interest accrued on the outstanding principal balance at
a rate of 10 percent per annum. The note holder had the sole option of
converting the principal represented by these notes into our common stock at a
strike price equal to a $0.01. These notes are currently in
default.  The Company converted $12,000 of these notes into 1,200,000
shares of the Company’s common stock.  A balance of $38,000 remains on
these promissory notes.  The Company is currently in default on these
notes and related accrued interest.  The note holders can covert this
debt to shares of the Company’s common stock to satisfy these
notes.  As of March 31, 2010, no stockholders have made demands for
payment of these loans.





Consulting
Agreements





On
January 11, 2010 the Company issued 4,137 shares of its restricted common stock
pursuant to a Consulting Services Agreement. The Company recorded the $6,330
fair value of the shares issued as stock-based consulting.





On
January 13, 2010 the Company issued 7,500 shares of its restricted common stock
pursuant to a Consulting Services Agreement. The Company recorded the $11,400
fair value of the shares issued as stock-based consulting.





On
February 5, 2010 the Company issued 2,500 shares of its restricted common stock
pursuant to a Consulting Services Agreement. The Company recorded the $2,625
fair value of the shares issued as stock-based consulting.


10





On
February 10, 2010 the Company issued 36,000 shares of its restricted common
stock pursuant to a Consulting Services Agreement. The Company recorded the
$37,800 fair value of the shares issued as stock-based consulting.





On
February 10, 2010 the Company issued 10,000 shares of its restricted common
stock pursuant to a Consulting Services Agreement. The Company recorded the
$10,500 fair value of the shares issued as stock-based consulting.





On March
4, 2010 the Company issued 10,000 shares of its restricted common stock pursuant
to a Consulting Services Agreement. The Company recorded the $10,200 fair value
of the shares issued as stock-based consulting.





On
March 15, 2010 the Company issued 10,000 shares of its restricted common stock
pursuant to a Consulting Services Agreement. The Company recorded the $10,400
fair value of the shares issued as stock-based consulting.





Option
Agreement





On
August 3, 2009, we signed an Option Agreement allowing the Company to purchase
up to a fifty percent working interest in the oil and gas exploration and
development activities on 2,087 acres known as Medicine River
Ranch.  This option is valid for one year or until a Definitive
Participation Agreement is either entered into or rejected by both
parties.  The Company issued 25,000 shares of restricted common stock
upon execution of this agreement and an additional 75,000 shares of restricted
common stock were to be issued upon acceptance of a Definitive Participation
Agreement.  On January 29, 2010, both parties agreed to cancel this
option and the issued shares were returned to the Company.





Employment
Agreements





On
September 29, 2009, the Company entered into an Employment Agreement with Steven
Weldon, our Chief Executive Officer.  As compensation for entering into
this Agreement, the Company granted and issued to Mr. Weldon 3,600,000 shares of
the common stock of the Company. The stock is restricted as defined by the rules
and regulations promulgated under the Securities Act of 1933, as
amended.  The shares are fully paid and non-assessable. An expense of
$900,000 was recognized for year ended March 31, 2010.





The
shares issued pursuant to this Agreement are subject to certain terms and
conditions. The shares are represented by 36 certificates of 100,000 shares
each.  All Certificates not delivered to the Executive are being held
by the Company.  One certificate representing 100,000 shares will be
delivered to the Executive on the 30th of each
month beginning October 30, 2009.  In the event that Mr. Weldon’s
employment pursuant to this agreement is terminated for any reason, the shares
represented by certificates still held by the Company will be contributed back
to the Company for cancellation.





On
October 7, 2009, the Company entered into an Employment Agreement with Jordan
Estra, our former Chief Executive Officer.  As compensation for entering
into this Agreement, the Company granted and issued to Mr. Estra 3,600,000
shares of the common stock of the Company. The stock is restricted as defined by
the rules and regulations promulgated under the Securities Act of 1933, as
amended.  The shares are fully paid and non-assessable.





The
shares issued pursuant to this Agreement were subject to certain terms and
conditions. The shares were represented by 36 certificates of 100,000 shares
each.  All Certificates not delivered to the Executive are being held
by the Company.  One certificate representing 100,000 shares has been
delivered to the Executive on the 7th of each
month beginning November 7, 2009.





Upon the
resignation of Mr. Estra’s on December 29, 2009, 3,327,000  shares
represented by certificates still held by the Company were contributed back to
the Company for cancellation.  Mr. Estra received a total of 273,000
restricted shares and an expense of $131,040 was recognized for the year ended
March 31,2010.




11


Note Conversions





During
the year ended March 31, 2010, the Company converted a total of $21,250 of notes
payable and $373 of interest payable from certain Note Holders into common stock
of the Company.  The Company issued 2,125,000 shares of our common
stock to satisfy the principal balances of the notes payable and 37,254 shares
of our common stock to satisfy accrued interest of the notes
payable.   A loss of $177,941 was recognized for the conversion
of a $2,000 note during the year ended March 31, 2010.





Agreement





During
the year ended March 31, 2010 the Company entered into agreements with its
former CEO and a significant stockholder in which they agreed to limit the
transfer of their common stock holdings to 5 percent  or less for each
calendar month for a period of two years.  In exchange, the Company
issued them 10,326 shares of restricted common stock.  The Company
recognized compensation expense of $516 for the year ended March 31,
2009.





Equity
Compensation Plan Information





The 2007
Amended Stock Option Plan was adopted by the Board of Directors on
February 6, 2008. Under this plan, a maximum of 8,000,000 shares of our
common stock, par value $0.0001, were authorized for issue. The vesting and
terms of all of the options are determined by the Board of Directors and may
vary by optionee; however, the term may be no longer than 10 years from the date
of grant.





On August
20, 2009, the Company issued 4,000,000 options to a consultant valued at
$984,600 under the 2007 Plan. The option’s exercise price is equal to fifty
percent (50%) of the average closing bid price for the three day period prior to
notice of exercise. The consultant will only be allowed to purchase shares upon
the exercise of the option or portion thereof to the extent that, at the time of
the purchase, the purchase will not result in the consultant beneficially owning
more than 9.9% of the issued and outstanding common shares of the
Company.


These
options are fully vested and represent the only options outstanding as of
December 31, 2010.




We used
the Black-Scholes option pricing model to determine the fair value of the option
grant. We valued the stock grant based on the following
assumptions:




Dividend
      Yield (per share)
                          
                          
                          0.0
                          %Volatility
      (%)
                          
                          
                          458.1
                          %Risk-free
      Interest Rate (%)
                          
                          
                          .42
                          %Expected
      Life
                          
                          1 Year





On August
11, 2005, the Board of Directors adopted the 2005 Restricted Stock Plan (the
“2005” Plan”) and it was approved on August 11, 2005 by a majority of our
stockholders at the 2005 Annual Meeting. The terms of the 2005 Plan provide for
grants of restricted stock awards.




Under the
2005 Plan, the total number of shares of restricted common stock that may be
subject to the granting of Awards during the term of the 2005 Plan shall be
equal to 5,000,000 shares. Shares with respect to which awards previously
granted that are forfeited, cancelled or terminated are returned to the plan and
may be reissued. A grant of 4,000 shares was made to a director and 2,000 shares
to an employee.  The director forfeited 1,400 shares on April 21, 2006
when he resigned and the employee forfeited 200 shares on May 31, 2006 when he
was terminated.





ITEM
      6.
            SELECTED
      FINANCIAL DATA





N/A





ITEM
      7.
            MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANICAL CONDITION AND RESULTS OF
      OPERATION





The
following discussion of our plan of operation, financial condition and results
of operations should be read in conjunction with the Company’s financial
statements, and notes thereto, included elsewhere herein.  This
discussion contains forward-looking statements that involve risks and
uncertainties.  Our actual results may differ materially from those
anticipated in these forward-looking statements as a result of various factors
including, but not limited to, those discussed in this Annual
Report.




12






Overview




Our
company was incorporated in the State of Delaware on April 4, 2001, under the
name of “Flagstick Ventures, Inc.” On March 28, 2008, a majority of our
stockholders approved changing our name to Signature Exploration and Production
Corp. as our business model had changed to becoming an independent energy
company engaged in the acquisition and development of crude oil and natural gas
leases in the United States.  As of March 31, 2010, we have not yet
generated revenues or incurred expenses related to the energy
operations.





Plan
of Operation


Our
strategy is to continue making acquisitions of select properties that have been
identified as economically attractive, technically and geologically sound and
have significant upside potential.




We are
building our business through the acquisition of producing oil and natural gas
wells, interests and leases. Our strategy is to combine the secure and reliable
revenue source of operating and non-operated interests from producing oil wells
with the potential of an oil and gas exploration project. We are purchasing
operating and non-operating interests, acquiring development stage exploration
property and carrying out an exploration program on the acquired
property.




The
Company continues to operate with very limited capital. Since our inception in
2001, we have been unable to locate a consistent source of additional financing
for use in our operational or expansion plans. The Company is currently
attempting to raise sufficient funds to purchase leases of oil and gas
properties.  We can give no assurances that the Company will be able
to purchase any leases.  Each oil and gas property in which we obtain
an interest in will have an operator who will be responsible for marketing
production.





Unproven
Properties





Koliba
Prospect – Bloomington TX





In
October 2009, we acquired a 15% working interest in this well. The Koliba well
prospect covers 143 acres over an anticlinal structure (target) located in the
North McFaddin Field. The prospect which is both a structural and strategraphic
trap that includes a four way closure. This well is considered a low risk/high
reward prospect due to its proximity to the previous producing well and the
potential for multiple pay sand discoveries in the prolific Frio interval.
Drilling began on this property on June 29, 2010.





Catron
Prospect – Carton County, NM





We
acquired a lease of 1,320 acres in Catron County, New Mexico.  The
lease term is for ten years.  We are evaluating options for the use of
this land.





Kenedy
Prospect – Kenedy County, TX





In August
2009, we acquired a 10% working interest with an option to acquire 10% on
additional wells on a 980 acre prospect located in Kenedy County, Texas. A 3-D
seismic has been performed on this property and reviewed by a geophysicist who
has advised us of two potential targets for drilling.





Nettie
Rhodes Prospect – Young County, Texas





In August
2009, we acquired a five percent turnkey working interest on the Nettie Rhodes
Lease.  The Nettie Rhodes Lease is located in the southwest corner of
Young County, Texas.  It is approximately six miles north east of the
town of Woodson, Texas and consists of approximately 160 acres.  The
land is on the west flank of the Bend Arch located in central
Texas.  There are currently five wells on properties adjacent to this
lease that are producing oil and natural gas.  We are currently
evaluating and obtaining cost estimates to perform a 3-D seismic on this
lease.




13


Cash
Requirements





We
estimate that we will require an additional $1,386,000 to fund our currently
anticipated requirements for ongoing operations for our existing business for
the next twelve-month period. We expect to pay $51,000 for professional fees and
expense related to being a public company, $45,000 for expenses related to
general operations and $19,000 for a rent settlement.  We will also
need approximately $1,271,000 to repay $1,198,000 of notes payable and the
related interest of approximately $73,000.





Based
upon our cash position, we will need to raise additional capital prior to the
end of the second quarter of 2010 in order to fund current operations. These
factors raise substantial doubt about our ability to continue as a going
concern.  We are pursuing several alternatives to address this situation,
including the raising of additional funding through equity or debt
financings.  We are in discussions with our existing stockholders to
provide additional funding in exchange for notes or equity.   In
order to finance existing operations and pay current liabilities over the next
twelve months, we will need to raise $1,375,000 of capital. However, there can
be no assurance that the requisite financing will be consummated in the
necessary time frame or on terms acceptable to us.  Should we be unable to
raise sufficient funds, we may be required to curtail our operating plans or
possibly cease operations.  No assurance can be given that we will be able
to operate profitably on a consistent basis, or at all, in the
future.





Results
of Operations




Comparison
of the fiscal year ended March 31, 2010 and March 31, 2009.





FINANCIAL
INFORMATION





2010
                
                
                2009Stock
      compensation
                
                
                2,018,000
                
                
                $
                -Investor
      relations
                
                
                504,000
                
                
                
                -General
      and administrative
                
                
                112,000
                
                
                
                117,000Other
      expense
                
                
                331,000
                
                
                
                226,000Net
      loss
                
                $
                (2,965,000
                )
                
                $
                (342,000
                )





Stock
Compensation.Stock compensation expenses increased by
approximately $2,018,000 in 2010.  This increase can be attributed to
employee compensation of $1,031,000 and consulting expense of
$987,000.





Investor
Relations.Investor relations expenses increased by
approximately $504,000 in 2010.





General and
Administrative.  General and administrative expenses decreased
by $5,000 in 2010 due to a decrease in professional fees.





Other
Expenses.  Other expenses increased by $105,000 in 2010 due to
a gain in the fair value of convertible notes and warrants of $102,000,
an  increase in loan modifications of $56,000 and increase of $150,000
in  interest expense on notes payable and interest related to the
beneficial conversion feature of convertible notes issued during the year ended
March 31, 2010.





Liquidity and Capital
Resources





We had
cash balances totaling approximately $22,000 as of March 31,
2010.   Historically, our principal source of funds has been cash
generated from financing activities.




Cash flow from
operations. We have been unable to generate either significant liquidity
or cash flow to fund our current operations. We anticipate that cash flows from
operations will be insufficient to fund our business operations for the next
twelve-month period.




14


Cash flows from
investing activities.There was $72,000 and $-0- of cash used
in investing activities for the purchase of oil and gas leases for the years
ended March 31, 2010 and 2009.





Cash flows from
financing activities. Net cash provided by financing activities was
generated from promissory notes that total $632,500 and $132,000 for the years
ended March 31, 2010 and 2010.





Variables
and Trends




We have
no operating history with respect to our acquisition and development of oil and
gas properties. In the event we are able to obtain the necessary financing to
move forward with our business plan, we expect our expenses to increase
significantly as we grow our business. Accordingly, the comparison of the
financial data for the periods presented may not be a meaningful indicator of
our future performance and must be considered in light these
circumstances.





Critical
Accounting Policies




Fair Value
Measurement.The Company holds certain financial assets which are
required to be measured at fair value on a recurring basis in accordance with
ASC Topic 820-10.   ASC Topic 820-10 establishes a fair value
hierarchy that prioritizes the inputs to valuation techniques used to measure
fair value. The hierarchy gives the highest priority to unadjusted quoted prices
in active markets for identical assets or liabilities (Level 1 measurements) and
the lowest priority to unobservable inputs (Level 3
measurements).  ASC Topic 820-10 defines fair value as the price that
would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants on the measurement date. A fair value
measurement assumes that the transaction to sell the asset or transfer the
liability occurs in the principal market for the asset or liability. The three
levels of the fair value hierarchy under ASC Topic 820-10 are described
below:





Level
1. Valuations based on quoted prices in active markets for identical assets
or liabilities that an entity has the ability to access.  The
Company’s Level 1 assets include cash.





Level
2. Valuations based on quoted prices for similar assets or liabilities,
quoted prices for identical assets or liabilities in markets that are not
active, or other inputs that are observable or can be corroborated by observable
data for substantially the full term of the assets or
liabilities.  The Company’s Level 2 assets and liabilities consist of
notes and convertible notes payable. Due to the short term nature of its notes
and convertible notes payable, the Company estimates the fair value of these
assets and liabilities at their current basis.





15


Level 3.
Valuations based on inputs that are supported by little or no market activity
and that are significant to the fair value of the assets or
liabilities. Level 3 fair value elections are made on an instrument by
instrument basis. The Company’s Level 3 liabilities consist of convertible
notes and detachable warrants accounted for as derivatives.  These
convertible notes are valued using internally developed valuation models, inputs
to which include interest rates, stock price, and volatilities. Unobservable
inputs used in these models are significant to the fair values of the
liabilities.





Commitments




Except as
shown in the following table, as of March 31, 2010, we did not have any material
capital commitments, other than funding our operating losses and repaying
outstanding debt. It is anticipated that any capital commitments that may occur
will be financed principally through borrowings from stockholders (although such
additional financing has not been arranged). However, there can be no assurance
that additional capital resources and financings will be available to us on a
timely basis, or if available, on acceptable terms.





Future
payments due on our contractual obligations as of March 31, 2010 are as
follows:





Lease
      settlement liability
                  
                  $
                  19,000Convertible
      notes from shareholders
                  
                  
                  428,000Convertible
      notes from shareholders, at fair value
                  
                  
                  770,000Accrued
      interest
                  
                  
                  73,000Total
                  
                  $
                  1,290,000





Off
Balance Sheet Arrangements




We have
no 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.




Stock-Based
Compensation




Please
see page F-6, Note 3 of the audited financial statements.





Recent
Accounting Pronouncements





Please
see page F-6, Note 3 of the audited financial statements.





ITEM
      7A.
            QUANTITIATIVE
      AND QUILITATIVE DISCLOSERS ABOUT MARKET
RISK





N/A





ITEM
      8.
            FINANCIAL
      STATEMENTS





The
financial statements required to be filed hereunder are set forth on pages F-1through F-6 and are incorporated herein by this
reference.





ITEM
      9.
            CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURES





There
were no other changes in or disagreements with our accountants on accounting and
financial disclosure during the last two fiscal years.




16


ITEM
      9A.
            CONTROLS
      AND PROCEDURES





Evaluation of Disclosure
Controls and Procedures





We
conducted an evaluation under the supervision and with the participation of our
management, including our Chief Executive Officer and Chief Financial Officer,
of the effectiveness of the design and operation of our disclosure controls and
procedures. The term “disclosure controls and procedures,” as defined in Rules
13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as
amended (“Exchange Act”), means controls and other procedures of a company that
are designed to ensure that information required to be disclosed by the company
in the reports it files or submits under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the
Securities and Exchange Commission's rules and forms. Disclosure controls and
procedures also include, without limitation, controls and procedures designed to
ensure that information required to be disclosed by a company in the reports
that it files or submits under the Exchange Act is accumulated and communicated
to the company's management, including its principal executive and principal
financial officers, or persons performing similar functions, as appropriate, to
allow timely decisions regarding required disclosure. Based on this evaluation,
our Chief Executive Officer concluded as of December 31, 2010 that our
disclosure controls and procedures were not effective at the reasonable
assurance level due to the material weaknesses in our internal controls over
financial reporting discussed immediately below.





Management’s Report on
Internal Control Over Financial Reporting





Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f)
under the Exchange Act. Our internal control over financial reporting is
designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles.  Our
evaluation of internal control over financial reporting includes using the COSO
framework, an integrated framework for the evaluation of internal controls
issued by the Committee of Sponsoring Organizations of the Treadway Commission,
to identify the risks and control objectives related to the evaluation of our
control environment.  The internal controls for the Company are provided by
executive management’s review and approval of all transactions.  Our
internal control over financial reporting also includes those policies and
procedures that:





(1)
pertain to the maintenance of records that in reasonable detail accurately and
fairly reflect the transactions and dispositions of our assets;


(2)
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with U.S. GAAP, and
that our receipts and expenditures are being made only in accordance with the
authorization of our management; and


(3)
provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of our assets that could have a
material effect on the financial statements.





Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.





Management
assessed the effectiveness of our internal control over financial reporting as
of March 31, 2010. This annual report does not include an attestation
report of our registered public accounting firm regarding internal control over
financial reporting. Management's report was not subject to attestation by our
registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permits us to provide only management's report in
this annual report.




17


Identified
Material Weaknesses





A
material weakness is a control deficiency, or combination of control
deficiencies, that results in more than a remote likelihood that a material
misstatement of the financial statements will not be prevented or
detected.  The matters involving internal controls over financial
reporting that our management considered to be material weaknesses under the
standards of the Public Company Accounting Oversight Board were:





·
            ineffective
      controls over period end financial disclosure and reporting processes
      including not having a functioning audit committee consisting of
      independent Board members as well as lack of expertise with respect to the
      application of US GAAP and SEC rules and
  regulations.





·
            one
      individual who, as an officer and director of the Company, has sole access
      and authority to receive cash and make cash
  disbursements





Management
believes that the material weaknesses set forth above did not have an effect on
our financial results.





Management’s
Remediation Initiatives





As a
result of our findings, we have begun to remediate the deficiency.  In
an effort to remediate the identified material weakness and enhance our internal
controls, we have initiated, or plan to initiate, the following series of
measures:





1.
            Identify
      and/or retain a second employee or member of management who is
      appropriately trained who will also have duel control with respect to the
      receipt of cash and the making of cash disbursements;
  and


2.
            Establish
      formal general accounting policies and
  procedures.


3.
            Update
      some of our current procedures to better address period end financial
      disclosure.


4.
            Update
      controls relating to other
processes.





We
anticipate that these initiatives will be at least partially, if not fully,
implemented by March 31, 2011.  Additionally, we plan to test our
updated controls in order to remediate our deficiencies by March 31,
2011.





Conclusion





As a
result of management's assessment of the effectiveness of our internal control
over financial reporting as of March 31, 2010, and the identification of the
material weakness set forth above, management has concluded that our internal
control over financial reporting is not effective.  It is reasonably
possible that, if not remediated, the material weaknesses noted above, could
result in a material misstatement in our reported financial statements that
might result in a material misstatement in a future annual or interim
period.  In light of the identified material
weakness and the conclusion that our internal control over financial reporting
is not effective, management will take the remediation initiatives set forth
above.  In addition management performed (1) additional review of the
area described above, and (2) performed additional analyses, including but not
limited to a detailed balance sheet and statement of operations analytical
review. These procedures were completed so management could gain assurance that
the financial statements and schedules included in this Form 10-K fairly present
in all material respects the financial position, results of operations and cash
flows for the periods presented.





Changes in Internal Control
over Financial Reporting





There
were no changes were made during our most recently completed fiscal quarter that
have materially affected or are reasonably likely to materially affect, our
internal control over financial reporting, as required by Rules 13a-15(d) and
15d-15(d) under the exchange Act.





ITEM
      9B.
            OTHER
      INFORMATION





None.




18


PART
III





ITEM 10.
            DIRECTORS,
      EXECUTIVE OFFICERS, AND CORPORATE
GOVERNANCE





The names
of our executive officers and directors, their ages as of June 30, 2010, and the
positions currently held by each are as follows:





Name
                      
                      Age
                      
                      PositionSteven
      Weldon
                      
                      34
                      
                      Chief
      Executive Officer and
Director





Steven
Weldon, a Certified Public Accountant,has
served as our Chief Financial Officer since September 2005.  Prior to
joining Signature Exploration and Production Corp. Mr. Weldon was the Tax
Manager for Westgate Resorts, Ltd., a timeshare developer, since July
2000.  Since September 2005, Mr. Weldon has also served as the Chief
Financial Officer of Inverted Paradigms Corp., a software
developer.  Mr. Weldon was an adjunct professor at Florida
Southern College from January 2002 to October 2005.  Since May 2005,
Mr. Weldon has served as the president, sole stockholder and director of
Steven W. Weldon, PA, a public accounting firm providing tax and accounting
services.  Mr. Weldon received his Bachelor of Science degree and his
Masters in Business Administration from Florida Southern College.





During
the past five years none of our directors, executive officers, promoters or
control persons was:




1)
            the subject of any bankruptcy
      petition filed by or against any business of which such person was a
      general partner or executive officer either at the time of the bankruptcy
      or within two years prior to that
time;





2)
            convicted
      in a criminal proceeding or is subject to a pending criminal proceeding
      (excluding traffic violations and other minor
  offenses);





3)
            subject
      to any order, judgment, or decree, not subsequently reversed, suspended or
      vacated, of any court of competent jurisdiction, permanently or
      temporarily enjoining, barring, suspending or otherwise limiting his
      involvement in any type of business, securities or banking activities;
      or





4)
            found
      by a court of competent jurisdiction (in a civil action), the Commission
      or the Commodity Futures Trading Commission to have violated a federal or
      state securities or commodities
law.





Section
16(a) Beneficial Ownership Reporting Compliance.




Since we
have no stock registered under Section 12(b) or Section 12(g) of the Exchange
Act, there are no persons who need to file reports under Section 16(a) of the
Exchange Act.





Code
of Ethics





We
adopted the Signature Exploration and Production Corp. Code of Ethics for the
CEO and Senior Financial Officers (the “finance code of ethics”), a code of
ethics that applies to our Chief Executive Officer, Chief Financial Officer and
other finance organization employees. A copy of the finance code of ethics may
be obtained from the Company, free of charge, upon written request delivered to
Signature Exploration and Production Corp. 3200 Southwest Freeway, Suite 3300,
Houston, TX 77027.  If we make any substantive amendments to the
finance code of ethics or grant any waiver, including any implicit waiver, from
a provision of the code to our Chief Executive Officer or Chief Financial
Officer, we will disclose the nature of such amendment or waiver in a report on
Form 8-K.




ITEM
11.  EXECUTIVE COMPENSATION




The
following summary compensation table reflects all compensation awarded to,
earned by, or paid to our Chief Executive Officer and president and other
employees for all services rendered to us in all capacities during each of the
years ended March 31, 2010, 2009 and 2008.


19





Summary
Compensation Table





Name
      and Position
              
              Year
              
              Salary
                  ($)
              
              
              Bonus
                  ($)
              
              
              Stock
                  Awards
                  ($)
              
              
              Option
                  Awards
                  ($)
              
              
              Non-Equity
                  Incentive
      Plan
                  Compensation
              
              
              Nonqualified
                  Deferred
                  Compensation
                  Earnings
                  ($)
              
              
              All
      Other
                  Compensation
              
              
              TotalSteven
      Weldon, CEO, President and Director
              
              2010
              
              
              30,000
              
              
              
              -
              
              
              
              900,000
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              930,0002009
              
              
              30,000
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              30,0002008
              
              
              30,000
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              30,000Jordan
      Estra, CEO, President and Director
              
              2010
              
              
              -
              
              
              
              -
              
              
              
              131,040
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              131,0402009
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -2008
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Scott
      Allen, former CEO, Director, and President
              
              2010
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -2009
              
              
              -
              
              
              
              -
              
              
              
              391
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              
              
              
              
              3912008
              
              
              102,453
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              102,453





Directors’
Compensation




Directors
are not currently compensated, although each is entitled to be reimbursed for
reasonable and necessary expenses incurred on our behalf. All directors hold
office until the next annual meeting of stockholders and until their successors
have been duly elected and qualified. There are no agreements with respect to
the election of directors. Officers are appointed annually by the Board of
Directors and each executive officer serves at the discretion of the Board of
Directors. Our board of directors does not have an audit or any other
committee.





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





The
following table presents information known to us, as of June 30, 2010, relating
to the beneficial ownership of common stock by:




·
            each
      person who is known by us to be the beneficial holder of more than 5% of
      our outstanding common stock;


·
            each
      of our named executive officers and directors;
  and


·
            our
      directors and executive officers as a
group.




We
believe that all persons named in the table have sole voting and investment
power with respect to all shares beneficially owned by them, except as
noted.




20


Percentage
ownership in the following table is based on 7,012,543 shares of common stock
outstanding as of June 30, 2010.  A person is deemed to be the
beneficial owner of securities that can be acquired by that person within 60
days from the date of this Annual Report upon the exercise of options, warrants
or convertible securities.  Each beneficial owner’s percentage
ownership is determined by dividing the number of shares beneficially owned by
that person by the base number of outstanding shares, increased to reflect the
shares underlying options, warrants or other convertible securities included in
that person’s holdings, but not those underlying shares held by any other
person.





Name
      of Beneficial Owner
                
                Number
      of
                  Shares
      of Common
                  Stock
      Beneficially
                  Owned
                
                
                Percentage
      of Shares
                    Beneficially
      OwnedSteven
      Weldon
                
                
                3,745,212
                
                
                
                53.41
                %Brannon
      Limited Partnership
                
                
                700,553
                
                
                
                9.99
                %Bristol
      Investment Fund, Ltd
                
                
                700,553
                
                
                
                9.99
                %Bristol
      Capital, LLC
                
                
                700,553
                
                
                
                9.99
                %Canyons
      Trust
                
                
                700,553
                
                
                
                9.99
                %All
      directors and officers (1 person)
                
                
                3,745,212
                
                
                
                53.41
                %







(1)
            Unless
      otherwise noted, the address of each person listed is c/o
      Signature Exploration and Production Corp. 3200 Southwest Freeway, Suite
      3300, Houston, TX 77027.(2)
            Certain
      stockholders have the right to convert notes, warrants, or options up to
      9.99% ownership as follows:  Brannon Limited Partnership –
      42,826,037, Bristol Investment Fund, LTD – 9,236,400, Ltd, Bristol
      Capital, LLC – 6,392,900 and Canyons Trust –
  753,200





ITEM
      13.
            CERTAIN
      RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR
    INDEPENDENCE





During
the year ended March 31, 2009 the Company entered into agreements with its
former CEO and a significant stockholder in which they agreed limit the transfer
of their common stock holdings to 5 percent or less for each calendar month for
a period of two years. In exchange, the Company issued them 10,326 shares of
restricted common stock.  The Company recognized compensation expense
of $516 for the year ended March 31, 2009.




ITEM
      14.
            PRINCIPAL
      ACCOUNTANT FEES AND SERVICES





Fiscal
      2010
                
                
                Fiscal
      2009Audit
      Fees(1)
                
                $
                34,000
                
                
                $
                66,093Audit-Related
      Fees(2)
                
                
                -0-
                
                
                
                -0-Tax
      Fees(3)
                
                
                -0-
                
                
                
                -0-Subtotal
                
                $
                34,000
                
                
                $
                66,093All
      other Fees(4)
                
                
                -0-
                
                
                
                -0-Total
                
                $
                34,000
                
                
                $
                66,093




21





(1)
            Audit Fees –Audit fees
      billed to the Company by Mark Bailey and Company, Ltd. for auditing the
      Company’s annual financial statements and reviewing the financial
      statements included in the Company’s Quarterly Reports on Form
      10-Q.





(2)
            Audit-Related Fees –
      There were no other fees billed by Mark Bailey and Company, Ltd, and
      during the last two fiscal years for assurance and related services that
      were reasonably related to the performance of the audit or review of the
      Company's financial statements and not reported under "Audit Fees"
      above.





(3)
            Tax Fees– There were
      no tax fees billed during the last past fiscal year for professional
      services.





(4)
            All Other Fees – There
      were no other fees billed by during the last two fiscal years for products
      and services provided.





Pre-approval
of Audit and Non-Audit Services of Independent Auditor




The Board
of Director’s policy is to pre-approve all audit and non-audit services provided
by the independent auditors. These services may include audit services,
audit-related services, tax services and other services. The Board of Director’s
pre-approval policy with respect to non-audit services is included as Exhibit
99.1 of to this Annual Report. Pre-approval is generally provided for up to 12
months from the date of pre-approval and any pre-approval is detailed as to the
particular service or category of services. The Board of Directors may delegate
pre-approval authority to one or more of its members when expedition of services
is necessary.




22


PART
IV





ITEM
      15.
            EXHIBITS





EXHIBIT
                  NUMBER
              
              DESCRIPTION3.1
              
              Form
      of Articles of Incorporation of Signature Exploration and Production Corp.
      (Previously filed on Form SB-2, filed with the Securities and Exchange
      Commission on February 12, 2002)3.2
              
              Bylaws
      of Signature Exploration and Production Corp.(Previously
      filed on Form SB-2, filed with the Securities and Exchange Commission on
      February 12, 2002)10.1
              
              Code
      of Ethics (Previously filed on Form 10-KSB, filed with the Securities and
      Exchange Commission on June 22, 2004)10.2
              
              Diabetic
      Treatment Centers of America, Inc. 2005 Restricted Stock Plan (Previously
      filed on the Company’s Proxy Statement on Schedule 14A, filed with the
      Securities and Exchange Commission on August 5, 2005)10.3
              
              Joint
      Venture Agreement (Previously filed on Form 8-K, filed with the Securities
      and Exchange Commission on May 16,2006)10.4
              
              2007
      Amended Stock Option(5)
      (Previously filed on Form S-8 POS, filed with the Securities and Exchange
      Commission on February 8, 2008)10.5
              
              Letter
      of Intent Dated February 3, 2009 (Previously filed on Form 10-K, filed
      with the Securities and Exchange Commission on July 14,
    2009)10.6
              
              Letter
      of Intent Dated February 24, 2009 (Previously filed on Form 10-K, filed
      with the Securities and Exchange Commission on July 14,
    2009)10.7
              
              Gating
      Agreement – Scott Allen (Previously filed on Form 10-K, filed with the
      Securities and Exchange Commission on July 14, 2009)10.8
              
              Gating
      Agreement – SEARA LLC (Previously filed on Form 10-K, filed with the
      Securities and Exchange Commission on July 14, 2009)10.9
              
              Gating
      Agreement – B&R Holding Company, LLC (Previously filed on Form 10-K,
      filed with the Securities and Exchange Commission on July 14,
      2009)31.1
              
              Certification
      of Chief Executive Officer Pursuant to Securities and Exchange Act Rules
      13a-14 and 15d-14 as Adopted 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, as Adopted
      Pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002.*99.1
              
              Audit
      Committee Pre-Approval Policy(2)








23


SIGNATURES




In
accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.




SIGNATURE
      EXPLORATION AND PRODUCTION CORP.Dated:  July
      14, 2010By:
                /S/  Steven
  WeldonName:
                Steven
      WeldonTitle:
                Chief  Executive
      Officer, President and
Director





In
accordance with 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.





SIGNATURE
      EXPLORATION AND PRODUCTION CORP.Dated:  July
      14, 2010By:
                /S/  Steven
  WeldonName:
                Steven
      WeldonTitle:
                Chief  Executive
      Officer, President and
Director


24


Table
of Contents





Report
      of Independent Registered Certified Public Accounting Firm
                    F-1Financial
      Statements:Balance
      Sheets – March 31, 2010 and 2009
                    F-2Statements
      of Operations – Years ended March 31, 2010 and 2009
                    F-3Statements
      of Stockholders’ Equity (Capital Deficiency) – Years endedMarch
      31, 2010 and 2009
                    F-4Statements
      of Cash Flows – Years ended March 31, 2010 and 2009
                    F-5Notes
      to Financial Statements
                    F-6




25




Report of Independent
Registered Public Accounting Firm
  To the
Board of Directors and Stockholders of Signature Exploration and Production
Corp.
  We have
audited the accompanying balance sheets of Signature Exploration and Production
Corp. (an exploration stage company) as of March 31, 2010 and 2009, and the
related statements of operations, stockholders’ equity, and cash flows for the
years then ended and from inception (March 1, 2008) to date. Signature
Exploration and Production Corp.’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 Signature Exploration and
Production Corp.  as of March 31, 2010 and 2009, and the results of
its operations and  cash flows for the years then ended and inception
to date, 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. As discussed in Note 2 of the accompanying
financial statements, the Company has incurred losses, has not generated any
revenue, and has negative operating cash flows since the inception of the
exploration activities. These factors, and the need for additional financing in
order for the Company to meet its business plans, raise substantial doubt about
its ability to continue as a going concern. Management’s plan to continue as a
going concern is also described in Note 2. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
 
  Mark
Bailey & Company, Ltd.
 Reno,
Nevada
 July 14,
2010
 F-1


SIGNATURE
EXPLORATION AND PRODUCTION CORP.


(An
Exploration Stage Company)


Balance
Sheets





March
      31,
                    
                    
                    March
      31,2010
                    
                    
                    2009AssetsCurrent
      assets:Cash
                    
                    $
                    22,258
                    
                    
                    $
                    4,032Debt
      issuance costs
                    
                    
                    75,823
                    
                    
                    
                    -Prepaid
      expenses and other current assets
                    
                    
                    450
                    
                    
                    
                    675Total
      current assets
                    
                    
                    98,531
                    
                    
                    
                    4,707Property
      and Equipment:Oil
      and gas properties, unproven
                    
                    
                    168,189
                    
                    
                    
                    -Total
      assets
                    
                    $
                    266,720
                    
                    
                    $
                    4,707Liabilities and Capital
      DeficiencyCurrent
      liabilities:Accounts
      payable
                    
                    $
                    -
                    
                    
                    $
                    8,439Accrued
      interest
                    
                    
                    72,670
                    
                    
                    
                    34,790Other
      accrued expenses
                    
                    
                    19,000
                    
                    
                    
                    21,760Convertible
      notes from shareholders
                    
                    
                    426,708
                    
                    
                    
                    295,000Convertible
      notes from shareholders, at fair value
                    
                    
                    258,475
                    
                    
                    
                    -Derivative
      liability, at fair value
                    
                    
                    292,050
                    
                    
                    
                    -Total
      current liabilities
                    
                    
                    1,068,903
                    
                    
                    
                    359,989Commitments
      and contengencies
                    
                    
                    -
                    
                    
                    
                    -Capital
      deficiency:Common
      stock, $0.0001 par value, 250,000,000 shares authorized 7,012,534 and
      897,142 shares issued and outstanding for the years ended March 31, 2010
      and 2009
                    
                    
                    701
                    
                    
                    
                    90Additional
      paid-in capital
                    
                    
                    4,190,012
                    
                    
                    
                    1,672,663Deficit
      accumulated related to abandoned activities
                    
                    
                    (1,676,223
                    )
                    
                    
                    (1,676,223
                    )Deficit
      accumulated during exploration stage
                    
                    
                    (3,316,673
                    )
                    
                    
                    (351,812
                    )Total
      capital deficiency
                    
                    
                    (802,183
                    )
                    
                    
                    (355,282
                    )Total
      liabilities and capital deficiency
                    
                    $
                    266,720
                    
                    
                    $
                    4,707





See
accompanying notes to the financial statements.


F-2


SIGNATURE
EXPLORATION AND PRODUCTION CORP.


(An
Exploration Stage Company)


Statements
of Operations


For
the years ended March 31, 2010 and 2009,


and
the Period from March 1, 2008 (Inception) to March 31, 2010





2010
              
              
              2009
              
              
              Inception
                  March
      1,
                  2008
      – March
                  31,
      2010Net
      revenue
              
              $
              -
              
              
              $
              -
              
              
              $
              -Cost
      of revenue
              
              
              -
              
              
              
              -
              
              
              
              -Gross
      profit (loss)
              
              
              -
              
              
              
              -
              
              
              
              -Stock
      compensation
              
              
              2,018,140
              
              
              
              
              
              
              
              2,018,140Investor
      relations
              
              
              503,809
              
              
              
              
              
              
              
              503,809General
      and administrative expenses
              
              
              113,556
              
              
              
              116,620
              
              
              
              238,194Loss
      from continuing operations
              
              
              (2,635,505
              )
              
              
              (116,620
              )
              
              
              (2,760,143
              )Other
      income/(expense)Change
      in fair value of convertible notes
              
              
              41,731
              
              
              
              -
              
              
              
              41,731Change
      in fair value of warrants
              
              
              60,687
              
              
              
              -
              
              
              
              60,687Loss
      on extinguishment of debt
              
              
              (177,941
              )
              
              
              
              
              
              
              (177,941
              )Loss
      on loan modification
              
              
              (80,500
              )
              
              
              (202,500
              )
              
              
              (283,000
              )Interest
      expense
              
              
              (173,333
              )
              
              
              (22,847
              )
              
              
              (198,008
              )Total
      other expenses
              
              
              (329,356
              )
              
              
              (224,347
              )
              
              
              (556,531
              )Net
      loss
              
              $
              (2,964,861
              )
              
              $
              (341,967
              )
              
              $
              (3,316,673
              )Weighted
      average common shares outstanding – basic and diluted
              
              
              4,270,373
              
              
              
              886,959
              
              
              
              2,578,666Net
      loss per share - basic and diluted
              
              $
              (0.69
              )
              
              $
              (0.39
              )
              
              $
              (1.29
              )





See
accompanying notes to the financial statements.


F-3


SIGNATURE
EXPLORATION AND PRODUCTION CORP.


(An
Exploration Stage Company)


Statements
of Stockholders’ Equity (Capital Deficiency)


For
the years ended March 31, 2010 and 2009,


and
the Period from March 1, 2008 (Inception) to March 31, 2010





Deficit
                    
                    
                    Deficitaccumulated
                    
                    
                    accumulatedAdditional
                    
                    
                    Related
      to
                    
                    
                    duringCommon
      stock
                    
                    
                    paid-in
                    
                    
                    abandoned
                    
                    
                    explorationShares
                    
                    
                    Amount
                    
                    
                    capital
                    
                    
                    activities
                    
                    
                    stage
                    
                    
                    TotalBalance,  March
      1, 2008
                    
                    
                    886,816
                    
                    
                    $
                    89
                    
                    
                    $
                    1,469,648
                    
                    
                    $
                    (1,676,223
                    )
                    
                    $
                    -
                    
                    
                    $
                    (206,486
                    )Net
      loss
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (9,845
                    )
                    
                    
                    (9,845
                    )Balance,  March
      31, 2008
                    
                    
                    886,816
                    
                    
                    $
                    89
                    
                    
                    $
                    1,469,648
                    
                    
                    $
                    (1,676,223
                    )
                    
                    
                    (9,845
                    )
                    
                    $
                    (216,331
                    )Issuance
      of stock as compensation, in March 2009
                    
                    
                    10,326
                    
                    
                    
                    1
                    
                    
                    
                    515
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    516Loss
      on loan modification
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    202,500
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    202,500Net
      loss
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (341,967
                    )
                    
                    
                    (341,967
                    )Balance,
      March 31, 2009
                    
                    
                    897,142
                    
                    
                    $
                    90
                    
                    
                    $
                    1,672,663
                    
                    
                    $
                    (1,676,223
                    )
                    
                    $
                    (351,812
                    )
                    
                    $
                    (
      355,282
                    )Issuance
      of stock for debt conversions
                    
                    
                    2,162,254
                    
                    
                    
                    216
                    
                    
                    
                    21,406
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    21,622Compensation
      expense – employment contracts
                    
                    
                    3,873,000
                    
                    
                    
                    387
                    
                    
                    
                    1,030,653
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    1,031,040Compensation
      expense – stock option
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    984,600
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    984,600Compensation
      expense – consulting
                    
                    
                    80,137
                    
                    
                    
                    8
                    
                    
                    
                    89,249
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    89,257Beneficial
      conversion features
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    133,000
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    133,000Loss
      on loan modification
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    258,441
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    258,441Net
      loss
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (2,964,861
                    )
                    
                    
                    (2,964,861
                    )Balance,
      March 31, 2010
                    
                    
                    7,012,534
                    
                    
                    $
                    701
                    
                    
                    $
                    4,190,012
                    
                    
                    $
                    (1,676,223
                    )
                    
                    $
                    (3,316,673
                    )
                    
                    $
                    (
      802,183
                    )





See accompanying notes to financial
statements.


F-4


SIGNATURE
EXPLORATION AND PRODUCTION CORP.


(An
Exploration Stage Company)


Statements
of Cash Flows


For
the years ended March 31, 2010 and 2009,


and
the Period from March 1, 2008 (Inception) to March 31, 2010





2010
              
              
              2009
              
              
              Inception
                  (March
      1, 2008
                  –
      March 31,
                  2010Cash
      flows from operating activities:Net
      loss
              
              $
              (2,964,861
              )
              
              $
              (341,967
              )
              
              $
              (3,316,673
              )Adjustments
      to reconcile net loss to net cash used inoperating
      activities:Stock
      compensation
              
              
              2,104,894
              
              
              
              516
              
              
              
              2,105,410Loss
      on loan modification
              
              
              80,500
              
              
              
              202,500
              
              
              
              283,000Loss
      on extinguishment of debt
              
              
              177,941
              
              
              
              
              
              
              
              177,941Change
      in fair value of convertible notes
              
              
              (41,731
              )
              
              
              -
              
              
              
              (41,731
              )Change
      in fair value of warrants
              
              
              (60,687
              )
              
              
              -
              
              
              
              (60,687
              )Non-cash
      interest
              
              
              173,333
              
              
              
              -
              
              
              
              197,491Changes
      in operating assets and liabilities:Other
      assets
              
              
              225
              
              
              
              (675
              )
              
              
              (450
              )Accounts
      payable
              
              
              (8,439
              )
              
              
              (12,014
              )
              
              
              (17,529
              )Accrued
      expenses
              
              
              (2,760
              )
              
              
              22,906
              
              
              
              (3,554
              )Net
      cash used in operating activities
              
              
              (541,585
              )
              
              
              (128,734
              )
              
              
              (676,782
              )Cash
      flows from investing activities:Investment
      in oil and gas properties
              
              
              (72,189
              )
              
              
              -
              
              
              
              (72,189
              )Net
      cash used in investing activities
              
              
              (72,189
              )
              
              
              -
              
              
              
              (72,189
              )Cash
      flows from financing activities:Proceeds
      from issuance of debt to stockholders
              
              
              632,000
              
              
              
              132,000
              
              
              
              770,500Proceeds
      from issuance of debt
              
              
              -
              
              
              
              -
              
              
              
              -Net
      cash provided by financing activities
              
              
              632,000
              
              
              
              132,000
              
              
              
              770,500Net
      increase (decrease) in cash
              
              
              18,226
              
              
              
              3,266
              
              
              
              21,529Cash,
      beginning of year
              
              $
              4,032
              
              
              $
              766
              
              
              $
              729Cash,
      end of year
              
              $
              22,258
              
              
              $
              4,032
              
              
              $
              22,258Supplemental
      disclosures of cash flow information:Cash
      paid during the year for:Interest
              
              $
              -
              
              
              $
              -
              
              
              $
              -Non-cash
      investing and financing activities:Convertible
      debt issued for oil and gas lease agreements
              
              $
              96,000
              
              
              $
              -
              
              
              $
              96,000Stock
      issued to settle convertible debt
              
              $
              21,250
              
              
              $
              -
              
              
              $
              21,250Stock
      issued to settle interest expense
              
              $
              373
              
              
              $
              -
              
              
              $
              373





See
accompanying notes to the financial statements.


F-5


SIGNATURE
EXPLORATION AND PRODUCTION CORP.


Notes
to Financial Statements


March
31, 2010





NOTE
1 – ORGANIZATION AND PRINCIPLES OF CONSOLIDATION




Reporting
Entity. Signature Exploration and Production
Corp.  (“Signature” or “the Company”) was incorporated on April 4,
2001 under the laws of the State of Delaware. The Company is authorized to issue
250,000,000 shares of common stock, par value $.0001. A subsidiary included in
prior year’s financial statements was dissolved in 2009.  As of March
1, 2008, the Company became an exploration stage company engaged in the
acquisition and development of crude oil and natural gas leases in the United
States. We have reported our Statement of Operations and
Statement of Cash Flows from the inception as an exploration stage company to
the current reporting period of March 31, 2010. The Company’s office is located
in Houston, Texas.





NOTE
2 – BASIS OF PRESENTATION




The
Company’s financial statements have been prepared assuming the Company will
continue as a going concern. The Company has experienced net losses since April
4, 2001, which losses have caused an accumulated deficit of approximately
$4,993,000 at March 31, 2010 of which $3,317,000 has been accumulated during our
current exploration activities. In addition, the Company has consumed cash in
its operating activities of approximately $542,000 and $129,000 for the years
ended March 31, 2010 and 2009, respectively. These factors, among others, raise
substantial doubt about the Company’s ability to continue as a going
concern.




Management
has been able, thus far, to finance the losses through a public offering,
private placements and obtaining operating funds from stockholders. The Company
is continuing to seek sources of financing.  There are no assurances
that the Company will be successful in achieving its goals.




In view
of these conditions, the Company’s ability to continue as a going concern is
dependent upon its ability to obtain additional financing or capital sources, to
meet its financing requirements, and ultimately to achieve profitable
operations. The Company is currently acquiring and developing crude oil and
natural gas leases.   Management believes that its current and
future plans provide an opportunity to continue as a going concern. The
accompanying financial statements do not include any adjustments relating to the
recoverability and classification of recorded assets, or the amounts and
classification of liabilities that may be necessary in the event the Company
cannot continue as a going concern.





NOTE
3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Exploration Stage
Company. The Company is considered to be in the exploration
stage.





Cash and Cash
Equivalents.The Company considers all short-term investments with an
original maturity of three months or less when purchased to be cash
equivalents.





Revenue
Recognition.Revenue associated with the production and sales of crude oil, natural
gas, natural gas liquids and other natural resources owned by the Company will
be recognized when production is sold to a purchaser at a fixed or determinable
price when delivery has occurred and title passes from the Company to its
customer, and if the collectability of the revenue is probable.





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


F-6


SIGNATURE
EXPLORATION AND PRODUCTION CORP.


Notes
to Financial Statements


March
31, 2010





NOTE
3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED




Income
Taxes.  The Company recognizes deferred tax assets and
liabilities for the expected future tax consequences of events that have been
included in financial statements or tax returns. Deferred tax items are
reflected at the enacted tax laws and statutory tax rates applicable to the
periods in which the differences are expected reverse. Valuation allowances are
established when necessary to reduce deferred tax assets to the amount expected
to be realized.   Due to the uncertainty regarding the success of
future operations, management has valued the deferred tax asset allowance at
100% of the related deferred tax assets.




Loss per
Share. The Company’s basic loss per share has been calculated using the
weighted average number of common shares outstanding during the period. The
Company has 59,208,537 common stock equivalent shares outstanding as of March
31, 2010.  However, such common stock equivalents, were not included
in the computation of diluted net loss per share as their inclusion would have
been anti-dilutive.




Oil and gas
properties.In July 2009, the Company changed its method of
accounting for its oil and gas exploration and development activities from the
full cost method to the successful efforts method. This change did not affect
our financial statements as we did not have any activity until the second
quarter. Although the full cost method of accounting for oil and gas exploration
and development activities continues to be an accepted alternative, the
successful efforts method of accounting is the preferred method. The Company
believes the successful efforts method provides a more transparent
representation of its results of operations and the ability to assess the
Company’s investments in oil and gas properties for impairment based on their
estimated fair values rather than being required to base valuation on prices and
costs as of the balance sheet date.





In
accordance with the successful efforts method of accounting for oil and gas
properties, costs of productive wells, developmental dry holes and productive
leases are capitalized into appropriate groups of properties based on
geographical and geological similarities. These capitalized costs are amortized
using the unit-of-production method based on estimated proved reserves. Proceeds
from sales of properties are credited to property costs, and a gain or loss is
recognized when a significant portion of an amortization base is sold or
abandoned.





Exploration
costs, such as exploratory geological and geophysical costs, delay rentals and
exploration overhead, are charged to expense as incurred. Exploratory drilling
costs, including the cost of stratigraphic test wells, are initially capitalized
but charged to exploration expense if and when the well is determined to be
nonproductive. The determination of an exploratory well’s ability to produce
must be made within one year from the completion of drilling activities. The
acquisition costs of unproved acreage are initially capitalized and are carried
at cost, net of accumulated impairment provisions, until such leases are
transferred to proved properties or charged to exploration expense as
impairments of unproved properties.





Recent
Accounting Pronouncements




In
December 2008, the Securities and Exchange Commission (SEC) released Final Rule,
Modernization of Oil and Gas
Reporting.The new disclosure requirements include provisions that permit
the use of new technologies to determine proved reserves if those technologies
have been demonstrated empirically to lead to reliable conclusions about
reserves volumes. The new requirements also will allow companies to disclose
their probable and possible reserves to investors. In addition, the new
disclosure requirements call for companies to: (a) report the independence
and qualifications of its reserves preparer or auditor; (b) file reports
when a third party is relied upon to prepare reserves estimates or conducts a
reserves audit; and (c) report oil and gas reserves using an average price
based upon the prior 12-month period rather than year-end prices. The new
disclosure requirements are effective for financial statements for fiscal years
ending on or after December 31, 2009. This Final Rule did not have a
significant effect on our current or prior financial position or
earnings.


F-7




SIGNATURE
EXPLORATION AND PRODUCTION CORP


Notes
to Financial Statements


March
31, 2010





NOTE
3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED




In
October 2009, the Financial Accounting Standards Board issued an Accounting
Standards Update to update the Extractive Industries—Oil and Gas Topic of the
FASB Accounting Standards Codification. The objective of the update is to align
the oil and gas reserve estimation and disclosure requirements of the financial
accounting standards with the SEC’s final rule discussed above. These amendments
did not have a significant effect on our current or prior financial position or
earnings.




In June
2008 the Financial Accounting Standards Board Emerging Issues Task Force (EITF)
reached a consensus on, “Determining Whether an Instrument (or Embedded Feature)
is Indexed to an Entity’s Own Stock.” This will be effective for fiscal years
beginning after December 15, 2008. This change had a material impact on our
financial condition or results of operations as discussed in Note
7.




NOTE
4 – FAIR VALUE MEASUREMENTS




The
Company holds certain financial assets which are required to be measured at fair
value on a recurring basis in accordance with ASC Topic
820-10.   ASC Topic 820-10 establishes a fair value hierarchy
that prioritizes the inputs to valuation techniques used to measure fair value.
The hierarchy gives the highest priority to unadjusted quoted prices in active
markets for identical assets or liabilities (Level 1 measurements) and the
lowest priority to unobservable inputs (Level 3 measurements).  ASC
Topic 820-10 defines fair value as the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction between market
participants on the measurement date. A fair value measurement assumes that the
transaction to sell the asset or transfer the liability occurs in the principal
market for the asset or liability. The three levels of the fair value hierarchy
under ASC Topic 820-10 are described below:




Level
1. Valuations based on quoted prices in active markets for identical assets
or liabilities that an entity has the ability to access.  The
Company’s Level 1 assets include cash.




Level
2. Valuations based on quoted prices for similar assets or liabilities,
quoted prices for identical assets or liabilities in markets that are not
active, or other inputs that are observable or can be corroborated by observable
data for substantially the full term of the assets or
liabilities.  The Company’s Level 2 assets and liabilities consist of
notes and convertible notes payable. Due to the short term nature of its notes
and convertible notes payable, the Company estimates the fair value of these
assets and liabilities at their current basis.





Level 3.
Valuations based on inputs that are supported by little or no market activity
and that are significant to the fair value of the assets or
liabilities. Level 3 fair value elections are made on an instrument by
instrument basis. The Company’s Level 3 liabilities consist of convertible
notes and detachable warrants accounted for as derivatives.  These
convertible notes are valued using internally developed valuation models, inputs
to which include interest rates, stock price, and volatilities. Unobservable
inputs used in these models are significant to the fair values of the
liabilities.


F-8


SIGNATURE
EXPLORATION AND PRODUCTION CORP.


Notes
to Consolidated Financial Statements (unaudited)


March
31, 2010





NOTE
4 – FAIR VALUE MEASUREMENTS, CONTINUED





Fair
      Value MeasurementLevel
      1
                
                
                Level
      2
                
                
                Level
      3
                
                
                TotalCash
                
                $
                22,258
                
                
                $
                -
                
                
                $
                -
                
                
                $
                22,258Convertible
      notes from stockholders
                
                $
                -
                
                
                $
                426,708
                
                
                $
                -
                
                
                $
                426,708Convertible
      notes from stockholders, at fair value
                
                $
                -
                
                
                $
                -
                
                
                $
                258,475
                
                
                $
                258,475Derivative
      liability
                
                $
                -
                
                
                $
                -
                
                
                $
                292,050
                
                
                $
                292,050




The
following table presents the changes in Level 3 instruments measured on a
recurring basis for the year ended March 31, 2010:




Convertible
      Notes
                
                
                Derivative
      Liability
                
                
                TotalBalance,
      beginning of period
                
                $
                -
                
                
                $
                -
                
                
                $
                -Realized
      and unrealized gains (losses);Included
      in other income (expense)
                
                
                41,731
                
                
                
                60,687
                
                
                
                102,41Included
      in other comprehensive income
                
                
                -
                
                
                
                -
                
                
                
                -Purchases,
      issuances, and settlements
                
                
                300,206
                
                
                
                352,737
                
                
                
                652,942Transfers
      in (out)
                
                
                -
                
                
                
                -
                
                
                
                -Balance,
      end of period
                
                $
                258,475
                
                
                $
                292,050
                
                
                $
                550,525




The
liabilities in the preceding tables were measured at fair value due to events or
circumstances the Company identified that significantly impacted the fair value
of these liabilities during the periods presented. The liabilities were
initially recorded in an amount equal to the undiscounted consideration
received. These amounts are adjusted periodically using a Black Scholes option
valuation model. The following assumptions were made in the Black-Scholes model:
(1) risk free interest rate of 0.41% to 2.6%, (2) remaining contractual life of
..66 to 4.79 years, (3) expected stock price volatility of 455.5% to 549.9%, and
(4) expected dividend yield of zero.





NOTE
5 – OIL AND GAS PROPERTIES




The
Company's aggregate capitalized costs related to oil and natural gas properties,
unproven are as follows:




Prospect
                  
                  CostsKoliba
                  
                  $
                  67,189Kennedy
                  
                  
                  60,000Catron
                  
                  
                  36,000Nettie
      Rhodes
                  
                  
                  5,000Total
                  
                  $
                  168,189




F-9


SIGNATURE
EXPLORATION AND PRODUCTION CORP.


Notes
to Consolidated Financial Statements (unaudited)


March
31, 2010




NOTE
5 – OIL AND GAS PROPERTIES, CONTINUED




Koliba
Prospect – Bloomington TX


In
October 2009, we acquired a 15% working interest in this well. The Koliba well
prospect covers 143 acres over an anticlinal structure (target) located in the
North McFaddin Field.


Catron
Prospect – Carton County, NM




We
acquired a lease of 1,320 acres in Catron County, New Mexico.  The
lease term is for ten years.




Kenedy
Prospect – Kenedy County, TX




In August
2009, we acquired a 10% working interest with an option to acquire 10% on
additional wells on a 980 acre prospect located in Kenedy County,
Texas.




Nettie
Rhodes Prospect – Young County, Texas




In August
2009, we acquired a five percent turnkey working interest on the Nettie Rhodes
Lease consisting of approximately 160 acres.




NOTE
6 – DEFERRED INCOME TAXES




At March
31, 2010, the Company had net operating loss carryforwards for income tax
purposes of approximately $3,555,000 available as offsets against future taxable
income.  The net operating loss carryforwards are expected to expire
at various times from 2022 through 2030.Utilization of the Company’s net
operating losses may be subject to substantial annual limitation if the Company
experiences a 50% change in ownership, as provided by the Internal Revenue Code
and similar state provisions.  Such an ownership change would substantially
increase the possibility of net operating losses expiring before complete
utilization.




The tax
effects of the primary temporary differences giving rise to the Company’s
deferred tax assets and liabilities are as follows for the year ended March 31,
2010:




2010
                    
                    
                    2009Deferred
      tax assets:Net
      operating loss carryforward
                    
                    $
                    1,338,000
                    
                    
                    $
                    669,000Accrued
      expenses
                    
                    
                    -
                    
                    
                    
                    -Allowance
      for doubtful accounts
                    
                    
                    -
                    
                    
                    
                    -Stock
      based compensation
                    
                    
                    388,000
                    
                    
                    
                    -Total
      deferred tax assets
                    
                    
                    1,726,000
                    
                    
                    
                    669,000Less
      valuation allowance
                    
                    
                    (1,726,000
                    )
                    
                    
                    (669,000
                    )Net
      deferred tax asset
                    
                    $
                    -
                    
                    
                    $
                    -





Because
of the Company’s lack of earnings history, the deferred tax assets have been
fully offset by a valuation allowance. In assessing the realizability of
deferred tax assets, management considers whether it is more likely than not
that some portion or all of the deferred tax assets will not be realized. The
ultimate realization of deferred tax assets is dependent upon the generation of
future taxable income during those periods that the temporary differences become
deductible. During the year ended March 31, 2010, the increase in the deferred
tax asset valuation allowance amounted to approximately
$1,057,000.


F-10


SIGNATURE
EXPLORATION AND PRODUCTION CORP.


Notes
to Financial Statements


March
31, 2010


NOTE
6 – DEFERRED INCOME TAXES, CONTINUED


The
provision for income taxes is different than would result from applying the U.S.
statutory rate to profit before taxes for the reasons set forth in the following
reconciliation:


2010
                
                
                2009Tax
      benefit computed at U.S. statutory rates
                
                $
                (1,038,000
                )
                
                $
                (116,000
                )Increases
      (decreases) in taxes resulting from:Non-deductible
      items
                
                
                55,000
                
                
                
                76,000Stock
      Compensation
                
                
                361,000
                
                
                
                -Change
      in valuation allowance
                
                
                669,000
                
                
                
                52,000State
      taxes
                
                
                (47,000
                )
                
                
                (12,000
                )Total
                
                $
                -
                
                
                $
                -


NOTE
7 – CONVERTIBLE NOTES AND WARRANTS


February
2010 Convertible Notes and Warrants


On
February 10, 2010, Signature Exploration and Production Corp. (the "Company")
entered into two Convertible Note Agreements ("Notes") for a total of
$352,942.  The Company received aggregate proceeds of $200,000 on
$235,295 of debts reflecting a 15% original issue discount to the Note
holders.  The remaining balance of $117,647 is due upon the request of
the Company when the funds are needed for operations.  The aggregate
proceeds of the additional funds will be $100,000 reflecting a 15% original
issue discount to the Note holders.


The Notes
are due on February 10, 2011.  The note holders may convert any
portion of the Notes that are outstanding, whether such portion represents
principal or interest, into shares of common stock of the Company at a price
equal to $0.65. The Notes include an anti-dilution adjustment that may not be
adjusted below $0.01.


Simultaneously
with the issuance of these Notes, the Company issued to each Note holder a
5-year warrant (the "Warrant") to purchase 271,494 shares of common stock of the
Company.  The Warrant is exercisable at a price equal to $0.75 The
Warrants include an anti-dilution adjustment that may not be adjusted below
$0.01.


The note
holder will only be allowed to convert shares or exercise warrants or portion
thereof to the extent that, at the time of the conversion or exercise, the
conversion or exercise will not result in the note holder beneficially owning
more than 9.9% of the issued and outstanding common shares of the
Company.


The
Company made a fair value election to account for the complete package of debt
and warrants as it provides the best indicator of the Company’s obligation
related to the transaction.  See Note 4.  The principle
amount due on these notes is $235,295, whereas, the Company’s aggregate fair
value of the notes is $57,880 and the remaining $88,401 has been allocated to
the derivative liability.


January
2010 Convertible Notes and Warrants


On
January 13, 2010, Signature Exploration and Production Corp. (the "Company")
entered into two Convertible Note Agreements ("Notes") for a total of
$64,706.  The Company received aggregate proceeds of $55,000
reflecting a %
original issue discount to the Note holders.


The Notes
are due on January 13, 2011.  The note holders may convert any portion
of the Notes that are outstanding, whether such portion represents principal or
interest, into shares of common stock of the Company at a price equal to $0.35.
The Notes include an anti-dilution adjustment that may not be adjusted below
$0.01.


F-11


SIGNATURE
EXPLORATION AND PRODUCTION CORP.


Notes
to Financial Statements


March
31, 2010





NOTE
7 – CONVERTIBLE NOTES AND WARRANTS, CONTINUED


Simultaneously
with the issuance of these Notes, the Company issued to each Note holder a
5-year warrant (the "Warrant") to purchase 92,437 shares of common stock of the
Company.  The Warrant is exercisable at a price equal to $0.50. The
Warrants include an anti-dilution adjustment that may not be adjusted below
$0.01.





The note
holder will only be allowed to convert shares or exercise warrants or portion
thereof to the extent that, at the time of the conversion or exercise, the
conversion or exercise will not result in the note holder beneficially owning
more than 9.9% of the issued and outstanding common shares of the
Company.





The
Company made a fair value election to account for the complete package of debt
and warrants as it provides the best indicator of the Company’s obligation
related to the transaction.  See Note 4..  The principle
amount due on these notes is $64,706, whereas, the Company’s aggregate fair
value of the notes is $13,541 and the remaining $13,675 has been allocated to
the derivative liability.





December
2009 Convertible Notes and Warrants





On
December 7, 2009, Signature Exploration and Production Corp. (the "Company")
entered into two Convertible Note Agreements ("Notes") for a total of
$352,942.  The Company received aggregate proceeds of $300,000
reflecting a 15% original issue discount to the Note holders.





The Notes
are due on December 7, 2010.  The note holders may convert any portion
of the Notes that are outstanding, whether such portion represents principal or
interest, into shares of common stock of the Company at a price equal to $0.35.
The Notes include an anti-dilution adjustment that may not be adjusted below
$0.01.





Simultaneously
with the issuance of this Note, the Company issued to each Note holder a 5-year
warrant (the "Warrant") to purchase 504,203 shares of common stock of the
Company.  The Warrant is exercisable at a price equal to $0.50. The
Warrants include an anti-dilution adjustment that may not be adjusted below
$0.01.





The note
holder will only be allowed to convert shares or exercise warrants or portion
thereof to the extent that, at the time of the conversion or exercise, the
conversion or exercise will not result in the note holder beneficially owning
more than 9.9% of the issued and outstanding common shares of the
Company.





The
Company made a fair value election to account for the complete package of debt
and warrants as it provides the best indicator of the Company’s obligation
related to the transaction.  See Note 4.The principle amount due on
these notes is $352,942, whereas, the Company’s aggregate fair value of the
notes is $187,054 and the remaining $189,974 has been allocated to the
derivative liability.





Convertible
Notes from Shareholders





On
February 23, 2010 we modified promissory notes in the amount of $2,000, which
are now included in convertible debt. Interest has accrued on the outstanding
principal balance from February 6, 2008 at a rate of 10 percent per annum. The
note holder has the sole option of converting the principal and interest
represented by these notes into our common stock at a strike price equal to a
$0.01. The note holder will only be allowed to convert shares or portion thereof
to the extent that, at the time of the conversion, the conversion will not
result in the note holder beneficially owning more than 9.9% of the issued and
outstanding common shares of the Company.  The company recognized a
loss of $2,000 and $-0- on the loan modification as of March 31, 2010 and 2009,
respectively.


F-12


SIGNATURE
EXPLORATION AND PRODUCTION CORP.


Notes
to Financial Statements


March
31, 2010





NOTE
7 – CONVERTIBLE NOTES AND WARRANTS, CONTINUED





On
October 20, 2009, we modified promissory notes in the amount of $78,500, which
are now included in convertible debt. Interest has accrued on the outstanding
principal balance from January 13, 2009 at a rate of 10 percent per annum. The
note holder has the sole option of converting the principal and interest
represented by these notes into our common stock at a strike price equal to a
$0.01. The note holder will only be allowed to convert shares or portion thereof
to the extent that, at the time of the conversion, the conversion will not
result in the note holder beneficially owning more than 9.9% of the issued and
outstanding common shares of the Company.  The company recognized a
loss of $78,500 and $-0- on the loan modification as of March 31, 2010 and 2009,
respectively.





On
October 13, 2009, the Company entered into two Convertible Note Agreements for
$22,000 and $15,000. The notes will accrue interest at the rate of 10% per annum
and are due on October 13, 2010.  The note holders may convert any
portion of the notes that are outstanding, whether such portion represents
principal or interest, into shares of common stock of the Company at a price
equal to $0.01.  The company recognized $16,958 and $-0- of interest
expense as a result of this conversion feature as March 31, 2010 and 2009,
respectively.





On August
27, 2009, we sold in a private placement, a promissory note in the amount of
$60,000 to an investor in exchange for a participation agreement in an oil and
gas prospect.  Interest has accrued on the outstanding principal
balance from August 27, 2009 at a rate of 10 percent per annum. The note holder
has the sole option of converting the principal and interest represented by this
note into our common stock at a strike price equal to a $0.01. This note was due
on November 20, 2009. The note holder will only be allowed to convert shares or
portion thereof to the extent that, at the time of the conversion, the
conversion will not result in the note holder beneficially owning more than 9.9%
of the issued and outstanding common shares of the Company.  The
company recognized $60,000 and $-0- of interest expense as a result of this
conversion feature as March 31, 2010 and 2009, respectively.  The
Company is currently in default on this note and related accrued
interest.  The investor can covert this debt to shares of the
Company’s common stock to satisfy these notes or make an immediate demand for
payment.  As of March 31, 2010, the investor has not made demands for
payment of this note.





On August
17, 2009, we sold in a private placement, a promissory note in the amount of
$18,000 to an investor in exchange for a land lease
agreement.  Interest has accrued on the outstanding principal balance
from August 17, 2009 at a rate of 10 percent per annum. The note holder has the
sole option of converting the principal and interest represented by this note
into our common stock at a strike price equal to a $0.01. This note was due on
November 20, 2009.  The note holder will only be allowed to convert
shares or portion thereof to the extent that, at the time of the conversion, the
conversion will not result in the note holder beneficially owning more than 9.9%
of the issued and outstanding common shares of the Company.   The
company recognized $18,000 and $-0- of interest expense as a result of this
conversion feature as of March 31, 2010 and 2009, respectively.  The
Company is currently in default on this note and related accrued
interest.  The investor can covert this debt to shares of the
Company’s common stock to satisfy these notes or make an immediate demand for
payment.  As of March 31, 2010, the investor has not made demands for
payment of this note.





On August
17, 2009, we sold in a private placement, a promissory note in the amount of
$18,000 to a stockholder in exchange for a land lease agreement. Interest has
accrued on the outstanding principal balance from August 17, 2009 at a rate of
10 percent per annum. The note holder has the sole option of converting the
principal and interest represented by this note into our common stock at a
strike price equal to a $0.01. This note was due on November 20,
2009.   The note holder will only be allowed to convert shares or
portion thereof to the extent that, at the time of the conversion, the
conversion will not result in the note holder beneficially owning more than 9.9%
of the issued and outstanding common shares of the Company.  The
company recognized $18,000 and $-0- of interest expense as a result of this
conversion feature as of March 31, 2010 and 2009, respectively.  The
Company is currently in default on this note and related accrued
interest.  The investor can covert this debt to shares of the
Company’s common stock to satisfy these notes or make an immediate demand for
payment.  As of March 31, 2010, the investor has not made demands for
payment of this note.


F-13





SIGNATURE
EXPLORATION AND PRODUCTION CORP.


Notes
to Financial Statements


March
31, 2010





NOTE
7 – CONVERTIBLE NOTES AND WARRANTS, CONTINUED





On March
4, 2009, we modified promissory notes in the amount of $202,500, which are now
included in convertible debt. Interest has accrued on the outstanding principal
balance from October 10, 2006 at a rate of 10 percent per annum. The note holder
has the sole option of converting the principal and interest represented by
these notes into our common stock at a strike price equal to a $0.01. The note
holder will only be allowed to convert shares or  portion thereof to
the extent that, at the time of the conversion, the conversion will not result
in the note holder beneficially owning more than 9.9% of the issued and
outstanding common shares of the Company.  The Company converted
$7,250 of these notes into 725,000 shares of the Company’s common
stock.  A balance of $195,250 remains on these promissory notes. The
Company is currently in default on these notes and related accrued
interest.  The note holders can covert this debt to shares of the
Company’s common stock to satisfy these notes.  As of March 31, 2010,
no stockholders have made demands for payment of these loans.





During
2007, we sold in private placements, promissory notes totaling $50,000 to a
stockholder.  Interest accrued on the outstanding principal balance at
a rate of 10 percent per annum. The note holder had the sole option of
converting the principal represented by these notes into our common stock at a
strike price equal to a $0.01. These notes are currently in
default.  The Company converted $12,000 of these notes into 1,200,000
shares of the Company’s common stock.  A balance of $38,000 remains on
these promissory notes.  The Company is currently in default on these
notes and related accrued interest.  The note holders can covert this
debt to shares of the Company’s common stock to satisfy these
notes.  As of March 31, 2010, no stockholders have made demands for
payment of these loans.





NOTE
8 – STOCKHOLDERS’ EQUITY (CAPITAL DEFICIENCY)





Consulting
Agreements.





On
January 11, 2010 the Company issued 4,137 shares of its restricted common stock
pursuant to a Consulting Services Agreement. The Company recorded the $6,330
fair value of the shares issued as stock-based consulting.





On
January 13, 2010 the Company issued 7,500 shares of its restricted common stock
pursuant to a Consulting Services Agreement. The Company recorded the $11,400
fair value of the shares issued as stock-based consulting.





On
February 5, 2010 the Company issued 2,500 shares of its restricted common stock
pursuant to a Consulting Services Agreement. The Company recorded the $2,625
fair value of the shares issued as stock-based consulting.





On
February 10, 2010 the Company issued 36,000 shares of its restricted common
stock pursuant to a Consulting Services Agreement. The Company recorded the
$37,800 fair value of the shares issued as stock-based consulting.





On
February 10, 2010 the Company issued 10,000 shares of its restricted common
stock pursuant to a Consulting Services Agreement. The Company recorded the
$10,500 fair value of the shares issued as stock-based consulting.





On March
4, 2010 the Company issued 10,000 shares of its restricted common stock pursuant
to a Consulting Services Agreement. The Company recorded the $10,200 fair value
of the shares issued as stock-based consulting.





On
March 15, 2010 the Company issued 10,000 shares of its restricted common stock
pursuant to a Consulting Services Agreement. The Company recorded the $7,700
fair value of the shares issued as stock-based consulting.





Option
Agreement.  On August 3, 2009, we signed an Option Agreement
allowing the Company to purchase up to a fifty percent working interest in the
oil and gas exploration and development activities on 2,087 acres known as
Medicine River Ranch.  This option is valid for one year or until a
Definitive Participation Agreement is either entered into or rejected by both
parties.  The Company issued 25,000 shares of restricted common stock
upon execution of this agreement and an additional 75,000 shares of restricted
common stock will be issued upon acceptance of a Definitive Participation
Agreement.  On January 29, 2010, both parties agreed to cancel this
option and the issued shares were returned to the Company.


F-14


SIGNATURE
EXPLORATION AND PRODUCTION CORP.


Notes
to Financial Statements


March
31, 2010





NOTE
8 – STOCKHOLDERS’ EQUITY (CAPITAL DEFICIENCY), CONTINUED





Employment
Agreement. On
September 29, 2009, the Company entered into an Employment Agreement with Steven
Weldon, our Chief Executive Officer.  As compensation for entering into
this Agreement, the Company granted and issued to Mr. Weldon 3,600,000 shares of
the common stock of the Company. The stock is restricted as defined by the rules
and regulations promulgated under the Securities Act of 1933, as
amended.  The shares are fully paid and non-assessable. An expense of
$900,000 was recognized for year ended March 31,2010.





The
shares issued pursuant to this Agreement are subject to certain terms and
conditions. The shares are represented by 36 certificates of 100,000 shares
each.  All Certificates not delivered to the Executive are being held
by the Company.  One certificate representing 100,000 shares will be
delivered to the Executive on the 30th of each
month beginning October 30, 2009.  In the event that Mr. Weldon’s
employment pursuant to this agreement is terminated for any reason, the shares
represented by certificates still held by the Company will be contributed back
to the Company for cancellation.





Employment
Agreement. On October 7, 2009, the Company entered into an Employment
Agreement with Jordan Estra, our former Chief Executive Officer.  As
compensation for entering into this Agreement, the Company granted and issued to
Mr. Estra 3,600,000 shares of the common stock of the Company. The stock is
restricted as defined by the rules and regulations promulgated under the
Securities Act of 1933, as amended.  The shares are fully paid and
non-assessable.





The
shares issued pursuant to this Agreement were subject to certain terms and
conditions. The shares were represented by 36 certificates of 100,000 shares
each.  All Certificates not delivered to the Executive are being held
by the Company.  One certificate representing 100,000 shares will be
delivered to the Executive on the 7th of each
month beginning November 7, 2009.





Upon the
resignation of Mr. Estra’s on December 29, 2009, 3,327,000  shares
represented by certificates still held by the Company were contributed back to
the Company for cancellation.  Mr. Estra received a total of 273,000
restricted shares and an expense of $131,040 was recognized for the year ended
March 31,2010.





Note
Conversion. During the year ended March 31, 2010, the Company converted a
total of $21,250 of notes payable and $373 of interest payable from certain Note
Holders into common stock of the Company.  The Company issued
2,125,000 shares of our common stock to satisfy the principal balances of the
notes payable and 37,254 shares of our common stock to satisfy accrued interest
of the notes payable.  A loss of $177,941 was recognized for the
conversion of a $2,000 note during the year ended March 31, 2010.





NOTE
9 – RELATED PARTY TRANSACTIONS





During
the year ended March 31, 2009 the Company entered into agreements with its CEO
and a significant stockholder in which they agreed to limit the transfer of
their common stock holdings to 5 percent  or less for each calendar
month for the next two years.  In exchange, the Company issued them
10,326 shares of restricted common stock .  The Company recognized
compensation expense of $516 for the year ended March 31, 2009.




NOTE
10 – STOCK OPTION PLAN





On
February 6, 2008, the Board of Directors adopted the Signature Exploration and
Production Corp. 2007 Amended Stock Option Plan (“2007 Plan”).  Under
the 2007 Plan, 8,000,000 shares of the Company’s restricted common stock may be
issuable upon the exercise of options issued to employees, advisors and
consultants.


F-15


SIGNATURE
EXPLORATION AND PRODUCTION CORP.


Notes
to Financial Statements


March
31, 2010





NOTE
10 – STOCK OPTION PLAN, CONTINUED





On August
20, 2009, the Company issued 4,000,000 options to a consultant valued at
$984,600 under the 2007 Plan. The option’s exercise price is equal to fifty
percent (50%) of the average closing bid price for the three day period prior to
notice of exercise. The consultant will only be allowed to purchase shares upon
the exercise of the option or portion thereof to the extent that, at the time of
the purchase, the purchase will not result in the consultant beneficially owning
more than 9.9% of the issued and outstanding common shares of the
Company.


These
options are fully vested and represent the only options outstanding as of March
31, 2010.




We used
the Black-Scholes option pricing model to determine the fair value of the option
grant. We valued the stock grant based on the following
assumptions:




Dividend
      Yield (per share)
                        
                        
                        0.0
                        %Volatility
      (%)
                        
                        
                        458.1
                        %Risk-free
      Interest Rate (%)
                        
                        
                        .42
                        %Expected
      Life
                        
                        1
      Year





NOTE
11 – SUBSEQUENT EVENT




On April
27, 2010, Signature Exploration and Production Corp. (the "Company") received
the remaining balance due on the note agreement entered into on February 10,
2010.  The aggregate proceeds of the additional funds were $100,000
reflecting a 15% original issue discount to the Note
holders.
  F-16