10-Q 1 mrge_10q.htm FORM 10-Q mrge_10q.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

 

For the Quarterly Period ended April 30, 2019

 

OR

 

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

 

For the transition period from _____________ to _____________

 

Commission file number: 000-55690

 

MIRAGE ENERGY CORPORATION

(Exact name of registrant as specified in its charter)

 

NEVADA

33-1231170

(State or other jurisdiction of incorporation)

(IRS Employer Identification No.)

 

900 Isom Rd., Ste. 306, San Antonio, TX

78216

(Address of principal executive offices)

(Zip Code)

 

(210) 858-3970

(Issuer’s telephone number, including area code)

 

__________________________________________________________

(Former name, former address and former fiscal year if changed since last report)

 

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the past 90 days. Yes x No ¨

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange:

 

Large accelerated filer

¨

Accelerated filer

¨

Non-accelerated filer

¨

Smaller reporting company

¨

Emerging growth company

x

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

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

 

Securities registered pursuant to Section 12(b) of the Act: None

 

Indicate the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: June 19, 2019 there were 395,739,327 shares of the Company’s common stock were issued and outstanding.

 

 
 
 
 

 

MIRAGE ENERGY CORPORATION

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED APRIL 30, 2019

 

TABLE OF CONTENTS

 

 

PAGE

 

PART I - FINANCIAL INFORMATION

 

Item 1.

Unaudited Financial Statements.

3

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

20

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

23

 

 

Item 4.

Controls and Procedures.

23

 

 

PART II - OTHER INFORMATION

 

Item 1.

Legal Proceedings.

24

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

24

 

Item 3.

Defaults Upon Senior Securities.

25

 

Item 4.

Mine Safety Disclosures.

25

 

Item 5.

Other Information.

25

 

Item 6.

Exhibits.

25

 

SIGNATURES

25

 

 
2
 
 

 

PART I – FINANCIAL INFORMATION

 

Item 1. Unaudited Financial Statements.

 

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s 10-K for the year ending July 31, 2018 filed with the Securities and Exchange Commission. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the periods presented have been reflected herein. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year ending July 31, 2019.

 

 
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Table of Contents

 

MIRAGE ENERGY CORPORATION

 

INDEX TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS

 

April 30, 2019

 

 

Page

 

Consolidated Balance Sheets as of April 30, 2019 (Unaudited) and July 31, 2018

5

 

Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three Months and Nine Months Ended April 30, 2019 and 2018 (Unaudited)

6

 

Consolidated Statement of Stockholders’ (Deficit) for the Nine Months Ended April 30, 2018 and 2019

7-8

 

Consolidated Statements of Cash Flows for the Nine Months Ended April 30, 2019 and 2018 (Unaudited)

9

 

Notes to the Consolidated Interim Financial Statements (Unaudited)

10

 

 
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MIRAGE ENERGY CORPORATION

Consolidated Balance Sheets

 

 

 

April 30,

 

 

July 31,

 

 

 

2019

 

 

2018

 

 

 

(Unaudited)

 

 

 

 

ASSETS

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

Cash and cash equivalents

 

$33,439

 

 

$13,480

 

Prepaid expenses

 

 

2,780

 

 

 

2,306

 

Total Current Assets

 

 

36,219

 

 

 

15,786

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment, net

 

 

3,425

 

 

 

4,611

 

 

 

 

 

 

 

 

 

 

Other Assets

 

 

 

 

 

 

 

 

Deposits

 

 

6,921

 

 

 

6,921

 

Total Other Assets

 

 

6,921

 

 

 

6,921

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$46,565

 

 

$27,318

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

Loans payable, related parties

 

$-

 

 

$155,105

 

Accounts payable and accrued liabilities

 

 

601,554

 

 

 

479,964

 

Loan payable

 

 

77,844

 

 

 

77,844

 

Convertible debentures

 

 

387,726

 

 

 

257,206

 

Accrued salaries and payroll taxes, related parties

 

 

1,796,838

 

 

 

1,413,176

 

Total Current Liabilities

 

 

2,913,962

 

 

 

2,383,295

 

 

 

 

 

 

 

 

 

 

Long-Term Liabilities

 

 

 

 

 

 

 

 

Loan payable

 

 

50,000

 

 

 

50,000

 

TOTAL LIABILITIES

 

 

2,926,943

 

 

 

2,433,295

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

Preferred stock, par value $0.001, 10,000,000 shares authorized, 10,000,000 shares issued and outstanding as of April 30, 2019 and July 31, 2018

 

 

10,000

 

 

 

10,000

 

Common stock, par value $0.001, 900,000,000 shares authorized, 394,409,327 shares issued and outstanding as of April 30, 2019; 342,628,540 shares issued and outstanding as of July 31, 2018

 

 

394,409

 

 

 

342,628

 

Additional paid-in capital

 

 

2,165,357

 

 

 

580,540

 

Accumulated deficit

 

 

(5,437,063)

 

 

(3,339,045)

Accumulated other comprehensive loss

 

 

(100)

 

 

(100)

TOTAL STOCKHOLDERS’ (DEFICIT)

 

 

(2,867,397)

 

 

(2,405,977)

TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT)

 

$46,565

 

 

$27,318

 

 

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

 

 
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MIRAGE ENERGY CORPORATION

Consolidated Statements of Operations and Comprehensive Income (Loss)

(Unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

April 30,

 

 

April 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative expenses

 

$220,655

 

 

$208,854

 

 

$655,336

 

 

$748,466

 

Professional fees

 

 

24,907

 

 

 

19,389

 

 

 

79,597

 

 

 

64,957

 

Total Operating Expenses

 

 

245,562

 

 

 

228,243

 

 

 

734,933

 

 

 

813,423

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS BEFORE OPERATIONS

 

 

(245,562)

 

 

(228,243)

 

 

(734,933)

 

 

(813,423)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER EXPENSE (INCOME)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense (income)

 

 

(914,295)

 

 

115,227

 

 

 

1,363,084

 

 

 

230,017

 

Total Other Expense (Income)

 

 

(914,295)

 

 

115,227

 

 

 

1,363,084

 

 

 

230,017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) BEFORE INCOME TAXES

 

 

668,733

 

 

 

(343,470)

 

 

(2,098,017)

 

 

(1,043,440)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS)

 

 

668,733

 

 

 

(343,470)

 

 

(2,098,017)

 

 

(1,043,440)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL COMPREHENSIVE INCOME (LOSS)

 

$668,733

 

 

$(343,470)

 

$(2,098,017)

 

$(1,043,440)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic Income (Loss) per Common Share

 

$0.00

 

 

$(0.00)

 

$(0.01)

 

$(0.00)

Weighted Average Common Shares Outstanding, Basic

 

 

367,662,091

 

 

 

316,567,075

 

 

 

363,104,279

 

 

 

313,795,366

 

Diluted Income (Loss) per Common Share

 

$0.00

 

 

$(0.00)

 

$(0.01)

 

$(0.00)

Weighted Average Common Shares Outstanding, Diluted

 

 

369,364,648

 

 

 

316,567,075

 

 

 

363,104,279

 

 

 

313,795,366

 

 

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

 

 
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MIRAGE ENERGY CORPORATION

Statement of Stockholders’ (Deficit)

(Unaudited)

 

For the Nine Months Ended April 30, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

Common Stock

 

 

Preferred Stock

 

 

Additional

 

 

 

 

 

Other

 

 

Total

 

 

 

Number

of Shares

 

 

Amount

 

 

Number of Shares

 

 

Amount

 

 

Paid-in

Capital

 

 

Accumulated

(Deficit)

 

 

Comprehensive

Loss

 

 

Stockholders’

(Deficit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance - July 31, 2017

 

 

310,190,456

 

 

$310,190

 

 

 

10,000,000

 

 

$10,000

 

 

$66,101

 

 

$(1,843,358)

 

$(100)

 

$(1,457,167)

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(263,502)

 

 

-

 

 

 

(263,502)

Balance - October 31, 2017

 

 

310,190,456

 

 

$310,190

 

 

 

10,000,000

 

 

$10,000

 

 

$66,101

 

 

$(2,106,860)

 

$(100)

 

$(1,720,669)

Common shares issued for services

 

 

1,000,000

 

 

 

1,000

 

 

 

-

 

 

 

-

 

 

 

41,500

 

 

 

-

 

 

 

-

 

 

 

42,500

 

Common shares issued for conversion of debt

 

 

3,472,892

 

 

 

3,473

 

 

 

-

 

 

 

-

 

 

 

85,515

 

 

 

-

 

 

 

-

 

 

 

88,988

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(436,468)

 

 

-

 

 

 

(436,468)

Balance – January 31, 2018

 

 

314,663,348

 

 

$314,663

 

 

 

10,000,000

 

 

$10,000

 

 

$193,116

 

 

$(2,543,328)

 

$(100)

 

$(2,025,649)

Sale of common stock

 

 

50,000

 

 

 

50

 

 

 

-

 

 

 

-

 

 

 

24,950

 

 

 

-

 

 

 

-

 

 

 

25,000

 

Common shares issued for conversion of debt

 

 

9,802,716

 

 

 

9,803

 

 

 

-

 

 

 

-

 

 

 

107,080

 

 

 

-

 

 

 

-

 

 

 

116,883

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(343,470)

 

 

-

 

 

 

(343,47)

Balance – April 30, 2018

 

 

324,516,064

 

 

$324,516

 

 

 

10,000,000

 

 

$10,000

 

 

$325,146

 

 

$(2,886,798)

 

$(100)

 

$(2,227,236)

 

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

 

 
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For the Nine Months Ended April 30, 2019

 

 

 

Common Stock

 

 

Preferred Stock

 

 

Additional

 

 

Accumulated

 

 

Accumulated

Other

 

 

Total

 

 

 

Number

of Shares

 

 

Amount

 

 

Number of Shares

 

 

Amount

 

 

Paid-in

Capital

 

 

Earnings

(Deficit)

 

 

Comprehensive

Loss

 

 

Stockholders’

(Deficit)

 

Balance - July 31, 2018

 

 

342,628,540

 

 

$342,628

 

 

 

10,000,000

 

 

$10,000

 

 

$580,540

 

 

$(3,339,045)

 

$(100)

 

$(2,405,977)

Common shares issued for conversion of debt and interest

 

 

11,691,502

 

 

 

11,692

 

 

 

-

 

 

 

-

 

 

 

211,026

 

 

 

-

 

 

 

-

 

 

 

222,718

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(406,896)

 

 

-

 

 

 

(406,896)

Balance - October 31, 2018

 

 

354,320,042

 

 

$354,320

 

 

 

10,000,000

 

 

$10,000

 

 

$791,566

 

 

$(3,745,941)

 

$(100)

 

$(2,590,155)

Sale of common stock

 

 

5,000,000

 

 

 

5,000

 

 

 

-

 

 

 

-

 

 

 

120,000

 

 

 

-

 

 

 

-

 

 

 

125,000

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(2,359,854

)

 

 

-

 

 

 

(2,359,855)

Balance - January 31, 2019

 

 

359,320,042

 

 

$359,320

 

 

 

10,000,000

 

 

$10,000

 

 

$911,566

 

 

$(6,105,795)

 

$(100)

 

$(4,825,009)

Sale of common stock

 

 

7,665,667

 

 

 

7,666

 

 

 

-

 

 

 

-

 

 

 

162,314

 

 

 

-

 

 

 

-

 

 

 

169,980

 

Common shares issued for conversion of debt and interest

 

 

27,423,618

 

 

 

27,423

 

 

 

-

 

 

 

-

 

 

 

1,091,477

 

 

 

-

 

 

 

-

 

 

1.118.900

 

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

668,732

 

 

 

-

 

 

 

668,732

 

Balance – April 30, 2019

 

 

394,409,327

 

 

$394,409

 

 

 

10,000,000

 

 

$10,000

 

 

$2,165,357,

 

 

$(5,437,063)

 

$(100)

 

$(2,867,397)

 

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

 

 
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MIRAGE ENERGY CORPORATION

Consolidated Statement of Cash Flows

(Unaudited)

 

 

 

Nine Months Ended

 

 

 

April 30,

 

 

 

2019

 

 

2018

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

Net (loss)

 

$(2,098,017)

 

$(1,043,440)

Adjustments to reconcile net (loss) to net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation expense

 

 

1,186

 

 

 

1,185

 

Financing Fees

 

 

21,500

 

 

 

-

 

Loss on change in fair value of convertible debt

 

 

1,058,798

 

 

 

121,391

 

Penalty on convertible debt

 

 

267,250

 

 

 

83,500

 

Issuance of stock for services and fees

 

 

-

 

 

 

42,500

 

Changes in operating assets and liabilities

 

 

 

 

 

 

 

 

Prepaid expenses

 

 

(474)

 

 

1,019

 

Accounts payable and accrued expenses

 

 

174,725

 

 

 

199,173

 

Accrued salaries and payroll taxes, related parties

 

 

383,662

 

 

 

419,500

 

Net cash (used) in operating activities

 

 

(191,370)

 

 

(175,172)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Proceeds from loan, related party

 

 

-

 

 

 

27,700

 

Repayment of loan, related party

 

 

(170,401)

 

 

(93,122)

Repayment of loan, convertible note

 

 

(65,250)

 

 

-

 

Proceeds from sale of common stock

 

 

294,980

 

 

 

25,000

 

Proceeds from convertible debt

 

 

152,000

 

 

 

209,000

 

Net cash provided by financing activities

 

 

211,329

 

 

 

168,578

 

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash

 

 

19,959

 

 

 

(6,594)

 

 

 

 

 

 

 

 

 

Cash and cash equivalents - beginning of period

 

 

13,480

 

 

 

11,776

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents - end of period

 

$33,439

 

 

$5,182

 

 

 

 

 

 

 

 

 

 

Supplemental Cash Flow Disclosures

 

 

 

 

 

 

 

 

Cash paid for interest

 

$25,344

 

 

$2,714

 

Cash payments for income taxes

 

$-

 

 

$-

 

 

 

 

 

 

 

 

 

 

Supplemental Non-Cash Activity Disclosures

 

 

 

 

 

 

 

 

Expenses paid by shareholder

 

$15,296

 

 

$22,621

 

Stock issued for convertible debt and interest

 

$1,341,619

 

 

$205,871

 

Proceeds from sale of convertible debt paid directly to vendor

 

$20,000

 

 

$-

 

 

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

 

 
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MIRAGE ENERGY CORPORATION

Notes to the Consolidated Interim Financial Statements

April 30, 2019

(Unaudited)

 

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

 

Mirage Energy Corporation (formerly Bridgewater Platforms Inc.) (the “Company”) is a Nevada corporation incorporated on May 6, 2014. On May 20, 2014, the Company incorporated a Canadian subsidiary known as Bridgewater Construction Ltd. in Ontario in association with its construction business. Mirage Energy Corporation is based at 900 Isom Rd Suite 306, San Antonio, TX 78216. The Company’s fiscal year end is July 31.

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The Financial Statements and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Financial Statements have been prepared using the accrual basis of accounting in accordance with Generally Accepted Accounting Principles (“GAAP”) of the United States.

 

In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position; (b) the result of operations; and (c) cash flows, have been made in order to make the financial statements presented not misleading. The results of operations for such interim periods are not necessarily indicative of operations for a full year. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s 10-K filed with the Securities and Exchange Commission on December 24, 2018.

 

In February 2016, the FASB issued guidance regarding the accounting for leases on “Leases” (ASC 842). The guidance requires recognition of most leases on the balance sheet and to disclose key information about leasing arrangements. The Company has assessed the impact of remaining time on the office rental lease as immaterial. The term of the existing lease on the office premises ends June 30, 2019. The lease allows a month to month rent thereafter which the Company has decided to accept.

 

Net Income (Loss) Per Share of Common Stock

 

The Company has adopted ASC Topic 260, “Earnings per Share,” (“EPS”) which requires presentation of basic EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation. In the accompanying financial statements, basic income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding plus common stock equivalents (if dilutive) related to convertible debt, stock options and warrants for each year. In the period of net loss, diluted EPS calculation is not deemed necessary as the effect would be anti-dilutive.

 

 
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As of April 30, 2019 and July 31, 2018, the Company has convertible notes with a total base principal of $88,000 and $206,000, respectively, which become convertible in 180 days. There is a potential for 5,281,794 shares if the principal of $88,000 were converted at April 30, 2019. These notes will have a dilutive effect on common stock for the three months ended April 30, 2019. The Company has 10,000,000 shares of Mirage’s Series A Preferred Stock which possess 20 votes per share and are convertible into 200,000,000 common shares. As of April 30, 2019 there were 328,124 warrants issued and outstanding which are equal to 328,124 shares which have not been exercised.

 

Basis of Consolidation

 

These financial statements include the accounts of the Company and its wholly owned subsidiaries, 4Ward Resources, Inc., Cenote Energy, S. de R.L. de C.V., WPF Transmission, Inc., and WPF Mexico Pipelines, S. de R.L. de C.V. All material intercompany balances and transactions have been eliminated.

 

Financial Instruments

 

The Company’s notes that have become convertible are subject to ASC Topic 480, “Distinguishing Liabilities from Equity,” as the debt is a mostly fixed amount to be settled with a variable number of shares.

 

NOTE 3 - GOING CONCERN

 

The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company had a net loss of $2,098,017 and had net cash used in operations of $191,370 for the nine months ended April 30, 2019 and had an accumulated deficit and working capital deficit of $5,437,063 and $2,827,743 at that date. The Company has not established an ongoing source of revenues sufficient to cover its operating cost, and requires additional capital to commence its operating plan. If the Company is unable to obtain adequate capital, it could be forced to cease operations. These factors raise substantial doubt about its ability to continue as a going concern.

 

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan to obtain such resources for the Company may include, but not be limited to: sales of equity instruments; traditional financing, such as loans; sale of participation interests and obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses. However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans.

 

There is no assurance that the Company will be able to obtain sufficient additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to the Company. In addition, profitability will ultimately depend upon the level of revenues received from business operations. However, there is no assurance that the Company will attain profitability. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

 
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NOTE 4 - DEBT

 

A summary of debt at April 30, 2019 and July 31, 2018 is as follows:

 

 

 

April 30,

 

 

July 31,

 

 

 

2019

 

 

2018

 

Notes payables related party, unsecured, interest bearing at 5% rate per annum, on demand

 

$-

 

 

$152,876

 

Note, unsecured interest bearing at 2% per annum, due July 9, 2020

 

 

50,000

 

 

 

50,000

 

Note, unsecured interest bearing at 7.5% per annum, due April 15, 2018. This was an accounts payable bill that was converted to a loan as per Note 7 - Commitments and Contingencies. This note is now in default as of April 16, 2018 and has a default interest of 17.5%.

 

 

77,844

 

 

 

77,844

 

Convertible debenture, unsecured, interest bearing at 12% per annum, issued January 5, 2018 in the amount of $75,000 with an original issue discount of $2,000 and cash proceeds of $73,000 during the year ended July 31, 2018, convertible at July 4, 2018 with conversion price at a discount rate of 45% of market price which is the average of the lowest trading price during the twenty trading day period ending on the latest complete trading day prior to the conversion date, maturity date of January 5, 2019. During September 2018, $25,000 of this debt was converted and the Company issued 3,223,726 shares of common stock with a fair value of $49,968 in payment leaving a principal balance of $30,000. This note defaulted in November 2018 and a default penalty of $144,000 was added to the note for a total of $219,000. During February and March 2019, $174,000 of this debt plus $6,148 in interest was converted and the Company issued 13,967,264 shares of common stock with a fair value of $553,734. The convertible note had a net change in fair value of $305,028.

 

 

-

 

 

 

104,706

 

Convertible debenture, unsecured, interest bearing at 12% per annum, issued February 26, 2018 in the amount of $43,000 with fees of $3,000 and cash proceeds of $40,000 during the year ended July 31, 2018, convertible at August 25, 2018 with conversion price at a discount rate of 45% of market price which is the average of the lowest trading price during the twenty trading day period ending on the latest complete trading day prior to the conversion date, maturity date of November 30, 2018. This note defaulted on March 25, 2018 and a default penalty of $21,500 was added to the note for a total of $64,500 during the year ended July 31, 2018 and incurred default interest rate of 22%. During August and September 2018, $64,500 of this debt plus $2,580 in interest was converted and the Company issued 8,467,776 shares of common stock with a fair value of $167,534 in payment leaving no balance due. The convertible note had a net change in fair value principal of $103,034 and a net change in fair value accrued interest of $2,077.

 

 

-

 

 

 

64,500

 

Convertible debenture, unsecured, interest bearing at 12% per annum, issued June 12, 2018 in the amount of $32,000 with fees of $2,000, cash proceeds of $28,200 and disbursement of $1,800, convertible at December 9, 2018 with conversion price at a discount rate of 45% of market price which is the average of the lowest trading price during the twenty trading day period ending on the latest complete trading day prior to the conversion date, maturity date of March 30, 2019. This note became convertible on December 9, 2018. This note defaulted on November 14, 2018 and a default penalty of $16,000 was added to the note for a total of $48,000 and incurred default interest rate of 22%. During February 2019, $48,000 of this debt plus $1,920 in interest was converted and the Company issued 3,081,482 shares of common stock with a fair value of $147,531 in payment leaving no balance due. The convertible note had a net change in fair value of $99,531.

 

 

-

 

 

 

32,000

 

  

 
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Convertible debenture, unsecured, interest bearing at 12% per annum, issued June 12, 2018 in the amount of $18,000 with fees of $0 and cash proceeds of $18,000 which was paid directly to the vendor in the year ended July 31, 2018, convertible at December 9, 2018 with conversion price at a discount rate of 45% of market price which is the average of the lowest trading price during the twenty trading day period ending on the latest complete trading day prior to the conversion date, maturity date of March 30, 2019. This note became convertible on December 9, 2018. This note defaulted on November 14, 2018 and a default penalty of $9,000 was added to the note for a total of $27,000 and incurred default interest rate of 22%. The convertible note had a net change in fair value of $27,546.

 

 

54,546

 

 

 

18,000

 

Convertible debenture, unsecured, interest bearing at 12% per annum,, issued July 10, 2018 in the amount of $38,000 with fees of $3,000 and cash proceeds of $35,000 during the year ended July 31, 2018, convertible at January 6, 2019 with conversion price at a discount rate of 45% of market price which is the average of the lowest trading price during the twenty trading day period ending on the latest complete trading day prior to the conversion date, maturity date of April 30, 2019. This note becomes convertible on January 6, 2019. This note defaulted on November 14, 2018 and a default penalty of $19,000 was added to the note for a total of $57,000 and incurred default interest rate of 22%. During February 2019, $57,000 of this debt plus $2,280 in interest was converted and the Company issued 3,207,302 shares of common stock with a fair value of $113,047.  The convertible note had a net change in fair value of $56,047.

 

 

-

 

 

 

38,000

 

Convertible debenture, unsecured, interest bearing at 12% per annum, issued August 6, 2018 in the amount of $35,000 with fees of $3,000, cash proceeds of $32,000, convertible at February 2, 2019 with conversion price at a discount rate of 49% of market price which is the average of the lowest trading price during the twenty trading day period ending on the latest complete trading day prior to the conversion date, maturity date of May 30, 2019. This note becomes convertible on February 2, 2019. This note defaulted on November 14, 2018 and a default penalty of $17,500 was added to the note for a total of $52,500 and incurred default interest rate of 22%. During February 2019, $52,500 of this debt plus $2,100 in interest was converted and the Company issued 3,689,190 shares of common stock with a fair value of $121,612.  The convertible note had a net change in fair value of $69,112.

 

 

-

 

 

 

-

 

Convertible debenture, unsecured, interest bearing at 12% per annum,, issued August 27, 2018 in the amount of $33,000 with fees of $3,000 and cash proceeds of $30,000, convertible at February 23, 2019 with conversion price at a discount rate of 49% of market price which is the average of the lowest trading price during the twenty trading day period ending on the latest complete trading day prior to the conversion date, maturity date of June 15, 2019. This note becomes convertible on February 23, 2019. This note defaulted on November 14, 2018 and a default penalty of $16,500 was added to the note for a total of $49,500 and incurred default interest rate of 22%. During March 2019, $49,500 of this debt plus $1,980 in interest was converted and the Company issued 3,478,380 shares of common stock with a fair value of $172,162.  The convertible note had a net change in fair value of $122,662.

 

 

-

 

 

 

-

 

  

 
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Convertible debenture, unsecured, interest bearing at 12% per annum, issued September 20, 2018 in the amount of $33,000 with fees of $3,000 and cash proceeds of $30,000, convertible at March 19, 2019 with conversion price at a discount rate of 49% of market price which is the average of the lowest trading price during the twenty trading day period ending on the latest complete trading day prior to the conversion date, maturity date of July 15, 2019. This note becomes convertible on March 19, 2019. This note defaulted on November 14, 2018 and a default penalty of $16,500 was added to the note for a total of $49,500 and incurred default interest rate of 22%. This note was repaid on March 6, 2019 directly to holder.

 

 

-

 

 

 

-

 

Convertible debenture, unsecured, interest bearing at 12% per annum, issued October 25, 2018 in the amount of $10,500 with fees of $500 and cash proceeds of $10,000 which was paid directly to the vendor, convertible at April 23, 2019 with conversion price at a discount rate of 49% of market price which is the average of the lowest trading price during the twenty trading day period ending on the latest complete trading day prior to the conversion date, maturity date of August 15, 2019. This note becomes convertible on April 23, 2019. This note defaulted on November 14, 2018 and a default penalty of $5,250 was added to the note for a total of $15,750 and incurred default interest rate of 22%. This note was repaid on April 22, 2019 directly to holder.

 

 

-

 

 

 

-

 

Convertible debenture, unsecured, interest bearing at 10% per annum, issued November 13, 2018 in the aggregate principal amount of $105,000 and total cash proceeds of $90,000 to be funded in three (3) tranches. The principal sum due shall be prorated based on the consideration actually paid. For each tranche paid, the Company will have to provide 164,062 warrant shares for holder to purchase for a total of 492,186 warrants which are equal to 492,186 shares.  During the 3rd Quarter Ended April 30, 2019, the second tranche of $35,000 was received with fees of $5,000 and cash proceeds of $30,000. The Holder shall have the right at any time to convert all or any part of outstanding and unpaid principal amount. The conversion price is the lessor of lowest traded price and lowest closing bid price with a 45% discount during the previous twenty-five (25) trading day period ending on the last complete trading day prior to the conversion dates, maturity date for first tranche of November 13, 2019. This note defaulted on November 14, 2018 and a default penalty of $17,500 was added to the note for a total of $52,500 and incurred default interest rate of 15%. Also, an additional 25% discount for a total of 70% discount must be factored in the conversion price until this note is no longer outstanding. The Company has not received any notice of default and associated default penalties remain unassessed by Lender. The convertible note has a net change in fair value of $227,680.

 

 

315,180

 

 

 

 

 

Convertible debenture, unsecured, interest bearing at 12% per annum, issued December 28, 2018 in the amount of $12,000 with fees of $2,000 and cash proceeds of $10,000 which was paid directly to the vendor, convertible at June 26, 2019 with conversion price at a discount rate of 49% of market price which is the average of the lowest closed trading price during the twenty trading day period ending on the latest complete trading day prior to the conversion date, maturity date of October 30, 2019. This note becomes convertible on June 26, 2019. This note defaulted on November 14, 2018 and a default penalty of $6,000 was added to the note for a total of $18,000 and incurred default interest rate of 22%.

 

 

18,000

 

 

 

-

 

Loan payable related party, unsecured, non-interest bearing, on demand

 

 

-

 

 

 

2,229

 

Total Debt

 

 

515,570

 

 

 

540,155

 

Less: Current Maturities

 

 

465,570

 

 

 

490,155

 

 

 

 

 

 

 

 

 

 

Total Long-Term Debt

 

$50,000

 

 

$50,000

 

  

 
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NOTE 5 - RELATED PARTY TRANSACTIONS

 

As of April 30, 2019, the CEO and two other members of management and one other employee had earned accrued unpaid salary in the amount of $1,739,250. Accrued salaries of $1,739,250 combined with accrued payroll taxes of $57,589 for a total accrued related party salaries and payroll tax of $1,796,839 for the period from June 2015 until April 30, 2019.

 

Also, Mr. Michael Ward, President was owed $2,229 at July 31, 2018 which has decreased to $0 as of April 30, 2019 resulting from additional expenses paid of $15,296 and repayments of $17,525 during the nine months ended April 30, 2019.

 

Additionally, White Boy Partnership, LLC, a company owned by the spouse of the CEO, had provided a total loan of $187,600. Repayments of $34,724 were made during the year ended July 31, 2018, which reduced the balance due to $152,876 as of July 31, 2018. Due to additional payments totaling $152,876 for the period ended April 30, 2019, the balance has decreased to a total loan amount of $0.

 

NOTE 6 – LEASES

 

On June 9, 2016, the Company entered into a Lease Agreement for its San Antonio, Texas office lease location. The Lease Period is for three (3) years beginning July 1, 2016. The landlord is holding $6,921 as security and shall be returned at the end of the lease. The Company shall pay as additional rent all other sums of money as shall become due and payable by them under this Lease. To date after thirty-four (34) months of this thirty-six (36) month lease, no such additional charges have been made. The Company has incurred rent expense in the amount of $21,100 and $82,178 for the three month ended April 30, 2019 and the year ended July 31, 2018 respectively. Below is the schedule of base rent for the remaining Lease term as of April 30, 2019.

 

Year

 

Amount

 

2019

 

$14,066

 

 

 

 

 

 

Total Remaining Base Rent

 

$14,066

 

 

NOTE 7 - COMMITMENTS AND CONTINGENCIES

 

The Company committed to eighteen (18) months of Acquisition of Pipeline Rights of Way to Marcos y Asociados with a total amount of $77,844 which was due April 15, 2018 and not paid as of April 30, 2019. Interest will continue accruing after April 30, 2019 until it is paid.

 

From time to time the Company may become a party to litigation matters involving claims against the Company. Management believes that it is adequately insured for its operations and there are no current matters that would have a material effect on the Company’s financial position or results of operations.

 

 
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NOTE 8 – EQUITY

 

For the period ended April 30, 2019, the Company issued 39,115,120 shares of common stock for conversion of convertible notes totaling $1,341,619. For the period ended April 30, 2019, the Company sold 12,665,667 shares of common stock to investors for cash proceeds of $294,980. Below you will find the individual transactions.

 

On August 28, 2018, Power Up Lending Group Ltd converted principal in the amount of $20,000 of the $43,000 note issued February 26, 2018 that was defaulted to $64,500 for 2,702,703 shares of common stock.

 

On August 31, 2018, Power Up Lending Group Ltd converted principal in the amount of $15,000 of the $43,000 note issued February 26, 2018 that was defaulted to $64,500 for 2,000,000 shares of common stock.

 

On September 5, 2018, Power Up Lending Group Ltd converted principal in the amount of $15,000 of the $43,000 note issued February 26, 2018 that was defaulted to $64,500 for 1,948,052 shares of common stock.

 

On September 10, 2018, Power Up Lending Group Ltd converted the remaining principal in the amount of $14,500 of the $43,000 note issued February 26, 2018 that was defaulted to $64,500 for 1,542,553 shares of common stock along with $2,580 of accrued interest for 274,468 shares of common stock.

 

On September 11, 2018, JSJ Investments, Inc. converted principal in the amount of $25,000 of the $75,000 note issued January 5, 2018 for 3,223,726 shares of common stock.

 

On January 7, 2019, the Company offered and sold Eight Hundred Thousand (800,000) shares of common stock to Robert Soer valued at $0.0250 per share for $20,000.

 

On January 9, 2019, the Company offered and sold One Million (1,000,000) shares of common stock to David Damerjian valued at $0.0250 per share for $25,000.

 

On January 14, 2019, the Company offered and sold Eight Hundred Thousand (800,000) shares of common stock to David Damerjian valued at $0.0250 per share for $20,000.

 

On January 14, 2019, the Company offered and sold Eight Hundred Thousand (800,000) shares of common stock to Henry Lackner valued at $0.0250 per share for $20,000.

 

On January 15, 2019, the Company offered and sold Eight Hundred Thousand (800,000) shares of common stock to Christine Maly valued at $0.0250 per share for $20,000.

 

On January 18, 2019, the Company offered and sold Eight Hundred Thousand (800,000) shares of common stock to Henry Lackner valued at $0.0250 per share for $20,000.

 

On February 11, 2019, Power Up Lending Group Ltd converted principal in the amount of $20,000 of the $32,000 note issued June 12, 2018 that was defaulted to $48,000 for 1,234,568 shares of common stock.

 

On February 12, 2019, JSJ Investments Inc converted the remaining principal in the amount of $30,000 of the $75,000 note issued January 5, 2018 that defaulted to $174,000 along with $6,148 of accrued interest for 4,694,538 shares of common stock.

 

On February 13, 2019, the Company offered and sold Four Hundred Thousand (400,000) shares of common stock to John Drobecker valued at $0.0250 per share for $10,000.

 

On February 13, 2019, the Company offered and sold Four Hundred Thousand (400,000) shares of common stock to Robert P Soer valued at $0.0250 per share for $10,000.

 

On February 13, 2019, the Company offered and sold Two Hundred Thousand (200,000) shares of common stock to Henry Lackner, Jr valued at $0.0250 per share for $5,000.

 

 
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On February 13, 2019, the Company offered and sold Two Hundred Thousand (200,000) shares of common stock to Dylan Lackner valued at $0.0250 per share for $5,000.

 

On February 11, 2019, Power Up Lending Group Ltd converted principal in the amount of $15,000 of the $32,000 note issued June 12, 2018 that was defaulted to $48,000 for 925,926 shares of common stock.

 

On February 14, 2019, the Company offered and sold Eight Hundred Thousand (800,000) shares of common stock to Richard A Lewis valued at $0.0250 per share for $20,000.

 

On February 14, 2019, Power Up Lending Group Ltd converted the remaining principal in the amount of $13,000 of the $32,000 note issued June 12, 2018 that was defaulted to $48,000 along with $2,580 of accrued interest for 920,988 shares of common stock.

 

On February 15, 2019, Power Up Lending Group Ltd converted principal in the amount of $15,000 of the $38,000 note issued July 10, 2018 that was defaulted to $57,000 for 887,574 shares of common stock.

 

On February 19, 2019, Power Up Lending Group Ltd converted principal in the amount of $15,000 of the $38,000 note issued July 10, 2018 that was defaulted to $57,000 for 681,818 shares of common stock.

 

On February 21, 2019, Power Up Lending Group Ltd converted principal in the amount of $18,000 of the $38,000 note issued July 10, 2018 that was defaulted to $57,000 for 978,261 shares of common stock.

 

On February 22, 2019, the Company offered and sold One Million Five Hundred Thousand (1,500,000) shares of common stock to David Damerjian valued at $0.0200 per share for $30,000.

 

On February 22, 2019, the Company offered and sold One Million Thousand (1,000,000) shares of common stock to Christine M Bulva valued at $0.0200 per share for $20,000.

 

On February 22, 2019, the Company offered and sold Two Hundred Fifty Thousand (250,000) shares of common stock to Henry J Lackner valued at $0.0200 per share for $5,000.

 

On February 22, 2019, the Company offered and sold Two Hundred Fifty Thousand (250,000) shares of common stock to Lisa Rooney valued at $0.0200 per share for $5,000.

 

On February 22, 2019, the Company offered and sold Two Hundred Fifty Thousand (250,000) shares of common stock to Danielle Lackner valued at $0.0200 per share for $5,000.

 

On February 22, 2019, Power Up Lending Group Ltd converted the remaining principal in the amount of $9,000 of the $38,000 note issued July 10, 2018 that was defaulted to $57,000 along with $2,280 of accrued interest for 659,649 shares of common stock.

 

 
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On February 25, 2019, the Company offered and sold Five Hundred Thousand (500,000) shares of common stock to William Grimms valued at $0.0200 per share for $10,000.

 

On February 25, 2019, the Company offered and sold Five Hundred Thousand (500,000) shares of common stock to John Drobecker valued at $0.0200 per share for $10,000.

 

On February 25, 2019, Power Up Lending Group Ltd converted principal in the amount of $15,000 of the $35,000 note issued August 6, 2018 that was defaulted to $52,500 for 1,013,514 shares of common stock.

 

On February 25, 2019, Power Up Lending Group Ltd converted principal in the amount of $17,000 of the $35,000 note issued August 6, 2018 that was defaulted to $52,500 for 1,148,649 shares of common stock.

 

On February 26, 2019, Power Up Lending Group Ltd converted the remaining principal in the amount of $20,500 of the $35,000 note issued August 6, 2018 that was defaulted to $52,500 along with $2,100 of accrued interest for 1,527,027 shares of common stock.

 

On February 27, 2019, JSJ Investments, Inc. converted principal in the amount of $45,000 of the $144,000 penalty on note issued January 5, 2018 for 2,727,272 shares of common stock.

 

On February 28, 2019, the Company offered and sold Five Hundred Thousand (500,000) shares of common stock to Christopher Thompson valued at $0.0200 per share for $10,000.

 

On March 1, 2019, Power Up Lending Group Ltd converted principal in the amount of $15,000 of the $33,000 note issued August 27, 2018 that was defaulted to $49,500 for 1,013,514 shares of common stock.

 

On March 4, 2019, Power Up Lending Group Ltd converted principal in the amount of $14,500 of the $33,000 note issued August 27, 2018 that was defaulted to $49,500 for 979,730 shares of common stock.

 

On March 4, 2019, Power Up Lending Group Ltd converted principal in the amount of $15,000 of the $33,000 note issued August 27, 2018 that was defaulted to $49,500 for 1,013,514 shares of common stock.

 

On March 6, 2019, the Company offered and sold Two Hundred Forty Nine Thousand (249,000) shares of common stock to Cameron Douglas McDonald valued at $0.0200 per share for $4,980.

 

On March 6, 2019, Power Up Lending Group Ltd converted the remaining principal in the amount of $5,000 of the $33,000 note issued August 27, 2018 that was defaulted to $49,500 along with $1,980 of accrued interest for 471,622 shares of common stock.

 

 
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On March 6, 2019, JSJ Investments, Inc. converted principal in the amount of $99,000 of the $144,000 penalty on note issued January 5, 2018 for 6,545,454 shares of common stock.

 

On April 16, 2019, the Company offered and sold Six Hundred Sixty Six Thousand Six Hundred Sixty Seven (666,667) shares of common stock to 321gold Ltd valued at $0.0300 per share for $20,000.

 

NOTE 9 - SUBSEQUENT EVENTS

 

The Company evaluated events occurring subsequent to April 30, 2019, identifying those that are required to be disclosed as follows:

 

On May 1, 2019, the Company entered into Securities Purchase Agreement with Power Up Lending Group Ltd to issue a convertible note in the aggregate principal amount of $103,500, with unsecured, interest bearing at 12% per annum and a maturity date of February 28, 2020.

 

On May 24, 2019, Crown Bridge Partners, LLC converted principal in the amount of $9,750 consisting of $9,250 of principal and $500 of fees for 500,000 shares of common stock on the first tranche of $35,000 of the note that was issued November 13, 2018 in the aggregate principal amount of $105,000 to be funded in three (3) tranches and the first tranche defaulted with a penalty of $17,500.

 

On June 10, 2018, Crown Bridge Partners, LLC converted principal in the amount of $14,940 consisting of $14,440 of principal and $500 of fees for 830,000 shares of common stock on the first tranche of $35,000 of the note that was issued November 13, 2018 in the aggregate principal amount of $105,000 to be funded in three (3) tranches and the first tranche defaulted with a penalty of $17,500.

 

 
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

Forward-Looking Statements

 

Except for historical information, this report contains certain forward-looking statements. Such forward-looking statements involve risks and uncertainties, including, among other things, statements regarding our business strategy, future revenues and anticipated costs and expenses. Such forward-looking statements include, among others, those statements including the words “expects,” “anticipates,” “intends,” “believes” and similar language. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed herein as well as in the “Current Business” and “Risk Factors” sections in our 10-K for the year ended July 31, 2018, as filed on December 24 , 2018. You should carefully review the risks described in our documents we file from time to time with the Securities and Exchange Commission (“SEC”). You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report. We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this document.

 

Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements.

 

All references in this Form 10-Q to the “Company,” “Mirage Energy,” “we,” “us,” or “our” are to Mirage Energy Corporation (formerly Bridgewater Platforms Inc.)

 

Corporate Overview

 

Company’s Plans

 

The Company has proposed to develop an integrated natural gas pipeline system in Texas and Mexico. The purpose of these pipelines will transport and store natural gas in an underground natural gas storage facility, which the Company proposes to permit and develop in northern Mexico. The Company believes that it has made substantial progress toward these goals with its preliminary project engineering designs and high level meetings with representatives of various Mexican regulatory agencies.

 

Discussion and Analysis of Financial Condition and Results of Operations

 

Revenues

 

Three month period ended April 30, 2019

 

For the three (3) month period ended April 30, 2019, we generated no revenue and incurred a net income of $668,733.

 

Our net income of $668,733 for the three (3) month period ended April 30, 2019 was the result of operating expenses of $245,562 and reduction of prior fair market value interest expense of $914,295. Our operating expenses consisted of $220,655 in general and administrative expenses, and $24,907 in professional fees.

 

 
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Three month period ended April 30, 2018

 

For the three (3) month period ended April 30, 2018, we generated no revenue and incurred a net loss of $343,470.

 

Our net loss of $343,470 for the three (3) month period ended April 30, 2018 was the result of operating expenses of $228,243 and other expense (comprised of interest expense) of $115,227. Our operating expenses consisted of $208,854 in general and administrative expenses, and $19,389 in professional fees.

 

Costs and Expenses

 

Our primary costs going forward are related to travel, professional fees, legal fees, financing fees and salaries and related payroll taxes associated with our proposed pipeline and natural gas storage activities in Mexico.

 

Three month period ended April 30, 2019 and 2018

 

For the three (3) months ended April 30, 2019, we had $220,655 in general and administrative expenses compared to $208,854 in general and administrative expenses for the three (3) months ended April 30, 2018. The $11,801 increase in general and administrative expenses was primarily the result of Mexico travel expenses during the three (3) months ended April 30, 2019 related to administrative expenses.

 

The professional fees for the three (3) months ending April 30, 2019 and April 30, 2018 were $24,907 and $19,389, respectively. The $5,508 increase was primarily related to increases in legal fees and transfer agent fees.

 

The executive compensation for the three (3) months ending April 30, 2019 and April 30, 2018 was $125,500 and $116,500 respectively. Increase was due to an increase in salaries.

 

Cash Flows

 

Operating Activities

 

For the nine (9) month period ended April 30, 2019, net cash used in operating activities was $191,370. The negative cash flow for the nine (9) months ended April 30, 2019 related to our net loss of $2,098,017, an decrease in prepaid expenses of $474, an increase of $267,250 in convertible debt due to default, adjusted for $21,500 in financing fees, adjusted for depreciation of $1,186, a change of $1,058,798 in convertible debt due to fair market value, an increase of $174,725 in accounts payable and accrued expenses and an increase of $383,662 in accrued salaries and payroll taxes – related parties.

 

For the nine (9) month period ended April 30, 2018, net cash used in operating activities was $175,172. The negative cash flow for the nine (9) months ended April 30, 2018 related to our net loss of $1,043,440, an increase in prepaid expenses of $1,019, adjusted for depreciation of $1,185, an increase of $83,500 in convertible debt due to default, a change of $121,391 in convertible debt due to fair market value, an increase of $199,173 in accounts payable and accrued expense, an increase of $42,500 in issuance of stock compensation for services and fees and an increase of $419,500 in accrued salaries and payroll taxes – related parties.

 

 
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Investing Activities

 

For the nine (9) months ended April 30, 2019 net cash used in investing activities was nil.

 

For the nine (9) months ended April 30, 2018 net cash used in investing activities was nil.

 

Financing Activities

 

For the nine (9) months ended April 30, 2019, net cash provided by financing activities was $211,329. The positive cash flow from financing activities for such period was comprised of proceeds from sale of common stock, and proceeds from convertible debentures.

 

For the nine (9) months ended April 30, 2018, net cash provided by financing activities was $168,578. The positive cash flow from financing activities for such period was comprised of a net increase in loans payable from related parties and proceeds from convertible debentures.

 

Liquidity

 

To date, we have funded our operations primarily with capital provided and loans provided by related parties, accruing of salaries and accounts payable. We do not currently have commitments in regards to fixed costs.

 

As of April 30, 2019, Mirage Energy Corporation had $33,439 in cash on hand and prepaid expenses of $2,780. Since Mirage Energy Corporation was unable to reasonably project its future revenue, it must presume that it will not generate any revenue during the next twelve (12) to twenty-four (24) months. We therefore will need to obtain additional debt or equity funding in the next two (2) – three (3) months, but there can be no assurances that such funding will be available to us in sufficient amounts or on reasonable terms.

 

The Company’s audited financial statements for the year ended July 31, 2018 contain a “going concern” qualification. As discussed in Note 3 of the Notes to Financial Statements, the Company has incurred losses and has not demonstrated the ability to generate cash flows from operations to satisfy its liabilities and sustain operations. Because of these conditions, our independent auditors have raised substantial doubt about our ability to continue as a going concern.

 

Our financial objective is to make sure the Company has the cash and debt capacity to fund on-going operating activities, investments and growth. We intend to fund future capital needs through our current cash position, additional credit facilities, future operating cash flow and debt or equity financing. We are continually evaluating these options to make sure we have capital resources to meet our needs.

 

 
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Existing capital resources are insufficient to support continuing operations of the Company over the next 12 months.

 

Management makes no assurances that adequate capital resources will be available to support continuing operations over the next 12 months. Management plans to pursue additional capital funding through multiple sources.

 

For the year ended July 31, 2018, the Company has funded operations with debt of $279,000 from convertible notes and proceeds of $40,100 from related party loans while making loan repayments of $95,398. The Company plans to raise additional funds through various sources to support ongoing operations throughout fiscal year 2019.

 

While no assurances can be given regarding the achievement of future results as actual results may differ materially, management anticipates adequate capital resources to support continuing operations over the next 12 months through the combination of infused capital through exercised warrants, infused capital through non-public private placement and existing cash reserves.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

 

As a “smaller reporting Company”, we are not required to provide the information required by this Item.

 

Item 4. Controls and Procedures.

 

Management’s Report on Disclosure Controls and Procedures

 

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our president (our principal executive officer, principal financial officer and principal accounting officer) to allow for timely decisions regarding required disclosure.

 

As of the end of the quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our president (our principal executive officer, principal financial officer and principle accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president (our principal executive officer, principal financial officer and principal accounting officer) concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this quarterly report due to our limited member of officers and members of the Board of Directors.

 

Changes in Internal Control over Financial Reporting

 

There have been no changes in our internal controls over financial reporting that occurred during the quarter ended April 30, 2019, that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.

 

 
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PART II-OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

There are no material legal proceedings pending against the Company to the knowledge of management.

 

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

 

During the quarter ending April 30, 2019, the Company sold 12,665,667 shares of common stock to investors for cash proceeds of $294,980. 

 

The Shares were not registered under the Securities Act of 1933, as amended (the “Securities Act”), and were in each case offered, sold and issued in reliance upon the exemption from registration provided by Section 4 (a) (2) of the Securities Act, as a transaction by an issuer not involving a public offering, Rule 506 of Regulation D promulgated thereunder and Regulation S.

 

 
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5. OTHER INFORMATION

 

On May 1, 2019, the Company entered into Securities Purchase Agreement with Power Up Lending Group Ltd to issue a convertible note in the aggregate principal amount of $103,500, with unsecured, interest bearing at 12% per annum and a maturity date of February 28, 2020 .

 

On March 26, 2019, the Company issued a Press Release discussing a Memorandum of Understanding executed on March 14, 2019.

 

The Company has entered into this proposed binding memorandum of understanding ("MOU") for the funding of its planned Concho/Progresso Pipeline and Natural Gas Storage facility connecting Texas to Mexico’s national pipeline grid, SISTRANGAS (the "Project").

 

The proposed binding MOU is with Organization Mondiale De development, a company registered in France ("OMD"). It is the Company's belief that the MOU will not become binding until OMD's "good will deposit" of $15,000,000 is paid to the Company, on or before April 14, 2019. To date, the good will deposit has not been paid or received by the Company.

 

The Company’s repeated failures to timely file its SEC reports have triggered defaults on our convertible promissory notes which will subject the Company to financial penalties. See Financial Statement Footnote 4.

 

ITEM 6. EXHIBITS

 

31.1

 

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

 

32.1

 

Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

101

 

The following financial information from our Quarterly Report on Form 10-Q for the quarter ended April 30, 2019 formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Cash Flows, and (iv) Condensed Notes to Interim Consolidated Financial Statements

 

 
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SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date: June 21, 2019

 

Mirage Energy Corporation

(Registrant)

 

By:

/s/ Michael R. Ward

/s/ Michael R. Ward

 

Michael R. Ward

 

Michael R. Ward

 

Chief Executive Officer

(Principal Executive Officer)

 

Chief Financial Officer

(Principal Accounting Officer)

 

 

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