UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

☒

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

 

For the Quarterly Period ended October 31, 2020

 

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 ☒    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 ☒    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

☒

 

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 ☒

 

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: December 30, 2020 there were 470,276,740 shares of the Company’s common stock were issued and outstanding. 

 

 

Table of Contents

  

MIRAGE ENERGY CORPORATION

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED OCTOBER 31, 2020

 

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.

14

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

17

 

 

Item 4.

Controls and Procedures.

17

 

 

PART II - OTHER INFORMATION

 

Item 1.

Legal Proceedings.

18

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

18

 

Item 3.

Defaults Upon Senior Securities.

18

 

Item 4.

Mine Safety Disclosures.

18

 

Item 5.

Other Information.

18

 

Item 6.

Exhibits.

19

 

SIGNATURES

20

  

 
2

Table of Contents

 

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, 2020 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, 2021.

 

 
3

Table of Contents

  

MIRAGE ENERGY CORPORATION

 

INDEX TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS

 

October 31, 2020

 

 

Page

 

Consolidated Balance Sheets as of October 31, 2020 (Unaudited) and July 31, 2020

5

 

Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended October 31, 2020 and 2019 (Unaudited)

6

 

Consolidated Statement of Stockholders’ Deficit for the Three Months Ended October 31, 2019 and 2020

7-8

 

Consolidated Statements of Cash Flows for the Three Months Ended October 31, 2020 and 2019 (Unaudited)

9

 

Notes to the Consolidated Interim Financial Statements (Unaudited)

10

  

 
4

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MIRAGE ENERGY CORPORATION

Consolidated Balance Sheets

 

 

 

October 31,

 

 

July 31,

 

 

 

2020

 

 

2020

 

 

 

(Unaudited)

 

 

 

 

ASSETS

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

Cash and cash equivalents

 

$ 168,824

 

 

$ 166,941

 

Prepaid expenses

 

 

24,475

 

 

 

9,559

 

Total Current Assets

 

 

193,299

 

 

 

176,500

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment, net

 

 

1,054

 

 

 

1,449

 

 

 

 

 

 

 

 

 

 

Other Assets

 

 

 

 

 

 

 

 

Deposits

 

 

6,921

 

 

 

6,921

 

Total Other Assets

 

 

6,921

 

 

 

6,921

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$ 201,274

 

 

$ 184,870

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$ 881,583

 

 

$ 836,290

 

Loan payable

 

 

127,844

 

 

 

127,844

 

Convertible debentures

 

 

297,531

 

 

 

281,351

 

Accrued salaries and payroll taxes, related parties

 

 

1,801,458

 

 

 

1,795,071

 

Total Current Liabilities

 

 

3,108,416

 

 

 

3,040,556

 

 

 

 

 

 

 

 

 

 

Long-Term Liabilities

 

 

 

 

 

 

 

 

Loan payable

 

 

963

 

 

 

1,234

 

TOTAL LIABILITIES

 

 

3,109,379

 

 

 

3,041,790

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ DEFICIT

 

 

 

 

 

 

 

 

Preferred stock, par value $0.001, 10,000,000 shares authorized, 10,000,000 shares issued and outstanding as of October 31, 2020 and July 31, 2020

 

 

10,000

 

 

 

10,000

 

Common stock, par value $0.001, 900,000,000 shares authorized, 470,276,740 shares issued and outstanding as of October 31, 2020; 462,730,684 shares issued and outstanding as of July 31, 2020

 

 

470,277

 

 

 

462,731

 

Stock subscription receivable

 

 

-

 

 

 

(20,000 )

Additional paid-in capital

 

 

9,359,941

 

 

 

8,597,401

 

Accumulated deficit

 

 

(12,748,223 )

 

 

(11,906,952 )

Accumulated other comprehensive loss

 

 

(100 )

 

 

(100 )

TOTAL STOCKHOLDERS’ DEFICIT

 

 

(2,908,105 )

 

 

(2,856,920 )

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

$ 201,274

 

 

$ 184,870

 

 

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

 

 
5

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MIRAGE ENERGY CORPORATION

Consolidated Statements of Operations and Comprehensive Income (Loss)

(Unaudited)

  

 

 

Three Months Ended

 

 

 

October 31,

 

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

General and administrative expenses

 

$ 528,416

 

 

$ 262,975

 

Professional fees

 

 

13,150

 

 

 

40,291

 

Total Operating Expenses

 

 

541,566

 

 

 

303,266

 

 

 

 

 

 

 

 

 

 

LOSS FROM OPERATIONS

 

 

(541,566 )

 

 

(303,266 )

 

 

 

 

 

 

 

 

 

OTHER EXPENSE

 

 

 

 

 

 

 

 

Interest expense

 

 

7,442

 

 

 

17,628

 

Loss on change in fair value of convertible debt

 

 

292,263

 

 

 

106,263

 

Total Other Expense

 

 

299,705

 

 

 

123,891

 

 

 

 

 

 

 

 

 

 

LOSS BEFORE INCOME TAXES

 

 

(841,271 )

 

 

(427,157 )

 

 

 

 

 

 

 

 

 

NET LOSS

 

 

(841,271 )

 

 

(427,157 )

 

 

 

 

 

 

 

 

 

TOTAL COMPREHENSIVE LOSS

 

$ (841,271 )

 

$ (427,157 )

 

 

 

 

 

 

 

 

 

Basic and Diluted Loss per Common Share

 

$ (0.00 )

 

$ (0.00 )

Basic and Diluted Weighted Average Common Shares Outstanding

 

 

468,104,075

 

 

 

411,501,009

 

 

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

 

 
6

Table of Contents

  

MIRAGE ENERGY CORPORATION

Statement of Stockholders’ (Deficit)

(Unaudited)

 

For the Three Months Ended October 31, 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, 2019

 

 

406,886,489

 

 

$ 406,886

 

 

 

10,000,000

 

 

$ 10,000

 

 

$ 2,986,180

 

 

$ (6,552,748 )

 

$ (100 )

 

$ (3,149,782 )

Common shares issued for conversion of debt and interest

 

 

4,830,016

 

 

 

4,830

 

 

 

-

 

 

 

-

 

 

 

347,761

 

 

 

-

 

 

 

-

 

 

 

352,591

 

Sale of common stock

 

 

2,000,000

 

 

 

2,000

 

 

 

-

 

 

 

-

 

 

 

78,000

 

 

 

-

 

 

 

-

 

 

 

80,000

 

Common stock warrants issued and valued

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

6,595

 

 

 

-

 

 

 

-

 

 

 

6,595

 

Common shares issued for exercise of warrants

 

 

3,696,973

 

 

 

3,697

 

 

 

-

 

 

 

-

 

 

 

(3,697 )

 

 

-

 

 

 

-

 

 

 

-

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(427,157 )

 

 

-

 

 

 

(427,157 )

Balance - October 31, 2019

 

 

417,413,478

 

 

$ 417,413

 

 

 

10,000,000

 

 

$ 10,000

 

 

$ 3,414,839

 

 

$ (6,979,905 )

 

$ (100 )

 

$ (3,137,753 )

.

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

 

 
7

Table of Contents

  

For the Three Months Ended October 31, 2020

 

 

 

Common Stock

 

 

Preferred Stock

 

 

 

 

Additional

 

 

 

 

 

Accumulated

Other 

 

 

Total

 

 

 

Number of Shares

 

 

Amount

 

 

Number of Shares

 

 

Amount

 

 

Stock

Sub. Rec.

 

 

Paid-in

Capital

 

 

Accumulated (Deficit)

 

 

Comprehensive

Loss

 

 

Stockholders’

(Deficit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance - July 31, 2020

 

 

462,730,684

 

 

$ 462,731

 

 

 

10,000,000

 

 

$ 10,000

 

 

$ (20,000 )

 

$ 8,597,401

 

 

$ (11,906,952 )

 

$ (100 )

 

$ (2,856,920 )

Common shares issued for conversion of debt and interest

 

 

2,564,695

 

 

 

2,565

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

500,884

 

 

 

-

 

 

 

-

 

 

 

503,449

 

Restricted shares issued for consulting services and fees

 

 

1,246,250

 

 

 

1,246

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

285,391

 

 

 

-

 

 

 

-

 

 

 

286,637

 

Common shares issued for exercise of warrants

 

 

4,235,111

 

 

 

4,235

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(4,235 )

 

 

-

 

 

 

-

 

 

 

-

 

Common shares cancelled

 

 

(500,000 )

 

 

(500 )

 

 

-

 

 

 

-

 

 

 

20,000

 

 

 

(19,500 )

 

 

-

 

 

 

-

 

 

 

-

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(841,271 )

 

 

-

 

 

 

(841,271 )

Balance - October 31, 2020

 

 

470,276,740

 

 

$ 470,277

 

 

 

10,000,000

 

 

$ 10,000

 

 

$ -

 

 

$ 9,359,941

 

 

$ (12,748,223 )

 

$ (100 )

 

$ (2,908,105 )

.

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

 

 
8

Table of Contents

  

MIRAGE ENERGY CORPORATION

Consolidated Statement of Cash Flows

(Unaudited)

 

 

 

Three Months Ended

 

 

 

October 31,

 

 

 

2020

 

 

2019

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

Net loss

 

$ (841,271 )

 

$ (427,157 )

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

 

 

 

 

 

 

 

 

Depreciation expense

 

 

395

 

 

 

395

 

Financing fees

 

 

6,500

 

 

 

32,648

 

Loss on change in fair value of convertible debt

 

 

292,263

 

 

 

106,263

 

Expenses paid by shareholder

 

 

5,048

 

 

 

8,575

 

Issuance of stock for services and fees

 

 

286,637

 

 

 

-

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Prepaid expenses

 

 

(14,916 )

 

 

(2,035 )

Accounts payable

 

 

45,021

 

 

 

58,088

 

Accrued expenses

 

 

5,867

 

 

 

5,250

 

Accrued salaries and payroll taxes, related parties

 

 

6,387

 

 

 

(9,061 )

Net cash (used) in operating activities

 

 

(208,069 )

 

 

(227,034 )

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Proceeds from loan, related party

 

 

-

 

 

 

1,000

 

Repayments of loan, related party

 

 

(5,048 )

 

 

(9,575 )

Proceeds from sale of common stock

 

 

-

 

 

 

80,000

 

Proceeds from sale of convertible debt

 

 

215,000

 

 

 

297,500

 

Net cash provided by financing activities

 

 

209,952

 

 

 

368,925

 

 

 

 

 

 

 

 

 

 

Net increase in cash

 

 

1,883

 

 

 

141,891

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents - beginning of period

 

 

166,941

 

 

 

70,456

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents - end of period

 

$ 168,824

 

 

$ 212,347

 

 

 

 

 

 

 

 

 

 

Supplemental Cash Flow Disclosures

 

 

 

 

 

 

 

 

Cash paid for interest

 

$ 591

 

 

$ 134

 

 

 

 

 

 

 

 

 

 

Supplemental Non-Cash Activity Disclosures

 

 

 

 

 

 

 

 

Stock issued for convertible interest

 

$ 33,235

 

 

$ 31,778

 

Stock issued for convertible debt

 

$ 470,214

 

 

$ 320,813

 

Cashless exercise of warrants

 

$ 4,235

 

 

$ 3,697

 

Stock cancellation of stock subscription

 

$ (20,000 )

 

$ -

 

 

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

 

 
9

Table of Contents

  

MIRAGE ENERGY CORPORATION

Notes to the Consolidated Interim Financial Statements

October 31, 2020

(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 November 19, 2020.

 

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.

 

As of October 31, 2020 and July 31, 2020, the Company has convertible notes with a total base principal of $239,000 and $100,500, respectively, which become convertible in 180 days. There is a potential for 2,025,756 shares if the principal of $239,000 were converted at October 31, 2020. These notes will have a dilutive effect on common stock for the three months ended October 31, 2020. 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 October 31, 2020, the Company no longer has any outstanding common stock purchase warrants.

 

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.   

 

 
10

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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.

 

Recent Accounting Pronouncements

 

In February 2016, the FASB issued ASU 2016-02, Leases, which will amend current lease accounting to require lessees to recognize (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 does not significantly change lease accounting requirements applicable to lessors; however, certain changes were made to align, where necessary, lessor accounting with the lessee accounting model. This standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company has reviewed these provisions and will apply to the fiscal year which begins August 1, 2021, as we follow the private company effective dates as an Emerging Growth Company which have been extended due to COVID-19.

 

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 $841,271 and had net cash used in operations of $208,069 for the three months ended October 31, 2020 and had an accumulated deficit and working capital deficit of $12,748,223 and $2,915,117 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.

 

NOTE 4 - DEBT

 

As of October 31, 2020, there were no shares of common stock that could be issued for convertible debt as shown in Note 9 - Subsequent Events as the notes were not convertible at October 31, 2020. 

 

For the three months ended October 31, 2020, the Company received proceeds of $215,000 from convertible notes, which was net of $6,000 in fees deducted and converted $503,449 of convertible notes and interest. There was a $292,263 loss on change in fair value of convertible debt in total.

 

For the year ended July 31, 2020, the Company received proceeds of $297,500 from convertible notes, which was net of $30,500 in fees deducted and converted $4,921,471 of convertible notes and interest. There was a $3,991,040 loss on change in fair value of convertible debt in total.

 

 
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A summary of debt at October 31, 2020 and July 31, 2020 is as follows:  

 

 

 

October 31,

 

 

July 31,

 

 

 

2020

 

 

2020

 

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 9 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 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 $7,157.

 

 

76,531

 

 

 

69,374

 

Convertible debenture, unsecured, interest bearing at 8% per annum, issued September 12, 2019 in the amount of $82,500 with fees of $9,500 and cash proceeds of $73,000, convertible at March 10, 2020 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 conversion date; maturity date of July 12, 2020. This note was convertible on March 10, 2020. The note defaulted on November 16, 2019 and a default penalty of $83,692 was added to the note and incurred default interest rate of 24%. The convertible note had a net change in fair value of $285,106.

 

 

-

 

 

 

211,977

 

Convertible debenture, unsecured, interest bearing at 10% per annum, issued September 21, 2020 in the amount of $153,000 with fees of $3,000 and cash proceeds of $150,000, convertible at March 20, 2021 with conversion price at a discount rate of 39% 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 conversion date; maturity date of July 21, 2021.

 

 

153,000

 

 

 

-

 

Convertible debenture, unsecured, interest bearing at 10% per annum, issued October 12, 2020 in the amount of $68,000 with fees of $3,000 and cash proceeds of $65,000, convertible at April 10, 2021 with conversion price at a discount rate of 39% 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 conversion date; maturity date of August 12, 2021.

 

 

68,000

 

 

 

-

 

Remaining unpaid portion due AT&T regarding cell phone installments

 

 

963

 

 

 

1,234

 

Total Debt

 

 

426,338

 

 

 

410,429

 

Less: Current Maturities

 

 

425,375

 

 

 

409,195

 

Total Long-Term Debt

 

$ 963

 

 

$ 1,234

 

 

 
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NOTE 5 - RELATED PARTY TRANSACTIONS

 

As of October 31, 2020, the CEO and two other members of management and one other employee had earned accrued unpaid salary in the amount of $1,733,019. Accrued salaries of $1,733,019 combined with accrued payroll taxes of $68,439 for a total accrued related party salaries and payroll tax of $1,801,458 for the period from June 2015 until October 31, 2020.

 

Also, Mr. Michael Ward, President, was owed $5,048 for monies outlaid on behalf of the Company which was netted for $5,048 in payments received leaving a net due Mr. Ward of $0 at October 31, 2020. During the year ended July 31, 2020, Mr. Michael Ward, President, provided $10,100 directly to the Company during the year with an additional $29,642 owed for monies outlaid on behalf of the Company for a total loan amount of $39,742 which was netted for $39,742 in payments received leaving a net due Mr. Ward of $0 at July 31, 2020.

 

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 was for three (3) years beginning July 1, 2016. On July 1, 2019, the Company entered into a First Amendment to Lease Agreement at same location. The landlord continues to hold $6,921 as security which is to be returned at the end of the new lease. The new Lease Period is three (3) years beginning July 1, 2019. 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 thirteen (13) 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 $56,604 and $84,906 for the three months ended October 31, 2020 and for the year ended July 31, 2020, respectively. Below is the schedule of rent for the remaining Lease term as of October 31, 2020.

 

Year Ending

 

Amount

 

July 31, 2021

 

$ 56,604

 

July 31, 2022

 

 

84,906

 

 

 

 

 

 

Total Remaining Base Rent

 

$ 141,510

 

 

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 October 31, 2020. Interest will continue accruing after October 31, 2020 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.

 

NOTE 8 - EQUITY

 

During the three months ended October 31, 2020, the Company issued 2,564,695 shares of common stock for conversion of a convertible note totaling $82,500 with a fair value of $470,214 for the debt and a fair value of $33,236 for the interest totaling $503,449.

 

Also, the Company issued a total of 4,235,111 shares of common stock as a cashless exercise of common stock warrants. On August 24, 2020, Crown Bridge Partners, LLC exercised the right to purchase 4,235,111 shares of common stock, respectively, per the Common Stock Warrants that were issued with the November 13, 2018 note.

 

For the three months ended October 31, 2020, the Company entered into agreement for 1,246,250 shares of common stock as compensation to consultants in the amount of $286,637. 

 

For the three months ended October 31, 2020, the Company had a cancellation of stock subscription of 500,000 shares totaling $20,000.

 

NOTE 9 - SUBSEQUENT EVENTS

 

The Company evaluated events occurring subsequent to October 31, 2020, identifying those that are required to be disclosed as follows: 

 

On December 9, 2020, the Company entered into a Securities Purchase Agreement with Power Up Lending Group Ltd. to issue a convertible note in the principal amount of $55,000, with unsecured, interest bearing at 10% per annum and a maturity date of September 9, 2021.

  

 
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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, 2020, as filed on November 19, 2020. 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. 

 

On June 11, 2020, the Company received a financing Term Sheet from Bluebell International, LLC (BBI) for $4 Billion plus an interest reserve and payment of Closing Costs. The equity would split with Mirage owning 25% after closing. Mirage would have no payment obligation regarding any of the $4 Billion loan. Mirage would be responsible for construction and after construction management.

  

 
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The Projects which will be initially developed include:

 

 

·

Mirage 1 - Burgos Hub Storage & Gas Pipeline (natural gas)

 

 

“Brasil Field” is the gas storage facility

“Concho Line” “Progreso Line” “Progreso Crossing” “Storage Line” (pipeline running from Corpus Christi, TX to the Brasil Field storage facility)

 

 

·

Mirage 2 - 48-inch Pipeline Rehabilitation (natural gas)

 

 

Pipeline running from Reynosa, Mexico to Nuevo

 

 

·

Mirage 3 - 30-inch and 48-inch Pipeline Rehabilitation (crude oil)

 

 

Bi-directional transport of crude oil across the Tehuantepec Isthmus of Mexico     

 

BBI is completing its Due Diligence activities prior to a Final Closing.

 

Discussion and Analysis of Financial Condition and Results of Operations

 

Revenues

 

Three month period ended October 31, 2020

 

For the three (3) month period ended October 31, 2020, we generated no revenue and incurred a net loss of $841,271.

 

Our net loss of $841,271 for the three (3) month period ended October 31, 2020 was the result of operating expenses of $541,566, interest expense of $7,442 and fair market value interest expense of $292,263. Our operating expenses consisted of $528,416 in general and administrative expenses and $13,150 in professional fees.

 

Three month period ended October 31, 2019

 

For the three (3) month period ended October 31, 2019, we generated no revenue and incurred a net loss of $427,157.

 

Our net loss of $427,157 for the three (3) month period ended October 31, 2019 was the result of operating expenses of $303,266 and other expense (comprised of interest expense and change in fair value of convertible debt) of $123,891. Our operating expenses consisted of $262,975 in general and administrative expenses, and $40,291 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.

  

 
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Three month period ended October 31, 2020 and 2019

 

For the three (3) months ended October 31, 2020, we had $541,566 in general and administrative expenses compared to $303,266 in general and administrative expenses for the three (3) months ended October 31, 2019. The $238,300 increase in general and administrative expenses was primarily the result of an increase in consulting, a decrease in financing fees and an increase in change in fair value of convertible debentures during the three (3) months ended October 31, 2020.

 

The professional fees for the three (3) months ending October 31, 2020 and October 31, 2019 were $13,150 and $40,291, respectively. The $27,141 decrease was primarily related to decrease in audit fees.

 

The executive compensation for the three (3) months ending October 31, 2020 and October 31, 2019 was $92,000 and $92,000, respectively. No change was due to the same executives employed at the same compensation during both periods.

  

Liquidity and Capital Resources

 

Cash Flows

 

Operating Activities

 

For the three (3) month period ended October 31, 2020, net cash used in operating activities was $208,069. The negative cash flow for the three (3) months ended October 31, 2020 related to our net loss of $841,271, an decrease in prepaid expenses of $14,916, an increase of $5,048 in expenses paid by shareholder, an increase of $286,637 in issuance of stock for services and fees, adjusted for $6,500 in financing fees, adjusted for depreciation of $395, a change of $292,263 in convertible debt due to fair market value, an increase of $45,021 in accounts payable, an increase of $5,867 accrued expenses and an increase of $6,387 in accrued salaries and payroll taxes – related parties.

 

For the three (3) month period ended October 31, 2019, net cash used in operating activities was $227,034. The negative cash flow for the three (3) months ended October 31, 2019 related to our net loss of $427,157, a decrease in prepaid expenses of $2,035, adjusted for $32,648 in financing fees, adjusted for depreciation of $395, a change of $106,263 in convertible debt due to fair market value, an increase of $8,575 in expenses paid by shareholder, an increase of $58,088 in accounts payable, an increase of $5,250 in accrued expenses and a decrease of $9,061 in accrued salaries and payroll taxes – related parties.

 

Investing Activities

 

For the three (3) months ended October 31, 2020 net cash used in investing activities was nil.

 

For the three (3) months ended October 31, 2019 net cash used in investing activities was nil.

 

Financing Activities

 

For the three (3) months ended October 31, 2020, net cash provided by financing activities was $209,952. The positive cash flow from financing activities for such period was comprised of proceeds from convertible debentures.

 

For the three (3) months ended October 31, 2019, net cash provided from financing activities was $368,925. The positive cash flow from financing activities for such period was comprised of an increase in loans payable from related parties, proceeds from sale of common stock, and proceeds from sale of convertible debenture.

  

 
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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 regarding fixed costs.

 

As of October 31, 2020, Mirage Energy Corporation had $168,824 in cash on hand and prepaid expenses of $24,475. 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, 2020 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.

 

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, 2020, the Company has funded operations with loan from related party of $10,100, debt of $297,500 from convertible notes, proceeds from sale of $719,000 in common stock, while making loan repayments of $39,742 to related party. The Company plans to raise additional funds through various sources to support ongoing operations during 2020 and 2021.

 

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 October 31, 2020, 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

 

None.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5. OTHER INFORMATION

 

None.

  

 
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Table of Contents

 

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 October 31, 2020 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: December 31, 2020

 

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)

 

 
20

 

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