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 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.
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Three-month period ended October 31, 2018
For the three (3) month period ended October 31, 2018, we generated no revenue
and incurred a net loss of $406,896.
Our net loss of $406,896 for the three (3) month period ended October 31, 2018
was the result of operating expenses of $251,980 and other expense (comprised of
interest expense and change in fair value of convertible debt) of $154,916. Our
operating expenses consisted of $212,677 in general and administrative expenses,
and $39,303 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 October 31, 2019 and 2018
For the three (3) months ended October 31, 2019, we had $262,975 in general and
administrative expenses compared to $212,677 in general and administrative
expenses for the three (3) months ended October 31, 2018. The $50,298 increase
in general and administrative expenses was primarily the result of spending
related to consulting fees, financing fees, travel and entertainment and to a
decrease in executive compensation during the three (3) months ended October 31,
2019.
The professional fees for the three (3) months ending October 31, 2019 and
October 31, 2018 were $40,291 and $39,303, respectively. The $988 increase was
primarily related to increases in audit fees and to decreases in legal fees.
The executive compensation for the three (3) months ending October 31, 2019 and
October 31, 2018 was $92,000 and $116,500 respectively. The difference was due
to decrease in salaries because one executive left as of yearend July 31, 2019.
Liquidity and Capital Resources
Cash Flows
Operating Activities
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 $66,663 in accounts payable, an increase of $5,250
in accrued expenses and an decrease of $9,061 in accrued salaries and payroll
taxes - related parties.
For the three (3) month period ended October 31, 2018, net cash used in
operating activities was $40,371. The negative cash flow for the three (3)
months ended October 31, 2019 related to our net loss of $406,896, a decrease in
prepaid expenses of $389, adjusted for $9,500 in financing fees, adjusted for
depreciation of $395, a change of $142,420 in convertible debt due to fair
market value, an increase of $84,411 in accounts payable, an increase of $2,580
in accrued expenses and an increase of $127,608 in accrued salaries and payroll
taxes - related parties.
Investing Activities
For the three (3) months ended October 31, 2019 net cash used in investing
activities was nil.
For the three (3) months ended October 31, 2018 net cash used in investing
activities was nil.
Financing Activities
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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For the three (3) months ended October 31, 2018, net cash provided from
financing activities was $38,317. 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 a
long-term loan and convertible debenture.
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, 2019, Mirage Energy Corporation had $212,347 in cash on hand
and prepaid expenses of $3,795. 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, 2019
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, 2019, the Company has funded operations with debt of
$329,500 from convertible notes, proceeds from sale of $325,978 in common stock,
while making loan repayments of $180,003 to related party and $83,250 to
convertible notes. The Company plans to raise additional funds through various
sources to support ongoing operations during 2019 and 2020.
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.
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