Mirage Energy Corp - Quarter Report: 2018 January (Form 10-Q)

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 January 31, 2018

OR

o 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

(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 o

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 o

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:

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 o No x

Indicate the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: April 25, 2018 there were 324,516,064 shares of the Company’s common stock issued and outstanding.

MIRAGE ENERGY CORPORATION

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED JANUARY 31, 2018

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, 2017 filed with the Securities and Exchange Commission and the financial statements contained in the Company’s Current Report 10-Q for the quarter ending January 31, 2018. 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, 2018.

MIRAGE ENERGY CORPORATION

INDEX TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS

January 31, 2018

MIRAGE ENERGY CORPORATION

Consolidated Balance Sheets

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

MIRAGE ENERGY CORPORATION

Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

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

MIRAGE ENERGY CORPORATION

Consolidated Statement of Cash Flows

(Unaudited)

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

MIRAGE ENERGY CORPORATION

Notes to the Consolidated Interim Financial Statements

January 31, 2018

(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

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 30, 2017.

Earnings or Loss per Share:

The Company accounts for earnings per share pursuant to ASC 260, Earnings per Share, which requires disclosure on the financial statements of "basic" and "diluted" earnings (loss) per share. Basic earnings (loss) per share are computed by dividing net income (loss) by the weighted average number of common shares outstanding for the year. 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.

During the period ended January 31, 2018, there were 3,472,893 shares of common stock issued in settlement of debt. There are 10,000,000 shares of preferred stock that are convertible into 200,000,000 shares of common stock. An additional 1,551,351 shares of common stock could potentially be issued for convertible debt.

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 $699,970 and had net cash used in operations of $145,845 for the six months ended January 31, 2018 and had an accumulated deficit and working capital deficit of $2,543,328 and $1,987,972 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

A summary of debt at January 31, 2018 and July 31, 2017 is as follows:

At the date each convertible instrument becomes convertible it is subject to ASC Topic 480, “Distinguishing Liabilities from Equity,” since the debt is a mostly fixed amount to be settled with a variable number of shares.

NOTE 5 - RELATED PARTY TRANSACTIONS

As of January 31, 2018, the CEO and two other members of management and one other employee had earned accrued unpaid salary in the amount of $1,113,000, as of January 31, 2018. Accrued salaries of $1,113,000 combined with accrued payroll taxes of $44,958 for a total accrued related party salaries and payroll tax of $1,157,958 for the six months ended.

Also, Mr. Michael Ward, President, was owed $21,078 at July 31, 2017 which has increased to $39,328 as of January 31, 2018 resulting from additional $27,434 of cash proceeds, expenses paid of $4,173, and repayments of $18,357. Additionally, a company owned by the spouse of the CEO provided a loan of $182,600 and $187,600 respectively, to 4Ward Resources, Inc. for the period ended January 31, 2018 and year ended July 31, 2017.

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 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 nineteen (19) months of this thirty-six (36) month lease, no such additional charges have been made. Below is the schedule of rent for the remaining Lease term as of January 31, 2018.

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 $77,844.00 still due in services as of January 31, 2018.

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.

In January, the Company entered into consulting agreements with two consultants with total consideration of 1,000,000 shares of common stock valued at $42,500. These shares were subsequently issued in March 2018.

NOTE 8 - SUBSEQUENT EVENTS

The Company evaluated events occurring subsequent to January 31, 2018, identifying those that are required to be disclosed as follows: 

On February 14, 2018, PowerUp Lending Group Ltd. converted the remaining principal $9,500 of the $33,000 note issued June 28, 2017 that was defaulted to $49,500 along with $1,980 of accrued interest for 1,551,351shares of common stock.

On February 26, 2018, the Company entered into Securities Purchase Agreement with PowerUp Lending Group Ltd. to issue an additional amount of convertible note in the amount of $43,000.

During March 2018, PowerUp Lending Group Ltd. converted $45,000 of the $38,000 note issued August 22, 2017 that was defaulted to $57,000 for 8,251,365 shares of common stock.

On March 12, 2018, 4Ward Resources, Inc., a subsidiary executed a promissory note for $77,844 with Marcos Y Asociados, a vendor, representing the account balance due as of 01/31/18. The note was due on, or before April 15, 2018. This note is currently in default. The interest is accruing at 7.5% annually plus the penalty interest of 10% per annum if not paid when due.

On March 21, 2018, the Company recorded and issued 50,000 shares of common stock at $0.50 per share to Michael Liska for $25,000 paid to Michael Ward which reduces the balance still owed to Mr. Ward for loans given and expenses paid on behalf of the Company.

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 Form 8-K, as filed on January 27, 2017. 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.

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 be to 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

Results of Operations

Three Months ended January 31, 2017 and 2018

Revenues

Three month period ended January 31, 2018

For the three (3) month period ended January 31, 2018, we generated no revenue and incurred a net loss of $436,468.

Our net loss of $436,468 for the three (3) month period ended January 31, 2018 was the result of operating expenses of $326,816 and other expense (comprised of interest expense) of $109,652. Our operating expenses consisted of $311,730 in general and administrative expenses, and $15,086 in professional fees.

Three month period ended January 31, 2017 

For the three (3) month period ended January 31, 2017, we generated no revenue and incurred a net loss of $274,760. 

Our net loss of $274,760 for the three (3) month period ended January 31, 2017 was the result of operating expenses of $272,680 and other expense (comprised of interest expense) of $2,080. Our operating expenses consisted of $248,979 in general and administrative expenses, and $23,701 in professional fees.

Costs and Expenses 

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

For the three (3) months ended January 31, 2018 and January 31, 2017, total general and administrative expenses were $311,730 and $248,979, respectively.

For the three (3) months ended January 31, 2018, we had $311,730 in general and administrative expenses compared to $248,979 in general and administrative expenses for the three (3) months ended January 31, 2017. The $62,751 increase in general and administrative expenses was primarily the result of spending related to executive compensation, office rental, travel and entertainment, public relations fees and other general and administrative expenses.

The professional fees for the three (3) months ending January 31, 2018 and January 31, 2017 were $15,086 and $23,701, respectively. The $8,615 decrease was primarily related to decreases in legal fees, stock transfer agent fees and other professional fees.

The executive compensation for the three (3) months ending January 31, 2018 and January 31, 2017 was $116,500 and $116,500, respectively. No change was due to same executives on the payroll during this quarter ended.

Liquidity and Capital Resources 

Cash Flows 

Operating Activities 

For the six (6) month period ended January 31, 2018, net cash used in operating activities was $150,018. The negative cash flow for the six (6) months ended January 31, 2018 related to our net loss of $699,970, a decrease in prepaid expenses of $219, adjusted for depreciation of $790, an increase of $35,500 in convertible debt due to default, a change of $65,164 in convertible debt due to fair market value, an increase of $106,985 in accounts payable, an increase of $9,155 in accrued expenses and an increase of $294,250 in accrued salaries and payroll taxes – related parties.

For the six (6) month period ended January 31, 2017, net cash used in operating activities was $187,379. The negative cash flow for the six (6) months ended January 31, 2017 related to our net loss of $481,202, a decrease in salary advances of $10,000, an increase in prepaid expenses of $2,290, adjusted for depreciation of $395, an increase of $152,077 in accounts payable, and an increase of $149,061 in accrued expenses.

Investing Activities 

For the six (6) months ended January 31, 2018 net cash used in investing activities was nil.

For the six (6) months ended January 31, 2017 net cash used in investing activities was $22,550. The negative cash flow from investing activities for such period was comprised of loans receivable – officer in the amount of $3,610 and project development costs of $18,940.

Financing Activities 

For the six (6) months ended January 31, 2018, net cash provided by financing activities was $175,077. The positive cash flow from financing activities for such period was comprised of an increase in proceeds from related party loan and convertible debt, increase in repayment of related party loan and an increase in issuance of stock for services and fees.

For the six (6) months ended January 31, 2017, net cash provided from financing activities was $134,100. The positive cash flow from financing activities for such period was comprised of an increase in loans payable from related parties.

Liquidity 

To date, we have funded our operations primarily with capital provided and loans provided by related parties, salaries accrued to related parties and accounts payable along with sale of convertible debentures. 

As of January 31, 2018, Mirage Energy Corporation had $41,008 in cash on hand and prepaid expenses of $1,778. 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, 2017 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 six months ended January 31, 2018, the Company has funded operations of $145,845 through loan proceeds of $166,000 and proceeds from related parties’ loan payable of $27,434. The $166,000 loan proceeds are from sale of convertible notes. The Company plans to raise additional funds through various sources to support ongoing operations during 2018.

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.

Critical Accounting Policies

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States of America, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue Recognition

The Company recognizes revenues when earned which shall be as products are shipped and services are delivered to customers or distributors. The Company shall also record accounts receivable for revenue earned but not yet collected.

Income Taxes

Income taxes are provided based upon the liability method of accounting pursuant to FASB ASC 740-10-25 Income Taxes – Recognition. Under this approach, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end. A valuation allowance is recorded against deferred tax assets if management does not believe the Company has met the “more likely than not” standard imposed by FASB ASC 740-10-25-5.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amount used for income tax purposes.

At July 31, 2017, the Company had net operating loss carry forwards of approximately ($794,945), which will begin to expire in 2036 and are calculated at an expected blended tax rate of approximately 26%.

“ FASB ASC 740 prescribes recognition threshold and measurement attributes for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FASB ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. At December 31, 2015, the Company has not taken any tax positions that would require disclosure under FASB ASC 740.

Pursuant to FASB ASC 740, income taxes are provided for based upon the liability method of accounting. Under this approach, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end. A valuation allowance is recorded against deferred tax assets if management does not believe the Company has met the “more likely than not” standard imposed by FASB ASC 740 to allow recognition of such assets.

Earnings (Loss) Per Share (“EPS”)

FASB ASC 260, Earnings Per Share provides for calculation of “basic” and “diluted” earnings per share. Basic earnings per share includes no dilution and is computed by dividing net income (loss) available to common shareholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity similar to fully diluted earnings per share. Basic and diluted losses per share were the same at the reporting dates as there were no common stock equivalents considered dilutive and outstanding.

Derivative Instruments

FASB ASC 815, Derivatives and Hedging establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. They require that an entity recognize all derivatives as either assets or liabilities in the balance sheet and measure those instruments at fair value.

If certain conditions are met, a derivative may be specifically designated as a hedge, the objective of which is to match the timing of gain or loss recognition on the hedging derivative with the recognition of (i) the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk; or (ii) the earnings effect of the hedged forecasted transaction. For a derivative not designated as a hedging instrument, the gain or loss is recognized in income in the period of change.

Impairment of Long-Lived Assets

Long-lived assets of the Company, including the Technology Rights, are reviewed for impairment when changes in circumstances indicate their carrying value has become impaired, pursuant to guidance established in the FASB ASC 360, “Accounting for the Impairment or Disposal of Long-Lived Assets.” Management considers assets to be impaired if the carrying amount of an asset exceeds the future projected cash flows from related operations (undiscounted and without interest charges). If impairment is deemed to exist, the asset will be written down to fair value, and a loss is recorded as the difference between the carrying value and the fair value. Fair values are determined based on quoted market values, discounted cash flows, or internal and external appraisals, as applicable. Assets to be disposed of are carried at the lower of carrying value or estimated net realizable value.

Fair Value of Financial Instruments

The Company’s financial instruments as defined by FASB ASC 825-10-50 include cash, trade accounts receivable, and accounts payable and accrued expenses.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Inflation

It is our opinion that inflation has not had a material effect on our operations.

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 January 31, 2018, that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II-OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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

ITEM 1A. RISK FACTORS

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

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

On March 21, 2018, the Company offered and sold Fifty Thousand (50,000) shares of common stock to Michael Liska valued at $0.50 per share.

On or about January 3, 2018, the Company engaged two individuals, Candice J. Renee and Mark Sands to provide investor awareness and communications in regard to the Company's business operations. The Company prepaid Renee Seven Hundred Thousand (700,000) shares valued at $29,750 and Mark Sands Three Hundred Thousand (300,000) shares valued at $12, 750 of Company restricted common stock for the services.

The shares of common stock were not registered under the Securities Act of 1933, as amended (the “Securities Act”), and were 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.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

See Item 5 below..

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Debt Financing Transactions

The Company entered into a series of security purchase agreements and corresponding convertible promissory notes in a series of debt financing transactions. The following is a summary of the promissory notes, which are qualified their entirety by the attached Exhibits 10.1, 10.2, 10.3, 10.4 and 10.5.

The Company has defaulted under the terms of the convertible promissory notes, principally for untimely filing of its SEC periodic reports.

Note 1

On June 28, 2017, the Company borrowed $33,000 from Power Up Lending Group Ltd., a Virginia corporation ("Power Up"). The promissory note bears interest at the rate of 12% per annum and is due March 30, 2018. The note is convertible into Company common stock at a Forty-five (45%) discount to the market price of our common stock. Market price is the average of the lowest one day trading price during a twenty (20) days preceding conversion. On January 9, January 19, February 1, February 16 and March 2, 2018, the Company issued 940,439, 1,181,102, 1,351,351, 1,551,351 and 2,459,016 conversion shares, respectively. The Power Up notes may be paid off during the initial 180 days at specified premiums. The Company may pay off the note during the initial 180 days at a premium. After the expiration of 180 days, the Company may not pay off the note. The note may be paid off at maturity. The Holder has voluntarily limited its conversion to no more than 4.99% of the Company's issued and outstanding common stock. This note went into default due to the Company's untimely filing of its Annual Report for the year ending July 31, 2017. A default penalty of $16,500 was assessed. As of March 6, 2018, this note had been paid in full by equity.

Note 2

On August 22, 2017, the Company borrowed $38,000 from Power Up. The promissory note bears interest at the rate of 12% per annum and is due on May 30, 2018. The note is convertible into Company common stock at a Forty-five (45%) discount to the market price of our common stock. Market price is the average of the lowest one day trading price during a twenty (20) days preceding conversion. The note may be paid off during the initial 180 days at a specified premium. The Company may pay off the note during the initial 180 days at a premium. After the expiration of 180 days, the Company may not pay off the note. The note may be paid off at maturity. The Holder has voluntarily limited its conversion to no more than 4.99% of the Company's issued and outstanding common stock. This note went into default due to the Company's untimely filing of its Annual Report for the year ending July 31, 2017. A default penalty of $19,000 was assessed.

Note 3

On December 4, 2017, the Company borrowed $53,000 from Power Up. The promissory note bears interest at the rate of 12% per annum and is due on September 15, 2018. The note is convertible into Company common stock at a Forty-five (45%) discount to the market price of our common stock. Market price is the average of the lowest one day trading price during a twenty (20) days preceding conversion. The note may be paid off during the initial 180 days at a specified premium. The Company may pay off the note during the initial 180 days at a premium. After the expiration of 180 days until the maturity date, the note may be paid off at a 150% premium. The Holder has voluntarily limited its conversion to no more than 4.99% of the Company's issued and outstanding common stock. This note went into default due to the Company's untimely filing of its Annual Report for the year ending July 31, 2017. A default penalty of $26,500 was assessed.

Note 4

On February 26, 2018, the Company borrowed 43,000 from Power Up Lending Group, Inc. The promissory note bears interest at the rate of 12% per annum and is due on November 30, 2018. The note is convertible into Company common stock at a Forty-five (45%) discount to the market price of our common stock. Market price is the average of the lowest one day trading price during a twenty (20) days preceding conversion. The note may be paid off during the initial 180 days at a specified premium. The Company may pay off the note during the initial 180 days at a premium. After the expiration of 180 days until the maturity date, the note may be paid off at a 150% premium. The Holder has voluntarily limited its conversion to no more than 4.99% of the Company's issued and outstanding common stock. This note went into default due to the Company's untimely filing of its Annual Report for the year ending July 31, 2017. A default penalty of $21,500 was assessed.

Note 5

On January 5, 2018, the Company borrowed $75,000 from JSJ Investments, Inc., a Texas corporation. The promissory note bears interest at the rate of 12% and is due on January 5, 2019. The note has an original issue discount of $2,000. The note is convertible into Company common stock at a Forty-five (45%) discount to the market price of our common stock. Market price is the average of the lowest one day trading price during a twenty (20) days preceding conversion. The Company may pay off the note during the initial 180 days at a premium. After the expiration of 180 days, the Company may not pay off the note. The note may be paid off at maturity. The Holder has voluntarily limited its conversion to no more than 4.99% of the Company's issued and outstanding common stock. The Company has defaulted on this note under paragraph 10(a)(iv, xi, xii, xiii, xiv). The Company has not received any notice of default and associated default penalties remain unassessed by Lender.

Trade Creditor Note:

On March 12, 2018, 4Ward Resources, Inc., a subsidiary executed a promissory note for $77,844 with Marcos Y Asociados Infraestructura Y Energia, S.C., a vendor representing the balance due as of 01/31/18 for rights of way services on behalf of the Company's development activities in Mexico. The note was due on, or before April 15, 2018. The Company has defaulted on the note repayment obligation.

ITEM 6. EXHIBITS

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: April 27, 2018

Mirage Energy Corporation

(Registrant)