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.
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 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 the office rental lease as immaterial. The term of the existing lease on the office premises ends June 30, 2022.
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 July 31, 2019 and July 31, 2018, the Company has convertible notes with a total base principal of $53,000 and $206,000, respectively, which become convertible in 180 days. There is a potential for 5,054,533 shares if the principal of $53,000 were converted at July 31, 2019. These notes will have a dilutive effect on common stock for the year ended July 31, 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 July 31, 2019, there were 328,124 warrants issued and outstanding which are equal to 328,124 shares which have not been exercised.
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.
In accordance with ASC 360 “Property Plant and Equipment,” the Company reviews the carrying value of intangibles subject to amortization and long-lived assets for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Intangible assets are amortized over their estimated useful lives. Recoverability of long-lived assets is measured by comparison of its carrying amount to the undiscounted cash flows that the asset or asset group is expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the property, if any, exceeds its fair market value.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.
Cash and cash equivalents include cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value. The Company had $70,456 and $13,480 in cash at July 31, 2019 and 2018, respectively.
The Company follows ASC 820, “Fair Value Measurements and Disclosures”, which defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents, accounts receivable. The Company places its cash and cash equivalents with financial institutions of high credit worthiness. At times, its cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits. The Company evaluates the collectability of its accounts receivable on an on-going basis and request deposits whenever it is necessary. The Company’s management plans to assess the financial strength and credit worthiness of any parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited.
ASC 718 “Compensation - Stock Compensation” prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).
The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, “Equity - Based Payments to Non-Employees.” Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.
Consultant share-based compensation was paid in the amount of $48,110 in 2018 and $466,800 in 2019.
The Company accounts for income taxes under ASC 740 “Income Taxes.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. No deferred tax assets or liabilities were recognized as of July 31, 2019 and 2018.
The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions.
The Company follows ASC 450-20, Loss Contingencies, to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. There were no contingencies as of July 31, 2019.
Future obligations for the rent of the office lease as of July 31, 2019 and 2018 were $247,432 and $83,045, respectively.
Certain prior year amounts have been reclassified to conform with the current year presentation.
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 our next fiscal year which begins August 1, 2019.
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 $3,213,703 and had net cash used in operations of $335,249 for the year ended July 31, 2019 and had an accumulated deficit and working capital deficit of $6,552,748 and $3,158,670 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.
As of July 31, 2019, the number of shares of common stock that can be issued for convertible debt as per Note 10 - Subsequent Events are 4,830,016. The other notes were not convertible at July 31, 2019.
For the year ended July 31, 2019, the Company received proceeds of $329,500 from convertible notes, which was net of $30,500 in fees deducted and $20,000 paid directly to the vendor, and converted $1,663,929 of convertible notes and interest. There was a $1,381,885 loss due to change in fair value of convertible debt and a $13,191 loss due to change in fair value of warrants. For the year ended July 31, 2018, the Company received $279,000 from convertible notes, which was net of $16,000 in fees deducted and $18,500 paid directly to the vendor, and converted $473,767 of convertible notes and interest. There was a $308,180 loss due to change in fair value of convertible debt.
The Company has authorized 900,000,000 common shares with a par value of $0.001 per share. The Company also designated 10,000,000 shares of Series A Preferred Stock with a par value of $0.001 per share which were issued to Mr. Michael Ward on January 23, 2017. There are 10,000,000 shares of preferred stock that are convertible into 200,000,000 shares of common stock.
Each common share entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought. Each share of Series A Preferred Stock has the right to be converted into twenty (20) shares of our Common Stock. Holders of Series A Preferred Stock have the right to vote such shares on an “as converted” basis, unless and until such shares are converted into shares of Common Stock.
For the year ended July 31, 2019, the Company issued 44,658,950 shares of common stock for conversion of convertible notes, totaling $1,663,929. For the period ended July 31, 2019, the Company sold 13,598,999 shares of common stock to investors for cash proceeds of $325,978. For the period ended July 31, 2019, the Company issued 6,000,000 shares of common stock as compensation to consultants in the amount of $460,800. For the year ended July 31, 2018, the Company issued 31,088,084 shares of common stock for conversion of convertible notes, totaling $473,767. For the period ended July 31, 2018, the Company sold 50,000 shares of common stock to investors for cash proceeds of $25,000. For the period ended July 31, 2018, the Company issued 1,300,000 shares of common stock as compensation to consultants and directors in the amount of $48,110. Below you will find the individual transactions for the year ended July 31, 2019:
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.
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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.
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 $1,920 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.
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.
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.
On May 24, 2019, Crown Bridge Partners, LLC converted principal in the amount of $9,750 (including $500 deposit fee) of the $35,000 note issued November 13, 2018 that was defaulted to $53,500 for 500,000 shares of common stock.
On June 10, 2019, Crown Bridge Partners, LLC converted principal in the amount of $14,940 (including $500 deposit fee) of the $35,000 note issued November 13, 2018 that was defaulted to $53,500 for 830,000 shares of common stock.
On June 26, 2019, the Company offered and sold Two Hundred Thousand (200,000) shares of common stock to accredited investor valued at $0.0300 per share for $6,000. These shares were subsequently issued as 333,333 shares and 133,333 were cancelled in August 2019.
On June 27, 2019, the Company offered and sold Three Hundred Thirty-Three Thousand Three Hundred Thirty-Three (333,333) shares of common stock to accredited investor valued at $0.0300 per share for $10,000.
On June 27, 2019, the Company offered and sold Three Hundred Thirty-Three Thousand Three Hundred and Thirty-Three (333,333) shares of common stock to accredited investor valued at $0.0300 per share for $10,000.
On June 28, 2019, Crown Bridge Partners, LLC converted principal in the amount of $12,045 (including $500 deposit fee) of the $35,000 note issued November 13, 2018 that was defaulted to $53,500 for 730,000 shares of common stock.
On June 29, 2019, the Company entered into consulting agreement with Candice Rene with total consideration of 4,000,000 shares of common stock valued at $311,200.
On June 29, 2019, the Company entered into consulting agreement with Mark Sands with total consideration of 1,000,000 shares of common stock valued at $77,800.
On June 29, 2019, the Company entered into consulting agreement with Robert Oram with total consideration of 1,000,000 shares of common stock valued at $77,800.
On July 15, 2019, the Company offered and sold Six Hundred Sixty-Six Thousand Six Hundred and Sixty-Six (66,666) shares of common stock to accredited investor valued at $0.0750 per share for $5,000.
On July 15, 2019, Crown Bridge Partners, LLC converted principal in the amount of $14,954 (including $500 deposit fee) of the $35,000 note issued November 13, 2018 that was defaulted to $54,000 for 1,240,000 shares of common stock.
On July 31, 2019, Crown Bridge Partners, LLC converted the remaining principal in the amount of $21,811 (including $500 deposit fee) of the $35,000 note issued November 13, 2018 that was defaulted to $54,000 along with $5,250 of accrued interest for 2,243,830 shares of common stock.
On November 13, 2018, the Company entered into Securities Purchase Agreement with Crown Bridge Partners, LLC (Crown) to issue a convertible note in the aggregate principal amount of $105,000 to be funded in three (3) tranches, of which (2) tranches have been received, and in addition for each tranche the Company will have to provide 164,062 warrant shares for holder to purchase at any time on or after the issuance with the exercise price of $0.32 and with a term of five years commencing on the Issuance Date and ending on the five-year anniversary.
We have received two Common Stock Purchase Warrants through July 31, 2019 equal to a total of 328,124 shares which has a fair value of $13,191.
NOTE 6 - PROVISION FOR INCOME TAXES
The Company provides for income taxes under ASC 740, “Income Taxes”. ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax basis of assets and liabilities and the tax rates in effect when these differences are expected to reverse. It also requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. Certain tax attributes are subject to an annual limitation as a result of the acquisition of our subsidiaries, which constitute a change of ownership as defined under Internal Revenue Code Section 382.
The Company is subject to taxation in the United States and certain state jurisdictions.
The provision for income taxes differs from the amounts which would be provided by applying the statutory federal income tax rate of 21% to the net loss before provision for income taxes for the following reasons:
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|
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Income tax expense at statutory rate
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$
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141,537
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|
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$
|
161,715
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|
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Valuation allowance
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|
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(141,537
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)
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|
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(161,715
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)
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Income tax expense
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$
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-
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|
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$
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-
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|
Net deferred tax assets consist of the following components as of:
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NOL Carryover
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$
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977,833
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|
|
$
|
770,072
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|
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Valuation allowance
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|
|
(977,833
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)
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|
|
(770,072
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)
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Net deferred tax asset
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|
$
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-
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|
|
$
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-
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Due to the change in ownership provisions of the Income Tax laws of United States of America, net operating loss carry forwards of approximately $977,833, which expire commencing in fiscal 2039, for federal income tax reporting purposes are subject to annual limitations. When a change in ownership occurs, net operating loss carry forwards may be limited as to use in future years. The tax years still left open are 2014, 2015, 2016, 2017, 2018 and 2019.
NOTE 7 - RELATED PARTY TRANSACTIONS
On January 24, 2017, Mirage Energy Corporation, a Nevada corporation (“Mirage” or the “Company”) entered into an agreement with Mirage’s President and CEO, Mr. Michael Ward, whereby Mirage acquired all of the issued and outstanding shares of 4Ward Resources Inc., a Texas corporation (“4Ward Resources”) from Mr. Ward in exchange for 10,000,000 shares of Mirage’s Common Stock and 10,000,000 shares of Mirage’s Series A Preferred Stock. The acquisition of 4Ward Resources was completed on January 24, 2017.
On January 28, 2017, 4Ward Resources, Inc., Mirage Energy Corporation’s wholly owned subsidiary, acquired Michael Ward’s ninety (90%) percent interest in two Mexican companies. The remaining ten (10%) percent interest was acquired by Mirage Energy Corporation from Patrick Dosser. Patrick Dosser is Michael Ward’s son.
Together, Mirage Energy and 4Ward Resources own 100% of the two Mexican corporations. The two Mexican corporations are WPF MEXICO PIPELINES, S. de R.L. de C.V., and CENOTE ENERGY S. de R.L. de C.V. Additionally, 4Ward Resources acquired all of Michael Ward’s interest in WPF TRANSMISSION, INC., a Texas corporation. These transactions were valued at their carry over basis of $140,286, representing $99,821 expended on behalf of these companies by 4Ward Resources, $1,500 expended by Mr. Michael Ward to be reimbursed by 4Ward Resources and $38,965 whose vendor payments will be assumed or paid by 4Ward Resources. These transactions were accounted for as a merger of entities under common control under ASC 805-50 whereby the financial information has been combined from the first day of the first period presented similar to a pooling of interest.
As of July 31, 2019, the CEO and two other members of management and one other employee had earned accrued unpaid salary in the amount of $1,801,989. Accrued salaries of $1,801,989 combined with accrued payroll taxes of $59,947 for a total accrued related party salaries and payroll tax of $1,861,936 for the period from June 2015 until July 31, 2019.
Also, Mr. Michael Ward provided $40,100 directly to the company with an additional $26,725 owed to Mr. Ward for monies outlaid on behalf of the Company for a total loan amount of $87,903 which was netted for $85,674 payments received leaving a net due Mr. Ward $2,229 at July 31, 2018 which has decreased to $0 as of July 31, 2019. This resulted from additional $24,898 of expenses paid which increased the total amount due to $27,127 less repayments of $27,127 during the year ended July 31, 2019.
Additionally, White Boy Partnership, LLC, a company owned by the spouse of the CEO, provided an additional loan of $187,600 to 4Ward Resources, Inc. 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. Repayments of $152,876 were made during the year ended July 31, 2019, which reduced the balance due to $0 as of July 31, 2019.
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 one (1) 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 $83,974 and $82,178 for the year ended July 31, 2019 and July 31, 2018 respectively. Below is the schedule of rent for the remaining Lease term as of July 31, 2019.
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Year Ending
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July 31, 2020
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$
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77,620
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|
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July 31, 2021
|
|
|
84,906
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|
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July 31, 2022
|
|
|
84,906
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|
|
|
|
|
|
|
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Total Remaining Base Rent
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$
|
247,432
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NOTE 9 - 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 July 31, 2019. Interest will continue accruing after July 31, 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.
NOTE 10 - SUBSEQUENT EVENTS
The Company evaluated events occurring subsequent to July 31, 2019, identifying those that are required to be disclosed as follows:
On August 5, 2019, Crown Bridge Partners, LLC funded a third tranche of $35,000 and in addition the Company will have to provide 164,062 warrant shares for holder to purchase.
On August 12, 2019, the Company entered into a Securities Purchase Agreement with Power Up Lending Group Ltd. to issue a convertible note in the principal amount of $73,000, with unsecured, interest bearing at 12% per annum and a maturity date of May 30, 2020.
On August 16, 2019, Crown Bridge Partners, LLC converted principal in the amount of $53,000 consisting of $52,500 of principal and $500 of fees plus interest of $5,250 for 4,830,016 shares of common stock on the second 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 second tranche defaulted with a penalty of $17,500.
On September 12, 2019, the Company entered into a Securities Purchase Agreement with BHP Capital NY Inc. and Jefferson Street Capital, LLC, severally and not jointly, to issue convertible notes in the aggregate principal amount of $165,000, each in the principal amount of $82,500, with unsecured, interest bearing at 8% per annum and a maturity date of May 30, 2020.
On September 24, 2019, the Company entered into a Securities Purchase Agreement with Power Up Lending Group Ltd. to issue an additional amount of convertible note in the amount of $55,000, with unsecured, interest bearing at 12% per annum and a maturity date of July 12, 2020.
In October 2019, the Company offered and sold 2,000,000 shares of common stock at $0.040 per share for $80,000.
On October 17, 2019, Crown Bridge Partners, LLC exercised the right to purchase 3,696,973 shares of common stock per Common Stock Warrant that was issued with November 13, 2018 note.
In January 2020, the Company offered and sold 4,200,000 shares of common stock at $0.035 per share for $147,000.
On February 10, 2020, Crown Bridge Partners, LLC exercised the right to purchase 4,109,828 shares of common stock per Common Stock Warrant, adjusted for dilution, that was issued with November 13, 2018 note.
None.
Evaluation of Disclosure Controls and Procedures
In connection with the preparation of this annual report, an evaluation was carried out by the Company’s management, with the participation of the chief executive officer and the chief financial officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”)) as of July 31, 2019. Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Commission’s rules and forms, and that such information is accumulated and communicated to management, including the chief executive officer and the chief financial officer, to allow timely decisions regarding required disclosures.
During the evaluation of disclosure controls and procedures as of July 31, 2019, management identified material weaknesses in internal control over financial reporting, which management considers an integral component of disclosure controls and procedures. Material weaknesses identified include the lack of any segregation of duties, lack of appropriate accounting policies and management’s assessment of internal control over financial reporting. As a result of the material weaknesses identified, management concluded that Company’s disclosure controls and procedures were not effective.
Notwithstanding the existence of these material weaknesses, management believes that the consolidated financial statements in this annual report on Form 10-K fairly present, in all material respects, Company’s financial condition as of July 31, 2019 and 2018, and results of its operations and cash flows for the years ended July 31, 2019 and 2018, in conformity with United States generally accepted accounting principles (GAAP).
Management’s Report on Internal Control over Financial Reporting
Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process, under the supervision of the chief executive officer and the chief financial officer, designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with United States generally accepted accounting principles (GAAP). Internal control over financial reporting includes those policies and procedures that:
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Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the Company’s assets;
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Provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and the board of directors; and
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Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.
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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
The Company’s management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting as of July 31, 2019, based on criteria established in
Internal Control - Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). As a result of this assessment, management identified material weaknesses in internal control over financial reporting.
A material weakness is a control deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.
The material weaknesses identified are disclosed below.
Ineffective Oversight of Financial Reporting
. The Company has not provided an appropriate level of oversight of the financial reporting process and has not appropriately monitored the Company’s system of internal control. The Company’s monitoring of management’s assessment of internal control over financial reporting did not result in appropriate actions taken by management to remedy the deficiencies in the process to assess internal control over financial reporting. The Company has no independent audit committee overseeing the financial reporting process.
Failure to Segregate Duties
. Management has not maintained any segregation of duties within the Company due to its reliance on individuals to fill multiple roles and responsibilities. Our failure to segregate duties has been a material weakness since inception through this annual report.
Sufficiency of Accounting Resources
. The Company has limited accounting personnel to prepare its financial statements. The insufficiency of our accounting resources has been a material weakness since inception.
As a result of the material weaknesses in internal control over financial reporting described above, the Company’s management has concluded that, as of July 31, 2019, the Company’s internal control over financial reporting was not effective based on the criteria in Internal Control - Integrated Framework issued by the COSO.
This annual report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. We were not required to have, nor have we, engaged the Company’s independent registered public accounting firm to perform an audit of internal control over financial reporting pursuant to the rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.
Changes in Internal Controls over Financial Reporting
During the period ended July 31, 2019, there have been no changes in internal control over financial reporting that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.
On August 12, 2019, the Company entered into a Securities Purchase Agreement with Power Up Lending Group Ltd. to issue a convertible note in the principal amount of $73,000, with unsecured, interest bearing at 12% per annum and a maturity date of May 30, 2020.
On August 16, 2019, Crown Bridge Partners, LLC converted principal in the amount of $53,000 consisting of $52,500 of principal and $500 of fees plus interest of $5,250 for 4,830,016 shares of common stock on the second 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 second tranche defaulted with a penalty of $17,500.
On September 12, 2019, the Company entered into a Securities Purchase Agreement with BHP Capital NY Inc. and Jefferson Street Capital, LLC, severally and not jointly, to issue convertible notes in the aggregate principal amount of $165,000, each in the principal amount of $82,500, with unsecured, interest bearing at 8% per annum and a maturity date of May 30, 2020.
On September 24, 2019, the Company entered into a Securities Purchase Agreement with Power Up Lending Group Ltd. to issue an additional amount of convertible note in the amount of $55,000, with unsecured, interest bearing at 12% per annum and a maturity date of July 12, 2020.
On October 17, 2019, Crown Bridge Partners, LLC exercised the right to purchase 3,696,973 shares of common stock per Common Stock Warrant that was issued with November 13, 2018 note.
On February 10, 2020, Crown Bridge Partners, LLC exercised the right to purchase 4,109,828 shares of common stock per Common Stock Warrant, adjusted for dilution, that was issued with November 13, 2018 note.
In October 2019, the Company offered and sold 2,000,000 shares of common stock at $0.040 per share for $80,000.
In January 2020, the Company offered and sold 4,200,000 shares of common stock at $0.035 per share for $147,000.
The Company believes the offer and sale of the shares of common stock above were made in reliance upon the exemptions from registration under Section 4(a)(2) and Regulation D Rule 506 of the Securities Act of 1933, as amended (the “Securities Act“). The offers and sales represented private transactions not involving a public offering. As such, the shares may not be offered or sold in the United States unless they are registered under the Securities Act, or an exemption from the registration requirements of the Securities Act is available.
The following table sets forth the names of the Company’s directors, executive officers, and key employees, and their positions with the Company, as of the date of this Annual Report:
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Term of Officers (Directors)
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Michael R. Ward
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63
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President, Chief Executive Officer, Principal Executive Officer, Chief Financial Officer, Principal Accounting Officer Chairman of the Board of Directors,
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August 11, 2016-Present
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Patrick C. Dosser
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36
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Vice President
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January 17, 2017-Present
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John W. Dosser
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37
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Vice President
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January 17, 2017-July 31, 2019
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David J. Cibrian
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55
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Member Board of Directors
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January 17, 2017-May 27, 2019
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Soll Sussman
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68
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Member Board of Directors
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March 8, 2017-Present
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Alejandro Amelio
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49
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Member Board of Directors
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March 8, 2017-Present
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Except as set forth in the brief account of business experience below, none of the events listed in Item 401(f) of Regulation S-K has occurred during the past ten years and that is material to the evaluation of the ability or integrity of any of the Company’s directors, director nominees or executive officers.
Business Experience of Directors and Executive Officers
Michael Ward - CEO, CFO, Director
Mr. Ward has been the President, CEO and a director of Mirage Energy Corporation since August 11, 2016. He has also been the President, CEO, CFO and director of 4 Ward Resources, Inc. since June 2015. In May of 2015, Mr. Ward founded 4Ward Resources, Inc. to develop an international pipeline crossing from Texas into Mexico interconnecting to a proposed natural gas storage reservoir. The proposed reservoir would be the first underground natural gas storage facility in the country of Mexico. 4Ward Resources, Inc. was acquired by Mirage Energy Corporation in January 2017. In February 2017, three additional subsidiaries associated with the pipelines and storage facility were acquired.
From August 2010 until December 2013, Mr. Ward was the President and CEO of Gambit Energy Corporation, formerly Gulfmark Energy Group, Inc., including its subsidiaries Gulfmark Resources, Inc. and Blanco Drilling, Inc. The companies were formed to focus on oil and gas acquisition, exploration, drilling, development, production with the view to sell natural gas, crude oil, and natural gas liquids, primarily from conventional reservoirs within the State of Texas. The Company drilled two Eagleford shale oil horizontal wells.
From May 2007 through July 2010, Mr. Ward was the President and CEO of Bentley Energy Corporation. Bentley Energy Corporation in association with its subsidiaries, Sonterra Energy Corporation and Lone Star Propane, engaged in distribution of propane in Central and South Texas.
From 1997 through December 6, 2006, Mr. Ward served as President and CEO of Tidelands Oil and Gas Corporation, then, a publicly held corporation quoted on the OTC Bulletin Board. Tidelands was involved in production and exploration, drilling, gas processing and pipeline transmission. The company was instrumental in creating an expedited process for a cross border gas transmission pipeline from Eagle Pass, Texas to Piedras Negras, Mexico. This international pipeline crossing process was coordinated between Tidelands, the Texas Railroad Commission, FERC and PEMEX. Additionally, Tidelands began work on a proposed underground natural gas storage project in the Brasil field in Mexico. This originally proposed natural gas storage facility in Mexico is the same project which 4Ward Resources and Mirage Energy are presently advancing through the Mexican energy regulatory authorities.
Mr. Ward has more than 40 years of diversified experience as an oil and gas professional.
Patrick C. Dosser - Vice President
Mr. Patrick Dosser has been a Vice President of 4Ward Resources, located in San Antonio Texas, since August 1, 2015. He continues to contribute his 10 years of expertise in the fields of exploration and production, midstream transmission, and propane services.
After graduating from Southwestern University with his Bachelor’s degree in 2005, Patrick Dosser worked at Tidelands Oil & Gas in IT and Human Resource departments. Mr. Dosser worked on all aspects of installation and maintenance of computers before he was promoted to the liaison between Tidelands, the Texas Railroad Commission and their Mexican Sub-contractors. Tidelands successfully permitted and constructed the first international pipeline between Eagle Pass, Texas and Piedras Negras, Coahuila. Tidelands began work on an underground storage project in the Brasil field in Mexico. Mr. Dosser is regarded as an integral part of the original team.
Starting in 2006, he worked as the Regulatory Compliance Officer at Sonterra Energy Corporation (“Sonterra”), which provides commercial and residential propane service in South Texas. During his time at Sonterra, he supervised the satellite company’s day to day operations, including scheduling all field and office personal. He also handled Sonterra’s public awareness programs, operator qualification programs and reported to all State and Federal agencies.
In 2010, Mr. Dosser began work at Blanco Drilling, Inc. (“Blanco Drilling”), an oil and gas exploration company. He scheduled all drilling crews and managed all drill site preparations. When he became the drilling supervisor, Mr. Dosser permitted and prepared drilling locations while managing the day-to-day activities of drilling personnel and third-party contractors. Mr. Dosser left Blanco Drilling in September 2013.
Mr. Patrick Dosser has not held a directorship in any companies which had a class of securities registered pursuant to section 12 of the U.S. Securities Exchange Act of 1934 (the “Exchange Act”) or subject to the requirements of section 15(d) of the Exchange Act.
John W. Dosser - Vice President
Mr. John Dosser has over 10 years of experience in the oil and gas sector of the energy industry. He has worked in all facets of the trade including upstream exploration and production, pipeline transport systems, and downstream propane delivery companies.
After graduating from Southwestern University with a Business Degree in 2005, Mr. Dosser became a Marketing Associate for Tidelands Oil & Gas Corporation. The Company had operations across North America with its corporate headquarters in San Antonio. Mr. Dosser worked on many pipeline projects including international crossings into Mexico. He was part of the original team pursuing the Burgos Hub project while working for Tidelands.
In December 2006, he was offered the Director of Marketing position at Bentley Energy Corporation (“Bentley”), an upstart energy company where he successfully developed the company’s identity through designing and implementation. Bentley wholly owned two (2) propane subsidiary companies that serviced customers throughout Central and South Texas. Mr. Dosser was responsible for maintaining propane inventory levels, purchasing inventory, and all marketing activity and promotions.
In July 2010, Mr. Dosser took a Marketing and Operations position at Gambit Energy, Inc., an oil and gas exploration company which drilled oil wells in South Texas in the Eagle Ford shale. He was responsible for building the company’s identity through branding as well as business development and mineral rights acquisitions.
Mr. John Dosser has not held a directorship in any companies which had a class of securities registered pursuant to section 12 of the U.S. Securities Exchange Act of 1934 (the “Exchange Act”) or subject to the requirements of section 15(d) of the Exchange Act.
Mr. Dosser resigned as Vice-President on July 31, 2019.
David J. Cibrian - Director
Mr. Cibrian has been a Managing Director with Brevet Capital, a New York City-based hedge fund (www.brevetcapital.com). He has served in a variety of roles during his career - lawyer, accountant, corporate executive and investment banker. David was formerly a CPA with Ernst & Young, Los Angeles and was a practicing international and corporate attorney for 25 years. Mr. Cibrian was also President of an energy efficiency technology company.
In addition to his work with Brevet, Mr. Cibrian has been on the Board of Onko Solutions, LLC, a medical device start-up company located in Austin, Texas, and has served as a Senior Advisor to Civitas Capital Group - Dallas, Texas. He has appeared on FOX Business Network
and been quoted in international business and legal media including The Wall Street Journal, Investor’s Business Daily, Newsweek and Mexico’s EI Financiero. Mr. Cibrian is a former member of the Texas Finance Commission and the Texas Credit Union Commission having been appointed by then Texas Governor Rick Perry.
The Company believes that Mr. Cibrian’s business experience and skill in business, both domestically and in Mexico, qualifies him as a valuable member of our Board of Directors.
Mr. Cibrian resigned as member of the board of directors on May 27, 2019.
Soll Sussman - Member Board of Directors
2012-Present
During the last five years, Mr. Sussman has been Managing Director of S Cubed Studio, an Austin based consulting firm which he founded after his retirement from the Texas General Land Office in 2012. S Cubed is a consulting firm that specializes in developing U.S and Mexico cross-border relationships and partnerships related to the oil and gas industry.
Additionally, between 2011 and 2015 Mr. Sussman was a consultant for the Border Environment Cooperation Commission. During this period, he assisted with the coordination of the annual U.S.-Mexico Border Energy Forum.
Prior to founding S Cubed Studio, he was employed for 21 years with the Texas General Land Office, a state government agency, working with a variety of energy marketing, renewable energy, alternative fuels and border energy programs.
Prior to 1991, Mr. Sussman worked outside the United States as an international news correspondent for The Associated Press (AP). His last post was as A.P. bureau chief for Canada, based in Toronto. He spent five years based in Mexico City as A.P. news editor for Mexico and Central America. His domestic assignments for The Associated Press included Dallas, Austin, Washington and New York.
Mr. Sussman holds a Master’s Degree from the University of Texas’ Institute of Latin American Studies and is a graduate of Johns Hopkins University in Baltimore, Maryland. He also continues to work as a writer, contributing freelance articles on business and cultural topics to a variety of weekly and monthly publications.
The Company believes that Mr. Sussman’s business experience and skill in the energy business, both domestically and in Mexico, qualifies him as a valuable member of our Board of Directors.
- Member Board of Directors
2003-Present
Mr. Amelio founded Technology Marketing Concepts (TMC) in 2003. TMC is an oil and gas industry sales, marketing and consulting firm focused on promoting financial and technical products cross-border between the U.S. and Mexico. In addition to owning and operating TMC, he is also an Operating Partner of PROM/TEC S.A. de C.V., a Mexico City-based company dedicated to marketing, promotion and sale of liquid custody transfer equipment and services focused primarily in the midstream and downstream energy sector.
The partnership with PROM/TEC S.A. de C.V. enhances Mr. Amelio’s cross-border effectiveness. Some of his current clients include PEMEX Logística, PEMEX Tranformación Industrial (previously PEMEX Refinación, PGPB and Petroquímica), Aeropuertos y Servicios Auxiliares (ASA), CFE, Celanese, BASF, Foster Wheeler, Grupo Avanzia, and ICA-Fluor Daniel, Grupo México.
Throughout his career, Mr. Amelio has built high level relations with PEMEX and other government regulating entities enabling him to participate at the forefront of Mexico’s Energy Reform initiatives. His current work includes large scale projects related to the midstream energy sector, as well as working foreign companies interested in investing and participating in the opportunities created by Mexico’s constitutional energy sector transformation.
Mr. Amelio’s business background has been substantially strengthened as a result of his bicultural business development and marketing experience which includes no less than 10 years of living and working in both the U.S. and Mexico.
Mr. Amelio holds a B.A. Degree in Marketing from Southern Methodist University, Dallas, Texas. He began his career in the oil and gas industry as an Associate at PTUSA Corporation, a Texas-based specialist in marketing and sales of heavy equipment for the oil and gas industry heavily focused on the Mexico market. Following his employment with PTUSA, he became an employee with several highly respected Hispanic Advertising Agencies, including Ornelas & Associates and Lopez Negrete Communications, where he worked as Copywriter, Broadcast Director and Account Executive. As an Account Director, he managed firm account clients such as Walmart, Budweiser, PepsiCo, and Cervecería Moctezuma.
The Company believes that Mr. Amelio’s oil and gas business experience in the energy marketing business, both domestically and in Mexico, qualifies him as a valuable member of our Board of Directors.
(c)
Identification of certain significant employees
. The Company currently does not have any significant employees, other than Michael Ward.
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From May 2007 through July 2010, Mr. Ward was the President and CEO of Bentley Energy Corporation (“Bentley”). Bentley engaged in distribution of propane in Central and South Texas. Bentley owned and operated various propane distribution companies. Bentley voluntarily filed for reorganization under Chapter 11 of the federal bankruptcy laws. The case was filed in the U.S. Bankruptcy Court, Western District of Texas on January 7, 2010. The court accepted the Company’s reorganization plan on, or about July 21, 2010 resulting in the Company’s sale to J.P. Energy Holdings, LLC. The Bentley bankruptcy petition was necessary in order to provide protection and continuity for its propane delivery to more than 8,000 customers. Bentley financed it business with a bank line of credit. Bentley had planned the line of credit would be converted to a 10-year term loan with a 5-year balloon at maturity one year later. At loan maturity, the bank only offered Bentley a straight 3-year loan term. Bentley’s propane business revenue was subject to seasonal fluctuations because it sold the majority of its propane in the winter months. Seasonal revenue fluctuations made it impossible for Bentley to meet bank payment obligations on a three-year term loan. Additionally, Bentley’s propane suppliers tightened credit and payment terms. This credit squeeze from the bank and suppliers coupled with the unprecedented financial crisis of 2008/2009 precipitated the bankruptcy. While under bankruptcy protection, Mr. Ward was able to sell the business, which operates today under a different name.
Mr. Michael Ward, CEO and a member of the Board of Directors of the Company, owns 165,862,562 shares of our common stock which represents 41% of the total shares issued and outstanding. Additionally, Mr. Ward owns 10,000,000 Series A preferred shares which are convertible into 200,000,000 common shares. Therefore, Mr. Ward is the Company’s controlling shareholder. Except as disclosed above in paragraph (f), Mr. Ward has not been a party to any legal proceedings at any time during the past ten (10) years.
Company shareholders who wish to communicate with the Board of Directors or an individual director may write to Mirage Energy Corporation’s offices located at 900 Isom Rd., Ste. 306, San Antonio, TX 78216. Your letter should indicate that you are a shareholder and whether you own your shares in street name. Letters received will be retained until the next Board meeting when they will be available to the addressed director. Such communications may receive an initial evaluation to determine, based on the substance and nature of the communication, a suitable process for internal distribution, review and response or other appropriate treatment. There is no assurance that all communications will receive a response.
We are a reporting company and file reports with the Securities and Exchange Commission (SEC), including this Form 10-K as well as other reports on Form 8-K and quarterly reports on Form 10-Q. The public may read and copy any materials filed with the SEC at the SEC’s Public Reference Room at 100 F St., NE., Washington, D.C. 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. The Company files its reports electronically and the SEC maintains an Internet site that contains reports, proxy and information statements and other information filed by the company with the SEC electronically. The address of that site is http://www.sec.gov.
Our policy was established to guard against any potential conflicts of interest. As the Company grows it will be the job of the audit committee to decide if additional controls need to be put in place.
On November 13, 2017, the Board of Directors adopted the Company’s Code of Ethical Conduct.
We presently have no formal independent Board committees. Until further determination, the full Board of Directors will undertake the duties of the audit committee, compensation committee and nominating and governance committee. The members of the Board of Directors performing these functions as of July 31, 2019 are Michael R. Ward, Soll Sussman and Alejandro Amelio.
The Board of Directors, in its Compensation Committee role, will be responsible for recommendations to the Board of Directors respecting the compensation of our named executive officers.
The Board of Directors, in its Audit Committee role, will be responsible for selecting the Company’s independent auditors, approve the scope of audit and related fees, and review financial reports, audit results, internal accounting procedures, related-party transactions, when appropriate, and programs to comply with applicable requirements relating to financial accountability. The Audit Committees function will include the development of policies and procedures for compliance by the Company and its officers and directors with applicable laws and regulations. The audit committee has reviewed and discussed the attached audited financial statements with management. The audit committee has received written disclosures from the independent accountant required by Independence Standard Board Standard No. 1, as amended, as adopted by the PCAOB in Rule 3600T and has discussed the independence of the company’s certifying accountant. Based on this review and discussion, the Board of Directors, in its audit committee role, recommended that the audited financial statements be included in this Annual Report.
The Board of Directors, in its Nomination and Governance Committee role, will be responsible for recommendations to the Board of Directors respecting corporate governance principles; prospective nominees for Director; Board member performance and composition; function, composition and performance of Board committees; succession planning; Director and Officer liability insurance coverage; and Director’s responsibilities.
Nevada Law provides that each existing or former director and officer of a corporation may be indemnified in certain instances against certain liabilities which he or she may incur, inclusive of fees, costs and other expenses incurred in connection with such defense, by virtue of his or her relationship with the corporation or with another entity to the extent that such latter relationship shall have been undertaken at the request of the corporation; and may have advanced such expenses incurred in defending against such liabilities upon undertaking to repay the same in the event an ultimate determination is made denying entitlement to indemnification. The Company’s bylaws incorporate the statutory form of indemnification by specific reference.
Insofar as indemnification for liabilities may be invoked to disclaim liability for damages arising under the Securities Act of 1933, as amended, or the Securities Act of 1934 (collectively, the “Acts”), as amended, it is the position of the Securities and Exchange Commission that such indemnification is against public policy as expressed in the Acts and are therefore, unenforceable.
On September 1, 2016, the Company filed a Form 8-A registration statement registering its common stock under Section 12(g) of the Securities Exchange Act of 1934, as amended. Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors and executive officers and beneficial holders of more than 10% of our common stock to file with the Commission initial reports of ownership and reports of changes in ownership of our equity securities. To the Company’s knowledge there were no reportable events under Section 16(b).
