MRGE Mirage Energy Corporation (CE)

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

Forward-Looking Statements

Except for historical information, this report contains certain forward-looking statements. Such forward-looking statements involve risks and uncertainties, including, among other things, statements regarding our business strategy, future revenues and anticipated costs and expenses. Such forward-looking statements include, among others, those statements including the words “expects,” “anticipates,” “intends,” “believes” and similar language. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed herein as well as in the “Current Business” and “Risk Factors” sections in our 10-K for the year ended July 31, 2020, as filed on November 19, 2020. You should carefully review the risks described in our documents we file from time to time with the Securities and Exchange Commission (“SEC”). You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report. We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this document.

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

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

Corporate Overview

Company’s Plans

The Company has proposed to develop an integrated natural gas pipeline system in Texas and Mexico. The purpose of these pipelines will transport and store natural gas in an underground natural gas storage facility, which the Company proposes to permit and develop in northern Mexico. The Company has completed the design and engineering work which was presented to the representatives of various Mexican regulatory agencies.

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

The Projects which will be initially developed include:

BBI has completed its Due Diligence activities prior to a Final Closing.

Discussion and Analysis of Financial Condition and Results of Operations

Revenues

Three month period ended January 31, 2021

For the three (3) month period ended January 31, 2021, we generated no revenue and incurred a net loss of $884,656.

Our net loss of $884,656 for the three (3) month period ended January 31, 2021 was the result of operating expenses of $288,537, interest expense of $21,049, fair market value interest expense of $436,820 and penalty on convertible debt of $138,250. Our operating expenses consisted of $281,117 in general and administrative expenses and $7,420 in professional fees.

Three month period ended January 31, 2020

For the three (3) month period ended January 31, 2020, we generated no revenue and incurred a net loss of $767,039.

Our net loss of $767,039 for the three (3) month period ended January 31, 2020 was the result of operating expenses of $238,538 and other expense (comprised of interest expense and change in fair value of convertible debt) of $528,501. Our operating expenses consisted of $222,983 in general and administrative expenses, and $15,555 in professional fees.

Costs and Expenses

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

Three month period ended January 31, 2021 and 2020

For the three (3) months ended January 31, 2021, we had $281,117 in general and administrative expenses compared to $222,983 in general and administrative expenses for the three (3) months ended January 31, 2020. The $58,134 increase in general and administrative expenses was primarily the result of an increase in directors fees, an increase in financing fees, an increase in payroll tax, an increase in telephone expenses and a decrease in travel and entertainment expenses during the three (3) months ended January 31, 2021.

The professional fees for the three (3) months ending January 31, 2021 and January 31, 2020 were $7,420 and $15,555, respectively. The $8,135 decrease was primarily related to decrease in legal fees.

The executive compensation for the three (3) months ending January 31, 2021 and January 31, 2020 was $92,000 and $92,000, respectively. No change was due to the same executives employed at the same compensation during both periods.

Six month period ended January 31, 2021 and 2020

For the six (6) months ended January 31, 2021, we had $809,533 in general and administrative expenses compared to $485,958 in general and administrative expenses for the six (6) months ended January 31, 2020. The $323,575 increase in general and administrative expenses was primarily the result of spending increase in consulting, an increase in directors fees, a decrease in travel and entertainment, an decrease in financing fees, an increase in public relations and an increase in telephone expenses during the six (6) months ended January 31, 2021.

The professional fees for the six (6) months ending January 31, 2021 and January 31, 2020 were $20,570 and $55,846, respectively. The $35,276 decrease was primarily related to a spending decrease for audit fees, a decrease in legal fees and a decrease in transfer agent fees.

The executive compensation for the six (6) months ending January 31, 2021 and January 31, 2020 was $184,000 and $184,000 respectively. No change was due to the same executives employed at the same compensation during both periods.

Liquidity and Capital Resources

Cash Flows

Operating Activities

For the six (6) month period ended January 31, 2021, net cash used in operating activities was $416,266. The negative cash flow for the six (6) months ended January 31, 2021 related to our net loss of $1,725,927, a decrease in prepaid expenses of $14,105, an increase of $8,945 in expenses paid by shareholder, an increase of $138,250 in convertible debt due to default, an increase of $354,637 in issuance of stock for services and fees, adjusted for $13,500 in financing fees, adjusted for depreciation of $791, a change of $729,083 in convertible debt due to fair market value, an increase of $78,999 in accounts payable, an increase of $5,867 accrued expenses and a decrease of $6,306 in accrued salaries and payroll taxes – related parties.

For the six (6) month period ended January 31, 2020, net cash used in operating activities was $474,340. The negative cash flow for the six (6) months ended January 31, 2020 related to our net loss of $1,194,196, a decrease in prepaid expenses of $107, an increase of expenses paid by shareholder of $16,611, adjusted for $34,298 in financing fees, adjusted for depreciation of $791, a change of $609,347 in convertible debt due to fair market value, an increase of $110,657 in accounts payable, an increase of $5,250 in accrued expenses and a decrease of $56,991 in accrued salaries and payroll taxes - related parties.

Investing Activities

For the six (6) months ended January 31, 2021 net cash used in investing activities was nil.

For the six (6) months ended January 31, 2020 net cash used in investing activities was nil.

Financing Activities

For the six (6) months ended January 31, 2021, net cash provided by financing activities was $308,055. The positive cash flow from financing activities for such period was comprised of proceeds from convertible debentures.

For the six (6) months ended January 31, 2020, net cash provided from financing activities was $507,889. The positive cash flow from financing activities for such period was comprised of proceeds from sale of common stock, proceeds from loan by related party and proceeds from convertible debentures.

Liquidity

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

As of January 31, 2021, Mirage Energy Corporation had $58,730 in cash on hand and prepaid expenses of $23,664. Since Mirage Energy Corporation was unable to reasonably project its future revenue, it must presume that it will not generate any revenue during the next twelve (12) to twenty-four (24) months. We therefore will need to obtain additional debt or equity funding in the next two (2) – three (3) months, but there can be no assurances that such funding will be available to us in sufficient amounts or on reasonable terms.

The Company’s audited financial statements for the year ended July 31, 2020 contain a “going concern” qualification. As discussed in Note 3 of the Notes to Financial Statements, the Company has incurred losses and has not demonstrated the ability to generate cash flows from operations to satisfy its liabilities and sustain operations. Because of these conditions, our independent auditors have raised substantial doubt about our ability to continue as a going concern.

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

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

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

For the year ended July 31, 2020, the Company has funded operations with loan from related party of $10,100, debt of $297,500 from convertible notes, proceeds from sale of $719,000 in common stock, while making loan repayments of $39,742 to related party. The Company plans to raise additional funds through various sources to support ongoing operations during 2020 and 2021.

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