UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

For the fiscal year ended July 31, 20202021

For the transition period from __________ to __________.

Commission File Number: 000-55690

900 Isom Rd., Ste. 306, San Antonio, TX 78216

(Address of Principal Executive Offices) (Zip Code)

Registrant’s Telephone Number, including Area Code:

(210) 858-3970

Securities Registered Pursuant of Section 12(b) of the Act:

None

Securities Registered Pursuant of Section 12(g) of the Act:

Common Stock, par value $0.001

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐     No ☒

Indicate by check mark of the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐     No ☒

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 the past 90 days. Yes ☒    No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒     No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange:

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐     No ☒

As of November 16, 2020,January 17, 2022, there were 470,776,740496,711,769 shares of the Company’s common stock, $0.001 par value, issued and outstanding.

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter 20202021 was $19,858,202.$74,905,415.

MIRAGE ENERGY CORPORATION

FORM 10-K

July 31, 20202021

TABLE OF CONTENTS

PART I

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K (“Annual Report”) contains forward looking statements that involve risks and uncertainties, principally in the sections entitled “Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” All statements other than statements of historical fact contained in this Annual Report, including statements regarding future events, our future financial performance, business strategy, and plans and objectives of management for future operations, are forward-looking statements. We have attempted to identify forward-looking statements by terminology including “anticipates,” “believes,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “should,” or “will” or the negative of these terms or other comparable terminology. Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks outlined under “Risk Factors” or elsewhere in this Report, which may cause our or our industry’s actual results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. New risks emerge from time to time and it is not possible for us to predict all risk factors, nor can we address the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause our actual results to differ materially from those contained in any forward-looking statements.

We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short term and long termlong-term business operations, and financial needs. These forward-looking statements are subject to certain risks and uncertainties that could cause our actual results to differ materially from those reflected in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this Report, and in particular, the risks discussed below and under the heading “Risk Factors” and those discussed in other documents we file with the Securities and Exchange Commission that are incorporated into this Report by reference. The following discussion should be read in conjunction with the consolidated financial statements and notes included herewith. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statement.

You should not place undue reliance on any forward-looking statement, each of which applies only as of the date of this Report. You should be aware that the occurrence of the events described in the section entitled “Risk Factors” and elsewhere in this Report could negatively affect our business, operating results, financial condition and stock price. Except as required by law, we undertake no obligation to update or revise publicly any of the forward-looking statements after the date of this Annual Report to conform our statements to actual results or changed expectations.

ITEM 1. Business

Mirage Energy Corporation (the “Company”) was incorporated in the State of Nevada on May 6, 2014, as Bridgewater Platforms, Inc. On November 7, 2016, the Company filed Articles of Merger with the Nevada Secretary of State whereby it entered into a statutory merger with its wholly owned subsidiary, Mirage Energy Corporation, pursuant to Nevada Revised Statutes. The effect of the merger was that the Company is the surviving entity and changed its name to “Mirage Energy Corporation”.

On January 24, 2017, the Company entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with Michael R. Ward, the sole director of the Company, whereby on the same date the Company issued 10,000,000 shares of its Common Stock and 10,000,000 shares of Series A Preferred Stock in exchange for 100% of the issued and outstanding equity interests of 4Ward Resources. The acquisition was completed on January 24, 2017.

The purpose of acquiring 4Ward Resources was for the Company to enter into the natural gas sale, pipeline, and storage business. The Company intends to develop an integrated pipeline and natural gas storage facility in Mexico and the United States.

The Company is in the process of preparing to obtain the necessary permits in Mexico and the United States.

Mirage, through its wholly owned subsidiaries, intends to develop an integrated pipeline and natural gas storage facility in Mexico and the United States. Since 2019, Mirage has been working to address the two main impediments affecting private sector companies attempting to enter the Mexico gas market. Presently, Mirage acknowledges a lack of private sector cross-border pipeline access to the Mexico gas markets and a national shortage of Mexico-based natural gas storage facilities and capacity.

Mirage is proposing to develop the Concho-Progreso Pipeline connecting South Texas and Mexico via it proposed Progreso International crossing under the Rio Grande River. All of the pipelines are being revised upward from 36 to 42 inch diameter pipe. The total length of the Concho-Progreso pipeline is estimated to be 250 miles.

This proposed pipeline includes the following components:

(a) a 7.1 mile 42” bi-directional U.S. pipeline termed the Concho Connector which proposes to tie into the Banquete and Agua Dulce headers;

(b) a 39.1 mile 42” bi-directional U.S. pipeline known as the Concho Extension linking the Concho Connector and its tie-ins to the Company’s Concho line;

(c) a 93.9 mile 42” bi-directional U.S. pipeline known as the Concho Line connecting the Company’s proposed international crossing at Progreso to Transcos’ South Texas mainline near Falfurrias, Texas;

(d) a proposed international crossing termed the Progreso Crossing between Texas and Mexico beneath the Rio Grande River near Progreso, Texas in Hidalgo County to connect to the Concho and Progreso lines;

(e) a 36 mile 42” bi-directional Mexico pipeline termed the Progreso Line connecting to the Company’s proposed Progreso international crossing to Station 19 on Sistrangas; and

(f) a 67 mile 42” bi-directional Mexico pipeline termed the Progreso Extension connecting the Progreso Line to the Los Ramones interconnect on Sistrangas.

MEXICO UNDER GROUND NATURAL GAS STORAGE:

In addition to the proposed pipelines and international crossing, the Company proposes to develop the Campo Brasil natural gas storage reservoir. Presently, the Campo Brasil is a depleted natural gas reservoir field. Mirage nominated this field in the inaugural tender for Mexico’s strategic reserve on July 25, 2018. This field is located approximately 14 miles from the proposed Progreso Line. This field was not selected by Cenegas during the first selection process. Cenegas has indicated that Mexico intends to develop natural gas storage in the North, Central and Southern regions of Mexico. The Company believes that the Brasil field is the most suitable candidate for development in Northern Mexico.

Mirage believes that the proposed Brasil Storage reservoir will give Mexico the ability to (1) balance peak loads by consumers, (2) implement price arbitrage on natural gas, (3) enable Mexico to create a Mexican natural gas hub for gas pricing thereby giving Mexico an alternative natural gas supply rather than limiting its choice to the natural gas spot market. The Company believes that the planned natural gas storage facility, when fully developed, will give Mexico a secure natural gas supply for approximately one year in the event all gas supplies were shut off from outside sources. We anticipate that the reservoir will have a capacity to store approximately 786 BCF (Billion Cubic Feet) of natural gas.

INTERNATIONAL PIPELINE CROSSING:

PROGRESO CROSSING: The planned Progresso crossing will be subject to a Presidential Permit for boring underneath the Rio Grande River. An approximate 46” bore hole under the river will provide the channel through which the 42” pipe will be pulled. The proposed ownership on US side of river will be held by WPF TRANSMISSION, INC. and on the MEXICO side of the river will be held by WPF MEXICO PIPELINES S. de R.L. de C.V.

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.

During 2017, the Company decided to focus all of its efforts on its planned gas pipeline and storage enterprises and therefore sold its subsidiary, Bridgewater Construction, Ltd., to Emanuel Oliveira in exchange for the satisfaction of a debt obligation owed to Mr. Oliveira. The effective date of the transaction was February 1, 2017.

Current Update

In addition to Mirage’s proposed pipeline and storage projects (the “Projects”), the company is evaluating several other oil and gas opportunities in Southern Mexico which would synergistically integrate with our proposed Projects in Mexico.

Competition

Proposed Pipeline Operations

Our proposed pipelines face competition from a number of sources, including major oil companies and other common carrier pipelines. Generally, pipelines are the lowest-cost method for long-haul commodity movements. Therefore, the most significant competitors for large volume shipments are other pipelines.

Competition among pipelines is based primarily on access to commodity supply, market demand, and transportation charges offered for commodity movements. In addition, in areas where additional infrastructure is needed to accommodate production needs, we will compete with other pipeline providers to offer the necessary transportation services to meet market demand.

In addition to competition from other pipelines, we face competition from trucks and rail that deliver products in a number of areas that we propose to serve. While their costs may not be competitive for longer hauls or large volume shipments, these sources of transportation compete effectively for incremental and marginal volume in many areas where such means of transportation are prevalent.

U.S. GOVERNMENT REGULATION

Safety Regulation

Our planned U.S. pipelines will be subject to United States Department of Transportation (“DOT”) regulations and to regulations under comparable state statutes relating to the design, installation, testing, construction, operation, replacement and management of pipeline facilities.

DOT regulations require operators of hazardous liquid interstate pipelines to develop and follow a program to assess the integrity of all pipeline segments that could affect designated “high consequence areas,” including:including high population areas, drinking water and ecological resource areas that are unusually sensitive to environmental damage from a pipeline release, and commercially navigable waterways. We have prepared our own written Integrity Management Program, identified the line segments that could impact high consequence areas, and completed a full assessment of these segments as prescribed by the regulations.

Environmental Regulation

General

Our planned operations will be subject to complex federal, state, and local laws and regulations relating to the protection of health and the environment, including laws and regulations which govern the handling and release of hydrocarbon materials, some of which are discussed below. Violations of environmental laws or regulations can result in the imposition of significant administrative, civil and criminal fines and penalties and, in some instances, injunctions banning or delaying certain activities.

There are will also be risks of accidental hydrocarbon releases into the environment associated with our planned future operations, such as potential releases of hazardous substances from our planned pipelines or storage facility. To the extent an event werewas not covered by insurance policies, such accidental releases could subject us to substantial liabilities arising from emergency response, environmental cleanup and restoration costs, claims made by neighboring landowners and other third parties for personal injury and property damage, and fines or penalties for any related violations of environmental laws or regulations.

Rate Regulation

General Interstate Regulation

Interstate common carrier pipeline operations are subject to rate regulation by the Federal Energy Regulatory Commission (FERC) under the Interstate Commerce Act, the Energy Policy Act of 1992, and related rules and orders. The Interstate Commerce Act requires that tariff rates for petroleum pipelines be “just and reasonable” and not unduly discriminatory.

Intrastate Regulation

Some of our planned pipeline operations will be subject to regulation by the Railroad Commission of Texas (“Texas RRC”). The applicable state statute will require that our planned pipeline rates be nondiscriminatorynon-discriminatory and provide no more than a fair return on the aggregate value of the pipeline property used to render services. State commissions generally have not initiated an investigation of rates or practices of petroleum pipelines in the absence of shipper complaints. Complaints to state agencies have been infrequent and are usually resolved informally. Although management cannot be certain that our intrastate rates ultimately would be upheld if challenged, we believe that, given this history, the tariffs now in effect are not likely to be challenged or, if challenged, are not likely to be ordered to be reduced.

MEXICO GOVERNMENT REGULATION

In 2013 Mexico commenced its initiative on energy reform. A new legal regulatory framework was instituted by amending Mexico’s Federal Constitution. Mexico’s underlying regulatory laws and administrative regulations continue to be developed in regard to the oil and gas industry. The public policy behind this energy reform is to increase Mexico’s oil and gas production through exploration and extraction contracts, as well as by increasing midstream and downstream infrastructure.

Prior to this reform, all of Mexico’s hydrocarbon activities were reserved to the state-owned company PEMEX. This reform will now permit private companies to participate in the exploration and extraction of gas resources through bidding procedures. All underground hydrocarbons remain the property of Mexico. There is no private ownership of hydrocarbons in Mexico.

Mexico’s domestic production of natural gas does not meet the national demand. Mexico must import additional natural gas to meets its growing national demand.

Mirage has proposed to focus its core business development of the midstream infrastructure with its proposed pipelines and storage facility.

Hydrocarbon Regulation

In Mexico, four regulatory bodies are responsible for regulation of hydrocarbon activities. These are (1) the Energy Ministry (SENER), (2) the National Hydrocarbon Commission (CNH), (3) the Energy Regulatory Commission (CRE), and (4) the National Agency of Industrial Safety and Environmental Protection of the Hydrocarbons Sector (ASEA).

Natural Gas Regulation

Natural gas activities are supervised and regulated by the CRE and the National Center for Natural Gas Control (CENAGAS). The CRE is the regulatory governmental body that issues permits related to gas activities. Additionally, the CRE supervises and oversees compliance with applicable laws, regulations and official Mexican standards, which includes, but is not limited to tariffs, pipelines and storage operations. CENAGAS was established to manage, administer and operate the National Natural Gas Transportation and Storage System with the view to ensure continuity and safety in natural gas activities throughout Mexico. ASEA supervises the health, safety and environmental protection of all natural gas activities throughout Mexico.

Lease, License, Concession Term

According to the hydrocarbon legal framework rights to oil and gas depend on the particular contractual plan applicable to the particular activities. We expect that our proposed natural gas storage field, if permitted, would be subject to a license contract.

Taxes and Fees

Taxes and fees payable to Mexico will be governed by the license contract.

Liability

The license contract will provide for performing all environmental obligations, commitments and conditions as may be required by applicable law, best industry practices and environmental permits. The contractor will be responsible for all environmental damage.

Restrictions

License contracts may contain restrictions concerning the creation of liens or other ownership encumbrances arising from contracts or materials, the selling or assigning, transferring, conveying or otherwise disposing of any rights or participation interests or other contractual obligations. There may also be restrictions on changes in control of the contracting entity. In many cases, the prior written consent of the CNH may be required.

Title to Properties

None.

Employees

During 2020,2021, the Company had five employees comprised of its two named executive officers, one administrative and two accounting employees.

Access to Company Reports

We file periodic reports, information statements and other information with the SEC in accordance with the requirements of the Securities Exchange Act of 1934, as amended. We link our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to such reports free of charge through our corporate website at www.mirageenergycorp.com to the SEC’s EDGAR repository. Within the time period required by the SEC, we will post on our website, any modifications to the code of ethics for our CEO and senior financial officers and any waivers applicable to senior officers as defined in the applicable code, as required by the Sarbanes-Oxley Act of 2002. You may also read and copy any document we file with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. One may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, our reports and information statements, and our other filings are also available to the public over the Internet at the SEC’s website at www.sec.gov. Unless specifically incorporated by reference in this Annual Report on Form 10-K, information that you may find on our website is not part of this report.

ITEM 1A. Risk Factors

YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS AND ALL OTHER INFORMATION CONTAINED IN THIS ANNUAL REPORT BEFORE PURCHASING OR INVESTING IN THE COMPANY. INVESTING IN OUR CAPITAL STOCK INVOLVES A HIGH DEGREE OF RISK. IF ANY OF THE FOLLOWING EVENTS OR OUTCOMES ACTUALLY OCCURS, OUR BUSINESS OPERATING RESULTS AND FINANCIAL CONDITION WOULD LIKELY SUFFER. AS A RESULT, THE TRADING PRICE OF OUR CAPITAL STOCK COULD DECLINE, AND YOU MAY LOSE ALL OR PART OF THE MONEY YOU PAID TO PURCHASE OUR CAPITAL STOCK.

Risks Related to Operating our Planned Business

Our planned business is dependent on the supply of and demand for the commodity that we plan to handle.

Our planned pipelines and other planned assets and facilities depend in part on continued production of natural gas in the geographic areas that they are expected to serve. Our business also depends in part on the level of demand for natural gas in the geographic areas to which our planned pipelines are expected to service, and the ability and willingness other parties to supply such demand.

Implementation of new regulations or changes to existing regulations affecting the energy industry could reduce production of and/or demand for natural gas, increase our costs and have a material adverse effect on our results of operations and financial condition. We cannot predict the impact of future economic conditions, fuel conservation measures, alternative fuel requirements, governmental regulation or technological advances in fuel economy and energy generation devices, all of which could reduce the production of and/or demand for natural gas.

We are subject to startupstart-up company risks.

The Company has a limited operating history and has primarily engaged in operations relating to the development of its proposed natural gas pipeline and storage facility plans. We are subject to many of the risks common to such enterprises, including the ability of the Company to implement its business plan, market acceptance of its proposed business, under-capitalization, cash shortages, limitations with respect to personnel, financing and other resources, and uncertainty of the Company’s ability to generate revenues. There can be no assurance that the Company’s activities will be successful or result in significant revenues or profit for the Company, and the likelihood of the Company’s success must be considered in the light of the stage in its development. The Company believes it has engaged professionals and consultants experienced in the type of business contemplated by the Company; however, there can be no assurance that the predictions, opinions, analyses, or conclusions of such professionals will prove to be accurate. In addition, no assurance can be given that the Company will be able to consummate its business strategy and plans or that financial or other limitations may not force the Company to modify, alter, significantly delay, or significantly impede the implementation of such plans or the Company’s ability to continue operations. If the Company is unable to successfully implement its business strategy and plans, investors may lose their entire investment in the Company.

Potential investors should also be aware of the difficulties normally encountered developing a gas pipeline and storage enterprise. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the inception of the enterprise that we plan to undertake. These potential problems include, but are not limited to, unanticipated problems relating to product development, manufacturing, operations and distribution, and additional costs and expenses that may exceed current estimates.

Financial distress experienced by our future customers or other counterparties could have an adverse impact on us in the event they are unable to pay us for the products or services we provide or otherwise fulfill their obligations to us.

We may be exposed to the risk of loss in the event of nonperformancenon-performance by our future customers or other counterparties. Some of these counterparties may be highly leveraged and subject to their own operating, market and regulatory risks, and some are experiencing, or may experience in the future, severe financial problems that have had or may have a significant impact on their creditworthiness.

Counterparties to any agreements with us may default on their obligations to us or file for bankruptcy protection. If a counterparty files for bankruptcy protection, we likely would be unable to collect all, or even a significant portion, of amounts that they owe to us. Counterparty defaults and bankruptcy filings could have a material adverse effect on our business, financial position, results of operations or cash flows. Furthermore, in the case of financially distressed customers, such events might force such customers to reduce or curtail their future use of our products and services, which could have a material adverse effect on our results of operations, financial condition, and cash flows.

We anticipate significant future capital needs and the availability of future capital is uncertain.

The Company has experienced negative cash flows from operations since its inception. The Company will be required to spend substantial funds to develop its business plans. The Company will need to raise additional capital. The Company’s capital requirements will depend on many factors, primarily relating to the problems, delays, expenses and complications frequently encountered by development stage companies; the progress of the Company’s permitting and development programs; the costs and timing of seeking regulatory approvals of the Company’s planned activities; and changes in economic, regulatory, or competitive conditions or the Company’s planned business. To satisfy its capital requirements, the Company may seek to raise funds in the public or private capital markets. The Company may seek additional funding through corporate collaborations and other financing vehicles. There can be no assurance that any such funding will be available to the Company, or if available, that it will be available on acceptable terms. If adequate funds are not available, the Company may be required to curtail significantly one or more of its planned pipeline and storage facility development programs or it may be required to obtain funds through arrangements with future collaborative partners. If the Company is successful in obtaining additional financing, the terms of the financing may have the effect of diluting or adversely affecting the holdings or the rights of the holders of Common Stock.

There is substantial doubt as to our ability to continue as a going concern.

Our financial results for the fiscal year ending July 31, 20202021 show substantial losses. As of July 31, 2020,2021, the Company had an Accumulated Deficit of $11,906,952.$16,129,612. For the fiscal years ending July 31, 20192020, and July 31, 2020,2021, the Company had losses of $3,213,703$5,354,204 and $5,354,204,$4,222,660, respectively. The accompanying financial statements have been prepared in conformity with the generally accepted accounting principles in the United States of America which contemplates the Company as a going concern. The Company has sought out additional investment to raise additional funds. However, there are no assurances that the Company will continue as a going concern without obtaining additional funding. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Our independent auditors, MaloneBailey, LLP, have expressed substantial doubt about our ability to continue as a going concern given our recurring losses from operations and net stockholder’s deficit. This opinion could materially limit our ability to raise additional funds by issuing new debt or equity securities or otherwise. We may be subject to product liability or breach of contract claims if our products do not work as represented.

Our operating results may be adversely affected by unfavorable economic and market conditions.

Economic conditions worldwide have from time to time contributed to slowdowns in several industries, including the oil and gas industry, resulting in reduced demand and increased price competition for our planned products and services. Volatility in commodity prices or changes in markets for a given commodity might also have a negative impact on many of our future customers, which in turn could have a negative impact on their ability to meet their obligations to us. In addition, decreases in the price of natural gas may have a negative impact on our future operating results and cash flow.

Our ability to begin and complete construction on our planned project may be inhibited by difficulties in obtaining permits and rights-of-way, public opposition, cost overruns, inclement weather and other delays.

A variety of factors outside of our control, such as difficulties in obtaining permits and rights-of-way or other regulatory approvals that can be exacerbated by public opposition to our planned project may cause delays in our ability to begin construction of our planned project. Inclement weather, natural disasters and delays in performance by third-party contractors, may result in increased costs or delays in construction. Significant cost overruns or delays could have a material adverse effect on our return on investment, results of operations and cash flows and could result in cancellation of the planned project or limit our ability to pursue other opportunities.

Additionally, we must obtain and maintain the required permits and rights to construct and operate pipelines on other owners’ land. We may not be able to obtain the required permits or rights at all, or obtaining the required permits and rights may take longer than anticipated, which could cause us to not be able to complete the planned project.

We face competition from other pipelines and other forms of transportation into the area we intend to serve as well as with respect to the supply for our pipeline systems.

Any future pipeline system or other form of transportation that delivers natural gas into the area that our planned pipelines would serve could offer transportation services that are more desirable than those we intend to provide because of price, location, facilities or other factors. We also could experience competition for the supply of natural gas from both existing and proposed pipeline systems.

Commodity transportation and storage activities involve numerous risks that may result in accidents or otherwise adversely affect our operations.

There are a variety of hazards and operating risks inherent to transportation and storage of natural gas and other products, such as leaks, releases, explosions, mechanical problems and damage caused by third parties. These risks could result in serious injury and loss of human life, significant damage to property and natural resources, environmental pollution and impairment of operations, any of which also could result in substantial financial losses. For pipeline and storage assets located near populated areas, including residential areas, commercial business centers, industrial sites and other public gathering areas, the level of damage resulting from these risks may be greater. Incidents that cause an interruption of service, such as when unrelated third-party construction damages a pipeline or a newly completed expansion experiences a weld failure, may negatively impact our revenues and cash flows while the affected asset is temporarily out of service.

Terrorist attacks or “cyber security” events, or the threat of them, may adversely affect our business.

The U.S. government has issued public warnings that indicate that pipelines and other infrastructure assets might be specific targets of terrorist organizations or “cyber security” events. These potential targets might include our planned pipeline or operating systems. A cyber security event could affect our ability to operate or control our facilities or disrupt our operations; also, customer information could be stolen. The occurrence of one of these events could cause a substantial decrease in revenues and cash flows, increased costs to respond or other financial loss, damage to our reputation, increased regulation or litigation or inaccurate information reported from our operations. There is no assurance that adequate cyber sabotage and terrorism insurance will be available at rates we believe are reasonable in the near future. These developments may subject our planned operations to increased risks, as well as increased costs, and, depending on their ultimate magnitude, could have a material adverse effect on our business, results of operations and financial condition.

Hurricanes and other natural disasters could have an adverse effect on our planned business, financial condition and results of operations.

Our planned pipelines and other assets may be located in areas that are susceptible to hurricanes and other natural disasters. These natural disasters could potentially damage or destroy our planned assets and disrupt the supply of the product we expect to transport. Natural disasters can similarly affect the facilities of our potential customers. In either case, losses could exceed our insurance coverage, if any, and our business, financial condition and results of operations could be adversely affected, perhaps materially.

Our planned business requires the retention and recruitment of a skilled workforce, and the loss of such workforce could result in the failure to implement our business plans.

Our planned operations and management require the recruitment and retention of a skilled workforce, including engineers, technical personnel and other professionals. We expect to compete with other companies in the energy industry for this skilled workforce. If we are unable to recruit new employees with the required knowledge and experience, our business could be negatively impacted. In addition, we would experience increased allocated costs to retain and recruit these professionals.

If we are unable to retain our President and Chief Executive Officer, our ability to execute our business strategy, including our growth strategy, may be hindered.

Our success depends in part on the performance of and our ability to retain our President/Chief Executive Officer, Michael Ward. Mr. Ward has been responsible for developing our strategy and executing our plans. If we are not successful in retaining Mr. Ward, or replacing him, our business, financial condition or results of operations will be adversely affected. We do not maintain key personnel insurance.

Risks Related to Regulation

New regulations, rulemaking and oversight, as well as changes in regulations, by regulatory agencies having jurisdiction over our planned operations could adversely impact our earnings, cash flows and operations.

Our planned assets and operations are subject to regulation and oversight by federal, state, and local regulatory authorities. Regulatory actions taken by these agencies have the potential to adversely affect our future profitability. Regulation affects almost every part of our planned business and extends to such matters as (i) the contracts for service we expect to enter into with customers; (ii) the certification and construction of new facilities; (iii) the integrity, safety and security of facilities and operations; (iv) the acquisition, extension, disposition or abandonment of services or facilities; (v) reporting and information posting requirements; (vi) the maintenance of accounts and records; and (vii) relationships with companies involved in various aspects of the natural gas and energy businesses.

Should we fail to comply with any applicable statutes, rules, regulations, and orders of such regulatory authorities, we could be subject to substantial penalties and fines. Furthermore, new laws or regulations sometimes arise from unexpected sources. New laws or regulations, or different interpretations of existing laws or regulations, including unexpected policy changes, applicable to us or our planned assets could have a material adverse impact on our business, financial condition and results of operations.

Environmental, health and safety laws and regulations could expose us to significant costs and liabilities.

Our planned operations are subject to federal, state, and local laws, regulations and potential liabilities arising under or relating to the protection or preservation of the environment, natural resources and human health and safety. Such laws and regulations affect many aspects of our planned operations, and generally require us to obtain and comply with various environmental registrations, licenses, permits, inspections and other approvals. Liability under such laws and regulations may be incurred without regard to fault under CERCLA, the Resource Conservation and Recovery Act, the Federal Clean Water Act or analogous state or other laws for the remediation of contaminated areas. Private parties also may have the right to pursue legal actions to enforce compliance as well as to seek damages for non-compliance with such laws and regulations or for personal injury or property damage. Our insurance may not cover all environmental risks and costs and/or may not provide sufficient coverage in the event an environmental claim is made against us.

Failure to comply with these laws and regulations also may expose us to civil, criminal and administrative fines, penalties and/or interruptions in our operations that could influence our business, financial position, results of operations and prospects.

Further, we cannot ensure that such existing laws and regulations will not be revised or that new laws or regulations will not be adopted or become applicable to us. There can be no assurance as to the amount or timing of future expenditures for environmental compliance or remediation, and actual future expenditures may be different from the amounts we currently anticipate. Revised or additional regulations that result in increased compliance costs or additional operating restrictions, particularly if those costs are not fully recoverable from our customers, could have a material adverse effect on our business, financial position, results of operations and prospects.

Risks Relating to an Investment in our Securities

If we fail to maintain effective internal controls over financial reporting, the price of our common stock may be adversely affected.

We are required to establish and maintain appropriate internal controls over financial reporting. Failure to establish those controls, or any failure of those controls once established, could adversely impact our public disclosures regarding our business, financial condition or results of operations. Any failure of these controls could also prevent us from maintaining accurate accounting records and discovering accounting errors and financial frauds. Rules adopted by the SEC pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 require annual assessment of our internal control over financial reporting. The standards that must be met for management to assess the internal control over financial reporting as effective are complex, and require significant documentation, testing and possible remediation to meet the detailed standards. We may encounter problems or delays in completing activities necessary to make an assessment of our internal control over financial reporting. If we cannot assess our internal control over financial reporting as effective, investor confidence and share value may be negatively impacted.

In addition, management’s assessment of internal controls over financial reporting may identify weaknesses and conditions that need to be addressed in our internal controls over financial reporting or other matters that may raise concerns for investors. Any actual or perceived weaknesses and conditions that need to be addressed in our internal control over financial reporting, disclosure of management’s assessment of our internal controls over financial reporting, or disclosure of our public accounting firm’s attestation to or report on management’s assessment of our internal controls over financial reporting may have an adverse impact on the price of our common stock.

Compliance with changing regulation of corporate governance and public disclosure will result in additional expenses.

Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002 and related SEC regulations, have created uncertainty for public companies and significantly increased the costs and risks associated with accessing the public markets and public reporting. For example, on January 30, 2009, the SEC adopted rules requiring companies to provide their financial statements in interactive data format using the eXtensible Business Reporting Language, or XBRL. We currently have to comply with these rules. Our management team will need to invest significant management time and financial resources to comply with both existing and evolving standards for public companies, which will lead to increased general and administrative expenses and a diversion of management time and attention from revenue generating activities to compliance activities.

Because of the early stage of development and the nature of our business, our securities are considered highly speculative.

Our securities must be considered highly speculative, generally because of the nature of our business and the early stage of its development. We have not generated any revenues, nor have we realized a profit from our planned operations to date and there is little likelihood that we will generate any revenues or realize any profits in the short term. Any profitability in the future from our business will be dependent upon our ability to build our planned pipelines and other related facilities and enter into contracts for the purchase and sale of natural gas. Since we have not generated any revenues, we will have to raise additional monies through the sale of our equity securities or debt in order to continue our business operations.

We may, in the future, issue additional common shares that would reduce investors’ percent of ownership and may dilute our share value.

The future issuance of common shares may result in substantial dilution in the percentage of our common shares held by our then existing stockholders. We may value any common shares issued in the future on an arbitrary basis. The issuance of common shares for future services or acquisitions or other corporate actions may have the effect of diluting the value of the common shares held by our investors and might have an adverse effect on any trading market for our common shares.

Broker-dealers may be discouraged from effecting transactions in our shares because they are considered penny stocks and are subject to the penny stock rules; thereby, potentially limiting the liquidity of our shares.

Rules 15g-1 through 15g-9 promulgated under the Securities Exchange Act of 1934, as amended, impose sales practice and disclosure requirements on NASD broker-dealers who make a market in “penny stocks”. A penny stock generally includes any non-NASDAQ equity security that has a market price of less than $5.00 per share. Our shares are quoted on the OTC PINK. NASD broker-dealers who act as market makers for our shares generally facilitate purchases and sales of our shares. The additional sales practice and disclosure requirements imposed upon broker-dealers may discourage broker-dealers from effecting transactions in our shares, which could severely limit the market liquidity of the shares and impede the sale of our shares in the secondary market.

Under the penny stock regulations, a broker-dealer selling penny stock to anyone other than an established customer or “accredited investor” (generally, an individual with net worth in excess of $1,000,000 or an annual income exceeding $200,000, or $300,000 together with his or her spouse) must make a special suitability determination for the purchaser and must receive the purchaser’s written consent to the transaction prior to sale, unless the broker-dealer or the transaction is otherwise exempt.

In addition, the penny stock regulations require the broker-dealer to deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared by the SEC relating to the penny stock market, unless the broker-dealer or the transaction is otherwise exempt. A broker-dealer is also required to disclose commissions payable to the broker-dealer and the registered representative and current quotations for the securities. Finally, a broker-dealer is required to send monthly statements disclosing recent price information with respect to the penny stock held in a customer’s account and information with respect to the limited market in penny stocks.

Our common stock may experience extreme rises or declines in price, and you may not be able to sell your shares at or above the price paid.

Our Common Stock may be highly volatile and could be subject to extreme fluctuations in response to various factors, many of which are beyond our control, including (but not necessarily limited to): (i) the trading volume of our shares; (ii) the number of securities analysts, market-makers and brokers following our common stock; (iii) changes in, or failure to achieve, financial estimates by securities analysts; (iv) actual or anticipated variations in quarterly operating results; (v) conditions or trends in our business industries; (vi) announcements by us of significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments; (vii) additions or departures of key personnel; (viii) sales of our common stock; and (ix) general stock market price and volume fluctuations of publicly-trading and particularly, microcap companies.

Investors may have difficulty reselling shares of our common stock, either at or above the price they paid for our stock, or even at fair market value. The stock markets often experience significant price and volume changes that are not related to the operating performance of individual companies, and because our common stock is thinly traded it is particularly susceptible to such changes. These broad market changes may cause the market price of our common stock to decline regardless of how well we perform as a company. In addition, there is a history of securities class action litigation following periods of volatility in the market price of a company’s securities. Although there is no such shareholder litigation currently pending or threatened against the Company, such a suit against us could result in the incursion of substantial legal fees, potential liabilities and the diversion of management’s attention and resources from our business. Moreover, and as noted below, our shares are currently traded on the OTC Pink and, further, are subject to the penny stock regulations. Price fluctuations in such shares are particularly volatile and subject to manipulation by market-makers, short-sellers and option traders.

A decline in the price of our common stock could affect our ability to raise further working capital, it may adversely impact our ability to continue operations and we may go out of business.

A prolonged decline in the price of our common stock could result in a reduction in the liquidity of our common stock and a reduction in our ability to raise capital. Because we may attempt to acquire a significant portion of the funds, we need in order to conduct our planned operations through the sale of equity securities, or convertible debt instruments, a decline in the price of our common stock could be detrimental to our liquidity and our operations because the decline may cause investors to not choose to invest in our stock. If we are unable to raise the funds we require for all our planned operations, we may be forced to reallocate funds from other planned uses and may suffer a significant negative effect on our business plan and operations, including our ability to develop new products and continue our current operations. As a result, our business may suffer, and not be successful and we may go out of business. We also might not be able to meet our financial obligations if we cannot raise enough funds through the sale of our common stock and we may be forced to go out of business.

Our officers, directors and principal stockholders can exert significant influence over us and may make decisions which may not be in the best interests of all stockholders.

Our officers, directors and principal stockholders (greater than 5% stockholders) collectively own a majority of our outstanding Common Stock. As a result of such ownership, these stockholders will be able to affect the outcome of, or exert significant influence over, all matters requiring stockholder approval, including the election and removal of directors and any change in control. In particular, this concentration of ownership of our Common Stock could have the effect of delaying or preventing a change of control of us or otherwise discouraging or preventing a potential acquirer from attempting to obtain control of us. This, in turn, could have a negative effect on the market price of our Common Stock. It could also prevent our stockholders from realizing a premium over the market prices for their shares of Common Stock. Moreover, the interests of this concentration of ownership may not always coincide with our interests or the interests of other stockholders, and accordingly, they could cause us to enter into transactions or agreements that we would not otherwise consider.

INTERNATIONAL BUSINESS RISK

International regulation may adversely affect our planned revenues.

We plan to market operate a segment of our business in Mexico. In addition to regulation by the U.S. government, our operations will be subject to environmental and safety regulations in Mexico. Regulations will vary from country to country and will vary from those of the United States. The difference in regulations under U.S. law and the laws of foreign countries may be significant and, in order to comply with the laws of these foreign countries. Any changes in our business practices or plans will require response to the laws of foreign countries and will result in additional expense to the Company and delay our proposed business plans.

Additionally, we may be required to obtain certifications or approvals by foreign governments to market and sell the products. We may also be required to obtain approval from the U.S. government to export the products. If we are delayed in receiving, or are unable to obtain import or export clearances, or if we are unable to comply with foreign regulatory requirements, we will be unable to execute our complete marketing strategy.

CURRENCY FLUCTUATIONS MAY MAKE OUR PRODUCTS UNCOMPETITIVE IN SOME IMPORTANT GEOGRAPHIES.

If the local currency of our products becomes too strong, it may not be possible to sell our products at a profit in regions where significant potential purchasers exist.

ITEM 1B. Unresolved Staff Comments

Not Applicable to Smaller Reporting Companies.

ITEM 2. Properties

Our executive and administrative offices are located at 900 Isom Rd, Suite 306, San Antonio, Texas. These offices consist of a total of 4,051 square feet and are rented by 4Ward Resources for a three (3) year term from July 1, 2019 through June 30, 2022, presently at a cost of $7,244$7,418 per month. The lease rate increases in each succeeding year of the term. We believe that our office spaces are sufficient to meet our present needs and do not anticipate any difficulty securing alternative or additional space, as needed, on terms acceptable to us.

ITEM 3. Legal Proceedings

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

ITEM 4. Mine Safety Disclosures

Not Applicable.

PART II

ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

(a) Market Information. Our common stock is currently quoted on the OTC Markets. Our trading symbol is “MRGE”.

OTC Markets securities are not listed and traded on the floor of an organized national or regional stock exchange. Instead, OTC Market securities transactions are conducted through a telephone and computer network connecting dealers. OTC Market issuers are traditionally smaller companies that do not meet the financial and other listing requirements of a national or regional stock exchange.

The quarterly high and low reported sale prices for our common stock as quoted on the OTC Markets for the periods indicated are as follows:

(b) Holders. The Company has approximately 7384 shareholders of record holding common stock.

(c) Dividends. The Company has not paid any cash dividends to date and has no intention of paying any cash dividends on the Common Stock in the foreseeable future. The declaration and payment of dividends is subject to the discretion of the Company’s Board of Directors and to certain limitations imposed under Nevada law. The timing, amount and form of dividends, if any, will depend upon, among other things, the Company’s results of operations, financial condition, cash requirements, and other factors deemed relevant by the Board of Directors. The Company intends to retain any future earnings for use in its business.

(d) Securities authorized for issuance under equity compensation plans: None.

(e) Recent Sales of unregistered securities: For the periodyear ended July 31, 2020,2021, the Company sold 17,458,3344,091,667 shares of common stock to fifty (50)twelve (12) accredited investors for cash proceeds of $719,000 and stock subscription receivable of $20,000.$415,000.

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.

ITEM 6. Selected Financial Data

Not applicable to small reporting company.

ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of our financial condition and results of operations should be read together with our financial statements audited by MaloneBailey, LLP, our independent registered public accounting firm and the related notes that are included elsewhere in this report. This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under the caption “Risk Factors” or in other parts of this report. See “Cautionary Note Regarding Forward-Looking Statements.”

Forward Looking Statements

Some of the statements contained in this Annual Report that are not historical facts are “forward-looking statements” which can be identified by the use of terminology such as “estimates,” “projects,” “plans,” “believes,” “expects,” “anticipates,” “intends,” or the negative or other variations, or by discussions of strategy that involve risks and uncertainties. We urge you to be cautious of the forward-looking statements, that such statements, which are contained in this Annual Report, reflect our current beliefs with respect to future events and involve known and unknown risks, uncertainties and other factors affecting our operations, market growth, services, products and licenses. No assurances can be given regarding the achievement of future results, as actual results may differ materially as a result of the risks we face, and actual events may differ from the assumptions underlying the statements that have been made regarding anticipated events. Factors that may cause actual results, our performance or achievements, or industry results, to differ materially from those contemplated by such forward-looking statements include without limitation:

All forward-looking statements made in connection with this Annual Report which are attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Given the uncertainties that surround such statements, you are cautioned not to place undue reliance on such forward-looking statements.

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 a proposed underground natural gas storage facility, which the Company proposes to permit and develop in northern Mexico. The Company believes that it has made substantial progress toward these goals with its preliminary project engineering designs and high-level meetings with representatives of various Mexican regulatory agencies.

Discussion and Analysis of Financial Condition and Results of Operations

Revenues

TwelveTwelve-month period ended July 31, 2021

For the twelve (12) month period ended July 31, 2021, we generated no revenue and incurred a net loss of $4,222,660.

Our net loss of $4,222,660 for the twelve (12) month period ended July 31, 2021 was the result of operating expenses of $3,217,071 and other expenses (comprised of interest expense) of $1,005,589. Our operating expenses consisted of $3,155,895 in general and administrative expenses, and $61,176 in professional fees.

Twelve-month period ended July 31, 2020

For the twelve (12) month period ended July 31, 2020, we generated no revenue and incurred a net loss of $5,354,204.

Our net loss of $5,354,204 for the twelve (12) month period ended July 31, 2020 was the result of operating expenses of $1,028,705 and other expenses (comprised of interest expense) of $4,325,499. Our operating expenses consisted of $929,142 in general and administrative expenses, and $99,563 in professional fees.

Twelve month period ended July 31, 2019

For the twelve (12) month period ended July 31, 2019, we generated no revenue and incurred a net loss of $3,213,703.

Our net loss of $3,213,703 for the twelve (12) month period ended July 31, 2019 was the result of operating expenses of $1,482,736 and other expenses (comprised of interest expense) of $1,730,967. Our operating expenses consisted of $1,376,055 in general and administrative expenses, and $106,681 in professional fees.

Costs and Expenses

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

For the years ended July 31, 20192020, and July 31, 2020,2021, total general and administrative expenses were $1,376,055$929,142 and $929,142,$3,155,895, respectively.

For the year ended July 31, 2019,2020, we had $1,376,055$929,142 in general and administrative expenses compared to $929,142,$3,155,895 in general and administrative expense for the year ended July 31, 2020.2021. The $446,913 decrease$2,226,753 increase in general and administrative expenses was primarily the result of reductions ofincreased spending related to consulting fees, salariescorporate advisory fees and related payroll taxes.directors’ fee, net of decrease in financing fees.

The professional fees for the years ending July 31, 20192020, and July 31, 20202021, were $106,681$99,563 and $99,563,$61,176, respectively. The $7,118$38,387 decrease was primarily result of increasedreduction of spending related to audit fees and legal fees, net of decreasesincrease in tax preparation and legal fees.

The executive compensation for the years ending July 31, 20192020, and July 31, 20202021, was $466,000$368,000 and $368,000, respectively. The reduction in compensation was due to an executive leaving the Company as of July 31, 2019. Otherwise thereThere were no changechanges in the compensation amounts.

Liquidity and Capital Resources

Cash Flows

Operating Activities

For the twelve (12) month period ended July 31, 2021, net cash used in operating activities was $821,595. The negative cash flow for the twelve (12) months ended July 31, 2021 related to our net loss of $4,222,660, adjusted for depreciation of $1,449, a decrease in financing fees of $17,000, a change of $753,376 in convertible debt due to fair market value, an increase of $191,750 in convertible debt due to default, an increase in expenses paid by shareholder of $28,188, a decrease in prepaid expenses of $40,860, an increase of $189,296 in accounts payable and accrued expenses and an increase of $6,229 in accrued salaries and payroll taxes - related parties.

For the twelve (12) month period ended July 31, 2020, net cash used in operating activities was $890,373. The negative cash flow for the twelve (12) months ended July 31, 2020 related to our net loss of $5,354,204, adjusted for depreciation of $1,581, an increase in financing fees of $38,098, a change of $3,991,040 in convertible debt due to fair market value, an increase of $230,942 in convertible debt due to default, an increase in expenses paid by shareholder of $29,642, a decrease in prepaid expenses of $7,799, an increase of $247,192 in accounts payable and accrued expenses and ana decrease of $66,865 in accrued salaries and payroll taxes - related parties.

Investing Activities

For the twelve (12) month period ended July 31, 2019, net cash used in operating activities was $335,249. The negative cash flow for the twelve (12) months ended July 31, 2019 related to our2021 net loss of $3,213,703, adjusted for depreciation of $1,581, an increasecash used in financing fees of $30,500, a change of $1,381,885 in convertible debt due to fair market value, a change of $13,191 in convertible debt due to fair market value, an increase of $285,750 in convertible debt due to default, an increase of $466,800 in issuance of stock compensation for services and fees, prepaid expenses of $546, and an increase of $698,201 in accounts payable and accrued expenses.

Investing Activitiesinvesting activities was nil.

For the twelve (12) months ended July 31, 2020 net cash used in investing activities was nil.

Financing Activities

For the twelve (12) months ended July 31, 20192021, net cash used in investingprovided from financing activities was nil.

Financing Activities$753,812. The positive cash flow from financing activities for such period was comprised of proceeds from sale of common stock and proceeds from sale of convertible debentures, net of loan repayments to a related party.

For the twelve (12) months ended July 31, 2020, net cash provided from financing activities was $986,858. The positive cash flow from financing activities for such period was comprised of an increase in loans payable from related parties, proceeds from sale of common stock and proceeds from sale of convertible debentures, net of loan repayments to a related party.

For the twelve (12) months ended July 31, 2019, net cash provided from financing activities was $392,225. The positive cash flow from financing activities for such period was comprised of proceeds from sale of common stock and proceeds from sale of convertible debentures, net of loan repayments to a related party and convertible notes.

Liquidity

To date, we have funded our operations primarily with capital provided and loans provided by related parties, accrual of salaries and accounts payable, sales of common stock and convertible debentures.

As of July 31, 2020,2021, Mirage Energy Corporation had $166,941in$99,158 in cash on hand and prepaid expenses of $9,559.$50,419. Since Mirage Energy Corporation is 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  sufficientinsufficient amounts or on reasonable terms.

The Company’s audited financial statements for the year ended July 31, 20202021, 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, 2020,2021, the Company has funded operations with loan from related party of $10,100, debt of $297,500$367,000 from convertible notes, proceeds from sale of $719,000$415,000 in common stock, while making loan repayments of $39,742$28,188 to related party. The Company plans to raise additional funds through various sources to support ongoing operations during 20202021 and 2021.2022.

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, 2020,2021, the Company had net operating loss carry forwards of approximately $1,837,458$4,428,618 with a portion expiring from years 2034 to 2037 if not used and are calculated at an expected tax rate of approximately 21%.

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. 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 7A. Quantitative and Qualitative Disclosure about Market Risk

Not applicable.

ITEM 8. Financial Statements and Supplementary Data

MIRAGE ENERGY CORPORATION

INDEX TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS

July 31, 20202021 AND 20192020

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of

Mirage Energy Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Mirage Energy Corporation and its subsidiaries (collectively, the “Company”) as of July 31, 20202021 and 2019,2020, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of July 31, 20202021 and 2019,2020, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Going Concern Matter

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. Management’sManagement's plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the auditsaudit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’sCompany's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ MaloneBailey, LLP

www.malonebailey.com

We have served as the Company’sCompany's auditor since 2017.

Houston, Texas

November 18, 2020January 20, 2022

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

.  

MIRAGE ENERGY CORPORATION

Consolidated Statements of Operations

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

MIRAGE ENERGY CORPORATION

Statements of Stockholders’ (Deficit)

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

MIRAGE ENERGY CORPORATION

Consolidated Statement of Cash Flows

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

MIRAGE ENERGY CORPORATION

Notes to the Unaudited Consolidated Financial Statements

July 31, 20202021 and 20192020

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

Mirage Energy Corporation (formerly Bridgewater Platforms Inc.) (the “Company”) is a Nevada corporation incorporated on May 6, 2014. On May 20, 2014, the Company incorporated a Canadian subsidiary known as Bridgewater Construction Ltd. in Ontario in association with its construction business. Mirage Energy Corporation is based at 900 Isom Rd Suite 306, San Antonio, TX 78216. The Company’s fiscal year end is July 31.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The Financial Statements and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Financial Statements have been prepared using the accrual basis of accounting in accordance with Generally Accepted Accounting Principles (“GAAP”) of the United States.

Net Income (Loss) Per Share of Common Stock

The Company has adopted ASC Topic 260, “Earnings per Share,” (“EPS”) which requires presentation of basic EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation. In the accompanying financial statements, basic income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding plus common stock equivalents (if dilutive) related to convertible debt, stock options and warrants for each year. In the period of net loss, diluted EPS calculation is not deemed necessary as the effect would be anti-dilutive.

As of July 31, 20202021, and July 31, 2019,2020, the Company has convertible notes with a total base principal of $100,500$125,000 and $239,500,$100,500, respectively, which become convertible in 180 days. There is a potential for 1,416,4911,486,694 shares if the principal of $100,500$125,000 were converted at July 31, 2020.2021. These notes will have a dilutive effect on common stock for the year ended July 31, 2020.2021. 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, 2020,2021, the Company has oneno open common stock purchase warrant open and it has not been exercised. For each warrant, there are 164,062 warrant shares issued and outstanding which upon exercise could potentially be 4,235,111 common stock shares.warrants.

Basis of Consolidation

These financial statements include the accounts of the Company and its wholly owned subsidiaries, 4Ward Resources, Inc., Cenote Energy, S. de R.L. de C.V., WPF Transmission, Inc., and WPF Mexico Pipelines, S. de R.L. de C.V. All material intercompany balances and transactions have been eliminated.

Long Lived Assets

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.

Use of Estimates

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

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 $166,941$99,158 and $70,456$166,941 in cash at July 31, 20202021 and 2019,2020, respectively.

Convertible Debt

The Company follows ASC 480-10, Distinguishing Liabilities from Equity (“ASC 480-10”) in its evaluation of the accounting for a hybrid instrument. A financial instrument that embodies an unconditional obligation, or a financial instrument other than an outstanding share that embodies a conditional obligation, that the issuer must or may settle by issuing a variable number of its equity shares shall be classified as a liability (or an asset in some circumstances) if, at inception, the monetary value of the obligation is based solely or predominantly on any one of the following: (a) a fixed monetary amount known at inception; (b) variations in something other than the fair value of the issuer’s equity shares; or (c) variations inversely related to changes in the fair value of the issuer’s equity shares. Hybrid instruments meeting these criteria are not further evaluated for any embedded derivatives and are carried as a liability at fair value at each balance sheet date with remeasurements reported in interest expense in the accompanying Consolidated Statements of Operations.

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.

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).

The three levels of the fair value hierarchy are described below:

Level 1

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2

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

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.

Concentrations of Credit Risk

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.

Share-based Expenses

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 $466,800 in 2019 and $0 in 2020.2020 and $2,254,637 in 2021.

Deferred Income Taxes and Valuation Allowance

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, 20202021 and 2019.2020.

Related Parties

The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions.

Commitments and Contingencies

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, 2020.2021.

Future obligations for the rent of the office lease as of July 31, 2021 and 2020 were $84,906 and 2019 were $162,736, and $247,432, respectively.

Reclassifications

Certain prior year amounts have been reclassified to conform with the current year presentation.

Recent Accounting Pronouncements

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

NOTE 3 - GOING CONCERN

The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company had a net loss of $5,354,204$4,222,660 and had net cash used in operations of $890,373$821,595 for the year ended July 31, 20202021, and had an accumulated deficit and working capital deficit of $11,906,952$16,129,612 and $2,864,056$3,075,398 at that date. The Company has not established an ongoing source of revenues sufficient to cover its operating cost and requires additional capital to commence its operating plan. If the Company is unable to obtain adequate capital, it could be forced to cease operations. These factors raise substantial doubt about its ability to continue as a going concern.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan to obtain such resources for the Company may include, but not be limited to: sales of equity instruments; traditional financing, such as loans; sale of participation interests and obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses. However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans.

There is no assurance that the Company will be able to obtain sufficient additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to the Company. In addition, profitability will ultimately depend upon the level of revenues received from business operations. However, there is no assurance that the Company will attain profitability. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 4 - DEBT

As of July 31, 2020,2021, the number of shares of common stock that can be issued for convertible debt are 1,486,694 of which have all been converted or paid as per Note 10 - Subsequent Events are 2,564,695. The other notes were not convertible atof this filing day except for Jabro Funding Corp in the amount of $18,000.

For the year ended July 31, 2020 have not been converted.2021, the Company received proceeds of $367,000 from convertible notes, which was net of $17,000 in fees deducted and converted $1,340,263 of convertible notes and interest. There was a $753,376 loss on change in fair value of convertible debt in total.

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

For the year ended July 31, 2019, the Company received proceeds of $329,500 from convertible notes, which was net of $30,500debt 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.total.

A summary of debt at July 31, 20202021, and July 31, 20192020 is as follows: