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iMine Corp. – ‘10-Q’ for 10/31/22

On:  Monday, 12/5/22, at 2:26pm ET   ·   For:  10/31/22   ·   Accession #:  1640334-22-2562   ·   File #:  0-55233

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

12/05/22  iMine Corp.                       10-Q       10/31/22   34:1.3M                                   Pubco Reporting … Inc/FA

Quarterly Report   —   Form 10-Q

Filing Table of Contents

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‘10-Q’   —   Quarterly Report

Document Table of Contents

Page (sequential)   (alphabetic) Top
 
11st Page  –  Filing Submission
"Table of Contents
"Part I: Financial Information
"Item 1
"Financial Statements
"Consolidated Balance Sheets as of April 30, 2022 and July 31, 2021 (Unaudited)
"Consolidated Statements of Operations for the three and nine months ended April 30, 2022 and 2021 (Unaudited)
"Consolidated Statements of Changes in Stockholders' Deficit for the three and nine months ended April 30, 2022 and 2021 (Unaudited)
"Consolidated Statements of Cash Flows for the nine months ended April 30, 2022 and 2021 (Unaudited)
"Notes to Unaudited Consolidated Financial Statements
"Item 2
"Management's Discussion and Analysis of Financial Condition and Results of Operations
"Item 3
"Quantitative and Qualitative Disclosures about Market Risk
"Item 4
"Controls and Procedures
"Part II: Other Information
"Legal Proceedings
"Item 6
"Exhibits

This is an HTML Document rendered as filed.  [ Alternative Formats ]



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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM  i 10-Q

 

(Mark One)

 i 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

 

For the quarterly period ended  i October 31, 2022

 

 

or

 

 

 i 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

 

For the transition period from ____________ to ________________

 

Commission file number:  i 000-55233

 

 i iMine Corporation

(Exact name of registrant as specified in its charter)

 

 i Nevada

 

 i 27-3816969

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

 i 488 NE 18th Street i Unit 511

 i Miami  i FL  i 33132

(Address of principal executive offices)

 

 i 786- i 553-4006

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading

 Symbol(s)

Name of each exchange on which registered

 

 

 

 

Indicate by check mark whether the registrant (1) has 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.  i Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).  i Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 Act.

 

Large accelerated filer

Accelerated filer

 i Non-accelerated Filer

Smaller reporting company

 i 

 

Emerging growth company

 i 

 

If an emerging growth company, indicate by a 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 in Rule 12b-2 of the Exchange Act). Yes  i  No ☒

 

As of October 31, 2022, there were  i 595,986 shares of the issuer’s common stock, par value $0.001 per share, outstanding.

 

 

 

iMINE CORPORATION

Form 10-Q

April 30, 2022

 

TABLE OF CONTENTS

 

 

Page No.

 

Part I: Financial Information

 

 

 

Item 1:

Financial Statements

4

 

Consolidated Balance Sheets as of April 30, 2022 and July 31, 2021 (Unaudited)

4

 

Consolidated Statements of Operations for the three and nine months ended April 30, 2022 and 2021 (Unaudited)

5

 

Consolidated Statements of Changes in Stockholders’ Deficit for the three and nine months ended April 30, 2022 and 2021 (Unaudited)

6

 

Consolidated Statements of Cash Flows for the nine months ended April 30, 2022 and 2021 (Unaudited)

7

 

Notes to Unaudited Consolidated Financial Statements

8

 

Item 2:

Management’s Discussion and Analysis of Financial Condition and Results of Operations

12

 

Item 3:

Quantitative and Qualitative Disclosures about Market Risk

14

 

Item 4:

Controls and Procedures

14

 

 

Part II: Other Information

 

 

Item 1

Legal Proceedings

 

16

 

 

 

 

 

 

Item 6:

Exhibits

16

 

 
2

Table of Contents

 

FORWARD LOOKING STATEMENTS

 

This report contains forward-looking statements regarding our business, financial condition, results of operations and prospects. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions or variations of such words are intended to identify forward-looking statements but are not deemed to represent an all-inclusive means of identifying forward-looking statements as denoted in this report. Additionally, statements concerning future matters are forward-looking statements.

 

Although forward-looking statements in this report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, without limitation, those specifically addressed under the headings “Risks Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our annual report on Form 10-K for the year ended July 31, 2022, in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Form 10-Q, and information contained in other reports that we file with the SEC. You are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this report.

 

We file reports with the SEC. The SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us.

 

We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this report, except as required by law. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this quarterly report, which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.

 

All references in this Form 10-Q to the “Company,” “iMine,” “we,” “us,” “our” and words of like import relate to iMine Corporation and its wholly-owned subsidiary, RAC Real Estate Acquisition Corp., a Wyoming corporation, unless the context indicates otherwise.

 

 
3

Table of Contents

 

PART I – FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

iMine Corporation

Consolidated Balance Sheets

(Unaudited)

 

 

 

October 31,

 

 

July 31,

 

 

 

2022

 

 

2022

 

ASSETS

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

Cash

 

$ i 3,910

 

 

$ i 718

 

Loan receivable

 

 

 i 453,425

 

 

 

 i 336,480

 

Prepaid expenses

 

 

 i 1,225

 

 

 

 i -

 

Total Current Assets

 

 

 i 458,560

 

 

 

 i 337,198

 

 

 

 

 

 

 

 

 

 

Investment

 

 

 i 1,389,800

 

 

 

 i -

 

TOTAL ASSETS

 

$ i 1,848,360

 

 

$ i 337,198

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$ i 80,902

 

 

$ i 13,075

 

Deferred interest income

 

 

 i -

 

 

 

 i 6,748

 

Due to related parties

 

 

 i 1,481,092

 

 

 

 i 8,812

 

Total Current Liabilities

 

 

 i 1,561,994

 

 

 

 i 28,635

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES

 

 

 i 1,561,994

 

 

 

 i 28,635

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity

 

 

 

 

 

 

 

 

Preferred stock:  i 10,000,000 authorized; $ i 0.001 par value

 

 

 

 

 

 

 

 

Series A preferred stock  i 100,000 designated; $ i 0.001 par value

 

 

 

 

 

 

 

 

 i 100,000 shares issued and outstanding

 

 

 i 100

 

 

 

 i 100

 

Common stock:  i 300,000,000 authorized; $ i 0.001 par value

 

 

 

 

 

 

 

 

 i 595,986 shares issued and outstanding

 

 

 i 596

 

 

 

 i 596

 

Additional paid in capital

 

 

 i 331,105

 

 

 

 i 331,105

 

Accumulated deficit

 

 

( i 45,435)

 

 

( i 23,238)

Total Stockholders' Equity

 

 

 i 286,366

 

 

 

 i 308,563

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$ i 1,848,360

 

 

$ i 337,198

 

 

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

 

 
4

Table of Contents

 

iMine Corporation

Consolidated Statement of Operations

 (Unaudited)

 

 

 

Three months ended

 

 

 

October 31,

 

 

 

2022

 

 

 

 

 

Interest income

 

$ i 14,255

 

 

 

 

 

 

Operating expenses

 

 

 

 

General and administrative

 

 

 i 325

 

Professional fees

 

 

 i 36,127

 

Total operating expenses

 

 

 i 36,452

 

 

 

 

 

 

Loss from operations

 

 

( i 22,197)

 

 

 

 

 

Loss before income taxes

 

 

( i 22,197)

Provision for income taxes

 

 

 i -

 

Net Loss

 

$( i 22,197)

 

 

 

 

 

Basic and diluted loss per share of common stock

 

$( i 0.04)

Basic weighted average number of common shares outstanding

 

 

 i 595,986

 

 

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

 

 
5

Table of Contents

 

iMine Corporation

Consolidated Statement of Changes in Stockholders’ Equity

 (Unaudited)

 

 

 

Series A

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Total

 

 

 

Preferred Stock

 

 

Common Stock

 

 

Paid in

 

 

Accumulated

 

 

Stockholders'

 

 

 

 Shares

 

 

 Amount

 

 

 Shares

 

 

 Amount

 

 

 Capital

 

 

 Deficit

 

 

 Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance - July 31, 2022

 

 

 i 100,000

 

 

$ i 100

 

 

 

 i 595,986

 

 

$ i 596

 

 

$ i 331,105

 

 

$( i 23,238)

 

$ i 308,563

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

-

 

 

 

 i -

 

 

 

 i -

 

 

 

( i 22,197)

 

 

( i 22,197)

Balance - October 31, 2022

 

 

 i 100,000

 

 

$ i 100

 

 

 

 i 595,986

 

 

$ i 596

 

 

$ i 331,105

 

 

$( i 45,435)

 

$ i 286,366

 

 

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

 

 
6

Table of Contents

 

iMine Corporation

Consolidated Statement of Cash Flows

 (Unaudited)

 

 

 

Three months ended

 

 

 

October 31,

 

 

 

2022

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

Net loss

 

$( i 22,197)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

Prepaid expenses

 

 

( i 1,225)

Accounts payable and accrued liabilities

 

 

 i 5,462

 

Deferred interest income

 

 

( i 11,051)

Due to related parties

 

 

 i 31,280

 

Net cash provided by operating activities

 

 

 i 2,269

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

Investment

 

 

( i 1,389,800)

Advance on loan receivable

 

 

( i 175,007)

Collection of loan receivable

 

 

 i 124,730

 

Net cash used in investing activities

 

 

( i 1,440,077)

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

Advance from related parties

 

 

 i 1,441,000

 

Net cash provided by financing activities

 

 

 i 1,441,000

 

 

 

 

 

 

Net change in cash

 

 

 i 3,192

 

Cash, beginning of period

 

 

 i 718

 

Cash, end of period

 

$ i 3,910

 

 

 

 

 

 

Supplemental cash flow information

 

 

 

 

Cash paid for interest

 

$ i -

 

Cash paid for taxes

 

$ i -

 

 

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

 

 
7

Table of Contents

 

iMine Corporation

Notes to Unaudited Consolidated Financial Statements

 

 i 

NOTE 1 - ORGANIZATION AND BUSINESS OPERATIONS

 

iMine Corporation (the “Company” or “iMine”) is a Nevada corporation incorporated on October 26, 2010 under the name Oconn Industries Corp. The Company’s name was changed on March 11, 2014 from Oconn Industries Corp. to Diamante Minerals, Inc. and to iMine Corporation on March 20, 2018. The change of name to iMine Corporation was effective through the merger of the Company’s wholly owned subsidiary, iMine Corporation, into the Company.

 

In July 2022, the Company acquired RAC Real Estate Acquisition Corp, a Wyoming Corporation ("RAC"). RAC is now a wholly owned subsidiary of the Company. The Company, through RAC, plans to focus on real estate transactions, in which the Company will buy and develop real estate for sale or rent of low-income housing. The Company plans to invest in three sectors of this market by (i) buying, refurbishing and selling traditional foreclosures, (ii) buying, developing and renting “Land Banks” that have an average pool of homes or lots in excess of 100 in one location and (iii) buying, refurbishing or developing and selling homes made available by the government through HECM pools. The Company is currently working with a third-party vendor to facilitate this plan.

 

 i 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Presentation of Interim Information

 

 i 

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) for interim financial information and with Rule 8-03 of Regulation S-X promulgated by the Securities and Exchange Commission. Accordingly, the consolidated financial statements do not include all of the information and footnotes required by US GAAP for complete financial statements. Notes to the unaudited interim consolidated financial statements that would substantially duplicate the disclosures contained in the audited consolidated financial statements for the year ended July 31, 2022 have been omitted. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the footnotes thereto for the fiscal year ended July 31, 2022 included within the Company’s Annual Report on Form 10-K.

 

In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position; (b) the result of operations; and (c) cash flows, have been made in order to make the consolidated financial statements presented not misleading. The results of operations for such interim periods are not necessarily indicative of operations for a full year.

 

Use of Estimates

 

 i 

The preparation of consolidated 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 and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s periodic filings with the SEC include, where applicable, disclosures of estimates, assumptions, uncertainties and markets that could affect the financial statements and future operations of the Company.

 

Principles of Consolidation

 

 i 

The consolidated financial statements include the accounts of iMine and its wholly owned subsidiaries. Intercompany transactions and balances have been eliminated.

 / 

 

 
8

Table of Contents

 

Fair Value Measurements

 

 i 

As defined in ASC 820” Fair Value Measurements,” fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).

 

Investments in Equity and Debt

 

Equity investments with readily determinable fair values are measured at fair value. Equity investments without readily determinable fair values are measured using the equity method or measured at cost with adjustments for observable changes in price or impairments. We perform a qualitative assessment on a periodic basis and recognize an impairment if there are sufficient indicators that the fair value of the investment is less than carrying value. Changes in value are recorded in other income (expense), net.

 

The Company’s debt securities are primarily invested in a third-party vendor and asset management company, to purchase, develop and manage real estate properties. Given the nature of lending to these types of businesses, substantially all of the Company’s investments in these portfolio companies are considered Level 3 assets under ASC Topic 820 because there generally is no known or accessible market or market indexes for debt instruments for these investment securities to be traded or exchanged. The Company may, from time to time, invest in public debt of companies that meet the Company’s investment objectives, and to the extent market quotations or other pricing indicators (i.e. broker quotes) are available, these investments are considered Level 1 or 2 assets in line with ASC Topic 820.

 

Revenue Recognition

 

 i 

The Company recognizes revenue in accordance with Topic 606, which requires the Company to recognize revenues when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the Company expects to be entitled to in exchange for those goods or services. The Company recognizes revenue based on the five criteria for revenue recognition established under Topic 606: 1) identify the contract, 2) identify separate performance obligations, 3) determine the transaction price, 4) allocate the transaction price among the performance obligations, and 5) recognize revenue as the performance obligations are satisfied.

 

The Company records interest income on an accrual basis and recognizes it as earned in accordance with the contractual terms of the loan agreement and underlying debt instrument, to the extent that such amounts are expected to be collected. Debt investments are placed on non-accrual status when it is probable that principal, interest or fees will not be collected according to contractual terms. When a debt investment is placed on non-accrual status, the Company ceases to recognize interest and fee income until the portfolio company has paid all principal and interest due or demonstrated the ability to repay its current and future contractual obligations to the Company. The Company may not apply the non-accrual status to a loan where the investment has sufficient collateral value to collect all of the contractual amount due and is in the process of collection. Interest collected on non-accrual investments are generally applied to principal.

 

Net Loss per Share of Common Stock

 

 i 

The Company calculates net loss per share in accordance with ASC Topic 260, “Earnings per Share.” Basic loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted earnings per share of common stock are computed by dividing net earnings by the weighted average number of shares and potential shares outstanding during the period. Potential shares of common stock consist of shares to be issued taken into account the effect of dilutive instruments. As of July 31, 2022, there were  i 100,000 shares of series A preferred stock, that were not included in the calculation of dilutive earnings per share as their effect would be anti-dilutive.

 / 

 

 
9

Table of Contents

 

Recent Accounting Pronouncements

 

 i 

The Company has implemented all new pronouncements that are in effect and that may impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its consolidated financial statements or results of operations.

 

 i 

NOTE 3 - GOING CONCERN AND LIQUIDITY CONSIDERATIONS

 

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. During the period ended October 31, 2022, the Company incurred a net loss of $ i 22,197. As of October 31, 2022, the Company had an accumulated deficit of $ i 45,435. In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plans to raise necessary funding through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the year ended July 31, 2023. However, until the Company engages in an active business or makes an acquisition the Company is likely to not be able to raise any significant debt or equity financing.

 

The ability of the Company to begin operations in its new business model is dependent upon, among other things, obtaining financing to commence operations and develop a business plan or making an acquisition. The Company cannot give any assurance as to its ability to develop or acquire a business or to operate profitably.

 

These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 / 

 

 i 

NOTE 4 – LOAN RECEIVABLE

 

On July 22, 2022, the Company received a promissory note, in the principal amount of $ i 672,960 from, and entered into a Loan Agreement dated July 18, 2022 with, Fix Pads Holdings, LLC. The note has a 12% interest rate per annum payable of $ i 672,960 and all principal and accrued interest are paid in full by July 1, 2023. Consideration for the note was paid in part by the Company in the amount of $ i 328,626, net of prepayment interest and in part by a third party investor in the amount of $ i 328,626.

 

On August 18, 2022, the Company issued the promissory note. The note has a  i 12% interest rate per annum payable of $ i 358,620 and is due on August 1, 2023. Consideration for the note was paid in part by the Company in the amount of $ i 175,007, net of prepayment interest and in part by a third party investor in the amount of $ i 175,007.

 

During the three months ended October 31, 2022, the Company collected $ i 124,730, of which $62,365 was collected on behalf of a third party investor, and recorded interest income of $ i 14,255. The Company recorded $ i 62,365 as payable to the third party, included in accounts payable and accrued liabilities as of October 31, 2022.

 / 

 

 i 

NOTE 5 - INVESTMENT

 

On October 4, 2022, the Company, through RAC, entered into a Limited Liability Agreement with Fix Pads Holdings, LLC ("Fix Pads"). As a result of the agreement, RAC and Fix Pads formed a limited liability company called RAC FIXPADS II, LLC, incorporated in the state of Delaware. The LLC has two members RAC and Fix Pads, both providing an initial contribution to the LLC of $ i 1,000 in exchange for a  i 50% membership interest represented by an issuance of  i 1,000 Units of the LLC to each party. Each member is entitled to 1 vote per member. The LLC is managed by a manager, Fix Pads. The agreement provides that additional capital contributions of the members will be made to the LLC as follows: (i) Fix Pads will transfer and assign all rights to and incidents of ownership for 60 residential properties it has title, or will have title, to the LLC, as set forth in the Agreement; and (ii) RAC will make additional cash contributions to the capital of the LLC, up to a maximum of $ i 5,214,000, on such dates and in such amounts as requested by the LLC, in the manner set forth in the agreement.

 / 

 

 
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Table of Contents

 

During the three months ended October 31, 2022, the Company invested $ i 1,389,800 and did not record any change in fair value nor impairment loss.

 

 i 

NOTE 6 - RELATED PARTY TRANSACTIONS

 

During the period ended October 31, 2022, the Company's shareholders paid operating expenses of $ i 31,280 on behalf of the Company, and related parties advanced $ i 1,441,000 to the Company.  The advances are unsecured, due on demand and non-bearing interest.

 

As of October 31, 2022 and July 31, 2022, the Company had due to related parties of $ i 1,481,092 and $ i 8,812, respectively.

 / 

 

 i 

NOTE 7 - EQUITY

 

Authorized Preferred Stock

 

The Company has authorized  i 10,000,000 shares of preferred stock at par value of $ i 0.001 per share.

 

Series A Preferred stick

 

The Company has designated  i 100,000 shares of preferred stock at par value of $ i 0.001 per share.

 

As of October 31, 2022 and July 31, 2022, the Company had  i 100,000 shares of Series A preferred stock issued and outstanding.

 

Authorized Common Stock

 

The Company has authorized  i 300,000,000 shares of common stock at par value of $ i 0.001 per share. Each share of common stock entitles the holder to one vote on any matter on which action of the stockholders of the corporation is sought.

 

As of October 31, 2022 and July 31, 2022, the Company had  i 595,986 shares of common stock issued and outstanding.

 

As of October 31, 2022 and July 31, 2022, the Company had no options and warrants outstanding.

 / 

 

 i 

NOTE 8 - SUBSEQUENT EVENTS

 

Management has evaluated subsequent events through November 30, 2022, the date on which the financial statements are available to be issued. All subsequent events requiring recognition as of October 31, 2022 have been incorporated into these consolidated financial statements.

 

 

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

 

Overview

 

In July of 2022 we acquired RAC Real Estate Acquisition Corp, a Wyoming Corporation (RAC). RAC is now a wholly owned subsidiary of the Company. The Company, through RAC, plans to focus on real estate transactions, in which we will buy and develop real estate for sale or rent of low-income housing. We plan to invest in three sectors of this market by (i) buying, refurbishing and selling traditional foreclosures, (ii) buying, developing and renting “Land Banks” that have an average pool of homes or lots in excess of 100 in one location and (iii) buying, refurbishing or developing and selling homes made available by the government through HECM pools. We are currently working with a third-party vendor to facilitate this plan.

 

On July 22, 2022, the Company received a promissory note, in the principal amount of $672,960 from, and entered into a Loan Agreement dated July 18, 2022 with, Fix Pads Holdings, LLC a South Carolina limited liability company. The note has a 12% interest rate per annum payable as follows: (1) a pre-payment on July 22, 2022 of pro-rated interest for the period from July 22, 2022 through July 30, 2022 in the amount of $2,212.47; (2) a pre-payment of interest on August 1, 2022 for the period from August 1, 2022 through September 30, 2022 in the amount of $13,496.07; and then (3) monthly payments of interest only beginning on October 1, 2022 and continuing on the 1st day of each month thereafter until all principal and accrued interest are paid in full by July 1, 2023. The note is secured by mortgages or deeds of trust on 7 properties. Consideration for the note was paid in part by the Company in the amount of $328,625.72 and in part by an investor, Frank Campanaro, in the amount of $328,625.73 (together both amounts equal $657,251.45 which represent the total note amount of $672,960 minus the two prepayments described above). On July 26, 2022, The Company entered into a partial assignment of the promissory note dated July 25, 2022, with Mr. Campanaro whereby the Company assigned to Mr. Campanaro the right to payment of principal in the amount of $336,480 and the right to half of the amount of any interest payments made on the principal amount of the note.

 

On August 18, 2022, the Company received a promissory note, in the principal amount of $358,620 from, and entered into a loan agreement, with, Fix Pads Holdings, LLC. The note has a 12% interest rate per annum payable as follows: (1) a pre-payment on August 19, 2022 of pro-rated interest for the period from August 19, 2022 through August 31, 2022 in the amount of $1,414.82; (2) a pre-payment of interest on August 19, 2022 for the period from September 1, 2022 through October 31, 2022 in the amount of $7,192.06; and then (3) monthly payments of interest only beginning on November 1, 2022 and continuing on the 1st day of each month thereafter until all principal and accrued interest are paid in full by August 1, 2023. The note is secured by mortgages or deeds of trust on 4 properties. Consideration for the note was paid in part by the Company in the amount of $175,006.56 and in part by Mr. Campanaro, in the amount of $175,006.56 (together both amounts equal $350,013.12 which represent the total note amount of $358,620 minus the two prepayments described above). On August 18, 2022, the Company entered into a partial assignment of the promissory note with Mr. Campanaro whereby the Company assigned to Mr. Campanaro the right to payment of principal in the amount of $179,310 and the right to half of the amount of any interest payments made on the principal amount of the note.

 

On October 4, 2022, the Company, through RAC, entered into a Limited Liability Agreement with Fixed Pads Holdings. As a result of the agreement, RAC and fix pads formed a limited liability company called RAC FIXPADS II, LLC, incorporated in the state of Delaware. The purpose of which is to purchase, finance, collateralize, improve, rehabilitate, market, sell or lease property, as well as carry on any lawful business, purpose or activity. The LLC has two members RAC and Fix Pads, both providing an initial contribution to the LLC of $1,000 in exchange for a 50% membership interest represented by an issuance of 1,000 Units of the LLC to each party. Each member is entitled to 1 vote per member. The LLC is managed by a manager, Fix Pads.

 

The Agreement provides that additional capital contributions of the members will be made to the LLC as follows: (i) Fix Pads will transfer and assign all rights to and incidents of ownership for 60 residential properties it has title, or will have title, to the LLC, as set forth in the Agreement; and (ii) RAC will make additional cash contributions to the capital of the LLC, up to a maximum of $5,214,000, on such dates and in such amounts as requested by the LLC, in the manner set forth in the Agreement.

 

 
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Under the Agreement profits and losses are allocated by the LLC to the members based on initial cash contributions of the members, the value of the properties contributed by Fix Pads and the additional cash contributions by RAC. Distributions to the members under the Agreement will be made as follows: (i) from the sale of each property by the LLC, the LLC shall distribute $13,000 of the net sale proceeds to RAC and distribute and additional amount to RAC equal to the average RAC additional cash capital contribution per property, the balance net proceeds will be distributed to Fix Pads; (ii) for any property that is leased by the LLC, RAC will have the option to buy such property from the LLC and for any such property that is not bought by RAC, any net rental income will be retained by the LLC and distributed to the members based on (a) further written agreement of the members or (b) if the members are unable to agree then on such terms as provided in the Agreement.

 

Since the acquisition of RAC, the Company, through our third-party vendor, has financed 11 foreclosed homes to be refurbished and sold as a test of the viability of this business model. Our plan over the next 12 months is to finance over 70 foreclosed homes to be refurbished and sold. We plan further to contract with Land Bank lots in excess of 100 lots to be developed into homes for rent. The Land Bank homes are to be constructed with new state of the art panel designed homes that are manufactured in Europe. This will significantly reduce the cost and time of construction for these homes.

 

Prior to March 16, 2018, we were engaged in the development of mining assets. We never generated any revenue from this business and as of April 30, 2018, all of the assets associated with the mining business were fully reserved against and have no value. On March 16, 2018, we had a change in management and changed our business to developing the business of designing and selling computer equipment which can be used for the mining of cryptocurrency. In April 2019, our sole director and officer resigned and we discontinued the business of designing and selling computer equipment for the cryptocurrency business, from which we did not generate any revenue. On August 14, 2019, the then sole officer and director resigned and Jose Maria Eduardo Gonzalez Romero was elected as our sole officer and director. In 2018 we purchased certain equipment for $500,000 borrowed from Mr. Romero. The equipment was never delivered to us in the United States, and on October 29, 2021, we entered into a settlement agreement with Gygabyte whereby we paid $10,790 to Gigabyte. Four pallets of equipment have been shipped from Taiwan and are expected to arrive in the U.S. next quarter. The equipment is in component parts and there is no assurance if this can be assembled and mined or sold since this equipment was purchased over three years ago.

 

On November 1, 2021, we entered into a settlement with Mr. Romero whereby he converted the principal amount of his $500,000 loan along with accrued interest into shares of the company at $.02 per share and we issued additional shares to him for his service as the CEO under his previous employment agreement. The total number of shares issued to Mr. Romero for his note conversion and compensation was 35,189,100.

 

On June 15, 2022, the Company’s common stock was reverse split at a 1:125 ratio. As a result, our outstanding shares of common stock went from 74,498,250 common stock outstanding to 595,986 common stock outstanding. References in this annual report to shares of common stock outstanding reflect this reverse stock split, unless otherwise stated.

 

Results of Operations

 

Three Months Ended October 31, 2022

 

For the three months ended October 31, 2022, we generated revenue from interest income of $14,255.

 

For the three months ended October 31, 2022, we incurred operating loss of $36,452, primarily professional fees, resulting in a net loss of $22,197 or ($0.04) per share (basic and diluted).

 

Liquidity and Capital Resources

 

The following summarizes our change in working capital from July 31, 2022 to October 31, 2022:

 

 

 

October 31,

 

 

July 31,

 

 

 

 

 

 

 

 

 

2022

 

 

2022

 

 

Change

 

 

%

 

Current assets

 

$458,560

 

 

$337,198

 

 

$121,362

 

 

 

36%

Current liabilities

 

$1,561,994

 

 

$28,635

 

 

$1,533,359

 

 

 

5,355%

Working capital (deficiency)

 

$(1,103,434)

 

$308,563

 

 

$1,654,721

 

 

 

536%

 

 
13

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The following table summarizes our cash flow for the three months ended October 31, 2022:

 

 

 

Three months ended October 31, 2022

 

Cash provided by operating activities

 

$2,269

 

Cash used in investing activities

 

$(1,440,077)

Cash provided by financing activities

 

$1,441,000

 

Cash on hand

 

$3,190

 

 

The cash flow used in operating activities for the three months ended October 31, 2022, reflects our net loss of $22,197. This amount was decreased by prepaid expenses of $1,225, increased by accounts payable and accrued interest of $5,462 and amounts due to related parties of $31,280. It was decreased by deferred interest income of $11,051.

 

The cash flow used in investment activities for the three months ended October 31, 2022, reflects our investment loss of $1,389,800. This amount was decreased by an advance on loan receivable of $175,007 and increased by collection of loan receivable of $124,730.

 

The cash flow provided by financing activities for the three months ended October 31, 2022, reflects an advance from related parties of $1,441,000.

 

Going Concern

 

Our financial statements have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. During the three months ended October 31, 2022, we incurred net cash provided by operating activities of $2,269. As of October 31, 2022, we had an accumulated deficit of $45,435 and earned $14,255 in interest revenues. In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management plans to raise necessary funding through equity and debt financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements. The ability of the Company to continue operations in its new business model is dependent upon, among other things, obtaining financing to continue operations and continue developing the business plan. The Company cannot give any assurance as to the ability to develop or operate profitably. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Off-Balance Sheet Arrangements

 

We do not have any off-balance sheet arrangements.

 

Critical Accounting Policies

 

Use of Estimates: The preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that directly affect the results of reported assets, liabilities, revenue, and expenses, including the valuation of non-cash transactions. Actual results may differ from these estimates.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

 

As a smaller reporting company, we have elected not to provide the disclosure required by this item.

 

Item 4. Controls and Procedures.

 

 
14

Table of Contents

 

Evaluation of Disclosure Controls and Procedures

 

We conducted an evaluation of the effectiveness of our “disclosure controls and procedures” (“Disclosure Controls”), as defined by Rules 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of October 31, 2022, the end of the period covered by this quarterly report on Form 10-Q. The Disclosure Controls evaluation was done under the supervision and with the participation of management, including our chief executive officer and chief financial officer, which positions are held by the same person who assumed both positions on August 14, 2019, and who is our only executive officer. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based upon this evaluation, our chief executive officer and chief financial officer, concluded that, due to the inadequacy of our internal controls over financial reporting, our sole principal being our chief executive and financial officer and sole director, and our limited internal audit function, our disclosure controls were not effective as of October 31, 2022, such that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to the president and treasurer, as appropriate, to allow timely decisions regarding disclosure.

 

Changes in Internal Control over Financial Reporting

 

As reported in our annual report on Form 10-K for the year ended July 31, 2022, management has determined that our internal controls contain material weaknesses due to the absence of segregation of duties, as well as lack of qualified accounting personnel and excessive reliance on third party consultants for accounting, financial reporting and related activities. The lack of any separation of duties, with the same person, who is our only principal who serves as both chief executive officer and chief financial officer, who is our sole director, and who does not have an accounting background and serves on a part-time basis, makes it unlikely that we will be able to implement effective internal controls over financial reporting in the near future.

 

During the period ended October 31, 2022, there was no change in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

 
15

Table of Contents

 

PART II – OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

We have no material pending legal proceedings required to be disclosed under this item.

 

Item 6. Exhibits.

 

Exhibits

 

Exhibit Number

 

Description of Exhibits

31.1

 

Section 302 Certificate of Chief Executive Officer and Principal Financial Officer.

32.1

 

Section 906 Certificate of Chief Executive Officer and Principal Financial Officer.

101

 

Inline XBRL DOCUMENT Set for the condensed consolidated financial statements and accompanying notes in Part I, Item 1, “Financial Statements” of this Quarterly Report on Form 10-Q.

104

 

Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set.

 

 
16

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

IMINE CORPORATION

 

Dated: December 05, 2022

/s/ Jose Maria Eduardo Gonzalez Romero

 

Jose Maria Eduardo Gonzalez Romero

 

Chief Executive Officer and Chief Financial Officer

 

 
17

 


Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘10-Q’ Filing    Date    Other Filings
8/1/23
7/31/23
7/1/23
Filed on:12/5/22
11/30/22
11/1/2210-K,  8-K
For Period end:10/31/22NT 10-K
10/4/228-K
10/1/22
9/30/22
9/1/22
8/31/22
8/19/224
8/18/228-K
8/1/22
7/31/2210-K,  NT 10-K
7/30/22
7/26/22
7/25/22
7/22/228-K
7/18/22
6/15/228-K
4/30/2210-Q
11/1/21
10/29/21
8/14/198-K
4/30/1810-Q
3/20/18
3/16/183,  8-K
3/11/14
10/26/10
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