10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10–Q

(Mark One)

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

For the quarterly period ended October 31, 2018

or

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

For the transition period from ____________ to ________________

Commission file number: 000-55233

iMine Corporation

(Exact name of registrant as specified in its charter)

Nevada	27-3816969
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
8520 Allison Point Blvd Ste. 223 #87928 Indianapolis, Indiana 46250
(Address of principal executive offices)
877-464-6388
(Registrant’s telephone number, including area code)

 

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. Yes x 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). Yes ¨ No x

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

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x
(Do not check if a smaller reporting company)		Emerging growth company	¨

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 x No ¨

As of December 14, 2018, there were 83,917,386 shares of the issuer’s common stock, par value $0.001 per share, outstanding.

iMINE CORPORATION

INDEX

		Page No.
Part I: Financial Information
Item 1:	Financial Statements	4
	Consolidated Balance Sheets as of October 31, 2018 (Unaudited) and July 31, 2017	4
	Consolidated Statements of Operations for the three months ended October 31, 2018 and 2017 (Unaudited)	5
	Consolidated Statements of Cash Flows for the three months ended October 31, 2018 and 2017 (Unaudited)	6
	Notes to Unaudited Consolidated Financial Statements	7-13
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3:	Quantitative and Qualitative Disclosures about Market Risk	16
Item 4:	Controls and Procedures	16
Part II: Other Information
Item 6:	Exhibits	17

 

2

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 “Managemeof the nt’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, 2017, 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 are to iMine Corporation and its subsidiary.

3

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

iMINE CORPORATION

Consolidated Balance Sheets

	October 31,			July 31,
	2018			2018
	(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	11,848		$	53,971
Prepaid inventory		400,000			400,000
Prepaid expenses		112,500			-
Total Current Assets		524,348			453,971
Non-current Assets
Prepaid expenses – non-current		93,750			-
TOTAL ASSETS	$	618,098		$	453,971
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable and accrued liabilities	$	18,183		$	18,711
Due to related parties		235,294			235,294
Convertible notes payable		136,723			90,938
Total Current Liabilities		390,200			344,943
TOTAL LIABILITIES		390,200			344,943
Stockholders’ Equity
Common stock: 300,000,000 authorized; $0.001 par value 83,917,386 and 78,542,286 shares issued and outstanding as of October 31, 2018 and July 31, 2018, respectively		83,917			78,542
Additional paid in capital		11,603,920			11,365,925
Accumulated deficit		(11,459,939	)		(11,335,439	)
TOTAL STOCKHOLDERS’ EQUITY		227,898			109,028
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	618,098		$	453,971

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

4

iMINE CORPORATION

Consolidated Statements of Operations

(Unaudited)

	Three Months Ended
	October 31,
	2018			2017
Revenue	$	-		$	-
Operating expenses
General and administrative		18,898			6,557
Professional fees		22,697			24,407
Stock-based compensation		18,750			-
Management fees (recovery)		-			(647,770	)
Total operating expenses		60,345			(616,806	)
Loss from operations		(60,345	)		616,806
Other income and expense
Interest and accretion on convertible notes		(64,155	)		-
Total other expense		(64,155	)		-
Income (loss) before income taxes		(124,500	)		616,806
Provision for income taxes		-			-
Net income (loss)	$	(124,500	)	$	616,806
Basic income (loss) per share of common stock	$	(0.00	)	$	0.01
Basic weighted average number of common shares outstanding		81,729,843			52,042,286
Diluted loss per share of common stock	$	(0.00	)	$	(0.00	)
Diluted weighted average number of shares of common stock outstanding		81,729,843			52,933,720

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

5

iMINE CORPORATION

Consolidated Statements of Cash Flows

(Unaudited)

	Three Months Ended
	October 31,
	2018			2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(124,500	)	$	616,806
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Stock-based compensation		18,750			-
Accrued interest and accretion on convertible notes		58,430			-
Management fee recovery		-			(647,770	)
Changes in operating assets and liabilities:
Prepaid expenses		-			1,450
Accounts payable and accrued liabilities		5,197			(2,083	)
Net cash used in operating activities		(42,123	)		(31,597	)
Net change in cash and cash equivalents		(42,123	)		(31,597	)
Cash and cash equivalents, beginning of period		53,971			197,190
Cash and cash equivalents, end of period	$	11,848		$	165,593
Supplemental cash flow information
Cash paid for interest	$	-		$	-
Cash paid for taxes	$	-		$	-

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

6

iMINE CORPORATION

Notes to Unaudited Consolidated Financial Statements

October 31, 2018

NOTE 1 - ORGANIZATION AND BUSINESS OPERATIONS

iMine Corporation (the “Company”) is a Nevada corporation incorporated on October 26, 2010 under the name Oconn Industries. The Company’s name was changed to Oconn Industries Corp. on February 16, 2012, to Diamante Minerals, Inc. on April 1, 2014 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. The Company has one subsidiary, iMine Corporation, an Indiana corporation.

The Company plans to engage in the business of selling the computer equipment that is used for mining cryptocurrency, and, as of October 31, 2018 had paid $400,000 on account of inventory of such computers which had not been received at October 31, 2018. Prior to March 2018, the Company was engaged in development of mining assets. The Company is no longer engaged in the development of mining assets. All assets relating the former mining business were valued at zero at October 31, 2018 and July 31, 2018, and the Company has no obligations or liabilities with respect to the former mining business as of October 31, 2018.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Presentation of Interim Information

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and with Rule 8-03 of Regulation S-X. Accordingly, the financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Notes to the unaudited interim consolidated financial statements that would substantially duplicate the disclosures contained in the audited financial statements for the year ended July 31, 2018 have been omitted. These financial statements should be read in conjunction with the audited financial statements and the footnotes thereto for the fiscal year ended July 31, 2018 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 financial statements presented not misleading. The results of operations for such interim periods are not necessarily indicative of operations for a full year.

Principles of Consolidation

The accompanying consolidated financial statements, including the accounts of the Company and its wholly-owned subsidiary, iMine Corporation, an Indiana corporation. All material intercompany accounts, transactions, and profits have been eliminated in consolidation.

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.

Classification

Certain classifications have been made to the prior year financial statements to conform to the current year presentation. The reclassification had no impact on previously reported net loss nor accumulated deficit.

7

Fiscal Period

The Company’s fiscal year end is July 31.

Fair Value Measurements

The Company measures the fair value of financial assets and liabilities based on US GAAP guidance which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.

FASB ASC 820, “Fair Value Measurements” defines fair value for certain financial and nonfinancial assets and liabilities that are recorded at fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. It requires that an entity measure its financial instruments to base fair value on exit price, maximize the use of observable units and minimize the use of unobservable inputs to determine the exit price. It establishes a hierarchy which prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy increases the consistency and comparability of fair value measurements and related disclosures by maximizing the use of observable inputs and minimizing the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the assets or liabilities based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy prioritizes the inputs into three broad levels based on the reliability of the inputs as follows:

· Level 1 – Inputs are quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Valuation of these instruments does not require a high degree of judgment as the valuations are based on quoted prices in active markets that are readily and regularly available.

· Level 2 – Inputs other than quoted prices in active markets that are either directly or indirectly observable as of the measurement date, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

· Level 3 – Valuations based on inputs that are unobservable and not corroborated by market data. The fair value for such assets and liabilities is generally determined using pricing models, discounted cash flow methodologies, or similar techniques that incorporate the assumptions a market participant would use in pricing the asset or liability.

Financial instruments, including cash, prepaid inventory, prepaid expenses, accounts payable and accrued liabilities, and due to related parties, are carried at amortized cost, which management believes approximates fair value due to the short-term nature of these instruments.

8

The following table presents information about the assets that are measured at fair value on a recurring basis as at October 31, 2018, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets. Fair values determined by Level 2 inputs utilize data points that are observable such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and included situations where there is little, if any, market activity for the asset:

			Quoted Prices in		Significant Other		Significant
	October 31,		Active Markets		Observable Inputs		Unobservable Inputs
	2018		(Level 1)		(Level 2)		(Level3)
Assets:
Cash	$	11,848	$	11,848	$	-	$	-
Liabilities:
Convertible notes payable		136,723		-		136,723		-
Total	$	148,571	$	11,848	$	136,723	$	-

Revenue Recognition

Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company sells the equipment to its customers with no residual warranty, installation or other obligation on the Company’s part. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:

· identify the contract with a customer;

· identify the performance obligations in the contract;

· determine the transaction price;

· allocate the transaction price to performance obligations in the contract; and

· recognize revenue as the performance obligation is satisfied.

The Company has yet to realize revenues from operations.

Stock-based expenses

The Company accounts for stock-based compensation arrangements with employees, nonemployee directors and consultants using a fair value method, which requires the recognition of compensation expense for costs related to all stock-based payments, including stock options, over the requisite service period in the Company’s consolidated statements of operations. The fair value method requires the Company to estimate the fair value of stock-based payment awards on the date of grant.

Income Taxes

The Company provides for income taxes under ASC 740, Accounting for Income Taxes. ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse.

ASC 740 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

Concentrations of Credit Risk

The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and related party payables it will likely incur in the near future. The Company places its cash with financial institutions of high credit worthiness. At times, its cash balance with a particular financial institution may exceed any applicable government insurance limits. 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.

9

Net Income (Loss) Per Share of Common Stock

The Company calculates net loss per share in accordance with ASC Topic 260, “Earnings per Share”. Basic income (loss) per share is computed by dividing the net income (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 issuable upon the conversion of outstanding convertible debt. As of October 31, 2018, there were 20,874,900 common stock equivalents outstanding, that were not included in the calculation of dilutive earnings per share as their effect would be anti-dilutive.

Recent Accounting Pronouncements

On December 22, 2017, the SEC issued Staff Accounting Bulletin (“SAB 118”), which provides guidance on accounting for tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Act for which the accounting under ASC 740 is complete. In March 2018, the FASB issued ASU 2018-05, Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (SEC Update), Income Taxes (Topic 740). ASU 2018-05 provides guidance regarding the recording of tax impacts where uncertainty exists, in the period of adoption of the 2017 U.S. Tax Cuts and Jobs Act (the “2017 Tax Act”).To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate to be included in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provision of the tax laws that were in effect immediately before the enactment of the Tax Act. While the Company is able to make reasonable estimates of the impact of the reduction in corporate rate and the deemed repatriation transition tax, the final impact of the Tax Act may differ from these estimates, due to, among other things, changes in our interpretations and assumptions, additional guidance that may be issued by the I.R.S., and actions that the Company may take. The Company has accounted for the tax effects of the Tax Cuts and Jobs Act under the guidance of SAB 118, on a provisional basis. The Company’s accounting for certain income tax effects is incomplete, but the Company has determined reasonable estimates for those effects The Company is continuing to gather additional information to determine the final impact on its consolidated financial statements.

In February 2018, the FASB issued ASU No, 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income”. The amendments in this Update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. Consequently, the amendments eliminate the stranded tax effects resulting from the Tax Cuts and Jobs Act and will improve the usefulness of information reported to financial statement users. However, because the amendments only relate to the reclassification of the income tax effects of the Tax Cuts and Jobs Act, the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations is not affected. The amendments in this Update also require certain disclosures about stranded tax effects. The amendments in this Update are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of the amendments in this Update is permitted, including adoption in any interim period, (1) for public business entities for reporting periods for which financial statements have not yet been issued and (2) for all other entities for reporting periods for which financial statements have not yet been made available for issuance. The amendments in this Update should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The Company is currently evaluating the impact of adopting this new guidance on its consolidated financial statements.

In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718), Improvements to Nonemployee Share-based Payments (“ASU 2018-07”). This ASU expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The effective date for the standard is for interim periods in fiscal years beginning after December 15, 2018, with early adoption permitted, but no earlier than the Company’s adoption date of Topic 606. Under the new guidance, the measurement of nonemployee equity awards is fixed on the grant date. The new guidance is required to be applied retrospectively with the cumulative effect recognized at the date of initial application. The Company has adopted this ASU 2018-07 and determined that it does not have a material effect on its financial condition and condensed consolidated statements of operations for the three months ended October 31, 2018.

10

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The ASU modifies the disclosure requirements in Topic 820, Fair Value Measurement, by removing certain disclosure requirements related to the fair value hierarchy, modifying existing disclosure requirements related to measurement uncertainty and adding new disclosure requirements, such as disclosing the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and disclosing the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. This ASU is effective for public companies for annual reporting periods and interim periods within those annual periods beginning after December 15, 2019. The Company is currently evaluating the effect, if any, that the ASU will have on its consolidated financial statements.

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 three months ended October 31, 2018, the Company incurred a loss of $124,500. As at October 31, 2018, the Company had an accumulated deficit of $11,459,939 and has earned no revenues since inception. The Company intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the year ending July 31, 2019. The Company has no arrangements or understandings with respect to any equity or other financing and it may not be able to complete any equity financing on reasonable, if any, terms.

The ability of the Company to begin operations in its new field of selling computer equipment for the mining of cryptocurrency and the mining of cryptocurrency in the testing of such equipment is dependent upon, among other things, obtaining additional financing to continue operations, and development of its business plan. The Company has not generated any revenue from this business through October 31, 2018, and the Company cannot give any assurance as to its ability to operate profitably.

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

NOTE 4 – PREPAID EXPENSE ANSD INVENTORY

Prepaid inventory represents payments made toward the purchase of inventory, consisting of equipment, which has not been delivered as of October 31, 2018 and July 31, 2018.

Prepaid expenses consist of consulting fees for the term of 2 years until August 31, 2020.

NOTE 5 - RELATED PARTY TRANSACTIONS

On March 19, 2018, the Company entered into a one-year employment agreement with the newly elected chief executive officer, who is also the sole director, pursuant to which the Company issued to him 17,500,000 shares of common stock, valued at $980,000, and agreed to pay him $164,706 to cover the federal income tax on the value of the stock and the tax payment. The shares are fully vested. As of October 31, 2018 and July 31, 2018, $164,706 was reflected as an amount due to related parties.

On March 19, 2018, the Company entered into a one-year consulting agreement with a consultant, who was, at the time, a 1.6% stockholder, pursuant to which the Company issued 7,500,000 shares of common stock, valued at $420,000, and agreed to pay $70,588 to the consultant to cover the federal income tax on the value of the stock and the tax payment. The shares were fully vested on issuance. As of October 31, 2018 and July 31, 2018, $70,588 was reflected as an amount due to related parties.

11

Prior to the change in management, the Company shared office space with other companies that were related parties. Two of these companies were significant stockholders of the Company, one of which shared the services of the chief financial officer and the other is a publicly-traded company which shared the services of the chief executive officer and the chief financial officer. Geological consulting fees were also paid to the company of the former chief executive officer.

The following table sets forth amounts paid and/or payable to related parties during the three months ended October 31, 2018 and 2017.

	For the three months ended
	October 31,
	2018		2017
Administrative fees	$	-	$	140
Shared office and administrative costs		-		3,250
	$	-	$	3,390

The following table sets forth the amounts due to related parties at October 31, 2018 and July 31, 2018:

	October 31,		July 31,
	2018		2018
	(Unaudited)
Due to chief executive officer pursuant to executive employment agreement	$	164,706	$	164,706
Due to consultant pursuant to consulting agreement		70,588		70,588
	$	235,294	$	235,294

NOTE 6 – CONVERTIBLE NOTES

At October 31, 2018 and July 31, 2018, convertible note consisted of the following:

	October 31,			July 31,
	2018			2018
	(Unaudited)
Convertible promissory notes outstanding	$	417,498		$	500,000
Less discount		(294,768	)		(417,330	)
Liability component as at date of issue		122,730			82,670
Accrued interest		13,993			8,268
Liability component	$	136,723		$	90,938

On March 20, 2018, the Company entered into a note purchase agreement with a non-affiliated party pursuant to which the purchaser would lend the Company a total of $500,000, for which the Company would issue two-year 5% convertible notes. The notes are convertible into common stock of the Company at $0.02 per share. The Company agreed to grant the lender a security interest in equipment which is purchased from the proceeds of the notes. As of October 31, 2018, the Company had received $500,000 pursuant to the note purchase agreement and issued its convertible notes in the principal amount of $500,000.

Interest of 5% is payable annually until the settlement date. No interest has been paid during the three months ended October 31, 2018.

On September 10, 2018, the holder of the convertible note converted $82,502 of the principal amount of the note into 4,125,100 shares of common stock.

12

NOTE 7 - COMMON STOCK

Authorized Common Stock

The Company has authorized 300,000,000 shares of common stock at par value of $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.

Issuance of Common Stock

During the three months ended October 31, 2018, the Company issued common stock as follows,

· 1,250,000 shares to a consultant for a consulting service valued at $225,000, of which $112,500 was recorded as prepaid expense and $93,750 was recorded as noncurrent prepaid expenses as of October 31, 2018.

· 4,125,100 shares for the conversion of convertible notes in the principal amount of $82,502.

There were 83,917,386 and 78,542,286 shares of common stock issued and outstanding as of October 31, 2018 and July 31, 2018, respectively.

As of October 31, 2018 and July 31, 2018, the Company had no options and warrants outstanding.

NOTE 8 – SUBSEQUENT EVENT

Management has evaluated subsequent events through the date which the financial statements are available to be issued. All subsequent events requiring recognition as of October 31, 2018 have been incorporated into these financial statements and there are no subsequent events that require disclosure in accordance with FASB ASC Topic 855, “Subsequent Events.”

13

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

Overview

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 October 31, 2018, all of the assets associated with the mining business have been fully reserved against and have no value.

On March 16, 2018, we had a change in management, with the resignation of our sole director and chief executive officer and our chief financial officer, and the appointment of a new director and chief executive officer, who is our sole executive officer. With the change of management, we changed our business. We are now in the process of developing the business of selling computer equipment which can be used for the mining of cryptocurrency and testing the equipment through the mining of cryptocurrency and the sale of cryptocurrency on one of the existing exchanges for the mined cryptocurrency. We cannot assure you that we will be successful in the development of this business. Through October 31, 2018, we had not generated any revenue from this business, and our business activity has been limited to purchasing computer equipment for our inventory, which we had not received as of October 31, 2018 and is reflected on our balance sheet as prepaid inventory, and developing our business plan.

In order to move forward with the new venture, we will need to raise a significant amount of funds. We have no assurance that financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing would result in additional dilution to existing stockholders.

During the period from March through June 2018, we raised $500,000 from the sale of our convertible notes in the principal amount of $500,000. The proceeds of these notes were used to purchase inventory and for working capital purposes, including expenses relating to our status as a public company. In order for us to generate revenue from our business we need to sell this equipment at a reasonable gross margin. We cannot assure you that we will be able to do so.

The terms of our employment agreements with our former chief executive officer, Chad Ulansky, and our former chief financial officer, Jennifer Irons, have had a significant effect upon the results of our operations during the year ended July 31, 2017. Pursuant to our employment agreements with each of Mr. Ulansky and Ms. Irons, we structured individual deferred share unit plans for their benefit. Each deferred share unit plan provides that, at our election, Mr. Ulansky or Ms. Irons (as the case may be) may receive all of his or her employment compensation due in the financial quarter in the form of deferred share units. Any such deferred stock units are to be credited to accounts maintained for each of Mr. Ulansky and Ms. Irons by us on a quarterly basis. The number of deferred stock units to be credited in a financial quarter is determined by dividing the compensation earned in such financial quarter by the fair market value. Upon termination of employment with us, other than as a result of death, each of Mr. Ulansky and Ms. Irons (as the case may be) may elect to receive one share of our Company’s common stock in respect of each whole deferred stock unit credited to his or her account or cash equal to the fair market value of such share. Subsequent to the July 31, 2017 year end, Mr. Ulansky and Ms. Irons agreed to waive the deferred stock units that had been issued to them under their deferred share unit plans. As a result of the grant of the deferred stock units, we recognize compensation equal to the compensation earned by Mr. Ulansky and Ms. Irons pursuant to their employment agreements. In addition, there is a management fee or management fee recovery based on changes in the market price of our common stock. If the price of our stock declines, there is a recovery of the management fee equal to the change in value of the stock underlying the deferred stock units, and if the price of our common stock increases there is a management fee equal to the increase in value. As a result of the change in stock price, for the three months ended October 31, 2017, we recognized a management fee recovery of $647,770, as a result of which we reported net income of $616,806 for the three months ended October 31, 2017.

14

Results of Operations

Three Months Ended October 31, 2018 and 2017

We have generated no revenues since inception.

For the three months ended October 31, 2018, we generated a loss of $124,500, or $(0.00) per share (basic and diluted) as compared with net income of $616,806, or $0.01 per share (basic) and $0.00 per share (diluted) for the three months ended October 31, 2017.

Operating expenses for the three months ended October 31, 2018 were $60,345, comprised of general and administrative expenses of $18,898, which related primarily to compensation, professional fees of $22,697, and stock-based expenses of $18,750.

Operating expenses for the three months ended October 31, 2017 were $(616,806), comprised of a management fee recovery $(647,770), general and administrative expenses of $6,557 and professional fees of $24,407.

For the three months ended October 31, 2018, we had interest and accretion on convertible notes of $64,155. We had no comparable expenses for the three months ended October 31, 2017.

Liquidity and Capital Resources

The following table shows are working capital at October 31, 2018 and July 31, 2018:

	October 31, 2018		July 31, 2018
Current Assets	$	524,348	$	453,971
Current Liabilities		390,200		334,943
Working Capital (Deficiency)	$	134,148	$	109,028

During the three months ended October 31, 2018, we used $42,123 in cash from operating activities compared to cash used by operating activities of $31,597 during the three months ended October 31, 2017. Our cash flow for the three months ended October 31, 2018 reflected our net loss of $124,500, increased by stock-based compensation of $18,750, accrued interest and accretion on convertible debt of $58,430, and an increase in accounts payable and accrued liabilities of $5,197.

During the three months ended October 31, 2017, we used $31,597 in cash from operating activities, reflecting our net income of $616,806, decreased primarily by the recovery of management fees $647,770.

We had no cash flow from investing or financing activities during the three months ended October 31, 2018 and 2017.

Our net change in cash and cash equivalents was $(42,123) for the three months ended October 31, 2018 and (31,597) for the three months ended October 31, 2017.

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, 2018, we incurred a loss of $124,500. At October 31, 2018, we had an accumulated deficit of $11,459,939 and we have earned no revenues since inception. We intend to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the year ending July 31, 2019. We have no arrangements or understandings with respect to any equity or other financing and we cannot assure you that we will be able to complete any equity financing on reasonable, if any, terms. Our inability to raise necessary financing could impair our ability to develop our business or to continue in business.

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

15

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not Applicable.

Item 4. Controls and Procedures.

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) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of October 31, 2018, 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 such positions on March 16, 2018 and who is our only employee and who does not work for us on a full-time basis. 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 employee 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, 2018, such that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 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, 2018, 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 employee 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, 2018, 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.

16

PART II – OTHER INFORMATION

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.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Schema Document
101.CAL	XBRL Taxonomy Calculation Linkbase Document
101.DEF	XBRL Taxonomy Definition Linkbase Document
101.LAB	XBRL Taxonomy Label Linkbase Document
101.PRE	XBRL Taxonomy Presentation Linkbase Document

17

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 18, 2018	By:	/s/ Daniel Tsai
		Daniel Tsai
		Chief Executive Officer and Chief Financial Officer

18

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO

SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002

I, Daniel Tsai, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of iMine Corporation, a Nevada corporation, for the quarter ended October 31, 2018;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: December 18, 2018	By:	/s/ Daniel Tsai
		Daniel Tsai
		Chief Executive Officer and Chief Financial Officer (principal executive officer and principal financial officer)

EX-32.2

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, Daniel Tsai, President and Chief Executive Officer and Chief Financial Officer of iMine Corporation (the “Registrant”), certifies, under the standards set forth and solely for the purposes of 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q of the Registrant for the quarter ended October 31, 2018 (the “Report”):

(1) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Date: December 18, 2018	By:	/s/ Daniel Tsai
	Name:	Daniel Tsai
	Title:	Chief Executive Officer and Chief Financial Officer (principal executive officer and principal financial officer)

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	3 Months Ended
	Oct. 31, 2018	Dec. 14, 2018
Document and Entity Information [Abstract]
Entity Registrant Name	iMine Corp
Entity Central Index Key	0001556801
Trading Symbol	jrvs
Current Fiscal Year End Date	--07-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		83,917,386
Document Type	10-Q
Document Period End Date	Oct. 31, 2018
Amendment Flag	false
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Entity Small Business	true
Entity Emerging Growth Company	false

XML

Consolidated Balance Sheets - USD ($)	Oct. 31, 2018	Jul. 31, 2018
Current Assets
Cash and cash equivalents	$ 11,848	$ 53,971
Prepaid inventory	400,000	400,000
Prepaid expenses	112,500
Total Current Assets	524,348	453,971
Non-current Assets
Prepaid expenses - non-current	93,750
TOTAL ASSETS	618,098	453,971
Current Liabilities
Accounts payable and accrued liabilities	18,183	18,711
Due to related parties	235,294	235,294
Convertible notes payable	136,723	90,938
Total Current Liabilities	390,200	344,943
TOTAL LIABILITIES	390,200	344,943
Stockholders' Equity
Common stock: 300,000,000 authorized; $0.001 par value 83,917,386 and 78,542,286 shares issued and outstanding as of October 31, 2018 and July 31, 2018, respectively	83,917	78,542
Additional paid in capital	11,603,920	11,365,925
Accumulated deficit	(11,459,939)	(11,335,439)
TOTAL STOCKHOLDERS' EQUITY	227,898	109,028
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 618,098	$ 453,971

XML

Consolidated Balance Sheets (Parentheticals) - $ / shares	Oct. 31, 2018	Jul. 31, 2018
Statement Of Financial Position [Abstract]
Common stock, shares authorized	300,000,000	300,000,000
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares issued	83,917,386	78,542,286
Common stock, shares outstanding	83,917,386	78,542,286

XML

Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Oct. 31, 2018	Oct. 31, 2017
Income Statement [Abstract]
Revenue	$ 0	$ 0
Operating expenses
General and administrative	18,898	6,557
Professional fees	22,697	24,407
Stock-based compensation	18,750
Management fees (recovery)		(647,770)
Total operating expenses	60,345	(616,806)
Loss from operations	(60,345)	616,806
Other income and expense
Interest and accretion on convertible notes	(58,430)
Total other expense	(64,155)
Income (loss) before income taxes	(124,500)	616,806
Provision for income taxes	0	0
Net income (loss)	$ (124,500)	$ 616,806
Basic income (loss) per share of common stock (in dollars per share)	$ (0.00)	$ 0.01
Basic weighted average number of common shares outstanding (in shares)	81,729,843	52,042,286
Diluted loss per share of common stock (in dollars per share)	$ (0.00)	$ (0.00)
Diluted weighted average number of shares of common stock outstanding (in shares)	81,729,843	52,933,720

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Oct. 31, 2018	Oct. 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ (124,500)	$ 616,806
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Stock-based compensation	18,750
Accrued interest and accretion on convertible notes	58,430
Management fee recovery		(647,770)
Changes in operating assets and liabilities:
Prepaid expenses		1,450
Accounts payable and accrued liabilities	5,197	(2,083)
Net cash used in operating activities	(42,123)	(31,597)
Net change in cash and cash equivalents	(42,123)	(31,597)
Cash and cash equivalents, beginning of period	53,971	197,190
Cash and cash equivalents, end of period	11,848	165,593
Supplemental cash flow information
Cash paid for interest	0	0
Cash paid for taxes	$ 0	$ 0

XML

ORGANIZATION AND BUSINESS OPERATIONS

3 Months Ended

Oct. 31, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

ORGANIZATION AND BUSINESS OPERATIONS

NOTE 1 - ORGANIZATION AND BUSINESS OPERATIONS

iMine Corporation (the “Company”) is a Nevada corporation incorporated on October 26, 2010 under the name Oconn Industries. The Company’s name was changed to Oconn Industries Corp. on February 16, 2012, to Diamante Minerals, Inc. on April 1, 2014 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. The Company has one subsidiary, iMine Corporation, an Indiana corporation.

The Company plans to engage in the business of selling the computer equipment that is used for mining cryptocurrency, and, as of October 31, 2018 had paid $400,000 on account of inventory of such computers which had not been received at October 31, 2018. Prior to March 2018, the Company was engaged in development of mining assets. The Company is no longer engaged in the development of mining assets. All assets relating the former mining business were valued at zero at October 31, 2018 and July 31, 2018, and the Company has no obligations or liabilities with respect to the former mining business as of October 31, 2018.

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Oct. 31, 2018

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Presentation of Interim Information

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and with Rule 8-03 of Regulation S-X. Accordingly, the financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Notes to the unaudited interim consolidated financial statements that would substantially duplicate the disclosures contained in the audited financial statements for the year ended July 31, 2018 have been omitted. These financial statements should be read in conjunction with the audited financial statements and the footnotes thereto for the fiscal year ended July 31, 2018 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 financial statements presented not misleading. The results of operations for such interim periods are not necessarily indicative of operations for a full year.

Principles of Consolidation

The accompanying consolidated financial statements, including the accounts of the Company and its wholly-owned subsidiary, iMine Corporation, an Indiana corporation. All material intercompany accounts, transactions, and profits have been eliminated in consolidation.

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.

Classification

Certain classifications have been made to the prior year financial statements to conform to the current year presentation. The reclassification had no impact on previously reported net loss nor accumulated deficit.

Fiscal Period

The Company’s fiscal year end is July 31.

Fair Value Measurements

The Company measures the fair value of financial assets and liabilities based on US GAAP guidance which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.

FASB ASC 820, “Fair Value Measurements” defines fair value for certain financial and nonfinancial assets and liabilities that are recorded at fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. It requires that an entity measure its financial instruments to base fair value on exit price, maximize the use of observable units and minimize the use of unobservable inputs to determine the exit price. It establishes a hierarchy which prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy increases the consistency and comparability of fair value measurements and related disclosures by maximizing the use of observable inputs and minimizing the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the assets or liabilities based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy prioritizes the inputs into three broad levels based on the reliability of the inputs as follows:

· Level 1 – Inputs are quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Valuation of these instruments does not require a high degree of judgment as the valuations are based on quoted prices in active markets that are readily and regularly available.

· Level 2 – Inputs other than quoted prices in active markets that are either directly or indirectly observable as of the measurement date, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

· Level 3 – Valuations based on inputs that are unobservable and not corroborated by market data. The fair value for such assets and liabilities is generally determined using pricing models, discounted cash flow methodologies, or similar techniques that incorporate the assumptions a market participant would use in pricing the asset or liability.

Financial instruments, including cash, prepaid inventory, prepaid expenses, accounts payable and accrued liabilities, and due to related parties, are carried at amortized cost, which management believes approximates fair value due to the short-term nature of these instruments.

The following table presents information about the assets that are measured at fair value on a recurring basis as at October 31, 2018, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets. Fair values determined by Level 2 inputs utilize data points that are observable such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and included situations where there is little, if any, market activity for the asset:

			Quoted Prices in		Significant Other		Significant
	October 31,		Active Markets		Observable Inputs		Unobservable Inputs
	2018		(Level 1)		(Level 2)		(Level3)
Assets:
Cash	$	11,848	$	11,848	$	-	$	-
Liabilities:
Convertible notes payable		136,723		-		136,723		-
Total	$	148,571	$	11,848	$	136,723	$	-

Revenue Recognition

Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company sells the equipment to its customers with no residual warranty, installation or other obligation on the Company’s part. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:

· identify the contract with a customer;

· identify the performance obligations in the contract;

· determine the transaction price;

· allocate the transaction price to performance obligations in the contract; and

· recognize revenue as the performance obligation is satisfied.

The Company has yet to realize revenues from operations.

Stock-based expenses

The Company accounts for stock-based compensation arrangements with employees, nonemployee directors and consultants using a fair value method, which requires the recognition of compensation expense for costs related to all stock-based payments, including stock options, over the requisite service period in the Company’s consolidated statements of operations. The fair value method requires the Company to estimate the fair value of stock-based payment awards on the date of grant.

Income Taxes

The Company provides for income taxes under ASC 740, Accounting for Income Taxes. ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse.

ASC 740 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

Concentrations of Credit Risk

The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and related party payables it will likely incur in the near future. The Company places its cash with financial institutions of high credit worthiness. At times, its cash balance with a particular financial institution may exceed any applicable government insurance limits. 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.

Net Income (Loss) Per Share of Common Stock

The Company calculates net loss per share in accordance with ASC Topic 260, “Earnings per Share”. Basic income (loss) per share is computed by dividing the net income (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 issuable upon the conversion of outstanding convertible debt. As of October 31, 2018, there were 20,874,900 common stock equivalents outstanding, that were not included in the calculation of dilutive earnings per share as their effect would be anti-dilutive.

Recent Accounting Pronouncements

On December 22, 2017, the SEC issued Staff Accounting Bulletin (“SAB 118”), which provides guidance on accounting for tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Act for which the accounting under ASC 740 is complete. In March 2018, the FASB issued ASU 2018-05, Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (SEC Update), Income Taxes (Topic 740). ASU 2018-05 provides guidance regarding the recording of tax impacts where uncertainty exists, in the period of adoption of the 2017 U.S. Tax Cuts and Jobs Act (the “2017 Tax Act”).To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate to be included in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provision of the tax laws that were in effect immediately before the enactment of the Tax Act. While the Company is able to make reasonable estimates of the impact of the reduction in corporate rate and the deemed repatriation transition tax, the final impact of the Tax Act may differ from these estimates, due to, among other things, changes in our interpretations and assumptions, additional guidance that may be issued by the I.R.S., and actions that the Company may take. The Company has accounted for the tax effects of the Tax Cuts and Jobs Act under the guidance of SAB 118, on a provisional basis. The Company’s accounting for certain income tax effects is incomplete, but the Company has determined reasonable estimates for those effects The Company is continuing to gather additional information to determine the final impact on its consolidated financial statements.

In February 2018, the FASB issued ASU No, 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income”. The amendments in this Update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. Consequently, the amendments eliminate the stranded tax effects resulting from the Tax Cuts and Jobs Act and will improve the usefulness of information reported to financial statement users. However, because the amendments only relate to the reclassification of the income tax effects of the Tax Cuts and Jobs Act, the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations is not affected. The amendments in this Update also require certain disclosures about stranded tax effects. The amendments in this Update are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of the amendments in this Update is permitted, including adoption in any interim period, (1) for public business entities for reporting periods for which financial statements have not yet been issued and (2) for all other entities for reporting periods for which financial statements have not yet been made available for issuance. The amendments in this Update should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The Company is currently evaluating the impact of adopting this new guidance on its consolidated financial statements.

In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718), Improvements to Nonemployee Share-based Payments (“ASU 2018-07”). This ASU expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The effective date for the standard is for interim periods in fiscal years beginning after December 15, 2018, with early adoption permitted, but no earlier than the Company’s adoption date of Topic 606. Under the new guidance, the measurement of nonemployee equity awards is fixed on the grant date. The new guidance is required to be applied retrospectively with the cumulative effect recognized at the date of initial application. The Company has adopted this ASU 2018-07 and determined that it does not have a material effect on its financial condition and condensed consolidated statements of operations for the three months ended October 31, 2018.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The ASU modifies the disclosure requirements in Topic 820, Fair Value Measurement, by removing certain disclosure requirements related to the fair value hierarchy, modifying existing disclosure requirements related to measurement uncertainty and adding new disclosure requirements, such as disclosing the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and disclosing the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. This ASU is effective for public companies for annual reporting periods and interim periods within those annual periods beginning after December 15, 2019. The Company is currently evaluating the effect, if any, that the ASU will have on its consolidated financial statements.

XML

GOING CONCERN AND LIQUIDITY CONSIDERATIONS

3 Months Ended

Oct. 31, 2018

Going Concern and Liquidity Considerations [Abstract]

GOING CONCERN AND LIQUIDITY CONSIDERATIONS

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 three months ended October 31, 2018, the Company incurred a loss of $124,500. As at October 31, 2018, the Company had an accumulated deficit of $11,459,939 and has earned no revenues since inception. The Company intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the year ending July 31, 2019. The Company has no arrangements or understandings with respect to any equity or other financing and it may not be able to complete any equity financing on reasonable, if any, terms.

The ability of the Company to begin operations in its new field of selling computer equipment for the mining of cryptocurrency and the mining of cryptocurrency in the testing of such equipment is dependent upon, among other things, obtaining additional financing to continue operations, and development of its business plan. The Company has not generated any revenue from this business through October 31, 2018, and the Company cannot give any assurance as to its ability to operate profitably.

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

XML

PREPAID EXPENSE ANSD INVENTORY

3 Months Ended

Oct. 31, 2018

Prepaid Expense, Current [Abstract]

PREPAID EXPENSE AND INVENTORY

NOTE 4 – PREPAID EXPENSE ANSD INVENTORY

Prepaid inventory represents payments made toward the purchase of inventory, consisting of equipment, which has not been delivered as of October 31, 2018 and July 31, 2018.

Prepaid expenses consist of consulting fees for the term of 2 years until August 31, 2020.

XML

RELATED PARTY TRANSACTIONS

3 Months Ended

Oct. 31, 2018

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 5 - RELATED PARTY TRANSACTIONS

On March 19, 2018, the Company entered into a one-year employment agreement with the newly elected chief executive officer, who is also the sole director, pursuant to which the Company issued to him 17,500,000 shares of common stock, valued at $980,000, and agreed to pay him $164,706 to cover the federal income tax on the value of the stock and the tax payment. The shares are fully vested. As of October 31, 2018 and July 31, 2018, $164,706 was reflected as an amount due to related parties.

On March 19, 2018, the Company entered into a one-year consulting agreement with a consultant, who was, at the time, a 1.6% stockholder, pursuant to which the Company issued 7,500,000 shares of common stock, valued at $420,000, and agreed to pay $70,588 to the consultant to cover the federal income tax on the value of the stock and the tax payment. The shares were fully vested on issuance. As of October 31, 2018 and July 31, 2018, $70,588 was reflected as an amount due to related parties.

Prior to the change in management, the Company shared office space with other companies that were related parties. Two of these companies were significant stockholders of the Company, one of which shared the services of the chief financial officer and the other is a publicly-traded company which shared the services of the chief executive officer and the chief financial officer. Geological consulting fees were also paid to the company of the former chief executive officer.

The following table sets forth amounts paid and/or payable to related parties during the three months ended October 31, 2018 and 2017.

	For the three months ended
	October 31,
	2018		2017
Administrative fees	$	-	$	140
Shared office and administrative costs		-		3,250
	$	-	$	3,390

The following table sets forth the amounts due to related parties at October 31, 2018 and July 31, 2018:

	October 31,		July 31,
	2018		2018
	(Unaudited)
Due to chief executive officer pursuant to executive employment agreement	$	164,706	$	164,706
Due to consultant pursuant to consulting agreement		70,588		70,588
	$	235,294	$	235,294