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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
NOTE 1 - ORGANIZATION AND BUSINESS OPERATIONS
RAC Real Estate Acquisition Corp. (the “Company”) is a Wyoming corporation incorporated on May 11, 2022. The business plan of the Company is to bid on HECM pools of homes made available by the government and, through third-party contractors, to refurbish the homes and, through a third-party asset management company, to manage the assets as rental properties.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The financial statements have been prepared using the accrual basis of accounting in accordance with Generally Accepted Accounting Principles (“GAAP”) of the United States. The Company uses the accrual basis of accounting and has adopted a May 31 fiscal year end.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements 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.
Cash and Cash Equivalents
For purposes of balance sheet presentation and reporting of cash flows, the Company considers all unrestricted demand deposits, money market funds and highly liquid debt instruments with an original maturity of less than 90 days to be cash and cash equivalents. The Company had no cash equivalents at May 31, 2022.
Periodically, the Company may carry cash balances at financial institutions more than the federally insured limit of $250,000 per institution. The Company has not experienced losses on account balances and management believes, based upon the quality of the financial institutions, that the credit risk with regard to these deposits is not significant.
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. |
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| · | 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. |
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| · | 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. |
The carrying amounts shown of the Company’s financial instruments including cash approximate fair value due to the short-term maturities of these instruments.
Revenue Recognition
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 has not realized any revenues from operations and is not currently engaged in any active business.
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.
Earnings per Share of Common Stock
The Company calculates earnings 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. As of May 31, 2022, there were no potential dilutive shares of common stock.
Commitments and Contingencies
The Company follows ASC 450-20, “Loss Contingencies”, to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.
Recent Accounting Pronouncements
The Company has implemented all new pronouncements that are in effect and that may impact its 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 financial statements or results of operations.
NOTE 3 - COMMON STOCK
Preferred Stock
The Company has authorized 1,000,000 shares of preferred stock at par value of $0.001 per share.
There were no shares of preferred stock issued and outstanding as of May 31, 2022.
Common Stock
The Company has authorized 9,000,000 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.
From inception to the period ended May 31, 2022, 1,000 shares of common stock were issued to the Company’s founders for $500,000.
There were 1,000 shares of common stock issued and outstanding as of May 31, 2022.
As of May 31, 2022, the Company had no options or warrants outstanding.
NOTE 4 - SUBSEQUENT EVENTS
Management has evaluated subsequent events through June 30, 2022, the date on which the financial statements are available to be issued. All subsequent events requiring recognition as of May 31, 2022, have been incorporated into these financial statements and there are no additional subsequent events that require disclosure in accordance with FASB ASC Topic 855, “Subsequent Events.”
(b) The unaudited pro forma financial information required by this item is filed herewith.
IMINE CORPORATION
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma combined financial statements give effect to the acquisition of RAC Real Estate Acquisition Corp (“RAC”) by iMine Corporation (the “Company”) pursuant to an Agreement and Plan of Reorganization (“Agreement”) dated effective June 30, 2022. Pursuant to the Agreement the Company will acquire all of the outstanding shares of common stock of RAC from its shareholders in exchange for 100,000 shares of Series A Preferred Stock the Company issued pro rata to the RAC’s shareholders.
IMINE CORPORATION
Unaudited Pro Forma Condensed Combined Balance Sheet
As of May 31,2022
| | | | | RAC Real Estate | | | | | | | | | | |
| | iMine Corporation | | | Acquisition Corp | | | | | | | | | | |
| | April 30, | | | May 31, | | | Proforma | | | | | | Proforma | |
| | 2022 | | | 2022 | | | Adjustments | | | Notes | | | As Adjusted | |
Assets | | | | | | | | | | | | | | | |
Current Assets | | | | | | | | | | | | | | | |
Cash | | $ | 395 | | | $ | 500,000 | | | $ | - | | | | | | $ | 500,395 | |
Prepaid expenses | | | 52 | | | | - | | | | - | | | | | | | 52 | |
Total Current assets | | | 447 | | | | 500,000 | | | | - | | | | | | | 500,447 | |
| | | | | | | | | | | | | | | | | | | |
Total Assets | | $ | 447 | | | $ | 500,000 | | | $ | - | | | | | | $ | 500,447 | |
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Liabilities and Shareholders' Deficit | | | | | | | | | | | | | | | | | | | |
Current Liabilities | | | | | | | | | | | | | | | | | | | |
Accounts payable and accrued liabilities | | $ | 9,305 | | | $ | - | | | $ | - | | | | | | $ | 9,305 | |
Due to related parties | | | 150,366 | | | | - | | | | - | | | | | | | 150,366 | |
Total Current Liabilities | | | 159,671 | | | | - | | | | - | | | | | | | 159,671 | |
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Total Liabilities | | | 159,671 | | | | - | | | | - | | | | | | | 159,671 | |
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Shareholders’ Equity (Deficit) | | | | | | | | | | | | | | | | | | | |
Series A preferred stock: 100,000 authorized; $0.001 par value 0 shares issued and outstanding and 100,000 shares issued and outstanding as adjusted | | | - | | | | - | | | | 100 | | | | 4 | (b) | | | 100 | |
Common stock: 300,000,000 authorized; $0.001 par value 74,498,053 shares issued and outstanding 595,984 shares issued and outstanding as adjusted | | | 74,498 | | | | - | | | | (73,902 | ) | | | 4 | (a),4(b) | | | 596 | |
Common stock, $0.001 par value; 9,000,000 shares authorized, 1,000 shares issued and outstanding | | | - | | | | 1 | | | | (1 | ) | | | 4 | (b) | | | - | |
Additional paid in capital | | | 12,594,045 | | | | 499,999 | | | | (12,753,964 | ) | | | | | | | 340,080 | |
Accumulated deficit | | | (12,827,767 | ) | | | - | | | | 12,827,767 | | | | | | | | - | |
Total Shareholder’s Equity (Deficit) | | | (159,224 | ) | | | 500,000 | | | | - | | | | | | | | 340,776 | |
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Total Liabilities and Shareholders' Equity (Deficit) | | $ | 447 | | | $ | 500,000 | | | $ | - | | | | | | | $ | 500,447 | |
See accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Statements.
IMINE CORPORATION
Unaudited Pro Forma Condensed Combined Statement of Operations
Nine months ended April 30, 2022
| | | | | RAC Real Estate | | | | | | | | | | |
| | | | | Acquisition Corp | | | | | | | | | | |
| | iMine Corporation | | | May 11, 2022 | | | | | | | | | | |
| | Nine months ended | | | (Inception) to | | | Proforma | | | | | | Proforma | |
| | April 30, 2022 | | | May 31, 2022 | | | Adjustments | | | Notes | | | As Adjusted | |
| | | | | | | | | | | | | | | |
Revenue | | $ | - | | | $ | - | | | $ | - | | | | | | $ | - | |
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Operating Expenses | | | | | | | | | | | | | | | | | | | |
General and administrative | | | 11,163 | | | | - | | | | - | | | | | | | 11,163 | |
Professional fees | | | 53,605 | | | | - | | | | - | | | | | | | 53,605 | |
Total operating expenses | | | 64,768 | | | | - | | | | - | | | | | | | 64,768 | |
| | | | | | | | | | | | | | | | | | | |
Loss from operations | | | (64,768 | ) | | | - | | | | - | | | | | | | (64,768 | ) |
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Other Income (Expense) | | | | | | | | | | | | | | | | | | | |
Other income | | | 69,000 | | | | | | | | | | | | | | | 69,000 | |
Interest expense | | | (15,123 | ) | | | - | | | | - | | | | | | | (15,123 | ) |
Total other expense | | | 53,877 | | | | - | | | | - | | | | | | | 53,877 | |
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Net loss before provision for income taxes | | | (10,891 | ) | | | - | | | | - | | | | | | | (10,891 | ) |
Income taxes | | | - | | | | - | | | | - | | | | | | | - | |
Net loss | | $ | (10,891 | ) | | $ | - | | | $ | - | | | | | | $ | (10,891 | ) |
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Basic and dilutive loss per common share | | $ | (0.00 | ) | | $ | - | | | | | | | | | | $ | (0.02 | ) |
Weighted average number of common shares outstanding | | | 66,298,796 | | | | 619 | | | | (65,769,025 | ) | | | 4 | (a)4(b) | | | 530,390 | |
See accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Statements.
IMINE CORPORATION
Notes to the Unaudited Pro Forma Condensed Combined Financial Statements
On July 1, 2022, iMine Corporation (the “Company”) entered into an Agreement and Plan of Reorganization dated effective June 30, 2022 (the “Agreement”) with RAC Real Estate Acquisition Corp, a Wyoming Corporation (“RAC”), pursuant to which the Company will acquire all of the outstanding shares of common stock of RAC from its shareholders in exchange for 100,000 shares of Series A Preferred stock the Company issued pro rata to the RAC’s shareholders.
NOTE 1. BASIS OF PRO FORMA PRESENTATION
The unaudited pro forma condensed combined financial statements are based on the Company’s and RAC’s historical consolidated financial statements as adjusted to give effect to the acquisition of RAC and the shares issued as part of the acquisition. The unaudited pro forma combined statements of operations for the nine months ended April 30, 2022 give effect to the RAC’ acquisition as if it had occurred on April 30, 2022. The unaudited proforma combined balance sheet as of April 30, 2022 gives effect to the RAC acquisition as if it had occurred on April 30, 2022.
Historical financial information has been adjusted in the pro forma balance sheet to pro forma events that are: (1) directly attributable to the Acquisition; (2) factually supportable; and (3) expected to have a continuing impact on the Company’s results of operations. The pro forma adjustments presented in the pro forma combined balance sheet and statement of operations are described in Note 4— Pro Forma Adjustments.
The unaudited pro forma condensed combined financial information is for illustrative purposes only. These companies may have performed differently had they actually been combined for the periods presented. You should not rely on the pro forma combined financial information as being indicative of the historical results that would have been achieved had the companies always been combined or the future results that the combined companies will experience after the acquisition.
NOTE 2. ACCOUNTING PERIODS PRESENTED
Certain pro forma adjustments were made to conform RAC accounting policies to the Company’s accounting policies as noted below.
The unaudited pro forma condensed combined balance sheet as of April 30, 2022 is presented as if the acquisition had occurred on April 30, 2022 and combines the historical balance sheet of the Company at April 30, 2022 and the historical balance sheet of the RAC at May 31, 2022.
The unaudited pro forma condensed combined statement of operations for the nine months ended April 30, 2022 has been prepared by combining the Company’s historical consolidated statement of operations for the period ended April 30, 2022, with the historical statement of operations of RAC for the inception to the period ended May 31, 2022.
NOTE 3. PRELIMINARY PURCHASE PRICE ALLOCATION
Effective June 30, 2022, the Company acquired RAC for total consideration of 100,000 shares of Company’s Series A preferred stock. The unaudited pro forma condensed combined financial statements include various assumptions, including those related to the preliminary purchase price allocation of the assets acquired of RAC based on carrying values.
Accordingly, pro forma adjustments are preliminary and have been made solely for illustrative purposes.
NOTE 4. PRO FORMA ADJUSTMENTS
The pro forma adjustments are based on our preliminary estimates and assumptions that are subject to change. The following adjustments have been reflected in the unaudited pro forma condensed combined financial information:
| a. | To adjust common stock of the Company due to a reverse stock split (1 for 125) effective on June 14, 2022 |
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| b. | To issue 100,000 shares of Series A Preferred Stock in exchange for 1,000 shares of common stock of RAC |
(d) The exhibits listed in the following Exhibit Index are filed as part of this report: