Transglobal Management Group, Inc 10-Q/A for FY2022 Q2
Transglobal Management Group, Inc. (TMGI)
About this 10-Q/A
Transglobal Management Group, Inc filed this 10-Q/A on June 29, 2022, covering the quarter ended November 30, 2021 (FY2022 Q2).
Headline figures
Quarter ended November 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net income
- $1.51M
- compared with a net loss of $629.62K a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Amendment No. 3 to 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 November 30, 2021 | |
| o | 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: 000-54163
| The Marquie Group, Inc. |
| (Exact name of registrant as specified in its Charter) |
| Florida | 26-2091212 | |
|
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employee Identification No.) | |
|
7901 4th ST N, Suite 4000 St. Petersburg, FL 33702 |
33702 | |
| (Address of principal executive office) | (Zip Code) |
(800) 351-3021
(Registrant’s telephone number, including area code)
Not Applicable
(Former Name, former address and former fiscal year, if changed since last report)
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 issuer was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes ☒ No
☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| Non-accelerated filer (Do not check if smaller reporting company) | ☐ | Smaller reporting company | ☒ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date: As of February 8, 2022, there were 13,485,330,996 shares of $0.0001 par value common stock, issued and outstanding.
EXPLANATORY NOTE
The Marquie Group, Inc. (the “Company”) is filing this Amendment No. 3 to amend in its entirety its quarterly report on Form 10-Q for the quarter ended November 30, 2021 originally filed with the U.S. Securities and Exchange Commission on January 24, 2022 (the “Original Filing”). As stated therein, the Original Filing financial statements were not reviewed by the Company’s independent registered public accounting firm.
| 2 |
| 3 |
PART I - FINANCIAL INFORMATION
| THE MARQUIE GROUP, INC. | ||||||||||
| (formerly Music of Your Life, Inc.) | ||||||||||
| Consolidated Balance Sheets | ||||||||||
| (Unaudited) | ||||||||||
| ASSETS | ||||||||||
| November 30, | May 31, | |||||||||
| 2021 | 2021 | |||||||||
| CURRENT ASSETS | ||||||||||
| Cash and cash equivalents | $ | — | $ | — | ||||||
| Total Current Assets | — | — | ||||||||
| OTHER ASSETS | ||||||||||
| Music inventory, net of accumulated depreciation | ||||||||||
| of $18,703 and $17,339, respectively | 2,945 | 4,309 | ||||||||
| Trademark costs | 10,365 | 10,365 | ||||||||
| Total Other Assets | 13,310 | 14,674 | ||||||||
| TOTAL ASSETS | $ | 13,310 | $ | 14,674 | ||||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||||
| CURRENT LIABILITIES | ||||||||||
| Bank overdraft | $ | 743 | $ | 1,140 | ||||||
| Accounts payable | 33,447 | 25,094 | ||||||||
| Accrued interest payable on notes payable | 475,796 | 427,023 | ||||||||
| Accrued consulting fees | 887,967 | 832,967 | ||||||||
| Notes payable, net of debt discounts of $155,468 | ||||||||||
| and $85,233, respectively | 1,386,492 | 1,366,430 | ||||||||
| Notes payable to related parties | 127,551 | 121,323 | ||||||||
| Derivative liability | 733,853 | 2,006,815 | ||||||||
| Total Current Liabilities | 3,645,849 | 4,780,792 | ||||||||
| TOTAL LIABILITIES | 3,645,849 | 4,780,792 | ||||||||
| STOCKHOLDERS' DEFICIT | ||||||||||
| Preferred Stock, $0.0001 par value; 20,000,000 shares | ||||||||||
| authorized, 200 and 200 shares issued and outstanding | — | — | ||||||||
| Common stock, $0.0001 par value; 50,000,000,000 shares | ||||||||||
| authorized, 10,752,405,326 and 4,678,552,506 shares issued | ||||||||||
| and outstanding, respectively | 1,075,242 | 467,855 | ||||||||
| Common stock payable - 1 share | 8,460 | 8,460 | ||||||||
| Additional paid-in-capital | 8,537,312 | 6,519,804 | ||||||||
| Accumulated deficit | (13,253,553 | ) | (11,762,237 | ) | ||||||
| Total Stockholders' Deficit | (3,632,539 | ) | (4,766,118 | ) | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ | 13,310 | $ | 14,674 | ||||||
The accompanying notes are an integral part of these financial statements
| 4 |
| THE MARQUIE GROUP, INC. | ||||||||||||||||
| (formerly Music of Your Life, Inc.) | ||||||||||||||||
| Consolidated Statements of Operations | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| November 30, | November 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| NET REVENUES | $ | — | $ | — | $ | — | $ | 60 | ||||||||
| OPERATING EXPENSES | ||||||||||||||||
| Accrued Salaries and Consulting fees | 30,000 | 75,000 | 60,000 | 151,000 | ||||||||||||
| Professional fees | 40,885 | 25,509 | 40,885 | 44,748 | ||||||||||||
| Other selling, general and administrative | 4,905 | 16,025 | 9,066 | 24,014 | ||||||||||||
| Total Operating Expenses | 75,790 | 116,534 | 109,951 | 219,762 | ||||||||||||
| LOSS FROM OPERATIONS | (75,790 | ) | (116,534 | ) | (109,951 | ) | (219,702 | ) | ||||||||
| OTHER INCOME (EXPENSES) | ||||||||||||||||
| Gain (Expense) from derivative liability | 2,827,992 | (352,801 | ) | 1,556,558 | (1,934,806 | ) | ||||||||||
| Interest expense (including amortization of debt discounts of | ||||||||||||||||
| $112,987, $107,760, $213,361 and $122,505, respectively) | (165,263 | ) | (150,325 | ) | (408,524 | ) | (307,107 | ) | ||||||||
| Loss on conversion of notes payable | ||||||||||||||||
| and accrued interest | (1,075,907 | ) | (9,956 | ) | (2,529,399 | ) | (545,519 | ) | ||||||||
| Total Other Income (Expenses) | 1,586,822 | (513,082 | ) | (1,381,365 | ) | (2,787,432 | ) | |||||||||
| LOSS BEFORE INCOME TAXES | 1,511,032 | (629,616 | ) | (1,491,316 | ) | (3,007,134 | ) | |||||||||
| INCOME TAX EXPENSE | — | — | — | — | ||||||||||||
| NET LOSS | $ | 1,511,032 | $ | (629,616 | ) | $ | (1,491,316 | ) | $ | (3,007,134 | ) | |||||
| BASIC AND DILUTED: | ||||||||||||||||
| Net income (loss) per common share | $ | 0.00 | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | |||||
| Weighted average shares outstanding | 8,700,949,908 | 1,468,733,286 | 7,447,032,352 | 2,112,549,509 | ||||||||||||
The accompanying notes are an integral part of these financial statements
| 5 |
| THE MARQUIE GROUP, INC. | ||||||||||||||||||||||||||||||||
| (formerly Music of Your Life, Inc.) | ||||||||||||||||||||||||||||||||
| Consolidated Statements of Stockholders' Deficit | ||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||
| Six Months Ended November 30, 2021 | ||||||||||||||||||||||||||||||||
| Total | ||||||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Common Stock | Additional | Accumulated | Stockholders' | |||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Payable | Paid-in Capital | Deficit | Deficit | |||||||||||||||||||||||||
| Balance, May 31, 2021 | 200 | $ | — | 4,678,552,506 | $ | 467,855 | $ | 8,460 | $ | 6,519,804 | $ | (11,762,237 | ) | $ | (4,766,118 | ) | ||||||||||||||||
| Common stock issued for conversion | ||||||||||||||||||||||||||||||||
| of debt | — | — | 2,948,115,857 | 294,813 | — | 1,208,287 | — | 1,503,100 | ||||||||||||||||||||||||
| Net loss for the three months ended | ||||||||||||||||||||||||||||||||
| August 31, 2021 | — | — | — | — | — | — | (3,002,348 | ) | (3,002,348 | ) | ||||||||||||||||||||||
| Balance, August 31, 2021 | 200 | $ | — | 7,626,668,363 | $ | 762,668 | $ | 8,460 | $ | 7,728,091 | $ | (14,764,585 | ) | $ | (6,265,366 | ) | ||||||||||||||||
| Common stock issued for conversion | ||||||||||||||||||||||||||||||||
| of debt | — | — | 3,125,736,963 | 312,575 | — | 809,221 | — | 1,121,796 | ||||||||||||||||||||||||
| Net loss for the three months ended | ||||||||||||||||||||||||||||||||
| November 30, 2021 | — | — | — | — | — | — | 1,511,032 | 1,511,032 | ||||||||||||||||||||||||
| Balance, November 30, 2021 | 200 | $ | — | 10,752,405,326 | $ | 1,075,242 | $ | 8,460 | $ | 8,537,312 | $ | (13,253,553 | ) | $ | (3,632,539 | ) | ||||||||||||||||
| Six Months Ended November 30, 2020 | ||||||||||||||||||||||||||||||||
| Total | ||||||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Common Stock | Additional | Accumulated | Stockholders' | |||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Payable | Paid-in Capital | Deficit | Deficit | |||||||||||||||||||||||||
| Balance, May 31, 2020 | 200 | $ | — | 373,710,385 | $ | 37,371 | $ | 8,460 | $ | 4,670,196 | $ | (8,893,053 | ) | $ | (4,177,026 | ) | ||||||||||||||||
| Common stock issued for conversion | ||||||||||||||||||||||||||||||||
| of debt | — | — | 2,476,735,213 | 247,673 | — | 451,854 | — | 699,527 | ||||||||||||||||||||||||
| Net loss for the three months ended | ||||||||||||||||||||||||||||||||
| August 31, 2020 | — | — | — | — | — | — | (2,377,518 | ) | (2,377,518 | ) | ||||||||||||||||||||||
| Balance, August 31, 2020 | 200 | — | 2,850,445,598 | 285,044 | 8,460 | 5,122,050 | (11,270,571 | ) | (5,855,017 | ) | ||||||||||||||||||||||
| Common stock issued for conversion | ||||||||||||||||||||||||||||||||
| of debt | — | — | 142,237,000 | 14,224 | — | — | — | 14,224 | ||||||||||||||||||||||||
| Net loss for the three months ended | ||||||||||||||||||||||||||||||||
| November 30, 2020 | — | — | — | — | — | — | (629,616 | ) | (629,616 | ) | ||||||||||||||||||||||
| Balance, November 30, 2020 | 200 | $ | — | 2,992,682,598 | $ | 299,268 | $ | 8,460 | $ | 5,122,050 | $ | (11,900,187 | ) | $ | (6,470,409 | ) | ||||||||||||||||
The accompanying notes are an integral part of these financial statements
| 6 |
| THE MARQUIE GROUP, INC. | ||||||||||||||
| (formerly Music of Your Life, Inc.) | ||||||||||||||
| Consolidated Statements of Cash Flows | ||||||||||||||
| (Unaudited) | ||||||||||||||
| For the Six Months Ended | ||||||||||||||
| November 30, | ||||||||||||||
| 2021 | 2020 | |||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||
| Net loss | $ | (1,491,316 | ) | $ | (3,007,134 | ) | ||||||||
| Adjustments to reconcile net income (loss) to net | ||||||||||||||
| cash used by operating activities: | ||||||||||||||
| Depreciation of music inventory | 1,364 | 1,734 | ||||||||||||
| Gain (Expense) from derivative liability | (1,556,558 | ) | 1,934,806 | |||||||||||
| Amortization of debt discounts | 213,361 | 122,505 | ||||||||||||
| Loss on conversion of notes payable and accrued interest | 2,529,399 | 545,519 | ||||||||||||
| Default interest added to notes principal balance | 102,400 | — | ||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||
| Accounts payable | 8,353 | 26,054 | ||||||||||||
| Accrued interest payable on notes payable | 87,666 | 72,965 | ||||||||||||
| Accrued consulting fees | 55,000 | 130,947 | ||||||||||||
| Net Cash Used by Operating Activities | (50,331 | ) | (172,604 | ) | ||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||
| Music inventory | — | (24 | ) | |||||||||||
| Net Cash Used by Investing Activities | — | (24 | ) | |||||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||
| Bank overdraft | (397 | ) | — | |||||||||||
| Proceeds from notes payable | 45,000 | 589,820 | ||||||||||||
| Repayments of notes payable | (500 | ) | (424,721 | ) | ||||||||||
| Repayments of notes payable to related parties | (25,272 | ) | — | |||||||||||
| Net proceeds from notes payable to related parties | 31,500 | 2,800 | ||||||||||||
| Net Cash Provided by Financing Activities | 50,331 | 167,899 | ||||||||||||
| NET DECREASE IN CASH AND CASH EQUIVALENTS | — | (4,729 | ) | |||||||||||
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | — | 4,742 | ||||||||||||
| CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | — | $ | 13 | ||||||||||
| SUPPLEMENTAL CASH FLOW INFORMATION | ||||||||||||||
| Cash Payments For: | ||||||||||||||
| Interest | $ | — | $ | — | ||||||||||
| Income taxes | $ | — | $ | — | ||||||||||
| Non-cash investing and financing activities: | ||||||||||||||
| Initial derivative liability charged to debt discounts | $ | 45,000 | $ | 385,000 | ||||||||||
| Conversion of debt and accrued interest into common stock | $ | 95,496 | $ | 168,231 | ||||||||||
| 7 |
THE MARQUIE GROUP, INC.
(formerly Music of Your Life, Inc.)
Notes to the Consolidated Financial Statements
November 30, 2021
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
Basis of Presentation
The accompanying unaudited financial statements are presented in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary in order to make the financial statements not misleading, have been included. Operating results for the three and six months ended November 30, 2021 are not necessarily indicative of results that may be expected for the year ending May 31, 2022.
Organization
The Marquie Group, Inc. (formerly Music of Your Life, Inc.) (the “Company”) was incorporated under the laws of the State of Florida on January 30, 2008 under the name of “Zhong Sen International Tea Company”. From January 2008 to May 2013, the Company operated with the principal business objective of providing sales and marketing consulting services to small to medium sized Chinese tea producing companies who wished to export and distribute high quality Chinese tea products worldwide. On May 31, 2013 (the “Closing Date”), the Company entered into a Merger Agreement (the “Merger Agreement”) by and among the Company, Music of Your Life, Inc., a Nevada corporation (“MYL Nevada”) incorporated October 10, 2012, and Music of Your Life Merger Sub, Inc., a Utah corporation ("Merger Sub"), pursuant to which MYL Nevada merged with Merger Sub. As a result of the merger, MYL Nevada became a wholly-owned subsidiary of the Company, and on July 26, 2013, the Company changed its name to Music of Your Life, Inc., a syndicated radio network. On May 20, 2014 the Company acquired 100% of the outstanding stock of iRadio, Inc., a Utah corporation. The Company was the surviving corporation. iRadio was an entity related to the Company by common ownership.
Reverse Stock Splits
Effective June 20, 2018, the Company effectuated a 1 share for 4,000 shares reverse stock split which reduced the issued and outstanding shares of common stock from 3,642,441,577 shares to 910,610 shares. Effective September 4, 2019, the Company effectuated a 1 share for 400 shares reverse stock split which reduced the issued and outstanding shares of common stock from 423,639,620 shares to 1,061,357 shares. The accompanying financial statements have been retroactively adjusted to reflect these reverse stock splits.
Acquisition of The Marquie Group, Inc.
On August 16, 2018 (see Note 8), the Company merged with The Marquie Group, Inc. (“TMGI”) in exchange for the issuance of a total of 100,000 shares of our common stock to TMGI’s stockholders. Following the merger, the Company had 102,277 shares of common stock issued and outstanding. On December 5, 2018, the Company amended and restated its Articles of Incorporation providing for a change in the Company’s name from “Music of Your Life, Inc.” to “The Marquie Group, Inc.” The TMGI business plan is to license, develop and launch a direct-to-consumer, health and beauty product line called “Whim” that use innovative formulations of plant-based, amino-acids and other natural alternatives to chemical ingredients.
Acquisition of Global Nutrition Experience, Inc.
On November 21, 2019 (see Note 8), the Company merged with Global Nutrition Experience, Inc. (“GNE”) in exchange for the issuance of a total of 193,000,000 shares of our common stock to GNE’s stockholder. The GNE business plan is to license intellectual property to third parties.
| 8 |
THE MARQUIE GROUP, INC.
(formerly Music of Your Life, Inc.)
Notes to the Consolidated Financial Statements
November 30, 2021
(Unaudited)
NOTE 2 - LOANS RECEIVABLE – RELATED PARTY
During the year ended May 31, 2013, the Company loaned $174,950 to the Company’s current chief executive in anticipation of the merger agreement described in Note 1. The loans were non-interest bearing and due on demand. Effective May 31, 2015, the Company agreed to waive collection of $100,000 of the remaining $115,950 loans receivable balance in exchange for the chief executive officer’s agreement to waive payment of the $100,000 accrued consulting fees balance due him at May 31, 2015. Effective May 31, 2020, the Company agreed to waive collection of $15,950 of the remaining loans receivable balance in exchange for the chief executive officer’s agreement to waive payment of $15,950 accrued consulting fees balance due him at May 31, 2020 (see Note 11). As of November 30, 2021, the balance due on this loan was $-0-.
NOTE 3 - MUSIC INVENTORY
Music inventory consisted of the following:
| November 30, 2021 | May 31, 2021 | |||||||
| Digital music acquired for use in operations – at cost | $ | 21,648 | $ | 21,648 | ||||
| Accumulated depreciation | (18,703 | ) | (17,339 | ) | ||||
| Music inventory – net | $ | 2,945 | $ | 4,309 | ||||
The Company purchases digital music to broadcast over the radio and internet. During the six months ended November 30, 2021, the Company purchased $-0- worth of music inventory. For the six months ended November 30, 2021 and 2020, depreciation of music inventory was $1,364 and $1,734, respectively.
NOTE 4 – ACCRUED CONSULTING FEES
Accrued consulting fees consisted of the following:
| November 30, 2021 | May 31, 2021 | |||||||
| Due to Company Chief Executive Officer pursuant to Consulting Agreement dated March 1, 2017 – monthly compensation of $10,000 | $ | 193,817 | $ | 138,817 | ||||
| Due to wife of Company Chief Executive Officer pursuant to consulting agreement effective August 16, 2018 – monthly compensation of $15,000 (which was terminated May 31, 2021) | 318,100 | 318,100 | ||||||
| Due to mother of Company Chief Executive Officer pursuant to Consulting Agreement dated September 1, 2015 (which was terminated November 30, 2019) – monthly compensation of $5,000 to November 30, 2019 | 131,350 | 131,350 | ||||||
| Due to service provider pursuant to Consulting Agreement dated September 1, 2015 (which was terminated February 28, 2019) – monthly compensation of $5,000 to February 28, 2019 | 144,700 | 144,700 | ||||||
| Due to service provider pursuant to Consulting Agreement dated September 1, 2015 (which was terminated November 30, 2019) – monthly compensation of $1,000 to November 30, 2019 | 48,000 | 48,000 | ||||||
| Due to two other service providers | 52,000 | 52,000 | ||||||
| Total | $ | 887,967 | $ | 832,967 | ||||
| 9 |
THE MARQUIE GROUP, INC.
(formerly Music of Your Life, Inc.)
Notes to the Consolidated Financial Statements
November 30, 2021
(Unaudited)
The accrued consulting fees balance changed as follows:
| Six Months Ended November 30, 2021 | Year Ended May 31, 2021 | |||||||
| Balance, beginning of period | $ | 832,967 | $ | 614,600 | ||||
| Compensation expense accrued pursuant to consulting agreements | 60,000 | 300,000 | ||||||
| Payments to consultants | (5,000 | ) | (81,633 | ) | ||||
| Balance, end of period | $ | 887,967 | $ | 832,967 | ||||
See Note 9 (Commitments and Contingencies).
NOTE 5 - NOTES PAYABLE
Notes payable consisted of the following:
| November 30, 2021 | May 31, 2021 | |||||||
| Notes payable to an entity, non-interest bearing, due on demand, unsecured | $ | 7,500 | $ | 7,500 | ||||
| Note payable to an individual, due on May 22, 2015, in default (B) | 25,000 | 25,000 | ||||||
| Note payable to an entity, non-interest bearing, due on February 1, 2016, in default (D) | 50,000 | 50,000 | ||||||
| Note payable to a family trust, stated interest of $2,500, due on October 31, 2015, in default (E) | 7,000 | 7,000 | ||||||
| Note payable to a corporation, stated interest of $5,000, due on October 21, 2015, in default (G) | 50,000 | 50,000 | ||||||
| Note payable to a corporation, stated interest of $5,000, due on November 6, 2015, in default (H) | 50,000 | 50,000 | ||||||
| Note payable to an individual, due on December 20, 2015, in default, 24% default rate from January 20, 2016 (I) | 25,000 | 25,000 | ||||||
| 10 |
THE MARQUIE GROUP, INC.
(formerly Music of Your Life, Inc.)
Notes to the Consolidated Financial Statements
November 30, 2021
(Unaudited)
| Convertible note payable to an entity, interest at 12%, due on December 29, 2016, in default (M) | 40,000 | 40,000 | ||||||
| Note payable to a family trust, interest at 10%, due on November 30, 2016, in default (P) | 25,000 | 25,000 | ||||||
| Convertible note payable to an individual, interest at 10%, due on demand (V) | 46,890 | 46,890 | ||||||
| Convertible note payable to an individual, interest at 8%, due on demand (W) | 29,000 | 29,000 | ||||||
| Convertible note payable to an individual, interest at 8%, due on demand (X) | 21,500 | 21,500 | ||||||
| Convertible note payable to an entity, interest at 10%, due on demand (Y) | 8,100 | 8,600 | ||||||
| Convertible note payable to an entity, interest at 10%, due on January 11, 2019, in default, 15% default interest rate from January 11, 2019 (AA) | 23,167 | 23,167 | ||||||
| Convertible note payable to an entity, interest at 10%, due on demand (CC) | 50,000 | 50,000 | ||||||
| Convertible note payable to an entity, interest at 10%, due on March 5, 2019, in default (DD) | 35,000 | 35,000 | ||||||
| Convertible note payable to an entity, interest at 10%, due on April 4, 2019 (EE) | — | 37,500 | ||||||
| Convertible note payable to an entity, interest at 10%, due on September 18, 2019 (FF) | — | 22,500 | ||||||
| Convertible note payable to an entity, interest at 10%, due on September 18, 2019, in default (GG) | 8,505 | 8,505 | ||||||
| Convertible note payable to an entity, interest at 10%, due on September 19, 2019, in default (HH) | 175,720 | 200,000 | ||||||
| Convertible note payable to an entity, interest at 10%, due on November 13, 2019, in default (JJ) | 5,050 | 56,055 | ||||||
| Convertible note payable to an entity, interest at 10%, due on November 15, 2019 (KK) | — | 20,000 | ||||||
| 11 |
THE MARQUIE GROUP, INC.
(formerly Music of Your Life, Inc.)
Notes to the Consolidated Financial Statements
November 30, 2021
(Unaudited)
| Convertible note payable to an entity, interest at 10%, due on November 30, 2019 (LL) | — | 5,000 | ||||||
| Convertible note payable to an entity, interest at 10%, due on December 6, 2019 (MM) | — | 3,000 | ||||||
| Convertible note payable to an entity, interest at 10%, due on December 11, 2019 (NN) | — | 10,000 | ||||||
| Convertible note payable to an entity, interest at 12%, due on March 10, 2020, in default, 24% default interest rate from March 10, 2020 (OO) | 58,750 | 58,750 | ||||||
| Convertible note payable to an entity, interest at 10%, due on September 12, 2020 (PP) | — | 12,500 | ||||||
| Convertible note payable to an entity, interest at 12%, due on November 30, 2021, in default, net of discount of $42,384 and $85,233, respectively (SS) | 170,000 | 84,767 | ||||||
| Note payable to an entity, interest at 12%, due on December 30, 2021 (TT) | 50,000 | 50,000 | ||||||
| Note payable to an entity, interest at 12%, due on April 15, 2022 (UU) | 47,612 | 55,000 | ||||||
| Convertible note payable to an entity, interest at 10%, due on June 4, 2022, net of discount of $121,586 and $-0-, respectively (VV) | 93,104 | 55,000 | ||||||
| Convertible note payable to an entity, interest at 8%, due on August 27, 2022, net of discount of $10,356 and $-0-, respectively (WW) | 3,644 | — | ||||||
| Convertible note payable to an entity, interest at 12%, due on September 3, 2022, net of discount of $23,526 and $-0-, respectively (XX) | 7,474 | — | ||||||
| Note payable to the Small Business Administration under the Payroll Protection Program, interest at 1%, due in installments through May 4, 2022, forgivable in part or whole subject to certain requirements | 70,000 | 70,000 | ||||||
| Note payable to the Small Business Administration under the Payroll Protection Program, interest at 1%, due in installments through April 5, 2023, forgivable in part or whole subject to certain requirements | 100,000 | 100,000 | ||||||
| Notes payable to individuals, non-interest bearing, due on demand | 103,476 | 103,476 | ||||||
| Total Notes Payable | 1,386,492 | 1,366,430 | ||||||
| Less: Current Portion | (1,386,492 | ) | (1,366,430 | ) | ||||
| Long-Term Notes Payable | $ | — | $ | — |
| 12 |
THE MARQUIE GROUP, INC.
(formerly Music of Your Life, Inc.)
Notes to the Consolidated Financial Statements
November 30, 2021
(Unaudited)
(B) On April 22, 2015, the Company issued a $25,000 Promissory Note, non-interest bearing (interest at 24% per annum after May 22, 2015), due at maturity on May 22, 2015.
(D) On July 24, 2015, the Company issued a $50,000 Promissory Note to Kodiak Capital Group, LLC (“Kodiak”) for services rendered in association with an Equity Purchase Agreement. As amended and restated January 4, 2016, the note is non-interest bearing and was due on February 1, 2016.
(E) On July 31, 2015, the Company issued a $25,000 Promissory Note with a stated interest amount of $2,500 due at maturity on October 31, 2015.
(G) On August 6, 2015, the Company issued a $50,000 Promissory Note with a stated interest amount of $5,000 due at maturity on October 21, 2015.
(H) On August 21, 2015, the Company issued a $50,000 Promissory Note with a stated interest amount of $5,000 due at maturity on November 6, 2015.
(I) On September 21, 2015, the Company issued a $25,000 Promissory Note with a stated interest amount of $2,500 due at maturity on December 20, 2015. In the event that all principal and interest are not paid to the lender by January 20, 2016, interest is to accrue at a rate of 24% per annum commencing on January 21, 2016.
(M) On December 29, 2015, the Company issued a $20,000 Convertible Promissory Note to a lender for net loan proceeds of $15,000. The note bears interest at a rate of 12% per annum, was due on December 29, 2016, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to 50% of the lowest closing bid price during the 30 Trading Day period prior to the Conversion Date. See Note 7 (Derivative Liability).
(P) On June 3, 2016, the Company issued a $25,000 Promissory Note. The note bears interest at a rate of 10% per annum and was due on November 30, 2016.
(V) On May 3, 2017, the Company issued a $72,750 Convertible Promissory Note to a lender as a replacement for the principal and interest due on a promissory note due on October 14, 2014. The note bears interest at a rate of 10% per annum, is due on demand, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to $0.0001293 per share.
(W) On April 5, 2017, the Company issued a $35,000 Convertible Promissory Note to a lender as a replacement for the principal and interest due on a promissory note due on August 23, 2015. The note bears interest at a rate of 8% per annum, is due on demand, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to 40% of the lowest Trading Price during the 5 Trading Day period prior to the Conversion Date. See Note 7 (Derivative Liability).
(X) On April 5, 2017, the Company issued a $27,500 Convertible Promissory Note to a lender as a replacement for the principal and interest due on a promissory note due on October 31, 2015. The note bears interest at a rate of 8% per annum, is due on demand, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to 40% of the lowest Trading Price during the 5 Trading Day period prior to the Conversion Date. See Note 7 (Derivative Liability).
(Y) On March 1, 2017, the Company issued a $8,600 Convertible Promissory Note to a vendor of the Company to convert certain accounts payable due to the vendor. The note bears interest at a rate of 10% per annum, is due on demand, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to the higher of $0.00004 per share or 60% of the lowest Trading Price during the 5 Trading Day period prior to the Conversion Date.
| 13 |
THE MARQUIE GROUP, INC.
(formerly Music of Your Life, Inc.)
Notes to the Consolidated Financial Statements
November 30, 2021
(Unaudited)
(AA) On January 11, 2018, the Company issued a $500,000 Convertible Promissory Note to a lender. During the quarter ended February 28, 2018, the Company borrowed $88,000 (of the $500,000), and received net loan proceeds of $75,000. The note bears interest at a rate of 10% per annum and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to 50% of the lowest Trading Price during the 15 Trading Day period prior to the Conversion Date. See Note 7 (Derivative Liability). The maturity date for each tranche funded is twelve months from the effective date of each payment.
(CC) On December 1, 2017, the Company issued a $50,000 Convertible Promissory Note to a vendor in settlement of certain accrued consulting fees of $50,000. The note bears interest at a rate of 10% per annum, is due on demand, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to 60% of the lowest Trading Price during the 20 Trading Day period prior to the Conversion Date. See Note 7 (Derivative Liability).
(DD) On March 5, 2018, the Company issued a $35,000 Convertible Promissory Note to a lender for net loan proceeds of $33,000. The note bears interest at a rate of 10% per annum, was due on March 5, 2019, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to 50% of the lowest Trading Price during the 20 Trading Day period prior to the Conversion Date. See Note 7 (Derivative Liability).
(EE) On April 4, 2018, the Company issued a $37,500 Convertible Promissory Note (Tranche 2 of (AA) above) to a lender for net loan proceeds of $35,500. The note bears interest at a rate of 10% per annum, was due on April 4, 2019, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to 50% of the lowest Trading Price during the 20 Trading Day period prior to the Conversion Date. See Note 7 (Derivative Liability).
(FF) On September 18, 2018, the Company issued a $22,500 Convertible Promissory Note (Tranche 3 of (AA) above) to a lender for net loan proceeds of $17,500. The note bears interest at a rate of 10% per annum, was due on September 18, 2019, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to 50% of the lowest Trading Price during the 20 Trading Day period prior to the Conversion Date. See Note 7 (Derivative Liability).
(GG) On September 18, 2018, the Company issued a $18,000 Convertible Promissory Note to a lender for net loan proceeds of $14,000. The note bears interest at a rate of 10% per annum, was due on September 18, 2019, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to 50% of the lowest Trading Price during the 20 Trading Day period prior to the Conversion Date. See Note 7 (Derivative Liability).
(HH) On December 19, 2018, the Company issued a $200,000 Convertible Promissory Note to a lender for net loan proceeds of $169,000. The note bears interest at a rate of 10% per annum, was due on September 19, 2019, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to the lesser of (i) the lowest Trading Price during the 25 Trading Day period prior to December 19, 2018 or (ii) 50% of the lowest Trading Price during the 25 Trading Day period prior to the Conversion Date. See Note 7 (Derivative Liability).
(II) On February 4, 2019, the Company issued a $170,000 Convertible Promissory Note to a lender for net loan proceeds of $149,955. The note bears interest at a rate of 10% per annum, was due on August 4, 2019, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to 50% of the lowest Trading Price during the 25 Trading Day period prior to the Conversion Date. See Note 7 (Derivative Liability).
(JJ) On February 13, 2019, the Company issued a $75,000 Convertible Promissory Note to a lender for net loan proceeds of $67,500. The note bears interest at a rate of 10% per annum, was due on November 13, 2019, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to 50% of the lowest Trading Price during the 20 Trading Day period prior to the Conversion Date. See Note 7 (Derivative Liability).
| 14 |
THE MARQUIE GROUP, INC.
(formerly Music of Your Life, Inc.)
Notes to the Consolidated Financial Statements
November 30, 2021
(Unaudited)
(KK) On November 15, 2018, the Company issued a $20,000 Convertible Promissory Note (Tranche 4 of (AA) above) to a lender for net loan proceeds of $20,000. The note bears interest at a rate of 10% per annum, was due on November 15, 2019, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to 50% of the lowest Trading Price during the 20 Trading Day period prior to the Conversion Date. See Note 7 (Derivative Liability).
(LL) On November 30, 2018, the Company issued a $5,000 Convertible Promissory Note (Tranche 5 of (AA) above) to a lender for net loan proceeds of $5,000. The note bears interest at a rate of 10% per annum, was due on November 30, 2019, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to 50% of the lowest Trading Price during the 20 Trading Day period prior to the Conversion Date. See Note 7 (Derivative Liability).
(MM) On December 6, 2018, the Company issued a $3,000 Convertible Promissory Note (Tranche 6 of (AA) above) to a lender for net loan proceeds of $3,000. The note bears interest at a rate of 10% per annum, was due on December 6, 2019, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to 50% of the lowest Trading Price during the 20 Trading Day period prior to the Conversion Date. See Note 7 (Derivative Liability).
(NN) On December 11, 2018, the Company issued a $10,000 Convertible Promissory Note (Tranche 7 of (AA) above) to a lender for net loan proceeds of $10,000. The note bears interest at a rate of 10% per annum, was due on December 11, 2019, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to 50% of the lowest Trading Price during the 20 Trading Day period prior to the Conversion Date. See Note 7 (Derivative Liability).
(OO) On June 10, 2019, the Company issued a $58,750 Convertible Promissory Note to a lender for net loan proceeds of $50,000. The note bears interest at a rate of 12% per annum (24% per annum default rate), was due on March 10, 2020, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to 50% of the lowest Trading Price during the 25 Trading Day period prior to the Conversion Date. See Note 7 (Derivative Liability).
(PP) On September 5, 2019, the Company issued a $12,500 Convertible Promissory Note to a lender for net loan proceeds of $10,000. The note bears interest at a rate of 10% per annum, was due on September 5, 2020, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to 50% of the lowest Trading Price during the 20 Trading Day period prior to the Conversion Date. See Note 7 (Derivative Liability).
(SS) On November 30, 2020, the Company issued a $170,000 Convertible Promissory Note to a lender which paid off some of the accrued interest for the note described in (RR) above. The Company received net proceeds of $32,500. The note bears interest at a rate of 12% per annum, is due on November 30, 2021, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to the lesser of (1) 105% of the closing bid price of the Common Stock on the Issue Date, or (2) the closing bid price of the Common Stock on the Trading Day immediately preceding the date of the conversion. See Note 7 (Derivative Liability).
(TT) On December 30, 2020, the Company issued a $50,000 Promissory Note. The note bears interest at a rate of 12% per annum and is due on December 30, 2021.
(UU) On April 15, 2021, the Company issued a $55,000 Convertible Promissory Note to a lender for net loan proceeds of $45,000. The note bears interest at a rate of 12% per annum, is due on April 15, 2022, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to the higher of (1) $0.0009, or (2) the par value of the Common Stock.
(VV) On June 4, 2021, the Company issued a $238,596 Convertible Promissory Note to a lender which paid off the principal and accrued interest for the notes described in (EE), (FF), (KK), (LL), (MM), (NN) and (PP) above. The note bears interest at a rate of 10% per annum, is due on June 4, 2022, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to the lesser of (1) $0.00004, or (2) 50% of the lowest trading price of the common stock for the previous 15 day trading period. See Note 7 (Derivative Liability).
| 15 |
THE MARQUIE GROUP, INC.
(formerly Music of Your Life, Inc.)
Notes to the Consolidated Financial Statements
November 30, 2021
(Unaudited)
(WW) On August 27, 2021, the Company issued a $14,000 Convertible Promissory Note to a lender for net loan proceeds of $10,000. The note bears interest at a rate of 8% per annum, is due on August 27, 2022, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to 65% of the lowest trading price in the 10 Trading Day period prior to the Conversion Date. See Note 7 (Derivative Liability).
(XX) On September 3, 2021, the Company issued a $31,000 Convertible Promissory Note to a lender for net loan proceeds of $24,400. The note bears interest at a rate of 12% per annum, is due on September 3, 2022, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to the higher of (1) $0.0003, or (2) the par value of the Common Stock. See Note 7 (Derivative Liability).
Concentration of Notes Payable:
The principal balance of the notes payable was due to:
| November 30, 2021 | May 31, 2021 | |||||||
| Lender A | $ | 23,167 | $ | 23,167 | ||||
| Lender B | 284,470 | 284,470 | ||||||
| Lender C | 225,086 | 225,000 | ||||||
| Lender D | 93,104 | 110,500 | ||||||
| 14 other lenders | 916,133 | 808,526 | ||||||
| Total | 1,541,960 | 1,451,663 | ||||||
| Less debt discounts | (155,468 | ) | (85,233 | ) | ||||
| Net | $ | 1,386,492 | $ | 1,366,430 | ||||
NOTE 6 - NOTES PAYABLE – RELATED PARTIES
Notes payable – related parties consisted of the following:
| November 30, 2021 | May 31, 2021 | |||||||
| Note payable to Company law firm (and owner of 2,500 shares of common stock since August 16, 2018), non-interest bearing, due on demand, unsecured | $ | 2,073 | $ | 2,073 | ||||
| Notes payable to The OZ Corporation (owner of 2,500 shares of common stock since August 16, 2018), non-interest bearing, due on demand, unsecured | 69,250 | 69,250 | ||||||
| Note payable to the Chief Executive Officer, non-interest bearing, due on demand, unsecured | 6,228 | — | ||||||
| Convertible note payable to John D. Thomas P.C. (Company law firm and owner of 2,500 shares of common stock since August 16, 2018), interest at 10%, due on demand, convertible at the option of the lender into shares of Company common stock equal to 60% of the lowest Trading Price during the 20 Trading Day period prior to the Conversion Date. See Note 7 (Derivative Liability) | 50,000 | 50,000 | ||||||
| Total Notes Payable | 127,551 | 121,323 | ||||||
| Less: Current Portion | (127,551 | ) | (121,323 | ) | ||||
| Long-Term Notes Payable | $ | — | $ | — | ||||
| 16 |
THE MARQUIE GROUP, INC.
(formerly Music of Your Life, Inc.)
Notes to the Consolidated Financial Statements
November 30, 2021
(Unaudited)
NOTE 7 - DERIVATIVE LIABILITY
The derivative liability at November 30, 2021 and May 31, 2020 consisted of:
| November 30, 2021 | May 31, 2021 | |||||||||||||||
| Face Value | Derivative Liability | Face Value | Derivative Liability | |||||||||||||
| Convertible note payable issued December 29, 2015, due December 29, 2016 (M) | $ | 40,000 | $ | 40,000 | $ | 40,000 | $ | 48,000 | ||||||||
| Convertible note payable issued April 5, 2017, due on demand (W) | 29,000 | 43,500 | 29,000 | 58,000 | ||||||||||||
| Convertible note payable issued April 5, 2017, due on demand (X) | 21,500 | 32,250 | 21,500 | 43,000 | ||||||||||||
| Convertible note payable issued January 11, 2018, due on January 11, 2019 (AA) | 23,167 | 23,167 | 23,167 | 27,800 | ||||||||||||
| Convertible note payable issued December 1, 2017, due on demand (BB) | 50,000 | 33,333 | 50,000 | 50,000 | ||||||||||||
| Convertible note payable issued December 1, 2017, due on demand (CC) | 50,000 | 33,333 | 50,000 | 50,000 | ||||||||||||
| Convertible note payable issued March 5, 2018, due on March 5, 2019 (DD) | 35,000 | 35,000 | 35,000 | 42,000 | ||||||||||||
| Convertible note payable issued April 4, 2018, due on April 4, 2019 (EE) | — | — | 37,500 | 45,000 | ||||||||||||
| Convertible note payable issued September 18, 2018, due on September 18, 2019 (FF) | — | — | 22,500 | 27,000 | ||||||||||||
| Convertible note payable issued September 18, 2018, due on September 18, 2019 (GG) | 8,505 | 8,505 | 8,506 | 10,208 | ||||||||||||
| Convertible note payable issued December 19, 2018, due on September 19, 2019 (HH) | 175,720 | 175,720 | 200,000 | 223,384 | ||||||||||||
| Convertible note payable issued February 4, 2019, due on August 4, 2019 (II) | — | — | 170,000 | 151,009 | ||||||||||||
| Convertible note payable issued February 13, 2019, due on November 13, 2019 (JJ) | 33,730 | 12,317 | 75,000 | 80,314 | ||||||||||||
| Convertible note payable issued November 15, 2018, due on November 15, 2019 (KK) | — | — | 20,000 | 24,000 | ||||||||||||
| Convertible note payable issued November 30, 2018, due on November 30, 2019 (LL) | — | — | 5,000 | 6,000 | ||||||||||||
| Convertible note payable issued December 6, 2018, due on December 6, 2019 (MM) | — | — | 3,000 | 3,600 | ||||||||||||
| Convertible note payable issued December 11, 2018, due on December 11, 2019 (NN) | — | — | 10,000 | 12,000 | ||||||||||||
| Convertible note payable issued June 10, 2019, due on March 10, 2020 (OO) | 58,750 | 58,750 | 58,750 | 70,500 | ||||||||||||
| Convertible note payable issued September 5, 2019, due on September 5, 2020 (PP) | — | — | 12,500 | 15,000 | ||||||||||||
| Convertible note payable issued November 30, 2020, due on November 30, 2021 (SS) | 127,616 | — | 170,000 | 1,020,000 | ||||||||||||
| Convertible note payable issued June 4, 2021, due on June 4, 2022 (VV) | 214,689 | 209,483 | 170,000 | 1,020,000 | ||||||||||||
| Convertible note payable issued August 27, 2021, due on August 27, 2022 (WW) | 14,000 | 19,815 | — | — | ||||||||||||
| Convertible note payable issued September 3, 2021, due on September 3, 2022 (XX) | 31,000 | 8,680 | — | — | ||||||||||||
| Totals | $ | 867,677 | $ | 733,853 | $ | 1,041,423 | $ | 2,006,815 | ||||||||
| 17 |
THE MARQUIE GROUP, INC.
(formerly Music of Your Life, Inc.)
Notes to the Consolidated Financial Statements
November 30, 2021
(Unaudited)
The above convertible notes contain a variable conversion feature based on the future trading price of the Company common stock. Therefore, the number of shares of common stock issuable upon conversion of the notes is indeterminate. Accordingly, we have recorded the fair value of the embedded conversion features as a derivative liability at the respective issuance dates of the notes and charged the applicable amounts to debt discounts and the remainder to other expense. The increase (decrease) in the fair value of the derivative liability from the respective issuance dates of the notes to the measurement dates is charged (credited) to other expense (income). The fair value of the derivative liability of the notes is measured at the respective issuance dates and quarterly thereafter using the Black Scholes option pricing model.
Assumptions used for the calculations of the derivative liability of the notes at November 30, 2021 include (1) stock price of $0.0001 per share, (2) exercise prices ranging from $0.00004 to $0.0003 per share, (3) terms ranging from 0 days to 277 days, (4) expected volatility of 380% and (5) risk free interest rates ranging from 0.10% to 0.11%.
Assumptions used for the calculations of the derivative liability of the notes at May 31, 2021 include (1) stock price of $0.0006 per share, (2) exercise prices ranging from $0.0001 to $0.0005 per share, (3) terms ranging from 0 days to 183 days, (4) expected volatility of 996% and (5) risk free interest rates ranging from 0.01% to 0.03%.
Concentration of Derivative Liability:
The derivative liability relates to convertible notes payable due to:
| November 30, 2021 | May 31, 2021 | |||||||
| Lender A | $ | 23,167 | $ | 27,801 | ||||
| Lender B | 234,470 | 293,884 | ||||||
| Lender C | 8,680 | 1,171,009 | ||||||
| Lender D | 12,316 | 82,600 | ||||||
| Lender E | 209,483 | — | ||||||
| 7 other lenders | 245,737 | 431,521 | ||||||
| Total | $ | 733,853 | $ | 2,006,815 | ||||
NOTE 8 - EQUITY TRANSACTIONS
On October 3, 2016, the Company amended its Articles of Incorporation to increase the number of authorized shares of common stock from 500,000,000 to 2,000,000,000 shares and to change the par value of both the common stock and preferred stock from $0.001 per share to $0.0001 per share.
On November 9, 2016, the Company amended its Articles of Incorporation to increase the number of authorized shares of common stock from 2,000,000,000 to 10,000,000,000 shares and to amend the voting rights for the Series A Preferred Stock. As amended, each share of Series A Preferred Stock shall have voting rights equal to four times the sum of (a) all shares of Common Stock issued and outstanding at the time of voting; plus (b) the total number of votes of all other classes of preferred stock which are issued and outstanding at the time of voting; divided by (c) the number of shares of Series A Preferred Stock issued and outstanding at the time of voting. The Series A Preferred Stock has no conversion, liquidation, or dividend rights.
On April 22, 2021, the Company amended its Articles of Incorporation to increase the number of authorized shares of common stock from 10,000,000,000 to 50,000,000,000 shares.
On August 16, 2018, the Company entered into a Merger Agreement by and among the Company, and The Marquie Group, Inc., a Utah Corporation (“TMG”), pursuant to with the Company merged with TMG. The Company is the surviving corporation. Each shareholder of TMG received one (1) share of common stock of the Company for every one (1) share of TMG common stock held as of August 16, 2018. In accordance with the terms of the merger agreement, all of the shares of TMG held by TMG shareholders were cancelled, and 100,000 shares of common stock of the Company were issued to the TMG shareholders.
| 18 |
THE MARQUIE GROUP, INC.
(formerly Music of Your Life, Inc.)
Notes to the Consolidated Financial Statements
November 30, 2021
(Unaudited)
TMG was incorporated on August 3, 2018. The merger provides the Company with certain registered trademarks and intellectual property of TMG with respect to health, beauty, and social networking products. The three stockholders of TMG prior to the merger who received the 100,000 shares are (1) Marc Angell (CEO of the Company) and Jacquie Angell (50,000 shares), (2) The OZ Corporation (holder of $103,250 of Company notes payable at May 31, 2019 and February 29, 2020) (25,000 shares), and (3) John Thomas P.C. (Company law firm and holder of $52,073 of Company notes payable at May 31, 2019 and February 29, 2020) (25,000 shares). Pursuant to ASC 805-50-30-5 relating to transactions between entities under common control, the intellectual property of TMG (and the issuance of the 100,000 shares of common stock) were recorded at $-0-, the historical cost of the property to TMG.
On August 28, 2019, the Securities and Exchange Commission (the “SEC”) issued a Notice of Qualification regarding a Form 1-A filed by the Company in connection with the Company’s offering of up to 1,333,333,333 shares of common stock at a price of $0.0075 per share or a total offering of $10,000,000. The end date of the offering is August 28, 2020. On December 26, 2019, the Company amended its Form 1-A Offering Circular to reduce the offering price from $0.0075 per share to $0.0035 per share. As part of this offering, during the three months ended February 29, 2020, the Company issued an aggregate of 58,438,096 shares of common stock for cash in the amount of $287,200.
On November 21, 2019, the Company merged with Global Nutrition Experience, Inc. (“GNE”) in exchange for the issuance of a total of 160,000,000 shares of our common stock to GNE’s stockholders. Following the merger, the Company had 161,061,647 shares of common stock issued and outstanding. GNE was incorporated on November 21, 2019. The stockholder of GNE prior to the merger who received the 160,000,000 shares was the Angell Family Trust. Pursuant to ASC 805-50-30-5 relating to transactions between entities under common control, the intellectual property of GNE (and the issuance of the 160,000,000 shares of common stock) were recorded at $-0-, the historical cost of the property to GNE. During the three months ended February 29, 2020, the Company issued an additional 33,000,000 shares of common stock as part of the merger.
During the year ended May 31, 2021, the Company issued an aggregate of 4,304,842,121 shares of common stock for the conversion of notes payable and accrued interest in the aggregate amount of $835,050. We incurred a loss on the conversion of notes payable and accrued interest of $1,445,042, which represents the excess of the $2,280,092 fair value of the 4,304,842,121 shares at the dates of conversion over the $835,050 amount of debt satisfied.
During the six months ended November 30, 2021, the Company issued an aggregate of 6,073,852,820 shares of common stock for the conversion of notes payable and accrued interest in the aggregate amount of $95,496. We incurred a loss on the conversion of notes payable and accrued interest of $2,529,399, which represents the excess of the $2,624,895 fair value of the 6,073,852,820 shares at the dates of conversion over the $95,496 amount of debt satisfied.
At November 30, 2021, there are no stock options or warrants outstanding.
NOTE 9 - COMMITMENTS AND CONTINGENCIES
Consulting Agreements with Individuals
The Company has entered into Consulting Agreements with the Company’s Chief Executive Officer, the wife of the Company’s Chief Executive Officer, the mother of the Company’s Chief Executive Officer, and other service providers (see Note 4 – Accrued Consulting Fees). The Consulting Agreement with the Company’s Chief Executive Officer provides for monthly compensation of $10,000. The Consulting Agreement with the wife of the Company’s Chief Executive Officer provided for monthly compensation of $15,000 and expired on May 31, 2021. The Consulting Agreement with the mother of the Company’s Chief Executive Officer provided for monthly compensation of $5,000 and was terminated as of November 30, 2019. The other 3 consulting agreements provided for monthly compensation totaling $6,500 and were terminated as of November 30, 2019.
| 19 |
THE MARQUIE GROUP, INC.
(formerly Music of Your Life, Inc.)
Notes to the Consolidated Financial Statements
November 30, 2021
(Unaudited)
Corporate Consulting Agreement
On March 14, 2018, the Company executed a Corporate Consulting Agreement (the “Agreement”) with a consulting firm entity (the “Consultant”). The Agreement provided for the Consultant to perform certain investor relations and other services for the Company. The term of the Agreement was 4 months but the Agreement provided that the Company could terminate the Agreement for any reason at any time upon 5 days written prior notice. The Agreement provided for 8 payments of cash fees totaling $240,000 to be paid to the Consultant over 4 months.
On April 1, 2018, the Company notified the Consultant that the Agreement was terminated. A total of $25,000 was paid to the Consultant in March 2018 which was expensed and included in “Salaries and Consulting Fees” in the Consolidated Statement of Operations for the year ended May 31, 2018. No other amounts were accrued at August 31, 2020 and May 31, 2020.
On October 16, 2018 (see Note 8), the Company issued 5,000 shares of its common stock to the Consultant. On October 26, 2018, the Consultant advised the Company that it had not been notified that the Agreement was terminated on April 1, 2018 and that the Company is in default of the Agreement.
Consulting Agreement with New Jersey Entity
On December 5, 2019 and January 13, 2020, the Company paid $50,000 and $50,000, respectively to a consulting firm entity (the “Consultant”) pursuant to Consulting Agreements dated December 4, 2019 and January 11, 2020. The Consulting Agreements provide for the Consultant to perform certain strategic planning, business development, and investor relations services for the Company for total compensation of $100,000 cash (which was expensed and included in “Other Selling, General and Administrative Expenses” in the Consolidated Statement of Operations for the three months ended February 29, 2020. The terms of the Consulting Agreements are for 90 days each.
NOTE 10 - GOING CONCERN
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. At November 30, 2021, the Company had negative working capital of $3,645,849 and an accumulated deficit of $13,253,553. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern.
To date the Company has funded its operations through a combination of loans and sales of common stock. The Company anticipates another net loss for the fiscal year ended May 31, 2022 and with the expected cash requirements for the coming year, there is substantial doubt as to the Company’s ability to continue operations.
The Company is attempting to improve these conditions by way of financial assistance through issuances of notes payable and additional equity and by generating revenues through sales of products and services.
The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
NOTE 11 – SUBSEQUENT EVENTS
From December 1, 2021 to December 29, 2021, the Company issued a total of 2,732,925,670 shares of its common stock for the conversion of notes payable and accrued interest in the aggregate amount of $82,013. The $250,045 excess of the $332,058 fair value of the 2,732,925,670 shares at the dates of conversion over the $82,013 of debt satisfied will be charged to “Loss on conversion of notes payable and accrued interest” in the three months ended February 28, 2022.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation
The following discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 relating to future events or our future performance. Actual results may materially differ from those projected in the forward-looking statements as a result of certain risks and uncertainties set forth in this prospectus. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed in this report.
BUSINESS OVERVIEW
The Marquie Group, Inc. (“TMGI), is a direct-to-consumer sales and marketing company with an exclusive pipeline of innovative health and beauty products. The Company markets these products through its wholly owned subsidiary Music of Your Life, a syndicated radio network heard nationwide on AM, FM and HD terrestrial radio stations, and simulcast over the internet. This is made possible by 30 and 60 second commercials airing every hour which are targeted toward the Music of Your Life listening audience. Broadcasting more than 40 years, Music of Your Life is the longest running music radio format in syndication.
Expenses which comprise the costs of goods sold will include licensing agreements and royalties, as well as operational and staffing costs related to the management of the Company’s syndicated radio network, product development and product marketing costs. General and administrative expenses are comprised of administrative wages; office expenses; outside legal, accounting, and other professional fees; travel and other miscellaneous office and administrative expenses. Selling and marketing expenses include selling/marketing wages and benefits, advertising and promotional expenses, as well as travel and other miscellaneous related expenses.
Because we have incurred losses, income tax expenses are immaterial. No tax benefits have been booked related to operating loss carryforwards, given our uncertainty of being able to utilize such loss carryforwards in future years. We anticipate incurring additional losses during the coming year.
RESULTS OF OPERATION
Following is management’s discussion of the relevant items affecting results of operations for the three and six months ended November 30, 2021 and 2020.
Revenues. The Company generated no net revenues during the three months ended November 30, 2021 and 2020. The Company generated no net revenues during the six months ended November 30, 2021 compared to $60 during the six months ended November 30, 2020. Revenues were generated from spot sales on our syndicated radio network.
Cost of Sales. Our cost of sales were $-0- for the three and six months ended November 30, 2021 and 2020. Our cost of sales in the future will consist principally of licensing costs and royalties associated with our syndicated radio network, other related services provided directly or outsourced through our affiliates, as well as operational and staffing costs with respect thereto.
Salaries and Consulting Fees. Accrued salaries and consulting fees were $30,000 and $75,000 for the three months ended November 30, 2021 and 2020, respectively. Accrued salaries and consulting fees were $60,000 and $151,000 for the six months ended November 30, 2021 and 2020, respectively. We expect that salaries and consulting expenses will increase as we add personnel to build our multi-media entertainment business.
Professional Fees. Professional fees were $40,885 and $25,509 for the three months ended November 30, 2021 and 2020, respectively. Professional fees were $40,885 and $44,748 for the six months ended November 30, 2021 and 2020, respectively. Professional fees consist mainly of the fees related to the audits and reviews of the Company’s financial statements as well as the filings with the Securities and Exchange Commission. We anticipate that professional fees will increase in future periods as we scale up our operations.
Other Selling, General and Administrative Expenses. Other selling, general and administrative expenses were $4,905 and $16,025 for the three months ended November 30, 2021 and 2020, respectively. Other selling, general and administrative expenses were $9,066 and $24,014 for the six months ended November 30, 2021 and 2020, respectively. We anticipate that SG&A expenses will increase commensurate with an increase in our operations.
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Other Income (Expenses). The Company had net other income of $1,586,822 for the three months ended November 30, 2021 compared to net other expenses of $513,082 for the three months ended November 30, 2020. The Company had net other expenses of $1,381,365 for the six months ended November 30, 2021 compared to net other expenses of $2,787,432 for the six months ended November 30, 2020. During the six months ended November 30, 2021, the company recorded income on the change in the fair value of the derivative liability in the amount of $1,556,558. During the six months ended November 30, 2020, the company recorded expense on the change in the fair value of the derivative liability in the amount of $1,934,806. During the six months ended November 30, 2021 and 2020, other expenses incurred were also comprised of interest expenses related to notes payable in the amount of $408,524 and $307,107, which included the amortization of debt discounts of $213,361 and $122,505, respectively. During the six months ended November 30, 2021 and 2020, the Company recorded a loss on the conversion of notes payable and accrued interest in the amount of $2,529,399 and $545,519, respectively, based on difference between the fair market value of the stock at issuance and the amount of notes payable and accrued interest converted.
LIQUIDITY AND CAPITAL RESOURCES
As of November 30, 2021, our primary source of liquidity consisted of $-0- in cash and cash equivalents. We hold our cash reserves in a major United States bank. Since inception, we have financed our operations through a combination of short and long-term loans, and through the private placement of our common stock.
We have sustained significant net losses which have resulted in negative working capital and an accumulated deficit at November 30, 2021 of $3,645,849 and $13,253,553, respectively, which raises doubt about our ability to continue as a going concern. We generated a net loss for the six months ended November 30, 2021 of $1,491,316. Without additional revenues, working capital loans, or equity investment, there is substantial doubt as to our ability to continue operations.
We believe these conditions have resulted from the inherent risks associated with small public companies. Such risks include, but are not limited to, the ability to (i) generate revenues and sales of our products and services at levels sufficient to cover our costs and provide a return for investors, (ii) attract additional capital in order to finance growth, and (iii) successfully compete with other comparable companies having financial, production and marketing resources significantly greater than those of the Company.
We believe that our capital resources are insufficient for ongoing operations, with minimal current cash reserves, particularly given the resources necessary to expand our multi-media entertainment business. We will likely require considerable amounts of financing to make any significant advancement in our business strategy. There is presently no agreement in place that will guarantee financing for our Company, and we cannot assure you that we will be able to raise any additional funds, or that such funds will be available on acceptable terms. Funds raised through future equity financing will likely be substantially dilutive to current shareholders. Lack of additional funds will materially affect our Company and our business and may cause us to substantially curtail or even cease operations. Consequently, you could incur a loss of your entire investment in the Company.
CRITICAL ACCOUNTING PRONOUNCEMENTS
Our financial statements and related public financial information are based on the application of generally accepted accounting principles in the United States (“GAAP”). GAAP requires the use of estimates, assumptions, judgments, and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenues, and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk, and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.
Our significant accounting policies are summarized in Note 2 of our financial statements included in our May 31, 2021 Form 10-K. While all these significant accounting policies impact our financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause a material effect on our results of operations, financial position or liquidity for the periods presented in this report.
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We recognize revenue on arrangements in accordance with FASB ASC No. 605, “Revenue Recognition”. In all cases, revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service is performed, and collectability of the resulting receivable is reasonably assured.
RECENT ACCOUNTING PRONOUNCEMENTS
We have reviewed accounting pronouncements issued during the past two years and have adopted any that are applicable to the Company. We have determined that none had a material impact on our financial position, results of operations, or cash flows for the periods presented in this report.
OFF-BALANCE SHEET ARRANGEMENTS
We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose entities” (“SPE”s).
Item 3. Quantitative and Qualitative Disclosures about Market Risks
Not applicable because we are a smaller reporting company.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures were not effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure as a result of continuing material weaknesses (such as the absence of an audit committee and absence of qualified independent directors) in its internal control over financial reporting. The disclosure controls and procedures were ineffective because there was no segregation of duties. One member of our management team handles all accounting duties including the recording of transactions, paying bills and reconciling the bank account. We have minimized this risk by having an external accountant review all transactions and make the appropriate adjustments before the review by our external auditor.
Changes in Internal Controls Over Financial Reporting
There have been no changes in the Company's internal control over financial reporting during the latest fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
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PART II - OTHER INFORMATION
Currently we are not aware of any litigation pending or threatened by or against the Company.
Not applicable because we are a smaller reporting company.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
See Note 8 in the notes to the financial statements.
With respect to the transactions in Note 8 to the financial statements, each of the recipients of securities of the Company was an accredited investor or is considered by the Company to be a “sophisticated person”, inasmuch as each of them has such knowledge and experience in financial and business matters that they are capable of evaluating the merits and risks of receiving securities of the Company. No solicitation was made, and no underwriting discounts were given or paid in connection with these transactions. The Company believes that the issuance of its securities as described above was exempt from registration with the Securities and Exchange Commission pursuant to Section 4(2) of the Securities Act of 1933.
Item 3. Defaults Upon Senior Securities.
The Company has not paid the principal and interest due on 14 notes payable aggregating $606,872 at November 30, 2021. See Note 5 to the Consolidated Financial Statements.
Item 4. Mine Safety Disclosures
Not Applicable.
None.
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| Exhibit No. | Description | |
| 3.1 | Amended and Restated Articles of Incorporation of Music of Your life, Inc. | |
| 3.2 | Amended and Restated Bylaws of Music of Your Life, Inc. | |
| 31.1 | Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 32.1 | Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 101.INS | XBRL Instance Document | |
| 101.SCH | XBRL Taxonomy Extension Schema Document | |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |
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.
| The Marquie Group, Inc. | ||
| Date: June 28, 2022 | By: | /s/ Marc Angell |
| Marc Angell | ||
| Chief Executive Officer | ||
| (Duly Authorized Officer and Principal Executive Officer) | ||
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SECTION 302 CEO CERTIFICATION
Form of Certification Required
by Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934
I, Marc Angell, certify that:
| 1. | I have reviewed this Report on Form 10-Q of The Marquie Group, Inc.; |
| 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 small business issuer as of, and for, the periods presented in this report; |
| 4. | The small business issuer’s other certifying officer 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)) for the small business issuer. We have concluded that our disclosure controls and procedures were ineffective as of the end of the period covered by this quarterly report because there was no segregation of duties. One member of our management team handles all accounting duties including the recording of transactions, paying bills and reconciling the bank account. We have minimized this risk by having an external accountant review all transactions and make the appropriate adjustments prior to the review by our external auditor. We also 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 small business issuer, 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 small business issuer’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; |
| d. | Disclosed in this report any change in the small business issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter (the small business issuer’s second fiscal quarter in the case of this report) that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting, and; |
| 5. | The small business issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of the internal control over financial reporting, to the small business issuer’s auditors and the audit committee of small business issuer’s board of directors (or persons performing the equivalent function): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting, which are reasonably likely to adversely affect the small business issuer’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 small business issuer’s internal control over financial reporting. |
| Date: June 28, 2022 | By: | /s/ Marc Angell |
| Marc Angell | ||
| Chief Executive Officer | ||
CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
(18 U.S.C. SECTION 1350)
In connection with the accompanying report of The Marquie Group, Inc. (the “Company”) on Form 10-Q for the quarter ended November 30, 2021 (the “Report”), I, Marc Angell, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | To my knowledge, the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and |
| (2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
| Date: June 28, 2022 | By: | /s/ Marc Angell |
| Marc Angell | ||
| Chief Executive Officer | ||