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As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 4/22/24 Marquie Group, Inc. 10-Q 2/29/24 50:3.1M GlobalOne Filings Inc/FA |
Document/Exhibit Description Pages Size
1: 10-Q Form 10-Q for 2/29/24 HTML 592K
2: EX-31.1 Certification -- §302 - SOA'02 HTML 20K
3: EX-32.1 Certification -- §906 - SOA'02 HTML 15K
9: R1 Cover HTML 64K
10: R2 Consolidated Balance Sheets HTML 108K
11: R3 Consolidated Balance Sheets (Parenthetical) HTML 41K
12: R4 Consolidated Statements of Operations (Unaudited) HTML 86K
13: R5 Consolidated Statements of Operations (Unaudited) HTML 18K
(Parenthetical)
14: R6 Consolidated Statements of Stockholders' Equity HTML 71K
(Deficit) (Unaudited)
15: R7 Consolidated Statements of Cash Flows (Unaudited) HTML 86K
16: R8 Pay vs Performance Disclosure HTML 28K
17: R9 Insider Trading Arrangements HTML 21K
18: R10 Summary of Significant Accounting Policies and HTML 26K
Organization
19: R11 Music Inventory HTML 22K
20: R12 Accrued Consulting Fees HTML 34K
21: R13 Notes Payable HTML 80K
22: R14 Notes Payable - Related Parties HTML 30K
23: R15 Derivative Liability HTML 61K
24: R16 Equity Transactions HTML 26K
25: R17 Commitments and Contingencies HTML 21K
26: R18 Investment in Acquisition HTML 20K
27: R19 Subsequent Events HTML 18K
28: R20 Summary of Significant Accounting Policies and HTML 31K
Organization (Policies)
29: R21 Music Inventory (Tables) HTML 21K
30: R22 Accrued Consulting Fees (Tables) HTML 35K
31: R23 Notes Payable (Tables) HTML 66K
32: R24 Notes Payable - Related Parties (Tables) HTML 26K
33: R25 Derivative Liability (Tables) HTML 59K
34: R26 Summary of Significant Accounting Policies and HTML 20K
Organization (Details Narrative)
35: R27 Music Inventory (Details) HTML 22K
36: R28 Music Inventory (Details Narrative) HTML 19K
37: R29 Accrued Consulting Fees (Details - Consulting fees HTML 33K
payable)
38: R30 Accrued Consulting Fees (Details - Consulting fees HTML 20K
activity)
39: R31 Notes Payable (Details) HTML 89K
40: R32 Notes Payable (Details - Principal balance of HTML 36K
notes payable by lender)
41: R33 Notes Payable Related Parties (Details) HTML 29K
42: R34 Derivative Liability (Details) HTML 61K
43: R35 Derivative Liability (Details - Derivative HTML 34K
liabilities by lenders)
44: R36 Equity Transactions (Details Narrative) HTML 29K
45: R37 Investment in Acquisition (Details Narrative) HTML 24K
47: XML IDEA XML File -- Filing Summary XML 85K
50: XML XBRL Instance -- marquie_i10q-022924_htm XML 813K
46: EXCEL IDEA Workbook of Financial Report Info XLSX 73K
5: EX-101.CAL XBRL Calculations -- tmgi-20240229_cal XML 104K
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| The Marquie Group, Inc. 10-Q |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
| (Mark One) | |
| i x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the quarterly period ended i February 29, 2024 | |
| i 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: i 000-54163
| i The Marquie Group, Inc. |
| (Exact name of registrant as specified in its Charter) |
| i Florida | i 26-2091212 | |
|
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employee Identification No.) | |
|
i St. Petersburg, i FL i 33702 |
i 33702 | |
| (Address of principal executive office) | (Zip Code) |
(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. i Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). i Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated Filer ☐ | Accelerated Filer ☐ |
| i Non-accelerated Filer ☒ | Smaller reporting company i ☒ |
| Emerging growth company i ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No i ☒
Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date: As of April 15, 2024, there were shares of $0.0001 par value common stock, issued and outstanding.
| 2 |
PART I - FINANCIAL INFORMATION
(formerly Music of Your Life, Inc.)
| February 29, | May 31, | |||||||
| 2024 | 2023 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | i 2,162 | $ | i – | ||||
| Total Current Assets | i 2,162 | i – | ||||||
| OTHER ASSETS | ||||||||
| Investment in Acquisition | i 6,200,000 | i 6,200,000 | ||||||
| Loans receivable, related party | i 35,237 | i 28,247 | ||||||
| Music inventory, net of accumulated depreciation of $ i 21,386 and $ i 20,719, respectively | i 882 | i 929 | ||||||
| Trademark costs | i 11,165 | i 10,365 | ||||||
| Total Other Assets | i 6,247,284 | i 6,239,541 | ||||||
| TOTAL ASSETS | $ | i 6,249,446 | $ | i 6,239,541 | ||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
| CURRENT LIABILITIES | ||||||||
| Bank overdraft | $ | i – | $ | i 46 | ||||
| Accounts payable | i 70,658 | i 50,664 | ||||||
| Accrued interest payable on notes payable | i 834,846 | i 578,017 | ||||||
| Accrued consulting fees, related parties | i 1,105,367 | i 925,367 | ||||||
| Accrued consulting fees | i 220,550 | i 220,550 | ||||||
| Notes payable, net of debt discounts of $ i 60,837 and $ i 66,794, respectively | i 1,546,330 | i 1,465,138 | ||||||
| Notes payable to related parties | i 2,082,015 | i 2,090,772 | ||||||
| Derivative liability | i 603,138 | i 1,035,998 | ||||||
| Total Current Liabilities | i 6,462,904 | i 6,366,552 | ||||||
| TOTAL LIABILITIES | i 6,462,904 | i 6,366,552 | ||||||
| STOCKHOLDERS' DEFICIT | ||||||||
| Preferred Stock, $ par value; shares authorized, and shares issued and outstanding | i – | i – | ||||||
| Common stock, $ par value; shares authorized, and shares issued and outstanding, respectively | i 141,080 | i 75,663 | ||||||
| Common stock payable - 1 share | i 8,460 | i 8,460 | ||||||
| Additional paid-in-capital | i 14,575,002 | i 14,486,896 | ||||||
| Accumulated deficit | ( i 14,938,000 | ) | ( i 14,698,030 | ) | ||||
| Total Stockholders' Deficit | ( i 213,458 | ) | ( i 127,011 | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ | i 6,249,446 | $ | i 6,239,541 | ||||
The accompanying notes are an integral part of these financial statements
| 3 |
(formerly Music of Your Life, Inc.)
Consolidated Statements of Operations
(Unaudited)
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| February 29, 2024 | February 28, 2023 | February 29, 2024 | February 28, 2023 | |||||||||||||
| NET REVENUES | $ | i – | $ | i – | $ | i – | $ | i – | ||||||||
| OPERATING EXPENSES | ||||||||||||||||
| Salaries and Consulting fees to related parties | i 60,000 | i 60,000 | i 180,000 | i 180,000 | ||||||||||||
| Professional fees | i 27,410 | i 8,096 | i 90,303 | i 59,209 | ||||||||||||
| Other selling, general and administrative | i 40,690 | i 1,369 | i 102,105 | i 13,370 | ||||||||||||
| Total Operating Expenses | i 128,100 | i 69,465 | i 372,408 | i 252,579 | ||||||||||||
| LOSS FROM OPERATIONS | ( i 128,100 | ) | ( i 69,465 | ) | ( i 372,408 | ) | ( i 252,579 | ) | ||||||||
| OTHER INCOME (EXPENSES) | ||||||||||||||||
| Change in fair value of derivative liability | ( i 202,283 | ) | ( i 501,275 | ) | i 508,915 | i 1,349,841 | ||||||||||
| Interest expense (including amortization of debt discounts of $ i 33,131, $ i 17,120, $ i 82,012, and $ i 44,614, respectively) | ( i 128,553 | ) | ( i 102,520 | ) | ( i 376,477 | ) | ( i 248,263 | ) | ||||||||
| Total Other Income (Expenses) | ( i 330,836 | ) | ( i 603,795 | ) | i 132,438 | i 1,101,578 | ||||||||||
| INCOME (LOSS) BEFORE INCOME TAXES | ( i 458,936 | ) | ( i 673,260 | ) | ( i 239,970 | ) | i 848,999 | |||||||||
| INCOME TAX EXPENSE | i – | i – | i – | i – | ||||||||||||
| NET INCOME (LOSS) | $ | ( i 458,936 | ) | $ | ( i 673,260 | ) | $ | ( i 239,970 | ) | $ | i 848,999 | |||||
| BASIC AND DILUTED: | ||||||||||||||||
| Net income (loss) per common share | $ | ) | $ | ) | $ | ) | $ | |||||||||
| Weighted average shares outstanding | ||||||||||||||||
The accompanying notes are an integral part of these financial statements
| 4 |
(formerly Music of Your Life, Inc.)
Consolidated Statements of Stockholders' Equity (Deficit)
(Unaudited)
| Nine Months Ended February 29, 2024 | ||||||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Common Stock | Additional Paid-in | Accumulated | Total Stockholders' Equity | |||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Payable | Capital | Deficit | (Deficit) | |||||||||||||||||||||||||
| Balance, May 31, 2023 | i 200 | $ | i – | i 756,612,000 | $ | i 75,663 | $ | i 8,460 | $ | i 14,486,896 | $ | ( i 14,698,030 | ) | $ | ( i 127,011 | ) | ||||||||||||||||
| Net income for the three months ended August 31, 2023 | – | – | – | – | – | – | i 353,082 | i 353,082 | ||||||||||||||||||||||||
| Balance, August 31, 2023 | i 200 | i – | i 756,612,000 | i 75,663 | i 8,460 | i 14,486,896 | ( i 14,344,948 | ) | i 226,071 | |||||||||||||||||||||||
| Common stock issued for conversion of debt | – | – | i 279,334,689 | i 27,932 | – | i 49,179 | – | i 77,111 | ||||||||||||||||||||||||
| Common stock issued for Standby Equity Agreement | – | – | i 118,443,135 | i 11,844 | – | i 43,887 | – | i 55,731 | ||||||||||||||||||||||||
| Net loss for the three months ended November 30, 2023 | – | – | – | – | – | – | ( i 134,116 | ) | ( i 134,116 | ) | ||||||||||||||||||||||
| Balance, November 30, 2023 | i 200 | i – | i 1,154,389,824 | i 115,440 | i 8,460 | i 14,579,962 | ( i 14,479,064 | ) | i 224,798 | |||||||||||||||||||||||
| Common stock issued for conversion of debt | – | – | i 256,400,000 | i 25,640 | – | ( i 4,960 | ) | – | i 20,680 | |||||||||||||||||||||||
| Net loss for the three months ended February 29, 2024 | – | – | – | – | – | – | ( i 458,936 | ) | ( i 458,936 | ) | ||||||||||||||||||||||
| Balance, February 29, 2024 | i 200 | $ | i – | i 1,410,789,824 | $ | i 141,080 | $ | i 8,460 | $ | i 14,575,002 | $ | ( i 14,938,000 | ) | $ | ( i 213,458 | ) | ||||||||||||||||
| 5 |
(formerly Music of Your Life, Inc.)
Consolidated Statements of Stockholders' Equity (Deficit)
(Unaudited)
(continued)
| Nine Months Ended February 28, 2023 | ||||||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Common Stock | Additional Paid-in | Accumulated | Total Stockholders' Equity | |||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Payable | Capital | Deficit | (Deficit) | |||||||||||||||||||||||||
| Balance, May 31, 2022 | i 200 | $ | i – | i 16,189,732 | $ | i 1,621 | $ | i 8,460 | $ | i 10,213,431 | $ | ( i 15,878,189 | ) | $ | ( i 5,654,677 | ) | ||||||||||||||||
| Round up of shares from reverse stock split | – | – | i 2,600 | – | – | – | – | – | ||||||||||||||||||||||||
| Net loss for the three months ended August 31, 2022 | – | – | – | – | – | – | ( i 111,440 | ) | ( i 111,440 | ) | ||||||||||||||||||||||
| Balance, August 31, 2022 | i 200 | i – | i 16,192,332 | i 1,621 | i 8,460 | i 10,213,431 | ( i 15,989,629 | ) | ( i 5,766,117 | ) | ||||||||||||||||||||||
| Common stock issued for conversion of debt | – | – | i 73,753,000 | i 7,375 | – | i 140,132 | – | i 147,507 | ||||||||||||||||||||||||
| Investment in Acquisition | – | – | i 666,666,668 | i 66,667 | – | i 4,133,333 | – | i 4,200,000 | ||||||||||||||||||||||||
| Net income for the three months ended November 30, 2022 | – | – | – | – | – | – | i 1,633,699 | i 1,633,699 | ||||||||||||||||||||||||
| Balance, November 30, 2022 | i 200 | i – | i 756,612,000 | i 75,663 | i 8,460 | i 14,486,896 | ( i 14,355,930 | ) | i 215,089 | |||||||||||||||||||||||
| Net loss for the three months ended February 28, 2023 | – | – | – | – | – | – | ( i 673,260 | ) | ( i 673,260 | ) | ||||||||||||||||||||||
| Balance, February 28, 2023 | i 200 | $ | i – | i 756,612,000 | $ | i 75,663 | $ | i 8,460 | $ | i 14,486,896 | $ | ( i 15,029,190 | ) | $ | ( i 458,171 | ) | ||||||||||||||||
The accompanying notes are an integral part of these financial statements
| 6 |
(formerly Music of Your Life, Inc.)
Consolidated Statements of Cash Flows
(Unaudited)
| For the Nine Months Ended | ||||||||
| February 29, 2024 | February 28, 2023 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income (loss) | $ | ( i 239,970 | ) | $ | i 848,999 | |||
| Adjustments to reconcile net income to net cash used by operating activities: | ||||||||
| Depreciation of music inventory | i 667 | i 1,008 | ||||||
| Change in fair value of derivative liability | ( i 508,915 | ) | ( i 1,349,841 | ) | ||||
| Amortization of debt discounts | i 82,012 | i 44,614 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts payable | i 19,994 | i 34,009 | ||||||
| Accrued interest payable on notes payable | i 288,209 | i 196,715 | ||||||
| Accrued consulting fees | i 180,000 | i 165,300 | ||||||
| Net Cash Used by Operating Activities | ( i 178,003 | ) | ( i 59,196 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Music inventory | ( i 620 | ) | i – | |||||
| Trademark costs | ( i 800 | ) | i – | |||||
| Payments to related party | ( i 6,990 | ) | ( i 23,247 | ) | ||||
| Net Cash Used by Investing Activities | ( i 8,410 | ) | ( i 23,247 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Bank overdraft | ( i 46 | ) | i – | |||||
| Proceeds from standby equity agreement | i 55,732 | i – | ||||||
| Proceeds from notes payable | i 141,646 | i 94,835 | ||||||
| Repayments of notes payable to related parties | ( i 8,757 | ) | ( i 12,700 | ) | ||||
| Net Cash Provided by Financing Activities | i 188,575 | i 82,135 | ||||||
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | i 2,162 | ( i 308 | ) | |||||
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | i – | i 353 | ||||||
| CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | i 2,162 | $ | i 45 | ||||
| SUPPLEMENTAL CASH FLOW INFORMATION | ||||||||
| Cash Payments For: | ||||||||
| Interest | $ | i – | $ | i – | ||||
| Income taxes | $ | i – | $ | i – | ||||
| Non-cash investing and financing activities: | ||||||||
| Initial derivative liability charged to debt discounts | $ | i 76,056 | $ | i – | ||||
| Issuance of stock and promissory note for investment in acquisition | $ | i – | $ | i 6,200,000 | ||||
| Conversion of debt and accrued interest into common stock | $ | i 97,791 | $ | i 147,507 | ||||
The accompanying notes are an integral part of these financial statements
| 7 |
(formerly Music of Your Life, Inc.)
Notes to the Consolidated Financial Statements
i
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
i
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.
i
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 nine months ended February 29, 2024 are not necessarily indicative of results that may be expected for the year ending May 31, 2024.
i
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 shares of our common stock to TMGI’s stockholders. Following the merger, the Company had 102 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.
| 8 |
i
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 February 29, 2024, the Company had negative working capital of $ i 6,460,742 and an accumulated deficit of $ i 14,938,000. 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, 2024 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.
/ / i
Music inventory consisted of the following:
i| Schedule of music inventory | ||||||||
| February 29, 2024 | May 31, 2023 | |||||||
| Digital music acquired for use in operations – at cost | $ | i 22,268 | $ | i 21,648 | ||||
| Accumulated depreciation | ( i 21,386 | ) | ( i 20,719 | ) | ||||
| Music inventory – net | $ | i 882 | $ | i 929 | ||||
The Company purchases digital music to broadcast over the radio and internet. During the three and nine months ended February 29, 2024, the Company purchased $ i i 620 / worth of music inventory. For the nine months ended February 29, 2024 and February 28, 2023, depreciation of music inventory was $ i 667 and $ i 1,008, respectively.
| 9 |
/ i
NOTE 3 – ACCRUED CONSULTING FEES
Accrued consulting fees consisted of the following:
i| Schedule of accrued consulting fees | ||||||||
| February 29, 2024 | May 31, 2023 | |||||||
| Due to Company Chief Executive Officer (Related Party) pursuant to Consulting Agreement dated March 1, 2017 – monthly compensation of $10,000 to May 31, 2022, increased to $20,000 after May 31, 2022 | $ | i 668,817 | $ | i 488,817 | ||||
| Due to wife of Company Chief Executive Officer (Related Party) pursuant to consulting agreement effective August 16, 2018 – monthly compensation of $15,000 (which was terminated May 31, 2021) | i 305,200 | i 305,200 | ||||||
| Due to mother of Company Chief Executive Officer (Related Party) pursuant to Consulting Agreement dated September 1, 2015 (which was terminated November 30, 2019) – monthly compensation of $5,000 to November 30, 2019 | i 131,350 | i 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 | i 144,700 | i 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 | i 48,000 | i 48,000 | ||||||
| Due to two other service providers | i 27,850 | i 27,850 | ||||||
| Total | $ | i 1,325,917 | $ | i 1,145,917 | ||||
The accrued consulting fees balance changed as follows:
i| Schedule of accrued consulting fees balance changed | ||||||||
| Nine Months Ended February 29, 2024 | Year Ended May 31, 2023 | |||||||
| Balance, beginning of period | $ | i 1,145,917 | $ | i 926,217 | ||||
| Compensation expense accrued pursuant to consulting agreements | i 180,000 | i 240,000 | ||||||
| Payments to consultants | i – | ( i 20,300 | ) | |||||
| Balance, end of period | $ | i 1,325,917 | $ | i 1,145,917 | ||||
See Note 8 (Commitments and Contingencies).
| 10 |
/ i
Notes payable consisted of the following:
i| Schedule of notes payable | ||||||||
| February 29, 2024 | May 31, 2023 | |||||||
| Notes payable to an entity, non-interest bearing, due on demand, unsecured | $ | i 64,700 | $ | i 64,700 | ||||
| Note payable to an individual, due on May 22, 2015, in default (B) | i 25,000 | i 25,000 | ||||||
| Note payable to an entity, non-interest bearing, due on February 1, 2016, in default (D) | i 50,000 | i 50,000 | ||||||
| Note payable to a family trust, stated interest of $2,500, due on October 31, 2015, in default (E) | i 7,000 | i 7,000 | ||||||
| Note payable to a corporation, stated interest of $5,000, due on October 21, 2015, in default (G) | i 50,000 | i 50,000 | ||||||
| Note payable to a corporation, stated interest of $5,000, due on November 6, 2015, in default (H) | i 50,000 | i 50,000 | ||||||
| Note payable to an individual, due on December 20, 2015, in default, 24% default rate from January 20, 2016 (I) | i 25,000 | i 25,000 | ||||||
| Convertible note payable to an entity, interest at 12%, due on December 29, 2016, in default (M) | i 40,000 | i 40,000 | ||||||
| Note payable to a family trust, interest at 10%, due on November 30, 2016, in default (P) | i 25,000 | i 25,000 | ||||||
| Convertible note payable to an individual, interest at 10%, due on demand (V) | i 46,890 | i 46,890 | ||||||
| Convertible note payable to an individual, interest at 8%, due on demand (W) | i 29,000 | i 29,000 | ||||||
| Convertible note payable to an individual, interest at 8%, due on demand (X) | i 21,500 | i 21,500 | ||||||
| Convertible note payable to an entity, interest at 10%, due on demand (Y) | i 8,100 | i 8,100 | ||||||
| Convertible note payable to an entity, interest at 10%, due on March 5, 2019, in default (DD) | i 35,000 | i 35,000 | ||||||
| Convertible note payable to an entity, interest at 10%, due on September 18, 2019, in default (GG) | i 8,505 | i 8,505 | ||||||
| Convertible note payable to an entity, interest at 12%, due on November 30, 2021, in default, net of discount of $-0- and $85,233, respectively (SS) | i 154,764 | i 154,764 | ||||||
| Convertible note payable to an entity, interest at 10%, due on June 4, 2022, in default (VV) | i 170,212 | i 170,212 | ||||||
| Convertible note payable to an entity, interest at 8%, due on August 27, 2022, in default (WW) | i 14,000 | i 14,000 | ||||||
| Convertible note payable to an entity, interest at 12%, due on December 21, 2022, in default (YY) | i 58,250 | i 58,250 | ||||||
| Convertible note payable to an entity, interest at 12%, due on February 8, 2023, in default (ZZ) | i 245,000 | i 245,000 | ||||||
| Convertible note payable to an entity, interest at 12%, due on June 10, 2023, net of discount of $-0- and $1,065, respectively (AA) | i – | i 37,815 | ||||||
| Convertible note payable to an entity, interest at 12%, due on November 4, 2023, in default, net of discount of $-0- and $13,143, respectively (C) | i 19,973 | i 17,412 | ||||||
| Convertible note payable to an entity, interest at 12%, due on April 10, 2024, net of discount of $6,845 and $52,586, respectively (F) | i 54,255 | i 8,514 | ||||||
| Convertible note payable to an entity, interest at 10%, due on August 15, 2024, net of discount of $25,021 and $-0-, respectively (J) | i 16,979 | i – | ||||||
| Convertible note payable to an entity, interest at 12%, due on September 18, 2024, net of discount of $1,932 and $-0-, respectively (K) | i 1,569 | i – | ||||||
| Convertible note payable to an entity, interest at 12%, due on January 18, 2025, net of discount of $27,039 and $-0-, respectively (L) | i 3,516 | i – | ||||||
| Note payable to an entity, terms to be agreed on and memorialized subsequent to February 29, 2024 | i 48,641 | i – | ||||||
| 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 | i 70,000 | i 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 | i 100,000 | i 100,000 | ||||||
| Notes payable to individuals, non-interest bearing, due on demand | i 103,476 | i 103,476 | ||||||
| Total Notes Payable | i 1,546,330 | i 1,465,138 | ||||||
| Less: Current Portion | ( i 1,546,330 | ) | ( i 1,465,138 | ) | ||||
| Long-Term Notes Payable | $ | i – | $ | i – | ||||
| 11 |
(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 6 (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 $0.1293 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 6 (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 6 (Derivative Liability).
| 12 |
(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 $0.04 per share or 60% of the lowest Trading Price during the 5 Trading Day period prior to the Conversion Date.
(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 6 (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 6 (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 6 (Derivative Liability).
(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 6 (Derivative Liability).
(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 6 (Derivative Liability).
(YY) On December 21, 2021, the Company issued a $58,250 Convertible Promissory Note to a lender for net loan proceeds of $49,925. The note bears interest at a rate of 12% per annum, is due on December 21, 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) $0.10, or (2) the par value of the Common Stock.
(ZZ) On February 8, 2022, the Company issued a $245,000 Convertible Promissory Note to a lender for net loan proceeds of $218,000. The note bears interest at a rate of 12% per annum, is due on February 8, 2023, 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) $0.10, or (2) the par value of the Common Stock.
| 13 |
(AA) On June 10, 2022, the Company issued a $38,880 Convertible Promissory Note to a lender for net loan proceeds of $31,800. The note bears interest at a rate of 12% per annum, is due on June 10, 2023, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to the lower of (1) $0.05, or (2) 50% of the lowest trading price in the 10 Trading Day period prior to the Conversion Date. See Note 6 (Derivative Liability).
(C) On November 4, 2022, the Company issued a $30,555 Convertible Promissory Note to a lender for net loan proceeds of $25,000. The note bears interest at a rate of 12% per annum, is due on November 4, 2023, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to the lower of (1) $0.005, or (2) 50% of the lowest trading price in the 10 Trading Day period prior to the Conversion Date. See Note 6 (Derivative Liability).
(F) On April 10, 2023, the Company issued a $61,100 Convertible Promissory Note to a lender for net loan proceeds of $55,000. The note bears interest at a rate of 12% per annum, is due on April 10, 2024, 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) $0.003, or (2) the par value of the Common Stock. See Note 6 (Derivative Liability).
(J) On November 7, 2023, the Company issued a $42,000 Convertible Promissory Note to a lender for net loan proceeds of $32,200. The note bears interest at a rate of 10% per annum, is due on August 15, 2024, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to 63% of the lowest trading price in the 10 Trading Day period prior to the Conversion Date. See Note 6 (Derivative Liability).
(K) On September 18, 2023, the Company issued a $3,500 Convertible Promissory Note to a lender for net loan proceeds of $3,500. The note bears interest at a rate of 12% per annum, is due on September 18, 2024, 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 in the 10 Trading Day period prior to the Conversion Date. See Note 6 (Derivative Liability).
(L) On January 18, 2024, the Company issued a $30,555 Convertible Promissory Note to a lender for net loan proceeds of $22,800. The note bears interest at a rate of 12% per annum, is due on January 18, 2025, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to the lower of $0.0002 or 50% of the lowest trading price in the 10 Trading Day period prior to the Conversion Date. See Note 6 (Derivative Liability).
| 14 |
Concentration of Notes Payable:
The principal balance of notes payable was due to:
i| Schedule of principal balance of notes payable | ||||||||
| February 29, 2024 | May 31, 2023 | |||||||
| Lender A | $ | i 458,014 | $ | i 458,014 | ||||
| Lender B | i 170,212 | i 170,212 | ||||||
| 14 other lenders | i 978,941 | i 903,706 | ||||||
| Total | i 1,607,167 | i 1,531,932 | ||||||
| Less debt discounts | ( i 60,837 | ) | ( i 66,794 | ) | ||||
| Net | $ | i 1,546,330 | $ | i 1,465,138 | ||||
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NOTE 5 - NOTES PAYABLE – RELATED PARTIES
Notes payable – related parties consisted of the following:
i| Schedule of notes payable related parties | ||||||||
| February 29, 2024 | May 31, 2023 | |||||||
| 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 | $ | i 2,073 | $ | i 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 | i 69,250 | i 69,250 | ||||||
| Note payable to the Chief Executive Officer, non-interest bearing, due on demand, unsecured | i 10,692 | i 19,449 | ||||||
| Note payable to the wife of the Chief Executive Officer as part of the 25% acquisition of Simply Whim, interest at 12%, due on September 20, 2023, unsecured (See Note 10) | i 2,000,000 | i 2,000,000 | ||||||
| Total Notes Payable | i 2,082,015 | i 2,090,772 | ||||||
| Less: Current Portion | ( i 2,082,015 | ) | ( i 2,090,772 | ) | ||||
| Long-Term Notes Payable | $ | i – | $ | i – | ||||
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The derivative liability consisted of the following:
i| Schedule of derivative liability | ||||||||||||||||
| February 29, 2024 | May 31, 2023 | |||||||||||||||
| Face Value | Derivative Liability | Face Value | Derivative Liability | |||||||||||||
| Convertible note payable issued December 29, 2015, due December 29, 2016 (M) | $ | i 40,000 | $ | i 120,000 | $ | i 40,000 | $ | i 81,481 | ||||||||
| Convertible note payable issued April 5, 2017, due on demand (W) | i 29,000 | i 116,000 | i 29,000 | i 81,093 | ||||||||||||
| Convertible note payable issued April 5, 2017, due on demand (X) | i 21,500 | i 86,000 | i 21,500 | i 60,120 | ||||||||||||
| Convertible note payable issued March 5, 2018, due on March 5, 2019 (DD) | i 35,000 | i 105,000 | i 35,000 | i 71,296 | ||||||||||||
| Convertible note payable issued September 18, 2018, due on September 18, 2019 (GG) | i 8,506 | i 25,517 | i 8,506 | i 17,326 | ||||||||||||
| Convertible note payable issued November 30, 2020, due on November 30, 2021 (SS) | i 154,764 | i 23,042 | i 154,764 | i 151,020 | ||||||||||||
| Convertible note payable issued June 4, 2021, due on June 4, 2022 (VV) | i 170,212 | i 9,216 | i 170,212 | i 153,285 | ||||||||||||
| Convertible note payable issued August 27, 2021, due on August 27, 2022 (WW) | i 14,000 | i 29,077 | i 14,000 | i 18,707 | ||||||||||||
| Convertible note payable issued June 10, 2022, due on June 10, 2023 (AA) | i – | i – | i 38,880 | i 154,078 | ||||||||||||
| Convertible note payable issued November 4, 2022, due on November 4, 2023 (C) | i 34,203 | i 8,640 | i 30,555 | i 92,797 | ||||||||||||
| Convertible note payable issued April 10, 2023, due on April 10, 2024 (F) | i 61,100 | i 28,802 | i 61,100 | i 154,795 | ||||||||||||
| Convertible note payable issued November 7, 2023, due on August 15, 2024 (J) | i 42,000 | i 11,521 | i 61,100 | i 154,795 | ||||||||||||
| Convertible note payable issued September 18, 2023, due on September 18, 2024 (K) | i 3,500 | i 28,802 | i 61,100 | i 154,795 | ||||||||||||
| Convertible note payable issued January 18, 2024, due on January 18, 2025 (L) | i 30,555 | i 11,521 | i 61,100 | i 154,795 | ||||||||||||
| Totals | $ | i 644,340 | $ | i 603,138 | $ | i 603,517 | $ | i 1,035,998 | ||||||||
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.
| 16 |
Assumptions used for the calculations of the derivative liability of the notes at February 29, 2024 include (1) stock price of $0.0003 per share, (2) exercise prices ranging from $0.00004 to $0.0001 per share, (3) terms ranging from 0 days to 323 days, (4) expected volatility of 2,207% and (5) risk free interest rates ranging from 4.80% to 5.53%.
Assumptions used for the calculations of the derivative liability of the notes at May 31, 2023 include (1) stock price of $0.0041 per share, (2) exercise prices ranging from $0.00004 to $0.001755 per share, (3) terms ranging from 0 days to 315 days, (4) expected volatility of 2,189% and (5) risk free interest rates ranging from 4.65% to 5.28%.
Concentration of Derivative Liability:
The derivative liability relates to convertible notes payable due to:
i| Schedule of derivative liability relates to convertible notes payable | ||||||||
| February 29, 2024 | May 31, 2023 | |||||||
| Lender A | $ | i 23,042 | $ | i 151,020 | ||||
| Lender B | i 9,217 | i 153,285 | ||||||
| Lender C | i 20,161 | i 415,233 | ||||||
| Lender D | i 159,594 | i 107,329 | ||||||
| 5 other lenders | i 391,124 | i 209,131 | ||||||
| Total | $ | i 603,138 | $ | i 1,035,998 | ||||
/ i
Effective April 21, 2022, the Company effectuated a i 1 for 1,000 reverse split of the Company’s Common Stock (“Reverse Split”), meaning that each 1,000 shares of Common Stock is consolidated into 1 share of Common Stock following the reverse split, provided however, that fractional shares would be rounded up to the nearest whole share. Following the Reverse Split, the Company had 16,192,332 common shares issued and outstanding. The accompanying financial statements have been retroactively adjusted to reflect this reverse stock split.
On October 13, 2022 (the “Closing Date”), the Company entered into a Standby Equity Commitment Agreement (the “Equity Agreement” by and among the Company, and MacRab, LLC, a Florida limited liability company ("MacRab"), pursuant to which MacRab has agreed to purchase at the Company’s sole discretion, up to five million dollars ($5,000,000) of the Company's common stock (the “Put Shares”) at a purchase price of 90% of the average of the two (2) lowest volume weighted average prices of the Company’s Common Stock on OTCQB during the six (6) Trading Days immediately following the Clearing Date.
Contemporaneous therewith, the Company and MacRab also entered into a Registration Rights Agreement, whereby the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended. Pursuant to the Registration Rights Agreement, the Company has registered the Put Shares pursuant in a registration statement on Form S-1 (the “Registration Statement”). The Registration Statement was filed on October 21, 2022.
During the nine months ended February 29, 2024, the Company issued an aggregate of shares of common stock pursuant to the Equity Agreement for net proceeds of $ i 55,731.
During the nine months ended February 29, 2024, the Company issued an aggregate of shares of common stock for the conversion of notes payable and accrued interest in the aggregate amount of $ i 97,791.
| 17 |
/ i
NOTE 8 - 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 3 – Accrued Consulting Fees). The Consulting Agreement with the Company’s Chief Executive Officer provided for monthly compensation of $10,000 through May 31, 2022 and was increased to $20,000 after May 31, 2022. 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. See Note 3 (Accrued Consulting Fees).
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 paid or accrued subsequent to May 31, 2018.
On October 16, 2018 (see Note 7), 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.
i
NOTE 9 – INVESTMENT IN ACQUISITION
On September 20, 2022, the Company entered into an agreement to acquire 25% of the outstanding shares of SIMPLY WHIM, INC., a Wyoming corporation (“SIMPLY WHIM”), in exchange for shares of common stock of the Company and a promissory note in the face amount of $ i 2,000,000. SIMPLY WHIM is a skin care product development company. At the date of the acquisition, the price per share of the company shares was $0.0063. The total consideration paid by the company (value of stock issued and promissory note) was $ i 6,200,000 which has been recorded as Investment in Acquisition on the balance sheet. The Company determined that the Simply Whim investment should be accounted for under the cost method because the Company does not have the ability to exercise significant influence over operating and financial policies of the investee given there is no representation on the board of directors, participation in policy-making processes, no interchange of managerial personnel, and the majority ownership of the investee is a nonpublic company held by one individual. The Company is currently evaluating the fair value of the investment under the current effective ASU 2016-01 accounting standard.
/ i
Subsequent to February 29, 2024, the Company issued an aggregate of 1,341,172,984 shares of common stock for the conversion of notes payable and accrued interest in the amount of $97,142.
| 18 |
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. is an emerging direct-to-consumer firm specializing in product development and media, including a dynamic radio and digital network. We craft and promote top-tier health and beauty solutions that enrich lives, showcased through engaging radio content for our audience. We maintain a website at www.themarquiegroup.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to these reports are available free of charge through our website as soon as reasonably practicable after those reports are electronically filed with or furnished to the SEC. The information on our website is not a part of or incorporated by reference into this or any other report of the company filed with, or furnished to, the SEC.
We have three operating segments: (1) Broadcast, (2) Digital Media, and (3) Health and Beauty, which also qualify as reportable segments. Our operating segments reflect how we assess the performance of each operating segment and determine the appropriate allocations of resources to each segment. We continually review our operating segment classifications to align with operational changes in our business and may make changes as necessary.
We measure and evaluate our operating segments based on operating income and operating expenses that exclude costs related to corporate functions, such as accounting and finance, human resources, legal, tax and treasury. We also exclude costs such as amortization, depreciation, taxes, and interest expense when evaluating the performance of our operating segments.
Broadcasting
Our foundational business is radio broadcasting, which includes the ownership and operation of a syndicated radio network including our affiliated radio stations subscribing to our programming delivery.
Advertising revenue generated from our syndicated radio operations is reported as broadcast revenue in our Consolidated Financial Statements. Advertising revenue is recorded on a gross basis unless an agency represents the advertiser, in which case revenue is reported net of the commission retained by the agency.
Broadcast revenue is impacted by the rates radio stations can charge for programming and advertising time, the level of airtime sold to programmers and advertisers, the number of impressions delivered, or downloads made, and the number of listener responses in the case of pay-per-call. Advertising rates are based upon the demand for advertising time, which in turn is based on our stations’ and networks’ ability to produce results for their advertisers. We market ourselves to advertisers based on the responsiveness of our audiences. We do not subscribe to traditional audience measuring services for most of our radio stations.
Each of our radio station affiliates allocates 3 minutes per hour of advertising time for our commercials at a preset time every hour based on the Music of Your Life clock.
| 19 |
Our results are subject to seasonal fluctuations. As is typical in the broadcasting industry, our second and fourth quarter advertising revenue typically exceeds our first and third quarter advertising revenue. Seasonal fluctuations in advertising revenue correspond with quarterly fluctuations in the retail industry. Additionally, we experience increased demand for political advertising during election even numbered years, over non-election odd numbered years. Political advertising revenue varies based on the number and type of candidates as well as the number and type of debated issues.
Broadcast operating expenses include: (i) employee salaries, commissions and related employee benefits and taxes, (ii) facility expenses such as lease expense and utilities, (iii) marketing and promotional expenses, (iv) production and programming expenses, and (v) music license fees. In addition to these expenses, our network incurs programming costs and expenses for internet communication facilities.
Digital Media
Revenue generated from this segment is reported as digital media revenue in our Consolidated Statements of Operations. Digital media revenue is impacted by the rates our sites can charge for advertising time, the level of advertisements sold, the number of impressions delivered, or the number of products sold.
The primary operating expenses incurred by our digital media businesses include: (i) employee salaries, commissions and related employee benefits and taxes, (ii) facility expenses such as lease expense and utilities, (iii) marketing and promotional expenses, (iv) royalties, (v) streaming costs, and (vi) cost of goods sold associated with e-commerce sites.
Health and Beauty
Except for AminoMints®, our health and beauty operations are owned by Simply Whim, Inc., and include Whim®, an emerging beauty brand blending Nature, Nutrition, and Science to offer safe and effective products. Whim’s founder, a 3-time cancer survivor under treatment, recognizes the U.S.'s regulatory lapses and strives for better standards. Exclusively made in the USA, Whim® aims to provide responsible beauty options. We forecast strong sales growth next year, driven by demand for safer beauty solutions, and plan to exceed these expectations with continued innovation.
Expenses which comprise the costs of goods sold will include operational and staffing costs related to 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 nine months ended February 29, 2024 and February 28, 2023.
Revenues. The Company generated no net revenues for Broadcasting and Digital Media during the three and nine months ended February 29, 2024 and February 28, 2023. Revenues in the past have been generated from spot sales on our syndicated radio network. Revenue for Health and Beauty will be included in the company’s upcoming annual 10-K report for the year ending May 31, 2024.
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Cost of Sales. Our cost of sales for Broadcasting and Digital Media was $-0- for the three and nine months ended February 29, 2024 and February 28, 2023. 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. Our Cost of Sales for Health and Beauty will be included in the company’s upcoming annual 10-K report for the year ending May 31, 2024.
Salaries and Consulting Expenses. Executive salaries remain unpaid and accruing for the year ending May 31, 2023. Accrued salaries and consulting expenses were $60,000 and 60,000 for the three months ended February 29, 2024 and February 28, 2023, respectively. Accrued salaries and consulting expenses were $180,000 and 180,000 for the nine months ended February 29, 2024 and February 28, 2023, respectively. We expect that salaries and consulting expenses, that are cash-based instead of share-based, will increase as we add personnel to build our health and beauty business.
Professional Fees. Professional fees were $27,410 and $8,096 for the three months ended February 29, 2024 and February 28, 2023, respectively. Professional fees were $90,303 and $59,209 for the nine months ended February 29, 2024 and February 28, 2023, 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 $40,690 and $1,369 for the three months ended February 29, 2024 and February 28, 2023, respectively. Other selling, general and administrative expenses were $102,105 and $13,370 for the nine months ended February 29, 2024 and February 28, 2023, respectively. The increase during the nine months ended February 29, 2024 was mostly the result of additional expenses of $62,205 related to investor relations. We anticipate that SG&A expenses will increase commensurate with an increase in our operations.
Other Income (Expenses). The Company had net other expenses of $330,836 and $603,795 for the three months ended February 29, 2024 and February 28, 2023, respectively. The Company had net other income of $132,438 and $1,101,578 for the nine months ended February 29, 2024 and February 28, 2023, respectively. During the nine months ended February 29, 2024 and February 28, 2023, the company recorded income on the change in the fair value of the derivative liability in the amount of $508,915 and $1,349,841, respectively. During the nine months ended February 29, 2024 and February 28, 2023, other expenses incurred were comprised of interest expenses related to notes payable in the amount of $376,477 and $248,263, which included the amortization of debt discounts of $82,012 and $44,614, respectively.
LIQUIDITY AND CAPITAL RESOURCES
As of February 29, 2024, our primary source of liquidity consisted of $2,162 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 February 29, 2024 of $6,460,742 and $14,938,000, respectively, which raises doubt about our ability to continue as a going concern. We generated a net loss for the nine months ended February 29, 2024 of $239,970. 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.
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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, 2023 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.
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.
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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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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 7 in the notes to the financial statements.
With respect to the transactions in Note 7 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 16 notes payable aggregating $977,704 at February 29, 2024. See Note 4 to the Consolidated Financial Statements.
Item 4. Mine Safety Disclosures
Not Applicable.
During the quarter ended February 29, 2024, no director or officer of the Company i i adopted / or i i terminated / a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
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| Exhibit No. | Description | |
| 3.1 | Amended and Restated Articles of Incorporation of Music of Your life, Inc. (incorporated by reference to the Company's Form S-1/A filed on November 22, 2022) | |
| 3.2 | Amended and Restated Bylaws of Music of Your Life, Inc. (incorporated by reference to the Company’s Form S-1/A filed on November 22, 2022) | |
| 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 |
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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: April 22, 2024 | By: | /s/ Marc Angell |
| Marc Angell | ||
| Chief Executive Officer | ||
| (Duly Authorized Officer and Principal Executive Officer) | ||
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| This ‘10-Q’ Filing | Date | Other Filings | ||
|---|---|---|---|---|
 | ||||
| 1/18/25 | ||||
| 9/18/24 | ||||
| 8/15/24 | ||||
| 5/31/24 | ||||
| Filed on: | 4/22/24 | |||
| 4/15/24 | NT 10-Q | |||
| 4/10/24 | ||||
| For Period end: | 2/29/24 | NT 10-Q | ||
| 1/18/24 | ||||
| 11/30/23 | 10-Q, NT 10-Q | |||
| 11/7/23 | ||||
| 11/4/23 | ||||
| 9/20/23 | ||||
| 9/18/23 | ||||
| 8/31/23 | 10-Q, NT 10-Q | |||
| 6/10/23 | ||||
| 5/31/23 | 10-K, NT 10-K | |||
| 4/10/23 | 8-K | |||
| 4/5/23 | ||||
| 2/28/23 | 10-Q, NT 10-Q | |||
| 2/8/23 | ||||
| 12/21/22 | ||||
| 11/30/22 | 10-Q, 10-Q/A, NT 10-Q | |||
| 11/22/22 | RW, S-1/A | |||
| 11/4/22 | ||||
| 10/21/22 | S-1 | |||
| 10/13/22 | ||||
| 9/20/22 | 4 | |||
| 8/31/22 | 10-Q, 10-Q/A, NT 10-Q | |||
| 8/27/22 | ||||
| 6/10/22 | ||||
| 6/4/22 | ||||
| 5/31/22 | 10-K, 10-K/A | |||
| 5/4/22 | ||||
| 4/21/22 | 8-K, DEF 14C | |||
| 2/8/22 | ||||
| 12/21/21 | ||||
| 11/30/21 | 10-Q, 10-Q/A, NT 10-Q | |||
| 8/27/21 | ||||
| 6/4/21 | ||||
| 5/31/21 | 10-K, 10-K/A, NT 10-K | |||
| 11/30/20 | 10-Q, 10-Q/A | |||
| 11/30/19 | 10-Q, NT 10-Q | |||
| 9/18/19 | ||||
| 3/5/19 | ||||
| 2/28/19 | 10-Q, 10-Q/A, NT 10-Q | |||
| 12/5/18 | 8-K, PRE 14C | |||
| 10/26/18 | 10-Q/A | |||
| 10/16/18 | ||||
| 9/18/18 | ||||
| 8/16/18 | 3, 4, 8-K | |||
| 5/31/18 | 10-K, 10-K/A, NT 10-K | |||
| 4/1/18 | ||||
| 3/14/18 | ||||
| 3/5/18 | ||||
| 5/3/17 | ||||
| 4/5/17 | ||||
| 3/1/17 | ||||
| 12/29/16 | ||||
| 11/30/16 | 10-Q, 10-Q/A, NT 10-Q | |||
| 6/3/16 | ||||
| 2/1/16 | ||||
| 1/21/16 | ||||
| 1/20/16 | ||||
| 1/4/16 | ||||
| 12/29/15 | ||||
| 12/20/15 | ||||
| 11/6/15 | ||||
| 10/31/15 | ||||
| 10/21/15 | ||||
| 9/21/15 | ||||
| 9/1/15 | ||||
| 8/23/15 | ||||
| 8/21/15 | ||||
| 8/6/15 | ||||
| 7/31/15 | ||||
| 7/24/15 | 8-K | |||
| 5/22/15 | ||||
| 4/22/15 | 10-Q/A | |||
| 10/14/14 | ||||
| 5/20/14 | 8-K | |||
| 7/26/13 | ||||
| 5/31/13 | 10-K, 10-K/A, 4, NT 10-K | |||
| 10/10/12 | ||||
| 1/30/08 | ||||
| List all Filings | ||||
As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 11/22/22 Marquie Group, Inc. S-1/A 24:2.2M GlobalOne Filings Inc/FA |