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 months ended August 31, 2019 are not necessarily indicative of results that may
be expected for the year ending May 31, 2020.
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., and is now operating a multi-media entertainment
company, producing live concerts, television shows and radio programming. 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.
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.
On August 16, 2018 (see Note 8),
the Company merged with The Marquie Group, Inc. (“TMG”) in exchange for the issuance of a total of 100,000 shares of
our common stock to TMG’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 TMG business plan is to 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, with and without non-THC CBD oil.
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. As of August 31, 2019, the balance due on this
loan was $15,950.
The Company purchases digital music
to broadcast over the radio and internet. During the three months ended August 31, 2019, the Company purchased $327 worth of music
inventory. For the three months ended August 31, 2019 and 2018, depreciation of music inventory was $924 and $813, respectively.
NOTE 5 - NOTES PAYABLE
Notes payable consisted of the following:
|
|
August 31, 2019
|
|
May 31, 2018
|
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 (I)
|
|
|
25,000
|
|
|
|
25,000
|
|
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
|
|
THE MARQUIE GROUP, INC.
(formerly Music of Your Life, Inc.)
Notes to the Consolidated Financial Statements
August 31, 2019
(Unaudited)
Convertible note payable to an entity, interest at 10%, due on April 21, 2017, in default (R)
|
|
|
35,496
|
|
|
|
35,496
|
|
Convertible note payable to an entity, interest at 10%, due on June 13, 2017, in default (S)
|
|
|
64,233
|
|
|
|
64,233
|
|
Convertible note payable to an entity, interest at 12%, due on October 31, 2017, in default (U)
|
|
|
—
|
|
|
|
8,313
|
|
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)
|
|
|
8,600
|
|
|
|
8,600
|
|
Convertible note payable to an entity, interest at 12%, due on March 16, 2018, in default (Z)
|
|
|
54,992
|
|
|
|
54,992
|
|
Convertible note payable to an entity, interest at 10%, due on January 11, 2019, in default (AA)
|
|
|
23,167
|
|
|
|
35,381
|
|
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, in default (EE)
|
|
|
37,500
|
|
|
|
37,500
|
|
Convertible note payable to an entity, interest at 10%, due on September 18, 2019 – net of discount of $1,110 and $6,781, respectively (FF)
|
|
|
21,390
|
|
|
|
15,719
|
|
Convertible note payable to an entity, interest at 10%, due on September 18, 2019 – net of discount of $888 and $5,425, respectively (GG)
|
|
|
17,112
|
|
|
|
12,575
|
|
Convertible note payable to an entity, interest at 10%, due on September 19, 2019 – net of discount of $13,869 and $81,022, respectively (HH)
|
|
|
186,131
|
|
|
|
118,978
|
|
Convertible note payable to an entity, interest at 10%, due on August 4, 2019, in default – net of discount of $-0- and $61,050, respectively (II)
|
|
|
170,000
|
|
|
|
108,950
|
|
THE MARQUIE GROUP, INC.
(formerly Music of Your Life, Inc.)
Notes to the Consolidated Financial Statements
August 31, 2019
(Unaudited)
Convertible note payable to an entity, interest at 10%, due on November 13, 2019 – net of discount of $20,329 and $45,604, respectively (JJ)
|
|
|
54,671
|
|
|
|
29,396
|
|
Convertible note payable to an entity, interest at 10%, due on November 15, 2019 – net of discount of $4,164 and $9,205, respectively (KK)
|
|
|
15,836
|
|
|
|
10,795
|
|
Convertible note payable to an entity, interest at 10%, due on November 30, 2019 – net of discount of $1,247 and $2,507, respectively (LL)
|
|
|
3,753
|
|
|
|
2,493
|
|
Convertible note payable to an entity, interest at 10%, due on December 6, 2019 – net of discount of $797 and $1,553, respectively (MM)
|
|
|
2,203
|
|
|
|
1,447
|
|
Convertible note payable to an entity, interest at 10%, due on December 11, 2019 – net of discount of $2,794 and $5,315, respectively (NN)
|
|
|
7,206
|
|
|
|
4,685
|
|
Convertible note payable to an entity, interest at 12%, due on March 10, 2020 – net of discount of $41,168 and $-0-, respectively (OO)
|
|
|
17,582
|
|
|
|
—
|
|
Notes payable to individuals, non-interest bearing, due on demand
|
|
|
103,476
|
|
|
|
103,476
|
|
Total Notes Payable
|
|
|
1,285,238
|
|
|
|
1,114,919
|
|
Less: Current Portion
|
|
|
(1,285,238
|
)
|
|
|
(1,114,919
|
)
|
Long-Term Notes Payable
|
|
$
|
—
|
|
|
$
|
—
|
|
(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.
THE MARQUIE GROUP, INC.
(formerly Music of Your Life, Inc.)
Notes to the Consolidated Financial Statements
August 31, 2019
(Unaudited)
(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.
(R) On July 21, 2016, the
Company issued a $56,250 Convertible Promissory Note to a lender for net loan proceeds of $50,000. The note bears interest at a
rate of 10% per annum (24% per annum default rate), was due on April 21, 2017, and is convertible at the option of the lender into
shares of the Company common stock at a Conversion Price equal to $0.0005 per share.
(S) On September 13, 2016,
the Company issued a $40,750 Convertible Promissory Note to a lender for net loan proceeds of $35,000. The note bears interest
at a rate of 10% per annum (24% per annum default rate), was due on June 13, 2017, and is convertible at the option of the lender
into shares of the Company common stock at a Conversion Price equal to $0.0005 per share.
(U) On January 31, 2017,
the Company issued a $46,750 Convertible Promissory Note to a lender for net loan proceeds of $40,000. The note bore interest at
a rate of 12% per annum (24% per annum default rate), was due on October 31, 2017, and was 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).
(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.
THE MARQUIE GROUP, INC.
(formerly Music of Your Life, Inc.)
Notes to the Consolidated Financial Statements
August 31, 2019
(Unaudited)
(Z) On June 16, 2017, the
Company issued a $37,000 Convertible Promissory Note to a lender for net loan proceeds of $31,000. The note bears interest at a
rate of 12% per annum (24% per annum default rate), was due on March 16, 2018, 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).
(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, is 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, is 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, is 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).
THE MARQUIE GROUP, INC.
(formerly Music of Your Life, Inc.)
Notes to the Consolidated Financial Statements
August 31, 2019
(Unaudited)
(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, is 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).
(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, is 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, is 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, is 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, is 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), is 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).
THE MARQUIE GROUP, INC.
(formerly Music of Your Life, Inc.)
Notes to the Consolidated Financial Statements
August 31, 2019
(Unaudited)
Concentration of Notes Payable:
The principal balance of the notes
payable was due to:
|
|
August 31, 2019
|
|
May 31, 2019
|
|
|
|
|
|
Lender A
|
|
$
|
275,888
|
|
|
$
|
296,414
|
|
Lender B
|
|
|
258,750
|
|
|
|
200,000
|
|
Lender C
|
|
|
170,000
|
|
|
|
170,000
|
|
15 other lenders
|
|
|
666,966
|
|
|
|
666,967
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
1,371,604
|
|
|
|
1,333,381
|
|
|
|
|
|
|
|
|
|
|
Less debt discounts
|
|
|
(86,366
|
)
|
|
|
(218,462
|
)
|
|
|
|
|
|
|
|
|
|
Net
|
|
$
|
1,258,238
|
|
|
$
|
1,114,919
|
|
NOTE 6 - NOTES PAYABLE – RELATED PARTIES
Notes payable – related parties
consisted of the following:
|
|
August 31,
2019
|
|
May 31,
2019
|
Note payable to Company law firm (and owner of 10,000,000 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 10,000,000 shares of common stock since August 16, 2018), non-interest bearing, due on demand, unsecured
|
|
|
103,250
|
|
|
|
103,250
|
|
Convertible note payable to John D. Thomas P.C. (Company law firm and owner of 10,000,000 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
|
|
|
155,323
|
|
|
|
155,323
|
|
Less: Current Portion
|
|
|
(155,323
|
)
|
|
|
(155,323
|
)
|
Long-Term Notes Payable
|
|
$
|
—
|
|
|
$
|
—
|
|
THE MARQUIE GROUP, INC.
(formerly Music of Your Life, Inc.)
Notes to the Consolidated Financial Statements
August 31, 2019
(Unaudited)
NOTE 7 - DERIVATIVE LIABILITY
The derivative liability at August
31, 2019 and May 31, 2019 consisted of:
|
|
|
|
August 31, 2019
|
|
May 31, 2019
|
|
|
Face Value
|
|
Derivative Liability
|
|
Face Value
|
|
Derivative Liability
|
Convertible note payable issued December 29, 2015, due December 29, 2016 (M)
|
|
|
|
|
|
|
|
|
|
$
|
40,000
|
|
|
$
|
200,000
|
|
|
$
|
40,000
|
|
|
|
$60,000
|
Convertible note payable issued January 31, 2017, due August 31, 2017 (U)
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
8,313
|
|
|
|
12,470
|
Convertible note payable issued April 5, 2017, due on demand (W)
|
|
|
|
|
|
|
|
|
|
|
29,000
|
|
|
|
188,500
|
|
|
|
29,000
|
|
|
|
55,769
|
Convertible note payable issued April 5, 2017, due on demand (X)
|
|
|
|
|
|
|
|
|
|
|
21,500
|
|
|
|
139,750
|
|
|
|
21,500
|
|
|
|
41,346
|
Convertible note payable issued June 16, 2017, due on March 16, 2018 (Z)
|
|
|
|
|
|
|
|
|
|
|
54,992
|
|
|
|
274,962
|
|
|
|
54,992
|
|
|
|
82,488
|
Convertible note payable issued January 11, 2018, due on January 11, 2019 (AA)
|
|
|
|
|
|
|
|
|
|
|
23,167
|
|
|
|
115,835
|
|
|
|
35,381
|
|
|
|
53,072
|
Convertible note payable issued December 1, 2017, due on demand (BB)
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
|
200,000
|
|
|
|
50,000
|
|
|
|
55,555
|
Convertible note payable issued December 1, 2017, due on demand (CC)
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
|
200,000
|
|
|
|
50,000
|
|
|
|
55,555
|
Convertible note payable issued March 5, 2018, due on March 5, 2019 (DD)
|
|
|
|
|
|
|
|
|
|
|
35,000
|
|
|
|
175,000
|
|
|
|
35,000
|
|
|
|
52,500
|
Convertible note payable issued April 4, 2018, due on April 4, 2019 (EE)
|
|
|
|
|
|
|
|
|
|
|
37,500
|
|
|
|
187,500
|
|
|
|
37,500
|
|
|
|
56,250
|
Convertible note payable issued September 18, 2018, due on September 18, 2019 (FF)
|
|
|
|
|
|
|
|
|
|
|
22,500
|
|
|
|
112,500
|
|
|
|
22,500
|
|
|
|
56,250
|
Convertible note payable issued September 18, 2018, due on September 18, 2019 (GG)
|
|
|
|
|
|
|
|
|
|
|
18,000
|
|
|
|
90,000
|
|
|
|
18,000
|
|
|
|
45,000
|
Convertible note payable issued December 19, 2018, due on September 19, 2019 (HH)
|
|
|
|
|
|
|
|
|
|
|
200,000
|
|
|
|
1,000,000
|
|
|
|
200,000
|
|
|
|
|
500,000
|
THE MARQUIE GROUP, INC.
(formerly Music of Your Life, Inc.)
Notes to the Consolidated Financial Statements
August 31, 2019
(Unaudited)
Convertible note payable issued February 4, 2019, due on August 4, 2019 (II)
|
|
|
170,000
|
|
|
|
850,000
|
|
|
|
170,000
|
|
|
|
396,667
|
|
Convertible note payable issued February 13, 2019, due on November 13, 2019 (JJ)
|
|
|
75,000
|
|
|
|
375,000
|
|
|
|
75,000
|
|
|
|
187,500
|
|
Convertible note payable issued November 15, 2018, due on November 15, 2019 (KK)
|
|
|
20,000
|
|
|
|
100,000
|
|
|
|
20,000
|
|
|
|
50,000
|
|
Convertible note payable issued November 30, 2018, due on November 30, 2019 (LL)
|
|
|
5,000
|
|
|
|
25,000
|
|
|
|
5,000
|
|
|
|
12,500
|
|
Convertible note payable issued December 6, 2018, due on December 6, 2019 (MM)
|
|
|
3,000
|
|
|
|
15,000
|
|
|
|
3,000
|
|
|
|
7,500
|
|
Convertible note payable issued December 11, 2018, due on December 11, 2019 (NN)
|
|
|
10,000
|
|
|
|
50,000
|
|
|
|
10,000
|
|
|
|
25,000
|
|
Convertible note payable issued June 10, 2019, due on March 10, 2020 (OO)
|
|
|
58,750
|
|
|
|
293,750
|
|
|
|
—
|
|
|
|
—
|
|
Totals
|
|
$
|
923,409
|
|
|
$
|
4,592,797
|
|
|
$
|
885,186
|
|
|
$
|
1,805,422
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 August 31, 2019 include (1) stock price of $0.12 per share, (2) exercise prices ranging
from $0.016 to $0.024 per share, (3) terms ranging from -0- days to 192 days, (4) expected volatility of 775% and (5) risk free
interest rates ranging from 1.89% to 2.10%.
Assumptions used for the calculations
of the derivative liability of the notes at May 31, 2019 include (1) stock price of $0.60 per share, (2) exercise prices ranging
from $0.15 to $0.20 per share, (3) terms ranging from 0 days to 166 days, (4) expected volatility of 490% and (5) risk free interest
rates ranging from 0.86% to 2.35%.
THE MARQUIE GROUP, INC.
(formerly Music of Your Life, Inc.)
Notes to the Consolidated Financial Statements
August 31, 2019
(Unaudited)
Concentration of Derivative Liability:
The derivative liability relates
to convertible notes payable due to:
|
|
August 31, 2019
|
|
May 31, 2019
|
|
|
|
|
|
Lender A
|
|
$
|
880,797
|
|
|
$
|
479,155
|
|
Lender B
|
|
|
1,293,750
|
|
|
|
512,469
|
|
Lender C
|
|
|
850,000
|
|
|
|
260,572
|
|
Lender D
|
|
|
375,000
|
|
|
|
187,500
|
|
6 other lenders
|
|
|
1,193,250
|
|
|
|
365,726
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
4,592,797
|
|
|
$
|
1,805,422
|
|
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 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.
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 August 31, 2019) (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 August 31, 2019) (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.
During the year ended May 31, 2019,
the Company issued an aggregate of 275,435 shares of common stock for the conversion of notes payable and accrued interest in the
aggregate amount of $283,977. We incurred a loss on the conversion of notes payable and accrued interest of $1,709,230, which represents
the excess of the $1,993,207 fair value of the 275,435 shares at the dates of conversion over the $283,977 amount of debt satisfied.
On October 16, 2018, the Company
issued 5,000 shares of its common stock to the consulting firm entity discussed in Note 9. The $41,000 estimated fair value of
the 5,000 shares (based on the
$8.20 closing price of our common stock on October 16, 2018) has been expensed and included in “Salaries and Consulting Fees”
in the three months ended November 30, 2018.
THE MARQUIE GROUP, INC.
(formerly Music of Your Life, Inc.)
Notes to the Consolidated Financial Statements
August 31, 2019
(Unaudited)
During the three months ended August
31, 2019, the Company issued an aggregate of 676,382 shares of common stock for the conversion of notes payable and accrued interest
in the aggregate amount of $49,556. We incurred a loss on the conversion of notes payable and accrued interest of $102,963, which
represents the excess of the $152,519 fair value of the 676,382 shares at the dates of conversion over the $49,556 amount of debt
satisfied.
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.
At August 31, 2019, 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 and has a term expiring
December 31, 2020. The Consulting Agreement with the wife of the Company’s Chief Executive Officer provides for monthly compensation
of $15,000 and has a term expiring July 31, 2021. The Consulting Agreement with the mother of the Company’s Chief Executive
Officer provides for monthly compensation of $5,000 and is month-to-month. The other 3 consulting agreements in effect at August
31, 2019 provide for monthly compensation totaling $6,500.
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 May 31, 2019 and August 31, 2019.
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.
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 August 31, 2019, the Company had negative working capital of $6,849,225
and an accumulated deficit of $11,140,439. 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, 2020 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.