THE MARQUIE GROUP, INC.
(formerly Music of Your Life, Inc.)
Notes to the Consolidated Financial Statements
May 31, 2020
Convertible note payable to an entity, interest at 10%, due on November 15, 2019, in default – net of discount of $-0- and $9,205, respectively (KK)
|
|
|
20,000
|
|
|
|
10,795
|
|
Convertible note payable to an entity, interest at 10%, due on November 30, 2019, in default – net of discount of $-0- and $2,507, respectively (LL)
|
|
|
5,000
|
|
|
|
2,493
|
|
Convertible note payable to an entity, interest at 10%, due on December 6, 2019, in default – net of discount of $-0- and $1,553, respectively (MM)
|
|
|
3,000
|
|
|
|
1,447
|
|
Convertible note payable to an entity, interest at 10%, due on December 11, 2019, in default – net of discount of $-0- and $5,315, respectively (NN)
|
|
|
10,000
|
|
|
|
4,685
|
|
Convertible note payable to an entity, interest at 12%, due on March 10, 2020, in default, 24% default rate from March 10, 2020 (OO)
|
|
|
58,750
|
|
|
|
—
|
|
Convertible note payable to an entity, interest at 10%, due on September 12, 2020 – net of discount of $3,313 and $-0-, respectively (PP)
|
|
|
9,187
|
|
|
|
—
|
|
Convertible note payable to an entity, interest at 10%, due on April 23, 2020, in default (QQ)
|
|
|
250,000
|
|
|
|
—
|
|
Note payable to the Small Business Administration under the Payroll Protection Program, interest at 1%, due in installments through May 4, 2022, forgivable in part or whole subject to certain requirements. _
|
|
|
70,000
|
|
|
|
—
|
|
Notes payable to individuals, non-interest bearing, due on demand
|
|
|
103,476
|
|
|
|
103,476
|
|
Total Notes Payable
|
|
|
1,536,575
|
|
|
|
1,114,919
|
|
Less: Current Portion
|
|
|
(1,536,575
|
)
|
|
|
(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
May 31, 2020
(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 9 (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 bears interest at a rate of
12% per annum (24% per annum default rate), was due on October 31, 2017, 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 9 (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 9 (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 9 (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
May 31, 2020
(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 9 (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 (15% per annum
default rate) 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 9 (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 9 (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 9 (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 9 (Derivative Liability).
(FF) On September 18, 2018, the Company
issued a $22,500 Convertible Promissory Note (Tranche 3 of (AA) above) to a lender for net loan proceeds of $17,500. The note bears
interest at a rate of 10% per annum, was due on September 18, 2019, and is convertible at the option of the lender into shares
of the Company common stock at a Conversion Price equal to 50% of the lowest Trading Price during the 20 Trading Day period prior
to the Conversion Date. See Note 9 (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 9 (Derivative Liability).
(HH) On December 19, 2018, the Company
issued a $200,000 Convertible Promissory Note to a lender for net loan proceeds of $169,000. The note bears interest at a rate
of 10% per annum, was due on September 19, 2019, and is convertible at the option of the lender into shares of the Company common
stock at a Conversion Price equal to the lesser of (i) the lowest Trading Price during the 25 Trading Day period prior to December
19, 2018 or (ii) 50% of the lowest Trading Price during the 25 Trading Day period prior to the Conversion Date. See Note 9 (Derivative
Liability).
THE MARQUIE GROUP, INC.
(formerly Music of Your Life, Inc.)
Notes to the Consolidated Financial Statements
May 31, 2020
(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 9 (Derivative Liability).
(JJ) On February 13, 2019, the Company
issued a $75,000 Convertible Promissory Note to a lender for net loan proceeds of $67,500. The note bears interest at a rate of
10% per annum, was due on November 13, 2019, and is convertible at the option of the lender into shares of the Company common stock
at a Conversion Price equal to 50% of the lowest Trading Price during the 20 Trading Day period prior to the Conversion Date. See
Note 9 (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, was due on November 15, 2019, and is convertible at the option of the lender into shares of
the Company common stock at a Conversion Price equal to 50% of the lowest Trading Price during the 20 Trading Day period prior
to the Conversion Date. See Note 9 (Derivative Liability).
(LL) On November 30, 2018, the Company
issued a $5,000 Convertible Promissory Note (Tranche 5 of (AA) above) to a lender for net loan proceeds of $5,000. The note bears
interest at a rate of 10% per annum, was due on November 30, 2019, and is convertible at the option of the lender into shares of
the Company common stock at a Conversion Price equal to 50% of the lowest Trading Price during the 20 Trading Day period prior
to the Conversion Date. See Note 9 (Derivative Liability).
(MM) On December 6, 2018, the Company
issued a $3,000 Convertible Promissory Note (Tranche 6 of (AA) above) to a lender for net loan proceeds of $3,000. The note bears
interest at a rate of 10% per annum, was due on December 6, 2019, and is convertible at the option of the lender into shares of
the Company common stock at a Conversion Price equal to 50% of the lowest Trading Price during the 20 Trading Day period prior
to the Conversion Date. See Note 9 (Derivative Liability).
(NN) On December 11, 2018, the Company
issued a $10,000 Convertible Promissory Note (Tranche 7 of (AA) above) to a lender for net loan proceeds of $10,000. The note bears
interest at a rate of 10% per annum, was due on December 11, 2019, and 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 20 Trading Day period prior
to the Conversion Date. See Note 9 (Derivative Liability).
(OO) On June 10, 2019, the Company
issued a $58,750 Convertible Promissory Note to a lender for net loan proceeds of $50,000. The note bears interest at a rate of
12% per annum (24% per annum default rate), was due on March 10, 2020, and is convertible at the option of the lender into shares
of the Company common stock at a Conversion Price equal to 50% of the lowest Trading Price during the 25 Trading Day period prior
to the Conversion Date. See Note 9 (Derivative Liability).
(PP) On September 5, 2019, the Company
issued a $12,500 Convertible Promissory Note to a lender for net loan proceeds of $10,000. The note bears interest at a rate of
10% per annum, was due on September 5, 2020, and is convertible at the option of the lender into shares of the Company common stock
at a Conversion Price equal to 50% of the lowest Trading Price during the 20 Trading Day period prior to the Conversion Date. See
Note 9 (Derivative Liability).
THE MARQUIE GROUP, INC.
(formerly Music of Your Life, Inc.)
Notes to the Consolidated Financial Statements
May 31, 2020
(QQ) On October 23, 2019, the Company
issued a $260,000 Convertible Promissory Note to a lender for net loan proceeds of $234,000. The note bears interest at a rate
of 10% per annum, was due on April 23, 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 9 (Derivative Liability).
Concentration of Notes Payable:
The principal balance of the notes payable was
due to:
|
|
May 31, 2020
|
|
May 31, 2019
|
|
|
|
Lender A
|
|
$
|
23,167
|
|
|
$
|
296,414
|
|
Lender B
|
|
|
258,750
|
|
|
|
200,000
|
|
Lender C
|
|
|
420,000
|
|
|
|
170,000
|
|
Lender D
|
|
|
110,500
|
|
|
|
—
|
|
16 other lenders
|
|
|
727,471
|
|
|
|
666,967
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
1,539,888
|
|
|
|
1,333,381
|
|
|
|
|
|
|
|
|
|
|
Less debt discounts
|
|
|
(3,313
|
)
|
|
|
(218,462
|
)
|
|
|
|
|
|
|
|
|
|
Net
|
|
$
|
1,536,575
|
|
|
$
|
1,114,919
|
|
NOTE 8 – NOTES PAYABLE – RELATED PARTIES
Notes payable – related parties
consisted of the following:
|
|
May 31,
2020
|
|
May 31,
2019
|
Note payable to Company law firm (and owner of 2,500 shares of common stock since August 16, 2018), non-interest bearing, due on demand, unsecured
|
|
$
|
2,073
|
|
|
$
|
2,073
|
|
Notes payable to The OZ Corporation (owner of 2,500 shares of common stock since August 16, 2018), non-interest bearing, due on demand, unsecured
|
|
|
103,250
|
|
|
|
103,250
|
|
Convertible note payable to John D. Thomas P.C. (Company law firm and owner of 25,000 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 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 9 (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
May 31, 2020
NOTE 9 - DERIVATIVE LIABILITY
The derivative liability at May 31,
2020 and 2019 consisted of:
|
|
May 31, 2020
|
|
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
|
|
|
$
|
53,333
|
|
|
$
|
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
|
|
|
|
38,667
|
|
|
|
29,000
|
|
|
|
55,769
|
|
Convertible note payable issued April 5, 2017, due on demand (X)
|
|
|
21,500
|
|
|
|
28,667
|
|
|
|
21,500
|
|
|
|
41,346
|
|
Convertible note payable issued June 16, 2017, due on March 16, 2018 (Z)
|
|
|
—
|
|
|
|
—
|
|
|
|
54,992
|
|
|
|
82,488
|
|
Convertible note payable issued January 11, 2018 (AA)
|
|
|
23,167
|
|
|
|
30,889
|
|
|
|
35,381
|
|
|
|
53,072
|
|
Convertible note payable issued December 1, 2017, due on demand (BB)
|
|
|
50,000
|
|
|
|
50,000
|
|
|
|
50,000
|
|
|
|
55,555
|
|
Convertible note payable issued December 1, 2017, due on demand (CC)
|
|
|
50,000
|
|
|
|
50,000
|
|
|
|
50,000
|
|
|
|
55,555
|
|
Convertible note payable issued March 5, 2018, due on March 5, 2019 (DD)
|
|
|
35,000
|
|
|
|
46,667
|
|
|
|
35,000
|
|
|
|
52,500
|
|
Convertible note payable issued April 4, 2018, due on April 4, 2019 (EE)
|
|
|
37,500
|
|
|
|
50,000
|
|
|
|
37,500
|
|
|
|
56,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE MARQUIE GROUP, INC.
(formerly Music of Your Life, Inc.)
Notes to the Consolidated Financial Statements
May 31, 2020
Convertible note payable issued September 18, 2018, due on September 18, 2019 (FF)
|
|
|
22,500
|
|
|
|
30,000
|
|
|
|
22,500
|
|
|
|
56,250
|
|
Convertible note payable issued September 18, 2018, due on September 18, 2019 (GG)
|
|
|
8,506
|
|
|
|
34,022
|
|
|
|
18,000
|
|
|
|
45,000
|
|
Convertible note payable issued December 19, 2018, due on September 19, 2019 (HH)
|
|
|
200,000
|
|
|
|
266,667
|
|
|
|
200,000
|
|
|
|
500,000
|
|
Convertible note payable issued February 4, 2019, due on August 4, 2019 (II)
|
|
|
170,000
|
|
|
|
226,667
|
|
|
|
170,000
|
|
|
|
396,667
|
|
Convertible note payable issued February 13, 2019, due on November 13, 2019 (JJ)
|
|
|
75,000
|
|
|
|
100,000
|
|
|
|
75,000
|
|
|
|
187,500
|
|
Convertible note payable issued November 15, 2018, due on November 15, 2019 (KK)
|
|
|
20,000
|
|
|
|
26,667
|
|
|
|
20,000
|
|
|
|
50,000
|
|
Convertible note payable issued November 30, 2018, due on November 30, 2019 (LL)
|
|
|
5,000
|
|
|
|
6,667
|
|
|
|
5,000
|
|
|
|
12,500
|
|
Convertible note payable issued December 6, 2018, due on December 6, 2019 (MM)
|
|
|
3,000
|
|
|
|
4,000
|
|
|
|
3,000
|
|
|
|
7,500
|
|
Convertible note payable issued December 11, 2018, due on December 11, 2019 (NN)
|
|
|
10,000
|
|
|
|
13,333
|
|
|
|
10,000
|
|
|
|
25,000
|
|
Convertible note payable issued June 10, 2019, due on March 10, 2020 (OO)
|
|
|
58,750
|
|
|
|
78,333
|
|
|
|
—
|
|
|
|
—
|
|
Convertible note payable issued September 5, 2019, due on September 5, 2020 (PP)
|
|
|
12,500
|
|
|
|
20,833
|
|
|
|
—
|
|
|
|
—
|
|
Convertible note payable issued October 23, 2019, due on April 23, 2020 (QQ)
|
|
|
250,000
|
|
|
|
333,333
|
|
|
|
—
|
|
|
|
—
|
|
Totals
|
|
$
|
1,121,423
|
|
|
$
|
1,488,745
|
|
|
$
|
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.
THE MARQUIE GROUP, INC.
(formerly Music of Your Life, Inc.)
Notes to the Consolidated Financial Statements
May 31, 2020
Assumptions used for the calculations
of the derivative liability of the notes at May 31, 2020 include (1) stock price of $0.0005 per share, (2) exercise prices ranging
from $0.00012 to $0.00018 per share, (3) terms ranging from 0 days to 97 days, (4) expected volatility of 863% and (5) risk free
interest rates ranging from 0.13% to 0.14%.
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%.
Concentration of Derivative Liability:
The derivative liability at May 31, 2020 relates
to convertible notes payable due to:
|
|
May 31, 2020
|
|
May 31, 2019
|
|
|
|
|
|
Lender A
|
|
$
|
30,889
|
|
|
$
|
479,155
|
|
Lender B
|
|
|
345,000
|
|
|
|
512,469
|
|
Lender C
|
|
|
560,000
|
|
|
|
260,572
|
|
Lender D
|
|
|
100,000
|
|
|
|
187,500
|
|
Lender E
|
|
|
151,500
|
|
|
|
—
|
|
6 other lenders
|
|
|
301,356
|
|
|
|
365.726
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,488,745
|
|
|
$
|
1,805,442
|
|
NOTE 10 - 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 which 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.
THE MARQUIE GROUP, INC.
(formerly Music of Your Life, Inc.)
Notes to the Consolidated Financial Statements
May 31, 2020
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, 2020 and 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, 2020 and 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) was 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 10. 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 year ended May 31, 2019.
During the year ended May 31, 2020,
the Company issued an aggregate of 62,458,453 shares of common stock for the conversion of notes payable and accrued interest in
the aggregate amount of $78,315. We incurred a loss on the conversion of notes payable and accrued interest of $159,802, which
represents the excess of the $238,117 fair value of the 62,458,453 shares at the dates of conversion over the $78,315 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. On December 26, 2019, the Company amended its Form 1-A Offering Circular to reduce the offering price from $0.0075
per share to $0.0035 per share. On February 25,2020, the Company amended its Form 1-A Offering Circular to reduce the offering
price to $0.0007 per share. As part of this offering, during the year ended May 31, 2020, the Company issued an aggregate of 117,866,667
shares of common stock for cash in the amount of $320,400. The end date of the offering was August 28, 2020.
On November 21, 2019, the Company
merged with Global Nutrition Experience, Inc. (“GNE”) in exchange for the issuance of a total of 160,000,000 shares
of our common stock to GNE’s stockholders. Following the merger, the Company had 161,061,647 shares of common stock issued
and outstanding. GNE was incorporated on November 21, 2019. The stockholder of GNE prior to the merger who received the 160,000,000
shares was the Angell Family Trust. Pursuant to ASC 805-50-30-5 relating to transactions between entities under common control,
the intellectual property of GNE (and the issuance of the 160,000,000 shares of common stock) were recorded at $-0-, the historical
cost of the property to GNE. During the three months ended February 29, 2020, the Company issued an additional 33,000,000 shares
of common stock as part of the merger.
At May 31, 2020 and 2019, there are
no stock options or warrants outstanding.
THE MARQUIE GROUP, INC.
(formerly Music of Your Life, Inc.)
Notes to the Consolidated Financial Statements
May 31, 2020
NOTE 11 - 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 6 – 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 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.
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 2020.
On October 16, 2018 (see Note 10),
the Company issued 5,000 shares of its common stock to the Consultant. On October 26, 2018, the Consultant advised the Company
that it had not been notified that the Agreement was terminated on April 1, 2018 and that the Company is in default of the Agreement.
Consulting Agreement with New
Jersey Entity
On December 5, 2019 and January 13, 2020, the Company
paid $50,000 and $50,000, respectively to a consulting firm entity (the “Consultant”) pursuant to Consulting Agreements
dated December 4, 2019 and January 11, 2020. The Consulting Agreements provided for the Consultant to perform certain strategic
planning, business development, and investor relations services for the Company for total compensation of $100,000 cash (which
was expensed and included in “Other Selling, General and Administrative Expenses” in the Consolidated Statement of
Operations for the three months ended February 29, 2020. The terms of the Consulting Agreements were for 90 days each.
THE MARQUIE GROUP, INC.
(formerly Music of Your Life, Inc.)
Notes to the Consolidated Financial Statements
May 31, 2020
NOTE 12 - 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 May 31, 2020, the Company had negative working capital of $4,194,613
and an accumulated deficit of $8,893,053. 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, 2021 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 additional equity and by generating revenues through sales
of products and services.
The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
NOTE 13 – SUBSEQUENT EVENTS
From June 1, 2020 to August 21, 2020,
the Company issued a total of 2,341,257,954 shares of its common stock for the conversion of notes payable and accrued interest
in the aggregate amount of $157,251. The $528,789 excess of the $686,040 fair value of the 2,341,257,954 shares at the dates of
conversion over the $157,251 of debt satisfied will be charged to “Loss on conversion of notes payable and accrued interest”
in the three months ended August 31, 2020.