NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
AND ORGANIZATION
Basis of Presentation
The accompanying unaudited financial statements
are presented in accordance with generally accepted accounting principles for interim financial information and the instructions to Form
10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring
accruals) considered necessary in order to make the financial statements not misleading, have been included. Operating results for the
three months ended August 31, 2021 are not necessarily indicative of results that may be expected for the year ending May 31, 2022.
Organization
The Marquie Group, Inc. (formerly Music
of Your Life, Inc.) (the “Company”) was incorporated under the laws of the State of Florida on January 30, 2008 under the
name of “Zhong Sen International Tea Company”. From January 2008 to May 2013, the Company operated with the principal business
objective of providing sales and marketing consulting services to small to medium sized Chinese tea producing companies who wished to
export and distribute high quality Chinese tea products worldwide. On May 31, 2013 (the “Closing Date”), the Company entered
into a Merger Agreement (the “Merger Agreement”) by and among the Company, Music of Your Life, Inc., a Nevada corporation
(“MYL Nevada”) incorporated October 10, 2012, and Music of Your Life Merger Sub, Inc., a Utah corporation ("Merger Sub"),
pursuant to which MYL Nevada merged with Merger Sub. As a result of the merger, MYL Nevada became a wholly-owned subsidiary of the Company,
and on July 26, 2013, the Company changed its name to Music of Your Life, Inc., a syndicated radio network. On May 20, 2014 the Company
acquired 100% of the outstanding stock of iRadio, Inc., a Utah corporation. The Company was the surviving corporation. iRadio was an entity
related to the Company by common ownership.
Reverse Stock Splits
Effective June 20, 2018, the Company effectuated
a 1 share for 4,000 shares reverse stock split which reduced the issued and outstanding shares of common stock from 3,642,441,577 shares
to 910,610 shares. Effective September 4, 2019, the Company effectuated a 1 share for 400 shares reverse stock split which reduced the
issued and outstanding shares of common stock from 423,639,620 shares to 1,061,357 shares. The accompanying financial statements have
been retroactively adjusted to reflect these reverse stock splits.
Acquisition of The Marquie Group,
Inc.
On August 16, 2018 (see Note 8), the Company
merged with The Marquie Group, Inc. (“TMGI”) in exchange for the issuance of a total of 100,000 shares of our common stock
to TMGI’s stockholders. Following the merger, the Company had 102,277 shares of common stock issued and outstanding. On December
5, 2018, the Company amended and restated its Articles of Incorporation providing for a change in the Company’s name from “Music
of Your Life, Inc.” to “The Marquie Group, Inc.” The TMGI business plan is to license, develop and launch a direct-to-consumer,
health and beauty product line called “Whim” that use innovative formulations of plant-based, amino-acids and other natural
alternatives to chemical ingredients.
Acquisition of Global Nutrition Experience,
Inc.
On November 21, 2019 (see Note 8), the Company
merged with Global Nutrition Experience, Inc. (“GNE”) in exchange for the issuance of a total of 193,000,000 shares of our
common stock to GNE’s stockholder. The GNE business plan is to license intellectual property to third parties.
NOTE 2 - LOANS RECEIVABLE – RELATED PARTY
During the year ended May 31, 2013, the
Company loaned $174,950 to the Company’s current chief executive in anticipation of the merger agreement described in Note 1. The
loans were non-interest bearing and due on demand. Effective May 31, 2015, the Company agreed to waive collection of $100,000 of the remaining
$115,950 loans receivable balance in exchange for the chief executive officer’s agreement to waive payment of the $100,000 accrued
consulting fees balance due him at May 31, 2015. Effective May 31, 2020, the Company agreed to waive collection of $15,950 of the remaining
loans receivable balance in exchange for the chief executive officer’s agreement to waive payment of $15,950 accrued consulting
fees balance due him at May 31, 2020 (see Note 11). As of August 31, 2021, the balance due on this loan was $-0-.
NOTE 3 - MUSIC INVENTORY
Music inventory consisted of the following:
|
|
August 31, 2021
|
|
May 31, 2021
|
Digital music acquired for use in operations – at cost
|
|
$
|
21,648
|
|
|
$
|
21,648
|
|
Accumulated depreciation
|
|
|
(18,021
|
)
|
|
|
(17,339
|
)
|
Music inventory – net
|
|
$
|
3,627
|
|
|
$
|
4,309
|
|
The Company purchases digital music to broadcast
over the radio and internet. During the three months ended August 31, 2021, the Company purchased $-0- worth of music inventory. For the
three months ended August 31, 2021 and 2020, depreciation of music inventory was $682 and $867, respectively.
NOTE 4 – ACCRUED CONSULTING FEES
Accrued consulting fees consisted
of the following:
|
|
August 31, 2021
|
|
May 31, 2021
|
Due to Company Chief Executive Officer pursuant to Consulting Agreement dated March 1, 2017 – monthly compensation of $10,000
|
|
$
|
163,817
|
|
|
$
|
138,817
|
|
Due to wife of Company Chief Executive Officer pursuant to consulting agreement effective August 16, 2018 – monthly compensation of $15,000 (which was terminated May 31, 2021)
|
|
|
318,100
|
|
|
|
318,100
|
|
Due to mother of Company Chief Executive Officer pursuant to Consulting Agreement dated September 1, 2015 (which was terminated November 30, 2019) – monthly compensation of $5,000 to November 30, 2019
|
|
|
131,350
|
|
|
|
131,350
|
|
Due to service provider pursuant to Consulting Agreement dated September 1, 2015 (which was terminated February 28, 2019) – monthly compensation of $5,000 to February 28, 2019
|
|
|
144,700
|
|
|
|
144,700
|
|
Due to service provider pursuant to Consulting Agreement dated September 1, 2015 (which was terminated November 30, 2019) – monthly compensation of $1,000 to November 30, 2019
|
|
|
48,000
|
|
|
|
48,000
|
|
Due to two other service providers
|
|
|
52,000
|
|
|
|
52,000
|
|
Total
|
|
$
|
857,967
|
|
|
$
|
832,967
|
|
The accrued consulting fees balance
changed as follows:
|
|
Three Months Ended
August 31, 2021
|
|
Year Ended
May 31, 2021
|
Balance, beginning of period
|
|
$
|
832,967
|
|
|
$
|
614,600
|
|
Compensation expense accrued pursuant to consulting agreements
|
|
|
30,000
|
|
|
|
300,000
|
|
Payments to consultants
|
|
|
(5,000
|
)
|
|
|
(81,633
|
)
|
Balance, end of period
|
|
$
|
857,967
|
|
|
$
|
832,967
|
|
See Note 9 (Commitments and Contingencies).
NOTE 5 - NOTES PAYABLE
Notes payable consisted of the following:
|
|
August 31, 2021
|
|
May 31, 2021
|
Notes payable to an entity, non-interest bearing, due on demand, unsecured
|
|
$
|
7,500
|
|
|
$
|
7,500
|
|
Note payable to an individual, due on May 22, 2015, in default (B)
|
|
|
25,000
|
|
|
|
25,000
|
|
Note payable to an entity, non-interest bearing, due on February 1, 2016, in default (D)
|
|
|
50,000
|
|
|
|
50,000
|
|
Note payable to a family trust, stated interest of $2,500, due on October 31, 2015, in default (E)
|
|
|
7,000
|
|
|
|
7,000
|
|
Note payable to a corporation, stated interest of $5,000, due on October 21, 2015, in default (G)
|
|
|
50,000
|
|
|
|
50,000
|
|
Note payable to a corporation, stated interest of $5,000, due on November 6, 2015, in default (H)
|
|
|
50,000
|
|
|
|
50,000
|
|
|
Note payable to an individual, due on December 20, 2015, in default, 24% default rate from January 20, 2016 (I)
|
|
|
25,000
|
|
|
|
25,000
|
|
Convertible note payable to an entity, interest at 12%, due on December 29, 2016, in default (M)
|
|
|
40,000
|
|
|
|
40,000
|
|
Note payable to a family trust, interest at 10%, due on November 30, 2016, in default (P)
|
|
|
25,000
|
|
|
|
25,000
|
|
Convertible note payable to an individual, interest at 10%, due on demand (V)
|
|
|
46,890
|
|
|
|
46,890
|
|
Convertible note payable to an individual, interest at 8%, due on demand (W)
|
|
|
29,000
|
|
|
|
29,000
|
|
Convertible note payable to an individual, interest at 8%, due on demand (X)
|
|
|
21,500
|
|
|
|
21,500
|
|
Convertible note payable to an entity, interest at 10%, due on demand (Y)
|
|
|
8,600
|
|
|
|
8,600
|
|
Convertible note payable to an entity, interest at 10%, due on January 11, 2019, in default, 15% default interest rate from January 11, 2019 (AA)
|
|
|
23,167
|
|
|
|
23,167
|
|
Convertible note payable to an entity, interest at 10%, due on demand (CC)
|
|
|
50,000
|
|
|
|
50,000
|
|
Convertible note payable to an entity, interest at 10%, due on March 5, 2019, in default (DD)
|
|
|
35,000
|
|
|
|
35,000
|
|
Convertible note payable to an entity, interest at 10%, due on April 4, 2019 (EE)
|
|
|
—
|
|
|
|
37,500
|
|
Convertible note payable to an entity, interest at 10%, due on September 18, 2019 (FF)
|
|
|
—
|
|
|
|
22,500
|
|
Convertible note payable to an entity, interest at 10%, due on September 18, 2019, in default (GG)
|
|
|
8,505
|
|
|
|
8,505
|
|
Convertible note payable to an entity, interest at 10%, due on September 19, 2019, in default (HH)
|
|
|
175,720
|
|
|
|
200,000
|
|
Convertible note payable to an entity, interest at 10%, due on November 13, 2019, in default (JJ)
|
|
|
33,730
|
|
|
|
56,055
|
|
Convertible note payable to an entity, interest at 10%, due on November 15, 2019 (KK)
|
|
|
—
|
|
|
|
20,000
|
|
|
Convertible note payable to an entity, interest at 10%, due on November 30, 2019 (LL)
|
|
|
—
|
|
|
|
5,000
|
|
Convertible note payable to an entity, interest at 10%, due on December 6, 2019 (MM)
|
|
|
—
|
|
|
|
3,000
|
|
Convertible note payable to an entity, interest at 10%, due on December 11, 2019 (NN)
|
|
|
—
|
|
|
|
10,000
|
|
Convertible note payable to an entity, interest at 12%, due on March 10, 2020, in default, 24% default interest rate from March 10, 2020 (OO)
|
|
|
58,750
|
|
|
|
58,750
|
|
Convertible note payable to an entity, interest at 10%, due on September 12, 2020 (PP)
|
|
|
—
|
|
|
|
12,500
|
|
Convertible note payable to an entity, interest at 12%, due on November 30, 2021 – net of discount of $42,384 and $85,233, respectively (SS)
|
|
|
127,616
|
|
|
|
84,767
|
|
Note payable to an entity, interest at 12%, due on December 30, 2021 (TT)
|
|
|
50,000
|
|
|
|
50,000
|
|
Note payable to an entity, interest at 12%, due on April 15, 2022 (UU)
|
|
|
55,000
|
|
|
|
55,000
|
|
Convertible note payable to an entity, interest at 10%, due on June 4, 2022, net of discount of $181,071 and $-0-, respectively (VV)
|
|
|
33,618
|
|
|
|
55,000
|
|
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
|
|
|
|
70,000
|
|
Note payable to the Small Business Administration under the Payroll Protection Program, interest at 1%, due in installments through April 5, 2023, forgivable in part or whole subject to certain requirements
|
|
|
100,000
|
|
|
|
100,000
|
|
Notes payable to individuals, non-interest bearing, due on demand
|
|
|
103,476
|
|
|
|
103,476
|
|
Total Notes Payable
|
|
|
1,310,072
|
|
|
|
1,366,430
|
|
Less: Current Portion
|
|
|
(1,310,072
|
)
|
|
|
(1,366,430
|
)
|
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.
(M) On December 29, 2015, the Company
issued a $20,000 Convertible Promissory Note to a lender for net loan proceeds of $15,000. The note bears interest at a rate of 12% per
annum, was due on December 29, 2016, and is convertible at the option of the lender into shares of the Company common stock at a Conversion
Price equal to 50% of the lowest closing bid price during the 30 Trading Day period prior to the Conversion Date. See Note 7 (Derivative
Liability).
(P) On June 3, 2016, the Company issued
a $25,000 Promissory Note. The note bears interest at a rate of 10% per annum and was due on November 30, 2016.
(V) On May 3, 2017, the Company issued
a $72,750 Convertible Promissory Note to a lender as a replacement for the principal and interest due on a promissory note due on October
14, 2014. The note bears interest at a rate of 10% per annum, is due on demand, and is convertible at the option of the lender into shares
of the Company common stock at a Conversion Price equal to $0.0001293 per share.
(W) On April 5, 2017, the Company issued
a $35,000 Convertible Promissory Note to a lender as a replacement for the principal and interest due on a promissory note due on August
23, 2015. The note bears interest at a rate of 8% per annum, is due on demand, and is convertible at the option of the lender into shares
of the Company common stock at a Conversion Price equal to 40% of the lowest Trading Price during the 5 Trading Day period prior to the
Conversion Date. See Note 7 (Derivative Liability).
(X) On April 5, 2017, the Company issued
a $27,500 Convertible Promissory Note to a lender as a replacement for the principal and interest due on a promissory note due on October
31, 2015. The note bears interest at a rate of 8% per annum, is due on demand, and is convertible at the option of the lender into shares
of the Company common stock at a Conversion Price equal to 40% of the lowest Trading Price during the 5 Trading Day period prior to the
Conversion Date. See Note 7 (Derivative Liability).
(Y) On March 1, 2017, the Company issued
a $8,600 Convertible Promissory Note to a vendor of the Company to convert certain accounts payable due to the vendor. The note bears
interest at a rate of 10% per annum, is due on demand, and is convertible at the option of the lender into shares of the Company common
stock at a Conversion Price equal to the higher of $0.00004 per share or 60% of the lowest Trading Price during the 5 Trading Day period
prior to the Conversion Date.
(AA) On January 11, 2018, the Company
issued a $500,000 Convertible Promissory Note to a lender. During the quarter ended February 28, 2018, the Company borrowed $88,000 (of
the $500,000), and received net loan proceeds of $75,000. The note bears interest at a rate of 10% per annum and is convertible at the
option of the lender into shares of the Company common stock at a Conversion Price equal to 50% of the lowest Trading Price during the
15 Trading Day period prior to the Conversion Date. See Note 7 (Derivative Liability). The maturity date for each tranche funded is twelve
months from the effective date of each payment.
(CC) On December 1, 2017, the Company
issued a $50,000 Convertible Promissory Note to a vendor in settlement of certain accrued consulting fees of $50,000. The note bears interest
at a rate of 10% per annum, is due on demand, and is convertible at the option of the lender into shares of the Company common stock at
a Conversion Price equal to 60% of the lowest Trading Price during the 20 Trading Day period prior to the Conversion Date. See Note 7
(Derivative Liability).
(DD) On March 5, 2018, the Company issued
a $35,000 Convertible Promissory Note to a lender for net loan proceeds of $33,000. The note bears interest at a rate of 10% per annum,
was due on March 5, 2019, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price
equal to 50% of the lowest Trading Price during the 20 Trading Day period prior to the Conversion Date. See Note 7 (Derivative Liability).
(EE) On April 4, 2018, the Company issued
a $37,500 Convertible Promissory Note (Tranche 2 of (AA) above) to a lender for net loan proceeds of $35,500. The note bears interest
at a rate of 10% per annum, was due on April 4, 2019, and is convertible at the option of the lender into shares of the Company common
stock at a Conversion Price equal to 50% of the lowest Trading Price during the 20 Trading Day period prior to the Conversion Date. See
Note 7 (Derivative Liability).
(FF) On September 18, 2018, the Company
issued a $22,500 Convertible Promissory Note (Tranche 3 of (AA) above) to a lender for net loan proceeds of $17,500. The note bears interest
at a rate of 10% per annum, was due on September 18, 2019, and is convertible at the option of the lender into shares of the Company common
stock at a Conversion Price equal to 50% of the lowest Trading Price during the 20 Trading Day period prior to the Conversion Date. See
Note 7 (Derivative Liability).
(GG) On September 18, 2018, the Company
issued a $18,000 Convertible Promissory Note to a lender for net loan proceeds of $14,000. The note bears interest at a rate of 10% per
annum, was due on September 18, 2019, and is convertible at the option of the lender into shares of the Company common stock at a Conversion
Price equal to 50% of the lowest Trading Price during the 20 Trading Day period prior to the Conversion Date. See Note 7 (Derivative Liability).
(HH) On December 19, 2018, the Company
issued a $200,000 Convertible Promissory Note to a lender for net loan proceeds of $169,000. The note bears interest at a rate of 10%
per annum, was due on September 19, 2019, and is convertible at the option of the lender into shares of the Company common stock at a
Conversion Price equal to the lesser of (i) the lowest Trading Price during the 25 Trading Day period prior to December 19, 2018 or (ii)
50% of the lowest Trading Price during the 25 Trading Day period prior to the Conversion Date. See Note 7 (Derivative Liability).
(II) On February 4, 2019, the Company
issued a $170,000 Convertible Promissory Note to a lender for net loan proceeds of $149,955. The note bears interest at a rate of 10%
per annum, was due on August 4, 2019, and is convertible at the option of the lender into shares of the Company common stock at a Conversion
Price equal to 50% of the lowest Trading Price during the 25 Trading Day period prior to the Conversion Date. See Note 7 (Derivative Liability).
(JJ) On February 13, 2019, the Company
issued a $75,000 Convertible Promissory Note to a lender for net loan proceeds of $67,500. The note bears interest at a rate of 10% per
annum, was due on November 13, 2019, and is convertible at the option of the lender into shares of the Company common stock at a Conversion
Price equal to 50% of the lowest Trading Price during the 20 Trading Day period prior to the Conversion Date. See Note 7 (Derivative Liability).
(KK) On November 15, 2018, the Company
issued a $20,000 Convertible Promissory Note (Tranche 4 of (AA) above) to a lender for net loan proceeds of $20,000. The note bears interest
at a rate of 10% per annum, was due on November 15, 2019, and is convertible at the option of the lender into shares of the Company common
stock at a Conversion Price equal to 50% of the lowest Trading Price during the 20 Trading Day period prior to the Conversion Date. See
Note 7 (Derivative Liability).
(LL) On November 30, 2018, the Company
issued a $5,000 Convertible Promissory Note (Tranche 5 of (AA) above) to a lender for net loan proceeds of $5,000. The note bears interest
at a rate of 10% per annum, was due on November 30, 2019, and is convertible at the option of the lender into shares of the Company common
stock at a Conversion Price equal to 50% of the lowest Trading Price during the 20 Trading Day period prior to the Conversion Date. See
Note 7 (Derivative Liability).
(MM) On December 6, 2018, the Company
issued a $3,000 Convertible Promissory Note (Tranche 6 of (AA) above) to a lender for net loan proceeds of $3,000. The note bears interest
at a rate of 10% per annum, was due on December 6, 2019, and is convertible at the option of the lender into shares of the Company common
stock at a Conversion Price equal to 50% of the lowest Trading Price during the 20 Trading Day period prior to the Conversion Date. See
Note 7 (Derivative Liability).
(NN) On December 11, 2018, the Company
issued a $10,000 Convertible Promissory Note (Tranche 7 of (AA) above) to a lender for net loan proceeds of $10,000. The note bears interest
at a rate of 10% per annum, was due on December 11, 2019, and is convertible at the option of the lender into shares of the Company common
stock at a Conversion Price equal to 50% of the lowest Trading Price during the 20 Trading Day period prior to the Conversion Date. See
Note 7 (Derivative Liability).
(OO) On June 10, 2019, the Company issued
a $58,750 Convertible Promissory Note to a lender for net loan proceeds of $50,000. The note bears interest at a rate of 12% per annum
(24% per annum default rate), was due on March 10, 2020, and is convertible at the option of the lender into shares of the Company common
stock at a Conversion Price equal to 50% of the lowest Trading Price during the 25 Trading Day period prior to the Conversion Date. See
Note 7 (Derivative Liability).
(PP) On September 5, 2019, the Company
issued a $12,500 Convertible Promissory Note to a lender for net loan proceeds of $10,000. The note bears interest at a rate of 10% per
annum, was due on September 5, 2020, and is convertible at the option of the lender into shares of the Company common stock at a Conversion
Price equal to 50% of the lowest Trading Price during the 20 Trading Day period prior to the Conversion Date. See Note 7 (Derivative Liability).
(SS) On November 30, 2020, the Company
issued a $170,000 Convertible Promissory Note to a lender which paid off some of the accrued interest for the note described in (RR) above.
The Company received net proceeds of $32,500. The note bears interest at a rate of 12% per annum, is due on November 30, 2021, and is
convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to the lesser of (1) 105%
of the closing bid price of the Common Stock on the Issue Date, or (2) the closing bid price of the Common Stock on the Trading Day immediately
preceding the date of the conversion. See Note 7 (Derivative Liability).
(TT) On December 30, 2020, the Company
issued a $50,000 Promissory Note. The note bears interest at a rate of 12% per annum and is due on December 30, 2021.
(UU) On April 15, 2021, the Company issued
a $55,000 Convertible Promissory Note to a lender for net loan proceeds of $45,000. The note bears interest at a rate of 12% per annum,
is due on April 15, 2022, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price
equal to the higher of (1) $0.0009, or (2) the par value of the Common Stock.
(VV) On June 4, 2021, the Company issued
a $238,596 Convertible Promissory Note to a lender which paid off the principal and accrued interest for the notes described in (EE),
(FF), (KK), (LL), (MM), (NN) and (PP) above. The note bears interest at a rate of 10% per annum, is due on June 4, 2022, and is convertible
at the option of the lender into shares of the Company common stock at a Conversion Price equal to the lesser of (1) $0.00004, or (2)
50% of the lowest trading price of the common stock for the previous 15 day trading period. See Note 7 (Derivative Liability).
Concentration of Notes Payable:
The principal balance of the notes payable
was due to:
|
|
August 31, 2021
|
|
May 31, 2021
|
|
|
|
|
|
Lender A
|
|
$
|
23,167
|
|
|
$
|
23,167
|
|
Lender B
|
|
|
284,470
|
|
|
|
284,470
|
|
Lender C
|
|
|
225,000
|
|
|
|
225,000
|
|
Lender D
|
|
|
214,689
|
|
|
|
110,500
|
|
14 other lenders
|
|
|
786,201
|
|
|
|
808,526
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
1,533,527
|
|
|
|
1,451,663
|
|
|
|
|
|
|
|
|
|
|
Less debt discounts
|
|
|
(223,455
|
)
|
|
|
(85,233
|
)
|
|
|
|
|
|
|
|
|
|
Net
|
|
$
|
1,310,072
|
|
|
$
|
1,366,430
|
|
NOTE 6 - NOTES PAYABLE – RELATED PARTIES
Notes payable – related parties consisted
of the following:
|
|
August 31,
2021
|
|
May 31,
2021
|
Note payable to Company law firm (and owner of 2,500 shares of common stock since August 16, 2018), non-interest bearing, due on demand, unsecured
|
|
$
|
2,073
|
|
|
$
|
2,073
|
|
Notes payable to The OZ Corporation (owner of 2,500 shares of common stock since August 16, 2018), non-interest bearing, due on demand, unsecured
|
|
|
69,250
|
|
|
|
69,250
|
|
Note payable to the Chief Executive Officer, non-interest bearing, due on demand, unsecured
|
|
|
6,228
|
|
|
|
—
|
|
Convertible note payable to John D. Thomas P.C. (Company law firm and owner of 2,500 shares of common stock since August 16, 2018), interest at 10%, due on demand, convertible at the option of the lender into shares of Company common stock equal to 60% of the lowest Trading Price during the 20 Trading Day period prior to the Conversion Date. See Note 7 (Derivative Liability)
|
|
|
50,000
|
|
|
|
50,000
|
|
Total Notes Payable
|
|
|
127,551
|
|
|
|
121,323
|
|
Less: Current Portion
|
|
|
(127,551
|
)
|
|
|
(121,323
|
)
|
Long-Term Notes Payable
|
|
$
|
—
|
|
|
$
|
—
|
|
NOTE 7 - DERIVATIVE LIABILITY
The derivative liability at August 31, 2021
and May 31, 2020 consisted of:
|
|
August 31, 2021
|
|
May 31, 2021
|
|
|
Face Value
|
|
Derivative Liability
|
|
Face Value
|
|
Derivative Liability
|
Convertible note payable issued December 29, 2015, due December 29, 2016 (M)
|
|
$
|
40,000
|
|
|
$
|
80,000
|
|
|
$
|
40,000
|
|
|
$
|
48,000
|
|
Convertible note payable issued April 5, 2017, due on demand (W)
|
|
|
29,000
|
|
|
|
72,500
|
|
|
|
29,000
|
|
|
|
58,000
|
|
Convertible note payable issued April 5, 2017, due on demand (X)
|
|
|
21,500
|
|
|
|
53,750
|
|
|
|
21,500
|
|
|
|
43,000
|
|
Convertible note payable issued January 11, 2018, due on January 11, 2019 (AA)
|
|
|
23,167
|
|
|
|
46,334
|
|
|
|
23,167
|
|
|
|
27,800
|
|
Convertible note payable issued December 1, 2017, due on demand (BB)
|
|
|
50,000
|
|
|
|
55,555
|
|
|
|
50,000
|
|
|
|
50,000
|
|
Convertible note payable issued December 1, 2017, due on demand (CC)
|
|
|
50,000
|
|
|
|
55,555
|
|
|
|
50,000
|
|
|
|
50,000
|
|
Convertible note payable issued March 5, 2018, due on March 5, 2019 (DD)
|
|
|
35,000
|
|
|
|
70,000
|
|
|
|
35,000
|
|
|
|
42,000
|
|
Convertible note payable issued April 4, 2018, due on April 4, 2019 (EE)
|
|
|
—
|
|
|
|
—
|
|
|
|
37,500
|
|
|
|
45,000
|
|
Convertible note payable issued September 18, 2018, due on September 18, 2019 (FF)
|
|
|
—
|
|
|
|
—
|
|
|
|
22,500
|
|
|
|
27,000
|
|
Convertible note payable issued September 18, 2018, due on September 18, 2019 (GG)
|
|
|
8,505
|
|
|
|
17,011
|
|
|
|
8,506
|
|
|
|
10,208
|
|
Convertible note payable issued December 19, 2018, due on September 19, 2019 (HH)
|
|
|
175,720
|
|
|
|
351,440
|
|
|
|
200,000
|
|
|
|
223,384
|
|
Convertible note payable issued February 4, 2019, due on August 4, 2019 (II)
|
|
|
—
|
|
|
|
—
|
|
|
|
170,000
|
|
|
|
151,009
|
|
Convertible note payable issued February 13, 2019, due on November 13, 2019 (JJ)
|
|
|
33,730
|
|
|
|
67,462
|
|
|
|
75,000
|
|
|
|
80,314
|
|
Convertible note payable issued November 15, 2018, due on November 15, 2019 (KK)
|
|
|
—
|
|
|
|
—
|
|
|
|
20,000
|
|
|
|
24,000
|
|
Convertible note payable issued November 30, 2018, due on November 30, 2019 (LL)
|
|
|
—
|
|
|
|
—
|
|
|
|
5,000
|
|
|
|
6,000
|
|
Convertible note payable issued December 6, 2018, due on December 6, 2019 (MM)
|
|
|
—
|
|
|
|
—
|
|
|
|
3,000
|
|
|
|
3,600
|
|
Convertible note payable issued December 11, 2018, due on December 11, 2019 (NN)
|
|
|
—
|
|
|
|
—
|
|
|
|
10,000
|
|
|
|
12,000
|
|
Convertible note payable issued June 10, 2019, due on March 10, 2020 (OO)
|
|
|
58,750
|
|
|
|
117,500
|
|
|
|
58,750
|
|
|
|
70,500
|
|
Convertible note payable issued September 5, 2019, due on September 5, 2020 (PP)
|
|
|
—
|
|
|
|
—
|
|
|
|
12,500
|
|
|
|
15,000
|
|
Convertible note payable issued November 30, 2020, due on November 30, 2021 (SS)
|
|
|
127,616
|
|
|
|
382,848
|
|
|
|
170,000
|
|
|
|
1,020,000
|
|
Convertible note payable issued June 4, 2021, due on June 4, 2022 (VV)
|
|
|
214,689
|
|
|
|
2,146,890
|
|
|
|
170,000
|
|
|
|
1,020,000
|
|
Totals
|
|
$
|
867,677
|
|
|
$
|
3,516,845
|
|
|
$
|
1,041,423
|
|
|
$
|
2,006,815
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, 2021 include (1) stock price of $0.0004 per share, (2) exercise prices ranging from
$0.00004 to $0.00018 per share, (3) terms ranging from 0 days to 277 days, (4) expected volatility of 404% and (5) risk free interest
rates ranging from 0.03% to 0.07%.
Assumptions used for the calculations of
the derivative liability of the notes at May 31, 2021 include (1) stock price of $0.0006 per share, (2) exercise prices ranging from $0.0001
to $0.0005 per share, (3) terms ranging from 0 days to 183 days, (4) expected volatility of 996% and (5) risk free interest rates ranging
from 0.01% to 0.03%.
Concentration of Derivative Liability:
The derivative liability relates to convertible
notes payable due to:
|
|
August 31, 2021
|
|
May 31, 2021
|
|
|
|
|
|
Lender A
|
|
$
|
46,334
|
|
|
$
|
27,801
|
|
Lender B
|
|
|
468,939
|
|
|
|
293,884
|
|
Lender C
|
|
|
382,848
|
|
|
|
1,171,009
|
|
Lender D
|
|
|
2,146,890
|
|
|
|
82,600
|
|
7 other lenders
|
|
|
471,834
|
|
|
|
431,521
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
3,516,845
|
|
|
$
|
2,006,815
|
|
NOTE 8 - EQUITY TRANSACTIONS
On October 3, 2016, the Company amended
its Articles of Incorporation to increase the number of authorized shares of common stock from 500,000,000 to 2,000,000,000 shares and
to change the par value of both the common stock and preferred stock from $0.001 per share to $0.0001 per share.
On November 9, 2016, the Company amended
its Articles of Incorporation to increase the number of authorized shares of common stock from 2,000,000,000 to 10,000,000,000 shares
and to amend the voting rights for the Series A Preferred Stock. As amended, each share of Series A Preferred Stock shall have voting
rights equal to four times the sum of (a) all shares of Common Stock issued and outstanding at the time of voting; plus (b) the total
number of votes of all other classes of preferred stock which are issued and outstanding at the time of voting; divided by (c) the number
of shares of Series A Preferred Stock issued and outstanding at the time of voting. The Series A Preferred Stock has no conversion, liquidation,
or dividend rights.
On April 22, 2021, the Company amended its
Articles of Incorporation to increase the number of authorized shares of common stock from 10,000,000,000 to 50,000,000,000 shares.
On August 16, 2018, the Company entered
into a Merger Agreement by and among the Company, and The Marquie Group, Inc., a Utah Corporation (“TMG”), pursuant to with
the Company merged with TMG. The Company is the surviving corporation. Each shareholder of TMG received one (1) share of common stock
of the Company for every one (1) share of TMG common stock held as of August 16, 2018. In accordance with the terms of the merger agreement,
all of the shares of TMG held by TMG shareholders were cancelled, and 100,000 shares of common stock of the Company were issued to the
TMG shareholders.
TMG was incorporated on August 3, 2018.
The merger provides the Company with certain registered trademarks and intellectual property of TMG with respect to health, beauty, and
social networking products. The three stockholders of TMG prior to the merger who received the 100,000 shares are (1) Marc Angell (CEO
of the Company) and Jacquie Angell (50,000 shares), (2) The OZ Corporation (holder of $103,250 of Company notes payable at May 31, 2019
and February 29, 2020) (25,000 shares), and (3) John Thomas P.C. (Company law firm and holder of $52,073 of Company notes payable at May
31, 2019 and February 29, 2020) (25,000 shares). Pursuant to ASC 805-50-30-5 relating to transactions between entities under common control,
the intellectual property of TMG (and the issuance of the 100,000 shares of common stock) were recorded at $-0-, the historical cost of
the property to TMG.
On August 28, 2019, the Securities and Exchange
Commission (the “SEC”) issued a Notice of Qualification regarding a Form 1-A filed by the Company in connection with the Company’s
offering of up to 1,333,333,333 shares of common stock at a price of $0.0075 per share or a total offering of $10,000,000. The end date
of the offering is August 28, 2020. On December 26, 2019, the Company amended its Form 1-A Offering Circular to reduce the offering price
from $0.0075 per share to $0.0035 per share. As part of this offering, during the three months ended February 29, 2020, the Company issued
an aggregate of 58,438,096 shares of common stock for cash in the amount of $287,200.
On November 21, 2019, the Company merged
with Global Nutrition Experience, Inc. (“GNE”) in exchange for the issuance of a total of 160,000,000 shares of our common
stock to GNE’s stockholders. Following the merger, the Company had 161,061,647 shares of common stock issued and outstanding. GNE
was incorporated on November 21, 2019. The stockholder of GNE prior to the merger who received the 160,000,000 shares was the Angell Family
Trust. Pursuant to ASC 805-50-30-5 relating to transactions between entities under common control, the intellectual property of GNE (and
the issuance of the 160,000,000 shares of common stock) were recorded at $-0-, the historical cost of the property to GNE. During the
three months ended February 29, 2020, the Company issued an additional 33,000,000 shares of common stock as part of the merger.
During the year ended May 31, 2021, the
Company issued an aggregate of 4,304,842,121 shares of common stock for the conversion of notes payable and accrued interest in the aggregate
amount of $835,050. We incurred a loss on the conversion of notes payable and accrued interest of $1,445,042, which represents the excess
of the $2,280,092 fair value of the 4,304,842,121 shares at the dates of conversion over the $835,050 amount of debt satisfied.
During the three months ended August 31,
2021, the Company issued an aggregate of 2,948,115,857 shares of common stock for the conversion of notes payable and accrued interest
in the aggregate amount of $49,608. We incurred a loss on the conversion of notes payable and accrued interest of $1,453,492, which represents
the excess of the $1,503,100 fair value of the 2,948,115,857 shares at the dates of conversion over the $49,608 amount of debt satisfied.
At August 31, 2021, there are no stock
options or warrants outstanding.
NOTE 9 - COMMITMENTS AND CONTINGENCIES
Consulting Agreements with Individuals
The Company has entered into Consulting
Agreements with the Company’s Chief Executive Officer, the wife of the Company’s Chief Executive Officer, the mother of the
Company’s Chief Executive Officer, and other service providers (see Note 4 – Accrued Consulting Fees). The Consulting Agreement
with the Company’s Chief Executive Officer provides for monthly compensation of $10,000. The Consulting Agreement with the wife
of the Company’s Chief Executive Officer provided for monthly compensation of $15,000 and expired on May 31, 2021. The Consulting
Agreement with the mother of the Company’s Chief Executive Officer provided for monthly compensation of $5,000 and was terminated
as of November 30, 2019. The other 3 consulting agreements provided for monthly compensation totaling $6,500 and were terminated as of
November 30, 2019.
Corporate Consulting Agreement
On March 14, 2018, the Company executed
a Corporate Consulting Agreement (the “Agreement”) with a consulting firm entity (the “Consultant”). The Agreement
provided for the Consultant to perform certain investor relations and other services for the Company. The term of the Agreement was 4
months but the Agreement provided that the Company could terminate the Agreement for any reason at any time upon 5 days written prior
notice. The Agreement provided for 8 payments of cash fees totaling $240,000 to be paid to the Consultant over 4 months.
On April 1, 2018, the Company notified the
Consultant that the Agreement was terminated. A total of $25,000 was paid to the Consultant in March 2018 which was expensed and included
in “Salaries and Consulting Fees” in the Consolidated Statement of Operations for the year ended May 31, 2018. No other amounts
were accrued at August 31, 2020 and May 31, 2020.
On October 16, 2018 (see Note 8), the Company
issued 5,000 shares of its common stock to the Consultant. On October 26, 2018, the Consultant advised the Company that it had not been
notified that the Agreement was terminated on April 1, 2018 and that the Company is in default of the Agreement.
Consulting Agreement with New Jersey
Entity
On December 5, 2019 and January 13, 2020, the Company paid $50,000
and $50,000, respectively to a consulting firm entity (the “Consultant”) pursuant to Consulting Agreements dated December
4, 2019 and January 11, 2020. The Consulting Agreements provide for the Consultant to perform certain strategic planning, business development,
and investor relations services for the Company for total compensation of $100,000 cash (which was expensed and included in “Other
Selling, General and Administrative Expenses” in the Consolidated Statement of Operations for the three months ended February 29,
2020. The terms of the Consulting Agreements are for 90 days each.
NOTE 10 - GOING CONCERN
The accompanying financial statements have
been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction
of liabilities in the normal course of business. At August 31, 2021, the Company had negative working capital of $6,279,358 and an accumulated
deficit of $14,764,585. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern.
To date the Company has funded its operations
through a combination of loans and sales of common stock. The Company anticipates another net loss for the fiscal year ended May 31, 2022
and with the expected cash requirements for the coming year, there is substantial doubt as to the Company’s ability to continue
operations.
The Company is attempting to improve these
conditions by way of financial assistance through issuances of notes payable and additional equity and by generating revenues through
sales of products and services.
The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
NOTE 11 – SUBSEQUENT EVENTS
From September 1, 2021 to October 15, 2021,
the Company issued a total of 740,000,000 shares of its common stock for the conversion of notes payable and accrued interest in the aggregate
amount of $14,300. The $437,700 excess of the $452,000 fair value of the 740,000,000 shares at the dates of conversion over the $14,300
of debt satisfied will be charged to “Loss on conversion of notes payable and accrued interest” in the three months ended
November 30, 2021.