Company Quick10K Filing
Quick10K
Music of Your Life
10-K 2019-05-31 Annual: 2019-05-31
10-Q 2019-02-28 Quarter: 2019-02-28
10-Q 2018-11-30 Quarter: 2018-11-30
10-Q 2018-08-31 Quarter: 2018-08-31
10-K 2018-05-31 Annual: 2018-05-31
10-Q 2018-02-28 Quarter: 2018-02-28
10-Q 2017-11-30 Quarter: 2017-11-30
10-Q 2017-08-31 Quarter: 2017-08-31
10-K 2017-05-31 Annual: 2017-05-31
10-Q 2017-02-28 Quarter: 2017-02-28
10-Q 2016-11-30 Quarter: 2016-11-30
10-Q 2016-08-31 Quarter: 2016-08-31
10-K 2016-05-31 Annual: 2016-05-31
10-Q 2016-02-29 Quarter: 2016-02-29
10-Q 2015-11-30 Quarter: 2015-11-30
10-Q 2015-08-31 Quarter: 2015-08-31
10-K 2015-05-31 Annual: 2015-05-31
10-Q 2015-02-28 Quarter: 2015-02-28
10-Q 2014-11-30 Quarter: 2014-11-30
10-Q 2014-08-31 Quarter: 2014-08-31
10-K 2014-05-31 Annual: 2014-05-31
10-Q 2014-02-28 Quarter: 2014-02-28
10-Q 2013-11-30 Quarter: 2013-11-30
8-K 2018-12-05 Amend Bylaw, Shareholder Vote, Exhibits
8-K 2018-08-16 M&A, Sale of Shares, Exhibits
8-K 2018-05-18 Amend Bylaw, Shareholder Vote
GLTC Geltech Solutions 32
UNIR Uniroyal Global 30
BTCY Biotricity 17
ADMT ADM Tronics Unlimited 11
TWX Time Warner 0
LOGQ Logicquest Technology 0
TRPO Tropic International 0
MREO Mirenco 0
QPAG Qpagos 0
SKYL SKY Resort 0
MYLI 2019-05-31
Part I
Item 1. Business.
Item 1A. Risk Factors.
Item 1B. Unresolved Staff Comments.
Item 2. Properties.
Item 3. Legal Proceedings.
Item 4. Mine Safety Disclosures
Part II
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Item 6. Selected Financial Data.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 8. Financial Statements and Supplementary Data.
Note 1 -Organization
Note 2 -Significant Accounting Policies
Note 3 - Financial Instruments
Note 4 - Loans Receivable - Related Party
Note 5 - Music Inventory
Note 6 - Accrued Consulting Fees
Note 7 - Notes Payable
Note 8 - Notes Payable - Related Parties
Note 9 - Derivative Liability
Note 10 - Equity Transactions
Note 11 - Commitments and Contingencies
Note 12 - Going Concern
Note 13 - Subsequent Events
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
Item 9A. Controls and Procedures.
Item 9B. Other Information.
Part III
Item 10. Directors, Executive Officers and Corporate Governance.
Item 11. Executive Compensation.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Item 14. Principal Accounting Fees and Services.
Part IV
Item 15. Exhibits.
EX-31.1 ex311_tmgi302cert05312019.htm
EX-32 ex32_tmgi906cert05312019.htm

Music of Your Life Earnings 2019-05-31

MYLI 10K Annual Report

Balance SheetIncome StatementCash Flow

10-K 1 f10k_tmgi053119.htm FORM 10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

 

Washington, D.C. 20549

 

FORM 10-K

 

  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
   

 

For the year ended May 31, 2019

 

  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
     

For the transition period from              to             

 

Commission file number: 000-54163

 

THE MARQUIE GROUP, INC.

(Exact name of registrant as specified in its charter)

 

Florida   26-2091212

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

     

3225 McLeod Drive, Suite 100

Las Vegas, Nevada

 

 

89121

(Address of principal executive offices)   (Zip Code)

 

(800) 351-3021

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

None   N/A
Title of each class   Name of each exchange on which registered

 

Securities registered pursuant to Section 12(b) of the Act: None

 

Securities registered pursuant to Section 12(g) of the Act None

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes   No 

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes   No 

 

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes   No 

   

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes   No 

 

Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer     Accelerated filer  
Non-accelerated filer     Smaller reporting company

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes      No

 

Based on the closing price of our common stock as listed on the OTC Bulletin Board, the aggregate market value of the common stock of The Marquie Group, Inc. held by non-affiliates as of November 30, 2018 was $385,680.

 

As of September 10, 2019, there were 1,061,356 shares of common stock issued and outstanding.

 

DOCUMENTS INCORPORATED BY REFERENCE:  None.

 

 

 

 2 

 

TABLE OF CONTENTS
PART I      5 
ITEM 1.  BUSINESS   5 
ITEM 1A.  RISK FACTORS   8 
ITEM 1B.  UNRESOLVED STAFF COMMENTS   8 
ITEM 2.  PROPERTIES   8 
ITEM 3.  LEGAL PROCEEDINGS   8 
ITEM 4.  MINE SAFETY DISCLOSURES   8 
PART II      9 
ITEM 5.  MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUERS PURCHASES OF EQUITY SECURITIES   9 
ITEM 6.  SELECTED FINANCIAL DATA   11 
ITEM 7.
  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS   11 
ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK   13 
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA   14 
ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE   38 
ITEM 9A.  CONTROLS AND PROCEDURES   38 
ITEM 9B.  OTHER INFORMATION   39 
PART III      40 
ITEM 10.
  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE   40 
ITEM 11.  EXECUTIVE COMPENSATION   42 
ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS   43 
ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE   45 
ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES   46 
PART IV      47 
ITEM 15.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES   47 
  SIGNATURES   48 

 

 3 

 

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Please see the note under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation,” for a description of special factors potentially affecting forward-looking statements included in this report.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 4 

PART I

ITEM 1. BUSINESS.

 

Company History

 

The Company was incorporated on January 30, 2008, in the State of Florida, as Maximum Consulting, Inc. and shortly thereafter changed its name to ZhongSen International Tea Company, with the principal business objective of providing sales and marketing consulting services to small to medium sized Chinese tea producing companies who wish to export and distribute high quality Chinese tea products worldwide. The Company commenced business activities in August 2008, when it entered into a related party Sales and Marketing Agreement with Yunnan Zhongsen Group, Ltd. However, due to lack of capital, the Company was unable to implement its business plan fully. On May 31, 2013, the Company entered into an acquisition agreement (the “Acquisition”) with Music of Your Life, Inc., a Nevada corporation (“MYL Nevada”). As a result of the Acquisition, MYL Nevada is a wholly-owned subsidiary of the Company, and the Company is now operating a multi-media entertainment company, producing television shows and radio programming. The Company changed its name to Music of Your Life, Inc. effective July 26, 2013.

 

The Company merged into The Marquie Group, Inc. on August 16, 2018, which was founded by Jacquie Carter prior to its merger with the Company . Jacquie Carter is a former Executive Director of Worldwide Training and Education at Herbalife Nutrition. During her 18 years with Herbalife, Jacquie created and launched over 60 products worldwide, which have accumulated more than $1-billion in sales.

 

Internet Licensing has transformed the advertising landscape in a way that is detrimental to advertising sales for terrestrial radio. In response to this, Music of Your Life and the Company began to explore developing a product line to be marketed through radio spots on the Company’s syndicated radio network. At the same time the Company was in an exploratory phase of developing amino-acid-based health and beauty care products. The Music of Your Life merged into the Company though Share Exchange Agreement in August 2018.

 

Acquisition of The Marquie Group, Inc.

 

On August 16, 2018 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.” On February 22, 2018 our FINRA symbol changed from “MYLI” to “TMGI.”

 

Operational Overview

 

The Company is currently operating two businesses; a nationally syndicated radio network called “Music of Your Life”, broadcasting on AM, FM, and HD terrestrial radio stations across the United Sates, and heard around the world over the Internet; and 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. The Company plans to market the new Whim products on the Music of Your Life network upon launch.

 

Our Business Strategy

 

The Company is currently developing a direct-to-consumer, health and beauty products platform that use innovative formulations of plant-based, amino-acids, and other natural alternatives to chemical ingredients, with and without non-THC CBD oil. Our branded, solution-driven slate of multiple SKU’s includes facial masks, facial serums, eye serums, CBD tinctures, and beauty drinks, each with unique, skin and complexion enhancing properties. Marketing plan includes a multi-channel, national sales program developed by the Company’s team of health and

 5 

beauty product marketing specialists that will target consumers through proven and tested inspirational branding and sensorial experience. The products will be introduced initially on the Company’s nationally syndicated radio network, Music of Your Life, the Company’s vast social media connections, as well as Jacquie Carter’s social media reach which covers more than 90-countries. The Company launched a new product-centric website at www.simplywhim.com for people to sign-up and receive discounts upon product launch. Please review our Risk Factors for limitations on advertising CBD products.

 

  Direct-to-consumer, health and beauty products platform that use innovative formulations of plant-based, amino-acids, with and without non-THC CBD alternatives to chemical ingredients.

 

  Branded, solution-driven slate of multiple SKU’s planned for a 2019 launch - a facial mask, a facial serum, a beauty drink, and CBD oil tinctures, each with unique, skin and complexion enhancing properties.

 

  Marketing plan includes a multi-channel, national sales program developed by the Company’s team of health and beauty product marketing specialists that will target consumers through proven and tested inspirational branding and sensorial experience.

 

Our skin care formulations will be made without Sulfates SLS and SLES, parabens, formaldehydes, formaldehyde-releasing agents, phthalates, mineral oil, retinyl palmitate, oxybenzone, coal tar, hydroquinone, triclosan, triclocarban. Only formulas which have less than one percent of synthetic fragrances will be sent to market.

 

According to the Physician’s Desk Reference approximately 10-20% of vitamins and minerals taken in supplement form are actually absorbed by the body. Because of this low rate of absorption typical multi-vitamins are not enough for us to obtain the vital nutrients our bodies need. And especially not the skin. Our ultimate goal is to be able supply both topical, nutrient driven products as well as accompanying beauty drinks. This will allow for a wonderful synergy inside and out and will assure us that we are taking the necessary steps to protect our bodies and look good and feel good while doing it.

 

The products will be introduced on the Company’s Nationwide Syndicated Radio Network, Music of Your Life, which is also simulcast to a worldwide audience over the Internet. Product videos and Blog Posts will be featured at www.simplywhim.com, www.whimandadare.com, www.whimbeauty.com, and www.musicofyourlife.com

 

Objectives

 

Our branded, solution-driven slate of multiple SKU’s includes facial masks, facial serums, eye serums, CBD tinctures, and beauty drinks, each with unique, skin and complexion enhancing properties. Marketing plan includes a multi-channel, national sales program developed by the Company’s team of health and beauty product marketing specialists that will target consumers through proven and tested inspirational branding and sensorial experience. The new Whim™ products will be introduced initially on the Company’s nationally syndicated radio network, Music of Your Life, the Company’s streaming video channels, and our access to social media reach which covers more than 90-countries, on the Company recently released website, www.simplywhim.com.

 

Market Advantage

 

Music of Your Life® can be heard on AM, FM, and HD radio stations across the U.S., including 5 of the top 10 markets, and to more than 90 countries worldwide over the Internet. This well-established listener base gives the company a strong market advantage over the typical Internet radio service.

 

Our product formulation and branding present distinct advantages:

 

  1. Whim™ - Beauty Drink. A fortified Beauty Drink powder, sold in portable on-the-go sachets, that easily dissolves in water for nutrition on-the-go. Beverage powder formulas under development will contain a targeted blend of ingredients that includes Amino Acids, Antioxidant Vitamins, “Super Food” (Acai, Moringa, Blueberry, etc.) Puree Blends, Hydrolyzed Collagen, and, in certain instances, non-THC, water-soluble CBD. These products will be sweetened with natural ingredients without the use of sugar.

 

 6 

 

  2. Whim™ - Face Serum. An AM/PM youth enhancing facial serum infused non-THC, water-soluble CBD oil and a proprietary blend of amino acids and other natural ingredients that help to address skin aging through additional plant-based technologies.

 

  3. Whim™ - Beauty Scrub/Mask. A treatment facial mask that delivers anti-aging ingredients to the skin to leave it looking and feeling more youthful.

 

These products are to be produced without sulfates SLS and SLES, parabens, formaldehydes, formaldehyde-releasing agents, phthalates, mineral oil, retinyl palmitate, coal tar, hydroquinone, triclosan, or triclocarban.

 

Competition

 

There are a few well-established companies selling health products containing CBD derived from hemp, and hundreds of new upstarts proposing virtually the same business model as the Company. However, many of these companies fail quickly, and the lack of regulatory guidelines has caused many of these companies unable to sell their products.

 

Employees

 

As of May 31, 2019, Marc Angell (Director and Chief Executive Officer) and Jacquie Carter (President) are non-employee officers and/or directors of the Company. The Company has no official employees. We currently have 4 on-air talent paid as part-time contractors, 1 part-time production person, an outside accountant, and an outside lawyer. Certain other executive positions have been identified, and we intend to fill these positions. Additional other support staff and other personnel will be hired when there is adequate capital available to do so.

 

We have undertaken preliminary investigations concerning candidates for the above positions and do not currently anticipate difficulty in filling such positions with qualified persons; however we cannot assure you that we will in fact be able to hire qualified persons for such positions when needed. Additional positions to be filled may be identified from time to time by the Company. We expect to be able to attract and retain such additional employees as are necessary, commensurate with the anticipated future expansion of our business. Further, we expect to continue to use consultants, contract labor, attorneys and accountants as necessary.

 

The loss of our CEO Marc Angell would likely have a material adverse effect on the Company. We intend to reduce this risk by obtaining key-man insurance in the event that affordable insurance coverage may be obtained. We cannot assure you that the Company will be able to obtain such insurance or that the Company will be successful in recruiting needed personnel.

 

Available Information

 

The Marquie Group, Inc. is subject to the information requirements of the Securities Exchange Act of 1934, as amended, and in accordance therewith files quarterly and annual reports, as well as other information with the Securities and Exchange Commission (“Commission”) under File No. 000-54163. Such reports and other information filed with the Commission can be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates, and at various regional and district offices maintained by the Commission throughout the United States. Information about the operation of the Commission’s public reference facilities may be obtained by calling the Commission at 1-800-SEC-0330. The Commission also maintains a website at http://www.sec.gov that contains reports and other information regarding the Company and other registrants that file electronic reports and information with the Commission.

 

 7 

ITEM 1A. RISK FACTORS.

 

Since we are a smaller reporting company, we are not required to supply the information required by this Item 1A.

 

ITEM 1B. UNRESOLVED STAFF COMMENTS.

 

None.

 

ITEM 2. PROPERTIES.

 

The Marquie Group’s corporate office is located at 3225 McLeod Drive, Suite 100, Las Vegas, NV 89121, telephone number, 800-351-3021. As the company continues to grow, the facilities and employment-related expenses will likely increase significantly. We believe that our office facilities are suitable and adequate for our operations as currently conducted and contemplated.

 

ITEM 3. LEGAL PROCEEDINGS.

 

The Company currently has no litigation pending, threatened or contemplated, or unsatisfied judgments.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not Applicable.

 

 

 

 

 

 

 

 

 

 8 

 

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

 

Market Information

 

Our common stock is listed on the OTCQB under the symbol “TMGI”. We had approximately 2,257 registered holders of our common stock as of May 31, 2019. Registered holders do not include those stockholders whose stock has been issued in street name. The last reported price for our common stock on September 10, 2019 was $0.03 per share.

 

The following table reflects the high and low closing sales prices per share (as adjusted for the June 20, 2018 1 share for 4,000 shares reverse stock split and the September 4, 2019 1 share for 400 shares reverse stock split) of our common stock during each calendar quarter as reported on the OTCQB, during the two fiscal years ended May 31:

 

    
   Price Range(1)
   High  Low
Fiscal May 31, 2019      
Fourth quarter   $7.96   $0.56 
Third quarter   $176.00   $8.00 
Second quarter   $59.96   $8.20 
First quarter   $160.00   $11.70 
           
Fiscal May 31, 2018          
Fourth quarter   $320.00   $160.00 
Third quarter   $480.00   $160.00 
Second quarter   $320.00   $160.00 
First quarter   $320.00   $160.00 
           

____________________

(1)The above quotations reflect inter-dealer prices, without retail mark-up, mark-down, or commission and may not necessarily represent actual transactions.

 

Dividends and Distributions

 

We have not paid any cash dividends on our common stock since inception and do not anticipate paying cash dividends in the foreseeable future. We expect that that any future earnings will be retained for use in developing and/or expanding our business.

 

Sales of Unregistered Securities

 

On June 19, 2018, the Financial Industry Regulatory Authority (“FINRA”) approved a 1 for 4,000 reverse split of the Company’s Common Stock (“Reverse Split”), meaning that each 4,000 shares of Common Stock is consolidated into 1 share of Common Stock following the reverse split, provided however, that fractional shares would be rounded up to the nearest whole share. Following the Reverse Split, the Company had 910,610 common shares issued and outstanding. Effective September 4, 2019, the Company effectuated a 1 for 400 reverse split of the Company’s common stock.

 

On August 16, 2018 (the “Closing Date”), Music of Your Life, Inc. (the “Company”) entered into a Merger Agreement (the “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 was the surviving

 9 

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 (as adjusted for the September 4, 2019 1 share for 400 shares stock split) of the Company were issued to the TMG shareholders. A majority of these shares, 50,000 shares of common stock of the Company were issued to Marc and Jacquie Angell, affiliates of the Company. This is considered a related party transaction. The TMG merger will provide the Company with certain registered trademarks and intellectual property of TMG with respect to health, beauty and social networking products.

 

With respect to the transactions noted above. Each of the recipients of securities of the Company was an accredited investor, or is considered by the Company to be a “sophisticated person”, inasmuch as each of them has such knowledge and experience in financial and business matters that they are capable of evaluating the merits and risks of receiving securities of the Company. No solicitation was made and no underwriting discounts were given or paid in connection with these transactions. The Company believes that the issuance of its securities as described above was exempt from registration with the Securities and Exchange Commission pursuant to Section 4(2) of the Securities Act of 1933.

 

Penny Stock Rules

 

The SEC has also adopted rules that regulate broker-dealer practices in connection with transactions in “penny stocks” as such term is defined by Rule 15g-9. Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system).

 

Our shares constitute penny stocks under the Exchange Act. The shares may remain penny stocks for the foreseeable future. The classification of our shares as penny stocks makes it more difficult for a broker-dealer to sell the stock into a secondary market, which makes it more difficult for a purchaser to liquidate his or her investment. Any broker-dealer engaged by the purchaser for the purpose of selling his or her shares in MYL will be subject to the penny stock rules.

 

The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, deliver a standardized risk disclosure document approved by the SEC, which: (i) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; (ii) contains a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of the Securities Act; (iii) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and significance of the spread between the bid and ask price; (iv) contains a toll-free telephone number for inquiries on disciplinary actions; (v) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and (vi) contains such other information and is in such form as the SEC shall require by rule or regulation. The broker-dealer also must provide to the customer, prior to effecting any transaction in a penny stock, (i) bid and offer quotations for the penny stock; (ii) the compensation of the broker-dealer and its salesperson in the transaction; (iii) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (iv) monthly account statements showing the market value of each penny stock held in the customer’s account.

 

In addition, the penny stock rules require that, prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitability statement. These disclosure requirements will have the effect of reducing the trading activity in the secondary market for our stock because it will be subject to these penny stock rules. Therefore, stockholders may have difficulty selling those securities.

 10 

 

ITEM 6. SELECTED FINANCIAL DATA.

 

Not required.

 

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Forward-Looking Statements

 

This report contains forward-looking statements that involve risks and uncertainties. We use words such as anticipate, believe, plan, expect, future, intend and similar expressions to identify such forward-looking statements. You should not place too much reliance on these forward-looking statements. Our actual results are likely to differ materially from those anticipated in these forward-looking statements for many reasons.

 

Overview

 

The Company is currently operating two businesses; a nationally syndicated radio network called “Music of Your Life”, broadcasting on AM, FM, and HD terrestrial radio stations across the United Sates, and heard around the world over the Internet; and 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. The Company plans to market the new Whim products on the Music of Your Life network upon launch.

 

Because we have incurred losses, income tax expenses are immaterial. No tax benefits have been booked related to operating loss carryforwards, given our uncertainty of being able to utilize such loss carryforwards in future years. We anticipate incurring additional losses during the coming year.

 

Results of Operations

 

Following is management’s discussion of the relevant items affecting results of operations for the years ended May 31, 2019 and 2018.

 

Revenues. The Company generated net revenues of $5,269 during the year ended May 31, 2019 as compared to $5,745 for the year ended May 31, 2018. Revenues were generated from spot sales, digital sales and subscription based sales from the live radio programming through radio stations around the country.

 

Cost of Sales. Our cost of sales was $-0- for both years ended May 31, 2019 and 2018. Our cost of sales in the future will consist principally of licensing costs and royalties associated with our syndicated radio network, other related services provided directly or outsourced through our affiliates, as well as operational and staffing costs with respect thereto.

 

Salaries and Consulting Expenses. Salaries and consulting expenses for the year ended May 31, 2019 were $451,000 as compared to $318,196 for the year ended May 31, 2018. During the year ended May 31, 2019, we issued 5,000 shares (as adjusted for the September 4, 2019 1 for 400 reverse stock split) of common stock to consultants during the period which resulted in $41,000 recorded as consulting expenses. We expect that salaries and consulting expenses, that are cash-based instead of share-based, will increase as we add personnel to build our multi-media entertainment business.

 

Professional Fees. Professional fees for the year ended May 31, 2019 were $88,169 as compared to $71,772 for the year ended May 31, 2018. We anticipate that professional fees will increase in future periods as we scale up our operations.

 11 

 

Other Selling, General and Administrative Expenses. Other selling, general and administrative expenses were $130,909 for the year ended May 31, 2019 as compared to $97,048 for the year ended May 31, 2018. We anticipate that Other SG&A expenses will increase commensurate with an increase in our operations.

 

Other Income (Expense). The Company had net other expense of $2,985,637 for the year ended May 31, 2019 as compared to $144,393 for the year ended May 31, 2018. For the year ended May 31, 2019, the company incurred interest expense of $648,288, expense from derivative liability of $628,119 and loss on conversion of notes payable and accrued interest of $1,709,230. For the year ended May 31, 2018 the company incurred $416,847 in interest expense and income from derivative liability of $272,454.

 

Liquidity and Capital Resources

 

As of May 31, 2019, our primary source of liquidity consisted of $6,297 in cash and cash equivalents. We hold most of our cash reserves in local checking accounts with local financial institutions. Since inception, we have financed our operations through a combination of short and long-term loans, and through the private placement of our common stock.

 

We have sustained significant net losses which have resulted in an accumulated deficit at May 31, 2019 of $7,948,240 and are currently experiencing a substantial shortfall in operating capital which raises doubt about our ability to continue as a going concern. We generated a net loss for the year ended May 31, 2019 of $3,650,446. Without additional revenues, working capital loans, or equity investment, there is substantial doubt as to our ability to continue operations.

 

We believe these conditions have resulted from the inherent risks associated with small public companies. Such risks include, but are not limited to, the ability to (i) generate revenues and sales of our products and services at levels sufficient to cover our costs and provide a return for investors, (ii) attract additional capital in order to finance growth, and (iii) successfully compete with other comparable companies having financial, production and marketing resources significantly greater than those of the Company.

 

We believe that our capital resources are insufficient for ongoing operations, with minimal current cash reserves, particularly given the resources necessary to expand our multi-media entertainment business. We will likely require considerable amounts of financing to make any significant advancement in our business strategy. There is presently no agreement in place that will guarantee financing for our Company, and we cannot assure you that we will be able to raise any additional funds, or that such funds will be available on acceptable terms. Funds raised through future equity financing will likely be substantially dilutive to current shareholders. Lack of additional funds will materially affect our Company and our business, and may cause us to substantially curtail or even cease operations. Consequently, you could incur a loss of your entire investment in the Company.

 

Off-Balance Sheet Arrangements

 

We do not have any off-balance sheet arrangements.

 12 

 

Critical Accounting Policies

 

We believe the following more critical accounting policies are used in the preparation of our financial statements:

 

Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. On a periodic basis, management reviews those estimates, including those related to valuation allowances, loss contingencies, income taxes, and projection of future cash flows.

 

Research and Development. Research and development costs are charged to operations when incurred and are included in operating expenses.

 

Recent Accounting Pronouncements

 

There were various accounting standards and interpretations recently issued, none of which are expected to a have a material impact on the Company's consolidated financial position, operations or cash flows.

 

Forward-Looking Statements

 

This report contains or incorporates by reference forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 concerning our future business plans and strategies, the receipt of working capital, future revenues and other statements that are not historical in nature. In this report, forward-looking statements are often identified by the words “anticipate,” “plan,” “believe,” “expect,” “estimate,” and the like. These forward-looking statements reflect our current beliefs, expectations and opinions with respect to future events, and involve future risks and uncertainties which could cause actual results to differ materially from those expressed or implied.

 

Other uncertainties that could affect the accuracy of forward-looking statements include:

 

• the worldwide economic situation;

• any changes in interest rates or inflation;

the willingness and ability of third parties to honor their contractual commitments;
our ability to raise additional capital, as it may be affected by current conditions in the  stock market and competition for risk capital;
our capital expenditures, as they may be affected by delays or cost overruns;
environmental and other regulations, as the same presently exist or may later be amended;
our ability to identify, finance and integrate any future acquisitions; and
the volatility of our common stock price.

 

This list is not exhaustive of the factors that may affect any of our forward-looking statements. You should read this report completely and with the understanding that our actual future results may be materially different from what we expect. These forward-looking statements represent our beliefs, expectations and opinions only as of the date of this report. We do not intend to update these forward looking statements except as required by law. We qualify all of our forward-looking statements by these cautionary statements.

 

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable.

 13 

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

 

CONTENTS
   Page
Report of Independent Registered Public Accounting Firm   15 
      
Consolidated Balance Sheets   16 
      
Consolidated Statements of Operations   17 
      
Consolidated Statements of Stockholders’ Deficit   18 
      
Consolidated Statements of Cash Flows   19 
      
Notes to the Consolidated Financial Statements   20 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 14 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

 

To the Board of Directors and Stockholders of The Marquie Group, Inc. (formerly Music of Your Life, Inc.)

 

Opinion on the Financial Statements

 

I have audited the accompanying consolidated balance sheets of The Marquie Group, Inc. (the “Company”) as of May 31, 2019 and 2018 and the related consolidated statements of operations, stockholders’ equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In my opinion, the consolidated financial statements present fairly, in all material respects, the financial position of The Marquie Group, Inc. as of May 31, 2019 and 2018 and the results of their operations and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.

 

Explanatory Paragraph – Going Concern

 

The accompanying financial statements referred to above have been prepared assuming that the Company will continue as a going concern. As discussed in Note 12 to the financial statements, the Company’s present financial situation raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to this matter are also described in Note 12. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company’s management. My responsibility is to express an opinion on the Company’s financial statements based on my audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

I conducted my audit in accordance with the standards of the PCAOB. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor was I engaged to perform, an audit of its internal control over financial reporting. As part of my audit I am required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, I express no such opinion.

 

My audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. My audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. I believe that my audit provides a reasonable basis for my opinion.

 

 

 

/s/ Michael T. Studer CPA P.C.

Michael T. Studer CPA P.C.

 

 

Freeport, New York

September 13, 2019

 

I have served as the Company’s auditor since 2015.

 15 

 

THE MARQUIE GROUP, INC.
(formerly Music of Your Life, Inc.)
Consolidated Balance Sheets
 
ASSETS
   May 31,  May 31,
   2019  2018
       
CURRENT ASSETS          
           
Cash and cash equivalents  $6,297   $5 
Loans receivable from related party   15,950    15,950 
           
Total Current Assets   22,247    15,955 
           
OTHER ASSETS          
           
Music inventory   9,397    9,681 
Trademark costs   10,015    7,665 
           
Total Other Assets   19,412    17,346 
           
TOTAL ASSETS  $41,659   $33,301 
           
LIABILITIES AND STOCKHOLDERS' DEFICIT
           
CURRENT LIABILITIES          
           
Bank overdraft  $—     $517 
Accounts payable   21,085    15,607 
Accrued interest payable on notes payable   260,290    252,051 
Accrued consulting fees   475,350    286,650 
Notes payable   1,114,919    820,753 
Notes payable to related parties   155,323    178,411 
Derivative liability   1,805,422    653,803 
           
Total Current Liabilities   3,832,389    2,207,792 
           
TOTAL LIABILITIES   3,832,389    2,207,792 
           
STOCKHOLDERS' DEFICIT          
           
Preferred Stock, $0.0001 par value; 20,000,000 shares          
 authorized, 200 and 200 shares issued and outstanding   —      —   
Common stock, $0.0001 par value; 10,000,000,000 shares          
 authorized, 382,717 and 2,277 shares issued          
 and outstanding, respectively   38    —   
Common stock payable - 1 share   8,460    8,460 
Additional paid-in-capital   4,149,012    2,114,843 
Accumulated deficit   (7,948,240)   (4,297,794)
           
Total Stockholders' Deficit   (3,790,730)   (2,174,491)
           
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT  $41,659   $33,301 
           

The accompanying notes are an integral part of these financial statements

 16 

 

THE MARQUIE GROUP, INC.
(formerly Music of Your Life, Inc.)
Consolidated Statements of Operations
 
   For the Years Ended
   May 31,
   2019  2018
       
NET REVENUES  $5,269   $5,745 
           
OPERATING EXPENSES          
           
Salaries and Consulting fees (including stock-based          
 compensation of $41,000 and $-0-, respectively)   451,000    318,196 
Professional fees   88,169    71,772 
Other selling, general and administrative   130,909    97,048 
           
Total Operating Expenses   670,078    487,016 
           
LOSS FROM OPERATIONS   (664,809)   (481,271)
           
OTHER INCOME (EXPENSES)          
           
Income (expense) from derivative liability   (628,119)   272,454 
Interest expense (including amortization of debt discounts          
  of $417,587 and $187,103, repectively)   (648,288)   (416,847)
Loss on conversion of notes payable and accrued interest   (1,709,230)   —   
           
Total Other Income (Expenses)   (2,985,637)   (144,393)
           
LOSS BEFORE INCOME TAXES   (3,650,446)   (625,664)
           
INCOME TAX EXPENSE   —      —   
           
NET LOSS  $(3,650,446)  $(625,664)
           
BASIC AND DILUTED:          
Net loss per common share  $(30.09)  $(338.56)
           
Weighted average shares outstanding   121,315    1,848 
           

 

The accompanying notes are an integral part of these financial statements

 

 

 

 

 

 17 

 

THE MARQUIE GROUP, INC.
Consolidated Statements of Stockholders' Deficit
For the Period from June 1, 2017 to May 31, 2019
                         
                        Total
   Preferred Stock  Common Stock  Common Stock  Additional  Accumulated  Stockholders'
   Shares  Amount  Shares  Amount  Payable  Paid-in Capital  Deficit  Deficit
                         
Balance, June 1, 2017   200   $—      1,506   $—     $8,460   $2,059,690   $(3,672,130)  $(1,603,980)
                                         
Common stock issued for conversion                                        
 of debt   —      —      697    —      —      54,653    —      54,653 
                                         
Common shares issued for cash   —      —      74    —      —      500    —      500 
                                         
Net loss for the year ended                                        
 May 31, 2018   —      —      —      —      —      —      (625,664)   (625,664)
                                         
Balance, May 31, 2018   200    —      2,277    —      8,460    2,114,843    (4,297,794)   (2,174,491)
                                         
Common stock issued for merger                                        
 with The Marquie Group, Inc.   —      —      100,000    10    —      (10)   —      —   
                                         
Rounded up shares issued in connection                                        
 with reverse stock split   —      —      5    —      —      —      —      —   
                                         
Common stock issued for conversion                                        
 of debt   —      —      275,435    28    —      1,993,179    —      1,993,207 
                                         
Common shares issued for services   —      —      5,000    —      —      41,000    —      41,000 
                                         
Net loss for the year ended                                        
 May 31, 2019   —      —      —      —      —      —      (3,650,446)   (3,650,446)
                                         
Balance, May 31, 2019   200   $—      382,717   $38   $8,460   $4,149,012   $(7,948,240)  $(3,790,730)
                                         

 

Note: The above statement reflects retroactively the 1 share for 4,000 shares reverse split effective June 20, 2018 and 1 share

for 400 shares reverse stock split effective September 4, 2019. 

 

The accompanying notes are an integral part of these financial statements

 18 

THE MARQUIE GROUP, INC.
(formerly Music of Your Life, Inc.)
Consolidated Statements of Cash Flows
      For the Years Ended
      May 31,
      2019  2018
          
CASH FLOWS FROM OPERATING ACTIVITIES:               
                
Net loss       $(3,650,446)  $(625,664)
Adjustments to reconcile net income (loss) to net               
 cash used by operating activities:               
Promissory note issued for services        —      50,000 
Stock-based compensation        41,000    —   
Depreciation of music inventory        3,305    7,374 
Expense (Income) from derivative liability        628,119    (272,454)
Amortization of debt discounts        417,587    187,103 
Non-cash interest expense        —      20,000 
Loss on conversion of notes payable and accrued interest        1,709,230    —   
Changes in operating assets and liabilities:               
Accounts payable        5,478    3,315 
Accrued interest payable on notes payable        161,295    201,744 
Accrued consulting fees        188,700    165,100 
                
Net Cash Used by Operating Activities        (495,732)   (263,482)
                
CASH FLOWS FROM INVESTING ACTIVITIES:               
                
Music inventory        (3,021)   (3,193)
Trademark costs        (2,350)   (325)
                
Net Cash Used by Investing Activities        (5,371)   (3,518)
                
CASH FLOWS FROM FINANCING ACTIVITIES:               
                
Bank overdraft        (517)   517 
Proceeds from sale of common stock        —      500 
Proceeds from notes payable        531,000    242,975 
Net proceeds from notes payable to related parties        1,505    12,900 
Payments on notes payable to related parties        (24,593)   —   
                
Net Cash Provided by Financing Activities        507,395    256,892 
                
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS        6,292    (10,108)
                
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD       5    10,113 
                
CASH AND CASH EQUIVALENTS, END OF PERIOD       $6,297   $5 
                
SUPPLEMENTAL CASH FLOW INFORMATION               
                
Cash Payments For:               
Interest       $—     $—   
Income taxes       $—     $—   
                
Non-cash investing and financing activities:               
Initial derivative liability charged to debt discounts       $485,500   $264,166 
Conversion of debt and accrued interest into common stock       $1,993,207   $54,653 
Common stock issued for merger with The Marquie Group, Inc.       $10   $—   
Promissory note issued for accrued consulting fees       $—     $50,000 
Accrued interest added to notes payable principal balances       $100,192   $—   

The accompanying notes are an integral part of these financial statements

 19 

 

THE MARQUIE GROUP, INC.

(formerly Music of Your Life, Inc.)

Notes to the Consolidated Financial Statements

May 31, 2019

 

NOTE 1 -ORGANIZATION

 

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.

 

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 430,589,412 shares to 1,061,356 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 9), 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.

 

NOTE 2 -SIGNIFICANT ACCOUNTING POLICIES

 

This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements. The following policies are considered to be significant:

 

a.       Principles of Consolidation

 

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and include the Company and its wholly-owned subsidiary. All inter-company accounts and transactions have been eliminated.

 

b.       Accounting Method

 

The Company recognizes income and expenses based on the accrual method of accounting. The Company has elected a May 31 year-end.

 20 

THE MARQUIE GROUP, INC.

(formerly Music of Your Life, Inc.)

Notes to the Consolidated Financial Statements

May 31, 2019

 

c.       Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

d.       Cash and Cash Equivalents

 

Cash equivalents are generally comprised of certain highly liquid investments with original maturities of less than three months.

 

e.       Basic and Fully Diluted Net Loss per Share of Common Stock

 

In accordance with Financial Accounting Standards No. ASC 260, “Earnings per Share,” basic net loss per common share is based on the weighted average number of shares outstanding during the periods presented. Diluted earnings per share is computed using the weighted average number of common shares plus dilutive common share equivalents outstanding during the period. Dilutive instruments (such as convertible notes payable) have not been included in the diluted earnings per share computations as their effect were antidilutive for the periods presented.

 

f.       Revenue Recognition

 

Revenue is recognized upon completion of services or delivery of goods where the sales price is fixed or determinable and collectability is reasonably assured. Advance customer payments are recorded as deferred revenue until such time as they are recognized. The Company does not offer any cash rebates. Returns or discounts, if any, are netted against gross revenues.

 

g.       Advertising

 

Advertising costs, which are expensed as incurred, were $438 and $4,301 for the years ended May 31, 2019 and 2018, respectively.

 

h.       Income Taxes

 

Deferred income taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences.  Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases.  Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.  Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

 

At May 31, 2019, the Company had net operating loss carryforwards of approximately $3,889,862, of which $3,035,346 expires in varying amounts through 2038 and $854,516 does not expire. No tax benefit has been reported in the financial statements because the potential tax benefits of the net operating loss carryforwards are offset by a valuation allowance of the same amount.

 21 

THE MARQUIE GROUP, INC.

(formerly Music of Your Life, Inc.)

Notes to the Consolidated Financial Statements

May 31, 2019

 

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal income tax reporting purposes are subject to annual limitations. Should a substantial change in ownership occur, net operating loss carryforwards may be limited as to future use.

Net deferred tax assets consist of the following components as of May 31, 2019 and 2018:

 

   May 31, 2019  May 31, 2018
Deferred tax assets:          
NOL Carryover  $816,871   $637,423 
Valuation allowance   (816,871)   (637,423)
Net deferred tax asset  $—     $—   

 

The income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate of 21% and 34%, respectively, to pretax income (loss) for the years ended May 31, 2019 and 2018 due to the following:

 

   May 31, 2019  May 31, 2018
Expected tax (benefit) at 21% and 34%, respectively  $(766,594)  $(212,726)
Non-deductible stock-based expenses   8,610    —   
Non-deductible expense (non-taxable income) from derivative liability   131,905    (92,634)
Non-deductible amortization of debt discounts   87,693    63,615 
Non-deductible loss on conversions of notes payable and accrued interest   358,938     
Remeasurement of deferred income tax from 34% to 21% (a)   —      394,595 
Change in valuation allowance   179,448    (152,850)
Provision for income taxes  $—     $—   

 

(a)As a result of the Tax Cuts and Jobs Act enacted on December 22, 2017, the United States corporate income tax rate became 21% effective January 1, 2018. Accordingly, we reduced our deferred income tax asset relating to our net operating loss carryforward (and the valuation allowance thereon) by $394,595 from $1,032,018 to $637,423 as of May 31, 2018.

 

For the periods presented, the Company had no tax positions or unrecognized tax benefits.

 

The Company includes interest and penalties arising from the underpayment of income taxes in the consolidated statements of operations in the provision for income taxes.  For the periods presented, the Company had no such interest or penalties.

 

i.Concentrations of Credit Risk

 

Financial instruments that potentially subject the Company to concentrations of credit risks consist of cash and cash equivalents. The Company places cash and cash equivalents at well-known quality financial institutions. Cash and cash equivalents at banks are insured by the Federal Deposit Insurance Corporation for up to $250,000. The Company did not have any cash or cash equivalents in excess of this amount at May 31, 2019.

 

 22 

THE MARQUIE GROUP, INC.

(formerly Music of Your Life, Inc.)

Notes to the Consolidated Financial Statements

May 31, 2019

j.       Recent Accounting Pronouncements

 

We have reviewed accounting pronouncements issued and have adopted any that are applicable to the Company. We have determined that none had a material impact on our financial position, results of operations, or cash flows for the years ended May 31, 2019 and 2018.

 

Certain other accounting pronouncements have been issued by the FASB and other standard setting organizations which are not yet effective and therefore have not yet been adopted by the Company. The impact on the Company’s financial position and results of operations from adoption of these standards is not expected to be material.

 

NOTE 3 - FINANCIAL INSTRUMENTS

 

The Company has adopted FASB ASC 820-10-50, “Fair Value Measurements.”  This guidance defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures.  The three levels are defined as follows:

 

Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

 

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

 

Level 3 inputs to valuation methodology are unobservable and significant to the fair measurement.

 

The carrying amounts reported in the balance sheets for the cash and cash equivalents, receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest.  

 

NOTE 4 - 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 (see Note 10). As of May 31, 2019, the balance due on this loan was $15,950.

 23 

THE MARQUIE GROUP, INC.

(formerly Music of Your Life, Inc.)

Notes to the Consolidated Financial Statements

May 31, 2019

NOTE 5 - MUSIC INVENTORY

 

Music inventory consisted of the following:

 

   May 31, 2019  May 31, 2018
Digital music acquired for use in operations – at cost  $20,076   $17,055 
Accumulated depreciation   (10,679)   (7,374)
Music inventory – net  $9,397   $9,681 

 

The Company purchases digital music to broadcast over the radio and internet. During the year ended May 31, 2019, the Company purchased $3,021 worth of music inventory. For the years ended May 31, 2019 and 2018, depreciation on music inventory was $3,305 and $7,374, respectively.

 

NOTE 6 – ACCRUED CONSULTING FEES

 

Accrued consulting fees consisted of the following:

 

   May 31,
2019
  May 31,
2018
Due to Company Chief Executive Officer pursuant to Consulting Agreement dated March 1, 2017 – monthly compensation of $10,000  $74,300   $71,800 
Due to wife of Company Chief Executive Officer pursuant to consulting agreement effective August 16, 2018 – monthly compensation of $15,000   90,500    —   
Due to mother of Company Chief Executive Officer pursuant to Consulting Agreement dated September 1, 2015 – monthly compensation of $5,000   101,350    76,350 
Due to service provider pursuant to Consulting Agreement dated September 1, 2015 (which was terminated February 28, 2019) – monthly compensation of $5,000   144,700    105,500 
Due to service provider pursuant to Consulting Agreement dated September 1, 2015 – monthly compensation of $1,000   45,000    33,000 
Due to two other service providers   19,500    —  
 Total  $475,350   $286,650 

 

 

 

 

 

 

 

 

 

 24 

THE MARQUIE GROUP, INC.

(formerly Music of Your Life, Inc.)

Notes to the Consolidated Financial Statements

May 31, 2019

 

The accrued consulting fees balance changed as follows:

 

   Year Ended
   May 31,
2019
  May 31,
2018
Balance, beginning of period  $286,650   $171,550 
Compensation expense accrued pursuant to consulting agreements   399,000    252,000 
Payments to consultants   (210,300)   (136,900)
 Balance, end of period  $475,350   $286,650 

 

See Note 11 (Commitments and Contingencies)

 

NOTE 7 - NOTES PAYABLE

 

Notes payable consisted of the following: 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 25 

 

THE MARQUIE GROUP, INC.

(formerly Music of Your Life, Inc.)

Notes to the Consolidated Financial Statements

May 31, 2019

 

   May 31,
2019
  May 31,
2018
Notes payable to an entity, non-interest bearing, due on demand, unsecured  $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 
Convertible note payable to an entity, interest at 10%, due on March 17, 2017, in default (Q)   —      33,686 
Convertible note payable to an entity, interest at 10%, due on April 21, 2017, in default (R)   35,496    46,250 
Convertible note payable to an entity, interest at 10%, due on June 13, 2017, in default (S)   64,233    40,750 
Convertible note payable to an entity, interest at 12%, due on August 16, 2017, in default (T)   —      36,900 
Convertible note payable to an entity, interest at 12%, due on October 31, 2017, in default (U)   8,313    46,750 
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    37,000 
Convertible note payable to an entity, interest at 10%, due on January 11, 2019, in default – net of discount of $-0- and $54,247, respectively (AA)   35,381    33,753 
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 – net of discount of $-0- and $26,658, respectively (DD)   35,000    8,342 
Convertible note payable to an entity, interest at 10%, due on April 4, 2019, in default – net of discount of $-0- and $31,644, respectively (EE)   37,500    5,856 
 26 
Convertible note payable to an entity, interest at 10%, due on September 18, 2019 – net of discount of $6,781 and $-0-, respectively (FF)   15,719    —   
Convertible note payable to an entity, interest at 10%, due on September 18, 2019 – net of discount of $5,425 and $-0-, respectively (GG)   12,575    —   
Convertible note payable to an entity, interest at 10%, due on September 19, 2019 – net of discount of $81,022 and $-0-, respectively (HH)   118,978    —   
Convertible note payable to an entity, interest at 10%, due on August 4, 2019 – net of discount of $61,050 and $-0-, respectively (II)   108,950    —   
Convertible note payable to an entity, interest at 10%, due on November 13, 2019 – net of discount of $45,604 and $-0-, respectively (JJ)   29,396    —   
Convertible note payable to an entity, interest at 10%, due on November 15, 2019 – net of discount of $9,205 and $-0-, respectively (KK)   10,795    —   
Convertible note payable to an entity, interest at 10%, due on November 30, 2019 – net of discount of $2,507 and $-0-, respectively (LL)   2,493    —   
Convertible note payable to an entity, interest at 10%, due on December 6, 2019 – net of discount of $1,553 and $-0-, respectively (MM)   1,447    —   
Convertible note payable to an entity, interest at 10%, due on December 11, 2019 – net of discount of $5,315 and $-0-, respectively (NN)   4,685    —   
Notes payable to individuals, non-interest bearing, due on demand   103,476    103,476 
Total Notes Payable   1,114,919    820,753 
Less: Current Portion   (1,114,919)   (820,753)
Long-Term Notes Payable  $—     $—   

 

 27 

THE MARQUIE GROUP, INC.

(formerly Music of Your Life, Inc.)

Notes to the Consolidated Financial Statements

May 31, 2019

 

(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 9 (Derivative Liability).

 

 28 

THE MARQUIE GROUP, INC.

(formerly Music of Your Life, Inc.)

Notes to the Consolidated Financial Statements

May 31, 2019

 

(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.

 

(Q) On June 17, 2016, the Company issued a $50,750 Convertible Promissory Note to a lender for net loan proceeds of $44,000. The note bore interest at a rate of 10% per annum (24% per annum default rate), was due on March 17, 2017, and was convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to the lesser of 55% of the lowest Trading Price during the 25 Trading Day period (a) prior to June 17, 2016 or (b) prior to the Conversion Date. See Note 9 (Derivative Liability).

 

(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.

 

(T) On November 16, 2016, the Company issued a $47,000 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 August 16, 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 9 (Derivative Liability).

 

(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%

 29 

THE MARQUIE GROUP, INC.

(formerly Music of Your Life, Inc.)

Notes to the Consolidated Financial Statements

May 31, 2019

 

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.

 

(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 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, 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 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, 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 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, is due on September 19, 2019, and is convertible at the option of the lender into shares of the Company common stock at a

 30 

THE MARQUIE GROUP, INC.

(formerly Music of Your Life, Inc.)

Notes to the Consolidated Financial Statements

May 31, 2019

 

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).

 

(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, 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 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, 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 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, 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 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, 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 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, 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 9 (Derivative Liability).

 

Concentration of Notes Payable:

 

The principal balance of the notes payable at May 31, 2019 was due to:

Lender A  $333,033 
Lender B   200,000 
Lender C   133,381 
15 other lenders   666,967 
      
Total   1,333,381 
      
Less debt discounts   (218,462)
      
Net  $1,114,919 

 31 

THE MARQUIE GROUP, INC.

(formerly Music of Your Life, Inc.)

Notes to the Consolidated Financial Statements

May 31, 2019

 

NOTE 8 - NOTES PAYABLE – RELATED PARTIES

 

Notes payable – related parties consisted of the following:

 

   May 31,
2019
  May 31,
2018
Note payable to wife of Company’s chief executive officer, non-interest bearing, due on demand, unsecured   $—     $23,088 
Note payable to Company law firm, non-interest bearing, due on demand, unsecured    2,073    2,073 
Notes payable to The OZ Corporation (owner of 25,000 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 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 6 (Derivative Liability)   50,000    50,000 
 Total Notes Payable   155,323    178,411 
Less: Current Portion   (155,323)   (178,411)
 Long-Term Notes Payable  $—     $—   

 

In the three months ended February 28, 2019, the Company paid the wife of the Company’s Chief Executive Officer a total of $50,000 for repayment due her ($24,593) and agreed interest expense ($25,407).

 

 

 

 

 

 

 

 

 32 

THE MARQUIE GROUP, INC.

(formerly Music of Your Life, Inc.)

Notes to the Consolidated Financial Statements

May 31, 2019

 

NOTE 9 - DERIVATIVE LIABILITY

 

The derivative liability at May 31, 2019 and 2018 consisted of:

 

   May 31, 2019  May 31, 2018
   Face Value  Derivative Liability  Face Value  Derivative Liability
Convertible note payable issued December 29, 2015, due December 29, 2016 (M)  $40,000   $60,000   $40,000   $40,000 
Convertible note payable issued June 17, 2016, due March 17, 2017 (Q)   —      —      33,686    27,561 
Convertible note payable issued November 16, 2016, due August 16, 2017 (T)   —      —      36,900    47,000 
Convertible note payable issued January 31, 2017, due August 31, 2017 (U)   8,313    12,470    46,750    46,750 
Convertible note payable issued April 5, 2017, due on demand (W)   29,000    55,769    29,000    43,500 
Convertible note payable issued April 5, 2017, due on demand (X)   21,500    41,346    21,500    32,250 
Convertible note payable issued June 16, 2017, due on March 16, 2018 (Z)   54,992    82,488    37,000    37,000 
Convertible note payable issued January 11, 2018 (AA)   35,381    53,072    88,000    171,204 
Convertible note payable issued December 1, 2017, due on demand (BB)   50,000    55,555    50,000    33,333 
Convertible note payable issued December 1, 2017, due on demand (CC)   50,000    55,555    50,000    33,333 
Convertible note payable issued March 5, 2018, due on March 5, 2019 (DD)   35,000    52,500    35,000    68,915 
Convertible note payable issued April 4, 2018, due on April 4, 2019 (EE)   37,500    56,250    37,500    72,957 
Convertible note payable issued September 18, 2018, due on September 18, 2019 (FF)   22,500    56,250    —      —   
Convertible note payable issued September 18, 2018, due on September 18, 2019 (GG)   18,000    45,000    —      —   
Convertible note payable issued December 19, 2018, due on September 19, 2019 (HH)   200,000    500,000    —      —   
Convertible note payable issued February 4, 2019, due on August 4, 2019 (II)   170,000    396,667    —      —   
Convertible note payable issued February 13, 2019, due on November 13, 2019 (JJ)   75,000    187,500    —      —   
Convertible note payable issued November 15, 2018, due on November 15, 2019 (KK)   20,000    50,000    —      —   
Convertible note payable issued November 30, 2018, due on November 30, 2019 (LL)   5,000    12,500    —      —   
Convertible note payable issued December 6, 2018, due on December 6, 2019 (MM)   3,000    7,500    —      —   
Convertible note payable issued December 11, 2018, due on December 11, 2019 (NN)   10,000    25,000    —      —   
Totals  $885,186   $1,805,422   $505,336   $653,803 

 

 33 

THE MARQUIE GROUP, INC.

(formerly Music of Your Life, Inc.)

Notes to the Consolidated Financial Statements

May 31, 2019

 

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 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%.

 

Assumptions used for the calculations of the derivative liability of the notes at May 31, 2018 include (1) stock price of $160.00 per share, (2) exercise prices ranging from $64.00 to $96.00 per share, (3) terms ranging from 0 days to 278 days, (4) expected volatility of 527% and (5) risk free interest rates ranging from 1.76% to 2.23%.

 

Concentration of Derivative Liability:

 

The derivative liability at May 31, 2019 relates to convertible notes payable due to:

Lender A  $479,155 
Lender B   512,469 
Lender C   260,572 
Lender D   187,500 
6 other lenders   365.726 
      
Total  $1,805,422 

 

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.

 

 

 

 

 

 

 34 

THE MARQUIE GROUP, INC.

(formerly Music of Your Life, Inc.)

Notes to the Consolidated Financial Statements

May 31, 2019

 

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 continues to have no conversion, liquidation, or dividend rights.

 

During the year ended May 31, 2018, the Company issued an aggregate of 697.05 shares of common stock for the conversion of notes payable and interest in the aggregate amount of $54,653.

 

During the year ended May 31, 2018, the Company issued 7.375 shares of common stock for cash in the amount of $500.

 

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 .0025 shares 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 2018 (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 2018 (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.

 

At May 31, 2019 and 2018, there are no stock options or warrants outstanding.

 

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

 35 

THE MARQUIE GROUP, INC.

(formerly Music of Your Life, Inc.)

Notes to the Consolidated Financial Statements

May 31, 2019

 

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 is month-to-month. The other 3 consulting agreements in effect at May 31, 2019 provide for monthly compensation totaling $3,000.

 

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 has been expensed and included in “Salaries and Consulting Fees” in the accompanying Consolidated Statement of Operations for the year ended May 31, 2018. No other amounts have been accrued at May 31, 2018 and 2019.

 

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.

 

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, 2019, the Company had negative working capital of $3,810,142 and an accumulated deficit of $7,948,240. 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 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

 

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.

 

 36 

THE MARQUIE GROUP, INC.

(formerly Music of Your Life, Inc.)

Notes to the Consolidated Financial Statements

May 31, 2019

 

From June 1, 2019 to August 31, 2019, the Company issued a total of 676,382 shares of its common stock for the conversion of notes payable and accrued interest in the aggregate amount of $65,820. The $86,699 excess of the $152,519 fair value of the 676,382 shares at the dates of conversion over the $65,820 of debt satisfied will be charged to “Loss on conversion of notes payable and accrued interest” in the three months ended August 31, 2019.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 37 

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

 

N/A - No change in accountant for the annual period ended May 31, 2019 and to present.

 

ITEM 9A. CONTROLS AND PROCEDURES.

 

Management’s Report on Disclosure Controls and Procedures

 

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, to allow for timely decisions regarding required disclosure.

 

As of May 31, 2019, the end of our fiscal year covered by this report, we carried out an evaluation, under the supervision of our Chief Executive Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, we concluded that our disclosure controls and procedures were ineffective as of the end of the period covered by this annual report because there was no segregation of the duties with only a sole member in our management team. Our board of directors has only one member. We do not have a formal audit committee.

 

Management’s Report on Internal Control over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act, as amended). In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of control procedures. The objectives of internal control include providing management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management’s authorization and recorded properly to permit the preparation of financial statements in conformity with accounting principles generally accepted in the United States. Our management assessed the effectiveness of our internal control over financial reporting as of May 31, 2019. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework. Our management has concluded that, as of May 31, 2018, our internal control over financial reporting is ineffective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with US generally accepted accounting principles. This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.

 

Inherent limitations on effectiveness of controls

 

Internal control over financial reporting has inherent limitations which include but is not limited to the use of independent professionals for advice and guidance, interpretation of existing and/or changing rules and principles, segregation of management duties, scale of organization, and personnel factors. Internal control over financial reporting is a process which involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of its inherent limitations, internal control

 38 

 

over financial reporting may not prevent or detect misstatements on a timely basis, however these inherent limitations are known features of the financial reporting process and it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

 

Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

Changes in Internal Control over Financial Reporting

 

None.

 

ITEM 9B. OTHER INFORMATION.

 

None.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 39 

 

PART III

 

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

 

Board of Directors

 

Our board of directors consists of the following individual:

 

Name and Year First Elected Director(1)   Age   Background Information

Marc Angell

(2013)

   58  

Mr. Angell, age 61, has been the Chief Executive Officer of Music of Your Life, Inc., since November 2012. Mr. Angell acquired the well-known Music of Your Life trademark in 2008, and in 2009 formed Global Radio Network, Inc as its CEO to operate the syndicated radio network known as Music of Your Life. In November 2012, Angell formed Music of Your Life, Inc. as an entertainment company to capitalize on the growth and development of the Music of Your Life trademark and branding, including radio, TV, live concerts, and merchandising. Angell has entered into deals with Time-Life for music catalogs. Mr. Angell, was a director of Wireless Village, Inc., a telecommunications solution provider, and Concierge Technologies, Inc. from June, 2004 to January, 2008. In 2000, Mr. Angell became the founder and President of Planet Halo, a wireless telecommunications company, until he sold it in May, 2004 to the public company Concierge Technologies, Inc. (OTC:BB CNCG). In January 1990 Mr. Angell founded Angellcom, a supplier and distributor of one-way paging devices in the U.S. He remained its CEO until 1999. Mr. Angell conceptualized, designed and marketed both the one-way pagers for Angellcom and the Halo device for Planet Halo. During the 1990s, Mr. Angell was also involved in the land mobile radio business as a license holder and manager of 220MHz radio systems throughout the United States and Mexico.

 

 

(1) The business address of each of our directors is 3225 McLeod Drive, Suite 100, Las Vegas, Nevada 89121

 

Director Independence

 

Because our common stock is not currently listed on a national securities exchange, we have used the definition of “independence” of The NASDAQ Stock Market to make this determination. NASDAQ Listing Rule 5605(a)(2) provides that an “independent director” is a person other than an officer or employee of the Company or any other individual having a relationship which, in the opinion of the Company’s board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The NASDAQ listing rules provide that a director cannot be considered independent if:

 

·                     the director is, or at any time during the past three years was, an employee of the company;

 

·                     the director or a family member of the director accepted any compensation from the company in excess of $120,000 during any period of 12 consecutive months within the three years preceding the independence determination (subject to certain exclusions, including, among other things, compensation for board or board committee service);

 

 40 

·                     a family member of the director is, or at any time during the past three years was, an executive officer of the company;

 

·                     the director or a family member of the director is a partner in, controlling stockholder of, or an executive officer of an entity to which the company made, or from which the company received, payments in the current or any of the past three fiscal years that exceed 5% of the recipient’s consolidated gross revenue for that year or $200,000, whichever is greater (subject to certain exclusions);

 

·                     the director or a family member of the director is employed as an executive officer of an entity where, at any time during the past three years, any of the executive officers of the company served on the compensation committee of such other entity; or the director or a family member of the director is a current partner of the company’s outside auditor, or at any time during the past three years was a partner or employee of the company’s outside auditor, and who worked on the company’s audit.

 

We do not have any independent directors. We do not have an audit committee, compensation committee or nominating committee. We do however have a code of ethics that applies to our officers, employees and director.

 

Compensation of Directors

 

Although we anticipate compensating the members of our board of directors in the future at industry levels, current members are not paid cash compensation for their service as directors. Each director may be reimbursed for certain expenses incurred in attending board of directors and committee meetings.

 

Board of Directors Meetings and Committees

 

Although various items were reviewed and approved by the Board of Directors via unanimous written consent during fiscal year ended May 31, 2019, the Board held no in-person meetings.

 

We do not have Audit or Compensation Committees of our board of directors. Because of the lack of financial resources available to us, we also do not have an “audit committee financial expert” as such term is described in Item 401 of Regulation S-K promulgated by the SEC.

 

Changes in Procedures by which Security Holders May Recommend Nominees to the Board

 

Any security holder who wishes to recommend a prospective director nominee should do so in writing by sending a letter to the Board of Directors. The letter should be signed, dated and include the name and address of the security holder making the recommendation, information to enable the Board to verify that the security holder was the holder of record or beneficial owner of the company’s securities as of the date of the letter, and the name, address and resumé of the potential nominee. Specific minimum qualifications for directors and director nominees which the Board believes must be met in order to be so considered include, but are not limited to, management experience, exemplary personal integrity and reputation, sound judgment, and sufficient time to devote to the discharge of his or her duties. There have been no changes to the procedures by which a security holder may recommend a nominee to the Board during our most recently ended fiscal year.

 

Executive Officers

 

Marc Angell is our sole executive officer, serving as our Chief Executive Officer and Secretary, as well as our principal accounting and financial officer. Further information pertaining to Mr. Angell’s business background and experience is contained in the section above marked DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

 41 

 

Section 16(a) Beneficial Ownership Reporting Compliance

 

We are required to identify each person who was an officer, director or beneficial owner of more than 10% of our registered equity securities during our most recent fiscal year and who failed to file on a timely basis reports required by Section 16(a) of the Securities Exchange Act of 1934.

 

To our knowledge, during the fiscal year ended May 31, 2019, based solely upon a review of such materials as are required by the Securities and Exchange Commission, no other officer, director, or beneficial holder of more than ten percent of our issued and outstanding shares of Common Stock failed to timely file with the Securities and Exchange Commission any form or report required to be so filed pursuant to Section 16(a) of the Exchange Act of 1934.

 

Code of Ethics

 

The Company expects that its Officers and Directors will maintain appropriate standards of honesty and ethical conduct in connection with the performance of their duties on behalf of the Company. In recognition of this expectation, the Company has adopted a Code of Ethics. The purpose of this Code of Ethics is to codify standards the Company believes are reasonably necessary to deter wrongdoing and to promotehonest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships and full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with, or submits to, the Securities and Exchange Commission (the “SEC”), or other regulatory bodies and in other public communications made by the Company.  

 

ITEM 11. EXECUTIVE COMPENSATION.

 

The following table summarizes the total compensation for the two fiscal years ended May 31, 2019 of each person who served as our principal executive officer or principal financial and accounting officer collectively, (the “Named Executive Officers”) including any other executive officer who received more than $100,000 in annual compensation from the Company. We did not award cash bonuses, stock options or non-equity incentive plan compensation to any Named Executive Officer during the two fiscal years ended May 31, 2019; thus these items are omitted from the table below:

 

Summary Compensation Table

 

Name and Principal Position

 

 

FiscalYear

 

 

Salary

 

 

Stock Awards

  All Other Compensation (1) 

 

Total

                
Marc Angell   2019   $—     $—     $117,700   $117,700 
Chief Executive Officer   2018   $—     $—     $54,700   $54,700 
Secretary                         

 

(1)Consulting fees paid. See Notes 6 and 11 to the financial statements.

 

There is no other arrangement or understanding between our directors and officers and any other person pursuant to which any director or officer was or is to be selected as such.

 

 42 

 

Outstanding Equity Awards at Fiscal Year-End

 

There were no grants or equity awards to our Named Executive Officers or directors during the fiscal year ended May 31, 2019.

 

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

 

The following table sets forth the beneficial ownership of each of our directors and executive officers, and each person known to us to beneficially own 5% or more of the outstanding shares of our common stock, and our executive officers and directors as a group, as of September 10, 2019. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the securities. Unless otherwise indicated, we believe that each beneficial owner set forth in the table has sole voting and investment power and has the same address as us. Our address is 3225 McLeod Drive, Suite 100, Las Vegas, Nevada 89121. As of September 10, 2019, there were 1,061,356 shares of common stock issued and outstanding, and 200 shares of Series A Preferred Stock issued and outstanding. Each share of Series A Preferred Stock 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 continues to have no conversion, liquidation, or dividend rights. The following table describes the ownership of our voting securities (i) by each of our officers and directors, (ii) all of our officers and directors as a group, and (iii) each person known to us to own beneficially more than 5% of our common stock or any shares of our preferred stock.

 

Name

 
 

Sole

Voting and

Investment

Power

 
 

Other

Beneficial

Ownership

 
 

Total

 
 

Percent of

Class

Outstanding

 
Jacquie Angell(1)    —      50,018    50,018    4.64%
Marc Angell(2)    —      50,018    50,018    4.64%
John D. Thomas, P.C.    25,000    —      25,000    2.32%
The Oz Corporation    25,000    —      25,000    2.32%
All directors/director nominees and executive officers as a group (1 person)    —      50,018    50,018    4.64%

 

(1)Shareholder and spouse of CEO/Chairman, Marc Angell. Includes 50,018 shares of common stock held by the Angell Family Trust.
(2)CEO/Chairman of the Board of Directors and spouse of shareholder, Jacquie Angell. Includes 50,018 shares of common stock held by the Angell Family Trust. Excludes 200 shares of Series A Preferred Stock held by Mr. Angell which have super-voting rights, but no conversion, dividend, or liquidation rights. If the votes of the Series A Preferred Stock were taken into account, Mr. Angell would beneficially hold approximately 80.93% of the voting securities of the Company.

 

Limitation of Liability of Directors and Officers; Indemnification and Advance of Expenses

 

Pursuant to our charter and under Section 607.0850 of the 2012 Florida Statutes (hereafter, the “Statutes”), our directors are not liable to us or our stockholders for monetary damages for breach of fiduciary duty, except for liability in connection with a breach of duty of loyalty, for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, for authorization of illegal dividend payments or stock redemptions under Florida law or any transaction from which a director has derived an improper personal benefit. Our charter provides that we are authorized to provide indemnification of (and

 43 

 

advancement of expenses) to our directors, officers, employees and agents (and any other persons to which applicable law permits us to provide indemnification) through Bylaw provisions, agreements with such persons, vote of stockholders or disinterested directors, or otherwise, to the fullest extent permitted by applicable law.

 

We intend to enter into indemnification agreements with certain of our current directors and officers. The indemnification agreement will indemnify the indemnitee to the fullest extent permitted by law, including against third-party claims and claims by or in right of the Company or any subsidiary or majority-owned partnership of the Company by reason of that person (including the advancement of expenses subject to certain conditions) (a) being a director, officer employee or agent of the Company, or of any subsidiary or majority-owned partnership of the Company or (b) serving at our request as a director, officer, employee or agent of another entity. If appropriate, we will be entitled to assume the defense of the claim with counsel selected by us and approved by the indemnitee (which approval may not be unreasonably withheld). Separate counsel employed by the indemnitee will be at his or her own expense unless (1) the employment of separate counsel has been previously authorized by us, (2) the indemnitee reasonably concludes there may be a conflict of interest or (3) we have not, in fact, employed counsel to assume the defense of such claim.

 

The Bylaws of the Company provide for indemnification of Covered Persons substantially identical in scope to that permitted under the Florida Law. Such Bylaws provide that the expenses of directors and officers of the Company incurred in defending any action, suit or proceeding, whether civil, criminal, administrative or investigative, must be paid by the Company as they are incurred and in advance of the final disposition of the action, suit or proceeding, upon receipt of an undertaking by or on behalf of such director or officer to repay all amounts so advanced if it is ultimately determined by a court of competent jurisdiction that the director or officer is not entitled to be indemnified by the Company.

 

Disclosure of Commission Position on Indemnification for Securities Act Liabilities

 

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the provisions above, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable.

 

In the event that a claim for indemnification against such liabilities, other than the payment by us of expenses incurred or paid by one of our directors, officers, or controlling persons in the successful defense of any action, suit or proceeding, is asserted by one of our directors, officers, or controlling persons in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification is against public policy as expressed in the Securities Act, and we will be governed by the final adjudication of such issue

 

Provisions of Our Charter and Bylaws

 

Our charter and bylaws provide that our board of directors will have the exclusive power to make, alter, amend or repeal any provision of our bylaws.

 

Change of Control

 

On February 26, 2013, Marc Angell purchased a controlling interest in the Company. Through his ownership of 200 shares of Series A Preferred Stock, he and may unilaterally determine the election of the Board and other substantive matters requiring approval of the Company’s stockholders.

 44 

 

Other than the transactions and agreements disclosed in this Report, the Registrant knows of no arrangements which may result in a change of control of the Registrant.

 

No officer, director, promoter or affiliate of the Registrant has, or proposes to have, any direct or indirect material interest in any asset proposed to be acquired by the Registrant through security holdings, contracts, options or otherwise.

 

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

 

Certain Relationships and Related Transactions

 

On March 4, 2016, the Board of Directors of Music of Your Life, Inc., a Florida corporation (the “Company”) issued all 200 previously authorized but unissued shares of Series A Preferred Stock (the “Preferred Stock”) to the Company’s sole officer and director Marc Angell. At September 10, 2019, the Preferred Stock collectively holds 80% of the total voting power of the Company.

 

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 continues to have no conversion, liquidation, or dividend rights.

 

On August 16, 2018 (the “Closing Date”), Music of Your Life, Inc. (the “Company”) entered into a Merger Agreement (the “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 was 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. A majority of these shares, 50,000 shares of common stock of the Company were issued to Marc and Jacquie Angell, affiliates of the Company. This is considered a related party transaction. The TMG merger will provide the Company with certain registered trademarks and intellectual property of TMG with respect to health, beauty and social networking products.

 45 

 

 

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

 

The following table sets forth fees invoiced by our independent registered accounting firm Michael T. Studer, CPA P.C. during the fiscal years ended May 31, 2019 and 2018:

 

   2019  2018
Audit Fees  $29,000   $26,500 
Audit Related Fees   2,000    -0- 
Tax Fees   -0-    -0- 
All Other Fees   -0-    -0- 
Total Fees  $31,000   $26,500 

 

It is the policy of the Board of Directors, which presently completes the functions of the Audit Committee, to engage the independent accountants selected to conduct our financial audit and to confirm, prior to such engagement, that such independent accountants are independent of the company. All services of the independent registered accounting firms reflected above were pre-approved by the Board of Directors.

 

 46 

 

PART IV

 

ITEM 15. EXHIBITS.

 

The following exhibits are filed with or incorporated by referenced in this report:

 

Exhibit Number  Description
 2.1   Merger Agreement by and between Zhong Sen International Tea Company, Music of Your Life, Inc., Music of Your Life Merger Sub, Inc. dated May 31, 2013 (incorporated by reference to Exhibit 2.1 to Registrant’s Current Report on Form 8-K filed on June 5, 2013).
 3.1   Amended and Restated Articles of Incorporation dated July 21, 2016.
 14.1   Code of Ethics for the Registrant
 21.1   Subsidiaries of the Registrant
 31.1   Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Marc Angell.
 32   Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Marc Angell.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 47 

SIGNATURES

 

In accordance with Section 13 or 15(d) of the Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

    MUSIC OF YOUR LIFE, INC.
     
     
  /s/ Marc Angell
Dated: September __, 2019 By: Marc Angell, Chief Executive Officer, and Principal Financial Officer

 

In accordance with the Exchange Act, this Report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.

 

/s/ Marc Angell   Chief Executive Officer September 13, 2019
Marc Angell    

 

 

//s/ Marc Angell   Director September 13, 2019
Marc Angell    

 

 48