MAJOR LEAGUE FOOTBALL INC - Quarter Report: 2015 July (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________

FORM 10-Q

(Mark One)

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

For the quarterly period ended July 31, 2015

OR

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

For the transition period from _______ to _______

Commission File Number: 000-51132

Major League Football, Inc.

(Exact name of registrant as specified in its charter)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, 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 þ  No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act (check one).

Large accelerated filer ¨   Accelerated filer ¨   Non-accelerated filer ¨   Smaller Reporting Company þ

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

The number of shares of the registrant’s Common Stock outstanding as of September 11, 2015 was 40,440,009.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

See Appendix

The following discussion contains forward-looking statements. The words “anticipate,” “believe,” “expect,” “plan,” “intend,” “estimate,” “project,” “will,” “could,” “may” and similar expressions are intended to identify forward-looking statements. Such statements reflect our Company's current views with respect to future events and financial performance and involve risks and uncertainties. Should one or more risks or uncertainties occur, or should underlying assumptions prove incorrect, actual results may vary materially and adversely from those anticipated, believed, expected, planned, intended, estimated, projected or otherwise indicated. Readers should not place undue reliance on these forward-looking statements.

The following discussion is qualified by reference to, and should be read in conjunction with our Company's financial statements and the notes thereto.

On July 14, 2014, Major League Football, Inc. f/k/a Universal Capital Management, Inc. (the “Company”) entered into and closed a definitive asset purchase agreement (“Asset Purchase Agreement”) with Major League Football, LLC, a development stage company formed in 2009 to establish, develop and operate a professional spring football league to be known as “Major League Football.” Prior to July 14, 2014, the Company's business was to identify and advise in development and market consumer products.

Pursuant to the terms of the Asset Purchase Agreement, we issued Major League Football, LLC 8,000,000 shares of our common stock in exchange for assets of Major League Football, LLC primarily comprised of business plans and related proprietary documents, trademarks and other related intellectual property related to the development of the league. Also, our board of directors was expanded, a new management team was appointed, and a number of league consultants were retained by our Company.

Plan of Operation

We are seeking to establish, develop and operate Major League Football (“MLFB”) as a professional spring/summer football league. Our anticipated launch is March 2016. We intend to fill a void by establishing teams in cities overlooked by existing professional sports leagues and provide fans with professional football in the NFL off-seasons, which will enable it to take a totally non-adversarial approach towards the National Football League (“NFL”). Our spring and early summer schedule ensures no direct competition with autumn/winter sports, including the 32 NFL, 9 Canadian Football League, 627 NCAA, 91 NAIA, 142 JUCO's, 27 Canadian Universities, and thousands of high school and collegiate institution teams.

We expect that we will need new financing over the next 12 months in order to position our Company for its anticipated launch in March 2016. Specifically, we anticipate that we will need to raise approximately $35 million prior to October 2015 and subsequently, commence another offering or offerings to raise an additional $50 million to cover our operating expenses through the end of 2017.

Single Entity Structure

We intend to operate the league as a single entity owned, stand alone, dominant independent sports league. The single entity structure will be based on the design of Major League Soccer (MLS), where a single entity sports league owns and operates all of its teams. This corporate structure provides several compelling benefits, including:

·

Centralized contracting for player’s services that results in controlled player payrolls without violating antitrust laws

·

Greater parity among teams

·

Focus on the bottom line

·

Controlled costs

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Management believes that this structure will also promote efficiency by depoliticizing decisions on league policies and allowing decisions to be made with consistency and in a timely fashion. Economies of scale will be achieved through centralizing contract negotiations and handling business affairs in the league office to ensure that individual teams are unified in their decision-making. Further, under this structure, we expect teams will operate in the best interest of the league.

MLFB Market Opportunity

Major League Football intends to establish a brand that is fan-friendly, exciting, affordable and interactive, but most importantly provides consumers real value for their sports dollars. MLFB will underscore the fans’ access to team members, coaches, league officials and other fans, something no other existing or previous football league has ever delivered to its viewing audience. Although Major League Football’s ticket pricing will be a fraction to that of the established professional leagues (NBA, MLB, NHL and NFL), its ultimate goal will be to offer its fans an incomparable value-added experience for their entertainment dollar.

Additionally, as a result of a carefully crafted study, we will not locate teams in any established NFL cities and more importantly in any Major League Baseball cities, thus avoiding direct in-season competition with an established sports entity. By positioning teams in prime emerging and under-represented markets throughout the contiguous 48 states (including potentially placing teams in the top two metropolitan markets in the country), our research suggests that an exciting sports entity like Major League Football will be viewed in a positive light by sports fans throughout the US, many of whom are already experiencing post Super Bowl withdrawal. Of equal or greater importance to Major League Football is the fact that both established and peripheral football fans in these exciting new markets will finally be afforded the opportunity of establishing their own personal sports identity while at the same time fostering strong community pride. Lastly, although Major League Football’s long range vision is to maintain a positive working relationship with the NFL, its ultimate intent is to function as an independent, stand-alone entity that captures sports content needed during off season.

Major League Football intends to disseminate its message using a comprehensive marketing strategy that employs both traditional and new media marketing channels. MLFB’s marketing plans are anticipated to create multiple revenue streams and engage sports fans over a variety of mediums, many of which have only emerged during the past five years. Specifically, Major League Football intends to develop a far-reaching Internet and mobile strategy that will serve as the backbone of its marketing strategy. This will include developing a mobile initiative, where fans can interact with the league, its players, its coaches, and other fans using their mobile phones.

Major League Football also intends to create an interactive website that includes a social networking aspect, podcasts, live video, and more. Along with this new media strategy, cross promotions will also be an important part of the MLFB’s marketing strategy. Major League Football plans to work with businesses involved in video, television, print media and the Internet to promote its business. We believe that the cumulative effect of this marketing plan will help it achieve its early objectives, which include the following:

·

Establish itself as a recognized professional football league

·

Build a base of teams and fans that is broad enough to sustain business over the critical first five years of operation

·

Generate enough revenue to expand its operations in years three through six

·

Build successful teams located in regions where there are no existing MLB franchises

·

Adopt a spring schedule to avoid competing with professional, collegiate and prep football

·

Provide year-round cash flow from multi-functioning revenue streams

·

Build a positive image for the league through year-round community relations campaigns

Professional Sports Market

Professional sports comprise one of the largest industries within the United States today. It is a $422 billion dollar industry that is four times larger than the auto industry and ten times greater than the film industry. Spectator sports have continued to grow over the last several decades and in 2012 the personal consumption of professional sports reached $25.4 billion. Upon closer inspection it becomes clearly evident that professional football is far and away the leader in this prestigious space.

2

Major League Football recognizes the NFL is the dominant professional sports league in the United States. Although it clearly respects the success of the NFL business model, its defined objective is to position itself as an independent, non-adversarial football league. Major League Football believes that its own business model encompasses innovations that will be viewed positively by NFL officials, resulting in a strong working relationship between the two leagues.

Major League Football will endeavor to maximize ticket vendor technology and enhance its services to patrons with innovative ticketing procedures that include:

·

Average ticket prices targeted at approximately one fourth the prices of NFL, NBA, NHL & MLB tickets

·

Year-round cash flow derived from multiple revenue streams utilizing new technologies that didn’t exist as recently as five years ago

·

A highly developed marketing strategy that uses both traditional and new media to attract existing football fans as well as an entirely untapped market of potential new fans

·

The most interactive, informative website in professional sports using cutting edge technologies that help preserve fan loyalty

·

Proven executive staff members with considerable practical experience in professional football

·

Player and coaching costs projected at 65-80% less than those of the NFL, NBA, NHL or MLB

Initially, Major League Football teams will operate in either existing collegiate or municipal stadiums during the under-represented spring and early summer season, 19 of which are among the top fifty (50) of the Nations (366) statistical market regions. Over the past decade, only one of the proposed Major League Football team cities (Memphis) showed a drop in population while during the same period of time, five of the current NFL franchise cities (Pittsburgh, Cleveland, Detroit, Buffalo and New Orleans) showed significant negative change.

We believe that our business model and long range vision possesses many innovations that will be viewed in a positive light by NFL owners and league officials, and will also lend itself to the potential of establishing a strong working relationship with our venture by positioning ourselves in a 100% non-adversarial position to the established NFL.

Audience

Major league Football believes that today’s market demands a controlled deliverable to a targeted demographic viewing audience as well as controlled advertising deliverables to specific targeted demographic audiences as well. Other sports attract audiences that are only a fraction of that number, in producing the sponsor and advertiser concerns. Therefore, retaining the mass appeal needed to attract such an audience is an over-arching consideration that shapes much of what we do and what concerns us.

We believe our largest competitive advantage on television will be that our product will be offered only one day of the week, through a broad array of regional telecasts, with key matchups of national interest featured as late games on Sunday afternoon and Sunday evening. We believe that scheduling and broadcasting our games only one day a week will prevent potential fragmentation of our audience and commoditization our product.

Integration of Television and Media

Major League Football will seek television distribution for its game programming through multiple avenues, including broadcast television, cable and satellite television, internet video interface and mobile devices. Support programming is going to take on a great deal of importance as well.

It will be Major League Football’s intent to pursue a national broadcasting deal that will offer promotional activity at the local level in each of its respective markets. Major League Football believes, that an opportunity exists in the “need for content” for viewer ship during the Spring season and believes that it has positioned itself uniquely in this space.

3

Merchandising & Licensing Overview

The thrust of our licensing and co-branding strategy is to create an increase in brand value for MLFB and the partners we align with. In order for the league to have a robust licensing and co-branding business, we have created a 3-tier approach that focuses on generating strong revenue streams for the league and initiating value based collaborative efforts that further enhance the MLFB brand.

The main benefits of the program are:

·

Fans will find quality items at more favorable price points

·

Teams will gain more profit on each item, and stop tying up money on inventory they can’t properly sell through

·

More fans will be wearing and supporting the team and league branded merchandise, which is the number one way to brand outside the stadium.

We also intend to develop private label products where we will feature products that are core fan favorites (hats, shirts, popular novelties and gifts, etc.) all manufactured at the highest level, and priced far below traditional licensed sports merchandise programs. All merchandise, when league sanctioned, will be pre-ticketed and priced.

Financial Condition

As reflected in the accompanying unaudited financial statements, the Company had no revenue, and a net loss and net cash used in operating activities of $635,725 and $67,663 respectively, for the three months ended July 31, 2015. Additionally, at July 31, 2015, the Company has minimal cash and has a working capital deficit of $1,659,841, an accumulated deficiency of $15,125,290 and a stockholders' deficiency of $1,599,687, which could have a material impact on the Company's financial condition and operations. As a result of the significant working capital deficit at July 31, 2015, the Company does not have sufficient cash resources or current assets to pay its obligations.

Results of Operations

Three months ending July 31, 2015, compared to the three months ended July 31, 2104

For the three months ended July 31, 2015, we had no revenue as compared to $20,000 for the three months ended July 31, 2014.  For 2014, all of our revenue was comprised of management services provided to customers under our previous business plan. As discussed previously, the Company has transitioned to a different business plan whereby it is seeking to establish, develop and operate MLFB as a professional spring football league with an anticipated launch date in March 2016.  

Total operating expenses for the three months ended July 31, 2015 were $629,656 as compared to total operating expenses for the three months ended July 31, 2014 of $1,303,531. The decrease from 2014 to 2015 was primarily that the 2014 amount had $400,000 of asset purchase expense related to the acquisition of MLF assets.  Since there was no tangible future cash flows for the acquired tangible and intangible assets, the $400,000 amount was expensed by the Company and recorded as an asset purchase expense.  Additionally, the decrease from 2014 included a $288,873 decrease in salaries and wages and a $58,874 decrease in professional fees.  The reduction in salaries and wages was primarily that in 2014, there was $663,732 of stock compensation expense for common stock issued to employees which no comparable amount in 2015, offset by $180,000 of accrued salaries and wages for the new MLFB management team in 2015 with no comparable amount in 2014.  The reduction in professional fees was primarily that in 2014, there was $118,750 of stock compensation expense for common stock issued to consultants with no comparable amount in 2015, offset by an increase in professional fees in 2015 related to the new MLFB business.

Other income (expense) for the three months ended July 31, 2015 was $6,069 of expense compared to $78,091 of income for the three months ended July 31, 2014. The decrease in income from 2014 to 2015 was that the 2014 amount consisted primarily of $62,073 of gain from the issuance of common stock for the exchange of debt and $21,894 of gain from the sale of marketable securities.

4

As a result of the above, we had a net loss of $635,725 and a net loss of $1,205,440 for the three months ended July 31, 2015 and 2014, respectively.

Liquidity and Capital Resources

From inception, our Company has relied upon the infusion of capital through capital share transactions and the issuance of debt for liquidity and we had $1,120 of cash at July 31, 2015. Consequently, payment of operating expenses will have to come similarly from equity capital or borrowed funds from investors related to our MLFB business plan. The Company is in the process of raising the initial capital to implement the Company's MLFB business strategy and business plan, both domestically and abroad, and it is in the process of reviewing the EB-5 Immigrant Investor Program to determine the feasibility of obtaining capital investments by foreign investors through the EB-5 program. There is no assurance that we will be successful in raising additional equity capital or additional borrowings, or if we can, that we can do so at a price that management believes to be appropriate.

On September 8, 2015, our Company entered into a privately negotiated Securities Purchase Agreement (the “Securities Purchase Agreement”) with Clairemont Private Investment Group, LLC (“Clairemont”). Under the Securities Purchase Agreement, our Company will sell to Clairemont (i) 5,000,000 shares of Series A 10% Convertible Preferred Stock (the “Series A Preferred Stock”) and a warrant to purchase up to an additional 5,000,000 shares of our common stock at an exercise price equal to 125% of the Conversion Price of the Series A Preferred Stock. The “Conversion Price” is equal to 75% of the 15 day VWAP price of the common stock; and (ii) the number of shares of common stock calculated pursuant to Securities Purchase Agreement at a price per share equal to the VWAP price of the Company’s common stock during the twenty (20) consecutive trading day period beginning on the last trading date prior to the date of delivery to the Company of the $10,000,000 investment; all in exchange for $15,000,000 and a right of first refusal to purchase a Company franchise in Missouri City, TX (the “Right of First Refusal”).  The $5 million sale and purchase of the Series A Preferred Stock and the warrant is expected to occur at a closing on or before September 30, 2015, subject to customary closing conditions. The $10 million sale and purchase of Company common stock is expected to occur at a closing on or before January 31, 2016, subject to customary closing conditions. The Right of First Refusal vests on the closing date of the sale and purchase of our common stock. No assurances can be made that one or both of the closings will occur or that the Right of First Refusal will vest.

We expect the sale of these securities will provide our Company with additional working capital to implement the Company's MLFB business strategy and business plan.

Critical Accounting Estimates

Our Company's accounting policies are more fully described in Note 1 of Notes to Financial Statements. As disclosed in Note 1 of Notes to Financial Statements, the preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying disclosures. Although these estimates are based on our management's best knowledge of current events and actions our Company may undertake in the future, actual results could differ from the estimates.

Evaluation of Disclosure Controls and Procedures As of the end of the period covered by this report, our Company evaluated the effectiveness and design and operation of its disclosure controls and procedures. Our Company's disclosure controls and procedures are the controls and other procedures that we designed to ensure that our Company records, processes, summarizes, and reports in a timely manner the information that it must disclose in reports that our Company files with or submits to the Securities and Exchange Commission. Our management, including our principal executive officer and principal financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of July 31, 2015 and concluded that the disclosure controls and procedures were not effective, because our Company did not have a full time Accounting Controller or Chief Financial Officer and utilized a part time consultant to perform these critical responsibilities. The absence of a full time accounting staff resulted in a lack of segregation of duties and accounting technical expertise necessary for an effective system of internal controls.

5

The Company plans to hire a full time Controller or Chief Financial Officer in the future when sufficient cash funds are available from either the sale of Company securities or through cash flow generated through its business plan.

Changes in Internal Control Over Financial Reporting.

No change in our Company's internal control over financial reporting occurred during our first fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

6

PART II – OTHER INFORMATION

Our Company has sold the following securities without registering the securities under the Securities Act:

No underwriters were utilized and no commissions or fees were paid with respect to any of the above transactions. These persons were the only offerees in connection with these transactions. We relied on Section 4(a)(2), 4(a)(5) and Regulation D of the Securities Act since the transactions do not involve any public offering.

In July 2014, the Company commenced an offering of up to $3,000,000 of convertible unsecured promissory notes to provide working capital for the Company. The terms include a four percent (4%) per annum interest rate, payable in full with interest nine (9) months from the issuance date, convertible into common stock of the Company pursuant to the terms that are more fully described in Note 3 of Notes to Financial Statements.  At July 31, 2015, no holders of the convertible unsecured promissory notes had elected to convert into common stock. Additionally, at July 31, 2015, $387,192 of the principal amount and interest of the convertible unsecured promissory notes, were in default as related to their term of nine (9) months from the issuance date. In September 2015, the Company obtained extensions of the convertible unsecured promissory notes in default as related to their term of nine (9) months from the issuance date.  As a result, the new repayment date for these convertible unsecured promissory notes is October 31, 2015 and they are no longer in default.  

The following exhibits are included herein:

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

8

MAJOR LEAGUE FOOTBALL, INC.

FINANCIAL STATEMENTS

JULY 31, 2015

(UNAUDITED)

CONTENTS

F-1

MAJOR LEAGUE FOOTBALL, INC.

BALANCE SHEETS

See accompanying condensed notes to these unaudited financial statements.

F-2

MAJOR LEAGUE FOOTBALL, INC.

STATEMENTS OF OPERATIONS

(UNAUDITED)

See accompanying condensed notes to these unaudited financial statements.

F-3

MAJOR LEAGUE FOOTBALL, INC.

STATEMENTS OF CASH FLOWS

(UNAUDITED)

See accompanying condensed notes to these unaudited financial statements.

F-4

MAJOR LEAGUE FOOTBALL, INC.

STATEMENTS OF CASH FLOWS (CONTINUED)

(UNAUDITED)

See accompanying condensed notes to these unaudited financial statements.

F-5

MAJOR LEAGUE FOOTBALL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

JULY 31, 2015

NOTE 1- NATURE OF OPERATIONS, BASIS OF PRESENTATION, GOING CONCERN, AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Major League Football, Inc. (the “Company,” “we,” “our” or “us”) is seeking to establish, develop and operate Major League Football ("MLFB") as a professional spring football league. Our anticipated launch is March 2016. We intend to fill a void by establishing franchises in cities overlooked by existing professional sports leagues and provide fans with professional football in the NFL off-seasons, which will enable it to take a totally non-adversarial approach towards the National Football League ("NFL"). Our spring and early summer schedule ensures no direct competition with autumn/winter sports, including the 32 NFL, 9 Canadian Football League, 627 NCAA, 91 NAIA, 142 JUCO's, 27 Canadian Universities, and thousands of high school and collegiate institution teams.

On July 14, 2014 our Company entered into and closed a definitive Asset Purchase Agreement with Major League Football, LLC, a company formed in 2009, to establish, develop and operate a professional spring/summer football league to be known as “Major League Football” (“MLFB”). Pursuant to the terms of the Asset Purchase Agreement, we issued Major League Football, LLC 8,000,000 shares of our common stock in exchange for assets of Major League Football, LLC primarily comprised of business plans and related proprietary documents, trademarks and other related intellectual property related to the development of the league. Also, our Board of Directors was expanded, a new management team was appointed, and a number of league consultants were retained by our Company. On November 24, 2014, we changed our name to Major League Football, Inc. from Universal Capital Management, Inc.

Unless the context otherwise requires, all references to the “Company,” “we,” “our” or “us” and other similar terms collectively means Major League Football, Inc., a Delaware corporation. Our principal offices are presently located at 6230 University Parkway, Suite 301, Lakewood Ranch, Florida, 34240. Our telephone number is (774) 213-1995. Our Internet website is located at: www.mlfb.com.

The accompanying unaudited financial statements have been prepared assuming the Company will continue as a going concern. As reflected in the accompanying unaudited financial statements, the Company had no revenue, and a net loss and net cash used in operating activities of $635,725 and $67,663 respectively, for the three months ended July 31, 2015. Additionally, at July 31, 2015, the Company has minimal cash and has a working capital deficit of $1,659,841, an accumulated deficiency of $15,125,290 and a stockholders' deficiency of $1,599,687, which could have a material impact on the Company's financial condition and operations. As a result of the significant working capital deficit at July 31, 2015, the Company does not have sufficient cash resources or current assets to pay its obligations.

During the three months ended July 31, 2015, the Company received $18,000 of proceeds from the issuance of convertible unsecured promissory notes and $20,000 from the issuance of unsecured promissory notes. See Note 8 - Subsequent Events.

In view of these matters, recoverability of any asset amounts shown in the accompanying unaudited financial statements is dependent upon the Company's ability to close on equity financing to implement its MLFB business plan and achieve a level of profitability - see Note 8 – Subsequent Events. These matters raise substantial doubt about the Company's ability to continue as a going concern. The accompanying unaudited financial statements do not include any adjustments relating to the recoverability or classification of recorded assets and liabilities that might result should the Company be unable to continue as a going concern.

F-6

MAJOR LEAGUE FOOTBALL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

JULY 31, 2015

NOTE 1- NATURE OF OPERATIONS, BASIS OF PRESENTATION, GOING CONCERN, AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Basis of Presentation

The accompanying interim financial statements of the Company are unaudited pursuant to certain rules and regulations of the Securities and Exchange Commission and include, in the opinion of management, all adjustments (consisting of only normal recurring accruals) necessary for a fair statement of the results of the periods indicated. Such results, however, are not necessarily indicative of results that may be expected for the full year. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations. The accompanying interim financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended April 30, 2015, as filed with the Securities and Exchange Commission on August 13, 2015. The interim operating results for the three months ending July 31, 2015 are not necessarily indicative of operating results expected for the full year.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying disclosures. Although these estimates are based on management's best knowledge of current events and actions the Company may undertake in the future, actual results could differ from the estimates. Significant estimates include the valuation of stock-based compensation and settlements and the valuation allowance on deferred tax assets.

Cash Equivalents

For the purposes of the statement of cash flows, the Company considers all investment instruments purchased with maturity of three months or less to be cash and cash equivalents.

Concentrations

Concentration of Credit Risk

Certain financial instruments potentially subject the Company to concentrations of credit risk. These financial instruments consist primarily of cash. At July 31, 2015, the Company did not have deposits with a financial institution that exceeded the FDIC deposit insurance coverage.

Concentration of Revenues

Innovation Industries accounted for 100% of our revenue for the three months ended July 31, 2014.  All of the revenue recorded related to our prior business plan.

Fair Value of Financial Instruments

The Company's financial instruments consist of cash, receivables, accounts payable and accrued expenses. The carrying values of cash, receivables, accounts payable and accrued expenses approximate fair value because of their short maturities.

The carrying value of the notes payable approximates fair value since the interest rate associated with the debt approximates the current market interest rates.

F-7

MAJOR LEAGUE FOOTBALL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

JULY 31, 2015

NOTE 1- NATURE OF OPERATIONS, BASIS OF PRESENTATION, GOING CONCERN, AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Revenue Recognition

Management Services for Equity Investments

The Company recognizes management services revenue for equity investments received as payment in accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 505-50-05, Accounting by a Grantee for an Equity Instrument to be Received in Conjunction with Providing Goods or Services. The Company enters into a management service agreement with a portfolio company to provide services defined in a contract for equity instruments in the form of the portfolio company's common stock or warrants to purchase common stock. The fair value of the common stock is the portfolio company's current fair market value and the fair value of the warrant is determined using the Black-Scholes method of valuation. The fair value of the equity instruments is also the Company's cost basis in the portfolio company's securities and the income that is recognized for management services. The Company recognizes management services revenue for which payment is to be received in cash as services are provided and in accordance with the revenue recognition criteria of the Securities and Exchange Commission. If persuasive evidence of an arrangement exists, the price is fixed or determinable and collectability is reasonably assured, revenue is deferred and recognized evenly as services are provided over the life of the contract unless otherwise stated in the contract.

All revenue for the Company in the amount of $20,000 for the three months ended July 31, 2014 was recorded as management services.

Stock Based Compensation

The Company accounts for stock based compensation in accordance with FASB ASC 718, Compensation – Share Based Compensation. This statement requires the recognition of compensation expense measured at fair value when the Company obtains employee services in stock-based payment transactions. For stock based compensation to non-employees, the Company follows the measurement and recognition criteria of ASC 505-50, Equity Payments to Non-Employees.

Income Taxes

We account for income taxes in accordance with FASB ASC 740 — Income Taxes. Under this method, deferred income taxes are determined based on the estimated future tax effects of differences between the financial statement and tax basis of assets and liabilities given the provisions of enacted tax laws. Deferred income tax provisions and benefits are based on changes to the assets or liabilities from year to year. In providing for deferred taxes, we consider tax regulations of the jurisdictions in which we operate, estimates of future taxable income, and available tax planning strategies. If tax regulations, operating results or the ability to implement tax-planning strategies vary, adjustments to the carrying value of deferred tax assets and liabilities may be required. Valuation allowances are recorded related to deferred tax assets based on the “more likely than not” criteria of FASB ASC 740 — Income Taxes.

FASB ASC 740 requires that we recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the “more-likely-than-not” threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. Tax penalties and interest are included in other income (expense) in the statement of operations and comprehensive loss.

Net Loss per Share of Common Stock

Basic net loss per common share (Basic EPS) excludes dilution and is computed by dividing net loss by the weighted average number of common shares outstanding or issuable during the period. Diluted net loss per share (Diluted EPS) reflects the potential dilution that could occur if stock options or other contracts to issue common stock, such as warrants or convertible notes, were exercised or converted into common stock. Common stock equivalents were not utilized to compute diluted loss per share as their effect would have been anti-dilutive for the three months ended July 31, 2015 and 2014, respectively. Therefore, diluted EPS equals basic EPS.

F-8

MAJOR LEAGUE FOOTBALL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

JULY 31, 2015

NOTE 1- NATURE OF OPERATIONS, BASIS OF PRESENTATION, GOING CONCERN, AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

At July 31, 2015, there were outstanding stock options to purchase 8,740,000 shares and 850,000 stock warrants to purchase shares respectively of the Company's common stock which may dilute future earnings per share.

Recently Issued Pronouncements

The Company has evaluated recent accounting pronouncements and their adoption has not had and is not expected to have, a material impact on the Company's financial position or results of operations. Additionally, other new pronouncements issued but not yet effective until after July 31, 2015 are not expected to have a significant effect on the Company's financial position or results of operations.

NOTE 2 – BUSINESS RISKS AND UNCERTAINTIES

Effective July 14, 2014, the Company entered a new a new business structure and business plan as MLFB.

The likelihood of our success must be considered in light of the risks frequently encountered by early stage companies. These risks include our potential inability to:

·

Establish MLFB as a viable sports league;

·

Establish product sales and marketing capabilities;

·

Establish and maintain markets for our league and potential products;

·

Identify, attract, retain and motivate qualified personnel; and

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Maintain our reputation and build trust with fans.

Accordingly, we cannot assure you that we will achieve or sustain profitability or generate sufficient cash flow from operations to meet our planned capital expenditures, working capital and debt service requirements. Our ability to obtain additional financing from other sources depends on many factors beyond our control, including the state of the capital markets and the prospects for our business. The necessary additional financing may not be available to us or may be available only on terms that would result in further dilution to the current owners of our common stock.

Our Company intends on financing its future development activities and its working capital needs largely from the sale of debt and equity securities, until such time that funds provided by operations, if ever, are sufficient to fund working capital requirements.

NOTE 3 – DEBT

Convertible notes and notes payable consists of the following:

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MAJOR LEAGUE FOOTBALL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

JULY 31, 2015

NOTE 3 – DEBT (CONTINUED)

In July 2014, the Company commenced an offering of up to $3,000,000 of convertible unsecured promissory notes to provide working capital for the Company. The terms include a four percent (4%) per annum interest rate, payable in full with interest nine (9) months from the issuance date, convertible into common stock of the Company at a 30% discounted rate to the offering price of an anticipated future private offering of common stock of the Company for 30 days after the Company delivers the offering documents to the lender and a one (1) year warrant to purchase up to 35% of the number of shares obtained upon conversion of the note as described above. Due to the contingency on the conversion, any accounting for conversion terms cannot be measured or recognized until the future offering occurs.

On February 24, 2015 and amended May 29, 2015, the Company provided additional conversion provisions to the holders of the convertible unsecured promissory notes at 4% discussed above. The additional provisions provide the holders of the notes (i) the right to convert the principal, along with all interest thereon, into shares of the registrant’s common stock at the conversion price of $0.30 per share, and (ii) a one (1) year warrant to purchase up to 100% of the number of shares obtained upon conversion of the note at the exercise price of $1.00 per share. At July 31, 2015, no holders of the convertible unsecured promissory notes had elected to convert into common stock.

At July 31, 2015, $372,860 of the principal amount of the convertible unsecured promissory notes were in default as related to their term of nine (9) months from the issuance date.  See Note 8 – Subsequent Events.

During the three months ended July 31, 2015, the Company received $18,000 of gross proceeds from this private placement offering and at July 31, 2015, had received a total of $481,560 of gross proceeds. At July 31, 2015, the Company had recorded $15,332 of accrued interest related to the convertible unsecured promissory notes.

Effective July 14, 2014, the Company granted 1,987,872 shares of its common stock based on the settlement of $331,553 in debt (principal and accrued interest). The shares of common stock were valued at $0.05 per share, the quoted market price on the date of grant and resulted in a gain on the settlement of debt in the amount of $232,159. 1,457,874 shares of common stock were granted to a related party and as a result, $170,086 was charged to additional paid in capital instead of a gain on the settlement of debt. The remaining gain in the amount of $62,073 was recorded in Other Income (Expense) in the statement of operations.

From February to July 2015, an officer of the Company has provided $15,200 of funds for working capital requirements. There is no formal agreement and no interest is being accrued by the Company with the principal due on demand. At July 31, 2015, the Company has recorded the amount as Notes Payable – Related Parties in the accompanying unaudited financial statements. See Note 6 – Related Party Transactions.

On July 31, 2015, an existing investor of the Company provided $20,000 of funds for working capital requirements structured as an unsecured promissory note.  The terms of the promissory note requires a $25,000 balloon repayment including principal and interest on August 31, 2015.  The Company has recorded the Note Payable at the gross amount of $25,000 less $5,000 of original issue discount that will be amortized to interest expense upon repayment.  See Note 8 – Subsequent Events.

NOTE 4 – STOCK BASED COMPENSATION

Stock Options to Consultants

Effective July 14, 2014, the Company granted 4,150,000 stock options to purchase common stock to consultants pursuant to the 2014 Plan and shall vest pursuant to the vesting provision contained in each of the stock option agreements. The exercise price of the stock options is $0.05 per share.

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MAJOR LEAGUE FOOTBALL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

JULY 31, 2015

NOTE 4 – STOCK BASED COMPENSATION (CONTINUED)

Of the 4,150,000 stock options, 1,100,000 vested immediately on the grant date of July 14, 2014 and the remaining 3,050,000 vest over a period of three to four years based upon the specific consulting agreements. The Company valued the stock options in accordance with ASC 505, Stock Compensation – Non Employees, by using the Black Scholes Pricing Model.

The 1,100,000 stock options that vested immediately on the grant date of July 14, 2014 were valued at $55,000 and expensed to consulting expense. In January 2015, 300,000 of the vested stock options were exercised leaving a balance of 800,000 unexercised vested stock options at July 31, 2015.

The remaining 3,050,000 unvested stock options are being re-measured by the Company each reporting period and the resulting fair value is used to determine the new remaining consulting expense to be recorded over the vesting period of three to four years. Effective in December 2014, 1,050,000 of the unvested stock options were canceled due to the termination of the underlying consulting agreements. As a result, the consulting expense for the remaining 2,000,000 unvested stock options was $73,576 for the three months ended July 31, 2015 and $1,688 for the period from July 14, 2014 to July 31, 2014.

The Company used the following assumptions in the calculation:

Stock Options to Employees

On February 24, 2015, pursuant to the terms of the 2014 Employee Stock Plan the Company issued to its employees, options to purchase up to 2,900,000 shares of common stock at an exercise price of $0.30 per share. The options vest over a period of 4 years, with 580,000 options vesting immediately. All of these options expire on February 23, 2025. In addition, on February 24, 2015, the Company granted Jerome Vainisi, the Company’s expected Chief Executive Officer, an option to purchase up to 3,000,000 shares of common stock at an exercise price of $0.30 per share. These options vest over a two year period, with 250,000 options vesting immediately and the remaining 2,750,000 options vesting in eight equal quarterly installments of 343,750 options. It is anticipated that Mr. Vainisi will commence serving as the Company’s Chief Executive Officer in the near future upon the finalization of his employment agreement.

As a result, a total of 5,900,000 stock options were granted on February 24, 2015. Of the 5,900,000 stock options, 830,000 vested immediately on the grant date of February 24, 2015 and the remaining 5,070,000 would vest over a period of two to four years based upon the specific agreement. The Company valued the stock options in accordance with ASC 718, Stock Compensation, using the Black Scholes Pricing Model to estimate fair value. The Company used the 'simplified method' for estimating the ‘remaining expected contractual term' because it does not have sufficient information to make more accurate estimates of the remaining expected term or employee exercise behavior (e.g., employee exercise patterns by industry and/or other categories of companies).

The 830,000 stock options that vested immediately on the grant date were valued at $390,100 and recorded to stock based compensation expense.

The remaining 5,070,000 unvested stock options had a fair value of $2,382,900 on the grant date and will be amortized ratably over the vesting periods. For the three months ended July 31, 2015, the Company recorded $219,991 in stock based compensation expense.

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MAJOR LEAGUE FOOTBALL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

JULY 31, 2015

NOTE 4 – STOCK BASED COMPENSATION (CONTINUED)

The Company used the following assumptions in the calculation:

The following table summarizes employee and consultant stock option activity of the Company for the three months ended July 31, 2015:

Stock Warrants

Effective July 14, 2014, the Company granted 2,000,000 warrants to purchase common stock, exercisable at $0.01 per share, to a consultant for services to be provided over a one year period. The warrant vested immediately and have an exercise period of one year. The Company valued the stock warrant in accordance with ASC 505-50, Equity Based Payments to Non-Employees, using the Black Scholes Pricing Model to determine the fair value. The fair value for these stock warrants was $81,624, which was being amortized to consulting expense over the term of the agreement.

The Company used the following assumptions in the calculation:

On January 1, 2015 the Company executed a rescission agreement with the Consultant terminating the consulting agreement and canceling the warrant issuance, effective retroactively to July 14, 2014. Therefore, the Company reversed $24,376 of consulting expense related to this agreement.

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MAJOR LEAGUE FOOTBALL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

JULY 31, 2015

NOTE 4 – STOCK BASED COMPENSATION (CONTINUED)

The following table summarizes consultant stock warrant activity of the Company for the three months ended July 31, 2015:

NOTE 5 – CAPITAL SHARE TRANSACTIONS

Capital Structure

The Company is authorized to issue up to 150,000,000 shares of common stock at $0.001 par value per share. As of July 31, 2015, 35,190,009 shares were issued and outstanding. Additionally, there are 5,250,000 shares of unvested common stock to be issued to employees over the remaining period of three years through July 14, 2018. The 5,250,000 unvested shares of common stock are considered legally issued and outstanding as they have all rights of ownership, other than the right to receive dividends, and in the case of 1,500,000 of the shares, the right to vote.

Common Stock Issued

On July 14, 2014, the Company granted 19,000,000 shares of its common stock to the new MLFB management team. Of the 19,000,000 shares, 12,000,000 vested immediately and the remaining 7,000,000 vest in equal annual installments over a 4 year employment period commencing July 2015. During the three months ended July 31, 2015, 1,750,000 of the 7,000,000 shares vested leaving a balance of 5,250,000 unvested shares and the Company recorded the issuance of the 1,750,000 shares at its par value of $1,750 with an offset to additional paid in capital. The unvested shares were valued at $0.05 per share or $350,000 and are being amortized to compensation expense over the vesting period.  During the three months ended July 31, 2015, the Company recorded $22,055 of compensation expense related to vesting of the shares.

On July 14, 2014, the Company granted 2,649,642 shares of its common stock for prior professional and employee services provided to the Company. The shares of common stock were granted at a contractually agreed value of $0.01 per share and were vested immediately. The shares of common stock were valued for accounting purposes at $0.05 per share, the quoted market price on the date of grant and resulted in $132,482 of stock based compensation expense as all of the shares were vested on the date of grant. The 2,649,642 shares issued included 100,000 shares to Stradley, Ronon Stevens & Young, LLP ("Stradley"), a law firm that has a judgment against the Company in the amount of $166,129. The Company is in discussion with the law firm to resolve the Judgment and anticipates a resolution in the near future. (See Note 7 – Commitments and Contingencies).

Effective November 28, 2014, the Company engaged an investor relations firm as a consultant to provide services related to shareholder information and public relations. The term of the agreement is for six (6) months. As compensation for the services, the Company issued the consultant 250,000 shares of common stock and will pay the consultant a monthly cash fee of $2,500. The Company valued the stock based upon the quoted market price of $0.90 on the date of grant, or $225,000. The $225,000 is being amortized to consulting expense over the 6 month term of the consulting agreement. At April 30, 2015, $37,500 of this amount (final month of the agreement) was recorded as prepaid consulting and during the three months ended July 31, 2015, was amortized to consulting expense in the accompanying unaudited statements of operations.

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MAJOR LEAGUE FOOTBALL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

JULY 31, 2015

NOTE 5 – CAPITAL SHARE TRANSACTIONS (CONTINUED)

Effective March 23, 2015, the Company engaged a consultant to provide services primarily related to strategic planning, business development and strategic advisory services. The term of the agreement is two (2) years and as compensation for the agreement, the Company issued the consultant 500,000 shares of common stock. The Company valued the stock based upon the quoted market price of $0.30 on the date of grant, or $150,000. The $150,000 is being amortized to consulting expense over the two year term of the consulting agreement. During the three months ended July 31, 2015, the Company recorded $18,750 of consulting expense and the remaining unamortized amount of $123,236 is recorded as 1) $75,000 of prepaid consulting – current and 2) $48,236 of prepaid consulting – non-current in the accompanying unaudited financial statements at July 31, 2015.

NOTE 6 – RELATED PARTY TRANSACTIONS

On July 14, 2014, the Company granted 1,457,874 shares of its common stock in exchange for canceling $242,980 in debt, including principal and accrued interest. The shares of common stock were valued at $0.05 per share, the quoted market price on the date of grant and resulted in a gain on the settlement of debt in the amount of $170,086 and this amount was charged to additional paid in capital in the accompanying unaudited financial statements.

During the three months ended July 31, 2015, the Company recorded $180,000 of compensation for its management in accordance with executed management service agreements. At July 31, 2015, a total of $420,000 was unpaid and is recorded as accounts payable – related parties in the accompanying unaudited financial statements.

From February to July, an officer of the Company provided $15,200 of funds for working capital requirements. There is no formal agreement and no interest is being accrued by the Company with the principal due on demand. At July 31, 2015, the Company has recorded this amount as notes payable – related parties in the accompanying unaudited financial statements. See Note 3 - Debt.

See Note 8 - Subsequent Events.

NOTE 7 – COMMITMENTS AND CONTINGENCIES

On July 31, 2015, the Company executed a lease agreement for its new corporate headquarters and training facility in Lakewood Ranch, Manatee County, Florida.  The term of the lease is two (2) years at a monthly rental rate of $11,918. At closing, the Company paid an $11,918 security deposit and is recorded as a current asset in the accompanying interim financial statements.  The Company has an option to extend the terms and conditions of the lease for an additional three (3) years by giving notice at least six (6) months before the expiration of the term.

As of July 31, 2015, the total future minimum lease payments under operating leases in respect of leased premises are payable as follows:

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MAJOR LEAGUE FOOTBALL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

JULY 31, 2015

NOTE 7 – COMMITMENTS AND CONTINGENCIES (CONTINUED)

Stradley Ronon Stevens & Young, LLP

On May 9, 2009, Stradley filed a lawsuit against the Company in the U.S. District Court for the District of Delaware for failure of the Company to pay legal fees owed in the amount of $166,129. On April 2, 2009, in order to avoid the cost of litigation, the Company agreed to a Consent of Judgment against it in the amount of $166,129 and the Company has recorded this amount as accounts payable as of July 31, 2013. In addition to the previously issued 80,000 shares of common stock, on July 14, 2014, the Company issued 100,000 shares of common stock to Stradley and is in discussion with the law firm to resolve the Judgment and anticipates a resolution in the near future. (See Note 5 – Capital Share Transactions).

Unpaid Taxes and Penalties

At July 31, 2015, the Company owed the State of Delaware $110,154 for unpaid state income taxes from the tax year ended April 30, 2007. The unpaid state income taxes are included as state income taxes payable in accompanying unaudited financial statements. Additionally, the Company owes the IRS and the State of Delaware for penalties and interest from the tax year ending April 30, 2007 of approximately $251,000. The interest and penalties are included as accrued expenses in the accompanying unaudited financial statements at July 31, 2015. The Company has agreements with both agencies to pay a minimum per month to avoid any collections or additional liens. However, due to cash flow constraints, the Company has been unable to pay the minimum monthly amounts and may be in default of the agreements with both agencies.

NOTE 8 – SUBSEQUENT EVENTS

Effective August 28, 2015, the Company granted 1,400,000 warrants to purchase common stock, exercisable at $0.35 per share, to a consultant for services to be provided over a one year period. Of the 1,400,000 stock warrants, 700,000 vested immediately on the grant date of August 28, 2015 and the remaining 700,000 vest six (6) months from the grant date on February 28, 2016. The warrant has an exercise period of thirty (30) months through February 28, 2018. The Company valued the stock warrant in accordance with ASC 505-50, Equity Based Payments to Non-Employees, using the Black Scholes Pricing Model to determine the fair value.

According to ASC 505-50, a measurement date was reached at the date of grant, or August 28, 2015 for the 700,000 warrants which vested on the grant date. For the 700,000 warrants that vest in six (6) months, the fair value will be re-valued at each reporting date until the vesting date of February 28, 2016.

The 700,000 stock warrants that vested immediately on the grant date were valued at $289,867, recorded to prepaid expense and will be amortized ratably to consulting expense over the twelve (12) month service period. The remaining 700,000 unvested stock warrants had a fair value of $289,867 on the grant date and will also be amortized ratably to consulting expense over the twelve (12) month service period, however these warrants will be re-valued through the vesting date of February 28, 2016, and the adjusted valuation, less the amounts amortized through the vesting date, will be amortized over the remaining service period of six (6) months.

The Company used the following in the calculation:

On August 31, 2015, an officer of the Company personally repaid $20,000 of an unsecured promissory note that had a required $25,000 balloon payment to be made by the Company as required under the terms of a promissory note.  The Company is in the process of obtaining additional capital to repay the officer but as of the date of these unaudited financial statements, this had not been completed - See Note 3 – Debt.

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MAJOR LEAGUE FOOTBALL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

JULY 31, 2015

NOTE 8 – SUBSEQUENT EVENTS (CONTINUED)

On September 8, 2015, the Company announced that it has entered into a privately negotiated Securities Purchase Agreement (the “Securities Purchase Agreement”) with an investment group.

Pursuant to the Securities Purchase Agreement, the Company will sell to the investment group: (i) 5,000,000 shares of Series A 10% Convertible Preferred Stock (the “Series A Preferred Stock”) and a warrant (the “Warrant”) to purchase up to an additional 5,000,000 shares of the common stock of the Company, par value $0.001 per share (the “Common Stock”), at an exercise price equal to 125% of the Conversion Price of the Series A Preferred Stock. The “Conversion Price” is equal to 75% of the 15 day VWAP price of the Common Stock; and (ii) the number of shares of Common stock calculated pursuant to Securities Purchase Agreement at a price per share equal to the VWAP price of the Company’s Common Stock during the twenty (20) consecutive trading day period beginning on the last trading date prior to the date of delivery to the Company of a $10,000,000 investment; all in exchange for $15,000,000 and a right of first refusal to purchase a Company franchise in Missouri City, TX (the “Right of First Refusal”). All of the securities offered and sold pursuant to the Securities Purchase Agreement are restricted and no registration rights are contemplated.

The $5 million sale and purchase of the Series A Preferred Stock and Warrant is expected to occur at a closing on or before September 30, 2015, subject to customary closing conditions. The $10 million sale and purchase of the Common Stock is expected to occur at a closing on or before January 31, 2016, subject to customary closing conditions. The Right of First Refusal vests on the closing date of sale and purchase of the Common Stock. No assurances can be made that one or both of the closings will occur or that the Right of First Refusal will vest.

In September 2015, the Company obtained extensions of convertible unsecured promissory notes in default as related to their term of nine (9) months from the issuance date. As a result, the new repayment date for these convertible unsecured promissory notes is October 31, 2015.  See Note 3 – Debt.

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