MAJOR LEAGUE FOOTBALL INC - Quarter Report: 2016 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, 2016

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 12, 2016 was 47,815,069.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

See Appendix

Introduction

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.

Plan of Operation

Major League Football, Inc. (the “Company”) is seeking to establish, develop and operate Major League Football ("MLFB") as a professional spring/summer football league. Our anticipated launch is March 2017. 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.

During April 2016, we determined to reschedule our inaugural year of professional, spring-league football from spring 2016 to spring 2017 due to a lack of adequate funding, and instead during 2016 to launch a development season to develop players, plan for staffing in cities and provide ample time for ticketing agencies and potential broadcasting partners to advertise and market MLFB's formal kick-off in 2017.

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.

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 2017. Specifically, we anticipate that we will need to raise approximately $10 million prior to November 2016 and subsequently, commence another offering or offerings to raise an additional $40 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 players’ services that result in controlled player payrolls without violating antitrust laws

·

Greater parity among teams

·

Focus on the bottom line

·

Controlled costs

1

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 placing teams in well respected and football fan friendly 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 few 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 all while taking advantage of the player name recognition that comes with fantasy football.

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

2

Professional Sports Market

In 2015, the sports media market in North America rose to $63.6 billion in revenue. At the conclusion of this year, that number is expected to climb to $67.07 billion. In 2019, when some of the professional sports leagues will begin contract extensions for television rights, that number is projected to climb to $73.52 billion. The primary reason for such growth is projected increasing revenues derived from media rights deals such as television but also digital media rights, which could lead the digital sports space to ultimately surpass sales from gate revenues. Sports media rights are projected to go from $14.6 billion in 2014 to $20.6 billion by 2019, accounting for a compound annual rate increase of 7.2% per year.

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 a few 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

·

A more 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, none of the proposed Major League Football team cities have shown 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 in prime time weekend viewing time slots, through a broad array of regional telecasts, with key matchups of national interest featured as late games on Saturday, Sunday afternoons and evenings. We believe that scheduling and broadcasting our games in standard time slots will prevent potential fragmentation of our audience and commoditization our product. 

3

Integration of Television and Media

On January 7, 2016, Major League Football entered into a two-year television contract with American Sports Network (“ASN”), a division of Sinclair Networks Group, which is owned by Sinclair Broadcast Group. The agreement included broadcasting for all regular season and post season MLFB games in both 2016 (season postponed) and 2017, along with promotional activity at the local level in each MLFB’s franchise markets. Since MLFB’s teams did not play any games in Spring 2016, on September 12, 2016, MLFB and ASN entered into a mutual termination agreement whereby the television contract was terminated and each party released the other party from liability relating to the television contract. The mutual termination agreement provides Major League Football with the ability to reach larger television viewing audience, increase its number of television advertising commercials & sponsorship opportunities in each game and diversify the number of sports networks carrying Major League Football games. Additionally, Major League Football will have the opportunity to increase its television revenue since they will be able to increase the size of its television audience distribution and Major League Football will no longer be sharing commercial & sponsorship spots with ASN. Diversifying the number of sports networks will provide Major League Football with additional promotion opportunities and the ability to further broaden its audience.

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.

Timeline of Significant Events

·

Recruited Jerry Vainisi as Acting CEO - On December 2, 201, MLFB recruited Jerome R. Vainisi to serve as our Chief Executive Officer, subject to the negotiation various conditions. Although we never formalized Mr. Vainisi’s status as our Chief Executive Officer, he worked with us from December 2014 to December 2015, and during his tenure, he helped us develop MLFB. Mr. Vainisi has a level of excellence and success within multiple levels of professional football. As General Manager of the Chicago Bears in 1985, he guided the franchise to its only Championship when his team defeated the New England Patriots in Super Bowl XX. He served as Vice President of Player Personnel for the Detroit Lions, and subsequent to that time, Mr. Vainisi and former Dallas Cowboys Executive Tex Schramm guided the NFL in establishing and operating the World League of American Football, which later became NFL Europe.

·

 Economic Development Package.  In May 2015, the Manatee Board of County Commissioners in Lakewood Ranch, Florida approved an economic development package to entice Major League Football to locate its headquarters and training facilities in Manatee County, Florida. All current economic development incentives remain for our 2017 season.

·

 Set up Corporate Headquarters and Training Camp Facilities in Lakewood Ranch, FL.  In June 2015 we decided to locate the Company’s new corporate headquarters and training facility in Lakewood Ranch, Manatee County, Florida.

4

·

 Hired Herman Edwards as Senior Advisor. In October 2015 we hired former NFL head coach and current ESPN NFL analyst, Herm Edwards, as the League’s and Management Team’s Senior Advisor.

·

 Try Out Camps. From October through December 2015, Major League Football held and completed the league's inaugural "Pro Day" tryout camps in 14 cities around the U.S., in doing so, Major League Football was able to qualify and vet over 2,000 athletes and sign over 1,400 of them to register for our inaugural draft. Upon completion of our inaugural draft from February 26-29, 2016, we then signed 560 players to player contracts with the league.

·

 Launched New Website. In December 2015 we launched our new official MLFB website.

·

Television Contract.  On January 7, 2016, we entered into a two-year television contract with American Sports Network (“ASN”), a division of Sinclair Networks Group, which is owned by Sinclair Broadcast Group. The agreement included broadcasting for all regular season and post season MLFB games in both 2016 (season postponed) and 2017. Since MLFB’s teams did not play any games in Spring 2016, on September 12, 2016, MLFB and ASN entered into a mutual termination agreement whereby the television contract was terminated and each party released the other party from liability relating to the television contract.

·

 Hired Rick Nichols as VP of Business Development. In January 2016 we hired Rick Nichols as Vice President of Business Development. Rick Nichols has over 27 years’ experience in the National Football League as a team administrator, with the Houston Oilers, (now Tennessee Titans), Denver Broncos and Arizona Cardinals. Rick will serve as lead negotiator for all our stadium leases, community development and oversea ticketing in each of our franchise cities.

·

 Held and Completed First Player Draft. During January 2016, we held and completed our first player draft. The league selected 560 players for its eight (8) team rosters to play in its 2016 inaugural season from an applicant pool of over 2,000 players. The league selected eight players that it designated as “franchise players” for the league.

·

Commenced First Free Agency Signings. During February 2016, we commenced the league’s first free agency period where each coach signed 10 additional players for their team.

·

Launched 2016 Development Season; Postponed Inaugural Season. During April 2016, we determined to reschedule our inaugural year of professional, spring-league football from spring 2016 to spring 2017 due to a lack of adequate funding, and instead during 2016 to launch a development season to develop players, plan for staffing in cities and provide ample time for ticketing agencies and our potential broadcasting partners to advertise and market MLFB's formal kick-off in 2017.

·

Executed BodyHype of Canada Contract.  In May 2016, MLFB entered into an agreement with BodyHype of Canada as the Official Uniform Supplier for MLFB.  They will also supply us with other league merchandise.

·

Election of Wesley S. Chandler to Board of Directors.  In August 2016, Wesley S. Chandler, our Company’s President, was elected to our board of directors.

Financial Condition

As reflected in the accompanying financial statements, the Company had a net loss and net cash used in operations of $1,783,635 and $14,584 for the three months ended July 31, 2016. Additionally, at July 31, 2016, the Company has zero cash and has an accumulated deficiency of $22,905,467, which could have a material impact on the Company’s financial condition and operations.

5

Results of Operations

Three months ending July 31, 2016, compared to the three months ended July 31, 2015

For the three months ended July 31, 2016 and 2015, we had no revenue.  The Company is working through its business plan whereby it is seeking to establish, develop and operate MLFB as a professional spring football league with an anticipated launch date in 2017.  

Total operating expenses for the three months ended July 31, 2016 were $1,832,611 as compared to total operating expenses for the three months ended July 31, 2015 of $629,656.  The increase from 2015 to 2016 was primarily from a $1,239,193 increase in professional fees.  The increase in professional fees was primarily from (1) $758,808 for the issuance of stock warrants for prior consulting services, and (2) a $438,070 increase in the amortization of prepaid consulting services.

Other income (expense) for the three months ended July 31, 2016 was $48,976 of income compared to $6,069 of expense for the three months ended July 31, 2015. The change from expense in 2015 to income in 2016 was primarily related to $216,744 of income from a change in the fair value of an embedded derivative liability with no corresponding amount for 2015, offset by a $158,892 increase in interest expense.  The increase in interest expense is primarily related to $138,631 for the amortization of debt discounts.  

As a result of the above, we had a net loss of $1,783,635 and a net loss of $635,725 for the three months ended July 31, 2016 and 2015, respectively.

Liquidity and Capital Resources

From inception, our Company has relied upon the infusion of capital through equity transaction, the issuance of debt and the sale of available-for-sale marketable equity securities to obtain liquidity. We had zero cash at July 31, 2016 and consequently, payment of operating expenses will have to come similarly from either equity capital to be raised from investors or from borrowed funds. There is no assurance that we will be successful in raising such additional equity capital or additional borrowings or if we can, that we can do so at a cost that management believes to be appropriate.

Critical Accounting Policies

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, 2016 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.

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

On June 22, 2016, TCA12, LLC (“landlord”) filed a lawsuit against the Company in the Circuit Court of the Twelfth Judicial Circuit in and for Manatee County, Florida against the Company related to the Company’s corporate office lease in Florida. The complaint was served on July 1, 2016. The lawsuit claims that the Company is indebted to the landlord in an amount in excess of $57,857 for unpaid rent plus an additional $224,596 for accelerated rent for a total of $282,453, but the landlord did not specifically seek the additional $224,596 for accelerated rent in its complaint. On August 5, 2016, the Company paid the landlord $100,000 and the landlord voluntarily dismissed the lawsuit.  The $100,000 payment was for an outstanding amount of $98.173, which included $3,699 in attorney's fees and the August 1, 2016 rent. As of the date of this report on form 10-Q, the Company has not paid the landlord the $19,269 in rent due on September 1, 2016 for the September 2016 rent, and is currently working with the landlord to avoid the landlord filing another suit against the Company for non-payment of rent.

Our Company 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.

The following exhibits are included herein:

7

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, 2016

(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, 2016

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. We have launched a “Development Season” for 2016 and our inaugural year of professional, spring-league football is anticipated to commence in March of 2017. The Company is using the Development Season to further develop players, plan for staffing in cities and provide ample time for ticketing agencies and potential broadcasting partners to advertise and market the formal kick-off in 2017. 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 schools and other collegiate institutions.

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.

Prior to July 13, 2014, our primary business was to identify and advise in development and market consumer products. Our strategy employed three primary channels: Direct Response Television (Infomercials), Television Shopping Networks and Retail Outlets. We sought to assist and enable entrepreneurs to introduce products to the consumer market. Entrepreneurs could leverage our experience and valuable business contacts in functions such as product selection, marketing development, media buying and direct response television production. Inventors and entrepreneurs submitted products or business concepts for our input and advice. We generated revenues from two primary sources (i) management of the entire business cycle of the consumer product and (ii) sales of consumer products, for which we received a share of net profits of consumer products sold.

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.

Going Concern

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 revenues, and a net loss and net cash used in operating activities of $1,783,635 and $14,584 respectively, for the three months ended July 31, 2016. Additionally, at July 31, 2016, the Company has a working capital deficit of $2,747,757, an accumulated deficiency of $22,905,467 and a stockholders' deficiency of $2,732,997, which could have a material impact on the Company's financial condition and operations.

F-6

MAJOR LEAGUE FOOTBALL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

JULY 31, 2016

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

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 achieve a level of profitability. These matters raise substantial doubt about the Company’s ability to continue as a going concern. Since inception, the Company has financed its activities from the sale of equity securities and from loans. The Company intends on financing its future development activities and its working capital needs largely from the sale of public equity securities and convertible debt securities, until such time that funds provided by operations, if ever, are sufficient to fund working capital requirements. The 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.

Basis of Presentation

The accompanying unaudited interim period 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 unaudited 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, 2016, as filed with the Securities and Exchange Commission on July 29, 2016. The interim operating results for the three months ending July 31, 2016 are not necessarily indicative of operating results expected for the full year.

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 in the accompanying financial statements include the allowance for doubtful receivables, valuation of collateral on certain receivables, valuation of derivative liabilities, valuation of beneficial conversion features in convertible debt, valuation of equity based instruments issued for other than cash, valuation allowance on deferred tax assets, depreciable lives and estimated residual value of furniture, fixtures and equipment.

Cash and Cash Equivalents

For the purpose of the statements of cash flows, the Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.  There were no cash equivalents at July 31, 2016 and 2015.

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, 2016 and 2015 the Company did not have deposits with a financial institution that exceeded the FDIC deposit insurance coverage and determined that it had no cash equivalents.

F-7

MAJOR LEAGUE FOOTBALL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

JULY 31, 2016

NOTE 1 – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Furniture, Fixtures and Equipment

Furniture, fixtures and equipment are stated at cost, net of accumulated depreciation.  For financial accounting purposes, depreciation is generally computed by the straight-line method over the following useful lives:

For the three months ended July 31, 2016, the Company recorded $116 of depreciation expense and at July 31, 2016, the accumulated depreciation balance was $413.

Provision for Loan Receivable and Collateral Deposit

In March 2016, the Company loaned $125,000 to a third party for the purpose of the third party making an investment that was expected to provide an additional return to the Company.  Due to significant uncertainties regarding the collectability of the original principal amount and/or any additional return, the Company recorded an allowance for the full amount of the Loan Receivable and classified as Provision for Loan Receivable in the accompanying unaudited financial statements.

In April 2016, the Company disbursed $50,000 of cash related to a collateral deposit with a third party that required additional deposits before a proposed transaction could be consummated.  At April 30, 2016, no further deposits had been made and as a result, the Company recorded an allowance for the full amount of the Collateral Deposit and classified as Provision for Collateral Deposit in the accompanying unaudited financial statements.

Convertible Promissory Notes and Related Embedded Derivatives

We account for the embedded conversion option contained in convertible instruments under the provisions of FASB ASC Topic No. 815-40, “Derivatives and Hedging – Contracts in an Entity’s Own Stock”.  The embedded conversion option contained in the convertible instruments were accounted for as derivative liabilities at the date of issuance and shall be adjusted to fair value through earnings at each reporting date.  The fair value of the embedded conversion option derivatives was determined using the Binomial Option Pricing model.  On the initial measurement date, the fair value of the embedded conversion option derivative was recorded as a derivative liability and was allocated as debt discount up to the proceeds of the notes with the remainder charged to current period operations as initial derivative expense.  Any gains and losses recorded from changes in the fair value of the liability for derivative contract was recorded as a component of other income (expense) in the accompanying statements of operations.

Fair Value of Financial Instruments

ASC 820, Fair Value Measurements and Disclosures, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:

Level 1

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

F-8

MAJOR LEAGUE FOOTBALL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

JULY 31, 2016

NOTE 1 – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Level 2

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.

Level 3

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The Company’s financial instruments consist principally of cash, amounts receivable, accounts payable, unsecured convertible notes payable, secured convertible notes payable, notes payable, notes payable – related party and an embedded conversion option liability. Pursuant to ASC 820, Fair Value Measurements and Disclosures and ASC 825, Financial Instruments, the Company believes that the recorded values of the other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.

Assets and liabilities measured at fair value on a recurring and non-recurring basis consist of the following at April 30, 2016:

The following is a summary of activity of Level 3 assets and liabilities for the three months ended July 31, 2016:

Changes in fair value of the embedded conversion option liability are included in other income (expense) in the accompanying unaudited financial statements.

Revenue Recognition

League Tryout Camps

The Company recognizes league tryout camp revenue on the dates that the tryout camps were held. There were no tryout camps held by the Company during the three months ended July 31, 2016.

Football League Operations

The Company will recognize revenue from future football league operations including gate, parking and concessions, stadium advertising and merchandising, licensing fees, sponsorships, naming rights, broadcast and cable, franchise fees, social media and on-line digital media including merchandising, advertising and subscriptions.  Since the football operations have not commenced and will not until March 2017, there was no revenue from football league operations during the three months ended July 31, 2016.

F-9

MAJOR LEAGUE FOOTBALL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

JULY 31, 2016

NOTE 1 – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Stock Based Compensation

Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award.

Pursuant to ASC 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.”  The expense is recognized over the service period of the award.  Until the measurement date is reached, the total amount of compensation expense remains uncertain.  The Company initially records compensation expense based on the fair value of the award at the reporting date.

Income Taxes

Deferred income tax assets and liabilities arise from temporary differences associated with differences between the financial statements and tax basis of assets and liabilities, as measured by the enacted tax rates, which are expected to be in effect when these differences reverse.  Deferred tax assets and liabilities are classified as current or non-current, depending upon the classification of the asset or liabilities to which they relate.  Deferred tax assets and liabilities not related to an asset or liability are classified as current or noncurrent depending on the periods in which the temporary differences are expected to reverse.  Valuation allowances are established when necessary to reduce the deferred tax assets to the amount expected to be realized.

The Company follows the provisions of FASB ASC 740-10 “Uncertainty in Income Taxes” (ASC 740-10).  Certain recognition thresholds must be met before a tax position is recognized in the financial statements.  An entity may only recognize or continue to recognize tax positions that meet a “more-likely-than-not” threshold.  As of July 31, 2016 and 2015, the Company does not believe it has any uncertain tax positions that would require either recognition or disclosure in the accompanying financial statements.  

Net Loss per Share of Common Stock

The Company computes net earnings (loss) per share in accordance with ASC 260-10, “Earnings per Share.”  ASC 260-10 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement.  Basic EPS is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period.  Diluted EPS gives effect to all dilutive potential common shares outstanding during the period.  The Company’s diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive.  At July 31, 2016, there were options to purchase 7,640,000 shares of the Company’s common stock, 9,593,746 warrants to purchase shares of the Company's common stock, 166,667 shares of the Company’s common stock reserved for issuance related to convertible unsecured notes payable and 2,986,817 shares of the Company’s common stock reserved for issuance related to convertible secured notes payable which may dilute future earnings per share.

F-10

MAJOR LEAGUE FOOTBALL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

JULY 31, 2016

NOTE 1 – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Related Parties

Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company.  Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests.  The Company discloses all related party transactions.  All transactions are recorded at fair value of the goods or services exchanged.

New Accounting Pronouncements

In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Presentation of Financial Statements­ Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entities Ability to Continue as a Going Concern (ASU 2014-15). The guidance in ASU 2014-15 sets forth management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern as well as required disclosures. ASU 2014-15 indicates that, when preparing financial statements for interim and annual financial statements, management should evaluate whether conditions or events, in the aggregate, raise substantial doubt about the entity's ability to continue as a going concern for one year from the date the financial statements are issued or are available to be issued. This evaluation should include consideration of conditions and events that are either known or are reasonably knowable at the date the financial statements are issued or are available to be issued, as well as whether it is probable that management's plans to address the substantial doubt will be implemented and, if so, whether it is probable that the plans will alleviate the substantial doubt. ASU 2014-15 is effective for annual periods ending after December 15, 2016, and interim periods and annual periods thereafter. Early application is permitted. The adoption of this guidance is not expected to have a material impact on the Company's unaudited financial statements.

The Company has evaluated other recent accounting pronouncements and their adoption, and has not had, and is not expected to have, a material impact on the Company's financial position or results of operations. Other new pronouncements issued but not yet effective until after April 30, 2016 are not expected to have a significant effect on the Company's financial position or results of operations.

NOTE 2 – DEBT

On January 6, 2016, the Company received $100,000 of proceeds from the issuance of a promissory note and recorded as Note Payable at July 31, 2016.  The terms of the promissory note include interest accrued at 8% annually and the principal and interest payable on demand.  Through July 31, 2016, the Company has accrued $2,676 of interest related to the promissory note and included in accrued interest in the accompanying unaudited financial statements.

F-11

MAJOR LEAGUE FOOTBALL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

JULY 31, 2016

NOTE 2 – DEBT (CONTINUED)

On June 6, 2016, the Company received $10,000 of proceeds from the issuance of a promissory note and recorded as Note Payable at July 31, 2016.  The terms of the promissory note include interest accrued at 4% annually and the principal and interest payable on demand.  Through July 31, 2016, the Company has accrued $61 of interest related to the promissory note and included in accrued interest in the accompanying unaudited financial statements.

From February to July 2015, an officer of the Company provided $15,300 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. During the three months ending October 31, 2015, the Company repaid $15,000 of these funds leaving a balance outstanding of $300. Additionally, on August 28, 2015, the officer personally repaid $20,000 of notes payable (see below). As a result, the outstanding balance owed to the officer is $20,300 at July 31, 2016, recorded as Notes Payable – Related Parties in the accompanying unaudited financial statements. See Note 5 – 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 required a $25,000 balloon repayment including principal and interest on August 31, 2015. The Company recorded the Note Payable at the gross amount of $25,000 less $5,000 of original issue discount to be amortized to interest expense upon repayment. On October 28, 2015, an officer of the Company personally repaid the note holder $20,000, representing the principal amount of the note payable (see above). In September 2015, the Company repaid the note holder $5,000 representing the interest component of the note and recorded the payment as interest expense against the original issue discount. As a result of the above repayments, the note payable has been paid in full.

On April 14, 2016, the Company received $50,000 of proceeds from the issuance of an unsecured convertible promissory note for working capital purposes.  The terms include interest accrued at 5% annually and the principal and interest payable in one year on April 14, 2017.  The note holder at its sole discretion, has the right to convert the principal amount, along with all accrued interest, into shares of the Company’s common stock at the conversion price of $0.30 per share.  Through July 31, 2016, the Company accrued $746 of interest related to the unsecured convertible promissory note and included in accrued interest in the accompanying financial statements.

F-12

MAJOR LEAGUE FOOTBALL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

JULY 31, 2016

NOTE 2 – DEBT (CONTINUED)

In accordance with ASC 470-20, the Company determined that a beneficial conversion feature (BCF) existed and utilizing the Black-Scholes Pricing Model, determined that the BCF fair value was $33,333 and recorded the $33,333 BCF as a debt discount with an offset to additional paid in capital.  The initial $33,333 BCF assumed that 166,667 shares would be issued upon conversion of the promissory note. The debt discount is being amortized as additional interest expense ratably over the one-year term of the note and during the three months ended July 31, 2016, the Company recorded $8,402 of interest expense with a corresponding reduction to the debt discount.  As a result, the debt discount has a balance of $23,378 at July 31, 2016.

The Company used the following assumptions in the calculation:

On March 9, 2016 (the Original Issue Date (OID), the Company received $445,000 of net proceeds for working capital purposes from the issuance of a $550,000 face value convertible secured promissory note with debt issue costs paid to or on behalf of the lender of $55,000.  The terms include interest accrued at 10% annually and the principal and interest payable is payable in one year on March 9, 2017.  Any amount of the principal or interest on this Note which is not paid when due shall bear Interest at the rate of the lower of Twenty-Two Percent (22%) per annum, or the highest rate permitted by law, from the due date thereof until the same is paid. Through July 31, 2016, $21,850 of accrued interest was recorded in the accompanying unaudited financial statements.

The lender has the right at any time after the effective date, at its election, to convert all or part of the outstanding and unpaid principal sum and accrued interest into shares of common stock of the Company, subject to certain conversion limitations set forth in the promissory note and certain price protection described below, as per the conversion formula: Number of shares receivable upon conversion equals the dollar conversion amount divided by the Conversion Price. The Conversion Price is equal to seventy percent (70%) of the average of the lowest three VWAPs of the Common Stock during the twenty (20) Trading Days immediately preceding a Conversion Date.

The promissory note contains customary affirmative and negative covenants of the Company. The Conversion Price is subject to “full ratchet” and other customary anti-dilution protections.

F-13

MAJOR LEAGUE FOOTBALL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

JULY 31, 2016

NOTE 2 – DEBT (CONTINUED)

In relation to the convertible secured promissory note, the Company issued the lender two warrants, a Series A warrant with a three (3) year term to acquire 250,000 shares of common stock of the Company at an exercise price of $1.02 per share and a Series B warrant with a three (3) year term to acquire 250,000 shares of common stock of the Company at an exercise price of $1.19 per share.

The principal amount of the promissory note, initially $550,000, may be prepaid in full solely during the dates set forth below, which shall be subject to the following upward adjustments, subject to the payment period upon which the date all amounts hereunder are paid in full by the Borrower occurs, as follows:

Subsequent to 120 days after the Issue Date, the Company has no right or option to prepay the principal amount of the promissory note.  As of July 9, 2016, the Company did not prepay the principal and this option is no longer available.

As collateral security, the promissory note is secured by all collateral granted by an officer of the Company to the Holder, including but not limited to two million (2,000,000) shares of Common Stock, in accordance with the terms and conditions of a Pledge Agreement by and between the officer and the lender, dated as of the OID.

The Company evaluated the secured convertible promissory note and the related warrants in accordance with ASC 815 “Derivatives and Hedging” and due to the price protection in the promissory note, determined that there was an embedded conversion feature that should be bifurcated and accounted for as a derivative liability in the balance sheet at fair value. The initial valuation on March 9, 2016 and recording of this derivative liability was $929,577 using the Binomial Lattice Option Pricing Model with the following assumptions; stock price $0.93, conversion price $0.47, expected term of 1 year, expected volatility of 247% and discount rate of 0.30%, accordance with ASC 815 “Derivatives and Hedging”.  The initial $929,577 derivative liability assumed that 1,161,972 shares would be issued upon conversion of the promissory note.

The Company evaluated the warrants and determined that there was no embedded conversion feature as the warrants contained a set exercise price with an adjustment only based upon customary items including stock dividends and splits, subsequent rights offerings and pro rate distributions. The Company calculated the relative fair value between the note and the warrants on the issue date utilizing the Black Scholes Pricing Model for the warrants.  As a result, the Company allocated $239,069 to the warrants and was recorded as a debt discount with an offset to additional paid in capital in the accompanying financial statements.  The warrant calculation used the following assumptions; stock price $0.93, Class A warrant exercise price $1.02, Class B warrant exercise $1.19, expected term of 3 years, expected volatility of 287% and discount rate of 0.30%.

On the note issue date of March 9, 2016, the Company recorded the following debt discounts as offsets to the $550,000 note payable and will be amortized over the one-year term of the note: (1) OID of $50,000, (2) debt issue costs of $55,000, (3) warrant fair value of $239,069 and (4) embedded conversion option liability of $205,931. As a result, the Company recorded a $723,646 expense for the initial fair value of embedded conversion derivative, recorded as a separate item in other income (expense) in the accompanying financial statements. The Company performed a revaluation of the embedded conversion liability using the Binomial Lattice Pricing Model at April 30, 2016 that resulted in a calculated value of $462,531.

The Company performed a revaluation of the embedded conversion liability using the Binomial Lattice Pricing Model at July 31, 2016 that resulted in a calculated value of $216,987.  As a result, the Company recorded $216,744 of income for the change in the fair value of compound embedded derivative, recorded as a separate item in other income (expense) in the accompanying unaudited financial statements.

F-14

MAJOR LEAGUE FOOTBALL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

JULY 31, 2016

NOTE 2 – DEBT (CONTINUED)

The revaluation of the embedded conversion liability at July 31, 2016 was calculated using the Binomial Lattice option pricing model with the following assumptions; stock price $0.29, conversion price $0.27, expected term of 0.61 years, expected volatility of 183% and discount rate of 0.28%.   The change in the derivative liability assumed that 2,986,817shares would be issued upon conversion of the promissory note at July 31, 2016.

For the three months ended July 31, 2016, the Company recorded $138,631 for amortization of the four debt discounts discussed above to interest expense in the accompanying unaudited financial statements.

NOTE 3 – STOCK BASED COMPENSATION

Stock Options

In May 8, 2006, the Company approved the 2006 Equity Incentive Plan ("2006 Plan") for the benefit of our directors, officers, employees and consultants, and which reserved 400,000 shares of our common stock for such persons pursuant to the 2006 Plan. The 2006 Plan has a term of 10 years and no option shall be exercisable more than 10 years after the date of grant, or such lesser period of time as is set forth in the award agreement. If for any reason other than death or disability, an Optionee of the 2006 Plan who at time of the grant of an Option under the 2006 Plan was an employee ceases to be an employee (such event being called a "Termination"), options held at the date of Termination (to the extent then exercisable) may be exercised in whole or in part at any time within three months of the date of such Termination; provided, however, that if such exercise of the option would result in liability for the optionee under Section 16(b) of the Securities Exchange Act of 1934, then such three-month period automatically shall be extended until the tenth day following the last date upon which optionee has any liability under Section 16(b) (but in no event after the expiration date of such Option). There are 40,000 options outstanding under this plan at July 31, 2016.

On July 14, 2014, the Company's board of directors approved the 2014 Employee Stock Plan ("2014 Plan") and authorized 10,000,000 shares of its common stock that shall be set aside and reserved for issuance pursuant to the 2014 Plan, subject to adjustments as may be required in accordance with the terms of the 2014 Plan. The 2014 Plan was subsequently approved by the Company's stockholders on November 11, 2014. The 2014 Plan has a term of 10 years and no option shall be exercisable more than 10 years after the date of grant, or such lesser period of time as is set forth in the award agreement. If for any reason other than death or disability, an optionee of the 2014 Plan who at time of the grant of an option under the 2014 Plan was an employee ceases to be an employee (such event being called a "Termination"), options held at the date of Termination (to the extent then exercisable) may be exercised in whole or in part at any time within three months of the date of such Termination; provided, however, that if such exercise of the option would result in liability for the optionee under Section 16(b) of the Securities Exchange Act of 1934, then such three-month period automatically shall be extended until the tenth day following the last date upon which optionee has any liability under Section 16(b) (but in no event after the expiration date of such option).

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.

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 charged 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.

F-15

MAJOR LEAGUE FOOTBALL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

JULY 31, 2016

NOTE 3 – STOCK BASED COMPENSATION (CONTINUED)

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 reduced by $104,092 for the three months ended July 31, 2016.

The Company used the following assumptions in estimating fair value:

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 acting 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 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. Effective December 11, 2015, Mr. Vainisi notified the Company that he would not finalize his employment agreement and is no longer the Company’s Chief Executive Officer.  As a result, he retained all vested options and the unvested options would be forfeited. At January 31, 2016, 1,281,250 (250,000 that vested immediately and 1,031,250 that vested as per above) of the options were vested and the remaining 1,718,750 were forfeited.  In accordance with the Company’s 2014 Employee Stock Plan, Mr. Vainisi has 90 days from the separation date of December 11, 2015, or March 10, 2016 to exercise the vested options or they expire. Mr. Vainisi did not exercise his 1,281,250 vested option on March 10, 2016 and they expired.

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. As discussed above, 1,718,750 of Mr. Vainisi’s unvested options were forfeited on December 11, 2015 and 1,281,250 of Mr. Vainisi’s vested options expired on March 10, 2016.  As a result, 2,070,000 unvested options are outstanding at July 31, 2016.

The Company valued the 2,070,000 unvested 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 (including 250,000 for Mr. Vainisi) on the grant date were valued at $390,100 and recorded to stock based compensation expense. Effective September 30, 2015, 10,000 of the vested stock options were exercised at $0.30 per share resulting in $3,000 of proceeds to the Company.

F-16

MAJOR LEAGUE FOOTBALL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

JULY 31, 2016

NOTE 3 – STOCK BASED COMPENSATION (CONTINUED)

The remaining 2,070,000 unvested stock options had a fair value of $1,090,400 on the grant date and are being amortized ratably over the vesting periods.  For the three months ended July 31, 2016, the Company recorded $57,101 in stock based compensation expense.

The Company used the following assumptions in estimating fair value:

Effective June 10, 2016, the Company granted 1,910,000 options to purchase common stock to five employees.  The exercise price is $0.31 per share and on the grant date, 102,500 of the options vested immediately and the remaining 1,807,500 options vest in various stages over a three-year period.

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 102,500 stock options that vested immediately on the grant date were valued at $32,717 and were recorded to stock based compensation expense.  The remaining 1,807,500 unvested stock options had a fair value of $576,944 on the grant date and will be amortized ratably over the vesting periods. For the three months ended July 31, 2016, the Company recorded $4,661 of stock based compensation expense related to the 1,807,500 unvested stock options.

The Company used the following assumptions in estimating fair value:

The following table summarizes employee and consultant stock option activity of the Company for the three months ended July 31, 2016:

F-17

MAJOR LEAGUE FOOTBALL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

JULY 31, 2016

NOTE 3 – STOCK BASED COMPENSATION (CONTINUED)

Stock Warrants

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. Additionally, the Company issued 400,000 shares of stock to the Consultant as compensation for the services. 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 August 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 was 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 Company recorded $73,062 of consulting expense for the 700,000 vested stock warrants for the three months ended July 31, 2016. As a result, the prepaid balance is $21,443 at July 31, 2016.

The Company used the following assumptions in estimating fair value:

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 were re-valued through the vesting date of February 28, 2016, and the adjusted valuation, less the amounts amortized through the vesting date, have been amortized over the remaining service period of six (6) months. As a result of the final re-measurement at February 28, 2016, the valuation was adjusted to $680,821 and as a result, the unamortized prepaid expense balance was $221,966 at April 30, 2016.

For the three months ended July 31, 2016, the Company recorded $171,604 of consulting expense and the unamortized amount of $50,362 is recorded as prepaid consulting at July 31, 2016.

The Company used the following assumptions in estimating fair value:

In relation to the 400,000 shares issued on the grant date, the Company valued the stock based upon the quoted market price of $0.42 on the date of grant, or $168,000. The $168,000 is being amortized to consulting expense over the one-month term of the consulting agreement and the unamortized prepaid consulting balance was $54,773 at April 30, 2016.  During the three months ended July 31, 2016, the Company recorded $42,345 of consulting expense and the remaining unamortized amount of $12,428 is recorded as prepaid consulting at July 31, 2016.

F-18

MAJOR LEAGUE FOOTBALL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

JULY 31, 2016

NOTE 3 – STOCK BASED COMPENSATION (CONTINUED)

As discussed above in Note 2 – Debt, in relation to a convertible secured promissory note, the Company issued the lender two warrants, a Series A warrant with a three (3) year term to acquire 250,000 shares of common stock of the Company at an exercise price of $1.02 per share and a Series B warrant with a three (3) year term to acquire 250,000 shares of common stock of the Company at an exercise price of $1.19 per share.

Effective June 10, 2016, the Company granted 2,400,000 warrants to purchase common stock, exercisable at $0.01 per share, to six (6) consultants for prior services provided. The warrants vested immediately and have an exercise period of three years. The Company valued the stock warrants 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 $758,808, which will be recorded to consulting expense immediately.

The Company used the following assumptions in estimating fair value:

The following table summarizes stock warrant activity of the Company for the three months ended July 31 2016:

NOTE 4 – COMMON STOCK

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, 2016, 43,015,069 shares were issued and outstanding. Additionally, there are 3,500,000 shares of unvested common stock to be issued to employees over the vesting period of four years through July 14, 2018. The 3,500,000 unvested shares of common stock are not included in the 43,014,069 shares reported but 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. See Note 7 – Subsequent Events.

F-19

MAJOR LEAGUE FOOTBALL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

JULY 31, 2016

NOTE 4 – COMMON STOCK (CONTINUED)

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 and July 31, 2016, 3,500,000 of the 7,000,000 shares vested leaving a balance of 3,500,000 unvested shares at July 31, 2016.  The Company recorded the issuance of the shares at its par value of $3,500 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, 2016, the Company recorded $22,055 of compensation expense related to vesting of the shares.  See Note 7 – Subsequent Events.

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, 2016, the Company recorded $18,750 of consulting expense and the remaining unamortized amount of $48,236 is recorded as prepaid consulting at July 31, 2016.

Effective October 15, 2015, the Company engaged a consultant to provide services primarily related to media services. The term of the agreement is one (1) year and as compensation for the agreement, the Company issued the consultant 112,500 shares of common stock. The Company valued the stock based upon the quoted market price of $1.00 on the date of grant, or $112,500. The $112,500 is being amortized to consulting expense over the one-year term of the consulting agreement. During the three months ended July 31, 2016, the Company recorded $28,125 of consulting expense and the remaining unamortized amount of $22,986 is recorded as prepaid consulting at July 31, 2016.

Effective December 8, 2015, the Company engaged a consultant to provide services primarily related to public relations services. The term of the agreement is six (6) months 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 $0.72 on the date of grant, or $275,000. The $275,000 is being amortized to consulting expense over the six-month term of the consulting agreement. During the three months ended July 31, 2016, the Company recorded $55,907 of consulting expense and the prepaid consulting amount has been fully amortized at July 31, 2016.

Effective January 1, 2016, the Company engaged three consultants to provide services primarily related to corporate strategies. The term for each of the three agreements is six (6) months and as compensation for the agreement, the Company issued the three consultants an aggregate 150,000 shares of common stock. The Company valued the stock based upon the quoted market price of $0.72 on the date of grant, or $108,000. The $108,000 is being amortized to consulting expense over the six-month term of the consulting agreement. During the three months ended July 31, 2016, the Company recorded $72,000 of consulting expense and the prepaid consulting amount has been fully amortized at July 31, 2016.

Effective January 14, 2016, the Company engaged a consultant to provide services primarily related to corporate strategies. The term of the agreement is six (6) months and as compensation for the agreement, the Company issued the consultant 100,000 shares of common stock. The Company valued the stock based upon the quoted market price of $0.80 on the date of grant, or $80,000. The $80,000 is being amortized to consulting expense over the six-month term of the consulting agreement. During the three months ended July 31, 2016, the Company recorded $32,527 of consulting expense and the prepaid consulting amount has been fully amortized at July 31, 2016.

From May 3, 2016 to June 10, 2016, the Company issued 160,132 shares of common stock to employees as a component of a Registration Statement on Form S-8 for an aggregate of 8,690,000 shares of the Company’s common stock.  The shares were issued per the Company’s 2014 Employee Stock Plan. The Company valued the stock based upon the quoted market price at prices ranging from of $0.32 to $0.51 on the date of grant, or $66,062 and was classified as stock compensation expense for the three months ended July 31, 2016 in the accompanying unaudited financial statements

F-20

MAJOR LEAGUE FOOTBALL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

JULY 31, 2016

NOTE 4 – COMMON STOCK (CONTINUED)

Effective May 4, 2016, the Company issued 91,860 shares of common stock to a former consultant to settle a dispute related to the exercise price of a warrant previously provided with a cashless option.  The Company valued to issuance of stock based upon the quoted market price of $0.45 on the date of issuance.  During the three months ended July 31, 2016, the Company recorded $41,337 of consulting expense related to the issuance of common stock.

NOTE 5 – RELATED PARTY TRANSACTIONS

During the three months ended July 31, 2016, the Company recorded $225,000 of compensation for its management in accordance with executed management service agreements. At July 31, 2016, a total of $1,185,000 was unpaid and is recorded as accrued officer compensation in the accompanying unaudited financial statements.  Additionally, during the three months ended July 31, 2016, the Company recorded $17,212 of employers share of payroll taxes related to the unpaid officer compensation resulting in accrued officer payroll taxes of $68,053 at July 31, 2016.

From February to August 2015, an officer of the Company provided $15,300 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. During the three months ending October 31, 2015, the Company repaid $15,000 of these funds, resulting in an outstanding balance of $300. Additionally, on August 28, 2015, the officer personally repaid $20,000 of notes payable. As a result, the outstanding balance owed to the officer is $20,300 at July 31, 2016, recorded as Notes Payable – Related Parties in the accompanying unaudited financial statements at July 31, 2016. See Note 2 - Debt.

During the three months ended June 30, 2016, an officer of the Company and another individual closely affiliated with the Company, advanced $6,647 of funds to the Company for working capital purposes.  The Company has recorded these advances as accounts payable – related parties in the accompanying unaudited financial statements at July 31, 2016.

NOTE 6 – 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, which is recorded in other assets in the accompanying financial statements at April 30, 2016. 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, 2016, the Company had not paid the landlord for the Florida corporate offices approximately $58,000 of lease payments.  As a result, the Company is in default of the lease agreement and subject to eviction, acceleration of the entire lease amount and other legal remedies that the landlord may pursue.

On June 2, 2016, the Company received a notice of default letter related to the corporate office lease in Florida.  The letter demanded payment for the full amount outstanding within seven days or the Landlord may pursue all legal remedies including termination of the lease.  On June 22, 2016, the Company received a complaint notice as the defendant in a lawsuit filed related to the corporate office lease in Florida.  The lawsuit claims that the Company is indebted to the landlord in an amount in excess of $57,857 for unpaid rent plus an additional $224,596 for accelerated rent for a total of $282,453, but the landlord does not specifically seek the additional $224,596 for accelerated rent in its complaint, although the court may later determine that the landlord is entitled to the accelerated rent amount. See Note 7 – Subsequent Events.

F-21

MAJOR LEAGUE FOOTBALL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

JULY 31, 2016

NOTE 6 – COMMITMENTS AND CONTINGENCIES (CONTINUED)

At July 31, 2016, subject to the outcome of the litigation noted in Note 7 – Subsequent Events, the total future minimum lease payments under operating leases in respect of leased premises are payable as follows:

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 continues to carry this amount as accounts payable at April 30, 2016. The Company negotiated with Stradley and in July 2014, agreed to issue Stradley 100,000 shares of common stock valued at $0.05 per share, the quoted market price on the date of grant, as a sign of good faith in regards to a resolution. The Company is still in discussions with the law firm in regard to this Judgment and anticipates a resolution in the near future.

Unpaid Taxes and Penalties

At April 30, 2016, 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 State of Delaware for penalties and interest from the tax year ending April 30, 2007 of $169,231, which is included as accrued expenses in the accompanying unaudited financial statements at July 31, 2016. The Company has an agreement with the State of Delaware to pay a minimum per month. However, due to cash flow constraints, the Company has been unable to pay the minimum monthly amounts and is in default of the agreement that may cause additional interest and penalties and lead to other collection efforts by the State of Delaware.

In September 2015, the Company reached an offer in compromise settlement with the IRS for unpaid penalties and interest from the tax year ended April 30, 2007. The settlement was in the amount of $13,785 and was to be paid by the Company with a $1,000 payment upon the execution of settlement, then the balance of $1,757 paid in November 2015 and making up the 20% down payment of $2,757, a second installment payment of $2,208, and then four monthly payments of $2,205. Through July 31. 2016, the Company had made all required payments in accordance with the settlement except for the final payment of $2,205. As a result, the Company is in default of the settlement agreement and the IRS could void or restructure the agreement.  

On February 5, 2016, the Company disclosed that the previously executed $20,000,000 sale and purchase of common stock with Clairemont Private Investment Group, LLC (“Clairemont”), scheduled to close on February 1, 2016 was in default. The Company disclosed that Clairemont breached the Amended Purchase Agreement by not providing to the Company the $20,000,000 purchase price for the common stock as required by the terms of the Amended Purchase Agreement. The Company intends to pursue legal remedies against Clairemont.

NOTE 7 – SUBSEQUENT EVENTS

On August 4, 2016, pursuant to the terms of the 2014 Employee Stock Plan the Company issued to an employee, an option to purchase 50,000 shares of common stock at an exercise price of $0.30 per share. The options vest over a period of 3 years, with 20,000 vesting immediately. This option expires on August 3, 2026.

The Company will value the 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).

F-22

MAJOR LEAGUE FOOTBALL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

JULY 31, 2016

NOTE 7 – SUBSEQUENT EVENTS (CONTINUED)

The 20,000 stock options that vested immediately on the grant date were valued at $3,418 and will be recorded to stock based compensation expense.

The remaining 30,000 unvested stock options had a fair value of $5,233 on the grant date and are being amortized ratably over the vesting periods.  

The Company used the following assumptions in estimating fair value:

On August 4, 2016, the Company received $130,000 of proceeds from the issuance of a promissory note.  The terms of the promissory note include interest accrued at 8% annually. A 1% loan origination fee and the principal and interest payable on demand.

Effective August 4, 2016, the Company granted 400,000 warrants to purchase common stock, exercisable at $0.01 per share, to a consultant for corporate strategy services. The warrants vested immediately and have an exercise period of two years. The Company valued the stock warrants 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 $69,741, which will be recorded to consulting expense immediately.

The Company used the following assumptions in estimating fair value:

Effective August 4, 2016, two of the Company’s consultants exercised a total of 1,300,000 warrants at an exercise price of $0.01 or $13,000 of consideration.  The two consultants paid for the exercise price of $13,000 by electing the cashless exchange option included in the warrant to decrease the balance due under their respecting consulting invoices.

On August 5, 2016, the Company paid $100,000 for the settlement of a lawsuit filed by the landlord of the Company’s office lease in Florida (See Note 6 – Commitments and Contingencies) for non-payment of rent.  The $100,000 payment was for an outstanding balance of $98,173, which included $3,699 in attorney's fees and the August 1, 2016 rent.

On August 31, 2016, 2015, the Company’s board of directors (the “Board”) increased the number of directors on the Board from two directors to three directors, and elected Wesley S. Chandler, the Company’s President, to the Board to fill the newly created directorship on the Board until the next annual meeting of the stockholders of the Company or until his earlier resignation or removal. Mr. Chandler will also continue to serve as President of the Company and he continues as an Executive Officer of the Company for Section 16 Purposes.

In connection with his new position, the remaining 2,000,000 shares of common stock held in escrow of Mr. Chandler’s 6,000,000 shares of common stock that were granted to Mr. Chandler in connection with his employee agreement were released from escrow and fully vested to Mr. Chandler. All other aspects of Mr. Chandler’s employee agreement remain the same. See Note 4 – Common Stock).

F-23

MAJOR LEAGUE FOOTBALL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

JULY 31, 2016

NOTE 7 – SUBSEQUENT EVENTS (CONTINUED)

On January 7, 2016, Major League Football entered into a two-year television contract with American Sports Network (“ASN”), a division of Sinclair Networks Group, which is owned by Sinclair Broadcast Group. The agreement included broadcasting for all regular season and post season MLFB games in both 2016 (season postponed) and 2017, along with promotional activity at the local level in each MLFB’s franchise markets. Since MLFB’s teams did not play any games in Spring 2016, on September 12, 2016, MLFB and ASN entered into a mutual termination agreement whereby the television contract was terminated and each party released the other party from liability relating to the television contract.

F-24