Marquie Group, Inc. - Annual Report: 2023 (Form 10-K)

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-K

Commission file number: 000-54163

THE MARQUIE GROUP, INC.

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code: (800) 351-3021

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

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

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

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

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

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

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

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

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.   ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.   ☐No

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during relevant recovery period pursuant to §240.10D-1(b).   ☐

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

Based on the closing price of our common stock as listed on the OTC Bulletin Board, the aggregate market value of the common stock of The Marquie Group, Inc. held by non-affiliates as of September 12, 2023, was $884,291.

As of September 12, 2023, there were 884,291,250 shares of common stock issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE: None.

THE MARQUIE GROUP, INC., AND SUBSIDIARIES

2023 FORM 10-K ANNUAL REPORT

TABLE OF CONTENTS

CERTAIN DEFINITIONS

Unless the context requires otherwise, all references in this annual report to “The Marquie Group”, “TMGI” or the “company,” including references to The Marquie Group by “we” “us” “our” and “its” refer to The Marquie Group, Inc., and our subsidiaries.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

The Marquie Group makes “forward-looking statements” from time to time in both written reports (including this annual report) and oral statements, within the meaning of federal and state securities laws. Disclosures that use words such as the company “believes,” “anticipates,” “estimates,” “expects,” “intends,” “will,” “may,” “intends,” “could,” “would,” “should,” “seeks,” “predicts,” or “plans” and similar expressions are intended to identify forward-looking statements, as defined under the Private Securities Litigation Reform Act of 1995.

You should not place undue reliance on these forward-looking statements, which reflect our expectations based upon data available to the company as of the date of this annual report. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from expectations. Except as required by law, the company undertakes no obligation to update or revise any forward-looking statements made in this annual report. Any such forward-looking statements, whether made in this annual report or elsewhere, should be considered in context with the various disclosures made by Salem about its business. These projections and other forward-looking statements fall under the safe harbors of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”).

PART I

ITEM 1. BUSINESS.

Relationship with Music of Your Life, Inc. (MOYL)

As of May 31, 2023, TMGI beneficially owned 100% of the outstanding shares of MOYL common stock. MOYL is the longest running syndicated radio network in the world. MOYL provides radio programming 24 hours a day, 7 days a week to AM, FM, and HD stations across the United States, and around the world over the internet.

Relationship with Simply Whim, Inc. (Whim)

As of May 31, 2023, TMGI beneficially owned 25% of the outstanding shares of Whim common stock. Whim is a direct to consumer, emerging skin care brand dedicated to high quality, safe and efficacious beauty enhancing products.

Relationship with Global Holdings Experience, Inc. (GNX)

As of May 31, 2023, TMGI beneficially owned 100% of the outstanding shares of GNX common stock. The GNE business plan is to license intellectual property to third parties.

Relationship with AminoMints, Inc. (AMI)

On April 21, 2023, we announced a joint venture / acquisition with AminoMints, Inc. with terms to be determined in the near future. AminoMints is an established brand of amino acids in mint form directed toward young adults as an entry toward a healthier lifestyle by incorporating amino acids in your diet as a daily regimen toward better health and cancer prevention.

Corporate Information

The Marquie Group, Inc. is an emerging direct-to-consumer firm specializing in marketing, product development, and media, including a dynamic radio and digital network. We craft and promote top-tier health and beauty solutions that enrich lives, showcased through engaging radio content for our audience.

We have three operating segments: (1) Broadcast, (2) Digital Media, and (3) Health and Beauty, which also qualify as reportable segments. Our operating segments reflect how we assess the performance of each operating segment and determine the appropriate allocations of resources to each segment. We continually review our operating segment classifications to align with operational changes in our business and may make changes as necessary.

We measure and evaluate our operating segments based on operating income and operating expenses that do not include allocations of costs related to corporate functions, such as accounting and finance, human resources, legal, tax and treasury, which are reported as unallocated corporate expenses in our consolidated statements of operations included in this annual report. We also exclude costs such as amortization, depreciation, taxes, and interest expense when evaluating the performance of our operating segments.

Our filings with the Securities and Exchange Commission (“SEC”) are available free of charge under the Investor Relations section of our website at www.themarquiegroup.com as soon as reasonably practical after electronically filed. Any information found on our website is not a part of or incorporated by reference into this annual report or any other report of TMGI filed with or furnished to the SEC.

Business Strategy

Covid-19 had a devastating impact on our company starting in 2020. We lost all advertising revenue, we lost several on-air personalities to illness, and our production facilities were shut down. We returned to the drawing board to create a new marketing plan for success, which took a couple years to implement. It was a big undertaking – reinvent the business by adding tangible goods and services to improve the company’s current revenue stream associated with radio advertising while at the same time, create a new stand-alone profitable enterprise. Implementing this new plan required recapitalizing the company to attract a business in-line with our model. We entered into an agreement with a new investor, paid-off most of our old debt, and found an S-1 investor. This giant pivot led to our first acquisition with Simply Whim and their Whim® line of products. The company is now heading in the right direction with this new philosophy.

We are fundamentally committed to providing products which use only safe and efficacious ingredients for health of the entire person at the cellular level, with emphasis on anti-aging and cancer prevention, using only products manufactured in the United States while adhering to strict global standards. Our commitment to these values means that we may choose not to switch to other products or ingredients or pursue potentially more profitable opportunities. We advertise these products across our broadcast network including local radio stations, streaming over the internet, downloadable podcast style programs, and social media.

The Marquie Group™

The Marquie Group manages corporate governance of its wholly owned subsidiaries, secures financing for operations, seeks-out products and companies for acquisition and implements the marketing plan of the company to increase profitability. To meet these objectives, TMGI recently acquired a 25% stake in Simply Whim, Inc., which encompasses the Whim Inner and Outer Nutrition line of health and beauty products. The Whim product line is designed to address modern skin nutrition and beauty challenges, using a safe, proprietary blend of amino acids, antioxidants, and other nature-derived ingredients.

By utilizing our wholly owned subsidiary, Music of Your Life® - a renowned radio brand and syndicated broadcast network - we advertise both our own products, and those of other businesses using 60-second radio commercials airing every hour on the network and heard around the country on our affiliated radio stations while simulcast over the internet. The company's primary objective is to develop or acquire captivating brands that can be successfully advertised on our broadcast radio network, our digital media platform and promoted through our extensive social media network of more than 500,000 followers. Whim products are also sold on our simplywhim.com website, our Public Square webstore, and our new Amazon webstore.

Music of Your Life®

Music of Your Life produces and delivers radio programming to affiliated AM, FM, and HD radio stations across the country and around the world over the internet. Since our launch in 1978, Music of Your Life has been broadcasting more than 400,000 hours making it the longest running non-stop radio program in the world. Terrestrial radio stations from around the country carry Music of Your Life programming on an advertising barter arrangement whereby Music of Your Life owns three minutes per hour for network commercials which are aired by the station in that city. This gives us direct access to our listeners at a local level to advertise our goods and services. The same Music of Your Life broadcast heard on local radio, is also simulcast over the internet, and heard around the world to more than 90-countries. We own 12 minutes of advertising time over the internet allowing us to reach our listeners on a national level. Music of Your Life is an automated delivery of “live” recordings. Several moving parts must come together seamlessly to deliver smooth sounding broadcast free of technical issues, including compelling programming delivered by announcers. Once the show leaves the studio, significant layers of technology are employed right up the point the sound is heard by the listener on either their car radio, portable radio, cell phone, computer, or intelligent television.

Our Music of Your Life song catalogue is compiled of more than 100,000 titles. Many of these songs include difficult to find older recordings that originated on long play records (LP’s) which date back to the turn of the 20^th century. We also have our entire catalogue on several hundred reel-to-reel tapes which preserve the high quality of the originals. We have transferred much of this music to a lossless digital format known as the Waveform Audio File Format (WAV). These WAV files are of a very large size and take up tremendous hard drive space, therefore, we have converted our entire catalogue to the MPEG-1 Audio Layer 3 format (MP3). Advancing software and hardware technology in the music space has reached a pinnacle with a recent lossless format called FLAC, or Free Lossless Audio Codec. This technology offers amazing CD or WAV quality specifications in a small file size. An effort is underway to convert the entire Music of Your Life catalogue from the original source material to the FLAC format offering our listeners a much-improved experience which cannot be found on any free streaming service today.

Looking ahead, we have an ambitious sales forecast for the growth of Music of Your Life, positioning it as the definitive podcast destination for the Great American Songbook, spanning iconic hits from the 1920s to the early 21st century. Leveraging cutting-edge audio reproduction and broadcasting technology, we aim to offer an unparalleled listening experience that outshines any of our competitors' offerings, regardless of price point.

To further enrich our network's entertainment offerings, we'll be launching an extended version of our already popular Celebrity Radio® podcast. This revamped edition will not only include high-quality audio but will also feature added video content, attracting a diverse array of guests from the music industry, radio, film, television, and social media. Sales projections indicate a considerable uptick in engagement and sponsorship opportunities as a result.

Additionally, we plan to extend our Street Talk® feature into the podcasting space, with episodes slated to feature timely conversations with influential personalities and industry leaders who shape the financial markets. We anticipate that this diversification will contribute significantly to our revenue streams in the coming years.

Simply Whim™

Whim® is a rising beauty brand committed to delivering high-quality, safe, and effective beauty products, formulated through a fusion of Nature, Nutrition, and Science. Established to fill the gap in an industry lacking adequate standards and regulations, Whim® is a response to a pressing need for safer, more transparent options in the beauty sector. Our founder, a 3-time cancer survivor who is currently undergoing treatment for her latest diagnosis, leverages her decades-long experience in the industry to create products that meet a higher standard. She is acutely aware that U.S. regulations for beauty products lag far behind those of many other countries, allowing the use of ingredients that are considered toxic, carcinogenic, and hormone-disrupting elsewhere. Proudly made and sold exclusively in the USA, Whim® is set to redefine beauty norms by offering conscientious choices for consumers.

As we look ahead, we are optimistic about our sales prospects. Our sales forecast for the next year anticipates a robust growth, reflecting the increasing consumer demand for safer, high-quality beauty solutions. We are committed to not just meeting but exceeding these expectations as we continue to innovate and expand our product range.

Whim® Beauty Products

VitaWhims™

We are currently in the process of developing VitaWhims™, a new line of sugar-free vitamin gummies, designed as a part of our Whim® Inner Nutrition health and beauty collection. This forthcoming addition is intended to replace our existing Whim® sleep aid, Hush, and our beauty supplement, Harmony. Meticulously crafted without sugar, corn syrup, dyes, or any unhealthy fillers, our gummies are designed to cater to a specific need. Recently, the nutritional gummy sector in the United States has witnessed remarkable growth, yet the demand for sugar-free options remains largely unfulfilled. VitaWhims™ is tactically positioned to bridge this gap with a mid-2024 launch. We anticipate the introduction of VitaWhims™ will substantially boost our revenue, capitalizing on the burgeoning demand for health-conscious, sugar-free options in the nutritional supplement market.

AminoMints®

Our recent collaboration with AminoMints, Inc. signifies our foray into the cancer prevention market, leveraging evidence-based supplements and ingredients bolstered by clinical trials, medical research, and substantiated outcomes. AminoMints, scheduled for launch in mid-2024, are concocted with a special mix of essential amino acids, proven to confer numerous health advantages such as augmented muscle development, bettered cognitive function, and a strengthened immune system. Importantly, these amino acids have demonstrated considerable promise in inhibiting cancer cell proliferation and boosting the effectiveness of standard cancer therapies. While AminoMints are not designed to supplant medical interventions, they serve as a handy and scientifically endorsed supplementary alternative for those seeking to maximize their overall wellness and bolster their body's innate cancer-fighting capabilities. With AminoMints, we deliver an innovative solution, underpinned by science, directly to your pocket. Looking ahead, our sales forecast for next year reflects an optimistic outlook, given the groundbreaking nature of this product and the increasing demand for supplementary options in cancer prevention. We anticipate a strong market response and robust sales growth following the product launch, as we contribute to the global effort to combat cancer.

Our History

Our company was incorporated on January 30, 2008, in the State of Florida, as Maximum Consulting, Inc. and shortly thereafter changed its name to ZhongSen International Tea Company, with the principal business objective of providing sales and marketing consulting services to small to medium sized Chinese tea producing companies. On May 31, 2013, our Company entered into an acquisition agreement (the “Acquisition”) with Music of Your Life, Inc., a Nevada corporation (“MOYL Nevada”). As a result of the Acquisition, MOYL Nevada became a wholly owned subsidiary of our Company. We changed our name to Music of Your Life, Inc. effective July 26, 2013. On August 16, 2018, we merged into The Marquie Group, Inc., changed our name and adopted the ticker symbol “TMGI”. (see below).

Covid Pandemic of 2020

The Marquie Group was deeply affected by the outbreak of Covid beginning in 2020. Just as we executed our new plan for growth under the recent name change and restructure, our subsidiary Music of Your Life, lost its revenue due to the shutdown of its advertising agency, Marketing Architects. Both of our senior announcers, who had been on the air for decades with top nationwide ratings, contracted the disease and could not return to work, one has since passed. Our remote announcers lost access to their recording studios. The new partnership with Simply Whim faltered as the company could not fill orders or build inventory due to the loss of all supply chain elements. The owner of Simply Whim suffered a heart attack and subsequently diagnosed with Stage IV breast cancer in mid-2020. She began the long, difficult journey of surgeries and chemotherapy which continues to this day. The decision was made to push-on and implement a short-term emergency plan for the company which included airing previously recorded programming for Music of Your Life, and source alternate packaging locally for the Whim products. The net result for the following two and a half years was a complete loss of revenue, adding convertible debt for operations, and another capital restructure.

The 25% acquisition of Simply Whim was implemented for us to have more control of the company, access capital markets, and move the Whim products to market more expeditiously. The new plan is working, and we have emerged in 2023 with new life. Supply chains have reopened, wholesale goods are no longer backordered, and customer orders are being filled. Whim products are currently advertised on the Music of Your Life radio network, our new Public Square store is launching in September 2023 with our new Amazon Marketplace store to follow in October. We have engaged the services of the well-known social media influencers, The Gemini Group for a September social media campaign launch and have engaged the services of the Amazon Marketplace media team at Social Influence for an October launch.

Music of Your Life

The Early Years

The Music of Your Life’s legacy in the radio and music industry began with its launch on January 1, 1978, by Al Ham, a renowned CBS Records executive and jingle writer. This event, which took place on WDJZ radio station in Bridgeport, Connecticut, marked the beginning of the world's longest running syndicated music radio network. Over time, the music programming evolved from its traditional Adult Standards music format to include hits from the 60’s, 70’s, and contemporary genres such as pop, rock & roll, country, and jazz segmented into various dayparts.

Record Breaking Longevity

Since its inception, Music of Your Life has aired over 400,000 hours of continuous radio programming, servicing more than 250 AM, FM, and HD radio stations in the U.S. The global reach of the network expanded over the past 10 years, reaching 90 countries through online streaming from our website and a host of third-party service providers. A Guinness Book of World Records application was filed in mid 2023 for a listing as the Longest Continuous Broadcast of a Radio Network.

Intellectual Property

In 1984, the network's theme song, originally sung by the legendary Tony Bennett, received recognition from the US Patent and Trademark Office, becoming one of the first sound recordings to be trademarked. Also in 1984, our partnership with CBS Records also led to the production of numerous Music of Your Life record albums and cassette tapes featuring top recording artists. In 2010, Music of Your Life, Inc. acquired the Music of Your Life trademarks for $250,000.

One-of-a-Kind Programming

One unique feature developed by the founder was having recorded messages by the stars whose songs were being played. Known as “The Stars Who Play the Stars”, a phrase coined by the legendary announcer, Gary Owens. These recorded messages, known as “liners”, can still be heard today, featuring voices from celebrities like Frank Sinatra, Barry Manilow, Danny DeVito, Kim Bassinger, among others.

Streaming Accessibility

Our network is accessible across nearly every streaming platform including Apple's iTunes, Tune-In, Shoutcast, Roku, YouTube, as well as on iPhones, iPads, Apple TV, CarPlay, and Android devices. We have an estimated audience of approximately 100,000 unique listeners per month across all platforms.

Celebrity Announcers

Our "Stars who Play the Stars" on-air lineup has featured various past and present celebrity DJs, enhancing our audience appeal, including shows hosted by 1950’s crooner Pat Boone, Peter Marshall from Hollywood Squares, Laugh-In’s Gary Owens, singer Patty Page, game show superstar Wink Martindale, big band leader Les Brown, Jr., Steve Torme, son of Mel, radio legends Johnny Magnus and Chuck Southcott.

Record Breaking Listener Trends

Over the years, the network gained significant traction, with more than 250 stations adopting Music of Your Life's format. Al Ham's innovative "matched-flow sequencing" for song arrangement contributed significantly to our audience retention, keeping listeners tuned in for up to 15 hours a day, 5-times the national average.

Satellite Radio and Cutting-Edge Technology

In 1996, we relaunched as a satellite-delivered service, enhancing our competitive edge against similar offerings from rivals like Westwood One and ABC Radio Networks. By harnessing technological advances, we transitioned from satellite to the Barix internet distribution system, achieving noticeable improvements in audio quality and a significant cost savings. Changes in FCC rules also allowed for simultaneous broadcasting on FM frequencies, further expanding our audience reach. Today, Music of Your Life has a strong presence across multiple AM, FM, HD radio stations, and worldwide online streaming platforms.

Live Performances, Cruise Ship Entertainment, TV Shows, Time Life Box Sets, CBS Records and More

Alongside our on-air success, our music was also promoted through live performances, featuring iconic big bands and artists, and special events such as the Music of Your Life television special on CBS Television. Our network's influence also extended to product offerings such as Music of Your Life CDs, Time Life-issued multi-CD box sets, and a Music of Your Life television special produced by PBS in 2016. For more than 10 years, Carnival Cruise Lines hosted the Music of Your Life Celebrity Cruise to the Bahamas. Despite the challenges posed by the digital revolution in music and radio advertising, we've continued to adapt and evolve. The Time Life - Music of Your Life collaboration, featuring Debbie Boone and Peter Marshall is one of the most successful boxsets in the iconic brand’s history.

Management Reboot and Brand Resilience

We've continually adapted our offerings, introducing contemporary artists and swing bands to our programming, thereby ensuring our content remains relevant to our audience. Despite facing challenges in the late 2000’s due to management issues, The Marquie Group took decisive action. In 2010, we underwent a significant restructuring under the leadership of Marc Angell, who revamped operations, improved programming, and revitalized the Music of Your Life brand. We strategized a plan to partner with companies or acquire products that we could market directly to the consumer using our network radio reach, thereby bypassing the traditional ad agency model, and sharing directly in revenue. This strategic shift led to the acquisition of Simply Whim, an emerging health and beauty company dedicated to high quality, safe and efficacious beauty enhancing products marketed under their popular Whim® brand.

New Advertising Agency

We’ve replaced the ad agency lost to covid with MSH Marketing starting July 2023. MSH specializes in pay-per-call or listener response revenue model. We expect to see revenue from this new opportunity during the 4^th quarter 2023.

The Marquie Group

New Direction

Challenged by a spike in music licensing fees and a decline in conventional radio advertising rates, formats, and prospects, we faced hurdles in maintaining a revenue stream with our Music of Your Life syndicated radio service. As a strategy to overcome these challenges, we investigated direct collaborations of products, and or acquisitions of companies with products for marketing with radio advertisements across our radio network. This led to the merger with The Marquie Group, a DTC (direct-to-consumer) sales and marketing company which holds exclusive licensing rights to an array of products, including those crafted by Simply Whim. One prominent offering from Simply Whim is the "Whim" beauty line – a brand focused on providing quality, safety, and effective beauty enhancement products. In 2022, the Company initiated marketing for the Whim products using the Music of Your Life radio network, primarily through a sequence of radio ads.

2023 marks the beginning of our venture into the arena of cancer prevention through safe, effective, and scientifically proven supplements. To implement this plan, we began with a joint venture with AminoMints, Inc. and their AminoMints® brand. We are currently reformulating the AminoMints product to enhance its cancer prevention properties. Reformulated AminoMints contains specific amino acids that have been scientifically proven to inhibit the growth of cancer cells by disrupting their metabolic pathways and starving them of the nutrients they need to proliferate. Generally, Amino acids play a crucial role in the development and maintenance of the immune system. AminoMints® helps to enhance the immune response, enabling the body to fight cancer cells more effectively.

In the coming months and years, we plan additional product development, joint ventures, and acquisitions with a revolutionary approach to cancer care, harnessing the power of amino acids to inhibit cancer growth, boost the immune system, enhance recovery, and promote overall well-being.

Recapitalization

On August 16, 2018, a merger was cemented with The Marquie Group, Inc. (TMGI). The deal saw the issuance of 100,000 of our common stock shares to TMGI’s shareholders. Post-merger, the total common stock shares issued and standing tallied at 102,277. On December 5, 2018, there was an amendment and a redefinition of the Company's Articles of Incorporation. This change transitioned the Company's name from "Music of Your Life, Inc." to "The Marquie Group, Inc." A symbol change with FINRA occurred on February 22, 2018 – moving from "MYLI" to "TMGI." During this time, we funded the company using convertible debt instruments from several lenders.

Simply Whim™

Entering the Multibillion Dollar Industry of Personal Care

The history of Simply Whim and the Whim® Brand begins with its founder, Jacquie Angell, a globally recognized expert in skincare with over two decades in the beauty and wellness industry. Jacquie has introduced products in more than 90 countries around the world, taking advantage of the opportunity to gain extensive knowledge on global product regulations, uses, and trends.

Needs Based Solutions

Jacquie's journey as a three-time cancer survivor has inspired her mission to create effective, safe, and simple skincare products. Her current experience with chemotherapy fuels her drive further. Her exposure to international regulations revealed to her that the US guidelines are far behind global standards. This realization led to a deeper investigation of ingredients used in the American beauty industry. She found numerous toxic, carcinogenic, and endocrine-disrupting ingredients in products, which posed significant health risks. Jacquie also identified the presence of ineffective but seemingly attractive natural ingredients in many products. Whim® aims to bridge the regulatory gap in the United States by adhering to strict global ingredient regulations rather than just the FDA's list of banned substances.

On a Whim

Motivated by these findings, Jacquie committed herself to the development of products that enhance health and beauty without compromise. She created the Whim® line to bridge the gap between Inner Health & Outer Nutrition™, firmly believing in the equal importance of what goes into and onto the body. She strives to educate others that Age is Not a Skin Type® and emphasizes the critical influence of lifestyle on skin health and aging. Whim® is dedicated to using only ingredients that either directly contribute to overall health and wellbeing or enhance the integrity and effectiveness of its product formulations. Whim® offers custom-blended products inspired by Nature, Nutrition, and Science to combat aging, stress, and environmental factors while nourishing the body, mind, and soul holistically. Whim® was conceived out of a passionate necessity for higher industry standards and regulations regarding skincare ingredients.

Our Strategy

Our primary objective is to provide high quality, safe and efficacious health and beauty products comporting with global regulations and guidelines rather than the substandard, often dangerous guidelines set in the United States. We advertise these products on our expanding radio network, Music of Your Life www.musicofyourlife.com, our webstore, simplywhim.com/all-products, and soon on Public Square and Amazon. Our Philosophy - offer people of all ages uniquely crafted products with powerful ingredients derived from Nature, Nutrition & Science to enhance health and beauty. Made in the USA and sold only in the USA.

Music of Your Life®

Our strategy is centered on building strong consumer relationships across our multiple platforms with national reach. Moreover, we believe that we can leverage our investments in innovative products and compelling intellectual property to better monetize our assets and to capture increasing market share across the broader audience ecosystem. The key elements of this growth strategy are:

Broadening the scope of audio engagement

Our goal for 2023 – 2024 is to increase the proliferation of connected TVs, voice assistants, smart auto and other connected devices which greatly increases the range of options for accessing and interacting with our content. Notably, our website musicofyourlife.com is currently under a rebuild to expand and simplify our access to a range of platforms and devices including smart speakers, digital auto dashes, tablets, wearables, smartphones, virtual assistants, televisions, and gaming consoles. include an all-in-one digital music, podcast, and live streaming digital radio service, We are very focused on rapidly growing content categories, such as podcasting. These initiatives not only improve the listener experience, but they also facilitate further engagement and heightened frequency of advertising impressions. We believe that podcasting is to talk what streaming is to music and is the next strategic audio platform. Our developing podcasting platform will allow us to capture incremental revenue as well as extend station brands, personalities, and events onto a new platform-ultimately extending and deepening our consumer relationships and our opportunities for additional advertising revenue.

Employing technology to gain greater penetration of advertising and listener reach.

As an indication of the size of the potential opportunity, we currently have approximately 350,000 total social media followers compared to millions of followers for some of our largest social and search competitors that utilize technology solutions for advertisers of all sizes. We will continue to enhance our monetization capabilities by utilizing the industry leading Triton Audio Marketplace, an innovative global open audio exchange that allows customers to aggregate audiences at scale across broadcast, podcast, and streaming, and Triton Digital, a global leader in digital audio advertising and measurement services. We plan to initiate the Triton services in the fourth quarter of this year.

Increasing share of national advertising market.

Broadcast radio is the number one consumer reach medium, and advertisers have a renewed appreciation for its scale, diverse demographic access and impact. We intend to complement our current local and national advertising presence in approximately 10 U.S. markets by further growing our stake in national advertising campaigns through our multi-platform portfolio of audio assets, roster of on-air talent, and the amplifying effect of our listeners' social engagement. As a result of our implementation of the Triton technology, national advertisers will be able to look to our audio offerings with their extensive reach, efficient pricing, and digital-like analytics.

Simply Whim™

We are expanding our efforts to target beauty enthusiasts across multiple demographics and shopping behaviors. Beauty enthusiasts have a deep emotional connection with beauty and develop brand loyalty when targeted with buying opportunities that reflect their social and economic profile.

Increasing our understanding about how the consumer and beauty category are evolving, during the first quarter 2023 we refreshed our strategic efforts to position Whim® for continued success. We are focused on four key strategic pillars designed to increase our market presence, create brand loyalty, and drive long-term profitable growth.

Drive breakthrough and disruptive growth through an expanded definition of Age is Not a Skin Type®.

Driving the message that your chronological age does not define how your skin ages, rather, the way you treat your skin through your lifestyle choices does, we are launching an advertising campaign our trademark Age is Not a Skin Type®, a daily regimen of Whim® products combined with a good diet, exercise, and healthy habits will help keep you looking young and healthy, regardless of your age.

Beauty enthusiasts enjoy the experience of discovering and trying new products and increasingly include beauty as part of their self-care and wellness journey. Reflecting these insights, our objective is to engage and continuously delight beauty enthusiasts with a curated, differentiated, inclusive assortment focused on leading beauty and self-care trends. We are focused on maximizing growth in two core categories: Outer Nutrition – a full-suite of topical skincare products including face wash, scrubs, moisturizers, and serums; and Inner Nutrition – a full-suite of ingestible nutrition products designed to drive growth of cross-category strategic platforms.

Evolve the omnichannel experience through connected physical and digital ecosystems.

Recent post-covid data trends confirm that beauty enthusiasts prefer to transact in physical stores, where they can discover and interact with products and other beauty enthusiasts. At the same time, digital channels offer convenience, product reviews, and price transparency. As a result, the guest journey is increasingly blurring across physical and digital channels. To drive greater guest engagement across all channels, we intend to enter the physical space focusing on resort spas and high-volume retail such as Sephora and Ulta. We will continue to differentiate our service offerings with our compelling story, healthy ingredients, and cleaver branding. We intend to grow our buy anywhere, fill anywhere capabilities with the inclusion of our new Amazon Marketplace and Public Square storefronts for a wider reach than a single point of purchase through our existing website SEO. Our objective is to deliver a cohesive, industry-leading omnichannel experience that drives breakthrough engagement with our guests and unlocks the combined potential of our physical and digital channels.

Expand and deepen our presence across the beauty journey, solidifying Whim® as a Lifestyle Brand focused on Nature Nutrition and Science.

Based on our marketing trends, beauty enthusiasts have an emotional, personal, and deep connection with beauty. Social media contributes to this connection, and we expect the influence and reach of beauty will continue to grow as engagement with social platforms increases. To expand Whim’s reach, relevancy, and buyer engagement, we intend to amplify our brand purpose; build a content ecosystem to deliver compelling, relevant ingredient awareness; drive further innovation in our high quality, safe, and efficacious beauty enhancing products to increase personalization, drive conversion, and support our brands. Our vision is to expand and deepen our presence across the beauty journey to increase consumer acquisition and drive consumer engagement, loyalty, and share of wallet.

Deeply committed to our “No Nasties” philosophy across new product development platforms utilizing the strictest global regulations.

Whim products are free of parabens, phthalates, sulfates, artificial colors, and dyes. They’re cruelty free, gluten free, and vegan friendly. We pride ourselves in our selection of unique ingredients with a strong foundation in the principles of nutrition. We utilize the power of antioxidant vitamins, amino acids, peptides, and plant-based botanicals from both land and sea. And our nutrition products are non-GMO, sugar free, fat free and carb free. And contain no artificial colors or flavors.

New product offerings play a key role in brand awareness and customer loyalty. Dedicated to bolstering brand recognition across platforms, we aim to enrich our beauty collection with innovative products. Our latest offering, VitaWhims™ – a sugar-free multi-vitamin gummy, crafted in alignment with the Whim® philosophy.

Intellectual Property

A major factor in our growth and success is based on labeling our goods and services with brands which easily identify with the consumer. Through our subsidiaries, we have obtained exclusive licenses with the right of first refusal to multiple trademarks registered with the United States Patent and Trademark Office (the “USPTO”) and offer goods and services using these trademarks.

We are currently negotiating a concurrent use agreement with ULTA Beauty, the nation’s largest beauty retailer, for the Whim trademark in Class 03. ULTA allowed their Whim trademark to expire under the USPTO guidelines. Simply Whim CEO Jacquie Angell has successfully obtained multiple Whim trademarks with the USPTO and is currently in discussions with ULTA legal representatives.

The Marquie Group, Inc.

Music of Your Life, Inc.

Simply Whim, Inc.

Our Market

Music of Your Life

Music of our Life produces and delivers multiple forms of broadcast audio: broadcast audio complete with music, announcers’ voice tracks, and commercials delivered to local AM, FM and HD terrestrial radio stations across the United States as a single 24 hours a day, 7 days a week via private feed using the Barix delivery system; a simulcast of the broadcast presentation streamed directly to the public over the internet from the musicofyourlife.com website; and as a pre-recorded podcast available as a download directly to the public from our website. (Internet radio is defined as a web-based audio service and is transmitted through the internet. It contains streaming media that delivers continuous streaming of audio that cannot be paused in between or replayed once the audio is finished.)

Simply Whim

Simply Whim sells direct to the consumer a line of healthy beauty products including skincare and dietary supplements for healthy skin called Whim®. We sell these products from our webstore at simplywhim.com and are currently in the process of launching our Amazon Marketplace and Public Square online stores.

Competition

Music of Your Life

We compete for share of our listeners’ time and engagement, a challenging task in today’s fragmented and multi-tasking world. We believe our national reach, the strength of our brand and assets, the quality of our programming and personalities, and the companionship nature of our medium allows us to compete effectively against both our legacy competition-cable and broadcast television, and other broadcast radio operators-as well as newer, digital competition, including streaming music and video services, social media, and other digital companies.

Similarly, we compete for advertising and marketing dollars in the U.S. advertising market against an increasingly diverse set of competitors. Our legacy competition for the radio, podcast and digital advertising market includes legacy broadcast radio operators, as well as satellite radio companies, podcasters and streaming music companies with ad supported components of their business. We also compete in the larger U.S. advertising market-inclusive of the radio, podcast and digital opportunity-by developing and offering competitive advertising products intended to attract advertising and marketing dollars that might otherwise go to companies in the cable and broadcast television, digital, search, Internet, audio, print, newspaper, sponsorship, and other advertising spaces.

Simply Whim

There is significant competition within each market and platform where our products are sold. We compete against manufacturers and marketers of beauty products, and personal care products. In addition to the established multinational brands against which we compete, small, targeted niche brands such as ours continue to enter the beauty market. We also have competition from private label products sold by retailers.

We believe that we compete primarily based on perceived value, including pricing and innovation, product efficacy, service to the consumer, promotional activities, advertising, special events, new product introductions, e-commerce initiatives, direct sales, and other activities (including influencers). It is difficult for us to predict the timing, scale, and effectiveness of our competitors’ actions in these areas or the timing and impact of new entrants into the marketplace.

Channels

Simply Whim

Marketing and Advertising

Music of Your Life

We self-promote expansion of our podcast, streaming and syndication services across our broadcast network, mobile streaming applications, our broadcast website, and other digital platforms that reach national, regional, and local audiences as opportunities become available.

Simply Whim

Our marketing expense is targeted towards digital, social media, and streaming advertising. We believe these channels are highly effective in communicating with existing customers, as well as attracting new buyers. Our marketing program has been effective in communicating with our existing online, mobile, and retail followers in a targeted and relevant way. Our digital marketing strategy includes search engine optimization, paid search, mobile advertising, social media, display advertising, and influencer marketing channels. Digital marketing, coupled with our national radio advertising, has helped us increase brand awareness and consideration among those not familiar with Whim®, which we believe has resulted in new customers.

Information Technology

We are committed to using technology to improve our competitive position. We depend on a variety of information systems and technologies (including cloud technologies) to manage the operations of our growing customer base. We rely on computer systems to provide information for all areas of our business, including streaming, supply chain, merchandising, POS, e- commerce, marketing, finance, and accounting. Our core business systems consist mostly of purchased and licensed software programs that integrate together and with our internally developed web-based solutions. Our technology also includes a company-wide network that connects all corporate users, on-line stores, and our internal distribution infrastructure and provides communications for continual polling of sales movement across all levels.

We manage data security and privacy at the highest levels. Our Chief Executive Officer is actively engaged in oversight of cybersecurity and IT infrastructure and works with outsourced vendors to manage all network operations. Our vendors keep our Chief Executive Officer informed on cybersecurity and privacy matters throughout the year. We have established processes for sharing data and performing third-party risk assessment and regular disaster recovery planning and response readiness testing. Our security approach also includes multiple layers of defense and testing of controls. We have strengthened our data protection capabilities through investments in our infrastructure hardware and software.

Employees

As of May 31, 2023, Marc Angell (Director and Chief Executive Officer) is the only non-employee officer director of The Marquie Group. The Company has no official employees. We have an outside accountant, bookkeeper, and lawyer. We outsource our information technology services to a third-party vendor. Certain other executive and board positions have been identified, and we intend to fill these positions. Additional other support staff and other personnel will be hired when there is adequate capital available to do so. Music of Your Life currently has one part-time production person and three part-time announcers. We have one on-site part-time producer and one outside part-time producer.

As of May 31, 2023, Jacquie Angell (Director and Chief Executive Officer) is the only non-employee officer director of Simply Whim, Inc. Simply Whim has no official employees and has one part-time marketing person, an outside accountant, and an outside lawyer.

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

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

Available Information

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

ITEM 1A. RISK FACTORS.

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

ITEM 1B. UNRESOLVED STAFF COMMENTS.

None.

ITEM 2. PROPERTIES.

The Marquie Group’s corporate office is located at 7901 4^th St. N., Ste. 4000, St. Petersburgh, FL 33702, telephone number, (800) 351-3021. As the company continues to grow, the facilities and employment-related expenses will likely increase significantly. We believe that our office facilities are suitable and adequate for our operations as currently conducted and contemplated.

ITEM 3. LEGAL PROCEEDINGS.

The Company entered into a settlement agreement with the SEC pursuant to violation of Section 5(a) and Section 5(c) of the Securities Act.

On December 15, 2022, we entered into a settlement agreement with the Securities and Exchange Commission. We agreed that we failed to comply with Regulation A, which provides a limited exemption to the registration requirements of the Security Act for certain public offerings. Specifically, after obtaining qualification to offer shares at a fixed price pursuant to Regulation A, our lawyer materially changed the offering price on two occasions and thereafter we offered and sold shares in an offering that was not exempt from registration pursuant to Regulation A. We filed a post-effective supplement and should have filed a fully amendment to its filing with the appropriate comment and SEC review. As a result, it was deemed that we violated Sections 5(a) and 5(c) of the Securities Act. As a settlement, we paid a $10,000 fine, are barred from Regulation A filings for five years, and must cease and desist from violating section 5 of the Securities Act.

ITEM 4. MINE SAFETY DISCLOSURES.

Not Applicable.

PART II

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

Market Information

Our common stock is listed on OTC Pink under the symbol “TMGI”. We had approximately 2,258 registered holders of our common stock as of May 31, 2023. Registered holders do not include those stockholders whose stock has been issued in street name. The last reported price for our common stock on August 8, 2023, was $0.0013 per share.

The following table reflects the high and low closing sales prices per share of our common stock during each calendar quarter as reported on the OTCQB, during the two fiscal years ended May 31, 2023:

____________________

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

Dividends and Distribution

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

Sales of Unregistered Securities

Effective April 21, 2022, the Company effectuated a 1 for 1,000 reverse split of the Company’s Common Stock (“Reverse Split”), meaning that each 1,000 shares of Common Stock is consolidated into 1 share of Common Stock following the reverse split, provided however, that fractional shares would be rounded up to the nearest whole share. Following the Reverse Split, the Company had 16,189,732 common shares issued and outstanding. Due to a data input error, the opening bid price on the effective date for the stock was set at $0.01 instead of $0.10. This resulted in a 10-times loss in shareholder value. See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

On August 16, 2018 (the “Closing Date”), Music of Your Life, Inc. (the “Company”) entered into a Merger Agreement (the “Merger Agreement”) by and among the Company, and The Marquie Group, Inc., a Utah corporation ("TMGI"), pursuant to which the Company merged with TMGI. The Company was the surviving corporation. Each shareholder of TMGI received one (1) share of common stock of the Company for every one (1) share of TMGI common stock held as of August 16, 2018. In accordance with the terms of the merger agreement, all of the shares of TMGI held by TMGI shareholders were cancelled, and 100,000 shares of common stock (as adjusted for the September 4, 2019, 1 share for 400 shares stock split) of the Company were issued to the TMGI shareholders. A majority of these shares, 50,000 shares of common stock of the Company were issued to Marc and Jacquie Angell, affiliates of the Company. This is considered a related party transaction. The TMGI merger will provide the Company with access to certain registered trademarks and intellectual property with respect to health, beauty, and social networking products.

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

Penny Stock Rules

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

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

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

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

ITEM 6. SELECTED FINANCIAL DATA.

Not required.

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

General

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the Consolidated Financial Statements and related notes under Item 8 of this annual report. Our Consolidated Financial Statements are not directly comparable from period to period due to acquisitions and dispositions. Refer to Note 3 of our Consolidated Financial Statements under Item 8 of this annual report for details of each of these transactions. We have elected the presentation requirements under Rule 12b-2 of the Exchange Act as a smaller reporting company and have herein included a two-year discussion of our financial condition and results of operations.

Overview

The Marquie Group, Inc. is an emerging direct-to-consumer firm specializing in marketing, product development, and media, including a dynamic radio and digital network. We craft and promote top-tier health and beauty solutions that enrich lives, showcased through engaging radio content for our audience. We maintain a website at www.themarquiegroup.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to these reports are available free of charge through our website as soon as reasonably practicable after those reports are electronically filed with or furnished to the SEC. The information on our website is not a part of or incorporated by reference into this or any other report of the company filed with, or furnished to, the SEC.

We have three operating segments: (1) Broadcast, (2) Digital Media, and (3) Health and Beauty, which also qualify as reportable segments. Our operating segments reflect how we assess the performance of each operating segment and determine the appropriate allocations of resources to each segment. We continually review our operating segment classifications to align with operational changes in our business and may make changes as necessary.

We measure and evaluate our operating segments based on operating income and operating expenses that exclude costs related to corporate functions, such as accounting and finance, human resources, legal, tax and treasury. We also exclude costs such as amortization, depreciation, taxes, and interest expense when evaluating the performance of our operating segments.

Our principal sources of broadcast revenue include:

Our principal sources of digital media revenue include:

Our principal sources of health and beauty revenue include:

In our broadcast and digital media operating segments, the rates we can charge for airtime, advertising and other products and services are dependent upon several factors, including:

In our health and beauty operating segment, the price we can charge for our products are dependent upon several factors, including:

Broadcasting

Our foundational business is radio broadcasting, which includes the ownership and operation of a syndicated radio network including our affiliated radio stations subscribing to our programming delivery. Refer to Item 1. Business of this annual report for a description of our broadcasting operations.

Advertising revenue generated from our syndicated radio operations is reported as broadcast revenue in our Consolidated Financial Statements included in Item 8 of this annual report. Advertising revenue is recorded on a gross basis unless an agency represents the advertiser, in which case revenue is reported net of the commission retained by the agency.

Broadcast revenue is impacted by the rates radio stations can charge for programming and advertising time, the level of airtime sold to programmers and advertisers, the number of impressions delivered, or downloads made, and the number of listener responses in the case of pay-per-call. Advertising rates are based upon the demand for advertising time, which in turn is based on our stations’ and networks’ ability to produce results for their advertisers. We market ourselves to advertisers based on the responsiveness of our audiences. We do not subscribe to traditional audience measuring services for most of our radio stations.

Each of our radio station affiliates allocates 3 minutes per hour of advertising time for our commercials at a preset time every hour based on the Music of Your Life clock.

Our results are subject to seasonal fluctuations. As is typical in the broadcasting industry, our second and fourth quarter advertising revenue typically exceeds our first and third quarter advertising revenue. Seasonal fluctuations in advertising revenue correspond with quarterly fluctuations in the retail industry. Additionally, we experience increased demand for political advertising during election even numbered years, over non-election odd numbered years. Political advertising revenue varies based on the number and type of candidates as well as the number and type of debated issues.

Broadcast operating expenses include: (i) employee salaries, commissions and related employee benefits and taxes, (ii) facility expenses such as lease expense and utilities, (iii) marketing and promotional expenses, (iv) production and programming expenses, and (v) music license fees. In addition to these expenses, our network incurs programming costs and lease expenses for satellite communication facilities.

Digital Media

Revenue generated from this segment is reported as digital media revenue in our Consolidated Statements of Operations under Item 8 of this annual report. Digital media revenue is impacted by the rates our sites can charge for advertising time, the level of advertisements sold, the number of impressions delivered, or the number of products sold, and the number of digital subscriptions sold. Like our broadcasting segment, our second and fourth quarter advertising revenue from our digital media segment generally exceeds the segment’s first and third quarter advertising revenue. This seasonal fluctuation in advertising revenue corresponds with quarterly fluctuations in the retail advertising industry. We also experience fluctuations in quarter-over-quarter comparisons based on the date on which Easter is observed, as this holiday generates a higher volume of product downloads from our church product websites. Additionally, we experience increased demand for advertising time and placement during election years for political advertisements.

The primary operating expenses incurred by our digital media businesses include: (i) employee salaries, commissions and related employee benefits and taxes, (ii) facility expenses such as lease expense and utilities, (iii) marketing and promotional expenses, (iv) royalties, (v) streaming costs, and (vi) cost of goods sold associated with e-commerce sites.

Health and Beauty

Except for AminoMints®, our health and beauty operations are owned by Simply Whim, Inc., and include Whim®, an emerging beauty brand blending Nature, Nutrition, and Science to offer safe and effective products. Whim’s founder, a 3-time cancer survivor under treatment, recognizes the U.S.'s regulatory lapses and strives for better standards. Exclusively made in the USA, Whim® aims to provide responsible beauty options. We forecast strong sales growth next year, driven by demand for safer beauty solutions, and plan to exceed these expectations with continued innovation.

Whim® Beauty Products:

Whim® Beauty Products in Development:

AminoMints®:

AminoMints® are a fun and innovative way to introduce amino acid supplements to those unfamiliar or have previously tried them and found the taste or experience unappealing. Daily amino acid supplementation is essential for maintaining health, optimal functioning, and addressing various health concerns. Amino acids are crucial components of all proteins. An imbalance of these amino acids can lead to numerous negative effects, such as fatigue, mood swings, concentration issues, muscle loss, and digestive disorders. Amino acid deficiencies are common and can also impact our appearance, leading to dry, brittle nails, dry hair and skin, loss of lean muscle, and weight gain.

All products in development are estimated to launch mid-2024.

Assets – Inventory and Equipment

Music of Your Life.

A significant amount of equipment is used to broadcast Music of Your Life programming. As of year-end May 31, 2023, all current equipment has been fully depreciated, and includes:

Simply Whim.

Simply Whim assets are not included in our balance sheet calculations as we own less than 51% of the company. This will change in the coming year as we acquire a controlling interest in the company. As of year-end, May 31, 2023, the Simply Whim assets include:

Assets – Intellectual Property

Trademarks

Trademarks are an integral part of our success and valuation. We have multiple trademarks registered with the United States Patent and Trademark Office (“USPTO”), with additional applications filed and awaiting registration. We have secured exclusive license agreements with right of first refusal to acquire for additional trademarks.

Music of Your Life®.

The Music of Your Life trademarks includes the second audio trademark in history to be registered by the USPTO. Total cost of Music of Your Life trademarks is $250,750.

Simply Whim™.

The Whim and related trademarks are owned by Simply Whim, Inc. Our 25% acquisition of Simply Whim included an exclusive license to use the trademarks in commerce, with a right of first refusal to acquire.

AminoMints®.

The AminoMints trademarks are owned by AminoMints, Inc. Our pending acquisition of AminoMints, Inc. will include an exclusive license, with first right of refusal for the AminoMints trademarks.

Trademark Licenses

We have exclusive license agreements for several additional trademarks, either registered, or pending registration with the USPTO.

Results of Operations

Following is management’s discussion of the relevant items affecting results of operations for the years ended May 31, 2023, and 2022.

Revenues. The Company’s wholly owned subsidiary, Music of Your Life generated $2,500 in net revenues for the years ended May 31, 2023 and 2022. Broadcast radio revenues are primarily generated by pay per call spot sales from various advertisers represented by the advertising agency, MSH Marketing, and pay per call spot sales from MyPillow. Through barter arrangements with our terrestrial radio station affiliates, Music of Your Life owns three minutes per hour to sell goods and services on these stations.

Our subsidiary, Simply Whim, generated $25,000 in gross revenue for the year ending May 31, 2023, and is forecasting an estimated 40-times growth in revenue for 2024.

Cost of Sales. Our cost of sales was $-0- for both years ended May 31, 2023 and 2022. Our cost of sales in the future will consist principally of licensing costs and royalties associated with our syndicated radio network, other related services provided directly or outsourced through our affiliates, as well as operational and staffing costs with respect thereto.

Salaries and Consulting Expenses. Executive salaries remain unpaid and accruing for the year ending May 31, 2023. Accrued salaries and consulting expenses for the year ended May 31, 2023 were $240,000 as compared to $120,000 for the year ended May 31, 2022. We expect that salaries and consulting expenses, that are cash-based instead of share-based, will increase as we add personnel to build our health and beauty business.

Professional Fees. Professional fees for the year ended May 31, 2023 were $85,190 as compared to $97,162 for the year ended May 31, 2022. We anticipate that professional fees will increase in future periods as we scale up our operations.

Other Selling, General and Administrative Expenses. Other selling, general and administrative expenses were $31,280 for the year ended May 31, 2023 as compared to $45,403 for the year ended May 31, 2022. We anticipate that Other SG&A expenses will increase commensurate with an increase in our operations.

Other Income (Expense). The Company had net other income of $1,536,629 for the year ended May 31, 2023. For the year ended May 31, 2023, the company incurred interest expense of $375,008 and recorded income from derivative liability of $1,911,637. The Company had net other expenses of $3,853,387 for the year ended May 31, 2022. For the year ended May 31, 2022, the company recorded a gain on settlement of debt in the amount of $260,032, incurred interest expense of $645,021, expense from derivative liability of $526,690 and loss on conversion of notes payable and accrued interest of $2,941,708.

Liquidity and Capital Resources

As of May 31, 2023, our primary source of liquidity consisted of $25,250 in cash and cash equivalents. We hold most of our cash reserves in local checking accounts with local financial institutions. Since inception, we have financed our operations through a combination of short and long-term loans, and through the private placement of our common stock.

We generated net income for the year ended May 31, 2023 of $1,180,159, mostly from derivative liability income. We have sustained significant net losses which have resulted in an accumulated deficit at May 31, 2023 of $14,698,030 and are currently experiencing a substantial shortfall in operating capital which raises doubt about our ability to continue as a going concern. Without additional revenues, working capital loans, or equity investment, there is substantial doubt as to our ability to continue operations.

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

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

Stock Price Listing Calculation Error

On April 21, 2022, our 1,000:1 reverse stock split became effective. The share price was to be recalculated at 1,000:1, the same ratio as our outstanding share total. However, the opening bid for our stock was set in error at $0.01, instead of $0.10, resulting in a 10-times loss in shareholder value. Despite many attempts over several months of communications with the various agencies, we were informed there was nothing that could be done to rectify the matter and the bid would not be corrected.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Critical Accounting Policies

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

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

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

Recent Accounting Pronouncements

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

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Report of Independent Registerred Public Accounting Firm

Board of Directors and Shareholders

The Marquie Group, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of The Marquie Group, Inc. (the “Company”) as of May 31, 2023 and May 31, 2022, respectively, and the related consolidated statements of operations, statements of stockholders’ deficit, and cash flows for the years then ended, and the related notes and schedules (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of May 31, 2023 and May 31, 2022, and the results of its operations and its cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

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

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

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

Going Concern Uncertainty

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in note 12 to the financial statements, the Company has incurred losses since inception of $14,698,030 and negative working capital of $6,366,552. These factors create an uncertainty as to the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in note 12. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Loss on conversions of notes payable and accrued interest to common stock

Critical Audit Matter Description

The Company has had outstanding notes payable to lenders which are convertible into Company common stock at conversion prices which are based on the future trading price of the Company's common stock. For the year ended May 31, 2022, the Company issued a total of 11,511,179 shares of its common stock pursuant to conversions of an aggregate of $285,683 in principal and accrued interest. The $2,941,708 in excess of the $3,227,391 fair value of the 11,511,179 shares of common stock at the respective dates of issuance over the $285,683 liability reduction was charged to Loss on Conversions of Notes Payable.

How the Critical Audit Matter was Addressed in the Audit

Our principal audit procedures related to the Company's loss on conversions of notes payable and accrued interest to common stock expense included:

Emphasis of Matters-Risks and Uncertainties

The Company is not able to predict the ultimate impact that COVID -19 will have on its business. However, if the current economic conditions continue, the pandemic could have an adverse impact on the economies and
financial markets of many countries, including the geographical area in which the Company plans to operate.

/s/ Gries & Associates, LLC

We have served as the Company’s auditor since 2022.

Denver, CO

PCAOB #6778

September 13, 2023

blaze@griesandassociates.com

501 S. Cherry Street, Suite 1100, Denver, Colorado 80246

(O)720-464-2875 (M)773-255-5631 (F)720-222-5846

THE MARQUIE GROUP, INC.

(formerly Music of Your Life, Inc.)

Consolidated Balance Sheets

The accompanying notes are an integral part of these financial statements

THE MARQUIE GROUP, INC.

(formerly Music of Your Life, Inc.)

Consolidated Statements of Operations

The accompanying notes are an integral part of these financial statements

THE MARQUIE GROUP, INC.

(formerly Music of Your Life, Inc.)

Consolidated Statements of Stockholders’ Deficit

For the Period from June 1, 2021 to May 31, 2023

The accompanying notes are an integral part of these financial statements

THE MARQUIE GROUP, INC.

(formerly Music of Your Life, Inc.)

Consolidated Statements of Cash Flows

The accompanying notes are an integral part of these financial statements

THE MARQUIE GROUP, INC.

(formerly Music of Your Life, Inc.)

Notes to the Consolidated Financial Statements

May 31, 2023

NOTE 1 - ORGANIZATION

Music of Your Life, Inc. (the “Company”) was incorporated under the laws of the State of Florida on January 30, 2008 under the name of “Zhong Sen International Tea Company”. From January 2008 to May 2013, the Company operated with the principal business objective of providing sales and marketing consulting services to small to medium sized Chinese tea producing companies who wished to export and distribute high quality Chinese tea products worldwide. On May 31, 2013 (the “Closing Date”), the Company entered into a Merger Agreement (the “Merger Agreement”) by and among the Company, Music of Your Life, Inc., a Nevada corporation (“MOYL Nevada”) incorporated October 10, 2012, and Music of Your Life Merger Sub, Inc., a Utah corporation (“Merger Sub”), pursuant to which MOYL Nevada merged with Merger Sub. As a result of the merger, MOYL Nevada became a wholly owned subsidiary of the Company, and on July 26, 2013, the Company changed its name to Music of Your Life, Inc., and operated a nationwide syndicated radio network.

Reverse Stock Split

Effective April 21, 2022, the Company effectuated a 1 share for 1,000 shares reverse stock split which reduced the issued and outstanding shares of common stock from 16,189,731,657 shares to 16,189,732 shares. The accompanying financial statements have been retroactively adjusted to reflect this reverse stock split. Due to a data input error, the opening Bid price for the stock was set at $0.01 instead of $0.10. This resulted in a 10-times loss in shareholder value. See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Acquisition of The Marquie Group, Inc.

On August 16, 2018 (see Note 10), the Company merged with The Marquie Group, Inc. (“TMGI”) in exchange for the issuance of a total of 100,000 shares of our common stock to TMGI’s stockholders. Following the merger, the Company had 102,277 shares of common stock issued and outstanding. On December 5, 2018, the Company amended and restated its Articles of Incorporation providing for a change in the Company’s name from “Music of Your Life, Inc.” to “The Marquie Group, Inc.” The TMGI business plan is to advertise a direct-to-consumer, health and beauty product line called “Whim” that use innovative formulations of plant-based, amino-acids and other natural alternatives to chemical ingredients.

Acquisition of Global Nutrition Experience, Inc.

On November 21, 2019 (see Note 10), the Company merged with Global Nutrition Experience, Inc. (“GNE”) in exchange for the issuance of a total of 193,000,000 shares of our common stock to GNE’s stockholder. The GNE business plan is to license intellectual property from, and to third parties.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

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

THE MARQUIE GROUP, INC.

(formerly Music of Your Life, Inc.)

Notes to the Consolidated Financial Statements

May 31, 2023

a.       Principles of Consolidation

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

b.       Accounting Method

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

c.       Use of Estimates in the Preparation of Financial Statements

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

d.       Cash and Cash Equivalents

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

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

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

f.       Revenue Recognition

The Company adopted ASC 606 requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. Advance customer payments are recorded as deferred revenue until such time as they are recognized. The Company does not offer any cash rebates. Returns or discounts, if any, are netted against gross revenues.

THE MARQUIE GROUP, INC.

(formerly Music of Your Life, Inc.)

Notes to the Consolidated Financial Statements

May 31, 2023

g.       Advertising

Advertising costs, which are expensed as incurred, were $3,750 for the year ended May 31, 2023 and $2,225 for the year ending May 31, 2022.

h.       Income Taxes

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

At May 31, 2023, the Company had net operating loss carryforwards of approximately $9,842,689, of which $3,340,960 expires in varying amounts through 2038 and $6,521,729 does not expire. No tax benefit has been reported in the financial statements because the potential tax benefits of the net operating loss carryforwards are offset by a valuation allowance of the same amount.

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

Net deferred tax assets consist of the following components as of May 31, 2023 and 2022: 

The income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate of 21% to pretax income (loss) for the years ended May 31, 2023 and 2022 due to the following: 

THE MARQUIE GROUP, INC.

(formerly Music of Your Life, Inc.)

Notes to the Consolidated Financial Statements

May 31, 2023

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

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

i.      Concentrations of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risks consist of cash and cash equivalents. The Company places cash and cash equivalents at well-known quality financial institutions. Cash and cash equivalents at banks are insured by the Federal Deposit Insurance Corporation for up to $250,000. The Company did not have any cash or cash equivalents in excess of this amount at May 31, 2023.

j.      Recent Accounting Pronouncements

We have reviewed accounting pronouncements issued and have adopted any that are applicable to the Company. We have determined that none had a material impact on our financial position, results of operations, or cash flows for the years ended May 31, 2023 and 2022.

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

NOTE 3 - FINANCIAL INSTRUMENTS

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

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

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

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

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

THE MARQUIE GROUP, INC.

(formerly Music of Your Life, Inc.)

Notes to the Consolidated Financial Statements

May 31, 2023

NOTE 4 - MUSIC INVENTORY

Our Music of Your Life song catalogue is compiled of more than 100,000 titles. Many of these songs include difficult to find older recordings that originated on long play records (LP’s) which date back to the turn of the 20^th century. We also have our entire catalogue on several hundred reel-to-reel tapes which preserve the high quality of the originals. We have transferred much of this music to a lossless digital format known as the Waveform Audio File Format (WAV). These WAV files are of a very large size and take up tremendous hard drive space, therefore, we have converted our entire catalogue to the MPEG-1 Audio Layer 3 format (MP3). Advancing software and hardware technology in the music space has reached a pinnacle with a recent lossless format called FLAC, or Free Lossless Audio Codec. This technology offers amazing, CD or WAV quality specifications in a small file size. An effort is underway to convert the entire Music of Your Life catalogue from the original source material to the FLAC format offering our listeners a much-improved experience which cannot be found on any free streaming service today.

The replacement value of our music catalogue is valued at more than $250,000.

Music inventory consisted of the following: 

The Company purchases digital music from time to time as new music become available for broadcast on our network. During the years ended May 31, 2023 and 2022, the Company purchased $1,250 worth of music inventory. For the years ended May 31, 2023 and 2022, depreciation on music inventory was $1,238 and $2,142, respectively.

THE MARQUIE GROUP, INC.

(formerly Music of Your Life, Inc.)

Notes to the Consolidated Financial Statements

May 31, 2023

NOTE 5 – ACCRUED CONSULTING FEES

Accrued consulting fees consisted of the following: 

The accrued consulting fees balance changed as follows: 

See Note 11 (Commitments and Contingencies)

THE MARQUIE GROUP, INC.

(formerly Music of Your Life, Inc.)

Notes to the Consolidated Financial Statements

May 31, 2023

NOTE 7 - NOTES PAYABLE

Notes payable consisted of the following: 

THE MARQUIE GROUP, INC.

(formerly Music of Your Life, Inc.)

Notes to the Consolidated Financial Statements

May 31, 2023

(B) On April 22, 2015, the Company issued a $25,000 Promissory Note, non-interest bearing (interest at 24% per annum after May 22, 2015), due at maturity on May 22, 2015.

(D) On July 24, 2015, the Company issued a $50,000 Promissory Note to Kodiak Capital Group, LLC (“Kodiak”) for services rendered in association with an Equity Purchase Agreement. As amended and restated January 4, 2016, the note is non-interest bearing and was due on February 1, 2016.

(E) On July 31, 2015, the Company issued a $25,000 Promissory Note with a stated interest amount of $2,500 due at maturity on October 31, 2015.

(G) On August 6, 2015, the Company issued a $50,000 Promissory Note with a stated interest amount of $5,000 due at maturity on October 21, 2015.

(H) On August 21, 2015, the Company issued a $50,000 Promissory Note with a stated interest amount of $5,000 due at maturity on November 6, 2015.

(I) On September 21, 2015, the Company issued a $25,000 Promissory Note with a stated interest amount of $2,500 due at maturity on December 20, 2015. In the event that all principal and interest are not paid to the lender by January 20, 2016, interest is to accrue at a rate of 24% per annum commencing on January 21, 2016.

(M) On December 29, 2015, the Company issued a $20,000 Convertible Promissory Note to a lender for net loan proceeds of $15,000. The note bears interest at a rate of 12% per annum, was due on December 29, 2016, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to 50% of the lowest closing bid price during the 30 Trading Day period prior to the Conversion Date. See Note 9 (Derivative Liability).

(P) On June 3, 2016, the Company issued a $25,000 Promissory Note. The note bears interest at a rate of 10% per annum and was due on November 30, 2016.

(V) On May 3, 2017, the Company issued a $72,750 Convertible Promissory Note to a lender as a replacement for the principal and interest due on a promissory note due on October 14, 2014. The note bears interest at a rate of 10% per annum, is due on demand, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to $0.0001293 per share.

(W) On April 5, 2017, the Company issued a $35,000 Convertible Promissory Note to a lender as a replacement for the principal and interest due on a promissory note due on August 23, 2015. The note bears interest at a rate of 8% per annum, is due on demand, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to 40% of the lowest Trading Price during the 5 Trading Day period prior to the Conversion Date. See Note 9 (Derivative Liability).

(X) On April 5, 2017, the Company issued a $27,500 Convertible Promissory Note to a lender as a replacement for the principal and interest due on a promissory note due on October 31, 2015. The note bears interest at a rate of 8% per annum, is due on demand, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to 40% of the lowest Trading Price during the 5 Trading Day period prior to the Conversion Date. See Note 9 (Derivative Liability).

THE MARQUIE GROUP, INC.

(formerly Music of Your Life, Inc.)

Notes to the Consolidated Financial Statements

May 31, 2023

(Y) On March 1, 2017, the Company issued a $8,600 Convertible Promissory Note to a vendor of the Company to convert certain accounts payable due to the vendor. The note bears interest at a rate of 10% per annum, is due on demand, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to the higher of $0.00004 per share or 60% of the lowest Trading Price during the 5 Trading Day period prior to the Conversion Date.

(CC) On December 1, 2017, the Company issued a $50,000 Convertible Promissory Note to a vendor in settlement of certain accrued consulting fees of $50,000. The note bears interest at a rate of 10% per annum, is due on demand, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to 60% of the lowest Trading Price during the 20 Trading Day period prior to the Conversion Date. See Note 9 (Derivative Liability).

(DD) On March 5, 2018, the Company issued a $35,000 Convertible Promissory Note to a lender for net loan proceeds of $33,000. The note bears interest at a rate of 10% per annum, was due on March 5, 2019, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to 50% of the lowest Trading Price during the 20 Trading Day period prior to the Conversion Date. See Note 9 (Derivative Liability).

(GG) On September 18, 2018, the Company issued a $18,000 Convertible Promissory Note to a lender for net loan proceeds of $14,000. The note bears interest at a rate of 10% per annum, was due on September 18, 2019, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to 50% of the lowest Trading Price during the 20 Trading Day period prior to the Conversion Date. See Note 9 (Derivative Liability).

(SS) On November 30, 2020, the Company issued a $170,000 Convertible Promissory Note to a lender which paid off some of the accrued interest for the note described in (RR) above. The Company received net proceeds of $32,500. The note bears interest at a rate of 12% per annum, is due on November 30, 2021, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to the lesser of (1) 105% of the closing bid price of the Common Stock on the Issue Date, or (2) the closing bid price of the Common Stock on the Trading Day immediately preceding the date of the conversion. See Note 7 (Derivative Liability).

(VV) On June 4, 2021, the Company issued a $238,596 Convertible Promissory Note to a lender which paid off the principal and accrued interest for the notes described in (EE), (FF), (KK), (LL), (MM), (NN) and (PP) above. The note bears interest at a rate of 10% per annum, is due on June 4, 2022, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to the lesser of (1) $0.00004, or (2) 50% of the lowest trading price of the common stock for the previous 15-day trading period. See Note 7 (Derivative Liability).

(WW) On August 27, 2021, the Company issued a $14,000 Convertible Promissory Note to a lender for net loan proceeds of $10,000. The note bears interest at a rate of 8% per annum, is due on August 27, 2022, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to 65% of the lowest trading price in the 10 Trading Day period prior to the Conversion Date. See Note 7 (Derivative Liability).

THE MARQUIE GROUP, INC.

(formerly Music of Your Life, Inc.)

Notes to the Consolidated Financial Statements

May 31, 2023

(YY) On December 21, 2021, the Company issued a $58,250 Convertible Promissory Note to a lender for net loan proceeds of $49,925. The note bears interest at a rate of 12% per annum, is due on December 21, 2022, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to the higher of (1) $0.0001, or (2) the par value of the Common Stock.

(ZZ) On February 8, 2022, the Company issued a $245,000 Convertible Promissory Note to a lender for net loan proceeds of $218,000. The note bears interest at a rate of 12% per annum, is due on February 8, 2023, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to the higher of (1) $0.0001, or (2) the par value of the Common Stock.

(AA) On June 10, 2022, the Company issued a $38,880 Convertible Promissory Note to a lender for net loan proceeds of $31,800. The note bears interest at a rate of 12% per annum, is due on June 10, 2023, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to the lower of (1) $0.05, or (2) 50% of the lowest trading price in the 10 Trading Day period prior to the Conversion Date. See Note 6 (Derivative Liability).

(C) On November 4, 2022, the Company issued a $30,555 Convertible Promissory Note to a lender for net loan proceeds of $25,000. The note bears interest at a rate of 12% per annum, is due on November 4, 2023, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to the lower of (1) $0.005, or (2) 50% of the lowest trading price in the 10 Trading Day period prior to the Conversion Date. See Note 6 (Derivative Liability).

(F) On April 10, 2023, the Company issued a $61,100 Convertible Promissory Note to a lender for net loan proceeds of $55,000. The note bears interest at a rate of 12% per annum, is due on April 10, 2024, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to the lower of (1) $0.003, or (2) par value of common stock. See Note 6 (Derivative Liability).

Concentration of Notes Payable

The principal balance of the notes payable was due to: 

THE MARQUIE GROUP, INC.

(formerly Music of Your Life, Inc.)

Notes to the Consolidated Financial Statements

May 31, 2023

NOTE 8 – NOTES PAYABLE – RELATED PARTIES

Notes payable – related parties consisted of the following: 

THE MARQUIE GROUP, INC.

(formerly Music of Your Life, Inc.)

Notes to the Consolidated Financial Statements

May 31, 2023

NOTE 9 - DERIVATIVE LIABILITY

The derivative liability at May 31, 2023 and 2022 consisted of: 

THE MARQUIE GROUP, INC.

(formerly Music of Your Life, Inc.)

Notes to the Consolidated Financial Statements

May 31, 2023

The above convertible notes contain a variable conversion feature based on the future trading price of the Company common stock. Therefore, the number of shares of common stock issuable upon conversion of the notes is indeterminate. Accordingly, we have recorded the fair value of the embedded conversion features as a derivative liability at the respective issuance dates of the notes and charged the applicable amounts to debt discounts and the remainder to other expense. The increase (decrease) in the fair value of the derivative liability from the respective issuance dates of the notes to the measurement dates is charged (credited) to other expense (income). The fair value of the derivative liability of the notes is measured at the respective issuance dates and quarterly thereafter using the Black Scholes option pricing model.

Assumptions used for the calculations of the derivative liability of the notes at May 31, 2023 include (1) stock price of $0.0041 per share, (2) exercise prices ranging from $0.00004 to $0.001755 per share, (3) terms ranging from 0 days to 315 days, (4) expected volatility of 2,189% and (5) risk free interest rates ranging from 4.65% to 5.28%.

Assumptions used for the calculations of the derivative liability of the notes at May 31, 2022 include (1) stock price of $0.001 per share, (2) exercise prices ranging from $0.00004 to $0.00065 per share, (3) terms ranging from 0 days to 88 days, (4) expected volatility of 1,986% and (5) risk free interest rates ranging from 0.73% to 1.16%.

Concentration of Derivative Liability

The derivative liability relates to convertible notes payable due to: