Attached files

file filename
EX-3.1 - Marquie Group, Inc.ex3_1.htm
EX-3.2 - Marquie Group, Inc.ex3_2.htm
EX-31.1 - SECTION 302 CEO CERTIFICATION - Marquie Group, Inc.ex31_1302certification.htm
EX-32.1 - SECTION 906 CEO CERTIFICATION - Marquie Group, Inc.ex32_1906certification.htm



UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)
   
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
   
For the quarterly period ended August 31, 2015
   
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ______to______

 

Commission File Number: 000-54163

 

Music of Your Life, Inc.
(Exact name of registrant as specified in its Charter)

  

Florida   26-2091212

(State or other jurisdiction of

incorporation or organization)

  (I.R.S. Employee Identification No.)
     

3225 McLeod Drive, Suite 100

Las Vegas, Nevada

  89121
(Address of principal executive office)   (Zip Code)

 

 (800) 351-3021

(Registrant’s telephone number, including area code)

 

Not Applicable

 (Former Name, former address and former fiscal year, if changed since last report)

 

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

 

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

 

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

 

Large accelerated filer ¨ Accelerated filer ¨
Non-accelerated filer (Do not check if smaller reporting company) ¨ Smaller reporting company x

 1

 

 

 

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

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date: As of October 14, 2015, there were 91,946,559 shares of $0.001 par value common stock, issued and outstanding.

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 2

 

 

PART I: FINANCIAL INFORMATION  
   
Item 1: Financial Statements 3
Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operation 10
Item 3: Quantitative and Qualitative Disclosures about Market Risk 14
Item 4: Controls and Procedures 14
   
PART II: OTHER INFORMATION  
   
Item 1: Legal Proceedings 15
Item 1A: Risk Factors 15
Item 2: Unregistered Sales of Equity Securities and Use of Proceeds 15
Item 3: Defaults Upon Senior Securities 15
Item 4: Mine Safety Disclosures 15
Item 5: Other Information 15
Item 6: Exhibits 15
   
SIGNATURES 16

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 3

 

 

PART I - FINANCIAL INFORMATION

 

ITEM 1.  Financial Statements

 

MUSIC OF YOUR LIFE, INC.
Consolidated Balance Sheets
       
ASSETS
   August 31,  May 31,
   2015  2015
   (Unaudited)   
       
CURRENT ASSETS          
           
Cash and cash equivalents  $53,016   $14,949 
Loans receivable from related party   15,950    15,950 
           
Total Current Assets   68,966    30,899 
           
OTHER ASSETS          
           
Deposits for acquisition of intangible assets   203,500    184,000 
Music inventory   4,793    4,145 
Trademark   4,215    4,215 
           
Total Other Assets   212,508    192,360 
           
TOTAL ASSETS  $281,474   $223,259 
           
LIABILITIES AND STOCKHOLDERS' DEFICIT          
           
CURRENT LIABILITIES          
           
Accounts payable  $8,299   $11,924 
Accrued interest payable on notes payable   95,732    90,164 
Accrued consulting fees   500    300 
Notes payable   189,089    130,000 
Notes payable to related parties   154,761    154,761 
           
Total Current Liabilities   448,381    387,149 
           
TOTAL LIABILITIES   448,381    387,149 
           
STOCKHOLDERS' DEFICIT          
           
Common stock, $0.001 par value; 500,000,000 shares          
 authorized, 90,946,559 and 83,446,559 shares issued          
 and outstanding, respectively   90,947    83,447 
Additional paid-in-capital   1,022,438    898,237 
Accumulated deficit   (1,280,292)   (1,145,574)
           
Total Stockholders' Deficit   (166,907)   (163,890)
           
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT  $281,474   $223,259 
           
The accompanying notes are an integral part of these financial statements

 4

 

MUSIC OF YOUR LIFE, INC.
Consolidated Statements of Operations
(Unaudited)
       
   For the Three Months Ended
   August 31,
   2015  2014
       
NET REVENUES  $2,718   $1,918 
           
OPERATING EXPENSES          
           
Salaries and Consulting fees   39,500    36,500 
Professional fees   14,282    8,381 
Selling, general and administrative   42,796    18,265 
           
Total Operating Expenses   96,578    63,146 
           
LOSS FROM OPERATIONS   (93,860)   (61,228)
           
OTHER INCOME (EXPENSES)          
           
Loss on change in fair value of derivative liability   —      (12,452)
Interest expense (including amortization of debt discount          
  of $35,290 and $13,833, respectively)   (40,858)   (40,924)
           
Total Other Income (Expenses)   (40,858)   (53,376)
           
LOSS BEFORE INCOME TAXES   (134,718)   (114,604)
           
INCOME TAX EXPENSE   —      —   
           
NET LOSS  $(134,718)  $(114,604)
           
BASIC AND DILUTED:          
Net loss per common share  $(0.00)  $(0.00)
           
Weighted average shares outstanding   85,701,994    73,145,478 
           
The accompanying notes are an integral part of these financial statements

 5

 

MUSIC OF YOUR LIFE, INC.
Consolidated Statements of Cash Flows
(Unaudited)
          
      For the Three Months Ended
      August 31,
      2015  2014
          
CASH FLOWS FROM OPERATING ACTIVITIES:               
                
Net loss       $(134,718)  $(114,604)
Adjustments to reconcile net loss to net               
 cash used by operating activities:               
Common stock issued for services        33,000    —   
Change in fair value of derivative liability        —      12,452 
Amortization of debt discounts        35,290    13,833 
Non-cash interest expenses             22,623 
Changes in operating assets and liabilities:               
Inventory        (648)   (367)
Accounts payable        (3,625)   20,096 
Accrued interest payable on notes payable        5,568    —   
Accrued consulting fees        200    —   
                
Net Cash Used by Operating Activities        (64,933)   (45,967)
                
CASH FLOWS FROM INVESTING ACTIVITIES:               
                
Deposits for acqusition of intangible assets        (19,500)   (30,500)
                
Net Cash Used by Investing Activities        (19,500)   (30,500)
                
CASH FLOWS FROM FINANCING ACTIVITIES:               
                
Bank overdraft        —      (987)
Proceeds from sale of common stock        —      65,000 
Proceeds from notes payable        185,000    87,500 
Payments on notes payable        (62,500)   —   
                
Net Cash Provided by Financing Activities        122,500    151,513 
                
NET INCREASE IN CASH AND CASH EQUIVALENTS       $38,067   $75,046 
                
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD   #    14,949    —   
                
CASH AND CASH EQUIVALENTS, END OF PERIOD       $53,016   $75,046 
                
SUPPLEMENTAL CASH FLOW INFORMATION               
                
Cash Payments For:               
Interest       $—     $—   
Income taxes       $—     $—   
                
Non-cash financing activity:               
Initial derivative liability on convertible note payable       $—     $30,434 
Beneficial conversion feature credited to additional paid in capital  $—     $25,610 
Common stock issued as part of Promissory Note loans recorded          
  as debt discounts and credited to additional paid in capital  $98,701   $—   
                
The accompanying notes are an integral part of these financial statements

 6

 

 

MUSIC OF YOUR LIFE, INC.

Notes to the Consolidated Financial Statements

August 31, 2015

(Unaudited)

 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION

 

Basis of Presentation

 

The accompanying unaudited financial statements are presented in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal occurring accruals) considered necessary in order to make the financial statements not misleading, have been included. Operating results for the three months ended August 31, 2015 are not necessarily indicative of results that may be expected for the year ending May 31, 2016. 

 

Organization

 

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

 

NOTE 2 - LOANS RECEIVABLE – RELATED PARTY

During the year ended May 31, 2013, the Company loaned $174,950 to the Company’s current chief executive in anticipation of the merger agreement described in Note 1. The loans are non-interest bearing and due on demand. Effective May 31, 2015, the Company agreed to waive collection of $100,000 of the remaining $115,950 loans receivable balance in exchange for the chief executive officer’s agreement to waive payment of the $100,000 accrued consulting fees balance due him at May 31, 2015 (see Note 8). As of August 31, 2015, the balance due on this loan was $15,950.

NOTE 3 – DEPOSITS FOR ACQUISITION OF INTANGIBLE ASSETS

As of August 31, 2015 the Company had paid $203,500 to the wife of the chief executive officer as deposits for certain trademarks and other intellectual property to be assigned to the Company. Under the agreement, if the Company fails to pay a total of $250,000 by December 31, 2015, the Company will forfeit all rights, title and interest in the trademarks and intellectual property unless extended by her. 

 7

 

MUSIC OF YOUR LIFE, INC.

Notes to the Consolidated Financial Statements

August 31, 2015

(Unaudited)

 

NOTE 4 - MUSIC INVENTORY

The Company purchases digital music to broadcast over the radio and internet. During the three months ended August 31, 2015, the Company purchased $648 worth of music inventory. The amount of music inventory held at August 31, 2015 was $4,793.

NOTE 5 - NOTES PAYABLE

Notes payable consisted of the following:

    August 31, 2015  

May 31,

2015

Notes payable to a corporation, non interest bearing, due on demand, unsecured   $              2,500   $              55,000
Note payable to an individual, stated interest of $15,000, due on October 15, 2014, in default                50,000                   50,000
Note payable to an individual, due on May 22, 2015, in default   25,000                   25,000
Note payable to a family trust, stated interest of $2,500, due on October 31, 2015 - net of debt discount of $9,834                  15,166                             -
Note payable to an individual, stated interest of $2,500, due on October 31, 2015 - net of debt discount of $9,834                  15,166                             -
Note payable to a corporation, stated interest of $5,000, due on October 21, 2015 - net of debt discount of $20,106                  29,894                             -
Note payable to a corporation, stated interest of $5,000, due on November 6, 2015 - net of debt discount of $23,636                  26,363                             -
Note payable to an individual, non interest bearing, due on August 23, 2015, in default                  25,000                             -
Total Notes Payable   189,089   130,000
Less: Current Portion   (189,089)   (130,000)
Long-Term Notes Payable   $                     -   $                 -

 

On August 15, 2014, the Company issued a $50,000 Promissory Note with a stated interest amount of $15,000 due at maturity on October 14, 2014. The Company also issued 350,000 shares of common stock, valued at $52,500, as part of the note agreement. The proceeds of the note were allocated between the principal and the market value of the stock resulting in the Company recording a discount on the debt of $25,610. This amount was amortized over the 60 days life of the promissory note.

 8

 

MUSIC OF YOUR LIFE, INC.

Notes to the Consolidated Financial Statements

August 31, 2015

(Unaudited)

 

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. The Company also agreed to issue 500,000 shares of common stock, valued at $50,000 on April 22, 2015, as part of the note agreement. The proceeds of the note were allocated between the principal and the market value of the stock resulting in the Company recording a discount on the debt of $16,667. This amount was amortized over the 30 days life of the promissory note.

On June 23, 2015, the Company issued a $25,000 Promissory Note, non-interest bearing, due at maturity on August 23, 2015. The Company also agreed to issue 500,000 shares of common stock, valued at $20,000, as part of the note agreement. The proceeds of the note were allocated between the principal and the market value of the stock resulting in the Company recording a discount on the debt of $11,111. This amount was amortized over the 60 days life of the promissory note.

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. The Company also issued 1,000,000 shares of common stock, valued at $38,000, as part of the note agreement. The proceeds of the note were allocated between the principal and the market value of the stock resulting in the Company recording a discount on the debt of $15,079. This amount is being amortized over the 90 days life of the promissory note.

On July 31, 2015, the Company issued a second $25,000 Promissory Note with a stated interest amount of $2,500 due at maturity on October 31, 2015. The Company also issued 1,000,000 shares of common stock, valued at $38,000, as part of the note agreement. The proceeds of the note were allocated between the principal and the market value of the stock resulting in the Company recording a discount on the debt of $15,079. This amount is being amortized over the 90 days life of the promissory note.

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. The Company also agreed to issue 2,000,000 shares of common stock, valued at $76,000, as part of the note agreement. The proceeds of the note were allocated between the principal and the market value of the stock resulting in the Company recording a discount on the debt of $30,159. This amount is being amortized over the 75 days life of the promissory note.

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. The Company also agreed to issue 2,000,000 shares of common stock, valued at $60,000, as part of the note agreement. The proceeds of the note were allocated between the principal and the market value of the stock resulting in the Company recording a discount on the debt of $27,273. This amount is being amortized over the 75 days life of the promissory note.

 9

 

 

MUSIC OF YOUR LIFE, INC.

Notes to the Consolidated Financial Statements

August 31, 2015

(Unaudited)

 

NOTE 6 - NOTES PAYABLE – RELATED PARTIES

Notes payable – related parties consisted of the following:

   

August 31,

2015

 

May 31,

2015

Note payable to an individual significant stockholder, interest capped at $75,000, due on demand   $             150,000   $          150,000
Note payable to wife of Company’s chief executive officer, non-interest bearing, due on demand, unsecured  

 

2,688

 

 

2,688

Note payable to Company law firm, non-interest bearing, due on demand, unsecured  

 

2,073

 

 

2,073

 

Total Notes Payable

 

 

154,761

 

 

154,761

Less: Current Portion   (154,761)   (154,761)
Long-Term Notes Payable   $                     -   $                    -

 

NOTE 7 - EQUITY TRANSACTIONS

On July 21, 2015 the Company issued 1,000,000 shares of common stock for consulting services rendered to the Company which was recorded as consulting fees on the statement of operations in the amount of $33,000.

On June 23, 2015, the Company agreed to issue 500,000 shares of common stock to an accredited investor in consideration of the investor making a $25,000 loan to the Company (see Note 5).

On July 31, 2015, the Company issued a total of 2,000,000 shares of common stock to two accredited investors in consideration of the investors making two separate $25,000 loans to the Company (see Note 5).

On August 6, 2015, the Company agreed to issue 2,000,000 shares of common stock to an accredited investor in consideration of the investor making a $50,000 loan to the Company (see Note 5).

On August 21 2015, the Company agreed to issue 2,000,000 shares of common stock to an accredited investor in consideration of the investor making a $50,000 loan to the Company (see Note 5).

NOTE 8 – COMMITMENTS AND CONTINGENCIES

On November 5, 2012, the Company executed a General Services Agreement with the Company’s chief executive officer. The agreement provided for monthly compensation of $10,000 and was to remain in full force and effect until either party provided 30 days notice of termination to the other party. Effective May 31, 2015, the chief executive officer agreed to waive payment of the $100,000 accrued consulting fees balance due him at May 31, 2015 in

 10

 

MUSIC OF YOUR LIFE, INC.

Notes to the Consolidated Financial Statements

August 31, 2015

(Unaudited)

 

exchange for the Company’s agreement to waive collection of $100,000 of the remaining $115,950 loans receivable balance due from the chief executive officer at May 31, 2015 before this transaction (see Note 2). As of May 31, 2015, this agreement has been terminated.

On November 15, 2012 and June 3, 2013, the Company executed General Services Agreements with two other service providers. The agreements provide for monthly compensation of $1,000 and $500, respectively, and remain in full force and effect until either party provides 90 days and 30 days, respectively, notice of termination to the other party.

NOTE 9 - GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. At August 31, 2015, the Company had negative working capital of $379,415 and an accumulated deficit of $1,280,292. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern.

To date the Company has funded its operations through a combination of loans and sales of common stock. The Company anticipates another net loss for the fiscal year ended May 31, 2016 and with the expected cash requirements for the coming year, there is substantial doubt as to the Company’s ability to continue operations.

The Company is attempting to improve these conditions by way of financial assistance through issuances of notes payable and additional equity and by generating revenues through sales of products and services.

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 10 - SUBSEQUENT EVENTS

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. The Company also agreed to issue 1,000,000 shares of common stock to the lender as part of the note agreement. In the event that all principal and interest are not paid to the lender by January 20, 2016, the Company is obligated to issue another 1,000,000 shares of common stock to the lender and for interest to accrue at a rate of 24% per annum commencing January 21, 2016.

On September 25, 2015, the Company issued a $55,750 Convertible Promissory Note to a lender for net loan proceeds of $45,000. The note bears interest at a rate of 10% per annum (24% per annum default rate), is due on June 25, 2016, 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 (a) 55% of the lowest Trading Price during the 25 Trading Day period prior to the Conversion Date or (b) $.00605 per share.

 11

 

 Item 2.     Management’s Discussion and Analysis of Financial Condition and Results of Operation

 

The following discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 relating to future events or our future performance. Actual results may materially differ from those projected in the forward-looking statements as a result of certain risks and uncertainties set forth in this prospectus. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed in this report.

 

BUSINESS OVERVIEW

 

We are a multi-media entertainment company that currently produces live radio programming 24 hours a day, syndicated to AM, FM and HD terrestrial radio stations around the country. The network is also heard streaming across the Internet using our registered trademark, iRadio®. Music of Your Life® has been on the air since 1978, making it the longest running syndicated music radio network in the world. Our principal source of revenue comes from selling radio spots, or commercials on the network, and licensing our trade names. Expenses which comprise the costs of goods sold will include licensing agreements and royalties, as well as operational and staffing costs related to the management of the Company’s syndicated network. General and administrative expenses are comprised of administrative wages and benefits; occupancy and office expenses; outside legal, accounting and other professional fees; travel and other miscellaneous office and administrative expenses. Selling and marketing expenses include selling/marketing wages and benefits, advertising and promotional expenses, as well as travel and other miscellaneous related expenses.

 

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

 

RESULTS OF OPERATION

 

Following is management’s discussion of the relevant items affecting results of operations for the three months ended August 31, 2015 and 2014.

 

Revenues. The Company generated net revenues of $2,718 during the three months ended August 31, 2015 compared to $1,918 for the three months ended August 31, 2014. Revenues were generated from spot sales, digital sales and subscription based sales from the live radio programming through radio stations around the country.

 

Cost of Sales. Our cost of sales for the three months ended August 31, 2015 and 2014 was $-0-. 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 Fees. Salaries and consulting fees for the three months ended August 31, 2015 were $39,500 compared to $36,500 for the three months ended August 31, 2014. This expense category included stock-based compensation to consultants of $33,000 and $-0- for 2015 and 2014, respectively, and included chief executive officer accrued compensation of $-0- and $30,000 for 2015 and 2014, respectively. We expect that salaries and consulting expenses, that are cash instead of share-based, will increase as we add personnel to build our multi-media entertainment business.

 

Professional Fees. Professional fees for the three months ended August 31, 2015 were $14,282 compared to $8,381 for the three months ended August 31, 2014. We anticipate that professional fees will increase in future periods as we scale up our operations.

 

Selling, General and Administrative Expenses. Selling, general and administrative expenses were $42,796 for the three months ended August 31, 2015 compared to $18,265 for the three months ended August 31, 2014. We anticipate that SG&A expenses will increase commensurate with an increase in our operations.

 

Other Income (Expense). The Company had net other expense of $40,858 for the three months ended August 31, 2015 compared to net other expenses of $53,376 for the three months ended August 31, 2014. Other expenses incurred were comprised of interest expenses related to notes payable and the amortization of debt discount. During the three months ended August 31, 2014, the Company also recorded a loss on the change in fair value of derivative liability in the amount of $12,452.

 

 12

 

LIQUIDITY AND CAPITAL RESOURCES

 

As of August 31, 2015, our primary source of liquidity consisted of $53,016 in cash and cash equivalents. We hold most of our cash reserves in local checking accounts with local financial institutions. Since inception, we have financed our operations through a combination of short and long-term loans, and through the private placement of our common stock.

 

We have sustained significant net losses which have resulted in negative working capital and an accumulated deficit at August 31, 2015 of $379,415 and $1,280,292, respectively, which raises doubt about our ability to continue as a going concern. We generated a net loss for the three months ended August 31, 2015 of $134,718. Without additional revenues, working capital loans, or equity investment, there is substantial doubt as to our ability to continue operations.

 

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

 

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

 

CRITICAL ACCOUNTING PRONOUNCEMENTS

 

Our financial statements and related public financial information are based on the application of generally accepted accounting principles in the United States (“GAAP”). GAAP requires the use of estimates, assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenues and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.

 

Our significant accounting policies are summarized in Note 2 of our financial statements included in our May 31, 2015 Form 10-K. While all of these significant accounting policies impact our financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause an effect on our results of operations, financial position or liquidity for the periods presented in this report. 

 

Revenue Recognition

 

We recognize revenue on arrangements in accordance with FASB ASC No. 605, “Revenue Recognition”.  In all cases, revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured.

 

RECENT ACCOUNTING PRONOUNCEMENTS

 

We have reviewed accounting pronouncements issued during the past two years 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 periods presented in this report.

 

OFF-BALANCE SHEET ARRANGEMENTS

 

We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose entities” (“SPE”s).

 13

 

 

Item 3.    Quantitative and Qualitative Disclosures about Market Risks

 

Not applicable because we are a smaller reporting company.

 

Item 4.    Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures 

 

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures were not effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure as a result of continuing material weaknesses (such as the absence of an audit committee and absence of qualified independent directors) in its internal control over financial reporting.

 

Changes in Internal Controls Over Financial Reporting

 

There have been no changes in the Company's internal control over financial reporting during the latest fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

 

PART II - OTHER INFORMATION

 

Item 1.    Legal Proceedings.

 

Currently we are not aware of any litigation pending or threatened by or against the Company.

 

Item 1A. Risk Factors

 

Not applicable because we are a smaller reporting company.

 

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

 

On July 21, 2015 the Company issued 1,000,000 shares of common stock for consulting services rendered to the Company which was recorded as consulting fees on the statement of operations in the amount of $33,000.

On June 23, 2015, the Company agreed to issue 500,000 shares of common stock to an accredited investor in consideration of the investor making a $25,000 loan to the Company.

On July 31, 2015, the Company issued a total of 2,000,000 shares of common stock to two accredited investors in consideration of the investors making two separate $25,000 loans to the Company.

On August 6, 2015, the Company agreed to issue 2,000,000 shares of common stock to an accredited investor in consideration of the investor making a $50,000 loan to the Company.

On August 21 2015, the Company agreed to issue 2,000,000 shares of common stock to an accredited investor in consideration of the investor making a $50,000 loan to the Company.

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.

 14

 

  

Item 3.    Defaults Upon Senior Securities.

 

The Company has not paid the principal and interest due on three notes payable aggregating $100,000 at August 31, 2015. See Note 5 to the Consolidated Financial Statements.

 

Item 4.    Mine Safety Disclosures

 

Not Applicable.

 

Item 5.    Other Information.

 

None.

 

 15

 

 

 

Item 6.    Exhibits.

 

Exhibit No.   Description
3.1   Amended and Restated Articles of Incorporation of Music of Your Life, Inc.
3.2   Amended and Restated Bylaws of Music of Your Life, Inc.
31.1   Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1   Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 


 

 

SIGNATURES

 

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

   

  Music of Your Life, Inc.
   
Date: October  20, 2015  By:  /s/  Marc Angell
    Marc Angell
    Chief Executive Officer
    (Duly Authorized Officer and Principal Executive Officer)