TMGI.OIDMarquie Group, INC
10-Q: The Marquie Group Reports Q1 2025 Results with Ongoing Concerns About Financial Stability
Sentiment:
Quarterly Report
The Marquie Group's Q1 2025 report reveals no revenue, a net loss, and continued concerns about the company's ability to operate as a going concern.
Capital raiseThe company entered into a Standby Equity Financing Agreement (SECA) with Mac Rab, LLC, for up to $1.25 million.The company issued 1,455,524,579 shares of common stock as part of a note purchase agreement.The company issued 349,461,323 shares of common stock for net proceeds of $55,730.The company issued 2,265,475,967 shares of common stock for the conversion of notes payable and accrued interest in the aggregate amount of $350,472.The company issued 185,000,000 shares of common stock for consulting and investor relations services valued at $102,700.
Worse than expectedThe company's financial results are worse than expected due to the lack of revenue, significant net loss, and continued concerns about the company's ability to operate as a going concern.
Summary
- The Marquie Group reported its financial results for the first quarter of fiscal year 2025, ending August 31, 2024.
- The company generated no net revenue during the quarter, consistent with the same period last year.
- Operating expenses totaled $60,640, primarily consisting of salaries and consulting fees to related parties.
- The company experienced a loss from operations of $60,640.
- Other expenses, including changes in the fair value of derivative liabilities and interest expenses, resulted in a total net loss of $204,944 for the quarter.
- The company's accumulated deficit increased to $15,068,430.
- The company's cash and cash equivalents remained minimal at $117.
- The company has a negative working capital of $6,235,552.
- The company's financial statements have been prepared assuming the company will continue as a going concern, however, there is substantial doubt about the company's ability to continue operations without additional funding.
- The company is attempting to improve its financial condition through additional equity issuances and generating revenue through sales of products and services.
Sentiment
Score: 2
Explanation: The document paints a very negative picture of the company's financial health, with no revenue, significant losses, and substantial doubt about its ability to continue as a going concern. The company's reliance on debt and equity financing, along with ineffective disclosure controls, further contribute to the negative sentiment.
Positives
- The company is attempting to improve its financial condition through additional equity issuances and generating revenue through sales of products and services.
- The company has a new Standby Equity Financing Agreement (SECA) with Mac Rab, LLC for up to $1.25 million.
Negatives
- The company has no revenue for the quarter.
- The company has a significant net loss of $204,944 for the quarter.
- The company has a large accumulated deficit of $15,068,430.
- The company has minimal cash reserves of $117.
- The company has negative working capital of $6,235,552.
- There is substantial doubt about the company's ability to continue as a going concern.
- The company has defaulted on $950,701 of notes payable.
- The company's disclosure controls and procedures were deemed ineffective due to a lack of segregation of duties.
Risks
- The company's ability to continue as a going concern is in doubt due to significant net losses, negative working capital, and an accumulated deficit.
- The company's reliance on short and long-term loans and private placements of common stock for financing is unsustainable.
- The company may not be able to generate sufficient revenue to cover costs and provide a return for investors.
- The company may not be able to attract additional capital to finance growth.
- The company faces significant competition from other companies with greater financial, production, and marketing resources.
- The company's lack of segregation of duties in accounting poses a risk to financial reporting.
- The company's new Standby Equity Financing Agreement (SECA) may cause the trading price of the common stock to fall.
Future Outlook
The company anticipates incurring additional losses during the coming year and expects that salaries and consulting expenses will increase as they add personnel to build their health and beauty business. The company also forecasts strong sales growth next year, driven by demand for safer beauty solutions, and plan to exceed these expectations with continued innovation.
Management Comments
- Management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, but there is no assurance that the underlying assumptions will prove to be correct.
- Management believes that their capital resources are insufficient for ongoing operations.
- Management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause a material effect on their results of operations, financial position or liquidity for the periods presented in this report.
Industry Context
The company operates in the direct-to-consumer health and beauty market, which is experiencing a growing demand for safer and more natural products. The company also operates a syndicated radio network, which is a mature industry facing competition from digital media.
Comparison to Industry Standards
- The Marquie Group's lack of revenue and significant losses are not typical for established companies in the health and beauty or broadcasting industries.
- Many companies in the health and beauty sector are experiencing growth, while The Marquie Group is struggling to generate revenue.
- The company's reliance on debt and equity financing is not sustainable compared to companies with established revenue streams.
- The company's negative working capital and accumulated deficit are significantly worse than industry benchmarks for similar-sized companies.
- The company's disclosure controls and procedures are not in line with industry standards for public companies.
Related Party Transactions
- The company has consulting agreements with the Chief Executive Officer, the wife of the Chief Executive Officer, and the mother of the Chief Executive Officer.
- The company has notes payable to related parties, including the company's law firm and The OZ Corporation.
- The company acquired 25% of Simply Whim, Inc. in exchange for shares and a promissory note to the wife of the Chief Executive Officer.
Stakeholder Impact
- Shareholders face a high risk of losing their entire investment due to the company's financial instability.
- Employees may face job insecurity due to the company's going concern issues.
- Creditors face a high risk of not being repaid due to the company's defaults on notes payable.
- Customers may be impacted by the company's potential inability to continue operations.
Next Steps
- The company is attempting to improve its financial condition through additional equity issuances and generating revenue through sales of products and services.
- The company will need to secure additional financing to continue operations.
- The company will need to improve its internal controls over financial reporting.
Key Dates
| Date | Description |
|---|---|
| 2008-01-30 | The Marquie Group, Inc. was incorporated under the laws of the State of Florida. |
| 2012-10-10 | Music of Your Life, Inc., a Nevada corporation (MYL Nevada) was incorporated. |
| 2013-05-31 | The company entered into a Merger Agreement with Music of Your Life, Inc. |
| 2013-07-26 | The company changed its name to Music of Your Life, Inc. |
| 2015-09-01 | Consulting Agreement with the mother of the Company Chief Executive Officer. |
| 2015-09-01 | Consulting Agreement with a service provider. |
| 2015-09-21 | The company issued a $25,000 Promissory Note with a stated interest amount of $2,500 due at maturity on December 20, 2015. |
| 2015-12-29 | The company issued a $20,000 Convertible Promissory Note to a lender. |
| 2016-01-04 | The company amended and restated a $50,000 Promissory Note to Kodiak Capital Group, LLC. |
| 2016-06-03 | The company issued a $25,000 Promissory Note. |
| 2017-03-01 | The company issued a $8,600 Convertible Promissory Note to a vendor. |
| 2017-03-01 | Consulting Agreement with the Company Chief Executive Officer. |
| 2017-04-05 | The company issued a $35,000 Convertible Promissory Note to a lender. |
| 2017-04-05 | The company issued a $27,500 Convertible Promissory Note to a lender. |
| 2017-05-03 | The company issued a $72,750 Convertible Promissory Note to a lender. |
| 2018-03-05 | The company issued a $35,000 Convertible Promissory Note to a lender. |
| 2018-03-14 | The company executed a Corporate Consulting Agreement with a consulting firm entity. |
| 2018-04-01 | The company notified the Consultant that the Corporate Consulting Agreement was terminated. |
| 2018-08-16 | The company merged with The Marquie Group, Inc. |
| 2018-08-16 | Consulting agreement with the wife of the Company Chief Executive Officer. |
| 2018-09-18 | The company issued a $18,000 Convertible Promissory Note to a lender. |
| 2018-10-16 | The company issued 5,000 shares of its common stock to the Consultant. |
| 2018-12-05 | The company amended and restated its Articles of Incorporation providing for a change in the company's name to The Marquie Group, Inc. |
| 2019-11-30 | Consulting Agreement with the mother of the Company Chief Executive Officer was terminated. |
| 2020-11-30 | The company issued a $170,000 Convertible Promissory Note to a lender. |
| 2021-05-31 | Consulting Agreement with the wife of the Company Chief Executive Officer expired. |
| 2021-06-04 | The company issued a $238,596 Convertible Promissory Note to a lender. |
| 2021-08-27 | The company issued a $14,000 Convertible Promissory Note to a lender. |
| 2022-09-19 | The company entered into an agreement to acquire 25% of the outstanding shares of SIMPLY WHIM, INC. |
| 2022-10-13 | The company entered into a Standby Equity Commitment Agreement with MacRab, LLC. |
| 2022-10-21 | The company filed a Registration Statement on Form S-1. |
| 2022-11-04 | The company issued a $30,555 Convertible Promissory Note to a lender. |
| 2022-12-21 | The company issued a $58,250 Convertible Promissory Note to a lender. |
| 2023-02-08 | The company issued a $245,000 Convertible Promissory Note to a lender. |
| 2023-04-10 | The company issued a $61,100 Convertible Promissory Note to a lender. |
| 2023-09-18 | The company issued a $3,500 Convertible Promissory Note to a lender. |
| 2023-09-20 | Note payable to the wife of the Chief Executive Officer as part of the 25% acquisition of Simply Whim was due. |
| 2023-11-07 | The company issued a $42,000 Convertible Promissory Note to a lender. |
| 2024-01-18 | The company issued a $30,555 Convertible Promissory Note to a lender. |
| 2024-05-20 | The company entered into a Note Purchase Agreement with QC. |
| 2024-05-21 | The company issued a convertible note to QC in the principal amount of $555,555.55. |
| 2024-08-31 | End of the reporting period for the quarterly report. |
| 2024-09-27 | The company entered into a Standby Equity Financing Agreement (SECA) with Mac Rab, LLC. |
| 2024-10-18 | Date of share count for the report. |
| 2024-10-21 | Date of the report. |
Keywords
financial results, going concern, net loss, revenue, debt, equity, derivative liability, working capital, Marquie Group, TMGI
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