MARQUIE GROUP, INC. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Form 10-Q)

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 differ materially from those projected in the forward-looking statements due to certain risks and uncertainties set forth in this prospectus. Although management believes that the assumptions made and the expectations reflected in the forward-looking statements are reasonable, there can be no assurance that the underlying assumptions will in fact prove to be correct or that actual results will not differ from the expectations expressed in this report. .



BUSINESS OVERVIEW



the Marquie Group, Inc. (“TMGI”) is a direct-to-consumer sales and marketing company with an exclusive pipeline of innovative health and beauty products. The Company markets these products through its wholly owned subsidiary music of your life, a syndicated radio network heard nationwide on AM, FM, and HD terrestrial radio stations, and simulcast over the Internet. This is made possible by hourly 30 and 60 second ads that are targeted to the music of your life audience listening. Broadcasting for more than 40 years, music of your life is the oldest music radio format in syndication.

Expenses that include cost of goods sold will include license agreements and royalties, as well as operating and personnel costs related to the management of the Company’s syndicated radio network, product development and marketing costs for products. General and administrative expenses include administrative salaries; office expenses; excluding legal, accounting and other professional fees; travel and other miscellaneous office and administrative expenses. Sales and marketing expenses include sales/marketing salaries and benefits, advertising and promotion expenses, as well as travel and other miscellaneous related expenses.

As we incurred losses, the income tax expense is not material. No tax benefit has been recognized related to operating loss carryforwards, given our uncertainty about the ability to utilize these loss carryforwards in future years. We expect to incur additional losses in the coming year.


RESULTS OF OPERATION


The following is management’s discussion of material items affecting operating results for the three and six months ended November 30, 2021 and 2020.

Revenues. The Company did not generate any net income during the three months ended
November 30, 2021 and 2020. The Company did not generate any net income during the six months ended November 30, 2021 compared to $60 in the six months ended
August 31, 2020. Revenue was generated from one-time sales on our syndicated radio network.

Cost of sales. Our cost of sales was $-0– for the three and six months ended
November 30, 2021 and 2020. Our cost of sales going forward will primarily consist of license costs and royalties associated with our syndicated radio network, other related services provided directly or outsourced through our affiliates, and operating and personnel costs in this respect.

Salaries and consulting fees. Payables and consulting fees have been $30,000
and $75,000 for the three months ended November 30, 2021 and 2020, respectively. Payables and consulting fees have been $60,000 and $151,000 for the six months ended November 30, 2021 and 2020, respectively. We expect salaries and consulting expenses to increase as we add staff to grow our multimedia entertainment business.

Professional fees. Professional fees were $40,885 and $25,509 for the three months ended November 30, 2021 and 2020, respectively. Professional fees were
$40,885 and $44,748 for the six months ended November 30, 2021 and 2020, respectively. Professional fees mainly include fees related to audits and reviews of the Company’s financial statements as well as deposits with the Security and Exchange Commission. We expect professional fees to increase in future periods as we expand our business.

Other selling, general and administrative expenses. Other selling, general and administrative expenses were $4,905 and $16,025 for the three months ended
November 30, 2021 and 2020, respectively. Other selling, general and administrative expenses were $9,066 and $24,014 for the six months ended
November 30, 2021 and 2020, respectively. We expect SG&A expenses to increase as our operations increase.


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Other income (expenses). The Company recorded other expenses net of $51,541 for the three months ended November 30, 2021 compared to other expenses net of $513,082
for the three months ended November 30, 2020. The Company recorded other charges net of $3,019,728 for the six months ended November 30, 2021 compared to other expenses net of $2,787,432 for the six months ended November 30, 2020. In the six months ended November 30, 2021 and 2020, the company recorded a charge on the change in fair value of the derivative liability for an amount of $1,271,434
and $1,934,806, respectively. In the six months ended November 30, 2021 and 2020, other expenses incurred also included interest expense related to notes payable for an amount of $294,802 and $307,107, which included the amortization of debt discounts from $100,374 and $122,505, respectively. In the six months ended November 30, 2021 and 2020, the Company recorded a loss on the translation of notes payable and accrued interest in the amount of $1,453,492
and $545,519, respectively, based on the difference between the fair market value of the shares at issue and the amount of notes payable and accrued interest converted.

CASH AND CAPITAL RESOURCES

From November 30, 2021, our primary source of cash was $-0– in cash and cash equivalents. We hold our cash reserves in a large United States
Bank. Since our inception, we have funded our operations through a combination of short and long-term loans and the private placement of our common stock.

We incurred significant net losses which resulted in negative working capital and an accumulated deficit November 30, 2021 of $6,368,119 and
$14,891,916, respectively, which raises doubts about our ability to continue our business. We generated a net loss for the six months ended November 30, 2021 of $3,129,679. Without additional revenue, working capital loans or equity investments, there is substantial doubt as to our ability to continue our operations.

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

We believe that our capital resources are insufficient for ongoing operations, with minimal current cash reserves, particularly given the resources needed to grow our multimedia entertainment business. We will likely need significant funding to significantly advance our business strategy. There is currently no agreement in place that will secure funding for our company, and we cannot assure you that we will be able to raise additional funds, or that such funds will be available on acceptable terms. Funds raised through future equity financing are likely to be significantly dilutive to current shareholders. Lack of additional funds will significantly affect our company and business and could cause us to significantly reduce or even cease operations. Accordingly, you may suffer a loss of your entire investment in the Company.

MAIN ACCOUNTING POSITIONS

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

Our significant accounting policies are summarized in note 2 of our financial statements included in our May 31, 2021 Form 10-K. While While all of these significant accounting policies affect our financial condition and results of operations, we consider certain of these policies to be material. Policies deemed critical are those that have the greatest impact on our financial statements and that require management to exercise greater judgment and make estimates. Actual results may differ from these estimates. Our management believes that, based on current facts and circumstances, the application of other reasonable judgments or estimation methodologies is unlikely to have a material impact on our results of operations, financial condition or liquidity for periods presented in this report.

We recognize revenue on arrangements in accordance with FASB ASC No. 605, “Revenue Recognition”. In all cases, revenue is not recognized until the price is fixed and determinable, there is persuasive evidence of an agreement, the service is rendered and collection of the resulting receivable is reasonably assured.

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RECENT ACCOUNTING PRONOUNCEMENTS

We have reviewed the accounting pronouncements issued over the past two years and have adopted those that apply to the Company. We have determined that none had a material impact on our financial condition, results of operations or cash flows for the periods presented in this report.

OFF-BALANCE SHEET ARRANGEMENTS

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

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