Quarterly Report for Quarter Ending August 31, 2025 (Form 10-Q)

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

The Marquie Group, Inc. is focused on creating high-quality health and beauty products that we market across various sales channels including our own syndicated radio network. For more information, visit our websites at www.simplywhim.com, and www.musicofyourlife.com. Our annual reports (Form 10-K), quarterly reports (Form 10-Q), current reports (Form 8-K), and any amendments to these reports are available free of charge at www.sec.gov. Please note that the information on our website is not part of, nor incorporated by reference into, this or any other company report filed with or submitted to the SEC.

We operate through two reportable segments: (1) Broadcast/Entertainment and (2) Health and Beauty. Resource allocation is determined by assessing each segment's operating income and expenses, with adjustments made as needed to reflect operational changes in the business. This assessment excludes costs associated with corporate functions-such as accounting, finance, human resources, legal, tax, and treasury-as well as amortization, depreciation, taxes, and interest expense.

Broadcasting

Our foundational business is radio broadcasting, which includes the ownership and operation of the nation's longest running syndicated music radio network, Music of Your Life. We produce 24-hours of radio content daily which is delivered to our affiliated AM/FM and HD radio stations and simulcast worldwide over the internet.

Advertising revenue generated from our syndicated radio operations is reported as broadcast revenue in our Consolidated Financial Statements. 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.

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.

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 expenses for internet communication facilities.

Health and Beauty

Our health and beauty operations are managed by Simply Whim, Inc., home to Whim®, a growing beauty brand that blends nature, nutrition, and science to deliver safe, effective products. Whim's founder-a three-time cancer survivor currently undergoing treatment-has firsthand experience with regulatory gaps in the United States and is committed to raising industry standards. Proudly crafted in the USA, Whim is dedicated to offering responsible beauty solutions, particularly to those navigating the challenges of chemotherapy and daily life.

Expenses which comprise the costs of goods sold will include operational and staffing costs related to product development and product marketing costs. General and administrative expenses are comprised of administrative wages; 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, 2025 and 2024.

Revenues. The Company generated net revenues of $11,920 and $-0- during the three months ended August 31, 2025 and 2024. Revenues were generated from advertising spot sales on our syndicated radio network. Revenue for Health and Beauty is expected to be included in the company's upcoming annual 10-K report for the year ending May 31, 2026.

Cost of Sales. Our cost of sales for Broadcasting and Digital Media was $-0- for the three months ended August 31, 2025 and 2024. 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. Our Cost of Sales for Health and Beauty will be included in the company's upcoming annual 10-K report for the year ending May 31, 2026.

Salaries and Consulting Expenses. Executive salaries remain unpaid and accruing for the period ended August 31, 2025. Accrued salaries and consulting expenses were $6,180 and $60,000 for the three months ended August 31, 2025 and 2024, respectively. 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 were $46,217 and $-0- for the three months ended August 31, 2025 and 2024, respectively. Professional fees consist mainly of the fees related to the audits and reviews of the Company's financial statements as well as the filings with the Securities and Exchange Commission. 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 $13,074 and $640 for the three months ended August 31, 2025 and 2024, respectively. We anticipate that SG&A expenses will increase commensurate with an increase in our operations.

Other Income (Expenses). The Company had net other expenses of $2,252,762 for the three months ended August 31, 2025. During the three months ended August 31, 2025, the company recorded a gain on the extinguishment of debt in the amount of $1,760,461, income on the change in the fair value of the derivative liability in the amount of $297,276, loss on the markdown of investment in the amount of $3,700,000 and interest expenses related to notes payable in the amount of $610,499.

LIQUIDITY AND CAPITAL RESOURCES

As of August 31, 2025, our primary source of liquidity consisted of $41,007 in cash and cash equivalents. We hold our cash reserves in a major United States bank. 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, 2025 of $4,186,461 and $18,118,250, 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, 2025 of $2,306,313. 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, 2025 Form 10-K. While all 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 a material effect on our results of operations, financial position or liquidity for the periods presented in this report.

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).