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EX-31.1 - EXHIBIT 31.1 SECTION 302 CERTIFICATION - MARILYNJEAN INTERACTIVE INC.f10k123114_ex31z1.htm
EX-32.1 - EXHIBIT 32.1 SECTION 906 CERTIFICATION - MARILYNJEAN INTERACTIVE INC.f10k123114_ex32z1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-K



 X  

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

 

For the Fiscal Year Ended December 31, 2014

 

 

     

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT

 

 

 

For the Transition Period from                      to                     


MARILYNJEAN INTERACTIVE INC.

(Exact name of registrant as specified in its charter)


Nevada

000-54870

41-2281199

(State or other jurisdiction of Incorporation)

(Commission File Number)

(IRS Employer Identification Number)


2360 Corporate Circle, Suite 400, Henderson, NV  89074-7722

(Address of principal executive offices)


(702) 425-6951

(Registrant’s Telephone Number)


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


Title of Each Class

 

Name of each exchange on which registered


Securities registered pursuant to section 12(g) of the Act: common stock with a par value of $0.001


Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes       No  X  

 

 

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  X  

 

 

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 registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.  

Yes  X   No      

 

 

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       No  X  

 

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K 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 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 a smaller reporting company)

Smaller reporting company

  X .


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes       No  X  





The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of December 31, 2014 was $Nil based upon the price ($Nil) at which the common stock was last sold as of the last business day of the most recently completed second fiscal quarter, multiplied by the approximate number of shares of common stock held by persons other than executive officers, directors and five percent stockholders of the registrant without conceding that any such person is an “affiliate” of the registrant for purposes of the federal securities laws.


Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:


194,528,352 common shares issued and outstanding as at March 30, 2015.


Does not include the 106,651,250 common shares of the Company that are reserved for issuance and issuable upon the redemption at any time by the holders of 106,651,250 Class B Exchangeable Preferred shares (the “Exchangeable Preferred Shares”) in the capital of MarilynJean Holdings Inc., a wholly-owned subsidiary of the Company.  Each Exchangeable Preferred Share is convertible into one common share in the capital of the Company on a one-for-one basis.


Documents incorporated by reference: None



2




Table of Contents


 

PAGE

FORWARD-LOOKING STATEMENTS

4

 

 

PART I

4

 

 

Item 1. Business

4

Additional Information

6

Item 1A. Risk Factors

6

Item 1B. Unresolved Staff Comments

8

Item 2. Properties

8

Item 3. Legal Proceedings

8

Item 4. Mine Safety Disclosures

9

 

 

PART II

9

 

 

ITEM 5. Market for the Company’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

9

Item 6. Selected Financial Data

10

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

10

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

13

Item 8.  Financial Statements and Supplementary Data

13

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

14

Item 9A. Controls and Procedures

14

Item 9B. Other Information

15

 

 

PART III

16

 

 

Item 10. Directors and Executive Officers and Corporate Governance

16

Item 11. Executive Compensation

20

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

22

Item 13. Certain Relationships and Related Transactions, and Director Independence

23

Item 14. Principal Accounting Fees and Services

24

 

 

PART IV

26

 

 

Item 15. Exhibits

26

 

 

SIGNATURES

27




3





FORWARD-LOOKING STATEMENTS


This annual report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements are not historical facts but rather are based on current expectations, estimates and projections. We may use words such as “anticipate,” “expect,” “intend,” “plan,” “believe,” “foresee,” “estimate” and variations of these words and similar expressions to identify forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted. These risks and uncertainties include the following:


·

Economic, competitive, demographic, business and other conditions in our local and regional markets;


·

Changes or developments in laws, regulations or taxes in our industry;


·

Actions taken or omitted to be taken by third parties including our suppliers and competitors, as well as legislative, regulatory, judicial and other governmental authorities;


·

Competition in our industry;


·

The loss of or failure to obtain any license or permit necessary or desirable in the operation of our business;


·

Changes in our business strategy, capital improvements or development plans;


·

The availability of additional capital to support capital improvements and development; and


·

Other risks identified in this report and in our other filings with the Securities and Exchange Commission.


This report should be read completely and with the understanding that actual future results may be materially different from what we expect. The forward looking statements included in this report are made as of the date of this report and should be evaluated with consideration of any changes occurring after the date of this report. We will not update forward-looking statements even though our situation may change in the future and we assume no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.


Use of Term


All amounts in this annual report are stated in United States dollars unless otherwise indicated. In this annual report, the terms “we”, “us”, “our”, “the Company” and “MarilynJean” mean MarilynJean Interactive Inc. and its subsidiary.


PART I


ITEM 1. BUSINESS


Description of our Business


Corporate Overview


We were incorporated in the State of Nevada on April 6, 2010. Following incorporation, we were engaged in the acquisition, exploration and development of prospective resource properties. However, we were not successful in developing our oil and gas interests and thus began to investigate other business opportunities in order to maximize shareholder value. As a result, on March 25, 2013, we entered into a share exchange agreement (the “Share Exchange Agreement”) with MarilynJean Media Inc. (“MJM”), a private company incorporated under the laws of British Columbia.  The Share Exchange Agreement closed on March 28, 2013.


Following the closing of the Share Exchange Agreement, our company decided to focus on MJM’s business, which is the business of operating a members-only private sale ecommerce website providing reduced retail prices on baby and children’s brands of apparel, toys and accessories.  With the commencement of the new business operated through MJM, our board of directors decided to seek out opportunities to divest our company of all assets related to our oil and gas business. Although our company has not entered into any negotiations or agreements related to such divestiture, our board of directors has instructed management to seek out viable options related to the sale and disposition of such assets.



4





During the first few months of 2015, management and the board has decided to pursue and identify other business opportunities to benefit our company and bring value to shareholders.  The business operated by MJM has not resulted in the sales or growth intended by management.  As a result, management and the board are looking weighing all options with respect to business opportunities.


Acquisition of MarilynJean Media Inc.


On March 28, 2013, we acquired 100% of the issued and outstanding common shares of MJM (the “Transaction”). MJM operates a members-only private sale ecommerce website providing reduced retail prices on baby and children’s brands of apparel, toys and accessories. Pursuant to the Transaction, we issued a total of 75,000,000 restricted shares of common stock to the former shareholders of MJM, equating to one share of common stock in the capital of our company for every issued common share of MJM.


Pursuant to the Transaction, the Canadian shareholders of MJM sold 106,651,250 common shares in the capital of MJM to MarilynJean Holdings Inc., our wholly-owned subsidiary, in consideration for the issuance of 106,651,250 Exchangeable Preferred Shares to such Canadian shareholders on a one-for-one basis. The Exchangeable Preferred Shares are redeemable by the holders and, in certain circumstances, by our company, into common shares of our company on a one-for-one basis in accordance with the terms of a share exchange agreement, trust agreement and support agreement. The Exchangeable Preferred Shares were issued to MJM shareholders resident in Canada in order to minimize any adverse tax consequences for such shareholders.


Additionally, on the closing date of the Transaction, the non-Canadian shareholders of MJM sold 75,000,000 common shares in the capital of MJM to our company in consideration for the issuance of 75,000,000 common shares in the capital of our company on a one-for-one basis.


Finally, on the closing of the Transaction, we issued 106,651,250 Series A Special Voting shares (the “Special Voting Shares”) to Chester Ku, a former director of our company, as a trustee (the “Trustee”) in accordance with the terms of a share exchange agreement and trust agreement. Pursuant to the terms of the trust agreement, the parties created the trust for the benefit of the holders of the Exchangeable Preferred Shares to enable the Trustee to exercise the voting rights of such shareholders until such time as they choose to redeem their Exchangeable Preferred Shares and receive common shares of our company on such redemption, and to allow the Trustee to hold certain exchange rights in respect of the Exchangeable Preferred Shares. The Special Voting Shares entitle the Trustee to exercise one vote per Special Voting Share, with the number of Special Voting Shares outstanding being equal to the number of Exchangeable Preferred Shares outstanding during the term of the agreement.


Intellectual Property


We currently own the MarilynJean.com domain name associated with our brand.


Research and Development


We have not incurred expenditures in research and development activities from inception.


Government Regulations


We are not aware of any government regulations that materially affects the operation of our business.


Subsidiaries


We currently hold the following two subsidiaries:


·

MarilynJean Holdings Inc. (referred to in this Form 10-K as “Exchangeco”).  Exchangeco is a British Columbia corporation solely incorporated to facilitate the closing of the Share Exchange Agreement on a tax deferred basis for former Canadian shareholders of MarilynJean Media Inc.  Our company holds 100% of Exchangeco.  Following consummation of the Share Exchange Agreement, Exchangeco held 106,651,250 common shares (58.7%) of MarilynJean Media Inc.


·

MarilynJean Media Inc. (referred to in this Form 10-K as “MJM”).  MJM is a British Columbia corporation acquired by our company upon the closing of the Share Exchange Agreement.  Our company holds 75,000,000 common shares (41.3%) of MJM and Exchangeco holds the remaining 106,651,250 common shares (58.7%) of MJM.



5





Employees


We have no significant employees other than Peter Janosi, our President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and Director.  We believe that until such time that we have fully developed our plan of operations we will not have any employees and that we will frequently use consultants to assist in the completion of various projects.


Additional Opportunities


We have not been as successful as originally anticipated with respect to our current business of operating a members-only private sale ecommerce website that provides reduced retail prices on baby and children’s brands of apparel, toys and accessories.  We are currently seeking alternative and suitable business opportunities. As of the date hereof, management has not entered into any formal written agreements for a business combination or business opportunity.  If and when any such agreement is reached, we intend to disclose such an agreement by filing a current report on Form 8-K with the Securities and Exchange Commission.


ADDITIONAL INFORMATION


We file annual, quarterly and current reports, proxy statements and other information with the SEC.  You may read and copy our reports or other filings made with the SEC at the SEC’s Public Reference Room, located at 100 F Street, N.W., Washington, DC 20549.  You can obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.  You can also access these reports and other filings electronically on the SEC’s web site, www.sec.gov.


ITEM 1A. RISK FACTORS


Risks Related to our Business


If we do not obtain additional financing, we will not be able to conduct our business operations to the extent that we become profitable.


Our current operating funds will cover the initial stages of our business plan; however, we only recently commenced operations and have generated limited revenue to date. We will require significant additional funds to execute and grow our business and we will incur significant legal and accounting costs necessary to maintain a public corporation. We currently do not have any arrangements for financing in place and we may not be able to obtain financing when required. We believe the only source of funds that would be realistic is through a loan from our directors and officers and the sale of equity capital.


We cannot offer any assurance as to our future financial results. You may lose your entire investment.


We have not received substantial income from operations to date and future financial results are uncertain. We cannot assure you that we can operate in a profitable manner. The Company has an accumulated deficit of $634,259 from inception to December 31, 2014. Even if we obtain future revenues sufficient to expand operations, increased cost of goods sold and marketing expenses will impair or prevent us from generating profitable returns. We recognize that if we are unable to generate significant revenues from our business development, we will not be able to earn profits or continue operations. There is limited history upon which to base any assumption as to the likelihood that we will prove successful, and we may not be able to generate significant revenues or ever achieve profitability. If we are unsuccessful in addressing these risks, our business will most likely fail.


Our independent auditor has indicated that there is substantial doubt about our ability to continue as a going concern, if true, you could lose your investment.


Our independent auditor has expressed substantial doubt about our ability to continue as a going concern given our limited operating history, working capital deficiency and the fact that we have generated only limited revenues to date. Potential investors should be aware that there are difficulties associated with operating a new business, and the high rate of failure associated with this fact. We have incurred a net loss of $138,001 for the year ended December 31, 2014. Our future is dependent upon our ability to obtain financing and upon future profitable operations from our website. These factors raise substantial doubt that we will be able to continue as a going concern.



6





Our limited operating experience and limited brand recognition in new markets may limit our expansion strategy and cause our business and growth to suffer.


Our future growth depends, to an extent, on our expansion efforts. We have limited experience with regulatory environments and market practices outside of Canada, and we may not be able to penetrate or successfully operate in any new market. We may also encounter difficulty expanding into new markets because of limited brand recognition leading to delayed acceptance of products distributed by our company by customers in these new markets. Our failure to develop new markets or disappointing growth outside of existing markets will harm our business and results of operations.


We will rely on a third-party for hosting and maintenance of our website. Any mismanagement or service interruptions could significantly harm our business


Our website is hosted and maintained by a third party hosting service. Any mismanagement, service interruptions, or damage to the data of our company or our customers, could result in the loss of customers, or other harm to our business.


We may be exposed to liability for infringing intellectual property rights of other companies


Our success will, in part, depend on our ability to operate without infringing on the proprietary rights of others. Although we have conducted searches and are not aware of any trademarks which our company might infringe, we cannot be certain that infringement has not or will not occur. We could incur substantial costs, in addition to the great amount of time lost, in defending any trademark infringement suits or in asserting any trademark rights, in suit with another party.


Risks Related to our Common Stock


Because we can issue additional shares of common stock, purchasers of our common stock may incur immediate dilution and may experience further dilution.


We are authorized to issue up to 500,000,000 shares of common stock, of which 194,528,352 common shares are issued and outstanding as of December 31, 2014. Our board of directors has the authority to cause us to issue additional shares of common stock, and to determine the rights, preferences and privileges of such shares, without consent of any of our shareholders. Consequently, our shareholders may experience more dilution in their ownership of our stock in the future.


Trading on the OTC QB Marketplace may be volatile and sporadic, which could depress the market price of our common stock and make it difficult for our shareholders to resell their shares.


Our common stock is quoted on the OTC QB Marketplace quotation system. Trading in stock quoted on the OTC QB Marketplace is often thin and characterized by wide fluctuations in trading prices, due to many factors that may have little to do with our operations or business prospects. This volatility could depress the market price of our common stock for reasons unrelated to operating performance. Moreover, the OTC QB Marketplace is not a stock exchange, and trading of securities on the OTC QB Marketplace is often more sporadic than the trading of securities listed on a quotation system like NASDAQ or a stock exchange like the NYSE. Accordingly, shareholders may have difficulty reselling any of their shares.


Our common stock is illiquid and shareholders may be unable to sell their shares.


There is currently no market for our common stock and we can provide no assurance to investors that a market will develop. If a market for our common stock does not develop, our shareholders may not be able to re-sell the shares of our common stock that they have purchased and they may lose all of their investment. Public announcements regarding our company, changes in government regulations, conditions in our market segment or changes in earnings estimates by analysts may cause the price of our common shares to fluctuate substantially. In addition, stock prices for start-up internet based companies fluctuate widely for reasons that may be unrelated to their operating results. These fluctuations may adversely affect the trading price of our common shares.



7





Penny stock rules will limit the ability of our stockholders to sell their stock.


The Securities and Exchange Commission has adopted regulations which generally define “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors”. The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the Securities and Exchange Commission, which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these 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 agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.


The Financial Industry Regulatory Authority, or FINRA, has adopted sales practice requirements which may also limit a shareholder’s ability to buy and sell our stock.


In addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for its shares


ITEM 1B. UNRESOLVED STAFF COMMENTS


Not required.


ITEM 2. PROPERTIES


Principal Executive Offices


Our principal executive offices are administered out of 2360 Corporate Circle, Suite 400, Henderson, Nevada. Concurrent with our change in directors, we have closed our Surrey office and distribution location, and all of our company’s operations are now administered outside of Canada. We currently do not have an office location.  We pay approximately $240 per year for web hosting services.


Our registered agent for service is Incorp Services, Inc., 2360 Corporate Circle, Ste 400, Henderson, NV 89074-7739.


Intellectual Property


The description of our intellectual property rights is under the section entitled “Intellectual Property”.


ITEM 3. LEGAL PROCEEDINGS


We know of no material, existing or pending legal proceedings against our Company, nor are we involved as a plaintiff in any material proceeding or pending litigation.  There are no proceedings in which our director, officer or any affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.



8





ITEM 4. MINE SAFETY DISCLOSURES


Not applicable.


PART II


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


Common Stock


Our common stock is not traded on any exchange.  Our common stock is currently quoted on the OTC QB Marketplace under the trading symbol “MJMI”.  Trading in stocks quoted on the OTC QB Marketplace is often thin and is characterized by wide fluctuations in trading prices due to many factors that may have little to do with a company’s operations or business prospects. We cannot assure you that there will be a market for our common stock in the future.


OTC QB Marketplace securities are not listed or traded on the floor of an organized national or regional stock exchange.  Instead, OTC QB Marketplace securities transactions are conducted through a telephone and computer network connecting dealers in stocks. OTC QB Marketplace issuers are traditionally smaller companies that do not meet the financial and other listing requirements of a regional or national stock exchange.


During the year ended December 31, 2013, no shares of our common stock traded.


Set forth below are the range of high and low bid quotations for the periods indicated as reported by the Yahoo! Finance. The market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commissions and may not necessarily represent actual transactions.


Quarter Ended

Bid High

Bid Low

Volume

September 30, 2014

$0.26

$0.10

3,800

December 31, 2014

$0.40

$0.11

300


Transfer Agent


The shares of our common stock are issued in registered form. The transfer agent and registrar for our common stock is Action Stock Transfer located at 2469 E Fort Union Blvd, Suite 214, Salt Lake City, UT 84121.


Record Holders


As of March 30, 2015, there were 194,528,352 shares of the registrant’s $0.001 par value common stock issued and outstanding and were owned by approximately 55 holders of record, based on information provided by our transfer agent.


Recent Sales of Unregistered Securities


Our company has sold the following securities within the last three fiscal years on an unregistered basis:


a)

Effective March 28, 2013, we issued 75,000,000 shares of our common stock to MJM shareholders pursuant to Regulation S of the 1933 Act, each of whom represented that they were not a “U.S. person” as such term is defined in Regulation S of the 1933 Act.  


b)

Effective March 28, 2013, we issued 106,651,250 Special Voting Shares to the Trustee pursuant to Regulation S of the 1933 Act, and the Trustee represented he was not a “U.S. person” as such term is defined in Regulation S of the 1933 Act.


Issuer Purchases of Equity Securities


During the fiscal year ended December 31, 2014, we did not purchase any of our equity securities.



9





Dividends


We have never declared or paid any cash dividends or distributions on our capital stock. We currently intend to retain our future earnings, if any, to support operations and to finance expansion and therefore we do not anticipate paying any cash dividends on our common stock in the foreseeable future.


Securities Authorized for Issuance Under Equity Compensation Plans


As at the date of this report, we did not have any equity compensation plans in place.


ITEM 6. SELECTED FINANCIAL DATA


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.


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


This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These forward-looking statements are not historical facts but rather are based on current expectations, estimates and projections.  We may use words such as “anticipate,” “expect,” “intend,” “plan,” “believe,” “foresee,” “estimate” and variations of these words and similar expressions to identify forward-looking statements.  These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted.  You should read this report completely and with the understanding that actual future results may be materially different from what we expect.  The forward-looking statements included in this report are made as of the date of this report and should be evaluated with consideration of any changes occurring after the date of this Report.  We will not update forward-looking statements even though our situation may change in the future and we assume no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.


Results of Operations


The following summary of our results of operations should be read in conjunction with our audited consolidated financial statements for the fiscal year ended December 30, 2014, which are included herein.


 

Year Ended

 

Year Ended

 

December 31,

 

December 31,

 

2014

 

2013

 

$

 

$

Revenue

 

1,704

Cost of Goods Sold

 

1,954

Gross Profit

 

(250)

Total Operating Expenses

132,821

 

283,977

Interest Expense

(5,180)

 

(5,814)

Net Loss

(138,001)

 

(290,041)


Revenues


We recorded a net loss of $138,001 for the fiscal year ended December 31, 2014 and have an accumulated deficit of $634,259 since inception. We have had $nil in operating revenues for the fiscal year ended December 31, 2014.



10





Expenses


Our operating expenses for the fiscal year ended December 31, 2014 and 2013 are outlined below:


 

Year Ended

December 31,

2014

$

 

Year Ended

December 31,

2013

$

Operating Expenses

 

 

 

Advertising and promotion

979

 

53,018

Automotive

81

 

3,224

Consulting

13,000

 

Foreign exchange loss

20,533

 

16,483

General and administrative

14,395

 

55,819

Impairment of oil and gas properties

50,000

 

Management fees

2,445

 

54,376

Professional fees

30,774

 

67,322

Rent

 

7,035

Travel

 

6,778

Website costs

614

 

19,922

Total Operating Expenses

132,821

 

283,977


Fiscal year ended December 31, 2014 compared to Fiscal year ended December 31, 2013


Advertising and promotion costs decreased to $979 for the year ended December 31, 2014 from $53,018 for the year ended December 31, 2013, due to decreased marketing and advertising expenditures.  


General and administrative costs decreased to $14,395 for the year ended December 31, 2014 from $55,819 for the year ended December 31, 2013, due to decreased administrative and office costs.


Professional fees decreased to $30,774 for the year ended December 31, 2014 from $67,322 for the year ended December 31, 2013, due to more legal expenses incurred in the prior fiscal year in connection with our acquisition of MJM.


Management fees decreased to $2,445 for the year ended December 31, 2014 from $54,376 for the year ended December 31, 2013, to reflect decreased operations.


Website costs decreased to $614 for the year ended December 31, 2014 from $19,922 for the year ended December 31, 2013, due to decreased website maintenance costs.


Liquidity and Capital Resources


We are in the early stages of our business and we are not self-sustainable from a cash perspective. We are required to fund our operating activities from the generation of financing activities, and we rely on a combination of equity and debt financings.


Our financial condition as at December 31, 2014 and 2013 and the changes between those periods for the respective items are summarized as follows:


Working Capital


 

Year Ended

December 31,

2014

$

 

Year Ended

December 31,

2013

$

Total Current Assets

8,510

 

59,365

Total Liabilities

188,866

 

181,437

Working Capital (Deficit)

(180,356)

 

(122,072)




11





Our current assets decreased by 86% primarily due to operating expenses incurred in the current fiscal quarter. The net working capital deficit position increased by 48% because of expenditures undertaken during the current fiscal year, and increases in accounts payable and accrued liabilities.


Cash Flows

 

Year Ended

December 31,

2014

$

 

Year Ended

December 31,

2013

$

Net Loss For the Year

(138,001)

 

(290,041)

Net Cash Used in Operating Activities

(75,682)

 

(242,243)

Net Cash Provided by Investing Activities

2,351

 

269,733

Effect of Exchange Rate Changes on Cash

22,694

 

11,494

Net Increase (Decrease) in Cash

(50,637)

 

38,984

Cash, End of Year

6,078

 

56,715


During the year ended December 31, 2014, we used net cash in operating activities in the amount of $75,682 compared to $242,243 used during the year ended December 31, 2013. The cash used in the current period by our operating activities decreased because of decreased operating expenditures . The cash used in the current period by our operating activities was primarily represented by professional fees and our administrative costs.


During the year ended December 31, 2014, investing activities provided cash in the amount of $2,351 compared to $269,733 provided during the year ended December 31, 2013. The cash provided in the current period represent restricted cash. Cash flows provided by investing activities during the year ended December 31, 2013 represent restricted cash and net cash acquired on recapitalization, following the closing of the Share Exchange Agreement on March 28, 2013.


Disclosure of Outstanding Share Data


Exchangeable Preferred Shares


Pursuant to the Transaction, we issued 106,651,250 Exchangeable Preferred Shares in the capital of MarilynJean Holdings Inc., a private British Columbia corporation wholly-owned by us to certain former shareholders of MJM.  Each Exchangeable Preferred Share can be exchanged for one common share of our company subject to the rights and restrictions of the Exchangeable Preferred Shares.  


Additional Disclosure for Venture Issuers Without Significant Revenue


 

Year Ended

 

Year Ended

 

December 31, 2014

 

December 31, 2013

General and administrative

14,395

 

55,819


Going Concern


The accompanying audited consolidated financial statements for the fiscal year ended December 31, 2014 have been prepared on a going concern basis, which implies that our company will continue to realize its assets and discharge its liabilities and commitments in the normal course of business. Our company has not generated substantial revenues since inception and has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate future. The continuation of our company as a going concern is dependent upon the continued financial support from our shareholders, the ability of our company to obtain necessary equity financing to achieve our operating objectives, and the attainment of profitable operations. As of December 31, 2014, we had cash of $ 6,078, a working capital deficit of 180,356, and an accumulated deficit of $634,259. These circumstances raise substantial doubt about our ability to continue as a going concern, as described in the explanatory paragraph to our independent auditors’ report on our most recent audited financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of that uncertainty.


The continuation of our business is dependent upon us raising additional financial support. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.



12





Future Financings


We recorded a net loss of $138,001 for the fiscal year ended December 31, 2014, and have an accumulated deficit of $634,259 since inception. As of December 31, 2014, we had cash of $6,078 (December 31, 2013 - $56,715). We anticipate continuing to rely on equity sales of our common shares or shareholder loans in order to continue to fund our business operations and/or exercises of the warrants comprising a portion of the units we previously registered. Issuances of additional shares will result in dilution to our existing stockholders. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our planned activities.


Off Balance Sheet Arrangements


We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.


Critical Accounting Policies


Our consolidated financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis.  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, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.


We regularly evaluate the accounting policies and estimates that we use to prepare our consolidated financial statements.  A complete summary of these policies is included in the notes to our financial statements.  In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances.  Actual results could differ from those estimates made by management.


Contractual Obligations


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.


Recently Issued Accounting Pronouncements


The Company has limited operations and is considered to be in the development stage. In the year ended December 31, 2014, the Company elected to early adopt Accounting Standards Update No. 2014-10, “Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements”. The adoption of this ASU allows the Company to remove the inception to date information and all references to development stage.


The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial statements.   


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA




13







MARILYNJEAN INTERACTIVE INC.

Consolidated Financial Statements

December 31, 2014

(Expressed in US dollars)


       Index


Report of Independent Registered Public Accounting Firm

F–2


Consolidated Balance Sheets

F–3


Consolidated Statements of Operations

F–4


Consolidated Statements of Stockholders’ Equity (Deficit)

F–5


Consolidated Statements of Cash Flows

F–6


Notes to the Consolidated Financial Statements

F–7




F-1






To the Board of Directors and Stockholders of


MarilynJean Interactive Inc. (the “Company”)


We have audited the accompanying consolidated balance sheets of MarilynJean Interactive Inc. as of December 31, 2014 and 2013, and the related consolidated statements of operations, stockholders’ equity (deficit), and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.


We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.


In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2014 and 2013, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.


The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has not generated significant revenues, has a working capital deficiency, and has incurred operating losses since inception. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also discussed in Note 1 to the consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.


/s/ Saturna Group Chartered Accountants LLP


Saturna Group Chartered Accountants LLP

Vancouver, Canada


March 30, 2014




F-2






MARILYNJEAN INTERACTIVE INC.

Consolidated Balance Sheets

(Expressed in US dollars)


 

December 31,

2014

$

 

December 31,

2013

$

 

 

 

 

ASSETS

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

Cash

6,078

 

56,715

Amounts receivable

2,432

 

2,650

 

 

 

 

Total Current Assets

8,510

 

59,365

 

 

 

 

Restricted cash (Note 4)

 

2,351

Oil and gas properties (Note 5)

 

50,000

 

 

 

 

Total Assets

8,510

 

111,716

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

Accounts payable

51,452

 

46,897

Accrued liabilities

20,896

 

13,350

Loans payable (Note 6)

51,502

 

56,174

Due to related parties (Note 7)

65,016

 

65,016

 

 

 

 

Total Liabilities

188,866

 

181,437

 

 

 

 

Nature of Operations and Continuance of Business (Note 1)

 

 

 

 

 

 

 

Stockholders’ Deficit

 

 

 

 

 

 

 

Preferred stock

Authorized: 200,000,000 shares, par value $0.001

Issued and outstanding: nil

 

 

 

 

 

Common stock

Authorized: 500,000,000 shares, par value $0.001

Issued and outstanding: 194,528,352 shares

194,528

 

194,528

 

 

 

 

Additional paid-in capital

216,444

 

216,444

 

 

 

 

Share subscriptions receivable (Note 8)

(1,038)

 

(1,038)

 

 

 

 

Accumulated other comprehensive income

43,969

 

16,603

 

 

 

 

Deficit

(634,259)

 

(496,258)

 

 

 

 

Total Stockholders’ Deficit

(180,356)

 

(69,721)

 

 

 

 

Total Liabilities and Stockholders’ Deficit

8,510

 

111,716



F-3






MARILYNJEAN INTERACTIVE INC.

Consolidated Statements of Operations

(Expressed in US dollars)


 

Year Ended

December 31,

2014

$

 

Year Ended

December 31,

2013

$

 

 

 

 

Revenue

 

1,704

 

 

 

 

Cost of goods sold

 

1,954

 

 

 

 

Gross Profit (Loss)

 

(250)

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

Advertising and promotion

979

 

53,018

Automotive

81

 

3,224

Consulting

13,000

 

Foreign exchange loss

20,533

 

16,483

General and administrative

14,395

 

55,819

Impairment of oil and gas properties (Note 5)

50,000

 

Management fees (Note 7)

2,445

 

54,376

Professional fees

30,774

 

67,322

Rent

 

7,035

Travel

 

6,778

Website costs

614

 

19,922

 

 

 

 

Total Operating Expenses

132,821

 

283,977

 

 

 

 

Loss Before Other Expense

(132,821)

 

(284,227)

 

 

 

 

Other Expense

 

 

 

 

 

 

 

Interest expense

(5,180)

 

(5,814)

 

 

 

 

Net Loss

(138,001)

 

(290,041)

 

 

 

 

Net Loss Per Share, Basic and Diluted

 

 

 

 

 

Weighted Average Shares Outstanding

194,528,352

 

174,033,019



F-4





MARILYNJEAN INTERACTIVE INC.

Consolidated Statements of Stockholders’ Equity (Deficit)

(Expressed in US dollars)


 



Preferred Stock

 

Common Stock

Additional Paid-in

Capital

Share Subscriptions Receivable

Accumulated Other Comprehensive Income

Deficit

Total

 

Amount

 

 

Amount

 

#

$

 

#

$

$

$

$

$

$

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2012

 

74,999,250

74,999

(954)

99

(206,217)

(132,073)

 

 

 

 

 

 

 

 

 

 

 

Shares issued for cash

-

-

 

106,652,000

106,652

(105,614)

(1,038)

 

 

 

 

 

 

 

 

 

 

 

March 25, 2013 – recapitalization transactions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares of Future Energy Corp.

 

119,528,352

119,528

(119,528)

 

 

 

 

 

 

 

 

 

 

 

Shares exchanged for exchangeable preferred shares in MarilynJean Holdings Inc. (Note 3)

 

(106,651,250)

(106,651)

106,651

 

 

 

 

 

 

 

 

 

 

 

Net assets acquired on reverse merger

 

335,889

335,889

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange translation

 

16,504

16,504

 

 

 

 

 

 

 

 

 

 

 

Net loss for the year

 

(290,041)

(290,041)

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2013

 

194,528,352

194,528

216,444

(1,038)

16,603

(496,258)

(69,721)

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange translation gain

 

27,366

27,366

 

 

 

 

 

 

 

 

 

 

 

Net loss for the year

 

(138,001)

(138,001)

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2014

 

194,528,352

194,528

216,444

(1,038)

43,969

(634,259)

(180,356)




F-5






MARILYNJEAN INTERACTIVE INC.

Consolidated Statements of Cash Flows

(Expressed in US dollars)


 

Year Ended

December 31,

2014

$

 

Year Ended

December 31,

2013

$

 

 

 

 

Operating Activities

 

 

 

 

 

 

 

Net loss for the year

(138,001)

 

(290,041)

 

 

 

 

Items not involving cash:

 

 

 

 

 

 

 

Impairment of oil and gas properties

50,000

 

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Accounts receivable

218

 

10,996

Accounts payable

4,555

 

26,495

Accrued liabilities

7,546

 

10,307

 

 

 

 

Net Cash Used in Operating Activities

(75,682)

 

(242,243)

 

 

 

 

Investing Activities

 

 

 

 

 

 

 

Restricted cash

2,351

 

2,675

Net cash acquired on recapitalization

 

267,058

 

 

 

 

Net Cash Provided by Investing Activities

2,351

 

269,733

 

 

 

 

Effect of Exchange Rate Changes on Cash

22,694

 

11,494

 

 

 

 

Increase (Decrease) in Cash

(50,637)

 

38,984

 

 

 

 

Cash, Beginning of Year

56,715

 

17,731

 

 

 

 

Cash, End of Year

6,078

 

56,715

 

 

 

 

Supplemental Disclosures:

 

 

 

 

 

 

 

Interest paid

 

Income taxes paid

 





F-6






MARILYNJEAN INTERACTIVE INC.

Notes to the consolidated financial statements

December 31, 2014

(Expressed in US dollars)



1.

Nature of Operations and Continuance of Business


Future Energy Corp. (the “Company”) was incorporated in the State of Nevada on April 6, 2010. The name was changed to MarilynJean Interactive Inc. on April 4, 2013.


The Company had previously been in the exploration stage since its formation and had not commenced any exploration activities. On March 25, 2013, the Company entered into a share exchange agreement with MarilynJean Media Inc. (“MJM") which is in the business of selling children’s products via the internet. Refer to Note 3.


These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize it assets and discharge its liabilities in the normal course of business. During the period ended December 31, 2014, the Company has not generated significant revenues, has a working capital deficit of $180,356, and has an accumulated deficit of $634,259. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.


2.

Summary of Significant Accounting Principles


(a)

Basis of Presentation


These consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States and are expressed in US dollars. These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, MarilynJean Holdings Inc. and MarilynJean Media Inc. All inter-company accounts and transactions have been eliminated.


(b)

Use of Estimates


The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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. The Company regularly evaluates estimates and assumptions related to impairment of oil and gas properties and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.


(c)

Cash and Cash Equivalents


The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents.



F-7






2.

Summary of Significant Accounting Principles (continued)


(d)

Foreign Currency Translation


The Company’s functional and reporting currency is the US dollar. Foreign exchange items are translated to US dollars in accordance with ASC 830, “Foreign Currency Translation Matters”, using the exchange rate prevailing at the balance sheet date. Monetary assets and liabilities are translated using the exchange rate at the balance sheet date. Non-monetary assets and liabilities are translated at historical rates. Revenues and expenses are translated at average rates for the period. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income.


The subsidiaries’ accounts are translated to US dollars using the current rate method. Accordingly, assets and liabilities are translated into US dollars at the period-end exchange rate while revenue and expenses are translated at the average exchange rates during the period. Related exchange gains and losses are included in a separate component of stockholders’ equity as accumulated other comprehensive income.


(e)

Financial Instruments


Pursuant to ASC 820, “Fair Value Measurements and Disclosures”, an entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:


Level 1


Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.


Level 2


Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.


Level 3


Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.


The Company’s financial instruments consist principally of cash, amounts receivable, accounts payable, accrued liabilities, loans payable, and amounts due to related parties. Pursuant to ASC 820, the fair value of our cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. We believe that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.


(f)

Oil and Gas Properties


The Company applies the successful efforts method of accounting for oil and gas properties. Under the successful efforts method, exploration costs such as exploratory geological and geophysical costs, delay rentals and exploration overhead are charged against earnings as incurred. Acquisition costs and costs of drilling exploratory wells are capitalized pending determination of whether proved reserves can be attributed to the area as a result of drilling the well. If management determines that commercial quantities of hydrocarbons have not been discovered, capitalized costs associated with exploratory wells are charged to exploration expense. Acquisition costs of unproved leaseholds are assessed for impairment during the holding period and transferred to proved oil and gas properties to the extent associated with successful exploration activities. Significant undeveloped leases are assessed individually for impairment, based on the Company’s current exploration plans, and a valuation allowance is provided if impairment is indicated.



F-8






MARILYNJEAN INTERACTIVE INC.

Notes to the consolidated financial statements

December 31, 2014

(Expressed in US dollars)



2.

Summary of Significant Accounting Principles (continued)


(f)

Oil and Gas Properties (continued)


Depreciation, depletion and amortization of the cost of proved oil and gas properties are calculated using the unit-of-production method. The reserve base used to calculate depreciation, depletion and amortization is the sum of proved developed reserves and proved undeveloped reserves for leasehold acquisition costs and the cost to acquire proved properties. With respect to lease and well equipment costs, which include development costs and successful exploration drilling costs, the reserve base includes only proved developed reserves. Estimated future dismantlement, restoration and abandonment costs, net of salvage values, are taken into account. Our current properties have minimal production and are considered unproved as of December 31, 2014 and as such are not subject to depletion until such time they are further developed and determined to be proved or impaired.


Amortization rates are updated to reflect: 1) the addition of capital costs, 2) reserve revisions (upwards or downwards) and additions, 3) property acquisitions and/or property dispositions and 4) impairments.


The Company reviews its proved properties in accordance with ASC 932-360, Extractive Activities Oil & Gas, Property, Plant, and Equipment (“ASC 360”). ASC 360 requires the Company to evaluate property and equipment as an event occurs or circumstances change that would more likely than not reduce the fair value of the property and equipment below the carrying amount. If the carrying amount of property and equipment is not recoverable from its undiscounted cash flows, then the Company would recognize an impairment loss for the difference between the carrying amount and the discounted cash flow. Unproved properties are also evaluated under ASC 932-360 periodically by management to determine whether they have been impaired. A property would likely be impaired, for example, if a dry hole has been drilled on it and the entity has no firm plans to continue drilling. Also, the likelihood of partial or total impairment of a property increases as the expiration of the lease term approaches if drilling activity has not commenced on the property or on nearby properties. If the results of the assessment indicate impairment, a loss shall be recognized by providing a valuation allowance.


(g)

Asset Retirement Obligations


The Company accounts for asset retirement obligations in accordance with the provisions of ASC 440, “Asset Retirement and Environmental Obligations” which requires the Company to record the fair value of an asset retirement obligation as a liability in the period in which it incurs a legal obligation associated with the retirement of tangible long-lived assets that result from the acquisition, construction, development, and/or normal use of the assets.


(h)

Long-lived Assets


In accordance with ASC 360-10, Accounting for Impairment or Disposal of Long-Lived Assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount of the fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet.



F-9






MARILYNJEAN INTERACTIVE INC.

Notes to the consolidated financial statements

December 31, 2014

(Expressed in US dollars)


2.

Summary of Significant Accounting Principles (continued)


(i)

Income Taxes


The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, “Accounting for Income Taxes”. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.


As of December 31, 2014 and 2013, the Company did not have any amounts recorded pertaining to uncertain tax positions.

The Company files federal and provincial income tax returns in Canada and federal, state, and local taxes in the US, as applicable. The Company may be subject to a reassessment of federal and provincial income taxes by Canadian tax authorities for a period of three years from the date of the original notice of assessment in respect of any particular taxation year. In certain circumstances, the US federal statute of limitations can reach beyond the standard three year period. US state statutes of limitations for income tax assessments vary from state to state. Tax authorities of Canada and US have not audited any of the Company’s, or its subsidiaries’, income tax returns for the open taxation years.


The Company recognizes interest and penalties related to uncertain tax positions in tax expense. During the years ended December 31, 2014 and 2013, there were no charges for interest or penalties.


(j)

Revenue Recognition


The Company earns revenue from the sale of children’s products. The Company recognizes revenue in accordance with ASC 605, “Revenue Recognition”. Revenue is recognized when the price is fixed or determinable, persuasive evidence of an arrangement exists, the goods have been shipped, and collectability is reasonably assured.


(k)

Stock-based Compensation


The Company records stock-based compensation in accordance with ASC 718, “Compensation – Stock Based Compensation” and ASC 505, “Equity Based Payments to Non-Employees”, which requires the measurement and recognition of compensation expense based on estimated fair values for all share-based awards made to employees and directors, including stock options.


ASC 718 requires companies to estimate the fair value of share-based awards on the date of grant using an option-pricing model. The Company uses the Black-Scholes option-pricing model as its method of determining fair value. This model is affected by the Company’s stock price as well as assumptions regarding a number of subjective variables. These subjective variables include, but are not limited to the Company’s expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviours. The value of the portion of the award that is ultimately expected to vest is recognized as an expense in the statement of operations over the requisite service period.


All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.



F-10






MARILYNJEAN INTERACTIVE INC.

Notes to the consolidated financial statements

December 31, 2014

(Expressed in US dollars)


2.

Summary of Significant Accounting Principles (continued)


(l)

Loss Per Share


The Company computes net loss per share in accordance with ASC 260, “Earnings per Share”. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. As at December 31, 2014, the Company had 106,651,250 (2013 – 138,440,375) potential dilutive shares outstanding.


(m)

Comprehensive Loss


ASC 220, “Comprehensive Income”, establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. The Company’s only component of comprehensive loss is unrealized gains and losses on foreign exchange translation.


(n)

Recent Accounting Pronouncements


The Company has limited operations and is considered to be in the development stage. In the year ended December 31, 2014, the Company elected to early adopt Accounting Standards Update No. 2014-10, “Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements”. The adoption of this ASU allows the Company to remove the inception to date information and all references to development stage.


The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.


3.

Acquisition of MarilynJean Media Inc. and Recapitalization


On March 25, 2013, the “Company entered into a share exchange agreement with MJM. Under the terms of the agreement, the Company, together with its wholly-owned subsidiary, MarilynJean Holdings Inc., acquired 100% of the issued and outstanding common shares of MJM in exchange for 75,000,000 shares of common stock of the Company and 106,651,250 exchangeable preferred stock of MarilynJean Holdings Inc. The exchangeable shares of preferred stock are redeemable by the holders into shares of common stock of the Company on a one-for-one basis. The share exchange agreement closed on March 28, 2013.


After the close of the share exchange agreement, the Company has 194,528,352 shares of common stock issued and outstanding and 106,651,250 shares of common stock reserved for issuance upon conversion of 106,651,250 exchangeable shares of preferred stock outstanding. The acquisition was a capital transaction in substance and therefore has been accounted for as a recapitalization, which is outside the scope ASC 805, “Business Combinations”. Under recapitalization accounting, MJM is considered the acquirer for accounting and financial reporting purposes, and acquired the assets and assumed the liabilities of the Company. Assets acquired and liabilities assumed are reported at their historical amounts. These consolidated financial statements include the accounts of the Company since the effective date of the recapitalization and the historical accounts of the business of MJM since its inception on September 1, 2011.



F-11






MARILYNJEAN INTERACTIVE INC.

Notes to the consolidated financial statements

December 31, 2014

(Expressed in US dollars)


3.

Acquisition of MarilynJean Media Inc. and Recapitalization (continued)


The assets acquired and liabilities assumed are as follows:


 

$

 

 

Cash

267,058

Amounts receivable

1,979

Loan receivable

100,000

Oil and gas properties

50,000

Accounts payable and accrued liabilities

(18,132)

Due to related parties

(65,016)

 

 

Net assets acquired

335,889


4.

Restricted Cash


Restricted cash represented cash pledged as security for the Company’s credit cards.


5.

Oil and Gas Properties


(a)

On July 25, 2010, the Company purchased a 1.57% working interest in an unproved property located in Franklin County, Illinois for $25,000. During the year ended December 31, 2014, the Company recorded an impairment of $25,000 due to the uncertainty of recovery of its cost.


(b)

On December 17, 2010, the Company purchased a 3% working interest in an unproved property located in Franklin County, Illinois for $25,000. During the year ended December 31, 2014, the Company recorded an impairment of $25,000 due to the uncertainty of recovery of its cost.


6.

Loans Payable


(a)

As at December 31, 2014, the Company has a loan payable of $22,211 (Cdn$25,767) (2013 - $24,226 (Cdn$25,767)) which bears interest at the Bank of Canada prime rate plus 2% per annum, due on April 17, 2014, and is secured by a general security agreement.


(b)

As at December 31, 2014, the Company has a loan payable of $20,671 (Cdn$23,980) (2013 - $22,546 (Cdn$23,980)) which bears interest at Bank of Canada prime rate plus 2% per annum, is unsecured, and due on May 28, 2014.


(c)

As at December 31, 2014, the Company has a loan payable of $8,620 (Cdn$10,000) (2013 - $9,402 (Cdn$10,000)) which bears interest at the Bank of Canada prime rate plus 2% per annum, is unsecured, and due on December 7, 2014.


7.

Related Party Transactions


(a)

As at December 31, 2014, the Company was indebted to a significant shareholder of the Company in the amount of $65,016 (2013 - $65,016), which is non-interest bearing, unsecured, and due on demand.


(b)

During the year ended December 31, 2014, the Company incurred management fees of $2,445 (2013 - $27,674) to the former Chief Executive Officer of the Company.


(c)

During the year ended December 31, 2014, the Company incurred management fees of $nil (2013 - $26,702) to the former Chief Financial Officer of the Company.



F-12






MARILYNJEAN INTERACTIVE INC.

Notes to the consolidated financial statements

December 31, 2014

(Expressed in US dollars)


8.

Common Stock


(a)

On March 1, 2013, the MJM issued 106,652,000 shares of common stock at $0.00001 per share for proceeds of $1,038 which had not yet been received as at December 31, 2014.


(b)

On March 22, 2013, the MJM effected a stock split for its issued and outstanding common shares, on the following basis:


·

6,750 Class A common shares for 1 Class A common share


·

100,000 Class B common shares for 1 Class B common share


·

6,750 Class C common shares for 1 Class C common share


All MJM share amounts have been retroactively restated for all periods presented.


(c)

On March 28, 2013, the Company issued 75,000,000 shares of common stock and its wholly-owned subsidiary, Marilyn Jean Holdings Inc., issued 106,651,250 exchangeable shares of preferred stock to the shareholders of MJM to acquire 100% of the issued and outstanding shares of MJM.


9.

Share Purchase Warrants


The following table summarizes the continuity of share purchase warrants:


 

Number of

warrants

Weighted average exercise price

$

 

 

 

Balance, December 31, 2012

 

 

 

Outstanding warrants of the Company prior to reverse merger

31,789,125

0.83

 

 

 

Balance, December 31, 2013

31,789,125

0.83

 

 

 

Expired

(31,789,125)

0.83

 

 

 

Balance, December 31, 2014




F-13






MARILYNJEAN INTERACTIVE INC.

Notes to the consolidated financial statements

December 31, 2014

(Expressed in US dollars)


10.

Income Taxes


The Company has $765,497 of net operating losses carried forward to offset taxable income in future years which expire commencing in fiscal 2031. The income tax benefit differs from the amount computed by applying the statutory tax rate to net loss before income taxes for the years ended December 31, 2014 and 2013 as a result of the following:


 

2014

$

 

2013

$

 

 

 

 

Net loss before taxes

(138,001)

 

(290,041)

Statutory rate

34%

 

34%

 

 

 

 

Expected tax recovery

(46,921)

 

(98,614)

 

 

 

 

Permanent differences and other

77

 

(7,624)

Change in tax rates

 

(2,062)

Tax rate difference for foreign jurisdiction

2,738

 

18,559

Losses of legal parent upon merger

 

(39,126)

Change in valuation allowance

44,106

 

128,867

 

 

 

 

Income tax provision

 


The significant components of deferred income tax assets and liabilities as at December 31, 2014 and 2013 after applying enacted corporate income tax rates are as follows:


 

2014

$

 

2013

$

 

 

 

 

Net operating losses carried forward

224,527

 

180,421

Valuation allowance

(224,527)

 

(180,421)

 

 

 

 

Net deferred income tax asset

 


As at December 31, 2014, the Company is in arrears on filing its statutory corporate income tax returns and the amounts presented above are based on estimates. The actual losses available could differ from these estimates.




F-14






ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.


None.


ITEM 9A. CONTROLS AND PROCEDURES.


Disclosure controls and procedures


We maintain “disclosure controls and procedures”, as that term is defined in Rule 13a-15(e), promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company’s reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal accounting officer to allow timely decisions regarding required disclosure.


As required by paragraph (b) of Rules 13a-15 under the Securities Exchange Act of 1934, our management, with the participation of our principal executive officer and principal financial officer, evaluated our company’s disclosure controls and procedures as of the end of the period covered by this annual report on Form 10-K. Based on this evaluation, and in light of the weaknesses identified below, the principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective.


Management’s annual report on internal control over financial reporting


Our management, including our principal executive officer and principal financial officer, is responsible for establishing and maintaining effective internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934).


Under the supervision of our principal executive officer and principal financial officer, our Company conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2014 using the criteria established in Internal Control—Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).


A material weakness is a deficiency or a combination of control deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over financial reporting as of December 31, 2014, the Company determined that there were significant deficiencies that constituted material weaknesses, as described below.


1.

We did not maintain appropriate cash controls – The Company has not maintained sufficient internal controls over financial reporting for the cash process, including failure to segregate cash handling and accounting functions, and did not require dual signature on the Company’s bank accounts.


2.

Lack of segregation of duties. We have an inadequate number of personnel to properly implement control procedures.


3.

Lack of a formal review process that includes multiple levels of review from adequate personnel with requisite expertise. We do not have a functioning audit committee of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures.


4.

We did not implement appropriate information technology controls – As at December 31, 2014, the Company retains copies of all financial data and material agreements; however there is no formal procedure or evidence of normal backup of the Company’s data or off-site storage of the data in the event of theft, misplacement, or loss due to unmitigated factors.  


5.

Lack of a functioning audit committee and outside directors – We only have one person acting as the sole officer and director of the Company.


In light of the existence of these control deficiencies, management concluded that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the company’s internal controls. As a result, management has concluded that our company did not maintain effective internal control over financial reporting as at December 31, 2014 based on criteria in Internal Control – Integrated Framework issued by COSO.



14






Saturna Group Chartered Accountants LLP, an independent registered public accounting firm, was not required to and has not issued a report concerning the effectiveness of our internal control over financial reporting as of December 31, 2014.


Limitations on Effectiveness of Controls


Our principal executive officer and principal financial officer do not expect that our disclosure controls or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additional controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.


Changes in internal control over financial reporting


Except as disclosed above, there were no changes in our internal control as of December 31, 2014, that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.


ITEM 9B. OTHER INFORMATION


On April 11, 2014 Jason Carvalho resigned as our President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer, and Director.  Also on April 11, 2014, Peter Janosi was appointed President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer, and sole director.  There was no disagreement between MarilynJean and Mr. Carvalho on any matter relating to MarilynJean’s operations, policies or practices.


Mr. Janosi received his Bachelor of Economics from the Zrinyi Miklós University in Budapest, Hungary and from 2006 to 2013 served as a police officer with the Budapest Police Services. Since 2010, concurrent with his employment as a police officer, Mr. Janosi has been mining and investing in Bitcoins and managing an online retail operation through E-bay.  In 2013, Mr. Janosi left the police department to pursue this business full time.  Mr. Janosi’s background in economics as well as experience in both online retail and marketing, as well as the early days of Bitcoin growth make him qualified to help lead our company in a new direction.


Mr. Janosi may terminate our existing business while leveraging our online presence into a new business which will likely be in the Bitcoin space.  Concurrent with our change in directors, we have closed our Surrey office and distribution location.  All of our company’s operations are now administered outside of Canada.



15






PART III


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE


Identification of Directors and Executive Officers


The following table sets forth the name and age of our sole director and executive officer:


Name

Age

Position with the Company

Date of Appointment

Peter Janosi

33

President, Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary and Director

April 11, 2014


Peter Janosi is the sole member of the Company’s audit committee.  


Term of Office


Our officers are appointed by the Company’s Board of Directors and their terms of office are at the discretion of the Board.  Our officers serve until the earlier occurrence of the appointment of his or her successor at the next meeting of stockholders, death, resignation or removal by the Board of Directors.  All of our directors hold office until the next annual general meeting of the shareholders or until their successors are elected and qualified.


Background and Business Experience


The following is a brief account of the education and business experience of our sole director and executive officer during at least the past five years, indicating his principal occupations and employment during the period, and the name and principal business of the organization in which such occupations or employment were carried on.


Peter Janosi, President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer, and Director


Peter Janosi was appointed as President, Chief Executive Officer and a director of our company on April 11, 2014. Mr. Jasnosi received his Bachelor of Economics from the Zrinyi Miklós University in Budapest, Hungary and from 2006 to 2013 served as a police officer with the Budapest Police Services. Since 2010, concurrent with his employment as a police officer, Mr. Janosi has been mining and investing in Bitcoins and managing an online retail operation through E-bay.  In 2013, Mr. Janosi left the police department to pursue this business full time.  Mr. Janosi’s background in economics as well as experience in both online retail and marketing, as well as the early days of  Bitcoin growth make him qualified to help lead our company in a new direction.


We believe Mr. Janosi is qualified to serve on our board of directors because of his education and business experiences described above.


Family Relationships


We currently do not have any officers or directors of our company who are related to each other.


Identification of Significant Employees


We have no significant employees other than Peter Janosi, our President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and Director.  We believe that until such time that we have fully developed our plan of operations we will not have any employees and that we will frequently use consultants to assist in the completion of various projects.  



16






Involvement in Certain Legal Proceedings


During the past 10 years no director, executive officer, promoter or control person of the Company has been involved in the following:


1.

A petition under the Federal bankruptcy laws or any state insolvency law which was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;


2.

Such person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);


i.

Such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:


ii.

Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;


iii.

Engaging in any type of business practice; or


iv.

Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;


3.

Such person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (2)(i) of this section, or to be associated with persons engaged in any such activity;


4.

Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;


5.

Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;


6.

Such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:


i.

Any Federal or State securities or commodities law or regulation; or


ii.

Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or


iii.

Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or


7.

Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.



17






Code of Ethics


Our board of directors has not adopted a code of ethics due to the fact that we presently are in the early stage of our operations and we do not have any employees who are not also officers of the Company.  We anticipate that we will adopt a code of ethics when we increase the number of our employees.


Compliance with Section 16(a) of the Exchange Act


We do not yet have a class of equity securities registered under the Securities Exchange Act of 1934, as amended. Hence, compliance with Section 16(a) thereof by our officers and directors is not required.


Audit Committee Disclosure


Under Canadian National Instrument 52-110 – Audit Committees (“NI 52-110”) reporting issuers are required to provide disclosure with respect to its Audit Committee including the text of the Audit Committee’s Charter, composition of the Committee, and the fees paid to the external auditor. We provide the following disclosure with respect to our Audit Committee:


Audit Committee Charter


Our audit committee charter was filed as Exhibit 99.1 to our December 31, 2013 annual report on Form 10-K, filed with the SEC on April 15, 2014 and incorporated by reference.


Composition of Audit Committee


The sole member of our Audit Committee is

:


Member

Independent(1)

Financially Literate(2)

Peter Janosi

No

Yes


(1)

A member of an audit committee is independent if the member has no direct or indirect material relationship with our company, which could, in the view of the Board, reasonably interfere with the exercise of a member’s independent judgment.


(2)

An individual is financially literate if he has the ability to read and understand a set of financial statements that present a breadth of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by our financial statements.


Audit Committee and Audit Committee Financial Expert


Our board of directors has determined that while Mr. Janosi qualifies as an "audit committee financial expert" as defined in Item 407(d)(5)(ii) of Regulation S-K, he does not qualify as an "independent" as the term is used by NASDAQ Marketplace Rule 5605(a)(2).


Audit Committee Oversight


At no time since the commencement of our most recently completed financial year was a recommendation of the Audit Committee to nominate or compensate an external auditor not adopted by the Board.


Reliance on Certain Exemptions


At no time since the commencement of our most recently completed financial year have we relied on the exemption in Section 2.4 of NI 52-110 (De Minimis Non-audit Services), or an exemption from NI 52-110, in whole or in part, granted under Part 8 of NI 52-110.


Pre-Approval Policies and Procedures


The Audit Committee is authorized by the Board to review the performance of our external auditors and approve in advance provision of services other than auditing and to consider the independence of the external auditors, including a review of the range of services provided in the context of all consulting services bought by us.



18






Exemption


We are relying on the exemption provided by section 6.1 of NI 52-110 which provides that we, as a venture issuer, are not required to comply with Part 3 (Composition of the Audit Committee) and Part 5 (Reporting Obligations) of NI 52-110.


Corporate Governance


General


The Board of Directors (the “Board”) of our company believes that good corporate governance improves corporate performance and benefits all shareholders. Canadian National Policy 58-201 Corporate Governance Guidelines provides non-prescriptive guidelines on corporate governance practices for reporting issuers such as the Company. In addition, Canadian National Instrument 58-101 Disclosure of Corporate Governance Practices prescribes certain disclosure by our company of its corporate governance practices. This disclosure is presented below.


Board of Directors


Our sole director is Peter Janosi who is not independent as Mr. Janosi also acts as an officer of the Company.


Directorships


Our sole director is not nor has been a director of any other reporting issuers or equivalent


Orientation and Continuing Education


New Board members receive an orientation package which includes reports on operations and results, and any public disclosure filings by our company, as may be applicable. The Board does not take any steps to provide continuing education for directors.


Ethical Business Conduct


The Board has found that the fiduciary duties placed on individual directors by our governing corporate legislation and the common law and the restrictions placed by applicable corporate legislation on an individual director’s participation in decisions of the Board in which the director has an interest have been sufficient to ensure that the Board operates in the best interests of our company.


Nomination of Directors


The Board considers its size each year when it considers the number of directors to recommend to the shareholders for election at the annual meeting of shareholders, taking into account the number required to carry out the Board’s duties effectively and to maintain a diversity of view and experience.


The Board does not have a nominating committee, and these functions are currently performed by the Board as a whole. However, if there is a change in the number of directors required by our company, this policy will be reviewed.


Compensation


The Board is responsible for determining compensation for the directors of our company to ensure it reflects the responsibilities and risks of being a director of a public company.


Other Board Committees


The Board has no committees other than the Audit Committee.


Assessments


The Board has no formal policy to monitor the effectiveness of the directors, the Board and its committees.



19






Indemnification of Directors and Officers


Our Bylaws do not restrict our ability to indemnify, to the greatest allowable extent permitted under the General Corporate Laws of Nevada, each director, executive officer, employee and agent and all other persons whom our company is authorized to indemnify under the provisions of the Nevada Revised Statutes to the fullest extent of the law (i) against all the expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the individual in connection with any action, suit or proceeding, whether civil, criminal, administrative, investigative, or in connection with any appeal therein, or otherwise, and (ii) against all expenses (including attorneys’ fees) actually and reasonably incurred by the individual in connection with the defense or settlement of any action or suit by or in the right of the company, or in connection with any appeal therein, or otherwise, if the individual acted in good faith and in a manner that they reasonably believed to be in or not opposed to the best interests of our company, and with respect to any criminal action or proceeding, had no reasonable cause to believe that such conduct was unlawful. Our company may, in our discretion, pay the expenses (including attorneys’ fees) incurred in defending any proceeding in advance of any final disposition, provided, however, that the payment of expenses incurred by a director or executive officer in advance of the final disposition of the proceeding shall be made only upon receipt of an undertaking by the director or executive officer to repay all amounts advanced if it should be ultimately determined that the director or executive officer is not entitled to be indemnified under our Bylaws or otherwise. Such expenses incurred by other employees and agents may be so paid upon such terms and conditions, if any, as our board of directors deems appropriate.


Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, executive officers and controlling persons of our company under Nevada law or otherwise, our company has been advised that the opinion of the Securities and Exchange Commission is that such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable.


ITEM 11. EXECUTIVE COMPENSATION


The following table sets forth the compensation paid to our executive officers during the years ended December 31, 2014 and 2013: 


Summary Compensation Table


Name And

Principal Position

Fiscal Year Ended

Salary

($)

Bonus

($)

Stock

Awards

($)

Option

Awards

($)

Non-Equity

Incentive

Plan

Compensation

($)

Nonqualified

Deferred

Compensation

Earnings

($)

All Other

Compensation

($)

Total

($)

 

 

 

 

 

 

 

 

 

 

Peter Janosi

President, CEO, CFO, Treasurer, Secretary & Director 1

2014

2013

-

N/A

-

N/A

-

N/A

-

N/A

-

N/A

-

N/A

-

N/A

-

N/A

 

 

 

 

 

 

 

 

 

 

Jason Carvalho 2

2014

2013

2,445

27,674

-

-

-

-

-

-

-

-

-

-

-

-

2,445

27,674

 

 

 

 

 

 

 

 

 

 

Filip Stoj 3

2014

2013

N/A 26,702

N/A

-

N/A

-

N/A

-

N/A

-

N/A

-

N/A

-

N/A 26,702

 

 

 

 

 

 

 

 

 

 

Georges Paquet 4

2014

2013

N/A

-

N/A

-

N/A

-

N/A

-

N/A

-

N/A

-

N/A

-

N/A

-


1

Mr. Janosi was appointed as President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer, and director on April 11, 2014.


2

Jason Carvalho resigned as President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer, and director on April 11, 2014.



20






3

Filip Stoj resigned as Chief Financial Officer, Treasurer, Secretary and a director effective November 13, 2013.


4

Georges Paquet resigned as President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and one of our directors on March 28, 2013.


Narrative Disclosure to Summary Compensation Table


Other than noted below, there are no employment contracts, compensatory plans or arrangements, including payments to be received from our company with respect to any executive officer, that would result in payments to such person because of his or her resignation, retirement or other termination of employment with our company, or our subsidiaries, any change in control, or a change in the person’s responsibilities following a change in control of our company.


There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers.


Outstanding Equity Awards at Fiscal Year-End


No named executive officer or director received any equity awards, or holds exercisable or unexercisable options, as of the years ended December 31, 2014 and 2013.


Retirement or Similar Benefit Plans


There are no arrangements or plans in which we provide retirement or similar benefits for our directors or executive officers.


Resignation, Retirement, Other Termination, or Change in Control Arrangements


We have no contract, agreement, plan or arrangement, whether written or unwritten, that provides for payments to our directors or executive officers at, following, or in connection with the resignation, retirement or other termination of our directors or executive officers, or a change in control of our company or a change in our directors’ or executive officers’ responsibilities following a change in control.


Compensation of Directors


Our directors receive no extra compensation for their service on our board of directors.


Long-Term Incentive Plans


There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers.  


Compensation Committee


We currently do not have a compensation committee of the Board of Directors.  The Board of Directors as a whole determines executive compensation.



21






ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS


Security Ownership of Certain Beneficial Owners


The following table sets forth the amount certain information concerning the number of shares of our common stock owned beneficially as of March 30, 2015 by: (i) each of our directors; (ii) each of our named executive officers; and (iii) each person or group known by us to beneficially own more than 5% of our outstanding shares of common stock.  Unless otherwise indicated, the shareholders listed below possess sole voting and investment power with respect to the shares they own.


Name and Address of

Beneficial Owner

Title of Class

Amount and Nature of

Beneficial Ownership

Percentage

of Class(1)

Peter Janosi
Director and Officer

1170 Budapest, Bihari út3/a  VIII/26

Common Stock

Nil

 

Nil

Directors and Executive Officers  

(1–as a group)

Common Stock

Nil

 

Nil

Jason Carvalho

5% Stockholder

104-12877 - 76th Avenue

Surrey, BC  V3W 1E6

Common Stock

22,950,000

Direct (2)

11.8%

George Paquet

840–23rd Street

St. Georges de Beauce, QC  G5Y 4N6

Common Stock

60,000,000

Direct

30.8%

Melany Paquet

1784–87th Street

St. Georges de Beauce, QC G6A 1L8

Common Stock

17,142,852

Direct

8.8%

 5% Stockholder

(1–as a group)

Common Stock

 

 

 


1

Based on 194,528,352 shares of our common stock outstanding as of March 30, 2015.


2

These shares represent Exchangeable Preferred Shares and are redeemable by the holders into common stock of our company on a one-for-one basis at any time by the holder in accordance with the terms of the Share Exchange Agreement, Trust Agreement and Support Agreement.  The percentage total is on an undiluted basis.


Changes in Control


There are no present arrangements or pledges of the Company’s securities which may result in a change in control of the Company.



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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE


Director Independence


For purposes of determining director independence, we have applied the definitions set out in NASDAQ Rule 5605(a)(2). The OTCBB on which shares of common stock are quoted does not have any director independence requirements.  The NASDAQ definition of “Independent Officer” means a person other than an Executive Officer or employee of the Company or any other individual having a relationship which, in the opinion of the Company’s Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.


According to the NASDAQ definition, we currently have no independent directors because our sole director is currently an officer of the Company.


Related Party Transactions


Other than as disclosed below, there has been no transaction, since our inception on May 19, 2004, or currently proposed transaction, in which we were or are to be a participant and the amount involved exceeds the lesser of $120,000 or one percent of our total assets at year end for the last completed fiscal year, and in which any of the following persons had or will have a direct or indirect material interest:


i.

Any director or executive officer of our company;


ii.

Any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to our outstanding shares of common stock;


iii.

Any of our promoters and control persons; and


iv.

Any member of the immediate family (including spouse, parents, children, siblings and in- laws) of any of the foregoing persons.


The following constituted related transactions with our company since inception:



·

On June 30, 2010 we issued 4,285,714 (post-split) shares of our common stock to our President, Georges Paquet, at a price of $0.001 and 1,428,571 (post-split) shares of our common stock to Melany Paquet at a price of $0.001 per share.  The shares were issued to both subscribers pursuant to Section 4(2) of the Securities Act of 1933 and/or Regulation S of the Securities Act of 1933 on the basis that the subscribers represented to us that they were not a “US Person” as such term is defined in Regulation S.   


·

On July 15, 2010 we issued 714,285 (post-split) shares of our common stock to our President, Georges Paquet, at a price of $0.001 per share.  The shares were issued to Mr. Paquet pursuant to Section 4(2) of the Securities Act of 1933 and/or Regulation S of the Securities Act of 1933 on the basis that Mr. Paquet represented to us that he was not a “US Person” as such term is defined in Regulation S.   


·

On December 8, 2010, our company issued a two year Promissory Note in the principal amount of $25,000 to Georges Paquet, our President. The $25,000 principal amount underlying the Promissory Note is payable on or before the two year anniversary of the Note and accrues interest at the rate of the Royal Bank of Canada Prime Interest Rate plus 2% per annum.



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·

On July 29, 2010, we entered into an assignment agreement with Tim Cooksey Oil pursuant to which we acquired a 1.57% working interest in the Charles Prior Project, located in Franklin County, Illinois in consideration of a payment of $25,000. JKV Oil Development, of which our director, Mr. Villines, is the President, owns a five percent (5%) working interest in the Charles Prior Project.


·

On December 17, 2010, we entered into an assignment agreement with JKV Oil Development, pursuant to which we acquired a 3% working interest in wells located in Franklin County, Illinois in consideration of a payment of $25,000. JKV Oil Development, of which our director, Mr. Villines, is the President, retained a fifteen percent (15%) working interest in the Sesser Wells.


·

On May 16, 2011, our company issued a one year Promissory Note in the principal amount of $5,000 to Georges Paquet, our President. The $5,000 principal amount underlying the Promissory Note is payable on or before the one year anniversary of the Note and accrues interest at the rate of the Royal Bank of Canada Prime Interest Rate plus 2% per annum.


·

On July 13, 2011, our company issued a one year Promissory Note in the principal amount of $10,000 to Georges Paquet, our President. The $10,000 principal amount underlying the Promissory Note is payable on or before the one year anniversary of the Note and accrues interest at the rate of the Royal Bank of Canada Prime Interest Rate plus 2% per annum.


·

On December 14, 2011, our company issued a one year Promissory Note in the principal amount of $10,000 to Georges Paquet, our President. The $10,000 principal amount underlying the Promissory Note is payable on or before the one year anniversary of the Note and accrues interest at the rate of the Royal Bank of Canada Prime Interest Rate plus 2% per annum.


The following constituted related party transactions with MJM since inception:


·

During the year ended December 31, 2013, MJM incurred management fees of Cdn$27,674 (2012 - $7,500) to Jason Carvalho the Chief Executive Officer of MJM.


·

During the year ended December 31, 2013, MJM incurred management fees of Cdn$26,702 (2012 - $7,500) to Filip Stoj, the former Chief Financial Officer of MJM.


·

Other than the foregoing, none of the directors or executive officers of our company, nor any person who owned of record or was known to own beneficially more than 5% of our company’s outstanding shares of our common stock, nor any associate or affiliate of such persons or companies, has any material interest, direct or indirect, in any transaction that has occurred during the past fiscal year, or in any proposed transaction, which has materially affected or will affect our company.


Review, Approval or Ratification of Transactions with Related Persons


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.



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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES


 

Year Ended

December 31, 2014

 

Year Ended

December 31, 2013

Audit fees

$9,500

 

Cdn $13,600

Audit-related fees

Nil

 

Cdn $1,200

Tax fees

Nil

 

Nil

All other fees

Nil

 

Nil

Total

$9,500

 

Cdn$14,800


Audit Fees


During the fiscal year ended December 31, 2014, we incurred $9,500 in fees to our principal independent accountants for professional services rendered in connection with the audit and review of our financial statements for the fiscal year ended December 31, 2014.


During the fiscal year ended December 31, 2013, we incurred Cdn$13,600 in fees to our principal independent accountants for professional services rendered in connection with the audit and review of our financial statements for the fiscal year ended December 31, 2013.


Audit-Related Fees


The aggregate fees billed during the fiscal years ended December 31, 2014 and 2013 for audit-related services by our principal independent accountants that are reasonably related to the performance of the audit or review of our financial statements (and are not reported under Item 9(e)(1) of Schedule 14A) was $nil and Cdn$1,200, respectively.


Tax Fees


The aggregate fees billed during the fiscal years ended December 31, 2014 and 2013 for professional services rendered by our principal accountant tax compliance, tax advice and tax planning were $nil and $nil, respectively.


All Other Fees


The aggregate fees billed during the fiscal years ended December 31, 2014 and 2013 for products and services provided by our principal independent accountants (other than the services reported in Items 9(e)(1) through 9(e)(3) of Schedule 14A) was $nil and $nil, respectively.



25






PART IV


ITEM 15. EXHIBITS.


Exhibit No.

Description

Filing

(3)

Articles of Incorporation and Bylaws

 

3.01

Articles of Incorporation

Filed with the SEC on October 28, 2010 as part of our Registration Statement on Form S-1.

3.01a

Certificate of Amendment dated October 5, 2010

Filed with the SEC on October 28, 2010 as part of our Registration Statement on Form S-1.

3.01b

Certificate of Change

Filed with the SEC on June 4, 2012 as part of our Current Report on Form 8-K.

3.01c

Certificate of Designation dated March 26, 2013

Filed with the SEC on March 26, 2013 as part of our Current Report on Form 8-K

3.02

Bylaws

Filed with the SEC on October 28, 2010 as part of our Registration Statement on Form S-1.

3.03

Articles of Merger dated April 4, 2013

Filed with the SEC on April 8, 2013 as part of our Current Report on Form 8-K

(10)

Material Contracts

 

10.01

Share Exchange Agreement with Marilyn Jean Media, Inc. dated March 25, 2013

Filed with the SEC on March 26, 2013 as part of our Current Report on Form 8-K

10.02

Voting and Exchange Trust Agreement dated March 28, 2013 among our company, MarilynJean Holdings Inc. and Chester Ku

Filed with the SEC on April 3, 2013 as part of our Current Report on Form 8-K

10.03

Exchangeable Share Support Agreement dated March 28, 2013 between our company and MarilynJean Holdings Inc.

Filed with the SEC on April 3, 2013 as part of our Current Report on Form 8-K

(21)

Subsidiaries

 

21.1

MarilynJean Holdings Inc. (British Columbia)

 

(31)

Section 302 Certification

 

31.1*

Section 302 Certification under Sarbanes-Oxley Act of 2002 of Peter Janosi

 

(32)

Section 906 Certification

 

32.1*

Section 906 Certification under Sarbanes-Oxley Act of 2002

 

99.1

Audit Committee Charter

Filed with the SEC on April 15, 2014 as part of our Annual Report on Form 10-K

(101)

XBRL

 

101.INS**

XBRL INSTANCE DOCUMENT

 

101.SCH**

XBRL TAXONOMY EXTENSION SCHEMA

 

101.CAL**

XBRL TAXONOMY EXTENSION CALCULATION LINKBASE

 

101.DEF**

XBRL TAXONOMY EXTENSION DEFINITION LINKBASE

 

101.LAB**

XBRL TAXONOMY EXTENSION LABEL LINKBASE

 

101.PRE**

XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE

 


*

Filed herewith


**

Pursuant to Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.



26







SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


 

MARILYNJEAN INTERACTIVE INC.

 

 

 

 

 

By: /s/Peter Janosi    

 

Its:  President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Principal Financial Officer, Secretary and Treasurer and Director

 

Dated April 15, 2015


Pursuant to the requirement of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:


 

MARILYNJEAN INTERACTIVE INC.

 

 

 

 

 

By: /s/Peter Janosi    

 

Its:  President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Principal Financial Officer, Secretary and Treasurer and Director

 

Dated April 15, 2015




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