What changed in this filing

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Item 1. Financial Statements

2020-07-15 compared with 2020-04-15 · 62 added, 64 removed, 280 unchanged (31% of the section changed)

2 unchanged sentences

Destiny Media Technologies Inc.

February 29, 2020

(Expressed in United States dollars)

25 unchanged sentences

Issued and outstanding:

10,450,656 shares [August 31, 2019 – issued and outstanding 11,000,796 shares]

10,450,656 shares

[August 31, 2019 – issued and outstanding 11,000,796 shares]

Additional paid-in capital [note 6]

5 unchanged sentences

Destiny Media Technologies Inc.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF

COMPREHENSIVE INCOME (LOSS)

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Expressed in United States dollars)

12 unchanged sentences

Interest income

Net income (loss)

Other income (expense)

Other comprehensive income (loss)

1 unchanged sentence

Total comprehensive income (loss)

Net income (loss) per common share,

basic and diluted

Net income (loss) per common share, basic and diluted

Weighted average common shares outstanding:

4 unchanged sentences

(Expressed in United States dollars)

Three months ended February 29, 2020 and February 28, 2019

comprehensive

Three months ended May 31, 2020 and 2019

stockholders'

Balance, November 30, 2019

Total comprehensive loss

Stock based compensation [note 6]

Common shares retired

comprehensive

Balance, February 29, 2020

Balance, November 30, 2018

Total comprehensive income

Total comprehensive income (loss)

Stock based compensation [note 6]

Balance, May 31, 2020

Balance, February 28, 2019

Total comprehensive income (loss)

Stock based compensation [note 6]

Balance, May 31, 2019

See accompanying notes

Destiny Media Technologies Inc.

1 unchanged sentence

(Expressed in United States dollars)

Six months ended February 29, 2020 and February 28, 2019

comprehensive

Nine months ended May 31, 2020 and 2019

stockholders'

comprehensive

Balance, August 31, 2019

Total comprehensive income

Total comprehensive income (loss)

Stock based compensation [note 6]

Common shares retired

Balance, February 29, 2020

Balance, May 31, 2020

Balance, August 31, 2018

Total comprehensive income

Total comprehensive income (loss)

Stock based compensation [note 6]

Balance, February 28, 2019

Balance, May 31, 2019

See accompanying notes

Destiny Media Technologies Inc.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

Nine months ended May 31, 2020 and 2019

(Expressed in United States dollars)

Six months ended February 29, 2020 and February 28, 2019

OPERATING ACTIVITIES

2 unchanged sentences

Depreciation and amortization [note 4]

Allowance for doubtful amounts

Stock-based compensation

28 unchanged sentences

FINANCIAL STATEMENTS

February 29, 2020

Destiny Media Technologies Inc.

12 unchanged sentences

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

Operating results for the six months ended February 29, 2020 are not necessarily indicative of the results that may be expected for the year ended August 31, 2020.

Operating results for the nine months ended May 31, 2020 are not necessarily indicative of the results that may be expected for the year ended August 31, 2020.

The balance sheet at August 31, 2019 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by United States generally accepted accounting principles for annual financial statements.

3 unchanged sentences

FINANCIAL STATEMENTS

February 29, 2020

SHORT TERM INVESTMENTS

1 unchanged sentence

PROPERTY AND EQUIPMENT AND INTANGIBLES

February 29, 2020

Property and equipment

11 unchanged sentences

Patents, trademarks and lists

Depreciation and amortization for the six months ended February 29, 2020 was $67,550 (2019:

Depreciation and amortization for the three and nine month periods ended May 31, 2020 was $33,194 and $100,744 respectively (2019:

$26,764 and $67,099 respectively)

Destiny Media Technologies Inc.

1 unchanged sentence

FINANCIAL STATEMENTS

February 29, 2020

RIGHT OF USE ASSET

1 unchanged sentence

The Company adopted the modified retrospective approach on adopting ASC 842 and accordingly the adoption was made effective September 1, 2019, with no restatement of the prior year comparatives.

During the six months ended February 29, 2020, the Company recorded a lease expense of $107,457 related to the depreciation of right-of-use assets.

Amortization of the deferred lease inducement of $5,447

During the three and nine-month periods ended May 31.

2020, the Company recorded a lease expense of $52,930 and $160,387, respectively, related to the depreciation of right-of-use assets.

Supplemental cash flow information related to the lease was as follows:

8 unchanged sentences

Effective September 16, 2019, the Company commenced a Normal Course Issuer Bid, pursuant to which the Company may purchase up to a maximum of 550,140 common shares, through the TSX Venture Exchange (the "TSX") at the market price at the time of purchase, subject to daily limits and compliance with the applicable rules of the TSX and Canadian securities laws.

During the six months ended February 29, 2020, the Company repurchased and cancelled 550,140 common shares for $533,223.

[b] Stock option plans

During the nine months ended May 31, 2020, the Company repurchased and cancelled 550,140 common shares for $533,223.

[b] Stock option plan

The Company has a stock option plan, namely the 2015 Stock Option Plan (the "Plan"), under which up to 530,000 shares of common stock, has been reserved for issuance.

6 unchanged sentences

FINANCIAL STATEMENTS

February 29, 2020

STOCKHOLDERS' EQUITY (cont'd.)

[b] Stock option plans (cont’d.)

[b] Stock option plan (cont'd.)

Stock-Based Payment Award Activity

A summary of stock option activity under the Plans as of February 29, 2020, and changes during the period then ended is presented below:

A summary of stock option activity under the Plan as of May 31, 2020, and changes during the period then ended is presented below:

Exercise Price

Outstanding at August 31, 2019

Outstanding at February 29, 2020

Exercisable at February 29, 2020

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted price of the Company’s common stock for the options that were in-the-money at February 29, 2020.

The following table summarizes information regarding the non-vested options outstanding as of February 29, 2020 and changes during the period then ended:

Outstanding at May 31, 2020

Exercisable at May 31, 2020

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted price of the Company's common stock for the options that were in-the-money at May 31, 2020.

The following table summarizes information regarding the non-vested options outstanding as of May 31, 2020 and changes during the period then ended:

Number of Options

Non-vested options at August 31, 2019

Non-vested options at February 29, 2020

As of February 29, 2020, there was $57,341 of total unrecognized compensation cost related to non- vested stock-based compensation awards.

The unrecognized compensation cost is expected to be

recognized over a weighted average period of 1.58 years.

Non-vested options at May 31, 2020

As of May 31, 2020, there was $80,386 of total unrecognized compensation cost related to non-vested stock-based compensation awards.

The unrecognized compensation cost is expected to be recognized over a weighted average period of 1.65 years.

Destiny Media Technologies Inc.

1 unchanged sentence

FINANCIAL STATEMENTS

February 29, 2020

STOCKHOLDERS' EQUITY (cont'd.)

[b] Stock option plans (cont’d.)

[b] Stock option plan (cont'd.)

On October 3, 2019, the Company adjusted the exercise price of 140,000 employee stock options previously issued to certain employees to $1.00.

The incremental fair value recorded on modification was $10,331, and determined using the Black-Scholes option-pricing model with the following assumptions weighted average volatility 146%, discount rate 1.7%, and weighted average life of 3.27 years.

During the six months ended February 29, 2020, the total stock-based compensation expense of $20,633 (2019:

$24,107) is reported in the statement of comprehensive income as follows:

Total stock-based compensation expense of $15,276 and $35,909 was recognized during the three and nine month periods ended May 31, 2020, (2019:

$10,363 and $34,470) is reported in the statement of comprehensive income as follows:

Stock-based compensation

10 unchanged sentences

Weighted average grant date fair value

No stock options were granted in the three and nine month periods ended May 31, 2019.

Expected volatilities are based on historical volatility of the Company's stock.

5 unchanged sentences

FINANCIAL STATEMENTS

February 29, 2020

STOCKHOLDERS' EQUITY (cont'd.)

[b] Stock option plans (cont’d.)

[c] Employee Stock Purchase Plan

5 unchanged sentences

The third-party plan agent is also responsible for the administration of the Plan on behalf of the Company and the participants.

STOCKHOLDERS’ EQUITY (cont’d.)

[c] Stock option plans (cont’d.)

During the six months ended February 29, 2020, the Company recognized compensation expense of $32,422 (2019 – $22,650) in salaries and wages on the consolidated statement of comprehensive income in respect of the Plan, representing the Company’s employee matching of cash contributions to the Plan.

The shares were purchased on the open market at an average price of $1.00 (2019:

The shares are held in trust by the Company for a period of one year from the date of purchase.

During the three and nine month periods ended May 31, 2020, the Company recognized compensation expense of $20,947 and $53,369 (2019 - $20,324 and $53,657) in salaries and wages on the consolidated statement of comprehensive income (loss) in respect of the Plan, representing the Company's employee matching of cash contributions to the Plan.

During the three month period ended May 31, 2020, the shares were purchased on the open market at an average price of $0.68, for the nine-month period ended May 31, 2020:

The shares are held in trust for a period of one year from the date of purchase.

The Company has entered into a lease agreement expiring June 30, 2022 for office premises consisting of approximately 6,550 square feet.

9 unchanged sentences

FINANCIAL STATEMENTS

February 29, 2020

COMMITMENTS (cont'd.)

During the six months ended February 29, 2020 the Company incurred depreciation expense of $117,269 (2019 –rent expense $123,133) in connection with its office premises lease, which has been allocated between general and administrative expenses, research and development and sales and marketing on the consolidated statement of comprehensive income (loss).

Amounts representing interest of $28,216 were recognized during the six-month period ended February 29, 2020 (2019 – nil).

During the three and nine month periods ended May 31, 2020 the Company incurred depreciation expense of $52,930 and $160,387 respectively (2019:

rent expense of $60,507 and $183,640) in connection with its office premises lease, which has been allocated between general and administrative expenses, research and development and sales and marketing on the consolidated statement of comprehensive income (loss).

Amounts representing interest of $10,267 and $35,070 were recognized during the three and nine-month periods ended May 31, 2020 (2019 - nil).

CONTINGENCIES

16 unchanged sentences

FINANCIAL STATEMENTS

February 29, 2020

NEW ACCOUNTING PRONOUNCEMENTS (cont'd.)

17 unchanged sentences

FINANCIAL STATEMENTS

February 29, 2020

CONCENTRATIONS AND ECONOMIC DEPENDENCE

2 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

North America

4 unchanged sentences

Some of these customers have distribution centers located around the globe and distribute around the world.

During the six months ended February 29, 2020, the Company generated 44% of total revenue from one customer [2019 - 42%].

During the three and nine month periods ended May 31, 2020, the Company generated 39% and 43% of total revenue from one customer respectively (2019 - 42% and 41%).

It is in management's opinion that the Company is not exposed to significant credit risk.

As at February 29, 2020, two customers represented $371,577 (65%) of the trade receivables balance [August 31, 2019, two customers represented $233,549 (70%)].

As at May 31, 2020, two customers represented $532,296 (71%) of the trade receivables balance (August 31, 2019, two customers represented $233,549 (70%)).

By July 8, 2020, the Company has collected $610,558 of the accounts receivable balance outstanding at May 31, 2020.

The Company has substantially all its assets in Canada and its current and planned future operations are, and will be, located in Canada.

5 unchanged sentences

FINANCIAL STATEMENTS

February 29, 2020

FAIR VALUE MEASUREMENTS

The following table presents the classification of financial assets that are measured at fair value on a recurring basis as of May 31, 2020 and August 31, 2019.

Cash and cash equivalents

Short-term investments

Total financial assets

August 31, 2019

Cash and cash equivalents

Short-term investments

Total financial assets

The company has no financial liabilities subject to level 1, 2 or 3 fair value measurements.

SUBSEQUENT EVENTS

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements