What changed in this filing

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Item 1. Financial Statements

2021-04-14 compared with 2021-01-13 · 88 added, 85 removed, 244 unchanged (41% of the section changed)

2 unchanged sentences

Destiny Media Technologies Inc.

November 30, 2020

February 28, 2021

(Expressed in United States dollars)

20 unchanged sentences

Total liabilities

Commitments and contingencies [note 7]

Contingencies [note 7]

Stockholders’ equity

11 unchanged sentences

Destiny Media Technologies Inc.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Expressed in United States dollars)

Three months ended November 30,

Service revenue [note 10]

3 unchanged sentences

Customer support

Third party and transaction costs

Third Party and transactions costs

Operating expenses

3 unchanged sentences

Depreciation and amortization

Income from operations

Income (loss) from operations

Interest income

Net income (loss)

Other comprehensive income (loss)

Foreign currency translation adjustments

Total comprehensive income

Net income per common share, basic and diluted

Total comprehensive income (loss)

Net income (loss) per common share,

basic and diluted

Weighted average common shares outstanding:

Basic and diluted

See accompanying notes

2 unchanged sentences

(Expressed in United States dollars)

Three months ended November 30, 2020 and 2019

Three months ended February 28, 2021 and February 29, 2020

stockholders'

comprehensive

Balance, August 31, 2020

Total comprehensive income

Balance, November 30, 2020

Total comprehensive income (loss)

Stock based compensation [note 6]

Common shares retired

Balance, February 28, 2021

Balance, November 30, 2019

Total comprehensive loss

Stock based compensation [note 6]

Common shares retired

Balance, February 29, 2020

See accompanying notes

Destiny Media Technologies Inc.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(Expressed in United States dollars)

Six months ended February 28, 2021 and February 29, 2020

stockholders'

comprehensive

Balance, August 31, 2020

Shares issued for rounding purposes in connection with reverse split

Repurchase of common stock

Total comprehensive income

Stock based compensation [note 6]

Balance, November 30, 2019

Common shares retired

Balance, February 28, 2021

Balance, August 31, 2019

Total comprehensive loss

Stock based compensation [note 6]

Common shares retired

Balance, February 29, 2020

See accompanying notes

1 unchanged sentence

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

Three months ended November 30,

Six months ended February 28, 2021 and February 29, 2020

(Expressed in United States dollars)

OPERATING ACTIVITIES

Net income (loss)

Items not involving cash:

1 unchanged sentence

Stock-based compensation

Deferred leasehold inducement

Allowance for doubtful accounts

Unrealized foreign exchange (gain) loss

7 unchanged sentences

Operating lease liability

Net cash provided by operating activities

Net cash provided by (used in) operating activities

INVESTING ACTIVITIES

Redemption (purchase) of short-term investments, net

Sale (Purchase) of short-term investments, net

Purchase of property, equipment and intangibles

10 unchanged sentences

Income taxes paid

Non-cash investing and financing activities

Right of use asset

Operating lease liability

See accompanying notes

2 unchanged sentences

FINANCIAL STATEMENTS

November 30, 2020

February 28, 2021

Destiny Media Technologies Inc.

9 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 three months ended November 30, 2020 are not necessarily indicative of the results that may be expected for the year ended August 31, 2021.

Operating results for the six months ended February 28, 2021 are not necessarily indicative of the results that may be expected for the year ended August 31, 2021.

The balance sheet at August 31, 2020 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.

9 unchanged sentences

FINANCIAL STATEMENTS

November 30, 2020

February 28, 2021

SHORT TERM INVESTMENTS

The Company's short-term investments consisted of one-year Guaranteed Investment Certificates with a major Canadian financial institution that earn interest at variable interest rates ranging from 0.10% - 2.36%.

As at November 30, 2020, the Company's short-term investments had reached maturity, and are included in cash and cash equivalents.

The Company's short-term investments consists of one-year Guaranteed Investment Certificates with a major Canadian financial institution that earn interest at variable interest rates ranging from 0.10% - 2.36%.

As at February 28, 2021, the Company's short-term investments had reached maturity, and are included in cash and cash equivalents.

PROPERTY AND EQUIPMENT AND INTANGIBLES

November 30, 2020

February 28, 2021

Property and equipment

11 unchanged sentences

Patents, trademarks and lists

Depreciation and amortization for the three month period ended November 30, 2020 was $24,315 (2019:

Depreciation and amortization for the six months ended February 28, 2021 was $50,715 (2020:

Destiny Media Technologies Inc.

1 unchanged sentence

FINANCIAL STATEMENTS

November 30, 2020

February 28, 2021

RIGHT OF USE ASSET

The Company entered into a lease agreement commencing July 1, 2017 and expiring June 30, 2022 consisting of approximately 6,600 square feet.

The Company entered into a lease agreement commencing July 1, 2017 and expiring June 30, 2022 consisting of approximately 6,600 square feet of office space.

On adoption of ASC 842, Lease Accounting, the Company recognized right-of-use assets and a corresponding increase in lease liabilities, in the amount of $671,911 which represented the present value of future lease payments using a discount rate of 8% per year.

1 unchanged sentence

Right of Use Asset Continuity

November 30, 2020

February 28, 2021

August 31, 2020

10 unchanged sentences

Operating Lease Liability Continuity

November 30, 2020

February 28, 2021

August 31, 2020

3 unchanged sentences

Balance, End of Period

During the three month period ended November 30, 2020 the Company recorded depreciation expense of $54,636 (2019 :

$54,158) which has been allocated between general and administrative expenses, research and development and sales and marketing on the consolidated statement of comprehensive income.

During the three and six month periods ended February 28, 2021 the Company recorded depreciation expense of $56,455 and $111,091 respectively (February 29, 2020:

$52,821 and $107,457 respectively) which has been allocated between general and administrative expenses, research and development and sales and marketing on the consolidated statement of comprehensive income (loss).

The total rent commitment, net of the leasehold improvement allowance, is being amortized to rent expense on a straight-line basis over the term of the lease.

2 unchanged sentences

FINANCIAL STATEMENTS

November 30, 2020

February 28, 2021

STOCKHOLDERS' EQUITY

1 unchanged sentence

The Company is authorized to issue up to 20,000,000 shares of common stock, par value $0.001 per share.

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 year ended August 31, 2020, the Company repurchased and cancelled 550,140 common shares for $533,223.

[b] Stock option plan

Effective January 15, 2021, the Company commenced a Normal Course Issuer Bid (NCIB), pursuant to which the Company may purchase up to a maximum of 522,532 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 three and six month periods ended February 28, 2021, the Company repurchased and cancelled 41,285 common shares for $45,004 (February 29, 2020:

550,140 common shares for $533,223 under a NCIB Effective September 16, 2019).

[b] Stock option plans

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.

4 unchanged sentences

Stock-Based Payment Award Activity

A summary of stock option activity under the Plan as of November 30, 2020, and changes during the period then ended is presented below:

A summary of stock option activity under the Plans as of February 28, 2021, and changes during the period then ended is presented below:

Exercise Price

Outstanding at August 31, 2020

Outstanding at November 30, 2020

Exercisable at November 30, 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 November 30, 2020.

Outstanding at February 28, 2021

Exercisable at February 28, 2021

Destiny Media Technologies Inc.

1 unchanged sentence

FINANCIAL STATEMENTS

November 30, 2020

February 28, 2021

STOCKHOLDERS' EQUITY (cont'd.)

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

The following table summarizes information regarding the non-vested options outstanding as of November 30, 2020 and changes during the period then ended:

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

The following table summarizes information regarding the non-vested options outstanding as of February 28, 2021 and changes during the period then ended:

Number of Options

Non-vested options at August 31, 2020

Non-vested options at November 30, 2020

As of November 30, 2020, there was $56,810 of total unrecognized compensation cost related to non-vested stock-based compensation awards.

Non-vested options at February 28, 2021

As of February 28, 2021, there was $43,192 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 0.74 years.

Total stock-based compensation expense of $12,849 was recognized during the three month period ended November 30, 2020, (2019:

$17,936) is reported in the statement of comprehensive income as follows:

During the six months ended February 28, 2021, the total stock-based compensation expense of $25,983 (February 29, 2020:

$20,633) is reported in the statement of comprehensive income (loss) as follows:

Stock-based compensation

13 unchanged sentences

FINANCIAL STATEMENTS

November 30, 2020

February 28, 2021

STOCKHOLDERS' EQUITY (cont'd.)

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

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

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

9 unchanged sentences

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

During the three month period ended November 30, 2020, the Company recognized compensation expense of $15,186 (2019 :

$13,132) 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.

During the three month period ended November 30, 2020, the shares were purchased on the open market at an average price of $0.67 (2019 :

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

During the six months ended February 28, 2021, the Company recognized compensation expense of $52,857 (February 29, 2020 - $32,422) 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 $0.81 (February 29, 2020:

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

CONTINGENCIES

8 unchanged sentences

FINANCIAL STATEMENTS

November 30, 2020

February 28, 2021

NEW ACCOUNTING PRONOUNCEMENTS

3 unchanged sentences

Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13").

Financial Instruments-Credit Losses (Topic 326) amends guidance on reporting credit losses for assets held

on an amortized cost basis and available-for-sale debt securities.

Financial Instruments-Credit Losses (Topic 326) amends guidance on reporting credit losses for assets held on an amortized cost basis and available-for-sale debt securities.

For assets held on an amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses.

5 unchanged sentences

The adoption of this standard did not have a material impact on the Company's consolidated financial statements.

In February 2018, the FASB issued ASU No.

2018-02, "Income Statement-Reporting Comprehensive Income (Topic 220):

Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" ("ASU 2018-02"), which provides financial statement preparers with an option to reclassify stranded tax effects within accumulated other comprehensive income to retained earnings in each period in which the effect of the change in the U.S.

federal corporate income tax rate in the Tax Cuts and Jobs Act (or portion thereof) is recorded.

The amendments in this ASU will be effective for the Company on September 1, 2019.

The amendments in this ASU should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S.

federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized.

The adoption of this guidance did not have a material impact on the Company's consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement - Disclosure Framework (Topic 820).

2 unchanged sentences

The adoption of this guidance did not have a material impact on the Company's consolidated financial statements.

Destiny Media Technologies Inc.

NOTES TO CONDENSED CONSOLIDATED INTERIM

FINANCIAL STATEMENTS

November 30, 2020

CONCENTRATIONS AND ECONOMIC DEPENDENCE

1 unchanged sentence

Revenue from external customers, by product and location of customer, is as follows:

United States

Total Play MPE® Revenue

United States

Total Clipstream ® Revenue

Destiny Media Technologies Inc.

NOTES TO CONDENSED CONSOLIDATED INTERIM

FINANCIAL STATEMENTS

February 28, 2021

Three Months Ended

Six Months Ended

North America

Total Play MPE®

North America

Total revenue

Revenue in the above table is based on location of the customer's billing address.

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

During the three month period ended November 30, 2020, the Company generated 38% of total revenue from one customer respectively (2019 :

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

During the six months ended February 28, 2021, the Company generated 42% of total revenue from one customer (February 29, 2020 - 44%).

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

As at November 30, 2020, one customer represented $144,407 (or 46%) of the trade receivables balance (August 31, 2020, two customers represented $275,620 (or 65%)).

As at February 28, 2021, one customer represented $145,541 (or 44%) of the trade receivables balance (August 31, 2020, two customers represented $275,620 (or 65%)).

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

2 unchanged sentences

These reclassifications did not affect prior periods' net earnings.

Destiny Media Technologies Inc.

NOTES TO CONDENSED CONSOLIDATED INTERIM

FINANCIAL STATEMENTS

November 30, 2020

SUBSEQUENT EVENTS

On January 4, 2021, the Company commenced a Normal Course Issuer Bid ("NCIB"), pursuant to which the Company may purchase up to a maximum of 522,532 shares of common stock in the capital of the Company, representing approximately 5% of the then-outstanding common stock.

Purchases pursuant to the NCIB will be made from time to time by RBC Dominion Securities Inc.

on behalf of the Company through the facilities of the TSX Venture Exchange at the market price at the time of purchase, subject to daily limits and compliance with the applicable rules of the TSX Venture Exchange and Canadian securities laws.

Shares purchased will be paid for with cash available from the Company's working capital.

On March 31, 2020, a further 23,800 shares of common stock were repurchased under the NCIB and cancelled.

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