What changed in this filing

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Item 1. Financial Statements

2022-01-13 compared with 2021-07-14 · 109 added, 117 removed, 222 unchanged (50% of the section changed)

2 unchanged sentences

Destiny Media Technologies Inc.

November 30, 2021

(Expressed in United States dollars)

19 unchanged sentences

Total liabilities

Contingencies [note 7]

Commitments and contingencies [note 7]

Stockholders' equity

11 unchanged sentences

Destiny Media Technologies Inc.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF INCOME

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF

(Expressed in United States dollars)

Three months ended November 30,

Service revenue [note 9]

3 unchanged sentences

Customer support

Third Party and transactions costs

Third party and transaction costs

Operating expenses

3 unchanged sentences

Depreciation and amortization

Income (loss) from operations

Income from operations

Interest income

Other income (loss)

Net income per common share,

Net income per common share, basic and diluted

Weighted average common shares outstanding:

Diluted [note 6]

See accompanying notes

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Expressed in United States dollars)

Net income for the period

Other comprehensive income (loss)

Foreign currency translation adjustments

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF

COMPREHENSIVE INCOME (LOSS)

See accompanying notes

Destiny Media Technologies Inc.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(Expressed in United States dollars)

Three months ended May 31, 2021 and 2020

stockholders'

comprehensive

Balance, February 28, 2021

Total comprehensive income (loss)

Stock based compensation [note 6]

Common shares retired

Balance, May 31, 2021

Balance, February 29, 2020

Total comprehensive loss

Stock based compensation [note 6]

Balance, May 31, 2020

Three months ended November 30,

Foreign currency translation adjustments

Total comprehensive income

See accompanying notes

2 unchanged sentences

(Expressed in United States dollars)

Nine months ended May 31, 2021 and 2020

Three months ended November 30, 2021 and 2020

stockholders'

2 unchanged sentences

Total comprehensive income

Shares repurchased for cancellation

Stock based compensation [note 6]

Common shares retired

Balance, May 31, 2021

Balance, November 30, 2021

Balance, August 31, 2020

Total comprehensive loss

Total comprehensive income

Stock based compensation [note 6]

Common shares retired

Balance, May 31, 2020

Balance, November 30, 2020

See accompanying notes

1 unchanged sentence

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

Nine months ended May 31, 2021 and 2020

Three months ended November 30,

(Expressed in United States dollars)

3 unchanged sentences

Stock-based compensation

Allowance for doubtful accounts

Deferred leasehold inducement

Unrealized foreign exchange (gain) loss

7 unchanged sentences

Operating lease liability

Net cash provided by (used in) operating activities

Net cash (used in) provided by operating activities

INVESTING ACTIVITIES

Sale (Purchase) of short-term investments, net

Purchase of property, equipment and intangibles

Redemption (purchase) of short-term investments, net

Development of software

Purchase of property, equipment and intangibles

Net cash provided by (used in) investing activities

9 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, 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 nine months ended May 31, 2021 are not necessarily indicative of the results that may be expected for the year ended August 31, 2021.

Operating results for the three months ended November 30, 2021 are not necessarily indicative of the results that may be expected for the year ended August 31, 2022.

The balance sheet at August 31, 2021 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, 2021

SHORT TERM INVESTMENTS

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 May 31, 2021, the Company's short-term investments had reached maturity, and are included in cash and cash equivalents.

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, 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, 2021

Property and equipment

2 unchanged sentences

Computer software

Leasehold improvements

Leasehold improvement

Software under development

6 unchanged sentences

Leasehold improvements

Software under development

Patents, trademarks and lists

Depreciation and amortization for the three and nine month periods ended May 31, 2021 was $26,673 and $77,388 (2020:

$33,194 and $100,744 respectively).

Destiny Media Technologies Inc.

1 unchanged sentence

FINANCIAL STATEMENTS

November 30, 2021

Depreciation and amortization for the three-month period ended November 30, 2021 was $ 27,172 (2020:

Destiny Media Technologies Inc.

NOTES TO CONDENSED CONSOLIDATED INTERIM

FINANCIAL STATEMENTS

November 30, 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 of office space.

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

Subsequent to November 30, 2021, the Company entered into an agreement to terminate the office lease effective January 31, 2022.

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, 2021

August 31, 2021

Balance, September 1

Lease Inducement

Foreign Currency Translation Adjustment

7 unchanged sentences

Operating Lease Liability Continuity

November 30, 2021

August 31, 2021

3 unchanged sentences

Balance, End of Period

During the three and nine month periods ended May 31, 2021 the Company recorded depreciation expense of $56,376 and $167,468 respectively (May 31, 2020:

$52,930 and $160,387 respectively) which has been allocated between general and administrative expenses, research and development and sales and marketing on the consolidated statement of income.

During the three-month period ended November 30, 2021 the Company recorded depreciation expense of $ 57,284 (2020:

$ 54,636 ) which has been allocated between general and administrative expenses, research and development and sales and marketing on the consolidated statement of comprehensive income.

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.

On December 17, 2021, the Company entered into an agreement to terminate the property lease effective January 31, 2022.

Destiny Media Technologies Inc.

1 unchanged sentence

FINANCIAL STATEMENTS

November 30, 2021

STOCKHOLDERS' EQUITY

2 unchanged sentences

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 month periods ended May 31, 2021, the Company repurchased and cancelled 114,400 common shares for $173,678.

For the nine month period ended May 31, 2021 155,685 common shares for $218,682 were repurchased (May 31, 2020:

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

[b] Stock option plans

During the three-month period ended November 30, 2021, the Company repurchased and cancelled 30,300 common shares for $ 44,166 .

As at November 30, 2021 a total of 215,585 shares had been repurchased for $ 304,570 under the NCIB.

[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.

A total of 120,000 common shares remain eligible for issuance under the Plan.

A total of Nil common shares remain eligible for issuance under the Plan.

Subsequent to November 30, 2021, the Company approved, subject to shareholder approval, a 2022 Stock Option plan, whereby 1,000,000 common shares would be reserved for issuance.

The options generally vest over a range of periods from the date of grant, some are immediate, and others are 12 or 24 months.

1 unchanged sentence

The options generally have a contractual term of five years.

Stock-Based Payment Award Activity

A summary of stock option activity under the Plans as of May 31, 2021, and changes during the period then ended is presented below:

Exercise Price

Outstanding at August 31, 2020

Outstanding at May 31, 2021

Exercisable at May 31, 2021

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, 2021.

For the three and nine month period ended May 31, 2021, the dilutive impact of in the money stock options was 104,474 and 114,633 respectively (2020:

Destiny Media Technologies Inc.

1 unchanged sentence

FINANCIAL STATEMENTS

November 30, 2021

STOCKHOLDERS' EQUITY (cont'd.)

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

The following table summarizes information regarding the non-vested options outstanding as of May 31, 2021 and changes during the period then ended:

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

Stock-Based Payment Award Activity

A summary of stock option activity under the Plan as of November 30, 2021, and changes during the period then ended is presented below:

Exercise Price

Outstanding at August 31, 2021

Outstanding at November 30, 2021

Exercisable at November 30, 2021

The following table summarizes information regarding the non-vested options outstanding as of November 30, 2021 and changes during the period then ended:

Number of Options

Non-vested options at August 31, 2021

Non-vested options at May 31, 2021

As of May 31, 2021, there was $29,574 of total unrecognized compensation cost related to non-vested stock-based compensation awards.

Non-vested options at November 30, 2021

As of November 30, 2021, there was $ 534,838 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 2.21 years.

During the nine months ended May 31, 2021, the total stock-based compensation expense of $39,117 (May 31, 2020:

$35,909) is reported in the statement of income as follows:

Destiny Media Technologies Inc.

NOTES TO CONDENSED CONSOLIDATED INTERIM

FINANCIAL STATEMENTS

November 30, 2021

STOCKHOLDERS' EQUITY (cont'd.)

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

Stock-Based Payment Award Activity (cont'd.)

Total stock-based compensation expense of $ 25,906 was recognized during the three month period ended November 30, 2021, (2020:

$ 12,849 ) is reported in the statement of comprehensive income as follows:

Stock-based compensation

10 unchanged sentences

Weighted average grant date fair value

Destiny Media Technologies Inc.

NOTES TO CONDENSED CONSOLIDATED INTERIM

FINANCIAL STATEMENTS

STOCKHOLDERS' EQUITY (cont'd.)

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

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

2 unchanged sentences

The risk-free rate for periods within the contractual life of the options is based on US Treasury bill rates in effect at the time of grant.

Destiny Media Technologies Inc.

NOTES TO CONDENSED CONSOLIDATED INTERIM

FINANCIAL STATEMENTS

November 30, 2021

STOCKHOLDERS' EQUITY (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.

During the nine months ended May 31, 2021, the Company recognized compensation expense of $71,938 (May 31, 2020 - $53,369) in salaries and wages on the consolidated statement of 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 $0.99 (May 31, 2020:

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

During the three month period ended November 30, 2021, the Company recognized compensation expense of $ 17,227 (2020:

$ 15,186 ) 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, 2021, the shares were purchased on the open market at an average price of $ 1.48 (2020 :

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

[d] Earnings Per Share

Net income per common share (basic) is calculated by dividing net income by the weighted average number of common shares outstanding during the period.

Net income per common share (diluted) is calculated by dividing net income for the period by the weighted average number of common shares outstanding during the period, plus the dilutive effect of outstanding common share equivalents.

This method requires that the dilutive effect of outstanding options and warrants issued be calculated using the treasury stock method.

Under the treasury stock method, all common share equivalents have been exercised at the beginning of the period (or at the time of issuance, if later), and that the funds obtained thereby were used to purchase common shares of the Company at the average trading price of common shares during the period, but only if dilutive.

Weighted average shares outstanding

Dilutive impact of outstanding stock options

Diluted weighted average common shares outstanding

At November 30, 2021, the Company had an aggregate of 921,000 (August 31, 2021:

410,000 ) stock options outstanding.

Destiny Media Technologies Inc.

NOTES TO CONDENSED CONSOLIDATED INTERIM

FINANCIAL STATEMENTS

November 30, 2021

CONTINGENCIES

5 unchanged sentences

The quantum of loss, if any, is not determinable at this time and management believes it is unlikely that the outcome of this matter will have an adverse impact on its results of operations, cash flows and financial condition.

Destiny Media Technologies Inc.

NOTES TO CONDENSED CONSOLIDATED INTERIM

FINANCIAL STATEMENTS

NEW ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Standards

In June 2016, the FASB issued ASU No.

2016-13, "Financial Instruments-Credit Losses (Topic 326):

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.

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.

The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected.

For available-for-sale debt securities, credit losses should be measured in a manner similar to current GAAP, however Topic 326 will require that credit losses be presented as an allowance rather than as a write-down.

ASU 2016-13 affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income.

The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash.

The amendments in this ASU will be effective for the Company on September 1, 2020.

The adoption of this standard 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).

The updated guidance improves the disclosure requirements on fair value measurements.

The amendments in this ASU was effective for the Company on September 1, 2020.

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

Destiny Media Technologies Inc.

1 unchanged sentence

FINANCIAL STATEMENTS

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, 2021 and August 31, 2020.

Cash and cash equivalents

Total financial assets

August 31, 2020

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.

November 30, 2021

CONCENTRATIONS AND ECONOMIC DEPENDENCE

1 unchanged sentence

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

Three Months Ended

Nine months Ended

North America

Total Play MPE®

North America

United States

Total Play MPE® Revenue

United States

Total Clipstream ® Revenue

Total Revenue

Destiny Media Technologies Inc.

NOTES TO CONDENSED CONSOLIDATED INTERIM

FINANCIAL STATEMENTS

CONCENTRATIONS AND ECONOMIC DEPENDENCE (cont'd.)

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

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

During the nine months ended May 31, 2021, the Company generated 42% of total revenue from one customer (May 31, 2020 - 43%).

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

During the three month period ended November 30, 2021, the Company generated 37 % of total revenue from one customer respectively (2020 :

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

As at May 31, 2021, one customer represented $147,872 (or 37%) of the trade receivables balance (August 31, 2020, two customers represented $275,620 (or 65%)).

As at November 30, 2021, one customer represented $ 272,449 (or 48 %) of the trade receivables balance (August 31, 2021, one customer represented $ 142,758 (or 36 %).

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, 2021

SUBSEQUENT EVENTS

On June 30, 2021, a further 15,000 shares of common stock were repurchased under the NCIB and cancelled.

On December 17, 2021 the Company entered into an agreement to terminate the office lease effective January 31, 2022.

The Company's lease was previously expected to terminate June 30, 2022.

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