What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2023-11-28 compared with 2022-11-14 · 91 added, 117 removed, 444 unchanged (32% of the section changed)

3 unchanged sentences

Report of Independent Registered Public Accounting Firm (PCAOB ID No.

Report of Independent Registered Public Accounting Firm (Davidson & Company LLP)

Consolidated Balance Sheets as of August 31, 2023 and 2022

Consolidated Statement of Comprehensive Income for the years ended August 31, 2022 and 2021

Consolidated Statement of Changes in Stockholders' Equity for the years ended August 31, 2022 and 2021

Consolidated Statement of Cash Flows for the years ended August 31, 2022 and 2021

Consolidated Statements of Comprehensive Income for the years ended August 31, 2023 and 2022

Consolidated Statements of Stockholders' Equity for the years ended August 31, 2023 and 2022

Consolidated Statements of Cash Flows for the years ended August 31, 2023 and 2022

Notes to Consolidated Financial Statements for the years ended August 31, 2023 and 2022

2 unchanged sentences

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated financial statements of Destiny Media Technologies Inc.

(the "Company") and its subsidiaries which comprise the consolidated balance sheet as of August 31, 2022, and the related consolidated statements of income and comprehensive income, cash flows, and stockholders' equity for the year then ended, and the related notes (collectively referred to as the "consolidated financial statements").

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as at August 31, 2022, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying balance sheets of Destiny Media Technologies Inc.

(the "Company") as of August 31, 2023 and 2022, and the related consolidated statements of comprehensive income, cash flows, and stockholders’ equity for each of the years in the two years in the period ended August 31, 2023, and the related notes (collectively referred to as the "consolidated financial statements").

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as at August 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended August 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audit.

Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

We determined that there are no critical audit matters.

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of this critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Evaluation of labour costs capitalized to computer software and software under development

As discussed in note 2 of the consolidated financial statements, the Company capitalizes costs related to application development activities that results in additional functionality.

As discussed in note 3 and 4 of the consolidated financial statements, labour costs of $682,617 were capitalized to software under development in intangible assets, of which $559,044 was subsequently reclassified to computer software in property and equipment.

We identified the evaluation of labour costs capitalized to computer software and software under development as a critical audit matter.

The complexity in determining whether the costs were incurred for software enhancement activities resulting in additional functionality required significant audit effort.

Our audit procedures related to the evaluation of labour costs capitalized to computer software and software under development included the following, among others:

We reviewed the underlying software enhancement project plans and assessed the nature of the activities performed to determine whether recognition criteria for internal-use software are met.

We evaluated management’s calculation of the labour costs to be capitalized by performing the following:

We tested the completeness of the data used in management’s calculation by agreeing the total time shown in the data set to the task tracking software for the entire fiscal year, including non-capitalizable time and capitalizable tasks.

We tested the accuracy of the data used in management’s calculation by agreeing the entry details to the details exported from the task tracking software.

We recalculated a sample of labour costs capitalized to computer software and software under development using data from the task tracking software.

We compared the completion date of the software enhancement projects to the projects completion report to verify the appropriateness of transferring certain assets from intangible assets to property and equipment during the fiscal year.

/s/ Smythe LLP

3 unchanged sentences

November 28, 2023

Report of Independent Registered Public Accounting Firm

To the Shareholders and Directors of

DESTINY MEDIA TECHNOLOGIES, INC.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of Destiny Media Technologies Inc.

(the “Company”) as of August 31, 2021, and the related consolidated statements of comprehensive income, changes in stockholders’ equity, and cash flows for the year ended August 31, 2021, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of August 31, 2021, and the results of its operations and its cash flows for the year ended August 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these financial statements based on our audit.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

We have served as the Company’s auditor from 2019 to 2022.

/s/ DAVIDSON & COMPANY LLP

Vancouver, Canada Chartered Professional Accountants

November 22, 2021

DESTINY MEDIA TECHNOLOGIES, INC.

Consolidated Balance Sheets

6 unchanged sentences

Intangible assets, net

Right-of-use assets

LIABILITIES AND STOCKHOLDERS' EQUITY

2 unchanged sentences

Deferred revenue

Current portion of operating lease liability

Total current liabilities

12 unchanged sentences

Consolidated Statements of Comprehensive Income

For the years ended August 31,

For the years ended December 31,

Service revenue

12 unchanged sentences

Gain on disposal of assets

Income before income tax

Net income before income tax

Current income tax expense

Net income for the year

Foreign currency translation adjustments

1 unchanged sentence

Net income per common share

Basic and diluted

Weighted average common shares outstanding:

Basic and diluted

The accompanying notes are an integral part of these consolidated financial statements .

7 unchanged sentences

Stock-based compensation

Shares repurchased for cancellation

Stock options repurchased and retired

Common shares retired

Balance, August 31, 2022

Total comprehensive income

1 unchanged sentence

Stock options repurchased and retired

Shares repurchased for cancellation

Common shares retired

Balance, August 31, 2023

10 unchanged sentences

Impairment expense

Operating lease liability

Unrealized foreign exchange gain/(loss)

6 unchanged sentences

Deferred revenue

Operating lease liability

Net cash provided by operating activities

Investing Activities

Sale of short-term investments, net

Development of software

Purchase of property, equipment, and intangibles

Net cash provided by (used in) investing activities

Net cash used in investing activities

Financing Activities

2 unchanged sentences

Net cash used in financing activities

Effect of foreign exchange rate changes on cash

Net increase (decrease) in cash and cash equivalents

Effect of foreign exchange rate changes on cash and cash equivalents

Net decrease in cash and cash equivalents

Cash and cash equivalents, beginning of year

14 unchanged sentences

The Company's stock is listed for trading under the symbol "DSNY" on the OTCQB U.S.

in the United States, under the symbol "DSY" on the TSX Venture Exchange (the "TSX") and under the symbol "DME" on the Berlin, Frankfurt, Xetra and Stuttgart exchanges in Germany.

in the United States, under the symbol "DSY" on the TSX Venture Exchange (the "TSXV") and under the symbol "DME" on the Berlin, Frankfurt, Xetra and Stuttgart exchanges in Germany.

Basis of Presentation and Principles of Consolidation

12 unchanged sentences

Actual results could differ from those estimates.

Significant estimates are related to the recoverability of long-term assets including property and equipment, intangible assets, amortization expense, and valuation of stock-based compensation.

Significant estimates are related to the labour capitalized to software under development and computer software, the recoverability of long-term assets including property and equipment, intangible assets, amortization expense, and valuation of stock-based compensation.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1 unchanged sentence

The Company's cash include cash in readily available checking accounts.

The Company's cash equivalents consist of one-year Guaranteed Investment Certificates ("GIC") with a major Canadian financial institution that earn interest at variable interest rates ranging from 0.10 % - 2.36 % and had reached their maturity.

The Company's cash equivalents consist of investments in mutual funds with a major Canadian financial institution that earn interest at variable interest rates ranging from 4.55 % - 4.90 %.

Concentrations of credit risk

6 unchanged sentences

Trade receivables are shown net of allowance for bad or doubtful accounts.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONT'D

Allowance for doubtful accounts

2 unchanged sentences

The amount ultimately realized from trade accounts receivable may differ from the amount estimated in the consolidated financial statements based on collection experience.

The Company had $ 41,331 and $ 39,518 in allowance at August 31, 2023 and 2022, respectively.

The Company recorded $ 3,129 and $ 44,304 in bad debt for the years ended August 31, 2023 and 2022, respectively.

Property and equipment, net

Property and equipment are recorded at cost, less accumulated depreciation .

Depreciation expense is recognized using the straight-line method over the useful life of the asset.

Furniture and fixtures are depreciated over five years .

Computer hardware is depreciated over 3.3 years.

Computer software is depreciated over two years .

Leasehold improvements are amortized over the lesser of the lease term or the estimated useful lives of the related assets.

Depreciation and amortization are recognized using the straight-line method over the estimated useful lives of the asset and is calculated using the following rates, commencing upon utilization of the assets:

Furniture and fixtures

Computer hardware

Computer software

Expenditures for repairs and maintenance of assets are charged to expense as incurred.

3 unchanged sentences

Development costs associated with the certain solutions offered exclusively through a software as a service model are accounted for in accordance with ASC 350-40 Internal-Use Software .

All other client solution development costs, which represent a significant majority of development costs, are accounted for in accordance with ASC 985-20 Costs of Software to be Sold, Leased or Marketed .

Under ASC 985-20, software development costs incurred in creating computer software solutions are expensed until technological feasibility has been established upon completion of a detailed program design.

Thereafter, all software development costs incurred through the software's general release date are capitalized and subsequently recorded at the lower of amortized cost or net realizable value.

Capitalized costs are amortized based on current and expected future revenue for each software solution with minimum annual amortization equal to the straight-line amortization over the estimated economic life of the solution.

We amortize capitalized costs over two years.

Under ASC 350-40, software development costs related to preliminary project activities and post-implementation and maintenance activities are expensed as incurred.

We capitalize direct costs related to application development activities that are probable to result in additional functionality.

Capitalization is limited to costs that are directly attributable to the specific software application and incurred during the application development stage.

These costs may include but are not limited to:

Direct costs of materials and services consumed in developing or obtaining internal-use software.

Costs of employees directly associated with the development project, including employee compensation and benefits.

Costs of third-party services utilized in the development process.

Costs associated with maintenance, training, and general and administrative activities are expensed as incurred.

The Company assesses the probability of completing the software development and the intended use of the software application to determine the eligibility of costs for capitalization.

Once a project reaches the stage where it is probable that the software will provide additional functionality, capitalization begins, and costs are capitalized until the project is substantially complete and ready for its intended use.

The capitalized costs are amortized on a straight-line basis over the estimated useful life of the software, typically not exceeding two years.

Patents, trademarks and lists are stated at cost.

Amortization is taken over the estimated useful lives of the assets.

Patents, trademarks and lists are amortized on a straight-line basis over 3 years.

Depreciation and amortization of patents, trademarks and lists are taken over the estimated useful lives of the assets and is calculated using the straight-line method over 3 years, commencing upon utilization of the assets.

Impairment of long-lived assets

The Company reviews long-lived assets, including property and equipment and intangible assets, for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable.

Intangible assets that are not subject to amortization are tested for impairment annually and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired.

An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition are less than the carrying amount.

1 unchanged sentence

No impairment losses have been recorded for the years ended August 31, 2023 and 2022.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONT'D

At the inception of a contractual arrangement, the Company determines whether the contract contains a lease by assessing whether there is an identified asset and whether the contract conveys the right to control the use of the identified asset in exchange for consideration over a period of time.

32 unchanged sentences

Control of the product or service is transferred either at a point in time or over time depending on the performance obligation.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONT'D

To the extent a contract includes multiple promised services or products, the Company applies judgment to determine whether promised services or products are capable of being distinct and distinct in the context of the contract.

20 unchanged sentences

Where SSP is not directly observable, the Company determines the SSP using information that may include market conditions and other observable inputs.

Consideration associated with support activities is estimated using a cost-plus reasonable margin approach, as there is no observable SSP.

Consideration associated with specified enhancements and upgrades is estimated using a cost-plus reasonable margin approach, as there is no observable SSP.

Consideration associated with support activities, specified enhancements and upgrades are estimated using a cost-plus reasonable margin approach, as there is no observable SSP.

(5) Recognition of revenue when, or as, the Company satisfies a performance obligation

1 unchanged sentence

The Company is principally responsible for the satisfaction of its distinct performance obligations, which are satisfied either at a point in time or over a period of time.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONT'D

Performance obligations satisfied at a point in time

28 unchanged sentences

These foreign currency gains and losses are included as a component of general and administrative expenses in the consolidated statements of comprehensive income.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONT'D

The Company operates internationally, which gives rise to the risk that cash flows may be adversely impacted by exchange rate fluctuations.

13 unchanged sentences

Stock-based compensation

Share-based compensation expense for employees and directors is recognized in the consolidated statements of comprehensive income based on estimated amounts, including the grant date fair value and the expected service period.

Stock-based compensation expense for employees and directors is recognized in the consolidated statements of comprehensive income based on estimated amounts, including the grant date fair value and the expected service period.

For stock options, we estimate the grant date fair value using a Black-Scholes valuation model, which requires the use of multiple subjective inputs including estimated future volatility, expected forfeitures and the expected term of the awards.

5 unchanged sentences

We recognize the value of the awards over the awards' requisite service or performance periods.

The requisite service period is generally the time over which our share-based awards vest.

The requisite service period is generally the time over which our stock-based awards vest.

Segment reporting

4 unchanged sentences

Accumulated other comprehensive income (deficit) consists only of accumulated foreign currency translation adjustments for all years presented.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONT'D

Earnings per share

14 unchanged sentences

The book value of cash and cash equivalents, accounts receivable, other receivables, deposits, accounts payable and accrued liabilities, and deferred revenue liabilities approximate their fair values due to the short-term maturity of those instruments.

The fair value of lease obligations is determined using discounted cash flows based on the expected amounts and timing of the cash flows discounted using a market rate of interest adjusted for appropriate credit risk.

Recently Adopted Accounting Standards

In December 2019, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No.

2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes , or ASU 2019-12, which simplifies the accounting for income taxes.

ASU 2019-12 is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2020 on a prospective basis, and early adoption is permitted.

The Company adopted this guidance effective September 1, 2021, and the adoption did not have a material impact on the Company's consolidated financial statements.

Recently Issued Accounting Pronouncements

The Company assesses the adoption impacts of recently issued accounting standards by FASB or other standard setting bodies on the Company's consolidated financial statements as well as material updates to previous assessments.

There were no new material accounting standards issued in year of 2022 that impacted the Company.

There were no new material accounting standards issued in years of 2022 and 2023 that impacted the Company.

PROPERTY AND EQUIPMENT, NET

5 unchanged sentences

Computer software

Leasehold improvements

Total property and equipment

5 unchanged sentences

Computer software

Leasehold improvements

Total property and equipment

Depreciation for the year ended August 31, 2022 was $ 128,968 (2021 - $ 90,022 ).

During the year ended August 31, 2023, the Company capitalized a total of $ 559,044 in salaries and wages related to computer software development (2022 - $ 269,777 ).

During the year ended August 31, 2023, $ 399,935 in Computer Software cost was fully depreciated and subsequently eliminated from the continuity schedule presented above.

Depreciation on property and equipment for the year ended August 31, 2023 was $ 227,488 (2022 - $ 128,968 ).

On January 31, 2022, the Company terminated the lease for the office space (Note 5).

13 unchanged sentences

Total intangible assets

Amortization for the year ended August 31, 2022 was $ 13,694 (2021 - $ 15,335 ).

During the year ended August 31, 2023, the Company capitalized a total of $ 682,617 in salaries and wages related to software under development (2022 - $ 626,778 ), out of this amount, $ 559,044 (2022 - $ 269,777 ) was subsequently reclassified to Computer software assets as the projects were completed (Note 3).

Amortization on intangible assets f or the year ended August 31, 2023 was $ 10,867 (2022 - $ 13,694 ).

RIGHT-OF-USE ASSET AND LEASE LIABILITY

6 unchanged sentences

Foreign currency translation adjustment

Balance, August 31, 2021

Foreign currency translation adjustment

Balance, August 31, 2022

Balance, August 31, 2023 and 2022

Operating Lease Liabilities

2 unchanged sentences

Foreign currency translation adjustment

Balance, August 31, 2021

Lease interest expense

Foreign currency translation adjustment

Balance, August 31, 2022

During the year ended August 31, 2022 the Company recorded depreciation expense of $ 95,010 (2021 - $ 224,154 ) which has been allocated between general and administrative, sales and marketing, and product development expenses on the consolidated statements of comprehensive income.

Balance, August 31, 2023 and 2022

During the year ended August 31, 2023 the Company recorded depreciation expense of $ nil (2022 - $ 95,010 ) which has been allocated between general and administrative, sales and marketing, and product development expenses on the consolidated statements of comprehensive income.

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

On January 31, 2022, upon exit of the lease a gain of $ 20,053 was recognized in the consolidated statement of comprehensive income.

As of August 31, 2022, the Company has no outstanding commitments related to the operating lease payments.

On January 31, 2022, upon exit of the lease a gain of $ 20,053 was recognized in the consolidated statements of comprehensive income.

As of August 31, 2023 and 2022, the Company had no outstanding commitments related to the operating lease payments.

STOCKHOLDERS' EQUITY

8 unchanged sentences

As of August 31, 2023, 361,000 common shares remain eligible for issuance under the 2022 Plan.

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

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

Any options that do not vest as the result of a grantee leaving the Company are forfeited and the underlying common shares are returned to the reserve.

The options generally have a contractual term of five years.

STOCKHOLDERS' EQUITY CONT'D

Stock-Based Payment Award Activity

7 unchanged sentences

The summary of option activity for the years ended August 31, 2023 and 2022 were as follows:

Number of Options

Weighted Average

7 unchanged sentences

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 as of August 31, 2023.

In all cases, the aggregate intrinsic value is nil.

In all cases, the aggregate intrinsic value was $nil.

There were no stock options repurchased during the year ended August 31, 2023.

During the year ended August 31, 2022, the Company repurchased 82,500 stock options for $ 11,275 .

The following table summarizes information regarding the non-vested options outstanding as of August 31, 2023 and changes during the period:

Weighted Average

Exercise Price

Number of Options

Weighted Average Exercise

Non-vested options at August 31, 2021

3 unchanged sentences

The unrecognized compensation cost is expected to be recognized over a weighted average period of 0.92 years (2022 - 1.25 years).

STOCKHOLDERS' EQUITY CONT'D

During the years ended August 31, 2023 and 2022, the total stock-based compensation expense was reported in the consolidated statement of comprehensive income as follows:

9 unchanged sentences

The maximum annual combined contributions will be $ 400,000 .

All purchases are made through the TSX by a third-party plan agent.

All purchases are made through the TSXV by a third-party plan agent.

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

2 unchanged sentences

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

As of August 31, 2023, 237,184 shares were held in trust by the Company.

The Company is subject to United States federal and state income taxes at an approximate rate of 21 .0% and to Canadian federal and British Columbia provincial taxes in Canada at an approximate rate of 27 .0%.

31 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.

Risk and Uncertainties

Starting in late 2019, a novel strain of the coronavirus, or COVID-19, began to rapidly spread around the world.

At this time, there continues to be significant volatility and uncertainty relating to the full extent to which the COVID-19 pandemic and the various responses to it will impact our business, operations, and financial results.

Most countries have at various times instituted quarantines, restrictions on travel, "stay at home" rules, social distancing measures and restrictions on the types of businesses that could continue to operate, as well as guidance in response to the pandemic and the need to contain it.

The spread of COVID-19 has adversely impacted global economic activity and has contributed to significant volatility and negative pressure in financial markets.

The pandemic has resulted, and may continue to result, in a significant disruption of global financial markets, which may reduce our ability to access capital in the future, which could negatively affect our liquidity.

If the COVID-19 pandemic does not continue to slow and the spread of COVID-19 is not contained, our business operations, including those of our customers, could be interrupted.

The duration of any business disruption cannot be reasonably estimated at this time but may materially affect our ability to operate our business and result in additional costs.

It is not possible to reliably measure or quantify the impact COVID-19 has had on the financial results of the Company.

If the COVID-19 pandemic continues for an extended period, it may materially adversely impact business operations and, consequently, future financial results.

CONCENTRATIONS, ECONOMIC DEPENDENCE AND SEGMENTS

8 unchanged sentences

As at August 31, 2023, one customer represented $ 143,689 (or 36 %) of the trade receivables balance (2022, one customer represented $ 283,144 (or 59 %)).

Subsequent to the year ended August 31, 2022 this customer paid $ 129,925 of outstanding balance.

Subsequent to the year ended August 31, 2023 this customer paid the outstanding balance in full.

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

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

Dismissal of Previous Independent Registered Public Accounting Firm

On August 31, 2022, we dismissed Davidson & Company LLP ("Davidson") as the Company's independent registered public accounting firm.

The reports of Davidson on the Company's consolidated financial statements for the years ended August 31, 2021 and 2020 did not contain an adverse opinion or disclaimer of opinion, and such reports were not qualified or modified as to uncertainty, audit scope, or accounting principle.

During the years ended August 31, 2021 and 2020, and during the subsequent period from September 1, 2021 through August 31, 2022 and up to the date of this Annal Report on Form 10-K, there were (i) no disagreements between the Company and Davidson on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, any of which, if not resolved to Davidson's satisfaction, would have caused Davidson to make reference thereto in its reports, and (ii) no "reportable events" within the meaning of Item 304(a)(1)(v) of Regulation S-K.

Engagement of New Independent Registered Public Accounting Firm

Concurrently therewith, on August 31, 2022, the Company approved the selection of Smythe LLP ("Smythe") as the Company's independent registered public accounting firm for the fiscal year ending August 31, 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-K

Item 8. Financial Statements and Supplementary Data