Destiny Media (DSNY) 10-Q 13 Apr 17 2017 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Feb. 28, 2017	Apr. 13, 2017
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Feb. 28, 2017
Trading Symbol	dsny
Entity Registrant Name	DESTINY MEDIA TECHNOLOGIES INC
Entity Central Index Key	1,099,369
Current Fiscal Year End Date	--08-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		55,013,874
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well Known Seasoned Issuer	No
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q2

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Feb. 28, 2017	Aug. 31, 2016
Current
Cash and cash equivalents	$ 939,390	$ 662,743
Accounts receivable, net of allowance for doubtful accounts of $1,891 [Aug 31, 2016 - $4,049]	516,773	628,135
Other receivables	31,762	15,051
Current portion of long term receivable	122,697	113,834
Prepaid expenses	30,158	61,525
Deposits	22,173	0
Total current assets	1,662,953	1,481,288
Deposits	560	22,978
Long term receivable	0	61,642
Property and equipment, net	137,074	174,951
Intangible assets, net	93,829	110,017
Total assets	1,894,416	1,850,876
Current
Accounts payable	137,477	108,157
Accrued liabilities	191,608	190,077
Deferred leasehold inducement	11,461	28,962
Deferred revenue	10,061	23,563
Obligation under capital lease - current portion	5,403	5,240
Total current liabilities	356,010	355,999
Obligation under capital lease - long term portion	3,405	6,472
Total liabilities	359,415	362,471
Commitments and contingencies	0	0
Stockholders' equity
Common stock, par value $0.001 Authorized: 100,000,000 shares Issued and outstanding: 55,013,874 shares [Aug 31, 2016 - issued and outstanding 55,013,874 shares]	55,014	55,014
Additional paid-in capital	9,690,884	9,666,080
Accumulated deficit	(7,860,389)	(7,896,312)
Accumulated other comprehensive (loss)	(350,508)	(336,377)
Total stockholders' equity	1,535,001	1,488,405
Total liabilities and stockholders' equity	$ 1,894,416	$ 1,850,876

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Feb. 28, 2017	Aug. 31, 2016
Allowance for Doubtful Accounts Receivable, Current	$ 1,891	$ 4,049
Common Stock, Par Value Per Share	$ 0.001	$ 0.001
Common Stock, Shares Authorized	100,000,000	100,000,000
Common Stock, Shares, Issued	55,013,874	55,013,874
Common Stock, Shares, Outstanding	55,013,874	55,013,874

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($)	3 Months Ended		6 Months Ended
	Feb. 28, 2017	Feb. 29, 2016	Feb. 28, 2017	Feb. 29, 2016
Revenue	$ 781,878	$ 763,897	$ 1,674,107	$ 1,611,618
Operating expenses
General and administrative	209,871	158,207	388,777	393,590
Sales and marketing	256,006	302,188	503,412	652,786
Research and development	346,465	331,722	671,139	650,762
Depreciation and Amortization	41,612	53,196	83,490	103,025
Total Operating Expenses	853,954	845,313	1,646,818	1,800,163
Income (loss) from operations	(72,076)	(81,416)	27,289	(188,545)
Other income
Interest income	3,871	6,033	8,634	12,155
Net income (loss)	(68,205)	(75,383)	35,923	(176,390)
Other comprehensive income (loss)
Foreign currency translation adjustments	19,238	(19,309)	(14,131)	(37,065)
Total comprehensive income (loss)	$ (48,967)	$ (94,692)	$ 21,792	$ (213,455)
Net income (loss) per common share, basic and diluted	$ 0	$ 0	$ 0	$ 0
Weighted average common shares outstanding:
Basic and diluted	55,013,874	55,013,874	55,013,874	54,458,929

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY - 6 months ended Feb. 28, 2017 - USD ($)	Common stock [Member]	Additional paid-in capital [Member]	Accumulated Deficit [Member]	Accumulated other comprehensive Income (loss) [Member]	Total
Beginning Balance at Aug. 31, 2016	$ 55,014	$ 9,666,080	$ (7,896,312)	$ (336,377)	$ 1,488,405
Beginning Balance (Shares) at Aug. 31, 2016	55,013,874
Total comprehensive income (loss)			35,923	(14,131)	21,792
Stock based compensation		24,804			24,804
Ending Balance at Feb. 28, 2017	$ 55,014	$ 9,690,884	$ (7,860,389)	$ (350,508)	$ 1,535,001
Ending Balance (Shares) at Feb. 28, 2017	55,013,874

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	6 Months Ended
	Feb. 28, 2017	Feb. 29, 2016
OPERATING ACTIVITIES
Net income (loss)	$ 35,923	$ (176,390)
Items not involving cash:
Depreciation and amortization	83,490	103,025
Stock-based compensation	24,804	24,804
Deferred leasehold inducement	(17,192)	(16,817)
Unrealized foreign exchange	1,530	(5,537)
Changes in non-cash working capital:
Accounts receivable	104,658	(40,741)
Other receivables	(16,872)	(20,574)
Prepaid expenses and deposits	30,711	7,278
Accounts payable	28,730	27,685
Accrued liabilities	2,522	(8,289)
Deferred revenue	(13,251)	(18,928)
Long term receivable	49,376	47,915
Net cash provided (used) by operating activities	314,429	(76,569)
INVESTING ACTIVITIES
Purchase of property and equipment	(32,466)	(114,497)
Net cash used in investing activities	(32,466)	(114,497)
FINANCING ACTIVITIES
Common stock issued in private placements	0	496,360
Net cash provided in financing activities	0	496,360
Effect of foreign exchange rate changes on cash	(5,316)	(19,602)
Net decrease in cash during the period	276,647	285,692
Cash, beginning of the period	662,743	387,316
Cash, end of the period	939,390	673,008
Supplementary disclosure
Interest paid	0	0
Income taxes paid	$ 0	$ 0

ORGANIZATION

ORGANIZATION	6 Months Ended
	Feb. 28, 2017
ORGANIZATION [Text Block]	1. ORGANIZATION Destiny Media Technologies Inc. (the “Company”) was incorporated in August 1998 under the laws of the State of Colorado and the corporate jurisdiction was changed to Nevada effective October 8, 2014. The Company develops technologies that allow for the distribution over the Internet of digital media files in either a streaming or digital download format. The technologies are proprietary. The Company operates out of Vancouver, BC, Canada and serves customers predominantly located in the United States, Europe and Australia. 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 and under the symbol “DME” on the Berlin, Frankfurt, Xetra and Stuttgart exchanges in Germany.

BASIS OF PRESENTATION

BASIS OF PRESENTATION	6 Months Ended
	Feb. 28, 2017
BASIS OF PRESENTATION [Text Block]	2. BASIS OF PRESENTATION The accompanying unaudited interim condensed consolidated financial statements have been prepared by management in accordance with accounting principles generally accepted in the United States for interim financial information pursuant to the rules and regulations of the United States Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by United States generally accepted accounting principles for annual financial statements. 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 28, 2017 are not necessarily indicative of the results that may be expected for the year ended August 31, 2017. The balance sheet at August 31, 2016 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. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended August 31, 2016.

LONG TERM RECEIVABLE

LONG TERM RECEIVABLE	6 Months Ended
	Feb. 28, 2017
LONG TERM RECEIVABLE [Text Block]	3. LONG TERM RECEIVABLE The Company agreed to settle litigation with an unrelated party. Pursuant to a Settlement Deed dated March 5, 2012, the Company became entitled to a settlement sum of $825,000 Australian dollars (“AUD”) (US $858,194), receivable in monthly installments over the course of 72 months, beginning on March 31, 2012 and ending on February 28, 2018. The balance is due to be paid in equal monthly installments of $14,050 AUD until the end of the obligation. The unpaid balance accrues interest of 10.25% per annum compounded monthly. The receivable is secured by a registered charge against real estate located in Australia. As of February 28, 2017, installments of $914,900 AUD including interest of $249,437 AUD have been received. The following table summarizes the changes regarding the carrying value of the remaining receivable balance during the six-month period ended February 28, 2017 and for the year ended August 31, 2016: February 28, 2017 August 31, 2016 $ $ Beginning balance 175,206 265,530 Gross installments received (63,842 ) (123,442 ) Interest included in above 7,877 23,172 Foreign exchange impact 3,456 9,946 Ending balance 122,697 175,206 The foreign exchange impact in above table is partially allocated into other comprehensive income (loss) and partially allocated into exchange gain (loss) on income statement. Payments to be received over the next two fiscal years as follows: Principal Interest Total $ $ $ 2017 59,810 5,024 64,834 2018 62,887 1,892 64,779 122,697 6,916 129,613

STOCKHOLDERS EQUITY

STOCKHOLDERS EQUITY	6 Months Ended
	Feb. 28, 2017
STOCKHOLDERS EQUITY [Text Block]	4. STOCKHOLDERS’ EQUITY [a] Common stock issued and authorized The Company is authorized to issue up to 100,000,000 shares of common stock, par value $0.001 per share. During the six months ended February 28, 2017, no shares were issued. [b] Stock option plans The Company has two existing stock option plans (the “Plan”), namely the 2006 Stock Option Plan and the 2015 Stock Option Plan, under which up to 7,750,000 shares of the common stock, has been reserved for issuance. A total of 2,153,181 common shares remain eligible for issuance under the plan. The options generally vest over a range of periods from the date of grant, some are immediate, and others are 12 or 24 months. Any options that do not vest as the result of a grantee leaving the Company are forfeited and the common shares underlying them are returned to the reserve. The options generally have a contractual term of five years. Stock-Based Payment Award Activity A summary of option activity under the Plans as of February 28, 2017, and changes during the period ended are presented below: Weighted Weighted Average Aggregate Average Remaining Intrinsic Exercise Price Contractual Value Options Shares $ Term $ Outstanding at August 31, 2016 950,000 0.40 1.58 — Granted — — — — Forfeited (100,000 ) 0.40 — — Expired — — — — Outstanding at February 28, 2017 850,000 0.40 1.16 — Exercisable at February 28, 2017 756,250 0.40 1.04 — 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 28, 2017. The following table summarizes information regarding the non-vested stock purchase options outstanding as of February 28, 2017: Weighted Average Number of Options Grant Date Fair Value $ Non-vested options at August 31, 2016 281,250 0.08 Granted — — Vested (187,500 ) 0.08 Non-vested options at February 28, 2017 93,750 0.08 As of February 28, 2017, there was $12,402 of total unrecognized compensation cost related to non-vested share-based compensation awards. The unrecognized compensation cost is expected to be recognized over a weighted average period of 0.24 years. During the six month periods ended February 28, 2017 and 2016, stock-based compensation expense has been reported in the consolidated statement of operations and comprehensive income as follows: Three Months Ended Six Months Ended February 28 February 29 February 28 February 29 2017 2016 2017 2016 $ $ $ $ Stock-based compensation: General and administrative 8,764 7,152 17,528 14,303 Sales and marketing 1,240 3,266 2,563 6,532 Research and development 2,398 1,984 4,713 3,969 Total stock-based compensation 12,402 12,402 24,804 24,804 [c] Employee Stock Purchase Plan The Company’s 2011 Employee Stock Purchase Plan (the “Plan”) became effective on February 22, 2011. Under the Plan, employees of Destiny are able to contribute up to 5% of their annual salary into a pool which is matched equally by Destiny. Independent directors are able to contribute a maximum of $12,500 each for a combined maximum annual purchase of $25,000. The maximum annual combined contributions will be $400,000. All purchases are made through the Toronto Stock Exchange by a third party plan agent. The third party plan agent will also be responsible for the administration of the Plan on behalf of Destiny and the participants. During the six months ended February 28, 2017, the Company recognized compensation expense of $30,002 (2016 - $15,995) in salaries and wages on the consolidated statement of operations and 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 $0.21 (2016 - $0.23) . The shares are held in trust by the Company for a period of one year from the date of purchase. [d] Warrants As at February 28, 2017, the Company has the following common stock warrants outstanding: Number of Aggregate Common Exercise Date Intrinsic Shares Price of Value Issuable $ Expiry $ $0.30 Warrants 1,010,000 0.30 October 20,2017 — 1,010,000 — The Company will have the right to accelerate the expiry date of all of the warrants if, at any time, the average closing price of the Company’s common shares is equal to or greater than $1.25 for 20 consecutive trading days. In the event of acceleration, the expiry date will be accelerated to a date that is 30 days after the Company issues a news release announcing that it has elected to exercise this acceleration right.

COMMITMENTS

COMMITMENTS	6 Months Ended
	Feb. 28, 2017
COMMITMENTS [Text Block]	5. COMMITMENTS In December 2014, the Company entered into a sublease agreement commencing May 1, 2015 and expiring June 29, 2017 for a premise with free occupation from December 2014 to April 2015. In February 2015 the sublease agreement was amended to include one extra month free occupation for May 2015 with rent payment starting June 1, 2015. The Company has fiscal year payments committed as follows: $ 2017 88,691 During the six months ended February 28, 2017 the Company incurred rent expense of $115,848 (2016 - $120,887) which has been allocated between general and administrative expenses, research and development and sales and marketing on the consolidated statement of operations and comprehensive income. The rent expense during the six months ended February 28, 2017 has included the allocation of rental payments on a straight-line basis. In February 2015, the Company entered into a capital lease. The Company is committed to make payments under its capital leases for the remaining terms of the leases as follows: $ 2017 2,676 2018 6,636 Total lease payments 9,312 Less: Amounts representing interest (504 ) Balance of obligation 8,808 Less: Current portion (5,403 ) Long term portion 3,405

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	6 Months Ended
	Feb. 28, 2017
RELATED PARTY TRANSACTIONS [Text Block]	6. RELATED PARTY TRANSACTIONS There were no related party transactions during the six months ended February 28, 2017 and comparative period ended February 29, 2016.

INCOME TAX

INCOME TAX	6 Months Ended
	Feb. 28, 2017
INCOME TAX [Text Block]	7. INCOME TAX The Company has adopted the provisions of ASC 740, Income taxes. This standard clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The standard also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company and its subsidiaries are subject to U.S. federal income tax, Canadian income tax, as well as income tax of multiple state and local jurisdictions. Based on the Company’s evaluation, the Company has concluded that there are no significant uncertain tax positions requiring recognition in the Company’s financial statements. The Company’s evaluation was performed for the tax years ended August 31, 1999 through August 31, 2016, the tax years which remain subject to examination by major tax jurisdictions as of February 28, 2017. The Company may from time to time be assessed interest or penalties by major tax jurisdictions, although any such assessments historically have been minimal and immaterial to the Company’s financial results. In the event the Company has received an assessment for interest and/or penalties, it has been classified in the financial statements as selling, general and administrative expense.

CONTINGENCIES

CONTINGENCIES	6 Months Ended
	Feb. 28, 2017
CONTINGENCIES [Text Block]	8. CONTINGENCIES On November 8, 2011, the Company was served with a Notice of Civil Claim in the Supreme Court of British Columbia from Noramco Capital Corporation for $100,000. The claim asserts that the Company has repudiated a subscription agreement entered into in August 2000. Management believes the claim is without merit and that the likelihood that the outcome of this matter will have a material adverse impact on its result of operations, cash flows and financial condition of the Company is remote. The Company has filed a counterclaim against Noramco and the alleged major beneficial shareholder of Noramco, R. A. Bruce McDonald, for damages arising from a proposed private placement in 2000 which did not close.

NEW ACCOUNTING PRONOUNCEMENTS

NEW ACCOUNTING PRONOUNCEMENTS	6 Months Ended
	Feb. 28, 2017
NEW ACCOUNTING PRONOUNCEMENTS [Text Block]	9. NEW ACCOUNTING PRONOUNCEMENTS Accounting Standards Not Yet Effective In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). ASU 2014-09 supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605)”, and requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date” (“ASU 2015-14”) in August 2015. The amendments in ASU 2015-14 defer the effective date of ASU 2014-09. Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. Further to ASU 2014-09 and ASU 2015-14, the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” (“ASU 2016-08”) in March 2016, ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” (“ASU 2016-10”) in April 2016, and ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients” (“ASU 2016-12”), respectively. The amendments in ASU 2016-08 clarify the implementation guidance on principal versus agent considerations, including indicators to assist an entity in determining whether it controls a specified good or service before it is transferred to the customers. ASU 2016-10 clarifies guideline related to identifying performance obligations and licensing implementation guidance contained in the new revenue recognition standard. The updates in ASU 2016-10 include targeted improvements based on input the FASB received from the Transition Resource Group for Revenue Recognition and other stakeholders. It seeks to proactively address areas in which diversity in practice potentially could arise, as well as to reduce the cost and complexity of applying certain aspects of the guidance both at implementation and on an ongoing basis. ASU 2016-12 addresses narrow-scope improvements to the guidance on collectability, non-cash consideration, and completed contracts at transition. Additionally, the amendments in this ASU provide a practical expedient for contract modifications at transition and an accounting policy election related to the presentation of sales taxes and other similar taxes collected from customers. The effective date and transition requirements for ASU 2016-08, ASU 2016-10 and ASU 2016-12 are the same as ASU 2014-09. We are currently in the process of evaluating the impact of the adoption of ASU 2014-09, ASU 2016-08, ASU 2016-10 and ASU 2016-12 on our consolidated financial statements. In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”). ASU 2014-15 will explicitly require management to assess an entity’s ability to continue as a going concern, and to provide related footnote disclosure in certain circumstances. The new standard will be effective for all entities in the first annual period ending after December 15, 2016. We are currently evaluating the impact of the adoption of this new standard on our consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”). Topic 740, Income Taxes, requires an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified statement of financial position. Deferred tax liabilities and assets are classified as current or noncurrent based on the classification of the related asset or liability for financial reporting. Deferred tax liabilities and assets that are not related to an asset or liability for financial reporting are classified according to the expected reversal date of the temporary difference. To simplify the presentation of deferred income taxes, the amendments in ASU 2015-17 require that deferred income tax liabilities and assets be classified as noncurrent in a classified statement of financial position. For public business entities, the amendments in this update are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. We do not expect the adoption of ASU 2015-17 to have a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). The amendments in this update create Topic 842, Leases, and supersede the leases requirements in Topic 840, Leases. Topic 842 specifies the accounting for leases. The objective of Topic 842 is to establish the principles that lessees and lessors shall apply to report useful information to users of financial statements about the amount, timing, and uncertainty of cash flows arising from a lease. The main difference between Topic 842 and Topic 840 is the recognition of lease assets and lease liabilities for those leases classified as operating leases under Topic 840. Topic 842 retains a distinction between finance leases and operating leases. The classification criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the previous leases guidance. The result of retaining a distinction between finance leases and operating leases is that under the lessee accounting model in Topic 842, the effect of leases in the statement of comprehensive income and the statement of cash flows is largely unchanged from previous GAAP. The amendments in ASU 2016-02 are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years for public business entities. Early application of the amendments in ASU 2016-02 is permitted. We are currently in the process of evaluating the impact of the adoption of ASU 2016-02 on our consolidated financial statements. 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 guideline on reporting credit losses for assets held at amortized cost basis and available-for-sale debt securities. For assets held at 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 fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. We are currently evaluating the impact of the adoption of ASU 2016-13 on our consolidated financial statements.

CONCENTRATIONS AND ECONOMIC DEP

CONCENTRATIONS AND ECONOMIC DEPENDENCE	6 Months Ended
	Feb. 28, 2017
CONCENTRATIONS AND ECONOMIC DEPENDENCE [Text Block]	10. CONCENTRATIONS AND ECONOMIC DEPENDENCE The Company operates solely in the digital media software segment and all revenue from its products and services are made in this segment. Revenue from external customers, by product and location of customer, is as follows: Three Months Ended Six Months Ended February 28 February 29 February 28 February 29 2017 2016 2017 2016 $ $ $ $ Play MPE® North America 307,868 306,075 671,127 652,027 Europe 397,098 381,877 837,260 801,433 Australasia 65,874 61,919 143,584 132,043 Total Play MPE® 770,840 749,871 1,651,971 1,585,503 Clipstream ® North America 11,038 14,026 22,136 26,115 Outside of North America — — — — Total Clipstream ® 11,038 14,026 22,136 26,115 Total revenue 781,878 763,897 1,674,107 1,611,618 Revenue in the above table is based on location of the customer. Some of these customers have distribution centers located around the globe and distribute around the world. During the six months ended February 28, 2017, the Company generated 41% of total revenue from one customer [2016 – 43%]. It is in management’s opinion that the Company is not exposed to significant credit risk. As at February 28, 2017, one customer represented $337,718 ( 65%) of the trade receivables balance [August 31, 2016 – one customer represented $354,459 ( 63%)]. The Company has substantially all its assets in Canada and its current and planned future operations are, and will be, located in Canada.

LONG TERM RECEIVABLE (Tables)

LONG TERM RECEIVABLE (Tables)	6 Months Ended
	Feb. 28, 2017
Schedule of Long Term Receivable [Table Text Block]	February 28, 2017 August 31, 2016 $ $ Beginning balance 175,206 265,530 Gross installments received (63,842 ) (123,442 ) Interest included in above 7,877 23,172 Foreign exchange impact 3,456 9,946 Ending balance 122,697 175,206
Schedule of Financing Receivables, Minimum Payments [Table Text Block]	Principal Interest Total $ $ $ 2017 59,810 5,024 64,834 2018 62,887 1,892 64,779 122,697 6,916 129,613

STOCKHOLDERS EQUITY (Tables)

STOCKHOLDERS EQUITY (Tables)	6 Months Ended
	Feb. 28, 2017
Schedule of Stock Option Activity [Table Text Block]	Weighted Weighted Average Aggregate Average Remaining Intrinsic Exercise Price Contractual Value Options Shares $ Term $ Outstanding at August 31, 2016 950,000 0.40 1.58 — Granted — — — — Forfeited (100,000 ) 0.40 — — Expired — — — — Outstanding at February 28, 2017 850,000 0.40 1.16 — Exercisable at February 28, 2017 756,250 0.40 1.04 —
Schedule of Non-vested Stock Options Activity [Table Text Block]	Weighted Average Number of Options Grant Date Fair Value $ Non-vested options at August 31, 2016 281,250 0.08 Granted — — Vested (187,500 ) 0.08 Non-vested options at February 28, 2017 93,750 0.08
Schedule of Stock-based Compensation Expense [Table Text Block]	Three Months Ended Six Months Ended February 28 February 29 February 28 February 29 2017 2016 2017 2016 $ $ $ $ Stock-based compensation: General and administrative 8,764 7,152 17,528 14,303 Sales and marketing 1,240 3,266 2,563 6,532 Research and development 2,398 1,984 4,713 3,969 Total stock-based compensation 12,402 12,402 24,804 24,804
Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block]	Number of Aggregate Common Exercise Date Intrinsic Shares Price of Value Issuable $ Expiry $ $0.30 Warrants 1,010,000 0.30 October 20,2017 — 1,010,000 —

COMMITMENTS (Tables)

COMMITMENTS (Tables)	6 Months Ended
	Feb. 28, 2017
Schedule of Sub-Lease Payments [Table Text Block]	$ 2017 88,691
Schedule of Future Minimum Lease Payments for Capital Leases [Table Text Block]	$ 2017 2,676 2018 6,636 Total lease payments 9,312 Less: Amounts representing interest (504 ) Balance of obligation 8,808 Less: Current portion (5,403 ) Long term portion 3,405

CONCENTRATIONS AND ECONOMIC D20

CONCENTRATIONS AND ECONOMIC DEPENDENCE (Tables)	6 Months Ended
	Feb. 28, 2017
Schedule of Revenue by Customer [Table Text Block]	Three Months Ended Six Months Ended February 28 February 29 February 28 February 29 2017 2016 2017 2016 $ $ $ $ Play MPE® North America 307,868 306,075 671,127 652,027 Europe 397,098 381,877 837,260 801,433 Australasia 65,874 61,919 143,584 132,043 Total Play MPE® 770,840 749,871 1,651,971 1,585,503 Clipstream ® North America 11,038 14,026 22,136 26,115 Outside of North America — — — — Total Clipstream ® 11,038 14,026 22,136 26,115 Total revenue 781,878 763,897 1,674,107 1,611,618

LONG TERM RECEIVABLE (Narrative

LONG TERM RECEIVABLE (Narrative) (Details)	6 Months Ended
	Feb. 28, 2017USD ($)mo
Long Term Receivable 1	$ 825,000
Long Term Receivable 2	$ 858,194
Long Term Receivable 3 | mo	72
Long Term Receivable 4	$ 14,050
Long Term Receivable 5	10.25%
Long Term Receivable 6	$ 914,900
Long Term Receivable 7	$ 249,437

STOCKHOLDERS EQUITY (Narrative)

STOCKHOLDERS EQUITY (Narrative) (Details)	6 Months Ended
	Feb. 28, 2017USD ($)moyrd$ / sharesshares
Stockholders Equity 1 | shares	100,000,000
Stockholders Equity 2 | $ / shares	$ 0.001
Stockholders Equity 3 | shares	7,750,000
Stockholders Equity 4 | shares	2,153,181
Stockholders Equity 5	12
Stockholders Equity 6 | mo	24
Stockholders Equity 7	$ 12,402
Stockholders Equity 8 | yr	0.24
Stockholders Equity 9	5.00%
Stockholders Equity 10	$ 12,500
Stockholders Equity 11	25,000
Stockholders Equity 12	400,000
Stockholders Equity 13	30,002
Stockholders Equity 14	15,995
Stockholders Equity 15	0.21
Stockholders Equity 16	0.23
Stockholders Equity 17	$ 1.25
Stockholders Equity 18	20
Stockholders Equity 19 | d	30

COMMITMENTS (Narrative) (Detail

COMMITMENTS (Narrative) (Details)	6 Months Ended
	Feb. 28, 2017USD ($)
Commitments 1	$ 115,848
Commitments 2	$ 120,887

CONTINGENCIES (Narrative) (Deta

CONTINGENCIES (Narrative) (Details)	6 Months Ended
	Feb. 28, 2017USD ($)
Contingencies 1	$ 100,000

CONCENTRATIONS AND ECONOMIC D25

CONCENTRATIONS AND ECONOMIC DEPENDENCE (Narrative) (Details)	6 Months Ended
	Feb. 28, 2017USD ($)
Concentrations And Economic Dependence 1	41.00%
Concentrations And Economic Dependence 2	43.00%
Concentrations And Economic Dependence 3	$ 337,718
Concentrations And Economic Dependence 4	65.00%
Concentrations And Economic Dependence 5	31
Concentrations And Economic Dependence 6	$ 354,459
Concentrations And Economic Dependence 7	63

Schedule of Long Term Receivabl

Schedule of Long Term Receivable (Details)	6 Months Ended
	Feb. 28, 2017USD ($)
Long Term Receivable Schedule Of Long Term Receivable 1	$ 175,206
Long Term Receivable Schedule Of Long Term Receivable 2	265,530
Long Term Receivable Schedule Of Long Term Receivable 3	(63,842)
Long Term Receivable Schedule Of Long Term Receivable 4	(123,442)
Long Term Receivable Schedule Of Long Term Receivable 5	7,877
Long Term Receivable Schedule Of Long Term Receivable 6	23,172
Long Term Receivable Schedule Of Long Term Receivable 7	3,456
Long Term Receivable Schedule Of Long Term Receivable 8	9,946
Long Term Receivable Schedule Of Long Term Receivable 9	122,697
Long Term Receivable Schedule Of Long Term Receivable 10	$ 175,206

Schedule of Financing Receivabl

Schedule of Financing Receivables, Minimum Payments (Details)	6 Months Ended
	Feb. 28, 2017USD ($)
Long Term Receivable Schedule Of Financing Receivables, Minimum Payments 1	$ 59,810
Long Term Receivable Schedule Of Financing Receivables, Minimum Payments 2	5,024
Long Term Receivable Schedule Of Financing Receivables, Minimum Payments 3	64,834
Long Term Receivable Schedule Of Financing Receivables, Minimum Payments 4	62,887
Long Term Receivable Schedule Of Financing Receivables, Minimum Payments 5	1,892
Long Term Receivable Schedule Of Financing Receivables, Minimum Payments 6	64,779
Long Term Receivable Schedule Of Financing Receivables, Minimum Payments 7	122,697
Long Term Receivable Schedule Of Financing Receivables, Minimum Payments 8	6,916
Long Term Receivable Schedule Of Financing Receivables, Minimum Payments 9	$ 129,613

Schedule of Stock Option Activi

Schedule of Stock Option Activity (Details)	6 Months Ended
	Feb. 28, 2017USD ($)
Stockholders Equity Schedule Of Stock Option Activity 1	$ 950,000
Stockholders Equity Schedule Of Stock Option Activity 2	0.40
Stockholders Equity Schedule Of Stock Option Activity 3	1.58
Stockholders Equity Schedule Of Stock Option Activity 4	$ 0
Stockholders Equity Schedule Of Stock Option Activity 5	0
Stockholders Equity Schedule Of Stock Option Activity 6	0
Stockholders Equity Schedule Of Stock Option Activity 7	0
Stockholders Equity Schedule Of Stock Option Activity 8	0
Stockholders Equity Schedule Of Stock Option Activity 9	$ (100,000)
Stockholders Equity Schedule Of Stock Option Activity 10	0.40
Stockholders Equity Schedule Of Stock Option Activity 11	$ 0
Stockholders Equity Schedule Of Stock Option Activity 12	0
Stockholders Equity Schedule Of Stock Option Activity 13	0
Stockholders Equity Schedule Of Stock Option Activity 14	0
Stockholders Equity Schedule Of Stock Option Activity 15	0
Stockholders Equity Schedule Of Stock Option Activity 16	0
Stockholders Equity Schedule Of Stock Option Activity 17	$ 850,000
Stockholders Equity Schedule Of Stock Option Activity 18	0.40
Stockholders Equity Schedule Of Stock Option Activity 19	1.16
Stockholders Equity Schedule Of Stock Option Activity 20	$ 0
Stockholders Equity Schedule Of Stock Option Activity 21	$ 756,250
Stockholders Equity Schedule Of Stock Option Activity 22	0.40
Stockholders Equity Schedule Of Stock Option Activity 23	1.04
Stockholders Equity Schedule Of Stock Option Activity 24	$ 0

Schedule of Non-vested Stock Op

Schedule of Non-vested Stock Options Activity (Details)	6 Months Ended
	Feb. 28, 2017USD ($)
Stockholders Equity Schedule Of Non-vested Stock Options Activity 1	$ 281,250
Stockholders Equity Schedule Of Non-vested Stock Options Activity 2	0.08
Stockholders Equity Schedule Of Non-vested Stock Options Activity 3	$ 0
Stockholders Equity Schedule Of Non-vested Stock Options Activity 4	0
Stockholders Equity Schedule Of Non-vested Stock Options Activity 5	$ (187,500)
Stockholders Equity Schedule Of Non-vested Stock Options Activity 6	0.08
Stockholders Equity Schedule Of Non-vested Stock Options Activity 7	$ 93,750
Stockholders Equity Schedule Of Non-vested Stock Options Activity 8	0.08

Schedule of Stock-based Compens

Schedule of Stock-based Compensation Expense (Details)	6 Months Ended
	Feb. 28, 2017USD ($)
Stockholders Equity Schedule Of Stock-based Compensation Expense 1	$ 8,764
Stockholders Equity Schedule Of Stock-based Compensation Expense 2	7,152
Stockholders Equity Schedule Of Stock-based Compensation Expense 3	17,528
Stockholders Equity Schedule Of Stock-based Compensation Expense 4	14,303
Stockholders Equity Schedule Of Stock-based Compensation Expense 5	1,240
Stockholders Equity Schedule Of Stock-based Compensation Expense 6	3,266
Stockholders Equity Schedule Of Stock-based Compensation Expense 7	2,563
Stockholders Equity Schedule Of Stock-based Compensation Expense 8	6,532
Stockholders Equity Schedule Of Stock-based Compensation Expense 9	2,398
Stockholders Equity Schedule Of Stock-based Compensation Expense 10	1,984
Stockholders Equity Schedule Of Stock-based Compensation Expense 11	4,713
Stockholders Equity Schedule Of Stock-based Compensation Expense 12	3,969
Stockholders Equity Schedule Of Stock-based Compensation Expense 13	12,402
Stockholders Equity Schedule Of Stock-based Compensation Expense 14	12,402
Stockholders Equity Schedule Of Stock-based Compensation Expense 15	24,804
Stockholders Equity Schedule Of Stock-based Compensation Expense 16	$ 24,804

Schedule of Stockholders' Equit

Schedule of Stockholders' Equity Note, Warrants or Rights (Details)	6 Months Ended
	Feb. 28, 2017USD ($)
Stockholders Equity Schedule Of Stockholders' Equity Note, Warrants Or Rights 1	$ 0.30
Stockholders Equity Schedule Of Stockholders' Equity Note, Warrants Or Rights 2	$ 1,010,000
Stockholders Equity Schedule Of Stockholders' Equity Note, Warrants Or Rights 3	0.30
Stockholders Equity Schedule Of Stockholders' Equity Note, Warrants Or Rights 4	$ 0
Stockholders Equity Schedule Of Stockholders' Equity Note, Warrants Or Rights 5	1,010,000
Stockholders Equity Schedule Of Stockholders' Equity Note, Warrants Or Rights 6	$ 0

Schedule of Sub-Lease Payments

Schedule of Sub-Lease Payments (Details)	6 Months Ended
	Feb. 28, 2017USD ($)
Commitments Schedule Of Sub-lease Payments 1	$ 88,691

Schedule of Future Minimum Leas

Schedule of Future Minimum Lease Payments for Capital Leases (Details)	6 Months Ended
	Feb. 28, 2017USD ($)
Commitments Schedule Of Future Minimum Lease Payments For Capital Leases 1	$ 2,676
Commitments Schedule Of Future Minimum Lease Payments For Capital Leases 2	6,636
Commitments Schedule Of Future Minimum Lease Payments For Capital Leases 3	9,312
Commitments Schedule Of Future Minimum Lease Payments For Capital Leases 4	(504)
Commitments Schedule Of Future Minimum Lease Payments For Capital Leases 5	8,808
Commitments Schedule Of Future Minimum Lease Payments For Capital Leases 6	(5,403)
Commitments Schedule Of Future Minimum Lease Payments For Capital Leases 7	$ 3,405

Schedule of Revenue by Customer

Schedule of Revenue by Customer (Details)	6 Months Ended
	Feb. 28, 2017USD ($)
Concentrations And Economic Dependence Schedule Of Revenue By Customer 1	$ 307,868
Concentrations And Economic Dependence Schedule Of Revenue By Customer 2	306,075
Concentrations And Economic Dependence Schedule Of Revenue By Customer 3	671,127
Concentrations And Economic Dependence Schedule Of Revenue By Customer 4	652,027
Concentrations And Economic Dependence Schedule Of Revenue By Customer 5	397,098
Concentrations And Economic Dependence Schedule Of Revenue By Customer 6	381,877
Concentrations And Economic Dependence Schedule Of Revenue By Customer 7	837,260
Concentrations And Economic Dependence Schedule Of Revenue By Customer 8	801,433
Concentrations And Economic Dependence Schedule Of Revenue By Customer 9	65,874
Concentrations And Economic Dependence Schedule Of Revenue By Customer 10	61,919
Concentrations And Economic Dependence Schedule Of Revenue By Customer 11	143,584
Concentrations And Economic Dependence Schedule Of Revenue By Customer 12	132,043
Concentrations And Economic Dependence Schedule Of Revenue By Customer 13	770,840
Concentrations And Economic Dependence Schedule Of Revenue By Customer 14	749,871
Concentrations And Economic Dependence Schedule Of Revenue By Customer 15	1,651,971
Concentrations And Economic Dependence Schedule Of Revenue By Customer 16	1,585,503
Concentrations And Economic Dependence Schedule Of Revenue By Customer 17	11,038
Concentrations And Economic Dependence Schedule Of Revenue By Customer 18	14,026
Concentrations And Economic Dependence Schedule Of Revenue By Customer 19	22,136
Concentrations And Economic Dependence Schedule Of Revenue By Customer 20	26,115
Concentrations And Economic Dependence Schedule Of Revenue By Customer 21	0
Concentrations And Economic Dependence Schedule Of Revenue By Customer 22	0
Concentrations And Economic Dependence Schedule Of Revenue By Customer 23	0
Concentrations And Economic Dependence Schedule Of Revenue By Customer 24	0
Concentrations And Economic Dependence Schedule Of Revenue By Customer 25	11,038
Concentrations And Economic Dependence Schedule Of Revenue By Customer 26	14,026
Concentrations And Economic Dependence Schedule Of Revenue By Customer 27	22,136
Concentrations And Economic Dependence Schedule Of Revenue By Customer 28	26,115
Concentrations And Economic Dependence Schedule Of Revenue By Customer 29	781,878
Concentrations And Economic Dependence Schedule Of Revenue By Customer 30	763,897
Concentrations And Economic Dependence Schedule Of Revenue By Customer 31	1,674,107
Concentrations And Economic Dependence Schedule Of Revenue By Customer 32	$ 1,611,618