Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
May 31, 2022 | Jul. 12, 2022 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | DESTINY MEDIA TECHNOLOGIES INC. | |
Entity Central Index Key | 0001099369 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | May 31, 2022 | |
Current Fiscal Year End Date | --08-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 10,122,261 | |
Entity Current Reporting Status | Yes | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Interactive Data Current | Yes | |
Document Transition Report | false | |
Document Quarterly Report | true | |
Entity File Number | 0-28259 | |
Entity Address, Address Line One | 428 - 1575 West Georgia Street | |
Entity Address, City or Town | Vancouver | |
Entity Address, Postal Zip Code | V6G 2V3 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, State or Province | BC | |
Entity Tax Identification Number | 84-1516745 | |
Local Phone Number | 609-7736 | |
City Area Code | 604 | |
Entity Address, Country | CA |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | May 31, 2022 | Aug. 31, 2021 |
Current | ||
Cash and cash equivalents | $ 1,953,454 | $ 2,752,662 |
Accounts receivable, net of allowance for doubtful accounts of $24,844 (August 31, 2021 - $19,743) | 800,847 | 400,233 |
Other receivables | 23,278 | 53,172 |
Prepaid expenses | 54,937 | 103,463 |
Deposits | 45,269 | 0 |
Total current assets | 2,877,785 | 3,309,530 |
Deposits | 0 | 35,556 |
Property and equipment, net | 359,490 | 143,487 |
Intangible assets, net | 254,489 | 187,622 |
Right-of-use assets | 0 | 190,253 |
Total assets | 3,491,764 | 3,866,448 |
Current | ||
Accounts payable | 116,158 | 202,722 |
Accrued liabilities | 301,394 | 309,839 |
Deferred revenue | 25,523 | 8,511 |
Current portion of operating lease liability | 0 | 226,978 |
Total current liabilities | 443,075 | 748,050 |
Total liabilities | 443,075 | 748,050 |
Contingencies | ||
Stockholders' equity | ||
Common stock, par value $0.001, authorized 20,000,000 shares. Issued and outstanding - 10,122,261 shares (August 31, 2021 - 10,265,361 shares) | 10,122 | 10,266 |
Additional paid-in capital | 9,137,129 | 9,157,804 |
Accumulated deficit | (5,828,790) | (5,788,539) |
Accumulated other comprehensive loss | (269,772) | (261,133) |
Total stockholders' equity | 3,048,689 | 3,118,398 |
Total liabilities and stockholders' equity | $ 3,491,764 | $ 3,866,448 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (parentheticals) - USD ($) | May 31, 2022 | Aug. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Allowance for Doubtful Accounts Receivable, Current | $ 24,844 | $ 19,743 |
Common Stock, Par Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 20,000,000 | 20,000,000 |
Common Stock, Shares, Issued | 10,122,261 | 10,265,361 |
Common Stock, Shares, Outstanding | 10,122,261 | 10,265,361 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
May 31, 2022 | May 31, 2021 | May 31, 2022 | May 31, 2021 | |
Service revenue | $ 999,282 | $ 1,083,987 | $ 3,029,853 | $ 3,138,663 |
Cost of revenue | 209,605 | 97,804 | 478,479 | 280,016 |
Gross Margin | 789,677 | 986,183 | 2,551,374 | 2,858,647 |
Operating expenses | ||||
General and administrative | 318,995 | 202,878 | 800,173 | 526,822 |
Sales and marketing | 113,172 | 361,411 | 772,163 | 1,004,839 |
Product development | 326,125 | 326,450 | 944,941 | 961,930 |
Depreciation and amortization | 36,313 | 26,673 | 90,059 | 77,388 |
Total Operating Expenses | 794,605 | 917,412 | 2,607,336 | 2,570,979 |
Income (loss) from operations | (4,928) | 68,771 | (55,962) | 287,668 |
Other income | ||||
Interest and other income | 1,686 | 823 | 4,693 | 3,162 |
Gain on disposal of assets | 0 | 0 | 11,018 | 0 |
Net income (loss) | (3,242) | 69,594 | (40,251) | 290,830 |
Foreign currency translation adjustments | 28,168 | 149,774 | (8,639) | 211,897 |
Total comprehensive income (loss) | $ 24,926 | $ 219,368 | $ (48,890) | $ 502,727 |
Net income (loss) per common share | ||||
Basic | $ 0 | $ 0.01 | $ 0 | $ 0.03 |
Diluted | $ 0 | $ 0.01 | $ 0 | $ 0.03 |
Weighted average common shares outstanding: | ||||
Basic | 10,122,261 | 10,426,961 | 10,185,320 | 10,428,809 |
Diluted | 10,122,261 | 10,531,708 | 10,185,320 | 10,543,442 |
Hosting costs [Member] | ||||
Cost of revenue | $ 50,604 | $ 32,582 | $ 138,399 | $ 92,291 |
Internal engineering support [Member] | ||||
Cost of revenue | 21,497 | 7,375 | 43,709 | 20,998 |
Customer support [Member] | ||||
Cost of revenue | 121,816 | 41,794 | 247,685 | 118,989 |
Third party and transaction costs [Member] | ||||
Cost of revenue | $ 15,688 | $ 16,053 | $ 48,686 | $ 47,738 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) | Common stock [Member] | Additional paid-in capital [Member] | Deficit [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total |
Beginning Balance at Aug. 31, 2020 | $ 10,451 | $ 9,366,290 | $ (6,171,068) | $ (345,456) | $ 2,860,217 |
Beginning Balance (Shares) at Aug. 31, 2020 | 10,450,646 | ||||
Total comprehensive income | 290,830 | 211,897 | 502,727 | ||
Stock based compensation | 39,117 | 39,117 | |||
Common shares retired | $ (156) | (218,526) | (218,682) | ||
Common shares retired (Shares) | (155,685) | ||||
Ending Balance at May. 31, 2021 | $ 10,295 | 9,186,881 | (5,880,238) | (133,559) | 3,183,379 |
Ending Balance (Shares) at May. 31, 2021 | 10,294,961 | ||||
Beginning Balance at Aug. 31, 2020 | $ 10,451 | 9,366,290 | (6,171,068) | (345,456) | 2,860,217 |
Beginning Balance (Shares) at Aug. 31, 2020 | 10,450,646 | ||||
Stock options repurchased and retired | $ (260,405) | ||||
Stock options repurchased and retired (Shares) | 185,285 | ||||
Ending Balance at Aug. 31, 2021 | $ 10,266 | 9,157,804 | (5,788,539) | (261,133) | 3,118,398 |
Ending Balance (Shares) at Aug. 31, 2021 | 10,265,361 | ||||
Beginning Balance at Feb. 28, 2021 | $ 10,409 | 9,347,311 | (5,949,832) | (283,333) | 3,124,555 |
Beginning Balance (Shares) at Feb. 28, 2021 | 10,409,361 | ||||
Total comprehensive income | 69,594 | 149,774 | 219,368 | ||
Stock based compensation | 13,134 | 13,134 | |||
Common shares retired | $ (114) | (173,564) | (173,678) | ||
Common shares retired (Shares) | (114,400) | ||||
Ending Balance at May. 31, 2021 | $ 10,295 | 9,186,881 | (5,880,238) | (133,559) | 3,183,379 |
Ending Balance (Shares) at May. 31, 2021 | 10,294,961 | ||||
Beginning Balance at Aug. 31, 2021 | $ 10,266 | 9,157,804 | (5,788,539) | (261,133) | 3,118,398 |
Beginning Balance (Shares) at Aug. 31, 2021 | 10,265,361 | ||||
Total comprehensive income | (40,251) | (8,639) | (48,890) | ||
Stock based compensation | 169,857 | 169,857 | |||
Stock options repurchased and retired | $ (179,401) | (11,275) | (11,275) | ||
Stock options repurchased and retired (Shares) | 143,100 | ||||
Common shares retired | $ (144) | (179,257) | (179,401) | ||
Common shares retired (Shares) | (143,100) | ||||
Ending Balance at May. 31, 2022 | $ 10,122 | 9,137,129 | (5,828,790) | (269,772) | 3,048,689 |
Ending Balance (Shares) at May. 31, 2022 | 10,122,261 | ||||
Beginning Balance at Feb. 28, 2022 | $ 10,122 | 9,064,465 | (5,825,548) | (297,940) | 2,951,099 |
Beginning Balance (Shares) at Feb. 28, 2022 | 10,122,261 | ||||
Total comprehensive income | (3,242) | 28,168 | 24,926 | ||
Stock based compensation | 75,163 | 75,163 | |||
Stock options repurchased and retired | (2,499) | (2,499) | |||
Ending Balance at May. 31, 2022 | $ 10,122 | $ 9,137,129 | $ (5,828,790) | $ (269,772) | $ 3,048,689 |
Ending Balance (Shares) at May. 31, 2022 | 10,122,261 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Operating Activities | ||
Net income (loss) | $ (40,251) | $ 290,830 |
Adjustments to reconcile net loss to net cash used in operations: | ||
Depreciation and amortization | 90,059 | 77,388 |
Stock-based compensation | 169,857 | 39,117 |
Allowance for doubtful accounts | 18,772 | (4,459) |
Gain on disposal of assets | (11,018) | 0 |
Unrealized foreign exchange loss | 29,607 | 18,465 |
Changes in non-cash working capital: | ||
Accounts receivable | (457,136) | 44,048 |
Other receivables | 29,680 | (18,001) |
Prepaid expenses and deposits | 38,382 | 12,920 |
Accounts payable | (59,699) | 26,646 |
Accrued liabilities | (33,315) | (35,591) |
Deferred revenue | 17,045 | (2,873) |
Operating lease liability | (9,498) | (10,952) |
Net cash provided by (used in) operating activities | (217,515) | 437,538 |
Investing Activities | ||
Sale of short-term investments, net | 0 | 800,624 |
Development of software | (88,099) | (63,554) |
Purchase of property, equipment, and intangibles | (294,916) | (34,658) |
Net cash provided by (used in) investing activities | (383,015) | 702,412 |
Financing Activities | ||
Repurchase of common stock for retirement | (179,401) | (218,682) |
Repurchase of stock options for retirement | (11,275) | 0 |
Net cash used in financing activities | (190,676) | (218,682) |
Effect of foreign exchange rate changes on cash | (8,002) | 171,967 |
Net increase (decrease) in cash and cash equivalents | (799,208) | 1,093,235 |
Cash and cash equivalents, beginning of period | 2,752,662 | 1,841,340 |
Cash and cash equivalents, end of period | 1,953,454 | 2,934,575 |
Supplementary disclosure: | ||
Interest paid | 0 | 0 |
Income taxes paid | $ 0 | $ 0 |
ORGANIZATION
ORGANIZATION | 9 Months Ended |
May 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION [Text Block] | NOTE 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 (the "TSX") and under the symbol "DME" on the Berlin, Frankfurt, Xetra and Stuttgart exchanges in Germany. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
May 31, 2022 | |
Basis Of Presentation [Abstract] | |
BASIS OF PRESENTATION [Text Block] | 2. BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements include the consolidated accounts of the Company and its wholly owned subsidiaries: Destiny Software Productions, Inc. ("DSNY"), MPE Distributions, Inc. ("MPE"), Tonality, Inc. ("Tonality"), and Sonox Digital Inc. ("Sonox"). All intercompany transactions have been eliminated on consolidation. The accompanying unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q have been prepared in conformity with generally accepted accounting principles in the U.S. ("U.S. GAAP"). The unaudited condensed consolidated financial statements presented in this Quarterly Report should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company's Annual Report on Form 10-K filed with the SEC on November 23, 2021 (the "2021 Form 10-K"). The balance sheet as of August 31, 2021 was derived from audited consolidated financial statements included in the 2021 Form 10-K but does not include all disclosures required by U.S. GAAP for complete financial statements. The Company's significant accounting policies are described in Note 2 to those consolidated financial statements. Interim results may not be indicative of the results that may be expected for the full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from these interim financial statements. The unaudited condensed consolidated financial statements reflect all adjustments which in the opinion of management are necessary for a fair statement of results of operations, financial condition, cash flows and stockholders' equity for the periods presented. Except as otherwise disclosed, all such adjustments are of a normal recurring nature. Use of Estimates The preparation of the unaudited condensed consolidated financial statements in accordance with U.S. GAAP requires management to make use of certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reported periods. The Company bases its estimates on historical experience and on various other assumptions that management believes are reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. Significant estimates are related to the recoverability of long-term assets including intangible assets, amortization expense, and valuation of stock-based compensation. |
CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS | 9 Months Ended |
May 31, 2022 | |
Cash and Cash Equivalents [Abstract] | |
CASH AND CASH EQUIVALENTS [Text Block] | 3. CASH AND CASH EQUIVALENTS The Company's c ash include cash in readily available checking accounts. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
May 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT [Text Block] | 4. PROPERTY AND EQUIPMENT May 31, 2022 Property and Equipment Cost Accumulated Net Book Furniture and fixtures $ 141,159 $ (125,014 ) $ 16,145 Computer hardware 328,621 (262,534 ) 66,087 Computer software 687,042 (409,784 ) 277,258 Leasehold improvements - - - Total property and equipment $ 1,156,822 $ (797,332 ) $ 359,490 August 31, 2021 Property and Equipment Cost Accumulated Net Book Furniture and fixtures $ 133,049 $ (114,740 ) $ 18,309 Computer hardware 293,930 (231,180 ) 62,750 Computer software 377,777 (333,751 ) 44,026 Leasehold improvements 157,934 (139,532 ) 18,402 Total property and equipment $ 962,690 $ (819,203 ) $ 143,487 May 31, 2022 Intangible Assets Cost Accumulated Net Book Software under development $ 239,302 $ - $ 239,302 Patents, trademarks, and lists 478,696 (463,509 ) 15,187 Total intangible assets $ 717,998 $ (463,509 ) $ 254,489 August 31, 2021 Intangible Assets Cost Accumulated Net Book Software under development $ 167,069 $ - $ 167,069 Patents, trademarks, and lists 441,178 (420,625 ) 20,553 Total intangible assets $ 608,247 $ (420,625 ) $ 187,622 Depreciation and amortization for the three and nine months ended May 31, 2022 was $36,313 and $90,059, respectively (three and nine months ended May 31, 2021 - $26,673 and $77,388, respectively). On January 31, 2022, the Company terminated the lease for the office space (Note 5). Accordingly, leasehold fixtures and fittings were disposed of and a loss of $9,035 was recognized in the statement of comprehensive income (loss) for the nine months ended May 31, 2022. |
RIGHT-OF-USE ASSET AND LEASE LI
RIGHT-OF-USE ASSET AND LEASE LIABILITY | 9 Months Ended |
May 31, 2022 | |
Leases [Abstract] | |
RIGHT-OF-USE ASSET AND LEASE LIABILITY [Text Block] | 5. RIGHT-OF-USE ASSET AND LEASE LIABILITY In 2017, 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 terminated the lease agreement on January 31, 2022. On adoption of ASC 842, Lease Accounting Right-of-Use Assets Balance, August 31, 2020 $ 403,961 Depreciation (224,154 ) Foreign currency translation adjustment 10,446 Balance, August 31, 2021 $ 190,253 Depreciation (95,010 ) Termination (94,210 ) Foreign currency translation adjustment (1,033 ) Balance, May 31, 2022 $ - Operating Lease Liabilities Balance, August 31, 2020 $ 457,324 Lease interest expense 28,714 Payments (270,898 ) Foreign currency translation adjustment 11,838 Balance, August 31, 2021 $ 226,978 Lease interest expense 6,036 Payments (117,548 ) Termination (114,263 ) Foreign currency translation adjustment (1,203 ) Balance, May 31, 2022 $ - During the three and nine months ended May 31, 2022 the Company recorded depreciation expense of $37,726 and $95,010 respectively (May 31, 2021 - $56,376 and $167,468, respectively) which has been allocated between general and administrative, sales and marketing, and product development expenses on the consolidated statement of comprehensive income (loss). 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 statement of comprehensive income (loss). As of May 31, 2022, the Company has no outstanding commitments related to the operating lease payments. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
May 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY [Text Block] | 6. STOCKHOLDERS' EQUITY [a] Common stock issued and authorized The Company is authorized to issue up to 20,000,000 shares of common stock, par value $0.001 per share. On 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 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 nine months ended May 31, 2022 that Company did not issue any common stock (May 31, 2021 - Nil). During the nine months ended May 31, 2022, the Company repurchased and cancelled 143,100 common shares for $179,401 (August 31, 2021 - 185,285 common shares for $260,405). [b] Stock option plans Pursuant to the Company's 2015 Stock Option Plan (the "2015 Plan"), 530,000 shares of common stock have been reserved for issuance. A total of 41,250 common shares remain eligible for issuance under the 2015 Plan. On February 18, 2022 the Company received shareholder approval for the 2022 Stock Option Plan (the "2022 Plan") (together with the 2015 Plan, the "Plans"), whereby 1,000,000 common shares are reserved for issuance. As at May 31, 2022, 507,833 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. 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. Stock-Based Payment Award Activity A summary of stock option activity under the Plans as of May 31, 2022, and changes during the period were the following: Number of Weighted Average Weighted Average Aggregate Intrinsic Outstanding at August 31, 2020 400,000 $ 1.35 3.24 $ - Granted 10,000 $ 1.00 4.16 $ - Outstanding at August 31, 2021 410,000 $ 1.34 2.26 $ - Granted 561,000 $ 1.50 5.00 $ - Forfeited (90,083 ) $ 1.38 4.09 $ - Exercised (30,000 ) $ 1.00 2.07 $ - Outstanding at May 31, 2022 850,917 $ 1.45 3.15 $ - Exercisable at May 31, 2022 471,667 $ 1.42 2.11 $ - 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 May 31, 2022. The following table summarizes information regarding the non-vested options outstanding as of May 31, 2022 and changes during the period: Number of Weighted Average Non-vested options at August 31, 2020 203,750 $ 0.48 Granted 10,000 $ 0.34 Vested (115,000 ) $ 0.47 Non-vested options at August 31, 2021 98,750 $ 0.48 Granted 561,000 $ 1.50 Forfeited (90,083 ) $ 1.38 Vested (190,417 ) $ 1.43 Non-vested options at May 31, 2022 379,250 $ 1.50 As of May 31, 2022, there was $359,312 of total unrecognized compensation cost related to non-vested stock-based compensation awards. The unrecognized compensation cost is expected to be recognized over a weighted average period of 1.5 years. During the nine months ended May 31, 2022, the total stock-based compensation expense is reported in the statement of comprehensive income (loss) as follows: Nine Months Ended May 31, Stock-based compensation 2022 2021 General and administrative $ 82,324 $ 13,594 Sales and marketing 39,029 14,502 Product development 48,504 11,021 Total stock-based compensation $ 169,857 $ 39,117 [c] Employee Stock Purchase Plan The Company's 2011 Employee Stock Purchase Plan (the "ESPP") became effective on February 22, 2011. Under the ESPP, employees of the Company can contribute up to 5% of their annual salary into a pool which is matched equally by the Company in order to purchase the Company's common shares under certain terms. Directors can 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 is also responsible for the administration of the ESPP on behalf of the Company and the participants. During the nine months period ended May 31, 2022, the Company recognized compensation expense of $95,956 (May 31, 2021 - $71,938) in salaries and wages on the consolidated statement of comprehensive income (loss) in respect of the ESPP, representing the Company's employee matching of cash contributions to the ESPP. The shares were purchased on the open market at an average price of $1.25 (May 31, 2021 - $0.99). The shares are held in trust by the Company for a period of one year from the date of purchase. [d] Earnings Per Share Net income (loss) per common share (basic) is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Net income (loss) per common share (diluted) is calculated by dividing net income (loss) 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. For the three and nine months ended May 31, 2022 the outstanding options, in the amount of 850,917, were anti-dilutive and have been excluded from the calculation of diluted income (loss) per share. |
CONTINGENCIES
CONTINGENCIES | 9 Months Ended |
May 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES [Text Block] | 7. CONTINGENCIES The Company is subject to claims and legal proceedings that arise in the ordinary course of business. Such matters are inherently uncertain, and there can be no guarantee that the outcome of any such matter will be decided favorably to the Company or that the resolution of any such matter will not have a material adverse effect upon the Company's financial statements. The Company does not believe that any of such pending claims and legal proceedings will have a material adverse effect on its consolidated financial statements. On September 5, 2017, the Company's former President and Chief Executive Officer filed a Notice of Civil Claim in the Supreme Court of British Columbia against the Company, its subsidiaries, independent directors and current Chief Executive Officer, claiming damages for conspiracy, breach of contract, wrongful dismissal, defamation and aggravated and punitive damages. The Company believes the claims are without merit and is defending itself against the claims. 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 In March 2020 the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, potentially leading to an economic downturn. It has also disrupted the normal operations of many businesses, including the Company's. This outbreak could decrease spending, adversely affect demand for the Company's product and harm the Company's business and results of operations. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company's business or results of operations at this time. |
CONCENTRATIONS AND ECONOMIC DEP
CONCENTRATIONS AND ECONOMIC DEPENDENCE | 9 Months Ended |
May 31, 2022 | |
Geographic Areas, Revenues from External Customers [Abstract] | |
CONCENTRATIONS AND ECONOMIC DEPENDENCE [Text Block] | 8. 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 earned during the three and nine months ended May 31, 2022 and 2021, by product and location of customer, was as follows: Three Months Ended May 31, Nine Months Ended May 31, 2022 2021 2022 2021 Play MPE® North America $ 498,465 $ 504,319 $ 1,460,020 $ 1,416,953 Europe 461,703 497,225 1,414,265 1,489,578 Australasia 31,781 79,275 133,476 218,035 Africa 6,563 1,626 19,642 6,092 Total Play MPE® 998,512 1,082,445 3,027,403 3,130,658 Clipstream® North America 770 1,542 2,450 8,005 Total $ 999,282 $ 1,083,987 $ 3,029,853 $ 3,138,663 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, 2022, the Company generated 41% of total revenue from one customer (May 31, 2021 - 42%). It is in management's opinion that the Company is not exposed to significant credit risk. As at May 31, 2022, one customer represented $570,964 (or 73%) 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. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
May 31, 2022 | |
Accounting Policies [Abstract] | |
Use of Estimates [Policy Text Block] | Use of Estimates The preparation of the unaudited condensed consolidated financial statements in accordance with U.S. GAAP requires management to make use of certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reported periods. The Company bases its estimates on historical experience and on various other assumptions that management believes are reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. Significant estimates are related to the recoverability of long-term assets including intangible assets, amortization expense, and valuation of stock-based compensation. |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
May 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment [Table Text Block] | May 31, 2022 Property and Equipment Cost Accumulated Net Book Furniture and fixtures $ 141,159 $ (125,014 ) $ 16,145 Computer hardware 328,621 (262,534 ) 66,087 Computer software 687,042 (409,784 ) 277,258 Leasehold improvements - - - Total property and equipment $ 1,156,822 $ (797,332 ) $ 359,490 August 31, 2021 Property and Equipment Cost Accumulated Net Book Furniture and fixtures $ 133,049 $ (114,740 ) $ 18,309 Computer hardware 293,930 (231,180 ) 62,750 Computer software 377,777 (333,751 ) 44,026 Leasehold improvements 157,934 (139,532 ) 18,402 Total property and equipment $ 962,690 $ (819,203 ) $ 143,487 May 31, 2022 Intangible Assets Cost Accumulated Net Book Software under development $ 239,302 $ - $ 239,302 Patents, trademarks, and lists 478,696 (463,509 ) 15,187 Total intangible assets $ 717,998 $ (463,509 ) $ 254,489 August 31, 2021 Intangible Assets Cost Accumulated Net Book Software under development $ 167,069 $ - $ 167,069 Patents, trademarks, and lists 441,178 (420,625 ) 20,553 Total intangible assets $ 608,247 $ (420,625 ) $ 187,622 |
RIGHT-OF-USE ASSET AND LEASE _2
RIGHT-OF-USE ASSET AND LEASE LIABILITY (Tables) | 9 Months Ended |
May 31, 2022 | |
Leases [Abstract] | |
Schedule of Right-of-Use Assets [Table Text Block] | Right-of-Use Assets Balance, August 31, 2020 $ 403,961 Depreciation (224,154 ) Foreign currency translation adjustment 10,446 Balance, August 31, 2021 $ 190,253 Depreciation (95,010 ) Termination (94,210 ) Foreign currency translation adjustment (1,033 ) Balance, May 31, 2022 $ - |
Schedule of Operating Lease Liabilities [Table Text Block] | Operating Lease Liabilities Balance, August 31, 2020 $ 457,324 Lease interest expense 28,714 Payments (270,898 ) Foreign currency translation adjustment 11,838 Balance, August 31, 2021 $ 226,978 Lease interest expense 6,036 Payments (117,548 ) Termination (114,263 ) Foreign currency translation adjustment (1,203 ) Balance, May 31, 2022 $ - |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 9 Months Ended |
May 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
Schedule of stock option activity [Table Text Block] | Number of Weighted Average Weighted Average Aggregate Intrinsic Outstanding at August 31, 2020 400,000 $ 1.35 3.24 $ - Granted 10,000 $ 1.00 4.16 $ - Outstanding at August 31, 2021 410,000 $ 1.34 2.26 $ - Granted 561,000 $ 1.50 5.00 $ - Forfeited (90,083 ) $ 1.38 4.09 $ - Exercised (30,000 ) $ 1.00 2.07 $ - Outstanding at May 31, 2022 850,917 $ 1.45 3.15 $ - Exercisable at May 31, 2022 471,667 $ 1.42 2.11 $ - |
Schedule of non-vested options activity [Table Text Block] | Number of Weighted Average Non-vested options at August 31, 2020 203,750 $ 0.48 Granted 10,000 $ 0.34 Vested (115,000 ) $ 0.47 Non-vested options at August 31, 2021 98,750 $ 0.48 Granted 561,000 $ 1.50 Forfeited (90,083 ) $ 1.38 Vested (190,417 ) $ 1.43 Non-vested options at May 31, 2022 379,250 $ 1.50 |
Schedule of stock-based compensation expense [Table Text Block] | Nine Months Ended May 31, Stock-based compensation 2022 2021 General and administrative $ 82,324 $ 13,594 Sales and marketing 39,029 14,502 Product development 48,504 11,021 Total stock-based compensation $ 169,857 $ 39,117 |
CONCENTRATIONS AND ECONOMIC D_2
CONCENTRATIONS AND ECONOMIC DEPENDENCE (Tables) | 9 Months Ended |
May 31, 2022 | |
Geographic Areas, Revenues from External Customers [Abstract] | |
Schedule of revenue from external customers [Table Text Block] | Three Months Ended May 31, Nine Months Ended May 31, 2022 2021 2022 2021 Play MPE® North America $ 498,465 $ 504,319 $ 1,460,020 $ 1,416,953 Europe 461,703 497,225 1,414,265 1,489,578 Australasia 31,781 79,275 133,476 218,035 Africa 6,563 1,626 19,642 6,092 Total Play MPE® 998,512 1,082,445 3,027,403 3,130,658 Clipstream® North America 770 1,542 2,450 8,005 Total $ 999,282 $ 1,083,987 $ 3,029,853 $ 3,138,663 |
CASH AND CASH EQUIVALENTS (Narr
CASH AND CASH EQUIVALENTS (Narrative) (Details) | May 31, 2022 |
Minimum [Member] | |
Schedule of Investments [Line Items] | |
Rate of investment interest | 0.10% |
Maximum [Member] | |
Schedule of Investments [Line Items] | |
Rate of investment interest | 2.36% |
PROPERTY AND EQUIPMENT (Narrati
PROPERTY AND EQUIPMENT (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
May 31, 2022 | May 31, 2021 | May 31, 2022 | May 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation and amortization | $ 36,313 | $ 26,673 | $ 90,059 | $ 77,388 |
Loss on disposal of property and equipment | $ 9,035 |
PROPERTY AND EQUIPMENT - Schedu
PROPERTY AND EQUIPMENT - Schedule of Property, Plant and Equipment (Details) - USD ($) | May 31, 2022 | Aug. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, Cost | $ 1,156,822 | $ 962,690 |
Property and equipment, Accumulated amortization | (797,332) | (819,203) |
Property and equipment, Net book value | 359,490 | 143,487 |
Intangibles, Cost | 717,998 | 608,247 |
Intangibles, Accumulated amortization | (463,509) | (420,625) |
Intangibles, Net book value | 254,489 | 187,622 |
Furniture and fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, Cost | 141,159 | 133,049 |
Property and equipment, Accumulated amortization | (125,014) | (114,740) |
Property and equipment, Net book value | 16,145 | 18,309 |
Computer hardware [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, Cost | 328,621 | 293,930 |
Property and equipment, Accumulated amortization | (262,534) | (231,180) |
Property and equipment, Net book value | 66,087 | 62,750 |
Computer software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, Cost | 687,042 | 377,777 |
Property and equipment, Accumulated amortization | (409,784) | (333,751) |
Property and equipment, Net book value | 277,258 | 44,026 |
Leasehold improvement [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, Cost | 0 | 157,934 |
Property and equipment, Accumulated amortization | 0 | (139,532) |
Property and equipment, Net book value | 0 | 18,402 |
Software under development [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Intangibles, Cost | 239,302 | 167,069 |
Intangibles, Accumulated amortization | 0 | 0 |
Intangibles, Net book value | 239,302 | 167,069 |
Patents, trademarks and lists [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Intangibles, Cost | 478,696 | 441,178 |
Intangibles, Accumulated amortization | (463,509) | (420,625) |
Intangibles, Net book value | $ 15,187 | $ 20,553 |
RIGHT-OF-USE ASSET AND LEASE _3
RIGHT-OF-USE ASSET AND LEASE LIABILITY (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
May 31, 2022 | May 31, 2021 | May 31, 2022 | May 31, 2021 | |
Lessee, Lease, Description [Line Items] | ||||
Recognition of right of use asset | $ 671,911 | |||
Weighted-average discount rate - operating leases | 8% | 8% | ||
Exit of lease gain | $ 20,053 | |||
General and administrative expenses, research and development and sales and marketing [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Depreciation | $ 37,726 | $ 56,376 | $ 95,010 | $ 167,468 |
RIGHT-OF-USE ASSET AND LEASE _4
RIGHT-OF-USE ASSET AND LEASE LIABILITY - Schedule of Right of Use Asset (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
May 31, 2022 | Aug. 31, 2021 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Balance, Start of Period | $ 190,253 | |
Balance, End of Period | 0 | $ 190,253 |
Adoption of ASC 842 [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Balance, Start of Period | 190,253 | 403,961 |
Depreciation | (95,010) | (224,154) |
Termination | (94,210) | |
Foreign currency translation adjustment | (1,033) | 10,446 |
Balance, End of Period | $ 0 | $ 190,253 |
RIGHT-OF-USE ASSET AND LEASE _5
RIGHT-OF-USE ASSET AND LEASE LIABILITY - Schedule of Operating Lease Liability (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
May 31, 2022 | Aug. 31, 2021 | |
Leases [Abstract] | ||
Balance | $ 226,978 | $ 457,324 |
Lease interest expense | 6,036 | 28,714 |
Payments | (117,548) | (270,898) |
Termination | (114,263) | |
Foreign currency translation adjustment | (1,203) | 11,838 |
Balance, End of Period | $ 0 | $ 226,978 |
STOCKHOLDERS' EQUITY (Narrative
STOCKHOLDERS' EQUITY (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Jan. 15, 2021 | May 31, 2022 | May 31, 2021 | May 31, 2022 | May 31, 2021 | Aug. 31, 2021 | Aug. 31, 2020 | Aug. 31, 2015 | |
Schedule of Stockholders Equity [Line Items] | ||||||||
Common Stock, Shares, Issued | 10,122,261 | 10,122,261 | 10,265,361 | |||||
Common Stock, Shares Authorized | 20,000,000 | 20,000,000 | 20,000,000 | |||||
Common stock, par or stated value per share | $ 0.001 | $ 0.001 | $ 0.001 | |||||
Value of shares repurchased | $ 2,499 | $ 11,275 | ||||||
Common shares retired | $ 173,678 | 179,401 | $ 218,682 | |||||
Compensation cost not yet recognized | $ 359,312 | $ 359,312 | ||||||
Compensation cost not yet recognized, period for recognition | 1 year 6 months | |||||||
Numbers of stock purchase options exercisable | 30,000 | |||||||
Stock-based compensation | $ 169,857 | 39,117 | ||||||
Defined contribution plan, maximum annual contributions per director,amount | 12,500 | |||||||
Defined contribution plan, combine maximum annual contributions for directors,amount | 25,000 | |||||||
Defined contribution plan, maximum annual contributions amount | 400,000 | |||||||
Employee stock ownership plan (ESOP), compensation expense | $ 95,956 | $ 71,938 | ||||||
Employee stock ownership plan (ESOP), weighted average purchase price of shares purchased | $ 1.25 | $ 0.99 | ||||||
Aggregate of stock options outstanding. | 850,917 | 850,917 | 410,000 | 400,000 | ||||
Common stock [Member] | ||||||||
Schedule of Stockholders Equity [Line Items] | ||||||||
Common Stock, Shares, Issued | 0 | 0 | ||||||
Number of shares repurchased | 143,100 | 185,285 | ||||||
Value of shares repurchased | $ 179,401 | $ 260,405 | ||||||
Common shares retired | $ 114 | $ 144 | $ 156 | |||||
2015 Stock Option Plan [Member] | ||||||||
Schedule of Stockholders Equity [Line Items] | ||||||||
Common stock reserved for issuance under stock option plan | 530,000 | |||||||
2022 Stock Option Plan [Member] | ||||||||
Schedule of Stockholders Equity [Line Items] | ||||||||
Common stock shares reserved for issuance under stock option plan | 507,833 | 507,833 | 41,250 | |||||
Common stock reserved for issuance under stock option plan | 1,000,000 | 1,000,000 | ||||||
Normal Course Issuer Bid ("NCIB") [Member] | ||||||||
Schedule of Stockholders Equity [Line Items] | ||||||||
Number of common shares purchase | 522,532 |
STOCKHOLDERS' EQUITY - Schedule
STOCKHOLDERS' EQUITY - Schedule of Stock Option Activity (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
May 31, 2022 | Aug. 31, 2021 | Aug. 31, 2020 | |
Shares | |||
Outstanding Balance | 410,000 | 400,000 | |
Granted | 561,000 | 10,000 | |
Forfeited | (90,083) | ||
Exercised | (30,000) | ||
Outstanding Balance | 850,917 | 410,000 | 400,000 |
Exercisable | 471,667 | ||
Weighted Average Exercise Price | |||
Outstanding Balance | $ 1.34 | $ 1.35 | |
Granted | 1.5 | 1 | |
Forfeited | 1.38 | ||
Exercised | 1 | ||
Outstanding Balance | 1.45 | $ 1.34 | $ 1.35 |
Exercisable | $ 1.42 | ||
Weighted Average Remaining Contractual Term | |||
Granted | 5 years | 4 years 1 month 28 days | |
Forfeited | 4 years 1 month 2 days | ||
Exercised | 2 years 25 days | ||
Weighted Average Remaining Contractual Term Outstanding Balance | 3 years 1 month 24 days | 2 years 3 months 3 days | 3 years 2 months 26 days |
Weighted Average Remaining Contractual Term Exercisable | 2 years 1 month 9 days | ||
Aggregate Intrinsic Value | |||
Outstanding Balance | $ 0 | $ 0 | |
Granted | 0 | 0 | |
Forfeited | 0 | ||
Exercised | 0 | ||
Outstanding Balance | 0 | $ 0 | $ 0 |
Exercisable | $ 0 |
STOCKHOLDERS' EQUITY - Schedu_2
STOCKHOLDERS' EQUITY - Schedule of Non-vested Stock Options Activity (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
May 31, 2022 | Aug. 31, 2021 | |
Stockholders' Equity Note [Abstract] | ||
Outstanding Balance | 98,750 | 203,750 |
Weighted Average Grant Date Fair Value | $ 0.48 | $ 0.48 |
Granted | 561,000 | 10,000 |
Options Weighted Average Grant Date Fair Value | $ 1.5 | $ 0.34 |
Vested | (190,417) | (115,000) |
Vested, Weighted Average Grant Date Fair Value | $ 1.43 | $ 0.47 |
Forfeited | (90,083) | |
Forfeited, Weighted Average Grant Date Fair Value | $ (1.38) | |
Outstanding Balance | 379,250 | 98,750 |
Weighted Average Grant Date Fair Value | $ 1.5 | $ 0.48 |
STOCKHOLDERS' EQUITY - Schedu_3
STOCKHOLDERS' EQUITY - Schedule of Stock-based Compensation Expense (Details) - USD ($) | 9 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Stockholders' Equity Note [Abstract] | ||
General and administrative | $ 82,324 | $ 13,594 |
Sales and marketing | 39,029 | 14,502 |
Product development | 48,504 | 11,021 |
Total stock-based compensation | $ 169,857 | $ 39,117 |
CONCENTRATIONS AND ECONOMIC D_3
CONCENTRATIONS AND ECONOMIC DEPENDENCE (Narrative) (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | Aug. 31, 2021 | |
Concentration Risk [Line Items] | |||
Accounts receivable, net of allowance for doubtful accounts | $ 800,847 | $ 400,233 | |
Customer Concentration Risk [Member] | Customer One [Member] | Revenue Benchmark [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 41% | 42% | |
Customer Concentration Risk [Member] | Customer One [Member] | Trade Accounts Receivable [Member] | |||
Concentration Risk [Line Items] | |||
Accounts receivable, net of allowance for doubtful accounts | $ 570,964 | $ 142,758 | |
Concentration risk, percentage | 73% | 36% |
CONCENTRATIONS AND ECONOMIC D_4
CONCENTRATIONS AND ECONOMIC DEPENDENCE - Schedule of Revenue by Customer (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
May 31, 2022 | May 31, 2021 | May 31, 2022 | May 31, 2021 | |
Concentration Risk [Line Items] | ||||
Revenue | $ 999,282 | $ 1,083,987 | $ 3,029,853 | $ 3,138,663 |
Play MPE [Member] | ||||
Concentration Risk [Line Items] | ||||
Revenue | 998,512 | 1,082,445 | 3,027,403 | 3,130,658 |
Play MPE [Member] | North America [Member] | ||||
Concentration Risk [Line Items] | ||||
Revenue | 498,465 | 504,319 | 1,460,020 | 1,416,953 |
Play MPE [Member] | Europe [Member] | ||||
Concentration Risk [Line Items] | ||||
Revenue | 461,703 | 497,225 | 1,414,265 | 1,489,578 |
Play MPE [Member] | Australasia [Member] | ||||
Concentration Risk [Line Items] | ||||
Revenue | 31,781 | 79,275 | 133,476 | 218,035 |
Play MPE [Member] | Africa [Member] | ||||
Concentration Risk [Line Items] | ||||
Revenue | 6,563 | 1,626 | 19,642 | 6,092 |
Clipstream [Member] | North America [Member] | ||||
Concentration Risk [Line Items] | ||||
Revenue | $ 770 | $ 1,542 | $ 2,450 | $ 8,005 |