DSNY 10-K
Destiny Media Technologies Inc (DSNY)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
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EXCHANGE ACT OF 1934 For the Fiscal Year ended
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 For the transition period from _________ to __________
Commission File Number:
(Exact name of registrant as specified in its charter)
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1110 - 885 West Georgia Street, Vancouver, British Columbia, V6C 3E8, Canada
(Former name, former address and former fiscal year, if changes since last report)
Securities registered under Section 12(b) of the Exchange Act: NOT APPLICABLE
Securities registered under Section 12(g) of the Exchange Act: COMMON STOCK, $0.001 PAR VALUE PER SHARE
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X]
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). [X]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
[ ]Yes [ ] No
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) [ ] Yes [X]
On May 31, 2025, the last business day of the registrant's most recently completed third fiscal quarter, the aggregate market value of the registrant's common stock held by non-affiliates of the registrant was approximately $
The number of shares outstanding of the registrant's common stock, par value $0.001, as of November 24, 2025 was
DOCUMENTS INCORPORATED BY REFERENCE
None.
PART I
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report on Form 10-K contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 under Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements through our use of words such as "may," "can," "anticipate," "assume," "should," "indicate," "would," "believe," "contemplate," "expect," "seek," "estimate," "continue," "plan," "point to," "project," "predict," "could," "intend," "target," "potential" and other similar words and expressions of the future.
There are a number of important factors that could cause the actual results to differ materially from those expressed in any forward-looking statement made by us. These factors include, but are not limited to:
- our goals and strategies;
- our future business development, financial condition and results of operations;
- expected changes in our revenue, costs or expenditures;
- growth of and competition trends in our industry;
- our expectations regarding demand for, and market acceptance of, our products;
- our expectations regarding our relationships with investors, institutional funding partners and other parties with whom we collaborate;
- fluctuations in general economic and business conditions in the markets in which we operate; and
- relevant government policies and regulations relating to our industry.
These forward-looking statements reflect our management's beliefs and views with respect to future events and are based on estimates and assumptions as of the date of this Annual Report on Form 10-K and are subject to risks and uncertainties. We discuss many of these risks in greater detail under "Risk Factors." Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Given these uncertainties, you should not place undue reliance on these forward-looking statements.
You should read this Annual Report on Form 10-K and the documents that we reference and have filed as exhibits to the Annual Report on Form 10-K completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of the forward-looking statements in this Annual Report on Form 10-K by these cautionary statements. Except as required by law, we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
In this report, "we," "us," "our," "our company", "Destiny" and similar references refer to Destiny Media Technologies, Inc., a Nevada corporation, and its wholly-owned subsidiaries: Destiny Software Productions, Inc. ("DSNY"), MPE Distribution, Inc. ("MPE"), Tonality, Inc. ("Tonality"), and Sonox Digital Inc. ("Sonox"), and (ii) the term "common stock" refers to the common stock, par value $0.001 per share, of Destiny Media Technologies, Inc., a Nevada corporation. The financial information included herein is presented in United States dollars unless otherwise indicated.
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ITEM 1. BUSINESS.
OVERVIEW AND CORPORATE BACKGROUND
Destiny Media Technologies Inc. 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. We carry out our business operations through our wholly owned subsidiaries: Destiny Software Productions Inc., a British Columbia company incorporated in 1992, MPE Distribution, Inc., a Nevada company that was incorporated in 2007, Tonality Inc., a Nevada company that was incorporated in 2021, and Sonox Digital Inc. incorporated under the Canada Business Corporations Act in 2012.
Our principal executive office is located at Suite 428, 1575 West Georgia Street, Vancouver, British Columbia V6G 2V3. Our telephone number is (604) 609-7736 and our facsimile number is (604) 609-0611.
Our common stock trades on TSX Venture Exchange in Canada under the symbol "DSY", on the OTCQB U.S. ("OTCQB") under the symbol "DSNY", and on various German exchanges (Frankfurt, Berlin, Stuttgart and Xetra) under the symbol "DME1".
Our corporate website is located at http://www.dsny.com.
OUR PRODUCTS AND SERVICES
Destiny develops and markets software as a service (SaaS) solutions that solve critical digital distribution and promotion problems for businesses in the music industry.
Play MPE®
The Company's core business is the Play MPE® online platform. Play MPE® distributes music for promotional purposes (broadcast quality audio, video, images, promotional information, metadata and other digital content) from record labels and artists to broadcasting professionals, music curators and music reviewers to discover, download, review and broadcast. Curators include radio programmers, digital streaming broadcasters, media reviewers (newspapers, magazines etc.), industry VIP's, DJ's, film and TV personnel, sports stadiums, retailers etc. In providing the distribution, Play MPE® provides several capabilities developed and designed to address the unique needs of both music promoters and broadcasters. Play MPE® was first to market and is the largest provider of this service and provides the most feature rich platform in the world.
Record labels and artists are Play MPE®'s customers. When adding music to the Play MPE® system, clients are targeting specific industry recipients who review and broadcast their music. Play MPE®'s primary value proposition in this marketing effort is a direct increase to record label and artist revenue through on-air broadcast royalties and indirect increases in revenue through growing song and artists' popularity.
Play MPE® provides numerous capabilities that improve record label efficiencies and the effectiveness of their promotional campaigns. The platform also provides administrative controls to enhance security for record label content. In doing so, Play MPE® satisfies a broad range of stakeholders representing diverse interests at record labels. Music is protected by Play MPE®'s patented proprietary watermarking system which provides watermarks unique to each recipient.
Customers range from small independent artists to the world's largest record labels (the "Major Record Labels"). The Major Record Labels are Universal Music Group ("Universal"), Warner Music Group ("Warner") and Sony Music Entertainment ("Sony"). These record labels directly own numerous sub-labels that include Capitol Music Group, Def Jam Recordings, Interscope Records, Island Records, Republic Records, Polydor, Deutsche Grammophon, Motown, Verve Label Group, Virgin Music Group, EMI, RCA Records, Epic Records, Columbia Records, Arista Records, Legacy Recordings, Provident Entertainment, Warner Records, Hollywood Records, Atlantic Records Group, 300 Elektra Entertainment, to name only a few. Play MPE® welcomes all of these labels into its customer base.
Play MPE® CASTER / CASTER +
Play MPE®'s cloud-based Caster software includes local distribution functions that provide capabilities for a client to create and schedule release announcements and select its targeted audience. Caster is a fully self-serve platform where users can manage every step of their releases, from account setup through payment. This functionality was added in fiscal 2025. Caster+ is a release preparation service provided by staff of Play MPE®.
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Caster is designed uniquely to suit music marketing plans and its significant components include:
- Release Creator includes drag and drop functionality to quickly embed images, social media links, insert video, add promotional files etc. to quickly create effective announcements.
- Release Scheduling allows numerous scheduling functions for initial announcements, repeated and updated announcements, changes in DRM (a recipient's ability to download or only stream the content) etc. These schedules can be uniquely edited by recipient or recipient list. Several administrative features here are also available to facilitate and manage release scheduling at scale.
- Templates facilitate consistent label branding and presentation while reducing release preparation time. Each release announcement can be saved as a template and reused or edited for future announcements. Clients can design and save unlimited templates to provide unique design and branding for individual artists or record labels.
- Contacts Management provides features that allow record labels to upload and manage their own targeted distribution lists. There are many features within this platform that provide efficiencies in destination management for all customers of Play MPE®. However, this section of the platform provides numerous functions that are critical for efficient contacts management at scale and is described in Caster's global distribution functionality. Within Contacts Management, users can easily select curated lists of engaged recipients provided by Play MPE® (see description below) or select their own managed recipient lists.
- Assets Management allows users to maintain and manage a repository of assets (single or multitrack releases) outside of the release creation process. This functionality saves users time when creating new releases and allows them to plan for future releases more efficiently. Assets Management also supports Quickshare, a secure one-to-one file sharing function.
- Reporting of release results shows recipient interactions including downloads, streams, clicks and opens.
Intuitive designs and functionality across all areas of this portion of the platform simplify the distribution process, reduce customer time required to distribute, and facilitate the inclusion of information to improve engagement which ultimately increases record label and artist revenue.
Caster is currently available in English, Spanish, German, Japanese and French.
When competing with an established service within a local market, it is these features balanced against changing consumer behaviors that determine Play MPE®'s ability to increase and acquire market share. Competing services offer the basic distribution requirements inherent in the service but do so while missing many features that provide efficient delivery, engaged recipients and accurate and complete distribution lists.
Public reviews can be found at https://www.plaympe.com/testimonials/.
Play MPE® CASTER (global architecture)
Play MPE®'s global distribution architecture was developed in close collaboration with our largest client to address the needs of its global approach to release distribution. This architecture provides functionality required for our largest client to conduct their unique approach to music distribution and provides numerous significant competitive advantages for this client. These features improve marketing coordination and revenue generation while reducing overall label staff time and costs.
Significant components include:
- Staff role management: Customers can grant varying capabilities or permissions for different staff positions. For example, one staff member can create a release while another can approve the release of this content. In a larger organization, this control ensures accurate and professional distributions are conducted, but allows for segregation of duties to maximize efficiency.
- Label management: With label management, administrative staff can determine which users have access to which labels and which content. Each label has a unique account environment allowing for its own unique setup, list curation, favorites, staff roles, templates etc. These unique environments also improve release security for a record label with a large global footprint.
- Global release sharing (replication): With global release sharing, distribution centers can share a release to a territory. That territory then can reuse the release while localizing it to suit the particular needs of that jurisdiction (editing language, artist information, local concert dates, local contacts etc). This eliminates duplication of upload and data entry while reducing errors. In the context of global distribution, across multiple territories, multiple labels, and thousands of unique releases, savings of staff time is significant. Metadata completeness and accuracy are also increased. When complete metadata is conveyed, recipient engagement is higher. Higher recipient engagement increases record label revenue. Within the included metadata are ISRC codes which are unique codes used to remit track royalties globally. When ISRC codes are communicated, royalty remittances are complete and timely. These aspects provide significant competitive advantages.
- Release embargos: When marketing and promotion departments create global campaigns for highly anticipated music releases, staff restrict access to this content until the public release time. Here, record labels can permit early access to the relevant content so local offices can edit, localize and schedule releases but controls are added to restrict certain permissions and prevent premature release. Our largest client enjoys competitive advantages with these capabilities derived through cost savings and improved marketing campaigns. Absent these functions, global release coordination is more costly, less coordinated and often delayed.
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- Asset repository integration: With this integration, Play MPE® automatically captures music, art, and associated metadata from an archival repository of our largest client, vastly reducing errors in release creation and data entry while making the process quicker. This further expands the competitive advantages enjoyed in global release sharing.
- Release management: There are numerous capabilities within release management that are necessary for efficient global release management. Content owners can change DRM for specific recipient groups within a release and quickly remove content globally if necessary etc.
- Asset management: Assets include music tracks, album art, metadata etc. Within the assets management portion, several features allow assets to be used, recomposed, combined, recombined etc. Features here allow efficient and quick delivery of new releases. Various aspects of assets management are used in global distribution situations.
- Release scheduling: While release scheduling is available for local distribution, many additional administrative features are designed to facilitate actions that reduce staff time in a global environment.
- Contacts management: Critically important to all promotions is the distribution of content to an interested and engaged audience. As introduced in the local distribution discussion, Caster provides a contacts management system with numerous features that facilitate efficient updates and maintenance actions that are critically important where users maintain a large recipient database, across multiple users, and multiple recipient lists. Absent these features, list maintenance becomes overly cumbersome, inefficient and ultimately inaccurate.
Collectively, functionality in global release management provides numerous competitive advantages that reduce overall costs, and improve marketing collaboration while increasing record label revenue and cash flow. We are unaware of any other service that provides these global distribution functions.
Play MPE® CASTER (targeted list management services)
Recipient lists are bundles of active and engaged recipients with an interest in specific music types or genres. Lists are sold as a fixed price per list (or package). As recipient lists are adjusted in real time, changes in gross recipient numbers or active recipients does not directly or immediately impact revenue.
Fundamental to our customers' success in music marketing is reaching music curators capable of, and actively engaged in, remarketing the promoted content to a wider consumer audience. To limit unwanted access to new music and to increase recipient engagement, targeted and limited distribution is a vital component in music promotion. Thus, Play MPE® is a permissions-only access system and only recipients designated or targeted to receive content obtain access to that content. Current and correct identification of engaged recipients is therefore critical to our customers' success. While targeted distribution limits access to new content, this aspect also improves recipient side engagement by eliminating unwanted content.
Play MPE® actively manages curated and targeted distribution lists or "packages". List creation and list maintenance involve several proprietary processes that are designed to create complete, active, accurate, and targeted lists to facilitate efficient marketing campaigns. Play MPE® provides more than 400 unique targeted lists comprising of around 17,000 unique and active recipients over 60 countries. To facilitate targeted music marketing campaigns, these lists are grouped by territory (typically by country), by genre of music, and by recipient type (see recipient player discussion). Relying on proprietary technical innovations and processes, these recipient lists are updated in real time. With an annual churn averaging between 27-34%, these recipient lists would quickly become inaccurate absent Play MPE®'s active curation. Play MPE® regularly monitors activity levels and recipients through proprietary analytics. Play MPE® provides the widest and most accurate distribution channels available in the industry.
For smaller record labels and independent artists, the provision of a list of destinations is a requirement for sale as these customers do not know who to contact. For larger record labels, promotions staff can upload their own contact lists. However, proprietary processes ensure Play MPE® lists are more accurate, complete and engaged. The majority of releases distributed through Play MPE®, include at least one targeted distribution list, curated by Play MPE®.
Play MPE® Player
Music curators review and download content through a cloud-based player and mobile apps (iOS and Android). Web players are currently available in 15 different languages: English, Spanish, Swedish, Finnish, Italian, Dutch, Portuguese, French, Japanese, German, Norwegian, Latvian, Lithuanian, Estonian, and Danish.
Recipients on the Play MPE® platform have a wide variety of personas and include programming directors for internet streaming, satellite or terrestrial radio, retail store curators, sports stadium DJs, clubs, events, music reviews in newspapers or magazines, on-air personalities, music supervisors who program TV, movies, commercials or video games, or "A&R" representatives at larger record labels. Each recipient within the Play MPE® platform has a unique library of music catered to, and appropriate for, that recipient.
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Recipients benefit from many features that make it easy to access, collaborate, review, and search for content. Play MPE®'s mobile apps offer off-line listening capabilities, the ability to utilize Google Chromecast and Apple Airplay streaming capabilities, creation of playlists, sorting, flagging and archiving features, and easier access to release metadata. Recipient side satisfaction directly increases activity which directly improves the effectiveness of promotional efforts of record label customers.
MTRTM
The Company launched MTRTM in the fourth quarter of fiscal 2024 to address an unmet need identified among smaller Play MPE® customers. Current MTRTM revenue is primarily derived from this customer segment.
MTRTM is an early-stage technology operating within the large and expanding radio tracking industry. The Company continues to develop additional functionality to enable broader commercial adoption, including features designed for users with greater data requirements and larger music repertoires.
BUSINESS DEVELOPMENT
Play MPE®
The Company is focused on expanding its market share of promotional distribution of music by expanding the use of the Play MPE® platform. Management believes that its current competitive advantages and market dynamics will lead to an increased market share for Play MPE® worldwide. With Play MPE®'s existing competitive advantages, management is currently investing in new features and processes to grow activity and users both sides of the transactions that generate revenue for Play MPE® and improved marketing processes. Growth is expected to come with improved sales and marketing activities and platform changes to encourage recipient and customer expansion.
Play MPE® has long standing and well-established use in several genres of music within the United States, and all music genres in Australia, New Zealand, Sweden, Finland, Norway, and Denmark. Within the United States, Play MPE® has a very long history and strong user base within the Christian, Country, Non - Commercial/NPR, College, Triple A, and Americana music genres.
The Company plans to further strengthen its presence through increased sales and marketing efforts aimed at expanding its customer base and supporting future growth.
MTRTM
MTRTM's initial customer base comprised primarily Play MPE® users tracking a limited number of singles within North America. The Company achieved early success in attracting low-volume Play MPE® customers in the United States; however, adoption to date has been limited among higher-volume customers and users outside of the Play MPE® platform. By the fourth quarter, MTRTM introduced enhanced functionality to support volume-based purchasing. The Company is evaluating opportunities to expand tracking capabilities beyond songs, broaden its global footprint, and further develop solutions suited to larger customers and those not currently utilizing Play MPE®.
Significant Customers
During the year ended August 31, 2025, we generated 46.9% of total revenue from one customer (2024 - 42.7%).
OUR BUSINESS OPERATIONS
As of November 24, 2025, the Company had 30 full-time employees and 6 full-time consultants.
COMPETITION
Play MPE®
Where a specific platform or method of distribution dominates a particular market segment, there are significant barriers to entry. This aspect applies where Play MPE® dominates a market segment or where a competitive platform dominates a segment in which Play MPE® is attempting to expand. Customers are reluctant to move to a new method, often abandoning established processes in favor of an improved platform gradually. This creates a resistance to change at both the recipient and sender level.
Play MPE® has numerous regional competitors isolated to a specific segment that vary by territory and customer types. Competitive alternatives include physical delivery, one-time digital deliveries providers, regional promotional platforms or digital archives. Digital archives are libraries of browsable music content that keep music in an organized database that can be accessed over a period of time. Play MPE® is a digital archive.
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Digital archives have numerous advantages over both physical and simply digital delivery services. In many cases these options are not designed for the industry, do not provide integrations, do not provide reporting, artist information and metadata are unavailable or less accessible and produce a lower rate of transfer. While these options are typically less expensive, they also provide significantly lower value.
Play MPE®'s advantages over competing archival platforms can be grouped into functionality that is either necessary to efficiently manage global marketing processes, or functionality that is isolated to local promotions campaigns or a more intuitive, improved user experience.
No other competing system provides the breadth of international distribution recipient lists or active recipients. The Company is unaware of any system that provides the unique global distribution functionality that provides significant competitive advantages in a cross market, cross label, global music marketing environment. Play MPE®'s features that facilitate global marketing campaigns are critical to the Company's global agreement with our largest client and a significant barrier to entry for a competitive offering. This agreement facilitates use by this client in numerous territories globally but does not guarantee it.
Play MPE® provides a superior user experience with its local distribution platform and on its players. The superior user experience and accurate and engaged recipient lists that Play MPE® provides results in increased activity on both sides of the platform. With increased activity, a marketing campaign's effectiveness increases.
When targeting a specific and incremental territory, the Company either has a dominant competitor or the market is fragmented. In both cases, it is critical that Play MPE® establish a network of activity on both sides of the platform by gathering content and obtaining recipient activity. The Company continues to monitor competitive developments and remains focused on innovation, platform enhancements, and customer experience improvements to strengthen its position across key markets.
MTRTM
MTRTM is designed to track song airplay across a broad network of broadcasting stations, addressing a growing demand for comprehensive and reliable airplay data. The global market for airplay monitoring and analytics is expanding rapidly as labels, artists, and promoters seek deeper insights to guide promotional strategy and measure campaign success. While long-established charting platforms typically focus on major stations within limited geographic areas, MTRTM targets a broader and underserved segment of the market. When combined with Play MPE®, MTRTM uniquely positions the Company to link music distribution data with airplay results, creating a powerful data ecosystem that can inform release strategies and strengthen the value proposition for customers at all levels of the industry.
SEASONALITY AND CYCLICALITY
Our operating results and operating cash flows have been subject to significant seasonal variations where holidays around late December typically result in lower-than-average sales. The Company has recently begun promoting archival distributions to take advantage of staff capacity and to provide greater value to both clients and recipients and to increase revenue around this time.
GOVERNMENT REGULATION
We are not currently subject to direct regulation by any governmental agency other than laws and regulations generally applicable to businesses. It is possible that a number of laws and regulations may be adopted in both the United States and Canada with particular applicability to the Internet. Governments have and may continue to enact legislation applicable to us in areas such as content distribution, performance and copying, other copyright issues, network security, encryption, the use of key escrow data, privacy protection, caching of content by server products, electronic authentication or "digital" signatures, illegal or obscene content, access charges and retransmission activities. The applicability to the Internet of existing laws governing issues such as property ownership, content, taxation, defamation, and personal privacy is also uncertain. Export or import restrictions, new legislation or regulation or governmental enforcement of existing regulations may limit the growth of the Internet, increase our costs of doing business or increase its legal exposure.
The Company owns proprietary algorithms, source code, web domain addresses, patents, trademarks and other intellectual property.
Patents
1. Digital Locking "Digital Media Distribution Method and System" (US Patent No. 7466823)
This patent provides a method of locking digital content which prevents play back on unauthorized machines and devices. Claims include separating security from the content, so that content files can be shared securely over peer-to-peer networks. This is one of the earliest patents for securing peer-to-peer distributed content.
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One of the more important claims in this patent is the ability to uniquely recognize a particular computer. Uniquely identifying a person's computer is a common issue which is usually approached by saving cookies or beacons to the user's computer or by tracking IP addresses. These are not reliable solutions as cookies are easily deleted and IP addresses easily changed. The Company's proprietary hash code process creates a serial number that can be used to recognize the user on subsequent visits without ever saving anything to that user's computer.
Watermarking "Methods for Watermarking Media Data"
i. US Patents No. 7983441,8300885, 9165560, 9679574
ii. United Kingdom and Europe Patent No. 2082527
We have developed a watermarking technology which can uniquely identify the individual who originally accessed a particular song. Our watermark is unique as it can be embedded and identified rapidly, it is inaudible, it survives on air broadcast, compression and conversion to other formats and is virtually impossible to remove. Our watermarking technology is used in the Play MPE® distribution system when songs are exported or when streaming a track. Other watermarking technologies are slow and provide a trade-off between a destruction of audio quality and the ease that they can be filtered out. When the original patent claims were granted in the US, the Company filed a set of new additional, broader claims in a continuation application in Canada and the US to further protect the technology.
2. Cross Platform Streaming Video "Script Based Video Rendering"
a. US Patents No. 9143826, 9137567, 9215499, 9571886, 9380338, 9432726, 9432727, 10645405
b. China Patent No. 201280050754.7
This solution enables publishers to serve streaming video from their web site without the need for a separate streaming server. The solution will play instantly in all recent browsers, including mobile devices, without the need for a separate video player.
Registered Trademarks
Play MPE®
Granted: USA, Canada, Japan, European Union, China and Australia
MPE®
Granted: Canada, Japan,
Sonox Digital®
Granted: China, Canada
Clipstream®
Granted: USA, Canada, Japan, Israel, European Union, China and Australia
MTRTM
Domain Names
We own a large number of domain names, including many valuable four-letter domain names (dice.net, dsny.com) and URL's featuring common words (radio-play.com, streamingaudio.com, pirateradio.com and many others).
ITEM 1A. RISK FACTORS.
You should carefully consider the following risk factors, together with the other information contained in this annual report on Form 10-K, including our financial statements and the related notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations," before making a decision to purchase or sell shares of our common stock. We cannot assure you that any of the events discussed in the risk factors below will not occur. These risks could have a material and adverse impact on our business, results of operations, financial condition and growth prospects. If that were to happen, the trading price of our common stock could decline. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations or financial condition. In this section, we first provide a summary of the more significant risks and uncertainties we face and then provide a full set of risk factors and discuss them in greater detail.
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If revenues decline, then our financial condition and results of operations will be adversely affected.
Our revenue is predominantly generated from our Play MPE® distribution service. Competitors may arise and/or customers may not renew distribution contracts. This factor could cause our revenue to decrease with the result that our financial condition and operating results would be adversely affected. Competitors have been small, regionally based, have limited resources, and have yet to capture a material share of the market. If a competitor were to develop a comparable or superior product, our market share could be reduced.
If we are not able to control our operating expenses, then our financial condition may be adversely affected.
Our ability to maintain profitability is conditional upon our ability to control our operating expenses. There is a risk that we will have to increase our operating expenses in the future. Factors that could cause our operating expenses to increase include: our determination to spend more on sales, marketing, and business development to increase product sales, our determination that more research and development expenditures are required to keep our current software products competitive, or to develop new products for the market. To the extent that our operating expenses increase without a corresponding increase in revenue, our financial condition would be adversely impacted.
If we are not successful in legal proceedings against us, then our business and financial condition could be adversely affected.
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, however if we are not successful in these legal proceeding and are forced to make payments of damages to the plaintiffs, then our business and our financial condition would be adversely affected.
Our financial results may be adversely impacted by currency fluctuations.
Our revenues are primarily in United States dollars while our operating expenses are primarily in Canadian dollars. An increase in the value of the Canadian dollar in relation to the United States dollar could have the effect of decreasing our income from operations. The Company maintains a large portion of its financial reserves in Canadian dollars to mitigate the downside risk of adverse exchange rates on its operating expenditures. Company has not entered into contracts for foreign exchange hedges.
If our products are defective or contain errors, we may become subject to product liability claims.
As a result of their complexity, our software products may contain undetected errors or failures when first introduced or as new versions are released. There can be no assurance that, despite testing we undertake and testing and use by current and potential customers, errors will not be found in new products after commencement of commercial use. The occurrence of such errors could result in loss of or delay in market acceptance of our products, which could have a material adverse effect on our business, financial condition, and results of operations. Our products also may be vulnerable to break-ins and similar disruptive problems caused by Internet or other users.
Such computer break-ins and other disruptions would jeopardize the security of information stored in and transmitted through the computer systems of our customers, which may result in significant liability to us and deter potential customers. The sale and support of our products may entail the risk of liability claims. A product liability claim brought against us could have a material adverse effect on our business, financial condition, and results of operations.
Successful expansion of our business will depend on our ability to manage growth.
Should we be successful in the sales, marketing, and business development efforts of our software products, we will experience significant growth in operations. If this occurs, management anticipates that additional expansion will be required to continue our product development. Any expansion of our business would place further demands on our management, operational capacity, and financial resources. We anticipate that we may need to recruit qualified personnel in all areas of operations, including management, sales, marketing, delivery, and software development. There can be no assurance that we will be effective in attracting and retaining additional qualified personnel, expanding operational capacity or otherwise managing growth. In addition, there can be no assurance that our current systems, procedures, or controls will be adequate to support any expansion of our operations. The failure to manage growth effectively could have a material adverse effect on our business, financial condition, and results of operations.
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Our network infrastructure could be vulnerable to system failure and/or security risks, including cybersecurity risks.
Despite the implementation of security measures, our network infrastructure could be vulnerable to unforeseen computer problems. Although we believe we have taken steps to mitigate much of the risk, we may in the future experience interruptions in service as a result of the accidental or intentional actions of Internet users, current and former employees, or others. Unknown security risks may result in liability to us and may also deter new customers from purchasing our software and services, and individuals from utilizing it. Although we intend to continue to implement and establish security measures, there can be no assurance that measures implemented by us will not be circumvented in the future, which could have a material adverse effect on our business, financial condition, or results of operations.
Our business depends on continued development of the internet and intranets as mediums of commerce and communications, and our ability to evolve along with these mediums.
The market for our streaming media products and services is new and evolving rapidly. It depends on increased use of the Internet and intranets. If the Internet and intranets are not adopted as methods for commerce and communications, or if the adoption rate slows, the market for our products and services may not grow or may develop more slowly than expected.
Sales of our products depend in large part on the continued development of the Internet as a viable commercial marketplace. There are now substantially more users and much more "traffic" over the Internet than ever before, use of the Internet is growing faster than anticipated, and the technological infrastructure of the Internet may be unable to support the demands placed on it by continued growth. Delays in development or adoption of new technological standards and protocols, or increased government regulation, could also affect Internet use. In addition, issues related to use of the Internet and intranets, such as security, reliability, cost, ease of use and quality of service, remain unresolved and may affect the amount of business that is conducted over the Internet and intranets.
We could experience product delays and errors, which could affect our ability to adapt to technological changes and evolving industry standards.
We have previously experienced development delays and cost overruns associated with our product development efforts. We may encounter such problems in the future. Delays and cost overruns could affect our ability to respond to technological changes, evolving industry standards, competitive developments, or customer requirements. Our products also may contain undetected errors that could cause adverse publicity, reduced market acceptance of the products, or lawsuits by customers.
Our business could be adversely affected by online commerce security failures.
Online commerce and communications depend on the ability to transmit confidential information securely over public networks. Any compromise of our ability to transmit confidential information securely, and costs associated with the prevention or elimination of such problems, could have a material adverse effect on our business.
Our business is international and could be affected by unexpected changes in international regulatory standards and laws.
We market and sell our products in the United States, Canada, Europe, Asia, South America, Africa and Australia. As such, we are subject to the normal risks of doing business abroad. Risks include unexpected changes in regulatory requirements, export and import restrictions, tariffs and trade barriers, difficulties in staffing and managing foreign operations, longer payment cycles, problems in collecting accounts receivable, potential adverse tax consequences, exchange rate fluctuations, increased risks of piracy, limits on the our ability to enforce our intellectual property rights, discontinuity of our infrastructures, limitations on fund transfers and other legal and political risks. Such limitations and interruptions could have a material adverse effect on our business.
Customer concentration.
During the year ended August 31, 2025, 46.9% of the Company's revenue is derived from one customer with operations in numerous countries. This customer currently operates under a month-to-month arrangement without a long-term contractual commitment. This customer remains of key importance to our operations and any adverse change to the revenue from this customer would have a material adverse effect on our results of operations.
9
ITEM 1B. UNRESOLVED STAFF COMMENTS.
None.
ITEM 2. PROPERTIES.
The Company has secured a one-year renewable annual lease for office space in downtown Vancouver, British Columbia, scheduled to expire on April 30, 2026.
ITEM 3. LEGAL PROCEEDINGS.
From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. Except as described below, we are not aware of any such legal proceedings or claims against us.
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 claims were heard in B.C. Supreme Court in December 2024. On October 24, 2025, the Supreme Court of British Columbia issued judgment dismissing all claims against the Company, its directors, and officers, and awarding the Company its costs.
ITEM 4. MINE SAFETY DISCLOSURES.
Not Applicable.
10
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Market Information
Our shares are currently trading on the OTCQB under the stock symbol DSNY. The average high and the low trading prices for our shares for each quarter of the last two fiscal years were:
|
QUARTER |
HIGH ($) |
LOW ($) |
|
1st Quarter 2024 |
$1.03 |
$0.79 |
|
2nd Quarter 2024 |
$1.08 |
$0.90 |
|
3rd Quarter 2024 |
$1.11 |
$0.90 |
|
4th Quarter 2024 |
$1.02 |
$0.67 |
|
1st Quarter 2025 |
$0.80 |
$0.60 |
|
2nd Quarter 2025 |
$0.76 |
$0.45 |
|
3rd Quarter 2025 |
$0.54 |
$0.31 |
|
4th Quarter 2025 |
$0.54 |
$0.20 |
The trades reflect inter-dealer prices, without retail mark-up, markdown or commission and may not represent actual transactions.
Our shares are also traded on the TSX Venture Exchange under the symbol DSY.
Holders of Common Stock
As of November 24, 2025 our shareholders' list for our common stock showed 58 registered shareholders and 9,637,410 shares of our common stock outstanding.
Dividends
We have not declared or paid any cash dividends on our capital stock. Any future determination regarding the declaration and payment of dividends will be made at the discretion of our Board of Directors, based on factors it considers relevant at the time, including the Company's financial condition, operating results, capital requirements, and applicable corporate law.
Recent Sales of Unregistered Securities
For a description of our equity compensation plans, please see Item 11 of this report on Form 10-K.
Repurchases of Equity Securities by the Issuer and Affiliated Purchasers
During the year ended August 31, 2025, the Company did not repurchase or cancel any common shares (August 31, 2024 - 459,200 common shares for $470,271).
Securities Authorized for Issuance Under Equity Compensation 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 481,870 common shares remain eligible for issuance under the 2015 Plan. On February 18, 2022, our Board of Directors approved the Company's 2022 Stock Option Plan (the "2022 Plan"), (together with the 2015 Plan, the "Plans"), whereby 1,000,000 common shares are reserved for issuance. A total of 371,500 common shares remain eligible for issuance under the 2022 Plan.
See Item 11 "Executive Compensation - Equity Compensation Plan Information" for additional information regarding the Plan.
11
ITEM 6. SELECTED FINANCIAL DATA.
Per §229.301 of Regulation S-K, the Company, designated a Smaller Reporting Company as defined in Section §229.10(f)(1) of Regulation S-K, is not required to provide selected financial data. Management's Discussion and Analysis of Financial Condition and Results of Operations is intended to help the reader understand the results of operations and financial condition of the Company and should be read in conjunction with our audited consolidated financial statements and notes thereto for the year ended August 31, 2025.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following management discussion and analysis of our financial condition and results of operations should be read together with our consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report on Form 10-K, including information with respect to our plans and strategy for our business and financing needs, includes forward-looking statements that involve risks and uncertainties and should be read together with the "Risk Factors" section of this Annual Report on Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed below and elsewhere in this Annual Report and in other reports we file with the SEC, particularly those under "Risk Factors."
Components of Results of Operations
Service revenue
The majority of the Company's revenue is generated from digital media distribution service. The service is billed either based on usage or on a fixed fee which is based on the volume and size of distributions provided. All revenues are recognized as the services are rendered to customers.
Cost of revenue
Cost of revenue primarily consists of personnel costs for our operations service and technical support employees and engineering support staff, cloud infrastructure costs, incremental transaction costs such as merchant and processing fees, and costs of external customer support software and services. In each case, personnel costs include salaries, benefits and any other compensation paid to such staff.
Operating expenses
Our technologies and products are developed and maintained in-house, the majority of our expenditures are contributed towards salaries, wages and benefits. Our operations are primarily conducted in Canada and therefore, our costs are primarily incurred in Canadian dollars while our revenues are primarily denominated in US dollars. Thus, operating expenses and the results of operations are impacted, to the extent they are not hedged, by the rise and fall of the relative values of the Canadian dollar to these currencies. The Company maintains a large portion of its financial reserves in Canadian dollars to mitigate the downside risk of adverse exchange rates on its operating expenditures.
- General and administrative expenses consist of salaries and related personnel costs including overhead, office rent, professional fees, shareholder relations, and general office expenses.
- Sales and marketing expenses consist of salaries and related personnel costs including overhead, office rent, and telecommunications costs. Sales and marketing expenses also include advertising and marketing expenditures, which consist of promotional materials, online or print advertising, business development tools, and marketing or business development related travel costs, including attendance at conference or trade shows, and record label and client visits.
- Product development expenses consist primarily of salaries and related personnel costs including overhead and consulting fees with respect to product development and deployment.
12
RESULTS OF OPERATIONS FOR THE YEARS ENDED AUGUST 31, 2025 AND 2024
Revenue
Total revenue for the year ended August 31, 2025 increased by 2.3% to $4,524,448 compared to the revenue of $4,420,768 for the year ended August 31, 2024. Adjusted for impacts of foreign currency translation, Play MPE® revenue increased 2.6% year over year.
Revenue growth was driven by a 6.8% increase in the Company's major label segment. Play MPE®'s distribution services also extend to large independent labels, promotion professionals, smaller record labels, and artists-collectively referred to as independent labels.
The Company achieved a 7.4% increase in total independent customers, reflecting improved marketing and customer conversion. Despite this growth, average spending from larger record labels and promoters declined, influenced by macroeconomic conditions. As a result, independent label revenue decreased by 3.4%, partially offsetting gains from the major label segment.
The United States independent label segment, representing approximately 40% of total Play MPE® revenue, experienced a 5.3% increase in its customer base but a 4.4% decline in segment revenue, driven by smaller average purchase sizes. Outside the U.S., independent label revenue increased by 3.3%, supported by international customer growth. Management believes the spending contraction within the U.S. segment is temporary and anticipates recovery as market conditions improve. In response, pricing and product adjustments are being implemented to encourage higher purchase volumes and values.
MTR™ Launch and Strategic Insights
At the end of fiscal 2024, the Company launched MTR™, a radio and digital airplay tracking tool, in the United States and Canada. MTR™ addresses a large and expanding radio tracking market focused on real-time analytics, copyright compliance, and data-driven decision-making within the music industry.
During the year, the Company observed an 89% correlation between Play MPE® downloads and subsequent tracked airplay for our independent label customers, as well as patterns indicating optimal distribution times and engagement-driving activities. These insights are expected to inform future product and marketing strategies.
Currently, MTR™ represents less than 1% of total revenue, with the majority of customers also using Play MPE®. The Company is focused on broadening MTR™ adoption beyond the Play MPE® ecosystem and increasing purchase volumes among both existing and new customers. Notably, 1.4% of Play MPE® sales during the year originated through MTR™ sales, demonstrating early cross-platform synergies and growth potential.
Revenue by Currency
The Company's revenues are denominated predominantly in US Dollars, Euros and Australian Dollars.
| % of Total Revenue | ||
| Currency | 2025 | 2024 |
| US Dollar | 91.8% | 48.1% |
| Euro | 1.2% | 45.0% |
| Australian Dollar | 3.5% | 4.3% |
| Other | 3.5% | 2.6% |
The shift in currency mix year-over-year is primarily attributable to one major customer transitioning its billing arrangement from Euros to U.S. Dollars during the fiscal year.
Cost of Revenue
Cost of revenue for the year ended August 31, 2025 increased by 12.5% to $686,553 compared to the cost of revenue of $610,527 for the year ended August 31, 2024.
The Company's cost of revenue primarily includes data hosting and processing, third-party transaction costs, and engineering, technical, and customer support expenses. These costs are influenced by transaction volume and the mix between full-service and self-service customers, with self-service users uploading and publishing releases independently and full-service customers supported by internal staff.
13
Gross Margin
Gross margin for the year ended August 31, 2025 was 84.8% of revenue, which represents a 1.4 percentage point decrease compared to the year ended August 31, 2024. This decline in gross margin is primarily caused by infrastructure required to build out the MTR™ business.
Operating Expenses
Operating costs during the year ended August 31, 2025 increased by 20.0% to $4,500,961 (2024 - $3,749,684). The increase in operating costs was primarily the result of the following:
- An increase of 77.4% in (non-cash) amortization expenditures, primarily related to the capitalization of salaries and wages in previous periods. This increase contributed a 9.7% increase to overall expenditures.
- A one-time, non-repeating cost associated with litigation increasing total costs by 6.6%. On October 24, 2025, the Company received a favorable judgement. All claims have been dismissed, and the Company was awarded costs; however no related recoveries have been recognized in the financial statements as of the reporting date.
- Telecommunication expenses contributed to a 3.3% increase in total costs, primarily driven by operating costs related to MTR™.
- Wages and benefits contributed to 1.9% increase in total expenditures, mostly due to one-time recruitment fee and lower capitalized salaries and wages during the year. The above increases were partially offset by a reduction in overall staffing, as the Company prioritized increased productivity and operational efficiency.
For ease of reference the following table has been prepared to present operating results had the Company not capitalized software for fiscal years 2025 and 2024.
| 2025 | 2024 | |||||
| Net Income for the Year | $ | (637,877 | ) | $ | 111,758 | |
| Capitalized Software Development | (306,052 | ) | (476,258 | ) | ||
| Adjustment to Amortization of Capitalized Software | 801,201 | 440,044 | ||||
| Adjusted net income/(loss) for the year | $ | (142,728 | ) | $ | 75,544 | |
General and Administrative Expenses
| 2025 | 2024 | $ Change | % Change | |||||||||
| Wages and benefits | $ | 361,433 | $ | 331,668 | 29,765 | 9.0% | ||||||
| Professional fees | 361,585 | 121,170 | 240,415 | 198.4% | ||||||||
| Office and miscellaneous | 94,528 | 84,287 | 10,241 | 12.2% | ||||||||
| Public company expenditures | 66,738 | 67,341 | (603 | ) | (0.9%) | |||||||
| Rent | 51,607 | 44,158 | 7,449 | 16.9% | ||||||||
| Foreign exchange loss (gain) | (50,252 | ) | 8,401 | (58,653 | ) | (698.2%) | ||||||
| Telecommunications | 9,108 | 8,520 | 588 | 6.9% | ||||||||
| Bad debt | 51,055 | (2,700 | ) | 53,755 | (1990.9%) | |||||||
| Other | 42,840 | 35,151 | 7,689 | 21.9% | ||||||||
| Total general and administrative expenses | $ | 988,642 | $ | 697,996 | 290,646 | 41.6% |
General and administrative expenses remained consistent with expectations, with a notable increase in professional fees related to the final stages of the litigation concluded on October 24, 2025. All claims were dismissed and the Company was awarded costs; however, no accruals related to the cost recovery has been recorded as of the reporting date. The increase in wages and benefits is primarily due to a one-time recruitment fee. Foreign exchange loss is mostly driven by the fluctuations of Canadian Dollar during the year.
Sales and Marketing Expenses
| 2025 | 2024 | $ Change | % Change | |||||||||
| Wages and benefits | $ | 761,387 | $ | 896,871 | (135,484 | ) | (15.1%) | |||||
| Advertising and marketing | 123,110 | 126,294 | (3,184 | ) | (2.5%) | |||||||
| Rent | 24,336 | 34,563 | (10,227) | (29.6%) | ||||||||
| Telecommunications | 1,268 | 5,748 | (4,480) | (77.9%) | ||||||||
| Total sales and marketing expenses | $ | 910,101 | $ | 1,063,476 | (153,375 | ) | (14.4%) |
14
Sales and marketing expenses declined as the Company restructured its business development group, leading to a reduction in overall staffing. Looking ahead, the Company expects to increase these expenditures, with a focus on marketing-related initiatives, as upcoming Play MPE® platform enhancements are anticipated to drive greater customer adoption.
Product Development Expenses
| 2025 | 2024 | $ Change | % Change | |||||||||
| Wages and benefits | $ | 1,365,129 | $ | 1,189,710 | 175,419 | 14.7% | ||||||
| Software services | 115,590 | 101,772 | 13,818 | 13.6% | ||||||||
| Rent | 71,281 | 71,795 | (514 | ) | (0.7%) | |||||||
| Telecommunications | 216,604 | 155,134 | 61,470 | 39.6% | ||||||||
| Product development expenses | $ | 1,768,604 | $ | 1,518,411 | 250,193 | 16.5% |
Product development costs increased as a result of a lower capitalization rate associated with software development. This increase is partially offset by a reduction in overall staffing, as the Company prioritized increased productivity and operational efficiency. In addition, telecommunication expenses increased as a result of infrastructure investments related to the development of the MTR™ business.
Depreciation and Amortization
Depreciation and amortization expense increased to $833,614 for the year ended August 31, 2025 from $469,801 for the year ended August 31, 2024, an increase of 77.4% was due to depreciation of additionally capitalized software development costs associated with MTRTM, and recently capitalized additions to Play MPE platform.
Other Income
Interest income earned on the Company's mutual funds was $25,189 for the year ended August 31, 2025 (2024 - $51,201). The interest income decreased by 50.8% year over year mostly due to decreased interest rates.
Net Income (Loss)
For the year ended August 31, 2025, we reported a net loss of $637,877 (2024 - net income of $111,758).
For the year ended August 31, 2025, adjusted EBITDA was $202,276 (2024 - $577,284). Adjusted EBITDA is not defined under U.S. GAAP, and it may not be comparable to similarly titled measures reported by other companies. We used Adjusted EBITDA, along with other GAAP measures, as a measure of our profitability because Adjusted EBITDA helps us to compare our performance on a consistent basis by removing from our operating results the impact of our capital structure, the effect of operating in different tax jurisdictions, the impact of our asset base, which can differ depending on the book value of assets, the accounting methods used to compute depreciation and amortization, the existence or timing of asset impairments and the effect of non-cash stock-based compensation expense.
We believe Adjusted EBITDA is useful to investors as it is a widely used measure of performance and the adjustments we make to Adjusted EBITDA provide further clarity on our profitability. We remove the effect of non-cash stock-based compensation from our earnings which can vary based on share price, share price volatility, and expected life of the equity instruments we grant. In addition, this stock-based compensation expense does not result in cash payments by the Company. Adjusted EBITDA has limitations as a profitability measure in that it does not include provisions for income taxes, the effect of our expenditures on capital assets, the effect of non-cash stock-based compensation expense and the effect of asset impairments. The following is a reconciliation of net income from operations to Adjusted EBITDA
| 2025 | 2024 | |||||
| Net income (loss) | $ | (637,877 | ) | $ | 111,758 | |
| Current income tax | - | - | ||||
| Stock-based compensation | 31,728 | 46,926 | ||||
| Depreciation and amortization | 833,614 | 469,801 | ||||
| Interest income | (25,189 | ) | (51,201 | ) | ||
| Adjusted EBITDA | $ | 202,276 | $ | 577,284 |
15
LIQUIDITY, FINANCIAL CONDITION
As of August 31, 2025, we held $1,117,889 (2024 - $1,481,582) in cash and cash equivalents. 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 2.3% - 2.9%.
On August 31, 2025, we had working capital of $1,634,587 compared to $1,842,071 as at August 31, 2024. The decrease in our working capital was primarily due to operating results.
Cash Flows
The following table sets forth a summary of the net cash flow activity for each of the years indicated:
| Net cash and cash equivalents provided by (used in) | 2025 | 2024 | $ Change | % Change | ||||||||
| Operating activities | $ | 65,156 | $ | 429,188 | (364,032 | ) | (84.8%) | |||||
| Investing activities | (335,184 | ) | (484,419 | ) | 149,235 | (30.8%) | ||||||
| Financing activities | - | (470,271 | ) | 470,271 | (100.0%) | |||||||
| Effect of foreign exchange rate changes on cash | (93,665 | ) | 4,315 | (97,980 | ) | (2270.7%) | ||||||
| Net decrease in cash and cash equivalents | $ | (363,693 | ) | $ | (521,187 | ) | 157,494 | (30.2%) |
Net cash provided by operating activities during the year ended August 31, 2025 was $65,156 (2024 - $429,188).
Investing Activities
Net cash used in investing activities for the year ended August 31, 2025 was $335,184, compared to cash used in investing activities of $484,419 for the year ended August 31, 2024. The year-over-year decrease in use of cash is due to the higher proportion of software development salaries and wages being capitalized in the prior year.
Financing Activities
Net cash used in financing activities during the year ended August 31, 2025 was $nil (2024 - $470,271). In 2024, this cash was used to repurchase and retire common stock of the Company under the Normal Course Issuer Bid ("NCIB"). None such repurchases occurred in 2025.
CAPITAL RESOURCES
The Company does not have any material commitments for capital expenditures and the Company is able to meet current and expected growth with income from operations.
OFF-BALANCE SHEET ARRANGEMENTS
As of August 31, 2025, the Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
16
CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGEMENTS AND ESTIMATES
Our management's discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States, or GAAP. The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities in our financial statements and accompanying notes. We evaluate these estimates and judgments on an ongoing basis. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
While our significant accounting policies are more fully described in Note 2 to our financial statements, we believe that the following accounting policies are the most critical for fully understanding and evaluating our financial condition and results of operations:
Revenue Recognition
The Company's revenue is derived from software as a service (SaaS) arrangements. The Company accounts for revenue in accordance with ASC 606. The core principle of ASC 606 is to recognize revenue upon the transfer of products or services to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products or services. ASC 606 prescribes a five-step model for recognizing revenue from contracts with customers: (1) identify the contract(s) with customers; (2) identify the separate performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the separate performance obligations in the contract; and (5) recognize revenue when (or as) the performance obligations are satisfied. The majority of our revenue is generated from digital media distribution service. The service is billed either based on usage or on a fixed fee which is based on the volume and size of distributions provided. All revenues are recognized on a monthly basis as the services are delivered to customers.
Research and Development Expense for Software Products
Our software solutions are offered to our customers through software as a service delivery models. 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 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. We test for impairment whenever events or changes in circumstances that could impact recoverability occur.
Stock-Based Compensation
We recognize the costs of employee services received in stock-based payment transactions according to the fair value provisions of the current stock-based payment guidance. The fair value of employee services received in stock-based payment transactions is estimated at the grant date and recognized over the requisite service period. Determining the appropriate fair value model and calculating the fair value of stock-based awards requires judgment, including estimating stock price volatility, forfeiture rates and expected life. We selected the Black-Scholes option pricing model as the most appropriate method for determining the estimated fair value of our stock-based awards. The Black-Scholes model requires the use of highly subjective and complex assumptions which determine the fair value of stock-based awards, including the option's expected term and the price volatility of the underlying stock. Our current estimate of volatility is based on historical and market-based implied volatilities of our stock price. To the extent volatility of our stock price increases in the future, our estimates of the fair value of options granted in the future could increase, thereby increasing stock-based compensation cost recognized in future periods. We derive the expected term assumption primarily based on our historical settlement experience, while giving consideration to options that have not yet completed a full life cycle. Stock-based compensation cost is recognized only for awards ultimately expected to vest. Our estimate of the forfeiture rates is based primarily on our historical experience. The estimated forfeiture rates may differ from actual forfeiture rates which would affect the amount of expense recognized during the period. In the future, as empirical evidence regarding these input estimates is available to provide more directionally predictive results, we may change or refine our approach of deriving these input estimates.
17
Income Taxes
Deferred income tax assets and liabilities are computed based on differences between the carrying amount of assets and liabilities on the balance sheet and their corresponding tax values using the enacted income tax rates by tax jurisdiction at each balance sheet date. Deferred income tax assets also result from unused loss carry forwards and other deductions. The valuation of deferred income tax assets is reviewed annually and adjusted, if necessary, by use of a valuation allowance to reflect the estimated realizable amount. Significant management judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities and any valuation allowance recorded against our net deferred tax assets. We evaluate all available evidence, such as recent and expected future operating results by tax jurisdiction, and current and enacted tax legislation and other temporary differences between book and tax accounting to determine whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. There is a risk that management estimates for operating results could vary significantly from actual results, which could materially affect the valuation of the future income tax asset. Although the Company has tax loss carryforwards and other deferred income tax assets, management has determined certain of these deferred tax assets do not meet the more likely than not criteria, and accordingly, these deferred income tax asset amounts have been completely offset by a valuation allowance as disclosed in Note 7 of our consolidated financial statements. If management's estimates of the cash flows or operating results do not materialize due to errors in estimates or unforeseen changes to the economic conditions affecting the Company, it could result in an impairment adjustment in future periods.
Accounts Receivable and Allowance for Doubtful Accounts
We extend credit to our customers based on evaluation of an individual customer's financial condition and collateral is generally not required. Accounts outstanding beyond the contractual payment terms are considered past due. We determine our allowance for doubtful accounts by considering a number of factors, including the length of time accounts receivable are beyond the contractual payment terms, our previous loss history, and a customer's current ability to pay its obligation to us. We write off accounts receivable when they are identified as uncollectible. All outstanding accounts receivable accounts are periodically reviewed for collectability on an individual basis.
Contingencies
As discussed under "Item 3. Legal Proceedings" and in Note 7 - "Commitments and Contingencies" in notes to consolidated financial statements, the Company is subject to various legal proceedings and claims that arise in the ordinary course of business. In accordance with US GAAP, the Company records a liability when it is probable that a loss has been incurred and the amount can be reasonably estimated. There is significant judgment required in both the probability determination and as to whether an exposure can be reasonably estimated. In management's opinion, the Company does not have a potential liability related to any current legal proceedings and claims that would individually or in the aggregate materially adversely affect its financial condition or operating results. However, the outcomes of legal proceedings and claims brought against the Company are subject to significant uncertainty. Should the Company fail to prevail in any of these legal matters or should several of these legal matters be resolved against the Company in the same reporting period, the operating results of a particular reporting period could be materially adversely affected.
Impairment of Long-Lived Assets
We evaluate the recoverability of our long-lived assets including tangible assets in accordance with authoritative guidance. When events or changes in circumstances indicate that the carrying amount of long-lived assets may not be recoverable, we recognize such impairment in the event the carrying amount of such assets exceeds the future undiscounted cash flows attributable to such assets. 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. We have not recorded any impairment losses to date.
New Accounting Pronouncements
See Note 2 to the Financial Statements included in Item 8 of this Annual Report.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Foreign Exchange Risk
Our revenues are denominated primarily in United States dollars, Australian dollars and Euros while our operating expenses are incurred primarily in Canadian dollars. Thus, operating expenses and the results of operations are impacted, to the extent they are not hedged, by the rise and fall of the relative values of the Canadian dollar to these currencies. We do not believe aggregated foreign exchange fluctuations in the Euro, and the Australian, Canadian, and US dollars have had a material effect on our results of operations during the years presented.
18
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
19
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, 2025, and the related consolidated statements of comprehensive income (loss), stockholders' equity, and cash flows for the year ended August 31, 2025, 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 of August 31, 2025, and the results of its operations and its cash flows for the year ended August 31, 2025 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. 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. 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. 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 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.
Critical Audit Matters
Capitalization of Payroll Expenses to Intangible Assets
As described in Note 2 to the consolidated financial statements, the Company capitalizes 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 development stage. As more fully described in Note 4 to the consolidated financial statements, payroll expenses of $306,052 were capitalized to software under development in intangible assets.
The principal considerations for our determination that capitalization of payroll expenses to intangible assets is a critical audit matter are that there were judgments made by management when assessing whether the payroll expenses incurred for software application activities were eligible for capitalization. This in turn led to a high degree of auditor judgement, subjectivity, and effort in performing procedures to evaluate management's judgements in assessing the accounting for the capitalization of payroll expenses to intangible assets.
20
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statement. Our audit procedures included, among others:
- Discussed, reviewed and obtained support on how management allocates payroll expenses to software under development.
- Discussed with management regarding the plans and intent for the software under development and computer software.
- Reviewed, discussed and obtained support for the reallocation of software under development to computer software.
- Recalculated amortization of the computer software to ensure amounts recorded were appropriate and in line with the accounting policy.
- Assessed impairment indicators of intangible assets and computer software.
We have served as the Company's auditor since 2025.
/s/
Chartered Professional Accountants
November 24, 2025
21
DESTINY MEDIA TECHNOLOGIES, INC.
Consolidated Balance Sheets
| Notes | August 31, 2025 |
August 31, 2024 |
|||||
| ASSETS | |||||||
| Cash and cash equivalents | $ | $ | |||||
| Accounts receivable, net of allowance for doubtful accounts of $ |
|||||||
| Other receivables | |||||||
| Prepaid expenses | |||||||
| Deposits | |||||||
| Total current assets | |||||||
| Property and equipment, net | 3 | ||||||
| Intangible assets, net | 4 | ||||||
| Total assets | $ | $ | |||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
| Current | |||||||
| Accounts payable | $ | $ | |||||
| Accrued liabilities | |||||||
| Deferred revenue | |||||||
| Total current liabilities | |||||||
| Total liabilities | |||||||
| Commitments and contingencies | 7 | ||||||
| Stockholders' equity | |||||||
| Common stock, par value $ Issued and outstanding - |
5 | ||||||
| Additional paid-in capital | 5 | ||||||
| Accumulated deficit | ( |
) | ( |
) | |||
| Accumulated other comprehensive loss | ( |
) | ( |
) | |||
| Total stockholders' equity | |||||||
| Total liabilities and stockholders' equity | $ | $ |
Note 9 - Subsequent Events
The accompanying notes are an integral part of these consolidated financial statements.
22
DESTINY MEDIA TECHNOLOGIES, INC.
Consolidated Statements of Comprehensive Income (Loss)
| For the years ended August 31, | |||||||
| Notes | 2025 | 2024 | |||||
| Service revenue | 8 | $ | $ | ||||
| Cost of revenue | |||||||
| Hosting costs | |||||||
| Internal engineering support | |||||||
| Customer support | |||||||
| Third-party and transactions costs | |||||||
| Gross margin | |||||||
| Operating expenses | |||||||
| General and administrative | |||||||
| Sales and marketing | |||||||
| Product development | |||||||
| Depreciation and amortization | 3, 4 | ||||||
| Income (loss) from operations | ( |
) | |||||
| Other income | |||||||
| Interest and other income | |||||||
| Net income (loss) before income tax | ( |
) | |||||
| Current income tax expense | 6 | ||||||
| Net income (loss) | $ | ( |
) | $ | |||
| Foreign currency translation adjustments | ( |
) | |||||
| Total comprehensive income (loss) | $ | ( |
) | $ | |||
| Net income (loss) per common share | |||||||
| Basic and diluted | 5(d) | $ | ( |
) | $ | ||
| Weighted average common shares outstanding: | |||||||
| Basic and Diluted | 5(d) | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
23
DESTINY MEDIA TECHNOLOGIES, INC.
Consolidated Statements of Stockholders' Equity
| Common stock | |||||||||||||||||||
| Notes | Shares | Amount | Additional Paid-in Capital |
Accumulated Deficit |
Accumulated Other Comprehensive Income (Loss) |
Total Stockholders' Equity |
|||||||||||||
| Balance, August 31, 2023 | ( |
) | ( |
) | |||||||||||||||
| Total comprehensive income | - | - | - | ||||||||||||||||
| Stock-based compensation | 5 | - | - | - | - | ||||||||||||||
| Common shares retired | 5 | ( |
) | ( |
) | ( |
) | - | - | ( |
) | ||||||||
| Balance, August 31, 2024 | ( |
) | ( |
) | |||||||||||||||
| Balance, August 31, 2024 | ( |
) | ( |
) | |||||||||||||||
| Total comprehensive loss | - | - | - | ( |
) | ( |
) | ( |
) | ||||||||||
| Stock-based compensation | 5 | - | - | - | - | ||||||||||||||
| Balance, August 31, 2025 | ( |
) | ( |
) | |||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
24
DESTINY MEDIA TECHNOLOGIES, INC.
Consolidated Statements of Cash Flows
| For the years ended August 31, | ||||||||
| Notes | 2025 | 2024 | ||||||
| Operating Activities | ||||||||
| Net income (loss) | $ | ( |
) | $ | ||||
| Adjustments to reconcile net income to net cash provided (used) in operations: | ||||||||
| Depreciation and amortization | 3, 4 | |||||||
| Stock-based compensation | 6(b) | |||||||
| Allowance for doubtful accounts | ( |
) | ||||||
| Unrealized foreign exchange gain (loss) | ( |
) | ||||||
| Changes in non-cash working capital: | ||||||||
| Accounts receivable | ( |
) | ( |
) | ||||
| Other receivables | ( |
) | ( |
) | ||||
| Prepaid expenses and deposits | ( |
) | ||||||
| Accounts payable | ( |
) | ||||||
| Accrued liabilities | ||||||||
| Deferred revenue | ( |
) | ||||||
| Net cash provided by operating activities | ||||||||
| Investing Activities | ||||||||
| Development of software | 3, 4 | ( |
) | ( |
) | |||
| Purchase of property, equipment, and intangibles | 3, 4 | ( |
) | ( |
) | |||
| Net cash used in investing activities | ( |
) | ( |
) | ||||
| Financing Activities | ||||||||
| Common stock repurchased for cancellation | 5(a) | ( |
) | |||||
| Net cash used in financing activities | ( |
) | ||||||
| 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 | ||||||||
| Cash and cash equivalents, end of year | $ | $ | ||||||
| Supplementary disclosure: | ||||||||
| Interest paid | $ | $ | ||||||
| Income taxes paid | 6 | $ | $ | |||||
The accompanying notes are an integral part of these consolidated financial statements.
25
DESTINY MEDIA TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 2025
1. ORGANIZATION AND BASIS OF PRESENTATION
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 "TSXV") and under the symbol "DME1" on the Berlin, Frankfurt, Xetra and Stuttgart exchanges in Germany.
Basis of Presentation and Principles of Consolidation
The Company's consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). The accompanying consolidated financial statements include the consolidated accounts of the Company and its wholly owned subsidiaries: Destiny Software Productions, Inc. ("DSNY"), MPE Distribution, Inc. ("MPE"), Tonality, Inc. ("Tonality"), and Sonox Digital Inc. ("Sonox"). All intercompany transactions and balances have been eliminated on consolidation.
Use of Estimates
The preparation of the 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 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 labor capitalized to software under development and computer software, the recoverability of long-term assets including property and equipment, intangible assets, amortization expense, recoverability of accounts receivable and valuation of stock-based compensation.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and cash equivalents
The Company's cash includes cash in readily available checking accounts. 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
Concentrations of credit risk
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts and management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held.
Accounts receivable
Trade receivables are amounts due from customers for services rendered in the ordinary course of business. Accounts receivable are non-interest bearing and are due for settlement in full within 30-60 days, depending on a contract. Trade receivables are shown net of allowance for bad or doubtful accounts.
26
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONT'D
Allowance for doubtful accounts
The Company establishes an allowance for doubtful accounts to ensure trade and other receivables are not overstated due to non-collectability. The Company's allowance is based on a variety of factors, including age of the receivable, significant one-time events, historical experience, and other risk considerations. 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 $
Property and equipment, net
Property and equipment are recorded at cost, less accumulated depreciation. 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. Upon retirement or sale, the cost and related accumulated depreciation of assets disposed of are removed from the accounts and any resulting gain or loss is included in net income (loss).
Intangible assets, net
Our software solutions are offered to our customers through software as a service delivery models. 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.
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. 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
27
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONT'D
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. The impairment loss, if recognized, would be based on the excess of the carrying value of the impaired asset over its respective fair value. No impairment losses have been recorded for the years ended August 31, 2025 and 2024.
Revenue recognition
The Company's revenue is derived from software as a service (SaaS) arrangement. The Company accounts for revenue in accordance with ASC 606, Revenue from Contracts with Customers.
The core principle of ASC 606 is to recognize revenue upon the transfer of products or services to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products or services. ASC 606 prescribes a five-step model for recognizing revenue from contracts with customers: (1) identify the contract(s) with customers; (2) identify the separate performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the separate performance obligations in the contract; and (5) recognize revenue when (or as) the performance obligations are satisfied.
The Company applies the five-step model to recognize revenue as follows:
(1) Identification of the contract, or contracts, with the customer
The Company considers the terms and conditions of written contracts and its customary business practices in identifying its contracts under ASC 606. The Company determines that it has a contract with a customer when the contract is executed, the Company can identify each party's rights regarding the services to be transferred, the Company can identify the payment terms for the services, the Company has determined that the customer has the ability and intent to pay, and the contract has commercial substance. In general, contract terms will be reflected in a written document that is signed by both parties.
(2) Identification of the performance obligation in the contract
Performance obligations are promises in a contract to transfer distinct products or services to a customer and is the unit of account under ASC 606. A contract's transaction price is allocated to each distinct performance obligation and revenue is recognized when the performance obligation is satisfied. A product or service is a distinct performance obligation if the customer can both benefit from the product or service either on its own or together with other resources that are readily available to the customer, and it is separately identifiable from other items within the context of the contract. Performance obligations are satisfied by transferring control of the product or service to the customer. Control of the product or service is transferred either at a point in time or over time depending on the performance obligation.
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. If these criteria are not met, the promised services are accounted for as a combined performance obligation.
The Company generates revenue primarily from usage fees for the Company's digital media distribution service. Usage fees are generally recognized as they are billed based on volume and size of distribution services provided in a given month. The Company's other performance obligations include maintenance services, email and phone support, and unspecified software updates released when, and if, available. Under the guidance of ASC 606, the Company has concluded that maintenance services and unspecified software upgrades are not distinct in the context of the Company's contracts because the Company's service is considered a multi-tenant software environment, and these activities represent a single combined performance obligation in connection with the Company's digital media distribution service, recognized at a point in time when the service is delivered to the customer.
28
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONT'D
Support activities are considered a separate performance obligation which is satisfied over time; however, such activities are performed substantially concurrently with the satisfaction of digital media distribution services. From time to time, certain of the Company's contracts contain additional separate performance obligations, including specific enhancements and upgrades.
(3) Determination of the transaction price
The transaction price is determined based on the consideration to which the Company expects to be entitled in exchange for providing services to the customer.
Digital media distribution services may be subject to either fixed or variable pricing. Variable consideration is allocated entirely to distinct service periods when it can be tied to a single performance obligation. Variable consideration is estimated and included in the transaction price if, in the Company's judgment, it is probable that there will not be a significant future reversal of cumulative revenue under the contract. When variable consideration is contingent and cannot be tied to a single performance obligation performed in a particular billing period, the Company estimates contingent variable consideration using the most likely method and recognizes consideration to the extent that the estimate for variable consideration is not constrained pursuant to the guidance provided in ASC 606.
A significant financing component generally does not exist under the Company's standard contracting and billing practices.
(4) Allocation of the transaction price to the performance obligations in the contract
If the contract contains a single combined performance obligation, the entire transaction price is allocated to the single combined performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on its standalone selling price ("SSP") in relation to the total fair value of all performance obligations in the arrangement. The majority of the Company's contracts contain two separate performance obligations that are performed concurrently. The Company allocates consideration to each performance obligation under the guidance of ASC 606 on a relative standalone selling price basis. 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, 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
The Company recognizes revenue when the services are delivered to its customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. 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.
Performance obligations satisfied at a point in time
Media distribution services comprise the majority of distinct performance obligations that are satisfied at a point in time, and revenue is recognized at the point in which the distribution service has been completed. Consideration for these services is typically billed in the same period that the service has been delivered to the customer.
Performance obligations satisfied over a period of time
Customer support activities comprise the majority of distinct performance obligations that are satisfied over a period of time. Revenue from support activities is recognized over an estimated support period since this activity is considered a 'stand-ready obligation'. This support period is substantially concurrent with the performance of media distribution services, as these services are performed substantially in conjunction with the related distribution. Any support activities provided outside of this billing period are not considered material. Revenue from specified enhancements and upgrades is recognized over an estimated performance period.
29
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONT'D
Contract Costs
Contract costs consist of two components, customer acquisition costs and costs to fulfill a contract. Customer acquisition costs are capitalized only if the costs are incrementally incurred to obtain a customer contract and may consist of sales commissions paid to sales personnel or third-party resellers. Generally, the Company does not incur any contract costs outside of the period that the related revenue is recognized.
Contract Modifications
Contract modifications may create new, or change existing, enforceable rights and obligations of the parties to the contract. We generally modify an existing contract using an addendum or signed change order. A contract modification is accounted for as a new contract if it reflects an increase in scope that is regarded as distinct from the original contract and is priced in-line with the standalone selling price for the related product or services obligated. If a contract modification is not considered a new contract, the modification is combined with the original contract and the impact on the revenue recognition profile depends on whether the remaining products and services are distinct from the original contract. If the remaining goods or services are distinct from those in the original contract, all remaining performance obligations will be accounted for on a prospective basis with unrecognized consideration allocated to the remaining performance obligations. If the remaining goods or services are not distinct, the modification will be treated as if it were a part of the existing contract, and the effect that the contract modification has on the transaction price, and on our measure of progress toward satisfaction of the performance obligations, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) at the date of the contract modification on a cumulative catch-up basis.
Cost of revenue
Cost of revenue primarily consists of personnel costs for our operations service and technical support employees and engineering support staff, cloud infrastructure costs, incremental transaction costs such as merchant and processing fees, and costs of external customer support software and services. In each case, personnel costs include salaries, benefits and any other compensation paid to such staff.
Translation of foreign currencies
The Company's reporting and functional currency is the U.S. dollar, except for its subsidiary, Destiny Software Productions, Inc., whose functional currency is the Canadian dollar. Financial statements of foreign operations for which the functional currency is the local currency are translated into U.S. dollars with assets and liabilities translated at the rate of exchange in effect at the balance sheet date and revenue and expense items translated at the average rates for the period. Unrealized gains and losses resulting from the translation of the financial statements into the reporting currency are deferred and accumulated in a separate component of stockholders' equity as a foreign currency translation gain (loss) in accumulated other comprehensive income (loss).
Transactions denominated in foreign currencies are translated into the reporting currency at the exchange rate in effect on the transaction date. These foreign currency gains and losses are included as a component of general and administrative expenses in the consolidated statements of comprehensive income (loss).
The Company operates internationally, which gives rise to the risk that cash flows may be adversely impacted by exchange rate fluctuations. The Company has not entered into contracts for foreign exchange hedges.
Income taxes
The Company utilizes the liability method of accounting for income taxes as set forth in ASC 740, Income Taxes. Under the liability method, deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect during the years in which the basis that give rise to the differences reverse. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized. In determining the need for valuation allowances, we consider projected future taxable income and the availability of tax planning strategies. If in the future we determine that we would not be able to realize our recorded deferred tax assets, an increase in the valuation allowance would be recorded, decreasing earnings in the period in which such determination is made.
30
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONT'D
We assess our income tax positions and record tax benefits for all years subject to examination based upon our evaluation of the facts, circumstances, and information available at the reporting date. For those tax positions where there is a greater than 50% likelihood that a tax benefit will be sustained, we have recorded the largest amount of tax benefit that may potentially be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where there is 50% or less likelihood that a tax benefit will be sustained, no tax benefit has been recognized in the consolidated financial statements.
The Company has concluded that there are no significant uncertain tax positions requiring recognition in the Company's consolidated financial statements. The Company's evaluation was performed for the tax years which remain subject to examination by major tax jurisdictions. 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 consolidated financial statements as general and administrative expense.
Stock-based compensation
Stock-based compensation expense for employees and directors is recognized in the consolidated statements of comprehensive income (loss) 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. We estimate the expected future volatility based on the Company's historical price volatility. The stock's future volatility may differ from the estimated volatility at the grant date. Our estimate of the forfeiture rate is based primarily on our historical experience. The estimated forfeiture rates may differ from actual forfeiture rates which would affect the amount of expense recognized during the period. When awards are forfeited because non-market based vesting conditions are not satisfied, the expense previously recognized is proportionately reversed. 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 stock-based awards vest.
Segment reporting
Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker in making decisions on how to allocate resources and assess performance. The Company views its operations and manages its business as one operating segment.
Comprehensive income (loss)
Comprehensive income (loss) includes all changes in equity except those resulting from investments by owners and distributions to owners. Accumulated other comprehensive income (deficit) consists only of accumulated foreign currency translation adjustments for all years presented.
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.
31
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONT'D
Fair value measurements
The Company uses the fair value hierarchy to measure the value of its financial instruments. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources, while unobservable inputs reflect a reporting entity's pricing based upon its own market assumptions. The basis for fair value measurements for each level within the hierarchy is described below:
-
- Level 1 - Quoted prices for identical assets or liabilities in active markets.
- Level 2 - Quoted prices for identical or similar assets and liabilities in markets that are not active; or other model-derived valuations whose inputs are directly or indirectly observable or whose significant value drivers are observable.
- Level 3 - Valuations derived from valuation techniques in which one or more significant inputs to the valuation model are unobservable and for which assumptions are used based on management estimates.
The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value.
Trade receivables are presented net of an allowance for expected credit losses, which management believes represents the best estimate of the lifetime expected losses on these assets. Accordingly, the net carrying amount of trade receivables approximates their fair value.
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.
Recently Issued Accounting Pronouncements
The Company assesses the adoption impacts of recently issued accounting standards by the 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 years of 2024 and 2025 that impacted the Company. Management has also evaluated accounting standards issued but not yet effective and does not expect their adoption to have a material effect.
32
3. PROPERTY AND EQUIPMENT, NET
| August 31, 2025 | |||||||||
| Property and Equipment | Cost | Accumulated Amortization |
Net Book Value | ||||||
| Furniture and fixtures | $ | $ | ( |
) | $ | ||||
| Computer hardware | ( |
) | |||||||
| Computer software | ( |
) | |||||||
| Total property and equipment | $ | $ | ( |
) | $ | ||||
| August 31, 2024 | |||||||||
| Property and Equipment | Cost | Accumulated Amortization |
Net Book Value | ||||||
| Furniture and fixtures | $ | $ | ( |
) | $ | ||||
| Computer hardware | ( |
) | |||||||
| Computer software | ( |
) | |||||||
| Total property and equipment | $ | $ | ( |
) | $ | ||||
During the year ended August 31, 2025, the Company capitalized a total of $
Depreciation on property and equipment for the year ended August 31, 2025 was $
4. INTANGIBLE ASSETS, NET
| August 31, 2025 | |||||||||
| Intangible Assets | Cost | Accumulated Amortization |
Net Book Value | ||||||
| Software under development | $ | $ | $ | ||||||
| Patents, trademarks, and lists | ( |
) | |||||||
| Total intangible assets | $ | $ | ( |
) | $ | ||||
| August 31, 2024 | |||||||||
| Intangible Assets | Cost | Accumulated Amortization |
Net Book Value | ||||||
| Software under development | $ | $ | $ | ||||||
| Patents, trademarks, and lists | ( |
) | |||||||
| Total intangible assets | $ | $ | ( |
) | $ | ||||
During the year ended August 31, 2025, the Company capitalized a total of $
Amortization on intangible assets for the year ended August 31, 2025 was $
33
5. STOCKHOLDERS' EQUITY
[a] Common stock issued and authorized
The Company is authorized to issue up to
During the year ended August 31, 2025, the Company did not issue any common stock (2024 - nil). During the year ended August 31, 2025, the Company did not repurchase or cancel any common shares (2024 -
[b] Stock option plans
Pursuant to the Company's 2015 Stock Option Plan (the "2015 Plan"),
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.
Stock-Based Payment Award Activity
During the year ended August 31, 2025, the Company did not grant any share purchase options to directors, officers, employees, and consultants of the Company (2024 -
| 2024 | |||
| Risk-free interest rate | |||
| Volatility | |||
| Exercise price | $ |
||
| Dividend yield | |||
| Forfeiture rate | |||
| Expected life (years) |
|
The summary of option activity for the years ended August 31, 2025 and 2024 were as follows:
| Number of Options | Weighted Average Exercise Price |
Weighted Average Contractual Term (Years) |
|||||||
| Outstanding at August 31, 2023 | $ |
|
|||||||
| Granted | $ |
|
|||||||
| Forfeited | ( |
) | $ |
|
|||||
| Expired | ( |
) | $ |
|
|||||
| Outstanding at August 31, 2024 | $ |
|
|||||||
| Forfeited | ( |
) | $ |
|
|||||
| Granted | - | ||||||||
| Expired | ( |
) | $ |
|
|||||
| Outstanding at August 31, 2025 | $ |
|
|||||||
| Exercisable at August 31, 2025 | $ |
|
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, 2025, no options were in-the-money and the aggregate intrinsic value was $nil (2024 - $nil). There were no stock options repurchased during the years ended August 31, 2025 and 2024.
34
5. STOCKHOLDERS' EQUITY CONT'D
The following table summarizes information regarding the non-vested options outstanding as of August 31, 2025 and changes during the period:
| Number of Options | Weighted Average Exercise Price |
|||||
| Non-vested options at August 31, 2023 | $ | |||||
| Granted | $ | |||||
| Forfeited | ( |
) | $ | |||
| Vested | ( |
) | $ | |||
| Non-vested options at August 31, 2024 | $ | |||||
| Granted | ||||||
| Forfeited | ( |
) | $ | |||
| Vested | ( |
) | $ | |||
| Non-vested options at August 31, 2025 | $ |
As of August 31, 2025, there was $
During the years ended August 31, 2025 and 2024, the total stock-based compensation expense was reported in the consolidated statement of comprehensive income (loss) as follows:
| Stock-based compensation | 2025 | 2024 | ||||
| General and administrative | $ | $ | ||||
| Sales and marketing | ||||||
| Product development | ||||||
| Total stock-based compensation | $ | $ |
[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 $
During the year ended August 31, 2025, the Company recognized compensation expense of $
[d] Earnings Per Share
The following table shows the computation of basic and diluted earnings per share for the years ended August 31, 2025, and 2024:
| 2025 | 2024 | |||||
| Numerator: | ||||||
| Net income (loss) | $ | ( |
) | $ | ||
| Denominator: | ||||||
| Weighted-average basic shares outstanding | ||||||
| Effect of dilutive stock-based awards | ||||||
| Weighted-average diluted shares | ||||||
| Basic and diluted earnings (loss) per share | $ | ( |
) | $ |
35
5. STOCKHOLDERS' EQUITY CONT'D
6. INCOME TAXES
The Company is subject to United States federal and state income taxes at an approximate rate of
| 2025 | 2024 | |||||
| Tax (recovery) at U.S. statutory rates | $ | ( |
) | $ | ||
| Permanent differences | ||||||
| Effect of higher foreign tax rates in Canada | ( |
) | ||||
| Foreign exchange and other adjustments | ( |
) | ||||
| Change in valuation allowance | ( |
) | ||||
| Provision for income taxes | $ | $ |
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company has recognized a valuation allowance for those deferred tax assets for which realization is not likely to occur.
Significant components of the Company's deferred tax assets as of August 31, 2025 and 2024 are as follows:
| 2025 | 2024 | |||||
| Deferred tax assets | ||||||
| Net operating loss carry forwards | $ | $ | ||||
| Excess of book over tax depreciation | ||||||
| Tax credit carry forwards | ||||||
| Total deferred tax assets | ||||||
| Valuation allowance | ( |
) | ( |
) | ||
| Net deferred tax assets | $ | $ |
Net income (loss) before income tax by geographic region is as follows:
| 2025 | 2024 | |||||
| United States | $ | $ | ( |
) | ||
| Canada | ( |
) | ||||
| Total | $ | ( |
) | $ |
If not utilized to reduce future taxable income, the Company's net operating loss carry forwards will expire as follows:
| 2025 and thereafter |
|||
| United States | $ | ||
| Canada | |||
| Total | $ |
If not utilized to reduce future taxes payable, the Company's investment and other tax credit carry forwards will expire as follows:
| 2032 and thereafter |
|||
| United States | $ | ||
| Canada | |||
| Total | $ |
36
7. COMMITMENTS AND 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 claims were heard in B.C. Supreme Court in December 2024. On October 24, 2025, the Supreme Court of British Columbia issued judgment dismissing all claims against the Company, its directors, and officers, and awarding the Company its costs. Refer to note 9 "Subsequent events".
8. CONCENTRATIONS, ECONOMIC DEPENDENCE AND SEGMENTS
The Company operates solely in the digital media software segment and all revenue from its products and services are made in this segment. Management evaluates the Company's operations and allocates resources on a consolidated basis. Accordingly, the Company operates as one operating and reportable segment.
Revenue from external customers earned during the years ended August 31, 2025 and 2024, by product and location of customer, was as follows:
| 2025 | 2024 | |||||
| Play MPE® | ||||||
| North America | $ | $ | ||||
| Europe | ||||||
| Australasia | ||||||
| Africa | ||||||
| Total Play MPE® | $ | $ |
Revenue presented above 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 year ended August 31, 2025, the Company generated
The Company has substantially all its assets in Canada and its current and planned future operations are, and will be, located in Canada.
9. SUBSEQUENT EVENTS
Legal proceedings
On October 24, 2025, the Supreme Court of British Columbia issued judgment dismissing all claims brought by the Company's former President and Chief Executive Officer against the Company, its subsidiaries, directors, and officers, and awarded costs to the Company. The judgment was in the Company's favor. The Company has not yet recognized any gains related to this outcome.
37
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
ITEM 9A. CONTROLS AND PROCEDURES.
Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to provide reasonable assurance that material information required to be disclosed in our periodic reports filed under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms and to provide reasonable assurance that such information is accumulated and communicated to our management, our Chief Executive Officer and our Chief Financial Officer, to allow timely decisions regarding required disclosure.
We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13(a)-15(e) under the Exchange Act. Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective, as of August 31, 2025.
Internal Controls Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting, as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act, is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Internal control over financial reporting includes policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company are transacted in accordance with authorizations of management and directors of the Company, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with existing policies or procedures may deteriorate. A material weakness is defined as "a deficiency, or a combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis.
Our management, under the supervision of our Chief Executive Officer and Chief Financial Officer, conducted an assessment of the effectiveness of our internal control over financial reporting as of August 31, 2025 based on the criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Based on this assessment, management concluded that our internal controls over financial reporting were effective as of August 31, 2025.
This annual report does not include an attestation report of the Company's independent registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's independent registered public accounting firm pursuant to the rules of the SEC that permit the Company to provide only management's report in this annual report.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting identified in management's evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the quarter ended August 31, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
38
ITEM 9B. OTHER INFORMATION.
None.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.
Not applicable.
39
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
All directors hold office for a term of approximately one year, or until the next annual meeting of shareholders, until the election and qualification of their successors. Officers are appointed by our board of directors and serve at the discretion of the board, subject to applicable employment agreements. The following table sets forth information regarding our executive officers and the members of our board of directors.
| Name | Position Held with the Company | Date First Elected or Appointed |
| Frederick Vandenberg | Director, President, Corporate Secretary, Chief Executive Officer | CEO since June 2017 |
| CFO since July 2007 | ||
| Hyonmyong Cho(1) | Chairman of the Board, Director | February 2017 |
| Samuel Jay Graber(1) | Director | February 2017 |
| Dave Summers(1) | Director | February 2019 |
| David Mossberg | Director | November 2021 |
| Olya Massalitina | Chief Financial Officer and Treasurer | April 2022 - September 2024 |
| Assel Mendesh | Chief Financial Officer | May 2025 |
(1) Member of our Audit Committee
Set forth below is a brief description of the background and business experience of each of our executive officers and directors for the past five years:
Fred Vandenberg, B. Comm. MBA, CPA, CA - Mr. Vandenberg has been our Chief Executive Officer since June 2017 and was our Chief Financial Officer from July 2007 to December 2017. Mr. Vandenberg's core responsibilities include strategic planning and coordinating strategic planning, marketing and product development functions of the Company. Mr. Vandenberg has been with the Company for 19 years, heading up the finance group and managing the majority of Play MPE® operations, including the initial transition of our customers to commercial agreements in 2008. Mr. Vandenberg oversees the business development and operational functions of Play MPE®, expanding into new markets while ensuring we continue to lead the industry in customer service. Mr. Vandenberg obtained a Bachelor of Commerce from McMaster University in 1991 and a Master of Business Administration (Finance) from McMaster University in 1993. In 1996, Mr. Vandenberg was designated as a Chartered Professional Accountant in Ontario and completed the CICA In-depth Tax program.
Hyonmyong Cho - Mr. Cho has been a director of the Company since February 2017. Hyonmyong Cho is currently a managing member of Greenlaw International Management Company LLC which manages Greenlaw International LP, a fund which invests in microcap stocks. From 2002 to 2008, Mr. Cho was a Managing Director of Forum Partners which managed several real estate private equity funds in Europe and Asia. At Forum Partners, Mr. Cho managed a worldwide team tasked with private equity deal structuring, analysis and negotiation. Prior to Forum Partners, Mr. Cho was a senior associate at Nassau Capital, whose only limited partner was Princeton University, and he was responsible for the due diligence, negotiation, documentation and monitoring of private equity transactions. Prior to that, Mr. Cho was a partner in Novalis Ventures, a venture capital fund focused on early-stage investments in the real estate industry. Before that, Mr. Cho was a Vice President at Cahill, Warnock & Company, a private equity firm focused on making direct investments in micro-cap public companies. Mr. Cho began his career as a financial analyst for Alex Brown & Sons, Inc. in the mergers and acquisitions, real estate and health care groups. Mr. Cho was a Morehead Scholar at the University of North Carolina, graduating with a B.A. in English Literature.
Samuel Jay Graber - Mr. Graber has been a director of the Company since February 2017. In 2016, Mr. Graber retired as VP of Business Development from Apex Software, LLC, but remained a business partner in the company. Apex Software LLC was a privately-owned developer of building drawing and area calculation software for jurisdictional mass appraisal at the municipal, county, province and statewide level as well as for the real estate mortgage appraisal industry. In 2020, the assets of Apex Software, LLC were sold to a long-term business partner with an approximate 1-year wind down of Mr. Graber's continued involvement. Prior to 20 years in the software/technology arena, Mr. Graber worked in direct sales/sales management for various manufacturing entities including automotive and decorative lighting, plastic extrusion, art glass and architectural flooring. Mr. Graber earned a BS degree in both Business Management and in Psychology from Eastern Mennonite College (now EMU).
Dr. David Summers Ph.D., BSc., MBA - Since 2016, Dr. Summers has been a business development and technology commercialization consultant. From 2008 through 2016, Dr. Summers was a director for Chemetics Inc., a global leader in technology-based engineering design for the pulp & paper, and mining & minerals industries. Dr. Summers was responsible for technology development, the electrolyzer business group, and global technical customer service. From 2007 to 2008 Dr. Summers was Vice President, Business Operations for Carbon Credit Corp, a private technology and consulting company. In this role, Dr. Summers helped position the company for acquisition by Ledcor Group. From 1998 to 2007 Dr. Summers worked at Ballard Power Systems, where he spent ten years in progressively senior leadership positions in Research and Development, Product Development and Business Development. He is the author of 12 publications and 5 patents. Dr. Summers holds a Bachelor of Science degree (honours chemistry) from Queen's University, a Ph.D. in Chemistry from the University of British Columbia, and a dual Master of Business Administration degree from Queen's University and Cornell University's Johnson School.
40
David Mossberg - Mr. Mossberg was appointed a director in November 2021. Mr. Mossberg is a seasoned capital markets executive with more than 25 years of experience analyzing companies and advising public company executives in multiple industries. Mr. Mossberg currently is the CEO of Three Part Advisors, LLC, a strategic investor relations advisory firm. Prior to founding Three Part Advisors, Mr. Mossberg was a sell-side analyst at Southwest Securities and was Director of Research at Hodges Capital Management. Mr. Mossberg holds a MBA from Southern Methodist University and BBA in Finance and BBA in International Business from University of Texas - Arlington. Mr. Mossberg also served in the United States Army Reserves as an interrogator/Russian linguist.
Olya Massalitina BSc., CPA - Mrs. Massalitina was appointed our Chief Financial Officer in April of 2022 and resigned in September 2024. Mrs. Massalitina is a Chartered Professional Accountant with over 10 years of experience working with a variety of publicly traded multinational companies in different industries. During that time, she has provided foundational financial services to clients including auditing, financial reporting, budgeting and forecasting, controls and processes, and more. Through her experience dealing with large international companies Mrs. Massalitina acquired considerable experience in finance, governance, and regulatory compliance. Mrs. Massalitina holds a Bachelor of Science, Mathematics degree from a well-recognized Ukrainian University and a Diploma in Accounting from British Columbia Institute of Technology.
Assel Mendesh, CPA, CGA, FCCA, CIA - Ms. Mendesh was appointed our Chief Financial Officer in May 2025, succeeding Mrs. Massalitina. Ms. Mendesh brings over 15 years of financial leadership experience across multiple industries. Most recently, she served as Director of Finance at Corza Medical Inc., a global medical device company, where she spearheaded several initiatives including the integration of acquired entities and enhanced functional reporting across jurisdictions, contributing to operational efficiencies, cost savings, and scalable growth. Prior to joining Corza Medical, she held senior finance role at Atlas Corp. (NYSE: ATCO), served as a Director of Operations at Sunesis Consulting accounting firm, and earlier in her career was an Audit Manager with PwC. Ms. Mendesh holds a Master of Science in Accounting and Finance degree from Alliance Manchester Business School.
CORPORATE GOVERNANCE
The Company promotes accountability for adherence to honest and ethical conduct; endeavors to provide full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with the SEC and in other public communications made by the Company; and strives to be compliant with applicable governmental laws, rules and regulations.
ELECTION OF DIRECTORS AND OFFICERS
Our Board has the responsibility for selecting the appropriate leadership structure for the Company. In making leadership structure determinations, the Board considers many factors, including the specific needs of the business and what is in the best interests of the Company's stockholders. Currently, Mr. Hyonmyong Cho serves as Chairman of the Board. The Board believes that its programs for overseeing risk, as described below, would be effective under a variety of leadership frameworks and therefore do not materially affect its choice of structure.
The Board of Directors is led by the Chairman. The Company has five directors, and its Chief Executive Officer and Chief Financial Officer report to the Board of Directors. Our structure provides the Company with multiple leaders who represent the Company to our stockholders, regulators, business partners and other stakeholders, among other reasons set forth below.
- This structure creates efficiency in the preparation of the meeting agendas and related Board materials as the Company's Chief Executive Officer works directly with those individuals preparing the necessary Board materials and is more connected to the overall daily operations of the Company. Agendas are also prepared with the permitted input of the full Board of Directors allowing for any concerns or risks of any individual director to be discussed as deemed appropriate. The Board believes that the Company has benefited from this structure and is in the best interest of the stockholders.
- The Company believes this structure allows for efficient and effective oversight, given the Company's relatively small size, its corporate strategy and focus.
Our directors are elected by our shareholders at our annual general meetings. Each director holds office until our next annual general meeting or until the director resigns or is removed in accordance with our bylaws.
41
THE BOARD'S AND ITS COMMITTEES' ROLE AND RISK OVERSIGHT
Effective risk oversight is an important priority of the Board. Because risks are considered in virtually every business decision, the Board discusses risk throughout the year generally or in connection with specific proposed actions. The Board's approach to risk oversight includes understanding the critical risks in the Company's business and strategy, evaluating the Company's risk management processes, allocating responsibilities for risk oversight, and fostering an appropriate culture of integrity and compliance with legal responsibilities.
The Board exercises direct oversight of strategic risks to the Company. The Audit Committee reviews and assesses the Company's processes to manage business and financial risk and financial reporting risk. It also reviews the Company's policies for risk assessment and assesses steps management has taken to control significant risks. The management periodically reports to our Board or relevant committee, which provides the relevant oversight on risk assessment and mitigation.
AUDIT COMMITTEE
Our audit committee currently consists of Dr. David Summers, Mr. Hyonmyong Cho, and Mr. Samuel Jay Graber. Each of Mr. Summers, Mr. Cho and Mr. Graber are non-employee directors of the Company and are considered independent as that term is defined by TSX rules and NASDAQ 5605(a)(2) and the applicable rules of the Securities and Exchange Commission. Our Board of Directors has currently designated Mr. Summers and Mr. Cho as "audit committee financial experts" as defined in Item 407(d)(5)(ii) of Regulation S-K. We believe that the audit committee members are capable of analyzing and evaluating our financial statements and understanding internal controls over financial reporting.
Our Board adopted a charter for the Audit Committee in November 2013, a copy of which is available on our corporate website www.dsny.com.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's directors, executive officers and persons who beneficially own 10% or more of a class of securities registered under Section 12 of the Exchange Act to file reports of beneficial ownership and changes in beneficial ownership with the SEC. Directors, executive officers and greater than 10% stockholders are required by the rules and regulations of the SEC to furnish the Company with copies of all reports filed by them in compliance with Section 16(a).
Based solely on our review of certain reports filed with the SEC pursuant to Section 16(a) of the Exchange Act, or Section 16(a), we believe that during the fiscal year ended August 31, 2025 all such filing requirements were complied with.
DIRECTORS' AND OFFICERS' LIABILITY INSURANCE
Destiny Media Technologies, Inc. has directors' and officers' liability insurance insuring our directors and officers against liability for acts or omissions in their capacities as directors or officers.
CODE OF ETHICS
The Company's code of ethics is available on our website at https://investors.dsny.com/investors/documents/.
We have adopted a code of ethics that applies to our principal executive officer, principle financial and accounting officer, or persons performing similar functions.
FAMILY RELATIONSHIPS
There are no family relationships among our officers and directors.
42
ITEM 11. EXECUTIVE COMPENSATION.
The following table presents information regarding the total compensation awarded to, earned by, or paid to each person serving as Chief Executive Officer during the year ended August 31, 2025 and 2024 and other individuals as required by Item 402(m)(2) of Regulation S-K, during the noted periods. These individuals are our named executive officers for 2025.
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) |
Option Awards ($) |
Other Annual Compensation ($) (1) |
Total ($) |
| Frederick Vandenberg (2) , Director, President, Chief Executive Officer, and former Chief Financial Officer | 2025 | 193,293 | - | - | - | 1,790 | 206,858 |
| 2024 | 198,396 | - | - | - | - | 200,070 | |
| Olya Massalitina (2) (4) | 2025 | 8,118 | - | - | - | - | 8,300 |
| Chief Financial Officer (resigned September 2024) | 2024 | 85,727 | - | - | - | - | 85,727 |
| Assel Mendesh (2) (3) | 2025 | 47,727 | - | - | - | 477 | 52,296 |
| Chief Financial Officer (appointed May 2025) | 2024 | - | - | - | - | - | - |
(1) The value of prerequisites and other personal benefits, securities and property for the individuals included in the summary compensation table that does not exceed $10,000 is not reported herein. Other compensation includes participation in the employee share purchase plan described below under long-term incentive plans.
(2) Compensation is stated in United States dollars. Where compensation was provided in Canadian dollars, compensation is based on an exchange rate of 0.7159 US dollars for each 1.00 Canadian dollar during the 2025 fiscal year and 0.7348 US dollars for each 1.00 Canadian dollar during the 2024 fiscal year.
(3) Appointed May 2025.
(4) Resigned effective September 2024
EMPLOYMENT AGREEMENT WITH OUR NAMED EXECUTIVE OFFICERS
We are not party to any written employment agreement or change in control arrangements with Mr. Vandenberg and Ms. Mendesh. We do not have any agreements with Mr. Vandenberg and Ms. Mendesh regarding the payments of bonus or other performance incentives. Mr. Vandenberg and Ms. Mendesh are eligible to receive stock options as and when approved by our Board of Directors.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
The following table summarizes equity awards granted to our named executive officers that were outstanding as of August 31, 2025:
Name and Principal Position |
Number of Securities Underlying Unexercised Options # Exercisable |
# Unexercisable | Incentive Plan Awards: Number of Securities Underlying Unexercised Options |
Weighted Average Option Exercise Price $ |
Option Expiration Date |
| Frederick Vandenberg, Chief Executive Officer |
80.000 | - | - | 1.50 | 31-Oct-2026 |
| 20,000 | - | - | 0.85 | 23-Jul-2028 |
LONG-TERM INCENTIVE PLANS
The Company has an Employee Stock Purchase Program whereby all employees of the Company are eligible to contribute up to 5% of their annual salary into a pool which is matched equally by the Company. Independent directors are able to contribute a maximum of $12,500 each annually, for a combined maximum annual purchase of $25,000. The aggregate maximum annual contributions is limited to $400,000. Money in the pool is used to purchase shares out of the market on a semi-monthly basis. All purchases are made through the Exchange by a third-party plan agent and no purchases are made on the OTC or German exchanges. The third-party plan agent is also responsible for the administration of the Plan on behalf of the Company and the participants.
43
Additionally,the Company has the 2015 Stock Option Plan and 2022 Stock Option Plan, under which up to an aggregate of 1,530,000 shares of the common stock have been reserved for issuance. As at August 31, 2025, an aggregate of 853,370 common shares remained eligible for issuance under the plans. The options generally vest over a range of periods from the date of grant, some are immediate, and others are at 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.
COMPENSATION OF DIRECTORS
Our directors are reimbursed for reasonable out-of-pocket expenses in connection with attendance at Board of Director and committee meetings. In addition, our directors are eligible for grants of options to purchase shares of our common stock at the discretion of our Board of Directors.
There were no options awarded to directors for the year ended August 31, 2025.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
The following table sets forth certain information concerning the number of shares of our common stock owned beneficially as of November 24, 2025 by: (i) each person (including any group) known to us to own more than five percent (5%) of any class of our voting securities, (ii) each of our directors and each of our named executive officers, and (iii) officers and directors as a group. Unless otherwise indicated, the shareholders listed possess sole voting and investment power with respect to the shares shown.
| Common Stock Beneficially Owned | Percentage of Shares Beneficially Owned (1) | |
| Name of beneficial owner | # of Shares | % |
| Hyonmyong Cho (2) | 554,288 | 5.8% |
| Samuel Jay Graber (3) | 269,028 | 2.8% |
| Frederick Vandenberg (4) | 551,984 | 5.7% |
| David Summers (5) | 73,381 | 0.8% |
| David Mossberg (6) | 104,023 | 1.1% |
| Assel Mendesh (7) | 1,708 | * |
| All directors and executive officers as a group (6 persons) | 1,554,412 | 16.1% |
| Mark Graber (8) | 2,085,779 | 21.6% |
*Owning less than 1%.
(1) Under Rule 13d-3 of the Exchange Act, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of such shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person's actual ownership or voting power with respect to the number of shares of common stock actually outstanding as of November 24, 2025. As of November 24, 2025, there were 9,637,410 shares of our common stock issued and outstanding.
(2) Consists of 142,735 shares held by Mr. Cho and 50,000 shares that may be acquired upon the exercise of stock options held by Mr. Cho within 60 days of November 24, 2025 and includes 361,553 shares held through Mr. Cho's indirect pecuniary ownership held through Greenlaw International LP, a Delaware limited partnership (the "Fund"), and Greenlaw International GP LLC, a Delaware limited liability company and the general partner of the Fund which has the right to receive an allocation of a portion of the profits of the Fund.
(3) Consists of 219,028 shares held by Mr. Graber, and 50,000 shares that may be acquired upon the exercise of stock options held by Mr. Graber within 60 days of November 24, 2025.
(4) Consists of 451,984 shares held by Mr. Vandenberg and 100,000 shares that are acquirable upon the exercise of stock options held by Mr. Vandenberg within 60 days of November 24, 2025.
(5) Consists of 23,381 shares held by Mr. Summers and 50,000 shares that are acquirable upon the exercise of stock options held by Mr. Summers within 60 days of November 24, 2025.
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(6) Consists of 54,023 shares held by Mr. Mossberg and 50,000 shares that are acquirable upon the exercise of stock options held by Mr. Mossberg within 60 days of November 24, 2025.
(7) Consists of 1,708 shares acquired through the Employee Stock Purchase plan held by Ms. Mendesh.
(8) Consists of (i) 1,933,809 shares of the Company's common stock directly held by Mark Graber; (ii) 145,970 shares beneficially owned by Four Star Investments, a Texas partnership over which Mr. Graber has shared voting and disposition power; and (iii) 6,000 shares held by Mr. Graber's spouse.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
The following table summarizes information about our equity compensation plans as of August 31, 2024.
| Plan Category | Number of Shares of Common Stock to be Issued upon Exercise of Outstanding Options (a) |
Weighted-Average Exercise Price of Outstanding Options (b) |
Number of Options Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a)) (c) |
||||
| Equity compensation plans approved by stockholders | 546,000 | $ | 1.32 | 481,870 | |||
| Equity compensation plans not approved by stockholders | - | $ | - | - | |||
| Total | 546,000 | $ | 1.32 | 481,870 |
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
Except as described under "Item 11. Executive Compensation" and under "Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters" none of the following persons has any direct or indirect material interest in any transaction to which we were or are a party during the past two years, or in any proposed transaction to which the Company proposes to be a party:
- any director or officer;
- any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to our common stock; or
- any immediate family member of any of the foregoing persons.
SHARE ISSUANCES
None.
All of our non-employee directors are our independent directors as that term is defined by TSX rules and NASDAQ 5605(a)(2) and the applicable rules of the Securities and Exchange Commission.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
Audit Fees
The aggregate audit and review fees incurred for the fiscal years ended August 31, 2025 and 2024 were $76,458 and $73,000, respectively. Such fees included work completed for our annual audit and for the review of our consolidated financial statements included in our Forms 10-K and 10-Q.
The 2025 audit was performed by Davidson & Company, the Company's current auditor, appointed as the Company's new independent registered public accounting firm on May 28, 2025. The 2024 audit was performed by Smythe LLP, the Company's predecessor auditor who resigned on May 28, 2025.
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Audit Related Fees
None.
Tax Fees
For the fiscal year ended August 31, 2025 the Company incurred $5,727 in fees billed for tax compliance services provided by BHI Tax. For the fiscal year ended August 31, 2024 the Company incurred $7,800 in fees billed for tax compliance services provided by Smythe LLP.
All Other Fees
None.
Pre-Approval Policies and Procedures
All auditing services and permitted non-audit services (including the fees and terms thereof) to be performed for the Company by our independent auditor must be approved by the Audit Committee in advance, except non-audit services (other than review and attestation services) if such services fall within exceptions established by the SEC. The Audit Committee will pre-approve any permissible non-audit services to be provided by the Company's independent auditors on behalf of the Company that do not fall within any exception to the pre-approval requirements established by the SEC. The Audit Committee may delegate to one or more members the authority to pre-approve permissible non-audit services, but any such delegate or delegates must present their pre-approval decisions to the Audit Committee at its next meeting. All of our accountants' services described above were pre-approved by the Audit Committee or by one or more members under the delegate authority described above.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
LIST OF DOCUMENTS FILED AS PART OF THE REPORT
The following documents are filed as part of this report:
(a)(1) Financial Statements:
1. Report of Independent Registered Public Accounting Firm (PCAOB ID No. 995);
2. Consolidated Balance Sheets;
3. Consolidated Statements of Comprehensive Income (loss);
4. Consolidated Statements of Cash Flows;
5. Consolidated Statement of Changes in Stockholders' Equity; and
6. Notes to the Consolidated Financial Statements.
(a)(2) Financial Statement Schedules:
(a)(3) Exhibits:
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* Filed herewith
† Management contract or compensatory plan or arrangement
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
DESTINY MEDIA TECHNOLOGIES, INC.
| By: | /s/Frederick Vandenberg |
| Frederick Vandenberg | |
| Chief Executive Officer, President | |
| (Principal Executive Officer) | |
| Date:November 24, 2025 |
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS that each individual whose signature appears below constitutes and appoints Frederick Vandenberg, his true and lawful attorney-in-fact and agent with full power of substitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, with all exhibits thereto and all documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
| By: | /s/Frederick Vandenberg |
| Frederick Vandenberg | |
| Chief Executive Officer (Principal Executive Officer) | |
| Date:November 24, 2025 |
| By: | /s/Assel Mendesh |
| Assel Mendesh | |
| Chief Financial Officer | |
| Date:November 24, 2025 |
| By: | /s/ Hyonmyong Cho |
| Hyonmyong Cho | |
| Director | |
| Date:November 24, 2025 |
| By: | /s/ Samuel Jay Graber |
| Samuel Jay Graber | |
| Director | |
| Date:November 24, 2025 |
| By: | /s/ David Summers |
| David Summers | |
| Director | |
| Date:November 24, 2025 |
| By: | /s/ David Mossberg |
| David Mossberg | |
| Director | |
| Date:November 24, 2025 |
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