DESTINY MEDIA TECHNOLOGIES INC. Dialogue and evaluation by administration of the monetary place and working outcomes. (type 10-Q)


The next dialogue needs to be learn at the side of the accompanying
monetary statements and notes thereto included inside this Quarterly Report on
Kind 10-Q. Along with historic info, the knowledge on this
dialogue comprises forward-looking statements throughout the which means of Part 27A
of the Securities Act of 1933, as amended (the "Securities Act"), and Part
21E of the Securities Alternate Act of 1934, as amended (the "Alternate Act").
These forward-looking statements contain dangers and uncertainties, together with
statements concerning the Firm's capital wants, enterprise technique and
expectations. Any statements contained herein that aren't statements of
historic details could also be deemed to be forward-looking statements.

In some instances, you may determine forward-looking statements by terminology such
as "might", "will", "ought to", "anticipate", "plan", "intend", "anticipate", "consider",
estimate", "predict", "potential" or "proceed", the destructive of such phrases or
different comparable terminology. Precise occasions or outcomes might differ materially. In
evaluating these statements, you must take into account numerous components described in
this Quarterly Report, together with the chance components underneath "Merchandise 1A. Threat Elements."
of half II, and, infrequently, in different reviews the Firm information with the
Securities and Alternate Fee. These components might trigger the Firm's precise
outcomes to vary materially from any forward-looking assertion. The Firm
disclaims any obligation to publicly replace these statements or disclose any
distinction between its precise outcomes and people mirrored in these statements.
Such info constitutes forward-looking statements throughout the which means of
the Personal Securities Litigation Reform Act of 1995.


Future Media Applied sciences Inc. was integrated in August 1998 underneath the legal guidelines
of the State of Colorado and the company jurisdiction was modified to Nevada
efficient October 8, 2014. We stock out our enterprise operations via our
wholly owned subsidiary, Future Software program Productions Inc., a British Columbia
firm that was integrated in 1992, MPE Distribution, Inc. a Nevada firm
that was integrated in 2007 and Sonox Digital Inc. integrated underneath the
Canada Enterprise Firms Act in 2012. The "Firm", "Future Media",
"Future", "we" or "us" refers back to the consolidated actions of all 4

Our predominant government workplace is positioned in workplace 1110, 885 West Georgia Avenue, Vancouver, British Columbia V6C 3E8. Our cellphone quantity is (604) 609-7736 and our fax quantity is (604) 609-0611.

Our widespread shares commerce on TSX Enterprise Alternate in Canada underneath the image “DSY”, on the OTCQB we (“OTCQB”) underneath the image “DSNY”, and on numerous German inventory exchanges (Frankfurt, Berlin, Stuttgart and Xetra) underneath the image DME, WKN 935 410.

Our company web site is positioned at


Future develops and markets software program as a service (SaaS) options that clear up
important digital distribution and promotion issues for companies within the music
business. The core of our enterprise is Play MPE®. Play MPE® is a service for
selling and securely distributing broadcast high quality audio, video, pictures,
promotional info and different digital content material via the web. The
system is at present utilized by the recording business for transferring pre-release
broadcast high quality music, radio reveals, and music movies to trusted recipients
resembling radio stations, media reviewers, VIP's, DJ's, movie and TV personnel,
sports activities stadiums and retailers. Music is protected by Play MPE®'s patented
proprietary watermarking system which supplies watermarks distinctive to every

Future is at present growing further performance and providers which might be
anticipated to extend the providers to current platform customers and due to this fact
increase Play MPE®'s addressable market, or act as catalysts to the Firm's
gross sales actions. As properly, the Firm is investing into analysis and
growth on incremental product choices anticipated so as to add addressable market

————————————————– ——————————

Play MPE®

The Firm's core enterprise is the Play MPE® platform. Play MPE® is a two-sided
B2B market that permits music labels and artists to distribute promotional
content material and musical belongings on the one facet, and for music broadcasting
professionals, music curators and music reviewers to find, obtain,
broadcast and overview the music, on the opposite. Play MPE® supplies a
software-based software to help file labels and artists in advertising their
music. File labels and artists are Play MPE®'s clients and pay for
submission into the system. Recipients are offered no cost entry to overview
music. When including music to the Play MPE® system, file labels are focusing on
particular business recipients who overview and broadcast their music. With this
advertising effort, file labels are focusing on a rise of their income
immediately via on-air broadcast royalties, streaming royalties and
synchronization income (income when the replica of a tune is coordinated
with video ads, tv, or movie), and oblique will increase in
income via rising tune and artists' recognition (for instance live performance ticket
gross sales and so forth.).

Prospects vary from small unbiased artists, to the world's largest file
labels; (the "Main File Labels") (Common Music Group ("Common"), Warner
Music Group "Warner" and Sony Music Leisure "Sony"). Prospects select Play
MPE® for its highly effective set of instruments, ease of use and its effectiveness in
attaining the file label's promotional targets. Recipients get pleasure from simple
entry to fascinating music in top quality audio information.

Play MPE® CASTER (Distribution software program)

Play MPE®'s Caster is a full-service distribution administration system that
features a full set of operational features that present all crucial
software program instruments to allow labels to handle world advertising campaigns. Broadly,
these parts embrace administration features and distribution features.
Administration features enable administration of labels and sub-labels, administration
of the belongings (audio information, video information, and related cowl artwork, artist
info) which might be distributed, and administration of client-side customers and consumer
permissions (roles with selectable capabilities). Distribution administration
features provide highly effective contacts administration capabilities, launch creation,
distribution bulletins and distribution scheduling, digital rights
administration by launch and by recipient, and launch replication and its
related scheduling and digital rights administration parts.

This full suite of instruments inside Play MPE® was developed for the music business
and in shut collaboration with Common to cater the features to its world
advertising workflow. Many consumers don't use the total suite of instruments. Nevertheless,
this full set of instruments is important to Common's world promotional marketing campaign
workflow and the core motive Play MPE® distributes internationally for

Caster is obtainable in English, Spanish, German, Japanese and French.

Play MPE® is a permissions-only entry system such that solely recipients
designated or focused to obtain content material receive entry to that content material. File
labels can use Play MPE®'s contacts administration system to manage recipient
lists. Contacts administration affords a number of options that facilitate environment friendly
updates and upkeep actions which might be critically necessary the place customers
keep a big recipient database, throughout a number of customers, and a number of
recipient lists. Absent these options, record upkeep turns into overly
cumbersome, inefficient and results in inaccuracies. The performance throughout the
contacts administration system is critically necessary to each distribution hubs at
Common and the Play MPE® operations group to effectively keep correct and
lively recipient lists.

Inside Play MPE®'s contacts administration platform, the Firm's operations group
affords on the market rigorously curated and actively maintained recipient lists with
greater than 14,000 music curators world wide. These lists embrace full
lists in 12 international locations, and lists underneath building in an extra 38. These
selectable lists get rid of the necessity for our shoppers to take care of present
recipient contact info. These lists provide vital worth to all
clients, however are crucial for smaller unbiased labels and artists who do
not have the assets to take care of present contacts. With out these curators
lists, many gross sales wouldn't be attainable. As lively lists in new territories are
accomplished, Play MPE® will develop income.

Along with the contacts administration performance, the Play MPE® product and
engineering workers are growing new technical processes to facilitate record
growth and upkeep. With these technical options, it's anticipated that
Play MPE® will increase saleable lists and thereby enhance income.

Play MPE® participant

Music curators are granted free entry to view and obtain content material via an easy-to-use net participant or cell participant apps (iOS and Android). Internet readers are at present obtainable in 15 completely different languages; English, Spanish, Swedish, Finnish, Italian, Dutch, Portuguese, French, Japanese, German, Norwegian, Latvian, Lithuanian, Estonian and Danish.

In growing Play MPE®'s recipient interfaces, the Firm's product and
engineering groups give attention to offering a really constructive consumer expertise. Recipients
get pleasure from many options that make it simple to entry, collaborate, overview, and search
for content material. Play MPE®'s cell apps provide off-line listening capabilities, the
skill to make the most of Google Chromecast and Apple Airplay streaming capabilities,
creation of playlists, sorting, flagging and archiving options, and simpler to
entry launch metadata. Recipient facet satisfaction immediately will increase exercise
which immediately improves the effectiveness of promotional efforts of file label

Recipients on the Play MPE® platform have all kinds of personas and embrace
programming administrators for web streaming, satellite tv for pc or terrestrial radio,
retail retailer broadcasters, sports activities stadium DJs, golf equipment, occasions, music critiques in
newspapers or magazines, on-air personalities, music supervisors who program TV,
films, commercials or video video games, or "A&R" representatives at bigger file
labels. Every recipient throughout the Play MPE® platform has a singular library of
music catered and acceptable for that recipient.


The Firm additionally developed Clipstream® for the web video business for which
it's pursuing strategic options. The Clipstream® On-line Video Platform
(OVP) is a self-service system, for encoding, internet hosting and reporting on video
playback which will be embedded in third social gathering web sites or emails. Playback is
at present via the Firm's proprietary JavaScript codec engine, which is
solely obtainable on the web via the Firm. The distinctive software-based
strategy to rendering video, has patents claiming preliminary precedence to 2011. This
product has incidental revenues and isn't supported or marketed.



Complete income for the three-month interval ending November 30, 2021 elevated by
roughly 1% ($1,134,151 in 2021 - $1,123,977 in 2020). Play MPE® represents
nearly all of the Firm's income.  Play MPE®'s 12 months so far income grew by
1% (or 1.7% after adjusting for favorable overseas alternate).  Play MPE®
continued to expertise progress within the unbiased labels in the USA,
Europe, and Australia with a median income progress of three% on this section.

Working Bills


As our applied sciences and merchandise are developed and maintained in-house, the
majority of our expenditures are on salaries and wages and related bills
resembling workplace house, provides and advantages. Our operations are primarily
performed in Canada and due to this fact, our prices are primarily incurred in Canadian
{dollars} whereas our revenues are primarily denominated in Euros and US {dollars}.
Thus, working bills and the outcomes of operations are impacted, to the
extent they aren't hedged, by the rise and fall of the relative values of the
Canadian greenback to those currencies. The Firm maintains a big portion of
its monetary reserves in Canadian {dollars} to mitigate the draw back danger of
hostile alternate charges on its working expenditures.

Complete working prices throughout the three-month interval ended November 30, 2021
elevated by 8.6% to $852,029 (2020 - $784,426). Working Prices within the
comparative interval, embrace one-time, non-recuring prices related to workers
restructuring. Adjusting for these one-time prices related to workers
restructuring, general prices elevated by 11.8%. The rise in prices is
primarily the results of expanded enterprise growth staffing prices designed to
increase Play MPE®'s world market share. The Firm additionally elevated staffing
prices to extra shortly increase the corporate's product providing. A portion of those
prices had been capitalized. Additionally growing general prices are impacts a weakening
of the US Greenback. International alternate impacts are typically quickly in nature
and usually reverse over time.

Basic and administrative   November 30     November 30
                                2021            2020
                             (3 months)      (3 months)      Change      Change
                                  $               $             $          %
Unhealthy debt                           4,316               -       4,316       0.0%
Workplace and miscellaneous          50,478          40,241      10,237      25.4%
Skilled charges                 18,295          46,825     (28,530 )   (60.9% )
Hire                               5,744           6,715        (971 )   (14.5% )
Telecommunications                   821             776          45       5.8%
Journey                             1,395           1,112         283      25.4%
Wages and advantages                69,575          63,880       5,695       8.9%
                                 150,624         159,549      (8,925 )    (5.6% )

Our common and administrative bills encompass salaries and associated
personnel prices together with overhead, workplace lease, and common workplace provides.
Basic and administrative prices additionally embrace skilled charges and common
journey expenditures. The lower in skilled charges is because of a discount of
company administration prices and a discount of litigation prices.

Gross sales and advertising         November 30     November 30
                               2021            2020
                            (3 months)      (3 months)      Change      Change
                                 $               $             $          %
Promoting and advertising        33,011           9,020      23,991     266.0%
Hire                             33,062          31,536       1,526       4.8%
Telecommunications                5,322           4,053       1,269      31.3%
Wages and advantages              344,415         257,865      86,550      33.6%
                                415,810         302,474     113,336      37.5%

Gross sales and advertising bills encompass salaries and associated personnel prices
together with overhead, workplace lease, and telecommunications prices.  Gross sales and
advertising bills additionally embrace promoting and advertising expenditures, which
encompass promotional supplies, on-line or print promoting, enterprise
growth instruments, and advertising or enterprise growth associated journey prices
together with attendance at convention or commerce reveals, and file label and shopper
visits. The rise in staffing prices primarily pertains to the employment of
further workers designed to develop Play MPE®'s market share. The rise in
promoting and advertising bills is expounded to elevated promoting,
sponsorship, and attendance at business occasions within the first quarter.

Product Improvement   November 30     November 30
                         2021            2020
                      (3 months)      (3 months)      Change      Change
                           $               $             $          %
Hire                       22,591          25,079      (2,488 )    (9.9% )
Software program providers          18,177          17,576         601       3.4%
Telecommunications         16,318          16,805        (487 )    (2.9% )
Wages and advantages        201,338         238,628     (37,290 )   (15.6% )
                          258,424         298,088      39,664     (13.3% )

Product growth prices consist primarily of salaries and associated personnel
prices together with overhead and consulting charges with respect to product growth
and deployment. The rise in wages and advantages is expounded to a rise in
staffing in product growth, offset by $72,290 capitalized as inside use
software program within the quarter (November 30, 2020: $Nil).


Depreciation and amortization

Depreciation and amortization expense elevated to $27,172 for the three-month
interval ended November 30, 2021 from $24,315 for the interval ended November 30,
2020, a rise of 11.7% because of a amortization of software program growth prices
related to Play MPE® recipient participant functions.

Different revenue and bills

Curiosity revenue has been $ 1,043 for the three-month interval ended November 30, 2021
(2020: $ 1,464) and is derived from one-year assured funding certificates.

Internet income

In the course of the three month interval ended November 30, 2021 we had a internet revenue of
$ 165,601 (2020 – $ 250,702).

For the three-month interval ended November 30, 2021, adjusted EBITDA was $217,635
(2020 - EBITDA $286,402).  Adjusted EBITDA will not be outlined underneath typically
accepted accounting ideas ("GAAP") and it might not be similar to
equally titled measures reported by different firms. We used Adjusted EBITDA,
together with different GAAP measures, as a measure of profitability as a result of Adjusted
EBITDA helps us to check our efficiency on a constant foundation by eradicating
from our working outcomes the affect of our capital construction, the impact of
working in numerous tax jurisdictions, the affect of our asset base, which
can differ relying on the guide worth of belongings, the accounting strategies used to
compute depreciation and amortization, the existence or timing of asset
impairments and the impact of non-cash stock-based compensation expense. We
consider Adjusted EBITDA is beneficial to traders as it's a broadly used measure of
efficiency and the changes we make to Adjusted EBITDA present additional
readability on our profitability. We take away the impact of non-cash stock-based
compensation from our earnings which might differ based mostly on share value, share value
volatility and anticipated lifetime of the fairness devices we grant. As well as,
this stock-based compensation expense doesn't end in money funds by us.
Adjusted EBITDA has limitations as a profitability measure in that it doesn't
embrace the curiosity expense on our money owed, our provisions for revenue taxes, the
impact of our expenditures for capital belongings, the impact of non-cash
stock-based compensation expense and the impact of asset impairments. The
following is a reconciliation of internet revenue (loss) from operations to Adjusted
EBITDA over the eight most not too long ago accomplished fiscal quarters:

                2022 Q1     2021 This fall     2021 Q3     2021 Q2     2021 Q1     

2020 This fall 2020 Q3 2020 Q2

                                           $           $           $           $           $           $
Internet Revenue
(loss)          165,601      91,699      69,594     (29,466 )   250,702     158,187      54,899     (155,331 )
and deferred
inducements      53,077      40,589      39,806      39,533      37,164      49,085      48,470       37,307
revenue           (1,043 )      (869 )      (823 )      (875 )    (1,464 )    (4,672 )    (5,266 )     (8,110 )
EBITDA          217,635     131,419     108,577       9,192     286,402     202,600      98,103     (126,134 )


As at November 30, 2021, we held $2,536,426 (August 31, 2021 - $2,752,662) in
money and money equivalents and short-term investments.  Our short-term
investments consisted of one-year Assured Funding Certificates (GICs) held
via a significant Canadian monetary establishment, and had reached maturity prior
to November 30, 2021.

AT November 30, 2021, we had working capital of $ 2,682,199 in comparison with
$ 2,561,480 like a August 31, 2021. In the course of the three month interval ended November 30, 2021, the Firm has concluded bidding purchases totaling $ 44,166.

Internet money utilized in working actions for the three-month interval ended November
30, 2021 was $52,626 (2020: internet money offered by working actions of
$441,654).  The first motive for the lower in money flows from working
actions is expounded to modifications in working capital that are anticipated to
reverse over time.


Internet money utilized in investing actions for the three-month interval ended November
30, 2021 was $80,287 (2020: money offered from investing actions of
$758,561). In the course of the three-month interval ended November 30, 2021, $72,290 was
utilized in software program underneath growth.

Internet money utilized in financing actions throughout the three-month interval ended
November 30, 2021 was $44,166 (2020: $nil), associated to money used to repurchase
and retire 30,300 shares of widespread inventory (2020: Nil) of the Firm underneath the


We put together our interim condensed consolidated monetary statements in accordance
with accounting ideas typically accepted in the USA of America,
and make estimates and assumptions that have an effect on our reported quantities of belongings,
liabilities, income and bills, and the associated disclosures of contingent
liabilities. We base our estimates on historic expertise and different
assumptions that we consider are affordable within the circumstances. Precise outcomes
might differ from these estimates.

There have been no vital modifications within the important accounting insurance policies and
estimates described in our Annual Report on Kind 10-Ok for the 12 months ended August
31, 2021 as filed with the SEC on November 23, 2021 aside from these described
in Word 8, "New Accounting Pronouncements" within the notes to our Interim Condensed
Consolidated Monetary Statements included on this Kind 10-Q.


Please consult with Word 8 “New accounting pronouncements” within the notes to our interim condensed consolidated monetary statements included on this Kind 10-Q.

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