UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
[
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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]
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| Large accelerated filer | [ ] | Accelerated filer | [ ] | ||
| [ ] | Smaller reporting company | ||||
| Emerging growth company |
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APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's class of common stock, as of the latest practicable date:
The number of shares outstanding of the registrant's common stock, par value $0.001, as of July 14, 2026 was
PART I - FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
DESTINY MEDIA TECHNOLOGIES, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
| Notes | May 31, 2026 |
August 31, 2025 |
|||||
| ASSETS | |||||||
| Cash and cash equivalents | 3 | $ | $ | ||||
| Accounts receivable, net of allowance for doubtful accounts of $ |
|||||||
| Other receivables | |||||||
| Prepaid expenses | |||||||
| Deposits | |||||||
| Total current assets | |||||||
| Property and equipment, net | 4 | ||||||
| Intangible assets, net | 5 | ||||||
| Total assets | $ | $ | |||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
| Current | |||||||
| Accounts payable | $ | $ | |||||
| Accrued liabilities | |||||||
| Deferred revenue | |||||||
| Total current liabilities | |||||||
| Total liabilities | |||||||
| Stockholders' equity | |||||||
| Common stock, par value $ |
6 | ||||||
| Additional paid-in capital | |||||||
| Accumulated deficit | ( |
) | ( |
) | |||
| Accumulated other comprehensive loss | ( |
) | ( |
) | |||
| Total stockholders' equity | |||||||
| Total liabilities and stockholders' equity | $ | $ |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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DESTINY MEDIA TECHNOLOGIES, INC.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(Unaudited)
| Three months ended May 31 | Nine months ended May 31 | ||||||||||||
| Notes | 2026 | 2025 | 2026 | 2025 | |||||||||
| 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 | 4,5 | ||||||||||||
| Loss from operations | ( |
) | ( |
) | ( |
) | ( |
) | |||||
| Other income | |||||||||||||
| Interest and other income | |||||||||||||
| Net loss before income tax | ( |
) | ( |
) | ( |
) | ( |
) | |||||
| Current income tax expense | |||||||||||||
| Net loss | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | |
| Foreign currency translation adjustments | ( |
) | ( |
) | ( |
) | |||||||
| Total comprehensive income (loss) | $ | ( |
) | $ | $ | ( |
) | $ | ( |
) | |||
| Net loss per common share | |||||||||||||
| Basic and diluted | 6(d) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) |
| Weighted average common shares outstanding: | |||||||||||||
| Basic | 6(d) | ||||||||||||
| Diluted | 6(d) | ||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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DESTINY MEDIA TECHNOLOGIES, INC.
Condensed Consolidated Statements of Stockholders' Equity
Three and Nine Months Ended May 31, 2026 and 2025
(Unaudited)
| Common stock | |||||||||||||||||||
| Notes | Shares | Amount | Additional Paid-in Capital |
Accumulated Deficit |
Accumulated Other Comprehensive Income (Loss) |
Total Stockholders' Equity |
|||||||||||||
| Balance, August 31, 2024 | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||
| Total comprehensive income (loss) | - | - | - | ( |
) | ||||||||||||||
| Stock-based compensation | 6(b) | - | - | - | - | ||||||||||||||
| Balance, November 30, 2024 | ( |
) | ( |
) | |||||||||||||||
| Total comprehensive income (loss) | - | - | - | ( |
) | ( |
) | ( |
) | ||||||||||
| Stock-based compensation | 6(b) | - | - | - | - | ||||||||||||||
| Balance, February 28, 2025 | ( |
) | ( |
) | |||||||||||||||
| Total comprehensive income (loss) | - | - | - | ( |
) | ||||||||||||||
| Stock-based compensation | 6(b) | - | - | - | - | ||||||||||||||
| Balance, May 31, 2025 | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||
| Common stock | |||||||||||||||||||
| Notes | Shares | Amount | Additional Paid-in Capital |
Accumulated Deficit |
Accumulated Other Comprehensive Income (Loss) |
Total Stockholders' Equity |
|||||||||||||
| Balance, August 31, 2025 | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||
| Total comprehensive income (loss) | - | - | - | ( |
) | ||||||||||||||
| Stock-based compensation | 6(b) | - | - | - | - | ||||||||||||||
| Balance, November 30, 2025 | ( |
) | ( |
) | |||||||||||||||
| Total comprehensive income (loss) | - | - | - | ( |
) | ( |
) | ||||||||||||
| Stock-based compensation | 6(b) | - | - | - | - | ||||||||||||||
| Balance, February 28, 2026 | ( |
) | ( |
) | |||||||||||||||
| Total comprehensive loss | - | - | - | ( |
) | ( |
) | ( |
) | ||||||||||
| Stock-based compensation | 6(b) | - | - | - | - | ||||||||||||||
| Balance, May 31, 2026 | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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DESTINY MEDIA TECHNOLOGIES, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| Nine months ended | |||||||
| May 31, 2026 | May 31, 2025 | ||||||
| Operating Activities | |||||||
| Net loss | $ | ( |
) | $ | ( |
) | |
| Adjustments to reconcile net income (loss) to net cash provided by operations: | |||||||
| Depreciation and amortization | |||||||
| Stock-based compensation | |||||||
| Bad debts | ( |
) | |||||
| 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 | ( |
) | ( |
) | |||
| Purchase of property, equipment, and intangibles | ( |
) | ( |
) | |||
| Net cash used in investing activities | ( |
) | ( |
) | |||
| Financing Activity | |||||||
| Net cash used in financing activity | |||||||
| Effect of foreign exchange rate changes on cash and cash equivalents | ( |
) | ( |
) | |||
| Net increase (decrease) in cash and cash equivalents | ( |
) | |||||
| Cash and cash equivalents, beginning of period | |||||||
| Cash and cash equivalents, end of period | $ | $ | |||||
| Supplementary disclosure: | |||||||
| Interest paid | $ | $ | |||||
| Income taxes paid | $ | $ | |||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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DESTINY MEDIA TECHNOLOGIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2026
1. ORGANIZATION
Destiny Media Technologies Inc. (the "Company") was incorporated in August 1998 under the laws of the State of Colorado and the corporate jurisdiction was changed to Nevada effective October 8, 2014. The Company develops technologies that allow for the distribution over the internet of digital media files in either a streaming or digital download format. The technologies are proprietary. The Company operates out of Vancouver, BC, Canada and serves customers predominantly located in North America, 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.V" on the TSX Venture Exchange (the "TSXV") and under the symbol "DME1.F" on the Berlin, Frankfurt, Xetra and Stuttgart exchanges in Germany.
2. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements include the consolidated accounts of the Company and its wholly owned subsidiaries: Destiny Software Productions, Inc. ("DSPI"), MPE Distributions, Inc. ("MPE"), Tonality, Inc. ("Tonality"), and Sonox Digital Inc. ("Sonox"). All intercompany transactions have been eliminated on consolidation. All figures are in United States dollars unless otherwise stated.
The accompanying unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q have been prepared in conformity with generally accepted accounting principles in the U.S. ("U.S. GAAP"). The unaudited condensed consolidated financial statements presented in this Quarterly Report should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company's Annual Report on Form 10-K filed with the SEC on November 24, 2025 (the "2025 Form 10-K"). The condensed consolidated balance sheet as of August 31, 2025 was derived from audited consolidated financial statements included in the 2025 Form 10-K but does not include all disclosures required by U.S. GAAP for complete financial statements. The Company's significant accounting policies are described in Note 2 to those consolidated financial statements.
Interim results may not be indicative of the results that may be expected for the full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from these interim financial statements. The unaudited condensed consolidated financial statements reflect all adjustments which in the opinion of management are necessary for a fair presentation of results of operations, financial condition, cash flows and stockholders' equity for the periods presented. Except as otherwise disclosed, all such adjustments are of a normal recurring nature.
Use of Estimates
The preparation of the 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 unaudited condensed consolidated financial statements and the reported amounts of revenue and expenses during the reported periods. The Company bases its estimates on historical experience and on various other assumptions that management believes are reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. Significant estimates are related to the labour capitalized to software under development and computer software, the recoverability of long-term assets including property, equipment, and intangible assets, amortization expense, and valuation of stock-based compensation.
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3. 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 an average interest of
4. PROPERTY AND EQUIPMENT, NET
| May 31, 2026 | |||||||||
| Property and Equipment | Cost |
Accumulated Amortization |
Net Book Value | ||||||
| Furniture and fixtures | $ | $ | ( |
) | $ | ||||
| Computer hardware | ( |
) | |||||||
| Computer software | ( |
) | |||||||
| Total property and equipment | $ | $ | ( |
) | $ | ||||
| August 31, 2025 | |||||||||
| Property and Equipment | Cost |
Accumulated Amortization |
Net Book Value | ||||||
| Furniture and fixtures | $ | $ | ( |
) | $ | ||||
| Computer hardware | ( |
) | |||||||
| Computer software | ( |
) | |||||||
| Total property and equipment | $ | $ | ( |
) | $ | ||||
During the three and nine months ended May 31, 2026, the Company reclassified a total of $
Depreciation on property and equipment for the three and nine months ended May 31, 2026 was $
5. INTANGIBLE ASSETS, NET
| May 31, 2026 | |||||||||
| Intangible Assets | Cost |
Accumulated Amortization |
Net Book Value | ||||||
| Software under development | $ | $ | $ | ||||||
| Patents, trademarks, and lists | ( |
) | |||||||
| Total intangible assets | $ | $ | ( |
) | $ | ||||
| August 31, 2025 | |||||||||
| Intangible Assets | Cost |
Accumulated Amortization |
Net Book Value | ||||||
| Software under development | $ | $ | $ | ||||||
| Patents, trademarks, and lists | ( |
) | |||||||
| Total intangible assets | $ | $ | ( |
) | $ | ||||
During the three and nine months ended May 31, 2026, the Company capitalized a total of $
Amortization of intangible assets for the three and nine months ended May 31, 2026 was $
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6. STOCKHOLDERS' EQUITY
[a] Common stock issued and authorized
The Company is authorized to issue up to
During the three and nine months ended May 31, 2026, the Company did not issue any common stock (May 31, 2025 -
[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
A summary of stock option activity under the Plans as of May 31, 2026, and changes during the period were the following:
|
Number of Options |
Weighted Average Exercise Price |
Weighted Average Contractual Term (Years) |
Aggregate Intrinsic Value |
|||||||
| Outstanding at August 31, 2024 | $ | $ | ||||||||
| Forfeited | ( |
$ | $ | |||||||
| Expired | ( |
$ | $ | |||||||
| Outstanding at August 31, 2025 | $ | $ | ||||||||
| Forfeited | ( |
$ | $ | |||||||
| Outstanding at May 31, 2026 | $ | $ | ||||||||
| Exercisable at May 31, 2026 | $ | $ |
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted price of the Company's common stock for the options that were in-the-money as of May 31, 2026. As of May 31, 2026, the aggregate intrinsic value of outstanding and exercisable options were both $
As of May 31, 2026, there was $
During the three and nine months ended May 31, 2026, the Company recorded $
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[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
During the three and nine months ended May 31, 2026, the Company recognized compensation expense of $
[d] Earnings Per Share
Net income (loss) per common share (basic) is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Net income (loss) per common share (diluted) is calculated by dividing net income (loss) for the period by the weighted average number of common shares outstanding during the period, plus the dilutive effect of outstanding common share equivalents. This method requires that the dilutive effect of outstanding options and warrants issued be calculated using the treasury stock method. Under the treasury stock method, all common share equivalents have been exercised at the beginning of the period (or at the time of issuance, if later), and that the funds obtained thereby were used to purchase common shares of the Company at the average trading price of common shares during the period, but only if dilutive. The following table shows the computation of basic and diluted earnings per share for the three and nine months ended May 31, 2026, and 2025:
| Three Months Ended | Nine Months Ended | ||||||||||||
|
May 31, 2026 |
May 31, 2025 |
May 31, 2026 |
May 31, 2025 |
||||||||||
| Numerator: | |||||||||||||
| Net loss | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | |
| Denominator: | |||||||||||||
| Weighted-average basic shares outstanding | |||||||||||||
| Effect of dilutive stock-based awards | |||||||||||||
| Weighted-average diluted shares | |||||||||||||
| Basic and diluted loss per share | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | |
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.
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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.
Revenue from external customers earned during the three and nine months ended May 31, 2026 and 2025, by location of customers, was as follows:
| Three Months Ended | Nine Months Ended | |||||||||||
| May 31, 2026 | May 31, 2025 | May 31, 2026 | May 31, 2025 | |||||||||
| North America | $ | $ | $ | $ | ||||||||
| Europe | ||||||||||||
| Australasia | ||||||||||||
| Africa | ||||||||||||
| Total revenue | $ | $ | $ | $ | ||||||||
Revenue presented above is based on the 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 three and nine months ended May 31, 2026, the Company generated
As at May 31, 2026, one customer represented $
The Company has substantially all its assets in Canada and its current and planned future operations are, and will be, located in Canada.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD LOOKING STATEMENTS
This report on Form 10-Q 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:
These forward-looking statements reflect our management's beliefs and views with respect to future events and are based on estimates and assumptions and are subject to risks and uncertainties, including those described in the Part II, Item 1A under the heading "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. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances 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. ("DSPI"), MPE Distributions, 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.
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 Distributions, 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 400, 22 E5th Avenue, Vancouver, British Columbia V5T 1G8. Our telephone number is (604) 609-7736 and our facsimile number is (604) 609-0611.
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Our common stock trades on TSX Venture Exchange in Canada under the symbol "DSY.V", on the OTCQB U.S. ("OTCQB") under the symbol "DSNY", and on various German exchanges (Frankfurt, Berlin, Stuttgart and Xetra) under the symbol "DME1.F".
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®.
Caster is designed uniquely to suit music marketing plans and its significant components include:
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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® Quickshare
Play MPE®'s Quickshare is a simplified distribution tool for Play MPE® customers to promote music directly to anyone inside or outside the Play MPE® platform. With this feature, customers can send a link to a dedicated webpage to allow streaming or downloading of content outside of Play MPE® Player. The distribution does not include numerous features included within Caster's full version and distribution is intended only to replace other file sharing services while attracting greater use within the Play MPE® platform. The initial version will provide limited access and sharing capabilities free of charge and is a value-added feature within Play MPE® local distribution suite of features.
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:
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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 more than 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.
Recipients enjoy 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.
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MTR™
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.
Products under development
Destiny is currently developing additional functionality and complimentary services that are expected to expand the Company's addressable market, or act as catalysts to the Company's sales activities for Play MPE®. These are described more fully in business development section of our Annual Report on Form 10-K for the fiscal year ended August 31, 2025, filed on November 24, 2025.
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RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MAY 31, 2026 AND 2025
| Three Months Ended | ||||||||||
| May 31, 2026 | May 31, 2025 | Change | ||||||||
| Service revenue | $ | 1,039,118 | $ | 1,133,963 | $ | (94,845 | ) | |||
| Cost of revenue | 166,238 | 161,872 | 4,366 | |||||||
| Gross margin | 872,880 | 972,091 | (99,211 | ) | ||||||
| Operating expenses | 1,097,213 | 1,049,348 | 47,865 | |||||||
| Loss from operations | (224,333 | ) | (77,257 | ) | (147,076 | ) | ||||
| Other income | 11,006 | 4,969 | 6,037 | |||||||
| Net loss | $ | (213,327 | ) | $ | (72,288 | ) | $ | (141,039 | ) | |
Revenue
Total revenue for the three months ended May 31, 2026 was $1,039,118 compared to the revenue of $1,133,963 for the three months ended May 31, 2025, a decrease of 8.4% period over period. Total revenue for the nine months ended May 31, 2026 was $3,285,366 compared to the revenue of $3,379,692 for the nine months ended May 31, 2025, a decrease of 2.8% period over period. Revenue decreased during the quarter primarily due to the execution of a longer-term agreement with a major label customer, which resulted in the elimination of certain short-term pricing that had previously contributed to revenue. Revenue from certain major label customers was also lower compared to the prior year period. These decreases were partially offset by continued strength in the Company's independent customer segment, supported by growth in customer acquisition, improved sales conversion rates and pricing adjustments implemented during the year. While the total number of releases distributed during the quarter decreased compared to the prior year period, revenue generated per release increased. MTR™ revenue decreased by 11.8% during the quarter; however, it remains an immaterial component of the Company's overall revenue.
Gross Margin
Gross margin for the three months ended May 31, 2026 was 84.0% of revenue, compared to 85.7% for the three months ended May 31, 2025. The Company's cost of revenue consists of data hosting and processing charges, third party transaction related costs, and engineering, technical and customer support costs. These costs are driven by the size and volume of customer transactions processed, as well as the relative proportion of "full-service" versus "self-service" revenue. Our self-service sales are derived from customers who have been provided with a customer account to access our encoder to independently upload and publish releases. Our full-service revenue is derived from customers who are fully serviced by our internal staff, who prepare and publish releases on their behalf. During the three months ended May 31, 2026, our gross margin decreased compared to the same period last year. The decrease was primarily due to higher salaries and wages included in cost of revenue, resulting from temporary changes in team responsibilities and organizational adjustments implemented during the period.
Operating Expenses
Operating costs during the three months ended May 31, 2026 increased by 4.6% to $1,097,213 (May 31, 2025 - $1,049,348). The increase in operating costs was primarily the result of the following:
For ease of reference the following table has been prepared to present operating results had the Company not capitalized software development salaries for the three months ended May 31, 2026 and 2025.
| Three Months Ended | ||||||
| May 31, 2026 | May 31, 2025 | |||||
| Net loss for the period | $ | (213,327 | ) | $ | (72,288 | ) |
| Capitalized software under development | (1,585 | ) | (82,592 | ) | ||
| Adjustment to depreciation of capitalized computer software | 159,027 | 185,137 | ||||
| Adjusted net income (loss) for the period | $ | (55,885 | ) | $ | 30,257 | |
15
| Three Months Ended | ||||||||||||
| General and administrative expenses | May 31, 2026 | May 31, 2025 | $ Change | % Change | ||||||||
| Wages and benefits | $ | 256,443 | $ | 94,878 | 161,565 | 170.3% | ||||||
| Professional fees | 30,644 | 16,802 | 13,842 | 82.4% | ||||||||
| Office and miscellaneous | 33,435 | 29,600 | 3,835 | 13.0% | ||||||||
| Shareholder relations | 4,329 | 14,998 | (10,669 | ) | (71.1%) | |||||||
| Rent | 12,641 | 14,177 | (1,536 | ) | (10.8%) | |||||||
| Foreign exchange loss | (18,036 | ) | 28,615 | (46,651 | ) | (163.0%) | ||||||
| Telecommunications | 4,821 | 4,744 | 77 | 1.6% | ||||||||
| Bad debt | 7,143 | (2,960 | ) | 10,103 | (341.3%) | |||||||
| Other | 11,429 | 5,339 | 6,090 | 114.1% | ||||||||
| Total general and administrative expenses | $ | 342,849 | $ | 206,193 | 136,656 | 66.3% | ||||||
General and administrative expenses increased by 66.3% during the period, primarily due to higher wages and benefits, including a one-time employee-related charge and increased consulting costs, as well as higher professional fees. The increase was partially offset by favorable foreign exchange movements compared to the prior year period.
| Three Months Ended | ||||||||||||
| Sales and marketing expenses | May 31, 2026 | May 31, 2025 | $ Change | % Change | ||||||||
| Wages and benefits | $ | 136,844 | $ | 186,033 | (49,189 | ) | (26.4%) | |||||
| Advertising and marketing | 28,794 | 38,491 | (9,697 | ) | (25.2%) | |||||||
| Rent | 7,706 | 3,938 | 3,768 | 95.7% | ||||||||
| Telecommunications | 180 | 298 | (118 | ) | (39.6%) | |||||||
| Total sales and marketing expenses | $ | 173,524 | $ | 228,760 | (55,236 | ) | (24.1%) | |||||
Sales and marketing expenses decreased by 24.1% during the period, primarily due to lower wages and benefits and reduced marketing expenditures. The decrease in wages and benefits reflects changes in the allocation of personnel costs among operating functions during the quarter.
| Three Months Ended | ||||||||||||
| Product development expenses | May 31, 2026 | May 31, 2025 | $ Change | % Change | ||||||||
| Wages and benefits | $ | 324,830 | $ | 326,638 | (1,808 | ) | (0.6%) | |||||
| Software services | 27,122 | 28,046 | (924 | ) | (3.3%) | |||||||
| Rent | 9,732 | 18,456 | (8,724 | ) | (47.3%) | |||||||
| Telecommunications | 54,657 | 50,830 | 3,827 | 7.5% | ||||||||
| Product development expenses | $ | 416,341 | $ | 423,970 | (7,629 | ) | (1.8%) | |||||
Product development expenses decreased by 1.8% during the period and remained relatively consistent with the prior year period. The decrease was primarily due to lower rent expense, reflecting office cost reduction initiatives and changes in the allocation of rent expense among operating departments.
Depreciation and Amortization
Depreciation and amortization expense decreased to $164,499 for the three months ended May 31, 2026, from $190,425 for the three months ended May 31, 2025, a decrease of 13.6% primarily due to a lower level of capitalized software development costs in recent quarters, resulting in a reduced amortization base.
Other Income
Interest income earned on the Company's mutual funds was $7,025 for the three months ended May 31, 2026 (May 31, 2025 - $4,969). One time gain on sale of property and equipment was $3,981 for the three months ended May 31, 2026 (May 31, 2025- $nil), resulting from the sale of certain assets during the period.
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RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED MAY 31, 2026 AND 2025
| Nine Months Ended | |||||||||
| May 31, 2026 | May 31, 2025 | Change | |||||||
| Service revenue | $ | 3,285,366 | $ | 3,379,692 | $ | (94,326 | ) | ||
| Cost of revenue | 515,434 | 467,274 | 48,160 | ||||||
| Gross margin | 2,769,932 | 2,912,418 | (142,486 | ) | |||||
| Operating expenses | 3,485,902 | 3,188,530 | 297,372 | ||||||
| Loss from operations | (715,970 | ) | (276,112 | ) | (439,858 | ) | |||
| Other income | 19,985 | 19,870 | 115 | ||||||
| Net loss | $ | (695,985 | ) | $ | (256,242 | ) | $ | (439,743 | ) |
Revenue
Total revenue for the nine months ended May 31, 2026 was $3,285,366 compared to the revenue of $3,379,692 for the nine months ended May 31, 2025, a decrease of 2.8% period over period.
The decrease in revenue during the nine-month period was primarily attributable to lower revenue generated from major label customers, including the impact of a longer-term agreement with a major label customer that reduced certain short-term pricing available in prior periods. The decline was partially offset by continued growth in the Company's independent customer segment, which experienced increases in customer acquisition and customer engagement during the period. After adjusting for the impact of foreign exchange rate fluctuations, revenue for the nine months ended May 31, 2026 decreased by 2.9% compared to the prior year period.
Gross Margin
Gross margin for the nine months ended May 31, 2026 was 84.3% of revenue, compared to 86.2% for the same period in 2025. The decrease was primarily due to higher infrastructure costs associated with additional hosting capacity deployed to support the Company's platform, as well as higher salaries and wages included in cost of revenue resulting from organizational changes and temporary increases in employee responsibilities during the period.
Operating Expenses
Operating costs during the nine months ended May 31, 2026 increased by 9.3% to $3,485,902 (May 31, 2025 - $3,188,530). This rise can be primarily attributed to the following factors:
For ease of reference the following table has been prepared to present operating results had the Company not capitalized software development salaries for the nine months ended May 31, 2026 and 2025.
| Nine Months Ended | ||||||
| May 31, 2026 | May 31, 2025 | |||||
| Net loss for the period | $ | (695,985 | ) | $ | (256,242 | ) |
| Capitalized software under development | (40,136 | ) | (285,297 | ) | ||
| Adjustment to depreciation of capitalized computer software | 483,228 | 521,531 | ||||
| Adjusted net loss for the period | $ | (252,893 | ) | $ | (20,008 | ) |
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| Nine Months Ended | ||||||||||||
| General and administrative expenses | May 31, 2026 | May 31, 2025 | $ Change | % Change | ||||||||
| Wages and benefits | $ | 733,171 | $ | 258,148 | 475,023 | 184.0% | ||||||
| Professional fees | 109,247 | 277,640 | (168,393 | ) | (60.7%) | |||||||
| Office and miscellaneous | 86,339 | 83,132 | 3,207 | 3.9% | ||||||||
| Shareholder relations | 50,589 | 57,032 | (6,443 | ) | (11.3%) | |||||||
| Rent | 40,688 | 37,309 | 3,379 | 9.1% | ||||||||
| Foreign exchange loss (gain) | 5,852 | (4,061 | ) | 9,913 | (244.1%) | |||||||
| Telecommunications | 7,309 | 7,338 | (29 | ) | (0.4%) | |||||||
| Bad debt | 29,124 | 2 | 29,122 | 100% | ||||||||
| Other | 37,194 | 35,872 | 1,322 | 3.7% | ||||||||
| Total general and administrative expenses | $ | 1,099,513 | $ | 752,412 | 347,101 | 46.1% | ||||||
General and administrative expenses increased by 46.1% during the period, primarily due to higher wages and benefits, including a one-time employee-related charge, lower capitalization of development costs and increased consulting costs. These increases were partially offset by lower professional fees compared to the prior year period, primarily due to litigation-related legal costs incurred in the prior year that did not recur in the current period.
| Nine Months Ended | ||||||||||||
| Sales and marketing expenses | May 31, 2026 | May 31, 2025 | $ Change | % Change | ||||||||
| Wages and benefits | $ | 465,132 | $ | 541,162 | (76,030 | ) | (14.0%) | |||||
| Advertising and marketing | 100,096 | 71,607 | 28,489 | 39.8% | ||||||||
| Rent | 21,124 | 17,474 | 3,650 | 20.9% | ||||||||
| Telecommunications | 745 | 998 | (253 | ) | (25.4%) | |||||||
| Total sales and marketing expenses | $ | 587,097 | $ | 631,241 | (44,144 | ) | (7.0%) | |||||
Sales and marketing expenses decreased by 7.0% during the period, primarily due to lower wages and benefits resulting from changes in personnel responsibilities and cost allocations. This decrease was partially offset by higher advertising and marketing expenditures to support ongoing marketing initiatives.
| Nine Months Ended | ||||||||||||
| Product development expenses | May 31, 2026 | May 31, 2025 | $ Change | % Change | ||||||||
| Wages and benefits | $ | 1,004,843 | $ | 965,312 | 39,531 | 4.1% | ||||||
| Software services | 86,639 | 80,561 | 6,078 | 7.5% | ||||||||
| Rent | 42,833 | 54,911 | (12,078 | ) | (22.0%) | |||||||
| Telecommunications | 160,976 | 162,965 | (1,989 | ) | (1.2%) | |||||||
| Product development expenses | $ | 1,295,291 | $ | 1,263,749 | 31,542 | 2.5% | ||||||
Product development expenses increased by 2.5% during the period, primarily due to lower capitalization of software development costs, resulting in a higher portion of development payroll being recognized as expense.
Depreciation and Amortization
Depreciation and amortization expense decreased to $504,001 for the nine months ended May 31, 2026 from $541,128 for the nine months ended May 31, 2025, a decrease of 6.9% primarily due to a lower level of capitalized software development costs in recent quarters, resulting in a reduced amortization base.
Other Income
Interest income earned on the Company's mutual funds was $16,004 for the nine months ended May 31, 2026 (May 31, 2025 - $19,870). One time gain on sale of property and equipment was $3,981 for the nine months ended May 31, 2026 (May 31, 2025- $nil).
18
Net Income (Loss)
During the three and nine months ended May 31, 2026 the Company reported a net loss of $213,327 and $695,985, respectively (May 31, 2025 - a net loss of $72,288 and $256,242, respectively).
For the three and nine months ended May 31, 2026, adjusted EBITDA loss was $(55,500) and $(205,597), respectively (May 31, 2025 - adjusted EBITDA was $122,097 and $292,848, respectively). 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 (loss) from operations to Adjusted EBITDA:
| Q3 2026 | Q2 2026 | Q1 2026 | Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | |||||||||||||||||
| Net income (loss) | $ | (213,327 | ) | (566,310 | ) | 83,652 | (381,635 | ) | (72,288 | ) | (302,094 | ) | 118,140 | (142,222 | ) | |||||||||
| Stock-based compensation | 353 | 705 | 1,333 | 3,896 | 8,929 | 8,144 | 10,759 | 11,107 | ||||||||||||||||
| Depreciation and amortization | 164,499 | 167,017 | 172,485 | 292,486 | 190,425 | 183,724 | 166,979 | 213,917 | ||||||||||||||||
| Interest income | (7,025 | ) | (4,053 | ) | (4,926 | ) | (5,319 | ) | (4,969 | ) | (6,493 | ) | (8,408 | ) | (10,529 | ) | ||||||||
| Adjusted EBITDA | $ | (55,500 | ) | (402,641 | ) | 252,544 | (90,572 | ) | 122,097 | (116,719 | ) | 287,470 | 72,273 |
LIQUIDITY AND FINANCIAL CONDITION
As at May 31, 2026, we held $1,397,098 (August 31, 2025 - $1,117,889) 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.
At May 31, 2026, we had working capital of $1,369,118 compared to $1,634,587 as at August 31, 2025. 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 the periods indicated:
| Nine Months Ended | |||||||||||||
| Net cash and cash equivalents provided by (used in) | May 31, 2026 | May 31, 2025 | $ Change | % Change | |||||||||
| Operating activities | $ | 355,433 | $ | 138,911 | 216,522 | 155.9% | |||||||
| Investing activities | (53,662 | ) | (314,225 | ) | 260,563 | (82.9%) | |||||||
| Financing activity | - | - | - | - | |||||||||
| Effect of foreign exchange rate changes on cash and cash equivalents | (22,562 | ) | (44,562 | ) | 22,000 | (49.4%) | |||||||
| Net increase (decrease) in cash and cash equivalents | $ | 279,209 | $ | (219,876 | ) | 499,085 | (227.0%) | ||||||
Operating Activities
Net cash provided by operating activities during the nine months ended May 31, 2026 was $355,433 (May 31, 2025 - $138,911). The increase in cash provided by operating activities was primarily due to favorable changes in working capital, including improved collections of accounts receivable.
19
Investing Activities
Net cash used in investing activities for the nine months ended May 31, 2026 was $53,662, compared to cash used in investing activities of $314,225 for the nine months ended May 31, 2025. The decrease in cash used in investing activities was primarily due to lower capitalized software development costs during the current period.
Financing Activity
Net cash used in financing activity during the nine months ended May 31, 2026 was $nil (May 31, 2025 - $nil).
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.
For a description of our critical accounting policies, see the sections entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Significant Judgements and Estimates" and "Financial Statements and Supplementary Data - Note 2, Summary of Significant Accounting Policies" contained in our 2025 Form 10-K. There have not been any material changes to the critical accounting policies discussed therein during the three and nine months ended May 31, 2026.
OFF-BALANCE SHEET ARRANGEMENTS
As of May 31, 2026, 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.
20
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Foreign Exchange Risk
Our revenues are denominated primarily in United States 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 periods presented.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Disclosure controls and procedures and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time period specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to management including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
In connection with this quarterly report, as required by Rule 13a-15 under the Securities Exchange Act of 1934, we have carried out an evaluation of the effectiveness of the design and operation of our Company's disclosure controls and procedures. This evaluation was carried out under supervision and with the participation of our Company's management, including our company's Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our Company's Chief Executive Officer and Chief Financial Officer concluded that as of May 31, 2026, our disclosure controls and procedures were effective as at the end of the period covered by this report.
Changes in Internal Control over Financial Reporting
There were no changes that would impact our internal controls for the period from March 1, 2026, to May 31, 2026.
21
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Company is not a party to any material legal proceedings.
ITEM 1A. RISK FACTORS.
In addition to the other information set forth in this Form 10-Q, you should carefully consider the factors discussed in "Item 1.A - Risk Factors" in our Form 10-K for the fiscal year ended August 31, 2025, filed with the SEC. These risks could materially and adversely affect our business, financial condition and results of operations. The risks described in our Form 10-K have not changed materially, however, they are not the only risks we face. Our operations could also be affected by additional factors that are not presently known to us or by factors that we currently consider immaterial to our business.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
Not Applicable.
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS.
| 31.1* | Section 302 Certification of Chief Executive Officer |
| 31.2* | Section 302 Certification of Chief Financial Officer |
| 32.1* | Section 906 Certification of Chief Executive Officer and Chief Financial Officer |
| 101.INS* | Inline XBRL Instance Document–the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document |
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
* Filed herewith
22
SIGNATURES
Pursuant to the requirements 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/Hyonmyong Cho | |
| Hyonmyong Cho | ||
| Chairman, Interim Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| Date: July 14, 2026 | ||
| By: | /s/Assel Mendesh | |
| Assel Mendesh | ||
| Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) | ||
| Date: July 14, 2026 |
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