Deepspatial Inc. — Interim / Quarterly Report 2022

Jul 12, 2022

Destiny Media Technologies Inc. Announces Fiscal 2022 Third Quarter Results

Vancouver, British Columbia--(Newsfile Corp. - July 12, 2022) - Destiny Media Technologies (TSXV: DSY) (OTCQB: DSNY), the makers of Play MPE®, a cloud-based SaaS solution for digital asset management in the music industry, today announced financial results for its fiscal 2022 third quarter ended May 31, 2022.

"During our third quarter, we continued to grow our product development capacity as we address specific opportunities that we identified in order to expand addressable markets and market conversion," said Fred Vandenberg, President and CEO. "We continue to see growing user activity and revenue in our developing markets with many positive signs for future growth."

Q3 2022 Financial Results

Highlights for Q3 2022 include (all figures are USD, and comparisons are to Q3 2021):

• Currency adjusted Play MPE® revenue down 2.3%
• Currency adjusted European revenue grew by 5.5%
• USA revenue up 1.1%
• Capitalized software development costs of $0.18 million

Nine Months Ended May 31, 2022 Financial Results

Highlights for the nine months ended May 31, 2022 include (all figures are USD, and comparisons are to the nine months ended May 31, 2021):

• Currency adjusted Play MPE® revenue up 0.3%
• Currency adjusted Canadian revenue grew by 27.6%
• Currency adjusted European revenue grew by 3.5%
• USA revenue up 2.1%
• Capitalized software development costs of $0.33 million

During the nine months ended May 31, 2022, under a normal course issuer bid, the Company repurchased 143,100 shares for a total cost of $0.18 million.

Fiscal 2022 Third Quarter Earnings Webinar

Destiny Media Technologies will hold a live webinar on Tuesday, July 12, 2022 at 2:00 p.m. Pacific Standard Time (5:00 p.m. Eastern Standard Time) to discuss financial results for its third quarter ended May 31, 2022. The live webinar will include comments from President and Chief Executive Officer, Fred Vandenberg, and Director of Business Development, Allan Benedict.

Date: Tuesday, July 12, 2022 Time: 2:00 p.m. Pacific Standard Time (5:00 p.m. Eastern Standard Time)

Attendees are encouraged to register prior to the scheduled time at the following: https://investors.dsny.com/investors/financials/ or by clicking on the Webinar Registration Form.

Attendees viewing the webinar can voluntarily submit questions during the live presentation. Attendee cameras will remain off throughout the presentation. Attendees' microphones will remain off unless the attendee voluntarily selects to engage in verbal questions similar to the format available on traditional conference call format.

The webinar format will provide the Company an opportunity to present visual information.

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For those without internet access, the webinar can be accessed via the following dial in details: Direct dial in: +1 312 626 6799 or +1 253 215 8782 Webinar ID: 823 7596 4271

Attendees participating via dial in will not have access the webinar video stream and will not have access to question and answer functions.

A recording of the webinar will be available after the event on https://investors.dsny.com/investors/financials/

DESTINY MEDIA TECHNOLOGIES, INC. Condensed Consolidated Balance Sheets

May 31, 2022 August 31, 2021

ASSETS Cash and cash equivalents $ 1,953,454 $ 2,752,662 Accounts receivable, net of allowance for doubtful accounts of $24,844 (August 31, 2021-$19,743) $ 800,847 $ 400,233 Other receivables $ 23,278 $ 53,172 Prepaid expenses $ 54,937 $ 103,463 Deposits $ 45,269 -

Total current assets $ 2,877,785 $ 3,309,530 Deposits - $ 35,556 Property and equipment, net $ 359,490 $ 143,487 Intangible assets, net $ 254,489 $ 187,622 Right-of-use assets - $ 190,253

Total assets $ 3,491,764 $ 3,866,448

LIABILITIES AND STOCKHOLDERS' EQUITY Current Accounts payable $ 116,158 $ 202,722 Accrued liabilities $ 301,394 $ 309,839 Deferred revenue $ 25,523 $ 8,511 Current portion of operating lease liability - $ 226,978

Total current liabilities $ 443,075 $ 748,050 Total liabilities $ 443,075 $ 748,050

Contingencies - -

Stockholders' equity Common stock, par value $0.001, authorized 20,000,000 shares Issued and outstanding - 10,122,261 shares (August 31, 2021 - 10,265,361 shares) $ 10,122 $ 10,266 Additional paid-in capital $ 9,137,129 $ 9,157,804 Accumulated deficit $(5,828,790) $(5,788,539) Accumulated other comprehensive loss $(269,772) $(261,133)

Total stockholders' equity $ 3,048,689 $ 3,118,398 Total liabilities and stockholders' equity $ 3,491,764 $ 3,866,448

DESTINY MEDIA TECHNOLOGIES, INC. Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

Three Months Ended May 31, 2022 Nine Months Ended May 31, 2021 $ 999,282 $ 1,083,987 $ 3,029,853 $ 3,138,663 Service revenue Hosting costs $ 50,604 $ 32,582 $ 138,399 $ 92,291 Internal engineering support $ 21,497 $ 7,375 $ 43,709 $ 20,998 Customer support $ 121,816 $ 41,794 $ 247,685 $ 118,989 Third-party and transactions costs $ 15,688 $ 16,053 $ 48,686 $ 47,738 209,605 $ 97,804 $ 478,479 $ 280,016 Gross margin $ 789,677 $ 986,183 $ 2,551,374 $ 2,858,647

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Operating expenses General and administrative 318,995 202,878 800,173 526,822 Sales and marketing 113,172 361,411 772,163 1,004,839 Product development 326,125 326,450 944,941 961,930 Depreciation and amortization 36,313 26,673 90,059 77,388 Total 794,605 917,412 2,607,336 2,570,979

Income (loss) from operations

• (4,928) 68,771 (55,962) 287,668

Other income Interest and other income 1,686 823 4,693 3,162 Gain on disposal of assets - - 11,018 -

Net income (loss) $ (3,242) $ 69,594 $ (40,251) $ 290,830 Foreign currency translation adjustments 28,168 149,774 (8,639) 211,897

Total comprehensive income (loss) $ 24,926 $ 219,368 $ (48,890) $ 502,727

Net income (loss) per common share Basic $ (0.00) $ 0.01 $ (0.00) $ 0.03 Diluted $ (0.00) $ 0.01 $ (0.00) $ 0.03

Weighted average common shares outstanding: Basic 10,122,261 10,426,961 10,185,320 10,428,809 Diluted 10,122,261 10,531,708 10,185,320 10,543,442

About Destiny Media Technologies Inc.

Destiny Media Technologies ("Destiny") provides software as service (SaaS) solutions to businesses in the music industry solving critical problems in distribution and promotion. The core service, Play MPE® (www.plaympe.com), provides promotional music marketing to engaged networks of decision makers in radio, film, TV, and beyond. More information can be found at www.dsny.com.

Forward-Looking Statements

This release contains forward-looking statements that reflect current views with respect to future events and operating performance. Any such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in these forward-looking statements. Destiny Media Technologies is not obligated to update these statements in the future. For more information on the Company's risks and uncertainties relating to those forward-looking statements, please refer to the Risk Factors section in our Annual Form 10-K for the fiscal year ended August 31, 2021, which is available on www.sedar.com or www.sec.gov.

Contact:

Fred Vandenberg CEO, Destiny Media Technologies, Inc. 604 609 7736 x236

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/130611