UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
(X)QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended May 31, 2000
OR
( ) 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: 0-028259
DESTINY MEDIA TECHNOLOGIES INC.
(Exact name of registrant as specified in its charter)
Colorado 84-1516745
-------- ----------
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
555 West Hastings Street, Suite 950, Vancouver, British Columbia Canada V6B 4N4
-------------------------------------------------------------------------------
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (604) 609-7736
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 since May 16, 1992 and (2) has been subject to the above filing
requirements for the past 90 days.
Yes X No __
---
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Sections 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes ___ No ___
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of May 31, 2000. Common Stock, no par value
22,501,000 Shares.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS.
Attached hereto and incorporated herein by reference.
Interim Consolidated Financial Statements of
DESTINY MEDIA TECHNOLOGIES INC.
(A Development Stage Company)
(Expressed in U.S. Dollars)
May 31, 2000
<PAGE>
<TABLE>
<CAPTION>
DESTINY MEDIA TECHNOLOGIES INC.
(A Development Stage Company)
Interim Consolidated Balance Sheet
(Expressed in U.S. Dollars)
May 31, August 31,
2000 1999
------------ ------------
(unaudited)
Assets
<S> <C> <C>
Current asset:
Cash $ 549,444 $ -
Accounts receivable 11,420 -
Shareholder loans 54,652 -
Prepaids 24,889 -
------------ ------------
Total current assets 640,405 -
Property and equipment, net 104,621 -
Intellectual property, net 143,591 594,236
Products under development, net 140,034 -
Goodwill, net 89,880 -
------------ ------------
$ 1,118,531 $ 594,236
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 74,297 $ -
Loans payable - 594,236
------------ ------------
74,297 594,236
Long-term debt 191,684 -
Stockholders' equity:
Common stock, authorized 100,000,000 shares, with a
par value of $0.001 per share; with 22,501,000 shares
issued and outstanding at May 31, 2000 22,501 5,950
Additional paid-in capital 1,806,524 53,550
Deficit accumulated during the development stage (975,181) (59,500)
Cumulative translation adjustment (1,294) -
------------ ------------
Total stockholders' equity 852,550 -
------------ ------------
$ 1,118,531 $ 594,236
============ ============
</TABLE>
See accompanying notes to interim consolidated financial statements.
1
<PAGE>
<TABLE>
<CAPTION>
DESTINY MEDIA TECHNOLOGIES INC.
(A Development Stage Company)
Interim Consolidated Statements of Operations
(Expressed in U.S. Dollars)
Period from
August 24, 1998
Nine months ended Three months (inception)
May 31, May 31, May 31, May 31, to May 31,
2000 1999 2000 1999 2000
---------- --------- ---------- ----------- ---------------
(unaudited) (unaudited) (unaudited)
<S> <C> <C> <C> <C> <C>
Sales $ 11,636 $ - $ 7,956 $ - $ 11,636
Operating expenses
Advertising and promotion 109,264 - 85,500 - 109,264
Amortization 66,809 - 31,904 - 66,809
Bank charges and interest 2,958 - 982 - 2,958
Consulting 27,510 - 22,378 - 27,510
Filings and listings 8,308 450 8,233 - 8,758
Financing 16,832 - - - 16,832
Management fees 104,534 27,125 49,583 11,833 143,492
Marketing 121,119 - 73,944 - 121,119
Meals and entertainment 2,756 - 1,385 - 2,756
Office and miscellaneous 13,508 6,689 6,824 2,684 22,882
Professional fees 74,228 1,681 52,722 287 76,196
Rent 31,554 5,300 14,124 2,700 39,554
Repairs and maintenance 2,565 - 2,083 - 2,565
Shareholder relations & transfer agent 17,784 600 12,732 150 18,534
Subcontracts 33,818 - 17,138 - 33,818
Trademark 5,810 - - - 5,810
Telephone and telecommunications 24,020 - 12,295 - 24,020
Travel 19,909 - 14,685 - 19,909
Wages and benefits 199,908 - 102,670 - 199,908
Write-off of goodwill 8,777 - 8,777 - 8,777
Write-off of products under development 4,398 - 4,398 - 4,398
Write-off of in-process research and
development 33,846 - - - 33,846
---------- --------- ---------- ----------- -------------
930,215 41,845 522,357 17,654 989,715
Interest income 2,898 - 907 - 2,898
---------- --------- ---------- ----------- -------------
Loss for the period $(915,681) $(41,845) $(513,494) $ (17,654) $ (975,181)
========== ========= ========== ============ =============
Net loss per common share, basic and diluted $ (0.043) $ (0.004) $ (0.023) $ (0.001) $ (0.062)
========== ========= ========== ============ =============
Weighted average common shares
outstanding, basic and diluted 21,180,128 9,734,615 22,501,000 16,822,826 15,615,309
=========== ========= ========== ============ =============
</TABLE>
See accompanying notes to interim consolidated financial statements.
2
<PAGE>
<TABLE>
<CAPTION>
DESTINY MEDIA TECHNOLOGIES INC.
(A Development Stage Company)
Interim Consolidated Statement of Stockholders' Equity
(Expressed in U.S. Dollars)
For the nine months ended May 31, 2000
Period from August 24, 1998 (inception) to May 31, 2000
Deficit
Accumulated
Common Stock Other During Cumulative Total
--------------------- Paid-In Development Translation Stockholders'
Shares Amount Capital Stage Adjustment Equity
---------- ------- ---------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance, August 24, 1998 - $ - $ - $ - $ - $ -
Common stock issued for
cash 17,850,000 17,850 41,650 - - 59,500
Net loss - - - (59,500) - (59,500)
---------- ------- ---------- ------------ ---------- -------------
Balance, August 31, 1999 17,850,000 17,850 41,650 (59,500) - -
Common stock issued for
cash 1,360,276 1,360 1,148,302 - - 1,149,662
Common stock issued on
acquisition 1,800,000 1,800 (1,200) - - 600
Common stock issued for
retirement of debt 1,490,724 1,491 617,772 - - 619,263
Cumulative translation
adjustment - - - - (1,294) (1,294)
Net loss - - - (915,681) - (915,681)
---------- ------- ---------- ------------ ---------- -------------
Unaudited balance,
May 31, 2000 22,501,000 $22,501 $1,806,524 $ (975,181) $ (1,294) $ 852,550
========== ======= ========== ============ =========== =============
</TABLE>
See accompanying notes to interim consolidated financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
DESTINY MEDIA TECHNOLOGIES INC.
(A Development Stage Company)
Interim Consolidated Statement of Cash Flows
(Expressed in U.S. dollars)
Period from
August 24, 1998
Nine months ended Three months ended (inception)
May 31, May 31, May 31, May 31, to May 31,
2000 1999 2000 1999 2000
----------- ----------- ----------- ----------- -----------
(unaudited) (uaudited) (unaudited)
Cash flows from operating activities:
Operations:
<S> <C> <C> <C> <C> <C>
Loss for the period $ (915,681) $ (41,845) $ (513,494) $ (17,654) $ (975,181)
Items not involving cash:
Depreciation 66,809 - 31,904 - 66,809
Write-off of goodwill 8,777 - 8,777 - 8,777
Write-off of products under development 4,398 - 4,398 - 4,398
Write-off of in-process research and development 33,846 - - 33,846
Changes in operating asset and liabilities:
Accounts receivable (2,917) - (8,709) - (2,917)
Prepaid expenses (25,549) - (5,059) - (25,549)
Intellectual property (680) - (680) - (680)
Products under development (6,394) - (6,394) - (6,394)
Accounts payable 59,911 - 70,015 - 59,911
----------- ----------- ----------- ----------- -----------
Net cash used in operating activities (777,480) (41,845) (419,242) (17,654) (836,980)
----------- ----------- ----------- ----------- -----------
Cash flows from investing activities:
Cash acquired on acquisition 250,719 - - - 250,719
Purchase of property and equipment (42,526) - (19,121) - (42,526)
----------- ----------- ----------- ----------- -----------
Net cash provided by investing activities 208,193 - (19,121) - 208,193
----------- ----------- ----------- ----------- -----------
Cash flows from financing activities:
Long-term debt 22,734 - - - 22,734
Shareholder loan (54,651) - 93,005 - (54,651)
Net proceeds from issuances of
common stock and subscriptions 1,149,662 - - - 1,209,162
----------- ----------- ----------- ----------- -----------
Net cash provided by financing activities 1,117,745 - 93,005 - 1,177,245
----------- ----------- ----------- ----------- -----------
Net increase (decrease) in cash and
cash equivalents during the period 548,458 (41,845) (345,358) (17,654) 548,458
Effect of foreign exchange rate changes on cash 986 - 4,536 - 986
Cash and cash equivalents at beginning of period - 59,500 890,266 35,309 -
----------- ----------- ----------- ----------- -----------
Cash and cash equivalents at end of period $ 549,444 $ 17,655 $ 549,444 $ 17,655 $ 549,444
=========== =========== =========== =========== ===========
Supplementary disclosure:
Non-cash transactions:
Stock issued to acquire Destiny
Software Productions Inc. $ 600 $ - $ - $ - $ 600
Stock issued for retirement of debt 619,263 - - - 619,263
</TABLE>
See accompanying notes to interim consolidated financial statements.
4
<PAGE>
DESTINY MEDIA TECHNOLOGIES INC.
(A Development Stage Company)
Notes to Interim Consolidated Financial Statements
(Expressed in U.S. dollars)
(Unaudited)
For the nine months ended May 31, 2000
--------------------------------------------------------------------------------
1. Organization
Destiny Media Technologies Inc. (the "Company") was incorporated in August
24, 1998 as Euro Industries Ltd. under the laws of the State of Colorado.
On October 19, 1999, the Company's name was changed to Destiny Media
Technologies Inc.
During the period from incorporation on August 24, 1998 to August 31, 1998,
the Company earned no revenue and incurred no expenses.
2. Future operations
From inception of the business, the Company has incurred cumulative losses
of $975,181 and used cash for operating activities of $836,980.
These financial statements have been prepared on the going concern basis
under which an entity is considered to be able to realize its assets and
satisfy its liabilities in the ordinary course of business. Operations to
date have been primarily financed by long-term debt and equity
transactions. The Company's future operations are dependent upon continued
support by creditors and shareholders, the achievement of profitable
operations and the successful completion of management's plan to obtain
additional equity financing. There can be no assurances that the Company
will be successful. The consolidated financial statements do not include
any adjustments relating to the recoverability of assets and classification
of assets and liabilities that might be necessary should the Company be
unable to continue as a going concern.
3. Acquisition
On October 20, 1999, 1,800,000 common shares were issued for the purchase
of Destiny Software Productions Ltd. ("Destiny Software"). Destiny Software
is a high-tech development company that develops video and audio
compression software and to a lesser extent design and development of
computer games. The transaction has been recorded under the purchase method
of accounting. The Company's interest in the net assets acquired, at
assigned values are estimated to be as follows:
5
<PAGE>
DESTINY MEDIA TECHNOLOGIES INC.
(A Development Stage Company)
Notes to Interim Consolidated Financial Statements
(Expressed in U.S. dollars)
(Unaudited)
For the nine months ended May 31, 2000
--------------------------------------------------------------------------------
3. Acquisition, continued
<TABLE>
<CAPTION>
Canadian U.S.
-------------- -------------
<S> <C> <C>
Cash $ 370,387 $ 250,719
Other current assets 12,885 8,722
Capital assets 135,878 91,977
Intellectual property 250,000 169,227
Products under development 206,804 139,988
Goodwill 170,606 115,485
Acquired in process research and development 50,000 33,846
Current liabilities (21,922) (14,839)
Long-term liabilities (1,173,752) (794,525)
-------------- -------------
$ 886 $ 600
-------------- -------------
Consideration
1,800,000 common shares $ 600
-------------- -------------
</TABLE>
These above indicated values for net assets are considered preliminary
estimates only and are subject to change.
Acquired in process research and development is valued based on accumulated
expenditures incurred to date on specifically identified products that are
in the early stages of development. Goodwill has been valued as equal to
the excess of the fair value of the consideration given over the fair value
of the net identifiable assets and liabilities acquired.
The fair market value of the consideration paid for the acquisition was
based on the trading price of the Company's shares at the time the
transaction was initially discussed. At that time, there had been only one
significant block of shares traded. The per share value of this trade was
considered representative of fair market value.
A 20% shareholder of the Company owned 100% of the outstanding shares of
Destiny Software.
6
<PAGE>
DESTINY MEDIA TECHNOLOGIES INC.
(A Development Stage Company)
Notes to Interim Consolidated Financial Statements
(Expressed in U.S. dollars)
(Unaudited)
For the nine months ended May 31, 2000
--------------------------------------------------------------------------------
4. Significant accounting policies
(a) Basis of presentation
These consolidated financial statements have been prepared using
generally accepted accounting principles in the United States. The
financial statements include the accounts of the Company's wholly owned
subsidiaries, Destiny Software Productions Inc. and Wonderfall
Productions Inc., and all adjustments, consisting solely of normal
recurring adjustments, which in management's opinion are necessary for
a fair presentation of the financial results for the interim periods.
The financial statements have been prepared consistent with the
accounting policies described in the Company's financial statements for
the period ended August 31, 1999 and should be read in conjunction
therewith. For United States accounting and reporting purposes, the
Company is considered to be in the development stage as it is devoting
all of its efforts to developing its business operations.
Certain comparative figures have been reclassified to conform to the
presentation adopted in the current year.
(b) Research and development costs
Research costs are expensed as incurred. Internal development costs are
expensed as incurred unless they meet certain criteria under generally
accepted accounting principles for deferral and amortization. Software
and related development costs, after the establishment of technological
feasibility and commercial viability, are capitalized as products under
development until the product is ready for general release to
customers. Amortization is provided on a product by product basis over
the estimated economic life of the product, not to exceed three years.
Amortization commences when the product is available for general
release to customers.
(c) Revenue recognition
The Company recognizes revenue when title has passed to the customer,
the collectibility of the consideration is reasonably assured and the
Company has no significant remaining performance obligations.
(d) Capital assets
Capital assets are carried at cost less accumulated amortization.
Amortization is calculated annually as follows:
Furniture and fixtures Declining balance 20%
Computer equipment Declining balance 30%
Computer software Straight-line 50%
Leasehold improvements Straight-line Lease-term
7
<PAGE>
DESTINY MEDIA TECHNOLOGIES INC.
(A Development Stage Company)
Notes to Interim Consolidated Financial Statements
(Expressed in U.S. dollars)
(Unaudited)
For the nine months ended May 31, 2000
--------------------------------------------------------------------------------
4. Significant accounting policies, continued
(e) Products under development
Products under development represent products that have been developed
to the stage of a working model and are carried at cost less
accumulated amortization. Amortization is provided on a straight-line
basis over two years.
(f) Goodwill
Goodwill represents the excess of the cost to acquire businesses over
the fair market value of the net assets acquired. These amounts are
amortized on a straight-line basis over three years. The Company
periodically evaluates the recoverability of goodwill and recognizes an
impairment loss if the projected undiscounted future cash flows are
less than the carrying amount. The amount of the impairment charge, if
any, is measured based on the discounted future operating cash flows
reflecting the Company's average cost of funds. The assessment of the
recoverability of goodwill will be impacted if estimated future
operating cash flows differ from those estimates.
(g) Stock split
These financial statements and related notes have been adjusted to give
retroactive effect to a three-for-one common share stock split which
occurred December 31, 1999.
(h) Use of estimates
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amount of revenue and
expenses during the reporting period. Actual amounts may differ from
these estimates.
(i) Income taxes
The Company follows the asset and liability method of accounting for
income taxes. Deferred tax assets and liabilities are recognized based
on the estimated future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and
liabilities and their respective tax basis. Deferred tax assets and
liabilities are measured using enacted tax rates in effect for the year
in which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change
in tax rates is recognized in income in the period that includes the
enactment date. To the extent that the realizability of deferred tax
assets is not considered by management to be more likely than not, a
valuation allowance is provided.
8
<PAGE>
DESTINY MEDIA TECHNOLOGIES INC.
(A Development Stage Company)
Notes to Interim Consolidated Financial Statements
(Expressed in U.S. dollars)
(Unaudited)
For the nine months ended May 31, 2000
--------------------------------------------------------------------------------
4. Significant accounting policies, continued
(j) Net loss per common share
Basic loss per share is computed by dividing net loss by the weighted
average number of common shares outstanding during the period. Diluted
loss per share is computed including in the weighted average number of
common shares outstanding, potentially dilutive common shares
outstanding during the period. As the Company had a net loss in the
period presented, basic and diluted net loss per share is the same.
(k) Foreign currency
Transactions denominated in foreign currencies are translated at the
rate prevailing at the time of the transactions.
At the balance sheet date, monetary assets and liabilities denominated
in a foreign currency are translated at the current rate of exchange.
Exchange gains and losses arising on translation or settlement of
foreign currency denominated monetary items are included in the
determination of net income for the current period.
5. Related party transactions
The Company issued shares to settle a long-term note receivable outstanding
to a significant shareholder. The Company also advanced $54,652 to a
shareholder. The advance related to ongoing financing of the Company.
6. Operating leases
The Company leases office facilities in British Columbia under an operating
lease agreement that expires May 31, 2001. Additional premises will be
leased beginning June 1, 2000. Minimum lease payments to May 31, 2001 under
these operating leases are $109,710.
9
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following information contains certain forward-looking statements that
anticipate future trends or events. These statements are based on certain
assumptions that may prove to be erroneous and are subject to certain risks
including but not limited to the risks of increased competition in the Company's
industry and other risks detailed in the Company's Securities and Exchange
Commission filings. Accordingly, actual results may differ, possibly materially,
from the predictions contained herein.
During the three months ended May 31, 2000, the Company experienced a net loss
of $513,494 as compared to a net loss of $17,654 for the three months ended May
31, 1999. The increase was due to a significant expansion of operations which
began in the first quarter of Fiscal 2000 and continued in the second and third
quarters. During this time the Company hired additional personnel; expanded its
facilities in the corporate headquarters; began additional research and
development; and, enlarged its marketing operations. The overall result was a
net loss of $513,494 for the third quarter of Fiscal 2000 and a net loss for the
first nine months of Fiscal 2000 of $915,681.
RESULTS OF OPERATIONS:
Reference is made to Item 2, "Management's Discussion and Analysis or Plan of
Operation" included in the Company's registration statement on Form 10-SB for
the year ended August 31, 1999, as amended, on file with the Securities and
Exchange Commission. The following discussion and analysis pertains to the
Company results of operations for the three-month and nine-month periods ended
May 31, 2000, compared to the results of operations for the three-month and
nine-month periods ended May 31, 1999, and to changes in the Company's financial
condition from August 31, 1999 to May 31, 2000.
THREE MONTHS ENDED May 31, 2000 and 1999:
For the third quarter of the current fiscal year, ending May 31, 2000, sales
were $7,956 as compared to nil for the same quarter of the previous year. The
modest sales were a result of the fact that the Company is currently engaged
primarily in research and development of its software products relating to
internet audio applications and did begin a significant marketing campaign for
these products until the end of the nine months ended May 31, 2000.
Operating expenses for the Company were $522,357 for the third quarter up from
$17,654 for the third quarter of last year. Because of the Company's expansion
in operations, increases occurred in every category of operating expenses. The
most significant expenses occurred in the categories of wages and benefits
($102,670); advertising and promotion ($85,500); amortization ($31,904);
consulting ($22,378); management fees ($49,583); marketing ($73,944); and,
professional fees ($52,722).
<PAGE>
The net loss for the quarter was $513,494 which represents a substantial
increase over the third quarter of last year when the net loss was $17,654. The
increase in the net loss was due to significant increases in all categories of
operating expenses over the prior period which resulted from the expansion of
operations described in the preceding paragraph.
The loss per share (fully diluted) was ($0.02) for the three months ended May
31, 2000 compared to $0.00 for the three months ended May 31, 2000.
NINE MONTHS ENDED MAY 31, 2000:
Sales in the first nine months ended May 31, 2000 were $11,636 compared to nil
for the nine months ended May 31, 1999. As was the case for the three months
period ended May 31, 2000, the modest sales were a result of the fact that the
Company is currently engaged primarily in research and development of its
software products relating to internet audio applications and did not begin a
significant marketing campaign for these products until the end of the nine
month period ended May 31, 2000.
Operating expenses for the Company were $930,215 for the nine months ended May
31, 2000 up from $41,845 for the nine months ended May 31, 1999. The primary
reasons for the increase of $888,370 are increases in virtually every category
of operating expenses because of the increase in business activity of the
Company during this time period.
The net loss for the nine months ended May 31, 2000 was ($915,681) which was an
increase of $888,370 over the net loss of ($41,845) for the nine months ended
May 31, 1999. The increase in net loss was due to increases in virtually every
category of operating activity because of the significant increase in business
activity by the Company.
The loss per share (fully diluted) was ($0.04) for the nine month period ended
May 31, 2000 compared to $0.00 for the nine months ended May 31, 1999.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Historically, the Company has financed its cash flow requirements through cash
flows generated from financing activities. Cash provided by financing activities
which occurred during the nine months ended May 31, 2000 was $1,117,745.This
resulted in an increase in cash and cash equivalents during the nine month
period of $548,458. The effect of foreign exchange rate changes on cash of $986
during the nine month period resulted in a cash and cash equivalent position of
$549,444 at the end of the period.
As of May 31, 2000 the Company had working capital of $566,108 which represented
an increase of $1,160,344 as compared to the working capital deficit of
($594,236) as of May 31, 2000. The increase in working capital was due to an
increase in cash of $549,444 and a decrease in loans payable of $594,236.
The Company has no external sources of liquidity in the form of credit lines
from banks.
Management believes that its available cash will be sufficient to fund the
Company's working capital requirements through August 31, 2000. The Company's
management further believes; however, that the Company does not have sufficient
liquidity to implement its expansion and acquisition strategies. As yet, no
investment banking agreements have been reached and there is no guarantee that
the Company will be able to raise the capital necessary to implement its
expansion plans.
IMPACT OF THE YEAR 2000 ISSUE:
The Year 2000 Issue arises because many computerized systems use two digits
rather than four to identify a year. Date-sensitive systems may recognize the
year 2000 as 1900 or some other date, resulting in errors when information using
year 2000 dates is processed. In addition, similar problems may arise in some
systems which use certain dates in 1999 to represent something other than a
date. Although the change in date has occurred, it is not possible to conclude
that all aspects of the Year 2000 Issue that may affect the company including
those related to customers, suppliers, or other third parties, have been fully
resolved.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISKS:
The Company does not have any derivative financial instruments as of May 31,
2000. However, the Company is exposed to interest rate risk.
The Company's interest income and expense are most sensitive to changes in the
general level of U.S. and Canadian interest rates. In this regard, changes in
U.S. and Canadian interest rates affect the interest earned on the Company's
cash equivalents as well as interest paid on debt.
FOREIGN CURRENCY RISK
The Company operates primarily in Canada. The Company's business and financial
condition is, therefore, sensitive to currency exchange rates or any other
restrictions imposed on its currency.
<PAGE>
Part II - OTHER INFORMATION
Item 1. Legal Proceedings - None
Item 2. Changes in Securities - None
Item 3. Default Upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Securities Holders - None
Item 5. Other Information - None
Item 6.(a) Exhibit 27 - Financial Data Schedule
Item 6.(b) Reports on Form 8-K - None
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.
(Registrant)
Dated: July 18, 2000 /s/ Steve Vestergaard, President and Director
------------- ---------------------------------------------
