DESTINY MEDIA TECHNOLOGIES INC. 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:
º our goals and strategies;
º our future business development, financial condition and results of
operations;
º expected changes in our revenue, costs or expenditures;
º growth of and competition trends in our industry;
º our expectations regarding demand for, and market acceptance of, our
products;º our expectations regarding our relationships with investors, institutional
funding partners and other parties with whom we collaborate;
º fluctuations in general economic and business conditions in the markets in
which we operate; and
º relevant government policies and regulations relating to our industry.
These forward-looking statements reflect our management's beliefs and views with respect to future events and are based on estimates and assumptions as of the date of this Annual Report on Form 10-K and are subject to risks and uncertainties. We discuss many of these risks in greater detail under "Risk Factors." Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Given these uncertainties, you should not place undue reliance on these forward-looking statements. You should read this Annual Report on Form 10-K and the documents that we reference and have filed as exhibits to the Annual Report on Form 10-K completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of the forward-looking statements in this Annual Report on Form 10-K by these cautionary statements. Except as required by law, we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. In this report, "we," "us," "our," "our company", "Destiny" and similar references refer toDestiny Media Technologies, Inc. , aNevada corporation, and its wholly-owned subsidiaries:Destiny Software Productions, Inc. ("DSNY"),MPE Distributions, Inc. ("MPE"),Tonality, Inc. ("Tonality"), andSonox Digital Inc. ("Sonox"), and (ii) the term "common stock" refers to the common stock, par value$0.001 per share, ofDestiny Media Technologies, Inc. , aNevada corporation. The financial information included herein is presented inUnited States dollars unless otherwise indicated.
OVERVIEW AND CORPORATE BACKGROUND
Destiny Media Technologies Inc. was incorporated inAugust 1998 under the laws of theState of Colorado and the corporate jurisdiction was changed toNevada effectiveOctober 8, 2014 . We carry out our business operations through our wholly owned subsidiaries:Destiny Software Productions Inc. , aBritish Columbia company incorporated in 1992,MPE Distribution, Inc. , aNevada company that was incorporated in 2007,Tonality Inc. , aNevada company that was incorporated in 2021, andSonox Digital Inc. incorporated under the Canada Business Corporations Act in 2012.
Our principal executive office is located at Suite 428,
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Our common stock trades on
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® Currently, the Company's core business is the Play MPE® online platform. Play MPE® distributes promotional content (broadcast quality audio, video, images, promotional information and other digital content) from music labels and artists to broadcasting professionals, music curators and music reviewers to discover, download, broadcast and review the content. Curators include radio programmers, digital streaming broadcasters, media reviewers, 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 music promoters. 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, streaming royalties and synchronization revenue (revenue when the reproduction of a song is coordinated with video advertisements, television, or film), and indirect increases in revenue through growing song and artists' popularity. Also, Play MPE® provides numerous capabilities that dramatically reduce record label costs and provide controls necessary for certain strategic marketing plans and controls to secure 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.
Described more fully below, features within Play MPE® are grouped into four main categories: local distribution software, global distribution architecture, targeted recipient list curation and recipient players.
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 Label and Artists Services, EMI, RCA Records, Epic Records ,
Columbia Records , Arista Records , Legacy Recordings, Provident Entertainment ,
Warner Records , Warner Bros, Atlantic Records Group , 300 Elektra Entertainment ,
to name only a few. Play MPE® welcomes all of these labels into its customer
base.
Customers choose Play MPE® for its powerful set of tools, ease of use and its effectiveness in achieving the record label's promotional objectives.
Play MPE® CASTER (local distribution software)
Play MPE®'s Caster software includes local distribution functions that provide capabilities for a client to create and schedule release announcements and select its targeted audience. Play MPE® is designed uniquely to suit music marketing plans and significant components include:
º Release Creator includes drag and drop functionality to quickly embed
images, social media links, add promotional files etc. to quickly create
effective announcements.
º Release Scheduling allows numerous scheduling functions for initial
announcements, repeated announcements, changes in DRM (a recipient's
ability to download or only stream the content) etc. These schedules can be
uniquely edited by recipient or recipient list. Several features here are
also available to facilitate release scheduling at scale.
º Templates facilitate consistent label branding and presentation while
reducing release preparation time. Each release announcement can be saved
as a template and reused or edited for future announcements. Clients can
design and save unlimited templates to provide unique design and branding
for artists or record labels.
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--------------------------------------------------------------------------------º Contacts Management provides features that allow record labels to upload
and manage their own targeted audience. There are many features within this
platform that provide efficiencies in destination management for all
customers of Play MPE®. However, this section of the platform provides
numerous functions that are critical for efficient contacts management at
scale and is described in Caster's global distribution functionality.
Within Contacts Management, users can easily select curated lists of
engaged recipients provided by Play MPE® (see description below) or by
selecting their managed recipient lists.º Reporting of release results shows recipient interactions including
downloads, streams, clicks and opens.
Intuitive designs and functionality across all areas of this portion of the platform simplify the distribution process, reduce customer time required to distribute, and facilitate the inclusion of information to improve engagement which ultimately increases record label and artist revenue.
Caster is currently available in English, Spanish, German, Japanese and French.
When competing with an established service within a local market, it is these features balanced against changing consumer behaviors that determine Play MPE®'s ability to increase and acquire market share. Competing services offer the basic distribution requirements inherent in the service but do so while missing many features that provide efficient delivery, engaged recipients and accurate and complete distribution lists.
Caster consistently receives high reviews on the platform's ease of use and capabilities and on its ultimate effectiveness. Public reviews can be found at https://www.plaympe.com/testimonials/
Play MPE® CASTER (global architecture)
Play MPE®'s global distribution architecture was developed in close collaboration with Universal to address the needs of its global approach to release distribution. This architecture provides functionality required for Universal to conduct their unique approach to music distribution and provides numerous significant competitive advantages for Universal. These features improve marketing coordination and revenue generation while reducing overall label costs.
Significant components include:
º Staff role management: Customers can grant varying capabilities or
permissions for different staff positions. For example, one staff member
can create a release while another can approve the release of this content.
In a larger organization, this control ensures accurate and professional
distributions are conducted, but allows for segregation of duties to
maximize efficiency.
º Label management: With label management, administrative staff can determine
which users have access to which labels and which content. Each label has a
unique account environment allowing for its own unique setup, list
curation, favorites, staff roles, templates etc.
º Global release sharing (replication): With global release sharing,
distribution centers can share a release to a territory. That territory
then can reuse the release while localizing it to suit the particular needs
of that jurisdiction (editing language, artist information, local concert
dates, local contacts etc.). This eliminates duplication of upload and data
entry while reducing errors. In the context of global distribution, across
multiple territories, multiple labels, and thousands of unique releases,
savings of staff time is significant. Metadata completeness and accuracy
are also increased. When complete metadata is conveyed, recipient
engagement is higher. Higher recipient engagement increases record label
revenue. Within the included metadata are ISRC codes which are unique codes
used to remit track royalties. When ISRC codes are communicated, royalty
remittances are complete and timely. These aspects provide significant
competitive advantages to Universal.
º Release embargos: When marketing and promotion departments create global
campaigns for highly anticipated music releases, staff restrict access to
this content until the public release time. Here, record labels can permit
early access to the relevant content so local offices can edit, localize
and schedule releases but controls are added to restrict certain
permissions and prevent premature release. Universal enjoys competitive
advantages with these capabilities derived through cost savings and
improved marketing campaigns. Absent these functions, global release
coordination is more costly and less coordinated.
º Archive integration: With archive integration, Play MPE® automatically
captures music, art, and associated metadata vastly reducing errors in
release creation and data entry. This further expands the competitive
advantages enjoyed in global release sharing.
º Release management: There are numerous capabilities within release
management that are necessary for efficient global release management.
Content owners can change DRM and quickly remove content globally if
necessary etc.º Asset management: Assets include music tracks, album art, metadata etc.
Within the assets management portion, several features allow assets to be
used, recomposed, combined, recombined etc. Features here allow efficient
and quick delivery of new releases.
º Release scheduling: While release scheduling is available for local
distribution, many additional features are designed to facilitate actions
that reduce staff time in a global environment.
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--------------------------------------------------------------------------------º Contacts management: Critically important to all promotions is the
distribution of content to an interested and engaged audience. As
introduced in the local distribution discussion, Caster provides a contacts
management system with numerous features that facilitate efficient updates
and maintenance actions that are critically important where users maintain
a large recipient database, across multiple users, and multiple recipient
lists. Absent these features, list maintenance becomes overly cumbersome,
inefficient and ultimately inaccurate.
Collectively, functions in global release management provide 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. Lists are sold as a fixed price per list (or list bundle). 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. 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 300 unique targeted lists comprising of more than 17,000 unique and active recipients over 30 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 a targeted distribution list, curated by Play MPE®.
Play MPE® Player
Music curators review and download content through a web-based player and mobile player 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
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED
Revenue
Total revenue for the three months endedNovember 30, 2022 decreased by approximately 10% to$1,020,737 compared to the revenue of$1,134,151 for the three months endedNovember 30, 2021 . Adjusted for impacts of foreign currency translation Play MPE® revenue declined by 4.1%. While unfavorable foreign exchange is the single largest source of the Company's revenue decline, adverse economic impacts affecting our independent customers led to a 13% reduction in revenue from our smaller independent record labels. These declines are expected to be temporary and to reverse as artist touring revenue rebounds following the lockdowns associated with the global pandemic. On the positive side, with efforts on product and business development, and adjusting for foreign exchange, global revenue from Universal Music Group grew by 8.7%, and global revenue from Warner Music Group by 10.5%. The Company has emphasized stronger commercial relationships with the Major Labels to provide a corner stone to stronger long term revenue growth. Product investments over the last several years have been focused on providing global distribution functionality in a browser-based platform that provides significant competitive advantages. These advantages are seen most prominently in a global distribution context and broadly consist of a significant reduction of global distribution costs, increased control over content, and various aspects that enhance the effectiveness of our client's marketing efforts which has a direct improvement to our customers' revenue. These investments delayed development efforts to expand services and add items that will assist in growing our customer base and has delayed revenue growth from smaller independent record labels. The Company is now moving resources to expand our addressable market and increase customer acquisition. The Company's revenues are denominated predominantly in US Dollars, Euros and Australian Dollars.Major Label revenue is predominantly (90%) denominated in Euro and, as a result of the decline in the value of the Euro relative tothe United States dollar, globalMajor Label revenue was adversely impacted in spite of growth within the European segment.
Gross Margin
Gross margin for the three months endedNovember 30, 2022 was 87.3% of revenue, which represents a decrease of 2.8% from the three months endedNovember 30, 2021 . 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 endedNovember 30, 2022 , our gross margin decreased over the comparative period predominately due to increase in staffing costs associated with the technical and customer support departments. 14 --------------------------------------------------------------------------------
Operating Expenses
Operating costs during the three months ended
º A decrease of approximately 5.2% due to favorable foreign exchange rates as
the US dollar strengthened relative to the Canadian dollar where the
majority of the Company's costs reside.
º An increase of approximately $175,000 in salaries and wages that were
capitalized. This increase in capitalized software development costsrepresents approximately 20.5% reduction in current operating costs. Costs
capitalized represent investments in new products and enhancements to the
Play MPE® platform that are capitalized based on an assessment of their
positive incremental value to the Company.
Three Months Ended
November 30,
General and administrative expenses 2022 2021 $ Change % Change
Wages and benefits $ 116,968 $ 69,575 47,393 68.1%
Professional fees 54,383 18,295 36,088 197.3%
Office and miscellaneous 20,924 27,404 (6,480 ) -23.6%
Shareholder relations 4,226 3,629 597 16.5%
Rent 11,751 5,744 6,007 104.6%
Foreign exchange (73,442 ) (3,080 ) (70,362 ) 2,284.5%
Telecommunications 2,281 821 1,460 177.8%
Bad debt (1,370 ) 4,316 (5,686 ) -131.7%
Other 27,340 23,920 3,420 14.3%
Total general and administrative
expenses $ 163,061 $ 150,624 12,437 8.3%
Our general and administrative expenses consist of salaries and related
personnel costs including overhead, office rent, professional fees, shareholder
relations, and general office expenses. The increase in salaries and wages can
be explained by increased non-cash stock-based compensation due to the number of
share-based awards. The increase in professional fees was due to the timing of
various corporate activities.
Three Months Ended
November 30,
Sales and marketing expenses 2022 2021 $ Change % Change
Wages and benefits $ 135,394 $ 344,415 (209,021 ) -60.7%
Advertising and marketing 24,227 33,011 (8,784 ) -26.6%
Rent 13,190 33,062 (19,872 ) -60.1%
Telecommunications 1,415 5,322 (3,907 ) -73.4%
Total sales and marketing expenses
-58.1%
Sales and marketing expenses consist of salaries and related personnel costs including overhead, office rent, and telecommunications costs. Sales and marketing expenses also include advertising and marketing expenditures, which consist of promotional materials, online or print advertising, business development tools, and marketing or business development related travel costs, including attendance at conference or trade shows, and record label and client visits.
The decrease in wages and benefits is the result of lower overall staffing numbers in business development as well as a shift in focus of staff towards product development.
Three Months Ended
November 30,
Product development expenses 2022 2021 $ Change % Change
Wages and benefits $ 189,469 $ 201,338 (11,869 ) -5.9%
Software services 20,455 18,177 2,278 12.5%
Rent 24,169 22,591 1,578 7.0%
Telecommunications 29,333 16,318 13,015 79.8%
Product development expenses
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-------------------------------------------------------------------------------- Throughout the second half of the prior year, the Company increased product development staffing in order to build upon earlier research and development of a new product complementary to Play MPE®. Overall staffing costs for product development, including those capitalized in the current and prior periods, increased by approximately 55%. The decline in current operating costs represents a large increase in the amount of costs capitalized. During the period endedNovember 30, 2022 ,$248,309 in wages and benefits paid to engineering and product development staff were capitalized to software under development intangible assets (November 30, 2021 -$72,290 ).
Depreciation and Amortization
Depreciation and amortization expense increased to$36,379 for the period endedNovember 30, 2022 (November 30, 2021 -$27,172 ). The increase of 33.9% was due to depreciation of additionally capitalized software development costs associated with Play MPE® recipient player applications during the year.
Other Income
Interest income earned on the Company's Guaranteed Investment Certificates was$7,668 for the period endedNovember 30, 2022 (November 30, 2021 -$1,043 ). The interest income more than doubled year over year due to increased interest rates inCanada . Net Income (Loss)
During the three months ended
For the three months endedNovember 30, 2022 , adjusted EBITDA was$324,134 (November 2021 -$217,635 ). Adjusted EBITDA is not defined underU.S. GAAP and it may not be comparable to similarly titled measures reported by other companies. We used Adjusted EBITDA, along with other GAAP measures, as a measure of our profitability because Adjusted EBITDA helps us to compare our performance on a consistent basis by removing from our operating results the impact of our capital structure, the effect of operating in different tax jurisdictions, the impact of our asset base, which can differ depending on the book value of assets, the accounting methods used to compute depreciation and amortization, the existence or timing of asset impairments and the effect of non-cash stock-based compensation expense. We believe Adjusted EBITDA is useful to investors as it is a widely used measure of performance and the adjustments we make to Adjusted EBITDA provide further clarity on our profitability. We remove the effect of non-cash stock-based compensation from our earnings which can vary based on share price, share price volatility and expected life of the equity instruments we grant. In addition, this stock-based compensation expense does not result in cash payments by the Company. Adjusted EBITDA has limitations as a profitability measure in that it does not include provisions for income taxes, the effect of our expenditures on capital assets, the effect of non-cash stock-based compensation expense and the effect of asset impairments. The following is a reconciliation of net income (loss) from operations to Adjusted EBITDA over the eight most recently completed fiscal quarters: Q1 2023 Q4 2022 Q3 2022 Q2 2022 Q1 2022 Q4 2021 Q3 2021 Q2 2021 Net Income (Loss)$ 258,266 193,673$ (3,242 ) $ (202,610 ) $ 165,601 $ 91,699 $ 69,594 $ (29,466 ) Stock-based compensation 37,157 (21,281 ) 75,163 68,789 25,905 12,620 13,133 26,400 Depreciation, amortization, and deferred leasehold inducements 36,379 52,603 36,313 26,574 27,172 27,969 26,673 13,133 Interest income (7,668 ) (4,460 ) (1,686 ) (1,964 ) (1,043 ) (869 ) (823 ) (875 ) Adjusted EBITDA$ 324,134 220,535$ 106,548 $ (109,211 ) $ 217,635 $ 131,419 $ 108,577 $ 9,192
LIQUIDITY AND FINANCIAL CONDITION
As at
As at
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--------------------------------------------------------------------------------Cash Flows
The following table sets forth a summary of the net cash flow activity for each
of the periods indicated:
Three Months Ended
November 30,
Net cash and cash equivalents provided
by (used in) 2022 2021 $ Change % Change
Operating activities $ 459,537 $ (52,626 ) 512,163 -973.2%
Investing activities (248,309 ) (80,287 ) (168,022 ) -209.3%
Financing activities - (44,166 ) 44,166 -100.0%
Effect of foreign exchange rate changes
on cash (60,951 ) (39,157 ) (21,794 ) -55.7%
Net increase (decrease) in cash and cash
equivalents $ 150,277 $ (216,236 ) 366,513 -169.5%
Operating Activities
Net cash provided by operating activities during the period ended November 30,
2022 was $459,537 (November 30, 2021 - $52,626 ). The primary reason for the
increase in cash flows from operating activities was the timing of receipts from
our customers.
Investing Activities
Net cash used in investing activities for the period ended November 30, 2022 was
$248,309 , compared to cash used in investing activities of $80,287 for the
period ended November 30, 2021 . During the three-month period ended November 30,
2022 , the contributions made towards investing activities was cash spent on new
capital assets and internally developed computer software.
Financing Activities
Net cash used in financing activities during the period ended
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 inthe 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 Estimates" and "Financial Statements and Supplementary Data - Note 2, Summary of Significant Accounting Policies" contained in our 2022 Form 10-K. There have not been any material changes to the critical accounting policies discussed therein during the three months endedNovember 30, 2022 .
OFF-BALANCE SHEET ARRANGEMENTS
As ofNovember 30, 2022 , 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. 17
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