DESTINY MEDIA TECHNOLOGIES INC - FORM 10-Q/A - XML - IDEA: XBRL DOCUMENT - February 14, 2012

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Share Capital
 3 Months Ended
Nov. 30, 2011
Share Capital [Text Block]

3. SHARE CAPITAL

[a] Common stock issued and authorized

The Company is authorized to issue up to 100,000,000 shares of common stock, par value $0.001 per share.

[b] Common stock cancelled

During the three months ended November 30, 2011, the Company cancelled 124,930 shares which were repurchased during the last quarter of fiscal year of 2011.

[c] Stock option plans

The Company has two existing stock option plans (the “Plans”), namely the Amended 1999 Stock Option Plan and the 2006 Stock Option Plan, under which up to 3,750,000 and 5,100,000 shares of the common stock, respectively, have been reserved for issuance. A total of 1,466,334 common shares remain eligible for issuance under the plans. The options generally vest over a range of periods from the date of grant, some are immediate, and others are 12 or 24 months. Any options that do not vest as the result of a grantee leaving the Company are forfeited and the common shares underlying them are returned to the reserve. The options generally have a contractual term of five years.

Stock-Based Payment Award Activity

A summary of option activity under the Plans as of November 30, 2011, and changes during the three month period ended are presented below:

                Weighted        
                Average     Aggregate  
          Weighted     Remaining     Intrinsic  
          Average     Contractual     Value  
Options   Shares     Exercise Price     Term     $   
Outstanding at August 31, 2011   2,290,000     0.50     0.99     25,500  
Granted   —     —              
Exercised   —     —              
Expired   —     —              
Outstanding at November 30, 2011   2,290,000     0.50     0.74     28,500  
Vested and exercisable at November 30, 2011   2,281,667     0.50     0.73     28,500  

The following table summarizes information regarding the non-vested stock purchase options outstanding as of November 30, 2011:

    Number of Options  
Non-vested options at August 31, 2011   14,583  
Vested   (6,250 )
Non-vested options at November 30, 2011   8,333  

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 at November 30, 2011.

During the three months ended November 30, 2011, total stock-based compensation expense related to employees of $1,410 are reported in the statement of operations as follows:

    November 30,     November 30,  
    2011     2010  
    $     $   
Stock-based compensation            
   General and administrative   616     604  
   Sales and marketing   256     357  
   Research and development   538     603  
Total stock-based compensation   1,410     1,564  

Valuation Assumptions

The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model. During the three months ended November 30, 2011 and three months ended November 30, 2010, there were no options granted.

As of November 30, 2011 there was $1,676 of unrecognized stock-based compensation cost related to employee stock options granted under the plans, which is expected to be fully recognized over the next 4 months.

[d] Employee Stock Purchase Plan

The Company’s 2011 Employee Stock Purchase Plan (the “Plan”) became effective on February 22, 2011. Under the Plan, employees of Destiny are able to contribute up to 5% of their annual salary into a pool which is matched equally by Destiny. Independent directors are able to contribute a maximum of $12,500 each for a combined maximum annual purchase of $25,000. The maximum annual combined contributions will be $400,000. All purchases are made through the Toronto Stock Exchange by a third party plan agent. The third party plan agent will also be responsible for the administration of the Plan on behalf of Destiny and the participants.

During the three month ended November 30, 2011, the Company recognized compensation expense of $10,486 (November 30, 2011: $Nil) in salaries and wages on the statement of operations in respect of the Plan, representing the Company’s employee matching of cash contributions to the plan. The shares were purchased on the open market at an average price of $0.41. The shares are held in trust by the Company for a period of one year from the date of purchase.

[e] Warrants

As at November 30, 2011, the Company has the following common stock warrants outstanding:

    Number of Common     Exercise Price        
    Shares Issuable     $     Date of Expiry  
                   
$0.22 Warrants   350,000     0.22     August 25, 2012  
$0.40 Warrants   361,000     0.40     February 28, 2012  
$0.50 Warrants   5,800,000 *   0.50     February 28, 2012  
$0.70 Warrants   500,000     0.70     April 9, 2012  
    7,011,000              

*5,400,000 of the $0.50 warrants have a forced conversion feature by which the Company can demand exercise of the share purchase warrants if the common shares trades at a price equal to or greater than $1.25 if certain conditions are met. The warrant agreements also provide for a weighted average down round provision whereby the exercise price will be reduced in the event the Company issues options or warrants, excluding employee options, at a price per shares less than the fair market value of the Company’s shares at the date of issuance.

The intrinsic value for these warrants is $91,440 as at November 30, 2011.

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