Thank you for joining us on the call today. Before we begin, I'd like to announce that we will be referring to today's earnings release, which was sent to the Newswire earlier this afternoon. I'd also like to remind everyone that this conference call could contain forward-looking statements about Destiny Media Technologies within the meaning of Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based upon current beliefs and expectations of management and are subject to risks and uncertainties, which could cause actual results to differ materially from those forward-looking statements. Such risks are fully discussed in the company's filings with the SEC and SEDAR, and the company does not assume any obligation to update information contained in this call. During this conference call, we will discuss certain non-GAAP financial measures. The non-GAAP financial measures are presented in the supplemental disclosures and should not be considered in isolation of, or as substitute of, or superior to the financial information prepared in accordance with GAAP and should be read in conjunction with the company's financial statements filed with the SEC and SEDAR. The non-GAAP financial measures used in the company's presentation may differ from similarly titled measures presented by other companies. A reconciliation of the non-GAAP financial measures to the most comparable GAAP financial measures can be found in the earnings press release. With that, I would now turn the call over to your host, Sandra Boenisch, Chief Financial Officer. Please go ahead.

Thank you. Hello, everyone. Thank you for joining us on the call today. I will go briefly over the financial results, and then I'll turn the call over to Fred. Play MPE revenue grew, on a currency-adjusted basis, by 11.8% over the comparable second quarter, fiscal 2018. Foreign currency fluctuations negatively affected the reported revenues by 3.9%, resulting in a net 7.9% increase to $879,000. The increases we experienced were coming from 2 different revenue arrangement groups. There was an increase in our Universal Music fixed-fee arrangement which commenced in the later 2 months of the quarter, resulting in a net 8% currency-adjusted increase in fixed-fee revenue for the quarter. We will continue to see the impacts of this in future quarters. In addition, there was a 16.3% currency-adjusted increase in nonfixed fee revenue. This increase was seen in every geographic market segment, and as a result of increased and expanded usage from both existing and new independent labels as well as increased usage from one of our major record label customers. Total expenditures grew by 7.4% due to an increase in salaries and wages, which grew by 16.7% on a currency-adjusted basis and marketing cost, which grew by approximately 30%. We have added human resources in business development and marketing, and we'll be continuing to add resources in product development and business development in the near term. Net income for the quarter, typically our slowest quarter, was just over $80,000. EBITDA was $105,000, and our working capital at the end of the quarter was $2.6 million. With that, I will turn it over to Fred.

Thanks, Sandra. Q2 saw the start of our -- of the financial impact of our reinvestment in Play MPE and hints at steepening revenue curve. I'm going to talk a little bit about revenue, and I'll probably repeat a little bit of what Sandra said but hopefully, I'll provide some greater clarity on it as well. At an increase of 7.9%, our revenue grew by the largest amount in 5 years. But that quarter only had 2 months of the increase of our negotiated agreement with Universal, and also it was adversely impacted by adverse exchange rates reducing our true revenue growth by 3.9%. We are very strongly encouraged by our interactions with our customers. We have seen that with our new software, the new agreement with Universal and larger investments in business development, we grow our customer base. Today, I'm going to discuss the revenue in 2 components: revenue associated with fixed fee agreements; and revenue associated with nonfixed fee agreements. On our investor page, you can see a 2019 investor presentation. This describes how our revenue is split between major label and independent label, fixed fee versus nonfixed fee and self-serve revenue versus full-service revenue. After geography and genres of music, these are the major segments of revenue that we have. Understanding the difference between these segments will help understand how we will plan on growing revenue. During the quarter, we saw the beginning of the growth associated with adding new genres of Jazz, Rhythmic, Urban, Dance and Top 40 music in the United States. This really represents the first acquisition of a new market segment in 7 years. It's really a proof of concept. If we invest in the product and in sales stuff, we can grow revenue. This segment has positively impacted our current quarter. Revenue with our client base tends to be very sticky. So after large -- larger initial investments of sales and marketing, this revenue will grow from more of a maintenance-type activity. Our business development team spent the fall demoing Play MPE, visiting record labels, attending trade shows, et cetera, for those genres of music. And revenue in Q2 for nonfixed fee agreements grew by 14.9%, or 16.3% if you remove the negative impacts of foreign exchange. We have described that our revenue comes from an engaged network of use. And as we have more activity, we have more referrals, which snowballs and tends to grow usage and revenue. A great analogy for what I'm talking about here is the experience with our revenue in the United States Independent Record Label segment. This segment has grown in 46 of the last 50 quarters. To see this visually, I encourage you to read the 2019 AGM letter available on our investor page. Our expectation is that we will add segments like this. And with each segment, we will increase the percentage of points to our revenue growth, similar to our experience with U.S. independent labels. It's like planting a tree. There's more work in the beginning. But these segments will continue to grow with longer amounts of -- lower amounts of business development once that segment gains some traction. Our fixed-fee revenue grew by only 1.7%. Now this growth is in spite of a negotiated 14% increase with Universal, which commenced 1 month into the quarter. As the Universal agreement is by far the majority of this segment, when this agreement applies to a full quarter we would expect to see a 12.7% increase in this portion of our revenue as that agreement only applies to 2 of the 3 months in the current quarter, we would normally expect to an 8% to 8.5% increase. However, negative impacts of foreign exchange, in this case, the rising value of the U.S. dollar to the value of the euro. When we express the amount of revenue in US dollars, we arrive at the 1.7%. This hides some of the real growth we are seeing. Obviously, I can't predict exchange rates, but we do expect that natural fluctuations in exchange will reverse, and we'll see a steepened revenue curve going forward. Currently, our business department group is targeting 5 additional, initial targets. Those targets are: U.K. major independent and major labels; the Canadian market, the entire Canadian market; Scandinavian independent record labels; South African major labels; and a global agreement with Warner, similar to our agreement with Universal. Earlier this month, our business development team visited numerous pluggers and record labels in the United Kingdom. This is a very fractured market. We have secured several trials, and we expect to see an increase in use over the next few months. Our plan is to build a stronger network of use within U.K., show the positive impacts of Play MPE, get endorsements, create some reinforcing opinions, and secure revenue later as this market enjoys the benefits of consolidation. Last week our business development group met with major labels in Canada. Obviously, very early stages but we are very encouraged by these interactions. What is true is that we have found that with the stronger sales team capable of meeting face-to-face with our clients, we grow our revenue. In many cases, our potential customers are surprised that a solution like ours exists. Very generally, while there is a challenge in getting clients to change the way they do things, there is also a lot of low-hanging fruit, where we simply need to show up and ask for the sale. As such, business development staffing levels appears to be our rate limiting factor currently. To address this, we added a business development consultant in the quarter to target the Canadian market. And we are recruiting for both internal and external sales staff. Internal sales will address the simpler leads that come into the office, in established markets, which was -- also generate -- free up existing biz develop staff to put their efforts in securing new business in new territories, more a case of strategic sales. Just after the quarter, we announced our integration with BDSradio. It is expected that this integration facilitates greater activity, brand awareness, et cetera. And this positively impacts activity in the system, which makes it easier to sell. We are only -- the only system that is integrated with both Mediabase and Billboard Radio, the 2 major U.S. trading reports. We believe that this integration will help expand specifically in the Canadian and Latin markets. We are also recruiting for greater resources in product development. What we are seeing here is that we have numerous opportunities to add products and streams of revenue as we engage with our customers. We need to increase our capacity in product to assess and evaluate these -- each of these ideas. While the majority of the company will focus on growing our core business, we will be evaluating additional services that can provide -- can identify ones that will increase revenue and make the more sense for us as a business. We may require further development resources and potentially add business development staff as we identify new product and revenue streams that we can obtain. So to summarize, after removing negative foreign exchange impacts, our nonfixed fee revenue grew by 6.3%. Our fixed-fee revenue grew by approximately 8%, or almost 13% if the Universal agreement had commenced at the beginning of the quarter. And we are pursuing more business development staff and targeting additional segments to grow revenue. We are really encouraged by these results. There's relatively small beginning, but it's more the direction that we're going and they hint at an increasing revenue curve. With that, I'll turn it over to questions.

[Operator Instructions] Our first question is from [ Brett Larson ], who is a private investor. Brett, please go ahead.

Yes, I'm a recent shareholder. I'm looking at your sales and marketing line there, the $280,000. Is that -- what does that include? Does that include the salaries? Or is that total cost of sales and marketing?

Which -- sorry, where are you looking?

Just on your income statement here. So you broke out -- so you have general administrative, then you have sales and marketing. And I'm assuming that increase in sales and marketing is your new staff. And is that fully reflected with your new staff? They're all 3 months through this quarter?

May I answer that, Fred?

Sure.

Yes. So there is actually a breakdown of what's in there, under the management discussion. But it is largely wages. It's also an allocation of overhead, which is based on those wages. And it's also some advertising and marketing. But yes, the majority of the increase is from wages and benefits and it's most of the increases that we experienced in the quarter but not entirely the 3 months.

Okay. And follow-up question. In terms of acquisitions, are you -- do you have anything in the near term that you're looking at? Or is that part of your strategy short term in terms of acquisitions in the fragmented market?

That's a good question. There's some potential for it. We've had some discussions with a couple of competitors, but the cost seems to be a bit prohibitive compared to the likelihood that we'll actually get that business by being smart about approaching it, selling our services. There's another one that I want to spend some time investigating and could be a potential target for us, which have no idea what -- at this stage, what price they would be looking at or if they would want to sell.

Right. Okay, on the flip side, would it -- your company ever catch the attention of Spotify? Or a company of that size? Would they have any interest in Destiny?

Spotify, is quite a bit different than us. They're a streaming services company where we -- we're -- the service that we offer is promotional distribution to specific influencers. So people who actually create playlists on Spotify would be recipient of our system. So I guess there is potential that they may see some value in there, but they're -- we're really 2 different businesses.

You don't see them moving into the radio side?

I think this -- the way our system works is -- yes, I think it would be hard to displace us, there's a bit of a network effect. So once radio or media reviewers are starting to use our system, it's really kind of hard to displace us. So everyone knows where to go to get the songs. That means the record labels know how to distribute it, and you establish that network of use. And if you look at competing system, it would be a pretty big barrier to entry for us. We also -- the system, the way it works really saves Universal, specifically, a lot of time. And I'm -- and it's really catered to their workflow. So it's not easy to replicate that. It's just -- our downside risk is very low.

Right. Okay. And one final question. Do you see automobiles being made without radios anytime in the next 10 years? Is that talked about at all?

Okay. So we get that concern a lot. But I think -- I can answer it in one or two ways. I can defend the use of radio, it's still, by far, the largest source of -- when a person hears a song, it -- radio is still by far the largest source. But all of that is -- and when it comes to new content, new songs, that's even a greater percentage. So radio is still a very important place to advertise or promote your song. But our system isn't really dependent on radio, it's a system where record labels use the system to promote the people they identify and they want to send to. So the majority of our distributions are decided upon by the promotions people themselves. So they can shift as the industry shifts, if radio becomes less important, they can change the recipients. And our ability to maintain our service isn't dependent on radio.

Okay. Great. Well, appreciate you doing the conference calls and just -- yes, your investor website and everything, it's well done.

Your next question is from [ Robert Park, ] who's a private investor.

First of all, I just want to say, I really admire your frugal fiscal, the way you manage your balance sheet. It's a great change from historically and it's really smart and sustainable, and I admire you for doing that, you and your CFO.

Thank you.

Can you give me or give us any kind of color on incremental product development and revenue and what kind of an investment it would require? I know it's a broad question but maybe from your perspective. Because you have this niche that really seems to be -- you're the leader in this niche, and there isn't really -- doesn't strike me as much competition in the same level of quality, but it also -- the next question is then where you go after you grab that up? And you see that as you go along and what, kind of, an investment does that require? Does that require you to raise money? I mean, what kind of degree -- is it incremental enough that your developers already can add little things to your line of products and it's really not a big expense, but as you see the opportunities you can do that very readily? Or somewhere in the middle? That's the question.

Okay. If you look at the letter that we sent out for the AGM on our investor page, you can -- there's a little bit of discussion on potential new products. Those -- we have a number of ideas just our -- from our understanding of the industry over the years knowing the way the industry is moving, they're becoming more data-driven, so we can potentially sell enhanced data to them. But our product -- I mean we're adding -- we're probably recruiting 2 new product people -- we're recruiting for a 2 new product people, and that's to help evaluate these ideas. So I don't know at this stage what -- which of those ideas we'll pursue. I have my biases, but I want to go through the -- a proper product evaluation process to establish that, but...

And what kind of investment...

As far as resources are concerned, I think we will -- we can -- we have about $2.6 million in cash and I can't see us needing to raise money at any level any time soon for the ideas that we are pursuing. I think we can outsource some of the development items or we can recruit some more development staffing, but until we have a bit better -- a few more months down the road and we have a better projection of what ideas we're taking on, then I'll have a better answer for that.

Sure. I just wanted some perspective on what it would cost to -- in view of the ideas you see now. It sounds like they're within your current revenue stream to manage independently...

I think currently, our resources would -- we would be able to take on some of the projects that we're thinking of. If we see an idea that is much more -- a much larger idea and it's -- we have a promising chance at obtaining that revenue, we'll revisit that and whether or not we need money to do that.

Yes. Yes. I like the way, though that you've gotten away from too much focus on the video and so on and using your revenue on this sort of little-by-little steady growth, right?

The current quarter, it does -- I mean, like I said it was -- it's the largest increase we've had in 5 years. But we also expect it to increase more in future quarters and just based on what we were seeing, and it's somewhat needed by negative exchange rate. So I think our true revenue growth is higher, and I think we can -- as long as our business development staff have some success in any one of those 6 targets that we're working on, I think we can really leverage that, both our relationships and the growing income, to pursue new products.

Sure, that makes sense. Great. It's nice not to see people maximizing leverage all the time. Again, I admire the way you manage your balance sheet.

[Operator Instructions] Your next question is from Brian Boyd from Brandes Investment Partners.

I was just wondering, so you have about $2.6 million in cash on the balance sheet. You're going to be generating cash every quarter. So what are your plans with all that cash?

Well, like I said, we are recruiting for at least 2 new business development people that will potentially eat into that in the short term. We're adding 2 more develop -- product development people. That will probably eat into that. I think, we'll still be generating positive income with those additions but, as far as use of cash, there is potential acquisitions -- acquisition or potentially expanding investments in development, whether that's done internally or externally, it's to be determined. But we do see a lot of opportunity to add new products and services. And I think, the steps involved in that are adding product people to evaluate them and then figuring out what the resources are that we need to add whether it's development or business development or both. But I think right now, I don't see us dipping into that $2.6 million because I think we can accomplish it all with existing positive returns, especially if we see revenue growth -- further revenue growth in future quarters.

There are no further questions at this time. Please proceed.

Okay. Thanks, everyone, for joining the call. I think there were some really good questions. If there's any more questions, you can always reach me at -- by e-mail or by phone, and thanks very much.

Ladies and gentlemen, this concludes your conference call today. We thank you for participating and ask that you please disconnect your lines.