Media Central Corporation Inc - Management's Discussion and Analysis Media for the free generation - Canadian Securities Exchange
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Media Central Corporation Inc.
Management’s Discussion and Analysis
For the Period Ended June 30 2021
Media for
the free generation
Media Central Corporation Inc.
Management’s Discussion and Analysis
June 30, 2021
(In thousands of Canadian dollars and thousands per-unit amounts)
Corporate Profile
Media Central Corporation Inc. (“Media Central” or the “Company”) is a media and technology company that publishes Canada’s two
largest alternative weekly newspapers and websites, two digital magazines in the cannabis and e-sports sectors and the first global
aggregated content news site with only arts, culture and entertainment feeds updated daily by a human curator and not a bot. The
company's new product road map includes a second new digital product late in 2021. The new digital products were developed by
Lunarstorm.ca, Media Central Corporation’s technology development partner.
By migrating these premium readers to on-trend digital formats, Media Central will:
● Accelerate its audience scale,
● Diversify its revenue streams
● Complement the quality and engagement if it’s social media feeds
● Take advantage of high margin programmatic advertising opportunities
● Reduce the risk of relying solely on its legacy titles.
To learn more about how we deliver our vision, visit www.mediacentralcorp.com
Our Plan
01 Build our future on multi-platform content creators and new technology platforms that accelerate audience scale and
produce diversified revenue streams.
02 Leverage the brand awareness of NOW Magazine and Georgia Straight as “storefronts” to make way for enabling on-
line audience scale.
03 Generate diversified revenues from standalone new digital products such as www.creatornews.com. Media Central Corp
owns a 25 percent equity interest in CreatorNews and will be paid 20 percent of the revenue generated based on its
traffic contribution.
04 Sharpen our existing content offering to build deeper engagement with readers on all platforms and step up our
marketing and promotion to support our sales efforts.
05 Leverage the knowledge of MediaCentral’s newest board member and the newly formed advisory board to develop
innovative new revenue models that increase our advertiser base and deal sizes.
Page 2
Media Central Corporation Inc.
Management’s Discussion and Analysis
June 30, 2021
(In thousands of Canadian dollars and thousands per-unit amounts)
Our Brands
CannCentral.com
Features lifestyle stories around cannabis use and experiences, including emerging trends in
wellness, travel, food and drink, pop culture, and cannabis-related products complimented by
enhanced strain and dispensary databases.
Combining authentic editorial content with trusted commentary on emerging trends, CannCentral
is poised to become a central source of information on the quickly evolving cannabis lifestyle.
NOW Magazine
NOW Magazine is an iconic Canadian brand which targets the free-thinking and educated
readers. NOW reaches 510,000 average unique readers in the Toronto and Greater Toronto
area and is distributed to more than 800 outlets each week, including copies distributed in top
events and festivals.
The Georgia Straight
Established as the news, lifestyle, and entertainment weekly in Vancouver for over 50 years, the
Georgia Straight is an integral part of the active urban west coast lifestyle with over 1 million
unique readers per week.
Regular weekly coverage includes news, tech, arts, music, fashion, travel, health, cannabis, food
and a comprehensive listing of entertainment activities and special events.
(Note: Media Central Corporation also publishes eCentral Sports, a digital gaming magazine and owns a 25 percent equity interest in
digital startup sites CreatorNews.com and CreatorStack.ca. CreatorNews.com is live. CreatorStack is in development and is scheduled to
launch Q4, 2021).
Our Management Team
Media Central Corporation has a cohesive executive management team with diverse skill sets and a deep understanding of building the
asset value of media companies. The management team benefits from the contributions of its Board of Directors and the newly formed
Advisory Board in terms of restructuring its business infrastructure and gaining an outside perspective on innovative new sales and
marketing strategies that appeal to a broader set of advertisers.
Please visit www.MediaCentralcorp.com for the biographies of our management team.
Introduction
This Management’s Discussion and Analysis (“MD&A”) is provided to enable a reader to assess the results of operations and financial
condition of Media Central for the period ended June 30, 2021. This MD&A is dated August 27, 2021 and should be read in conjunction
with the interim condensed consolidated financial statements and related notes for the period ended June 30, 2021 (“Interim Consolidated
Financial Statements”). Unless the context indicates otherwise, references to “Media Central”, “Media Central”, “we”, “us” “our” or “the
Company”, this MD&A refers to Media Central and its consolidated operations.
Forward-Looking Information
Certain information included in this MD&A contains forward-looking information within the meaning of applicable Canadian securities laws.
This information includes, but is not limited to, statements made in Business Overview and Strategy, Results from Operations, Debt Profile
and other statements concerning Media Central’s objectives, its strategies to achieve those objectives, as well as statements with respect
Page 3
Media Central Corporation Inc.
Management’s Discussion and Analysis
June 30, 2021
(In thousands of Canadian dollars and thousands per-unit amounts)
to management’s beliefs, plans, estimates and intentions, and similar statements concerning anticipated future events, results,
circumstances, performance or expectations that are not historical facts. Forward-looking information generally can be identified by the
use of forward-looking terminology such as “outlook”, “objective”, “may”, “will”, “would”, “expect”, “intend”, “estimate”, “anticipate”, “believe”,
“should”, “plan”, “continue”, or similar expressions suggesting future outcomes or events or the negative thereof. Such forward-looking
information reflects management’s beliefs and is based on information currently available. All forward-looking information in this MD&A is
qualified by the following cautionary statements.
Forward looking information necessarily involves known and unknown risks and uncertainties, which may be general or specific and which
give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, assumptions
may not be correct and objectives, strategic goals and priorities may not be achieved. A variety of factors, many of which are beyond
Media Central’s control, affect the operations, performance and results of the Company and its subsidiaries, and could call actual results
to differ materially from current expectations of estimated or anticipated events or results.
Although Media Central believes that the expectations reflected in such forward-looking information are reasonable and represent the
Company’s projections, expectations and beliefs at this time, such information involves known and unknown risks and uncertainties which
may cause the Company’s actual performance and results in future periods to differ materially from any estimates or projections of future
performance or results expressed or implied by such forward-looking information. Important factors that could cause actual results to differ
materially include but are not limited to: Business Overview, Results from Operations, Liquidity and Capital Resources, Capital Structure
and Stock Option Plan. See Risks and Uncertainties for further information. The reader is cautioned to consider these factors, uncertainties
and potential events carefully and not to put undue reliance on forward-looking information, as there can be no assurance that actual
results will be consistent with such forward-looking information.
The forward-looking information included in this MD&A is made as of the date of this MD&A and should not be relied upon as representing
Media Central’s views as of any date subsequent to the date of this MD&A. Management undertakes no obligation, except as required by
applicable law, to publicly update or revise any forward-looking information, whether as a result of new information, future events or
otherwise.
Business Overview and Growth Strategy
Business Overview
Media Central Corporation Inc. (“Media Central” or the “Company”) is domiciled in Toronto, Ontario, Canada. Media Central Corporation
Inc., common shares are listed on the Canadian Securities Exchange under the symbol FLYY and on the Frankfurt Stock Exchange under
the symbol 3AT. The Company’s registered office is 35A Hazelton Avenue, Toronto, Ontario, M5R 2E3. These interim condensed
consolidated financial statements comprise the Company and its subsidiaries (together referred to as the “Group”). Media Central is
primarily involved in developing and operating high-quality digital and print publishing assets.
Media Central is a media and technology company focused on accelerating its audience scale through the brand awareness of its legacy
“storefront” print and on-line newspaper brands and the technology development of contemporary new digital products.
Developments in 2021
Growth Strategy
Media Central continues to operate in a complex economic and social environment with little visibility. Despite the uncertainty, the company
is focused on transforming itself into a sustainable media and technology entity that generates predictable revenue growth and accelerated
audience scale. In May, the Company shared its 2021 Vision at a Town Hall meeting with employees.
The headlines were:
1. Media Central’s new board, installed in late November 2020, has spent a considerable amount of time and energy working with
management to stabilize the company’s business infrastructure
2. A commitment to increasing the appeal and ubiquity of our content on all platforms
3. A commitment to adopting new and innovative sales and marketing solutions that appeal to local and national advertisers alike
Page 4
Media Central Corporation Inc.
Management’s Discussion and Analysis
June 30, 2021
(In thousands of Canadian dollars and thousands per-unit amounts)
4. Investment in on-trend scalable digital products that accelerate our audience scale, complement our legacy titles, and diversify
our revenue streams
Competition and Market Trends
Since December 31, 2019, the outbreak of the novel strain of coronavirus, specifically identified as “COVID-19”, has resulted in
governments worldwide enacting emergency measures to combat the spread of the virus. These measures, which include the
implementation of travel bans, self-imposed quarantine periods and social distancing, have caused a material interruption to businesses,
resulting in a global economic slowdown.
Global equity markets have experienced significant volatility and weakness, with the Canadian government and central banks reacting
with significant monetary and fiscal interventions designed to stabilize the economic conditions. The duration and impact of COVID-19 is
unknown, as is the efficacy of the government and central bank interventions. It is not possible to reliably estimate the length and severity
of these developments and the impact on the financial results and condition of Media Central and its operating subsidiaries in future
periods.
We compete with other media companies for advertising spend. Competition for readership is generally based on the platform, content,
timeliness of information and price. Conversely, competition for advertising is generally based on audience size, demographics, rates, and
consumer/commercial client targeting capabilities.
Our industry continues to shift from print to digital media and our products face competition for readership and advertising from a wide
variety of media sources. In addition, we compete for advertising with local digital advertising networks and other programmatic channels
such as Google, Facebook, and Amazon.
In 2019, worldwide digital ad spending rose by approximately 17.6% to $333.25B, accounting for approximately half of the global ad
market1. The estimated global ad market is expected to grow to approximately $775B in 2021, at a rate of 7% year-over-year growth, with
digital advertising representing approximately 48% of the market2. By 2023, businesses will allocate more than 50% of their budgets to
digital advertising, with the Internet accounting for the single-largest advertising segment accounting for 40.6% of all advertising revenue3.
Overall, we believe that we are well positioned to capitalize on this trend increasing our share of locally available digital dollars.
1
Enberg, J. (2019, March 28). Global Digital Ad Spending 2019. eMarketer: https://www.emarketer.com/content/global-digital-ad-spending-2019
2
Gupta, K. (2019). The State of Digital Media Q4 2019. Polar: https://polar.me/
3
PricewaterhouseCoopers (2019). Global Entertainment & Media Outlook – Segmented Findings.
https://www.pwc.com/gx/en/industries/tmt/media/outlook/segment-findings.html
Page 5Media Central Corporation Inc.
Management’s Discussion and Analysis
June 30, 2021
(In thousands of Canadian dollars and thousands per-unit amounts)
Presentation of Financial Information
Unless otherwise specified herein, financial results, including historical comparatives, contained in this MD&A are based on Media Central’s
Interim Condensed Consolidated Financial Statements for the period ended June 30, 2021, which have been prepared in accordance with
International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and the
interpretations of the IFRS Interpretations Committee (“IFRIC”). Unless otherwise specified, amounts are in thousands of Canadian dollars
and percentage changes are calculated using whole numbers.
Capital Structure
June 30, December 31,
Notes 2021 2020
Current
Promissory note (a)(d) $ 60 $ 60
Convertible debentures (a)(c) 839 -
$ 899 $ 60
Non-current liabilities
Loans payable to financial intuitions (a)(b) $ 590 $ 70
Convertible debentures (a)(c) - 842
$ 590 $ 912
Page 6Media Central Corporation Inc.
Management’s Discussion and Analysis
June 30, 2021
(In thousands of Canadian dollars and thousands per-unit amounts)
(a) Terms and repayment schedule
The terms and conditions of outstanding loans are as follows:
(b) Loans payable to financial intuitions
The Group, through its subsidiaries, applied for and was advanced $40 (December 31, 2010: $100) through the Canada Emergency
Business Account (“CEBA”) program, which provides for an interest-free loan to cover the operating costs, offered in the context of
COVID-19. $20 (year ended December 31, 2020: $30) of the balance has been recognized as revenue as a result of CRA guidelines
in relation to the forgivable portion of the loan.
On December 31, 2022, the Group will have the option to either: (i) extend the CEBA for another 3 years, at which point it will bear
interest at 5% per annum, or (ii) repay the balance of the loan on or before December 31, 2022, which will result in loan forgiveness of
$50.
The Group will only be entitled to the granted portion at the time that the balance of 75% of the initial loan is repaid or at the time when
the Group has reasonable assurance that it will be able to repay the loan on or before December 31, 2022.
As of June 30, 2021, the Group has not repaid the loan and as such, this amount has been presented as a non-current liability on the
unaudited interim condensed consolidated statements of financial position.
In June 2021, the Group received two $250 loans from the Business Development Bank of Canada’s (“BDC”) Highly Affected Sectors
Credit Availability Program (“HASCAP Loan”). The HASCAP Loans, totaling $500, have a non-revolving ten-year term credit facility
with an interest rate of 4%. Repayment terms are interest only for one year from the date of issue, and monthly principal plus interest
payments for the remaining nine years. The HASCAP Loan is secured by a general security agreement and is guaranteed by BDC.
On February 21, 2020, the Group completed a non-brokered private placement of senior secured convertible notes (“Debentures”) and
warrants for total gross proceeds of $1,626, net of financing costs of $108 and 3,178 warrants valued at $471, using the Black- Scholes
method. Inputs in the Black-Scholes option pricing model included: market price on valuation date of $0.05; expected dividend yield of
0%; expected volatility of 150% using the historical price history of the Company; risk-free interest rate of 1.27%; and an expected
average life of one (1) year.
Page 7Media Central Corporation Inc.
Management’s Discussion and Analysis
June 30, 2021
(In thousands of Canadian dollars and thousands per-unit amounts)
The senior secured convertible notes bear interest at 10% and are due February 28, 2022. The notes may convert at the option of the
holder into 14 common shares and 7 warrants at a price of $0.07 per common share. Each warrant entitles the holder to purchase one
additional common share at $0.20 per share.
The conversion price for the common shares is equal to $0.07 per share and the Debentures are subject to prepayment and forced
conversion terms under certain circumstances. The Debentures are subject to a four-month hold period under applicable Canadian
securities law.
The above debenture was determined to be a compound financial instrument consisting of a host debt component and a residual equity
component representing the conversion feature and the additional warrants issuable on conversion.
Management used the residual method to allocate the fair value of the conversion options and warrants. Management calculated the fair
value of the liability component as $1,047 using a discount rate of 22.5%, which is the prevailing market rate for a similar liability of
comparable credit status and providing substantially the same cash flows that do not have an associated conversion option and then
management deducted the fair value of the liability component from the fair value of the debenture as a whole, resulting in a residual
amount of $471.
On July 7, 2020, certain holders of the convertible debentures exercised their option to convert the debt into common shares, resulting
in an issuance of 7,143 common shares valued at $500 par value. The value attributable to the converted warrants was $155.
On February 8, 2021, certain holders of the convertible debentures exercised their option to convert the debt into common shares,
resulting in an issuance of 1,429 common shares valued at $100 par value. The value attributable to the converted warrants was $31.
(d) Promissory note
On July 23, 2020, the Group entered the promissory agreement with a third party. The principal amount was $100 at an interest rate of
10% per annum, calculated quarterly. The principal amount outstanding along with interest accrued is $60 payable on July 23, 2021.
The promissory agreement remains unpaid as of the date of approval of the MD&A.
Financial Performance
Six months ended June 30, 2021, compared with three months ended June 30, 2020
Media Central’s loss and comprehensive loss totaled $1,033 for the six months ended June 30, 2021, with basic and diluted loss per share
of $0.003. This compares with a prior year loss comprehensive loss of $2,610, with basic and diluted loss per share of $0.008 for the six
months ended June 30, 2020. The reduction in operating losses of $1,577 was principally due to the following factors:
Revenues
Media Central’s principal business consists of creating and distributing content on digital, social media and print platform, generated by
our content creators through our digital and print platforms. We do not charge readers for digital access to our on-line content.
Advertising
Most of our advertising revenue is derived from offerings sold directly by our sales teams. Our advertising revenue is primarily driven by
print and digital display advertising. However, as we increase the number of distribution channels and accelerate audience scale, we
are benefiting from demand side programmatic (“DSP”), and supply side programmatic (“SSP”) advertising revenue generated by
machines and “artificial intelligence”). We are also testing e-commerce partnerships with on-trend categories such as cannabis.
In print, ads are priced according to pre-established rate cards based on number of print copies and number of monthly on-line users
and number of social media followers.
Our advertising revenues are affected, in part, by seasonality. Revenue dips typically occur in January, February, and July.
Page 8Media Central Corporation Inc.
Management’s Discussion and Analysis
June 30, 2021
(In thousands of Canadian dollars and thousands per-unit amounts)
Financial impact
Total revenues for the six months ending June 30, 2021, were $921, a $95 or 9.4 percent decrease compared to the same period last
year. It is important to note that the year over year decrease in the first half of 2021 was due to the timing of COVID’s impact. There was
no pandemic-related negative revenue impact on a year over year comparison in the first 11 weeks of 2021. Conversely, there was
considerable negative revenue impact in the last 15 weeks of the first two quarters of 2021.
The Company increased 2Q 2021 revenues 53.5 percent year over year despite the lingering effect of COVID and anticipates continued
quarterly revenue growth in the third and fourth quarters of 2021.
Cost of Sales
Cost of sales of 20.4 percent for the three months ending June 2021 was an improvement from the first six months ending June 2021 cost
of sales of 22.0%.
Operating Expenses
A breakdown of administrative expenses for the six months ended June 30, 2021, and 2020 is provided below.
2021 2020 Variance
Six Months Ended June 30, ($) ($) ($)
Professional fees (a) 438 1,605 (1,167)
Salaries and benefits (b) 858 935 (77)
Rent (e) 20 80 (60)
Office and general 148 48 100
Depreciation and amortization (d) 71 147 (76)
Accretion 19 nil 19
Dues and subscriptions 19 151 (132)
Business licenses 15 35 (20)
Repairs and maintenance 10 19 (9)
Listing expenses 11 106 (95)
Travel (f) 6 47 (41)
Stock-based compensation (c) 6 117 (111)
1,621 3,290 (1,669)
(a) Professional fees for the period ended June 30, 2021, was $438 in comparison to $1,605, representing a decline of $1,167. The
$1,167 decrease relates primarily to a shift in strategy regarding the use of external consulting services from the approach taken
in 2020.
(b) Salaries and benefits for the period ended June 30, 2021, was $858 compared to $935 in 2020, representing a decline of $77.
The $77 decrease relates to wage reductions that went into effect Week 3 in March 2020 that partially offset the revenue impact
of the pandemic. In addition, Media Central and its subsidiaries applied for and received $371 in government support for the six
months ended June 30, 2021.
(c) Stock-based compensation expenses for the period ended June 30, 2021, was $6 in comparison to $117, representing a decline
of $111. Stock-based compensation expense will vary from period to period depending upon the number of options granted and
vested during a period and the fair value of the options calculated as at the grant date.
(d) Depreciation and amortization expenses for the period ended June 30, 2021, were $71 in comparison to $147, representing a
decline of $76. The $76 decrease is associated with the amortization of property, plant and equipment, right-of-use assets and
intangible assets acquired.
(e) Rent fees for the period ended June 30, 2021, was $20 in comparison to $80, representing a decrease of $60. The $60 decrease
relates to leases assumed relating to Media Central’s subsidiaries, as well as rent subsidies received. In September 2020 the
Page 9Media Central Corporation Inc.
Management’s Discussion and Analysis
June 30, 2021
(In thousands of Canadian dollars and thousands per-unit amounts)
Government of Canada enacted the Canada Emergency Rent Subsidy (“CERS”) to provide commercial rent or property expenses
support for eligible businesses affected by COVID-19. The total amount of subsidies received by Media Central and its
subsidiaries from the Canadian government amounted to $49 as of June 30, 2021.
(f) Travel expenses for the period ended June 30, 2021, were $6 in comparison to $47, representing a decline of $41. The $41
decrease relates primarily to the impact of COVID-19 on travel activities.
Three months ended June 30, 2021, compared with three months ended June 30, 2020
Media Central’s loss and comprehensive loss totaled $605 for the three months ended June 30, 2021, with basic and diluted loss per share
of $0.002. This compares with a loss and comprehensive loss of $1,171, with basic and diluted loss per share of $0.003 for the three
months ended June 30, 2020. The decrease of $566 was principally due to the following factors:
Financial impact
Total revenues for the three months ending June 30, 2021, were $511, a $178 or 53.5 percent increase compared to the same period last
year. It is important to note that the year over year decrease in the first half of 2021 was due to the timing of COVID’s impact. There was
no pandemic-related negative revenue impact on a year over year comparison in the first 11 weeks of 2021. Conversely, there was
considerable negative revenue impact in the last 15 weeks of the first two quarters of 2021.
Cost of Sales
Cost of sales of 20.4 percent for the three months ending June 2021 was an improvement from the first six months ending June 2021 cost
of sales of 22.0%.
Operating Expenses
A breakdown of administrative expenses for the three months ended June 30, 2021, and 2020 is provided below.
2021 2020 Variance
Three Months Ended June 30, ($) ($) ($)
Professional fees (i) 167 730 (563)
Salaries and benefits (ii) 635 275 360
Rent (v) (58) 29 (87)
Office and general 85 3 82
Depreciation and amortization (iv) 49 71 (22)
Accretion 19 nil 19
Dues and subscriptions 9 122 (113)
Business licenses 6 35 (29)
Repairs and maintenance 4 19 (15)
Listing expenses 9 64 (55)
Travel 4 - 4
Stock-based compensation (iii) 19 8 11
948 1,356 (408)
(i) Professional Fees for the period ending June 30, 2021, was $167 compared to $730 in the same prior year period and represented
a savings of $563. The improvement was due to a change in IT contractors.
(ii) Wages and Benefits for the period ending June 30, 2021, was $635 compared to $275 in the same prior year period and
represented an increase of $360. The Company does not anticipate such significant Wage and Benefits increases in future
quarters.
Page 10Media Central Corporation Inc.
Management’s Discussion and Analysis
June 30, 2021
(In thousands of Canadian dollars and thousands per-unit amounts)
(iii) Stock-based compensation expenses for the period ended June 30, 2021, was $19 in comparison to $8, representing an increase
of $11. Stock-based compensation expense will vary from period to period depending upon the number of options granted and
vested during a period and the fair value of the options calculated as at the grant date.
(iv) Depreciation and amortization expenses for the period ended June 30, 2021, were $49 in comparison to $71, representing a
decline of $22. The $22 decrease is associated with the amortization of property, plant and equipment, right-of-use asset and
intangible assets acquired.
(v) Rent fees for the period ended June 30, 2021, was ($58) in comparison to $29, representing a decrease of $87. The $87 decrease
relates to leases assumed relating to Media Central’s subsidiaries, as well as rent subsidies received.
(vi) Travel expenses for the period ended June 30, 2021, were $4 in comparison to $nil, representing an increase of $4. The $4
increase relates limited travel primarily to the impact of COVID-19 on travel activities.
Summary of Quarterly Results
Profit or Loss
Total Basic and
Revenue Diluted Loss Per
$ Total Share
Three Months Ended $ $ (1)
June 30, 2021 511 (605) (0.002)
March 31, 2021 410 (428) (0.011)
December 31, 2020 485 (631) (0.006)
September 30, 2020 404 (1,318) (0.004)
June 30, 2020 333 (1,171) (0.003)
March 31, 2020 683 (1,439) (0.005)
December 31, 2019 166 (4,415) (0.002)
September 30, 2019 - (2,911) (0.006)
(1) Per share amounts are rounded to the nearest cent, therefore aggregating quarterly amounts may not reconcile to year-to-
date per share amounts.
Page 11Media Central Corporation Inc.
Management’s Discussion and Analysis
June 30, 2021
(In thousands of Canadian dollars and thousands per-unit amounts)
Employees and Labor Relations
Media Central has 31 full-time employees and 5 part-time equivalent active employees as of June 30, 3021. Approximately 32% of our
employees were represented by a union as of June 30, 2021. As a result of COVID-19, we have temporarily laid off 5 full-time and 13 part-
time equivalent employees and 2 full-time employees are on paid medical leave.
The collective bargaining agreement (“CBA”) expired on December 31, 2019. The Employer and the Union have reached an agreement
on a new 2-year CBA. The Employer is awaiting the final draft of the CBA to sign.
COVID-19
The Canadian federal and provincial governments have not introduced measures which impede the activities of Media Central.
Management believes the business will continue and accordingly, the current situation bears no impact on management’s going concern
assumption. However, it is not possible to reliably estimate the length and severity of these developments and the impact on the financial
results and condition of Media Central in future periods.
Liquidity and Cash Management
Media Central is working to meet all its obligations and other commitments as they become due. Media Central has various financing
sources to fund operations and will continue to fund working capital needs through these sources until cash flows generated from operating
activities is sufficient.
It is anticipated that further financings will be required to continue operations beyond the next twelve months as cash flows from operating
activities have not been sufficient to date. There can be no assurance that additional financing from related parties or others will be available
at all, or on terms acceptable to the Company. For these reasons, management considers it to be in the best interests of the Company
and its shareholders to afford management a reasonable degree of flexibility as to how the funds are employed, or for other purposes, as
needs arise.
Capital Management Framework
Media Central defines capital as the aggregate of common shares and debt. Media Central’s capital management framework is designed
to maintain a level of capital that funds the operations and business strategies and builds long-term shareholder value.
Media Central’s objective is to manage its capital structure in such a way as to diversify its funding sources, while minimizing its funding
costs and risks. Media Central expects to be able to satisfy all its financing requirements through use of some or all the following: cash on
hand, cash generated by operations, and through the public and private offerings of its common equity.
Outstanding Share Data
The number of common shares of the Company outstanding and the number of common shares issuable pursuant to other outstanding
securities of Media Central as at the date of this MD&A are as follows:
Securities As of August 27, 2021
Common shares outstanding 387,443
Issuable under warrants 165,041
Issuable under options 4,300
Total securities 556,784
Changes in Significant Accounting Policies
Media Central monitors the potential changes proposed by the IASB and analyzes the effect that changes in the standards may have on
Media Central’s operations. Standards issued but not yet effective up to the date of issuance of these interim condensed consolidated
Page 12Media Central Corporation Inc.
Management’s Discussion and Analysis
June 30, 2021
(In thousands of Canadian dollars and thousands per-unit amounts)
financial statements are described below. This description is of the standards and interpretations issued that Media Central reasonably
expects to be applicable at a future date. Media Central intends to adopt these standards when they become effective.
IAS 1, Presentation of Financial Statements (“IAS 1”)
In January 2010, the IASB issued amendments to IAS 1, Presentation of Financial Statements to clarify that the classification of liabilities
as current or non-current should be based on rights that are in existence at the end of the reporting period and is unaffected by expectations
about whether an entity will exercise their right to defer settlement of a liability. The amendments further clarify that settlement refers to
the transfer to the counterparty of cash, equity instruments, other assets, or services. The amendments are effective for annual reporting
periods beginning on or after January 1, 2022 and must be applied retrospectively.
Media Central is currently evaluating the impact of these amendments on its Interim Consolidated Financial Statements and will apply the
amendments from the effective date.
Disclosure of Internal Controls
Management has established processes to provide them with sufficient knowledge to support representations that they have exercised
reasonable diligence to ensure that (i) the unaudited condensed consolidated interim financial statements do not contain any untrue
statement of material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in
light of the circumstances under which it is made, as of the date of and for the periods presented by the unaudited condensed consolidated
interim financial statements; and (ii) the unaudited condensed consolidated interim financial statements fairly present in all material
respects the financial condition, financial performance and cash flows of the Company, as of the date of and for the periods presented.
In contrast to the certificate required for non-venture issuers under National Instrument 52-109 Certification of Disclosure in Issuers’ Annual
and Interim Filings (“NI 52-109”), the Venture Issuer Basic Certificate filed by the Company does not include representations relating to
the establishment and maintenance of disclosure controls and procedures (“DC&P”) and internal control over financial reporting (“ICFR”),
as defined in NI 52-109. In particular, the certifying officers filing such certificate are not making any representations relating to the
establishment and maintenance of:
● controls and other procedures designed to provide reasonable assurance that information required to be disclosed by the issuer
in its annual filings, interim filings or other reports filed or submitted under securities legislation is recorded, processed,
summarized and reported within the time periods specified in securities legislation; and
● a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of unaudited
condensed consolidated interim financial statements for external purposes in accordance with the issuer’s generally accepted
accounting principles (IFRS).
The Company’s certifying officers are responsible for ensuring that processes are in place to provide them with sufficient knowledge to
support the representations they are making in such certificate. Investors should be aware that inherent limitations on the ability of certifying
officers of a venture issuer to design and implement on a cost-effective basis DC&P and ICFR as defined in NI 52-109 may result in
additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities
legislation.
Related Parties
a) Transactions with key management personnel
Page 13Media Central Corporation Inc.
Management’s Discussion and Analysis
June 30, 2021
(In thousands of Canadian dollars and thousands per-unit amounts)
(b) Balances due to related parties
Included within current liabilities as of June 30, 2021, the Company has a $295 (2020: $50) balance payable to the board chairman as
a result of a non-interest-bearing advance with no set terms of repayment.
Risks and Uncertainties
An investment in the securities of the Company is highly speculative and involves numerous and significant risks. Such investment should
be undertaken only by investors whose financial resources are sufficient to enable them to assume these risks and who have no need for
immediate liquidity in their investment. Prospective investors should carefully consider the risk factors that have affected, and which in the
future are reasonably expected to affect, the Company and its financial position. Please refer to the section entitled " Risks and
Uncertainties" in the Company's Annual MD&A for the fiscal year ended December 31, 2020, available on SEDAR at www.sedar.com.
Contingencies and commitments
Central Media may have various other contractual obligations in the normal course of operations. Central Media is not contingently liable
with respect to litigation, claims and environmental matters, including those that could result in mandatory damages or other relief. Any
expected settlement of claims in excess of amounts recorded will be charged to profit or loss as and when such determination is made.
Subsequent Events
(a) On July 15, 2021, the Company issued an aggregate of 14,688 common shares of the Company at a deemed price of $0.016
per share to certain service providers in full satisfaction of amounts owing for past services in the aggregate amount of $235.
Insiders of the Company received an aggregate of 1,563 common shares in connection with the issuance. All securities issued
are subject to a statutory hold period expiring on November 16, 2021.
(b) On July 22, 2021, the Company announced the appointment of media veteran, Carolyn R. Wall to the Company’s Board of
Directors, effective August 1, 2021.
(c) On July 28, 2021, the Company announced the formation of its advisory board and appointed Mr. Jack Harding as the inaugural
member.
(d) On August 4, 2021, the Company announced that it has appointed Greg Messinger to the Company’s Advisory Board.
(e) On August 11, 2021, the Company issued an aggregate of 1,500 common shares of the Company at a deemed price of $0.015
per share to certain service providers in full satisfaction of amounts owing for settlement of debt in the aggregate amount of
$23. All securities issued are subject to a statutory hold period expiring on December 11, 2021.
(f) On August 23, 2021, the Company granted an aggregate of 4,000 stock options to advisors of the Company, each of which
entitles the holder to acquire one common share of the Company at an exercise price of $0.02 until the earlier of (i) July 16,
2026; and (ii) the date the optionee ceases to be a service provider of the Company. The options vest as to 25% immediately,
as to a further 25% on each of October 16, 2021, January 16, 2022, and April 16, 2022.
Additional Information
These documents, as well as additional information regarding Media Central, have been filed electronically with the Canadian securities
regulators through the System for Electronic Document Analysis and Retrieval (“SEDAR”) and may be accessed through SEDAR’s website
at www.sedar.com or Media Central’s website at www.MediaCentralcorp.com.
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