Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes ☑   No ☐⬜

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑    No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes ☐   No ☑

The Registrant has 90,477,798 shares of common stock outstanding as at May 3,August 1, 2019.

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the generally accepted accounting principles for interim financial statements and instructions for Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments considered necessary for a fair presentation, have been included. Operating results for any quarter are not necessarily indicative of the results for any other quarter or for a full year. In connection with the preparation of the condensed consolidated financial statements the Company evaluated subsequent events after the balance sheet date of March 31,June 30, 2019 through the filing of this report.

As of March 31,June 30, 2019, the Company has a working capital deficit of $726,259.$564,968. Our current liabilities include deferred revenue of $703,517.$776,564. The costs expected to be incurred to realize the deferred revenue in the next 12 months are minimal.

The Company has a plan in place for the next 12 months to ensure ongoing expenditures are balanced with the expected growth rate and believes cash on hand and cash generated will be sufficient to fund operations for the next 12 months. However, to implement our business plan may require additional financing. Additional financings may come from future equity or debt offerings that could result in dilution to our stockholders. No assurance can be given that additional financing will be available or that, if it is available, it will be on terms acceptable to us.

 

 

 

We are a software developer and distributor of financial market data and related services to a global marketplace. We specialize in the collection, aggregation, and delivery of both delayed and real-time financial data content via the Internet. We develop and license software components that deliver dynamic content to banks, brokerage firms, financial institutions, mutual fund companies, online information and financial portals, media outlets, public companies, and corporate intranets.

 

 

The consolidated financial statements include the operations of QuoteMedia, Ltd., a wholly owned subsidiary of QuoteMedia, Inc. All intercompany transactions and balances have been eliminated.

 

 

The U.S. dollar is the functional currency of all our company's operations. Foreign currency asset and liability amounts are remeasured into U.S. dollars at end-of-period exchange rates, except for equipment and intangible assets, which are remeasured at historical rates. Foreign currency income and expenses are remeasured at average exchange rates in effect during the period, except for expenses related to balance sheet amounts remeasured at historical exchange rates. Exchange gains and losses arising from remeasurement of foreign currency-denominated monetary assets and liabilities are included in earnings in the period in which they occur.

 

 

We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of the Company’s customers to make required payments. The Company determines the allowance by reviewing the age of the receivables and assessing the anticipated ability of customers to pay. No collateral is required for any of the receivables and the Company does not usually apply financing charges to outstanding accounts receivable balances. If the financial condition of our customers were to deteriorate, adversely affecting their ability to make payments, additional allowances would be required. The allowance for doubtful accounts was $100,000 as of March 31,June 30, 2019 and December 31, 2018.

 

 

 

 

Other accounting standards that have been issued by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s consolidated financial statements upon adoption.

 

 

 

The Company provides market data, financial web content solutions and cloud-based applications. Our revenue by type of service consists of the following:

 

 

 

Changes in deferred revenue for the period were as follows:

 

 

 

 

 

The Company entered into a five-year office lease with 410734 B.C. Ltd. effective May 1, 2016 for approximately $7,365 per month. David M. Shworan is a control person of 410734 B.C. Ltd. At March 31,June 30, 2019, there were no amounts due to 410734 B.C. Ltd. As a matter of policy all related party transactions are subject to review and approval by the Company’s Board of Directors.

 

 

Supplemental balance sheet information related to leases was as follows:

 

 

 

 

Maturities of lease liabilities were as follows:

 

 

The components of lease expense for the three months ended March 31, 2019 were as follows:

 

 

Supplemental cash flow information related to leases for the three months ended March 31, 2019 was as follows:

 

 

 

 

We are authorized to issue up to 10,000,000 non-designated preferred shares at the Board of Directors’ discretion.

 

On December 28, 2017, a total of 550,000 shares of the Company’s Preferred Stock were designated as “Series A Redeemable Convertible Preferred Stock.” The Series A Redeemable Convertible Preferred Stock has no dividend or voting rights. Holders of Series A Redeemable Convertible Preferred Stock shall have the right to convert their shares into shares of common stock at the rate of 83.33 shares of common stock for one share of Series A Redeemable Convertible Preferred Stock, at any time following the date the closing price of a share of common stock on a securities exchange or actively traded over-the-counter market has exceeded $0.30 for ninety (90) consecutive trading days. The conversion rights are subject to the availability of authorized but unissued shares of common stock.

 

In the event of any liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary, before any distribution or payment is made to any holders of any shares of common stock, the holders of shares of Series A Redeemable Convertible Preferred Stock shall be entitled to be paid first out of the assets of the Corporation available for distribution to holders of the Company’s capital stock whether such assets are capital, surplus, or earnings, an amount equal to $25.00 per share of Series A Redeemable Convertible Preferred Stock.

 

At March 31,June 30, 2019, 125,885124,485 shares of Series A Redeemable Convertible Preferred Stock were outstanding. During the three and six months ended June 30, 2019 1,400 shares of Series A Redeemable Convertible Preferred Stock were redeemed. No shares of Series A Redeemable Convertible Preferred Stock were issued or redeemed during the three and six months ended March 31, 2019 andJune 30, 2018.

 

 

No shares of common stock were issued during the threesix months ended March 31,June 30, 2019 and 2018.

 

 

 

Total estimated stock-based compensation expense, related to all of the Company’s stock-based awards, recognized for the three and six months ended March 31,June 30, 2019 and 2018 was comprised as follows:

 

 

 

There were 26,372,803 common stock warrants and options outstanding at March 31,June 30, 2019. No stock options or warrants to purchase common stock were granted or exercised during the threesix months ended March 31,June 30, 2019 and 2018.

 

The following table summarizes our non-vested common stock option and warrant activity for the threesix months ended March 31,June 30, 2019:

 

 

The following table summarizes the weighted average remaining contractual life and exercise price of common stock options and warrants outstanding at March 31,June 30, 2019:

 

 

At March 31,June 30, 2019, there was $119,739$106,623 of unrecognized compensation cost related to non-vested options and warrants granted to purchase common stock which is expected to be recognized over a weighted-average period of 3.202.95 years.

 

 

 

On December 28, 2017, the Company entered into a Compensation Agreement with David M. Shworan, the President and Chief Executive Officer of QuoteMedia, Ltd., a wholly owned subsidiary of Quotemedia, Inc., pursuant to which, in lieu of receiving a cash salary the Company will issue to Mr. Shworan warrants to purchase shares of Series A Redeemable Convertible Preferred Stock (“Compensation Preferred Stock Warrants”). Provided that Mr. Shworan is employed by or otherwise providing services to the Company or its subsidiaries on each of January 1, 2018 and 2019, the Company will issue to Mr. Shworan warrants to purchase up to 15,000 shares of Compensation Preferred Stock Warrants at an exercise price equal to $1.00 per share. A total of $90,000 and $180,000 of stock-based compensation expense was recognized related to the Compensation Preferred Stock Warrants during the three and six months ended March 31,June 30, 2019 and 2018.2018, respectively. At March 31,June 30, 2019, there was $270,000$180,000 of unrecognized compensation costs related to the 15,000 Compensation Preferred Stock Warrants granted on January 1, 2019 which are expected to be recognized over a weighted-average period of 0.75 years.

 

Also pursuant to the Compensation Agreement with Mr. Shworan, on December 28, 2017 the Company issued Mr. Shworan warrants to purchase up to 382,243 shares of Series A Redeemable Convertible Preferred Stock at an exercise price equal to $1.00 per share (“Liquidity Preferred Stock Warrant”). The Liquidity Preferred Stock Warrants only vest and become exercisable on the consummation of a Liquidity Event as defined in the Company’s Certificate of Designation of Series A Redeemable Convertible Preferred Stock. The probability of the liquidity event performance condition is not currently determinable or probable; therefore, no compensation expense has been recognized as of March 31,June 30, 2019. The probability is re-evaluated each reporting period. As of March 31,June 30, 2019, there was $9,173,832 in unrecognized stock-based compensation expense related to these Liquidity Preferred Stock Warrants. Since the Liquidity Preferred Stock Warrants only vest and become exercisable on the consummation of a Liquidity Event which is currently determined not to be probable, we are also unable to determine the weighted-average period over which the unrecognized compensation cost will be recognized.

 

The following table represents total preferred stock warrant activity for the threesix months ended March 31,June 30, 2019:

 

 

The following table summarizes the total non-vested preferred stock warrant activity for the threesix months ended March 31,June 30, 2019:

 

 

The following table summarizes the weighted average remaining contractual life and exercise price of preferred stock warrants outstanding at March 31,June 30, 2019:

 

 

There was no cash received from the exercise ofNo preferred stock warrants were exercised for the threesix months ended March 31,June 30, 2019 and 2018. At March 31,June 30, 2019, the total aggregate intrinsic value of preferred stock warrants outstanding was $9,923,832. The aggregate intrinsic value of preferred stock warrants exercisable was $480,000.$570,000. The intrinsic value of our preferred stock warrants is calculated as the amount by which the liquidation value of our Series A Redeemable Convertible Preferred Stock ($25) exceeds the exercise price of the warrant ($1).

 

 

 

 

 

 

 

 

The following discussion should be read in conjunction with our financial statements and notes thereto included elsewhere in this report. We caution readers regarding certain forward looking statements in the following discussion, elsewhere in this report, and in any other statements, made by, or on behalf of our company, whether or not in future filings with the Securities and Exchange Commission. Forward-looking statements are statements not based on historical information and which relate to future operations, strategies, financial results, or other developments. Forward-looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, economic, and competitive uncertainties and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward looking statements made by, or on behalf of, our company. Uncertainties and contingencies that might cause such differences include those risk factors disclosed in our annual report on Form 10-K for the year ended December 31, 2018 and other reports filed from time to time with the SEC.

 

We disclaim any obligation to update forward-looking statements. All references to “we”, “our”, “us”, or “QuoteMedia” refer to QuoteMedia, Inc., and its predecessors, operating divisions, and subsidiaries.

 

This report should be read in conjunction with our Form 10-K for the fiscal year ended December 31, 2018 filed with the Securities and Exchange Commission.

 

 

We are a developer of financial software and a distributor of market data and research information to online brokerages, clearing firms, banks, media properties, public companies and financial service corporations worldwide. Through the aggregation of information from many direct data, news, and research sources, we offer a comprehensive range of solutions for all market-related information provisioning requirements.

 

We have three general product lines: Interactive Content and Data Applications, Data Feed Services, and Portfolio Management Systems. For financial reporting purposes, our product categories share similar economic characteristics and share costs; therefore, they are combined into one reporting segment.

 

 

Our Data Feed Services consist of raw streaming real-time market data delivered over the Internet or via dedicated telecommunication lines, and supplemental fundamental, historical, and analytical data, keyed to the same symbology, which provides a complete market data solution offered to our customers. Currently, QuoteMedia’s Data Feed services include complete coverage of North American exchanges and over 70 exchanges worldwide. For financial reporting purposes, Data Feed Services revenue is included in the Interactive Content and Data Applications revenue totals.

 

 

Quotestream Professional is specifically designed for use by financial services professionals, offering exceptional coverage and functionality at extremely aggressive pricing. Quotestream Professional features broad market coverage, reliability, complete flexibility, ultra-low-latency tick-by-tick data, as well as completely customizable screens, advanced charting, comprehensive technical analysis, news and research data.

 

Quotestream Mobile is a true companion product to the Quotestream desktop products (Quotestream and Quotestream Professional) – any changes made to portfolios in either the desktop or mobile application are automatically reflected in the other.

 

 

A key feature of QuoteMedia’s business model is that all of our product lines generate recurring monthly licensing revenue from each client. Contracts to license Quotestream to our corporate clients, for example, typically have a term of one to threesix years and are automatically renewed unless notice is given at least 90 days prior to the expiration of the current license term. We also generate Quotestream revenue through individual end-user licenses on a monthly or annual subscription fee basis.  Interactive Content and Data Applications and Market Data Feeds are licensed for a monthly, quarterly, annual, or semi-annual subscription fee. Contracts to license our Financial Data Products and Data Feeds typically have a term of one to threesix years and are automatically renewed unless notice is given 90 days prior to the expiration of the contract term.

 

The global financial markets have experienced extreme volatility and disruption in recent years. As a result, financial institutions globally have acted to control or reduce operational spending. While in some areas the anticipated impact of current market conditions may lead to a decision to reduce demand for market data and related services, we expect overall spending on financial information services will grow modestly over the next several years.

 

The Canadian dollar depreciated 5.1%3.6% and 4.3% when comparing average exchange rates for Q1the three and six months ended June 30, 2019 to Q1and 2018. The exchange rate fluctuation decreased both Canadian dollar revenues and expenses once translated into U.S. dollars for the three and six months ended March 31,June 30, 2019 when compared to the same periodperiods in 2018 but had a minimal impact on our net income.

 

Our revenue grew 8% year over year7% when comparing the three and six months ended June 30, 2019 to the comparative periods in 2018. Through March 31,June 30, 2019, we have experienced 1314 consecutive quarters of revenue growth. We expect our positive revenue growth to continue for the remainder of 2019.2019 and into 2020.

 

 

For the remainder of 2019 we will maintain our focus on marketing Quotestream for deployments by brokerage firms to their retail clients and continue our expansion into the investment professional market with Quotestream Professional. We also plan to continue the growth of our Data Feed Services client base, particularly through the addition of major new international data feed coverage, as well as new data delivery products.

 

QuoteMedia will continue to focus on increasing the sales of its Interactive Content and Data Applications, particularly in the context of large-scale enterprise deployments encompassing solutions ranging across several product lines. QMod is a major component of this strategy, given the broad demand for mobile-ready, SEO-friendly Web content.

 

Important development projects for 2019 include broad expansion of data and news coverage, including the addition of a wide array of international exchange data and news and video feeds, expansion of fixed-income coverage, and the introduction of several new and upgraded market information products.

 

New deployments of our trade integration capabilities, which allow our Quotestream applications to interact with our brokerage clients’ back-end trade execution and reporting platforms (enabling on-the-fly trade execution and tracking of holdings) are underway and will continue to be a priority in the coming year.

 

Opportunistically, efforts will be made to evaluate and pursue the development of additional new products that may eventually be commercialized by our company. Although not currently anticipated, we may require additional capital to execute our proposed plan of operation. There can be no assurance that such additional capital will be available to our company on commercially reasonable terms or at all.

 

Our future performance will be subject to a number of business factors, including those beyond our control, such as a continuation of market uncertainty and evolving industry needs and preferences, as well as the level of competition and our ability to continue to successfully market our products and technology. There can be no assurance that we will be able to successfully implement our marketing strategy, continue our revenue growth, or achieve profitable operations.

 

 

 

 

Total licensing revenue increased 8%7% when comparing the three and six months ended March 31,June 30, 2019 and 2018.

 

Our Portfolio Management System revenue increased by 8%3% and 6% when comparing the three-monththree and six-month periods ended March 31,June 30, 2019 and 2018, due to an increaseincreases in Corporate Quotestream Revenue, offset by a decrease in Individual Quotestream revenue.Revenue.

 

Corporate Quotestream revenue increased 16%4% and 10% for the three-month periodthree and six-month periods ended March 31,June 30, 2019 from the comparative periodperiods in 2018 due to new contracts signed since the comparative periodperiods and increases in the number of subscribers for existing clients.

 

Individual Quotestream revenue decreased 5%remained relatively unchanged from the three-month comparative period2018 periods, increasing 1% and decreasing 2% for the three and six months ended June 30, 2019, respectively. Increases in 2018. The decrease is due to a decreasethe number of Individual Quotestream subscribers were offset by decreases in the average revenue per subscriber from the comparative periodperiods. This was mainly due to foreign exchange fluctuations. Thefluctuations as 55% of our Individual Quotestream revenue is earned in Canadian dollars and the Canadian dollar depreciated 5.1%3.6% and 4.3% when comparing average exchange rates for Q1the three and six months ended June 30, 2019 to Q1 2018 therefore decreasing Canadian dollar revenue when re-measured into U.S. dollars.and 2018.

 

Interactive Content and Data Application revenue increased 7%10% and 8% when comparing the three-monththree and six-month periods ended March 31,June 30, 2019 and 2018, mainly due to an increase in the average revenue per client. The increase in average revenue per client is attributable to the launch of new products such as QMod, our new proprietary Web delivery system, which has allowed us to attract larger clients.

 

 

 

Our cost of revenue consists of fixed and variable stock exchange fees and data feed provisioning costs. Cost of revenue also includes amortization of capitalized internal-use software costs. We capitalize the costs associated with developing new products during the application development stage.

 

Cost of revenue increased 7%3% and 5% when comparing the three-monththree and six-month periods ended March 31,June 30, 2019 and 2018. The increase in cost of revenue was mainly due to increased variable stock exchange fees resulting from increased customer usage, as well as new and increased fees levied by our content providers. It is also due to an increase in the amortization of capitalized internal-use software costs related to the increase in capitalized development costs in 2019.

 

Overall, the cost of revenue remained constantdecreased as a percentage of sales, as evidenced by our gross margin percentage which remained unchanged at 49%increased to 51% and 50% for the three-month periodsthree and six months ended March 31,June 30, 2019 and 2018.from 49% in the comparative 2018 periods.

 

 

 

 

 

Sales and marketing consists primarily of sales and customer service salaries, investor relations, travel and advertising expenses. Sales and marketing expenses remained relatively unchanged from the comparative period, decreasing 0% and 1% when comparingcompared to the three-monththree and six-month periods ended March 31,June 30, 2019 and 2018.

 

 

General and administrative expenses consist primarily of salaries expense, office rent, insurance premiums, and professional fees. General and administrative expenses remained relatively unchanged from the comparative periods, decreasing 3%increasing 5% and 1% when comparing the three-monththree and six-month periods ended March 31,June 30, 2019 and 2018.

 

 

Software development expenses consist primarily of costs associated with the design, programming, and testing of our software applications during the preliminary project stage. Software development expenses also include costs incurred to maintain our software applications.

 

Software development expenses increased 3%5% and 4% for the three-month periodthree and six-month periods ended March 31,June 30, 2019 when compared to the same periodperiods in 2018. The increase was mainly due to hiring additional development personnel since the comparative period.

 

We capitalized $307,506$348,528 and $660,240 of development costs for the three monthsand six month periods ended March 31,June 30, 2019, compared to $196,888$233,893 and $430,781 for the same periodperiods in 2018. These costs relate to the development of application software used by subscribers to access, manage, and analyze information in our databases. Capitalized costs associated with application software are amortized over their estimated economic life of threesix years. The increase in capitalized development costs from the comparative period is due to new projects outsourced to a third-party software development firm in 2019.

 

 

 

 

Foreign exchange gains and losses arise from the re-measurement of Canadian dollar monetary assets and liabilities into U.S. dollars. We have a net Canadian dollar liability; therefore, we incur a foreign exchange gain when the Canadian dollar depreciates from the period beginning date, and a loss when the Canadian dollar appreciates. Gains and losses arising from exchange rate fluctuations between transaction and settlement dates for foreign currency denominated transactions are also included in foreign exchange gains and losses.

 

We incurred a foreign exchange loss of $14,058 for the three months ended March 31, 2019 attributable to the re-measurement of Canadian dollar monetary assets and liabilities into U.S. dollars, as theThe Canadian dollar appreciated 2.1%1.7% versus the U.S. dollar when comparing the foreign exchange ratesrate at June 30, 2019 to the rate at March 31, 2019 resulting in a foreign exchange loss of $7,256 for the three months ended June 30, 2019, compared to a foreign exchange gain of $4,383 for the same period in 2018 when the Canadian dollar depreciated 2.0% versus the U.S. dollar.

The Canadian dollar appreciated 3.8% versus the U.S. dollar when comparing the foreign exchange rate at June 30, 2019 to the rate at December 31, 2018. In2018 resulting in a foreign exchange loss of $21,314 for the comparativesix months ended June 30, 2018, period, we incurredcompared to a foreign exchange gain of $3,817 attributable to$8,200 for the re-measurement of Canadian dollar monetary assets and liabilities into U.S. dollars due tosame period in 2018 when the Canadian dollar depreciating 2.5%depreciated 4.6% versus the U.S. dollar.

 

 

 

 

For the three-monththree and six month periods ended March 31,June 30, 2019, the Company recorded Canadian income tax expense of $752$747 and $1,499 compared to $791$774 and $1,565 in the comparative periods in 2018.

 

 

As a result of the foregoing, net income for the three and six months ended March 31,June 30, 2019 was $113,056$202,361 and $315,417 compared to net income of $8,161$112,536 and $120,697 for the three and six months ended March 31,June 30, 2018. Basic and diluted earnings per share were $0.00 for each of the three monthsand six month periods ended March 31,June 30, 2019 and 2018.

 

 

Our cash totaled $966,167$1,015,468 at March 31,June 30, 2019, as compared with $810,332 at December 31, 2018, an increase of $155,835.$205,136. Net cash of $601,698$1,051,385 was provided by operations for the threesix months ended March 31,June 30, 2019, primarily due to the net income during the period adjusted for non-cash charges the decrease in accounts receivable and the increase in accounts payable.payable, offset by the increase in accounts receivable. Net cash used in investing activities for the threesix months ended March 31,June 30, 2019 was $439,470$797,949 resulting primarily from capitalized application software costs and the purchase of new computer equipment and intangible assets.equipment. Cash used in financing activities for the threesix months ended March 31,June 30, 2019 was $6,393 due$48,300 related to the redemption of 1,400 shares of preferred stock and the repayment of capital lease financing.

 

We have a working capital deficit of $726,259$564,968 as of March 31,June 30, 2019, however current liabilities include $703,517$776,564 in deferred revenue and the expected costs necessary to realize the deferred revenue in 2019 are minimal.

 

Based on the factors discussed above, we believe that our cash on hand and cash generated from operations will be sufficient to fund our current operations for a period of one year after issuance of these Financial Statements. However, to implement our business plan may require additional financing. Additional financings may come from future equity or debt offerings that could result in dilution to our stockholders. Further, current adverse capital and credit market conditions could limit our access to capital. We may be unable to raise capital or bear an unattractive cost of capital that could reduce our financial flexibility.

 

 

Under the supervision and with the participation of our Chairman of the Board and Chairman of the Audit Committee, Chief Executive Officer and Chief Financial Officer, we completed an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) to the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on that evaluation, we and our management have concluded that our disclosure controls and procedures at March 31,June 30, 2019 were effective at the reasonable assurance level to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and are designed to ensure that information required to be disclosed by us in these reports is accumulated and communicated to our management, as appropriate to allow timely decisions regarding required disclosures. In the threesix months ended March 31,June 30, 2019, there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to affect, our internal control over financial reporting.

 

We will consider further actions and continue to evaluate the effectiveness of our disclosure controls and internal controls and procedures on an ongoing basis, taking corrective action as appropriate. Management does not expect that disclosure controls and procedures or internal controls can prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable and not absolute assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. While management believes that its disclosure controls and procedures provide reasonable assurance that fraud can be detected and prevented, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

 

 

 

 

 

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

 

Dated: May 15,August 13, 2019