UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
☑ | | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2020March 31, 2021
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period _________ to _________
Commission File Number: 0-28599
QUOTEMEDIA, INC.
(Exact name of registrant as specified in its charter)
Nevada | 91-2008633 | |
(State or Other Jurisdiction of Incorporation or Organization) | (IRS Employer Identification Number) | |
17100 East Shea Boulevard, Suite 230, Fountain Hills, AZ 85268
(Address of Principal Executive Offices)
(480) 905-7311
(Registrant’s Telephone Number, Including Area Code)
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):
Large accelerated filer ☐ | Accelerated filer ☐ |
Non-accelerated filer ☐ (Do not check if a smaller reporting company) | Smaller reporting company ☑ |
| Emerging growth company ☐ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. ☐
The Registrant has 90,477,798 shares of common stock outstanding as of November 2, 2020.at May 3, 2021.
QUOTEMEDIA, INC.
FORM 10-Q for the Quarter Ended September 30, 2020March 31, 2021
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PART I - FINANCIALPART I-FINANCIAL INFORMATION
ItemItem 1. Financial Statements
QUOTEMEDIA, INC.
CONDENSEDCONDENSED CONSOLIDATED BALANCE SHEETS(UNAUDITED)
| | | | |
ASSETS | | |
| | |
Current assets: | | |
Cash and cash equivalents | $678,552 | $815,487 | $815,499 | $417,910 |
Accounts receivable, net | 728,740 | 680,759 | 493,160 | 698,334 |
Prepaid expenses | 135,029 | 103,093 | 205,616 | 108,477 |
Other current assets | 90,263 | 47,793 | 38,762 | 113,826 |
Total current assets | 1,632,584 | 1,647,132 | 1,553,037 | 1,338,547 |
| | |
Deposits | 16,755 | 16,084 | 16,094 | 15,886 |
Property and equipment, net | 2,643,666 | 2,273,087 | 2,929,832 | 2,755,537 |
Goodwill | 110,000 | 110,000 |
Intangible assets | 63,498 | 51,265 | 70,196 | 61,914 |
Operating lease right-of-use assets | 699,658 | 328,676 | 642,470 | 671,402 |
| | |
Total assets | $5,166,161 | $4,426,244 | $5,321,629 | $4,953,286 |
| | |
LIABILITIES AND STOCKHOLDERS’ DEFICIT | | |
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS’ DEFICIT | | |
| | |
Current liabilities: | | |
Accounts payable and accrued liabilities | $1,759,714 | $1,286,340 | $2,552,890 | $2,026,741 |
Deferred revenue | 666,516 | 579,343 | 541,862 | 544,902 |
Current portion of operating lease liabilities | 171,542 | 172,049 | 151,379 | 164,843 |
Current portion of finance lease liabilities | 19,583 | 33,914 | 4,560 | 11,951 |
Total current liabilities | 2,617,355 | 2,071,646 | 3,250,691 | 2,748,437 |
| | |
Paycheck Protection Program loan (Note 8) | 141,257 | - | - | 133,257 |
Long-term portion of operating lease liabilities | 520,414 | 167,496 | 474,785 | 504,783 |
Long-term portion of finance lease liabilities | 2,777 | 13,949 | 1,426 | 2,108 |
| | |
Mezzanine equity: | | |
Series A Redeemable Convertible Preferred stock, $0.001 par value, | | |
550,000 shares designated; Shares issued and outstanding: | | |
123,685 at September 30, 2020 and December 31, 2019 | 2,983,857 | |
123,685 at March 31, 2021 and December 31, 2020 | | 2,983,857 |
| | |
Stockholders’ deficit: | | |
Preferred stock, 10,000,000 shares authorized, 550,000 shares designated | - | |
Common stock, $0.001 par value, 150,000,000 shares authorized, shares issued and | | |
outstanding: 90,477,798 at September 30, 2020 and December 31, 2019 | 90,479 | |
outstanding: 90,477,798 at March 31, 2021 and December 31, 2020 | | 90,479 |
Additional paid-in capital | 19,598,944 | 19,568,011 | 19,612,822 | 19,605,883 |
Accumulated deficit | (20,788,922) | (20,469,194) | (21,092,431) | (21,115,518) |
Total stockholders’ deficit | (1,099,499) | (810,704) | (1,389,130) | (1,419,156) |
| | |
Total liabilities and stockholders’ deficit | $5,166,161 | $4,426,244 | $5,321,629 | $4,953,286 |
QUOTEMEDIA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
| Three-months ended September 30, | Nine-months ended September 30, | Three months ended March 31, |
| | | | | | |
| | |
LICENSING FEES | $3,140,358 | $2,963,172 | $9,136,141 | $8,818,637 | |
REVENUE | | $3,606,218 | $2,966,584 |
| | |
COST OF REVENUE | 1,706,476 | 1,429,308 | 4,795,150 | 4,355,110 | 2,063,640 | 1,499,484 |
| | |
GROSS PROFIT | 1,433,882 | 1,533,864 | 4,340,991 | 4,463,527 | 1,542,578 | 1,467,100 |
| | |
OPERATING EXPENSES | | |
| | |
Sales and marketing | 552,960 | 463,929 | 1,602,501 | 1,393,929 | 638,864 | 517,480 |
General and administrative | 555,002 | 600,329 | 1,817,748 | 1,646,388 | 607,240 | 650,053 |
Software development | 405,703 | 311,028 | 1,246,722 | 923,218 | 407,288 | 425,827 |
| 1,513,665 | 1,375,286 | 4,666,971 | 3,963,535 | 1,653,392 | 1,593,360 |
| | |
OPERATING PROFIT (LOSS) | (79,783) | 158,578 | (325,980) | 499,992 | |
OPERATING LOSS | | (110,814) | (126,260) |
| | |
OTHER INCOME (EXPENSES) | | |
| | |
Foreign exchange gain (loss) | 5,930 | (543) | 11,887 | (21,857) | |
Interest and other expense, net | (701) | (1,349) | (3,419) | (4,533) | |
Foreign exchange gain | | 2,448 | 11,206 |
Interest expense | | (1,008) | (1,527) |
Other income (Note 8) | | 133,257 | - |
| 5,229 | (1,892) | 8,468 | (26,390) | 134,697 | 9,679 |
| | |
INCOME (LOSS) BEFORE INCOME TAXES | (74,554) | 156,686 | (317,512) | 473,602 | 23,883 | (116,581) |
| | |
Provision for income taxes | (751) | (758) | (2,216) | (2,257) | |
Income tax expense | | (796) | (744) |
| | |
NET INCOME (LOSS) | $(75,305) | $155,928 | $(319,728) | $471,345 | $23,087 | $(117,325) |
| | |
EARNINGS (LOSS) PER SHARE | | |
| | |
Basic earnings (loss) per share | $(0.00) | $0.00 | $(0.00) | $0.01 | $0.00 | $(0.00) |
Diluted earnings (loss) per share | $(0.00) | $0.00 | $(0.00) | $0.00 | $0.00 | $(0.00) |
| | |
WEIGHTED AVERAGE SHARES OUTSTANDING | | |
| | |
Basic | 90,477,798 | 90,477,798 |
Diluted | 90,477,798 | 107,173,219 | 90,477,798 | 105,577,615 | 119,810,697 | 90,477,798 |
QUOTEMEDIA, INC.
CONDENSED STATEMENTS OF CHANGES IN SERIES A REDEEMABLE CONVERTIBLE
PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT (UNAUDITED)
| Series A Redeemable Convertible Preferred Stock | | | | |
Three-months ended September 30, 2020: | | | | | Additional Paid-in Capital | | Total Stockholders’ Equity (Deficit) |
Balance, June 30, 2020 | 123,685 | $2,983,857 | 90,477,798 | $90,479 | $19,592,005 | $(20,713,617) | $(1,031,133) |
| | | | | | | |
Stock-based compensation | - | - | - | - | 6,939 | - | 6,939 |
| | | | | | | |
Net loss | - | - | - | - | - | (75,305) | (75,305) |
| | | | | | | |
Balance, September 30, 2020 | 123,685 | $2,983,857 | 90,477,798 | $90,479 | $19,598,944 | $(20,788,922) | $(1,099,499) |
| Series A Redeemable Convertible Preferred Stock | | | | |
Nine-months ended September 30, 2020: | | | | | Additional Paid-in Capital | | Total Stockholders’ Equity (Deficit) |
Balance, December 31, 2019 | 123,685 | $2,983,857 | 90,477,798 | $90,479 | $19,568,011 | $(20,469,194) | $(810,704) |
| | | | | | | |
Stock-based compensation | - | - | - | - | 30,933 | - | 30,933 |
| | | | | | | |
Net loss | - | - | - | - | - | (319,728) | (319,728) |
| | | | | | | |
Balance, September 30, 2020 | 123,685 | $2,983,857 | 90,477,798 | $90,479 | $19,598,944 | $(20,788,922) | $(1,099,499) |
| Series A Redeemable Convertible Preferred Stock | | | | |
Three-months ended September 30, 2019: | | | | | Additional Paid-in Capital | | Total Stockholders’ Equity (Deficit) |
Balance, June 30, 2019 | 124,485 | $3,003,528 | 90,477,798 | $90,479 | $19,362,858 | $(20,712,774) | $(1,259,437) |
| | | | | | | |
Preferred shares redeemed | (800) | (19,671) | - | - | (329) | - | (329) |
| | | | | | | |
Stock-based compensation | - | - | - | - | 103,116 | - | 103,116 |
| | | | | | | |
Net income | - | - | - | - | - | 155,928 | 155,928 |
| | | | | | | |
Balance, September 30, 2019 | 123,685 | $2,983,857 | 90,477,798 | $90,479 | $19,465,645 | $(20,556,846) | $(1,000,722) |
| Series A Redeemable Convertible Preferred Stock | | | | |
| | | | | Additional Paid-in Capital | | Total Stockholders’ Equity (Deficit) |
Balance, December 31, 2020 | 123,685 | $2,983,857 | 90,477,798 | $90,479 | $19,605,883 | $(21,115,518) | $(1,419,156) |
| | | | | | | |
Stock-based compensation | | | | | 6,939 | | 6,939 |
| | | | | | | |
Net income | | | | | | 23,087 | 23,087 |
| | | | | | | |
Balance, March 31, 2021 | 123,685 | $2,983,857 | 90,477,798 | $90,479 | $19,612,822 | $(21,092,431) | $(1,389,130) |
| Series A Redeemable Convertible Preferred Stock | | | | |
Nine-months ended September 30, 2019: | | | | | Additional Paid-in Capital | | Total Stockholders’ Equity (Deficit) |
Balance, December 31, 2018 | 125,885 | $3,037,952 | 90,477,798 | $90,479 | $19,157,202 | $(21,028,191) | $(1,780,510) |
| | | | | | | |
Preferred shares redeemed | (2,200) | (54,095) | - | - | (905) | - | (905) |
| | | | | | | |
Stock-based compensation | - | - | - | - | 309,348 | - | 309,348 |
| | | | | | | |
Net income | - | - | - | - | - | 471,345 | 471,345 |
| | | | | | | |
Balance, September 30, 2019 | 123,685 | $2,983,857 | 90,477,798 | $90,479 | $19,465,645 | $(20,556,846) | $(1,000,722) |
| Series A Redeemable Convertible Preferred Stock | | | | |
| | | | | Additional Paid-in Capital | | Total Stockholders’ Equity (Deficit) |
Balance, December 31, 2019 | 123,685 | $2,983,857 | 90,477,798 | $90,479 | $19,568,011 | $(20,469,194) | $(810,704) |
| | | | | | | |
Stock-based compensation | | | | | 11,991 | | 11,991 |
| | | | | | | |
Net loss | | | | | | (117,325) | (117,325) |
| | | | | | | |
Balance, March 31, 2020 | 123,685 | $2,983,857 | 90,477,798 | $90,479 | $19,580,002 | $(20,586,519) | $(916,038) |
QUOTEMEDIA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
| Nine-months ended September 30, | Three months ended March 31, |
| | | | |
OPERATING ACTIVITIES: | | |
| | |
Net income (loss) | $(319,728) | $471,345 | $23,087 | $(117,325) |
| | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | | |
Depreciation and amortization | 971,274 | 790,563 | 347,788 | 305,757 |
Stock-based compensation expense | 30,933 | 309,348 | 6,939 | 11,991 |
Bad debt expense | 120,509 | 12,619 | |
Gain on forgiveness of PPP loan (Note 8) | | (133,257) | - |
Changes in assets and liabilities: | | |
Accounts receivable | (168,490) | (119,572) | 205,174 | (19,899) |
Prepaid expenses | (31,936) | 42,044 | (97,139) | 13,118 |
Other current assets | (42,470) | (68,182) | 75,064 | (2,824) |
Deposits | (671) | (3,073) | (208) | (106) |
Accounts payable, accrued and other liabilities | 454,803 | 217,678 | 511,619 | 185,093 |
Deferred revenue | 87,173 | (82,704) | (3,040) | 7,670 |
Net cash provided by operating activities | 1,101,397 | 1,570,066 | 936,027 | 383,475 |
| | |
INVESTING ACTIVITIES: | | |
| | |
Purchase of fixed assets | (111,060) | (322,124) | (31,059) | (33,292) |
Purchase of intangible assets | (17,127) | - | (9,999) | (17,128) |
Capitalized application software | (1,225,899) | (1,007,189) | (489,307) | (335,548) |
Net cash used in investing activities | (1,354,086) | (1,329,313) | (530,365) | (385,968) |
| | |
FINANCING ACTIVITIES: | | |
| | |
Paycheck Protection Program loan | 141,257 | - | |
Repayment of finance lease obligations | (25,503) | (21,364) | (8,073) | (10,216) |
Redemption of preferred stock | - | (55,000) | |
Net cash provided by (used) in financing activities | 115,754 | (76,364) | |
Net cash used in financing activities | | (8,073) | (10,216) |
| | |
Net increase (decrease) in cash | (136,935) | 164,389 | 397,589 | (12,709) |
| | |
Cash and equivalents, beginning of period | 815,487 | 810,332 | 417,910 | 815,487 |
| | |
Cash and equivalents, end of period | $678,552 | $974,721 | $815,499 | $802,778 |
| | |
QUOTEMEDIA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
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 September 30, 2020March 31, 2021 through the filing of this report.
As of September 30, 2020,March 31, 2021, the Company has a working capital deficit of $984,771.$1,697,654. Our current liabilities include deferred revenue of $666,516.$541,862. 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.
These financial statements should be read in conjunction with our financial statements and the notes thereto for the fiscal year ended December 31, 20192020 contained in our Form 10-K filed with the Securities and Exchange Commission dated March 27, 2020.26, 2021.
Risks and Uncertainties
We are continuing to closely monitor the impact of the COVID-19 pandemic on all aspects of our business, including how it will impact team members, customers, suppliers, and global markets. While our licensed-based revenue is generally more recurring in nature, the uncertainty caused by the COVID-19 pandemic has led some clients to delay purchasing decisions, product and service implementations or cancel or reduce spending with us. The COVID-19 pandemic has also caused some of our smaller clients to cease operations altogether resulting in an increase in bad debts from 2019. Given the dynamic nature of these circumstances, it is too early to assess the full impact of the COVID-19 pandemic on our ongoing business, results of operations, and overall future financial performance.
2.
SIGNIFICANT ACCOUNTING POLICIES
a) Nature of operations
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.
QUOTEMEDIA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)
b) Basis of consolidation
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.
c) Foreign currency translation and transactions
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.
QUOTEMEDIA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
d) Allowances for doubtful accounts
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 $110,000 and $73,500$175,000 as of September 30, 2020March 31, 2021 and December 31, 2019, respectively.2020. Bad debt expense was $25,664$19,822 and $120,509$70,931 for the three months ended March 31, 2021 and nine-months ended September 30, 2020, respectively. Bad debt expense was $13,395 and $12,619 for the three and nine-months ended September 30, 2019, respectively.
e) Accounting Pronouncements
Recently Adopted
In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-04,Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This ASU simplifies the accounting for goodwill by eliminating step 2 from the goodwill impairment test. Under the new ASU, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss will be recognized for the amount by which the carrying amount exceeds its fair value. The Company adopted the new standard on January 1, 2020. There was no impact upon adoption to our consolidated financial statements and related disclosures.
In August 2018,December 2019, the FASB issued ASU 2018-13,Fair Value MeasurementNo. 2019-12, Income Taxes (Topic 820),740): Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects related to accounting for income taxes. The standard removes modifiescertain exceptions to the general principles in Topic 740 and adds various disclosure requirements around the topic in orderalso clarifies and amends existing guidance to clarify and improve the cost-benefit nature of disclosures. For example, disclosures around transfers between fair value hierarchy Levelsconsistent application. The new standard will be removedeffective for interim and further detail around changes in unrealized gains and losses for the period and unobservable inputs determining Level 3 fair value measurements will be added. The Companyannual periods beginning after December 15, 2020, with early adoption permitted. We adopted the new standardthis Topic 740 on January 1, 2020. There was no impact upon2021. The adoption toof the new tax standard did not have a material effect on our consolidated financial statements and related disclosures.statements.
In August 2018, the FASB issued ASU 2018-15,Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract, which requires a customer in a cloud computing arrangement that is a service contract to follow the internal-use software guidance in Topic 350, "Intangibles - Goodwill and Other" to determine which implementation costs to capitalize as assets or expense as incurred. The Company adopted the new standard on January 1, 2020. There was no impact upon adoption to our consolidated financial statements and related disclosures.Not Yet Adopted
In June 2016, the FASB issued ASU 2016-13:2016-13, Financial Instruments-Credit Losses (Topic 326), which changes the impairment model for most financial assets, including accounts receivable, and replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. The guidance is effective for the Company for interim and annual periods beginning after December 15, 2022. Early adoption is permitted. The Company is currently assessing the timing and impact of adopting ASU 2016-13 on the Company’s consolidated financial statements.
QUOTEMEDIA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)
Not Yet Adopted
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.
Disaggregated Revenue
The Company provides market data, financial web content solutions and cloud-based applications. Our revenue by type of service consists of the following:
| Three-months ended September 30, | Nine-months ended September 30, | Three months ended March 31, |
| | | | | | |
Portfolio Management Systems | | |
Portfolio Management Systems: | | |
Corporate Quotestream | $1,127,941 | $944,122 | $3,158,076 | $2,864,166 | $1,454,072 | $976,917 |
Individual Quotestream | 485,392 | 458,338 | 1,379,518 | 1,383,196 | 562,787 | 438,634 |
Interactive Content & Data Application | 1,527,025 | 1,560,712 | 4,598,547 | 4,571,275 | |
Interactive Content and Data Applications | | 1,589,359 | 1,551,033 |
Total revenue | $3,140,358 | $2,963,172 | $9,136,141 | $8,818,637 | $3,606,218 | $2,966,584 |
QUOTEMEDIA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Deferred Revenue
Changes in deferred revenue for the period were as follows:
Balance at December 31, 20192020 | $579,343544,902 |
Revenue recognized in the current period from the amounts in the beginning balance | (429,616219,903) |
New deferrals, net of amounts recognized in the current period | 512,066217,232 |
Effects of foreign currency translation | 4,723(369) |
Balance at September 30, 2020March 31, 2021 | $666,516541,862 |
Practical Expedients
As permitted under ASU 2014-09 (and related ASUs), unsatisfied performance obligations are not disclosed, as the original expected duration of substantially all of our contracts is one year or less.
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 September 30,March 31, 2021 and December 31, 2020, there were no amounts due to 410734 B.C. Ltd.
The Company entered into a marketing agreement with Bravenet Web Services, Inc. (“Bravenet”) effective November 28, 2019 for approximately $2,500 per month. David M. Shworan is a control person of Bravenet. At September 30, 2020,March 31, 2021 and December 31,2020, there was $6,500 and $7,500, arerespectively, due to Bravenet related to this agreement. As a matter of policy all related party transactions are subject to review and approval by the Company’s Board of Directors.
QUOTEMEDIA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)
We have operating leases for corporate offices and finance leases for certain equipment. Our leases have remaining lease terms of 1 year to 5 years. We determine if an arrangement is a lease at inception. Operating lease assets and liabilities are included in operating lease right-of-use assets and operating lease liabilities, respectively, on our consolidated balance sheets. Finance lease assets and liabilities are included in property and equipment and finance lease liabilities, respectively, on our consolidated balance sheets.The Company renewed its lease for office space in Vancouver, Canada as of August 1, 2020 for an additional 5 years resulting in a right of use asset and an offsetting lease liability of $507,753.
Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. We elected the short-term lease exception and therefore only recognize right-of-use assets and lease liabilities for leases with a term greater than one year. When determining lease terms, we factor in options to extend or terminate leases when it is reasonably certain that we will exercise that option. We have lease agreements with lease and non-lease components, which are generally accounted for separately. For certain leases we account for the lease and non-lease components as a single lease component.
QUOTEMEDIA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Supplemental balance sheet information related to leases was as follows:
| | | | |
| | |
Operating Leases | | |
| | |
Operating lease right-of-use assets | $699,658 | $328,676 | $642,470 | $671,402 |
| | |
Current portion of operating lease liability | $171,542 | $172,049 | $151,379 | $164,843 |
Long-term portion of operating lease liability | 520,414 | 167,496 | 474,785 | 504,783 |
Total operating lease liability | $691,956 | $339,545 | $626,164 | $669,626 |
| | |
Finance Leases | | |
| | |
Computer equipment on financing lease | $101,049 | $101,049 |
Less: accumulated depreciation | 80,371 | 52,888 | 96,531 | 85,936 |
| $20,678 | $48,161 | |
Property and equipment, net | | $4,518 | $15,113 |
| | |
Current portion of finance lease liability | 19,583 | 33,914 | 4,560 | 11,951 |
Long-term portion of finance lease liability | 2,777 | 13,949 | 1,426 | 2,108 |
Total finance lease liability | $22,360 | $47,863 | $5,986 | $14,059 |
| | |
| | |
| | |
Weighted Average Remaining Lease Term | | |
Operating leases | | |
Finance leases | | |
Weighted Average Discount Rate | | |
Operating leases | 9.7% | 9.7% |
Finance leases | 8.2% | 8.8% |
10
QUOTEMEDIA, INC.
NOTESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)
| | |
| | |
Weighted Average Remaining Lease Term | | |
Operating leases | | |
Finance leases | | |
| | |
Weighted Average Discount Rate | | |
Operating leases | 9.7% | 9.3% |
Finance leases | 8.8% | 8.9% |
Maturities of lease liabilities were as follows:
Year ending December 31, | | | | |
| | |
2020 (for the remainder of the year) | $64,571 | $9,051 | |
2021 | 213,556 | 12,061 | |
2021 (excluding the three months ended March 31, 2021) | | $156,583 | $4,073 |
2022 | 178,695 | 2,151 | 187,609 | 2,157 |
2023 | 164,374 | - | 173,279 | - |
2024 | 148,877 | - | 157,721 | - |
Thereafter | 79,581 | - | |
2025 | | 84,310 | - |
Total lease payments | 849,654 | 23,263 | 759,502 | 6,230 |
Less imputed interest | (157,698) | (903) | (133,338) | (244) |
Total | $691,956 | $22,360 | $626,164 | $5,986 |
The components of lease expense for the three months ended March 31, 2021 and nine-months ended September 30, 2020 and 2019 were as follows:
| Three-months ended September 30, | Nine-months ended September 30, |
| | | | |
Operating lease costs: | | | | |
Operating lease costs | $62,235 | $38,440 | $176,396 | $130,463 |
Short-term lease costs | 20,661 | 31,765 | 71,660 | 97,526 |
Total operating lease costs | $82,896 | $70,205 | $248,056 | $227,989 |
| | | | |
Finance lease costs: | | | | |
Amortization | $8,763 | $8,763 | $26,289 | $26,289 |
Interest | 645 | 1,327 | 2,415 | 4,544 |
Total finance lease costs | $9,408 | $10,090 | $28,704 | $30,833 |
QUOTEMEDIA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) | | |
Operating lease costs: | | |
Operating lease costs | $65,627 | $56,956 |
Short-term lease costs | 22,403 | 25,499 |
Total operating lease costs | $88,030 | $82,455 |
| | |
Finance lease costs: | | |
Amortization | $10,595 | $8,763 |
Interest | 142 | 949 |
Total finance lease cost | $10,737 | $9,712 |
Supplemental cash flow information for the nine-monthsthree months ended September 30,March 31, 2021 and 2020 and 2019 related to leases was as follows:
| | | | |
Cash paid for amounts included in the measurement of lease liabilities: | | |
Operating cash flows from operating leases | $118,985 | $131,803 | $67,563 | $54,774 |
Operating cash flows from finance leases | 2,415 | 4,544 | 142 | 949 |
| | |
Right-of-use assets obtained in exchange for lease obligations: | | |
Operating leases | 507,753 | - | |
There were no additional right of use assets obtained in exchange for lease obligations for the three months ended March 31, 2021 and 2020.
QUOTEMEDIA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
6.
REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT
a) Redeemable Convertible Preferred SharesStock
We are authorized to issue up to 10,000,000 non-designated preferred shares at the Board of Directors’ discretion.
On December 28, 2017, aA total of 550,000 shares of the Company’s Preferred Stock wereare designated as “Series A Redeemable Convertible Preferred Stock.” The Series A Redeemable Convertible Preferred Stock has no dividend or voting rights.
At September 30, 2020,March 31, 2021, 123,685 shares of Series A Redeemable Convertible Preferred Stock were outstanding. No shares of Series A Redeemable Convertible Preferred Stock were issued or redeemed during the three months ended March 31, 2021 and nine-months ended September 30, 2020. During the three and nine-months ended September 30, 2019 2,200 shares of Series A Redeemable Convertible Preferred Stock were redeemed.
Redemption 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 addition, a limited amount of1,000 Series A Redeemable Convertible Preferred Stock may be redeemed at the holder’s option ifat the following criteria are met:
(i)Ifliquidation value of $25 per share if the cash balance of the Company as reported at the end of each fiscal quarter in 2018 exceeds $350,000, up to an aggregate of 600 Series A Redeemable Convertible Preferred Stock may be redeemed at the liquidation value of $25 per share.
(ii)If the cash balance of the Company as reported at the end of each fiscal quarter in 2019 exceeds $375,000, up to an aggregate of 800 Series A Redeemable Convertible Preferred Stock may be redeemed at the liquidation value of $25 per share.
QUOTEMEDIA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(iii)If the cash balance of the Company as reported at the end of each fiscal quarter in 2020 and in subsequent years exceeds $400,000, up to an aggregate of 1,000 Series A Redeemable Convertible Preferred Stock may be redeemed at the liquidation value of $25 per share.
$400,000.
In accordance with ASC 480-10-S99, because a limited amountnumber of Series A Redeemable Convertible Preferred Stock may be redeemed at the holder’s option if the above criteria are met, it was classified as mezzanine equity and not permanent equity.
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.
b) Common Stockstock
No shares of common stock were issued during the three months ended March 31, 2021 and nine-months ended September 30, 2020 and 2019.2020.
QUOTEMEDIA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
c) Stock Options and Warrants
FASB ASC 718, Stock Compensation, requires all share-based payments to employees, including grants of employee stock options, to be recognized as compensation expense over the service period (generally the vesting period) in the consolidated financial statements based on their fair values. The impact of forfeitures that may occur prior to vesting is also estimated and considered in the amount recognized.
Total stock-based compensation expense, related to all of the Company’s stock-based awards, recognized for the three months ended March 31, 2021 and nine-months ended September 30, 2020 and 2019 was comprised as follows:
| Three-months ended September 30, | Nine-months ended September 30, | Three months ended March 31, |
| | | | | | |
| | |
Sales and marketing | $4,239 | $99,291 | $22,833 | $297,873 | $4,239 | $9,291 |
General and administrative | 2,700 | 8,100 | 2,700 |
Development | - | 1,125 | - | 3,375 | |
Stock-based compensation expense | $6,939 | $103,116 | $30,933 | $309,348 | |
Total stock-based compensation expense | | $6,939 | $11,991 |
Common Stock Options and Warrants
There were 26,372,803The following table summarizes our common stock warrantsoption and options outstanding at September 30, 2020. No stock options or warrants to purchase common stock were granted or exercised duringwarrant activity for the three and nine-monthsmonths ended September 30, 2020 and 2019.March 31, 2021:
| Common Stock Options and Warrants | Weighted-Average Grant Date Exercise Price |
| | |
Outstanding at January 1, 2021 | 26,372,803 | $0.06 |
Forfeited during the period | (600,000) | $0.04 |
Outstanding at March 31, 2021 | 25,772,803 | $0.06 |
The following table summarizes our non-vested common stock option and warrant activity for the nine-monthsthree months ended September 30, 2020:March 31, 2021:
| Common Stock Options and Warrants | Weighted-Average Grant Date Exercise Price |
| | |
Non-vested at January 1, 2020 | 5,625,000 | $0.08 |
Vested during the period | (675,000) | $0.05 |
Non-vested at September 30, 2020 | 4,950,000 | $0.09 |
| Common Stock Options and Warrants | Weighted-Average Grant Date Exercise Price |
| | |
Non-vested at January 1, 2021 | 3,700,000 | $0.08 |
Vested during the period | (425,000) | $0.04 |
Non-vested at March 31, 2021 | 3,275,000 | $0.09 |
QUOTEMEDIA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
The following table summarizes the weighted average remaining contractual life and exercise price of common stock options and warrants outstanding at September 30, 2020:March 31, 2021:
| Common Stock Options and Warrants Outstanding | Common Stock Options and Warrants Exercisable |
| | Weighted Average Remaining | Weighted Average | | Weighted Average |
| | | | | |
| | | | | |
$0.03-0.11 | 26,372,803 | 8.6 | $0.06 | 21,422,803 | $0.05 |
| | Common Stock Options and Warrants Outstanding | |
Common Stock Options and Warrants Exercisable |
| | | | Weighted | | | | | | |
| | | | Average | | Weighted | | | | Weighted |
| | | | Remaining | | Average | | | | Average |
| | Number | | Contractual | | Exercise | | Number | | Exercise |
| | Outstanding | | Life (Years) | | Price | | Exercisable | | Price |
| | | | | | | | | | |
$0.03-0.11 | | 25,772,803 | | 8.2 | | $0.06 | | 22,497,803 | | $0.05 |
At September 30, 2020,March 31, 2021, there was $50,208$20,817 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 2.11.6 years.
All stock options and warrants to purchase common stock have been granted with exercise prices equal to or greater than the market value of the underlying common shares on the date of grant. At September 30, 2020,March 31, 2021, the aggregate intrinsic value of options and warrants outstanding was $940,785.$4,075,659. The aggregate intrinsic value of options and warrants exercisable was $888,535.$3,661,634. The intrinsic value of stock options and warrants are calculated as the amount by which the market price of our common stock exceeds the exercise price of the option or warrant.
Preferred Stock Warrants
OnPursuant to the 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 toissued 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 in lieu of a cash salary. From the period December 28, 2017 to the Company or its subsidiaries on each of January 1, 2018 andDecember 31, 2019 the Company will issue to Mr. Shworan warrants to purchase up to 15,000 sharesissued a total of 31,250 Compensation Preferred Stock Warrants at an exercise price equal to $1.00 per share. A total of $90,000 of stock-based compensation expense was recognized related to the Compensation Preferred Stock Warrants during the comparative three-months ended March 31, 2019.
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 September 30, 2020.March 31, 2021. The probability is re-evaluated each reporting period. As of September 30, 2020,March 31, 2021, 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.
As of September 30, 2020,March 31, 2021, there were a total of 413,493 preferred stock warrants outstanding with a weighted average remaining contractual life of 27.326.8 years. As of September 30, 2020;March 31, 2021, 31,250 preferred stock warrants were exercisable. No preferred stock warrants were exercised for the three months ended March 31, 2021 and nine-months ended September 30, 2020 and 2019.2020.
QUOTEMEDIA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Basic net income per share is computed by dividing net income during the period by the weighted-average number of common shares outstanding, excluding the dilutive effects of common stock equivalents. Common stock equivalents include redeemable convertible preferred stock, stock options and warrants. Diluted net income per share is computed by dividing net income by the weighted-average number of dilutive common shares outstanding during the period. Diluted shares outstanding is calculated using the treasury stock method by adding to the weighted shares outstanding any potential shares of common stock from outstanding redeemable convertible preferred stock, stock options and warrants that are in-the-money. In periods when a net loss is reported, all common stock equivalents are excluded from the calculation because they would have an anti-dilutive effect, meaning the loss per share would be reduced. Therefore, in periods when a loss is reported, the calculation of basic and dilutive loss per share results in the same value. The calculations for basic and diluted net income per share for the three months ended March 31, 2021 and nine-months ended September 30, 2020 and 2019 are as follows:
QUOTEMEDIA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
| Three-months ended September 30, | Nine-months ended September 30, |
| | | | |
| | | | |
Net income (loss) | $(75,305) | $155,928 | $(319,728) | $471,345 |
| | | | |
Weighted average common shares used | | | | |
to calculate net income per share | 90,477,798 | 90,477,798 | 90,477,798 | 90,477,798 |
Stock options and warrants to purchase | | | | |
common stock | - | 16,695,421 | - | 15,099,817 |
Weighted average common shares used | | | | |
to calculate diluted net income per share | 90,477,798 | 107,173,219 | 90,477,798 | 105,577,615 |
| | | | |
Net income per share – basic | $(0.00) | $0.00 | $(0.00) | $0.01 |
Net income per share – diluted | $(0.00) | $0.00 | $(0.00) | $0.00 |
| Three months ended March 31, |
| | |
| | |
Net income (loss) | $23,087 | $(117,325) |
| | |
Weighted average common shares used to calculate net income per share | 90,477,798 | 90,477,798 |
Warrants to purchase redeemable convertible preferred stock | 2,499,900 | - |
Redeemable convertible preferred stock | 10,306,671 | - |
Stock options and warrants to purchase common stock | 16,526,328 | - |
Weighted average common shares used to calculate diluted net income per share | 119,810,697 | 90,477,798 |
| | |
Net income (loss) per share – basic | $0.00 | $(0.00) |
Net income (loss) per share – diluted | $0.00 | $(0.00) |
The number of shares of potentially dilutive common stock related to options, warrants and redeemable convertible preferred stock that were excluded from the calculation of dilutive shares since the inclusion of such shares would be anti-dilutive for the three months ended March 31, 2021 and nine-months ended September 30, 2020 and 2019 are shown below:
| Three-months ended September 30, | Nine-months ended September 30, |
| | | | |
| | | | |
Stock options and warrants to purchase | | | | |
common stock | 11,245,134 | - | 13,021,821 | - |
Warrants to purchase redeemable | | | | |
convertible preferred stock | 2,499,900 | 2,604,063 | 2,499,900 | 2,604,063 |
Redeemable convertible preferred stock | 10,306,671 | 10,306,671 | 10,306,671 | 10,306,671 |
Total potential common shares excluded | 24,051,705 | 12,910,734 | 25,828,392 | 12,910,734 |
| Three months ended March 31, |
| | |
| | |
Warrants to purchase redeemable convertible preferred stock | - | 2,499,900 |
Redeemable convertible preferred stock | - | 10,306,671 |
Stock options and warrants to purchase common stock | - | 14,751,112 |
Total potential common shares excluded | - | 27,557,683 |
8.
PAYCHECK PROTECTION PROGRAM
On April 24, 2020, the Company received an $8,000 grant as part of the Economic Injury Disaster Loan (“EIDL”) program through the Small Business Administration (“SBA”), and on May 4, 2020, the Company received a $133,257 loan under the Paycheck Protection Program (“PPP”). The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides qualifying businesses with these proceeds for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The proceeds and accrued interest are forgivable after twenty-four weeks, known as the covered period, as long as the borrower uses the proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. The amount of forgiveness will be reduced if the borrower terminates employees or reduces salaries during the twenty-four-week period. EIDL grants received are also deducted from the forgivable portion of PPP loans. The unforgiven portion of the PPP proceeds will be payable over two years at an interest rate of 1%, with a deferral of payments for the first six-months after the covered period. The Company is accounting for the PPP loan was forgiven in its entirety on February 19, 2021. In accordance with ASC 470, Debt,. the forgiveness of the loan was recognized as other income on our consolidated statements of operations.
ITEM 2. Management’s Discussion and Analysis
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, 20192020 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, 20192020 filed with the Securities and Exchange Commission.
Overview
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 Interactive Content and Data Applications consist of a suite of software applications that provide publicly traded company and market information to corporate clients via the Internet. Products include stock market quotes, fundamentals, historical and interactive charts, company news, filings, option chains, insider transactions, corporate financials, corporate profiles, screeners, market research information, investor relations provisions, level II, watch lists, and real-time quotes. All of our content solutions are completely customizable and embed directly into client Web pages for seamless integration with existing content. We are continuing to develop and launch new modules of QModTM,QModTM, our new proprietary Web delivery system. QMod was created for secure market data provisioning as well as ease of integration and unlimited customization. Additionally, QMod delivers search engine optimized (SEO) ready responsive content designed to adapt on the fly when rendered on mobile devices or standard Web pages – automatically resizing and reformatting to fit the device on which it is displayed.
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.
Our Portfolio Management Systems consist of QuotestreamTM,QuotestreamTM, Quotestream Mobile, Quotestream Professional, and our Web Portfolio Management systems. Quotestream Desktop is an Internet-based streaming online portfolio management system that delivers real-time and delayed market data to both consumer and corporate markets. Quotestream has been designed for syndication and private branding by brokerage, banking, and Web portal companies. Quotestream’s enhanced features and functionality – most notably tick-by-tick true streaming data, significantly enhanced charting features, and a broad range of additional research and analytical content and functionality – offer a professional-level experience to nonprofessional users.
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 three 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 three years and are automatically renewed unless notice is given 90 days prior to the expiration of the contract term.
Business Environment and Trends
The global financial markets have experienced extreme volatility and disruption in recent months. The outbreak ofover the past year due to COVID-19 pandemic and the resulting response by governments and individuals around the world has caused contraction inpandemic. While global economies. Wefinancial markets are recovering, risk still exists therefore we will continue to closely monitoringmonitor the impact of the COVID-19 pandemic on all aspects of our business, including how it will impact team members, customers, suppliers, and global markets.
Our operations also have been affected by a range of external factors related In Canada, our employees are subject to the COVID-19 pandemic that are not within our control. For example, many jurisdictions imposed a wide range of restrictions on thetheir physical movementmovements therefore most of our employees and vendors to limit the spread of COVID-19. We have taken numerous steps, and willworkforce in Canada continue to take further actions, in our approach to addressing the COVID-19 pandemic. To protect the health and safety of our team members, we successfully transitioned our workforce to remote work environments. We are also working closely with our clients to support them as they implement their own contingency plans, helping them access our products and services remotely.
While our licensed-based revenue is generally more recurring in nature, the uncertainty caused by the COVID-19 pandemic has led some clients to delay purchasing decisions, product and service implementations or cancel or reduce spending with us. WeWhile the impact of COVID-19 appears to be diminishing, we are focused on maintaining a strong balance sheet and liquidity position and have been actively evaluatingwill continue to closely monitor the potential impact of COVID-19. We have implemented certain cost control efforts to help us mitigate the impact that COVID-19 has had on our financial position and operating results. As much uncertainty still exists, and we will continue to adjust our COVID-19 response going forward as circumstances dictate.
On April 24, 2020, the Company received an $8,000 grant as part of the Economic Injury Disaster Loan (“EIDL”) program through the Small Business Administration (“SBA”), and on May 4, 2020, the Company received a $133,257 loan under the Paycheck Protection Program (“PPP”). On February 19, 2021, the Company received forgiveness from the SBA for its PPP loan in its entirety. The Company anticipates that it will meetrecognized the requirements for full forgiveness forof the loan as other income on our PPP loan.consolidated statements of operations. See Financial Statement Note 8 – Paycheck Protection Program.
The Canadian dollar depreciated 2% when comparing average exchange rates for the nine-months ended September 30, 2020 and 2019. The exchange rate fluctuation decreased both Canadian dollar revenues and expenses once translated into U.S. dollars for the nine-months ended September 30, 2020 when compared to the same period in 2019 but had a minimal impact on our net income.
Our revenue grew 6 % and 4%22% when comparing the three and nine-monthsquarter ended September 30, 2020March 31, 2021 to the comparative periods in 2019.2020 period. Based on clients currently under contract, and new contracts signed subsequent to September 30, 2020, we expect acceleratedto maintain similar revenue growth for the remainder of 2020 and for 2021 despite current market conditions related to COVID-19.2021.
Plan of Operation
For the remainder of 2020 and for 2021 we plan to continue to expand our product lines and improve our infrastructure. We plan to continue to add more features and data to our existing products and release newer versions with improved performance and flexibility for client integration.
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 2020 andthe remainder of 2021 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.
We are also creating new proprietary data sets, analytics, and scoring mechanisms. We are now aggregating data direct from the sources to produce data sets that are proprietary to QuoteMedia. This allows us to offer our clients new data products and lower our product costs structure as we replace some of our existing data providers with our own lower cost data.
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.
Critical Accounting Policies and Estimates
In the 2020 Annual Report, we disclose our critical accounting policies and estimates upon which our financial statements are derived. There have been no material changes to these policies since December 31,2020 that are not included in Note 3 of the accompanying consolidated financial statements for the three months ended March 31, 2021. Readers are encouraged to read the 2020 Annual Report in conjunction
Results of Operations
Revenue
Three-months ended September 30, | | | | |
| | | | |
Corporate Quotestream | $1,127,941 | $944,122 | $183,819 | 19% |
Individual Quotestream | 485,392 | 458,338 | 27,054 | 6% |
Total portfolio management systems | 1,613,333 | 1,402,460 | 210,873 | 15% |
| | | | |
Interactive content and data applications | 1,527,025 | 1,560,712 | (33,687) | (2%) |
| | | | |
Total subscription revenue | $3,140,358 | $2,963,172 | $177,186 | 6% |
Nine-months ended September 30, | | | | | |
Three months ended March 31, | | | | | |
| | |
Corporate Quotestream | $3,158,076 | $2,864,166 | $293,910 | 10% | $1,454,072 | $976,917 | $477,155 | 49% |
Individual Quotestream | 1,379,518 | 1,383,196 | (3,678) | (0%) | 562,787 | 438,634 | 124,153 | 28% |
Total portfolio management systems | 4,537,594 | 4,247,362 | 290,232 | 7% | 2,016,859 | 1,415,551 | 601,308 | 42% |
| | |
Interactive content and data applications | 4,598,547 | 4,571,275 | 27,272 | 1% | 1,589,359 | 1,551,033 | 38,326 | 2% |
| | |
Total subscription revenue | $9,136,141 | $8,818,637 | $317,504 | 4% | $3,606,218 | $2,966,584 | $639,634 | 22% |
Total subscription revenue increased 6% and 4%22% when comparing the three months ended March 31, 2021 and nine-months ended September 30, 2020 and 2019, respectively.
2020.
Our total Portfolio Management System revenue increased by 15% and 7%, respectively,42% when comparing the three months ended March 31, 2021 and nine-month periods ended September 30, 2020, due to increases in both Corporate Quotestream and 2019.Individual Quotestream revenue.
Corporate Quotestream revenue increased 19% and 10%49% for the three and nine-month periodsmonths ended September 30, 2020, respectively,March 31, 2021 from the comparative periodsperiod in 20192020 primarily due to new Corporate Quotestream customerscontracts signed since the comparative periodsperiod and increasesan increase in usersthe number of subscribers for existing customers.clients. The increase is attributable in part to improvements and upgrades made to our Portfolio Management products as the additional data offerings and improved functionality have contributed to the increase in our average revenue per customer. We have also been able to take advantage of new opportunities arising from the economic downturn related to COVID-19 as financial sector firms are looking for more efficient and cost-effective solutions to their data and technology needs. We also believe there has been an increase in the need for our services for customers working remotely during the pandemic, a trend we expect to continue for the foreseeable future.
Individual Quotestream revenue increased 6%28% for the three-month periodthree months ended September 30, 2020March 31, 2021 from the comparative 2019 period butin 2020. There was relatively unchanged year to date versus the comparative 2019 period. The increase was due mostly to an increase in average revenue per customer.total users, which can be attributed to new marketing efforts initiated since the comparative period and more customers working remotely due to COVID-19.
Interactive Content and Data Application revenue decreasedincreased 2% when comparing the three-months ended September 30,March 31, 2021 and 2020, and 2019, primarily due to the impact of COVID-19 as we have seen an increase in bad debts and a number of our smaller customers have temporarily suspended their services or ceased operations altogether. Interactive Content and Data Application revenue increased 1% when comparing the nine-month periods ended September 30, 2020 and 2019, mainly attributable to an increase in the average revenue per client despite a decrease in number of clients.client. The increase in average revenue per client results from the launch of new products such as QMod, our new proprietary Web delivery system,and the expansion of our data coverage as well as the general strengthening of our financial position, all of which have allowed us to attract new, larger clients.clients to replace some of our smaller clients lost due to the economic hardship related to COVID-19.
Cost of Revenue and Gross Profit Summary
Three-months ended September 30, | | | | |
| | | | |
Cost of revenue | $1,706,476 | $1,429,308 | $277,168 | 19% |
Gross profit | $1,433,882 | $1,533,864 | $(99,982) | (7%) |
Gross margin % | 46% | 52% | | |
Nine-months ended September 30, | | | | | |
Three months ended March 31, | | | | | |
| | |
Cost of revenue | $4,795,150 | $4,355,110 | $440,040 | 10% | $2,063,640 | $1,499,484 | $564,156 | 38% |
Gross profit | $4,340,991 | $4,463,527 | $(122,536) | (3%) | $1,542,578 | $1,467,100 | $75,478 | 5% |
Gross margin % | 48% | 51% | | 43% | 49% | |
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 19% and 10% when comparing the three and nine-month periods ended September 30,We launched a major growth initiative in early 2020, and 2019, respectively. The increasesinvesting in cost of revenue are primarily due to increases in stock exchange fees due to increased customer usage from the comparative periods that are consistent with increases in Corporate Quotestream revenue. The increases are also due to increases in the amortization of capitalized internal-use software costs resulting from increased investment ininfrastructure, new product development, data collection, and data collection.
Overall,the expansion of our global market coverage. As a result, our cost of revenue increases ledincreased 38% for the three months ended March 31, 2021 from the comparative period in 2020. We incurred increased stock exchange fees related to increased usage and new market data added since the comparative period, and increased amortization expense associated with internally developed application software.
Overall, the cost of revenue increased as a decrease inpercentage of sales, as evidenced by our gross margin percentage whichthat decreased to 46% and 48%43% for the three and nine-month periodsmonths ended September 30, 2020March 31, 2021 from 52% and 51%49% in the comparative periods.
period. Our gross margins have also been impacted by our revenue mix, as our Portfolio Management System revenue has been growing at a higher rate than our Interactive Content revenue which typically has higher gross margins.
Operating Expenses Summary
Three-months ended September 30, | | | | |
| | | | |
Sales and marketing | $552,960 | $463,929 | $89,031 | 19% |
General and administrative | 555,002 | 600,329 | (45,327) | (8%) |
Software development | 405,703 | 311,028 | 94,675 | 30% |
Total operating expenses | $1,513,665 | $1,375,286 | $138,379 | 10% |
Nine-months ended September 30, | | | | | |
Three months ended March 31, | | | | | |
| | |
Sales and marketing | $1,602,501 | $1,393,929 | $208,572 | 15% | $638,864 | $517,480 | $121,384 | 23% |
General and administrative | 1,817,748 | 1,646,388 | 171,360 | 10% | 607,240 | 650,053 | (42,813) | (7%) |
Software development | 1,246,722 | 923,218 | 323,504 | 35% | 407,288 | 425,827 | (18,539) | (4%) |
Total operating expenses | $4,666,971 | $3,963,535 | $703,436 | 18% | $1,653,392 | $1,593,360 | $60,032 | 4% |
Sales and Marketing
Sales and marketing consist primarily of sales and customer service salaries, investor relations, travel and advertising expenses. Sales and marketing expenses increased by 19% and 15%23% when comparing the three months ended March 31, 2021 and nine-month periods ended September 30, 2020 and 2019, respectively.2020. The increases are primarilyincrease is a result of additional sales personnel hired since the comparative periods. We also implemented a new marketing program in February 2020 targeted at potential new Individual Quotestream customers.to support our growth initiative.
General and Administrative
General and administrative expenses consist primarily of salaries expense, office rent, insurance premiums, and professional fees. General and administrative expenses decreased 8% and increased 10%7% when comparing the three months ended March 31, 2021 and nine-month periods ended September 30, 2020 and 2019, respectively.2020. The quarter to date decrease is mainly due to one-time recruiting feesprimarily driven by a decrease in bad debts from the comparative period. Bad debts in the comparative period. The year to date increase is primarilyperiod were abnormally high due to additional hiring of personnel to meet expected future growth and an increase in bad debts related to the impact of COVID-19.
Software Development
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 30% and 35%decreased 4% for the three and nine-month periodsmonths ended September 30, 2020, respectively,March 31, 2021 when compared to the same periodsperiod in 2019. The increases were mainly2020, primarily due to hiring additional development personnel since the comparative periods to accelerate new product development and data collection.
a higher capitalization rate. We capitalized $460,666 and $1,225,898$489,306 of development costs for the three and nine-month periodsmonths ended September 30, 2020, respectively,March 31, 2021 compared to $346,949 and $1,007,189 for$335,549 in the same periodsperiod in 2019.2020. 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 three years. Amortization of capitalized costs of software were $290,791 and $814,410 for the three and nine-month periods ended September 30, 2020, respectively, compared to $229,677 and $648,169 for the same periods in 2019.
Other Income and (Expense) Summary
Three-months ended September 30, | | |
| | |
Foreign exchange loss | $5,930 | $(543) |
Interest expense | (701) | (1,349) |
Total other income (expenses) | $5,229 | $(1,892) |
Nine-months ended September 30, | | | |
Three months ended March 31, | | | |
| | |
Foreign exchange gain (loss) | $11,887 | $(21,857) | $2,448 | $11,206 |
Interest expense | (3,419) | (4,533) | (1,008) | (1,527) |
Total other income (expenses) | $8,468 | $(26,390) | |
Other income | | 133,257 | - |
Total other income and (expenses), net | | $134,697 | $9,679 |
Foreign Exchange Gain (Loss)
We incurred foreign exchange gains of $2,448 and $11,206 for the three months ended March 31, 2021 and 2020, respectively. 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 generally incur a foreign exchange gain when the Canadian dollar depreciates from the period beginning date,dollars 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 gain of $5,930 for the three-months ended September 30, 2020. The Company renewed its lease for office space in Vancouver, Canada as of August 1, 2020 for an additional 5 years resulting in a right of use asset and an offsetting lease liability of $CAD681,999 ($US507,753). The remeasurement of this operating lease liability into U.S. dollars at September 30, 2020 resulted in a foreign exchange gain as the Canadian dollar depreciated 2% versus the U.S. dollar from the lease renewal date. This foreign exchange gain was offset by the foreign exchange re-measurement loss arising from the Canadian dollar appreciating 2% versus the U.S. dollar when comparing the foreign exchange rate at June 30, 2020 to the rate at September 30, 2020. We incurred a foreign exchange loss of $543 for the same quarterly period in 2019 arising from exchange rate fluctuations between transaction and settlement dates for foreign currency denominated transactions.
We incurred a foreign exchange gain of $11,887 for the nine-months ended September 30, 2020 primarily due to the foreign exchange re-measurement gain as the Canadian dollar depreciated 5% versus the U.S. dollar when comparing the foreign exchange rate at September 30, 2020 to the rate at December 31, 2019. We incurred a foreign exchange loss of $21,857 for the comparative 2019 period mainly attributable to the re-measurement of Canadian dollar monetary assets and liabilities into U.S. dollars as the Canadian dollar appreciated 2.9% versus the U.S. dollar in 2018.
Interest Expense
Interest expense relates primarily to the interest expense associated with our finance leases and was relatively unchanged from the comparative period. Interest expense of $701 and $3,419$1,008 was incurred for the three and nine-month periodsmonths ended September 30, 2020, respectively,March 31, 2021, compared to $1,349 and $4,533$1,527 incurred in the same 2019 periods.2020 period.
Other Income
Other income was $133,257 for the three months ended March 31, 2021. On May 4, 2020, the Company received a $133,257 loan under the Paycheck Protection Program (“PPP”). The PPP loan was forgiven in its entirety on February 19, 2021 and was recognized as other income. No other income was recognized in the comparative 2020 period. See Financial Statement Note 8 “Paycheck Protection Program”.
Provision for Income Taxes
For the three and nine-month periodsmonths ended September 30, 2020,March 31, 2021, the Company recorded Canadian income tax expense of $751 and $2,216, respectively,$796 compared to $758 and $2,257$744 in the comparative periodsperiod in 2019.2020.
Net Income (Loss) for the Period
As a result of the foregoing, our net income for the Company recognizedthree months ended March 31, 2021 was $23,087 compared to net loss of $75,305 and $319,728$117,325 for the three and nine-month periodsmonths ended September 30, 2020 compared to net income of $155,928 and $471,345 for the three and nine-month periods ended September 30, 2019. Basic and diluted earnings per share were $(0.00) for the three and nine-month periods ended September 30,March 31, 2020. Basic and diluted earnings per share were $0.00 and $0.01 for the three months ended March 31, 2021, and nine-month periods$(0.00) for the three months ended September 30, 2019.March 31, 2020.
Liquidity and Capital Resources
Our cash totaled $678,552$815,499 at September 30, 2020,March 31, 2021, as compared with $815,487$417,910 at December 31, 2019, a decrease2020, an increase of $136,935.$397,589. Net cash of $1,101,397$936,027 was provided by operations for the nine-monthsthree months ended September 30, 2020,March 31, 2021, primarily due to cash generated from the results of operations excludingnet income during the period adjusted for non-cash charges and the increase in accounts payable, offset by the increase in accounts receivable and net loss.payable. Net cash used in investing activities for the nine-monthsthree months ended September 30, 2020March 31, 2021 was $1,354,086$530,365 resulting primarily from capitalized application software costs and the purchase of new computer equipment.costs. Cash provided byused in financing activities for the nine-monthsthree months ended September 30, 2020March 31, 2021 was $115,754$8,073 related to the PPP loan offset by repayment of capital lease financing.
We havetypically operate with a working capital deficit. As of March 31, 2021 our working capital deficit of $984,771 as of September 30, 2020,is $1,697,654, however current liabilities include $666,516$541,862 in deferred revenue and the expected costs necessary to realize the deferred revenue are minimal. If circumstances dictate, we have the flexibility to reduce development spending to maintain a strong liquidity position.
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.at least the next 12 months through May 2022. 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.
Our long-term liquidity requirements will depend on many factors, including the rate at which we expand our business and whether we do so internally or through acquisitions. To the extent that the funds generated from operations are insufficient to fund our activities in the long term, we may be required to raise additional funds through public or private financing. 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.
Preferred Stock Redemption Rights
At March 31, 2021, 123,685 shares of Series A Redeemable Convertible Preferred Stock were outstanding and 1,000 shares may be redeemed at the holder’s option at the liquidation value of $25 per share if the cash balance of the Company as reported at the end of each fiscal quarter exceeds $400,000. See Financial Statement Note 6 a) “Preferred shares”.
Foreign Exchange Risk
Approximately 28% of our consolidated revenue and 35% percent of our consolidated expenses are denominated in Canadian dollars; therefore, our consolidated cashflow may be impacted by foreign exchange fluctuations.
Off-Balance Sheet Arrangements
At March 31, 2021 and December 31, 2020, we did not have any unconsolidated entities or financial partnerships, or other off-balance sheet arrangements.
ITEM 4. Controls and Procedures
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 September 30, 2020March 31, 2021 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 three-monthsthree months ended September 30, 2020,March 31, 2021, 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.
PART II - OTHER INFORMATION
ExhibitNumber | | Description of Exhibit |
| | |
| | Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended. |
| | Certification of Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended. |
| | Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
| | Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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.
QUOTEMEDIA, INC.
By: | /s/ Keith J. Randall | |
| Keith J. Randall | |
| Chief Executive Officer and Chief Financial Officer | |
| (Duly authorized officer and principal financial officer) | |
Dated: May 13, 2021