Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 31, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Entity Registrant Name | QuoteMedia, Inc. | ||
Entity Central Index Key | 0001101433 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Entity Voluntary Filers | No | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Current Reporting Status | Yes | ||
Document Period End Date | Dec. 31, 2022 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2023 | ||
Entity Common Stock Shares Outstanding | 90,477,798 | ||
Entity Public Float | $ 12,731,153 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 0-28599 | ||
Entity Incorporation State Country Code | NV | ||
Entity Tax Identification Number | 91-2008633 | ||
Entity Address Address Line 1 | 17100 East Shea Boulevard | ||
Entity Address Address Line 2 | Suite 230 | ||
Entity Address City Or Town | Fountain Hills | ||
Entity Address State Or Province | AZ | ||
Entity Address Postal Zip Code | 85268 | ||
City Area Code | 480 | ||
Icfr Auditor Attestation Flag | false | ||
Auditor Name | Moss Adams LLP | ||
Auditor Location | Phoenix, AZ | ||
Auditor Firm Id | 1930 | ||
Local Phone Number | 905-7311 | ||
Security 12b Title | Common stock, par value $.001 per share | ||
Entity Interactive Data Current | Yes |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 477,987 | $ 258,705 |
Accounts receivable, net | 910,277 | 624,127 |
Prepaid expenses | 231,694 | 220,399 |
Other current assets | 29,092 | 39,226 |
Total current assets | 1,649,050 | 1,142,457 |
Deposits | 15,002 | 16,005 |
Property and equipment, net (see note 6) | 4,208,250 | 3,417,977 |
Goodwill (see note 6) | 110,000 | 110,000 |
Intangible assets (see note 7) | 73,572 | 64,856 |
Operating lease right-of-use assets (see note 5) | 506,219 | 829,960 |
Total assets | 6,562,093 | 5,581,255 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 2,512,837 | 2,434,389 |
Deferred revenue (see note 3) | 1,166,848 | 622,497 |
Current portion of operating lease liabilities (see note 5) | 174,166 | 180,544 |
Current portion of finance lease liabilities (see note 5) | 0 | 2,094 |
Total current liabilities | 3,853,851 | 3,239,524 |
Long-term portion of operating lease liabilities (see note 5) | 323,685 | 532,782 |
Preferred stock warrant liability (see note 9) | 629,375 | 513,750 |
Mezzanine equity: | ||
Preferred stock, 10,000,000 shares authorized: Series A Redeemable Convertible Preferred stock, $0.001 par value, 550,000 shares designated; shares issued and outstanding: 123,685 at December 31, 2022 and December 31, 2021 | 2,983,857 | 2,983,857 |
Stockholders' deficit: | ||
Common stock, $0.001 par value, 150,000,000 shares authorized, shares issued and outstanding: 90,477,798 at December 31, 2022 and December 31, 2021 | 90,479 | 90,479 |
Additional paid-in capital | (18,903,272) | (18,887,759) |
Accumulated deficit | (20,222,426) | (20,666,896) |
Total stockholders' deficit | (1,228,675) | (1,688,658) |
Total liabilities and stockholders' deficit | $ 6,562,093 | $ 5,581,255 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Common Stock, Par Value | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 150,000,000 | 150,000,000 |
Common Stock, Shares Issued | 90,477,798 | 90,477,798 |
Common Stock, Shares Outstanding | 90,477,798 | 90,477,798 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Par Value | $ 0.001 | $ 0.001 |
Preferred Stock, Issued | 123,685 | 123,685 |
Preferred Stock, Outstanding | 123,685 | 123,685 |
Convertible Preferred Stock Designated | 550,000 | 550,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | ||
REVENUE (see note 3) | $ 17,527,605 | $ 15,174,372 |
COST OF REVENUE | 8,972,129 | 8,438,658 |
GROSS PROFIT | 8,555,476 | 6,735,714 |
OPERATING EXPENSES | ||
Sales and marketing | 2,952,968 | 2,507,169 |
General and administrative | 3,015,453 | 2,538,429 |
Software development | 2,096,404 | 1,712,558 |
Total operating expenses | 8,064,825 | 6,758,156 |
OPERATING INCOME (LOSS) | 490,651 | (22,442) |
OTHER INCOME (EXPENSES), NET | ||
Foreign exchange (loss) gain | (40,307) | (107,382) |
Interest expense | (2,818) | (2,641) |
Other income | 0 | 133,257 |
Total other income | 43,125 | 237,998 |
INCOME BEFORE INCOME TAXES | 447,526 | 215,556 |
Income tax expense (see note 8) | (3,056) | (3,184) |
NET INCOME | $ 444,470 | $ 212,372 |
EARNINGS PER SHARE (see note 10) | ||
Basic earnings per share | $ 0 | $ 0 |
Diluted earnings per share | $ 0 | $ 0 |
WEIGHTED AVERAGE SHARES OUTSTANDING (see note 10) | ||
Basic | 90,477,798 | 90,477,798 |
Diluted | 119,545,723 | 119,313,662 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS DEFICIT - USD ($) | Total | Series A Redeemable Convertible Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit |
Balance, shares at Dec. 31, 2020 | 123,685 | 90,477,798 | |||
Balance, amount at Dec. 31, 2020 | $ (1,932,906) | $ 2,983,857 | $ 90,479 | $ 18,855,883 | $ (20,879,268) |
Stock-based compensation | 31,876 | 0 | 0 | 31,876 | 0 |
Net income | 212,372 | $ 0 | $ 0 | 0 | 212,372 |
Balance, shares at Dec. 31, 2021 | 123,685 | 90,477,798 | |||
Balance, amount at Dec. 31, 2021 | (1,688,658) | $ 2,983,857 | $ 90,479 | 18,887,759 | (20,666,896) |
Stock-based compensation | 15,513 | 0 | 0 | 15,513 | 0 |
Net income | 444,470 | $ 0 | $ 0 | 0 | 444,470 |
Balance, shares at Dec. 31, 2022 | 123,685 | 90,477,798 | |||
Balance, amount at Dec. 31, 2022 | $ (1,228,675) | $ 2,983,857 | $ 90,479 | $ 18,903,272 | $ (20,222,426) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
OPERATING ACTIVITIES: | ||
Net income | $ 444,470 | $ 212,372 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 2,121,135 | 1,640,245 |
Stock-based compensation expense - common stock warrants | 15,513 | 31,876 |
Stock-based compensation expense - preferred stock warrants | 115,625 | 0 |
Gain on forgiveness of PPP loan (Note 12) | 0 | (133,257) |
Changes in assets and liabilities: | ||
Accounts receivable | (286,150) | 74,207 |
Prepaid expenses | (11,295) | (111,922) |
Other current assets | 10,134 | 74,600 |
Deposits | 1,003 | (119) |
Accounts payable, accrued and other liabilities | 186,714 | 292,790 |
Deferred revenue | 544,351 | 77,595 |
Net cash provided by operating activities | 3,141,500 | 2,158,387 |
INVESTING ACTIVITIES: | ||
Purchase of fixed assets | (164,221) | (94,406) |
Purchase of intangible assets | (16,313) | (9,999) |
Capitalized application software | (2,739,590) | (2,201,222) |
Net cash used in investing activities | (2,920,124) | (2,305,627) |
FINANCING ACTIVITIES: | ||
Repayment of finance lease obligations | 2,094 | 11,965 |
Net cash provided used in financing activities | (2,094) | (11,965) |
Net increase (decrease) in cash and cash equivalents | 219,282 | (159,205) |
Cash and cash equivalents, beginning of year | 258,705 | 417,910 |
Cash and cash equivalents, end of year | $ 477,987 | $ 258,705 |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Significant Accounting Policies | 1. SIGNIFICANT ACCOUNTING POLICIES a) Nature of operations Quotemedia, Inc. (the “Company”) is a software developer and distributor of financial market data and related services to a global marketplace. The Company specializes in the collection, aggregation, and delivery of both delayed and real-time financial data content via the Internet. The Company develops 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. b) Basis of consolidation The consolidated financial statements include the operations of QuoteMedia, Ltd., a wholly owned Canadian subsidiary of the Company. All intercompany transactions and balances have been eliminated. c) Foreign currency translation and transactions The U.S. dollar is the functional currency of all the 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 year, except for expenses related to balance sheet amounts remeasured at historical exchange rates. Because the U.S. dollar is the functional currency, exchange gains and losses arising from remeasurement of foreign currency-denominated monetary assets and liabilities are included in income in the period in which they occur. d) Cash and cash equivalents Cash equivalents include money market investments that have an original maturity of three months or less and are redeemable on demand. The Company maintains its accounts primarily at one financial institution. At times throughout the year, the Company’s cash and cash equivalents balances may exceed amounts insured by the Federal Deposit Insurance Corporation. e) Allowance for doubtful accounts The Company maintains 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 the Company’s customers were to deteriorate, adversely affecting their ability to make payments, additional allowances would be required. The allowance for doubtful accounts was $200,000 and $150,000 at December 31, 2022 and 2021, respectively. Bad debt expense for the years ended December 31, 2022 and 2021 were $135,969 and $38,061, respectively. f) Property and equipment Property and equipment are recorded at cost less accumulated depreciation. Furniture and equipment are depreciated using the straight-line method over their estimated useful lives of five years. Leasehold improvements are amortized using the straight-line method over the terms of the respective leases or useful lives, whichever is shorter. Retirements, sales, and disposals of assets are recorded by removing the cost and accumulated depreciation from the asset and accumulated depreciation accounts with the resulting gain or loss reflected in income. There were no fixed assets retired during the years ended December 31, 2022 and 2021. Capitalized software development includes costs incurred in connection with the internal development of software. These costs relate to software used by subscribers to access, manage and analyze information in the Company’s databases. The majority of the capitalized costs relate to a portion of the salaries and other related costs for the Company’s software engineers. Capitalized costs associated with internally developed software are amortized over three years which is their estimated economic life. Depreciable and amortizable assets are evaluated for impairment upon a significant change in the operating environment. In these circumstances, if an evaluation of the undiscounted cash flows indicates impairment, the asset is written down to its estimated fair value, which is based on discounted future cash flows. Useful lives are periodically evaluated to determine whether events or circumstances have occurred which indicate the need for revision. There were no impairments recorded for the years ended December 31, 2022 and 2021. g) Earnings per share Basic earnings per share are computed by dividing income by the weighted average number of shares outstanding during the year. Diluted earnings per share considers shares outstanding (computed under basic earnings per share) and potentially dilutive common shares (such as stock options and redeemable convertible preferred stock outstanding). The effect of a stock split or reverse split is applied retroactively to preceding periods. h) Income taxes Income taxes are provided in accordance with Financial Accounting Standards Board (“FASB”) ASC 740, Income Taxes Deferred tax assets are reduced by a valuation allowance, when, in the opinion of management, it is likely that some portion of the deferred tax asset will not be realized. Deferred taxes are adjusted for the effects of changes in tax laws and rates. Interest and penalties, if applicable, would be recorded in operations. The Company recorded Canadian income tax expense of $3,056 and $3,184 for the years ended December 31, 2022 and 2021, respectively (see Note 8). i) Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities as of the year end and the reported amount of revenue and expenses during the year. Such estimates include (i) fair values used to test goodwill and capitalized development costs for impairment; (ii) the amount of allowance for doubtful accounts, (iii) the capitalization of software development costs, (iv) income taxes, (v) the incremental borrowing rate for operating leases, (vi) the useful life of property and equipment, and (vii) stock-based compensation. Actual results and outcomes may differ from management’s estimates and assumptions. j) Software development expenses Software development expenses consist primarily of costs incurred to maintain the Company’s software applications. The Company expensed $2,096,404 and $1,712,558 in software development costs during the years ended December 31, 2022 and 2021, respectively (see Note 6). k) Revenue The Company generates substantially all of its revenue from subscriptions for access to its software products and related support. The Company licenses financial market data information on a monthly, quarterly, or annual basis. The Company’s products and services are divided into two main categories: Interactive Content and Data Applications · Proprietary financial software applications and streaming market data feeds · Subscriptions are typically sold for a fixed fee and revenue is recognized ratably over the term of the subscription. Portfolio Management and Real-Time Quote Systems 1. Corporate Quotestream (Business-to-Business) o Web-delivered, embedded applications providing real-time, streaming market quotes and research information targeted to both professionals and non-professional users. o Revenue is typically earned based on customer usage. 2. Individual Quotestream (Business-to-Consumer) o Web-delivered, embedded applications providing real-time, streaming market quotes and research information targeted to non-professional users. o Subscriptions are typically sold for a fixed fee and revenue is recognized ratably over the term of the subscription. The Company does not provide its customers with the right to take possession of its software products at any time. The Company determines revenue recognition through the following steps: · Identification of the contract, or contracts, with a customer · Identification of the performance obligations in the contract · Determination of the transaction price · Allocation of the transaction price to the performance obligations in the contract · Recognition of revenue when, or as, the Company satisfies a performance obligation The Company executes a signed contract with the customer that specifies services to be provided, the payment amounts and terms, and the period of service, among other terms. Contract Balances Timing of revenue recognition may differ from the timing of invoicing to customers. The Company records a receivable when revenue is recognized prior to invoicing, or deferred revenue when revenue is recognized subsequent to invoicing. Upfront set-up or development fees are deferred and recognized over the service term of the contract, as set-up and development fees are not distinct from the market data service contracts to which they relate. The Company considers the following factors when determining if collection of a fee is reasonably assured: customer creditworthiness, past transaction history with the customer, current economic industry trends, and changes in customer payment terms. If these factors do not indicate collection is reasonably assured, revenue is deferred until collection becomes reasonably assured, which is generally upon receipt of cash. Cost of revenue Cost of revenue primarily consists of customer support personnel-related compensation expenses, including salaries, bonuses, benefits, payroll taxes, and stock-based compensation expense, as well as expenses related to third-party hosting costs, software license fees, amortization of capitalized software development costs, amortization of acquired technology intangible assets, and allocated overhead. l) Financial instruments Financial instruments consist principally of cash and cash equivalents, accounts receivable, accounts payable and notes payable. The Company believes that the fair value of financial instruments approximates the recorded book value of those instruments due to the short-term nature of the instruments or stated interest rates that approximate market interest rates. m) Stock-Based Compensation Stock-based compensation awards are measured at their fair value on the date of grant with the expense recognized, net of estimated forfeitures, over the related service or performance period on a straight-line basis . The Company used the Black-Scholes valuation model to calculate the fair value of common stock options and warrants. n) Recent Accounting Pronouncements Recently Adopted There are no new recently adopted accounting pronouncements for the year ended December 31, 2022. Not Yet Adopted In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments-Credit Losses (Topic 326) In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40) 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. |
PRIOR PERIOD ERROR
PRIOR PERIOD ERROR | 12 Months Ended |
Dec. 31, 2022 | |
PRIOR PERIOD ERROR | |
PRIOR PERIOD ERROR | 2. PRIOR PERIOD ERROR Subsequent to the filing of its Quarterly Report for the quarterly period ended March 31, 2022, the Company reassessed its classification of warrants to purchase shares of Series A Redeemable Convertible Preferred Stock (“Compensation Preferred Stock Warrants” – see Financial Statement Note 9 “ Redeemable Convertible Preferred Stock and Stockholders’ Deficit” Distinguishing Liabilities From Equity · Additional Paid-in Capital was reduced by $750,000 · Preferred Stock Warrant Liability was increased by $513,750 · Accumulated Deficit was reduced by $236,250 In addition, Additional Paid-in Capital was reduced by $750,000 and Accumulated Deficit was reduced by $513,750 for the comparative stockholders’ equity balances as of December 31, 2020. |
REVENUE
REVENUE | 12 Months Ended |
Dec. 31, 2022 | |
REVENUE | |
Revenue | 3. REVENUE Disaggregated Revenue The Company provides market data, financial web content solutions and cloud-based applications. The Company’s revenue by type of service consists of the following for the years ended December 31, 2022 2021 Portfolio Management Systems Corporate Quotestream $ 6,906,499 $ 6,399,618 Individual Quotestream 2,092,778 2,281,966 Interactive Content & Data APIs 8,528,328 6,492,788 Total revenue $ 17,527,605 $ 15,174,372 Deferred Revenue Changes in deferred revenue were as follows for the years ending December 31, 2022 2021 Beginning balance $ 622,497 $ 544,902 Revenue recognized in the current period from the amounts in the beginning balance (568,001 ) (422,118 ) New deferrals, net of amounts recognized in the current period 1,112,431 500,936 Effects of foreign currency translation (79 ) (1,223 ) Total deferred revenue $ 1,166,848 $ 622,497 |
RELATED PARTIES
RELATED PARTIES | 12 Months Ended |
Dec. 31, 2022 | |
PRIOR PERIOD ERROR | |
Related Parties | 4. RELATED PARTIES The Company entered into a five-year office lease with 410734 B.C. Ltd. effective May 1, 2021 for approximately $6,500 per month. David M. Shworan, CEO of Quotemedia Ltd., is a control person of 410734 B.C. Ltd. At December 31, 2022, there was $13,343 due to 410734 B.C. Ltd. The Company entered into a marketing agreement with Bravenet Web Services, Inc. (“Bravenet”) effective November 28, 2019. The Company agreed to pay Bravenet an upfront setup fee of $7,000 upon signing the agreement and a monthly service fee of $2,500 starting February 2020. For the years ended December 31, 2022 and 2021, there was $12,500 and $11,970 due to Bravenet related to this agreement, respectively. David M. Shworan is a control person of Bravenet. At December 31, 2022, there were $70,100 in unreimbursed expenses owed to Keith Randall, CEO of Quotemedia, Inc. As a matter of policy all significant related party transactions are subject to review and approval by the Company’s Board of Directors. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2022 | |
LEASES | |
Leases | 5. LEASES The Company has operating leases for corporate offices. The Company’s leases have remaining lease terms of 1 year to 4 years. Management determines 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 the Company’s consolidated balance sheets. Finance lease assets and liabilities are included in property and equipment and finance lease liabilities, respectively, on the Company’s consolidated balance sheets. The Company renewed its lease for office space in Parksville, Canada as of May 1, 2021 for an additional 5 years resulting in a right of use asset and an offsetting lease liability of $233,978. 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 the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The Company 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, the Company factors in options to extend or terminate leases when it is reasonably certain that the Company will exercise that option. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. For certain leases the Company accounts for the lease and non-lease components as a single lease component. Supplemental balance sheet information related to leases at December 31, was as follows: 2022 2021 Operating Leases Operating lease right-of-use assets, net $ 506,219 $ 829,960 Current portion of operating lease liability $ 174,166 $ 180,544 Long-term portion of operating lease liability 323,685 532,782 Total operating lease liability $ 497,851 $ 713,326 Finance Leases Computer equipment on financing lease $ - $ 11,929 Less: accumulated depreciation - 11,929 Computer equipment on financing lease, net $ - $ - Current portion of finance lease liability - 2,094 Total finance lease liability $ - $ 2,094 2022 2021 Weighted Average Remaining Lease Term Operating leases 2.7 years 3.6 years Finance leases - 0.8 years Weighted Average Discount Rate Operating leases 9.9 % 9.8 % Finance leases 7.5 % 7.5 % Maturities of lease liabilities were as follows: Operating Leases Year ending December 31, 2023 215,349 2024 201,420 2025 134,941 2026 19,109 Total lease payments 570,819 Less imputed interest (72,968 ) Total $ 497,851 The components of lease expense for the years ended December 31, were as follows: 2022 2021 Operating lease costs: Operating lease costs $ 236,737 $ 259,191 Short-term lease costs 98,570 89,634 Total operating lease costs $ 335,307 $ 348,825 Finance lease costs: Amortization $ - $ 15,113 Interest 64 422 Total finance lease cost $ 64 $ 15,535 Supplemental cash flow information related to leases was as follows: 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 224,741 $ 262,060 Operating cash flows from finance leases 64 422 Financing cash flows from finance leases 2,087 11,965 Right-of-use assets obtained in exchange for lease obligations: Operating leases - 233,978 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2022 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | 6. PROPERTY AND EQUIPMENT At December 31: 2022 2021 Computer equipment $ 1,493,705 $ 1,330,548 Office furniture and equipment 27,783 26,719 Leasehold improvements 13,573 13,573 Capitalized application software 16,214,697 13,475,108 Total property and equipment 17,749,758 14,845,948 Less: accumulated depreciation and amortization (13,541,508 ) (11,427,971 ) Property and equipment, net $ 4,208,250 $ 3,417,977 Property and Equipment are recorded at cost less accumulated depreciation. Depreciation is calculated on a straight-line basis over the assets’ estimated useful lives as follows: Computer equipment 5 years Office furniture and equipment 5 years Leasehold improvements Shorter of useful life or the term of lease Capitalized application software 3 years For the years ended December 31, 2022 and 2021, the Company capitalized $2,739,590 and $2,201,222 of costs, respectively, related to upgrades and enhancements made to existing software applications. Software applications are used by the Company’s subscribers to access, manage and analyze information in the Company’s databases. For the years ended December 31, 2022 and 2021, amortization expenses associated with the internally developed application software was $1,943,292 and $1,462,039, respectively. At December 31, 2022, the remaining book value of the capitalized application software was $3,798,374. Depreciation expense for equipment and leaseholds for the years ended December 31, 2022 and 2021 was $170,245 and $171,149, respectively. |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 12 Months Ended |
Dec. 31, 2022 | |
INTANGIBLE ASSETS AND GOODWILL | |
INTANGIBLE ASSETS AND GOODWILL | 7. INTANGIBLE ASSETS AND GOODWILL 2022 2021 Intangible assets: Software licenses & intellectual property $ 138,159 $ 121,845 Domain names 20,569 20,569 158,728 142,414 Less: accumulated amortization (85,156 ) (77,558 ) Total intangible assets, net $ 73,572 $ 64,856 Goodwill: Purchase of business unit $ 110,000 $ 110,000 Amortization for amortized intangible assets is calculated on a straight-line basis over the assets’ estimated useful lives. The useful life of the software licenses and domain names is estimated to be 20 years. The useful life of intellectual property is 5 years. Amortization expense for amortized intangible assets was $7,596 and $7,057 for the years ended December 31, 2022 and 2021, respectively. The estimated amortization expense of definite-lived intangible assets is as follows: Year ending December 31, 2023 $ 7,936 2024 7,936 2025 7,936 2026 7,936 2027 7,936 Thereafter 33,892 Total $ 73,572 Goodwill is reported as an indefinite life intangible asset. The Company evaluates goodwill for impairment on an annual basis in accordance with FASB ASC 350-20, Goodwill |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
INCOME TAXES | 8. INCOME TAXES The Company accounts for income taxes according to the provisions of FASB ASC 740, Income Taxes, Reconciliations of income taxes computed at the statutory federal rate to income tax expense (benefit) for the years ended December 31, 2022 and 2021 are as follows: 2022 2021 Net income before income tax $ 447,526 $ 215,556 Tax provision (benefit) at the statutory rate of 21% 110,544 43,916 State income taxes, net of federal income tax (16,440 ) 8,095 Stock-based compensation and other non-deductible expenses 47,040 6,694 Change in federal NOL - 2,703 Adjustment in respect of prior periods 99,660 - Change in other items 86,042 (70,472 ) State income tax expense - 64 Canadian income tax expense 3,070 3,184 Change in valuation (326,860 ) 9,000 Income tax expense (recovery) $ 3,056 $ 3,184 In 2022, the Company recorded a Canadian income tax expense of $3,056. The Company does not have any material Canadian deferred tax assets or deferred tax liabilities. As of December 31, 2022, net operating loss carry-forward for federal and state income tax reporting purposes amounted to approximately $8,047,000 and $3,430,000 of which $6,968,000 of federal net operating loss carry-forwards will expire in varying amounts through the year 2037. The remaining federal net operating loss of approximately $1,079,000 are available for carry-forward indefinitely. The components of the Company’s deferred tax asset (liabilities) at December 31, 2022 and 2021 are as follows: 2022 2021 Tax effect of net operating loss carry-forward – U.S. $ 1,822,760 $ 2,703,000 Tax effect of net operating loss carry-forward – Canada 141,340 - Property & equipment (3,610 ) 4,000 Right-of-use asset (133,860 ) - Capital lease obligation 131,700 - Intangibles (321,970 ) (730,000 ) Other 49,740 36,000 Less valuation allowance (1,686,100 ) (2,013,000 ) Net deferred tax asset $ - $ - A valuation allowance has been recognized to offset the entire effect of the Company’s net deferred tax asset as the realization of this deferred tax benefit is uncertain. The valuation allowance decreased $326,900 for the year ended December 31, 2022. This is primarily due to the increase of federal and state net operating losses. The Company has analyzed filing positions in all of the federal and state jurisdictions where it is required to file income tax returns, as well as all open tax years (2018-2022) in these jurisdictions. The Company believes that its income tax filing positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material adverse effect on the Company’s financial condition, results of operations, or cash flows. Therefore, no reserves for uncertain income tax positions have been recorded. |
REDEEMABLE CONVERTIBLE PREFERRE
REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS DEFICIT | 12 Months Ended |
Dec. 31, 2022 | |
REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS DEFICIT | |
REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT | 9. REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT a) Redeemable convertible preferred shares The Company is authorized to issue up to 10,000,000 non-designated preferred shares at the Board of Directors’ discretion. 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. At December 31, 2022, 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 years ended December 31, 2022 and 2021. 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, 1,000 Series A Redeemable Convertible Preferred Stock 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. In accordance with ASC 480-10-S99, because a limited amount 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 stock No shares of common stock were issued during the years ended December 31, 2022 and 2021. c) Stock Options and Warrants 1999 Stock Option Plan During March 1999, the Company adopted, and the Company’s stockholders approved, the 1999 Stock Option Plan to advance the interests of the Company by encouraging and enabling key employees to acquire a financial interest in the Company and link their interests and efforts to the long-term interests of the Company’s stockholders. A total of 400,000 shares of common stock were initially reserved for issuance under the 1999 plan. In September 1999, this number was increased to 2,500,000. As of December 31, 2022, 1,144,817 shares of the Company’s common stock had been issued upon exercise of options granted under the 1999 plan, and there were outstanding options to acquire 1,355,183 shares of the Company’s common stock under the 1999 plan. 2003 Equity Incentive Compensation Plan The Company’s Board of Directors has approved the 2003 Equity Incentive Compensation Plan, or the 2003 plan, approved by the Company’s stockholders at the annual meeting held on February 14, 2003. The purpose of the 2003 plan is to assist the Company in attracting, motivating, retaining, and rewarding high-quality executives and other employees, directors, officers, and independent contractors by enabling such persons to acquire or increase a proprietary interest in the Company in order to strengthen the mutuality of interests between such persons and the Company’s stockholders, and providing such persons with annual and long-term performance incentives to expend their maximum efforts in the creation of stockholder value. FASB ASC 718, Stock Compensation At December 31, 2022, there are 15,000,000 shares of common stock authorized for issuance pursuant to the 2003 plan. As of December 31, 2022, 2,350,372 shares of common stock had been issued upon exercise of options granted under the 2003 plan, and there were 4,720,000 options outstanding under the 2003 plan. Total estimated stock-based compensation expense, related to all the Company’s stock-based awards was comprised as follows: 2022 2021 Sales and marketing $ 131,858 $ 16,956 General and administrative - 14,920 Stock based compensation expense $ 131,858 $ 31,876 Common Stock Options and Warrants The following table summarizes the Company’s common stock option and warrant activity for the years ended December 31, 2022 and 2021: Common Stock Options and Warrants Weighted-Average Grant Date Exercise Price Outstanding at January 1, 2021 26,372,803 $ 0.06 Granted during the period 1,030,000 $ 0.04 Forfeited during the period (1,630,000 ) $ 0.04 Outstanding at December 31, 2021 25,772,803 $ 0.06 Outstanding at December 31, 2022 25,772,803 $ 0.06 The following table summarizes the Company’s non-vested common stock option and warrant activity for the years ended December 31, 2022 and 2021: 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 (1,675,000 ) $ 0.08 Non-vested at December 31, 2021 2,025,000 $ 0.08 Vested during the period (2,025,000 ) $ 0.08 Non-vested at December 31, 2022 - $ 0.08 The following table summarizes the weighted average remaining contractual life and exercise price of common stock options and warrants outstanding at December 31, 2022: Common Stock Options and Warrants Outstanding Common Stock Options and Warrants Exercisable Weighted Number Average Weighted Number Weighted Outstanding at Remaining Average Exercisable at Average December 31, Contractual Exercise December 31, Exercise 2022 Life (Years) Price 2022 Price $0.03-0.10 25,772,803 6.56 $ 0.06 25,772,803 $ 0.06 At December 31, 2022, there was no unrecognized compensation cost related to non-vested options granted to purchase common stock. We calculate the fair value of stock options and warrants granted to purchase common stock under the provisions of FASB ASC 718 using the Black-Scholes valuation model with the following assumptions: 2022 2021 Expected dividend yield N/A - Expected stock price volatility N/A 103 % Risk-free interest rate N/A 4 % Expected life of options (years) N/A 1.0 Weighted average fair value of options and warrants granted N/A $ 0.13 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. Preferred Stock Warrants Pursuant to the December 28, 2017 Compensation Agreement with David M. Shworan, the President and Chief Executive Officer of QuoteMedia, Ltd., a wholly owned subsidiary of Quotemedia, Inc., the Company issued Mr. Shworan warrants to purchase shares of Series A Redeemable Convertible Preferred Stock (“Compensation Preferred Stock Warrants”) in lieu of a cash salary. From the period December 28, 2017 to December 31, 2019 the Company issued a total of 31,250 Compensation Preferred Stock Warrants at an exercise price equal to $1.00 per share. 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 December 31, 2022. The probability is re-evaluated each reporting period. As of December 31, 2022, 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, the Company is also unable to determine the weighted-average period over which the unrecognized compensation cost will be recognized. As of December 31, 2022 and 2021, there were a total of 413,493 preferred stock warrants outstanding with a weighted average remaining contractual life of 25 years. As of December 31, 2022, 31,250 preferred stock warrants were exercisable. No preferred stock warrants were exercised for the years ended December 31, 2022 and 2021. Fair Value Measurement of Compensation Preferred Stock Warrants The Company adheres to ASC 820, which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC 820 applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements; accordingly, the standard does not require any new fair value measurements of reported balances. ASC 820 emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). · Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company could access. · Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. · Level 3 inputs are unobservable inputs for the asset or liability, which is typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The estimated fair value of the Preferred Stock Warrant liability is determined using Level 3 inputs. As of December 31, 2022 and 2021, the fair value of the Preferred Stock Warrant Liability was $629,375 and $513,750, respectively. The Preferred Stock Warrants were valued using a bond plus option framework reflecting the cash flow of the Preferred Stock Warrants and used a probability weighted sum of the value in each potential year before expiration to estimate the fair value of the Preferred Stock Warrants. Volatility was based on public peer companies, adjusted for size and leverage. Risk-free rate was selected based on term matched Treasury securities. Bond repayment depends on the Company’s timely access to the required cash and as such, is discounted at the Company’s assumed borrowing rate. This model was run based on the Management’s expected term and probabilities of a liquidity event. The key inputs for the framework were as follows as of December 31, 2022 and 2021: Valuation Inputs December 31, 2022 December 31, 2021 Expected Time to Expiration (years) 25.05 26.05 Stock Price on Valuation Date $ 0.21 $ 0.16 Peer Volatility 52.31 % 48.79 % Cash Flow Discount Rate 12.93 % 14.56 % The following table sets forth a summary of the changes in the fair value of the Level 3 Preferred Stock Warrant Liability for the years ended December 31, 2022 and December 31,2021: Preferred Stock Warrant Liability Fair value as of December 31, 2021 513,750 Change in fair value 115,625 Fair value as of December 31, 2022 $ 629,375 The changes in fair value attributable to the Preferred Stock Warrants are recorded as an adjustment to stock compensation expense and reported in Sales and Marketing expense on the Statements of Operations. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2022 | |
EARNINGS PER SHARE (see note 10) | |
EARNINGS PER SHARE | 10. EARNINGS PER SHARE 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 stock options and warrants that are in-the-money. For outstanding redeemable convertible preferred stock, potential common shares are determined using the if-converted method. The calculations for basic and diluted net income per share for the year ended December 31, 2022 and 2021 are as follows: 2022 2021 Net income $ 444,470 $ 212,372 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 2,499,900 Redeemable convertible preferred stock 10,306,671 10,306,671 Stock options and warrants to purchase common stock 16,089,121 16,029,293 Weighted average common shares used to calculate diluted net income per share 119,373,490 119,313,662 Net income per share – basic $ 0.00 $ 0.00 Net income per share – diluted $ 0.00 $ 0.00 |
SUPPLEMENTARY CASH FLOW INFORMA
SUPPLEMENTARY CASH FLOW INFORMATION | 12 Months Ended |
Dec. 31, 2022 | |
SUPPLEMENTARY CASH FLOW INFORMATION | |
SUPPLEMENTARY CASH FLOW INFORMATION | 11. SUPPLEMENTARY CASH FLOW INFORMATION 2022 2021 Cash paid for Interest $ 3,356 $ 2,641 The non-cash amounts related to right-of-use assets obtained in exchange for lease obligations are noted below for the years ended December 31,2022 and 2021: 2022 2021 Right-of-use assets obtained in exchange for lease obligations $ - $ 233,978 There were no non-cash amounts related to the purchase of fixed assets under finance leases for the years ended December 31, 2022 and 2021. Cash and cash equivalents consists entirely of cash at December 31, 2022. |
PAYCHECK PROTECTION PROGRAM
PAYCHECK PROTECTION PROGRAM | 12 Months Ended |
Dec. 31, 2022 | |
PAYCHECK PROTECTION PROGRAM | |
PAYCHECK PROTECTION PROGRAM | 12. PAYCHECK PROTECTION PROGRAM 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 PPP loan was forgiven in its entirety on February 19, 2021. In accordance with ASC 470, Debt, |
REVENUE CONCENTRATION
REVENUE CONCENTRATION | 12 Months Ended |
Dec. 31, 2022 | |
REVENUE CONCENTRATION | |
Revenue Concentration | 13. REVENUE CONCENTRATION A significant portion of the Company’s revenue has historically been derived from customers outside of the United States, primarily in Canada. For the years ended December 31, 2022 and 2021, revenue from Canada accounted for approximately 35% and 28%, respectively, of total revenue. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2022 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 14. SUBSEQUENT EVENTS The Company has evaluated events up to the filing date of these consolidated financial statements and determined there are no other subsequent event activity required disclosure. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Nature of operations | Quotemedia, Inc. (the “Company”) is a software developer and distributor of financial market data and related services to a global marketplace. The Company specializes in the collection, aggregation, and delivery of both delayed and real-time financial data content via the Internet. The Company develops 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. |
Basis of consolidation | The consolidated financial statements include the operations of QuoteMedia, Ltd., a wholly owned Canadian subsidiary of the Company. All intercompany transactions and balances have been eliminated. |
Foreign currency translation and transactions | The U.S. dollar is the functional currency of all the 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 year, except for expenses related to balance sheet amounts remeasured at historical exchange rates. Because the U.S. dollar is the functional currency, exchange gains and losses arising from remeasurement of foreign currency-denominated monetary assets and liabilities are included in income in the period in which they occur. |
Cash and cash equivalents | Cash equivalents include money market investments that have an original maturity of three months or less and are redeemable on demand. The Company maintains its accounts primarily at one financial institution. At times throughout the year, the Company’s cash and cash equivalents balances may exceed amounts insured by the Federal Deposit Insurance Corporation. |
Allowances for doubtful accounts | The Company maintains 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 the Company’s customers were to deteriorate, adversely affecting their ability to make payments, additional allowances would be required. The allowance for doubtful accounts was $200,000 and $150,000 at December 31, 2022 and 2021, respectively. Bad debt expense for the years ended December 31, 2022 and 2021 were $135,969 and $38,061, respectively. |
Property and equipment | Property and equipment are recorded at cost less accumulated depreciation. Furniture and equipment are depreciated using the straight-line method over their estimated useful lives of five years. Leasehold improvements are amortized using the straight-line method over the terms of the respective leases or useful lives, whichever is shorter. Retirements, sales, and disposals of assets are recorded by removing the cost and accumulated depreciation from the asset and accumulated depreciation accounts with the resulting gain or loss reflected in income. There were no fixed assets retired during the years ended December 31, 2022 and 2021. Capitalized software development includes costs incurred in connection with the internal development of software. These costs relate to software used by subscribers to access, manage and analyze information in the Company’s databases. The majority of the capitalized costs relate to a portion of the salaries and other related costs for the Company’s software engineers. Capitalized costs associated with internally developed software are amortized over three years which is their estimated economic life. Depreciable and amortizable assets are evaluated for impairment upon a significant change in the operating environment. In these circumstances, if an evaluation of the undiscounted cash flows indicates impairment, the asset is written down to its estimated fair value, which is based on discounted future cash flows. Useful lives are periodically evaluated to determine whether events or circumstances have occurred which indicate the need for revision. There were no impairments recorded for the years ended December 31, 2022 and 2021. |
Earnings per share | Basic earnings per share are computed by dividing income by the weighted average number of shares outstanding during the year. Diluted earnings per share considers shares outstanding (computed under basic earnings per share) and potentially dilutive common shares (such as stock options and redeemable convertible preferred stock outstanding). The effect of a stock split or reverse split is applied retroactively to preceding periods. |
Income taxes | Income taxes are provided in accordance with Financial Accounting Standards Board (“FASB”) ASC 740, Income Taxes Deferred tax assets are reduced by a valuation allowance, when, in the opinion of management, it is likely that some portion of the deferred tax asset will not be realized. Deferred taxes are adjusted for the effects of changes in tax laws and rates. Interest and penalties, if applicable, would be recorded in operations. The Company recorded Canadian income tax expense of $3,056 and $3,184 for the years ended December 31, 2022 and 2021, respectively (see Note 8). |
Use of estimates | The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities as of the year end and the reported amount of revenue and expenses during the year. Such estimates include (i) fair values used to test goodwill and capitalized development costs for impairment; (ii) the amount of allowance for doubtful accounts, (iii) the capitalization of software development costs, (iv) income taxes, (v) the incremental borrowing rate for operating leases, (vi) the useful life of property and equipment, and (vii) stock-based compensation. Actual results and outcomes may differ from management’s estimates and assumptions. |
Software development expenses | Software development expenses consist primarily of costs incurred to maintain the Company’s software applications. The Company expensed $2,096,404 and $1,712,558 in software development costs during the years ended December 31, 2022 and 2021, respectively (see Note 6). |
Revenue | The Company generates substantially all of its revenue from subscriptions for access to its software products and related support. The Company licenses financial market data information on a monthly, quarterly, or annual basis. The Company’s products and services are divided into two main categories: Interactive Content and Data Applications · Proprietary financial software applications and streaming market data feeds · Subscriptions are typically sold for a fixed fee and revenue is recognized ratably over the term of the subscription. Portfolio Management and Real-Time Quote Systems 1. Corporate Quotestream (Business-to-Business) o Web-delivered, embedded applications providing real-time, streaming market quotes and research information targeted to both professionals and non-professional users. o Revenue is typically earned based on customer usage. 2. Individual Quotestream (Business-to-Consumer) o Web-delivered, embedded applications providing real-time, streaming market quotes and research information targeted to non-professional users. o Subscriptions are typically sold for a fixed fee and revenue is recognized ratably over the term of the subscription. The Company does not provide its customers with the right to take possession of its software products at any time. The Company determines revenue recognition through the following steps: · Identification of the contract, or contracts, with a customer · Identification of the performance obligations in the contract · Determination of the transaction price · Allocation of the transaction price to the performance obligations in the contract · Recognition of revenue when, or as, the Company satisfies a performance obligation The Company executes a signed contract with the customer that specifies services to be provided, the payment amounts and terms, and the period of service, among other terms. Timing of revenue recognition may differ from the timing of invoicing to customers. The Company records a receivable when revenue is recognized prior to invoicing, or deferred revenue when revenue is recognized subsequent to invoicing. Upfront set-up or development fees are deferred and recognized over the service term of the contract, as set-up and development fees are not distinct from the market data service contracts to which they relate. The Company considers the following factors when determining if collection of a fee is reasonably assured: customer creditworthiness, past transaction history with the customer, current economic industry trends, and changes in customer payment terms. If these factors do not indicate collection is reasonably assured, revenue is deferred until collection becomes reasonably assured, which is generally upon receipt of cash. Cost of revenue Cost of revenue primarily consists of customer support personnel-related compensation expenses, including salaries, bonuses, benefits, payroll taxes, and stock-based compensation expense, as well as expenses related to third-party hosting costs, software license fees, amortization of capitalized software development costs, amortization of acquired technology intangible assets, and allocated overhead. |
Financial instruments | Financial instruments consist principally of cash and cash equivalents, accounts receivable, accounts payable and notes payable. The Company believes that the fair value of financial instruments approximates the recorded book value of those instruments due to the short-term nature of the instruments or stated interest rates that approximate market interest rates. |
Stock-based compensation | Stock-based compensation awards are measured at their fair value on the date of grant with the expense recognized, net of estimated forfeitures, over the related service or performance period on a straight-line basis . The Company used the Black-Scholes valuation model to calculate the fair value of common stock options and warrants. |
Accounting Pronouncements | Recently Adopted There are no new recently adopted accounting pronouncements for the year ended December 31, 2022. Not Yet Adopted In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments-Credit Losses (Topic 326) In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40) 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. |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
REVENUE | |
Disaggregated revenue | 2022 2021 Portfolio Management Systems Corporate Quotestream $ 6,906,499 $ 6,399,618 Individual Quotestream 2,092,778 2,281,966 Interactive Content & Data APIs 8,528,328 6,492,788 Total revenue $ 17,527,605 $ 15,174,372 |
Deferred revenue | 2022 2021 Beginning balance $ 622,497 $ 544,902 Revenue recognized in the current period from the amounts in the beginning balance (568,001 ) (422,118 ) New deferrals, net of amounts recognized in the current period 1,112,431 500,936 Effects of foreign currency translation (79 ) (1,223 ) Total deferred revenue $ 1,166,848 $ 622,497 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
LEASES | |
Summary of lease | 2022 2021 Operating Leases Operating lease right-of-use assets, net $ 506,219 $ 829,960 Current portion of operating lease liability $ 174,166 $ 180,544 Long-term portion of operating lease liability 323,685 532,782 Total operating lease liability $ 497,851 $ 713,326 Finance Leases Computer equipment on financing lease $ - $ 11,929 Less: accumulated depreciation - 11,929 Computer equipment on financing lease, net $ - $ - Current portion of finance lease liability - 2,094 Total finance lease liability $ - $ 2,094 |
Maturities of lease liabilities | Operating Leases Year ending December 31, 2023 215,349 2024 201,420 2025 134,941 2026 19,109 Total lease payments 570,819 Less imputed interest (72,968 ) Total $ 497,851 |
Components of lease expense | 2022 2021 Operating lease costs: Operating lease costs $ 236,737 $ 259,191 Short-term lease costs 98,570 89,634 Total operating lease costs $ 335,307 $ 348,825 Finance lease costs: Amortization $ - $ 15,113 Interest 64 422 Total finance lease cost $ 64 $ 15,535 |
Supplemental cash flow information | 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 224,741 $ 262,060 Operating cash flows from finance leases 64 422 Financing cash flows from finance leases 2,087 11,965 Right-of-use assets obtained in exchange for lease obligations: Operating leases - 233,978 |
Weighted Average Remaining Lease Term | 2022 2021 Weighted Average Remaining Lease Term Operating leases 2.7 years 3.6 years Finance leases - 0.8 years Weighted Average Discount Rate Operating leases 9.9 % 9.8 % Finance leases 7.5 % 7.5 % |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
PROPERTY AND EQUIPMENT | |
Property and equipment | 2022 2021 Computer equipment $ 1,493,705 $ 1,330,548 Office furniture and equipment 27,783 26,719 Leasehold improvements 13,573 13,573 Capitalized application software 16,214,697 13,475,108 Total property and equipment 17,749,758 14,845,948 Less: accumulated depreciation and amortization (13,541,508 ) (11,427,971 ) Property and equipment, net $ 4,208,250 $ 3,417,977 |
Estimated useful lives of assets | Computer equipment 5 years Office furniture and equipment 5 years Leasehold improvements Shorter of useful life or the term of lease Capitalized application software 3 years |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
INTANGIBLE ASSETS AND GOODWILL | |
Amortized intangible assets | 2022 2021 Intangible assets: Software licenses & intellectual property $ 138,159 $ 121,845 Domain names 20,569 20,569 158,728 142,414 Less: accumulated amortization (85,156 ) (77,558 ) Total intangible assets, net $ 73,572 $ 64,856 Goodwill: Purchase of business unit $ 110,000 $ 110,000 |
Estimated amortization expense of definite-lived intangible assets | Year ending December 31, 2023 $ 7,936 2024 7,936 2025 7,936 2026 7,936 2027 7,936 Thereafter 33,892 Total $ 73,572 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
Reconciliations of income taxes | 2022 2021 Net income before income tax $ 447,526 $ 215,556 Tax provision (benefit) at the statutory rate of 21% 110,544 43,916 State income taxes, net of federal income tax (16,440 ) 8,095 Stock-based compensation and other non-deductible expenses 47,040 6,694 Change in federal NOL - 2,703 Adjustment in respect of prior periods 99,660 - Change in other items 86,042 (70,472 ) State income tax expense - 64 Canadian income tax expense 3,070 3,184 Change in valuation (326,860 ) 9,000 Income tax expense (recovery) $ 3,056 $ 3,184 |
Components of deferred tax asset | 2022 2021 Tax effect of net operating loss carry-forward – U.S. $ 1,822,760 $ 2,703,000 Tax effect of net operating loss carry-forward – Canada 141,340 - Property & equipment (3,610 ) 4,000 Right-of-use asset (133,860 ) - Capital lease obligation 131,700 - Intangibles (321,970 ) (730,000 ) Other 49,740 36,000 Less valuation allowance (1,686,100 ) (2,013,000 ) Net deferred tax asset $ - $ - |
REDEEMABLE CONVERTIBLE PREFER_2
REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS DEFICIT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS DEFICIT | |
Stock-based compensation | 2022 2021 Sales and marketing $ 131,858 $ 16,956 General and administrative - 14,920 Stock based compensation expense $ 131,858 $ 31,876 |
Non-vested common stock warrant and stock option activity | Common Stock Options and Warrants Weighted-Average Grant Date Exercise Price Outstanding at January 1, 2021 26,372,803 $ 0.06 Granted during the period 1,030,000 $ 0.04 Forfeited during the period (1,630,000 ) $ 0.04 Outstanding at December 31, 2021 25,772,803 $ 0.06 Outstanding at December 31, 2022 25,772,803 $ 0.06 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 (1,675,000 ) $ 0.08 Non-vested at December 31, 2021 2,025,000 $ 0.08 Vested during the period (2,025,000 ) $ 0.08 Non-vested at December 31, 2022 - $ 0.08 |
Non-vested stock option and warrant activity | Common Stock Options and Warrants Outstanding Common Stock Options and Warrants Exercisable Weighted Number Average Weighted Number Weighted Outstanding at Remaining Average Exercisable at Average December 31, Contractual Exercise December 31, Exercise 2022 Life (Years) Price 2022 Price $0.03-0.10 25,772,803 6.56 $ 0.06 25,772,803 $ 0.06 2022 2021 Expected dividend yield N/A - Expected stock price volatility N/A 103 % Risk-free interest rate N/A 4 % Expected life of options (years) N/A 1.0 Weighted average fair value of options and warrants granted N/A $ 0.13 Valuation Inputs December 31, 2022 December 31, 2021 Expected Time to Expiration (years) 25.05 26.05 Stock Price on Valuation Date $ 0.21 $ 0.16 Peer Volatility 52.31 % 48.79 % Cash Flow Discount Rate 12.93 % 14.56 % |
Preferred stock warrant activity | Preferred Stock Warrant Liability Fair value as of December 31, 2021 513,750 Change in fair value 115,625 Fair value as of December 31, 2022 $ 629,375 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
EARNINGS PER SHARE (see note 10) | |
Components of earnings per share | 2022 2021 Net income $ 444,470 $ 212,372 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 2,499,900 Redeemable convertible preferred stock 10,306,671 10,306,671 Stock options and warrants to purchase common stock 16,089,121 16,029,293 Weighted average common shares used to calculate diluted net income per share 119,373,490 119,313,662 Net income per share – basic $ 0.00 $ 0.00 Net income per share – diluted $ 0.00 $ 0.00 |
SUPPLEMENTARY CASH FLOW INFOR_2
SUPPLEMENTARY CASH FLOW INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SUPPLEMENTARY CASH FLOW INFORMATION | |
Cash paid for interest | 2022 2021 Cash paid for Interest $ 3,356 $ 2,641 |
Non-cash amounts related to the purchase of fixed assets under capital lease | 2022 2021 Right-of-use assets obtained in exchange for lease obligations $ - $ 233,978 |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
SIGNIFICANT ACCOUNTING POLICIES | ||
Allowance for doubtful accounts | $ 200,000 | $ 150,000 |
Bad debt expense | 135,969 | 38,061 |
Income tax expense | 3,056 | 3,184 |
Software development costs | $ 2,096,404 | $ 1,712,558 |
PRIOR PERIOD ERROR (Details Nar
PRIOR PERIOD ERROR (Details Narrative) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Preferred Stock Warrant Liability | 123,685 | 123,685 | |
Accumulated Deficit | $ (20,222,426) | $ (20,666,896) | |
Restatement Adjustment [Member] | |||
Preferred Stock Warrant Liability | 513,750 | ||
Accumulated Deficit | $ 236,250 | $ 513,750 | |
Additional paid-in capital reduced | 750,000 | 750,000 | |
Accumulated deficit reduced | 513,750 | $ 13,750 | |
Preferred stock warrant liability increased | $ 513,750 |
REVENUE (Details)
REVENUE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Total revenue | $ 17,527,605 | $ 15,174,372 |
Interactive Content and Data APIs | ||
Total revenue | 8,528,328 | 6,492,788 |
Corporate Quotestream | ||
Total revenue | 6,906,499 | 6,399,618 |
Individual Quotestream | ||
Total revenue | $ 2,092,778 | $ 2,281,966 |
REVENUE (Details 1)
REVENUE (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
REVENUE | ||
Deferred Revenue, Beginning Balance | $ 622,497 | $ 544,902 |
Revenue Recognized In The Current Period From The Amounts In The Beginning Balance | (568,001) | (422,118) |
New Deferrals, Net Of Amounts Recognized In The Current Period | 1,112,431 | 500,936 |
Effects Of Foreign Currency Translation | (79) | (1,223) |
Deferred Revenue, Ending Balance | $ 1,166,848 | $ 622,497 |
RELATED PARTIES (Details Narrat
RELATED PARTIES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
410734 B.C. Ltd | ||
Due To Related Party | $ 13,343 | $ 0 |
Lease Term | 5 years | |
Lease Per Month | $ 6,500 | |
Bravenet | ||
Due To Related Party | 12,500 | $ 11,970 |
Related Party Expense | 2,500 | |
Lease Per Month | 7,000 | |
Unreimbursed expenses | $ 70,100 |
LEASES (Details)
LEASES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
LEASES | ||
Operating lease right-of-use assets | $ 506,219 | $ 829,960 |
Current portion of operating lease liability | 174,166 | 180,544 |
Long-term portion of operating lease liability | 323,685 | 532,782 |
Total operating lease liability | 497,851 | 713,326 |
Computer equipment on financing lease | 0 | 11,929 |
Less: accumulated depreciation | 0 | 11,929 |
Computer Equipment On Financing Lease, Net | 0 | 0 |
Current portion of finance lease liability | 0 | 2,094 |
Total finance lease liability | $ 0 | $ 2,094 |
Weighted Average Remaining Lease Term | ||
Operating Leases | 2 years 8 months 12 days | 3 years 7 months 6 days |
Finance Lease | 9 months 18 days | |
Weighted Average Discount Rate | ||
Operating Leases | 9.90% | 9.80% |
Finance Leases | 7.50% | 7.50% |
LEASES (Details 1)
LEASES (Details 1) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Operating Lease Obligations | ||
2023 | $ 215,349 | |
2024 | 201,420 | |
2025 | 134,941 | |
2026 | 19,109 | |
Total Lease Payments | 570,819 | |
Less Imputed Interest | (72,968) | |
Total | $ 497,851 | $ 713,326 |
LEASES (Details 2)
LEASES (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating lease costs: | ||
Operating lease costs | $ 236,737 | $ 259,191 |
Short-term lease costs | 98,570 | 89,634 |
Total operating lease costs | 335,307 | 348,825 |
Finance lease costs: | ||
Amortization | 0 | 15,113 |
Interest | 64 | 422 |
Total finance lease costs | $ 64 | $ 15,535 |
LEASES (Details 3)
LEASES (Details 3) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 224,741 | $ 262,060 |
Operating cash flows from finance leases | 64 | 422 |
Financing cash flows from finance leases | 2,087 | 11,965 |
Operating leases | $ 0 | $ 233,978 |
LEASES (Details Narrative)
LEASES (Details Narrative) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
LEASES | |
Lessee, Operating Lease, Description | 1 year to 4 years |
Operating leases | $ 233,978 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Total property and equipment | $ 17,749,758 | $ 14,845,948 |
Less: accumulated depreciation | (13,541,508) | (11,427,971) |
Property and equipment, net | 4,208,250 | 3,417,977 |
Computer Software, Intangible Asset [Member] | ||
Total property and equipment | 16,214,697 | 13,475,108 |
Computer Equipment | ||
Total property and equipment | 1,493,705 | 1,330,548 |
Office Furniture and Equipment | ||
Total property and equipment | 27,783 | 26,719 |
Leasehold Improvements | ||
Total property and equipment | $ 13,573 | $ 13,573 |
PROPERTY AND EQUIPMENT (Detai_2
PROPERTY AND EQUIPMENT (Details 1) | 12 Months Ended |
Dec. 31, 2022 | |
Computer Software, Intangible Asset [Member] | |
Estimated useful lives | 3 |
Computer Equipment | |
Estimated useful lives | 5 |
Office Furniture and Equipment | |
Estimated useful lives | 5 |
Leasehold Improvements | |
Estimated useful lives | Shorter of useful life or the term of lease |
PROPERTY AND EQUIPMENT (Detai_3
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
PROPERTY AND EQUIPMENT | ||
Capitalized application software | $ 2,739,590 | $ 2,201,222 |
Amortization expenses | 1,943,292 | 1,462,039 |
Remaining book value of capitalized application software | 3,798,374 | |
Depreciation expense for equipment and leaseholds | $ 170,245 | $ 171,149 |
INTANGIBLE ASSETS AND GOODWIL_2
INTANGIBLE ASSETS AND GOODWILL (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Intangible assets: | ||
Software licenses | $ 138,159 | $ 121,845 |
Domain names | 20,569 | 20,569 |
Intangible assets, gross | 158,728 | 142,414 |
Less: accumulated amortization | (85,156) | (77,558) |
Intangible assets, net | 73,572 | 64,856 |
Goodwill: | ||
Purchase of business unit | $ 110,000 | $ 110,000 |
INTANGIBLE ASSETS AND GOODWIL_3
INTANGIBLE ASSETS AND GOODWILL (Details 1) | Dec. 31, 2022 USD ($) |
INTANGIBLE ASSETS AND GOODWILL | |
2023 | $ 7,936 |
2024 | 7,936 |
2025 | 7,936 |
2027 | 7,936 |
2026 | 7,936 |
Thereafter | 33,892 |
Total | $ 73,572 |
INTANGIBLE ASSETS AND GOODWIL_4
INTANGIBLE ASSETS AND GOODWILL (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Amortization expense for intangible assets | $ 7,596 | $ 7,057 |
Software Licenses | ||
Estimated useful life | 20 years | |
Purchase Option | ||
Estimated useful life | 5 years |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
INCOME TAXES | ||
Net income before income tax | $ 447,526 | $ 215,556 |
Tax provision (benefit) at the statutory rate of 21% | 110,544 | 43,916 |
State income taxes, net of federal income tax | (16,440) | 8,095 |
Stock-based compensation and other non-deductible expenses | 47,040 | 6,694 |
Change in federal NOL | 0 | (2,703) |
Adjustment in respect of prior periods | 99,660 | 0 |
Change in other items | 86,042 | (70,472) |
State income tax expense | 0 | 64 |
Canadian income tax expense | 3,070 | 3,184 |
Change in valuation | (326,860) | 9,000 |
Income tax expense (recovery) | $ 3,056 | $ 3,184 |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
INCOME TAXES | ||
Tax effect of net operating loss carryforward - U.S | $ 1,822,760 | $ 2,703,000 |
Tax effect of net operating loss carryforward - canada | 141,340 | 0 |
Property & equipment | 3,610 | 4,000 |
Right-of-use asset | (133,860) | 0 |
Capital lease obligation | 131,700 | 0 |
Intangibles | (321,970) | (730,000) |
Other | 49,740 | 36,000 |
Less valuation allowance | (1,686,100) | (2,013,000) |
Net deferred tax asset | $ 0 | $ 0 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Net operating loss carryforwards | $ 1,079,000 |
Valuation allowance | $ 326,900 |
Decription of federal net operating loss carryforward | of which $6,968,000 of federal net operating loss carry-forwards will expire in varying amounts through the year 2037 |
Federal | |
Net operating loss carryforwards | $ 8,047,000 |
State | |
Canadian income tax expense (benefit) | 3,056 |
Net operating loss carryforwards | $ 3,430,000 |
REDEEMABLE CONVERTIBLE PREFER_3
REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS DEFICIT (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Stock-based compensation expense | $ 131,858 | $ 31,876 |
Sales and Marketing | ||
Stock-based compensation expense | 131,858 | 16,956 |
General and Administrative | ||
Stock-based compensation expense | $ 0 | $ 14,920 |
REDEEMABLE CONVERTIBLE PREFER_4
REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS DEFICIT (Details 1) - Common Stock Options and Warrants | 12 Months Ended |
Dec. 31, 2021 $ / shares shares | |
Outstanding, beginning | shares | 26,372,803 |
Forfeited during the period | shares | (1,630,000) |
Granted during the period | shares | 1,030,000 |
Outstandings, ending | shares | 25,772,803 |
Weighted-average exercise price outstanding, beginning | $ / shares | $ 0.06 |
Weighted-average exercise price outstanding, Granted during the period | $ / shares | 0.04 |
Weighted-average exercise price outstanding, Forfeited during the period | $ / shares | 0.04 |
Weighted-average exercise price outstanding, ending | $ / shares | $ 0.06 |
REDEEMABLE CONVERTIBLE PREFER_5
REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS DEFICIT (Details 2) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS DEFICIT | ||
Common stock options and warrants Non-vested, beginning | 2,025,000 | 3,700,000 |
Common stock options and warrants vested | (2,025,000) | (1,675,000) |
Common stock options and warrants Non-vested, ending | 2,025,000 | |
Weighted-average grant date exercise price Non-vested, beginning | $ 0.08 | $ 0.08 |
Weighted-average grant date exercise price , Vested | 0.08 | 0.08 |
Weighted-average grant date exercise price Non-vested, ending | $ 0.08 | $ 0.08 |
REDEEMABLE CONVERTIBLE PREFER_6
REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS DEFICIT (Details 3) - Common Stock Options and Warrants - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Range of exercise price, minimum | $ 0.03 | |
Range of exercise price, maximum | $ 0.10 | |
Outstanding, beginning | 25,772,803 | 25,772,803 |
Weighted average remaining contractual life | 6 years 6 months 21 days | |
Weighted-average exercise price outstanding, beginning | $ 0.06 | $ 0.06 |
Weighted-average exercise price, exercisable | $ 0.06 |
REDEEMABLE CONVERTIBLE PREFER_7
REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS DEFICIT (Details 4) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS DEFICIT | ||
Expected dividend yield | 0 | |
Stock Price on Valuation Date | $ 0.21 | $ 0.16 |
5-Year Peer Volatility | 52.31% | 48.79% |
Cash Flow Discount Rate | 12.93% | 14.56% |
REDEEMABLE CONVERTIBLE PREFER_8
REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS DEFICIT (Details 5) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS DEFICIT | ||
Expected dividend yield | 0% | 0% |
Expected stock price volatility | 0% | 103% |
Risk-free interest rate | 0% | 4% |
Weighted average fair value of options and warrants granted | $ 0.13 | |
Expected life of options (years) | 1 year |
REDEEMABLE CONVERTIBLE PREFER_9
REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS DEFICIT (Details 6) - Preferred Stock Warrant Liability | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Beginning balance | $ 513,750 |
Change in fair value | 115,625 |
Ending balance | $ 629,375 |
REDEEMABLE CONVERTIBLE PREFE_10
REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS DEFICIT (Details Narrative) - USD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 28, 2017 | |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | ||
Common Stock Options and Warrants | ||||
Common stock warrants and options outstanding | 25,772,803 | 26,372,803 | ||
Unrecognized share-based compensation, period of recognition | 25 years | |||
Aggregate intrinsic value, outstanding | $ 3,921,022 | |||
Common Stock Options and Warrants | 1999 Stock Option Plan | ||||
Common stock issued | 1,144,817 | |||
Common stock were initially reserved for issuance | 400,000 | |||
Common stock were initially reserved for issuance increased | 2,500,000 | |||
Outstanding options to acquire | 1,355,183 | |||
Common Stock Options and Warrants | 2003 Equity Incentive Compensation Plan Member | ||||
Common stock issued | 15,000,000 | |||
options granted | 2,350,372 | |||
options Outstanding | 4,720,000 | |||
Series A Redeemable Convertible Preferred | ||||
Preferred stock, shares designated | 550,000 | |||
Convertible Preferred Stock redeemed | $ 123,685 | |||
Redeemable convertible preferred stock, amount | 400,000 | |||
Preferred stock liquidation value | $ 25 | |||
Conversion price per share | $ 83.33 | |||
Number of consecutive trading days | 25 years | |||
Closing price of share of common stock on securities exchange exceed price per share | $ 0.30 | |||
Warrant to purchase of common stock | 382,243 | |||
Warrant to purchase of common stock exercise price per share | $ 1 | |||
Preferred Stock Warrant | ||||
Preferred stock warrants exercisable | 31,250 | |||
Stock Warrants Exercisable | 31,250 | |||
Common stock warrants and options outstanding | 413,493 | |||
Unrecognized share-based compensation | $ 9,173,832 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
EARNINGS PER SHARE (see note 10) | ||
Net income (loss) | $ 444,470 | $ 212,372 |
Weighted average common shares used to calculate net income (loss) per share | 90,477,798 | 90,477,798 |
Warrants to purchase redeemable convertible preferred stock | $ 2,499,900 | $ 2,499,900 |
Redeemable convertible preferred stock | $ 10,306,671 | $ 10,306,671 |
Stock options and warrants to purchase common stock | 16,089,121 | 16,029,293 |
Weighted average common shares used to calculate diluted net income per share | 119,373,490 | 119,313,662 |
Net income (loss) per share - basic | $ 0 | $ 0 |
Net income (loss) per share - diluted | $ 0 | $ 0 |
SUPPLEMENTARY CASH FLOW INFOR_3
SUPPLEMENTARY CASH FLOW INFORMATION (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
SUPPLEMENTARY CASH FLOW INFORMATION | ||
Cash paid for interest | $ 3,356 | $ 2,641 |
Operating leases | $ 0 | $ 233,978 |
PAYCHECK PROTECTION PROGRAM (De
PAYCHECK PROTECTION PROGRAM (Details Narrative) | May 04, 2020 USD ($) |
PAYCHECK PROTECTION PROGRAM | |
Proceeds from paycheck protection program amount | $ 133,257 |
REVENUE CONCENTRATION (Details
REVENUE CONCENTRATION (Details Narrative) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue from Contract with Customer, Product and Service Benchmark [Member] | Canada | ||
Revenue concentration | 35% | 28% |