Quotemedia Inc 10-Q for FY2023 Q3

Quotemedia Inc (QMCI)

10-Q 2023-11-13 For: 2023-09-30

Added on April 06, 2026

About this 10-Q

Quotemedia Inc filed this 10-Q on November 13, 2023, covering the quarter ended September 30, 2023 (FY2023 Q3).

Headline figures

Quarter ended September 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $4.76M; up 8.5% from $4.39M a year earlier
Net income: $126.04K; down 59.3% from net income of $309.54K a year earlier
Diluted EPS: $0.00; compared with $0.00 a year earlier

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		Page
Part I.	Financial Information

Item 1.	Consolidated financial statements (unaudited):	3

	Condensed Consolidated Balance Sheets at September 30, 2023 and December 31, 2022	3

	Condensed Consolidated Statements of Operations for the three and nine-months ended September 30, 2023 and 2022	4

	Condensed Consolidated Statements of Changes in Series A Redeemable Convertible Preferred Stock and Stockholders’ Deficit for the three and nine-months ended September 30, 2023 and 2022	5

	Condensed Consolidated Statements of Cash Flows for the nine-months ended September 30, 2023 and 2022	6

	Notes to Condensed Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15

Item 4.	Controls and Procedures	21

Part II.	Other Information

Item 6.	Exhibits	22

Signatures		23

	September 30, 2023			December 31, 2022
ASSETS

Current assets:
Cash and cash equivalents	$	820,939		$	477,987
Accounts receivable, net		1,028,148			910,277
Prepaid expenses		161,258			231,694
Other current assets		86,707			29,092
Total current assets		2,097,052			1,649,050

Deposits		20,181			15,002
Property and equipment, net		4,728,954			4,208,250
Goodwill		110,000			110,000
Intangible assets		67,620			73,572
Operating lease right-of-use assets (see note 6)		442,384			506,219

Total assets	$	7,466,191		$	6,562,093

LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS’ DEFICIT

Current liabilities:
Accounts payable and accrued liabilities	$	2,201,664		$	2,512,837
Current portion of deferred revenue (see note 4)		1,676,949			1,166,848
Current portion of operating lease liabilities (see note 6)		198,239			174,166
Total current liabilities		4,076,852			3,853,851

Long-term portion of deferred revenue (see note 4)		372,715			-
Long-term portion of operating lease liabilities (see note 6)		239,080			323,685
Preferred stock warrant liability (see note 7)		710,000			629,375

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 September 30, 2023 and December 31, 2022 (see note 7)		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 September 30, 2023 and December 31, 2022		90,479			90,479
Additional paid-in capital		18,903,272			18,903,272
Accumulated deficit		(19,910,064	)		(20,222,426	)
Total stockholders’ deficit		(916,313	)		(1,228,675	)

Total liabilities, mezzanine equity and stockholders’ deficit	$	7,466,191		$	6,562,093

	Three-months ended September 30,				Nine-months ended September 30,
	2023		2022		2023			2022

REVENUE (see note 4)	$	4,762,442	$	4,390,667	$	14,225,467		$	12,953,420

COST OF REVENUE		2,296,736		2,096,773		6,941,469			6,599,396

GROSS PROFIT		2,465,706		2,293,894		7,283,998			6,354,024

OPERATING EXPENSES

Sales and marketing		711,861		784,094		2,365,626			2,276,526
General and administrative		924,249		757,318		2,546,950			2,213,189
Software development		725,449		544,525		2,039,537			1,549,454
		2,361,559		2,085,937		6,952,113			6,039,169

OPERATING INCOME		104,147		207,957		331,885			314,855

OTHER INCOME (EXPENSES)

Foreign exchange gain (loss)		21,803		102,327		(16,271	)		(15,309	)
Interest income (expense), net		825		10		(1,031	)		(1,721	)
		22,628		102,337		(17,302	)		(17,030	)

NET INCOME BEFORE INCOME TAXES		126,775		310,294		314,583			297,825

Income tax expense		739		751		2,221			2,321

NET INCOME	$	126,036	$	309,543	$	312,362		$	295,504

EARNINGS PER SHARE (see note 8)

Basic earnings per share	$	0.00	$	0.00	$	0.00		$	0.00
Diluted earnings per share	$	0.00	$	0.00	$	0.00		$	0.00

WEIGHTED AVERAGE SHARES OUTSTANDING (see note 8)

Basic		90,477,798		90,477,798		90,477,798			90,477,798
Diluted		121,479,248		119,432,085		121,103,306			119,517,746

	Series A Redeemable Convertible Preferred Stock				Common Stock				Additional					Total
Three-months ended September 30, 2023:	Number of Shares		Amount		Number of Shares		Amount		Paid-in Capital		Accumulated Deficit			Stockholders’ Deficit
Balance, June 30, 2023		123,685	$	2,983,857		90,477,798	$	90,479	$	18,903,272	$	(20,036,100	)	$	(1,042,349	)

Net income		-		-		-		-		-		126,036			126,036

Balance, September 30, 2023		123,685	$	2,983,857		90,477,798	$	90,479	$	18,903,272	$	(19,910,064	)	$	(916,313	)

	·	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.

	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.

	·	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

	·	Additional Paid-in Capital was reduced by $750,000.
	·	Accumulated Deficit was reduced by $236,250.

	September 30, 2023			September 30, 2022
Deferred revenue at beginning of period	$	1,166,848		$	622,497
Revenue recognized in the current period from the amounts in the beginning balance		(995,364	)		(522,431	)
New deferrals, net of amounts recognized in the current period		1,873,614			988,102
Effects of foreign currency translation		4,566			(59	)
Deferred revenue at end of period	$	2,049,664		$	1,088,109

Current portion of deferred revenue	$	1,676,949		$	1,088,109
Long-term portion of deferred revenue		372,715			-
Total deferred revenue	$	2,049,664		$	1,088,109

	September 30, 2023		December 31, 2022
Operating Leases

Operating lease right-of-use assets	$	442,384	$	506,219

Current portion of operating lease liability	$	198,239	$	174,166
		239,080		323,685
Total operating lease liability	$	437,319	$	497,851

	September 30, 2023			December 31, 2022

Weighted Average Remaining Lease Term
Operating leases	2.2 years			2.7 years
Weighted Average Discount Rate
Operating leases		9.5	%	9.9%

	Operating Leases

2023 (excluding the nine-months ended September 30, 2023)	$	57,437
2024		230,067
2025		164,285
2026 and thereafter		34,006
Total lease payments		485,795
Less imputed interest		(48,476	)
Total	$	437,319

	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in operating leases	$	172,454	$	173,682
Operating cash flows used in finance leases		-		64
Financing cash flows used in finance leases		-		2,094

Right-of-use assets obtained in exchange for lease obligations:
Operating leases		78,304		-

	·	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.

	Nine-months ended September 30,
	2023			2022
OPERATING ACTIVITIES:

Net income	$	312,362		$	295,504

Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		1,944,271			1,544,810
Stock-based compensation expense – common stock warrants		-			(720	)
Stock-based compensation expense – preferred stock warrants		80,625			-
Changes in assets and liabilities:
Accounts receivable		(300,133	)		(99,542	)
Prepaid expenses		(52,764	)		76,570
Other current assets		(57,615	)		27,316
Deposits		(5,179	)		(40,528	)
Accounts payable, accrued and other liabilities		(184,670	)		(77,132	)
Deferred revenue		1,065,078			465,612
Net cash provided by operating activities		2,801,975			2,191,890

INVESTING ACTIVITIES:

Purchase of fixed assets		(71,249	)		(105,629	)
Purchase of intangible assets		-			(16,313	)
Capitalized application software		(2,387,774	)		(2,022,885	)
Net cash used in investing activities		(2,459,023	)		(2,144,827	)

FINANCING ACTIVITIES:

Repayment of finance lease obligations		-			(2,094	)
Net cash used in financing activities		-			(2,094	)

Net increase in cash		342,952			44,969

Cash and equivalents, beginning of period		477,987			258,705

Cash and equivalents, end of period	$	820,939		$	303,674

	Three-months ended September 30,				Nine-months ended September 30,
	2023		2022		2023		2022
Portfolio Management Systems
Corporate Quotestream	$	1,782,581	$	1,708,627	$	5,486,732	$	5,146,298
Individual Quotestream		458,428		512,142		1,420,138		1,606,133
Interactive Content and Data APIs		2,521,433		2,169,898		7,318,597		6,200,989
Total revenue	$	4,762,442	$	4,390,667	$	14,225,467	$	12,953,420

Valuation Inputs	September 30, 2023			December 31, 2022
Expected Time to Expiration (years)		24.30			25.05
Stock Price on Valuation Date	$	0.28		$	0.21
Peer Volatility		46.56	%		52.31	%
Cash Flow Discount Rate		15.47	%		12.93	%

	Preferred Stock Warrant Liability
Fair value as of December 31, 2022	$	629,375
Change in fair value		137,813
Fair value as of June 30, 2023		767,188
Change in fair value		(57,188	)
Fair value as of September 30, 2023	$	710,000

Exhibit Number		Description of Exhibit
31.1		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.
31.2		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.
32.1		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.
32.2		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.

By:	/s/ Keith J. Randall
	Keith J. Randall
	Chief Executive Officer and Chief Financial Officer
	(Duly authorized officer and principal financial officer)

1.	I have reviewed this Quarterly Report on Form 10-Q of Quotemedia, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:

	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	By:	/s/ Keith J. Randall
		Keith J. Randall
		Chief Executive Officer

	By:	/s/ Keith J. Randall
		Keith J. Randall
		Chief Financial Officer

	(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and

	(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.