Quotemedia Inc 10-K for FY2023

Quotemedia Inc (QMCI)

10-K 2024-04-08 For: 2023-12-31

Added on April 06, 2026

About this 10-K

Quotemedia Inc filed this 10-K on April 8, 2024, covering the fiscal year ended December 31, 2023 (FY2023).

Headline figures

Fiscal year ended December 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $18.91M; up 7.9% from $17.53M a year earlier
Net income: $361.58K; down 18.6% from net income of $444.47K a year earlier
Diluted EPS: $0.00; compared with $0.00 a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →

Title of each class		Name of exchange on which registered
Common stock, par value $.001 per share		OTCQB tier of the OTC Markets

Large, accelerated filer	☐		Accelerated filer	☐
Non-accelerated filer	☐	(Do not check if a smaller reporting company)	Smaller reporting company	☒
			Emerging growth company	☐

PART I

ITEM 1.	BUSINESS	3
ITEM 1A.	RISK FACTORS	9
ITEM 1B.	UNRESOLVED STAFF COMMENTS	12
ITEM 2.	PROPERTIES	12
ITEM 3.	LEGAL PROCEEDINGS	12
ITEM 4.	MINE SAFETY DISCLOSURES	12

PART II

ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES	13
ITEM 6.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	13
ITEM 6A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	20
ITEM 7.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	20
ITEM 8.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	20
ITEM 8A.	CONTROLS AND PROCEDURES	21
ITEM 8B.	OTHER INFORMATION	21

PART III

ITEM 9.	DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE	22
ITEM 10.	EXECUTIVE COMPENSATION	23
ITEM 11.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	26
ITEM 12.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	30
ITEM 13.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	31

PART IV

ITEM 14.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	32

SIGNATURES		33
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS		34

	·	Streaming Real-time Data Feeds
	·	Dynamic Content Web Displays
	·	Data APIs, XML and JSON Data
	·	News Feed Aggregation and Delivery
	·	Mobile App Solutions
	·	Complete Portfolio Management
	·	Corporate Investor Relations Solutions
	·	Research Information Supply
	·	Custom Software Application Development

	·	A risk disclosure document.

	·	Disclosure of market quotations, if any.

	·	Disclosure of the compensation of the broker-dealer and its salesperson in the transaction; and

	·	Monthly account statements showing the market values of our securities held in the customer's accounts.

	Years ended December 31
	2023		2022		Change ($)			Change (%)

Corporate Quotestream	$	7,275,615	$	6,906,499	$	369,116			5	%
Individual Quotestream		1,861,396		2,092,778		(213,382	)	(11		%)
Total Portfolio Management Systems		9,137,011		8,999,277		137,734			2	%
Interactive Content and Data APIs		9,770,714		8,528,328		1,242,386			15	%
Total Licensing Revenue	$	18,907,725	$	17,527,605	$	1,380,120			8	%

	Years ended December 31,
	2023			2022

Foreign exchange loss	$	(45,017	)	$	(40,307	)
Interest expense		(1,846	)		(2,818	)
Total other expenses	$	(46,863	)	$	(43,125	)

Name	Age	Position

Robert J. Thompson	81	Chairman of the Board

Keith J. Randall	57	Chief Executive Officer and Chief Financial Officer, and Director

David M. Shworan	56	President and Chief Executive Officer of QuoteMedia, Ltd., and Director

Name and Principal Position	Year	Salary ($)		Bonus ($)		Option Awards ($) (1),(4),(5)		All Other Compensation ($) (2)		Total ($)

Keith J. Randall (3)	2023	$	210,000		-		-		-	$	210,000
Chief Executive Officer &	2022	$	197,500		-		-		-	$	197,500
CFO, QuoteMedia, Inc.

David M. Shworan (4)	2023	$	400,000		-		-		-	$	400,000
Chief Executive Officer,	2022	$	400,000	$	133,333		-		-	$	533,333
QuoteMedia, Ltd.

(1)	Options Awards represent the fair value of option awards granted, repriced, or otherwise modified, computed in accordance with FASB ASC 718, Stock Compensation.
(2)	The executive officers listed also received certain perquisites, the aggregate value of which did not exceed $10,000 for any year presented.
(3)	Mr. Randall is our Chief Financial Officer, and effective March 31, 2018, was also appointed Chief Executive Officer, and Director. Mr. Randall has retained his role as Chief Financial Officer and will serve as both “Principal Executive Officer” and “Principal Financial and Accounting Officer.”
(4)	Mr. Shworan is President and Chief Executive Officer of QuoteMedia, Ltd., a wholly owned subsidiary of QuoteMedia, Inc. In 2022 Mr. Shworan was paid a base salary of $400,000 and was awarded a bonus of $133,333 which was accrued as of December 31, 2022, of which $100,000 remains unpaid as of March 18, 2024.

	Number of Securities Underlying Unexercised Common Stock Options/Warrants
Name	Exercisable		Unexercisable		Option/Warrant Exercise Price ($)		Option/Warrant Exercise Date

David M. Shworan		200,000		-	$	0.036	15-May-2025
		2,000,000		-	$	0.036	15-May-2025
		3,000,000		-	$	0.036	15-May-2025
		2,400,000		-	$	0.036	15-May-2025
		4,000,000		-	$	0.100	28-Dec-2037

Keith J. Randall		100,000		-	$	0.036	15-May-2025
		50,000		-	$	0.036	15-May-2025
		50,000		-	$	0.036	15-May-2025
		100,000		-	$	0.035	26-Oct-2027

	Number of Securities Underlying Unexercised Preferred Stock Warrants
Name	Exercisable		Unexercisable		Option/Warrant Exercise Price ($)		Option/Warrant Exercise Date

David M. Shworan		1,250		-	$	1.00	28-Dec-2047
		15,000		-	$	1.00	01-Jan-2048
		15,000		-	$	1.00	01-Jan-2049
		-		382,243	$	1.00	28-Dec-2037

(a)	warrants to purchase up to 1,250 shares of Series A Redeemable Convertible Preferred Stock at an exercise price equal to $1.00 per share (the “Preferred Stock Warrant”)
(b)	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 (the “Liquidity Preferred Stock Warrant”)
(c)	warrants to purchase up to 4,000,000 shares of common stock at an exercise price equal to $0.10 per share (which warrant has specific performance vesting thresholds) (the “Common Stock Warrant”)
(d)	provided that Mr. Shworan is employed by or otherwise providing services to the Company or its subsidiaries on each of January 1, 2018, and 2019, the Company will at that time issue to Mr. Shworan warrants to purchase up to 15,000 shares of Series A Preferred Stock at an exercise price equal to $1.00 per share in lieu of paying Mr. Shworan a cash salary.
(e)	provided that Mr. Shworan is employed by or otherwise providing services to the Company or its subsidiaries on January 1, 2020, the Company shall pay Mr. Shworan a base salary at the annual rate of $350,000 during the term of his employment or service with the Company and its subsidiaries.

Name of Beneficial Owner (1)	Number of Shares of Common Stock Owned (2)		Percentage of Common Stock Beneficially Owned (2)

Directors and Executive Officers
David M. Shworan (3)		44,151,800		41.6	%
Robert J. Thompson (4)		1,610,286		1.8	%
Keith J. Randall (5)		793,976		0.9	%

All directors and executive officers as a group		43,806,062		43.4	%

5% Stockholders (6)		7,404,735		8.2	%

(1)	Each person named in the table has sole voting and investment power with respect to all common stock beneficially owned by him or her, subject to applicable community property law, except as otherwise indicated. Except as otherwise indicated, each person may be reached through us at 17100 E. Shea Blvd., Suite 230, Fountain Hills, Arizona 85268.

(2)	The percentages shown are calculated based upon 90,477,798 shares of common stock outstanding on March 18, 2024. The numbers and percentages shown include the shares of common stock actually owned as of March 18, 2024, and the shares of common stock that the identified person or group had the right to acquire within 60 days of such date. In calculating the percentage of ownership, all shares of common stock that the identified person or group had the right to acquire within 60 days of March 18, 2024 upon the exercise of options are deemed to be outstanding for the purpose of computing the percentage of the shares of common stock owned by such person or group but are not deemed to be outstanding for the purpose of computing the percentage of the shares of common stock owned by any other person.

(3)	Represents the following:

	·	10,511,800 shares of common stock owned by Mr. Shworan and vested options and warrants to directly acquire 11,600,000 shares of common stock.

	·	17,002,500 shares owned by Mr. Shworan's wife.

	·	1,037,500 shares of common stock owned by Bravenet Web Services, Inc. and vested options and warrants to acquire 1,480,000 shares of common stock. Mr. Shworan is the control person of Bravenet Web Services, Inc. and Mr. Shworan disclaims beneficial ownership of these shares except to the extent of his pecuniary interest therein.

	·	Vested options and warrants to acquire 2,520,000 shares of common stock owned by Harrison Avenue Holdings Ltd. Mr. Shworan is the control person of Harrison Avenue Holdings Ltd. and Mr. Shworan disclaims beneficial ownership of these shares except to the extent of his pecuniary interest therein.

	·	See also Item 11, “Executive Compensation – Employment Agreements.”

	Years ended December 31
	2023			2022			Change ($)		Change (%)

Cost of revenue	$	9,263,073		$	8,972,129		$	290,944		3	%

Gross profit	$	9,644,652		$	8,555,476		$	1,089,176		13	%

Gross margin %		51	%		49	%

	Years ended December 31
	2023		2022		Change ($)		Change (%)

Sales and marketing	$	3,130,051	$	2,952,968	$	177,083		6	%
General and administrative		3,346,157		3,015,453		330,704		11	%
Software development		2,757,031		2,096,404		660,627		32	%
Total operating expenses	$	9,233,239	$	8,064,825	$	1,168,414		14	%

(4)	Represents 807,483 shares of common stock and vested options and warrants to acquire 802,803 shares of common stock.

(5)	Represents 493,976 shares of common stock and vested options and warrants to acquire 300,000 shares of common stock.

(6)	Represents 7,404,735 shares of our common stock owned by FinTech HQ Inc.

	Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants, and Rights		Weighted Average Exercise Price of Outstanding Options, Warrants, and Rights		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
Plan Category	(a)		(b)		(c)

Equity Compensation Plans approved by stockholders		4,720,000	$	0.04		7,929,628

Equity Compensation Plans not approved by stockholders		21,052,803	$	0.03		N/A
Total		25,772,803				7,329,628

	·	The cash and fair market value of property that is the highest price per share paid (including extraordinary dividends) in any reorganization, merger, consolidation, liquidation, dissolution, or sale of substantially all assets of our company; or

	·	The highest fair market value per share (generally based on market prices) at any time during the 60 days before and 60 days after a change in control.

	·	Approval by stockholders of any reorganization, merger, or consolidation or other transaction or series of transactions if persons who were shareholders immediately prior to such reorganization, merger, or consolidation or other transaction do not, immediately thereafter, own more than 50% of the combined voting power of the reorganized, merged, or consolidated company's then outstanding, voting securities, or a liquidation or dissolution of our company or the sale of all or substantially all of the assets of our company (unless the reorganization, merger, consolidation or other corporate transaction, liquidation, dissolution or sale is subsequently abandoned),

	·	A change in the composition of our Board of Directors such that the persons constituting the Board of Directors on the date the award is granted, or the Incumbent Board, and subsequent directors approved by the Incumbent Board (or approved by such subsequent directors), cease to constitute at least a majority of our Board of Directors, or

	·	The acquisition by any person, entity or "group", within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act, of more than 50% of either the then outstanding shares of our common stock or the combined voting power of our company's then outstanding voting securities entitled to vote generally in the election of directors excluding, for this purpose, any acquisitions by (1) our company, (2) any person, entity, or "group" that as of the date on which the award is granted owns beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act) of a controlling interest, or (3) any employee benefit plan of our company.

	2023		2022

Audit Fees	$	233,299	$	189,241
Audit-Related Fees	$	-	$	-
Tax Fees	$	-	$	-
All Other Fees	$	-	$	-

Exhibit Number		Description of Exhibit
3.1		Second Amended and Restated Articles of Incorporation (1)
3.2		Amended and Restated Bylaws (1)
10.4		Amended 1999 Equity Incentive Compensation Plan (2)
10.7		2003 Equity Incentive Compensation Plan (1)
21		List of Subsidiaries
31.1		Certification of Chief 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 Chief 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 Chief 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 Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(1)	Incorporated by reference to the Annual Report on Form 10-KSB filed with the Commission on March 27, 2003.

(2)	Incorporated by reference to the Quarterly Report on Form 10-QSB filed with the Commission on August 12, 2003.

	QUOTEMEDIA, INC.

Date: April 8, 2024,	By:	/s/ Keith J. Randall
		Keith J. Randall Chief Executive Officer and Chief Financial Officer

/s/ Robert J. Thompson	Chairman of the Board	April 8, 2024
Robert J. Thompson

/s/ David M. Shworan	Director	April 8, 2024
David M. Shworan

/s/ Keith J. Randall	Chief Executive Officer and Chief Financial Officer and Director (Principal	April 8, 2024
Keith J. Randall	Executive and Financial and Accounting Officer)

Report of Independent Registered Public Accounting Firm - MNP LLP PCAOB ID:1930		F1 – F-2

Consolidated Balance Sheets		F-3

Consolidated Statements of Operations		F-4

Consolidated Statements of Changes in Series A Redeemable Convertible Preferred Stock and Stockholders’ Deficit		F-5

Consolidated Statements of Cash Flows		F-6

Notes to Consolidated Financial Statements		F-7 – F-18

·	Obtained an understanding of the Company's process to identify development projects and development costs qualifying for capitalization;

·	Evaluated management's listing of active development projects by review of project reports and discussions with development personnel to assess the reasonableness as to whether the activities were demonstrative of the capitalization criteria in accordance with the applicable accounting standard;

·	Obtained a schedule compiled by management to compute the capitalized costs by project and performed testing over the completeness and mathematical accuracy of the hours and payroll rates included within the schedule;

·	Tested a sample of the Company’s capitalized costs by validating the nature of the activities performed and time devoted to capitalizable activities through discussion with individual software developers and project managers;

·	Agreed the calculated amounts for capitalization to underlying payroll data to evaluate the reasonableness of hourly rates used for cost capitalization; and

·	Assessed the appropriateness of the disclosures in the notes to the consolidated financial statements.

	2023			2022
ASSETS

Current assets:
Cash and cash equivalents	$	342,014		$	477,987
Accounts receivable, net		1,154,787			910,277
Prepaid expenses		133,478			231,694
Other current assets		104,931			29,092
Total current assets		1,735,210			1,649,050

Deposits		16,850			15,002
Property and equipment, net (see note 5)		302,224			409,875
Capitalized internal-use software development costs, net (see note 6)		4,552,910			3,798,375
Goodwill (see note 7)		110,000			110,000
Intangible assets (see note 7)		65,636			73,572
Operating lease right-of-use assets (see note 4)		393,472			506,219

Total assets	$	7,176,302		$	6,562,093

LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS’ DEFICIT

Current liabilities:
Accounts payable and accrued liabilities	$	2,210,933		$	2,512,837
Deferred revenue (see note 2)		1,456,381			1,166,848
Current portion of operating lease liabilities (see note 4)		206,146			174,166
Total current liabilities		3,873,460			3,853,851

Long-term portion of deferred revenue (see note 2)		375,568			-
Long-term portion of operating lease liabilities (see note 4)		191,735			323,685
Preferred stock warrant liability (see note 8)		611,563			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 December 31, 2023 and December 31, 2022 (see note 9)		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, 2023 and December 31, 2022		90,479			90,479
Additional paid-in capital		18,910,482			18,903,272
Accumulated deficit		(19,860,842	)		(20,222,426	)
Total stockholders’ deficit		(859,881	)		(1,228,675	)

Total liabilities and stockholders’ deficit	$	7,176,302		$	6,562,093

	2023			2022

REVENUE (see note 2)	$	18,907,725		$	17,527,605

COST OF REVENUE		9,263,073			8,972,129

GROSS PROFIT		9,644,652			8,555,476

OPERATING EXPENSES

Sales and marketing		3,130,051			2,952,968
General and administrative		3,346,157			3,015,453
Software development		2,757,031			2,096,404
		9,233,239			8,064,825

OPERATING INCOME		411,413			490,651

OTHER EXPENSES, NET

Foreign exchange loss		(45,017	)		(40,307	)
Interest expense		(1,846	)		(2,818	)
		(46,863	)		(43,125	)

INCOME BEFORE INCOME TAXES		364,550			447,526

Income tax expense (see note 8)		(2,966	)		(3,056	)

NET INCOME	$	361,584		$	444,470

EARNINGS PER SHARE (see note 10)

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

WEIGHTED AVERAGE SHARES OUTSTANDING (see note 10)

Basic		90,477,798			90,477,798
Diluted		121,030,357			119,373,490

	Series A Redeemable Convertible Preferred Stock				Common Stock				Additional					Total Stockholders’
	Number of Shares		Amount		Number of Shares		Amount		Paid-in Capital		Accumulated Deficit			Equity (Deficit)
Balance, December 31, 2021		123,685	$	2,983,857		90,477,798	$	90,479	$	18,887,759	$	(20,666,896	)	$	(1,688,658	)

Stock-based compensation		-		-		-		-		15,513		-			15,513

Net income		-		-		-		-		-		444,470			444,470

Balance, December 31, 2022		123,685	$	2,983,857		90,477,798	$	90,479	$	18,903,272	$	(20,222,426	)	$	(1,228,675	)

Stock-based compensation		-		-		-		-		7,210		-			7,210

Net income		-		-		-		-		-		361,584			361,584

Balance, December 31, 2023		123,685	$	2,983,857		90,477,798	$	90,479	$	18,910,482	$	(19,860,842	)	$	(859,881	)

	2023			2022
OPERATING ACTIVITIES:

Net income	$	361,584		$	444,470

Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		2,645,906			2,121,135
Allowance for doubtful accounts		225,000			200,000
Stock-based compensation expense – common stock warrants		7,210			15,513
Fair value adjustment		(17,812	)		115,625
Changes in assets and liabilities:
Accounts receivable		(469,510	)		(486,150	)
Prepaid expenses		98,216			(11,295	)
Other current assets		(75,839	)		10,134
Deposits		(1,848	)		1,003
Accounts payable, accrued and other liabilities		(289,127	)		186,714
Deferred revenue		665,101			544,351
Net cash provided by operating activities		3,148,881			3,141,500

INVESTING ACTIVITIES:

Purchase of property and equipment		(81,809	)		(164,221	)
Purchase of intangible assets		-			(16,313	)
Capitalized internal-use software development costs		(3,203,045	)		(2,739,590	)
Net cash used in investing activities		(3,284,854	)		(2,920,124	)

FINANCING ACTIVITIES:

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

Net increase (decrease) in cash and cash equivalents		(135,973	)		219,282

Cash and cash equivalents, beginning of year		477,987			258,705

Cash and cash equivalents, end of year	$	342,014		$	477,987

See supplementary information (Note 11)

	·	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

	2023		2022

Portfolio Management Systems
Corporate Quotestream	$	7,275,615	$	6,906,499
Individual Quotestream		1,861,396		2,092,778
Interactive Content & Data APIs		9,770,714		8,528,328
Total revenue	$	18,907,725	$	17,527,605

	2023			2022

Beginning balance	$	1,166,848		$	622,497
Revenue recognized in the current period from the amounts in the beginning balance		(1,033,287	)		(568,001	)
New deferrals, net of amounts recognized in the current period		1,695,447			1,112,431
Effects of foreign currency translation		2,941			(79	)
Total deferred revenue	$	1,831,949		$	1,166,848

Current portion of deferred revenue	$	1,456,381		$	1,166,848
Long-term portion of deferred revenue		375,568			-
Total deferred revenue	$	1,831,949		$	1,166,848