What changed in this filing

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Item 1. Financial Statements

2022-11-10 compared with 2022-08-22 · 88 added, 86 removed, 356 unchanged (33% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30, 2022

December 31, 2021

Current assets:

18 unchanged sentences

Preferred stock, 10,000,000 shares authorized:

Series A Redeemable Convertible Preferred stock, $ 0.001 par value, 550,000 shares designated;

Series A Redeemable Convertible Preferred stock, $ 0.001 par value,

550,000 shares designated;

Shares issued and outstanding:

123,685 at June 30, 2022 and December 31, 2021

123,685 at September 30, 2022 and December 31, 2021

Stockholders’ deficit:

Common stock, $ 0.001 par value, 150,000,000 shares authorized, shares issued and outstanding:

90,477,798 at June 30, 2022 and December 31, 2021

Common stock, $ 0.001 par value, 150,000,000 shares authorized, shares issued and

90,477,798 at September 30, 2022 and December 31, 2021

Additional paid-in capital

1 unchanged sentence

( 20,371,392 )

( 20,666,896 )

Total stockholders’ deficit

4 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three-months ended June 30,

Six-months ended June 30,

Three-months ended September 30,

Nine-months ended September 30,

COST OF REVENUE

6 unchanged sentences

Foreign exchange gain (loss)

Interest expense

Interest income (expense), net

Other income (Note 9)

NET LOSS BEFORE INCOME TAXES

NET INCOME BEFORE INCOME TAXES

Income tax expense

LOSS PER SHARE

Basic and diluted loss per share

EARNINGS PER SHARE

Basic earnings per share

Diluted earnings per share

WEIGHTED AVERAGE SHARES OUTSTANDING

Basic and diluted

QUOTEMEDIA, INC.

4 unchanged sentences

Total Stockholders’

Three-months ended June 30, 2022:

Three-months ended September 30, 2022:

Number of Shares

Accumulated Deficit

Balance, March 31, 2022

Balance, June 30, 2022

$ ( 20,680,935 )

1 unchanged sentence

Stock-based compensation

Balance, June 30, 2022

Balance, September 30, 2022

$ ( 20,371,392 )

3 unchanged sentences

Total Stockholders’

Three-months ended June 30, 2021:

Three-months ended September 30, 2021:

Number of Shares

Accumulated Deficit

Balance, March 31, 2021

Balance, June 30, 2021

$ ( 20,935,806 )

1 unchanged sentence

Stock-based compensation

Balance, June 30, 2021

Balance, September 30, 2021

$ ( 20,780,875 )

6 unchanged sentences

Total Stockholders’

Six-months ended June 30, 2022:

Nine-months ended September 30, 2022:

Number of Shares

4 unchanged sentences

Stock-based compensation

Balance, June 30, 2022

Balance, September 30, 2022

$ ( 20,371,392 )

3 unchanged sentences

Total Stockholders’

Six-months ended June 30, 2021:

Nine-months ended September 30, 2021:

Number of Shares

4 unchanged sentences

Stock-based compensation

Balance, June 30, 2021

Balance, September 30, 2021

$ ( 20,780,875 )

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six-months ended June 30,

Nine-months ended September 30,

OPERATING ACTIVITIES:

22 unchanged sentences

Net cash used in financing activities

Net increase in cash

Net increase (decrease) in cash

Cash and equivalents, beginning of period

7 unchanged sentences

Operating results for any quarter are not necessarily indicative of the results for any other quarter or for a full year.

In connection with the preparation of the condensed consolidated financial statements, the Company evaluated subsequent events after the balance sheet date of June 30, 2022 through the filing of this report.

As of June 30, 2022, the Company has a working capital deficit of $ 2,324,203 .

In connection with the preparation of the condensed consolidated financial statements, the Company evaluated subsequent events after the balance sheet date of September 30, 2022 through the filing of this report.

As of September 30, 2022, the Company has a working capital deficit of $ 2,337,632 .

Our current liabilities include deferred revenue of $ 1,088,109 and a $ 218,000 nonrefundable customer deposit.

28 unchanged sentences

If the financial condition of our customers were to deteriorate, adversely affecting their ability to make payments, additional allowances would be required.

The allowance for doubtful accounts was $ 150,000 as of June 30, 2022 and December 31, 2021.

Bad debt expense was $ 30,633 and $ 58,502 for the three ended June 30, 2022 and 2021, respectively.

Bad debt expense was $ 36,191 and $ 78,324 for the six-months ended June 30, 2022 and 2021, respectively.

The allowance for doubtful accounts was $ 150,000 as of September 30, 2022 and December 31, 2021.

Bad debt expenses were $ 19,745 and $ 9,866 for the three ended September 30, 2022 and 2021, respectively.

Bad debt expenses were $ 55,936 and $ 88,210 for the nine-months ended September 30, 2022 and 2021, respectively.

QUOTEMEDIA, INC.

15 unchanged sentences

Recently Adopted

There are no new recently adopted accounting pronouncements for the three-months ended June 30, 2022.

There are no new recently adopted accounting pronouncements for the three-month period ended September 30, 2022.

Not Yet Adopted

18 unchanged sentences

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, March 31, 2021, and June 30, 2021.

QUOTEMEDIA, INC.

3 unchanged sentences

Our revenue by type of service consists of the following:

Three-months ended June 30,

Six-months ended June 30,

Three-months ended September 30,

Nine-months ended September 30,

Portfolio Management Systems

9 unchanged sentences

Effects of foreign currency translation

Balance at June 30, 2022

Balance at September 30, 2022

Practical Expedients

4 unchanged sentences

Shworan is a control person of 410734 B.C.

At June 30, 2022 and December 31, 2021, there were no amounts due to 410734 B.C.

At September 30, 2022 and December 31, 2021, there were no amounts due to 410734 B.C.

The Company entered into a marketing agreement with Bravenet Web Services, Inc.

1 unchanged sentence

Shworan is a control person of Bravenet.

At June 30, 2022 and December 31, 2021, there was $ 5,000 and $ 11,970 , respectively, due to Bravenet related to this agreement.

At September 30, 2022 and December 31, 2021, there was $ 7,500 and $ 11,970 , respectively, due to Bravenet related to this agreement.

As a matter of policy all related party transactions are subject to review and approval by the Company’s Board of Directors.

13 unchanged sentences

Supplemental balance sheet information related to leases was as follows:

September 30,

Operating Leases

8 unchanged sentences

Current portion of finance lease liability

Long-term portion of finance lease liability

Total finance lease liability

September 30,

Weighted Average Remaining Lease Term

6 unchanged sentences

Year ending December 31,

2022 (excluding the six-months ended June 30, 2022)

2022 (excluding the nine-months ended September 30, 2022)

2026 and thereafter

Total lease payments

Less imputed interest

The components of lease expense for the three and six-months ended June 30, 2022 and 2021 were as follows:

Three-months ended June 30,

Six-months ended June 30,

The components of lease expense for the three and nine-months ended September 30, 2022 and 2021 were as follows:

Three-months ended September 30,

Nine-months ended September 30,

Operating lease costs:

6 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Supplemental cash flow information for the six-months ended June 30, 2022 and 2021 related to leases was as follows:

Supplemental cash flow information for the nine-months ended September 30, 2022 and 2021 related to leases was as follows:

Cash paid for amounts included in the measurement of lease liabilities:

8 unchanged sentences

A total of 550,000 shares of the Company’s Preferred Stock are designated as “Series A Redeemable Convertible Preferred Stock.” The Series A Redeemable Convertible Preferred Stock has no dividend or voting rights.

At June 30, 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 three and six-months ended June 30, 2022 and 2021.

At September 30, 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 three and nine-months ended September 30, 2022 and 2021.

Redemption Rights

5 unchanged sentences

b) Common stock

No shares of common stock were issued during the three and six-months ended June 30, 2022 and 2021.

No shares of common stock were issued during the three and nine-months ended September 30, 2022 and 2021.

c) Stock Options and Warrants

3 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Total stock-based compensation expense, related to all of the Company’s stock-based awards, recognized for the three and six-months ended June 30, 2022 and 2021 was comprised as follows:

Three-months ended June 30,

Six-months ended June 30,

Total stock-based compensation expense, related to all of the Company’s stock-based awards, recognized for the three and nine-months ended September 30, 2022 and 2021 was comprised as follows:

Three-months ended September 30,

Nine-months ended September 30,

Sales and marketing

2 unchanged sentences

Common Stock Options and Warrants

There were 25,772,803 common stock warrants and options outstanding at June 30, 2022 at a weighted-average grant date exercise price of $ 0.06 .

No stock options or warrants to purchase common stock were granted or exercised during the six-months ended June 30, 2022 and 2021.

In the comparative six-month ended period ending June 30, 2021, 600,000 stock options were forfeited.

The following table summarizes our non-vested common stock option and warrant activity for the six-months ended June 30, 2022:

There were 25,772,803 common stock warrants and options outstanding at September 30, 2022 at a weighted-average grant date exercise price of $ 0.06 .

No stock options or warrants to purchase common stock were granted or exercised during the nine-months ended September 30, 2022 and 2021.

In the comparative nine-month period ending September 30, 2021, 600,000 stock options were forfeited.

The following table summarizes our non-vested common stock option and warrant activity for the nine-months ended September 30, 2022:

QUOTEMEDIA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Common Stock Options

2 unchanged sentences

Vested during the period

Non-vested at June 30, 2022

The following table summarizes the weighted average remaining contractual life and exercise price of common stock options and warrants outstanding at June 30, 2022:

Non-vested at September 30, 2022

The following table summarizes the weighted average remaining contractual life and exercise price of common stock options and warrants outstanding at September 30, 2022:

Common Stock Options and Warrants Outstanding

1 unchanged sentence

and Warrants Exercisable

At June 30, 2022, there was $ 7,035 of unrecognized compensation cost related to non-vested options and warrants granted to purchase common stock which is expected to be recognized over a weighted-average period of 0.5 years.

At September 30, 2022, there was $ 2,796 of unrecognized compensation cost related to non-vested options and warrants granted to purchase common stock which is expected to be recognized over a weighted-average period of 0.2 years.

All stock options and warrants to purchase common stock have been granted with exercise prices equal to or greater than the market value of the underlying common shares on the date of grant.

At June 30, 2022, the aggregate intrinsic value of options and warrants outstanding was $ 3,921,022 .

At September 30, 2022, the aggregate intrinsic value of options and warrants outstanding was $ 3,147,838 .

The aggregate intrinsic value of options and warrants exercisable was $ 3,027,838 .

10 unchanged sentences

The probability of the liquidity event performance condition is not currently determinable or probable;

therefore, no compensation expense has been recognized as of June 30, 2022.

therefore, no compensation expense has been recognized as of September 30, 2022.

The probability is re-evaluated each reporting period.

As of June 30, 2022, there was $ 7,185,430 in unrecognized stock-based compensation expense related to these Liquidity Preferred Stock Warrants.

As of September 30, 2022, there was $ 7,185,430 in unrecognized stock-based compensation expense related to these Liquidity Preferred Stock Warrants.

Since the Liquidity Preferred Stock Warrants only vest and become exercisable on the consummation of a Liquidity Event which is currently determined not to be probable, we are also unable to determine the weighted-average period over which the unrecognized compensation cost will be recognized.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of June 30, 2022, there were a total of 413,493 preferred stock warrants outstanding with a weighted average remaining contractual life of 25.5 years.

As of June 30, 2022, 31,250 preferred stock warrants were exercisable.

No preferred stock warrants were granted or exercised for the three and six-months ended June 30, 2022 and 2021.

As of September 30, 2022, there were a total of 413,493 preferred stock warrants outstanding with a weighted average remaining contractual life of 25.3 years.

As of September 30, 2022, 31,250 preferred stock warrants were exercisable.

No preferred stock warrants were granted or exercised for the three and nine-months ended September 30, 2022 and 2021.

Fair Value Measurement of Compensation Preferred Stock Warrants

12 unchanged sentences

The estimated fair value of the Preferred Stock Warrant liability is determined using Level 3 inputs.

As of June 30, 2022 and December 31, 2021, the fair value of the Preferred Stock Warrant Liability was $ 587,440 and $ 513,750 , respectively.

As of September 30, 2022 and December 31, 2021, the fair value of the Preferred Stock Warrant Liability was $ 500,313 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.

3 unchanged sentences

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 June 30, 2022 and December 31, 2021:

The key inputs for the framework were as follows as of September 30, 2022 and December 31, 2021:

Valuation Inputs

June 30, 2022

September 30, 2022

December 31, 2021

Expected Time to Expiration

Expected Time to Expiration (years)

Stock Price on Valuation Date

5-Year Peer Volatility

Peer Volatility

Cash Flow Discount Rate

The following table sets forth a summary of the changes in the fair value of the Level 3 Preferred Stock Warrant Liability for the three and six-months ended June 30, 2022:

QUOTEMEDIA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table sets forth a summary of the changes in the fair value of the Level 3 Preferred Stock Warrant Liability for the three and nine-months ended September 30, 2022:

Preferred Stock Warrant Liability

1 unchanged sentence

Change in fair value

Fair value as of March 31, 2022

Change in fair value

Fair value as of June 30, 2022

Change in fair value

Fair value as of September 30, 2022

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.

The changes in fair value for the Preferred Stock Warrant Liability in the comparative three and six-months periods ended June 30, 2021 were insignificant.

LOSS PER SHARE

The changes in fair value for the Preferred Stock Warrant Liability in the comparative three and nine-months periods ended September 30, 2021 were insignificant.

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.

4 unchanged sentences

Therefore, in periods when a loss is reported, the calculation of basic and dilutive loss per share results in the same value.

The calculations for basic and diluted net income per share for the three and six-months ended June 30, 2022 and 2021 are as follows:

QUOTEMEDIA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three-months ended June 30,

Six-months ended June 30,

Weighted average common shares used to calculate net income per share

Warrants to purchase redeemable convertible preferred stock

Redeemable convertible preferred stock

Stock options and warrants to purchase common stock

Weighted average common shares used to calculate diluted net income per share

Net loss per share – basic and diluted

The number of shares of potentially dilutive common stock related to options, warrants and redeemable convertible preferred stock that were excluded from the calculation of dilutive shares since the inclusion of such shares would be anti-dilutive for the three and six-month periods ended June 30, 2022 and 2021 are shown below:

Three-months ended June 30,

Six-months ended June 30,

The calculations for basic and diluted net income per share for the three and nine-months ended September 30, 2022 and 2021 are as follows:

Three-months ended September 30,

Nine-months ended September 30,

Weighted average shares outstanding - basic and diluted

Stock options and warrants to purchase common stock

1 unchanged sentence

Redeemable convertible preferred stock

Total potential common shares excluded

Weighted average shares outstanding - basic and diluted

Net income per share – basic

Net income per share – diluted

PAYCHECK PROTECTION PROGRAM

3 unchanged sentences

The PPP loan was forgiven in its entirety on February 19, 2021.

In accordance with ASC 470, Debt, the forgiveness of the loan was recognized as other income on our consolidated statements of operations in the comparative six-months ended June 30, 2021 period.

In accordance with ASC 470, Debt, the forgiveness of the loan was recognized as other income on our consolidated statements of operations in the comparative nine-months ended September 30, 2021 period.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements