What changed in this filing

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Item 1. Financial Statements

2023-08-14 compared with 2023-05-12 · 120 added, 91 removed, 299 unchanged (41% of the section changed)

25 unchanged sentences

shares issued and outstanding:

123,685 at March 31, 2023 and December 31, 2022 (see note 7)

123,685 at June 30, 2023 and December 31, 2022 (see note 7)

Stockholders’ deficit:

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

90,477,798 at March 31, 2023 and December 31, 2022

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

90,477,798 at June 30, 2023 and December 31, 2022

Additional paid-in capital

6 unchanged sentences

Total liabilities, mezzanine equity and stockholders’ deficit

The accompanying notes are an integral part of these interim condensed financial statements.

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

QUOTEMEDIA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three-months ended

Three-months ended June 30,

Six-months ended June 30,

REVENUE (see note 4)

4 unchanged sentences

Software development

OPERATING INCOME

OTHER INCOME (EXPENSES), NET

Foreign exchange (loss) gain

OPERATING INCOME (LOSS)

OTHER EXPENSES

Foreign exchange loss

Interest expense

INCOME BEFORE INCOME TAXES

NET INCOME (LOSS) BEFORE INCOME TAXES

Income tax expense

NET INCOME (LOSS)

$ ( 163,080 )

EARNINGS PER SHARE (see note 8)

Basic earnings per share

Diluted earnings per share

Basic earnings (loss) per share

Diluted earnings (loss) per share

WEIGHTED AVERAGE SHARES OUTSTANDING (see note 8)

The accompanying notes are an integral part of these interim condensed financial statements.

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

QUOTEMEDIA, INC.

3 unchanged sentences

Preferred Stock

Three-months ended March 31, 2023:

Number of Shares

Three-months ended June 30, 2023:

Stockholders’

Equity (Deficit)

Balance, March 31, 2023

$ ( 20,109,136

$ ( 1,115,385

Balance, June 30, 2023

$ ( 20,036,100 )

$ ( 1,042,349 )

Series A Redeemable Convertible

Preferred Stock

Three-months ended June 30, 2022:

Stockholders’

Balance, March 31, 2022 (restated)

$ ( 20,517,855

$ ( 1,535,378

Stock-based compensation

Balance, June 30, 2022

$ ( 20,680,935 )

$ ( 1,694,219 )

Series A Redeemable Convertible

Preferred Stock

Six-months ended June 30, 2023:

Stockholders’

Balance, December 31, 2022

1 unchanged sentence

$ ( 1,228,675

Balance, March 31, 2023

Balance, June 30, 2023

$ ( 20,036,100 )

2 unchanged sentences

Preferred Stock

Three-months ended March 31, 2022:

Number of Shares

Stockholders’ Equity (Deficit)

Six-months ended June 30, 2022:

Stockholders’

Balance, December 31, 2021 (restated)

2 unchanged sentences

Stock-based compensation

Balance, March 31, 2022 (restated)

Balance, June 30, 2022

$ ( 20,680,935 )

$ ( 1,694,219 )

The accompanying notes are an integral part of these interim condensed financial statements.

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

QUOTEMEDIA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three-months ended

2022 (restated)

Six-months ended June 30,

OPERATING ACTIVITIES:

Net income (loss)

Adjustments to reconcile net income to net cash provided by operating activities:

11 unchanged sentences

Purchase of fixed assets

Purchase of intangible assets

Capitalized application software

( 1,575,346 )

( 1,287,716 )

Net cash used in investing activities

( 1,612,466 )

( 1,384,379 )

FINANCING ACTIVITIES:

4 unchanged sentences

Cash and equivalents, end of period

The accompanying notes are an integral part of these interim condensed financial statements.

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

QUOTEMEDIA, INC.

5 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, management evaluated subsequent events after the balance sheet date of March 31, 2023 through the filing of this report.

In connection with the preparation of the condensed consolidated financial statements, management evaluated subsequent events after the balance sheet date of June 30, 2023 through the filing of this report.

These consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto for the fiscal year ended December 31, 2022 contained in the Form 10-K filed with the Securities and Exchange Commission dated March 31, 2023.

22 unchanged sentences

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 $ 125,000 and $ 200,000 as of March 31, 2023 and December 31, 2022, respectively.

Bad debt expenses were ($ 64,093 ) and $ 5,558 for the three ended March 31, 2023 and 2022, respectively.

The allowance for doubtful accounts was $ 125,000 and $ 200,000 as of June 30, 2023 and December 31, 2022, respectively.

Bad debt expense was $ 25,852 and $ 30,633 for the three-months ended June 30, 2023 and 2022, respectively.

Bad debt expense (recovery) was ($ 38,241 ) and $ 36,191 for the six-months ended June 30, 2023 and 2022, respectively.

The Company generates substantially all of its revenue from subscriptions for access to its software products and related support.

31 unchanged sentences

f) Accounting Pronouncements

Recently Adopted

On January 1, 2023, the Company adopted Accounting Standards Update (“ASU”) 2016-13, Financial Instruments-Credit Losses (Topic 326) , which changes the impairment model for most financial assets, including accounts receivable, and replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses.

The adoption of ASU 2016-13 had no impact on the Company’s consolidated financial statements.

QUOTEMEDIA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Not Yet Adopted

6 unchanged sentences

The Company does not expect that the adoption of ASU 2020-06 will have a significant impact on the Company’s consolidated financial statements.

QUOTEMEDIA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

2 unchanged sentences

The Company concluded that its original classification of the Preferred Stock Warrants as equity was incorrect and that the Preferred Stock Warrants should have been classified as a liability in accordance with Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities From Equity , resulting in the following revisions in the Company’s comparative consolidated financial statements:

Statement of Operations for the three-months ended March 31, 2022:

Sales and marketing expenses were increased by $ 55,625 .

Net income decreased by $ 55,625 .

Statement of Cash Flows for the three-months ended March 31, 2022:

Net income decreased by $55,625.

Stock-based compensation expense – preferred stock warrants increased by $55,625.

Statement of Changes in Series A Redeemable Convertible Preferred Stock and Stockholders’ Deficit as of December 31, 2021:

1 unchanged sentence

Accumulated Deficit was reduced by $ 236,250 .

Statement of Changes in Series A Redeemable Convertible Preferred Stock and Stockholders’ Deficit as of March 31, 2022:

Additional Paid-in Capital was reduced by $ 750,000 .

Accumulated Deficit was reduced by $ 180,625 .

Disaggregated Revenue

1 unchanged sentence

Revenue by type of service consists of the following:

Three-months ended

Three-months ended June 30,

Six-months ended June 30,

Portfolio Management Systems

3 unchanged sentences

Total revenue

QUOTEMEDIA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Deferred Revenue

Changes in deferred revenue for the period were as follows:

Balance at December 31, 2022

Changes in deferred revenue for the six-months ended June 30, 2023 and 2022 were as follows:

June 30, 2023

June 30, 2022

Deferred revenue at beginning of period

Revenue recognized in the current period from the amounts in the beginning balance

1 unchanged sentence

Effects of foreign currency translation

Balance at March 31, 2023

Deferred revenue at end of period

Current portion of deferred revenue

2 unchanged sentences

Practical Expedients

As permitted under ASU 2014-09 (and related ASUs), unsatisfied performance obligations are not disclosed, as the original expected duration of substantially of the Company’s contracts is one year or less.

We apply a practical expedient and do not disclose the value of the remaining performance obligations for contracts that are less than one year in duration, which represent a substantial majority of our revenue.

QUOTEMEDIA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

RELATED PARTIES

2 unchanged sentences

Shworan, CEO of Quotemedia Ltd., is a control person of 410734 B.C.

At March 31, 2023, there were no amounts due to 410734 B.C.

At June 30, 2023, there were no amounts due to 410734 B.C.

At December 31, 2022, there was $ 13,343 due to 410734 B.C.

2 unchanged sentences

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.

At March 31, 2023 and 2022, there was $ 7,500 and $ 12,500 due to Bravenet related to this agreement, respectively.

At June 30, 2023 and December 31, 2022, there was $ 5,000 and $ 12,500 due to Bravenet related to this agreement, respectively.

Shworan is a control person of Bravenet.

At March 31, 2023 and December 31, 2022, there were $ 134,102 and $ 70,100 in unreimbursed expenses owed to Keith Randall, CEO of Quotemedia, Inc., respectively.

At June 30, 2023 and December 31, 2022, there were $ 220,517 and $ 70,100 in unreimbursed expenses owed to Keith Randall, CEO of Quotemedia, Inc., respectively.

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

16 unchanged sentences

Total operating lease liability

QUOTEMEDIA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Weighted Average Remaining Lease Term

4 unchanged sentences

Year ending December 31 ,

2023 (excluding the three-months ended March 31, 2023)

2023 (excluding the six-months ended June 30, 2023)

2026 and thereafter

1 unchanged sentence

Less imputed interest

The components of lease expense for the three-months ended March 31, 2023 and 2022 were as follows:

Three-months ended

QUOTEMEDIA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The components of lease expense for the three and six-months ended June 30, 2023 and 2022 were as follows:

Three-months ended June 30,

Six-months ended June 30,

Operating lease costs:

4 unchanged sentences

Total finance lease costs

Supplemental cash flow information for the three-months ended March 31, 2023 and 2022 related to leases was as follows:

Supplemental cash flow information for the six-months ended June 30, 2023 and 2022 related to leases was as follows:

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

2 unchanged sentences

Financing cash flows from finance leases

There was no additional right of use assets obtained in exchange for lease obligations for the three-months ended March 31, 2023 and 2022.

There was no additional right of use assets obtained in exchange for lease obligations for the six-months ended June 30, 2023 and 2022.

REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT

2 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 March 31, 2023, 123,685 shares of Series A Redeemable Convertible Preferred Stock were outstanding.

No shares of Series A Redeemable Convertible Preferred Stock were issued or redeemed during the three-months ended March 31, 2023 and 2022.

QUOTEMEDIA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

At June 30, 2023, 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, 2023 and 2022.

Redemption Rights

4 unchanged sentences

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.

QUOTEMEDIA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

b) Common stock

No shares of common stock were issued during the three-months ended March 31, 2023 and 2022.

No shares of common stock were issued during the three and six-months ended June 30, 2023 and 2022.

c) Stock Options and Warrants

1 unchanged sentence

The impact of forfeitures that may occur prior to vesting is also estimated and considered in the amount recognized.

Total stock-based compensation expense, related to all of the Company’s stock-based awards, recognized for the three-months ended March 31, 2023 and 2022 was comprised as follows:

Three-months ended

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, 2023 and 2022 was comprised as follows:

Three-months ended June 30,

Six-months ended June 30,

Sales and marketing

General and administrative

Total stock-based compensation expense

Common Stock Options and Warrants

There were 25,772,803 fully vested common stock warrants and options outstanding at March 31, 2023 and December 31, 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 three-months ended March 31, 2023 and 2022.

The following table summarizes the weighted average remaining contractual life and exercise price of common stock options and warrants outstanding and exercisable at March 31, 2023:

At March 31, 2023, there was no unrecognized compensation cost related to non-vested options and warrants granted to purchase common stock.

QUOTEMEDIA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

There were 25,772,803 fully vested common stock warrants and options outstanding at June 30, 2023 and December 31, 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 three and six-months ended June 30, 2023 and 2022.

The following table summarizes the weighted average remaining contractual life and exercise price of common stock options and warrants outstanding and exercisable at June 30, 2023:

At June 30, 2023, there was no unrecognized compensation cost related to non-vested options and warrants granted to purchase common stock.

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 March 31, 2023, the aggregate intrinsic value of options and warrants outstanding and exercisable was $ 5,725,118 .

At June 30, 2023, the aggregate intrinsic value of options and warrants outstanding and exercisable was $ 6,240,574 .

The intrinsic value of stock options and warrants are calculated as the amount by which the market price of the Company’s common stock exceeds the exercise price of the option or warrant.

9 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 March 31, 2023.

therefore, no compensation expense has been recognized as of June 30, 2023.

The probability is re-evaluated each reporting period.

As of March 31, 2023, there was $ 7,185,430 in unrecognized stock-based compensation expense related to these Liquidity Preferred Stock Warrants.

As of June 30, 2023, 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, management is also unable to determine the weighted-average period over which the unrecognized compensation cost will be recognized.

As of March 31, 2023, there were a total of 413,493 preferred stock warrants outstanding with a weighted average remaining contractual life of 24.8 years.

As of March 31, 2023, 31,250 preferred stock warrants were exercisable.

No preferred stock warrants were granted or exercised for the three-months ended March 31, 2023 and 2022.

QUOTEMEDIA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of June 30, 2023, there were a total of 413,493 preferred stock warrants outstanding with a weighted average remaining contractual life of 24.5 years.

As of June 30, 2023, 31,250 preferred stock warrants were exercisable.

No preferred stock warrants were granted or exercised for the three and six-months ended June 30, 2023 and 2022.

Fair Value Measurement of Compensation Preferred Stock Warrants

11 unchanged sentences

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.

QUOTEMEDIA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

As of March 31, 2023 and December 31, 2022, the fair value of the Preferred Stock Warrant Liability was $ 707,125 and $ 629,375 , respectively.

As of June 30, 2023 and December 31, 2022, the fair value of the Preferred Stock Warrant Liability was $ 767,188 and $ 629,375 , 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 March 31, 2023 and December 31, 2022:

The key inputs for the framework were as follows as of June 30, 2023 and December 31, 2022:

Valuation Inputs

June 30, 2023

December 31, 2022

Expected Time to Expiration (years)

2 unchanged sentences

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-months ended March 31, 2023:

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 six-months ended June 30, 2023:

Preferred Stock Warrant Liability

2 unchanged sentences

Fair value as of March 31, 2023

Change in fair value

Fair value as of June 30, 2023

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.

6 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-months ended March 31, 2023 and 2022 are as follows:

Three-months ended

Weighted average common shares used to calculate net income per share

Warrants to purchase redeemable convertible preferred stock

The calculations for basic and diluted net income per share for the three and six-months ended June 30, 2023 and 2022 are as follows:

Three-months ended June 30,

Six-months ended June 30,

Net income (loss)

$ ( 163,080 )

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 income per share – basic

Net income per share – diluted

Stock options and warrants to purchase

Weighted average common shares used to

calculate diluted net income per share

Net income (loss) per share – basic

Net income (loss) per share – diluted

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