What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2023-08-14 compared with 2023-05-12 · 60 added, 42 removed, 122 unchanged (46% of the section changed)

42 unchanged sentences

While we do not have any operations or customers in the Ukraine or Russia, we will continue to monitor the situation as a prolonged conflict could impact our business.

Approximately 38% of our revenue and 39% of our expenses are denominated in Canadian dollars.

Approximately 39% of our revenue and expenses are denominated in Canadian dollars.

The Canadian dollar depreciated 6% against the U.S.

dollar when comparing the average exchange rate for the three-months ended March 31,2023 versus the comparative 2022 period.

dollar when comparing the average exchange rate for the six-months ended June 30,2023 versus the comparative 2022 period.

This decreased both Canadian dollar revenues and expenses by approximately 2.5% once translated into U.S.

dollars but had a minimal impact on our net income and cash flow.

Our revenue increased 11% for the three-months ended March 31, 2023 versus the comparative 2022 period.

Based on revenue already under contract, we expect our revenue growth and net income to improve for the remainder of fiscal 2023.

Our revenue increased 11% for the six-months ended June 30, 2023 versus the comparative 2022 period.

Based on revenue already under contract, we expect similar revenue growth and an improvement to net income for the remainder of fiscal 2023.

Plan of Operation

22 unchanged sentences

Results of Operations

Three-months ended March 31,

Three-months ended June 30,

Corporate Quotestream

3 unchanged sentences

Total subscription revenue

Total licensing revenue increased 11% when comparing the three-months ended March 31, 2023 and 2022.

The increase is a result of a 2% increase in revenue from licensing our Portfolio Management Systems and 22% increase in revenue from our Interactive Content and Data APIs.

The depreciation of the Canadian dollar since the comparative period, discussed above in the “Business Environment and Trends” section, significantly impacted our revenue across all product lines, reducing our total revenue by 3%.

Corporate Quotestream revenue increased 6% for the three-months ended March 31, 2023 from the comparative period in 2022 due to an increase in both the number of customers and average revenue per customer since the comparative period.

Six-months ended June 30,

Corporate Quotestream

Individual Quotestream

Total Portfolio Management Systems

Interactive Content and Data APIs

Total subscription revenue

Total licensing revenue increased 10% and 11% when comparing the three and six-months ended June 30, 2023 and 2022.

The depreciation of the Canadian dollar since the comparative periods, discussed above in the “Business Environment and Trends” section, significantly impacted our revenue across all product lines, reducing our total revenue by approximately 2.5%.

Corporate Quotestream revenue increased 9% and 8% for the three and six-months ended June 30, 2023 from the comparative periods in 2022 due to an increase in both the number of customers and average revenue per customer since the comparative periods.

We have added new products over the past couple years that are continuing to gain traction in the market, and we have made improvements and upgrades to our existing Portfolio Management products as we continue to improve functionality and add new data offerings.

These improvements have allowed us to attract larger customers and increase the average revenue for our existing customers.

Individual Quotestream revenue decreased 12% for the three-months ended March 31, 2023 from the comparative period in 2022 due to both a decrease in total subscribers and average revenue per subscriber.

Interactive Content and Data APIs revenue increased 22% for the three-months ended March 31, 2023 from the comparative period in 2022.

The increase is attributable to an increase in the average revenue per client as the launch of new products and the expansion of our data coverage have allowed us to attract larger clients.

Individual Quotestream revenue decreased 12% for the three and six-months ended June 30, 2023 from the comparative periods in 2022 due to decreases in both total subscribers and average revenue per subscriber.

Interactive Content and Data APIs revenue increased 16% and 19% for the three and six-months ended June 30, 2023 from the comparative periods in 2022.

The increases are attributable to an increase in the average revenue per client as the launch of new products and the expansion of our data coverage have allowed us to attract larger clients.

Cost of Revenue and Gross Profit Summary

Three-months ended March 31,

Three-months ended June 30,

Cost of revenue

Gross margin %

Six-months ended June 30,

Cost of revenue

Gross margin %

Our cost of revenue consists of fixed and variable stock exchange fees and data feed provisioning costs.

1 unchanged sentence

We capitalize the costs associated with developing new products during the application development stage.

Our cost of revenue increased 4% for the three-months ended March 31, 2023 from the comparative period in 2022.

Our cost of revenue increased 3% for the three and six-months ended June 30, 2023 from the comparative periods in 2022.

This was mainly due to increased amortization expenses associated with internally developed application software resulting from our major growth initiative, which included investing in infrastructure, new product development, data collection, and the expansion of our global market coverage.

Overall, the cost of revenue decreased as a percentage of sales, as evidenced by our gross margin percentage that increased to 51% for the three-months ended March 31, 2023 from 47% in the comparative 2022 period.

New contracts signed since the comparative period have higher gross margins than our other customer contracts typically have on average, resulting in a significant increase in our gross margin percentage.

Overall, the cost of revenue decreased as a percentage of sales, as evidenced by our gross margin percentage that increased to 51% for the three and six-months ended June 30, 2023 from 47% in the comparative 2022 periods.

New contracts signed since the comparative periods have higher gross margins than our other customer contracts typically have on average, resulting in a significant increase in our gross margin percentage.

Operating Expenses Summary

Three-months ended March 31,

Three-months ended June 30,

Sales and marketing

2 unchanged sentences

Total operating expenses

Six-months ended June 30,

Sales and marketing

General and administrative

Software development

Total operating expenses

Sales and Marketing

Sales and marketing consist primarily of sales and customer service salaries, investor relations, travel and advertising expenses.

Sales and marketing expenses increased 10% for the three-months ended March 31, 2023 when compared to the same period in 2022.

The increase is a result of additional sales personnel hired since the comparative period to support our product growth initiatives and salary increases for existing personnel.

The increase was offset by the depreciation of the Canadian dollar from the comparative period as most of our sales personnel are located in Canada.

Sales and marketing expenses increased 11% for the three and six-months ended June 30, 2023 when compared to the same periods in 2022.

The increases are a result of additional sales personnel hired since the comparative periods to support our product growth initiatives and salary increases for existing personnel.

The increases were offset by the depreciation of the Canadian dollar from the comparative periods as most of our sales personnel are located in Canada.

General and Administrative

General and administrative expenses consist primarily of salaries expense, office rent, insurance premiums, and professional fees.

General and administrative expenses increased 27% for the three-months ended March 31, 2023 when compared to the same period in 2022.

The increase is mainly a result of additional professional fees resulting from the change of principal accountants in January 2023.

General and administrative expenses decreased 2% for the three-months ended June 30, 2023, and increased 11% for the six-months ended June 30, 2023 when compared to the same periods in 2022.

The increase for the six-months ended June 30, 2023 is mainly a result of additional professional fees incurred in the first quarter of 2023 resulting from the change of principal accountants in January 2023.

Software Development

1 unchanged sentence

Software development expenses also include costs incurred to maintain our software applications.

Software development expenses increased 34% for the three-months ended March 31, 2023 when compared to the same period in 2022, primarily due to new personnel hired since the comparative period to improve our infrastructure, security, and business continuity management.

The increase in development personnel costs was offset by the depreciation of the Canadian dollar from the comparative period as most of our development personnel are located in Canada.

We capitalized $766,515 of development costs for the three-month period ended March 31, 2023 compared to $606,152 in the same period in 2022.

Software development expenses increased 28% and 31% for the three and six-months ended June 30, 2023 when compared to the same periods in 2022, primarily due to new personnel hired since the comparative periods to improve our infrastructure, security, and business continuity management.

The increases in development personnel costs were offset by the depreciation of the Canadian dollar from the comparative periods as most of our development personnel are located in Canada.

We capitalized $808,832 and $1,575,346 of development costs for the three and six-month periods ended June 30, 2023 compared to $681,564 and $1,287,716 in the same periods in 2022.

These costs relate to the development of application software used by subscribers to access, manage, and analyze information in our databases.

Capitalized costs associated with application software are amortized over their estimated economic life of three years.

Other Income and (Expense) Summary

Three-months ended March 31,

Foreign exchange (loss) gain

Other Expenses

Three-months ended June 30,

Foreign exchange loss

Interest expense, net

Total other (expense) income, net

Total other expenses, net

Six-months ended June 30,

Foreign exchange loss

Interest expense, net

Total other expenses, net

Foreign Exchange Gain

We incurred a foreign exchange loss of $8,001 for the three-month period ended March 31, 2023, compared to a foreign exchange gain of $17,590 in the comparative 2022 period.

We incurred a foreign exchange losses of $30,073 and $38,074 for the three and six-months ended June 30, 2023, compared to a foreign exchange losses of $135,733 and $119,367 in the comparative 2022 periods.

Foreign exchange gains and losses arise from the re-measurement of Canadian dollar monetary assets and liabilities into U.S.

2 unchanged sentences

Interest expense is netted against interest earned on cash balances.

Net interest expense of $1,452 was incurred for the three-month period ended March 31, 2023, compared to $1,224 incurred in the same 2022 period.

Net interest expenses of $404 and $1,856 were incurred for the three and six-month ended June 30, 2023, compared to $507 and $1,731 incurred in the same 2022 periods.

Provision for Income Taxes

For the three-month period ended March 31, 2023, the Company recorded $730 in Canadian income tax expense compared to $790 in the comparative period in 2022.

For the three and six-months ended June 30, 2023, the Company recorded $752 and 1,482 in Canadian income tax expense compared to $780 and $1,570 in the comparative periods in 2022.

Net Income for the Period

As a result of the foregoing, our net income for the three-month period ended March 31, 2023 was $113,290 compared to $149,041 in the comparative period in 2022.

Basic and diluted earnings per share were $0.00 for the three-months periods ended March 31, 2023 and 2022, respectively.

As a result of the foregoing, our net income for the three and six-month ended June 30, 2023 was $73,036 and $186,326 compared to net losses of 163,080 and 14,039 in the comparative periods in 2022.

Basic and diluted earnings per share were $0.00 for the three and six-months periods ended June 30, 2023 and 2022.

Basic and diluted losses per share were $(0.00) for the three and six-months periods ended June 30, 2022

Liquidity and Capital Resources

Our cash totaled $675,065 at March 31, 2023, as compared with $477,987 at December 31, 2022, an increase of $197,078.

Net cash of $992,379 was provided by operations for the three-months ended March 31, 2023, primarily due to adjustments for non-cash charges and the increase in deferred revenue, offset by a decrease in accounts payable and accrued liabilities.

Net cash used in investing activities for the three-months ended March 31, 2023 was $795,301, primarily due to capitalized application software costs and the purchases of fixed assets.

Our cash totaled $740,100 at June 30, 2023, as compared with $477,987 at December 31, 2022, an increase of $262,113.

Net cash of $1,874,579 was provided by operations for the six-months ended June 30, 2023, primarily due to adjustments for non-cash charges and the increase in deferred revenue, offset by a decrease in accounts payable and accrued liabilities.

Net cash used in investing activities for the six-months ended June 30, 2023 was $1,612,466, primarily due to capitalized application software costs and the purchases of fixed assets.

We typically operate with a working capital deficit.

As of March 31, 2023, our working capital deficit was $1,806,768, however current liabilities include $1,095,103 in deferred revenue.

As of June 30, 2023, our working capital deficit was $1,929,103, however current liabilities include $1,530,329 in deferred revenue.

The expected costs necessary to realize the deferred revenue are minimal.

If circumstances dictate, we have the flexibility to reduce development spending to maintain a strong liquidity position.

Based on the factors discussed above, we believe that our cash on hand and cash generated from operations will be sufficient to fund our current operations for at least the next 12 months through April 2024.

However, implementing our business plan may require additional financing.

6 unchanged sentences

Preferred Stock Redemption Rights

At March 31, 2023, 123,685 shares of Series A Redeemable Convertible Preferred Stock were outstanding and 1,000 shares 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.

At June 30, 2023, 123,685 shares of Series A Redeemable Convertible Preferred Stock were outstanding and 1,000 shares 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.

See Financial Statement Note 7 a) “ Preferred shares ”.

Foreign Exchange Risk

Currently, approximately 38% of our consolidated revenue and 39% percent of our consolidated expenses are denominated in Canadian dollars.

Currently, approximately 39% of our consolidated revenue and expenses are denominated in Canadian dollars.

Since currently our Canadian dollar revenue and expenses are closely matched, our consolidated cashflows are not significantly impacted by foreign exchange fluctuations.

Off-Balance Sheet Arrangements

At March 31, 2023 and December 31, 2022, we did not have any unconsolidated entities or financial partnerships, or other off-balance sheet arrangements.

At June 30, 2023 and December 31, 2022, we did not have any unconsolidated entities or financial partnerships, or other off-balance sheet arrangements.

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 2. Management’s Discussion and Analysis