What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-11-13 compared with 2023-08-14 · 45 added, 42 removed, 140 unchanged (38% 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 39% of our revenue and expenses are denominated in Canadian dollars.

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

The Canadian dollar depreciated 5% against the U.S.

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

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

This decreased both Canadian dollar revenues and expenses by approximately 2% once translated into U.S.

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

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.

Our revenue increased 10% for the nine-months ended September 30, 2023 versus the comparative 2022 period.

Based on revenue already under contract, we expect lower revenue growth but an improvement in net income for the remainder of fiscal 2023 and for 2024.

Plan of Operation

For the remainder of 2023 we plan to continue to expand our product lines and improve our infrastructure.

For the remainder of 2023 and for 2024 we plan to continue to expand our product lines and improve our infrastructure.

We plan to continue to add more features and data to our existing products and release newer versions with improved performance and flexibility for client integration.

20 unchanged sentences

Results of Operations

Three-months ended June 30,

Three-months ended September 30,

Corporate Quotestream

3 unchanged sentences

Total subscription revenue

Six-months ended June 30,

Nine-months ended September 30,

Corporate Quotestream

3 unchanged sentences

Total subscription revenue

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

Total licensing revenue increased 8% and 10% when comparing the three and nine-months ended September 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%.

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.

Corporate Quotestream revenue increased 4% and 7% for the three and nine-months ended September 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 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.

Individual Quotestream revenue decreased 11% and 12% for the three and nine-months ended September 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 18% for the three and nine-months ended September 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 June 30,

Three-months ended September 30,

Cost of revenue

Gross margin %

Six-months ended June 30,

Nine-months ended September 30,

Cost of revenue

3 unchanged sentences

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

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

Our cost of revenue increased 10% and 5% for the three and nine-months ended September 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 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.

For the three-months ended September 30, 2023, our cost of revenue was unchanged as a percentage of sales, as evidenced by our gross margin percentage that was 52% for the three-month ended September 30, 2023 and 2022.

For the nine-months ended September 30, 2023, our cost of revenue decreased as a percentage of sales, as evidenced by our gross margin percentage that increased to 51% from 49% in the comparative 2022 period.

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

Operating Expenses Summary

Three-months ended June 30,

Three-months ended September 30,

Sales and marketing

2 unchanged sentences

Total operating expenses

Six-months ended June 30,

Nine-months ended September 30,

Sales and marketing

4 unchanged sentences

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

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.

Sales and marketing expenses decreased 9% for the three-months ended September 30, 2023 due to a one-time bonus accrual made in the comparative 2022 period.

Sales and marketing expenses increased 4% for the nine-months ended September 30, 2023 when compared to the same period in 2022.

The increase is 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.

1 unchanged sentence

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

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.

General and administrative expenses increased 22% and 15% for the three and nine-months ended September 30, 2023 when compared to the same periods in 2022.

The increases for the three and nine-months ended September 30, 2023 are mainly a result of additional professional fees resulting from the change of principal accountants in January 2023 as well as an increase in bad debt expenses from the comparative periods in 2022.

Software Development

1 unchanged sentence

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

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.

Software development expenses increased 33% and 32% for the three and nine-months ended September 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.

We capitalized $812,428 and $2,387,774 of development costs for the three and nine-month periods ended September 30, 2023 compared to $735,169 and $2,022,885 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 Expenses

Three-months ended June 30,

Foreign exchange loss

Interest expense, net

Other Income (Expenses)

Three-months ended September 30,

Foreign exchange gain

Interest income, net

Total other expenses, net

Six-months ended June 30,

Nine-months ended September 30,

Foreign exchange loss

2 unchanged sentences

Foreign Exchange Gain

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.

We incurred foreign exchange gains of $21,803 and $102,327 for the three-months ended September 30, 2023 and 2022, respectively.

We incurred foreign exchange losses of $16,271 and $15,309 for the nine-months ended September 30, 2023 and 2022, respectively.

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 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.

Net interest income of $825 and $10 was earned for the three-months ended September 30, 2023 and 2022.

Net interest expenses of $1,031 and $1,721 were incurred for the nine-months ended September 30, 2023 and 2022..

Provision for Income Taxes

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.

For the three and nine-months ended September 30, 2023, the Company recorded $739 and $2,221 in Canadian income tax expense compared to $751 and $2,321 in the respective comparative periods in 2022.

Net Income for the Period

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

As a result of the foregoing, our net income for the three and nine-month ended September 30, 2023 was $126,036 and $312,362 compared to $309,543 and $295,504 in the respective comparative periods in 2022.

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

Liquidity and Capital Resources

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.

Our cash totaled $820,939 at September 30, 2023, as compared with $477,987 at December 31, 2022, an increase of $342,952.

Net cash of $2,801,975 was provided by operations for the nine-months ended September 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 and an increase in accounts receivable.

Net cash used in investing activities for the nine-months ended September 30, 2023 was $2,459,023, primarily due to capitalized application software costs and the purchases of fixed assets.

We typically operate with a working capital deficit.

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

As of September 30, 2023, our working capital deficit was $1,979,800, however current liabilities include $1,676,949 in deferred revenue.

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

9 unchanged sentences

Preferred Stock Redemption Rights

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.

At September 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 39% of our consolidated revenue and expenses are denominated in Canadian dollars.

Currently, approximately 38% of our consolidated revenue, and 39% of our consolidated 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 June 30, 2023 and December 31, 2022, we did not have any unconsolidated entities or financial partnerships, or other off-balance sheet arrangements.

At September 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