What changed in this filing

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Item 1. Financial Statements

2024-11-14 compared with 2024-08-14 · 104 added, 94 removed, 360 unchanged (35% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

Current assets:

21 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, 2024 and December 31, 2023 (see note 6)

123,685 at September 30, 2024 and December 31, 2023 (see note 6)

Stockholders’ equity:

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, 2024 and December 31, 2023 (see note 6)

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

90,477,798 at June 30, 2024 and December 31, 2023

123,685 at September 30, 2024 and December 31, 2023 (see note 6)

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

90,477,798 at September 30, 2024 and December 31, 2023

Additional paid-in capital

7 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,

REVENUE (see note 3)

20 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

Series A Redeemable Convertible

Series A Redeemable

Preferred Stock

Three-months ended June 30, 2024:

Accumulated Deficit

Total Stockholders’ Equity (Deficit)

Balance, March 31, 2024

$ ( 19,889,018 )

$ ( 888,057 )

Reclassification of preferred stock warrants

Reclassification of series A redeemable convertible preferred stock

Stock-based compensation

Stockholders’

Three-months ended September 30, 2024:

Balance, June 30, 2024

$ ( 20,140,191 )

Series A Redeemable Convertible

Balance, September 30, 2024

$ ( 20,581,132 )

Series A Redeemable

Preferred Stock

Six-months ended June 30, 2024:

Accumulated Deficit

Total Stockholders’ Equity (Deficit)

Total Stockholders’

Nine-months ended September 30, 2024:

Paid-in Capital

Balance, December 31, 2023

4 unchanged sentences

Stock-based compensation

Balance, June 30, 2024

Balance, September 30, 2024

$ ( 20,581,132 )

3 unchanged sentences

PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT

Series A Redeemable Convertible

Series A Redeemable

Preferred Stock

Three-months ended June 30, 2023:

Accumulated Deficit

Total Stockholders’ Deficit

Balance, March 31, 2023

Three-months ended September 30, 2023:

Stockholders’

Balance, June 30, 2023

$ ( 20,036,100 )

$ ( 1,042,349 )

Balance, June 30, 2023

Balance, September 30, 2023

$ ( 19,910,064 )

$ ( 916,313 )

Series A Redeemable Convertible

Series A Redeemable

Preferred Stock

Six-months ended June 30, 2023:

Accumulated Deficit

Total Stockholders’ Deficit

Nine-months ended September 30, 2023:

Stockholders’

Balance, December 31, 2022

1 unchanged sentence

$ ( 1,228,675 )

Balance, June 30, 2023

Balance, September 30, 2023

$ ( 19,910,064 )

3 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six-months ended June 30,

Nine-months ended September 30,

OPERATING ACTIVITIES:

32 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 June 30, 2024 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 September 30, 2024 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, 2023 contained in the Form 10-K filed with the Securities and Exchange Commission dated April 8, 2024.

19 unchanged sentences

The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of the Company’s customers to make required payments.

The Company believes that the historical loss information it has compiled is a reasonable base on which to determine expected credit losses for trade receivables held at June 30, 2024, because the composition of the trade receivables at that date is consistent with that used in developing the historical credit-loss percentages (i.e., the similar risk characteristics of its customers and its credit practices have not changed significantly over time).

The allowance for doubtful accounts was $ 350,000 and $ 225,000 as of June 30, 2024 and December 31, 2023, respectively.

Bad debt expenses were $127,650 and $ 25,852 for the three-months ended June 30, 2024 and 2023, respectively.

Bad debt expenses (recovery) were $ 140,979 and ($ 38,241 ) for the six-months ended June 30, 2024 and 2023, respectively.

The Company believes that the historical loss information it has compiled is a reasonable base on which to determine expected credit losses for trade receivables held at September 30, 2024, because the composition of the trade receivables at that date is consistent with that used in developing the historical credit-loss percentages (i.e., the similar risk characteristics of its customers and its credit practices have not changed significantly over time).

The allowance for doubtful accounts was $ 525,000 and $ 225,000 as of September 30, 2024 and December 31, 2023, respectively.

Bad debt expenses were $ 182,171 and $ 155,980 for the three-months ended September 30, 2024 and 2023, respectively.

Bad debt expenses were $ 323,150 and $ 117,739 for the nine-months ended September 30, 2024 and 2023, respectively.

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

31 unchanged sentences

If these factors do not indicate collection is reasonably assured, revenue is not recognized until collection becomes reasonably assured, which is generally upon receipt of cash.

QUOTEMEDIA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Cost of revenue

9 unchanged sentences

The Company does not expect that the adoption of ASU 2023-07 will have a significant impact on the Company’s consolidated financial statements.

QUOTEMEDIA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In December 2023, the FASB issued ASU No.

9 unchanged sentences

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

3 unchanged sentences

Total revenue

QUOTEMEDIA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Deferred Revenue

Changes in deferred revenue were as follows for the periods ending June 30,

Changes in deferred revenue were as follows for the periods ending September 30,

Beginning balance at Jan 1,

14 unchanged sentences

There were no amounts due to 410734 B.C.

at June 30, 2024 and December 31, 2023.

at September 30, 2024 and December 31, 2023.

The Company pays a monthly marketing service fee of $ 3,000 to Bravenet Web Services, Inc.

(“Bravenet”).

At June 30, 2024 and December 31, 2023, there was $ 15,000 and $ 12,500 due to Bravenet related to this agreement, respectively.

At September 30, 2024 and December 31, 2023, there was $ 19,425 and $ 12,500 due to Bravenet related to this agreement, respectively.

Shworan is a control person of Bravenet.

At June 30, 2024 and December 31, 2023, there were $ 185,498 and $ 68,988 in unreimbursed expenses owed to Keith Randall, CEO of Quotemedia, Inc., respectively.

At September 30, 2024 and December 31, 2023, there were $ 185,816 and $ 68,988 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.

QUOTEMEDIA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company has operating leases for corporate offices.

9 unchanged sentences

For certain leases the Company accounts for the lease and non-lease components as a single lease component.

QUOTEMEDIA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Supplemental balance sheet information related to leases was as follows:

September 30,

Operating Leases

3 unchanged sentences

Total operating lease liability

September 30,

Weighted Average Remaining Lease Term

3 unchanged sentences

Maturities of lease liabilities were as follows:

Year ending December 31,

2024 (excluding the six-months ended June 30, 2024)

2024 (excluding the nine-months ended September 30, 2024)

Total lease payments

Less imputed interest

QUOTEMEDIA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The components of lease expense for the three and six-months ended June 30, 2024 and 2023 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, 2024 and 2023 were as follows:

Three-months ended

September 30,

Nine-months ended

September 30,

Operating lease costs:

2 unchanged sentences

Total operating lease costs

Supplemental cash flow information for the six-months ended June 30, 2024 and 2023 related to leases was as follows:

QUOTEMEDIA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Supplemental cash flow information for the nine-months ended September 30, 2024 and 2023 related to leases was as follows:

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

Operating cash flows from operating leases

There was no additional right of use assets obtained in exchange for lease obligations for the six-months ended June 30, 2024 and 2023.

There was no additional right of use assets obtained in exchange for lease obligations for the nine-months ended September 30, 2024 and 2023.

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 June 30, 2024 and December 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 and six-months ended June 30, 2024 and 2023.

At September 30, 2024 and December 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 and nine-months ended September 30, 2024 and 2023.

Redemption Rights

9 unchanged sentences

b) Common stock

No shares of common stock were issued during the three and six-months ended June 30, 2024 and 2023.

No shares of common stock were issued during the three and nine-months ended September 30, 2024 and 2023.

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, 2024 and 2023 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, 2024 and 2023 was comprised as follows:

Three-months ended

September 30,

Nine-months ended

September 30,

Sales and marketing

1 unchanged sentence

Common Stock Options and Warrants

The following table summarizes the Company’s common stock option and warrant activity for the six-months ended June 30, 2024:

Common Stock Options

Weighted-Average Grant Date Exercise Price

The following table summarizes the Company’s common stock option and warrant activity for the nine-months ended September 30, 2024:

Average Grant

Date Exercise

Outstanding at December 31, 2023

1 unchanged sentence

Forfeited during the period

Outstanding at June 30, 2024

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, 2024:

$ 0.03 - 0.11

At June 30, 2024, there was no unrecognized compensation cost related to non-vested options and warrants granted to purchase common stock.

Outstanding at September 30, 2024

The following table summarizes the weighted average remaining contractual life and exercise price of common stock options and warrants outstanding and exercisable at September 30, 2024:

At September 30, 2024, there was no unrecognized compensation cost related to non-vested options and warrants granted to purchase common stock.

Management calculates the fair value of stock options and warrants granted to purchase common stock under the provisions of FASB ASC 718 using the Black-Scholes valuation model with the following assumptions:

Three-months ended June 30,

Six-months ended June 30,

Three-months ended

September 30,

Nine-months ended

S eptember 30,

Expected dividend yield

4 unchanged sentences

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, 2024, the aggregate intrinsic value of options and warrants outstanding and exercisable was $ 3,147,838 .

At September 30, 2024, the aggregate intrinsic value of options and warrants outstanding and exercisable was $ 3,921,022 .

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.

11 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, 2024.

therefore, no compensation expense has been recognized as of September 30, 2024.

The probability is re-evaluated each reporting period.

As of June 30, 2024, there was $ 7,480,496 in unrecognized stock-based compensation expense related to these liquidity preferred stock warrants.

As of September 30, 2024, there was $ 7,480,496 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 June 30, 2024, there were a total of 413,493 preferred stock warrants outstanding with a weighted average remaining contractual life of 23.5 years.

As of June 30, 2024, 31,250 preferred stock warrants were exercisable.

No preferred stock warrants were granted or exercised for the six-months ended June 30, 2024 and 2023.

As of September 30, 2024, there were a total of 413,493 preferred stock warrants outstanding with a weighted average remaining contractual life of 23.3 years.

As of September 30, 2024, 31,250 preferred stock warrants were exercisable.

No preferred stock warrants were granted or exercised for the nine-months ended September 30, 2024 and 2023.

Reclassification of Preferred Stock Warrant Liability resulting from Amendment to Redemption Rights

25 unchanged sentences

Valuation Inputs

September 30,

December 31, 2023

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 and six-months ended June 30, 2024 and 2023:

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, 2024 and 2023:

Fair value as of December 31, 2023 and 2022, respectively

Change in fair value

Fair value as of March 31, 2024 and 2023, respectively

Change in fair value

Reclassification of preferred stock warrants on April 26, 2024

Fair value as of June 30, 2024 and 2023, respectively

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 three and six-months ended June 30, 2024 and 2023 statements of operations.

Change in fair value

Fair value as of September 30, 2024 and 2024, respectively

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 three and nine-months ended September 30, 2024 and 2023 statements of operations.

EARNINGS (LOSS) PER SHARE

5 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, 2024 and 2023 are as follows:

QUOTEMEDIA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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, 2024 and 2023 are as follows:

Three-months ended

September 30,

Nine-months ended

September 30,

Net income (loss)

8 unchanged sentences

Net income (loss) per share – diluted

The number of shares of potentially dilutive common stock related to options and warrants that were excluded from the calculation of dilutive shares since the inclusion of such shares would be anti-dilutive for the three and six-months ended June 30, 2024 and 2023 are shown below:

Three-months ended June 30,

Six-months ended June 30,

QUOTEMEDIA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The number of shares of potentially dilutive common stock related to options and warrants that were excluded from the calculation of dilutive shares since the inclusion of such shares would be anti-dilutive for the three and nine-months ended September 30, 2024 and 2023 are shown below:

Three-months ended

September 30,

Nine-months ended

September 30,

Warrants to purchase redeemable convertible preferred stock

3 unchanged sentences

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