What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-15 compared with 2024-11-14 · 59 added, 64 removed, 109 unchanged (53% of the section changed)

25 unchanged sentences

For financial reporting purposes, Data Feed Services revenue is included in the Interactive Content and Data APIs revenue totals.

Our Portfolio Management Systems consist of Quotestream TM , Quotestream Mobile, Quotestream Professional, and our Web Portfolio Management systems.

Our Portfolio Management Systems consist of Quotestream, Quotestream Mobile, Quotestream Professional, and our Web Portfolio Management systems.

Quotestream Desktop is an Internet-based streaming online portfolio management system that delivers real-time and delayed market data to both consumer and corporate markets.

10 unchanged sentences

Business Environment and Trends

While our licensed-based revenue is generally more recurring in nature, the uncertainty caused by the recent market downturn and rising inflation may result in some clients to delay purchasing decisions, product and service implementations or cancel or reduce spending with us.

While our licensed-based revenue is generally recurring in nature, the uncertainty caused by the recent market downturn and rising inflation may result in some clients delaying purchasing decisions, product and service implementations or cancel or reduce spending with us.

New tariffs proposed by the U.S.

government could lead to a general slowdown in economic activity, which could negatively impact our business.

Events in Ukraine and Russia have continued to cause disruptions in the global financial markets.

While we do not have any operations or customers in 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.

The Canadian dollar remained relatively unchanged against the U.S.

dollar when comparing the average exchange rate for the nine-months ended September 30, 2024 versus the comparative 2023 period.

Because our Canadian dollar revenue and expenses are evenly matched, exchange rate fluctuations have minimal impact on our net income and cash flows.

Our revenue decreased 1% for the nine-months ended September 30, 2024 versus the comparative 2023 period.

Based on revenue already under contract, we expect to return to positive revenue growth in fiscal 2025.

Approximately 35% of our revenue and 38% of our expenses are denominated in Canadian dollars.

The Canadian dollar depreciated against the U.S.

dollar when comparing the average exchange rate for the three-months ended March 31, 2025 versus the comparative 2024 period.

This decreased both Canadian dollar revenues and expenses once translated into U.S.

dollars, but because our Canadian dollar revenue and expenses are evenly matched, the exchange rate fluctuation had minimal impact on our net income and cash flows.

Our revenue increased 3% this quarter versus the comparative period and on an FX-neutral basis our revenue growth was 5%.

The FX-neutral results are calculated by translating Canadian dollar denominated revenue into U.S.

dollars using the comparative period’s average exchange rate.

Based on revenue already under contract we expect our revenue growth to continue to improve for the remainder of fiscal 2025.

We reduced the number of development staff in late 2024 as some of our major development projects are near completion.

However, our development cost expense increased this quarter due to a higher percentage of development salaries being expensed rather than capitalized, as more development time was spent on system maintenance and other development activities that did not meet the criteria for capitalization.

While this had no impact on our cashflow, it had a negative impact on our earnings as we are expensing development costs in the current period related to past capitalized development.

We expect this trend to continue for the remainder of 2025.

Plan of Operation

1 unchanged sentence

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.

This expansion is expected to result in both increased revenue and costs for the remainder of fiscal 2024.

We plan to leverage artificial intelligence (AI) tools, where possible, to automate this process.

This expansion is expected to result in both increased revenue and costs for the fiscal year 2025.

We will maintain our focus on marketing Quotestream for deployments by brokerage firms to their retail clients and continue our expansion into the investment professional market with Quotestream Professional.

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QMod is a major component of this strategy, given the broad demand for mobile-ready, SEO-friendly Web content.

Important development projects for the remainder of 2024 include broad expansion of data and news coverage, including the addition of a wide array of international exchange data and news, video feeds, expansion of fixed-income coverage, and the introduction of several new and upgraded market information products.

Important development projects for 2025 include broad expansion of data and news coverage, including the addition of a wide array of international exchange data and news, video feeds, expansion of fixed-income coverage, and the introduction of several new and upgraded market information products.

New deployments of our trade integration capabilities, which allow our Quotestream applications to interact with our brokerage clients’ back-end trade execution and reporting platforms (enabling on-the-fly trade execution and tracking of holdings) are underway and will continue to be a priority for the remainder of 2025.

1 unchanged sentence

We are now aggregating data direct from the sources to produce data sets that are proprietary to QuoteMedia.

This allows us to offer our clients new data products and lower our product costs structure as we replace some of our existing data providers with our own lower cost data.

This allows us to offer our clients new data products and lower our product cost structure as we replace some of our existing data providers with our own lower cost data.

Opportunistically, efforts will be made to evaluate and pursue the development of additional new products that may eventually be commercialized by our company.

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Critical Accounting Policies and Estimates

In the 2024 Annual Report, we disclose our critical accounting policies and estimates upon which our consolidated financial statements are derived.

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Results of Operations

Three-months ended September 30,

Corporate Quotestream

Individual Quotestream

Total Portfolio Management Systems

Interactive Content and Data APIs

Total subscription revenue

Nine-months ended September 30,

Three-months ended March 31,

Corporate Quotestream

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Total subscription revenue

Total licensing revenue decreased 1% for the three and nine-month ended September 30, 2024 from the comparative 2023 periods.

Total Portfolio Management Systems revenue increased 0% and decreased 2% for the three and nine-months ended September 30, 2024 from the comparative 2023 periods.

Corporate Quotestream revenue was relatively unchanged from the comparative 2023 periods, increasing 1% for the three- months ended September 30, 2024 and decreasing 2% for the nine-months ended September 30, 2024.

Individual Quotestream revenue decreased 1% and 2% for the three and nine-months ended September 30, 2024 from the comparative 2023 periods in due to decreases in total subscribers, offset by increases in average revenue per subscriber.

Interactive Content and Data APIs revenue decreased 3% and 0% for the three and nine-months ended September 30, 2024 from the comparative periods in 2023.

The decreases were due to decreases in the number of customers, offset by increases in average revenue per customer.

The launch of new products and the expansion of our data coverage have allowed us to attract larger clients, increasing our average revenue per customer.

Total licensing revenue increased 3% for the three-months ended March 31, 2025 from the comparative 2024 period.

On an FX-neutral basis our revenue growth was 5% as the Canadian dollar depreciated versus the U.S.

dollar since the comparative period.

Total Portfolio Management Systems revenue increased 8% for the three-months ended March 31, 2025 from the comparative 2024 period.

Corporate Quotestream revenue increased 11% from the comparative 2024 period.

The increase was due to increases in both the number of customers and the average revenue per customer from the comparative period.

The increase was offset by FX rate fluctuations as on an FX-neutral basis Corporate Quotestream revenue grew 13% from the comparative period

Individual Quotestream revenue decreased 3% for the three-months ended March 31, 2025 from the comparative 2024 period due primarily to FX rate fluctuations as on an FX-neutral basis our revenue for the quarter was unchanged from the comparative period.

Interactive Content and Data APIs revenue decreased 1% for the three-months ended March 31, 2025 from the comparative period in 2024 due primarily to FX rate fluctuations as on an FX-neutral basis our quarterly revenue grew 1% from the comparative period.

Cost of Revenue and Gross Profit Summary

Three-months ended September 30,

Cost of revenue

Gross margin %

Nine-months ended September 30,

Three-months ended March 31,

Cost of revenue

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

Our cost of revenue increased 10% and 5% for the three and nine-months ended September 30, 2024 from the comparative periods in 2023.

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 increased as a percentage of sales, as evidenced by our gross margin percentage that decreased to 46% and 48% for the three and nine-months ended September 30, 2024 from 52% and 51% in the comparative 2023 periods.

Our cost of revenue increased 16% for the three-months ended March 31, 2025 from the comparative period in 2024.

This was mainly due to increased stock exchange fees and increased amortization expenses associated with internally developed application software relating to new product development, data collection, and the expansion of our global market coverage.

Overall, the cost of revenue increased as a percentage of sales, as evidenced by our gross margin percentage that decreased to 44% for the three-months ended March 31, 2025 from 50% in the comparative 2024 period.

Operating Expenses Summary

Three-months ended September 30,

Sales and marketing

General and administrative

Software development

Total operating expenses

Nine-months ended September 30,

Three-months ended March 31,

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 23% for the three-months ended September 30, 2024, when compared to the same period in 2023 due to increased personnel costs and negative stock-based compensation expense of ($57,188) in the comparative 2023 period related to the preferred stock warrant liability fair value adjustment.

Sales and marketing expenses increased 6% for the nine-months ended September 30, 2024, when compared to the same period in 2023 due to increased personnel costs, offset by stock-based compensation expense of $80,625 in the comparative 2023 period related to the preferred stock warrant liability fair value adjustment.

Increases in personnel costs were due to additional sales personnel hired since the comparative periods to support our product growth initiatives and salary increases for existing personnel

Sales and marketing expenses increased 6% for the three-months ended March 31, 2025, when compared to the same period in 2024.

The increase was mainly due to a non-recurring adjustment of $51,000 lowering sales personnel expense in the comparative period.

Without that one-time adjustment Sales and Marketing expenses would be relatively unchanged from the comparative period.

General and Administrative

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

General and administrative expenses increased 2% for the three-months ended September 30, 2024, when compared to the same period in 2023, due to increases in bad debt expenses.

General and administrative expenses increased 3% for the nine-months ended September 30, 2024, when compared to the same periods in 2023, due to increases in bad debt expenses offset by decreased professional fees as we incurred additional professional fees in the comparative 2023 period resulting from the change of principal accountants in January 2023.

General and administrative expenses decreased 13% for the three-months ended March 31, 2025, when compared to the same period in 2024.

The decrease is mainly a result of a decrease in professional fees from the comparative period, as well as a general reduction in general and administrative expenses resulting from the overall reduction in our staff count since the comparative period.

Software Development

1 unchanged sentence

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

Software development expenses increased 6% and 16% for the three and nine-months ended September 30, 2024 when compared to the same periods in 2023, primarily due to new personnel hired since the comparative periods to improve our infrastructure, security, and business continuity management.

We capitalized $909,035 and $2,591,750 of development costs for the three and nine-month periods ended September 30, 2024 compared to $812,428 and $2,387,774 in the same periods in 2023.

Software development expenses increased 27% for the three-months ended March 31, 2025 when compared to the same period in 2024.

This was due to a decrease in the percentage of development salaries capitalized versus the comparative period as we capitalized 16% of development salaries this quarter versus 25% the comparative period.

This increase was offset by the reduction in the number of development personnel as discussed in the Business Environment and Trends section above.

We capitalized $523,599 and $776,225 of development costs for the three-month periods ended March 31, 2025 and 2024, respectively.

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

1 unchanged sentence

Other Income and (Expense) Summary

Three-months ended September 30,

Three-months ended March 31,

Foreign exchange gain (loss)

1 unchanged sentence

Total other income (expense), net

Nine-months ended September 30,

Foreign exchange gain (loss)

Interest expense, net

Total other income (expenses), net

Foreign Exchange Gain

We incurred a foreign exchange loss of $31,881 and a foreign exchange gain of $3,841 for the three and nine-months periods ended September 30, 2024, compared to a foreign exchange gain of $21,803 and a foreign exchange loss of $16,271 in the comparative 2023 periods.

We incurred foreign exchange gains of $5,962 and $25,307 for the three-months periods ended March 31, 2025 and 2024, respectively.

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

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Interest expense is netted against interest earned on cash balances.

Net interest income of $76 and net interest expense of $1,296 were incurred for the three and nine-months periods ended September 30, 2024, compared to net interest income of $825 and net interest expense of $1,031 incurred in the same 2023 periods.

Net interest expense of $2,387 and $953 were incurred for the three-months periods ended March 31, 2025 and 2024, respectively.

Provision for Income Taxes

For the three and nine-months periods ended September 30, 2024, the Company recorded $738 and $2,206 in Canadian income tax expenses compared to $739 and $2,221 in the comparative periods in 2023.

Net Income (Loss) for the Period

As a result of the foregoing, our net losses for the three and nine-months periods ended September 30, 2024 were $440,941 and $720,290 compared to net income of $126,036 and $312,362 in the comparative periods in 2023.

The basic and diluted loss per share was $(0.00) for the three and nine-months periods ended September 30, 2024, compared to the basic and diluted earnings per share of $0.00 for the three and nine-months periods ended September 30, 2023.

For the three-months periods ended March 31, 2025 and 2024, the Company recorded $66,151 and $738 in Canadian income tax expenses, respectively.

Net Loss for the Period

As a result of the foregoing, our net losses for the three-months periods ended March 31, 2025 and 2024 were $499,811 and $28,176, respectively.

The basic and diluted loss per share was $(0.01) and (0.00) for the three-months periods ended March 31, 2025 and 2024, respectively.

Liquidity and Capital Resources

Our cash totaled $291,217 at September 30, 2024, as compared with $342,014 at December 31, 2023, a decrease of $50,797.

Net cash of $2,575,327 was provided by operations for the nine-months ended September 30, 2024, primarily due to adjustments for non-cash charges and the increase in accounts payable and accrued liabilities, offset by our net loss and an increase in accounts receivable.

Net cash used in investing activities for the nine-months ended September 30, 2024 was $2,626,124, due to capitalized application software costs and purchases of computer equipment.

Our cash totaled $173,191 at March 31, 2025, as compared with $585,319 at December 31, 2024, a decrease of $412,128.

Net cash of $125,768 was provided by operations for the three-months ended March 31, 2025, primarily due to adjustments for non-cash charges and the increase in accounts payable and accrued liabilities, offset by our net loss and an increase in accounts receivable.

Net cash used in investing activities for the three-months ended March 31, 2025 was $537,896, due to capitalized application software costs and purchases of computer equipment.

We typically operate with a working capital deficit.

As of September 30, 2024, our working capital deficit was $3,330,119, however current liabilities include $2,027,800 in deferred revenue.

As of March 31, 2025, our working capital deficit was $4,019,077, however current liabilities include $1,533,393 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 October 2025.

However, implementing our business plan may require additional financing.

6 unchanged sentences

Foreign Exchange Risk

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

Currently, approximately 35% of our consolidated revenue and 38% 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 September 30, 2024 and December 31, 2023, we did not have any unconsolidated entities or financial partnerships, or other off-balance sheet arrangements.

At March 31, 2025 and December 31, 2024, 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