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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Nevada
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91-2008633
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(State or Other Jurisdiction of Incorporation or Organization)
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(IRS Employer Identification Number)
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Large accelerated filer
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Accelerated filer
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o |
Non-accelerated filer
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o |
Smaller reporting company
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x |
(Do not check if a smaller reporting company)
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Page
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Part I.
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Financial Information
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Item 1.
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Financial Statements (unaudited):
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3 | |||
Condensed Consolidated Balance Sheets at March 31, 2015 and December 31, 2014
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3 | ||||
Condensed Consolidated Statements of Operations for the three months ended March 31, 2015 and 2014
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4 | ||||
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2015 and 2014
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5 | ||||
Notes to Condensed Consolidated Financial Statements
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6 | ||||
Item 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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12 | |||
Item 4.
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Controls and Procedures
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18 | |||
Part II.
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Other Information
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||||
Item 6.
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Exhibits
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19 | |||
Signatures
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20 |
March 31,
2015
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December 31,
2014
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|||||||
ASSETS
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||||||||
Current assets:
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Cash
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$ | 195,697 | $ | 423,053 | ||||
Accounts receivable, net
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466,731 | 405,727 | ||||||
Prepaid expenses
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66,479 | 48,985 | ||||||
Other current assets
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33,057 | 40,940 | ||||||
Total current assets
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761,964 | 918,705 | ||||||
Deposits
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17,908 | 19,273 | ||||||
Property and equipment, net
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1,509,563 | 1,486,267 | ||||||
Goodwill
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110,000 | 110,000 | ||||||
Intangible assets
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80,984 | 82,468 | ||||||
Total assets
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$ | 2,480,419 | $ | 2,616,713 | ||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT
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Current liabilities:
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Accounts payable and accrued liabilities
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1,253,299 | $ | 1,249,659 | |||||
Deferred revenue
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541,279 | 559,214 | ||||||
Total current liabilities
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1,794,578 | 1,808,873 | ||||||
Long-term portion of amounts due to related parties
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8,581,841 | 8,398,160 | ||||||
Stockholders’ deficit:
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||||||||
Preferred stock, nondesignated, 10,000,000 shares
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||||||||
authorized, none issued
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- | - | ||||||
Common stock, $0.001 par value, 150,000,000 shares
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||||||||
authorized, 90,444,162 and 90,444,162 shares issued
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and outstanding
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90,445 | 90,445 | ||||||
Additional paid-in capital
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9,002,092 | 8,998,192 | ||||||
Accumulated deficit
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(16,988,537 | ) | (16,678,957 | ) | ||||
Total stockholders’ deficit
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(7,896,000 | ) | (7,590,320 | ) | ||||
Total liabilities and stockholders’ deficit
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$ | 2,480,419 | $ | 2,616,713 |
Three months ended
March 31,
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||||||||
2015
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2014
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LICENSING FEES
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$ | 2,188,317 | $ | 2,224,067 | ||||
COST OF REVENUE
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1,261,398 | 1,273,283 | ||||||
GROSS PROFIT
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926,919 | 950,784 | ||||||
OPERATING EXPENSES
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||||||||
Sales and marketing
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380,680 | 414,078 | ||||||
General and administrative
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483,418 | 539,600 | ||||||
Software development
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260,340 | 244,412 | ||||||
1,124,438 | 1,198,090 | |||||||
OPERATING LOSS
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(197,519 | ) | (247,306 | ) | ||||
OTHER INCOME AND (EXPENSE)
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||||||||
Foreign exchange gain
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97,998 | 26,221 | ||||||
Interest expense (related party)
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(209,251 | ) | (185,228 | ) | ||||
(111,253 | ) | (159,007 | ) | |||||
LOSS BEFORE INCOME TAXES
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(308,772 | ) | (406,313 | ) | ||||
Income tax expense
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(808 | ) | (907 | ) | ||||
NET LOSS
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$ | (309,580 | ) | $ | (407,220 | ) | ||
LOSS PER SHARE
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||||||||
Basic and diluted loss per share
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$ | (0.00 | ) | $ | (0.00 | ) | ||
WEIGHTED AVERAGE SHARES OUTSTANDING
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||||||||
Basic and diluted
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90,444,162 | 90,444,162 |
Three months ended
March 31,
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2015
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2014
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Operating activities:
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Net loss
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$ | (309,580 | ) | $ | (407,220 | ) | ||
Adjustments to reconcile net loss to net cash provided
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by operating activities:
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Depreciation and amortization
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222,129 | 209,732 | ||||||
Bad debt expense
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18,991 | 5,472 | ||||||
Stock-based compensation expense
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3,900 | 2,363 | ||||||
Changes in assets and liabilities:
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||||||||
Accounts receivable
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(79,995 | ) | 115,804 | |||||
Prepaid expenses
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(17,494 | ) | 6,587 | |||||
Other current assets
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7,883 | 2,980 | ||||||
Deposits
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1,365 | 657 | ||||||
Accounts payable and amounts due to related parties
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187,321 | 411,314 | ||||||
Deferred revenue
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(17,935 | ) | (40,974 | ) | ||||
Net cash provided by operating activities
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16,585 | 306,715 | ||||||
Investing activities:
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||||||||
Purchase of fixed assets
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(68,724 | ) | (53,186 | ) | ||||
Capitalized application software
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(175,217 | ) | (193,298 | ) | ||||
Net cash used in investing activities
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(243,941 | ) | (246,484 | ) | ||||
Net increase (decrease) in cash
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(227,356 | ) | 60,231 | |||||
Cash and equivalents, beginning of period
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423,053 | 425,899 | ||||||
Cash and equivalents, end of period
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$ | 195,697 | $ | 486,130 |
March 31, 2015
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December 31, 2014
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Notional
Amount
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Net Asset
(Liability)
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Notional
Amount
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Net Asset
(Liability)
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Forward contracts
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$ | - | $ | - | $ | 200,000 | $ | (5,297 | ) |
March 31,
2015
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December 31,
2014
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Purchase of business unit
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$ | 162,683 | $ | 171,576 | ||||
Computer hosting services
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25,699 | 43,579 | ||||||
Office rent
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966,712 | 1,005,367 | ||||||
Other
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17,276 | 17,276 | ||||||
Loan
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851,915 | 850,112 | ||||||
Lead generation services
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1,190,016 | 1,160,754 | ||||||
Due to Management
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5,367,541 | 5,149,496 | ||||||
$ | 8,581,842 | $ | 8,398,160 |
Three months ended
March 31,
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2015
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2014
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Sales and marketing
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$ | 1,899 | $ | 362 | ||||
General and administrative
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2,001 | 2,001 | ||||||
Total stock-based compensation
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$ | 3,900 | $ | 2,363 |
Options and
Warrants |
Weighted-
Average |
|||||||
Outstanding at December 31, 2014
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11,877,803 | $ | 0.04 | |||||
Stock options forfeited/expired
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(50,000 | ) | $ | 0.04 | ||||
Outstanding at March 31, 2015
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11,827,803 | $ | 0.04 |
Weighted-
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||||||||
Options and
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Average Grant
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Warrants
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Date Fair Value
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Non-vested stock options and warrants at
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December 31, 2014
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298,323 | $ | 0.04 | |||||
Vested during the period
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(5,001 | ) | $ | 0.07 | ||||
Non-vested stock options and warrants at
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March 31, 2015
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293,322 | $ | 0.04 |
Options and Warrants
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|||||||||||||||||||||
Options and Warrants Outstanding
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Exercisable
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Weighted
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|||||||||||||||||||||
Number
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Average
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Weighted
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Number
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Weighted
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|||||||||||||||||
Outstanding at
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Remaining
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Average
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Exercisable at
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Average
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|||||||||||||||||
March 31,
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Contractual
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Exercise
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March 31,
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Exercise
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2015
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Life
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Price
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2015
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Price
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|||||||||||||||||
$0.05-0.07 | 11,827,803 | 2.70 | $ | 0.04 | 11,534,481 | $ | 0.04 |
Three Months ended March 31,
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2015
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2014
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Change ($)
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Change (%)
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|||||||||||||
Corporate Quotestream
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$ | 685,686 | $ | 644,744 | $ | 40,942 | 6.4 | % | ||||||||
Individual Quotestream
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405,897 | 423,695 | (17,798 | ) | (4.2 | )% | ||||||||||
Total Portfolio Management Systems
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1,091,583 | 1,068,439 | 23,144 | 2.2 | % | |||||||||||
Interactive Content and Data Applications
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1,096,734 | 1,155,628 | (58,894 | ) | (5.1 | )% | ||||||||||
Total Licensing Revenue
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$ | 2,188,317 | $ | 2,224,067 | $ | (35,750 | ) | (1.6 | )% |
2015
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2014
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Change ($)
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Change (%)
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|||||||||||||
Three months ended March 31,
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Cost of revenue
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$ | 1,261,398 | $ | 1,273,283 | $ | (11,885 | ) | (1 | )% | |||||||
Gross profit
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$ | 926,919 | $ | 950,784 | $ | (23,865 | ) | (3 | %) | |||||||
Gross margin %
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42 | % | 43 | % |
2015
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2014
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Change ($)
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Change (%)
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|||||||||||||
Three months ended March 31,
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Sales and marketing
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$ | 380,680 | $ | 414,078 | $ | (33,398 | ) | (8 | )% | |||||||
General and administrative
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483,418 | 539,600 | (56,182 | ) | (10 | )% | ||||||||||
Software development
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260,340 | 244,412 | 15,928 | 7 | % | |||||||||||
Total operating expenses
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$ | 1,124,438 | $ | 1,198,090 | $ | (73,652 | ) | (6 | %) |
2015
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2014
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Three months ended March 31,
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Foreign exchange gain (loss)
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$ | 97,998 | $ | 26,221 | ||||
Interest expense
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(209,251 | ) | (185,228 | ) | ||||
Total other income and (expenses)
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$ | (111,253 | ) | $ | (159,007 | ) |
Exhibit Number
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Description of Exhibit
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31.1
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31.2
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32.1
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32.2
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QUOTEMEDIA, INC.
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|||
Dated: May 13, 2015
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By:
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/s/ R. Keith Guelpa | |
R. Keith Guelpa, | |||
President and Chief Executive Officer | |||
(Principal Executive Officer) | |||
By:
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/s/ Keith J. Randall | ||
Keith J. Randall,
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|||
Chief Financial Officer
(Principal Accounting Officer)
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Exhibit 31.1
CERTIFICATION
I, R. Keith Guelpa, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Quotemedia, Inc.;
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: May 13, 2015
By: /s/ R. Keith Guelpa
R. Keith Guelpa
Chief Executive Officer
Exhibit 31.2
CERTIFICATION
I, Keith J. Randall, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Quotemedia, Inc.;
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: May 13, 2015
By: /s/ Keith J. Randall
Keith J. Randall
Chief Financial Officer
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Quotemedia, Inc. (the "Company") for the quarterly period ended March 31, 2015 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, R. Keith Guelpa, Chief Executive Officer of the Company, certify, to my best knowledge and belief, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
By: /s/ R. Keith Guelpa
____________________
R. Keith Guelpa
Chief Executive Officer
May 13, 2015
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Quotemedia, Inc. (the "Company") for the quarterly period ended March 31, 2015 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Keith J. Randall, Chief Financial Officer of the Company, certify, to my best knowledge and belief, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
By: /s/ Keith J. Randall
____________________
Keith J. Randall
Chief Financial Officer
May 13, 2015
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LOSS PER SHARE (Details Narrative) (USD $)
|
3 Months Ended | |
---|---|---|
Mar. 31, 2015
|
Mar. 31, 2014
|
|
Loss Per Share Details Narrative | ||
Loss per share - basic and diluted | $ 0.00 | $ 0.00 |
Stock options and warrants excluded from the calculation of dilutive loss per share because they were anti-dilutive | 11,827,803 | 11,827,803 |
RELATED PARTIES
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Mar. 31, 2015
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Related Parties | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Note 4. RELATED PARTIES |
The following table summarizes amounts due to related parties at March 31, 2015 and December 31, 2014:
As a matter of policy all related party transactions are subject to review and approval by the Companys Board of Directors. All amounts due to related parties have been classified as non-current liabilities as we do not expect to repay amounts due to related parties within a year of the March 31, 2015 balance sheet date. Repayments are subject to our company having sufficient cash on hand and are intended not to impair continuing business operations. Our related party creditors have agreed to these repayment terms. |