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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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QUOTEMEDIA, INC. |
(Exact name of registrant as specified in its charter) |
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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Non-accelerated filer
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o |
Smaller reporting company
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x |
(Do not check if a smaller reporting company) |
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 June 30, 2015 and December 31, 2014
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3 | ||||
Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2015 and 2014
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4 | ||||
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 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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13 | |||
Item 4.
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Controls and Procedures
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21 | |||
Part II.
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Other Information
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Item 6.
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Exhibits
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22 | |||
Signatures
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23 |
June 30,
2015 |
December 31,
2014 |
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ASSETS
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||||||||
Current assets:
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||||||||
Cash
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$ | 231,385 | $ | 423,053 | ||||
Accounts receivable, net of allowance for doubtful accounts of $90,000 at June 30, 2015 and December 31, 2014
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328,958 | 405,727 | ||||||
Prepaid expenses
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65,200 | 48,985 | ||||||
Other current assets
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44,566 | 40,940 | ||||||
Total current assets
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670,109 | 918,705 | ||||||
Deposits
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20,847 | 19,273 | ||||||
Property and equipment, net
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1,477,193 | 1,486,267 | ||||||
Goodwill
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110,000 | 110,000 | ||||||
Intangible assets
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79,499 | 82,468 | ||||||
Total assets
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$ | 2,357,648 | $ | 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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$ | 1,107,156 | $ | 1,249,659 | ||||
Deferred revenue
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651,195 | 559,214 | ||||||
Total current liabilities
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1,758,351 | 1,808,873 | ||||||
Long-term portion of amounts due to related parties
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8,937,285 | 8,398,160 | ||||||
Stockholders’ deficit:
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||||||||
Preferred stock, nondesignated, 10,000,000 shares authorized, none issued
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- | - | ||||||
Common stock, $0.001 par value, 150,000,000 shares authorized, 90,477,798 and 90,444,162 shares issued and outstanding
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90,479 | 90,445 | ||||||
Additional paid-in capital
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9,288,486 | 8,998,192 | ||||||
Accumulated deficit
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(17,716,953 | ) | (16,678,957 | ) | ||||
Total stockholders’ deficit
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(8,337,988 | ) | (7,590,320 | ) | ||||
Total liabilities and stockholders’ deficit | $ | 2,357,648 | $ | 2,616,713 |
Three months ended June 30,
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Six months ended June 30,
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2015
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2014
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2015
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2014
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|||||||||||||
Revenue
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$ | 2,203,079 | $ | 2,278,956 | $ | 4,391,396 | $ | 4,503,023 | ||||||||
Cost of revenue
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1,272,513 | 1,239,493 | 2,533,911 | 2,512,776 | ||||||||||||
Gross profit
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930,566 | 1,039,463 | 1,857,485 | 1,990,247 | ||||||||||||
Operating expenses
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||||||||||||||||
Sales and marketing
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637,953 | 406,782 | 1,018,633 | 820,860 | ||||||||||||
General and administrative
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512,853 | 518,762 | 996,271 | 1,058,362 | ||||||||||||
Software development
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249,768 | 298,760 | 510,108 | 543,172 | ||||||||||||
1,400,574 | 1,224,304 | 2,525,012 | 2,422,394 | |||||||||||||
Operating loss
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(470,008 | ) | (184,841 | ) | (667,527 | ) | (432,147 | ) | ||||||||
Other income and (expense)
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||||||||||||||||
Foreign exchange gain (loss)
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(39,895 | ) | (48,806 | ) | 58,103 | (22,585 | ) | |||||||||
Interest expense (related party)
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(217,701 | ) | (191,617 | ) | (426,952 | ) | (376,845 | ) | ||||||||
(257,596 | ) | (240,423 | ) | (368,849 | ) | (399,430 | ) | |||||||||
Loss before income taxes
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(727,604 | ) | (425,264 | ) | (1,036,376 | ) | (831,577 | ) | ||||||||
Provision for income taxes
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(812 | ) | (917 | ) | (1,620 | ) | (1,824 | ) | ||||||||
Net loss
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$ | (728,416 | ) | $ | (426,181 | ) | $ | (1,037,996 | ) | $ | (833,401 | ) | ||||
Loss per share
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||||||||||||||||
Basic and diluted loss per share
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(0.01 | ) | (0.00 | ) | (0.01 | ) | (0.01 | ) | ||||||||
Weighted average shares outstanding
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||||||||||||||||
Basic and diluted
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90,461,165 | 90,444,162 | 90,452,710 | 90,444,162 |
Six months ended June 30,
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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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$ | (1,037,996 | ) | $ | (833,401 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities:
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||||||||
Depreciation and amortization
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443,982 | 421,610 | ||||||
Bad debt expense
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73,456 | 8,826 | ||||||
Stock-based compensation expense
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290,328 | 5,738 | ||||||
Changes in assets and liabilities:
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Accounts receivable
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3,313 | 52,396 | ||||||
Prepaid expenses
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(16,215 | ) | (5,549 | ) | ||||
Other current assets
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(3,626 | ) | (8,081 | ) | ||||
Deposits
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(1,574 | ) | (49 | ) | ||||
Accounts payable and amounts due to related parties
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396,622 | 784,219 | ||||||
Deferred revenue
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91,981 | 74,380 | ||||||
Net cash provided by operating activities
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240,271 | 500,089 | ||||||
Investing activities:
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Purchase of fixed assets
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(86,341 | ) | (72,057 | ) | ||||
Capitalized application software
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(345,598 | ) | (403,246 | ) | ||||
Net cash used in investing activities
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(431,939 | ) | (475,303 | ) | ||||
Net increase (decrease) in cash
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(191,668 | ) | 24,786 | |||||
Cash and equivalents, beginning of period
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423,053 | 425,899 | ||||||
Cash and equivalents, end of period
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$ | 231,385 | $ | 450,685 |
June 30, 2015
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December 31, 2014
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Notional
Amount |
Net Asset
(Liability) |
Notional
Amount |
Net Asset
(Liability) |
|||||||||||||
Forward contracts
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- | - | $ | 200,000 | $ | (5,297 | ) |
June 30,
2015 |
December 31,
2014 |
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Purchase of business unit
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$ | 170,644 | $ | 171,576 | ||||
Computer hosting services
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45,123 | 43,579 | ||||||
Office rent
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1,014,023 | 1,005,367 | ||||||
Other
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17,276 | 17,276 | ||||||
Loan
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879,123 | 850,112 | ||||||
Lead generation services
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1,220,014 | 1,160,754 | ||||||
Due to Management
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5,591,082 | 5,149,496 | ||||||
$ | 8,937,285 | $ | 8,398,160 |
Three months ended June 30,
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Six months ended June 30,
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2015
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2014
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2015
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2014
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Sales and marketing
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$ | 269,759 | $ | 1,374 | $ | 271,658 | $ | 1,736 | ||||||||
General and administrative
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12,909 | 2,001 | 14,910 | 4,002 | ||||||||||||
Development
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60 | - | 60 | - | ||||||||||||
Total stock-based compensation
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$ | 282,728 | $ | 3,375 | $ | 286,628 | $ | 5,738 |
Three months ended June 30,
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Six months ended June 30,
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|||||||||||||||
2015
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2014
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2015
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2014
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Expected dividend yield
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- | - | - | - | ||||||||||||
Expected stock price volatility
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287 | % | 206 | % | 287 | % | 206 | % | ||||||||
Risk-free interest rate
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4 | % | 4 | % | 4 | % | 4 | % | ||||||||
Expected life of options
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5.00 | 5.86 | 5.00 | 5.86 | ||||||||||||
Weighted average fair value of options and warrants granted
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$ | 0.11 | $ | 0.03 | $ | 0.11 | $ | 0.03 |
Weighted-
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||||||||
Options and
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Average
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|||||||
Warrants
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Exercise Price
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|||||||
Outstanding at December 31, 2014
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11,877,803 | $ | 0.04 | |||||
Stock options granted
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490,000 | $ | 0.04 | |||||
Warrants granted
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7,968,803 | $ | 0.04 | |||||
Stock options forfeited/expired
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(595,000 | ) | $ | 0.04 | ||||
Warrants forfeited/expired
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(7,968,803 | ) | $ | 0.04 | ||||
Outstanding at June 30, 2015
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11,772,803 | $ | 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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(10,002 | ) | $ | 0.07 | ||||
Non-vested stock options and warrants at
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||||||||
June 30, 2015
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288,321 | $ | 0.03 |
Options and Warrants
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||||||||||||||
Options and Warrants Outstanding
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Exercisable | |||||||||||||
Weighted
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||||||||||||||
Number
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Average
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Weighted |
Number
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Weighted | ||||||||||
Outstanding at
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Remaining
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Average |
Exercisable at
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Average | ||||||||||
June 30,
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Contractual
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Exercise |
June 30,
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Exercise | ||||||||||
2015
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Life
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Price |
2015
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Price
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||||||||||
$ |
0.03-0.07
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11,772,803
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9.45
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$ |
0.04
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11,484,482
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$ |
0.04
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2015
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2014
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Change ($)
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Change (%)
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|||||||||||||
Three months ended June 30, | ||||||||||||||||
Corporate Quotestream
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$ | 675,037 | $ | 666,499 | $ | 8,538 | 1 | % | ||||||||
Individual Quotestream
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408,764 | 452,124 | (43,360 | ) | (10 | )% | ||||||||||
Total Portfolio Management Systems
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1,083,801 | 1,118,623 | (34,822 | ) | (3 | )% | ||||||||||
Interactive Content and Data Applications
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1,119,278 | 1,160,333 | (41,055 | ) | (4 | )% | ||||||||||
Total Licensing Revenue
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$ | 2,203,079 | $ | 2,278,956 | $ | (75,877 | ) | (3 | %) |
Six months ended June 30, | ||||||||||||||||
Corporate Quotestream
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$ | 1,360,723 | $ | 1,311,243 | $ | 49,480 | 4 | % | ||||||||
Individual Quotestream
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814,661 | 875,819 | (61,158 | ) | (7 | )% | ||||||||||
Total Portfolio Management Systems
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2,175,384 | 2,187,062 | (11,678 | ) | (1 | )% | ||||||||||
Interactive Content and Data Applications
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2,216,012 | 2,315,961 | (99,949 | ) | (4 | )% | ||||||||||
Total Licensing Revenue
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$ | 4,391,396 | $ | 4,503,023 | $ | (111,627 | ) | (2 | )% |
2015
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2014
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Change ($)
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Change (%)
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|||||||||||||
Three months ended June 30, | ||||||||||||||||
Cost of revenue
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$ | 1,272,513 | $ | 1,239,493 | $ | 33,020 | 3 | % | ||||||||
Gross profit
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$ | 930,566 | $ | 1,039,463 | $ | (108,897 | ) | (10 | )% | |||||||
Gross margin %
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42 | % | 46 | % |
Six months ended June 30, | ||||||||||||||||
Cost of revenue
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$ | 2,533,911 | $ | 2,512,776 | $ | 21,135 | 1 | % | ||||||||
Gross profit
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$ | 1,857,485 | $ | 1,990,247 | $ | (132,762 | ) | (7 | )% | |||||||
Gross margin %
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42 | % | 44 | % |
2015
|
2014
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Change ($)
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Change (%)
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|||||||||||||
Three months ended June 30, | ||||||||||||||||
Sales and marketing
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$ | 637,953 | $ | 406,782 | $ | 231,171 | 57 | % | ||||||||
General and administrative
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512,853 | 518,762 | (5,909 | ) | (1 | )% | ||||||||||
Software development
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249,768 | 298,760 | (48,992 | ) | (16 | )% | ||||||||||
Total operating expenses
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$ | 1,400,574 | $ | 1,224,304 | $ | 176,270 | 14 |
%
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Six months ended June 30,
|
||||||||||||||||
Sales and marketing
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$ | 1,018,633 | $ | 820,860 | $ | 197,773 | 24 | % | ||||||||
General and administrative
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996,271 | 1,058,362 | (62,091 | ) | (6 | )% | ||||||||||
Software development
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510,108 | 543,172 | (33,064 | ) | (6 | )% | ||||||||||
Total operating expenses
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$ | 2,525,012 | $ | 2,422,394 | $ | 102,618 | 4 | % |
2015
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2014
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|||||||
Three months ended June 30,
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Foreign exchange gain (loss)
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$ | (39,895 | ) | $ | (48,806 | ) | ||
Interest expense
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(217,701 | ) | (191,617 | ) | ||||
Total other income and (expenses)
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$ | (257,596 | ) | $ | (240,423 | ) |
Foreign exchange gain (loss)
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$ | 58,103 | $ | (22,585 | ) | |||
Interest expense
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(426,952 | ) | (376,845 | ) | ||||
Total other income and (expenses)
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$ | (368,849 | ) | $ | (399,430 | ) |
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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101
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Interactive Data Files (Quarterly Report on Form 10-Q, for the quarterly period ended June 30, 2015, furnished in XBRL (eXtensible Business Reporting Language)).
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QUOTEMEDIA, INC. | |||
Dated: August 14, 2015
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By:
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/s/ R. Keith Guelpa | |
R. Keith Guelpa,
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|||
President and Chief Executive Officer
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|||
(Principal Executive Officer) | |||
By: | /s/ Keith J. Randall | ||
Keith J. Randall, | |||
Chief Financial Officer | |||
(Principal Accounting Officer) |
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: August 14, 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: August 14, 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 June 30, 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
August 14, 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 June 30, 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
August 14, 2015
H0F(B`@``3P<``!@```!X;"]W;W)K The following table summarizes amounts due to related parties at
June 30, 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 repayments of amounts due to related parties
must be approved by our Board of Directors. Repayments are subject to our company having sufficient cash on hand and are intended
not to impair continuing business operations. All amounts due to related parties have been classified as non-current liabilities
as we do not expect to make any repayments within a year of the June 30, 2015 balance sheet date. Our related party creditors have
agreed to these repayment terms. a) Fair value of financial instruments FASB ASC 820, Fair Value Measurements and
Disclosures establishes three levels of inputs that may be used to measure fair value: quoted prices in active markets for
identical assets or liabilities (referred to as Level 1), observable inputs other than Level 1 that are observable for the asset
or liability either directly or indirectly (referred to as Level 2), and unobservable inputs to the valuation methodology that
are significant to the measurement of fair value of assets or liabilities (referred to as Level 3). From time to time we utilize forward contracts
that are measured at fair market value on a recurring basis based on Level 2 inputs. We had no forward contracts outstanding at
June 30, 2015. At December 31, 2014, the fair market value for forward contracts was a liability of $5,297 and was included in
accrued liabilities. b) Derivative instruments A significant portion of our expenses are paid
in Canadian dollars, therefore changes to the exchange rate between the U.S. and Canadian dollar affect our operating results.
To manage this exchange rate risk, from time to time we utilize forward contracts to purchase Canadian dollars. Our Company policy
limits contracts to maturities of one year or less from the date of issuance. We do not enter into foreign exchange forward contracts
for trading purposes. We account for derivatives and hedging activities
in accordance with FASB ASC 815, Derivatives and Hedging, which requires that all derivative instruments be recorded on
the balance sheet at their respective fair values. The accounting for changes in the fair value of a derivative instrument is dependent
upon whether the derivative has been designated and qualifies as part of a hedging relationship and on the type of hedging relationship. We have chosen not to elect hedge accounting
for these forward contracts; therefore, changes in fair value for these instruments are immediately recognized in earnings and
included in our foreign exchange gain (loss). The fluctuations in the value of these forward contracts do, however, generally offset
the impact of changes in the value of the underlying risk that they are intended to economically hedge. The following table provides gross notional
value of foreign currency derivative financial instruments and the related net asset or liability. The table presents the notional
amount (at contract exchange rates) and the fair value of the derivatives in U.S. dollars: We are required to maintain a margin deposit
with a foreign exchange corporation based on the value of the forward contracts outstanding. There were no margin deposits at June
30, 2015. Margin deposits totaling $11,500 are included in other current assets at December 31, 2014. The accompanying unaudited condensed consolidated
financial statements have been prepared in accordance with the generally accepted accounting principles for interim financial statements
and instructions for Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting only of normal
recurring adjustments considered necessary for a fair presentation, have been included. 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 the Company evaluated subsequent events after the balance sheet date of June 30, 2015 through
the filing of this report. These financial statements should be read in
conjunction with our financial statements and the notes thereto for the fiscal year ended December 31, 2014 contained in our Form
10-K filed with the Securities and Exchange Commission dated March 31, 2015. a) Nature of operations We are a software developer and distributor
of financial market data and related services to a global marketplace. We specialize in the collection, aggregation, and delivery
of both delayed and real-time financial data content via the Internet. We develop and license software components that deliver
dynamic content to banks, brokerage firms, financial institutions, mutual fund companies, online information and financial portals,
media outlets, public companies, and corporate intranets. b) Basis of consolidation The consolidated financial statements include
the operations of Quotemedia, Ltd., a wholly owned subsidiary of Quotemedia, Inc. All intercompany transactions and balances have
been eliminated. c) Foreign currency translation and transactions The U.S. dollar is the functional currency
of all our company's operations. Foreign currency asset and liability amounts are remeasured into U.S. dollars at end-of-period
exchange rates, except for equipment and intangible assets, which are remeasured at historical rates. Foreign currency income and
expenses are remeasured at average exchange rates in effect during the period, except for expenses related to balance sheet amounts
remeasured at historical exchange rates. Exchange gains and losses arising from remeasurement of foreign currency-denominated monetary
assets and liabilities are included in income in the period in which they occur. d) Allowances for doubtful accounts We maintain an allowance for doubtful accounts
for estimated losses resulting from the inability of the Companys customers to make required payments. The Company determines
the allowance by reviewing the age of the receivables and assessing the anticipated ability of customers to pay. No collateral
is required for any of the receivables and the Company does not usually apply financing charges to outstanding accounts receivable
balances. If the financial condition of our customers were to deteriorate, adversely affecting their ability to make payments,
additional allowances would be required. The allowance for doubtful accounts was $90,000 as at June 30, 2015 and December 31, 2014. e) Accounting Pronouncements New Accounting Standards In May 2014, the Financial Accounting Standards
Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers,
which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers
and will supersede most current revenue recognition guidance. The standard is effective for public entities for annual and interim
periods beginning after December 15, 2017. Early adoption is not permitted. The Company is currently evaluating the impact that
this guidance will have on our consolidated financial position, results of operations and related disclosures. In June 2014, the FASB issued ASU No. 2014-12,
Compensation - Stock Compensation (Topic 718), which makes amendments to the codification topic 718, Accounting for Share-Based
Payments, when the terms of an award provide that a performance target could be achieved after the requisite service period.
The new accounting standards update becomes effective for the Company on January 1, 2016. The Company does not expect that this
guidance will have an impact on its financial position, results of operations or cash flows as the Company does not currently have
any outstanding awards with a performance target that could be achieved after the requisite service period. In August 2014, the FASB issued ASU No. 2014-15,
Disclosures of Uncertainties About an Entity's Ability to Continue as a Going Concern. The new standard provides guidance
around management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going
concern and to provide related footnote disclosures. The new standard is effective for fiscal years, and interim periods within
those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The Company is currently evaluating the impact
that this guidance will have on our consolidated financial position, results of operations and related disclosures. In April 2015, the FASB issued Update No. 2015-03,
Simplifying the Presentation of Debt Issuance Costs. The amendment requires that all costs incurred to issue debt be presented
in the balance sheet as a direct deduction from the carrying value of the debt. The new standard is limited to the presentation
of debt issuance costs and does not affect the recognition or measurement of debt issuance costs. This update will become effective
for all annual periods and interim reporting periods beginning after December 15, 2015. The Company is currently evaluating the
impact that this guidance will have on our consolidated financial position, results of operations and related disclosures. Other accounting standards that have been issued
by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material
impact on the Companys consolidated financial statements upon adoption. We are a software developer and distributor
of financial market data and related services to a global marketplace. We specialize in the collection, aggregation, and delivery
of both delayed and real-time financial data content via the Internet. We develop and license software components that deliver
dynamic content to banks, brokerage firms, financial institutions, mutual fund companies, online information and financial portals,
media outlets, public companies, and corporate intranets. The consolidated financial statements include
the operations of Quotemedia, Ltd., a wholly owned subsidiary of Quotemedia, Inc. All intercompany transactions and balances have
been eliminated. The U.S. dollar is the functional currency
of all our company's operations. Foreign currency asset and liability amounts are remeasured into U.S. dollars at end-of-period
exchange rates, except for equipment and intangible assets, which are remeasured at historical rates. Foreign currency income and
expenses are remeasured at average exchange rates in effect during the period, except for expenses related to balance sheet amounts
remeasured at historical exchange rates. Exchange gains and losses arising from remeasurement of foreign currency-denominated monetary
assets and liabilities are included in income in the period in which they occur. We maintain an allowance for doubtful accounts
for estimated losses resulting from the inability of the Companys customers to make required payments. The Company determines
the allowance by reviewing the age of the receivables and assessing the anticipated ability of customers to pay. No collateral
is required for any of the receivables and the Company does not usually apply financing charges to outstanding accounts receivable
balances. If the financial condition of our customers were to deteriorate, adversely affecting their ability to make payments,
additional allowances would be required. The allowance for doubtful accounts was $90,000 as at June 30, 2015 and December 31, 2014. New Accounting Standards In May 2014, the Financial Accounting Standards
Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers,
which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers
and will supersede most current revenue recognition guidance. The standard is effective for public entities for annual and interim
periods beginning after December 15, 2017. Early adoption is not permitted. The Company is currently evaluating the impact that
this guidance will have on our consolidated financial position, results of operations and related disclosures. In June 2014, the FASB issued ASU No. 2014-12,
Compensation - Stock Compensation (Topic 718), which makes amendments to the codification topic 718, Accounting for Share-Based
Payments, when the terms of an award provide that a performance target could be achieved after the requisite service period.
The new accounting standards update becomes effective for the Company on January 1, 2016. The Company does not expect that this
guidance will have an impact on its financial position, results of operations or cash flows as the Company does not currently have
any outstanding awards with a performance target that could be achieved after the requisite service period. In August 2014, the FASB issued ASU No. 2014-15,
Disclosures of Uncertainties About an Entity's Ability to Continue as a Going Concern. The new standard provides guidance
around management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going
concern and to provide related footnote disclosures. The new standard is effective for fiscal years, and interim periods within
those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The Company is currently evaluating the impact
that this guidance will have on our consolidated financial position, results of operations and related disclosures. In April 2015, the FASB issued Update No. 2015-03,
Simplifying the Presentation of Debt Issuance Costs. The amendment requires that all costs incurred to issue debt be presented
in the balance sheet as a direct deduction from the carrying value of the debt. The new standard is limited to the presentation
of debt issuance costs and does not affect the recognition or measurement of debt issuance costs. This update will become effective
for all annual periods and interim reporting periods beginning after December 15, 2015. The Company is currently evaluating the
impact that this guidance will have on our consolidated financial position, results of operations and related disclosures. Other accounting standards that have been issued
by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material
impact on the Companys consolidated financial statements upon adoption. The basic and diluted net loss per share was
$(0.01) and $(0.00) per share for the three months ended June 30, 2015 and 2014, respectively. The basic and diluted net loss per
share was $(0.01) and $(0.01) per share for the six months ended June 30, 2015 and 2014, respectively. There were 11,772,803 stock
options and warrants excluded from the calculation of dilutive loss per share for the three and six months ended June 30, 2015,
because they were anti-dilutive. There were 12,377,803 stock options and warrants excluded from the calculation of dilutive loss
per share for the comparative three and six months ended June 30, 2014, because they were anti-dilutive. FASB
ASC 718, Stock Compensation requires all share-based payments to employees, including grants of employee stock options, to be
recognized as compensation expense over the service period (generally the vesting period) in the consolidated financial statements
based on their fair values. The impact of forfeitures that may occur prior to vesting is also estimated and considered in the
amount recognized. Total
estimated stock-based compensation expense, related to all of the Companys stock-based awards, recognized for the three
and six months ended June 30, 2015 and 2014 was comprised as follows: At
June 30, 2015 there was $16,306 of unrecognized compensation cost related to non-vested share-based payments which is expected
to be recognized over a weighted-average period of 0.70 years. We
calculate the fair value of stock options and warrants granted under the provisions of FASB ASC 718 using the Black-Scholes valuation
model with the following assumptions: The following
table represents stock option and warrant activity for the six months ended June 30, 2015: The following
table summarizes our non-vested stock option and warrant activity for the six months ended June 30, 2015: As
at June 30, 2015 all new stock options and warrants have been granted with exercise prices equal to or greater than the market
value of the underlying common shares on the date of grant. Extended options and warrants that were accounted for as an exchange
of the original awards for new awards were granted with the same exercise price as the original awards. There was no cash received
from the exercise of stock options or warrants for the six months ended June 30, 2015. At
June 30, 2015 the aggregate intrinsic value of options and warrants outstanding was $641,785. The aggregate intrinsic value of
options and warrants exercisable was $625,827. The intrinsic value of stock options and warrants are calculated as the amount
by which the market price of our common stock exceeds the exercise price of the option or warrant.&Y\[],3WJX8C^?&MSV-[-H5,(:(C-+XFR9LDC,IW'+#3J)GTG5WBNV5
M6SZ]TO3B?J*V[=MX,]0E+\W[OO>OW*>GI]NG+VRXW_CT?$4? *J$FO*^JHN"O(X_PVR&P29!9!'M+;`?ED0#X&9%.<1>2,&G>IW.]VG6*R
M3G%[Q^KBZG[@LZ/2TRW\H7K+I$%K9=VI"X>C5PU@]W"
M+0OD7H%\13>6`3`%L_TX#J#D1N^AH<)KJ'#/>%D``J^"F5[JR4$XQME,2U[L
ML2'H-P2=R`H)?RS`V5QP/=D_/"[FWSO'(0#A&DO^8(`V&7"R0L(?#7!--C@H
M5ILOG$L'!ZJPPRA=8R_\1.$RCCXI9+KPXQ7>*&@A[^VG&;/;%:LLS?#F(@L5GO)"R-@E
M=^>'%@^=[T)6Y@6)ZZSD'/!(ZZE9YF2V^17M-1WGT7(.PVP]91(M`F"LNTWD71(BG940Q)'H*
MM0/R\7'\7%]^$
Stock-based Compensation Details Narrative
Unrecognized compensation cost related to non-vested share-based payments
$ 16,306
Non-vested share-based payments which is expected to be recognized over a weighted-average period
8 months 12 days
Aggregate intrinsic value of options and warrants
$ 641,785
Aggregate intrinsic value of options and warrants exercisable
$ 625,827
6 Months Ended
Related Parties
Note 4. RELATED PARTIES
June 30,
2015
December 31,
2014
Purchase of business unit
$
170,644
$
171,576
Computer hosting services
45,123
43,579
Office rent
1,014,023
1,005,367
Other
17,276
17,276
Loan
879,123
850,112
Lead generation services
1,220,014
1,160,754
Due to Management
5,591,082
5,149,496
$
8,937,285
$
8,398,160
6 Months Ended
Financial Instruments
Note 3. FINANCIAL INSTRUMENTS
June 30, 2015
December 31, 2014
Notional
Amount
Net Asset
(Liability)
Notional
Amount
Net Asset
(Liability)
Forward contracts
-
-
$
200,000
$
(5,297
)
6 Months Ended
Basis Of Presentation
Note 1. BASIS OF PRESENTATION
Options and Warrants
Outstanding - Opening Balance
11,877,803
Stock options granted
490,000
Warrants granted
7,968,803
Stock options forfeited/expired
(595,000)
Warrants forfeited/expired
(7,968,803)
Outstanding - Ending Balance
11,772,803
Weighted-Average Exercise Price
Weighted-Average Exercise Price Outstanding - Opening Balance
$ 0.04
Stock options granted
0.04
Warrants granted
0.04
Stock options forfeited/expired
0.04
Warrants forfeited/expired
0.04
Weighted-Average Exercise Price Outstanding - Ending Balance
$ 0.04
6 Months Ended
Number Outstanding
11,772,803
11,877,803
Weighted-Average Exercise Price
$ 0.04
$ 0.04
0.03-0.07
Number Outstanding
11,772,803
Weighted Average Remaining Contractual Life
9 years 5 months 12 days
Weighted-Average Exercise Price
$ 0.04
Number Exercisable
11,484,482
Weighted-Average Exercise Price
$ 0.04
6 Months Ended
Significant Accounting Policies
Note 2. SIGNIFICANT ACCOUNTING POLICIES
Condensed Consolidated Balance Sheets Parenthetical
Allowance for doubtful accounts
$ 90,000
$ 90,000
Stockholders' deficit:
Preferred stock, shares authorized
10,000,000
10,000,000
Preferred stock, shares issued
0
0
Common stock, par value
$ 0.001
$ 0.001
Common stock, shares authorized
150,000,000
150,000,000
Common stock, shares issued
90,477,798
90,444,162
Common stock, shares outstanding
90,477,798
90,444,162
Net Asset (Liability)
$ 0
$ (5,297)
Forward Contracts [Member]
Notional Amount
200,000
Net Asset (Liability)
$ (5,297)
6 Months Ended
Document And Entity Information
Entity Registrant Name
QUOTEMEDIA INC
Entity Central Index Key
0001101433
Document Type
10-Q
Document Period End Date
Jun. 30, 2015
Amendment Flag
false
Current Fiscal Year End Date
--12-31
Is Entity a Well-known Seasoned Issuer?
No
Is Entity a Voluntary Filer?
No
Is Entity's Reporting Status Current?
Yes
Entity Filer Category
Smaller Reporting Company
Entity Common Stock, Shares Outstanding
90,477,798
Document Fiscal Period Focus
Q2
Document Fiscal Year Focus
2015
Financial Instruments Details Narrative
Fair market value for forward contract
$ 0
$ (5,297)
Margin deposits totaling
$ 0
$ 11,500
3 Months Ended
6 Months Ended
Condensed Consolidated Statements Of Operations
Revenue
$ 2,203,079
$ 2,278,956
$ 4,391,396
$ 4,503,023
Cost of revenue
1,272,513
1,239,493
2,533,911
2,512,776
Gross profit
930,566
1,039,463
1,857,485
1,990,247
Operating expenses
Sales and marketing
637,953
406,782
1,018,633
820,860
General and administrative
512,853
518,762
996,271
1,058,362
Software development
249,768
298,760
510,108
543,172
Total operating expenses
1,400,574
1,224,304
2,525,012
2,422,394
Operating loss
(470,008)
(184,841)
(667,527)
(432,147)
Other income and (expense)
Foreign exchange gain (loss)
(39,895)
(48,806)
58,103
(22,585)
Interest expense (related party)
(217,701)
(191,617)
(426,952)
(376,845)
Total other income and (expense)
(257,596)
(240,423)
(368,849)
(399,430)
Loss before income taxes
(727,604)
(425,264)
(1,036,376)
(831,577)
Provision for income taxes
(812)
(917)
(1,620)
(1,824)
Net loss
$ (728,416)
$ (426,181)
$ (1,037,996)
$ (833,401)
Loss per share
Basic and diluted loss per share
$ (0.01)
$ (0.00)
$ (0.01)
$ (0.01)
Weighted average shares outstanding
Basic and diluted
90,461,165
90,444,162
90,452,710
90,444,162
6 Months Ended
Significant Accounting Policies Policies
Nature of operations
Basis of consolidation
Foreign currency translation and transactions
Allowances for doubtful accounts
Accounting Pronouncements
6 Months Ended
Loss Per Share
Note 6. LOSS PER SHARE
Options and Warrants
Outstanding - Opening Balance
298,323
Vested during the period
(10,002)
Outstanding - Ending Balance
288,321
Weighted- Average Grant Date Fair Value
Weighted-Average Exercise Price Outstanding - Opening Balance
$ 0.04
Vested during the period
0.07
Weighted-Average Exercise Price Outstanding - Ending Balance
$ 0.03
Due to related parties
$ 8,937,285
$ 8,398,160
Purchase of Business Unit
Due to related parties
170,644
171,576
Computer Hosting Services
Due to related parties
45,123
43,579
Office Rent
Due to related parties
1,014,023
1,005,367
Other
Due to related parties
17,276
17,276
Loan
Due to related parties
879,123
850,112
Lead Generation Services
Due to related parties
1,220,014
1,160,754
Due to Management
Due to related parties
$ 5,591,082
$ 5,149,496
6 Months Ended
Stock-based Compensation Tables
Total estimated stock-based compensation expense
Three months ended June 30,
Six months ended June 30,
2015
2014
2015
2014
Sales and marketing
$
269,759
$
1,374
$
271,658
$
1,736
General and administrative
12,909
2,001
14,910
4,002
Development
60
-
60
-
Total stock-based compensation
$
282,728
$
3,375
$
286,628
$
5,738
Stock option and warrant activity
Three months ended June 30,
Six months ended June 30,
2015
2014
2015
2014
Expected dividend yield
-
-
-
-
Expected stock price volatility
287
%
206
%
287
%
206
%
Risk-free interest rate
4
%
4
%
4
%
4
%
Expected life of options
5.00
5.86
5.00
5.86
Weighted average fair value of options and warrants granted
$
0.11
$
0.03
$
0.11
$
0.03
Option and Warrats
Weighted-
Options and
Average
Warrants
Exercise Price
Outstanding at December 31, 2014
11,877,803
$
0.04
Stock options granted
490,000
$
0.04
Warrants granted
7,968,803
$
0.04
Stock options forfeited/expired
(595,000
)
$
0.04
Warrants forfeited/expired
(7,968,803
)
$
0.04
Outstanding at June 30, 2015
11,772,803
$
0.04
Nonvested stock option and warrant activity
Weighted-
Options and
Average Grant
Warrants
Date Fair Value
Non-vested stock options and warrants at
December 31, 2014
298,323
$
0.04
Vested during the period
(10,002
)
$
0.07
Non-vested stock options and warrants at
June 30, 2015
288,321
$
0.03
Options and Warrants
Options and Warrants Outstanding
Exercisable
Weighted
Number
Average
Weighted
Number
Weighted
Outstanding at
Remaining
Average
Exercisable at
Average
June 30,
Contractual
Exercise
June 30,
Exercise
2015
Life
Price
2015
Price
$
0.03-0.07
11,772,803
9.45
$
0.04
11,484,482
$
0.04
6 Months Ended
Financial Instruments Tables
Fair value of the derivatives
June 30, 2015
December 31, 2014
Notional
Amount
Net Asset
(Liability)
Notional
Amount
Net Asset
(Liability)
Forward contracts
-
-
$
200,000
$
(5,297
)
6 Months Ended
Related Parties Tables
Amounts due to related parties
June 30,
2015
December 31,
2014
Purchase of business unit
$
170,644
$
171,576
Computer hosting services
45,123
43,579
Office rent
1,014,023
1,005,367
Other
17,276
17,276
Loan
879,123
850,112
Lead generation services
1,220,014
1,160,754
Due to Management
5,591,082
5,149,496
$
8,937,285
$
8,398,160
Significant Accounting Policies Details Narrative
Allowance for doubtful accounts
$ 90,000
$ 90,000
3 Months Ended
6 Months Ended
Stock-based Compensation Details 1
Expected dividend yield
Expected stock price volatility
287.00%
206.00%
287.00%
206.00%
Risk-free interest rate
4.00%
4.00%
4.00%
4.00%
Expected life of options
5 years
5 years 10 months 10 days
5 years
5 years 10 months 10 days
Weighted average fair value of options and warrants granted
$ 0.11
$ 0.03
$ 0.11
$ 0.03
3 Months Ended
6 Months Ended
Loss Per Share Details Narrative
Loss per share - basic and diluted
$ (0.01)
$ (0.00)
$ (0.01)
$ (0.01)
Stock options and warrants excluded from the calculation of dilutive loss per share because they were anti-dilutive
11,772,803
12,377,803
11,772,803
12,377,803
6 Months Ended
Stock-based Compensation
Note 5. STOCK-BASED COMPENSATION
Three
months ended June 30,
Six
months ended June 30,
2015
2014
2015
2014
Sales and marketing
$
269,759
$
1,374
$
271,658
$
1,736
General and administrative
12,909
2,001
14,910
4,002
Development
60
-
60
-
Total stock-based compensation
$
282,728
$
3,375
$
286,628
$
5,738
Three
months ended June 30,
Six
months ended June 30,
2015
2014
2015
2014
Expected dividend yield
-
-
-
-
Expected stock price volatility
287
%
206
%
287
%
206
%
Risk-free interest rate
4
%
4
%
4
%
4
%
Expected life of options
5.00
5.86
5.00
5.86
Weighted average fair value of options
and warrants granted
$
0.11
$
0.03
$
0.11
$
0.03
Weighted-
Options
and
Average
Warrants
Exercise
Price
Outstanding at December 31,
2014
11,877,803
$
0.04
Stock options granted
490,000
$
0.04
Warrants granted
7,968,803
$
0.04
Stock options forfeited/expired
(595,000
)
$
0.04
Warrants forfeited/expired
(7,968,803
)
$
0.04
Outstanding at June 30, 2015
11,772,803
$
0.04
Weighted-
Options
and
Average
Grant
Warrants
Date
Fair Value
Non-vested stock options and warrants
at
December 31, 2014
298,323
$
0.04
Vested during the period
(10,002
)
$
0.07
Non-vested stock options and warrants
at
June 30, 2015
288,321
$
0.03
Options and Warrants
Options
and Warrants Outstanding
Exercisable
Weighted
Number
Average
Weighted
Number
Weighted
Outstanding at
Remaining
Average
Exercisable at
Average
June 30,
Contractual
Exercise
June 30,
Exercise
2015
Life
Price
2015
Price
$
0.03-0.07
11,772,803
9.45
$
0.04
11,484,482
$
0.04
On May 15, 2015, the Companys Board of Directors and Compensation Committee authorized extending the term of a total of
8,458,803 options and warrants held by certain directors, executives, and employees of the Company. The expiry dates of the options
and warrants were extended by ten years. All other terms remained unchanged. The extension of the options and warrants was accounted
for as an exchange of the original awards for new awards. The incremental increase in fair value of the new awards resulted in
additional stock-based compensation expenses totaling $278,828 that was recognized in full in May 2015.
Label
Element
Value
Net loss
us-gaap_NetIncomeLoss
$ (426,181)
Net loss
us-gaap_NetIncomeLoss
$ (728,416)
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M\,E*&N5_F[UG^M-J*$QQ^C1].GV.??)FB%$L492HQ,!"T(X&O^U]`KU5%."&
MIGTXF*W\3.Z@DMZ$VAB8'_GS*$"+XI08G$_/W2E:>GXW5PW,(E.)]/N9O%^J
M4CPO`2@>3EBZF,_]Y'Q(Y4!1B1SL%F]S&Y5^>N[`E,3DS2J8].?$)/QY&L4/
M;NP?0
4#1
M7+/Y'"RU85.)-H^):%_Y3<@O2[^`;&0VBA'X$Q'D$_O(K]Y-7=U[\):YMG#]
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