-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, M9/VXsF3hJAOaOW1L3d9D5PJhe0OIEeQBIzj003XXT15azpNGh6UnMLNkodw+/oa 9a411QKg4H5/WytdFnMuZg== 0000950147-02-000971.txt : 20020813 0000950147-02-000971.hdr.sgml : 20020813 20020812181121 ACCESSION NUMBER: 0000950147-02-000971 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20020630 FILED AS OF DATE: 20020813 FILER: COMPANY DATA: COMPANY CONFORMED NAME: QUOTEMEDIA COM INC CENTRAL INDEX KEY: 0001101433 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 912008633 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-28599 FILM NUMBER: 02727783 BUSINESS ADDRESS: STREET 1: 11100 NE 8TH STREET STREET 2: SUITE 300 CITY: BELLEVUE STATE: WA ZIP: 98004 BUSINESS PHONE: 4154511604 MAIL ADDRESS: STREET 1: 11100 NE 8TH STREET STREET 2: SUITE 300 CITY: BELLEVUE STATE: TX ZIP: 98004 10QSB 1 e-8814.txt QUARTERLY REPORT FOR THE QTR ENDED 6/30/02 U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB Quarterly Report under Section 13 or 15 D of the Securities Exchange Act of 1934 For Quarter Ended: June 30, 2002 Commission File Number: 0-28599 QUOTEMEDIA.COM, INC. (Exact name of small business issuer as specified in its charter) NEVADA (State or other jurisdiction of incorporation or organization) 91-2008633 (IRS Employer Identification Number) 14500 Northsight Blvd. Suite 312 Scottsdale, AZ (Address of principal executive offices) 85260 (Zip Code) (480) 905-7311 (Issuer's Telephone Number) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes [X] No [ ]. On August 9, 2002, the Registrant had 42,919,529 shares of common stock outstanding. QUOTEMEDIA.COM, INC. INDEX TO QUARTERLY REPORT ON FORM 10-QSB Page Part I. Financial Information Item 1. Financial Statements 3 Balance Sheets 3 Statements of Operations 4 Statements of Cash Flows 5 Notes to Financial Statements 6 Item 2. Management's Discussion and Analysis 7 Part II. Other Information Item 1. Legal Proceedings 11 Item 2. Changes in Securities 11 Item 3. Defaults Upon Senior Securities 11 Item 4. Submission of Matters to a Vote of Security Holders 11 Item 5. Other Information 11 Item 6. Exhibits and Reports on Form 8-K 11 Signatures 12 2 QUOTEMEDIA.COM, INC. (A DEVELOPMENT STAGE COMPANY) BALANCE SHEET JUNE 30, 2002 (UNAUDITED) ASSETS JUNE 30, 2002 ------------- CURRENT ASSETS Cash and cash equivalents $ 5,829 Accounts receivable 289 Deposits 15,448 ----------- Total current assets 21,566 Fixed assets, net 50,261 ----------- $ 71,827 =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 266,554 Note payable 87,775 Deferred revenue 6,000 Due to related parties, net 365,245 ----------- 725,574 ----------- STOCKHOLDERS' EQUITY Common stock, $0.001 par value, 50,000,000 shares authorized, 37,869,529 shares issued and outstanding 37,870 Additional paid-in capital 5,360,550 Accumulated deficit (6,052,167) ----------- (653,747) ----------- $ 71,827 =========== "Subsequent Events" (Note 3) See accompanying notes 3 QUOTEMEDIA.COM, INC. STATEMENTS OF OPERATIONS SIX AND THREE MONTHS ENDED JUNE 30, 2002 AND 2001 (UNAUDITED)
SIX SIX THREE THREE MONTHS MONTHS MONTHS MONTHS ENDED ENDED ENDED ENDED JUNE 30, 2002 JUNE 30, 2001 JUNE 30, 2002 JUNE 30, 2001 ------------ ------------ ------------ ------------ OPERATING REVENUE Advertising $ 6,165 $ 1,713 $ 4,707 $ 267 Licensing fees 12,580 5,365 8,147 2,388 ------------ ------------ ------------ ------------ 18,745 7,078 12,854 2,655 OPERATING EXPENSES Business development 4,929 138,858 2,026 129,716 Financing expense 340,250 75,000 52,500 -- Office and administration 322,828 257,863 261,677 92,842 Professional fees 7,325 50,473 2,257 19,036 Research and development 96,070 30,936 51,847 16,514 Website content 96,777 110,687 51,295 34,327 ------------ ------------ ------------ ------------ 868,179 663,817 421,602 292,435 ------------ ------------ ------------ ------------ OPERATING LOSS (849,434) (656,739) (408,748) (289,780) OTHER INCOME AND EXPENSES Interest income 114 146 24 11 Loss on sale of securities -- (2,794) -- -- ------------ ------------ ------------ ------------ 114 (2,648) 24 11 LOSS FOR PERIOD (849,320) (659,387) (408,724) (289,769) ============ ============ ============ ============ EARNINGS PER SHARE Basic loss per share $ (0.02) $ (0.03) $ (0.01) $ (0.01) ============ ============ ============ ============ Diluted $ (0.02) $ (0.03) $ (0.01) $ (0.01) ============ ============ ============ ============ WEIGHTED AVERAGE SHARES OUTSTANDING Basic 35,984,032 20,679,711 37,664,034 19,240,683 ============ ============ ============ ============ Diluted 39,551,898 21,499,800 39,313,938 20,693,183 ============ ============ ============ ============
See accompanying notes 4 QUOTEMEDIA.COM, INC. STATEMENTS OF CASH FLOWS SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (UNAUDITED)
SIX MONTHS ENDED SIX MONTHS ENDED JUNE 30, 2002 JUNE 30, 2001 --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES: NET LOSS $(849,320) $(659,387) ADJUSTMENTS TO RECONCILE LOSS TO NET CASH USED IN OPERATING ACTIVITIES: Depreciation expense 8,054 7,127 Loss on sale of marketable securities -- 2,794 Issuance of capital stock for services 323,750 213,750 CHANGES IN ASSETS AND LIABILITIES: Accounts receivable (289) 3,159 Deposits (44) (6,793) Accounts payable (78,583) 39,925 Deferred revenue 6,000 (2,055) Due from related parties, net 124,492 148,014 --------- --------- NET CASH USED IN OPERATING ACTIVITIES $(465,940) $(253,466) --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale of marketable securities $ -- $ 81,626 Purchase of marketable securities -- (43,000) Fixed assets (9,251) -- --------- --------- NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (9,251) 38,626 --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Share subscription receivable 20,000 -- Repayment of note payable (40,000) 100,000 Issuance of capital stock for cash 200,000 -- Issuance of capital stock for debt 100,000 -- --------- --------- NET CASH PROVIDED BY FINANCING ACTIVITIES 280,000 100,000 --------- --------- NET DECREASE IN CASH (195,191) (114,840) CASH, BEGINNING OF PERIOD 201,020 158,339 --------- --------- CASH, END OF PERIOD $ 5,829 $ 43,499 ========= =========
See accompanying notes 5 QUOTEMEDIA.COM, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENTS SIX MONTH PERIOD ENDED JUNE 30, 2002 1. UNAUDITED INTERIM FINANCIAL STATEMENTS The accompanying unaudited financial statements have been prepared in accordance with the generally accepted accounting principles for interim financial statements and instructions for Form 10-QSB. 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. These financial statements should be read in conjunction with our consolidated financial statements and the notes thereto for the fiscal year ended December 31, 2001 contained in our Form 10-KSB filed with the Securities and Exchange Commission dated March 18, 2002. 2. BASIS OF PRESENTATION BUSINESS COMBINATION The Company ("QuoteMedia") was incorporated June 28, 1999 under the laws of the State of Colorado. On July 14, 1999, Skyline Entertainment, Inc., ("Skyline") issued 11,000,000 common shares to acquire 100% of the issued and outstanding shares of QuoteMedia. This issuance represented approximately 72% of the issued and outstanding shares of Skyline. As a result, the selling shareholders of QuoteMedia have become the controlling shareholders of Skyline. This transaction, under which control of the parent company passes to the former shareholders of the subsidiary, is accounted as a reverse takeover. Under reverse takeover accounting, the cost of the acquisition of QuoteMedia has been recorded using the purchase method, with QuoteMedia (the legal subsidiary) being recognized as the parent for accounting purposes. Under the July 14, 1999 agreement, immediately after the reverse takeover, QuoteMedia was merged into Skyline, with Skyline being the surviving corporation. Skyline's name was then changed to QuoteMedia.com, Inc. EARNINGS PER SHARE Earnings per share have been computed based on the weighted average number of common shares outstanding. For the nine-month period prior to the reverse acquisition discussed above, the number of common shares outstanding used in computing earnings per share is the number of common shares outstanding as a result of such reverse acquisition, plus such additional shares issued by the Company subsequent to the business combination. 3. SUBSEQUENT EVENTS In July and August of 2002, the company issued 2,700,000 shares of restricted common stock at $0.05 for total proceeds of $135,000. 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with our financial statements and notes thereto included elsewhere in this report. We caution readers regarding certain forward looking statements in the following discussion, elsewhere in this report, and in any other statements, made by, or on behalf of our company, whether or not in future filings with the Securities and Exchange Commission. Forward-looking statements are statements not based on historical information and which relate to future operations, strategies, financial results, or other developments. Forward-looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, economic, and competitive uncertainties and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward looking statements made by, or on behalf of, our company. We disclaim any obligation to update forward-looking statements. All references to "we", "our", "us", of "quotemedia" refer to Quotemedia.com, Inc., and it predecessors, operating divisions, and subsidiaries. This report should be read in conjunction with our Form 10-KSB filed with the Securities and Exchange Commission dated March 18, 2002. OVERVIEW We are a leading Java Internet software developer and Vertical Service Provider, or VSP, specializing in the collection, aggregation, and delivery of both delayed and real-time financial data and complementary content via the Internet. Our unique plug and play product capabilities provide a competitive advantage to Internet sites by offering a cost effective and simple alternative to the complex and expensive data feed model employed by most web sites today. The modules are lightweight, reliable, and easy to install, require fewer content updates and data feeds, and have fewer maintenance issues. They are highly customizable, allowing for seamless integration into a customer's web page. To add a module to a web site, a webmaster simply copies and pastes one line of our code to the desired web page. Our products allow existing web portals and brokerage firms to offer investment information and services to their clients via the Internet. Investors can monitor investments through our customizable portfolio tracker, research investment opportunities, watch live video, and execute trades, all from within their browser. We believe that the business model of licensing turnkey, cost effective software solutions to our customers on a private label basis is unique and timely. The private label model allows our company to take advantage of existing brand recognition and loyalties already established between our customers and their clients. Our new QuoteStream(TM) product line is comprised of three products (QuoteStream Lite, QuoteStream, and QuoteStream Pro), all based on the company's revolutionary, proprietary Java Applet that delivers a broad range of 7 value-added financial information and services, such as market indices, stock watch lists, charts, delayed and real-time Level I and Level II streaming (dynamically updated) content in a small (under 100k) web delivered micro-application that requires no downloads or user-resident software, and resides on the user's computer desktop. We have designed our QuoteStream(TM) products specifically for private branding by brokerage, banking, and web portal companies ("Corporate Partners"), and to meet the needs of their customers. QuoteStream enables a Corporate Partner to complement their existing product offering, differentiate themselves from their competition, and generate potentially substantial incremental revenue. This comprehensive micro-application, allows Corporate Partners to offer their own private branded QuoteStream Lite product at no cost to the Partner Company and no cost to their customer. In addition, Partners can offer and up-sell the enhanced QuoteStream and QuoteStream Pro products. We will derive the majority of our revenue from monthly user subscription fees for Level I and Level II products, which we share with our corporate marketing partners. We will also derive revenue from other sources such as email list rentals, banner ads etc. RESULTS OF OPERATIONS REVENUE Revenue consists of advertising fees generated from sponsorship advertisements and licensing fees generated from our software applications. Revenue for the three month period ended June 30, 2002 was $12,854 compared to $2,655 for the three month period ended June 30, 2001. Revenue for the six month period ended June 30, 2002 was $18,745 compared to $7,078 for the six month period ended June 30, 2001. The increase is due to increased licensing fees and banner-advertising revenue related to the Company's Quotestream product. OPERATING EXPENSES WEBSITE CONTENT Website content expenses consist primarily of fees paid to the company's strategic partners for providing financial content such as news, stock quotes, charts, company background data, and general information. Website content expenses for the three month period ended June 30, 2002 were $51,295 compared with $34,327 for the three month period ending June 30, 2001. Website content expenses for the six month period ended June 30, 2002 were $96,777 compared with $110,687 for the six month period ending June 30, 2001. The decrease is due to the Company re-negotiating lower rates for website content. 8 PROFESSIONAL FEES Professional fees consist primarily of legal and accounting fees. Professional fees for the three month period ended June 30, 2002 were $2,257 compared with $19,036 for the three month period ending June 30, 2001. Professional fees for the six month period ended June 30, 2002 were $7,325 compared with $50,473 for the six month period ending June 30, 2001. The decrease is due to a decrease in legal fees associated with trade marking activity and other legal matters. RESEARCH AND DEVELOPMENT Research and development expenses consist primarily of costs associated with the design, programming, and testing of our company's software applications. Research and development expenses for the three month period ended June 30, 2002 were $51,847 compared with $16,514 for the three month period ended June 30, 2001. Research and development expenses for the six month period ended June 30, 2002 were $96,070 compared $30,936 for the six month period ended June 30, 2001. The increase is due to the development of the Company's Quotestream product. BUSINESS DEVELOPMENT Business development consists primarily of marketing, investor relations, travel, and printing expenses. Business development expenses for the three month period ended June 30, 2002 were $2,026 compared to $129,716 for the three month period ended June 30, 2001. Business development expenses for the six month period ended June 30, 2002 were $4,929 compared to $138,858 for the six month period ended June 30, 2001. The decrease is due to a reduction of business development spending due to poor market conditions. FINANCING EXPENSE Financing expenses relate to the cost of common stock issued for assistance in obtaining equity and debt financing. Financing expenses during the three month period ended June 30, 2002 were $52,500. No financing expenses were incurred for the three period ended June 30, 2001. Financing expenses for the six month period ended June 30, 2002 were $340,250 compared to $75,000 for the six month period ended June 30, 2001. The increase is due to a larger number of shares required to be issued for assistance in obtaining financing due to poor market conditions. OFFICE AND ADMINISTRATION Office and administration expenses consist primarily of rent, computer equipment leases, computer maintenance and storage and salary expenses. Office and administration expenses for the three month period ended June 30, 2002 were $261,677 compared to $92,842 for the three month period ended June 30, 2001. Office and administration expenses for the six month period ended June 30, 2002 were $322,828 compared to $257,863 for the six month period ended June 30, 2001. The increase is due to salary and relocation expenses that were accrued during the period but remain unpaid as at June 30, 2002. 9 INTEREST INCOME Interest income consists of interest earned on cash and money market investments. Interest income for the three month period ended June 30, 2002 was $24 compared to $11 for the three month period ended June 30, 2001. Interest income for the six month period ended June 30, 2002 was $114 compared to $146 for the six month period ended June 30, 2001. LOSS ON SALE OF MARKETABLE SECURITIES The Company had no sales of marketable securities in the six month period ended June 30, 2002. The Company incurred a loss on the sale of marketable securities of $2,794 for the six month period ending June 30, 2001. LOSS FOR THE PERIOD As a result of the foregoing, we incurred a loss for the three months ended June 30, 2002 of $408,724 or approximately $(0.01) per share compared to a loss of $289,769 and $ (0.01) per share for the three months ended June 30, 2001. The Company incurred a loss for the six months ended June 30, 2002 of $849,320 or approximately $(0.02) per share compared to a loss of $659,387 and $ (0.03) per share for the six months ended June 30, 2001. LIQUIDITY AND CAPITAL RESOURCES Our cash totaled $5,829 at June 30, 2002, as compared with $158,339 at December 31, 2001, a decrease of $195,191. Net cash of $465,940 was used in operations for the six months ended June 30, 2002, primarily resulting from our net loss for the period offset by an increase in amounts due to related parties and the issuance of capital stock for services. Net cash used by investing activities for the six months ended June 30, 2002 was $9,251 resulting from the purchase of fixed assets. Net cash provided by financing activities for the six months ended June 30, 2002 was $280,000 resulting from the issuance of capital stock for cash and debt and the decrease in share subscription receivable, offset by the partial repayment of notes payable. We cannot predict the timing and amount of future capital expenditures. In July and August of 2002, the company issued 2,700,000 shares of restricted common stock at $0.05 for total proceeds of $135,000. We believe that cash on hand will be sufficient to fund our current operations through the third quarter of 2002. We intend to accelerate our development and infrastructure spending in the coming calendar quarters if we have sufficient available capital resources. We will require additional financings, which may come from future equity or debt offerings that could result in dilution to our stockholders. Adequate capital may not be available at that time and the lack of such capital could adversely affect our business. 10 PART II OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS - none ITEM 2. CHANGES IN SECURITIES During April 2002, we issued 150,000 shares of restricted common stock at a price of $0.22 per share, or an aggregate price of $33,000 as a financing fee for financing provided to the Company. We issued 200,000 shares of restricted common stock at a price of $0.10 per share, or an aggregate offering price of $20,000 as part of a private equity financing. We issued 1,000,000 shares of restricted common stock at a price of $0.10 for in consideration for debt owed by the Company. We issued these shares without registration under the Securities Act in reliance on the exemption provided by Section 4(2) of the Securities Act as a transaction by an issuer not involving a public offering. During May 2002, we issued 130,000 shares of restricted common stock at a price of $0.15 per share, or an aggregate price of $19,500, as a financing fee for financing provided to the Company.. We issued these shares without registration under the Securities Act in reliance on the exemption provided by Section 4(2) of the Securities Act as a transaction by an issuer not involving a public offering. ITEM 3. DEFAULTS UPON SENIOR SECURITIES - none ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - none ITEM 5. OTHER INFORMATION - none ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits Exhibit 99.1 Certification by Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Exhibit 99.2 Certification by Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (b) Reports on Form 8-K - None 11 SIGNATURES Pursuant to the requirements of Section 12 of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. QUOTEMEDIA.COM, INC. Dated: August 9, 2002 By: /s/ R. Keith Guelpa ------------------------------------ R. Keith Guelpa, President (Principal Executive Officer) By: /s/ Keith J. Randall ------------------------------------ Keith J. Randall, C.A., Chief Financial Officer (Principal Accounting Officer) 12 EX-99.1 3 ex99-1.txt CERTIFICATION BY CEO PURSUANT TO SECTION 906 EXHIBIT 99.1 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-QSB of Quotemedia.com, Inc. (the "Company") for the quarterly period ended June 30, 2002 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. ss. 1350, as adopted pursuant to ss. 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 9, 2002 EX-99.2 4 ex99-2.txt CERTIFICATION OF CFO PURSUANT TO SECTION 906 EXHIBIT 99.2 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-QSB of Quotemedia.com, Inc. (the "Company") for the quarterly period ended June 30, 2002 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. ss. 1350, as adopted pursuant to ss. 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 9, 2002 -----END PRIVACY-ENHANCED MESSAGE-----