0001137171-12-000438.txt : 20121114 0001137171-12-000438.hdr.sgml : 20121114 20121114150300 ACCESSION NUMBER: 0001137171-12-000438 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 20120930 FILED AS OF DATE: 20121114 DATE AS OF CHANGE: 20121114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: QUOTEMEDIA 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: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-28599 FILM NUMBER: 121203709 BUSINESS ADDRESS: STREET 1: 17100 E SHEA BLVD STREET 2: SUITE 230 CITY: FOUNTAIN HILLS STATE: AZ ZIP: 85268 BUSINESS PHONE: 4809057311 MAIL ADDRESS: STREET 1: 17100 E SHEA BLVD STREET 2: SUITE 230 CITY: FOUNTAIN HILLS STATE: AZ ZIP: 85268 FORMER COMPANY: FORMER CONFORMED NAME: QUOTEMEDIA INC DATE OF NAME CHANGE: 20030628 FORMER COMPANY: FORMER CONFORMED NAME: QUOTEMEDIA COM INC DATE OF NAME CHANGE: 19991221 10-Q 1 quotemedia_10q.htm QUOTEMEDIA, INC 10 - Q MD Filed by Filing Services Canada Inc. 403-717-3898
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 (Mark one)
R
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended September 30, 2012
OR
 
£
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period _________ to _________                    
    
Commission File Number:   0-28599

QUOTEMEDIA, INC.
 (Exact name of registrant as specified in its charter)
 
Nevada
91-2008633
(State or Other Jurisdiction of Incorporation or Organization)
(IRS Employer Identification Number)
 
17100 East Shea Boulevard, Suite 230, Fountain Hills, AZ 85268
(Address of Principal Executive Offices)

(480) 905-7311
(Registrant’s Telephone Number, Including Area Code)
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 R   No £
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes R    No £
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  £
Accelerated filer  £
Non-accelerated filer £ (Do not check if a smaller reporting company)
Smaller reporting company R
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes £   No R
 
The Registrant has 89,371,320 shares of common stock outstanding as at November 2, 2012.

 
1

 
 
QUOTEMEDIA, INC.
FORM 10-Q for the Quarter Ended September 30, 2012

INDEX

   
Page
Part I.
Financial Information
 
     
Item 1.
Financial Statements (unaudited):
3
     
 
Consolidated Balance Sheets at September 30, 2012 and December 31, 2011
3
     
 
Consolidated Statements of Operations for the three and nine months ended September 30, 2012 and 2011
4
     
 
Consolidated Statements of Cash Flows for the nine months ended September 30, 2012 and 2011
5
     
 
Notes to Consolidated Financial Statements
6
     
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
12
     
Item 4.
Controls and Procedures
20
     
Part II.
Other Information
 
     
Item 6.
Exhibits
21
     
Signatures
22

 
2

 
PART I - FINANCIAL INFORMATION

Item 1.   Financial Statements

QUOTEMEDIA, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
 
   
September 30, 2012
   
December 31, 2011
 
             
ASSETS
           
             
Current assets:
           
    Cash
  $ 420,257     $ 427,010  
    Accounts receivable, net
    806,837       654,449  
    Prepaid expenses
    47,827       247,165  
    Other current assets
    263,364       200,925  
    Total current assets
    1,538,285       1,529,549  
                 
    Deposits
    22,084       24,357  
    Property and equipment, net
    1,266,929       1,238,811  
    Goodwill
    110,000       110,000  
    Intangible assets
    92,654       96,990  
                 
        Total assets
  $ 3,029,952     $ 2,999,707  
                 
LIABILITIES AND STOCKHOLDERS’ DEFICIT
               
                 
Current liabilities:
               
    Accounts payable and accrued liabilities
  $ 1,062,458     $ 1,059,600  
    Deferred revenue
    628,661       602,517  
        Total current liabilities
    1,691,119       1,662,117  
                 
Long-term portion of amounts due to related parties
    6,369,338       5,976,859  
                 
Stockholders’ deficit:
               
    Preferred stock, nondesignated, 10,000,000 shares
    -       -  
    authorized, none issued
               
    Common stock, $0.001 par value, 150,000,000 shares
               
    authorized, 89,371,320 shares issued and outstanding
    89,372       89,372  
    Additional paid-in capital
    8,919,681       8,912,132  
    Accumulated deficit
    (14,039,558 )     (13,640,773 )
        Total stockholders’ deficit
    (5,030,505 )     (4,639,269 )

        Total liabilities and stockholders’ deficit
  $ 3,029,952     $ 2,999,707  

 
 

See accompanying notes

 3


 
 
 
QUOTEMEDIA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
 
   
Three months ended
September 30,
   
Nine months ended 
September 30,
 
   
2012
   
2011
   
2012
   
2011
 
                         
                         
Revenue
  $ 2,388,241     $ 2,330,479     $ 7,429,241     $ 6,563,369  
                                 
Cost of revenue
    1,188,580       1,053,454       3,590,724       3,055,839  
                                 
Gross profit
    1,199,661       1,277,025       3,838,517       3,507,530  
                                 
Operating expenses
                               
                                 
  Sales and marketing
    414,052       477,206       1,316,540       1,457,243  
  General and administrative
    452,638       468,159       1,488,568       1,453,860  
  Software development
    304,477       278,291       900,853       882,028  
      1,171,167       1,223,656       3,705,961       3,793,131  
                                 
Operating profit (loss)
    28,494       53,369       132,556       (285,601 )
                                 
Other income and (expense)
                               
                                 
  Foreign exchange gain (loss)
    (61,907 )     83,162       (59,232 )     42,523  
  Interest expense (related party)
    (158,934 )     (141,281 )     (469,118 )     (401,442 )
      (220,841 )     (58,119 )     (528,350 )     (358,919 )
                                 
Loss before income taxes
    (192,347 )     (4,750 )     (395,794 )     (644,520 )
                                 
Provision for income taxes
    (1,004 )     (511 )     (2,991 )     (1,534 )
                                 
Net loss
  $ (193,351 )   $ (5,261 )   $ (398,785 )   $ (646,054 )
                                 
Loss per share
                               
                                 
Basic and diluted loss per share
    (0.00 )     (0.00 )     (0.00 )     (0.01 )
                                 
Weighted average shares outstanding
                               
                                 
Basic and diluted
    89,371,320       89,371,320       89,371,320       89,371,320  
 

 
 

See accompanying notes

 4


 
 
QUOTEMEDIA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

   
Nine months ended
September 30,
 
   
2012
   
2011
 
             
Operating activities:
           
             
Net loss
  $ (398,785 )   $ (646,054 )
                 
Adjustments to reconcile net loss to net cash provided by operating activities:
               
Depreciation and amortization
    561,890       524,271  
Bad debt expense
    70,386       31,718  
Stock-based compensation expense
    7,549       37,477  
Noncash barter revenue
    (180,000 )     (270,000 )
Noncash barter advertising expense
    96,000       270,000  
Changes in assets and liabilities:
               
Accounts receivable
    (222,774 )     (162,313 )
Prepaid expenses
    19,338       (20,656 )
      Other current assets
    201,561       (55,485 )
Deposits
    2,273       102  
Accounts payable and amounts due to related parties
    395,337       287,912  
Deferred revenue
    26,144       205,289  
Net cash provided by operating activities
    578,919       202,261  
                 
Investing activities:
               
                 
Purchase of fixed assets
    (20,675 )     (36,464 )
Capitalized application software
    (564,997 )     (504,687 )
Net cash used in investing activities
    (585,672 )     (541,151 )
                 
Financing activities:
               
                 
Loans from related parties
    -       200,000  
Net cash provided by financing activities
    -       200,000  
                 
Net increase (decrease) in cash
    (6,753 )     (138,890 )
                 
Cash and equivalents, beginning of period
    427,010       510,018  
                 
Cash and equivalents, end of period
  $ 420,257     $ 371,128  
 

 
 

See accompanying notes

 5


 
 
QUOTEMEDIA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 
1.  
BASIS OF PRESENTATION

The accompanying unaudited 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 financial statements, the Company evaluated subsequent events after the balance sheet date of September 30, 2012 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, 2011 contained in our Form 10-K filed with the Securities and Exchange Commission dated March 29, 2012.

2.  
SIGNIFICANT ACCOUNTING POLICIES

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) Barter revenue
 
The Company licensed one of its portfolio management applications in exchange for advertising services of a customer, referred to as “barter revenue”, whereby advertising credits were received in exchange for subscription services. This revenue was recognized in the period in which the applications are licensed based on the fair market value of the services delivered. The Company determined the fair market value of the service delivered based upon amounts charged for similar services in non barter arrangements within the previous six-month period. The Company also ensured that the value of barter delivered did not exceed the value of cash-based revenue in any period.
 
 
6

QUOTEMEDIA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED
 


The following table summarizes our barter revenue transactions for the three and nine month periods ended September 30, 2012 and 2011:

   
Three months ended 
September 30,
   
Nine months ended 
September 30,
 
   
2012
   
2011
   
2012
   
2011
 
                         
Barter revenue earned
    -     $ 90,000     $ 180,000     $ 270,000  
Advertising credits expensed
    -       90,000       96,000       270,000  

The Company’s barter licensing agreement expired on June 30, 2012, at which time we had unused advertising credits valued at $180,000 that were reflected as prepaid expenses.   In June 2012 we agreed to accept a cash settlement of $264,000 to forfeit our unused advertising credits.  In accordance with the terms of the settlement agreement, the $264,000 cash payment was received in full on July 31, 2012.  The settlement was applied against prepaid expenses, with the excess ($84,000) applied against advertising credits expensed in the second quarter of 2012.
 
e) Accounting Pronouncements

Recent Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (FASB) issued amended guidance and disclosure requirements for fair value measurements. These changes became effective January 1, 2012 on a prospective basis and did not have a material impact on the consolidated financial results. See Note 3, “Financial Instruments” for fair value disclosures.

In July 2012, the FASB issued ASU No. 2012-02, on testing indefinite-lived intangible assets for impairment. Under the guidance, testing the decline in the realizable value (impairment) of indefinite-lived intangible assets other than goodwill has been simplified. The guidance allows an organization the option to first assess qualitative factors to determine whether it is necessary to perform the quantitative impairment test. An organization electing to perform a qualitative assessment is no longer required to calculate the fair value of an indefinite-lived intangible asset unless the organization determines, based on a qualitative assessment, that it is “more likely than not” that the asset is impaired. The guidance is effective for impairment tests for fiscal years beginning after September 15, 2012. We will adopt this guidance on January 1, 2013 but do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.
 
 
 
7

 
 
QUOTEMEDIA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED


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 Company’s consolidated financial statements upon adoption.

3.  
FINANCIAL INSTRUMENTS

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 September 30, 2012.  At December 31, 2011, the fair market value for forward contracts was an asset of $745 and was included in other current assets.

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:

 
8

 
 
QUOTEMEDIA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


 

 
September 30, 2012
 
December 31, 2011
 
Notional Amount
 
Net Asset (Liability)
 
Notional Amount
 
Net Asset (Liability)
               
Forward contracts
-
 
-
 
$    100,000
 
$           745
 
We are required to maintain a margin deposit with a foreign exchange corporation based on the value of the forward contracts outstanding. We had no forward contracts outstanding at September 30, 2012.  There were margin deposits totaling $5,000 included in other current assets at December 31, 2011.

4.  
RELATED PARTIES

The following table summarizes amounts due to related parties at September 30, 2012 and December 31, 2011:

   
September 30, 2012
   
December 31, 2011
 
Purchase of business unit
  $ 226,045     $ 202,372  
Computer hosting services
    119,263       456,734  
Office rent
    947,993       865,601  
Other
    17,276       17,276  
Loan
    717,810       658,224  
Lead generation services
    927,746       860,977  
Due to Management
    3,413,205       2,915,675  
    $ 6,369,338     $ 5,976,859  

During the three months period ended September 30, 2012, we made payments to related parties of $300,000 and $26,061 that were applied against amounts owed for computer hosting services and office rent respectively.  During the nine months period ended September 30, 2012, we made payments of $450,000 and $95,557 that were applied against amounts owed for computer hosting services and office rent respectively.

As a matter of policy, all related party transactions are subject to review and approval by the Company’s 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 September 30, 2012 balance sheet date.  Our related party creditors have agreed to these repayment terms.

 
9

 
QUOTEMEDIA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 
5.  
STOCK-BASED COMPENSATION

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 Company’s stock-based awards, recognized for the three and nine months ended September 30, 2012 and 2011 was comprised as follows:

   
Three months ended 
September 30,
   
Nine months ended 
September 30,
 
   
2012
   
2011
   
2012
   
2011
 
                         
Sales and marketing
  $ 750     $ 969     $ 1,546     $ 27,390  
General and administrative
    2,001       549       6,003       4,337  
Software development
    -       -       -       5,750  
Total stock-based compensation
  $ 2,751     $ 1,518     $ 7,549     $ 37,477  

At September 30, 2012 there was $45,347 of unrecognized compensation cost related to non-vested share-based payments which is expected to be recognized over a weighted-average period of 4.23 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:

 
Three months ended  
September 30,
 
Nine months ended   
 September 30,
 
2012
 
2011
 
2012
 
2011
Expected dividend yield
n/a
 
n/a
 
-
 
-
Expected stock price volatility
n/a
 
n/a
 
276%
 
187%
Risk-free interest rate
n/a
 
n/a
 
4%
 
4%
Expected life of options
n/a
 
n/a
 
6.3 years
 
2.1 years
Weighted average fair value of options and warrants granted
n/a
 
n/a
 
$0.062
 
$0.03

The following table represents stock option and warrant activity for the nine months ended September 30, 2012:

 
10

 
QUOTEMEDIA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 
         
Weighted-
 
   
Options and
   
Average
 
   
Warrants
   
Exercise Price
 
Outstanding at December 31, 2011
    13,707,803     $ 0.05  
                 
Granted under company stock option plan
    230,000     $ 0.06  
                 
Outstanding at September 30, 2012
    13,937,803     $ 0.05  

The following table summarizes our non-vested stock option and warrant activity for the nine months ended September 30, 2012:
         
Weighted-
 
   
 Options and
   
 Average Grant
 
   
Warrants
   
  Date Fair Value
 
Non-vested stock options and warrants at
           
December 31, 2011
    972,222     $ 0.04  
Granted during the period
    230,000     $ 0.06  
Vested during the period
    (279,169 )   $ 0.04  
Non-vested stock options and warrants at
               
September 30, 2012
    923,053     $ 0.05  
                 
 
 
                     
Options and Warrants
 
     
Options and Warrants Outstanding
   
Exercisable
 
           
Weighted
                   
     
Number
   
Average
   
Weighted
   
Number
   
Weighted
 
     
Outstanding at
   
Remaining
   
Average
   
Exercisable at
   
Average
 
     
September 30,
   
Contractual
   
Exercise
   
September 30,
   
Exercise
 
     
2012
   
Life
   
Price
   
2012
   
Price
 
                                 
$ 0.05-0.10       13,437,803       3.41     $ 0.04       12,514,750     $ 0.04  
$ 0.11-0.40       500,000       2.13     $ 0.40       500,000     $ 0.40  

As at September 30, 2012 all 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.

At September 30, 2012 the aggregate intrinsic value of options and warrants outstanding was $446,935.  The aggregate intrinsic value of options and warrants exercisable was $423,924.  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.

6.  
LOSS PER SHARE

The basic and diluted net loss per share was $(0.00) per share for each of the three months ended September 30, 2012 and 2011.  The basic and diluted net loss per share was $(0.00) and $(0.01) per share for the nine months ended September 30, 2012 and 2011, respectively.  There were 13,937,803 and 13,707,803 stock options and warrants excluded from the calculation of dilutive loss per share for the three and nine months ended September 30, 2012 and 2011, respectively, because they were anti-dilutive.

 
11

 

ITEM 2.    Management’s Discussion and Analysis

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. Uncertainties and contingencies that might cause such differences include those risk factors disclosed in our annual report on Form 10-K for the year ended December 31, 2011 and other reports filed from time to time with the SEC.

We disclaim any obligation to update forward-looking statements. All references to “we”, “our”, “us”, or “quotemedia” refer to QuoteMedia, Inc., and its predecessors, operating divisions, and subsidiaries.

This report should be read in conjunction with our Form 10-K for the fiscal year ended December 31, 2011 filed with the Securities and Exchange Commission.

 
Overview
 
We are a developer of financial software and a distributor of market data and research information to stock exchanges, online brokerages, clearing firms, banks, media properties, public companies and financial service corporations worldwide. Through the aggregation of information from many direct data, news, and research sources, we offer a comprehensive range of solutions for all market-related information provisioning requirements.

We have three general product lines:  Data Feed Services, Interactive Content and Data Applications, and Portfolio Management Systems.

Our Data Feed Services consist of raw streaming real-time market data and request-based market data delivered over the Internet or via dedicated telecommunication lines, and supplemental fundamental, historical, and analytical data, keyed to the same symbology, which provides a complete market data solution to be offered to our customers.  Currently, QuoteMedia’s Data Feed services include complete coverage of North American exchanges and over 70 exchanges worldwide.
 
Our Interactive Content and Data Applications consist of a suite of software applications that provide publicly traded company and market information to corporate clients via the Internet.  Products include stock market quotes, fundamentals, historical and interactive charts, company news, filings, option chains, insider transactions, corporate financials, corporate profiles, screeners, market research information, investor relations provisions, level II, watch lists, and real-time quotes. All of our content solutions are completely customizable and embed directly into client Web pages for seamless integration with existing content.
 
 
 
12

 

Our Portfolio Management Systems consist of Quotestream Desktop, Quotestream Professional, Quotestream Wireless, Quotestream Mobile and our Web Portfolio Management systems.   Quotestream Desktop is an Internet-based streaming online portfolio management system that delivers real-time and delayed market data to both consumer and corporate markets.  Quotestream has been designed for syndication and private branding by brokerage, banking, and Web portal companies.  Quotestream’s enhanced features and functionality – most notably tick-by-tick true streaming data, significantly enhanced charting features, and a broad range of additional research and analytical content and functionality – offer a professional level experience to non-professional users.

Quotestream Professional is designed specifically for use by financial services professionals, offering exceptional coverage and functionality at extremely aggressive pricing.  Quotestream Professional features broad market coverage, reliability, complete flexibility, ultra low-latency tick-by-tick data, as well as completely customizable screens, advanced charting, comprehensive technical analysis, news and research data.

Quotestream Wireless and Mobile are true companion products to the Quotestream desktop products (Quotestream and Quotestream Professional) – any changes made to portfolios in either the desktop or wireless application are automatically reflected in the other.

A key feature of QuoteMedia’s business model is that all of our product lines generate recurring monthly licensing revenue from each client. Contracts to license Quotestream to our corporate clients, for example, typically have a term of one to three years and are automatically renewed unless notice is given at least 90 days prior to the expiration of the current license term.  We also generate Quotestream revenue through individual end-user licenses on a monthly or annual subscription fee basis.  Interactive Content and Data Applications and Market Data Feeds are licensed for a monthly, quarterly, annual, or biannual subscription fee. Contracts to license our Financial Data Products and Data Feeds typically have a term of one to three years and are automatically renewed unless notice is given 90 days prior to the expiration of the contract term.

Business environment and trends
 
The global financial markets have experienced extreme volatility and disruption in recent years. As a result, financial institutions globally have acted to control or reduce operational spending. Nevertheless, during this same period we have maintained positive overall revenue growth.  While in some areas the anticipated impact of current market conditions may lead to a decision to reduce demand for market data and related services, we expect overall spending on financial information services will grow modestly over the next several years.

Plan of operation
 
Our plan of operation for the remainder of 2012 will focus on marketing Quotestream for deployments by brokerage firms to their retail clients, and pursuing further expansion into the investment professional market with Quotestream Professional. Licensing Quotestream Wireless, both as a companion to the Quotestream desktop products, and as a stand-alone solution, will also  continue to be a focal point. We will also look to continue the growth of our Data Feed Services client base, and to increase the sales of its Interactive Content and Data Applications, particularly in the context of large scale enterprise deployments encompassing solutions ranging across several product lines.
 
 
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  We have a plan in place to manage costs to ensure that our ongoing expenditures are balanced with our revenue growth rate.  We anticipate that based on product deployments that have been recently completed or are near completion, we will see moderate revenue growth for the remainder of 2012.

Opportunistically, efforts will be made to evaluate and pursue the development of additional new products that may eventually be commercialized by our company.  Although not currently anticipated, we may require additional capital to execute our proposed plan of operation. There can be no assurance that such additional capital will be available to our company, on commercially reasonable terms or at all.

Our future performance will be subject to a number of business factors, including those beyond our control, such as a continuation of the economic downturn and evolving industry needs and preferences as well as the level of competition and our ability to continue to successfully market our products and technology.  There can be no assurance that we will be able to successfully implement our marketing strategy, continue our revenue growth, or achieve profitable operations.
 
Results of Operations
 
Revenue
 
 
2012
2011
Change ($)
Change (%)
         
Three months ended September 30,
     
         
Licensing revenue
$       2,388,241
$       2,330,479
$          57,762
2%

Nine months ended September 30,
   

Licensing revenue
$       7,429,241
$       6,563,369
$          865,872
13%


Licensing revenue has increased 2% and 13% when comparing the three and nine months ended September 30, 2012 and 2011.  The increase is a result of sales growth from licensing both our Interactive Content and Data Applications and Portfolio Management Systems.

Interactive Content and Data Application revenue increased $83,613 (7%) and $366,913 (11%) when comparing the three and nine month periods ended September 30, 2012 and 2011.  The increases are primarily due to an increase in the average value of Interactive Content and Data Application client contracts, as we signed several large-scale contracts since the comparable periods – most notably new contracts with Toronto Stock Exchange and Stockhouse.com.
 
 
14

 
 
Our Portfolio Management System revenue decreased by a total of $25,851 (2%) and increased $498,959 (16%) when comparing the three and nine month periods ended September 30, 2012 and 2011.  Corporate Quotestream revenue decreased $37,802 (5%) and increased $416,599 (19%) for the three and nine months periods ended September 30, 2012 from the comparative periods in 2011.  The decrease for the three months ended September 30, 2012 is due to the expiration of our barter licensing agreement on June 30, 2012. See discussion below regarding our barter licensing agreement.  The increase for the nine months ended September 30, 2012 is due to new large-scale contracts signed since the comparable periods – most notably new contracts with the Toronto Stock Exchange and Stockhouse.com, offset by the expiration of our barter licensing agreement.

Individual Quotestream revenue increased $11,951 (4%) and $82,360 (9%) from the comparative periods in 2011, resulting from an increase in the number of subscribers and an increase in the average revenue per subscriber.  Included in Portfolio Management System revenue is revenue earned from licensing of one of our portfolio management applications in exchange for advertising services, referred to as “barter revenue,” whereby advertising credits were received for subscription services.  Our barter licensing agreement expired on June 30, 2012 therefore there was no barter revenue for the three months ended September 30, 2012.  Barter revenue was $180,000 for the nine month periods ended September 30, 2012.  This barter revenue amounted to $90,000 and $270,000 for the three and nine month periods ended September 30, 2011.  See discussion regarding our barter licensing agreement below under “Sales and Marketing”.

Cost of Revenue and Gross Profit Summary
 
 
2012
2011
Change ($)
Change (%)
         
Three months ended September 30,
     
         
Cost of revenue
$       1,188,580
$       1,053,454
$          135,126
13%
Gross profit
$       1,199,661
$       1,277,025
$          (77,364)
(6)%
Gross margin %
50%
55%
   

Nine months ended September 30,
         
Cost of revenue
$       3,590,724
$       3,055,839
$          534,885
18%
Gross profit
$       3,838,517
$       3,507,530
$          330,987
9%
Gross margin %
52%
53%
   

Our cost of revenue consists of fixed and variable stock exchange fees and data feed provisioning costs. Cost of revenue also includes amortization of capitalized application software costs. We capitalize the costs associated with developing new products once technological feasibility has been established.

Cost of revenue increased 13% and 18% when comparing the three and nine month periods ended September 30, 2012 and 2011. The increases are primarily due to increases in variable stock exchange, data feed, and bandwidth usage charges resulting from the growth in the number of Quotestream clients from the comparable periods. The increases are also due to new and increased fees levied by a number of stock exchanges since the comparable periods and to the acquisition of new data content required to support the new products and features that we have recently developed.
 
 
15

 
 
Overall, the cost of revenue increased as a percentage of sales, as evidenced by our gross margin percentage which decreased to 50% and 52% for the three and nine month periods ended September 30, 2012 from 55% and 53% in the respective comparative periods in 2011. The decreases in gross margins from the comparatives periods are due to a reduction in barter revenue as our barter licensing agreement expired on June 30, 2012.  See discussion regarding our barter licensing agreement below under “Sales and Marketing”.

Operating Expenses Summary

 
2012
2011
Change ($)
Change (%)
         
Three months ended September 30,
     
         
Sales and marketing
$          414,052
$          477,206
$        (63,154)
(13%)
General and administrative
452,638
468,159
(15,521)
(3)%
Software development
304,477
278,291
26,186
9%
Total operating expenses
$       1,171,167
$       1,223,656
$        (52,489)
(4%)

Nine months ended September 30,
     
         
Sales and marketing
$       1,316,540
$       1,457,243
$        (140,703)
(10)%
General and administrative
1,488,568
1,453,860
34,708
2%
Software development
900,853
882,028
18,825
2%
Total operating expenses
$       3,705,961
$       3,793,131
$        (87,170)
(2)%

Sales and Marketing

Sales and marketing consists primarily of sales and customer service salaries, investor relations, travel and advertising expenses. Sales and marketing expenses decreased $63,154 (13%) and $140,703 (10%) for the three and nine month periods ended September 30, 2012 when compared to the same periods in 2011.

The decrease from the comparative periods is primarily due to a decrease in non-cash advertising costs.  We had no non-cash advertising expenses in the three month period ended September 30, 2012, and $96,000 of non-cash advertising costs in the nine month periods ended September 30, 2012.  We incurred $90,000 and $270,000 of non-cash advertising costs in the respective 2011 comparative periods.

We received advertising credits with a large national magazine in exchange for subscription services. The advertising credits were expensed as used and unused advertising credits were reflected as prepaid expenses.  The Company’s barter licensing agreement expired on June 30, 2012, at which time we had unused advertising credits valued at $180,000 that were reflected as prepaid expenses.   In June 2012 we agreed to accept a cash settlement of $264,000 to forfeit our unused advertising credits.  In accordance with the terms of the settlement agreement, the $264,000 cash payment was received in full on July 31, 2012.  The settlement was applied against prepaid expenses, with the excess ($84,000) applied against advertising credits expensed in the second quarter of 2012.
 
 
16

 
 
General and Administrative

General and administrative expenses consist primarily of salaries expense, office rent, insurance premiums, and professional fees.  General and administrative expenses decreased $15,521 (3%) and increased $34,708 (2%) for the three and nine month periods ended September 30, 2012, respectively, when compared to the same periods in 2011.  The decrease for the three months ended September 30, 2012 is due to a reduction in administrative staff from the comparative period.  The increase for the nine months ended September 30, 2012 is due mainly to an increase in bad debt expense offset by a reduction in administrative staff from the comparative period.

Software Development

Software development expenses consist primarily of costs associated with the design, programming, and testing of our software applications prior to the establishment of technological feasibility. Software development expenses also include costs incurred to maintain our software applications.

Software development expenses increased $26,186 (9%) and $18,825 (2%) for the three and nine month periods ended September 30, 2012, respectively, when compared to the same periods in 2011, primarily due to the hiring of new development personnel and competitive salary adjustments to existing personnel from the comparative periods.

We capitalized $192,905 and $564,997 of development costs for the three and nine months ended September 30, 2012, compared to $173,020 and $504,687 for the same periods in 2011. These costs relate to the development of application software used by subscribers to access, manage, and analyze information in our databases. Capitalized costs associated with application software are amortized over their estimated economic life of three years.

 
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Other Income and (Expense) Summary

 
2012
2011
     
Three months ended September 30,
   
     
Foreign exchange gain (loss)
             $        (61,907)
             $          83,162
Interest expense
  (158,934)
  (141,281)
Total other income and (expenses)
             $      (220,841)
             $        (58,119)

Nine months ended September 30,

Foreign exchange gain (loss)
$        (59,232)
$         42,523
Interest expense
 (469,118)
 (401,442)
Total other income and (expenses)
$      (528,350)
$    (358,919)

Foreign Exchange Gain (Loss)

Exchange gains and losses primarily arise from the re-measurement of Canadian dollar monetary assets and liabilities into U.S. dollars. The change in fair value for outstanding foreign exchange forward contracts is also included in foreign exchanges gains and losses as well as gains and losses recognized from foreign exchange forward contracts exercised during the period.

We recognized foreign exchange loss of $61,907 and $59,232 for the three and nine month periods ended September 30, 2012, compared to foreign exchange gain of $83,162 and $42,523 for the same periods in 2011.  The foreign exchange losses for the three and nine month periods ended September 30, 2012 are due to the loss arising from the re-measurement of Canadian dollar monetary assets and liabilities into U.S. dollars, as we have a net Canadian dollar liability and the U.S. dollar depreciated versus the Canadian dollar from December 31, 2011 to September 30, 2012.

Interest Expense

Interest is accrued on certain amounts owed to related parties. Interest expense increased for the three and nine month periods ended September 30, 2012 due to additional borrowings compared to the same periods in 2011.  Interest is accrued at 10% per annum.  Interest income earned on cash balances is netted against interest expenses.

Provision for Income Taxes

For the three and nine month periods ended September 30, 2012, the Company recorded Canadian income tax expense of $1,004 and $2,991, respectively, compared to $511 and $1,534 in the comparative periods in 2011.

 
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Net Loss for the Period

As a result of the foregoing, net loss for the three months ended September 30, 2012 was $(193,351) or $(0.00) per share compared to a net loss of $(5,261) or $(0.00) per share for the three months ended September 30, 2011.  The net loss for the nine months ended September 30, 2012 was $(398,785) or $(0.00) per share compared to a net loss of $(646,054) or $(0.01) per share for the nine months ended September 30, 2011.

Liquidity and Capital Resources

Our cash totaled $420,257 at September 30, 2012, as compared with $427,010 at December 31, 2011, a decrease of $6,753.  Net cash of $578,919 was provided by operations for the nine months ended September 30, 2012, primarily due to the increase in amounts due to related parties and deferred revenue, offset by the net loss for the period adjusted for non-cash charges. Net cash used in investing activities for the nine months ended September 30, 2012 was $585,672 resulting from capitalized application software costs and the purchase of new computer equipment.  There were no financing activities for the nine month period ended September 30, 2012.

For the nine months ended September 30, 2012 we had a net loss of $398,785, and at September 30, 2012 we have a net working capital deficit of $152,834 which represented current assets minus current liabilities.

We have a plan in place for the next 12 months to ensure that our ongoing expenditures are balanced with our expected revenue growth rate.  We anticipate that based on product deployments that have recently been completed and are near completion, we will continue to see revenue growth for the next 12 months.  Our current liabilities include deferred revenue of $628,661. The costs expected to be incurred to realize the deferred revenue in the next 12 months are minimal. Our long-term liabilities include $6,369,338 due to related parties. 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.

Based on the factors discussed above, we believe that our cash on hand and cash generated from operations will be sufficient to fund our current operations for at least the next 12 months.  However, to implement our business plan may require additional financing. Additional financings may come from future equity or debt offerings that could result in dilution to our stockholders.

Our long-term liquidity requirements will depend on many factors, including the rate at which we expand our business, and whether we do so internally or through acquisitions. To the extent that the funds generated from operations are insufficient to fund our activities in the long term, we may be required to raise additional funds through public or private financing. No assurance can be given that additional financing will be available or that, if it is available, it will be on terms acceptable to us.

 
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ITEM 4.    Controls and Procedures

Under the supervision and with the participation of our Chairman of the Board and Chairman of the Audit Committee, Chief Executive Officer and Chief Financial Officer, we completed an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) to the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on that evaluation, we and our management have concluded that our disclosure controls and procedures at September 30, 2012 were effective at the reasonable assurance level to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and are designed to ensure that information required to be disclosed by us in these reports is accumulated and communicated to our management, as appropriate to allow timely decisions regarding required disclosures. In the three months ended September 30, 2012, there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to affect, our internal control over financial reporting.

We will consider further actions and continue to evaluate the effectiveness of our disclosure controls and internal controls and procedures on an ongoing basis, taking corrective action as appropriate. Management does not expect that disclosure controls and procedures or internal controls can prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable and not absolute assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. While management believes that its disclosure controls and procedures provide reasonable assurance that fraud can be detected and prevented, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

 
20

 
PART II - OTHER INFORMATION
 
ITEM 6.  EXHIBITS 
     
Exhibit
Number
 
Description of Exhibit
     
31.1
 
31.2
 
32.1
 
32.2
 
101
 
Interactive Data Files (Quarterly Report on Form 10-Q, for the quarterly period ended September 30, 2012, furnished in XBRL (eXtensible Business Reporting Language)).
 
 
21

 
 
SIGNATURES
 
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
QUOTEMEDIA, INC.
 
       
 
Dated: November 14, 2012
 
       
 
By:
/s/ R. Keith Guelpa
 
       
 
R. Keith Guelpa,
 
 
President and Chief Executive Officer
 
 
(Principal Executive Officer)
 
       
 
By:
/s/ Keith J. Randall
 
       
 
Keith J. Randall,
 
 
Chief Financial Officer
 
 
(Principal Accounting Officer)
 

 
22

 
EX-31.1 2 ex31_1.htm CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO RULE 13A-14(A) AND RULE 15D-14(A), PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. MD Filed by Filing Services Canada Inc. 403-717-3898
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:  November 14, 2012
By:   /s/ R. Keith Guelpa

R. Keith Guelpa
Chief Executive Officer

 
 

 

EX-31.2 3 ex31_2.htm CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO RULE 13A-14(A) AND RULE 15D-14(A), PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. MD Filed by Filing Services Canada Inc. 403-717-3898
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:  November 14, 2012
By:   /s/ Keith J. Randall

Keith J. Randall
Chief Financial Officer

 
 

 

EX-32.1 4 ex32_1.htm CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002. MD Filed by Filing Services Canada Inc. 403-717-3898
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 September 30, 2012 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
November 14, 2012
 
 
 

 

EX-32.2 5 ex32_2.htm CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002. MD Filed by Filing Services Canada Inc. 403-717-3898
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 September 30, 2012 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
November 14, 2012
 
 
 

 

EX-101.INS 6 qmci-20120930.xml 0001101433 2012-01-02 2012-09-30 0001101433 2012-11-02 0001101433 2012-09-30 0001101433 2011-12-31 0001101433 2012-07-01 2012-09-30 0001101433 2011-07-01 2011-09-30 0001101433 2011-01-01 2011-09-30 0001101433 2012-01-01 2012-09-30 iso4217:USD xbrli:shares iso4217:USD xbrli:shares QUOTEMEDIA INC 0001101433 10-Q 2012-09-30 false --12-31 No No Yes Smaller Reporting Company Q3 2012 89371320 <p style="margin: 0pt"></p> <p style="font: 12pt Garamond; margin: 0 0 10pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The accompanying unaudited 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. 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RELATED PARTIES
9 Months Ended
Sep. 30, 2012
Related Party Transactions [Abstract]  
RELATED PARTIES

The following table summarizes amounts due to related parties at September 30, 2012 and December 31, 2011:

 

   September 30, 2012  December 31, 2011
Purchase of business unit  $226,045   $202,372 
Computer hosting services   119,263    456,734 
Office rent   947,993    865,601 
Other   17,276    17,276 
Loan   717,810    658,224 
Lead generation services   927,746    860,977 
Due to Management   3,413,205    2,915,675 
   $6,369,338   $5,976,859 

 

During the three months period ended September 30, 2012, we made payments to related parties of $300,000 and $26,061 that were applied against amounts owed for computer hosting services and office rent respectively. During the nine months period ended September 30, 2012, we made payments of $450,000 and $95,557 that were applied against amounts owed for computer hosting services and office rent respectively.

 

As a matter of policy, all related party transactions are subject to review and approval by the Company’s 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 September 30, 2012 balance sheet date. Our related party creditors have agreed to these repayment terms.

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