10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark one)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2023

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)

(602) 830-1443

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of exchange on which registered
Common stock, par value $.001 per share	OTCQB tier of the OTC Markets

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section15(d) of the Act. Yes ☐ No ☒

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 ☒  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 ☒   No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☒

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", "smaller reporting company" and "emerging growth 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	☒
			Emerging growth company	☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of March 18, 2024, there were outstanding 90,477,798 shares of the issuer's common stock, par value $.001 per share and 123,685 shares of Series A Redeemable Convertible Preferred Stock, par value $.001 per share.

The aggregate market value of common stock held by non-affiliates of the issuer (60,624,539 shares) based on the closing price of the issuer's common stock as quoted on the OTCQB tier of the OTC Markets as of the last business day of the issuer’s most recently completed second fiscal quarter, June 30, 2023, was $18,187,362. For the purposes of this computation, all executive officers, directors, and 10% beneficial owners of the issuer are deemed to be affiliates. Such a determination should not be deemed an admission that such officers, directors, or 10% beneficial owners are, in fact, affiliates of the issuer.

Documents incorporated by reference:  None

QUOTEMEDIA, INC.

ANNUAL REPORT ON FORM 10-K

FISCAL YEAR ENDED DECEMBER 31, 2023

TABLE OF CONTENTS

PART I
ITEM 1.	BUSINESS	3
ITEM 1A.	RISK FACTORS	9
ITEM 1B.	UNRESOLVED STAFF COMMENTS	12
ITEM 2.	PROPERTIES	12
ITEM 3.	LEGAL PROCEEDINGS	12
ITEM 4.	MINE SAFETY DISCLOSURES	12
PART II
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES	13
ITEM 6.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	13
ITEM 6A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	20
ITEM 7.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	20
ITEM 8.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	20
ITEM 8A.	CONTROLS AND PROCEDURES	21
ITEM 8B.	OTHER INFORMATION	21
PART III
ITEM 9.	DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE	22
ITEM 10.	EXECUTIVE COMPENSATION	23
ITEM 11.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	26
ITEM 12.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	30
ITEM 13.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	31
PART IV
ITEM 14.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	32
SIGNATURES		33
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS		34

Statement Regarding Forward-Looking Statements

The statements contained in this report on Form 10-K that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements regarding our "expectations," "anticipation," "intentions," "beliefs," or "strategies" regarding the future. Our actual results could differ materially from those in the forward-looking statements. Among the factors that could cause actual results to differ materially are the factors discussed in Item 1A. "Risk Factors."

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PART I

ITEM 1. BUSINESS.

General

QuoteMedia, Inc. (OTCQB: QMCI) is a leading provider of financial data, market research information, analytics, news feeds, and financial software solutions to online brokerages, banks, clearing firms, financial service companies, media portals, and public corporations. We are a sole source for a wide array of market information and services, including streaming stock market data feeds, research and analysis information, content applications, portfolio management systems, software products, corporate investor relations provisioning, news services, mobile apps, and custom development. Our portfolio management products are provided on a SaaS (software as a service) model, as are our other interactive content and data APIs.

We have created a scalable system that aggregates, manages, and streams information from the stock exchanges and from other information and content feeds across both the Web and dedicated telecommunication lines. Because QuoteMedia is a comprehensive single-source market data provider, our clients are not required to deal with multiple data vendors, many of which continue to employ outdated infrastructures and delivery technologies. This allows our clients to license comprehensive financial information applications and raw data more efficiently and cost-effectively.

QuoteMedia offers clients the advantages of a sole source for a broad range of data, information, and services, including:

· Streaming Real-time Data Feeds

· Dynamic Content Web Displays

· Data APIs, XML and JSON Data

· News Feed Aggregation and Delivery

· Mobile App Solutions

· Complete Portfolio Management

· Corporate Investor Relations Solutions

· Research Information Supply

· Custom Software Application Development

Our data delivery solutions are fast, lightweight, reliable, and easy to implement across all platforms. Our products are technologically advanced, providing a framework for quick implementation, seamless client integration and complete customization.

We are a United States reporting public company that was incorporated in the State of Nevada in 1999. Our shares are quoted on the OTCQB tier of the OTC Markets under the trading symbol QMCI. Our corporate head office is located at 17100 East Shea Boulevard, Suite 230, Fountain Hills, Arizona 85268, and our telephone number is (602) 830-1443. All references to our business operations in this report include the operations of QuoteMedia, Inc. and our operating divisions and subsidiaries.

Our Web site is located at www.quotemedia.com. Through our Web site we make available free of charge the following company information: our annual reports on Form 10-K; our quarterly reports on Form 10-Q; our current reports on Form 8-K; our proxy statements; and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934. These reports are available as soon as reasonably practical after we electronically file these reports with the SEC. We also post on our Web site the charter of our Audit Committee; our Corporate Governance Guidelines; our Code of Business Conduct/Ethics and Code of Ethics for the CEO and Senior Financial Officers, and any amendments or waivers thereto; and any other corporate governance materials contemplated by SEC or applicable regulations. These documents are also available in print to any stockholder requesting a copy from our corporate secretary at our principal executive offices.

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Products and Services

QuoteMedia has developed a full range of financial data and market information solutions which are licensed to our clients on a monthly, quarterly, or annual basis. Our products and services are divided into three main categories: Data Feed Services; Interactive Web Content and Data APIs; and Portfolio Management and Real-Time Quote Systems. 

Data Feed Services

QuoteMedia offers comprehensive, low latency, tick-by-tick enterprise level streaming market data feeds delivered over the Internet or via dedicated telecommunication lines, as well as supplemental fundamental, historical, and analytical data, keyed to the same symbology which provides a complete market data solution to our customers. Currently, QuoteMedia’s Data Feed services include complete coverage of North American exchanges and over 70 exchanges worldwide. Data Feeds coverage includes equities, options, futures, commodities, currencies, mutual funds, ETFs, and indices.  The data is normalized for ease of use and is provided in a wide range of formats and delivery methods.  Data is available in real-time, delayed, and end-of-day format, as well as Level 1 and Level 2 (Market Depth).

QuoteMedia has also created Quotestream Connect^TM, a hybrid of our existing Data Feed Services, and our Portfolio Management Systems.  It is a new method of delivering real-time data feeds to individual users to power 3^rd party applications.  In most cases, this allows QuoteMedia to retain Vendor of Record status with the exchanges – resulting in significant savings for our clients in resources and exchange fees.

Interactive Content and Data APIs

QuoteMedia’s proprietary financial software applications and widgets (QMod^TM) comprise a unique suite of custom Web technologies that combine the power and depth of established financial databases with the flexibility and efficiency of the Web to deliver customized high-quality content to clients around the world. QuoteMedia financial data delivery application products and components comprise an extensive product line that spans the spectrum of Quote Modules, Charts, Market Movers, News, Watch Lists, Tickers, Market Summaries, Option Chains, Filings, Investor Relations Solutions, Fundamentals, Screeners and much more. Our lightweight and fast-loading applications provide an extensive array of information in a variety of delivery vehicles. All our content solutions are completely customizable, embedded directly into client Web pages for seamless integration with existing content, and are licensed to our clients on a recurring subscription basis. Our Interactive Content and Data APIs include the following:

Quote Modules – allow users to enter information and look up various data points on equities, funds, rates, currencies, and the markets.  Our Quote Modules provide complete market data and supplemental data coverage.  This comprehensive coverage consists of fundamental data (EPS, P/E ratio, dividends, yield, shares outstanding, market cap, etc.), analytical statistics (52 week high/low, moving averages, average volumes, moving performance numbers), historical EOD data (fully adjusted and keyed historical data), market updates, North American indices, market movers, actives, gainers, losers, company information (business description, address, phone, fax, auditors, officers, etc.), classification codes (sector, industry, NAICS, SIC, CIK, etc.), share statistics (shares outstanding, float, holdings, profitability, management effectiveness, short interest, short interest ratio), as well as broader market information such as bank rates and currency values. The data returned is compact, customizable, and incorporates comprehensive information, including charts, news, historical stock prices, market depth, filings, insiders, financials, and other information.

Real-Time Snap Quotes – Cost-effective, customizable, instant real-time quotes and market data, real-time charts, real-time level II, and real-time options.  The real-time snap quote service features client-controlled entitlements, comprehensive online tracking, detailed reporting capabilities, and North American exchange fee capping.  These features are unique to our company and result in greater efficiency and cost savings for our clients.

Market Indices – At-a-glance display of market conditions, fed directly from the major North American and international exchanges and index providers.

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Charts – Markets and equity charting are available in a variety of formats. Static thumbnails or dynamic interactive charting is available to allow full market charting or individual stock performance displays, including comparisons to other equities or indices, as well as the ability to plot a wide range of technical studies. 

Stock Screeners – Allow users to filter stocks based on a wide variety of selection criteria, including sector/industry, share price, market cap, exchange, EPS, P/E ratio, etc.

Fund Screeners – Allow users to filter US or Canadian mutual funds based on an array of distinct characteristics, including fund types, performance metrics, fee structures, etc.

News – Topic-based, sector-based, and equity-based lookup of news stories and commentary relating to the markets, individual companies, or specific areas of interest.

Watch Lists – Display current values and trends for a group of user-defined equities and indices.

Market Statistics – Top gainers and losers on the day for a variety of exchanges and detailed statistical analysis of most actively traded stocks.  A variety of economic indicators are also provided.

Financial Calendars – Including Corporate Events Calendars, Economic Calendars, Stock Market Holiday, and Trading Calendars etc.

Wallboards – Deliver updated market data and news headlines in Real-Time for display to power the wallboard for trade floors, classrooms or other wall displays. Ideal for displaying Indices, Commodities Prices (such as Gold, Silver, Oil and Gas), Currencies, Rates, News Headlines and Commentary, and can even incorporate a client's own content or advertising.

Finance Calculators – Examples include Bond Yield, Cost Basis, Future Asset Value, Loan Payment, Investment Calculator, Monthly Mortgage Payment, Present Asset Value, Rate of Return, Total Return, Currency Converter, etc.

Investor Relations – Information on current value, historical data, charting and news, and other data related to individual public companies for investor relations information provisioning.  These products provide a turnkey and self-updating investor relations solution for corporate Web sites and their investors.

QMod^TM – QuoteMedia’s proprietary web delivery system, called QMod, was created for secure market data provisioning as well as ease of integration and unlimited customization and responsiveness. QMod is an extensible market data component JavaScript library used to deliver market data content to Web platforms powered by JSON back-ends. With extensibility in mind, QMod can be utilized to build custom applications on demand for clients as well as continue to improve existing and new components with ease.  The resulting widgets are mobile-ready because they automatically re-size and optimize based on the type of device they are viewed on – whether a laptop, tablet, or any model of mobile phone.   And, unlike competitive products, QMod is SEO friendly, providing self-generating, automatically updating content that is optimized for search engine indexing – whereas the content and associated links delivered through most competitors’ widgets are essentially invisible to search engine web crawlers.

Portfolio Management Systems

QuoteMedia offers three leading edge portfolio managements systems: Quotestream™ Desktop and Mobile; Quotestream™ Professional; and a Web Portfolio Management product.   Each of these systems can be implemented independently, or they can be employed in conjunction with each other to provide a complete portfolio management solution for both nonprofessionals and professionals.

Quotestream™ Desktop (Download), Web (Browser) and Mobile Apps

QuoteMedia’s proprietary software, Quotestream, is our unique, Web-delivered, embedded application providing real-time, tick-by-tick, streaming market quotes and research information.  Quotestream is the next generation portfolio management system for nonprofessional users, with enhanced features and functionality compared to our original Quotestream product – most notably tick-by-tick true streaming data, significantly enhanced charting features, and a broad range of additional research and analytical content and custom functionality. 

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 Quotestream is geared towards providing a professional-level experience to non-professional users.  Coverage includes North American and LSE real-time data, NASDAQ, TSX, TSXV and LSE Level 2 data (market depth), market indices, dynamic and interactive charts, options, news, and research information, and end-of-day quote data for over 35 international exchanges, in an easy-to-use and highly configurable interface.

Quotestream Web is the latest HTML5, browser-based version of Quotestream. No downloads or installations are required with this quick, lightweight, and robust application. It is a sophisticated streaming portfolio management solution that only requires a browser, allowing users to track investments and access research data with ease.

The Quotestream Suite of products has been designed specifically for syndication and private branding by brokerage, banking, and other corporate clients. It can be fully integrated into existing user registration databases, portfolio systems and on-line trading systems, thus enabling any brokerage, clearing firm, bank, or other corporation to seamlessly complement their existing product offerings and differentiate themselves from their competition.

QuoteMedia corporate clients purchase volume licenses for their customers, gaining significant increases in customer attraction, retention and activity, and increased revenues as a result.

Quotestream Web and Desktop offer the user custom portfolios and watchlists, market summaries, Level 1 and Level 2 data, a trade trend meter, volume leaders, top gainers and losers, company news, insider activity, SEC filings, research, analysis and opinions, earnings forecasts, news, index/stock ticker, intraday and historical charting, interactive charting, desktop alerts, and email alerts. Users may fully customize their workspaces to suit their needs.  The design also offers quite simple point-and-click and drag-and-drop navigation with little or no typing involved.  Quotestream displays in full screen mode, providing a comprehensive professional trade terminal-style interface.

 QuoteMedia’s Quotestream Mobile is a revolutionary mobile companion to the Desktop and Web product that allows users to access financial data, news, and charting in real-time or delayed modes, from handheld devices. Quotestream Mobile allows users to manage their portfolios and watchlists, and access market research on phones and tablets. Quotestream Mobile supports iOS™ and Android™.

Quotestream Mobile can be integrated with any brokerage/clearing firm's existing on-line trading platform without the installation of expensive business enterprise servers.  Additionally, the application is designed to allow private branding by brokerage, banking, and other corporate clients.

Quotestream Mobile, Quotestream Desktop, and Quotestream Web are true companion products as any changes made to portfolios in either application is automatically reflected in the other.

Quotestream™ Professional

Quotestream Professional is designed specifically for use by financial services professionals and their key support personnel, 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 Professional was created with the latest technology, making QuoteMedia’s professional application one of the most sophisticated, user-friendly, and dependable market data and technical analysis solutions available to market professionals today. It provides true thin client access as there is no software to download, no upgrades to install, and no technical staff required. Quotestream Professional is accessed via the Internet, avoiding expensive server and circuit infrastructure requirements.

Quotestream Professional also features mobile access to the same portfolios and market data entitlements through mobile devices.  The desktop and mobile applications work in a companion relationship, where any changes made on one device immediately transfer to the other.

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Web Portfolio Manager

The Web Portfolio Manager is a user-friendly yet powerful solution allowing users to track their holdings, conduct in-depth research and analyze performance for all stocks, mutual funds and indices listed on any of the major global exchanges.

The Web Portfolio Manager provides immediate Web access to detailed Quote Data, Market and Company News, Charting, Depth / Level II, Filings, Historical Data, Snap Quotes and more.   The Web Portfolio Manager is an efficient and economical solution for both the new and experienced investor.

The Web Portfolio Manager offers corporate clients such as banks, wealth management companies, brokerages, clearing firms and Web portals an ideal opportunity to cost-effectively provide premium online portfolio management services for their investor customers.

The Web Portfolio Manager can be integrated with the Quotestream products so that changes in any one platform, including real-time data entitlements, are reflected across the other systems.

Quotestream Connect^TM

Quotestream Connect^TM is a hybrid of our existing Data Feed Services, and our Portfolio Management Systems.  It is a new method of delivering real-time data feeds to individual users to power third party applications.  In most cases, this allows QuoteMedia to retain Vendor of Record status with the exchanges – resulting in significant savings for our clients in resources and exchange fees.

Products Competitive Advantage

Our products attract a broad market base, targeting corporate clients worldwide and providing comprehensive financial data services in a wide selection of custom packages.  Markets for our services include:

·   Online brokerages ·   Full-service brokerage firms ·   Banks and other financial institutions ·   Financial Web sites ·   Web portals ·   Public companies ·   Investor relations firms ·   Mutual fund companies ·   Internet service providers ·   Media companies ·   Publishers and Data firms ·   Wealth management companies ·   Individual traders and investors ·   Securities exchanges

Our financial data services provide a sensible solution to the high up-front cost of in-house developed software. We leverage our technical talent and innovative infrastructure across multiple client platforms, thus creating an economical, efficient, and scalable system that can manage and deliver information application capabilities to an unlimited number of entities from data centers and content feeds across the Internet and over dedicated lines. Our data feeds have among the lowest latency of any available in the market and are developed and delivered using technology that is more current than that used by many major competitors in this market.  Our marketing strategy is based on the following key competitive advantages:

Superior Products – Our goal has always been to create the best products on the market.  We develop all our products in-house and take pride in creating quality applications.  Our products stand out for their superior design, user-friendliness, ease of implementation, customizability, reliability, data speed, accuracy, and comprehensiveness.

Custom Development – QuoteMedia’s ability to provide complete custom design and development services differentiates us from our competitors.  We can create custom market data applications and software engineered precisely to our clients’ specifications, and the speed with which we are able to take a product from concept to deliverable truly sets us apart.

Data Speed and Quality – Our connections to the world’s exchanges for equities and derivatives have most sources of latency removed allowing us to deliver extremely fast, accurate, and reliable data. 

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Single Source Provider – Clients are eager to acquire premium market data feeds, financial applications, streaming solutions, and news and research information from a sole source provider. Rather than having to license applications, information and market data from multiple sources, our clients enjoy the benefits of dealing with a single comprehensive market data supplier. 

Cutting Edge Data Delivery Technology - We use state-of-the-art hardware and software systems for maximum speed and efficiency.  This provides us with a distinct advantage over our competitors, most of whom use outdated data delivery technologies based on legacy style data networks. 

Effective Marketing – We have implemented a marketing strategy that focuses on multiple markets for our products and services, from individual nonprofessional end users to corporate and institutional clients and their customers. 

Low Infrastructure Costs - Because of the unique technological advancements in data delivery developed by our company, our distribution model, and the strategic partnerships that are in place, we have maintained very low corporate overhead. All our development is completed in-house, resulting in significant cost efficiencies.  This allows us to focus our resources on data management, data acquisition, customer satisfaction, and business development activities.  Our low-cost base of development and operation also allows us to maintain very competitive pricing.

Competition

Many companies provide financial market data and related information. Companies such as Bloomberg and Rifinitiv and Factset are some of the data providers in this highly competitive marketplace.

While there are many financial data providers, what differentiates us from others is that we offer clients a comprehensive solution for stock market-related information provisioning with more advanced technologies than employed by most of our competitors. Our diversity of technical expertise, agile responsiveness to custom corporate requirements and development needs, and proven commitment to superior delivery technologies have established QuoteMedia as a frontrunner in the financial market data industry.

QuoteMedia's array of products benefit clients with an exceptional number of strong technical differentiators in embedded, fully private-labeled, and seamlessly integrated environments which combine to offer strong market differentiation.

Trademarks, Domain Names, and Intellectual Property

We own the trademarks for “QuoteMedia”, “Quotestream” and “QMod”, the domain names www.quotemedia.com; www.quotestream.com; and www.quotestream.ca. We will continue to own and protect these key assets into the future.

We protect our other intellectual property by a combination of copyrights, trademarks and confidentiality agreements with our employees, customers, and other agents.

Regulatory Issues

We are not subject to any special governmental regulation concerning our supplying of products and services to the marketplace, and we believe we are complying in all material respects with all existing regulations governing other aspects of our businesses.

Employees

We currently have a total of 131 full-time employees, with 8 located in the United States and 123 located in Canada. Our employees are not members of any union, nor have we entered into any collective bargaining agreements. We believe that we have a good relationship with our employees. With the successful implementation of our business plan, we may continue to hire additional employees during fiscal 2024 to handle anticipated growth in the areas of administration, programming, sales, marketing, and customer care.

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ITEM 1A. RISK FACTORS.

You should carefully consider the following factors, in addition to those discussed elsewhere in this report, in evaluating our company and our business.

Catastrophic events outside of our control may impact on our business. The U.S. and global markets have, from time to time, experienced periods of disruptions due to a natural disaster, such as a tsunami, power shortage, or flood; public health crises, such as a pandemic or epidemic; political crises, such as terrorism, war, or other conflict; or other events outside of our control that may occur and adversely impact our business and operating results. The conflict in Ukraine has caused instability in global economies. We will closely monitor the impact of the conflict in Ukraine on all aspects of our business, including how it will impact team members, customers, suppliers, and global markets. The extent to which Ukraine conflict may impact our business will depend on future developments, which are highly uncertain and cannot be predicted.

Declining activity levels in the securities markets or the failure of market participants could lower demand for our services. Our business is dependent upon the health of the financial markets as well as the financial health of the participants in those markets. The recent uncertainty in the global financial markets could result in lower activity levels, including lower trading volumes and a substantial reduction in the number of issuances of new securities. It could also lead to the collapse of some market participants. Some of the demand for financial market data is dependent upon activity levels in the securities markets, while other demand is static and is not dependent on activity levels. If a downturn in the global financial markets results in a prolonged, significant decline in activity levels or continues to have an adverse impact on the financial condition of our customers, our revenue could be materially adversely affected.

The impact of cost-cutting pressures across the industries we serve could lower demand for our services. During 2023 we saw customers continue their focus on containing or reducing costs because of the more challenging market conditions, and this trend may continue into 2024. Customers within the financial services industry that strive to reduce their operating costs may continue to reduce their spending on financial market data and related services. If customers elect to reduce their spending with us, our results of operations could be materially adversely affected. Alternatively, customers may use other strategies to reduce their overall spending on financial market data services by consolidating their spending with fewer vendors, by selecting vendors with lower-cost offerings or by self-sourcing their need for financial market data. If customers elect to consolidate their spending on financial market data services with other vendors instead of us, if we cannot price our services as aggressively as the competition, or if customers elect to self-source their needs, our results of operations could be materially adversely affected.

Consolidation of financial services within and across industries, or the failure of financial services firms could lower demand for our services. Over the past few years there has been consolidation among some participants in the financial markets and the collapse of others. We continue to deliver services to several customers currently involved in the process of a merger or acquisition. As consolidation occurs and synergies are achieved, there may be fewer potential customers for our services. There are two types of consolidations: consolidations within an industry, such as banking; and across industries, such as consolidations of insurance, banking, and brokerage companies. When two companies that separately subscribe to or use our services combine, they may terminate or reduce duplicative subscriptions for our services, or if they are billed on a usage basis, usage may decline due to synergies created by the business combination. A large number of cancellations, or lower utilization on an absolute dollar basis resulting from consolidations, could have a material adverse effect on our revenue. In addition, if financial services firms accounting for a material percentage of our revenues or profit cease operations because of bankruptcy and the assets of such customers are not acquired by successor entities, such events could have a material adverse effect on our results of operations.

Adverse capital and credit market conditions could limit our access to capital. The capital and credit markets have been experiencing extreme volatility and disruption for the past few years.  Disruptions, uncertainty or volatility in the capital and credit markets may limit our access to capital required to operate and grow our business. As such, we may be unable to raise capital or bear an unattractive cost of capital which could reduce our financial flexibility.

If we are unable to maintain relationships with key suppliers and providers of market data, we will not be able to provide our services to our customers. We depend on key suppliers for the data we provide to our customers. Some of this data is exclusive to particular suppliers, such as national stock exchanges, and cannot be obtained from other suppliers. In other cases, although the data may be available from secondary sources, the secondary source may not be as adequate or reliable as the primary or preferred source, or we may not be able to obtain replacement data from an alternative supplier without undue cost and expense, if at all. We generally obtain data via license agreements. The disruption of any license agreement with a major data supplier could disrupt our operations and lead to an adverse impact on our results of operations. 

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A prolonged outage at one of our data centers that we share could result in reduced revenue and the loss of customers. Our customers rely on us for time-sensitive, up-to-date data that is reliably delivered. Our business is dependent on our ability to rapidly and efficiently process substantial quantities of data and transactions on our computer-based networks and systems. Our computer operations and those of our suppliers and customers are vulnerable to interruption by fire, natural disaster, power loss, telecommunications failure, terrorist attacks, acts of war, internet failures, computer viruses and other events beyond our reasonable control. We maintain multiple redundant data centers to minimize the risk that any such event will disrupt operations. In addition, we maintain insurance for such events. However, the business interruption insurance we carry may not be sufficient to compensate us fully for losses or damages that may occur because of such events. Any such losses or damages incurred by us could have a material adverse effect on our business. Although we seek to minimize these risks through security measures, controls and redundant data centers, there can be no assurance that such efforts will be successful or effective.

We compete against companies with greater financial resources. We operate in highly competitive markets in which we compete with other distributors of financial and business information and related services. We expect competition to continue to be rigorous. Some of our competitors and potential competitors have significantly greater financial, technical, and marketing resources than we have. These competitors may be able to expand product offerings and data content more effectively, and to respond more rapidly than us to new or emerging technologies, changes in the industry or changes in customer needs. They may also be able to devote greater resources to the development, promotion, and sale of their products. Increased competition in the future could limit our ability to maintain or increase our market share or maintain our margins and could have a material adverse effect on our business, financial condition, or operating results.

New product offerings by competitors or new technologies could cause our services to become obsolete. We operate in an industry that is characterized by rapid and significant technological change, frequent new services, data content and coverage enhancements, and evolving industry standards. Without the timely introduction of new services and data content and coverage enhancements, our services could become technologically obsolete or inadequate over time, in which case our revenue and operating results would suffer. We expect our competitors to continue to improve the performance of their current services, to enhance data content and coverage and to introduce new services and technologies. These competitors may adapt more quickly to new technologies, changes in the industry and changes in customers’ requirements than we can. If we fail to adequately anticipate customers’ needs and technological trends accurately, we will be unable to introduce new services into the market and our ability to compete will be materially adversely impacted. Further, if we are unsuccessful at developing and introducing new services that are appealing to customers, with acceptable prices and terms, or if any such new services are not made available in a timely manner, our ability to compete would be materially adversely impacted. In both cases our ability to generate revenue could suffer and our business and operating results could be materially adversely affected. We will need to successfully enhance or add to current services to effectively expand into new geographic areas. In addition, new services, data content and coverage that we may develop and introduce may not achieve market acceptance and would result in lower revenue.

We may need additional capital with which to implement our business plan, and there is no agreement with any third party to provide such capital. Implementing our business plan may require additional equity or debt financing. If we require additional funding or determine it appropriate to raise additional funding in the future, there is no assurance that adequate funding, whether through additional equity financing, debt financing, or other sources, will be available when needed or on terms acceptable to us. Further, any such funding may result in significant dilution to existing stockholders. The inability to obtain sufficient funds from operations and external sources when needed may have a material adverse effect on our business, results of operations, and financial condition.

10

We depend on key personnel and expect to hire additional personnel. Our performance substantially depends on the services of David M. Shworan, President and Chief Executive Officer of QuoteMedia, Ltd., a wholly owned subsidiary of our company. The loss of Mr. Shworan, or our other key employees, could have a material adverse effect on our business. Our future success will also depend in large part upon our ability to attract and retain highly skilled management, technical engineers, sales and marketing personnel, and finance and technical personnel.  Competition for such personnel is intense and there can be no assurance that we will be able to attract and retain such personnel.  The loss of the services of any key personnel, the inability to attract or retain qualified personnel in the future, or any delays in hiring required personnel, particularly technical engineers, and sales personnel, could have a material adverse effect on our business, results of operations, and financial condition.

We may need to spend significant amounts of money to protect against security breaches. A party who can circumvent our security measures could misappropriate proprietary information or cause interruptions in our Internet operations.  We may be required to expend significant capital and resources to protect against the threat of such security breaches or to alleviate problems caused by such breaches.  Consumer concern over Internet security has been, and could continue to be, a barrier to commercial activities requiring consumers to send their credit card information over the Internet.  Computer viruses, break-ins, or other security problems could lead to misappropriation of proprietary information and interruptions, delays, or cessation in service to our customers.  Moreover, until more comprehensive security technologies are developed, the security and privacy concerns of existing and potential customers may inhibit the growth of the Internet as a merchandising medium.  Were these risks to occur, our business, results of operations, and financial condition could be materially adversely affected.

The success of our anticipated future growth depends upon our ability to successfully manage the growth of our proposed operations. We expect to experience significant growth in our number of employees and scope of operations.  Our future success will depend upon our ability to successfully manage the expansion of our operations. Our ability to manage and support our growth effectively will depend on our ability to implement adequate improvements to financial and management controls, reporting, order entry systems, and other procedures and hire sufficient numbers of financial, accounting, administrative, and management personnel.  Our expansion and the resulting growth in the number of our employees will result in increased responsibility for both existing and new management personnel.  There can be no assurance that we will be able to identify, attract, and retain experienced accounting and financial personnel.  Our future operating results will depend on the ability of our management and other key employees to implement and improve our systems for operations, financial control, and information management and to recruit, train, and manage our employee base.  There can be no assurance that we will be able to achieve or manage any such growth successfully or to implement and maintain adequate financial and management controls and procedures.  Any inability to do so may have a material adverse effect on our business, results of operations, and financial condition. Our future success depends upon our ability to address potential market opportunities while managing our expenses to match our ability to finance operations.  This need to manage our expenses may place a significant strain on our management and operational resources.  If we are unable to manage our expenses effectively, our business, results of operations, and financial condition may be adversely affected.

Penny stock rules may make buying or selling our common stock difficult. Our common stock in the past has been, and from time to time in the future may be, subject to the "penny stock" rules as promulgated under the Securities Exchange Act of 1934.  In the event that no exclusion from the definition of a "penny stock" under the Exchange Act is available, then any broker engaging in a transaction in our common stock will be required to provide each customer with:

· A risk disclosure document.

· Disclosure of market quotations, if any.

· Disclosure of the compensation of the broker-dealer and its salesperson in the transaction; and

· Monthly account statements showing the market values of our securities held in the customer's accounts.

The bid and offer quotation and compensation information must be provided prior to effecting the transaction and must be contained in the customer's confirmation.  Certain brokers are less willing to engage in transactions involving "penny stocks" because of the additional disclosure requirements described above, which may make it more difficult for holders of our common stock to dispose of their shares.

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Investors should not expect to receive a dividend in the future. We have never paid any cash dividends on our common stock and do not currently anticipate that we will pay dividends in the foreseeable future. Instead, we intend to apply the earnings to the expansion and development of our business.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

None.

ITEM 2. PROPERTIES.

We lease executive office space in Fountain Hills, Arizona. The term of this lease expires June 30, 2026.

We lease office space for technical staff in Vancouver, British Columbia, Canada. The term of this lease expires July 31, 2025. We lease office space for sales and customer support staff in Parksville, British Columbia, Canada. The term of this lease expires April 30, 2026.

We believe that our current leased space is sufficient to meet our needs for the next 12 months and that the property is currently in acceptable condition. Beyond that, we anticipate the need to expand our lease facilities in all locations as our company grows. We have no other properties and have no agreements to acquire any properties.

ITEM 3. LEGAL PROCEEDINGS.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

None.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES.

Our common stock is quoted on the OTCQB tier of the OTC Markets under the symbol "QMCI." As of March 18, 2024, there were approximately 145 holders of record of our common stock. As of March 18, 2024, the closing price for our common stock was $0.21.

As of March 18, 2024, there were 123,685 shares outstanding of Series A Redeemable Convertible Preferred Stock, par value $0.001 per share. The Series A Redeemable Convertible Preferred Stock has a redeemable value of $25 and is convertible into 83.33 shares of our common stock if the common stock trades above $0.30 for 90 consecutive trading days.

Dividend Policy

We have never paid any cash dividends to holders of our common stock, and for the foreseeable future we intend to retain any earnings to finance our operations and do not anticipate paying cash dividends with respect to our common stock. Subject to the preferences that may be applicable to any then-outstanding preferred stock, the holders of our common stock will be entitled to receive such dividends, if any, as may be declared by our Board of Directors, from time to time, out of legally available funds. Payments of any cash dividends in the future will depend on our financial condition, results of operations, and capital requirements as well as other factors deemed relevant by our Board of Directors.

Issuer Purchases of Equity Securities

During 2023, no shares of our common stock were repurchased, and no Series A Redeemable Convertible Preferred Stock were redeemed.

ITEM 6. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Overview

We are a developer of financial software and a distributor of market data and research information to 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: Interactive Content and Data APIs, Data Feed Services, and Portfolio Management Systems. For financial reporting purposes, our product categories share similar economic characteristics and share costs; therefore, they are combined into one reporting segment.

Our Interactive Content and Data APIs 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 our content solutions are completely customizable and embedded directly into client Web pages for seamless integration with existing content. We are continuing to develop and launch new modules of QModTM, our new proprietary Web delivery system. QMod was created for secure market data provisioning as well as ease of integration and unlimited customization. Additionally, QMod delivers search engine optimized (SEO) ready responsive content designed to adapt on the fly when rendered on mobile devices or standard Web pages – automatically resizing and reformatting to fit the device on which it is displayed.

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Our Data Feed Services consist of raw streaming real-time market data delivered over the Internet or via dedicated telecommunication lines. We provide supplemental fundamental, historical, and analytical data, keyed to the same symbology, which provides a complete market data solution offered to our customers. Currently, QuoteMedia’s Data Feed services include complete coverage of North American exchanges and over 70 exchanges worldwide. For financial reporting purposes, Data Feed Services revenue is included in the Interactive Content and Data APIs revenue totals.

Our Portfolio Management Systems consist of QuotestreamTM, Quotestream Mobile, Quotestream Professional, and our Web Portfolio Management systems. Quotestream Desktop is an Internet-based streaming online portfolio management system that delivers real-time and delayed market data to both consumer and corporate markets.  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 nonprofessional users.

Quotestream Professional is specifically designed 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 Mobile is a true companion product to the Quotestream desktop products (Quotestream and Quotestream Professional) – any changes made to portfolios in either the desktop or mobile application are automatically reflected in the other.

A key feature of QuoteMedia’s business model is that all 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 five 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 APIs and Market Data Feeds are licensed for a monthly, quarterly, annual, or semi-annual subscription fee. Contracts to license our Financial Data Products and Data Feeds typically have a term of one to five years and are automatically renewed unless notice is given 90 days prior to the expiration of the contract term.

Business Environment and Trends

While our licensed-based revenue is generally more recurring in nature, the uncertainty caused by the recent market downturn and rising inflation may result in some clients to delay purchasing decisions, product and service implementations or cancel or reduce spending with us.  Events in Ukraine and Russia have continued to cause disruptions in the global financial markets. While we do not have any operations or customers in Ukraine or Russia, we will continue to monitor the situation as a prolonged conflict could impact our business.

Our revenue increased 8% in 2023 and we expect similar revenue growth in fiscal 2024.  Approximately 38% of our revenue and 39% of our expenses are denominated in Canadian dollars. The Canadian dollar depreciated 4% against the U.S. dollar when comparing the average exchange rate for 2023 versus 2022.  This decreased both Canadian dollar revenues and expenses once translated into U.S. dollars but had a minimal impact on our net income.

Plan of Operation

For 2024 we plan to continue to expand our product lines and improve our infrastructure.  We plan to continue to add more features and data to our existing products and release newer versions with improved performance and flexibility for client integration.  This expansion is expected to result in both increased revenue and costs for the fiscal year 2024.

We will maintain our focus on marketing Quotestream for deployments by brokerage firms to their retail clients and continue our expansion into the investment professional market with Quotestream Professional. We also plan to continue the growth of our Data Feed Services client base, particularly through the addition of major new international data feed coverage, as well as new data delivery products.

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QuoteMedia will continue to focus on increasing the sales of its Interactive Content and Data APIs, particularly in the context of large-scale enterprise deployments encompassing solutions ranging across several product lines. QMod is a major component of this strategy, given the broad demand for mobile-ready, SEO-friendly Web content.

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

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

We are also creating new proprietary data sets, analytics, and scoring mechanisms.  We are now aggregating data direct from the sources to produce data sets that are proprietary to QuoteMedia. This allows us to offer our clients new data products and lower our product cost structure as we replace some of our existing data providers with our own lower cost data.

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

Critical Accounting Policies and Estimates

Management’s Discussion and Analysis discusses our financial statements which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the balance sheet date and reported amounts of revenue and expenses during the reporting period. On an ongoing basis we evaluate our estimates and judgments. We base our estimates and judgments on historical experience and on various other factors that are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our financial statements.

Revenue recognition

In accordance with Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606), we recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services by applying the following steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation.

We exercise judgment in assessing the creditworthiness of our customers and therefore in our determination of whether collectability is reasonably assured. Should changes in conditions cause us to determine that these criteria are not met for future transactions, revenue recognized in future reporting periods could be adversely affected.

15

Capitalized Application Software

Capitalized software costs include costs incurred in connection with the internal development of software. These costs relate to software used by subscribers to access, manage and analyze information in the Company’s databases. Capitalized costs associated with internally developed software are amortized over three years which is their estimated economic life. We exercise significant judgment in determining that capitalized application software costs meet the criteria established in Financial Accounting Standards Board (“FASB”) ASC 350-40, Internal-Use Software. The most significant estimates are the allocation of our development personnel’s time working on capitalized internally developed software.

For the years ended December 31, 2023, and 2022, the Company capitalized $3,203,045 and $2,739,590 of costs, respectively, related to upgrades and enhancements made to existing software applications. Software applications are used by the Company’s subscribers to access, manage and analyze information in the Company’s databases. For the years ended December 31, 2023, and 2022, amortization expenses associated with the internally developed application software were $2,448,510 and $1,943,292, respectively. At December 31, 2023 and 2022, the remaining book value of the capitalized application software was $4,552,910 and $3,798,374.

Recent Accounting Pronouncements

Recently Adopted

On January 1, 2023, the Company adopted Accounting Standards Update (“ASU”) 2016-13, Financial Instruments-Credit Losses (Topic 326), which changes the impairment model for most financial assets, including accounts receivable, and replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. The adoption of ASU 2016-13 had no impact on the Company’s consolidated financial statements.

Not Yet Adopted

In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). ASU 2020-06 simplifies the complexity associated with applying U.S. Generally Accepted Accounting Principles (“GAAP”) for certain financial instruments with characteristics of liabilities and equity. More specifically, the amendments focus on the guidance for convertible instruments and derivative scope exception for contracts in an entity's own equity. The new standard is effective for the Company for fiscal years beginning after December 15, 2023. The Company does not expect that the adoption of ASU 2020-06 will have a significant impact on the Company’s consolidated financial statements.

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). This standard improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments in ASU 2023-07 will be applied retrospectively to all prior periods presented in the consolidated financial statements. The Company does not expect that the adoption of ASU 2023-07 will have a significant impact on the Company’s consolidated financial statements.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosure (“ASU 2023-09”). This standard provides transparency to income tax disclosures related to the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, for public entities with early adoption permitted. The amendments in ASU 2023-09 will be applied prospectively in the consolidated financial statements. The Company is currently evaluating the timing of its adoption of this standard and the impact on its consolidated financial statements.

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.

16

Results of Operations

Revenue

	Years ended December 31
	2023		2022		Change ($)			Change (%)
Corporate Quotestream	$	7,275,615	$	6,906,499	$	369,116			5	%
Individual Quotestream		1,861,396		2,092,778		(213,382	)	(11		%)
Total Portfolio Management Systems		9,137,011		8,999,277		137,734			2	%
Interactive Content and Data APIs		9,770,714		8,528,328		1,242,386			15	%
Total Licensing Revenue	$	18,907,725	$	17,527,605	$	1,380,120			8	%

Total licensing revenue increased 8% when comparing the years ended December 31, 2023, and 2022. The increase is a result of a 2% increase in revenue from licensing our Portfolio Management Systems and a 15% increase in revenue from our Interactive Content and Data APIs.

Total Portfolio Management System revenue increased by 2% when comparing the years ended December 31, 2023, and 2022, due to an 5% increase in Corporate Quotestream offset by an 11% decrease in Individual Quotestream revenue.

Corporate Quotestream revenue increased 5% for the year ended December 31, 2023, from the comparative period in 2022 due to an increase in the average revenue per customer. We have added new products over the past couple of years that are continuing to gain traction in the market, and we have made improvements and upgrades to our existing Portfolio Management products as we continue to improve functionality and add new data offerings.  These improvements have allowed us to attract larger customers and increase the average revenue for our existing customers.

Individual Quotestream revenue decreased 11% for the year ended December 31, 2023, from the comparative period in 2022 due mainly to a decrease in total subscribers.  The depreciation of the Canadian dollar, discussed above in the “Business Environment and Trends” section, also impacted Individual Quotestream revenue as approximately 50% of our Individual Quotestream revenue is earned in Canadian dollars.

Interactive Content and Data APIs revenue increased 15% for the year ended December 31, 2023, from the comparative period in 2022.  The increase is attributable to an increase in the average revenue per client. The launch of new products and the expansion of our data coverage have allowed us to attract new, larger clients to replace some of our smaller clients lost since the comparative period.

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Cost of Revenue and Gross Profit Summary

	Years ended December 31
	2023			2022			Change ($)		Change (%)
Cost of revenue	$	9,263,073		$	8,972,129		$	290,944		3	%
Gross profit	$	9,644,652		$	8,555,476		$	1,089,176		13	%
Gross margin %		51	%		49	%

Our cost of revenue consists of fixed and variable stock exchange fees and data feed provisioning costs. The cost of revenue also includes amortization of capitalized internal-use software costs. We capitalize the costs associated with developing new products during the application development stage.

Our cost of revenue increased 3% for the year ended December 31, 2023, from the comparative period in 2022. This was mainly due to increased amortization expenses associated with internally developed application software resulting from our major growth initiative, which included investing in infrastructure, new product development, data collection, and the expansion of our global market coverage.

Overall, the cost of revenue decreased as a percentage of sales, as evidenced by our gross margin percentage that increased to 51% in 2023 from 49% in 2022. New contracts signed since the comparative period have higher gross margins than our existing customer contracts typically have on average, resulting in an increase in our gross margin percentage.

Operating Expenses Summary

	Years ended December 31
	2023		2022		Change ($)		Change (%)
Sales and marketing	$	3,130,051	$	2,952,968	$	177,083		6	%
General and administrative		3,346,157		3,015,453		330,704		11	%
Software development		2,757,031		2,096,404		660,627		32	%
Total operating expenses	$	9,233,239	$	8,064,825	$	1,168,414		14	%

Sales and Marketing

Sales and marketing expenses consist primarily of sales and customer service salaries, investor relations, travel, and advertising expenses. Sales and marketing expenses increased 6% when comparing the years ended December 31, 2023, and 2022.  The increase is a result of additional sales personnel hired since the comparative period to support our product growth initiatives and salary increases and bonuses for existing personnel. The increase was offset by the 4% depreciation of the Canadian dollar from the comparative period as most of our sales personnel are in Canada.

General and Administrative

General and administrative expenses consist primarily of salaries expense, office rent, insurance premiums, and professional fees. General and administrative increased 11% when comparing the years ended December 31, 2023, and 2022. The increase is mainly a result of additional professional fees resulting from the change of principal accountants in January 2023.

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Software Development

Software development expenses consist primarily of costs associated with the design, programming, and testing of our software applications during the preliminary project stage. Software development expenses also include costs incurred to maintain our software applications.

Software development expenses increased 32% for the year ended December 31, 2023, when compared to fiscal 2022, primarily due to new personnel hired since the comparative period to improve our infrastructure, security, and business continuity management.  The increase in development personnel costs was offset by the 4% depreciation of the Canadian dollar from the comparative period as most of our development personnel are in Canada.

We capitalized $3,203,045 of development costs for the year ended December 31, 2023, compared to $2,739,590 in 2022. 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.

Other Expenses Summary

	Years ended December 31,
	2023			2022
Foreign exchange loss	$	(45,017	)	$	(40,307	)
Interest expense		(1,846	)		(2,818	)
Total other expenses	$	(46,863	)	$	(43,125	)

Foreign Exchange Gain (Loss)

We incurred a foreign exchange loss of $45,017 for the year ended December 31, 2023, compared to a foreign exchange loss of $40,307 for the year ended December 31, 2022. 

Foreign exchange gains and losses arise from the re-measurement of Canadian dollar monetary assets and liabilities into U.S. dollars. We have a net Canadian dollar liability; therefore, we incur a foreign exchange gain when the Canadian dollar depreciates from the period beginning date, and a loss when the Canadian dollar appreciates. Gains and losses arising from exchange rate fluctuations between transaction and settlement dates for foreign currency denominated transactions are also included in foreign exchange gains and losses.

Interest Expense

Interest expense relates primarily to the interest expense associated with our finance leases and was relatively unchanged from the comparative period. Interest expense of $1,846 was incurred for the year ended December 31, 2023, compared to $2,818 incurred for the year ended December 31, 2022.

Provision for Income Taxes

In 2023, the Company recorded Canadian income tax expense of $2,966 compared to a Canadian income tax expense of $3,056 in 2022.

Net Income for the Period

As a result of the foregoing, net income for the year ended December 31, 2023, was $361,584 compared to net income of $444,470 for the year ended December 31, 2022. Basic and diluted earnings per share were $0.00 for the years ended December 31, 2023, and 2022, respectively.

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Liquidity and Capital Resources

Our cash totaled $342,014 at December 31, 2023, as compared with $477,987 at December 31, 2022, a decrease of $135,973. Net cash of $3,148,881 was provided by operations for the year ended December 31, 2023, primarily due to the net income during the period adjusted for non-cash charges and an increase in deferred revenue, offset by a decrease in accounts payable and an increase in accounts receivable. Net cash used in investing activities for the year ended December 31, 2023, was $3,284,854 resulting primarily from capitalized application software costs. If circumstances dictate, however, we have the flexibility to reduce development spending to maintain a strong liquidity position.

We typically operate with a working capital deficit. As of December 31, 2023, our working capital deficit is $2,138,250, however current liabilities include $1,456,381 in deferred revenue and the expected costs necessary to realize the deferred revenue are minimal.

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, implementing our business plan may require additional financing. Additional financing may come from future equity or debt offerings that could result in dilution to our stockholders. Further, current adverse capital and credit market conditions could limit our access to capital. We may be unable to raise capital or bear an unattractive cost of capital that could reduce our financial flexibility.

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.

ITEM 6A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not required.

ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Reference is made to the Financial Statements, the Notes thereto, and the Report of Independent Public Accountants thereon commencing at page F-1 of this Report, in which Financial Statements, Notes, and report are incorporated herein by reference.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

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ITEM 8A. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

We have evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures as of December 31, 2023. Based on this evaluation, our CEO and CFO have concluded that our disclosure controls and procedures are effective to ensure that we record, process, summarize, and report information required to be disclosed by us in our periodic reports filed under the Exchange Act within the time periods specified by the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting

The management of QuoteMedia, Inc. is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Our internal control over financial reporting is a process designed by, or under the supervision of our CEO and CFO, and affected by our Board of Directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. All internal control systems, no matter how well designed, have inherent limitations, including the possibility of human error and the circumvention of overriding controls. Accordingly, even effective internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management, with the participation and supervision of our Chairman of the Board and Chairman of the Audit Committee, Chief Executive Officer and Chief Financial Officer, have evaluated 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”)) as of December 31, 2023, and concluded that our disclosure controls and procedures were not effective due to material weaknesses in internal control over financial reporting. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on that evaluation, our management identified the following material weaknesses in our internal control over financial reporting, as described below.

Notwithstanding the material weaknesses described below our management has concluded that our consolidated financial statements for the periods covered by and included in this Quarterly Report are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and fairly present, in all material respects, our financial position, results of operations and cash flows for each of the periods presented herein.

The following material weaknesses were identified during the preparation and review of the current period financial statements:

· There is a lack of segregation of duties in financial reporting.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. The management’s report was not subject to attestation by our registered public accounting firm pursuant to Sarbanes-Oxley Rule 404 (c).

Changes in Internal Control over Financial Reporting

During the last quarter of the fiscal year covered by this report, there have not been any changes in our internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

After the date of their evaluation, there have not been any significant changes in our internal controls or in other factors that could significantly affect these controls, including any corrective action regarding significant deficiencies and material weaknesses.

ITEM 8B. OTHER INFORMATION.

Not applicable.

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PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE.

The following table sets forth certain information regarding our directors and executive officers.

Name	Age	Position
Robert J. Thompson	81	Chairman of the Board
Keith J. Randall	57	Chief Executive Officer and Chief Financial Officer, and Director
David M. Shworan	56	President and Chief Executive Officer of QuoteMedia, Ltd., and Director

Our listed directors will serve until the next annual meeting of stockholders or until their death, resignation, retirement, removal, disqualification, or until their successors have been duly elected and qualified.  Vacancies in our existing Board of Directors are filled by majority vote of the remaining directors.  Our officers serve at the will of our Board of Directors.  There is no family relationship between any executive officer and director.

Robert J. Thompson has served as our Chairman of the Board since February 2000. Mr. Thompson is also a director of several privately-owned corporations.  Formerly, Mr. Thompson was Chairman of the Board of C.M. Oliver Inc., a Canadian regulated, publicly traded investment broker/dealer involved in investment banking activities throughout North America and in Europe. For almost 30 years prior, Mr. Thompson practiced as a Chartered Professional Accountant and Certified Management Consultant. He was a Partner of KPMG LLP (formerly Peat Marwick Mitchell & Co.), Woods Gordon/Clarkson Gordon (Arthur Young & Co.) and Ernst & Whinney. He withdrew from public practice after serving as the National Partner in Charge of the Senior Management Services Division of KPMG.

Keith J. Randall has served as our Vice President, Treasurer, and Chief Financial Officer since September 1999 and Secretary since July 2000. Mr. Randall served as Vice President and Chief Financial Officer of Datawest Solutions, Inc. (formerly C.M. Oliver, Inc.) from August 1999 until March 2000. From August 1998 until August 1999, Mr. Randall served as Controller of C.M. Oliver & Company Ltd., a publicly held Canadian corporation offering brokerage/financial planning and investment banking services. Mr. Randall is a licensed Chartered Professional Accountant in Canada and a Certified Public Accountant in the United States. He received a Bachelor of Commerce degree with Honors from Queen's University in May 1991.  Effective March 31, 2018, the Board appointed Mr. Randall as President, Chief Executive Officer, and Director. Mr. Randall retained his role as Treasurer and Chief Financial Officer.

David M. Shworan has served as President and Chief Executive Officer of QuoteMedia, Ltd., a wholly owned subsidiary of our company since December 2004.  Mr. Shworan has served as a director of our company since November 2002.  Mr. Shworan served as our President and Chief Executive Officer from November 2002 to December 2004.  Mr. Shworan is a veteran of online marketing, technology, and business.  Mr. Shworan is the founder of several technology companies and has been a consultant to a number of technology companies.  

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Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our directors, officers, and persons who own more than 10% of a registered class of our equity securities to file reports of ownership and changes in ownership with the SEC.  Directors, officers, and greater than 10% stockholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file.  Based solely upon our review of the copies of such forms that we received during the fiscal year ended December 31, 2023, and written representations that no other reports were required, we believe that each person who at any time during the fiscal year was a director, officer, or beneficial owner of more than 10% of our common stock complied with all Section 16(a) filing requirements during such fiscal year.

Code of Ethics

Our Board of Directors has adopted Corporate Governance Guidelines; a Code of Business Conduct/Ethics, Code of Ethics for the CEO and Senior Financial Officers, and any amendments or waivers thereto; an Audit Committee Charter; and any other corporate governance materials contemplated by SEC or applicable regulations.  We post these corporate governance materials on our Web site at www.quotemedia.com/qmci/investors.php. These documents are also available in print to any stockholder by contacting our corporate secretary at our executive offices.

Information Relating to Our Audit Committee of the Board of Directors

The purpose of the Audit Committee is to assist our Board of Directors in the oversight of the integrity of the consolidated financial statements of our company, our company’s compliance with legal and regulatory matters, the independent auditor’s qualifications and independence, and the performance of our company’s independent auditors. The primary responsibilities of the Audit Committee are set forth in its charter and include various matters with respect to the oversight of our company’s accounting and financial reporting process and audits of the consolidated financial statements of our company on behalf of our Board of Directors. The Audit Committee also selects the independent certified public accountants to conduct the annual audit of the consolidated financial statements of our company; reviews the proposed scope of such audit; reviews accounting and financial controls of our company with the independent public accountants and our financial accounting staff; and reviews and approves transactions between us and our directors, officers, and their affiliates. The Audit Committee currently consists solely of Robert J. Thompson. The Board of Directors has determined that Mr. Thompson qualifies as an “audit committee financial expert” in accordance with the applicable rules and regulations of the SEC.

ITEM 10. EXECUTIVE COMPENSATION.

Summary of Cash and Other Compensation

The following table sets forth certain information concerning the compensation for the fiscal years ended December 31, 2023, and 2022 earned by our Chief Executive Officers and one other executive officer (collectively, the “Named Executive Officers”). None of our other executive officers’ cash salary and bonus exceeded $100,000 during fiscal 2023.

Summary Compensation Table

Name and Principal Position	Year	Salary ($)		Bonus ($)		Option Awards ($) (1),(4),(5)		All Other Compensation ($) (2)		Total ($)
Keith J. Randall (3)	2023	$	210,000		-		-		-	$	210,000
Chief Executive Officer &	2022	$	197,500		-		-		-	$	197,500
CFO, QuoteMedia, Inc.
David M. Shworan (4)	2023	$	400,000		-		-		-	$	400,000
Chief Executive Officer,	2022	$	400,000	$	133,333		-		-	$	533,333
QuoteMedia, Ltd.

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(1)	Options Awards represent the fair value of option awards granted, repriced, or otherwise modified, computed in accordance with FASB ASC 718, Stock Compensation.
(2)	The executive officers listed also received certain perquisites, the aggregate value of which did not exceed $10,000 for any year presented.
(3)	Mr. Randall is our Chief Financial Officer, and effective March 31, 2018, was also appointed Chief Executive Officer, and Director. Mr. Randall has retained his role as Chief Financial Officer and will serve as both “Principal Executive Officer” and “Principal Financial and Accounting Officer.”
(4)	Mr. Shworan is President and Chief Executive Officer of QuoteMedia, Ltd., a wholly owned subsidiary of QuoteMedia, Inc. In 2022 Mr. Shworan was paid a base salary of $400,000 and was awarded a bonus of $133,333 which was accrued as of December 31, 2022, of which $100,000 remains unpaid as of March 18, 2024.

Outstanding Equity Awards at Fiscal Year End

	Number of Securities Underlying Unexercised Common Stock Options/Warrants
Name	Exercisable		Unexercisable		Option/Warrant Exercise Price ($)		Option/Warrant Exercise Date
David M. Shworan		200,000		-	$	0.036	15-May-2025
		2,000,000		-	$	0.036	15-May-2025
		3,000,000		-	$	0.036	15-May-2025
		2,400,000		-	$	0.036	15-May-2025
		4,000,000		-	$	0.100	28-Dec-2037
Keith J. Randall		100,000		-	$	0.036	15-May-2025
		50,000		-	$	0.036	15-May-2025
		50,000		-	$	0.036	15-May-2025
		100,000		-	$	0.035	26-Oct-2027
	Number of Securities Underlying Unexercised Preferred Stock Warrants
Name	Exercisable		Unexercisable		Option/Warrant Exercise Price ($)		Option/Warrant Exercise Date
David M. Shworan		1,250		-	$	1.00	28-Dec-2047
		15,000		-	$	1.00	01-Jan-2048
		15,000		-	$	1.00	01-Jan-2049
		-		382,243	$	1.00	28-Dec-2037

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Employment Agreements

David M. Shworan has served as President and Chief Executive Officer of QuoteMedia, Ltd., a wholly owned subsidiary of QuoteMedia, Inc., since December 30, 2004.  On December 28, 2017, the Company entered into a Compensation Agreement with Mr. Shworan pursuant to which, among other things, the Company will issue to Mr. Shworan the following:

(a)	warrants to purchase up to 1,250 shares of Series A Redeemable Convertible Preferred Stock at an exercise price equal to $1.00 per share (the “Preferred Stock Warrant”)
(b)	warrants to purchase up to 382,243 shares of Series A Redeemable Convertible Preferred Stock at an exercise price equal to $1.00 per share (the “Liquidity Preferred Stock Warrant”)
(c)	warrants to purchase up to 4,000,000 shares of common stock at an exercise price equal to $0.10 per share (which warrant has specific performance vesting thresholds) (the “Common Stock Warrant”)
(d)	provided that Mr. Shworan is employed by or otherwise providing services to the Company or its subsidiaries on each of January 1, 2018, and 2019, the Company will at that time issue to Mr. Shworan warrants to purchase up to 15,000 shares of Series A Preferred Stock at an exercise price equal to $1.00 per share in lieu of paying Mr. Shworan a cash salary.
(e)	provided that Mr. Shworan is employed by or otherwise providing services to the Company or its subsidiaries on January 1, 2020, the Company shall pay Mr. Shworan a base salary at the annual rate of $350,000 during the term of his employment or service with the Company and its subsidiaries.

Other than for certain provisions in Mr. Shworan’s Compensation Agreement noted above, we have no compensatory plan or arrangement with respect to any executive officer where such plan or arrangement will result in payments to such officer upon or following his resignation, retirement, or other termination of employment with us and our subsidiaries, or as a result of a change in control of our company or a change in the executive officers’ responsibilities following a change in control.

Director Compensation and Other Information

The following table shows the amount of compensation earned by our independent director in 2023. We compensate our independent director with directors’ fees and stock options. Options Awards represent the fair value of option awards granted in 2023, computed in accordance with FASB ASC 718, Stock Compensation.

Name	Fees Earned or Paid in Cash ($)		Option Awards ($)		All Other Compensation ($)		Total ($)
Robert J. Thompson	$	150,000		-		-	$	150,000

The Chairman of the Board, Robert J. Thompson, currently receives a monthly retainer of $12,500.  Directors who are also employees do not receive additional cash compensation for service on our Board of Directors. All directors receive a grant of 200,000 options to purchase shares of common stock upon joining our Board of Directors, which are vested on the date of the grant.  From time to time, we grant our directors options or warrants to purchase additional shares of common stock. 

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ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The following table sets forth certain information regarding the shares of our outstanding common stock beneficially owned as of March 18, 2024, by (i) each of our directors and executive officers, (ii) all directors and executive officers as a group, and (iii) each other person who is known by us to beneficially own or to exercise voting or dispositive control over more than 5% of our common stock.

Name of Beneficial Owner (1)	Number of Shares of Common Stock Owned (2)		Percentage of Common Stock Beneficially Owned (2)
Directors and Executive Officers
David M. Shworan (3)		44,151,800		41.6	%
Robert J. Thompson (4)		1,610,286		1.8	%
Keith J. Randall (5)		793,976		0.9	%
All directors and executive officers as a group		43,806,062		43.4	%
5% Stockholders (6)		7,404,735		8.2	%

(1)	Each person named in the table has sole voting and investment power with respect to all common stock beneficially owned by him or her, subject to applicable community property law, except as otherwise indicated. Except as otherwise indicated, each person may be reached through us at 17100 E. Shea Blvd., Suite 230, Fountain Hills, Arizona 85268.
(2)	The percentages shown are calculated based upon 90,477,798 shares of common stock outstanding on March 18, 2024. The numbers and percentages shown include the shares of common stock actually owned as of March 18, 2024, and the shares of common stock that the identified person or group had the right to acquire within 60 days of such date. In calculating the percentage of ownership, all shares of common stock that the identified person or group had the right to acquire within 60 days of March 18, 2024 upon the exercise of options are deemed to be outstanding for the purpose of computing the percentage of the shares of common stock owned by such person or group but are not deemed to be outstanding for the purpose of computing the percentage of the shares of common stock owned by any other person.
(3)	Represents the following:

· 10,511,800 shares of common stock owned by Mr. Shworan and vested options and warrants to directly acquire 11,600,000 shares of common stock.

· 17,002,500 shares owned by Mr. Shworan's wife.

· 1,037,500 shares of common stock owned by Bravenet Web Services, Inc. and vested options and warrants to acquire 1,480,000 shares of common stock. Mr. Shworan is the control person of Bravenet Web Services, Inc. and Mr. Shworan disclaims beneficial ownership of these shares except to the extent of his pecuniary interest therein.

· Vested options and warrants to acquire 2,520,000 shares of common stock owned by Harrison Avenue Holdings Ltd. Mr. Shworan is the control person of Harrison Avenue Holdings Ltd. and Mr. Shworan disclaims beneficial ownership of these shares except to the extent of his pecuniary interest therein.

· See also Item 11, “Executive Compensation – Employment Agreements.”

(4)	Represents 807,483 shares of common stock and vested options and warrants to acquire 802,803 shares of common stock.
(5)	Represents 493,976 shares of common stock and vested options and warrants to acquire 300,000 shares of common stock.
(6)	Represents 7,404,735 shares of our common stock owned by FinTech HQ Inc.

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Equity Compensation Plan Information

The following table sets forth information with respect to our common stock that may be issued upon the exercise of outstanding options, warrants, and rights to purchase shares of our common stock as of December 31, 2023.

	Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants, and Rights		Weighted Average Exercise Price of Outstanding Options, Warrants, and Rights		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
Plan Category	(a)		(b)		(c)
Equity Compensation Plans approved by stockholders		4,720,000	$	0.04		7,929,628
Equity Compensation Plans not approved by stockholders		21,052,803	$	0.03		N/A
Total		25,772,803				7,329,628

1999 Stock Option Plan

During March 1999, we adopted, and our stockholders approved, the 1999 Stock Option Plan to advance the interests of our company by encouraging and enabling key employees to acquire a financial interest in our company and link their interests and efforts to the long-term interests of our stockholders.  A total of 400,000 shares of common stock were initially reserved for issuance under the 1999 plan.  In September 1999, this number was increased to 2,500,000.  As of December 31, 2023, 1,144,817 shares of our common stock had been issued upon exercise of options granted under the 1999 plan, and there were outstanding options to acquire 1,355,183 shares of our common stock under the 1999 plan.

The 1999 plan is administered by our Board of Directors, or a committee appointed by our board.  Our board or the committee has the authority to grant options, determine the purchase price of shares of our common stock covered by each option, determine the persons who are eligible under the 1999 plan, interpret the 1999 plan, determine the terms and provisions of an option agreement, and make all other determinations deemed necessary for the administration of the 1999 plan.  Options may be granted to any director, officer, key employee, or any advisory board member of our company.  Incentive stock options may not be granted to a director, consultant, or advisory board member that is not an employee of our company.

The price of any incentive stock options may not be less than 100% of the fair market value of our common stock on the date of grant.  The price of any incentive stock options granted to a person who owns more than 10% of our common stock may not be less than 110% of the fair market value of our common stock on the date of grant.  The option price for nonincentive stock options may not be less than 50% of the fair market value of our common stock on the date of grant.  Options may be granted for terms of up to, but not exceeding, ten years from the date of grant; however, in the case of an incentive stock option granted to an individual who beneficially owns 10% more of the stock of our company, the exercise period shall not exceed five years from the date of grant.  Our Board of Directors may accelerate the exerciseability of any outstanding options at any time for any reason.

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In the event of any change in the number of shares of our common stock, the number of shares of common stock covered by outstanding options and the price per share of such options will be adjusted accordingly to reflect any such changes.  Similar changes will also be made if our company engages in any merger, consolidation, or reclassification in which it is the surviving entity.  In the event that we are not the surviving entity, each option shall terminate provided that each holder will have the right to exercise during a ten-day period ending on the fifth day prior to such corporate transaction.  In the event of a change of control, our board or the committee may terminate each option, provided that each holder receives the amount of cash equal to the difference between the exercise price of each option and the fair market value of each share of stock subject to such option.

Our board may suspend, terminate, modify, or amend the 1999 plan provided that, in certain instances, the holders of much of our common stock issued and outstanding approve the amendment.

2003 Equity Incentive Compensation Plan

Our Board of Directors has approved our 2003 Equity Incentive Compensation Plan, or the 2003 plan, approved by our stockholders at the annual meeting held on February 14, 2003. The purpose of the 2003 plan is to assist our company in attracting, motivating, retaining, and rewarding high-quality executives and other employees, directors, officers, and independent contractors by enabling such persons to acquire or increase a proprietary interest in our company in order to strengthen the mutuality of interests between such persons and our stockholders, and providing such persons with annual and long-term performance incentives to expend their maximum efforts in the creation of stockholder value. 

At December 31, 2023, there are 15,000,000 shares of common stock authorized for issuance pursuant to the 2003 plan.  As of December 31, 2023, 2,350,372 shares of common stock had been issued upon exercise of options granted under the 2003 plan, and there were 4,720,000 options outstanding under the 2003 plan.

Eligibility and Administration

The persons eligible to receive awards under the 2003 plan are the officers, directors, employees, and independent contractors of our company. The 2003 plan is to be administered by a committee designated by our Board of Directors consisting of not less than two directors, each member of which must be a "nonemployee director" as defined under Rule 16b-3 under the Exchange Act and an "outside director" for purposes of Section 162(m) of the Code.  However, except as otherwise required to comply with Rule 16b-3 of the Exchange Act, or Section 162(m) of the Code, our Board of Directors may exercise any power or authority granted to the committee. Subject to the terms of the 2003 plan, the committee or our Board of Directors is authorized to select eligible persons to receive awards, determine the type and number of awards to be granted and the number of shares of common stock to which awards will relate, specify times at which awards will be exercisable or settleable (including performance conditions that may be required as a condition thereof), set other terms and conditions of awards, prescribe forms of award agreements, interpret and specify rules and regulations relating to the 2003 plan, and make all other determinations that may be necessary or advisable for the administration of the 2003 plan.

Stock Options and SARs

The committee or our Board of Directors is authorized to grant stock options, including both incentive stock options, or ISOs, which can result in potentially favorable tax treatment to the participant, and nonqualified stock options, and SARs entitling the participant to receive the amount by which the fair market value of a share of common stock on the date of exercise (or defined "change in control price" following a change in control) exceeds the grant price of the SAR.  The exercise price per share subject to an option and the grant price of a SAR are determined by the committee, but in the case of an ISO must not be less than the fair market value of a share of common stock on the date of grant.  For purposes of the 2003 plan, the term "fair market value" means the fair market value of common stock, awards, or other property as determined by the committee or our Board of Directors or under procedures established by the committee or our Board of Directors.  Unless otherwise determined by the committee or our Board of Directors, the fair market value of common stock as of any given date shall be the closing sales price per share of common stock as reported on the principal stock exchange or market on which common stock is traded on the date as of which such value is being determined or, if there is no sale on that date, then on the last previous day on which a sale was reported.  The maximum term of each option or SAR, the times at which each option or SAR will be exercisable, and provisions requiring forfeiture of unexercised options or SARs at or following termination of employment generally are fixed by the committee or our Board of Directors, except that no option or SAR may have a term exceeding ten years.  Options may be exercised by payment of the exercise price in cash, shares that have been held for at least six months, outstanding awards, or other property having a fair market value equal to the exercise price, as the committee or our Board of Directors may determine from time to time.  Methods of exercise and settlement and other terms of the SARs are determined by the committee or our Board of Directors.  SARs granted under the 2003 plan may include "limited SARs" exercisable for a stated period following a change in control of our company, as discussed below.

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Restricted and Deferred Stock

The committee or our Board of Directors is authorized to grant restricted stock and deferred stock.  Restricted stock is a grant of shares of common stock that may not be sold or disposed of, and that may be forfeited in the event of certain terminations of employment, prior to the end of a restricted period specified by the committee or our Board of Directors.  A participant granted restricted stock generally has all the rights of a stockholder of our company, unless otherwise determined by the committee or the Board.  An award of deferred stock confers upon a participant the right to receive shares of common stock at the end of a specified deferral period, subject to possible forfeiture of the award in the event of certain terminations of employment prior to the end of a specified restricted period.  Prior to settlement, an award of deferred stock carries no voting or dividend rights, or other rights associated with share ownership, although dividend equivalents may be granted, as discussed below.

Bonus Stock and Awards in Lieu of Cash Obligations

The committee or our Board of Directors is authorized to grant shares of common stock as a bonus free of restrictions, or to grant shares of common stock or other awards in lieu of company obligations to pay cash under the 2003 plan or other plans or compensatory arrangements, subject to such terms as the committee or our Board of Directors may specify.

Acceleration of Vesting; Change in Control

The committee or our Board of Directors may in the case of a "change of control" of our company, as defined in the 2003 plan, in its discretion, accelerate the exercisability, the lapsing of restrictions, or the expiration of deferral or vesting periods of any award (including the cash settlement of SARs and "limited SARs" which may be exercisable in the event of a change in control).  In addition, the committee or our Board of Directors may provide in an award agreement that the performance goals relating to any performance-based award will be deemed met upon the occurrence of any "change in control." Upon the occurrence of a change in control, if so provided in the award agreement, stock options and limited SARs (and other SARs which so provide) may be cashed out based on a defined "change in control price," which will be the higher of

· The cash and fair market value of property that is the highest price per share paid (including extraordinary dividends) in any reorganization, merger, consolidation, liquidation, dissolution, or sale of substantially all assets of our company; or

· The highest fair market value per share (generally based on market prices) at any time during the 60 days before and 60 days after a change in control.

For purposes of the 2003 plan, the term "change in control" generally means:

· Approval by stockholders of any reorganization, merger, or consolidation or other transaction or series of transactions if persons who were shareholders immediately prior to such reorganization, merger, or consolidation or other transaction do not, immediately thereafter, own more than 50% of the combined voting power of the reorganized, merged, or consolidated company's then outstanding, voting securities, or a liquidation or dissolution of our company or the sale of all or substantially all of the assets of our company (unless the reorganization, merger, consolidation or other corporate transaction, liquidation, dissolution or sale is subsequently abandoned),

· A change in the composition of our Board of Directors such that the persons constituting the Board of Directors on the date the award is granted, or the Incumbent Board, and subsequent directors approved by the Incumbent Board (or approved by such subsequent directors), cease to constitute at least a majority of our Board of Directors, or

· The acquisition by any person, entity or "group", within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act, of more than 50% of either the then outstanding shares of our common stock or the combined voting power of our company's then outstanding voting securities entitled to vote generally in the election of directors excluding, for this purpose, any acquisitions by (1) our company, (2) any person, entity, or "group" that as of the date on which the award is granted owns beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act) of a controlling interest, or (3) any employee benefit plan of our company.

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Amendment and Termination

Our Board of Directors may amend, alter, suspend, discontinue, or terminate the 2003 plan or the committee's authority to grant awards without further stockholder approval, except stockholder approval must be obtained for any amendment or alteration if such approval is required by law or regulation or under the rules of any stock exchange or quotation system on which shares of common stock are then listed or quoted. Thus, stockholder approval may not necessarily be required for every amendment to the 2003 plan which might increase the cost of the 2003 plan or alter the eligibility of persons to receive awards. Stockholder approval will not be deemed to be required under laws or regulations, such as those relating to ISOs, that condition favorable treatment of participants on such approval, although our Board of Directors may, in its discretion, seek stockholder approval in any circumstance in which it deems such approval advisable. Unless earlier terminated by our Board of Directors, the 2003 plan will terminate at such time as no shares of common stock remain available for issuance under the 2003 plan and we have no further rights or obligations with respect to outstanding awards under the 2003 plan.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

Certain Relationships and Related Parties

The Company entered a five-year office lease with 410734 B.C. Ltd. effective May 1, 2021, for approximately $6,500 per month. David M. Shworan, President and Chief Executive Officer of Quotemedia Ltd., is a control person of 410734 B.C. Ltd. At December 31, 2023, no amounts were due to 410734 B.C. Ltd.

The Company entered into a marketing agreement with Bravenet Web Services, Inc. (“Bravenet”) effective November 28, 2019. The Company agreed to pay Bravenet an upfront setup fee of $7,000 upon signing the agreement and a monthly service fee of $2,500 starting February 2020. For the years ended December 31, 2023, and 2022, there was $12,000 and $12,500 due to Bravenet related to this agreement, respectively. David M. Shworan is a control person of Bravenet. At December 31, 2023, there was $68,988 in unreimbursed expenses owed to Keith Randall, CEO of Quotemedia, Inc. As a matter of policy all significant related party transactions are subject to review and approval by the Company’s Board of Directors.

Director Independence

Our Board of Directors has determined, after considering all the relevant facts and circumstances, that Mr. Thompson is an “independent” director as such term is defined by Nasdaq.

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ITEM 13. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

On September 27, 2022, Quotemedia, Inc. (the “Company”) received notification from its independent registered public accounting firm, Moss Adams LLP (“Moss Adams”), that Moss Adams was resigning as the Company’s independent registered public accounting firm upon completion of the review of the Company’s unaudited financial statements for the quarter ended September 30, 2022. On January 17, 2023, the Audit Committee of our Board of Directors engaged MNP LLP as our new independent registered public accounting firm.

Aggregate fees billed to our company for the fiscal years ended December 31, 2023, and 2022 by MNP LLP, our principal accountants, are as follows:

	2023		2022
Audit Fees	$	233,299	$	189,241
Audit-Related Fees	$	-	$	-
Tax Fees	$	-	$	-
All Other Fees	$	-	$	-

Aggregate fees billed to our company for the fiscal years ended December 31, 2023, and 2022 by Moss Adams LLP, our former principal accountants, are as follows:

	2023		2022
Audit Fees	$	-	$	104,895
Audit-Related Fees	$	-	$	-
Tax Fees	$	-	$	-
All Other Fees	$	-	$	-

Audit Committee Pre-Approval Policies

The duties and responsibilities of our Audit Committee include the pre-approval of all audit, audit-related, tax, and other services permitted by law or applicable SEC regulations (including fee and cost ranges) to be performed by our independent auditor. Any pre-approved services that will involve fees or costs exceeding pre-approved levels will also require specific pre-approval by the Audit Committee. Unless otherwise specified by the Audit Committee in pre-approving a service, the pre-approval will be effective for the 12-month period following pre-approval. The Audit Committee will not approve any non-audit services prohibited by applicable SEC regulations or any services in connection with a transaction initially recommended by the independent auditor, the purpose of which may be tax avoidance and the tax treatment of which will not be supported by the Internal Revenue Code and related regulations.

To the extent deemed appropriate, the Audit Committee may delegate pre-approval authority to the Chairman of the Board or any one or more other members of the Audit Committee provided that any member of the Audit Committee who has exercised any such delegation must report any such pre-approval decision to the Audit Committee at its next scheduled meeting. The Audit Committee will not delegate the pre-approval of services to be performed by the independent auditor to management.

All services provided by MNP LLP and Moss Adams LLP described above under the captions “Audit Fees” were approved by our Audit Committee.

31

PART IV

ITEM 14. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) The following documents are filed as a part of the report:

(1) Financial Statements

Financial Statements are listed in the Index to Consolidated Financial Statements of this report.

(2) Financial Statement Schedules

No financial statement schedules are included because such schedules are not applicable, are not required, or because required information is included in the consolidated financial statements or notes thereto.

  (3)   Exhibits

Exhibit Number	Description of Exhibit
3.1	Second Amended and Restated Articles of Incorporation (1)
3.2	Amended and Restated Bylaws (1)
10.4	Amended 1999 Equity Incentive Compensation Plan (2)
10.7	2003 Equity Incentive Compensation Plan (1)
21	List of Subsidiaries
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended.
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended.
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

__________________

(1)	Incorporated by reference to the Annual Report on Form 10-KSB filed with the Commission on March 27, 2003.
(2)	Incorporated by reference to the Quarterly Report on Form 10-QSB filed with the Commission on August 12, 2003.

32

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	QUOTEMEDIA, INC.
Date: April 8, 2024,	By:	/s/ Keith J. Randall
		Keith J. Randall Chief Executive Officer and Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ Robert J. Thompson	Chairman of the Board	April 8, 2024
Robert J. Thompson
/s/ David M. Shworan	Director	April 8, 2024
David M. Shworan
/s/ Keith J. Randall	Chief Executive Officer and Chief Financial Officer and Director (Principal	April 8, 2024
Keith J. Randall	Executive and Financial and Accounting Officer)

33

QuoteMedia, Inc.

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm - MNP LLP PCAOB ID:1930	F1 – F-2
Consolidated Balance Sheets	F-3
Consolidated Statements of Operations	F-4
Consolidated Statements of Changes in Series A Redeemable Convertible Preferred Stock and Stockholders’ Deficit	F-5
Consolidated Statements of Cash Flows	F-6
Notes to Consolidated Financial Statements	F-7 – F-18

34

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of QuoteMedia Inc.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of QuoteMedia Inc. (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of operations, changes in series A redeemable convertible preferred stock and stockholders’ deficit, and cash flows for each of the years in the two- year period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2023 and 2022, and the results of its consolidated operations and its consolidated cash flows for each of the years in the two-year period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which they relate.

F-1

Capitalized Internal-Use Software Development Costs

As described in Note 1(f) and 6 to the consolidated financial statements, the Company capitalizes certain costs relating to the development of internal software. These costs may be related to new products as well as existing products when the costs will result in significant additional functionality. Management applied significant judgment in assessing whether the assets met the required criteria for initial capitalization, including the assessment of expected future benefits from the projects to be capitalized, technical feasibility and commercial viability. The value of development costs capitalized during the year ended December 31, 2023 was $3,203,045.

The principal considerations for our determination that capitalized development costs is a critical audit matter was the significant judgment required by management in assessing whether the assets met the required criteria for initial capitalization, stage of development, and nature of costs that qualify for capitalization. This resulted in a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating the audit evidence relating to managements process of identifying projects and the stage of development and related development activities within those projects that qualify for capitalization, in accordance with the applicable accounting standards.

We responded to this matter by performing procedures over capitalized software development costs. Our audit work in relation to this included, but was not restricted to, the following:

· Obtained an understanding of the Company's process to identify development projects and development costs qualifying for capitalization;

· Evaluated management's listing of active development projects by review of project reports and discussions with development personnel to assess the reasonableness as to whether the activities were demonstrative of the capitalization criteria in accordance with the applicable accounting standard;

· Obtained a schedule compiled by management to compute the capitalized costs by project and performed testing over the completeness and mathematical accuracy of the hours and payroll rates included within the schedule;

· Tested a sample of the Company’s capitalized costs by validating the nature of the activities performed and time devoted to capitalizable activities through discussion with individual software developers and project managers;

· Agreed the calculated amounts for capitalization to underlying payroll data to evaluate the reasonableness of hourly rates used for cost capitalization; and

· Assessed the appropriateness of the disclosures in the notes to the consolidated financial statements.

Chartered Professional

Accountants Licensed Public

Accountants

We have served as the Company’s auditor since 2023.

Mississauga, Canada

April 8, 2024

F-2

QUOTEMEDIA, INC.

CONSOLIDATED BALANCE SHEETS

As of December 31,

	2023			2022
ASSETS
Current assets:
Cash and cash equivalents	$	342,014		$	477,987
Accounts receivable, net		1,154,787			910,277
Prepaid expenses		133,478			231,694
Other current assets		104,931			29,092
Total current assets		1,735,210			1,649,050
Deposits		16,850			15,002
Property and equipment, net (see note 5)		302,224			409,875
Capitalized internal-use software development costs, net (see note 6)		4,552,910			3,798,375
Goodwill (see note 7)		110,000			110,000
Intangible assets (see note 7)		65,636			73,572
Operating lease right-of-use assets (see note 4)		393,472			506,219
Total assets	$	7,176,302		$	6,562,093
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable and accrued liabilities	$	2,210,933		$	2,512,837
Deferred revenue (see note 2)		1,456,381			1,166,848
Current portion of operating lease liabilities (see note 4)		206,146			174,166
Total current liabilities		3,873,460			3,853,851
Long-term portion of deferred revenue (see note 2)		375,568			-
Long-term portion of operating lease liabilities (see note 4)		191,735			323,685
Preferred stock warrant liability (see note 8)		611,563			629,375
Mezzanine equity:
Preferred stock, 10,000,000 shares authorized:
Series A Redeemable Convertible Preferred stock, $0.001 par value,
550,000 shares designated; shares issued and outstanding:
123,685 at December 31, 2023 and December 31, 2022 (see note 9)		2,983,857			2,983,857
Stockholders’ deficit:
Common stock, $0.001 par value, 150,000,000 shares authorized, shares issued and
outstanding: 90,477,798 at December 31, 2023 and December 31, 2022		90,479			90,479
Additional paid-in capital		18,910,482			18,903,272
Accumulated deficit		(19,860,842	)		(20,222,426	)
Total stockholders’ deficit		(859,881	)		(1,228,675	)
Total liabilities and stockholders’ deficit	$	7,176,302		$	6,562,093

F-3

QUOTEMEDIA, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

For each of the years ended December 31,

	2023			2022
REVENUE (see note 2)	$	18,907,725		$	17,527,605
COST OF REVENUE		9,263,073			8,972,129
GROSS PROFIT		9,644,652			8,555,476
OPERATING EXPENSES
Sales and marketing		3,130,051			2,952,968
General and administrative		3,346,157			3,015,453
Software development		2,757,031			2,096,404
		9,233,239			8,064,825
OPERATING INCOME		411,413			490,651
OTHER EXPENSES, NET
Foreign exchange loss		(45,017	)		(40,307	)
Interest expense		(1,846	)		(2,818	)
		(46,863	)		(43,125	)
INCOME BEFORE INCOME TAXES		364,550			447,526
Income tax expense (see note 8)		(2,966	)		(3,056	)
NET INCOME	$	361,584		$	444,470
EARNINGS PER SHARE (see note 10)
Basic earnings per share	$	0.00		$	0.00
Diluted earnings per share	$	0.00		$	0.00
WEIGHTED AVERAGE SHARES OUTSTANDING (see note 10)
Basic		90,477,798			90,477,798
Diluted		121,030,357			119,373,490

The accompanying notes are an integral part of these consolidated financial statements.

F-4

QUOTEMEDIA, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SERIES A REDEEMABLE CONVERTIBLE

PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT

For the years ended December 31, 2023 and 2022

	Series A Redeemable Convertible  Preferred Stock				Common Stock				Additional					Total Stockholders’
	Number of Shares		Amount		Number of Shares		Amount		Paid-in Capital		Accumulated Deficit			Equity (Deficit)
Balance, December 31, 2021		123,685	$	2,983,857		90,477,798	$	90,479	$	18,887,759	$	(20,666,896	)	$	(1,688,658	)
Stock-based compensation		-		-		-		-		15,513		-			15,513
Net income		-		-		-		-		-		444,470			444,470
Balance, December 31, 2022		123,685	$	2,983,857		90,477,798	$	90,479	$	18,903,272	$	(20,222,426	)	$	(1,228,675	)
Stock-based compensation		-		-		-		-		7,210		-			7,210
Net income		-		-		-		-		-		361,584			361,584
Balance, December 31, 2023		123,685	$	2,983,857		90,477,798	$	90,479	$	18,910,482	$	(19,860,842	)	$	(859,881	)

The accompanying notes are an integral part of these consolidated financial statements.

F-5

QUOTEMEDIA, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For each of the years ended December 31, 

	2023			2022
OPERATING ACTIVITIES:
Net income	$	361,584		$	444,470
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		2,645,906			2,121,135
Allowance for doubtful accounts		225,000			200,000
Stock-based compensation expense – common stock warrants		7,210			15,513
Fair value adjustment		(17,812	)		115,625
Changes in assets and liabilities:
Accounts receivable		(469,510	)		(486,150	)
Prepaid expenses		98,216			(11,295	)
Other current assets		(75,839	)		10,134
Deposits		(1,848	)		1,003
Accounts payable, accrued and other liabilities		(289,127	)		186,714
Deferred revenue		665,101			544,351
Net cash provided by operating activities		3,148,881			3,141,500
INVESTING ACTIVITIES:
Purchase of property and equipment		(81,809	)		(164,221	)
Purchase of intangible assets		-			(16,313	)
Capitalized internal-use software development costs		(3,203,045	)		(2,739,590	)
Net cash used in investing activities		(3,284,854	)		(2,920,124	)
FINANCING ACTIVITIES:
Repayment of finance lease obligations		-			(2,094	)
Net cash used in financing activities		-			(2,094	)
Net increase (decrease) in cash and cash equivalents		(135,973	)		219,282
Cash and cash equivalents, beginning of year		477,987			258,705
Cash and cash equivalents, end of year	$	342,014		$	477,987
See supplementary information (Note 11)

The accompanying notes are an integral part of these consolidated financial statements.

F-6

QUOTEMEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES

a) Nature of operations

Quotemedia, Inc. (the “Company”) is a software developer and distributor of financial market data and related services to a global marketplace. The Company specializes in the collection, aggregation, and delivery of both delayed and real-time financial data content via the Internet. The Company develops 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 Canadian subsidiary of the Company. All intercompany transactions and balances have been eliminated.

c) Foreign currency translation and transactions

The U.S. dollar is the functional currency of all the 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 year, except for expenses related to balance sheet amounts remeasured at historical exchange rates. Because the U.S. dollar is the functional currency, 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) Cash and cash equivalents

Cash equivalents include money market investments that have an original maturity of three months or less and are redeemable on demand. The Company maintains its accounts primarily at one financial institution. At times throughout the year, the Company’s cash and cash equivalents balances may exceed amounts insured by the Federal Deposit Insurance Corporation.

e) Allowance for doubtful accounts

The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of the Company’s customers to make required payments. The Company believes that the historical loss information it has compiled is a reasonable base on which to determine expected credit losses for trade receivables held at December 31, 2023, because the composition of the trade receivables at that date is consistent with that used in developing the historical credit-loss percentages (i.e., the similar risk characteristics of its customers and its credit practices have not changed significantly over time).  The allowance for doubtful accounts was $225,000 and $200,000 at December 31, 2023 and 2022, respectively. Bad debt expense for the years ended December 31, 2023 and 2022 were $117,973 and $135,969, respectively.

f) Property and equipment and capitalized internal-use software development costs

Property and equipment are recorded at cost less accumulated depreciation. Furniture and equipment are depreciated using the straight-line method over their estimated useful lives of five years. Leasehold improvements are amortized using the straight-line method over the terms of the respective leases or useful lives, whichever is shorter. Retirements, sales, and disposals of assets are recorded by removing the cost and accumulated depreciation from the asset and accumulated depreciation accounts with the resulting gain or loss reflected in income. There were no fixed assets retired during the years ended December 31, 2023 and 2022.

Capitalized software development includes costs incurred in connection with the internal development of software. These costs relate to software used by subscribers to access, manage and analyze information in the Company’s databases. The majority of the capitalized costs relate to a portion of the salaries and other related costs for the Company’s software engineers. Capitalized costs associated with internally developed software are amortized over three years which is their estimated economic life.

Depreciable and amortizable assets are evaluated for impairment upon a significant change in the operating environment. In these circumstances, if an evaluation of the undiscounted cash flows indicates impairment, the asset is written down to its estimated fair value, which is based on discounted future cash flows. Useful lives are periodically evaluated to determine whether events or circumstances have occurred which indicate the need for revision. There were no impairments recorded for the years ended December 31, 2023 and 2022.

g) Earnings per share

Basic earnings per share are computed by dividing income by the weighted average number of shares outstanding during the year. Diluted earnings per share considers shares outstanding (computed under basic earnings per share) and potentially dilutive common shares (such as stock options and redeemable convertible preferred stock outstanding). Anti-dilutive securities represent potentially dilutive securities which are excluded from the computation of diluted EPS as their impact would be anti-dilutive. Convertible instruments with non-market-price contingencies are excluded from diluted earnings per share until all the required non-market-price based contingencies are met. The effect of a stock split or reverse split is applied retroactively to preceding periods.

F-7

QUOTEMEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

h) Income taxes

Income taxes are provided in accordance with Financial Accounting Standards Board (“FASB”) ASC 740, Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between income for financial statement purposes and income for tax purposes as well as operating loss carry-forwards. Deferred tax expenses or recovery result from the net change during the year of deferred tax assets and liabilities. Any interest and penalties are recorded as part of income tax expense.

Deferred tax assets are reduced by a valuation allowance, when, in the opinion of management, it is likely that some portion of the deferred tax asset will not be realized. Deferred taxes are adjusted for the effects of changes in tax laws and rates. Interest and penalties, if applicable, would be recorded in operations. The Company recorded Canadian income tax expense of $2,966 and $3,056 for the years ended December 31, 2023 and 2022, respectively (see Note 7).

i) Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities as of the year end and the reported amount of revenue and expenses during the year. Such estimates include (i) fair values used to test goodwill and capitalized development costs for impairment; (ii) the amount of allowance for doubtful accounts, (iii) the capitalization of software development costs, (iv) income taxes, (v) the incremental borrowing rate for operating leases, (vi) the useful life of property and equipment, and (vii) stock-based compensation. Actual results and outcomes may differ from management’s estimates and assumptions.

j) Software development expenses

Software development expenses consist primarily of costs incurred to maintain the Company’s software applications. The Company expensed $2,757,031 and $2,096,404 in software development costs during the years ended December 31, 2023 and 2022, respectively (see Note 5). Software development costs are costs that did not meet the capitalization criteria for internal-use software development costs (see Note 6).

k) Revenue

The Company generates substantially all of its revenue from subscriptions for access to its software products and related support. The Company licenses financial market data information on a monthly, quarterly, or annual basis. The Company’s products and services are divided into two main categories:

Interactive Content and Data Applications

· Proprietary financial software applications and streaming market data feeds

· Subscriptions are typically sold for a fixed fee and revenue is recognized ratably over the term of the subscription.

Portfolio Management and Real-Time Quote Systems

1. Corporate Quotestream (Business-to-Business)

o Web-delivered, embedded applications providing real-time, streaming market quotes and research information targeted to both professionals and non-professional users.

o Revenue is typically earned based on customer usage.

2. Individual Quotestream (Business-to-Consumer)

o Web-delivered, embedded applications providing real-time, streaming market quotes and research information targeted to non-professional users.

o Subscriptions are typically sold for a fixed fee and revenue is recognized ratably over the term of the subscription.

The Company does not provide its customers with the right to take possession of its software products at any time.

The Company determines revenue recognition through the following steps:

· Identification of the contract, or contracts, with a customer

· Identification of the performance obligations in the contract

· Determination of the transaction price

· Allocation of the transaction price to the performance obligations in the contract

· Recognition of revenue when, or as, the Company satisfies a performance obligation

The Company executes a signed contract with the customer that specifies services to be provided, the payment amounts and terms, and the period of service, among other terms.

F-8

QUOTEMEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Contract Balances

The Company’s corporate customers are invoiced based on fee schedules that are agreed upon in each customer contract. Individual Quotestream customers are charged a subscription fee based on their subscription agreement. The Company recognizes revenue when performance obligations have been satisfied, which is the date the customer has access to the contracted market data.  The timing of revenue recognition may differ from the timing of invoicing to customers. The Company records a receivable when revenue is recognized prior to invoicing, or deferred revenue when revenue is recognized subsequent to invoicing. Upfront set-up or development fees are deferred and recognized evenly from the date performance obligations have been met to the end of the service term of the contract, as set-up and development fees are not distinct from the market data service contracts to which they relate.

The Company considers the following factors when determining if collection of a fee is reasonably assured: customer creditworthiness, past transaction history with the customer, current economic industry trends, and changes in customer payment terms. If these factors do not indicate collection is reasonably assured, revenue is not recognized until collection becomes reasonably assured, which is generally upon receipt of cash.

Cost of revenue

Cost of revenue primarily consists of customer support personnel-related compensation expenses, including salaries, bonuses, benefits, payroll taxes, and stock-based compensation expense, as well as expenses related to third-party hosting costs, software license fees, amortization of capitalized software development costs, amortization of acquired technology intangible assets, and allocated overhead.

l) Financial instruments

Financial instruments consist principally of cash and cash equivalents, accounts receivable and accounts payable and preferred stock warrant liability. The Company believes that the fair value of financial instruments approximates the recorded book value of those instruments due to the short-term nature of the instruments or stated interest rates that approximate market interest rates.

m) Stock-Based Compensation

Stock-based compensation awards are measured at their fair value on the date of grant with the expense recognized, net of estimated forfeitures, over the related service or performance period on a straight-line basis. The Company used the Black-Scholes valuation model to calculate the fair value of common stock options and warrants. 

n) Recent Accounting Pronouncements

Recently Adopted

On January 1, 2023, the Company adopted Accounting Standards Update (“ASU”) 2016-13, Financial Instruments-Credit Losses (Topic 326), which changes the impairment model for most financial assets, including accounts receivable, and replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. The adoption of ASU 2016-13 had no impact on the Company’s consolidated financial statements.

Not Yet Adopted

In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). ASU 2020-06 simplifies the complexity associated with applying U.S. Generally Accepted Accounting Principles (“GAAP”) for certain financial instruments with characteristics of liabilities and equity. More specifically, the amendments focus on the guidance for convertible instruments and derivative scope exception for contracts in an entity's own equity. The new standard is effective for the Company for fiscal years beginning after December 15, 2023. The Company does not expect that the adoption of ASU 2020-06 will have a significant impact on the Company’s consolidated financial statements.

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). This standard improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments in ASU 2023-07 will be applied retrospectively to all prior periods presented in the consolidated financial statements. The Company does not expect that the adoption of ASU 2023-07 will have a significant impact on the Company’s consolidated financial statements.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosure (“ASU 2023-09”). This standard provides transparency to income tax disclosures related to the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 for public entities with early adoption permitted. The amendments in ASU 2023-09 will be applied prospectively in the consolidated financial statements. The Company is currently evaluating the timing of its adoption of this standard and the impact in its consolidated financial statements.

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.

F-9

QUOTEMEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

2. REVENUE

Disaggregated Revenue

The Company provides market data, financial web content solutions and cloud-based applications.  The Company’s revenue by type of service consists of the following for the years ended December 31,

	2023		2022
Portfolio Management Systems
Corporate Quotestream	$	7,275,615	$	6,906,499
Individual Quotestream		1,861,396		2,092,778
Interactive Content & Data APIs		9,770,714		8,528,328
Total revenue	$	18,907,725	$	17,527,605

Deferred Revenue

Changes in deferred revenue were as follows for the years ending December 31,

	2023			2022
Beginning balance	$	1,166,848		$	622,497
Revenue recognized in the current period from the amounts in the beginning balance		(1,033,287	)		(568,001	)
New deferrals, net of amounts recognized in the current period		1,695,447			1,112,431
Effects of foreign currency translation		2,941			(79	)
Total deferred revenue	$	1,831,949		$	1,166,848
Current portion of deferred revenue	$	1,456,381		$	1,166,848
Long-term portion of deferred revenue		375,568			-
Total deferred revenue	$	1,831,949		$	1,166,848

Practical Expedients

The Company applies a practical expedient and does not disclose the value of the remaining performance obligations for contracts that are less than one year in duration, which represent a substantial majority of its revenue.

3. RELATED PARTIES

The Company entered into a five-year office lease with 410734 B.C. Ltd. effective May 1, 2021 for approximately $6,500 per month. David M. Shworan, President and Chief Executive Officer of Quotemedia Ltd., is a control person of 410734 B.C. Ltd. At December 31, 2023, no amounts were due to 410734 B.C. Ltd.

The Company entered into a marketing agreement with Bravenet Web Services, Inc. (“Bravenet”) effective November 28, 2019. The Company agreed to pay Bravenet an upfront setup fee of $7,000 upon signing the agreement and a monthly service fee of $2,500 starting February 2020. For the years ended December 31, 2023 and 2022, there was $12,000 and $12,500 due to Bravenet related to this agreement, respectively. David M. Shworan is a control person of Bravenet. At December 31, 2023, there were $68,988 in unreimbursed expenses owed to Keith Randall, CEO of Quotemedia, Inc. As a matter of policy all significant related party transactions are subject to review and approval by the Company’s Board of Directors.

4. LEASES

The Company has operating leases for corporate offices. The Company’s leases have remaining lease terms of 1 year to 4 years. Management determines if an arrangement is a lease at inception. Operating lease assets and liabilities are included in operating lease right-of-use assets and operating lease liabilities, respectively, on the Company’s consolidated balance sheets. Finance lease assets and liabilities are included in property and equipment and finance lease liabilities, respectively, on the Company’s consolidated balance sheets. The Company renewed its lease for office space in Fountain Hills, Arizona as of July 1, 2023 for an additional 3 years resulting in a right of use asset and an offsetting lease liability of $78,304.

F-10

QUOTEMEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The Company elected the short-term lease exception and therefore only recognize right-of-use assets and lease liabilities for leases with a term greater than one year. When determining lease terms, the Company factors in options to extend or terminate leases when it is reasonably certain that the Company will exercise that option. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. For certain leases the Company accounts for the lease and non-lease components as a single lease component.

Supplemental balance sheet information related to leases at December 31, was as follows:

	2023		2022
Operating Leases
Operating lease right-of-use assets, net	$	393,472	$	506,219
Current portion of operating lease liability	$	206,146	$	174,166
Long-term portion of operating lease liability		191,735		323,685
Total operating lease liability	$	397,881	$	497,851

	2023			2022
Weighted Average Remaining Lease Term
Operating leases	1.9 years			2.7 years
Weighted Average Discount Rate
Operating leases		9.5	%		9.9	%

Maturities of lease liabilities were as follows:

Year ending December 31,	Operating Leases
2024	$	235,025
2025		167,607
2026		34,476
Total lease payments		437,108
Less imputed interest		(39,227	)
Total	$	397,881

The components of lease expense for the years ended December 31, were as follows:

	2023		2022
Operating lease costs:
Operating lease costs	$	235,459	$	236,737
Short-term lease costs		108,421		98,570
Total operating lease costs	$	343,880	$	335,307
Finance lease costs:
Interest	$	-	$	64

F-11

QUOTEMEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

Supplemental cash flow information related to leases was as follows:

	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	231,985	$	224,741
Operating cash flows from finance leases		-		64
Financing cash flows from finance leases		-		2,087
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	78,304	$	-

5. PROPERTY AND EQUIPMENT

At December 31:

	2023			2022
Computer equipment	$	1,575,514		$	1,493,705
Office furniture and equipment		27,783			27,783
Leasehold improvements		13,573			13,573
Total property and equipment		1,616,870			1,535,061
Less: accumulated depreciation and amortization		(1,314,646	)		(1,125,186	)
Property and equipment, net	$	302,224		$	409,875

Property and Equipment are recorded at cost less accumulated depreciation. Depreciation and amortization is calculated on a straight-line basis over the assets’ estimated useful lives as follows:

Computer equipment	5 years
Office furniture and equipment	5 years
Leasehold improvements	Shorter of useful life or the term of lease

Depreciation expense for equipment and leaseholds for the years ended December 31, 2023 and 2022 was $189,460 and $170,245, respectively.

6. CAPITALIZED INTERNAL-USE DEVELOPMENT COSTS

At December 31:

	2023			2022
Capitalized internal-use software development costs	$	19,417,742		$	16,214,697
Less: accumulated amortization		(14,864,832	)		(12,416,322	)
Capitalized internal-use software development costs, net	$	4,552,910		$	3,798,375

Changes in capitalized internal-use software development costs were as follows for the years ending December 31,

	2023			2022
Opening balance	$	3,798,375		$	3,002,076
Additions during the year		3,203,045			2,739,590
Amortization		(2,448,510	)		(1,943,292	)
Ending balance	$	4,552,910		$	3,798,374

Capitalized internal-use software development costs are recorded at cost less accumulated depreciation. Amortization is calculated on a straight-line basis over three years which is the capitalized internal-use software development costs estimated useful life.

For the years ended December 31, 2023 and 2022, the Company capitalized $3,203,045 and $2,739,590 of costs, respectively, related to upgrades and enhancements made to existing software applications. Software applications are used by the Company’s subscribers to access, manage and analyze information in the Company’s databases. For the years ended December 31, 2023 and 2022, amortization expenses associated with the internally developed application software was $2,448,510 and $1,943,292, respectively. At December 31, 2023 and 2022, the remaining book value of the capitalized application software was $4,552,910 and $3,798,374.

F-12

QUOTEMEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

7. INTANGIBLE ASSETS AND GOODWILL

At December 31:

	2023			2022
Intangible assets:
Software licenses & intellectual property	$	138,159		$	138,159
Domain names		20,569			20,569
		158,728			158,728
Less: accumulated amortization		(93,092	)		(85,156	)
Total intangible assets, net	$	65,636		$	73,572
Goodwill:
Purchase of business unit	$	110,000		$	110,000

Amortization for amortized intangible assets is calculated on a straight-line basis over the assets’ estimated useful lives. The useful life of the software licenses and domain names is estimated to be 20 years. The useful life of intellectual property is 5 years. Amortization expense for amortized intangible assets was $7,936 and $7,596 for the years ended December 31, 2023 and 2022, respectively.

The estimated amortization expense of definite-lived intangible assets is as follows:

Year ending December 31,
2024	$	7,936
2025		7,936
2026		7,936
2027		7,936
2028		4,008
Thereafter		29,884
Total	$	65,636

Goodwill is reported as an indefinite life intangible asset. The Company evaluates goodwill for impairment on an annual basis in accordance with FASB ASC 350-20, Goodwill. Through December 31, 2023 the Company has not identified any impairment indicators related to goodwill.

8. INCOME TAXES

The Company accounts for income taxes according to the provisions of FASB ASC 740, Income Taxes, which prescribes an asset and liability approach for computing deferred income taxes.

Reconciliations of income taxes computed at the statutory federal rate to income tax expense (benefit) for the years ended December 31, 2023 and 2022 are as follows:

	2023			2022
Net income before income tax	$	364,550		$	447,526
Tax provision (benefit) at the statutory rate of 21%		75,297			110,544
State income taxes, net of federal income tax		29,392			(16,440	)
Stock-based compensation and other non-deductible expenses		(2,226	)		47,040
Change in intangibles		507,085			-
Adjustment in respect of prior periods		-			99,660
Change in other items		40,044			86,042
Canadian income tax expense (benefit)		2,966			3,070
Change in valuation allowance		(649,592	)		(326,860	)
Income tax expense (recovery)	$	2,966		$	3,056

F-13

QUOTEMEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In 2023, the Company recorded Arizona income tax expense of $50 and Canadian income tax expense of $2,966. The Company does not have any material Canadian deferred tax assets or deferred tax liabilities.

As of December 31, 2023, we had net operating loss carryforwards for federal and state income tax reporting purposes amounting to approximately $8,200,000 and $400,000 which expire in varying amounts through the year 2042.

The components of the Company’s deferred tax asset (liabilities) at December 31, 2023 and 2022 are as follows:

	2023			2022
Tax effect of net operating loss carry-forward – U.S.	$	1,742,266		$	1,822,760
Tax effect of net operating loss carry-forward – Canada		-			141,340
Property & equipment		(28,085	)		(3,610	)
Right-of-use asset		(133,860	)		(133,860	)
Capital lease obligation		131,700			131,700
Intangibles		(734,020	)		(321,970	)
Other		58,507			49,740
Less valuation allowance		(1,036,508	)		(1,686,100	)
Net deferred tax asset	$	-		$	-

A valuation allowance has been recognized to offset the entire effect of the Company’s net deferred tax asset as the realization of this deferred tax benefit is uncertain. The valuation allowance decreased $649,592 for the year ended December 31, 2023.

The Company has analyzed filing positions in all of the federal and state jurisdictions where it is required to file income tax returns, as well as all open tax years (2017-2023) in these jurisdictions. The Company believes that its income tax filing positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material adverse effect on the Company’s financial condition, results of operations, or cash flows. Therefore, no reserves for uncertain income tax positions have been recorded.

9. REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT

a) Redeemable convertible preferred shares

The Company is authorized to issue up to 10,000,000 non-designated preferred shares at the Board of Directors’ discretion.

A total of 550,000 shares of the Company’s Preferred Stock were designated as “Series A Redeemable Convertible Preferred Stock.” The Series A Redeemable Convertible Preferred Stock has no dividend or voting rights.

At December 31, 2023 and 2022, 123,685 shares of Series A Redeemable Convertible Preferred Stock were outstanding. No shares of Series A Redeemable Convertible Preferred Stock were issued or redeemed during the years ended December 31, 2023 and 2022.

Redemption Rights

Holders of Series A Redeemable Convertible Preferred Stock shall have the right to convert their shares into shares of common stock at the rate of 83.33 shares of common stock for one share of Series A Redeemable Convertible Preferred Stock, at any time following the date the closing price of a share of common stock on a securities exchange or actively traded over-the-counter market has exceeded $0.30 for ninety (90) consecutive trading days. The conversion rights are subject to the availability of authorized but unissued shares of common stock.

In addition, 1,000 Series A Redeemable Convertible Preferred Stock may be redeemed at the holder’s option at the liquidation value of $25 per share if the cash balance of the Company as reported at the end of each fiscal quarter exceeds $400,000.

In accordance with ASC 480-10-S99, because a limited amount of Series A Redeemable Convertible Preferred Stock may be redeemed at the holder’s option if the above criteria are met, it was classified as mezzanine equity and not permanent equity.

In the event of any liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary, before any distribution or payment is made to any holders of any shares of common stock, the holders of shares of Series A Redeemable Convertible Preferred Stock shall be entitled to be paid first out of the assets of the Corporation available for distribution to holders of the Company’s capital stock whether such assets are capital, surplus, or earnings, an amount equal to $25.00 per share of Series A Redeemable Convertible Preferred Stock.

F-14

QUOTEMEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

b) Common stock

No shares of common stock were issued during the years ended December 31, 2023 and 2022.

c) Stock Options and Warrants

1999 Stock Option Plan

During March 1999, the Company adopted, and the Company’s stockholders approved, the 1999 Stock Option Plan to advance the interests of the Company by encouraging and enabling key employees to acquire a financial interest in the Company and link their interests and efforts to the long-term interests of the Company’s stockholders.  A total of 400,000 shares of common stock were initially reserved for issuance under the 1999 plan.  In September 1999, this number was increased to 2,500,000.  As of December 31, 2023, 1,144,817 shares of the Company’s common stock had been issued upon exercise of options granted under the 1999 plan, and there were outstanding options to acquire 1,355,183 shares of the Company’s common stock under the 1999 plan.

2003 Equity Incentive Compensation Plan

The Company’s Board of Directors has approved the 2003 Equity Incentive Compensation Plan, or the 2003 plan, approved by the Company’s stockholders at the annual meeting held on February 14, 2003. The purpose of the 2003 plan is to assist the Company in attracting, motivating, retaining, and rewarding high-quality executives and other employees, directors, officers, and independent contractors by enabling such persons to acquire or increase a proprietary interest in the Company in order to strengthen the mutuality of interests between such persons and the Company’s stockholders, and providing such persons with annual and long-term performance incentives to expend their maximum efforts in the creation of stockholder value.

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.

At December 31, 2023, there are 15,000,000 shares of common stock authorized for issuance pursuant to the 2003 plan.  As of December 31, 2023, 2,350,372 shares of common stock had been issued upon exercise of options granted under the 2003 plan, and there were 4,720,000 options outstanding under the 2003 plan.

Total estimated stock-based compensation expense (recovery), related to all the Company’s stock-based awards was comprised as follows:

	2023			2022
Sales and marketing expense (recovery)	$	(17,602	)	$	131,858
General and administrative expense		7,000			-
Stock based compensation expense	$	(10,602	)	$	131,858

Common Stock Options and Warrants

The following table summarizes the Company’s common stock option and warrant activity for the years ended December 31, 2023 and 2022:

	Common Stock Options and Warrants			Weighted-Average Grant Date Exercise Price
Outstanding at December 31, 2022 and 2021		25,772,803		$	0.06
Granted during the year		1,030,000		$	0.04
Forfeited during the year		(1,030,000	)	$	0.04
Outstanding at December 31, 2023		25,772,803		$	0.06

F-15

QUOTEMEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

The following table summarizes the Company’s non-vested common stock option and warrant activity for the years ended December 31, 2023 and 2022:

	Common Stock Options and Warrants			Weighted-Average Grant Date Exercise Price
Non-vested at December 31, 2021		2,025,000		$	0.08
Vested during the year		(2,025,000	)	$	0.08
Non-vested at December 31, 2022 and 2023		-

The following table summarizes the weighted average remaining contractual life and exercise price of common stock options and warrants outstanding at December 31, 2023:

	Common Stock Options and Warrants Outstanding						Common Stock Options  and Warrants Exercisable
			Weighted
	Number		Average		Weighted		Number		Weighted
	Outstanding at		Remaining		Average		Exercisable at		Average
	December 31,		Contractual		Exercise		December 31,		Exercise
	2023		Life (Years)		Price		2023		Price
$0.03-0.10		25,772,803		5.76	$	0.06		25,772,803	$	0.06

At December 31, 2023, there was no unrecognized compensation cost related to non-vested options granted to purchase common stock.

Management calculates the fair value of stock options and warrants granted to purchase common stock under the provisions of FASB ASC 718 using the Black-Scholes valuation model with the following assumptions:

	2023			2022
Expected dividend yield		-			N/A
Expected stock price volatility		97	%		N/A
Risk-free interest rate		4	%		N/A
Expected life of options (years)		1.96			N/A
Weighted average fair value of options and warrants granted	$	0.21			N/A

All stock options and warrants to purchase common stock 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 December 31, 2023, the aggregate intrinsic value of options and warrants outstanding and exercisable was $4,436,478. The intrinsic value of stock options and warrants are calculated as the amount by which the market price of the Company’s common stock exceeds the exercise price of the option or warrant.

Preferred Stock Warrants

Pursuant to the December 28, 2017 Compensation Agreement with David M. Shworan, the President and Chief Executive Officer of QuoteMedia, Ltd., a wholly owned subsidiary of Quotemedia, Inc., the Company issued Mr. Shworan warrants to purchase shares of Series A Redeemable Convertible Preferred Stock (“Compensation Preferred Stock Warrants”) in lieu of a cash salary. From the period December 28, 2017 to December 31, 2019 the Company issued a total of 31,250 Compensation Preferred Stock Warrants at an exercise price equal to $1.00 per share.

Also pursuant to the Compensation Agreement with Mr. Shworan, on December 28, 2017 the Company issued Mr. Shworan warrants to purchase up to 382,243 shares of Series A Redeemable Convertible Preferred Stock at an exercise price equal to $1.00 per share (“Liquidity Preferred Stock Warrant”). The Liquidity Preferred Stock Warrants only vest and become exercisable on the consummation of a Liquidity Event as defined in the Company’s Certificate of Designation of Series A Redeemable Convertible Preferred Stock. The probability of the liquidity event performance condition is not currently determinable or probable; therefore, no compensation expense has been recognized as of December 31, 2023. The probability is re-evaluated each reporting period. As of December 31, 2023 and 2022, there was $9,173,832 in unrecognized stock-based compensation expense related to these Liquidity Preferred Stock Warrants. Since the Liquidity Preferred Stock Warrants only vest and become exercisable on the consummation of a Liquidity Event which is currently determined not to be probable, the Company is also unable to determine the weighted-average period over which the unrecognized compensation cost will be recognized.

F-16

QUOTEMEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

As of December 31, 2023 and 2022, there were a total of 413,493 preferred stock warrants outstanding with a weighted average remaining contractual life of 24 years. As of December 31, 2023, 31,250 preferred stock warrants were exercisable. No preferred stock warrants were exercised for the years ended December 31, 2023 and 2022.

Fair Value Measurement of Compensation Preferred Stock Warrants

The Company adheres to ASC 820, which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC 820 applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements; accordingly, the standard does not require any new fair value measurements of reported balances.

ASC 820 emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

· Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company could access.

· Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals.

· Level 3 inputs are unobservable inputs for the asset or liability, which is typically based on an entity’s own assumptions, as there is little, if any, related market activity.

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

The estimated fair value of the Preferred Stock Warrant liability is determined using Level 3 inputs. As of December 31, 2023 and 2022, the fair value of the Preferred Stock Warrant Liability was $611,563 and $629,375, respectively. The Preferred Stock Warrants were valued using a bond plus option framework reflecting the cash flow of the Preferred Stock Warrants and used a probability weighted sum of the value in each potential year before expiration to estimate the fair value of the Preferred Stock Warrants. Volatility was based on public peer companies, adjusted for size and leverage. Risk-free rate was selected based on term matched Treasury securities. Bond repayment depends on the Company’s timely access to the required cash and as such, is discounted at the Company’s assumed borrowing rate. This model was run based on the Management's expected term and probabilities of a liquidity event.  The key inputs for the framework were as follows as of December 31, 2023 and 2022:

Valuation Inputs	December 31, 2023			December 31, 2022
Expected Time to Expiration (years)		24.05			25.05
Stock Price on Valuation Date	$	0.23		$	0.21
Peer Volatility		47.35	%		52.31	%
Cash Flow Discount Rate		15.86	%		12.93	%

F-17

QUOTEMEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

The following table sets forth a summary of the changes in the fair value of the Level 3 Preferred Stock Warrant Liability for the years ended December 31, 2023 and December 31,2022:

	Preferred Stock Warrant Liability
Fair value as of December 31, 2021	$	513,750
Change in fair value		115,625
Fair value as of December 31, 2022	$	629,375
Change in fair value		(17,812	)
Fair value as of December 31, 2023	$	611,563

The changes in fair value attributable to the Preferred Stock Warrants are recorded as an adjustment to stock compensation expense and reported in Sales and Marketing expense on the Consolidated Statements of Operations.

10. EARNINGS PER SHARE

Basic net income per share is computed by dividing net income during the year by the weighted-average number of common shares outstanding, excluding the dilutive effects of common stock equivalents. Common stock equivalents include redeemable convertible preferred stock, stock options and warrants. Diluted net income per share is computed by dividing net income by the weighted-average number of dilutive common shares outstanding during the period. Diluted shares outstanding is calculated using the treasury stock method by adding to the weighted shares outstanding any potential shares of common stock from stock options and warrants that are in-the-money. For outstanding redeemable convertible preferred stock, potential common shares are determined using the if-converted method. The calculations for basic and diluted net income per share for the year ended December 31, 2023 and 2022 are as follows:

	2023		2022
Net income	$	361,584	$	444,470
Weighted average common shares used to calculate net income per share		90,477,798		90,477,798
Warrants to purchase redeemable convertible preferred stock		2,499,900		2,499,900
Redeemable convertible preferred stock		10,306,671		10,306,671
Stock options and warrants to purchase common stock		17,745,988		16,089,121
Weighted average common shares used to calculate diluted net income per share		121,030,357		119,373,490
Net income per share – basic	$	0.00	$	0.00
Net income per share – diluted	$	0.00	$	0.00

11. SUPPLEMENTARY CASH FLOW INFORMATION

	2023		2022
Cash paid for
Interest	$	4,371	$	3,356

The non-cash amounts related to right-of-use assets obtained in exchange for lease obligations are noted below for the years ended December 31,2023 and 2022:

	2023		2022
Right-of-use assets obtained in exchange for lease obligations	$	78,304	$	-

Cash and cash equivalents consists entirely of cash at December 31, 2023 and 2022.

12. REVENUE CONCENTRATION

A significant portion of the Company’s revenue has historically been derived from customers outside of the United States, primarily in Canada. For the years ended December 31, 2023 and 2022, revenue from Canada accounted for approximately 38% and 35%, respectively, of total revenue.

13. SUBSEQUENT EVENTS

The Company has evaluated events up to the filing date of these consolidated financial statements and determined there are no other subsequent event activity required disclosure.

F-18

EX-21

EXHIBIT 21

LIST OF SUBSIDIARIES OF

QUOTEMEDIA, INC.

(as of December 31, 2023)

Name of Subsidiary	Place of Incorporation
Quotemedia, Ltd.	British Columbia, Canada

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Keith J. Randall, certify that:

1.	I have reviewed this annual report on Form 10-K 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(s) 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(s) 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: April 8, 2024

By:	/s/ Keith J. Randall
Keith J. Randall
Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Keith J. Randall, certify that:

1.	I have reviewed this annual report on Form 10-K 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(s) 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(s) 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: April 8, 2024

By:	/s/ Keith J. Randall
Keith J. Randall
Chief Financial Officer

EX-32.1

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 Annual Report on Form 10-K of Quotemedia, Inc. (the "Company") for the year ended December 31, 2023 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Keith J. Randall, 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/ Keith J. Randall
Keith J. Randall
Chief Executive Officer
April 8, 2024

 

EX-32.2

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 Annual Report on Form 10-K of Quotemedia, Inc. (the "Company") for the year ended December 31, 2023 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
April 8, 2024

XML

Cover - USD ($)	12 Months Ended
	Dec. 31, 2023	Mar. 18, 2024	Jun. 30, 2023
Cover [Abstract]
Entity Registrant Name	QuoteMedia, Inc.
Entity Central Index Key	0001101433
Document Type	10-K
Amendment Flag	false
Entity Voluntary Filers	No
Current Fiscal Year End Date	--12-31
Entity Well Known Seasoned Issuer	No
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Dec. 31, 2023
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2023
Entity Common Stock Shares Outstanding		90,477,798
Entity Public Float			$ 18,187,362
Document Annual Report	true
Document Transition Report	false
Document Fin Stmt Error Correction Flag	false
Entity File Number	0-28599
Entity Incorporation State Country Code	NV
Entity Tax Identification Number	91-2008633
Entity Address Address Line 1	17100 East Shea Boulevard
Entity Address Address Line 2	Suite 230
Entity Address City Or Town	Fountain Hills
Entity Address State Or Province	AZ
Entity Address Postal Zip Code	85268
City Area Code	602
Icfr Auditor Attestation Flag	false
Auditor Location	Mississauga, Canada
Auditor Firm Id	1930
Local Phone Number	830-1443
Security 12b Title	Common stock, par value $.001 per share
Entity Interactive Data Current	Yes
Auditor Name	MNP LLP

XML

CONSOLIDATED BALANCE SHEETS - USD ($)	Dec. 31, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 342,014	$ 477,987
Accounts receivable, net	1,154,787	910,277
Prepaid expenses	133,478	231,694
Other current assets	104,931	29,092
Total current assets	1,735,210	1,649,050
Deposits	16,850	15,002
Property and equipment, net (see note 5)	302,224	409,875
Capitalized internal-use software development costs, net (see note 6)	4,552,910	3,798,375
Goodwill (see note 7)	110,000	110,000
Intangible assets (see note 7)	65,636	73,572
Operating lease right-of-use assets (see note 4)	393,472	506,219
Total assets	7,176,302	6,562,093
Current liabilities:
Accounts payable and accrued liabilities	2,210,933	2,512,837
Deferred revenue (see note 2)	1,456,381	1,166,848
Current portion of operating lease liabilities (see note 4)	206,146	174,166
Total current liabilities	3,873,460	3,853,851
Long-term portion of deferred revenue (see note 2)	375,568	0
Long-term portion of operating lease liabilities (see note 4)	191,735	323,685
Preferred stock warrant liability (see note 8)	611,563	629,375
Mezzanine equity:
Preferred stock, 10,000,000 shares authorized: Series A Redeemable Convertible Preferred stock, $0.001 par value, 550,000 shares designated; shares issued and outstanding: 123,685 at December 31, 2023 and December 31, 2022 (see note 9)	2,983,857	2,983,857
Stockholders' deficit:
Common stock, $0.001 par value, 150,000,000 shares authorized, shares issued and outstanding: 90,477,798 at December 31, 2023 and December 31, 2022	90,479	90,479
Additional paid-in capital	18,910,482	18,903,272
Accumulated deficit	(19,860,842)	(20,222,426)
Total stockholders' deficit	(859,881)	(1,228,675)
Total liabilities and stockholders' deficit	$ 7,176,302	$ 6,562,093

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2023	Dec. 31, 2022
CONSOLIDATED BALANCE SHEETS
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	90,477,798
Common Stock, Shares Outstanding	90,477,798	90,477,798
Preferred Stock, Par Value	$ 0.001	$ 0.001
Preferred Stock, Shares Authorized	10,000,000	10,000,000
Preferred Stock, Issued	123,685	123,685
Preferred Stock, Outstanding	123,685	123,685
Convertible Preferred Stock Designated	550,000	550,000

XML

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
CONSOLIDATED STATEMENTS OF OPERATIONS
REVENUE (see note 2)	$ 18,907,725	$ 17,527,605
COST OF REVENUE	9,263,073	8,972,129
GROSS PROFIT	9,644,652	8,555,476
OPERATING EXPENSES
Sales and marketing	3,130,051	2,952,968
General and administrative	3,346,157	3,015,453
Software development	2,757,031	2,096,404
Total operating expenses	9,233,239	8,064,825
OPERATING INCOME	411,413	490,651
OTHER EXPENSES, NET
Foreign exchange loss	(45,017)	(40,307)
Interest expense	(1,846)	(2,818)
OTHER EXPENSES, NET	(46,863)	(43,125)
INCOME BEFORE INCOME TAXES	364,550	447,526
Income tax expense (see note 8)	(2,966)	(3,056)
NET INCOME	$ 361,584	$ 444,470
EARNINGS PER SHARE (see note 10)
Basic earnings per share	$ 0.00	$ 0.00
Diluted earnings per share	$ 0.00	$ 0.00
WEIGHTED AVERAGE SHARES OUTSTANDING (see note 10)
Basic	90,477,798	90,477,798
Diluted	121,030,357	119,373,490

XML

CONSOLIDATED STATEMENTS OF CHANGES IN SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS DEFICIT - USD ($)	Total	Common Stock	Series A Redeemable Convertible Preferred Stock	Additional Paid-In Capital	Accumulated Deficit
Balance, shares at Dec. 31, 2021		90,477,798	123,685
Balance, amount at Dec. 31, 2021	$ (1,688,658)	$ 90,479	$ 2,983,857	$ 18,887,759	$ (20,666,896)
Stock-based compensation	15,513	0	0	15,513	0
Net income	444,470	$ 0	$ 0	0	444,470
Balance, shares at Dec. 31, 2022		90,477,798	123,685
Balance, amount at Dec. 31, 2022	(1,228,675)	$ 90,479	$ 2,983,857	18,903,272	(20,222,426)
Stock-based compensation	7,210	0	0	7,210	0
Net income	361,584	$ 0	$ 0	0	361,584
Balance, shares at Dec. 31, 2023		90,477,798	123,685
Balance, amount at Dec. 31, 2023	$ (859,881)	$ 90,479	$ 2,983,857	$ 18,910,482	$ (19,860,842)

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
OPERATING ACTIVITIES:
Net income	$ 361,584	$ 444,470
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	2,645,906	2,121,135
Allowance for doubtful accounts	225,000	200,000
Stock-based compensation expense - common stock warrants	7,210	15,513
Fair value adjustment	(17,812)	115,625
Changes in assets and liabilities:
Accounts receivable	(469,510)	(486,150)
Prepaid expenses	98,216	(11,295)
Other current assets	(75,839)	10,134
Deposits	(1,848)	1,003
Accounts payable, accrued and other liabilities	(289,127)	186,714
Deferred revenue	665,101	544,351
Net cash provided by operating activities	3,148,881	3,141,500
INVESTING ACTIVITIES:
Purchase of property and equipment	(81,809)	(164,221)
Purchase of intangible assets	0	(16,313)
Capitalized internal-use software development costs	(3,203,045)	(2,739,590)
Net cash used in investing activities	(3,284,854)	(2,920,124)
FINANCING ACTIVITIES:
Repayment of finance lease obligations	0	(2,094)
Net cash used in financing activities	0	(2,094)
Net increase (decrease) in cash and cash equivalents	(135,973)	219,282
Cash and cash equivalents, beginning of year	477,987	258,705
Cash and cash equivalents, end of year	$ 342,014	$ 477,987

XML

SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2023

SIGNIFICANT ACCOUNTING POLICIES

Significant Accounting Policies

1. SIGNIFICANT ACCOUNTING POLICIES

a) Nature of operations

Quotemedia, Inc. (the “Company”) is a software developer and distributor of financial market data and related services to a global marketplace. The Company specializes in the collection, aggregation, and delivery of both delayed and real-time financial data content via the Internet. The Company develops 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 Canadian subsidiary of the Company. All intercompany transactions and balances have been eliminated.

c) Foreign currency translation and transactions

The U.S. dollar is the functional currency of all the 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 year, except for expenses related to balance sheet amounts remeasured at historical exchange rates. Because the U.S. dollar is the functional currency, 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) Cash and cash equivalents

Cash equivalents include money market investments that have an original maturity of three months or less and are redeemable on demand. The Company maintains its accounts primarily at one financial institution. At times throughout the year, the Company’s cash and cash equivalents balances may exceed amounts insured by the Federal Deposit Insurance Corporation.

e) Allowance for doubtful accounts

The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of the Company’s customers to make required payments. The Company believes that the historical loss information it has compiled is a reasonable base on which to determine expected credit losses for trade receivables held at December 31, 2023, because the composition of the trade receivables at that date is consistent with that used in developing the historical credit-loss percentages (i.e., the similar risk characteristics of its customers and its credit practices have not changed significantly over time).  The allowance for doubtful accounts was $225,000 and $200,000 at December 31, 2023 and 2022, respectively. Bad debt expense for the years ended December 31, 2023 and 2022 were $117,973 and $135,969, respectively.

f) Property and equipment and capitalized internal-use software development costs

Property and equipment are recorded at cost less accumulated depreciation. Furniture and equipment are depreciated using the straight-line method over their estimated useful lives of five years. Leasehold improvements are amortized using the straight-line method over the terms of the respective leases or useful lives, whichever is shorter. Retirements, sales, and disposals of assets are recorded by removing the cost and accumulated depreciation from the asset and accumulated depreciation accounts with the resulting gain or loss reflected in income. There were no fixed assets retired during the years ended December 31, 2023 and 2022.

Capitalized software development includes costs incurred in connection with the internal development of software. These costs relate to software used by subscribers to access, manage and analyze information in the Company’s databases. The majority of the capitalized costs relate to a portion of the salaries and other related costs for the Company’s software engineers. Capitalized costs associated with internally developed software are amortized over three years which is their estimated economic life.

Depreciable and amortizable assets are evaluated for impairment upon a significant change in the operating environment. In these circumstances, if an evaluation of the undiscounted cash flows indicates impairment, the asset is written down to its estimated fair value, which is based on discounted future cash flows. Useful lives are periodically evaluated to determine whether events or circumstances have occurred which indicate the need for revision. There were no impairments recorded for the years ended December 31, 2023 and 2022.

g) Earnings per share

Basic earnings per share are computed by dividing income by the weighted average number of shares outstanding during the year. Diluted earnings per share considers shares outstanding (computed under basic earnings per share) and potentially dilutive common shares (such as stock options and redeemable convertible preferred stock outstanding). Anti-dilutive securities represent potentially dilutive securities which are excluded from the computation of diluted EPS as their impact would be anti-dilutive. Convertible instruments with non-market-price contingencies are excluded from diluted earnings per share until all the required non-market-price based contingencies are met. The effect of a stock split or reverse split is applied retroactively to preceding periods.

h) Income taxes

Income taxes are provided in accordance with Financial Accounting Standards Board (“FASB”) ASC 740, Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between income for financial statement purposes and income for tax purposes as well as operating loss carry-forwards. Deferred tax expenses or recovery result from the net change during the year of deferred tax assets and liabilities. Any interest and penalties are recorded as part of income tax expense.

Deferred tax assets are reduced by a valuation allowance, when, in the opinion of management, it is likely that some portion of the deferred tax asset will not be realized. Deferred taxes are adjusted for the effects of changes in tax laws and rates. Interest and penalties, if applicable, would be recorded in operations. The Company recorded Canadian income tax expense of $2,966 and $3,056 for the years ended December 31, 2023 and 2022, respectively (see Note 7).

i) Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities as of the year end and the reported amount of revenue and expenses during the year. Such estimates include (i) fair values used to test goodwill and capitalized development costs for impairment; (ii) the amount of allowance for doubtful accounts, (iii) the capitalization of software development costs, (iv) income taxes, (v) the incremental borrowing rate for operating leases, (vi) the useful life of property and equipment, and (vii) stock-based compensation. Actual results and outcomes may differ from management’s estimates and assumptions.

j) Software development expenses

Software development expenses consist primarily of costs incurred to maintain the Company’s software applications. The Company expensed $2,757,031 and $2,096,404 in software development costs during the years ended December 31, 2023 and 2022, respectively (see Note 5). Software development costs are costs that did not meet the capitalization criteria for internal-use software development costs (see Note 6).

k) Revenue

The Company generates substantially all of its revenue from subscriptions for access to its software products and related support. The Company licenses financial market data information on a monthly, quarterly, or annual basis. The Company’s products and services are divided into two main categories:

Interactive Content and Data Applications

· Proprietary financial software applications and streaming market data feeds

· Subscriptions are typically sold for a fixed fee and revenue is recognized ratably over the term of the subscription.

Portfolio Management and Real-Time Quote Systems

1. Corporate Quotestream (Business-to-Business)

o Web-delivered, embedded applications providing real-time, streaming market quotes and research information targeted to both professionals and non-professional users.

o Revenue is typically earned based on customer usage.

2. Individual Quotestream (Business-to-Consumer)

o Web-delivered, embedded applications providing real-time, streaming market quotes and research information targeted to non-professional users.

o Subscriptions are typically sold for a fixed fee and revenue is recognized ratably over the term of the subscription.

The Company does not provide its customers with the right to take possession of its software products at any time.

The Company determines revenue recognition through the following steps:

· Identification of the contract, or contracts, with a customer

· Identification of the performance obligations in the contract

· Determination of the transaction price

· Allocation of the transaction price to the performance obligations in the contract

· Recognition of revenue when, or as, the Company satisfies a performance obligation

The Company executes a signed contract with the customer that specifies services to be provided, the payment amounts and terms, and the period of service, among other terms.

Contract Balances

The Company’s corporate customers are invoiced based on fee schedules that are agreed upon in each customer contract. Individual Quotestream customers are charged a subscription fee based on their subscription agreement. The Company recognizes revenue when performance obligations have been satisfied, which is the date the customer has access to the contracted market data.  The timing of revenue recognition may differ from the timing of invoicing to customers. The Company records a receivable when revenue is recognized prior to invoicing, or deferred revenue when revenue is recognized subsequent to invoicing. Upfront set-up or development fees are deferred and recognized evenly from the date performance obligations have been met to the end of the service term of the contract, as set-up and development fees are not distinct from the market data service contracts to which they relate.

The Company considers the following factors when determining if collection of a fee is reasonably assured: customer creditworthiness, past transaction history with the customer, current economic industry trends, and changes in customer payment terms. If these factors do not indicate collection is reasonably assured, revenue is not recognized until collection becomes reasonably assured, which is generally upon receipt of cash.

Cost of revenue

Cost of revenue primarily consists of customer support personnel-related compensation expenses, including salaries, bonuses, benefits, payroll taxes, and stock-based compensation expense, as well as expenses related to third-party hosting costs, software license fees, amortization of capitalized software development costs, amortization of acquired technology intangible assets, and allocated overhead.

l) Financial instruments

Financial instruments consist principally of cash and cash equivalents, accounts receivable and accounts payable and preferred stock warrant liability. The Company believes that the fair value of financial instruments approximates the recorded book value of those instruments due to the short-term nature of the instruments or stated interest rates that approximate market interest rates.

m) Stock-Based Compensation

Stock-based compensation awards are measured at their fair value on the date of grant with the expense recognized, net of estimated forfeitures, over the related service or performance period on a straight-line basis. The Company used the Black-Scholes valuation model to calculate the fair value of common stock options and warrants. 

n) Recent Accounting Pronouncements

Recently Adopted

On January 1, 2023, the Company adopted Accounting Standards Update (“ASU”) 2016-13, Financial Instruments-Credit Losses (Topic 326), which changes the impairment model for most financial assets, including accounts receivable, and replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. The adoption of ASU 2016-13 had no impact on the Company’s consolidated financial statements.

Not Yet Adopted

In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). ASU 2020-06 simplifies the complexity associated with applying U.S. Generally Accepted Accounting Principles (“GAAP”) for certain financial instruments with characteristics of liabilities and equity. More specifically, the amendments focus on the guidance for convertible instruments and derivative scope exception for contracts in an entity's own equity. The new standard is effective for the Company for fiscal years beginning after December 15, 2023. The Company does not expect that the adoption of ASU 2020-06 will have a significant impact on the Company’s consolidated financial statements.

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). This standard improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments in ASU 2023-07 will be applied retrospectively to all prior periods presented in the consolidated financial statements. The Company does not expect that the adoption of ASU 2023-07 will have a significant impact on the Company’s consolidated financial statements.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosure (“ASU 2023-09”). This standard provides transparency to income tax disclosures related to the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 for public entities with early adoption permitted. The amendments in ASU 2023-09 will be applied prospectively in the consolidated financial statements. The Company is currently evaluating the timing of its adoption of this standard and the impact in its consolidated financial statements.

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.

XML

REVENUE

12 Months Ended

Dec. 31, 2023

REVENUE

REVENUE

2. REVENUE

Disaggregated Revenue

The Company provides market data, financial web content solutions and cloud-based applications.  The Company’s revenue by type of service consists of the following for the years ended December 31,

	2023		2022
Portfolio Management Systems
Corporate Quotestream	$	7,275,615	$	6,906,499
Individual Quotestream		1,861,396		2,092,778
Interactive Content & Data APIs		9,770,714		8,528,328
Total revenue	$	18,907,725	$	17,527,605

Deferred Revenue

Changes in deferred revenue were as follows for the years ending December 31,

	2023			2022
Beginning balance	$	1,166,848		$	622,497
Revenue recognized in the current period from the amounts in the beginning balance		(1,033,287	)		(568,001	)
New deferrals, net of amounts recognized in the current period		1,695,447			1,112,431
Effects of foreign currency translation		2,941			(79	)
Total deferred revenue	$	1,831,949		$	1,166,848
Current portion of deferred revenue	$	1,456,381		$	1,166,848
Long-term portion of deferred revenue		375,568			-
Total deferred revenue	$	1,831,949		$	1,166,848

Practical Expedients

The Company applies a practical expedient and does not disclose the value of the remaining performance obligations for contracts that are less than one year in duration, which represent a substantial majority of its revenue.

XML

RELATED PARTIES

12 Months Ended

Dec. 31, 2023

RELATED PARTIES

RELATED PARTIES

3. RELATED PARTIES

The Company entered into a five-year office lease with 410734 B.C. Ltd. effective May 1, 2021 for approximately $6,500 per month. David M. Shworan, President and Chief Executive Officer of Quotemedia Ltd., is a control person of 410734 B.C. Ltd. At December 31, 2023, no amounts were due to 410734 B.C. Ltd.

The Company entered into a marketing agreement with Bravenet Web Services, Inc. (“Bravenet”) effective November 28, 2019. The Company agreed to pay Bravenet an upfront setup fee of $7,000 upon signing the agreement and a monthly service fee of $2,500 starting February 2020. For the years ended December 31, 2023 and 2022, there was $12,000 and $12,500 due to Bravenet related to this agreement, respectively. David M. Shworan is a control person of Bravenet. At December 31, 2023, there were $68,988 in unreimbursed expenses owed to Keith Randall, CEO of Quotemedia, Inc. As a matter of policy all significant related party transactions are subject to review and approval by the Company’s Board of Directors.

XML

LEASES

12 Months Ended

Dec. 31, 2023

LEASES

LEASES

4. LEASES

The Company has operating leases for corporate offices. The Company’s leases have remaining lease terms of 1 year to 4 years. Management determines if an arrangement is a lease at inception. Operating lease assets and liabilities are included in operating lease right-of-use assets and operating lease liabilities, respectively, on the Company’s consolidated balance sheets. Finance lease assets and liabilities are included in property and equipment and finance lease liabilities, respectively, on the Company’s consolidated balance sheets. The Company renewed its lease for office space in Fountain Hills, Arizona as of July 1, 2023 for an additional 3 years resulting in a right of use asset and an offsetting lease liability of $78,304.

Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The Company elected the short-term lease exception and therefore only recognize right-of-use assets and lease liabilities for leases with a term greater than one year. When determining lease terms, the Company factors in options to extend or terminate leases when it is reasonably certain that the Company will exercise that option. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. For certain leases the Company accounts for the lease and non-lease components as a single lease component.

Supplemental balance sheet information related to leases at December 31, was as follows:

	2023		2022
Operating Leases
Operating lease right-of-use assets, net	$	393,472	$	506,219
Current portion of operating lease liability	$	206,146	$	174,166
Long-term portion of operating lease liability		191,735		323,685
Total operating lease liability	$	397,881	$	497,851

	2023			2022
Weighted Average Remaining Lease Term
Operating leases	1.9 years			2.7 years
Weighted Average Discount Rate
Operating leases		9.5	%		9.9	%

Maturities of lease liabilities were as follows:

Year ending December 31,	Operating Leases
2024	$	235,025
2025		167,607
2026		34,476
Total lease payments		437,108
Less imputed interest		(39,227	)
Total	$	397,881

The components of lease expense for the years ended December 31, were as follows:

	2023		2022
Operating lease costs:
Operating lease costs	$	235,459	$	236,737
Short-term lease costs		108,421		98,570
Total operating lease costs	$	343,880	$	335,307
Finance lease costs:
Interest	$	-	$	64

Supplemental cash flow information related to leases was as follows:

	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	231,985	$	224,741
Operating cash flows from finance leases		-		64
Financing cash flows from finance leases		-		2,087
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	78,304	$	-

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PROPERTY AND EQUIPMENT

12 Months Ended

Dec. 31, 2023

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT

5. PROPERTY AND EQUIPMENT

At December 31:

	2023			2022
Computer equipment	$	1,575,514		$	1,493,705
Office furniture and equipment		27,783			27,783
Leasehold improvements		13,573			13,573
Total property and equipment		1,616,870			1,535,061
Less: accumulated depreciation and amortization		(1,314,646	)		(1,125,186	)
Property and equipment, net	$	302,224		$	409,875

Property and Equipment are recorded at cost less accumulated depreciation. Depreciation and amortization is calculated on a straight-line basis over the assets’ estimated useful lives as follows:

Computer equipment	5 years
Office furniture and equipment	5 years
Leasehold improvements	Shorter of useful life or the term of lease

Depreciation expense for equipment and leaseholds for the years ended December 31, 2023 and 2022 was $189,460 and $170,245, respectively.

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CAPITALIZED INTERNAL-USE DEVELOPMENT COSTS

12 Months Ended

Dec. 31, 2023

CAPITALIZED INTERNAL-USE DEVELOPMENT COSTS

CAPITALIZED INTERNAL-USE DEVELOPMENT COSTS

6. CAPITALIZED INTERNAL-USE DEVELOPMENT COSTS

At December 31:

	2023			2022
Capitalized internal-use software development costs	$	19,417,742		$	16,214,697
Less: accumulated amortization		(14,864,832	)		(12,416,322	)
Capitalized internal-use software development costs, net	$	4,552,910		$	3,798,375

Changes in capitalized internal-use software development costs were as follows for the years ending December 31,

	2023			2022
Opening balance	$	3,798,375		$	3,002,076
Additions during the year		3,203,045			2,739,590
Amortization		(2,448,510	)		(1,943,292	)
Ending balance	$	4,552,910		$	3,798,374

Capitalized internal-use software development costs are recorded at cost less accumulated depreciation. Amortization is calculated on a straight-line basis over three years which is the capitalized internal-use software development costs estimated useful life.

For the years ended December 31, 2023 and 2022, the Company capitalized $3,203,045 and $2,739,590 of costs, respectively, related to upgrades and enhancements made to existing software applications. Software applications are used by the Company’s subscribers to access, manage and analyze information in the Company’s databases. For the years ended December 31, 2023 and 2022, amortization expenses associated with the internally developed application software was $2,448,510 and $1,943,292, respectively. At December 31, 2023 and 2022, the remaining book value of the capitalized application software was $4,552,910 and $3,798,374.

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INTANGIBLE ASSETS AND GOODWILL

12 Months Ended

Dec. 31, 2023

INTANGIBLE ASSETS AND GOODWILL

INTANGIBLE ASSETS AND GOODWILL

7. INTANGIBLE ASSETS AND GOODWILL

At December 31:

	2023			2022
Intangible assets:
Software licenses & intellectual property	$	138,159		$	138,159
Domain names		20,569			20,569
		158,728			158,728
Less: accumulated amortization		(93,092	)		(85,156	)
Total intangible assets, net	$	65,636		$	73,572
Goodwill:
Purchase of business unit	$	110,000		$	110,000

Amortization for amortized intangible assets is calculated on a straight-line basis over the assets’ estimated useful lives. The useful life of the software licenses and domain names is estimated to be 20 years. The useful life of intellectual property is 5 years. Amortization expense for amortized intangible assets was $7,936 and $7,596 for the years ended December 31, 2023 and 2022, respectively.

The estimated amortization expense of definite-lived intangible assets is as follows:

Year ending December 31,
2024	$	7,936
2025		7,936
2026		7,936
2027		7,936
2028		4,008
Thereafter		29,884
Total	$	65,636

Goodwill is reported as an indefinite life intangible asset. The Company evaluates goodwill for impairment on an annual basis in accordance with FASB ASC 350-20, Goodwill. Through December 31, 2023 the Company has not identified any impairment indicators related to goodwill.

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INCOME TAXES

12 Months Ended

Dec. 31, 2023

INCOME TAXES

INCOME TAXES

8. INCOME TAXES

The Company accounts for income taxes according to the provisions of FASB ASC 740, Income Taxes, which prescribes an asset and liability approach for computing deferred income taxes.

Reconciliations of income taxes computed at the statutory federal rate to income tax expense (benefit) for the years ended December 31, 2023 and 2022 are as follows:

	2023			2022
Net income before income tax	$	364,550		$	447,526
Tax provision (benefit) at the statutory rate of 21%		75,297			110,544
State income taxes, net of federal income tax		29,392			(16,440	)
Stock-based compensation and other non-deductible expenses		(2,226	)		47,040
Change in intangibles		507,085			-
Adjustment in respect of prior periods		-			99,660
Change in other items		40,044			86,042
Canadian income tax expense (benefit)		2,966			3,070
Change in valuation allowance		(649,592	)		(326,860	)
Income tax expense (recovery)	$	2,966		$	3,056

In 2023, the Company recorded Arizona income tax expense of $50 and Canadian income tax expense of $2,966. The Company does not have any material Canadian deferred tax assets or deferred tax liabilities.

As of December 31, 2023, we had net operating loss carryforwards for federal and state income tax reporting purposes amounting to approximately $8,200,000 and $400,000 which expire in varying amounts through the year 2042.

The components of the Company’s deferred tax asset (liabilities) at December 31, 2023 and 2022 are as follows:

	2023			2022
Tax effect of net operating loss carry-forward – U.S.	$	1,742,266		$	1,822,760
Tax effect of net operating loss carry-forward – Canada		-			141,340
Property & equipment		(28,085	)		(3,610	)
Right-of-use asset		(133,860	)		(133,860	)
Capital lease obligation		131,700			131,700
Intangibles		(734,020	)		(321,970	)
Other		58,507			49,740
Less valuation allowance		(1,036,508	)		(1,686,100	)
Net deferred tax asset	$	-		$	-

A valuation allowance has been recognized to offset the entire effect of the Company’s net deferred tax asset as the realization of this deferred tax benefit is uncertain. The valuation allowance decreased $649,592 for the year ended December 31, 2023.

The Company has analyzed filing positions in all of the federal and state jurisdictions where it is required to file income tax returns, as well as all open tax years (2017-2023) in these jurisdictions. The Company believes that its income tax filing positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material adverse effect on the Company’s financial condition, results of operations, or cash flows. Therefore, no reserves for uncertain income tax positions have been recorded.

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REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS DEFICIT

12 Months Ended

Dec. 31, 2023

Stockholders' deficit:

REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT

9. REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT

a) Redeemable convertible preferred shares

The Company is authorized to issue up to 10,000,000 non-designated preferred shares at the Board of Directors’ discretion.

A total of 550,000 shares of the Company’s Preferred Stock were designated as “Series A Redeemable Convertible Preferred Stock.” The Series A Redeemable Convertible Preferred Stock has no dividend or voting rights.

At December 31, 2023 and 2022, 123,685 shares of Series A Redeemable Convertible Preferred Stock were outstanding. No shares of Series A Redeemable Convertible Preferred Stock were issued or redeemed during the years ended December 31, 2023 and 2022.

Redemption Rights

Holders of Series A Redeemable Convertible Preferred Stock shall have the right to convert their shares into shares of common stock at the rate of 83.33 shares of common stock for one share of Series A Redeemable Convertible Preferred Stock, at any time following the date the closing price of a share of common stock on a securities exchange or actively traded over-the-counter market has exceeded $0.30 for ninety (90) consecutive trading days. The conversion rights are subject to the availability of authorized but unissued shares of common stock.

In addition, 1,000 Series A Redeemable Convertible Preferred Stock may be redeemed at the holder’s option at the liquidation value of $25 per share if the cash balance of the Company as reported at the end of each fiscal quarter exceeds $400,000.

In accordance with ASC 480-10-S99, because a limited amount of Series A Redeemable Convertible Preferred Stock may be redeemed at the holder’s option if the above criteria are met, it was classified as mezzanine equity and not permanent equity.

In the event of any liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary, before any distribution or payment is made to any holders of any shares of common stock, the holders of shares of Series A Redeemable Convertible Preferred Stock shall be entitled to be paid first out of the assets of the Corporation available for distribution to holders of the Company’s capital stock whether such assets are capital, surplus, or earnings, an amount equal to $25.00 per share of Series A Redeemable Convertible Preferred Stock.

b) Common stock

No shares of common stock were issued during the years ended December 31, 2023 and 2022.

c) Stock Options and Warrants

1999 Stock Option Plan

During March 1999, the Company adopted, and the Company’s stockholders approved, the 1999 Stock Option Plan to advance the interests of the Company by encouraging and enabling key employees to acquire a financial interest in the Company and link their interests and efforts to the long-term interests of the Company’s stockholders.  A total of 400,000 shares of common stock were initially reserved for issuance under the 1999 plan.  In September 1999, this number was increased to 2,500,000.  As of December 31, 2023, 1,144,817 shares of the Company’s common stock had been issued upon exercise of options granted under the 1999 plan, and there were outstanding options to acquire 1,355,183 shares of the Company’s common stock under the 1999 plan.

2003 Equity Incentive Compensation Plan

The Company’s Board of Directors has approved the 2003 Equity Incentive Compensation Plan, or the 2003 plan, approved by the Company’s stockholders at the annual meeting held on February 14, 2003. The purpose of the 2003 plan is to assist the Company in attracting, motivating, retaining, and rewarding high-quality executives and other employees, directors, officers, and independent contractors by enabling such persons to acquire or increase a proprietary interest in the Company in order to strengthen the mutuality of interests between such persons and the Company’s stockholders, and providing such persons with annual and long-term performance incentives to expend their maximum efforts in the creation of stockholder value.

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.

At December 31, 2023, there are 15,000,000 shares of common stock authorized for issuance pursuant to the 2003 plan.  As of December 31, 2023, 2,350,372 shares of common stock had been issued upon exercise of options granted under the 2003 plan, and there were 4,720,000 options outstanding under the 2003 plan.

Total estimated stock-based compensation expense (recovery), related to all the Company’s stock-based awards was comprised as follows:

	2023			2022
Sales and marketing expense (recovery)	$	(17,602	)	$	131,858
General and administrative expense		7,000			-
Stock based compensation expense	$	(10,602	)	$	131,858

Common Stock Options and Warrants

The following table summarizes the Company’s common stock option and warrant activity for the years ended December 31, 2023 and 2022:

	Common Stock Options and Warrants			Weighted-Average Grant Date Exercise Price
Outstanding at December 31, 2022 and 2021		25,772,803		$	0.06
Granted during the year		1,030,000		$	0.04
Forfeited during the year		(1,030,000	)	$	0.04
Outstanding at December 31, 2023		25,772,803		$	0.06

The following table summarizes the Company’s non-vested common stock option and warrant activity for the years ended December 31, 2023 and 2022:

	Common Stock Options and Warrants			Weighted-Average Grant Date Exercise Price
Non-vested at December 31, 2021		2,025,000		$	0.08
Vested during the year		(2,025,000	)	$	0.08
Non-vested at December 31, 2022 and 2023		-

The following table summarizes the weighted average remaining contractual life and exercise price of common stock options and warrants outstanding at December 31, 2023:

	Common Stock Options and Warrants Outstanding						Common Stock Options  and Warrants Exercisable
			Weighted
	Number		Average		Weighted		Number		Weighted
	Outstanding at		Remaining		Average		Exercisable at		Average
	December 31,		Contractual		Exercise		December 31,		Exercise
	2023		Life (Years)		Price		2023		Price
$0.03-0.10		25,772,803		5.76	$	0.06		25,772,803	$	0.06

At December 31, 2023, there was no unrecognized compensation cost related to non-vested options granted to purchase common stock.

Management calculates the fair value of stock options and warrants granted to purchase common stock under the provisions of FASB ASC 718 using the Black-Scholes valuation model with the following assumptions:

	2023			2022
Expected dividend yield		-			N/A
Expected stock price volatility		97	%		N/A
Risk-free interest rate		4	%		N/A
Expected life of options (years)		1.96			N/A
Weighted average fair value of options and warrants granted	$	0.21			N/A

All stock options and warrants to purchase common stock 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 December 31, 2023, the aggregate intrinsic value of options and warrants outstanding and exercisable was $4,436,478. The intrinsic value of stock options and warrants are calculated as the amount by which the market price of the Company’s common stock exceeds the exercise price of the option or warrant.

Preferred Stock Warrants

Pursuant to the December 28, 2017 Compensation Agreement with David M. Shworan, the President and Chief Executive Officer of QuoteMedia, Ltd., a wholly owned subsidiary of Quotemedia, Inc., the Company issued Mr. Shworan warrants to purchase shares of Series A Redeemable Convertible Preferred Stock (“Compensation Preferred Stock Warrants”) in lieu of a cash salary. From the period December 28, 2017 to December 31, 2019 the Company issued a total of 31,250 Compensation Preferred Stock Warrants at an exercise price equal to $1.00 per share.

Also pursuant to the Compensation Agreement with Mr. Shworan, on December 28, 2017 the Company issued Mr. Shworan warrants to purchase up to 382,243 shares of Series A Redeemable Convertible Preferred Stock at an exercise price equal to $1.00 per share (“Liquidity Preferred Stock Warrant”). The Liquidity Preferred Stock Warrants only vest and become exercisable on the consummation of a Liquidity Event as defined in the Company’s Certificate of Designation of Series A Redeemable Convertible Preferred Stock. The probability of the liquidity event performance condition is not currently determinable or probable; therefore, no compensation expense has been recognized as of December 31, 2023. The probability is re-evaluated each reporting period. As of December 31, 2023 and 2022, there was $9,173,832 in unrecognized stock-based compensation expense related to these Liquidity Preferred Stock Warrants. Since the Liquidity Preferred Stock Warrants only vest and become exercisable on the consummation of a Liquidity Event which is currently determined not to be probable, the Company is also unable to determine the weighted-average period over which the unrecognized compensation cost will be recognized.

As of December 31, 2023 and 2022, there were a total of 413,493 preferred stock warrants outstanding with a weighted average remaining contractual life of 24 years. As of December 31, 2023, 31,250 preferred stock warrants were exercisable. No preferred stock warrants were exercised for the years ended December 31, 2023 and 2022.

Fair Value Measurement of Compensation Preferred Stock Warrants

The Company adheres to ASC 820, which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC 820 applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements; accordingly, the standard does not require any new fair value measurements of reported balances.

ASC 820 emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

· Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company could access.

· Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals.

· Level 3 inputs are unobservable inputs for the asset or liability, which is typically based on an entity’s own assumptions, as there is little, if any, related market activity.

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

The estimated fair value of the Preferred Stock Warrant liability is determined using Level 3 inputs. As of December 31, 2023 and 2022, the fair value of the Preferred Stock Warrant Liability was $611,563 and $629,375, respectively. The Preferred Stock Warrants were valued using a bond plus option framework reflecting the cash flow of the Preferred Stock Warrants and used a probability weighted sum of the value in each potential year before expiration to estimate the fair value of the Preferred Stock Warrants. Volatility was based on public peer companies, adjusted for size and leverage. Risk-free rate was selected based on term matched Treasury securities. Bond repayment depends on the Company’s timely access to the required cash and as such, is discounted at the Company’s assumed borrowing rate. This model was run based on the Management's expected term and probabilities of a liquidity event.  The key inputs for the framework were as follows as of December 31, 2023 and 2022:

Valuation Inputs	December 31, 2023			December 31, 2022
Expected Time to Expiration (years)		24.05			25.05
Stock Price on Valuation Date	$	0.23		$	0.21
Peer Volatility		47.35	%		52.31	%
Cash Flow Discount Rate		15.86	%		12.93	%

The following table sets forth a summary of the changes in the fair value of the Level 3 Preferred Stock Warrant Liability for the years ended December 31, 2023 and December 31,2022:

	Preferred Stock Warrant Liability
Fair value as of December 31, 2021	$	513,750
Change in fair value		115,625
Fair value as of December 31, 2022	$	629,375
Change in fair value		(17,812	)
Fair value as of December 31, 2023	$	611,563

The changes in fair value attributable to the Preferred Stock Warrants are recorded as an adjustment to stock compensation expense and reported in Sales and Marketing expense on the Consolidated Statements of Operations.

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EARNINGS PER SHARE

12 Months Ended

Dec. 31, 2023

EARNINGS PER SHARE (see note 10)

EARNINGS PER SHARE

10. EARNINGS PER SHARE

Basic net income per share is computed by dividing net income during the year by the weighted-average number of common shares outstanding, excluding the dilutive effects of common stock equivalents. Common stock equivalents include redeemable convertible preferred stock, stock options and warrants. Diluted net income per share is computed by dividing net income by the weighted-average number of dilutive common shares outstanding during the period. Diluted shares outstanding is calculated using the treasury stock method by adding to the weighted shares outstanding any potential shares of common stock from stock options and warrants that are in-the-money. For outstanding redeemable convertible preferred stock, potential common shares are determined using the if-converted method. The calculations for basic and diluted net income per share for the year ended December 31, 2023 and 2022 are as follows:

	2023		2022
Net income	$	361,584	$	444,470
Weighted average common shares used to calculate net income per share		90,477,798		90,477,798
Warrants to purchase redeemable convertible preferred stock		2,499,900		2,499,900
Redeemable convertible preferred stock		10,306,671		10,306,671
Stock options and warrants to purchase common stock		17,745,988		16,089,121
Weighted average common shares used to calculate diluted net income per share		121,030,357		119,373,490
Net income per share – basic	$	0.00	$	0.00
Net income per share – diluted	$	0.00	$	0.00

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SUPPLEMENTARY CASH FLOW INFORMATION

12 Months Ended

Dec. 31, 2023

SUPPLEMENTARY CASH FLOW INFORMATION

SUPPLEMENTARY CASH FLOW INFORMATION

11. SUPPLEMENTARY CASH FLOW INFORMATION

	2023		2022
Cash paid for
Interest	$	4,371	$	3,356

The non-cash amounts related to right-of-use assets obtained in exchange for lease obligations are noted below for the years ended December 31,2023 and 2022:

	2023		2022
Right-of-use assets obtained in exchange for lease obligations	$	78,304	$	-

Cash and cash equivalents consists entirely of cash at December 31, 2023 and 2022.

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REVENUE CONCENTRATION

12 Months Ended

Dec. 31, 2023

REVENUE CONCENTRATION

REVENUE CONCENTRATION

12. REVENUE CONCENTRATION

A significant portion of the Company’s revenue has historically been derived from customers outside of the United States, primarily in Canada. For the years ended December 31, 2023 and 2022, revenue from Canada accounted for approximately 38% and 35%, respectively, of total revenue.

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SUBSEQUENT EVENTS

12 Months Ended

Dec. 31, 2023

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

13. SUBSEQUENT EVENTS

The Company has evaluated events up to the filing date of these consolidated financial statements and determined there are no other subsequent event activity required disclosure.

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SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2023

SIGNIFICANT ACCOUNTING POLICIES

Nature of operations

Quotemedia, Inc. (the “Company”) is a software developer and distributor of financial market data and related services to a global marketplace. The Company specializes in the collection, aggregation, and delivery of both delayed and real-time financial data content via the Internet. The Company develops 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.

Basis of consolidation

The consolidated financial statements include the operations of QuoteMedia, Ltd., a wholly owned Canadian subsidiary of the Company. All intercompany transactions and balances have been eliminated.

Foreign currency translation and transactions

The U.S. dollar is the functional currency of all the 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 year, except for expenses related to balance sheet amounts remeasured at historical exchange rates. Because the U.S. dollar is the functional currency, 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.

Cash and cash equivalents

Cash equivalents include money market investments that have an original maturity of three months or less and are redeemable on demand. The Company maintains its accounts primarily at one financial institution. At times throughout the year, the Company’s cash and cash equivalents balances may exceed amounts insured by the Federal Deposit Insurance Corporation.

Allowances for doubtful accounts

The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of the Company’s customers to make required payments. The Company believes that the historical loss information it has compiled is a reasonable base on which to determine expected credit losses for trade receivables held at December 31, 2023, because the composition of the trade receivables at that date is consistent with that used in developing the historical credit-loss percentages (i.e., the similar risk characteristics of its customers and its credit practices have not changed significantly over time).  The allowance for doubtful accounts was $225,000 and $200,000 at December 31, 2023 and 2022, respectively. Bad debt expense for the years ended December 31, 2023 and 2022 were $117,973 and $135,969, respectively.

Property and equipment and capitalized internal-use software development costs

Property and equipment are recorded at cost less accumulated depreciation. Furniture and equipment are depreciated using the straight-line method over their estimated useful lives of five years. Leasehold improvements are amortized using the straight-line method over the terms of the respective leases or useful lives, whichever is shorter. Retirements, sales, and disposals of assets are recorded by removing the cost and accumulated depreciation from the asset and accumulated depreciation accounts with the resulting gain or loss reflected in income. There were no fixed assets retired during the years ended December 31, 2023 and 2022.

Capitalized software development includes costs incurred in connection with the internal development of software. These costs relate to software used by subscribers to access, manage and analyze information in the Company’s databases. The majority of the capitalized costs relate to a portion of the salaries and other related costs for the Company’s software engineers. Capitalized costs associated with internally developed software are amortized over three years which is their estimated economic life.

Depreciable and amortizable assets are evaluated for impairment upon a significant change in the operating environment. In these circumstances, if an evaluation of the undiscounted cash flows indicates impairment, the asset is written down to its estimated fair value, which is based on discounted future cash flows. Useful lives are periodically evaluated to determine whether events or circumstances have occurred which indicate the need for revision. There were no impairments recorded for the years ended December 31, 2023 and 2022.

Earnings per share

Basic earnings per share are computed by dividing income by the weighted average number of shares outstanding during the year. Diluted earnings per share considers shares outstanding (computed under basic earnings per share) and potentially dilutive common shares (such as stock options and redeemable convertible preferred stock outstanding). Anti-dilutive securities represent potentially dilutive securities which are excluded from the computation of diluted EPS as their impact would be anti-dilutive. Convertible instruments with non-market-price contingencies are excluded from diluted earnings per share until all the required non-market-price based contingencies are met. The effect of a stock split or reverse split is applied retroactively to preceding periods.

Income taxes

Income taxes are provided in accordance with Financial Accounting Standards Board (“FASB”) ASC 740, Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between income for financial statement purposes and income for tax purposes as well as operating loss carry-forwards. Deferred tax expenses or recovery result from the net change during the year of deferred tax assets and liabilities. Any interest and penalties are recorded as part of income tax expense.

Deferred tax assets are reduced by a valuation allowance, when, in the opinion of management, it is likely that some portion of the deferred tax asset will not be realized. Deferred taxes are adjusted for the effects of changes in tax laws and rates. Interest and penalties, if applicable, would be recorded in operations. The Company recorded Canadian income tax expense of $2,966 and $3,056 for the years ended December 31, 2023 and 2022, respectively (see Note 7).

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities as of the year end and the reported amount of revenue and expenses during the year. Such estimates include (i) fair values used to test goodwill and capitalized development costs for impairment; (ii) the amount of allowance for doubtful accounts, (iii) the capitalization of software development costs, (iv) income taxes, (v) the incremental borrowing rate for operating leases, (vi) the useful life of property and equipment, and (vii) stock-based compensation. Actual results and outcomes may differ from management’s estimates and assumptions.

Software development expenses

Software development expenses consist primarily of costs incurred to maintain the Company’s software applications. The Company expensed $2,757,031 and $2,096,404 in software development costs during the years ended December 31, 2023 and 2022, respectively (see Note 5). Software development costs are costs that did not meet the capitalization criteria for internal-use software development costs (see Note 6).

Revenue

The Company generates substantially all of its revenue from subscriptions for access to its software products and related support. The Company licenses financial market data information on a monthly, quarterly, or annual basis. The Company’s products and services are divided into two main categories:

Interactive Content and Data Applications

· Proprietary financial software applications and streaming market data feeds

· Subscriptions are typically sold for a fixed fee and revenue is recognized ratably over the term of the subscription.

Portfolio Management and Real-Time Quote Systems

1. Corporate Quotestream (Business-to-Business)

o Web-delivered, embedded applications providing real-time, streaming market quotes and research information targeted to both professionals and non-professional users.

o Revenue is typically earned based on customer usage.

2. Individual Quotestream (Business-to-Consumer)

o Web-delivered, embedded applications providing real-time, streaming market quotes and research information targeted to non-professional users.

o Subscriptions are typically sold for a fixed fee and revenue is recognized ratably over the term of the subscription.

The Company does not provide its customers with the right to take possession of its software products at any time.

The Company determines revenue recognition through the following steps:

· Identification of the contract, or contracts, with a customer

· Identification of the performance obligations in the contract

· Determination of the transaction price

· Allocation of the transaction price to the performance obligations in the contract

· Recognition of revenue when, or as, the Company satisfies a performance obligation

The Company executes a signed contract with the customer that specifies services to be provided, the payment amounts and terms, and the period of service, among other terms.

Contract Balances

The Company’s corporate customers are invoiced based on fee schedules that are agreed upon in each customer contract. Individual Quotestream customers are charged a subscription fee based on their subscription agreement. The Company recognizes revenue when performance obligations have been satisfied, which is the date the customer has access to the contracted market data.  The timing of revenue recognition may differ from the timing of invoicing to customers. The Company records a receivable when revenue is recognized prior to invoicing, or deferred revenue when revenue is recognized subsequent to invoicing. Upfront set-up or development fees are deferred and recognized evenly from the date performance obligations have been met to the end of the service term of the contract, as set-up and development fees are not distinct from the market data service contracts to which they relate.

The Company considers the following factors when determining if collection of a fee is reasonably assured: customer creditworthiness, past transaction history with the customer, current economic industry trends, and changes in customer payment terms. If these factors do not indicate collection is reasonably assured, revenue is not recognized until collection becomes reasonably assured, which is generally upon receipt of cash.

Cost of revenue

Cost of revenue primarily consists of customer support personnel-related compensation expenses, including salaries, bonuses, benefits, payroll taxes, and stock-based compensation expense, as well as expenses related to third-party hosting costs, software license fees, amortization of capitalized software development costs, amortization of acquired technology intangible assets, and allocated overhead.

Financial instruments

Financial instruments consist principally of cash and cash equivalents, accounts receivable and accounts payable and preferred stock warrant liability. The Company believes that the fair value of financial instruments approximates the recorded book value of those instruments due to the short-term nature of the instruments or stated interest rates that approximate market interest rates.

Stock-based compensation

Stock-based compensation awards are measured at their fair value on the date of grant with the expense recognized, net of estimated forfeitures, over the related service or performance period on a straight-line basis. The Company used the Black-Scholes valuation model to calculate the fair value of common stock options and warrants. 

Recent Accounting Pronouncements

Recently Adopted

On January 1, 2023, the Company adopted Accounting Standards Update (“ASU”) 2016-13, Financial Instruments-Credit Losses (Topic 326), which changes the impairment model for most financial assets, including accounts receivable, and replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. The adoption of ASU 2016-13 had no impact on the Company’s consolidated financial statements.

Not Yet Adopted

In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). ASU 2020-06 simplifies the complexity associated with applying U.S. Generally Accepted Accounting Principles (“GAAP”) for certain financial instruments with characteristics of liabilities and equity. More specifically, the amendments focus on the guidance for convertible instruments and derivative scope exception for contracts in an entity's own equity. The new standard is effective for the Company for fiscal years beginning after December 15, 2023. The Company does not expect that the adoption of ASU 2020-06 will have a significant impact on the Company’s consolidated financial statements.

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). This standard improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments in ASU 2023-07 will be applied retrospectively to all prior periods presented in the consolidated financial statements. The Company does not expect that the adoption of ASU 2023-07 will have a significant impact on the Company’s consolidated financial statements.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosure (“ASU 2023-09”). This standard provides transparency to income tax disclosures related to the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 for public entities with early adoption permitted. The amendments in ASU 2023-09 will be applied prospectively in the consolidated financial statements. The Company is currently evaluating the timing of its adoption of this standard and the impact in its consolidated financial statements.

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.

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REVENUE (Tables)

12 Months Ended

Dec. 31, 2023

REVENUE

Disaggregated revenue

	2023		2022
Portfolio Management Systems
Corporate Quotestream	$	7,275,615	$	6,906,499
Individual Quotestream		1,861,396		2,092,778
Interactive Content & Data APIs		9,770,714		8,528,328
Total revenue	$	18,907,725	$	17,527,605

Deferred revenue

	2023			2022
Beginning balance	$	1,166,848		$	622,497
Revenue recognized in the current period from the amounts in the beginning balance		(1,033,287	)		(568,001	)
New deferrals, net of amounts recognized in the current period		1,695,447			1,112,431
Effects of foreign currency translation		2,941			(79	)
Total deferred revenue	$	1,831,949		$	1,166,848
Current portion of deferred revenue	$	1,456,381		$	1,166,848
Long-term portion of deferred revenue		375,568			-
Total deferred revenue	$	1,831,949		$	1,166,848

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LEASES (Tables)

12 Months Ended

Dec. 31, 2023

LEASES

Summary of leases information related to balance sheet

	2023		2022
Operating Leases
Operating lease right-of-use assets, net	$	393,472	$	506,219
Current portion of operating lease liability	$	206,146	$	174,166
Long-term portion of operating lease liability		191,735		323,685
Total operating lease liability	$	397,881	$	497,851

Weighted Average Remaining Lease Term

	2023			2022
Weighted Average Remaining Lease Term
Operating leases	1.9 years			2.7 years
Weighted Average Discount Rate
Operating leases		9.5	%		9.9	%

Maturities of lease liabilities

Year ending December 31,	Operating Leases
2024	$	235,025
2025		167,607
2026		34,476
Total lease payments		437,108
Less imputed interest		(39,227	)
Total	$	397,881

Components of lease expense

	2023		2022
Operating lease costs:
Operating lease costs	$	235,459	$	236,737
Short-term lease costs		108,421		98,570
Total operating lease costs	$	343,880	$	335,307
Finance lease costs:
Interest	$	-	$	64

Supplemental cash flow information

	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	231,985	$	224,741
Operating cash flows from finance leases		-		64
Financing cash flows from finance leases		-		2,087
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	78,304	$	-

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PROPERTY AND EQUIPMENT (Tables)

12 Months Ended

Dec. 31, 2023

PROPERTY AND EQUIPMENT

Property and equipment

	2023			2022
Computer equipment	$	1,575,514		$	1,493,705
Office furniture and equipment		27,783			27,783
Leasehold improvements		13,573			13,573
Total property and equipment		1,616,870			1,535,061
Less: accumulated depreciation and amortization		(1,314,646	)		(1,125,186	)
Property and equipment, net	$	302,224		$	409,875

Estimated useful lives of assets

Computer equipment	5 years
Office furniture and equipment	5 years
Leasehold improvements	Shorter of useful life or the term of lease

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CAPITALIZED INTERNAL-USE DEVELOPMENT COSTS (Tables)

12 Months Ended

Dec. 31, 2023

CAPITALIZED INTERNAL-USE DEVELOPMENT COSTS

Capitalized internal use developments costs

	2023			2022
Capitalized internal-use software development costs	$	19,417,742		$	16,214,697
Less: accumulated amortization		(14,864,832	)		(12,416,322	)
Capitalized internal-use software development costs, net	$	4,552,910		$	3,798,375

Changes in capitalized internal-use software development costs

	2023			2022
Opening balance	$	3,798,375		$	3,002,076
Additions during the year		3,203,045			2,739,590
Amortization		(2,448,510	)		(1,943,292	)
Ending balance	$	4,552,910		$	3,798,374

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INTANGIBLE ASSETS AND GOODWILL (Tables)

12 Months Ended

Dec. 31, 2023

INTANGIBLE ASSETS AND GOODWILL

Amortized intangible assets

	2023			2022
Intangible assets:
Software licenses & intellectual property	$	138,159		$	138,159
Domain names		20,569			20,569
		158,728			158,728
Less: accumulated amortization		(93,092	)		(85,156	)
Total intangible assets, net	$	65,636		$	73,572
Goodwill:
Purchase of business unit	$	110,000		$	110,000

Estimated amortization expense of definite-lived intangible assets

Year ending December 31,
2024	$	7,936
2025		7,936
2026		7,936
2027		7,936
2028		4,008
Thereafter		29,884
Total	$	65,636

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INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2023

INCOME TAXES

Reconciliations of income taxes

	2023			2022
Net income before income tax	$	364,550		$	447,526
Tax provision (benefit) at the statutory rate of 21%		75,297			110,544
State income taxes, net of federal income tax		29,392			(16,440	)
Stock-based compensation and other non-deductible expenses		(2,226	)		47,040
Change in intangibles		507,085			-
Adjustment in respect of prior periods		-			99,660
Change in other items		40,044			86,042
Canadian income tax expense (benefit)		2,966			3,070
Change in valuation allowance		(649,592	)		(326,860	)
Income tax expense (recovery)	$	2,966		$	3,056

Components of deferred tax asset and liabilities

	2023			2022
Tax effect of net operating loss carry-forward – U.S.	$	1,742,266		$	1,822,760
Tax effect of net operating loss carry-forward – Canada		-			141,340
Property & equipment		(28,085	)		(3,610	)
Right-of-use asset		(133,860	)		(133,860	)
Capital lease obligation		131,700			131,700
Intangibles		(734,020	)		(321,970	)
Other		58,507			49,740
Less valuation allowance		(1,036,508	)		(1,686,100	)
Net deferred tax asset	$	-		$	-

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REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS DEFICIT (Tables)

12 Months Ended

Dec. 31, 2023

Stockholders' deficit:

Stock-based compensation

	2023			2022
Sales and marketing expense (recovery)	$	(17,602	)	$	131,858
General and administrative expense		7,000			-
Stock based compensation expense	$	(10,602	)	$	131,858

Non-vested common stock warrant and stock option activity

	Common Stock Options and Warrants			Weighted-Average Grant Date Exercise Price
Outstanding at December 31, 2022 and 2021		25,772,803		$	0.06
Granted during the year		1,030,000		$	0.04
Forfeited during the year		(1,030,000	)	$	0.04
Outstanding at December 31, 2023		25,772,803		$	0.06

Non-vested stock option and warrant activity

	Common Stock Options and Warrants			Weighted-Average Grant Date Exercise Price
Non-vested at December 31, 2021		2,025,000		$	0.08
Vested during the year		(2,025,000	)	$	0.08
Non-vested at December 31, 2022 and 2023		-

Weighted average remaining contractual life and exercise price of common stock options and warrants outstanding

	Common Stock Options and Warrants Outstanding						Common Stock Options  and Warrants Exercisable
			Weighted
	Number		Average		Weighted		Number		Weighted
	Outstanding at		Remaining		Average		Exercisable at		Average
	December 31,		Contractual		Exercise		December 31,		Exercise
	2023		Life (Years)		Price		2023		Price
$0.03-0.10		25,772,803		5.76	$	0.06		25,772,803	$	0.06

Schedule of assumptions

	2023			2022
Expected dividend yield		-			N/A
Expected stock price volatility		97	%		N/A
Risk-free interest rate		4	%		N/A
Expected life of options (years)		1.96			N/A
Weighted average fair value of options and warrants granted	$	0.21			N/A

Schedule of management's expected term and probabilities of a liquidity event

Valuation Inputs	December 31, 2023			December 31, 2022
Expected Time to Expiration (years)		24.05			25.05
Stock Price on Valuation Date	$	0.23		$	0.21
Peer Volatility		47.35	%		52.31	%
Cash Flow Discount Rate		15.86	%		12.93	%

Preferred stock warrant activity

	Preferred Stock Warrant Liability
Fair value as of December 31, 2021	$	513,750
Change in fair value		115,625
Fair value as of December 31, 2022	$	629,375
Change in fair value		(17,812	)
Fair value as of December 31, 2023	$	611,563

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EARNINGS PER SHARE (Tables)

12 Months Ended

Dec. 31, 2023

EARNINGS PER SHARE (see note 10)

Components of earnings per share

	2023		2022
Net income	$	361,584	$	444,470
Weighted average common shares used to calculate net income per share		90,477,798		90,477,798
Warrants to purchase redeemable convertible preferred stock		2,499,900		2,499,900
Redeemable convertible preferred stock		10,306,671		10,306,671
Stock options and warrants to purchase common stock		17,745,988		16,089,121
Weighted average common shares used to calculate diluted net income per share		121,030,357		119,373,490
Net income per share – basic	$	0.00	$	0.00
Net income per share – diluted	$	0.00	$	0.00

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SUPPLEMENTARY CASH FLOW INFORMATION (Tables)

12 Months Ended

Dec. 31, 2023

SUPPLEMENTARY CASH FLOW INFORMATION

Cash paid for interest

	2023		2022
Cash paid for
Interest	$	4,371	$	3,356

Non-cash amounts related to right-of-use assets obtained in exchange for lease obligations

	2023		2022
Right-of-use assets obtained in exchange for lease obligations	$	78,304	$	-

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SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
SIGNIFICANT ACCOUNTING POLICIES
Allowance for doubtful accounts	$ 225,000	$ 200,000
Income tax expense	2,966	3,056
Software development cost	2,757,031	2,096,404
Bad debt expense	$ (117,973)	$ (135,969)

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REVENUE (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Total revenue	$ 18,907,725	$ 17,527,605
Interactive Content and Data APIs
Total revenue	9,770,714	8,528,328
Corporate Quotestream
Total revenue	7,275,615	6,906,499
Individual Quotestream
Total revenue	$ 1,861,396	$ 2,092,778

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REVENUE (Details 1) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
REVENUE
Deferred Revenue, Beginning Balance	$ 1,166,848	$ 622,497
Revenue Recognized In The Current Period From The Amounts In The Beginning Balance	(1,033,287)	(568,001)
New Deferrals, Net Of Amounts Recognized In The Current Period	1,695,447	1,112,431
Effects Of Foreign Currency Translation	2,941	(79)
Deferred Revenue, Ending Balance	1,831,949	1,166,848
Current portion of deferred revenue	1,456,381	1,166,848
Long-term portion of deferred revenue	375,568	0
Total deferred revenue	$ 1,831,949	$ 1,166,848

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RELATED PARTIES (Details Narrative) - Bravenet Web Services, Inc. - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Due To Related Party	$ 12,000	$ 12,500
Expenses on related party	2,500
Lease Per Month	7,000
Unreimbursed expenses	$ 68,988

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LEASES (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
LEASES
Operating lease right-of-use assets	$ 393,472	$ 506,219
Current portion of operating lease liability	206,146	174,166
Long-term portion of operating lease liability	191,735	323,685
Total operating lease liability	$ 397,881	$ 497,851
Weighted Average Remaining Lease Term
Operating Leases	1 year 10 months 24 days	2 years 8 months 12 days
Weighted Average Discount Rate
Operating Leases	9.50%	9.90%

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LEASES (Details 1) - USD ($)	Dec. 31, 2023	Dec. 31, 2022
Operating Lease Obligations
2024	$ 235,025
2025	167,607
2026	34,476
Total Lease Payments	437,108
Less Imputed Interest	(39,227)
Total	$ 397,881	$ 497,851

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LEASES (Details 2) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Operating lease costs:
Operating lease costs	$ 235,459	$ 236,737
Short-term lease costs	108,421	98,570
Total operating lease costs	343,880	335,307
Finance lease costs:
Interest	$ 0	$ 64

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LEASES (Details 3) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$ 231,985	$ 224,741
Operating cash flows from finance leases	0	64
Financing cash flows from finance leases	0	2,087
Operating leases	$ 78,304	$ 0

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LEASES (Details Narrative)	12 Months Ended
	Dec. 31, 2023 USD ($)
LEASES
Lessee, Operating Lease, Description	1 year to 4 years
Operating leases	$ 78,304

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PROPERTY AND EQUIPMENT (Details) - USD ($)	Dec. 31, 2023	Dec. 31, 2022
Total property and equipment	$ 1,616,870	$ 1,535,061
Less: accumulated depreciation	(1,314,646)	(1,125,186)
Property and equipment, net	302,224	409,875
Computer Equipment
Total property and equipment	1,575,514	1,493,705
Office Furniture and Equipment
Total property and equipment	27,783	27,783
Leasehold Improvements
Total property and equipment	$ 13,573	$ 13,573

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PROPERTY AND EQUIPMENT (Details 1)	12 Months Ended
	Dec. 31, 2023
Computer Equipment
Estimated useful lives	5
Office Furniture and Equipment
Estimated useful lives	5
Leasehold Improvements
Estimated useful lives	Shorter of useful life or the term of lease

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PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)	12 Months Ended	24 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
PROPERTY AND EQUIPMENT
Depreciation expense for equipment and leaseholds	$ 189,460	$ 170,245

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CAPITALIZED INTERNAL-USE DEVELOPMENT COSTS (Details) - USD ($)	Dec. 31, 2023	Dec. 31, 2022
CAPITALIZED INTERNAL-USE DEVELOPMENT COSTS
Capitalized internal-use software development costs	$ 19,417,742	$ 16,214,697
Less: accumulated amortization	(14,864,832)	(12,416,322)
Capitalized internal-use software development costs, net	$ 4,552,910	$ 3,798,375

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CAPITALIZED INTERNAL-USE DEVELOPMENT COSTS (Details 1) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
CAPITALIZED INTERNAL-USE DEVELOPMENT COSTS
Opening balance	$ 3,798,375	$ 3,002,076
Additions during the year	3,203,045	2,739,590
Amortization	(2,448,510)	(1,943,292)
Ending balance	$ 4,552,910	$ 3,798,374

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CAPITALIZED INTERNAL-USE DEVELOPMENT COSTS (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
CAPITALIZED INTERNAL-USE DEVELOPMENT COSTS
Capitalized costs	$ 3,203,045	$ 2,739,590
Amortization	(2,448,510)	(1,943,292)
Value of capitalized application software	$ 4,552,910	$ 3,798,374

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INTANGIBLE ASSETS AND GOODWILL (Details) - USD ($)	Dec. 31, 2023	Dec. 31, 2022
Intangible assets:
Software licenses	$ 138,159	$ 138,159
Domain names	20,569	20,569
Intangible assets, gross	158,728	158,728
Less: accumulated amortization	(93,092)	(85,156)
Intangible assets, net	65,636	73,572
Goodwill:
Purchase of business unit	$ 110,000	$ 110,000

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INTANGIBLE ASSETS AND GOODWILL (Details 1)	Dec. 31, 2023 USD ($)
INTANGIBLE ASSETS AND GOODWILL
2024	$ 7,936
2025	7,936
2026	7,936
2027	7,936
2028	4,008
Thereafter	29,884
Total	$ 65,636

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INTANGIBLE ASSETS AND GOODWILL (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Amortization expense for intangible assets	$ 7,936	$ 7,596
Purchase Option
Estimated useful life	5 years
Software Licenses
Estimated useful life	20 years

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INCOME TAXES (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
INCOME TAXES
Net income before income tax	$ 364,550	$ 447,526
Tax provision (benefit) at the statutory rate of 21%	75,297	110,544
State income taxes, net of federal income tax	29,392	(16,440)
Stock-based compensation and other non-deductible expenses	(2,226)	47,040
Change in intangibles	507,085	0
Adjustment in respect of prior periods	0	99,660
Change in other items	40,044	86,042
Canadian income tax expense	2,966	3,070
Change in valuation	(649,592)	(326,860)
Income tax expense (recovery)	$ 2,966	$ 3,056

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INCOME TAXES (Details 1) - USD ($)	Dec. 31, 2023	Dec. 31, 2022
INCOME TAXES
Tax effect of net operating loss carryforward - U.S	$ 1,742,266	$ 1,822,760
Tax effect of net operating loss carryforward - canada	0	141,340
Property & equipment	(28,085)	(3,610)
Right-of-use asset	(133,860)	(133,860)
Capital lease obligation	131,700	131,700
Intangibles	(734,020)	(321,970)
Other	58,507	49,740
Less valuation allowance	(1,036,508)	(1,686,100)
Net deferred tax asset	$ 0	$ 0

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INCOME TAXES (Details Narrative)	12 Months Ended
	Dec. 31, 2023 USD ($)
Valuation allowance	$ 649,592
Decription of federal net operating loss carryforward	which expire in varying amounts through the year 2042
State
Canadian income tax expense (benefit)	$ 2,966
Net operating loss carryforwards	400,000
Arizona income tax expense	50
Federal
Net operating loss carryforwards	$ 8,200,000

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REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS DEFICIT (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Stock-based compensation expense	$ (10,602)	$ 131,858
Sales and Marketing
Stock-based compensation expense	(17,602)	131,858
General and Administrative
Stock-based compensation expense	$ 7,000	$ 0

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REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS DEFICIT (Details 1) - Common Stock Options and Warrants	12 Months Ended
	Dec. 31, 2023 $ / shares shares
Outstanding, beginning | shares	25,772,803
Granted during the period | shares	1,030,000
Forfeited during the period | shares	(1,030,000)
Outstandings, ending | shares	25,772,803
Weighted-average exercise price outstanding, beginning | $ / shares	$ 0.06
Weighted-average exercise price outstanding, Granted during the period | $ / shares	0.04
Weighted-average exercise price outstanding, Forfeited during the period | $ / shares	0.04
Weighted-average exercise price outstanding, ending | $ / shares	$ 0.06

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REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS DEFICIT (Details 2) - $ / shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Stockholders' deficit:
Common stock options and warrants Non-vested, beginning	0	2,025,000
Common stock options and warrants vested		(2,025,000)
Common stock options and warrants Non-vested, ending	0	0
Weighted-average grant date exercise price Non-vested, beginning	$ 0	$ 0.08
Weighted-average grant date exercise price , Vested	0	0.08
Weighted-average grant date exercise price Non-vested, ending	$ 0	$ 0

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REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS DEFICIT (Details 3) - Common Stock Options and Warrants	12 Months Ended
	Dec. 31, 2023 $ / shares shares
Range of exercise price, minimum	$ 0.03
Range of exercise price, maximum	$ 0.10
Outstanding, beginning | shares	25,772,803
Common stock and warrants exercisable | shares	25,772,803
Weighted average remaining contractual life	5 years 9 months 3 days
Weighted-average exercise price outstanding, beginning	$ 0.06
Weighted-average exercise price, exercisable	$ 0.06

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REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS DEFICIT (Details 4) - $ / shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Stockholders' deficit:
Expected dividend yield	0.00%	0.00%
Expected stock price volatility	97.00%	0.00%
Risk-free interest rate	4.00%	0.00%
Expected life of options (years)	1 year 11 months 15 days
Weighted average fair value of options and warrants granted	$ 0.21	$ 0.00

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REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS DEFICIT (Details 5) - $ / shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Stockholders' deficit:
Expected Time to Expiration (years)	24 years 18 days	25 years 18 days
Stock Price on Valuation Date	$ 0.23	$ 0.21
5-Year Peer Volatility	47.35%	52.31%
Cash Flow Discount Rate	15.86%	12.93%

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REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS DEFICIT (Details 6) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Beginning balance	$ 629,375
Ending balance	611,563	$ 629,375
Preferred Stock Warrant Liability
Beginning balance	629,375	513,750
Change in fair value	(17,812)	115,625
Ending balance	$ 611,563	$ 629,375

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REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS DEFICIT (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 28, 2017
Preferred stock, shares authorized	10,000,000	10,000,000
Common Stock Options and Warrants
Common stock warrants and options outstanding	25,772,803	25,772,803
Unrecognized share-based compensation, period of recognition	25 years
Aggregate intrinsic value, outstanding	$ 4,436,478
Common Stock Options and Warrants | 1999 Stock Option Plan
Common stock issued	1,144,817
Common stock were initially reserved for issuance	400,000
Common stock were initially reserved for issuance increased	2,500,000
Outstanding options to acquire	1,355,183
Common Stock Options and Warrants | 2003 Equity Incentive Compensation Plan Member
Common stock issued	15,000,000
options granted	2,350,372
options Outstanding	4,720,000
Series A Redeemable Convertible Preferred
Preferred stock, shares designated	550,000
Convertible Preferred Stock redeemed	$ 123,685
Redeemable convertible preferred stock, amount	400,000
Preferred stock liquidation value	$ 25
Conversion price per share	$ 83.33
Number of consecutive trading days	25 years
Closing price of share of common stock on securities exchange exceed price per share	$ 0.30
Warrant to purchase of common stock			382,243
Warrant to purchase of common stock exercise price per share			$ 1.00
Preferred Stock Warrant
Warrant to purchase of common stock exercise price per share			$ 1.00
Weighted average remaining contractual life	24 years
Preferred stock warrants exercisable			31,250
Fair value of the Preferred Stock Warrant Liability	$ 611,563	$ 629,375
Stock Warrants Exercisable	31,250
Common stock warrants and options outstanding	413,493	413,493
Unrecognized share-based compensation	$ 9,173,832	$ 9,173,832

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EARNINGS PER SHARE (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
EARNINGS PER SHARE (see note 10)
Net income (loss)	$ 361,584	$ 444,470
Weighted average common shares used to calculate net income per share	90,477,798	90,477,798
Warrants to purchase redeemable convertible preferred stock	$ 2,499,900	$ 2,499,900
Redeemable convertible preferred stock	$ 10,306,671	$ 10,306,671
Stock options and warrants to purchase common stock	17,745,988	16,089,121
Weighted average common shares used to calculate diluted net income per share	121,030,357	119,373,490
Net income per share - basic	$ 0.00	$ 0.00
Net income per share - diluted	$ 0.00	$ 0.00

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SUPPLEMENTARY CASH FLOW INFORMATION (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
SUPPLEMENTARY CASH FLOW INFORMATION
Cash paid for interest	$ 4,371	$ 3,356
Right-of-use assets obtained in exchange for lease obligations	$ 78,304	$ 0

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REVENUE CONCENTRATION (Details Narrative)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2021
Revenue from Contract with Customer, Product and Service Benchmark [Member] | Canada
Revenue concentration	38.00%	35.00%