Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 11, 2020 | Jun. 30, 2019 | |
Document And Entity Information | |||
Entity Registrant Name | QUOTEMEDIA INC | ||
Entity Central Index Key | 0001101433 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 90,477,798 | ||
Entity Public Float | $ 60,624,539 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 | ||
Entity Interactive Data Current | Yes | ||
Entity Incorporation State Country Code | NV | ||
Entity File Number | 0-28599 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 815,487 | $ 810,332 |
Accounts receivable, net | 680,759 | 538,081 |
Prepaid expenses | 103,093 | 132,356 |
Other current assets | 47,793 | 170,914 |
Total current assets | 1,647,132 | 1,651,683 |
Deposits | 16,084 | 15,339 |
Property and equipment, net | 2,273,087 | 1,702,875 |
Goodwill | 110,000 | 110,000 |
Intangible assets | 51,265 | 57,029 |
Operating lease right-of-use asset | 328,676 | 0 |
Total assets | 4,426,244 | 3,536,926 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 1,286,340 | 1,495,064 |
Deferred revenue | 579,343 | 707,880 |
Current portion of operating lease liabilities | 172,049 | 0 |
Current portion of finance lease liabilities | 33,914 | 30,083 |
Total current liabilities | 2,071,646 | 2,233,027 |
Long-term portion of operating lease liabilities | 167,496 | 0 |
Long-term portion of finance lease liabilities | 13,949 | 46,457 |
Mezzanine equity: | ||
Series A Redeemable Convertible Preferred stock, $0.001 par value, 550,000 shares designated, 123,685 at December 31, 2019 and 125,885 at December 31, 2018 | 2,983,857 | 3,037,952 |
Stockholders' deficit: | ||
Preferred stock, 10,000,000 shares authorized, 550,000 shares designated | 0 | 0 |
Common stock, $0.001 par value, 150,000,000 shares authorized, shares issued and outstanding: 90,477,798 at December 31, 2019 and December 31, 2018, respectively | 90,479 | 90,479 |
Additional paid-in capital | 19,568,011 | 19,157,202 |
Accumulated deficit | (20,469,194) | (21,028,191) |
Total stockholders' deficit | (810,704) | (1,780,510) |
Total liabilities and stockholders' deficit | $ 4,426,244 | $ 3,536,926 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Stockholders' deficit: | ||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares designated | 550,000 | 550,000 |
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 |
Series A Redeemable Convertible Preferred Stock | ||
Mezzanine equity: | ||
Convertible Preferred stock designated | 550,000 | 550,000 |
Convertible Preferred stock issued | 123,685 | 125,885 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement [Abstract] | ||
REVENUE | $ 11,793,731 | $ 11,127,670 |
COST OF REVENUE | 5,781,756 | 5,528,723 |
GROSS PROFIT | 6,011,975 | 5,598,947 |
OPERATING EXPENSES | ||
Sales and marketing | 1,879,404 | 1,839,957 |
General and administrative | 2,279,861 | 2,044,337 |
Software development | 1,253,055 | 1,215,151 |
Total | 5,412,320 | 5,099,445 |
OPERATING PROFIT | 599,655 | 499,502 |
OTHER INCOME (EXPENSES) | ||
Foreign exchange gain (loss) | (31,385) | 8,743 |
Interest expense | (6,259) | (7,289) |
Total | (37,644) | 1,454 |
INCOME BEFORE INCOME TAXES | 562,011 | 500,956 |
Income tax expense | (3,014) | (3,085) |
NET INCOME | $ 558,997 | $ 497,871 |
EARNINGS PER SHARE | ||
Basic earnings per share | $ 0.01 | $ 0.01 |
Diluted earnings per share | $ 0 | $ 0 |
WEIGHTED AVERAGE SHARES OUTSTANDING | ||
Basic | 90,477,798 | 90,477,798 |
Diluted | 118,745,576 | 113,367,414 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT - USD ($) | Series A Redeemable Convertible Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning Balance, Shares at Dec. 31, 2017 | 127,685 | 90,477,798 | |||
Beginning Balance, Amount at Dec. 31, 2017 | $ 3,082,211 | $ 90,479 | $ 18,727,661 | $ (21,526,062) | $ (2,707,922) |
Preferred shares issued (redeemed), shares | (1,800) | ||||
Preferred shares issued (redeemed), amount | $ (44,259) | (741) | (741) | ||
Costs associated with forgiveness of debt | (8,850) | (8,850) | |||
Stock-based compensation | 439,132 | 439,132 | |||
Net income (loss) | 497,871 | 497,871 | |||
Ending Balance, Shares at Dec. 31, 2018 | 125,885 | 90,477,798 | |||
Ending Balance, Amount at Dec. 31, 2018 | $ 3,037,952 | $ 90,479 | 19,157,202 | (21,028,191) | (1,780,510) |
Preferred shares issued (redeemed), shares | (2,200) | ||||
Preferred shares issued (redeemed), amount | $ (54,095) | (905) | (905) | ||
Stock-based compensation | 411,714 | 411,714 | |||
Net income (loss) | 558,997 | 558,997 | |||
Ending Balance, Shares at Dec. 31, 2019 | 123,685 | 90,477,798 | |||
Ending Balance, Amount at Dec. 31, 2019 | $ 2,983,857 | $ 90,479 | $ 19,568,011 | $ (20,469,194) | $ (810,704) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
OPERATING ACTIVITIES | ||
Net income | $ 558,997 | $ 497,871 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 1,113,129 | 893,248 |
Stock-based compensation expense | 411,714 | 439,132 |
Changes in assets and liabilities: | ||
Accounts receivable | (142,678) | (193,569) |
Prepaid expenses | 29,263 | (42,472) |
Other current assets | 123,121 | (21,535) |
Deposits | (745) | 1,212 |
Accounts payable, accrued and other liabilities | (197,855) | (70,908) |
Deferred revenue | (128,537) | 1,061 |
Net cash provided by operating activities | 1,766,409 | 1,504,040 |
INVESTING ACTIVITIES | ||
Purchase of fixed assets | (325,655) | (190,161) |
Capitalized application software | (1,351,922) | (879,534) |
Net cash used in investing activities | (1,677,577) | (1,069,695) |
FINANCING ACTIVITIES: | ||
Repayment of capital lease obligations | (28,677) | (21,314) |
Costs associated with forgiveness of debt | 0 | (8,850) |
Redemption of preferred stock | (55,000) | (45,000) |
Net cash used in financing activities | (83,677) | (75,164) |
Net increase in cash | 5,155 | 359,181 |
Cash, beginning of year | 810,332 | 451,151 |
Cash, end of year | $ 815,487 | $ 810,332 |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | a) Nature of operations We are a software developer and distributor of financial market data and related services to a global marketplace. We specialize in the collection, aggregation, and delivery of both delayed and real-time financial data content via the Internet. We develop 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 QuoteMedia, Inc. All intercompany transactions and balances have been eliminated. c) Foreign currency translation and transactions The U.S. dollar is the functional currency of all our company's operations. Foreign currency asset and liability amounts are remeasured into U.S. dollars at end-of-period exchange rates, except for equipment and intangible assets, which are remeasured at historical rates. Foreign currency income and expenses are remeasured at average exchange rates in effect during the 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. We maintain our accounts primarily at one financial institution. At times throughout the year, our cash and cash equivalents balances may exceed amounts insured by the Federal Deposit Insurance Corporation. e) Allowance for doubtful accounts We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of the Company’s customers to make required payments. The Company determines the allowance by reviewing the age of the receivables and assessing the anticipated ability of customers to pay. No collateral is required for any of the receivables and the Company does not usually apply financing charges to outstanding accounts receivable balances. If the financial condition of our customers were to deteriorate, adversely affecting their ability to make payments, additional allowances would be required. The allowance for doubtful accounts was $80,000 and $100,000 at December 31, 2019 and 2018, respectively. Bad debt expense for the years ended December 31, 2019 and 2018 were $43,689 and $78,432 respectively. f) Property and equipment Fixed assets 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. We retired fixed assets with original costs totaling $199,021 and $724,877 during the years ended December 31, 2019 and 2018, respectively. The Company received no proceeds for the fixed assets retired during the years ended December 31, 2019 and 2018. The fixed assets retired were fully depreciated therefore no gains or losses were recognized. 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. 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, 2019 and 2018. 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 takes into account shares outstanding (computed under basic earnings per share) and potentially dilutive common shares (such as stock options and redeemable convertible preferred stock outstanding). 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 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 $3,014 and $3,085 for the years ended December 31, 2019 and 2018, respectively (see Note 8). 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, and (v) 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 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. The Company expensed $1,253,055 and $1,215,151 in software development costs during the years ended December 31, 2019 and 2018, respectively (see Note 6). k) Revenue We license financial market data information on a monthly, quarterly, or annual basis. Our products and services are divided into two main categories: Interactive Content and Data Applications and Portfolio Management and Real-Time Quote Systems. Revenue recognition Effective January 1, 2018, the Company adopted Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606) The Company adopted this ASU using the modified retrospective approach. Accordingly, prior periods have not been adjusted to conform to the new guidance. There was no cumulative effect to opening retained earnings after applying the new guidance to all contracts with customers that were not completed as of January 1, 2018. Contract Balances Timing of revenue recognition may differ from the timing of invoicing to customers. We record 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 over the 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 deferred until collection becomes reasonably assured, which is generally upon receipt of cash. Practical Expedients As permitted under ASU 2014-09 (and related ASUs), unsatisfied performance obligations are not disclosed, as the original expected duration of substantially all of our contracts is one year or less. l) Financial instruments Financial instruments consist principally of cash, accounts receivable, accounts payable and notes payable. We believe 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. We used the Black-Scholes valuation model to calculate the fair value of common stock options and warrants. n) Accounting Pronouncements Recently Adopted In February 2016, FASB issued ASU 2016-02, Leases In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718) Not Yet Adopted In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract 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. |
LIQUIDITY
LIQUIDITY | 12 Months Ended |
Dec. 31, 2019 | |
Liquidity | |
LIQUIDITY | The Company had a net income of $558,997 for the year ended December 31, 2019 and net cash of $1,766,409 was provided by operating activities, and although we have a working capital deficit of $424,514 as of December 31, 2019, current liabilities include $579,343 in deferred revenue and the expected costs necessary to realize the deferred revenue in 2020 are minimal. Implementation of our business plan may require additional financing. Additional financings may come from future equity or debt offerings that could result in dilution to our stockholders. Based on the factors discussed above, management believes that our cash on hand and cash generated from operations will be sufficient to fund operations for a period of one year after issuance of these consolidated financial statements. |
REVENUE
REVENUE | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | Disaggregated Revenue The Company provides market data, financial web content solutions and cloud-based applications. Our revenue by type of service consists of the following: 2019 2018 Portfolio Management Systems Corporate Quotestream $3,841,722 $3,616,907 Individual Quotestream 1,829,149 1,856,840 Interactive Content & Data Applications 6,122,860 5,653,923 Total revenue $11,793,731 $11,127,670 Deferred Revenue Changes in deferred revenue for the period were as follows: Balance at December 31, 2018 $707,880 Revenue recognized in the current period from the amounts in the beginning balance (566,535) New deferrals, net of amounts recognized in the current period 447,884 Effects of foreign currency translation (9,885) Balance at December 31, 2019 $579,343 |
RELATED PARTIES
RELATED PARTIES | 12 Months Ended |
Dec. 31, 2019 | |
Notes to Financial Statements | |
RELATED PARTIES | The Company entered into a five-year office lease with 410734 B.C. Ltd. effective May 1, 2016 for approximately $7,365 per month. David M. Shworan is a control person of 410734 B.C. Ltd. At December 31, 2019, there were no amounts 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 $3,000 starting February 2020. At December 31, 2019, there was $7,000 due to Bravenet related to this agreement. David M. Shworan is a control person of Bravenet. As a matter of policy all significant related party transactions are subject to review and approval by the Company’s Board of Directors. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
LEASES | We have operating leases for corporate offices and finance leases for certain equipment. Our leases have remaining lease terms of 1 year to 5 years. We determine 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 our consolidated balance sheets. Finance lease assets and liabilities are included in property and equipment and finance lease liabilities, respectively, on our consolidated balance sheets. 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 our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. We 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, we factor in options to extend or terminate leases when it is reasonably certain that we will exercise that option. We have lease agreements with lease and non-lease components, which are generally accounted for separately. For certain leases we account for the lease and non-lease components as a single lease component. Supplemental balance sheet information related to leases was as follows: 2019 2018 Operating Leases Operating lease right-of-use assets $328,676 $- Current portion of operating lease liability $172,049 $- Long-term portion of operating lease liability 167,496 - Total operating lease liability $339,545 $- Finance Leases Computer equipment on financing lease $101,049 $101,049 Less: accumulated depreciation 52,888 17,836 Computer equipment on financing lease, net $48,161 $83,213 Current portion of finance lease liability 33,914 30,083 Long-term portion of finance lease liability 13,949 46,457 Total finance lease liability $47,863 $76,540 2019 2018 Weighted Average Remaining Lease Term Operating leases 2.9 years - Finance leases 1.5 years 2.5 years Weighted Average Discount Rate Operating leases 9.3% - Finance leases 8.9% 8.9% Maturities of lease liabilities were as follows: Year ending December 31, Operating Leases Finance Leases 2020 $194,961 $36,810 2021 88,499 12,263 2022 50,572 2,162 2023 33,326 - 2024 15,715 - Total lease payments 383,073 51,235 Less imputed interest (43,528) (3,372) Total $339,545 $47,863 The components of lease expense were as follows: 2019 2018 Operating lease costs: Operating lease costs $184,634 $- Short-term lease costs 125,430 - Total operating lease costs $310,064 $- Finance lease costs: Amortization $35,053 $17,836 Interest 5,795 6,049 Total finance lease cost $40,848 $23,885 Supplemental cash flow information related to leases was as follows: 2019 2018 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $190,719 $- Operating cash flows from finance leases 5,795 6,049 Financing cash flows from finance leases 31,015 17,836 Right-of-use assets obtained in exchange for lease obligations: Operating leases 207,034 - |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | 2019 2018 Computer equipment $1,104,845 $782,202 Office furniture and equipment 25,387 22,375 Leasehold improvements 12,009 12,009 Capitalized application software 9,600,195 8,447,294 Total property and equipment 10,742,436 9,263,880 Less: accumulated depreciation (8,469,349) (7,561,005) Property and equipment, net $2,273,087 $1,702,875 Property and Equipment are recorded at cost less accumulated depreciation. Depreciation 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 Capitalized application software 3 years For the years ended December 31, 2019 and 2018, the Company capitalized $1,351,922 and $879,534 of costs, respectively, related to upgrades and enhancements made to existing software applications. Software applications are used by our subscribers to access, manage and analyze information in our databases. For the years ended December 31, 2019 and 2018, amortization expenses associated with the internally developed application software was $918,902 and $746,464, respectively. At December 31, 2019, the remaining book value of the capitalized application software was $1,715,122. Depreciation expense for equipment and leaseholds for the years ended December 31, 2019 and 2018 was $188,463 and $139,028 respectively. |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | 2019 2018 Intangible assets: Software licenses $104,718 $104,718 Domain names 10,570 10,570 115,288 115,288 Less: accumulated amortization (64,023) (58,259) Total intangible assets, net $51,265 $57,029 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 purchase option is 5 years which is the term of the option. The useful life of the software licenses and domain names is estimated to be 20 years. Amortization expense for amortized intangible assets was $5,764 and $7,628 for the years ended December 31, 2019 and 2018, respectively. The estimated amortization expense of definite-lived intangible assets is as follows: Year ending December 31, 2020 $5,764 2021 5,764 2022 5,764 2023 5,764 2024 5,764 Thereafter 22,445 Total $51,265 Goodwill is reported as an indefinite life intangible asset. We evaluate goodwill for impairment on an annual basis in accordance with FASB ASC 350-20, Goodwill |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | We account for income taxes according to the provisions of FASB ASC 740, Income Taxes, Reconciliations of income taxes computed at the statutory federal rate to income tax expense (benefit) for the years ended December 31, 2019 and 2018 are as follows: 2019 2018 Tax provision at the statutory rate of 21% $116,746 $103,883 State income taxes, net of federal income tax 17,012 15,137 Stock-based compensation 86,460 92,218 Change in federal NOL (1,090) (349) Change in valuation allowance and other (219,128) (210,890) State income tax expense 50 104 Canadian income tax expense 3,014 3,085 Income tax expense $3,064 $3,188 In 2019, the Company recorded Arizona income tax expense of $50 and Canadian income tax expense of $3,014. The Company does not have any material Canadian deferred tax assets or deferred tax liabilities. As of December 31, 2019, we had net operating loss carryforwards for federal and state income tax reporting purposes amounting to approximately $10,409,000 and $1,578,000 that expire in varying amounts through the year 2037. The components of our deferred tax asset (liabilities) at December 31, 2019 and 2018 are as follows: 2019 2018 Tax effect of net operating loss carryforward $2,235,000 $2,372,000 Property and equipment 4,000 1,000 Intangibles (420,000) (315,000) Other 19,000 24,000 Less valuation allowance (1,838,000) (2,082,000) 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 $250,000 for the year ended December 31, 2019. This is primarily due to the usage of federal and state net operating losses. 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 (2016-2019) 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. |
STOCKHOLDERS' DEFICIT
STOCKHOLDERS' DEFICIT | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' deficit: | |
STOCKHOLDERS' DEFICIT | a) Preferred shares We are authorized to issue up to 10,000,000 non-designated preferred shares at the Board of Directors’ discretion. On December 28, 2017, 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, 2019, 123,685 shares of Series A Redeemable Convertible Preferred Stock were outstanding. No shares of Series A Redeemable Convertible Preferred Stock were issued, and 2,200 shares were redeemed during the year ended December 31, 2019. The shares were redeemed at their $25 per share liquidation value. 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, a limited amount of Series A Redeemable Convertible Preferred Stock may be redeemed at the holder’s option if the following criteria are met: (i) If the cash balance of the Company as reported at the end of each fiscal quarter in 2018 exceeds $350,000, up to an aggregate of 600 Series A Redeemable Convertible Preferred Stock may be redeemed at the liquidation value of $25 per share. (ii) If the cash balance of the Company as reported at the end of each fiscal quarter in 2019 exceeds $375,000, up to an aggregate of 800 Series A Redeemable Convertible Preferred Stock may be redeemed at the liquidation value of $25 per share. (iii) If the cash balance of the Company as reported at the end of each fiscal quarter in 2020 and in subsequent years exceeds $400,000, up to an aggregate of 1,000 Series A Redeemable Convertible Preferred Stock may be redeemed at the liquidation value of $25 per share. 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, 2019 and 2018. c) Stock Options and Warrants FASB ASC 718, Stock Compensation Total estimated stock-based compensation expense, related to all the Company’s stock-based awards was comprised as follows: 2019 2018 Sales and marketing $397,164 $397,164 General and administrative 10,800 37,468 Development 3,750 4,500 Stock based compensation expense $411,714 $439,132 Common Stock Options and Warrants There were 26,372,803 common stock warrants and options outstanding at December 31, 2019. No stock options or warrants to purchase common stock were granted or exercised for the years ended December 31, 2019 and 2018. The following table summarizes our non-vested common stock option and warrant activity for the years ended December 31, 2019 and 2018: Common Stock Options and Warrants Weighted-Average Grant Date Exercise Price Non-vested at January 1, 2018 7,625,000 $0.04 Vested during the period (1,400,000) $0.05 Non-vested at December 31, 2018 6,225,000 $0.08 Vested during the period (600,000) $0.05 Non-vested at December 31, 2019 5,625,000 $0.08 The following table summarizes the weighted average remaining contractual life and exercise price of common stock options and warrants outstanding at December 31, 2019: 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 2019 Life (Years) Price 2019 Price $0.03-0.10 26,372,803 9.4 $0.06 20,747,803 $0.05 At December 31, 2019, there was $81,141 of unrecognized compensation cost related to non-vested options granted to purchase common stock which is expected to be recognized over a weighted-average period of 2.6 years. 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. Preferred Stock Warrants On December 28, 2017, the Company entered into a Compensation Agreement with David M. Shworan, the President and Chief Executive Officer of QuoteMedia, Ltd., a wholly owned subsidiary of Quotemedia, Inc., pursuant to which, in lieu of receiving a cash salary the Company will issue to Mr. Shworan warrants to purchase shares of Series A Redeemable Convertible Preferred Stock (“Compensation Preferred Stock Warrants”). 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 issue to Mr. Shworan warrants to purchase up to 15,000 shares of Compensation Preferred Stock Warrants at an exercise price equal to $1.00 per share. A total of $360,000 of stock-based compensation expense was recognized related to the Compensation Preferred Stock Warrants for the years ended December 31, 2019 and 2018. 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, 2019. The probability is re-evaluated each reporting period. As of December 31, 2019, 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, we are also unable to determine the weighted-average period over which the unrecognized compensation cost will be recognized. The following table represents total preferred stock warrant activity for the years ended December 31, 2019 and 2018: Preferred Stock Warrants Weighted-Average Exercise Price Outstanding at January 1, 2018 383,493 $1.00 Granted during the period 15,000 $1.00 Outstanding at December 31, 2018 398,493 $1.00 Granted during the period 15,000 $1.00 Outstanding at December 31, 2019 413,493 $1.00 As of December 31, 2019, there were a total of 413,493 preferred stock warrants outstanding with a weighted average remaining contractual life of 28 years. As of December 31, 2019, 31,250 preferred stock warrants were exercisable. No preferred stock warrants were exercised for the years ended December 31, 2019 and 2018. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2019 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | Basic net income per share is computed by dividing net income during the period 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. 2019 2018 Net income (loss) $558,997 $497,871 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 1,299,948 Redeemable convertible preferred stock 10,306,671 10,489,997 Stock options and warrants to purchase common stock 15,461,207 11,099,671 Weighted average common shares used to calculate diluted net income per share 118,745,576 113,367,414 Net income per share – basic $0.01 $0.01 Net income per share – diluted $0.00 $0.00 The number of shares of potentially dilutive common stock related to options and warrants that were excluded from the calculation of dilutive shares since the inclusion of such shares would be anti-dilutive for the are shown below: 2019 2018 Stock options and warrants to purchase common stock - 4,000,000 Total potential common shares excluded - 4,000,000 |
SUPPLEMENTARY CASH FLOW INFORMA
SUPPLEMENTARY CASH FLOW INFORMATION | 12 Months Ended |
Dec. 31, 2019 | |
Supplemental Cash Flow Information [Abstract] | |
SUPPLEMENTARY CASH FLOW INFORMATION | 2019 2018 Cash paid for Interest $6,314 $7,289 The non-cash amounts related to the purchase of fixed assets under capital lease are noted below for the years ended December 31,2019 and 2018: 2019 2018 Purchase of fixed assets under capital lease $- $101,049 |
REVENUE CONCENTRATION
REVENUE CONCENTRATION | 12 Months Ended |
Dec. 31, 2019 | |
Revenue Concentration | |
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, 2019 and 2018, revenue from Canada accounted for approximately 31% of total revenue |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | The Company has evaluated events up to the filing date of these consolidated financial statements and determined that no subsequent event activity required disclosure. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Nature of operations | We are a software developer and distributor of financial market data and related services to a global marketplace. We specialize in the collection, aggregation, and delivery of both delayed and real-time financial data content via the Internet. We develop 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 QuoteMedia, Inc. All intercompany transactions and balances have been eliminated. |
Foreign currency translation and transactions | The U.S. dollar is the functional currency of all our company's operations. Foreign currency asset and liability amounts are remeasured into U.S. dollars at end-of-period exchange rates, except for equipment and intangible assets, which are remeasured at historical rates. Foreign currency income and expenses are remeasured at average exchange rates in effect during the 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. We maintain our accounts primarily at one financial institution. At times throughout the year, our cash and cash equivalents balances may exceed amounts insured by the Federal Deposit Insurance Corporation. |
Allowances for doubtful accounts | We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of the Company’s customers to make required payments. The Company determines the allowance by reviewing the age of the receivables and assessing the anticipated ability of customers to pay. No collateral is required for any of the receivables and the Company does not usually apply financing charges to outstanding accounts receivable balances. If the financial condition of our customers were to deteriorate, adversely affecting their ability to make payments, additional allowances would be required. The allowance for doubtful accounts was $80,000 and $100,000 at December 31, 2019 and 2018, respectively. Bad debt expense for the years ended December 31, 2019 and 2018 were $43,689 and $78,432 respectively. |
Property and equipment | Fixed assets 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. We retired fixed assets with original costs totaling $199,021 and $724,877 during the years ended December 31, 2019 and 2018, respectively. The Company received no proceeds for the fixed assets retired during the years ended December 31, 2019 and 2018. The fixed assets retired were fully depreciated therefore no gains or losses were recognized. 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. 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, 2019 and 2018. |
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 takes into account shares outstanding (computed under basic earnings per share) and potentially dilutive common shares (such as stock options and redeemable convertible preferred stock outstanding). 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 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 $3,014 and $3,085 for the years ended December 31, 2019 and 2018, respectively (see Note 8). |
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, and (v) 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 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. The Company expensed $1,253,055 and $1,215,151 in software development costs during the years ended December 31, 2019 and 2018, respectively (see Note 6). |
Revenue | We license financial market data information on a monthly, quarterly, or annual basis. Our products and services are divided into two main categories: Interactive Content and Data Applications and Portfolio Management and Real-Time Quote Systems. Revenue recognition Effective January 1, 2018, the Company adopted Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606) The Company adopted this ASU using the modified retrospective approach. Accordingly, prior periods have not been adjusted to conform to the new guidance. There was no cumulative effect to opening retained earnings after applying the new guidance to all contracts with customers that were not completed as of January 1, 2018. Contract Balances Timing of revenue recognition may differ from the timing of invoicing to customers. We record 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 over the 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 deferred until collection becomes reasonably assured, which is generally upon receipt of cash. Practical Expedients As permitted under ASU 2014-09 (and related ASUs), unsatisfied performance obligations are not disclosed, as the original expected duration of substantially all of our contracts is one year or less. |
Financial instruments | Financial instruments consist principally of cash, accounts receivable, accounts payable and notes payable. We believe 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. We used the Black-Scholes valuation model to calculate the fair value of common stock options and warrants. |
Accounting Pronouncements | Recently Adopted In February 2016, FASB issued ASU 2016-02, Leases In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718) Not Yet Adopted In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract 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. |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregated revenue | 2019 2018 Portfolio Management Systems Corporate Quotestream $3,841,722 $3,616,907 Individual Quotestream 1,829,149 1,856,840 Interactive Content & Data Applications 6,122,860 5,653,923 Total revenue $11,793,731 $11,127,670 |
Schedule of deferred revenue | Balance at December 31, 2018 $707,880 Revenue recognized in the current period from the amounts in the beginning balance (566,535) New deferrals, net of amounts recognized in the current period 447,884 Effects of foreign currency translation (9,885) Balance at December 31, 2019 $579,343 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Summary of lease | 2019 2018 Operating Leases Operating lease right-of-use assets $328,676 $- Current portion of operating lease liability $172,049 $- Long-term portion of operating lease liability 167,496 - Total operating lease liability $339,545 $- Finance Leases Computer equipment on financing lease $101,049 $101,049 Less: accumulated depreciation 52,888 17,836 Computer equipment on financing lease, net $48,161 $83,213 Current portion of finance lease liability 33,914 30,083 Long-term portion of finance lease liability 13,949 46,457 Total finance lease liability $47,863 $76,540 2019 2018 Weighted Average Remaining Lease Term Operating leases 2.9 years - Finance leases 1.5 years 2.5 years Weighted Average Discount Rate Operating leases 9.3% - Finance leases 8.9% 8.9% |
Maturities of lease liabilities | Year ending December 31, Operating Leases Finance Leases 2020 $194,961 $36,810 2021 88,499 12,263 2022 50,572 2,162 2023 33,326 - 2024 15,715 - Total lease payments 383,073 51,235 Less imputed interest (43,528) (3,372) Total $339,545 $47,863 |
Components of lease expense | 2019 2018 Operating lease costs: Operating lease costs $184,634 $- Short-term lease costs 125,430 - Total operating lease costs $310,064 $- Finance lease costs: Amortization $35,053 $17,836 Interest 5,795 6,049 Total finance lease cost $40,848 $23,885 |
Supplemental cash flow information | 2019 2018 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $190,719 $- Operating cash flows from finance leases 5,795 6,049 Financing cash flows from finance leases 31,015 17,836 Right-of-use assets obtained in exchange for lease obligations: Operating leases 207,034 - |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | 2019 2018 Computer equipment $1,104,845 $782,202 Office furniture and equipment 25,387 22,375 Leasehold improvements 12,009 12,009 Capitalized application software 9,600,195 8,447,294 Total property and equipment 10,742,436 9,263,880 Less: accumulated depreciation (8,469,349) (7,561,005) Property and equipment, net $2,273,087 $1,702,875 |
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 Capitalized application software 3 years |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Amortized intangible assets | 2019 2018 Intangible assets: Software licenses $104,718 $104,718 Domain names 10,570 10,570 115,288 115,288 Less: accumulated amortization (64,023) (58,259) Total intangible assets, net $51,265 $57,029 Goodwill: Purchase of business unit $110,000 $110,000 |
Estimated amortization expense of definite-lived intangible assets | Year ending December 31, 2020 $5,764 2021 5,764 2022 5,764 2023 5,764 2024 5,764 Thereafter 22,445 Total $51,265 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Reconciliations of income taxes | 2019 2018 Tax provision at the statutory rate of 21% $116,746 $103,883 State income taxes, net of federal income tax 17,012 15,137 Stock-based compensation 86,460 92,218 Change in federal NOL (1,090) (349) Change in valuation allowance and other (219,128) (210,890) State income tax expense 50 104 Canadian income tax expense 3,014 3,085 Income tax expense $3,064 $3,188 |
Components of deferred tax asset | 2019 2018 Tax effect of net operating loss carryforward $2,235,000 $2,372,000 Property and equipment 4,000 1,000 Intangibles (420,000) (315,000) Other 19,000 24,000 Less valuation allowance (1,838,000) (2,082,000) Net deferred tax asset $- $- |
STOCKHOLDERS' DEFICIT (Tables)
STOCKHOLDERS' DEFICIT (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' deficit: | |
Stock-based compensation | 2019 2018 Sales and marketing $397,164 $397,164 General and administrative 10,800 37,468 Development 3,750 4,500 Stock based compensation expense $411,714 $439,132 |
Non-vested stock option and warrant activity | The following table summarizes our non-vested common stock option and warrant activity for the years ended December 31, 2019 and 2018: Common Stock Options and Warrants Weighted-Average Grant Date Exercise Price Non-vested at January 1, 2018 7,625,000 $0.04 Vested during the period (1,400,000) $0.05 Non-vested at December 31, 2018 6,225,000 $0.08 Vested during the period (600,000) $0.05 Non-vested at December 31, 2019 5,625,000 $0.08 The following table summarizes the weighted average remaining contractual life and exercise price of common stock options and warrants outstanding at December 31, 2019: 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 2019 Life (Years) Price 2019 Price $0.03-0.10 26,372,803 9.4 $0.06 20,747,803 $0.05 |
Preferred stock warrant activity | Preferred Stock Warrants Weighted-Average Exercise Price Outstanding at January 1, 2018 383,493 $1.00 Granted during the period 15,000 $1.00 Outstanding at December 31, 2018 398,493 $1.00 Granted during the period 15,000 $1.00 Outstanding at December 31, 2019 413,493 $1.00 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
EARNINGS PER SHARE | |
Components of earnings per share | 2019 2018 Net income (loss) $558,997 $497,871 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 1,299,948 Redeemable convertible preferred stock 10,306,671 10,489,997 Stock options and warrants to purchase common stock 15,461,207 11,099,671 Weighted average common shares used to calculate diluted net income per share 118,745,576 113,367,414 Net income per share – basic $0.01 $0.01 Net income per share – diluted $0.00 $0.00 |
Potentially dilutive shares | 2019 2018 Stock options and warrants to purchase common stock - 4,000,000 Total potential common shares excluded - 4,000,000 |
SUPPLEMENTARY CASH FLOW INFOR_2
SUPPLEMENTARY CASH FLOW INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Supplemental Cash Flow Information [Abstract] | |
Cash paid for interest | 2019 2018 Cash paid for Interest $6,314 $7,289 |
Non-cash amounts related to the purchase of fixed assets under capital lease | 2019 2018 Purchase of fixed assets under capital lease $- $101,049 |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | ||
Allowance for doubtful accounts | $ 80,000 | $ 100,000 |
Bad debt expense | 43,689 | 78,432 |
Software development costs | $ 1,253,055 | $ 1,215,151 |
LIQUIDITY (Details Narrative)
LIQUIDITY (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Liquidity | ||
Net income (loss) | $ 558,997 | $ 497,871 |
Cash flow from operating activities | 1,766,409 | 1,504,040 |
Deferred revenue | $ 579,343 | $ 707,880 |
REVENUE (Details)
REVENUE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues | $ 11,793,731 | $ 11,127,670 |
Corporate Quotestream | ||
Revenues | 3,841,722 | 3,616,907 |
Individual Quotestream | ||
Revenues | 1,829,149 | 1,856,840 |
Interactive Content & Data Applications | ||
Revenues | $ 6,122,860 | $ 5,653,923 |
REVENUE (Details 1)
REVENUE (Details 1) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Deferred revenue, beginning balance | $ 707,880 |
Revenue recognized in the current period from the amounts in the beginning balance | (566,535) |
New deferrals, net of amounts recognized in the current period | 447,884 |
Effects of foreign currency translation | (9,885) |
Deferred revenue, ending balance | $ 579,343 |
LEASES (Details)
LEASES (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 328,676 | $ 0 |
Current portion of operating lease liability | 172,049 | 0 |
Long-term portion of operating lease liability | 167,496 | 0 |
Total operating lease liability | 339,545 | 0 |
Computer equipment on financing lease | 101,049 | 101,049 |
Less: accumulated depreciation | 52,888 | 17,836 |
Property and equipment, net | 48,161 | 83,213 |
Current portion of finance lease liability | 33,914 | 30,083 |
Long-term portion of finance lease liability | 13,949 | 46,457 |
Total finance lease liability | $ 47,863 | $ 76,540 |
Weighted Average Remaining Lease Term | ||
Operating leases | 2 years 10 months 24 days | |
Finance leases | 1 year 6 months | 2 years 6 months |
Weighted Average Discount Rate | ||
Operating leases | 9.30% | 0.00% |
Finance leases | 8.90% | 8.90% |
LEASES (Details 1)
LEASES (Details 1) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Operating Lease Obligations | ||
2020 | $ 194,961 | |
2021 | 88,499 | |
2022 | 50,572 | |
2023 | 33,326 | |
2024 | 15,715 | |
Total lease payments | 383,073 | |
Less imputed interest | (43,528) | |
Total | 339,545 | $ 0 |
Finance Leases Obligations Payable within: | ||
2020 | 36,810 | |
2021 | 12,263 | |
2022 | 2,162 | |
2023 | 0 | |
2024 | 0 | |
Total lease payments | 51,235 | |
Less imputed interest | (3,372) | |
Total | $ 47,863 | $ 76,540 |
LEASES (Details 2)
LEASES (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Operating lease costs: | ||
Operating lease costs | $ 184,634 | $ 0 |
Short-term lease costs | 125,430 | 0 |
Total operating lease costs | 310,064 | 0 |
Finance lease costs: | ||
Amortization | 35,053 | 17,836 |
Interest | 5,795 | 6,049 |
Total finance lease cost | $ 40,848 | $ 23,885 |
LEASES (Details 3)
LEASES (Details 3) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 190,719 | $ 0 |
Operating cash flows from finance leases | 5,795 | 6,049 |
Financing cash flows from finance leases | 31,015 | 17,836 |
Right-of-use assets obtained in exchange for lease obligations: | ||
Operating leases | $ 207,034 | $ 0 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Total property and equipment | $ 10,742,436 | $ 9,263,880 |
Less: accumulated depreciation | (8,469,349) | (7,561,005) |
Property and equipment, net | 2,273,087 | 1,702,875 |
Computer equipment | ||
Total property and equipment | 1,104,845 | 782,202 |
Office furniture and equipment | ||
Total property and equipment | 25,387 | 22,375 |
Leasehold improvements | ||
Total property and equipment | 12,009 | 12,009 |
Capitalized application software | ||
Total property and equipment | $ 9,600,195 | $ 8,447,294 |
PROPERTY AND EQUIPMENT (Detai_2
PROPERTY AND EQUIPMENT (Details 1) | 12 Months Ended |
Dec. 31, 2019 | |
Computer equipment | |
Estimated useful lives | 5 years |
Office furniture and equipment | |
Estimated useful lives | 5 years |
Leasehold improvements | |
Estimated useful lives | Term of lease |
Capitalized application software | |
Estimated useful lives | 3 years |
PROPERTY AND EQUIPMENT (Detai_3
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | ||
Capitalized application software | $ 1,351,922 | $ 879,534 |
Amortization expenses | 918,902 | 746,464 |
Remaining book value of capitalized application software | 1,715,122 | |
Depreciation expense for equipment and leaseholds | $ 188,463 | $ 139,028 |
INTANGIBLE ASSETS AND GOODWIL_2
INTANGIBLE ASSETS AND GOODWILL (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Amortized intangible assets: | ||
Software licenses | $ 104,718 | $ 104,718 |
Domain names | 10,570 | 10,570 |
Amortized intangible assets, gross | 115,288 | 115,288 |
Less: accumulated amortization | (64,023) | (58,259) |
Amortized intangible assets, net | 51,265 | 57,029 |
Unamortized intangible assets: | ||
Goodwill associated with purchase of business unit | $ 110,000 | $ 110,000 |
INTANGIBLE ASSETS AND GOODWIL_3
INTANGIBLE ASSETS AND GOODWILL (Details 1) | Dec. 31, 2019USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2020 | $ 5,764 |
2021 | 5,764 |
2022 | 5,764 |
2023 | 5,764 |
2024 | 5,764 |
For years thereafter | 22,445 |
Total | $ 51,265 |
INTANGIBLE ASSETS AND GOODWIL_4
INTANGIBLE ASSETS AND GOODWILL (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Amortization expense for intangible assets | $ 5,764 | $ 7,628 |
Purchase Option | ||
Estimated useful life | 5 years | |
Software Licenses | ||
Estimated useful life | 20 years | |
Domain Names | ||
Estimated useful life | 20 years |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Tax provision (benefit) at the statutory rate of 21% | $ 116,746 | $ 103,883 |
State income taxes, net of federal income tax | 17,012 | 15,137 |
Stock-based compensation | 86,460 | 92,218 |
Change in federal NOL | (1,090) | (349) |
Change in valuation allowance and other | (219,128) | (210,890) |
State income tax expense (benefit) | 50 | 104 |
Canadian income tax expense (benefit) | 3,014 | 3,085 |
Income tax expense (benefit) | $ 3,064 | $ 3,188 |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Tax effect of net operating loss carryforward | $ 2,235,000 | $ 2,372,000 |
Property & equipment | 4,000 | 1,000 |
Intangibles | (420,000) | (315,000) |
Other | 19,000 | 24,000 |
Less valuation allowance | (1,838,000) | (2,082,000) |
Net deferred tax asset | $ 0 | $ 0 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Canadian income tax expense (benefit) | $ 3,014 |
Decreased in valuation allowance | 250,000 |
Federal | |
Net operating loss carryforwards | 10,409,000 |
State | |
Net operating loss carryforwards | $ 1,578,000 |
STOCKHOLDERS' DEFICIT (Details)
STOCKHOLDERS' DEFICIT (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Stock-based compensation expense | $ 411,714 | $ 439,132 |
Sales and Marketing | ||
Stock-based compensation expense | 397,164 | 397,164 |
General and Administrative | ||
Stock-based compensation expense | 10,800 | 37,468 |
Development | ||
Stock-based compensation expense | $ 3,750 | $ 4,500 |
STOCKHOLDERS' DEFICIT (Details
STOCKHOLDERS' DEFICIT (Details 1) - Stock Option And Warrant - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Common Stock Options and Warrants | ||
Outstanding - Opening Balance | 6,225,000 | 7,625,000 |
Vested during the period | (600,000) | (1,400,000) |
Outstanding - Ending Balance | 5,625,000 | 6,225,000 |
Weighted- Average Grant Date Fair Value | ||
Weighted-Average Exercise Price Outstanding - Opening Balance | $ 0.08 | $ 0.04 |
Vested during the period | .05 | 0.05 |
Weighted-Average Exercise Price Outstanding - Ending Balance | $ .08 | $ 0.08 |
STOCKHOLDERS' DEFICIT (Detail_2
STOCKHOLDERS' DEFICIT (Details 2) - 0.03-0.07 [Member] | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Number Outstanding | shares | 26,372,803 |
Weighted Average Remaining Contractual Life | 9 years 4 months 24 days |
Weighted-Average Exercise Price, Outstanding | $ / shares | $ .06 |
Number Exercisable | shares | 20,747,803 |
Weighted-Average Exercise Price, Exercisable | $ / shares | $ .05 |
STOCKHOLDERS' DEFICIT (Detail_3
STOCKHOLDERS' DEFICIT (Details 3) - Preferred Stock Warrant - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Warrants | ||
Outstanding - Opening Balance | 398,493 | 383,493 |
Warrants granted | 15,000 | 15,000 |
Outstanding - Ending Balance | 413,493 | 398,493 |
Weighted-Average Exercise Price | ||
Weighted-Average Exercise Price Outstanding - Opening Balance | $ 1 | $ 1 |
Warrants granted | 1 | 1 |
Weighted-Average Exercise Price Outstanding - Ending Balance | $ 1 | $ 1 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
EARNINGS PER SHARE | ||
Net income (loss) | $ 558,997 | $ 497,871 |
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 | $ 1,299,948 |
Redeemable convertible preferred stock | $ 10,306,671 | $ 10,489,997 |
Stock options and warrants to purchase common stock | 15,461,207 | 11,099,671 |
Weighted average common shares used to calculate diluted net income per share | 118,745,576 | 113,367,414 |
Net income (loss) per share - basic | $ 0.01 | $ 0.01 |
Net income (loss) per share - diluted | $ 0 | $ 0 |
EARNINGS PER SHARE (Details 1)
EARNINGS PER SHARE (Details 1) - shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Total potential common shares excluded | 0 | 4,000,000 |
Stock Options and Warrants to Purchase Common Stock | ||
Total potential common shares excluded | 0 | 4,000,000 |
SUPPLEMENTARY CASH FLOW INFOR_3
SUPPLEMENTARY CASH FLOW INFORMATION (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Supplemental Cash Flow Information [Abstract] | ||
Cash paid for interest | $ 6,314 | $ 7,289 |
Purchase of fixed assets under capital lease | $ 0 | $ 101,049 |
REVENUE CONCENTRATION (Details
REVENUE CONCENTRATION (Details Narrative) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue | Canada | ||
Revenue concentration | 31.00% | 31.00% |