U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A 1
Quarterly Report Under
the Securities Exchange Act of 1934
For Quarter Ended: March 31, 2000
Commission File Number: 0-28599
QUOTEMEDIA.COM, INC.
(Exact name of small business issuer as specified in its charter)
Nevada
(State or other jurisdiction of incorporation or organization)
91-2008633
----------
(IRS Employer Identification No.)
11100 NE 8th Street, Suite 300
Bellevue, Washington
--------------------
(Address of principal executive offices)
98004
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(Zip Code)
(415) 451-1604
--------------
(Issuer's Telephone Number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days: Yes
__X__ No ____.
The number of shares of the registrant's only class of common stock issued and
outstanding, as of March 31, 2000 was 19,240,683 shares.
<PAGE>
PART I
ITEM 1. FINANCIAL STATEMENTS.
The unaudited financial statements for the three month period ended March
31, 2000, are attached hereto.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the Financial
Statements and notes thereto included herein. In connection with, and because it
desires to take advantage of, the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, the Company cautions readers regarding
certain forward looking statements in the following discussion and elsewhere in
this report and in any other statement made by, or on the behalf of the Company,
whether or not in future filings with the Securities and Exchange Commission.
Forward looking statements are statements not based on historical information
and which relate to future operations, strategies, financial results or other
developments. Forward looking statements are necessarily based upon estimates
and assumptions that are inherently subject to significant business, economic
and competitive uncertainties and contingencies, many of which are beyond the
Company's control and many of which, with respect to future business decisions,
are subject to change. These uncertainties and contingencies can affect actual
results and could cause actual results to differ materially from those expressed
in any forward looking statements made by, or on behalf of, the Company. The
Company disclaims any obligation to update forward looking statements.
Plan of Operation
Our business strategy is comprised of three distinct, yet interrelated
facets: (i) Private Label Product Strategy; (ii) Interactive Financial Tools &
On-line Trading Portal Strategy; and (iii) Vendor Relationship Strategy.
Following is a description of these facets.
PRIVATE LABEL PRODUCT STRATEGY
In order to compete effectively, we must adopt an original and animated
product strategy designed to provide service access to huge audiences with
underlying demographic parallels. Through private label product adaptation, we
intend to offer a customized suite of products, tools, and permitting
technologies to financial and investment industry institutions such as retail
brokerages, mutual fund companies, banks, credit unions and investment advisory
firms. Our Private Label Products ("PLP") strategy is designed to meet the
necessity of comprehensive systems employed by the financial community. Research
has determined that there is a
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waiting market of potential institutional clients who wish to nurture and serve
the specific requirements of their own distinct investor clients.
Through the PLP program, we intend to offer a wide selection of components
that include but are not limited to: (i) branded analytical tools, applications
and functions; (ii) access to account information; (iii) on-line trading
systems; (iv) registered rep/employee web pages; (v) specialty client to
representative e- mail response services; (vi) branded identification for the
PLP usage; and (vii) branded versions of our desktop applications.
INTERACTIVE FINANCIAL TOOLS & ON-LINE TRADING PORTAL STRATEGY
We believe that what matters in the new environment on the Internet is not
only what providers deliver in terms of content but also how it is delivered. As
such, we incorporate a fundamentally new approach to this paradigm by becoming a
true portal to a myriad of "financial applications," rather than "web pages" of
information. In effect, we abandon the "online newspaper" format and HTTP
protocol so common in today's leading financial websites. We leverage the
browser and eventually the Desktop for massive interactivity and optimal
responsiveness. Our site is a large set of financial applications allowing an
investor to trade, watch charts, quote-grids, news tickers and conduct research,
using advanced Internet "thin client" (Java) technology. Our browser technology
in effect becomes customized for the retrieval of financial information, with
application-like responsiveness. Our private label marketing strategy supports
the applications by being the first screen that a user sees when he first brings
up his or her browser and empowers the user to conduct transactions and use
applications from within the comfort of our or branded site's environment.
We intend to incorporate technologies which allow the user to trade with
his broker of choice within our portal. The content and technologies offered
provides the user with a more personalized and informative environment in which
to execute investment decisions.
Our financial content offering includes investment performance data,
financial and business news and company-specific information. Investment
performance data is raw financial data about a company's stock, its industry and
the economy as a whole. This data includes specific information in price quotes,
performance charts, company- specific fundamental data and market indices.
Financial and business news consists of real-time and delayed broadcasts of
general and business/financial news as well as company-specific press releases.
We will assemble the current news and company press releases from data feeds
provided by Comtex. Company specific content is corporate information that
complements the investment performance data for a particular company's
securities offering. Such data includes a briefing about products and
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services, corporate management, historic performance, financial statements and
disclosure documents.
Analytic provisions are expected to enable investors to enhance the
accuracy of their decisions to improve the productivity and performance of their
portfolios. On our website, analytic tools enable retail investors to
screen/source investment opportunities, track investment performance and analyze
and interpret financial information through fundamental and technical tools.
Analytic tools that will be offered include, but are not limited to, advanced
charting for technical analysis, adept systems which interpret financial
fundamentals, library research tools which retrieve and store relevant
information about an investor's portfolio in the investor's personal library,
portfolio monitoring and management tools.
VENDOR RELATIONSHIP STRATEGY
Our approach is to establish relationships with premier industry contenders
whose products have established brand equity. Most brokerage firms and financial
services organizations are realizing that financial information creating,
packaging, and hosting is not their core business and can actually save
extensive financial resources by outsourcing these services through partnering.
The "bundling" of this information and content and technology within our
data warehouse allows us to selectively contract individual data from specific
content providers under the best financial and redistribution terms and provides
the user with a true one-stop shopping environment.
We have negotiated a number of contracts with major providers of financial
content, including but not limited to StockPoint Inc., which provides quotes,
charts, company background data and general information; Thomson Information
Services Inc., which provides research reports, analysis and educational data;
CNBC/Dow Jones, which provides video feeds; IPO.com, Inc., which provides IPO
information; Market Guide Inc., which provides company performance reports,
financial analysis and a "What's Hot, What's Not" report; and Prophet Financial
Systems, Inc., which provides stock charting. The contracts with the
aforementioned companies have a term of between one to three years and are based
upon a worldwide license fee and/or cost per thousand page view format. We have
commitments with respect to these contracts totaling $673,953, $673,953 and
$561,627 in years 2000, 2001 and 2002, respectively. While no assurances can be
provided, we expect that similar additional agreements with key content
providers will be reached in the future.
We believe that we have assembled one of the industries most impressive and
comprehensive data warehouses. We have identified
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content areas for specialization and as they are not currently aggregated in a
single "portal" by other investment services, we should have a basis of
differentiation from our competitors.
Such areas of specialization are expected to support us in creating and
fostering an Internet community. An Internet community is established by
providing targeted information and comprehensive opportunities for electronic
transactions. The community becomes a reference point for users with shared
interests or tasks. Establishing such a community is very consequential because
the community becomes the continuous, "repeat traffic" to our site.
The financial services industry on the Internet is currently fragmented and
confusing. An overwhelming number of providers are offering various types of
investment-related information and services. The large financial aggregation
providers such as Yahoo Financial, Microsoft(TM) Investor, Quicken Financial
Network and Wall Street City are engaged in a fierce competition to bundle
content and analytic tools and provide access through super web portals. Their
goal is to become one-stop super-sites and entry portals to large arrays of
financial content in the traditional library or newspaper approach.
We believe that one critical component has been overlooked in the drive to
become super portals. The financial information providers still oblige the user
to conduct business within the confines and limitations of the World Wide Web.
The users often must leave the portal to conduct trades with their chosen online
broker, discount broker, or full service broker. Through strategic alliances,
online discount brokers are also bundling resources in an attempt to attract and
retain end users. Discount brokerages, however, have been apprehensive to supply
any research at $7.95 per trade and only minimal information for $29.95 per
trade.
We offer a multi faceted revenue model consisting of the following: (i)
monthly service fees; (ii) advertising revenue; (iii) delivery of real time data
(streaming quotes, etc.); and (iv) the on-line sale of books, magazine and
newsletter subscriptions, investment software, investment tools and
complementary goods and services.
We will install turnkey websites for brokerage firms and other companies
and on-line trading systems for brokerage firms and other companies for a
license fee. The fee structure will vary based on the number of clients,
existing Internet and server components and the back office system employed by
the firm. We will charge the private labeled firms a monthly fee based on the
number of active accounts and the level of service and site content selected by
the firm.
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In addition, we have retained an advertising agency (Doubleclick) on behalf
of the networked partner firms to place advertisements on the private labeled
websites. The ads will be of a non-competitive nature to the partnered firms.
The advertising rate charged will be competitive within the industry and is
estimated at approximately $20 to $35 per 1,000 page views after we achieve
approximately 20 million page views per month. There can be no assurances we
will ever meet this threshold.
In the future, we intends to offer real time streaming information,
streaming quotes, real time stock and index monitors and Internet delivered
information to complementary market analysis legacy software programs such as
TradeStation and Windows on Wall Street. We will offer users the ability to
purchase on-line research reports from top analysis firms and financial services
firms such as Thomson Financial Interactive, Inc.
Our portal is also expected to offer for sale relevant and complementary
goods and services to its subscriber base. We will offer financial books,
magazine and newsletter subscriptions, investment software, investment tools and
other relevant goods and services. We are also an Amazon.com affiliate member.
SALES ADVERTISING AND PROMOTIONS STRATEGY
Our products will be marketed through a combination of direct sales and
online subscriptions. We will rely on a multi-faceted direct sales team to sell
our product line, private label contracts and bundled content to other financial
sites. We are currently building a sales team consisting of account managers and
executive salespersons to market and distribute our products throughout North
America. Sales executives will be responsible for the sale of private label
contracts, our content, related products and tools to financial institutions, or
other financial sites.
Our marketing communications strategy will encompass extensive promotions
on and offline directed at its cyber investor, institutional, corporate
advertiser and public company audiences. This is intended to be executed
aggressively throughout North America. Our promotional campaigns may be
comprised of digital or online marketing, direct marketing, print media
advertising and public relations. To accomplish our sales goals, we expect to
engage an Internet advertising network/agency to promote the sale of advertising
space on the website.
We acknowledge that simply having a website does not guarantee
automatically reaching millions of customers. In this regard, we will expand our
online presence by trafficking our name, Internet address, identity and message
in front of as many end users as possible in a manner that is respectful of Net
culture. We may use one or more of the following listed online tools to
accomplish these goals:
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(i) Usenet Newsgroups. A newsgroup is a place on the Internet where groups
of people post and read messages on a particular topic. We will participate in
industry related newsgroups to gain visibility and develop relationships with
our targeted audiences. Newsgroups offer us a great deal of marketing leverage
because their potential audiences include participants who are interested in
related topics.
(ii) Mailing Lists. Mailing lists are not direct mail lists but, rather,
they are similar to e-mail newsletters or on-going dialogues dedicated to
special interests. Like newsgroups where messages are posted, e-mail messages
are sent to specific mailing lists. We will participate in special interest
mailing lists to gain visibility among a targeted audience and generate traffic
for our site.
(iii) Internet Advertising. Advertising online is expected to help us
create visibility in cyberspace. We will develop, purchase and place banner ads
with links to our site on industry-related and high volume search engines. These
ads are expected to promote our online presence and help direct traffic to the
site. We will employ online ad networks and brokers such as Web Connect to guide
our purchase of ad space on appropriate sites. We will also actively post
notices on What's New sites and newsgroups that cover new Net features and
websites. We also anticipate submitting our site to all What's Cool rating
services and contests in order to position it as a "best of breed" site.
(iv) Search Engines, Directories, Regional Indexes, and Business Indices.
We intend to register and list our web addresses with search engines and
directories such as Yahoo, Lycos, Web Crawler, and Infoseek. We may use a
professional service company such as www.submitit.com, www.netcreations.com, or
www.mgroup.com to register the appropriate URLs with the most significant search
engines. When registering, we will include keyword sensitive content tags and
titles to ensure that it results in the top 20 or better in most search returns.
Professional services will also be employed to list its URL with numerous e-mail
directories (similar to the White pages), business and regional indices and
promotional sites.
(v) Mutual Links. For every search engine there are at least 100 special
interest websites dedicated to a specific market. We believe that creating
mutual links can be more powerful than listing with search engines and
directories because mutual links allow us to target a very specific market. This
tactic is considerably more successful than banner ads, as the link is perceived
by the user to be "information," rather than advertising. We will attempt to
select industry-related and trade association websites (NIRI, CIRI, and American
Association for Individual Investors) and negotiate reciprocal links to and from
their web pages.
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(vi) Public Relations. We intend to engage the services of a dedicated
public relations company to devise and implement an aggressive public relations
campaign. This contractor will act as the primary spokesperson for us. The PR
agent will be expected to create and distribute press kits to appropriate
audiences to acquire substantial exposure for us on local, national and radio
talk shows and TV magazines shows both in Canada and the US. This firm will also
be responsible for organizing press tours and interviews to further enhance
editorial coverage for us in key business and technology magazines and
newspapers.
Results of Operations
We began generating revenues from operations during the three month period
ended March 31, 2000. As a result, this report does not contain any comparative
information, as there is nothing to compare our current results of operations
with.
Revenues for this period totalled $9,487, including $6,791 in advertising
revenues. Operating costs, including selling, general and administrative costs
totalled $517,983. As a result, we incurred a loss during the three month period
ended March 31, 2000, of $(508,496), or approximately $(.03) per share.
TRENDS
We intend to continue to identify, purchase and develop complimentary,
proprietary technologies and investment tools to enhance our websites and help
to build strong market differentiation. As of the date of this report, we have
not established contractual relationships with any unrelated web portals. We
intend to develop relationships over the next few months and fiscal year and
have targeted well-established web portals which can demonstrate significant
registered user bases. It is our intention to continue the development of such
relationships, with the ultimate goal of developing a large enough user base to
sustain profitability through a combination of license fees and sponsorship ads
from partnered sites. However, as of the date of this report, we have reached no
other definitive agreements and there can be no assurances that we will contract
with other web portals meeting the aforesaid characteristics in the future.
We expect to begin generating profits from operations by the end of 2000.
However, no assurances can be provided that this will occur within the time
parameter stated herein, or at all.
YEAR 2000 DISCLOSURE
Many existing computer programs use only two digits to identify a year in
the date field. These programs were designed and developed without considering
the impact of the recent change in the century. If not corrected, many computer
applications were
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expected to fail or create erroneous results by or at the Year 2000. As a
result, many companies were required to undertake major projects to address the
Year 2000 issue. We did not incur any negative impact as a result of this
problem and no problems in this regard are anticipated in the future.
INFLATION
Although management expects that the operations of the Company will be
influenced by general economic conditions once the Company commences generating
revenues, the Company does not believe that inflation had a material effect on
the results of operations during the three month period ended March 31, 2000.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS - NONE
ITEM 2. CHANGES IN SECURITIES - NONE
ITEM 3. DEFAULTS UPON SENIOR SECURITIES - NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS -
NONE
ITEM 5. OTHER INFORMATION - NONE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K -
(a) Exhibits
EX-27 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the three month
period ended March 31, 2000.
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<TABLE>
QUOTEMEDIA.COM, INC.
(A Development Stage Company)
BALANCE SHEET
<CAPTION>
(Unaudited) (Audited)
March 31, December 31,
2000 1999
---------- ----------
<S> <C> <C>
ASSETS
CURRENT
Cash and cash equivalents $1,382,892 $ 672,038
Marketable securities (Note 4) 102,500 102,500
Accounts receivable 4,114 23,931
Prepaid expenses 300,500 0
Deposits 47,388 0
---------- ----------
1,837,394 798,469
Fixed assets 15,577 14,206
Investments and advances 80,000 0
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$1,932,971 $ 812,675
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT
Accounts payable 83,032 130,240
Due to related parties 0 13,200
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83,032 143,440
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STOCKHOLDERS' EQUITY
Capital stock issued 19,241 17,228
Additional paid-in capital 3,057,723 1,370,536
Deficit (1,227,025) (718,529)
---------- ----------
1,849,939 669,235
---------- ----------
$1,932,971 $ 812,675
========== ==========
See accompanying notes.
</TABLE>
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<TABLE>
QUOTEMEDIA.COM, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
(Unaudited)
<CAPTION>
Three Months
Ended
March 31,
2000
----------
<S> <C>
REVENUE $ 6,791
----------
6,791
EXPENSES
Website content 110,594
Professional and consulting 18,456
Research and development 73,845
Business development and travel 129,356
Office 185,732
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517,983
----------
INTEREST INCOME 2,696
LOSS FOR THE PERIOD (508,496)
==========
Basic loss per share $ (0.03)
Diluted loss per share $ (0.03)
Weighted average number of shares outstanding
- basic 18,234,184
- diluted 19,334,184
See accompanying notes.
</TABLE>
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<TABLE>
QUOTEMEDIA.COM, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
(Unaudited)
<CAPTION>
Three Months
Ended
March 31,
2000
----------
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the period $ (508,496)
Adjustments to reconcile loss to net cash
used in operating activities
Depreciation 1,372
Issuance of capital stock for services 393,950
Changes in non-cash working capital items
Accounts receivable 19,817
Prepaid expenses (300,500)
Deposits (47,388)
Accounts payable (47,208)
Due to related parties (13,200)
----------
(501,653)
----------
Cash flow from investing activities
Fixed assets (2,743)
Due from related parties (80,000)
----------
(82,743)
----------
Cash flow from financing activities
Issuance of capital stock for cash 1,295,250
----------
1,295,250
----------
Net increase in cash 710,854
Cash, Beginning 672,038
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Cash, Ending $1,382,892
==========
Cash and cash equivalents include cash and money market investments
See accompanying notes.
</TABLE>
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QUOTEMEDIA.COM, INC.
NOTES TO FINANCIAL STATEMENTS
Three Month Period Ended March 31, 2000
1. Unaudited Interim Financial Statements
The accompanying unaudited financial statements have been prepared in
accordance with the instructions for Form 10-QSB and do not include all
of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion
of management, all adjustments, consisting only of normal recurring
adjustments considered necessary for a fair presentation, have been
included. Operating results for any quarter are not necessarily
indicative of the results for any other quarter or for the full year.
2. Basis of Presentation
Business combination
On July 14, 1999, pursuant to the terms of an Agreement and Plan of
Reorganization, the Company acquired all of the outstanding common
stock of QuoteMedia.com, Inc., a Colorado corporation ("Old QMI") in
exchange for 11,000,000 unregistered shares of the Company's common
stock. As a result of the transaction, the former shareholders of Old
QMI received shares representing an aggregate of 72% of the Company's
outstanding common stock, resulting in a change in control of the
Company. As a result of the merger, the Company was the surviving
entity and Old QMI ceased to exist. In conjunction with the applicable
Articles of Merger, the Company changed it's name to "QuoteMedia.com,
Inc." References to the "Company" or "QMI" refer to QuoteMedia.com,
Inc. together, with the predecessor company, Old QMI.
The acquisition of Old QMI has been accounted for as a reverse
acquisition. Under the accounting rules for a reverse acquisition, Old
QMI is considered the acquiring entity. The Company recorded the assets
and liabilities (excluding intangibles) at their historical cost basis
which was deemed to be approximate fair market value. The reverse
acquisition is treated as a non-cash transaction except to the extent
of cash acquired, since all consideration given was in the form of
stock.
Earnings per share
Earnings per share have been computed based on the weighted average
number of common shares outstanding. For the three month period prior
to the reverse acquisition discussed in the business combination
section of Note 2 above, the number of common shares outstanding used
in computing earnings per share is the number of common shares
outstanding as a result of such reverse acquisition, plus such
additional shares issued by the Company subsequent to the business
combination.
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QUOTEMEDIA.COM, INC.
NOTES TO FINANCIAL STATEMENTS
Three Month Period Ended March 31, 2000
3. History and Business Activity
The Company was incorporated in the state of Nevada on June 29, 1992,
under the name "Genetic Futures, Inc." Since its inception, the
Company has undertaken to implement numerous business plans and, in
relation to such various businesses, has been known under many
different names, including (in order) Physician's Cybernetic Systems,
Inc., Videocom International, Inc., Canadian Tasty Fries, Inc.,
International Tasty Fries, Inc., Filtered Souls Entertainment, Inc.,
Skyline Entertainment, Inc. and, finally, its current name,
QuoteMedia.com, Inc. The name was changed to QuoteMedia.com, Inc.
concurrent with the business combination described in Note 2. Prior to
such business combination, Old QMI had not engaged in any operations
or generated any revenue.
4. Comparative Figures
There are no comparative figures as Old QMI, the surviving entity for
accounting purposes, commenced operations on June 28, 1999.
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities and Exchange
Act of 1934, the Registrant has duly caused this amended report to be signed on
its behalf by the undersigned, thereunto duly authorized.
QUOTEMEDIA.COM, INC.
(Registrant)
Dated: June 8, 2000
By: s/R. Keith Guelpa
--------------------------
R. Keith Guelpa, President
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QUOTEMEDIA.COM, INC.
EXHIBIT INDEX TO QUARTERLY REPORT ON FORM 10-QSB
FOR THE QUARTER ENDED MARCH 31, 2000
EXHIBITS Page No.
EX-27 Financial Data Schedule.............................................17
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