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Risk Factors - QMCI
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PART I
ITEM 1. BUSINESS.
General
QuoteMedia, Inc. (OTCQB: QMCI) is a leading provider of financial data, market research information, analytics, news feeds, and financial software solutions to online brokerages, banks, clearing firms, financial service companies, media portals, and public corporations. (OTCQB: QMCI) is a leading provider of financial data, market research information , analytics, news feeds, and financial software solutions to online brokerages, banks, clearing firms, financial service companies, media portals, and public corporations. We are a sole source for a wide array of market information and services, including streaming stock market data feeds, research and analysis information, content applications, portfolio management systems, software products, corporate investor relations provisioning, news services, mobile apps, and custom development. We are a single source for a wide array of market information and services, including streaming stock market data feeds, research and analysis information, content applications, portfolio management systems, software products, corporate investor relations provisioning, news services, mobile apps, and custom development. Our portfolio management products are provided on a SaaS (software as a service) model, as are our other interactive content and data APIs.
We have created a scalable system that aggregates, manages, and streams information from the stock exchanges and from other information and content feeds across both the Web and dedicated telecommunication lines. Because QuoteMedia is a comprehensive single-source market data provider, our clients are not required to deal with multiple data vendors, many of which continue to employ outdated infrastructures and delivery technologies. This allows our clients to license comprehensive financial information applications and raw data more efficiently and cost-effectively.
QuoteMedia offers clients the advantages of a sole source for a broad range of data, information, and services, including:
Our data delivery solutions are fast, lightweight, reliable, and easy to implement across all platforms. Our products are technologically advanced, providing a framework for quick implementation, seamless client integration and complete customization.
We are a United States reporting public company that was incorporated in the State of Nevada in 1999. Our shares are quoted on the OTCQB tier of the OTC Markets under the trading symbol QMCI. Our corporate head office is located at 17100 East Shea Boulevard, Suite 230, Fountain Hills, Arizona 85268, and our telephone number is (602) 830-1443. All references to our business operations in this report include the operations of QuoteMedia, Inc. and our operating divisions and subsidiaries.
Our Web site is located at www.quotemedia.com. Through our Web site we make available free of charge the following company information: our annual reports on Form 10-K; our quarterly reports on Form 10-Q; our current reports on Form 8-K; our proxy statements; and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934. These reports are available as soon as reasonably practical after we electronically file these reports with the SEC. We also post on our Web site the charter of our Audit Committee; our Corporate Governance Guidelines; our Code of Business Conduct/Ethics and Code of Ethics for the CEO and Senior Financial Officers, and any amendments or waivers thereto; and any other corporate governance materials contemplated by SEC or applicable regulations. These documents are also available in print to any stockholder requesting a copy from our corporate secretary at our principal executive offices.
Products and Services
QuoteMedia has developed a full range of financial data and market information solutions which are licensed to our clients on a monthly, quarterly, or annual basis. Our products and services are divided into three main categories: Data Feed Services; Interactive Web Content and Data APIs; and Portfolio Management and Real-Time Quote Systems.
Data Feed Services
QuoteMedia offers comprehensive, low latency, tick-by-tick enterprise level streaming market data feeds delivered over the Internet or via dedicated telecommunication lines, as well as supplemental fundamental, historical, and analytical data, keyed to the same symbology which provides a complete market data solution to our customers. Currently, QuoteMedia’s Data Feed services include complete coverage of North American exchanges and over 70 exchanges worldwide. Data Feeds coverage includes equities, options, futures, commodities, currencies, mutual funds, ETFs, and indices. The data is normalized for ease of use and is provided in a wide range of formats and delivery methods. Data is available in real-time, delayed, and end-of-day format, as well as Level 1 and Level 2 (Market Depth).
QuoteMedia has also created Quotestream ConnectTM, a hybrid of our existing Data Feed Services, and our Portfolio Management Systems. It is a new method of delivering real-time data feeds to individual users to power 3rd party applications. In most cases, this allows QuoteMedia to retain Vendor of Record status with the exchanges – resulting in significant savings for our clients in resources and exchange fees.
Interactive Content and Data APIs
QuoteMedia’s proprietary financial software applications and widgets (QModTM) comprise a unique suite of custom Web technologies that combine the power and depth of established financial databases with the flexibility and efficiency of the Web to deliver customized high-quality content to clients around the world. QuoteMedia financial data delivery application products and components comprise an extensive product line that spans the spectrum of Quote Modules, Charts, Market Movers, News, Watch Lists, Tickers, Market Summaries, Option Chains, Filings, Investor Relations Solutions, Fundamentals, Screeners and much more. Our lightweight and fast-loading applications provide an extensive array of information in a variety of delivery vehicles. All our content solutions are completely customizable, embedded directly into client Web pages for seamless integration with existing content, and are licensed to our clients on a recurring subscription basis. All of our content solutions are completely customizable, embed directly into client Web pages for seamless integration with existing content, and are licensed to our Clients on a recurring subscription basis. Our Interactive Content and Data APIs include the following:
Quote Modules – allow users to enter information and look up various data points on equities, funds, rates, currencies, and the markets. Our Quote Modules provide complete market data and supplemental data coverage. This comprehensive coverage consists of fundamental data (EPS, P/E ratio, dividends, yield, shares outstanding, market cap, etc.), analytical statistics (52 week high/low, moving averages, average volumes, moving performance numbers), historical EOD data (fully adjusted and keyed historical data), market updates, North American indices, market movers, actives, gainers, losers, company information (business description, address, phone, fax, auditors, officers, etc.), classification codes (sector, industry, NAICS, SIC, CIK, etc.), share statistics (shares outstanding, float, holdings, profitability, management effectiveness, short interest, short interest ratio), as well as broader market information such as bank rates and currency values. The data returned is compact, customizable, and incorporates comprehensive information, including charts, news, historical stock prices, market depth, filings, insiders, financials, and other information.
Real-Time Snap Quotes – Cost-effective, customizable, instant real-time quotes and market data, real-time charts, real-time level II, and real-time options. The real-time snap quote service features client-controlled entitlements, comprehensive online tracking, detailed reporting capabilities, and North American exchange fee capping. These features are unique to our company and result in greater efficiency and cost savings for our clients.
Market Indices – At-a-glance display of market conditions, fed directly from the major North American and international exchanges and index providers.
Charts – Markets and equity charting are available in a variety of formats. Static thumbnails or dynamic interactive charting is available to allow full market charting or individual stock performance displays, including comparisons to other equities or indices, as well as the ability to plot a wide range of technical studies.
Stock Screeners – Allow users to filter stocks based on a wide variety of selection criteria, including sector/industry, share price, market cap, exchange, EPS, P/E ratio, etc.
Fund Screeners – Allow users to filter US or Canadian mutual funds based on an array of distinct characteristics, including fund types, performance metrics, fee structures, etc.
News – Topic-based, sector-based, and equity-based lookup of news stories and commentary relating to the markets, individual companies, or specific areas of interest.
Watch Lists – Display current values and trends for a group of user-defined equities and indices.
Market Statistics – Top gainers and losers on the day for a variety of exchanges and detailed statistical analysis of most actively traded stocks. A variety of economic indicators are also provided.
Financial Calendars – Including Corporate Events Calendars, Economic Calendars, Stock Market Holiday, and Trading Calendars etc.
Wallboards – Deliver updated market data and news headlines in Real-Time for display to power the wallboard for trade floors, classrooms or other wall displays. Ideal for displaying Indices, Commodities Prices (such as Gold, Silver, Oil and Gas), Currencies, Rates, News Headlines and Commentary, and can even incorporate a client’s own content or advertising.
Finance Calculators – Examples include Bond Yield, Cost Basis, Future Asset Value, Loan Payment, Investment Calculator, Monthly Mortgage Payment, Present Asset Value, Rate of Return, Total Return, Currency Converter, etc.
Investor Relations – Information on current value, historical data, charting and news, and other data related to individual public companies for investor relations information provisioning. These products provide a turnkey and self-updating investor relations solution for corporate Web sites and their investors.
QMod – QuoteMedia’s proprietary web delivery system, called QMod, was created for secure market data provisioning as well as ease of integration and unlimited customization and responsiveness. QMod is an extensible market data component JavaScript library used to deliver market data content to Web platforms powered by JSON back-ends. With extensibility in mind, QMod can be utilized to build custom applications on demand for clients as well as continue to improve existing and new components with ease. The resulting widgets are mobile-ready because they automatically re-size and optimize based on the type of device they are viewed on – whether a laptop, tablet, or any model of mobile phone. And, unlike competitive products, QMod is SEO friendly, providing self-generating, automatically updating content that is optimized for search engine indexing – whereas the content and associated links delivered through most competitors’ widgets are essentially invisible to search engine web crawlers.
Portfolio Management Systems
QuoteMedia offers three leading edge portfolio managements systems: Quotestream™ Desktop and Mobile; Quotestream Professional; and a Web Portfolio Management product. Each of these systems can be implemented independently, or they can be employed in conjunction with each other to provide a complete portfolio management solution for both nonprofessionals and professionals.
Quotestream Desktop (Download), Web (Browser) and Mobile Apps
QuoteMedia’s proprietary software, Quotestream, is our unique, Web-delivered, embedded application providing real-time, tick-by-tick, streaming market quotes and research information. Quotestream is the next generation portfolio management system for nonprofessional users, with enhanced features and functionality compared to our original Quotestream product – most notably tick-by-tick true streaming data, significantly enhanced charting features, and a broad range of additional research and analytical content and custom functionality. Quotestream is geared towards providing a professional-level experience to non-professional users. Coverage includes North American and LSE real-time data, NASDAQ, TSX, TSXV and LSE Level 2 data (market depth), market indices, dynamic and interactive charts, options, news, and research information, and end-of-day quote data for over 35 international exchanges, in an easy-to-use and highly configurable interface.
Quotestream Web is the latest HTML5, browser-based version of Quotestream. No downloads or installations are required with this quick, lightweight, and robust application. It is a sophisticated streaming portfolio management solution that only requires a browser, allowing users to track investments and access research data with ease.
The Quotestream Suite of products has been designed specifically for syndication and private branding by brokerage, banking, and other corporate clients. It can be fully integrated into existing user registration databases, portfolio systems and on-line trading systems, thus enabling any brokerage, clearing firm, bank, or other corporation to seamlessly complement their existing product offerings and differentiate themselves from their competition.
QuoteMedia corporate clients purchase volume licenses for their customers, gaining significant increases in customer attraction, retention and activity, and increased revenues as a result.
Quotestream Web and Desktop offer the user custom portfolios and watchlists, market summaries, Level 1 and Level 2 data, a trade trend meter, volume leaders, top gainers and losers, company news, insider activity, SEC filings, research, analysis and opinions, earnings forecasts, news, index/stock ticker, intraday and historical charting, interactive charting, desktop alerts, and email alerts. Users may fully customize their workspaces to suit their needs. The design also offers quite simple point-and-click and drag-and-drop navigation with little or no typing involved. The design also offers a very simple point-and-click and drag-and-drop navigation with little or no typing involved. Quotestream displays in full screen mode, providing a comprehensive professional trade terminal-style interface.
QuoteMedia’s Quotestream Mobile is a revolutionary mobile companion to the Desktop and Web product that allows users to access financial data, news, and charting in real-time or delayed modes, from handheld devices. Quotestream Mobile allows users to manage their portfolios and watchlists, and access market research on phones and tablets. Quotestream Mobile supports iOS™ and Android™.
Quotestream Mobile can be integrated with any brokerage/clearing firm’s existing on-line trading platform without the installation of expensive business enterprise servers. Additionally, the application is designed to allow private branding by brokerage, banking, and other corporate clients.
Quotestream Mobile, Quotestream Desktop, and Quotestream Web are true companion products as any changes made to portfolios in either application is automatically reflected in the other.
Quotestream Professional
Quotestream Professional is designed specifically for use by financial services professionals and their key support personnel, offering exceptional coverage and functionality at extremely aggressive pricing. Quotestream Professional features broad market coverage, reliability, complete flexibility, ultra-low-latency tick-by-tick data, as well as completely customizable screens, advanced charting, comprehensive technical analysis, news, and research data. Quotestream Professional features broad market coverage, reliability, complete flexibility, ultra low-latency tick-by-tick data, as well as completely customizable screens, advanced charting, comprehensive technical analysis, news and research data.
Quotestream Professional was created with the latest technology, making QuoteMedia’s professional application one of the most sophisticated, user-friendly, and dependable market data and technical analysis solutions available to market professionals today. It provides true thin client access as there is no software to download, no upgrades to install, and no technical staff required. Quotestream Professional is accessed via the Internet, avoiding expensive server and circuit infrastructure requirements.
Quotestream Professional also features mobile access to the same portfolios and market data entitlements through mobile devices. The desktop and mobile applications work in a companion relationship, where any changes made on one device immediately transfer to the other.
Web Portfolio Manager
The Web Portfolio Manager is a user-friendly yet powerful solution allowing users to track their holdings, conduct in-depth research and analyze performance for all stocks, mutual funds and indices listed on any of the major global exchanges.
The Web Portfolio Manager provides immediate Web access to detailed Quote Data, Market and Company News, Charting, Depth / Level II, Filings, Historical Data, Snap Quotes and more. The Web Portfolio Manager is an efficient and economical solution for both the new and experienced investor.
The Web Portfolio Manager offers corporate clients such as banks, wealth management companies, brokerages, clearing firms and Web portals an ideal opportunity to cost-effectively provide premium online portfolio management services for their investor customers.
The Web Portfolio Manager can be integrated with the Quotestream products so that changes in any one platform, including real-time data entitlements, are reflected across the other systems.
Quotestream Connect
Quotestream Connect is a hybrid of our existing Data Feed Services, and our Portfolio Management Systems. It is a new method of delivering real-time data feeds to individual users to power third party applications. In most cases, this allows QuoteMedia to retain Vendor of Record status with the exchanges – resulting in significant savings for our clients in resources and exchange fees.
Products Competitive Advantage
Our products attract a broad market base, targeting corporate clients worldwide and providing comprehensive financial data services in a wide selection of custom packages. Markets for our services include:
Our financial data services provide a sensible solution to the high up-front cost of in-house developed software. We leverage our technical talent and innovative infrastructure across multiple client platforms, thus creating an economical, efficient, and scalable system that can manage and deliver information application capabilities to an unlimited number of entities from data centers and content feeds across the Internet and over dedicated lines. Our data feeds have among the lowest latency of any available in the market and are developed and delivered using technology that is more current than that used by many major competitors in this market. Our marketing strategy is based on the following key competitive advantages:
Superior Products – Our goal has always been to create the best products on the market. We develop all our products in-house and take pride in creating quality applications. We develop all of our products in-house and take pride in creating quality applications. Our products stand out for their superior design, user-friendliness, ease of implementation, customizability, reliability, data speed, accuracy, and comprehensiveness.
Custom Development – QuoteMedia’s ability to provide complete custom design and development services differentiates us from our competitors. We can create custom market data applications and software engineered precisely to our clients’ specifications, and the speed with which we are able to take a product from concept to deliverable truly sets us apart.
Data Speed and Quality – Our connections to the world’s exchanges for equities and derivatives have most sources of latency removed allowing us to deliver extremely fast, accurate, and reliable data.
Single Source Provider – Clients are eager to acquire premium market data feeds, financial applications, streaming solutions, and news and research information from a sole source provider. Rather than having to license applications, information and market data from multiple sources, our clients enjoy the benefits of dealing with a single comprehensive market data supplier.
Cutting Edge Data Delivery Technology - We use state-of-the-art hardware and software systems for maximum speed and efficiency. This provides us with a distinct advantage over our competitors, most of whom use outdated data delivery technologies based on legacy style data networks.
Effective Marketing – We have implemented a marketing strategy that focuses on multiple markets for our products and services, from individual nonprofessional end users to corporate and institutional clients and their customers.
Low Infrastructure Costs - Because of the unique technological advancements in data delivery developed by our company, our distribution model, and the strategic partnerships that are in place, we have maintained very low corporate overhead. All our development is completed in-house, resulting in significant cost efficiencies. All of our development is completed in-house, resulting in significant cost efficiencies. This allows us to focus our resources on data management, data acquisition, customer satisfaction, and business development activities. Our low-cost base of development and operation also allows us to maintain very competitive pricing.
Competition
Many companies provide financial market data and related information. Companies such as Bloomberg and LSEG Data & Analytics and Factset are some of the data providers in this highly competitive marketplace.
While there are many financial data providers, what differentiates us from others is that we offer clients a comprehensive solution for stock market-related information provisioning with more advanced technologies than employed by most of our competitors. Our diversity of technical expertise, agile responsiveness to custom corporate requirements and development needs, and proven commitment to superior delivery technologies have established QuoteMedia as a frontrunner in the financial market data industry.
QuoteMedia’s array of products benefit clients with an exceptional number of strong technical differentiators in embedded, fully private-labeled, and seamlessly integrated environments which combine to offer strong market differentiation.
Trademarks, Domain Names, and Intellectual Property
We own the trademarks for “QuoteMedia”, “Quotestream” and “QMod”, the domain names www.quotemedia.com; www.quotestream.com; and www.quotestream.ca. We will continue to own and protect these key assets into the future.
We protect our other intellectual property by a combination of copyrights, trademarks and confidentiality agreements with our employees, customers, and other agents.
Regulatory Issues
We are not subject to any special governmental regulation concerning our supplying of products and services to the marketplace, and we believe we are complying in all material respects with all existing regulations governing other aspects of our businesses.
Employees
We currently have a total of 115 full-time employees, with 8 located in the United States and 107 located in Canada. Our employees are not members of any union, nor have we entered into any collective bargaining agreements. We believe that we have a good relationship with our employees. With the successful implementation of our business plan, we may continue to hire additional employees during fiscal 2026 to handle anticipated growth in the areas of administration, programming, sales, marketing, and customer care. With the successful implementation of our business plan, we may hire additional employees during fiscal 2022 to handle anticipated growth in the areas of administration, programming, sales, marketing, and customer care.
ITEM 1A. RISK FACTORS.
You should carefully consider the following factors, in addition to those discussed elsewhere in this report, in evaluating our company and our business.
There is substantial doubt about our ability to continue as a going concern. These consolidated financial statements have been prepared on a going concern basis. The Company has incurred losses since inception resulting in an accumulated deficit of $23,505,303 and further losses are anticipated in the development of its business. The Company does not have sufficient cash to fund normal operations and meet debt obligations for the next 12 months without deferring payment on certain current liabilities and/or raising additional funds. In order to continue to meet its fiscal obligations in the current fiscal year and beyond, the Company may need to seek additional financing. This raises substantial doubt about the Company’s ability to continue as a going concern. Its ability to continue as a going concern is dependent upon the ability of the Company to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due.
Catastrophic events outside of our control may impact on our business. The U.S. and global markets have, from time to time, experienced periods of disruptions due to a natural disaster, such as a tsunami, power shortage, or flood; public health crises, such as a pandemic or epidemic; political crises, such as terrorism, war, or other conflict; or other events outside of our control that may occur and adversely impact our business and operating results. The conflicts in the Middle East and Ukraine have caused instability in global economies. The conflict in Ukraine has also caused instability in global economies. We will closely monitor the impact of these conflicts on all aspects of our business, including how it will impact team members, customers, suppliers, and global markets. We will closely monitor the impact of the COVID-19 pandemic and the conflict in the Ukraine on all aspects of our business, including how it will impact team members, customers, suppliers, and global markets. The extent to which these conflicts may impact our business will depend on future developments, which are highly uncertain and cannot be predicted. The extent to which COVID-19 and the Ukraine conflict may impact our business will depend on future developments, which are highly uncertain and cannot be predicted.
New tariffs or taxes could impact our business. We rely on foreign development, customer service, and lead generation services. The new tariffs proposed by the U.S. government do not apply to digital services, however a discriminatory (non-tariff) tax could be applied to income on digital services performed by foreign companies which would increase our costs. Tariffs could also lead to a general slowdown in economic activity, which could negatively impact our business. The extent to which tariffs may impact our business will depend on future developments, which are highly uncertain and cannot be predicted.
Declining activity levels in the securities markets or the failure of market participants could lower demand for our services. Our business is dependent upon the health of the financial markets as well as the financial health of the participants in those markets. The recent uncertainty in the global financial markets could result in lower activity levels, including lower trading volumes and a substantial reduction in the number of issuances of new securities. It could also lead to the collapse of some market participants. Some of the demand for financial market data is dependent upon activity levels in the securities markets, while other demand is static and is not dependent on activity levels. If a downturn in the global financial markets results in a prolonged, significant decline in activity levels or continues to have an adverse impact on the financial condition of our customers, our revenue could be materially adversely affected. In the event that a downturn in the global financial markets results in a prolonged, significant decline in activity levels or continues to have an adverse impact on the financial condition of our customers, our revenue could be materially adversely affected.
The impact of cost-cutting pressures across the industries we serve could lower demand for our services. During 2025 we saw customers continue their focus on containing or reducing costs because of the more challenging market conditions, and this trend may continue into 2026. Customers within the financial services industry that strive to reduce their operating costs may continue to reduce their spending on financial market data and related services. If customers elect to reduce their spending with us, our results of operations could be materially adversely affected. Alternatively, customers may use other strategies to reduce their overall spending on financial market data services by consolidating their spending with fewer vendors, by selecting vendors with lower-cost offerings or by self-sourcing their need for financial market data. If customers elect to consolidate their spending on financial market data services with other vendors instead of us, if we cannot price our services as aggressively as the competition, or if customers elect to self-source their needs, our results of operations could be materially adversely affected.
Consolidation of financial services within and across industries, or the failure of financial services firms could lower demand for our services. Over the past few years there has been consolidation among some participants in the financial markets and the collapse of others. We continue to deliver services to several customers currently involved in the process of a merger or acquisition. We continue to deliver services to a number of customers currently involved in the process of a merger or acquisition. As consolidation occurs and synergies are achieved, there may be fewer potential customers for our services. There are two types of consolidations: consolidations within an industry, such as banking; and across industries, such as consolidations of insurance, banking, and brokerage companies. When two companies that separately subscribe to or use our services combine, they may terminate or reduce duplicative subscriptions for our services, or if they are billed on a usage basis, usage may decline due to synergies created by the business combination. A large number of cancellations, or lower utilization on an absolute dollar basis resulting from consolidations, could have a material adverse effect on our revenue. In addition, if financial services firms accounting for a material percentage of our revenues or profit cease operations because of bankruptcy and the assets of such customers are not acquired by successor entities, such events could have a material adverse effect on our results of operations. In addition, if financial services firms accounting for a material percentage of our revenues or profit cease operations as a result of bankruptcy and the assets of such customers are not acquired by successor entities, such events could have a material adverse effect on our results of operations.
Adverse capital and credit market conditions could limit our access to capital. The capital and credit markets have been experiencing extreme volatility and disruption for the past few years. Disruptions, uncertainty or volatility in the capital and credit markets may limit our access to capital required to operate and grow our business. As such, we may be unable to raise capital or bear an unattractive cost of capital which could reduce our financial flexibility.
If we are unable to maintain relationships with key suppliers and providers of market data, we will not be able to provide our services to our customers. We depend on key suppliers for the data we provide to our customers. Some of this data is exclusive to particular suppliers, such as national stock exchanges, and cannot be obtained from other suppliers. In other cases, although the data may be available from secondary sources, the secondary source may not be as adequate or reliable as the primary or preferred source, or we may not be able to obtain replacement data from an alternative supplier without undue cost and expense, if at all. We generally obtain data via license agreements. The disruption of any license agreement with a major data supplier could disrupt our operations and lead to an adverse impact on our results of operations.
A prolonged outage at one of our data centers that we share could result in reduced revenue and the loss of customers. Our customers rely on us for time-sensitive, up-to-date data that is reliably delivered. Our business is dependent on our ability to rapidly and efficiently process substantial quantities of data and transactions on our computer-based networks and systems. Our computer operations and those of our suppliers and customers are vulnerable to interruption by fire, natural disaster, power loss, telecommunications failure, terrorist attacks, acts of war, internet failures, computer viruses and other events beyond our reasonable control. We maintain multiple redundant data centers to minimize the risk that any such event will disrupt operations. In addition, we maintain insurance for such events. However, the business interruption insurance we carry may not be sufficient to compensate us fully for losses or damages that may occur because of such events. Any such losses or damages incurred by us could have a material adverse effect on our business. Although we seek to minimize these risks through security measures, controls and redundant data centers, there can be no assurance that such efforts will be successful or effective.
We compete against companies with greater financial resources. We operate in highly competitive markets in which we compete with other distributors of financial and business information and related services. We expect competition to continue to be rigorous. Some of our competitors and potential competitors have significantly greater financial, technical, and marketing resources than we have. These competitors may be able to expand product offerings and data content more effectively, and to respond more rapidly than us to new or emerging technologies, changes in the industry or changes in customer needs. They may also be able to devote greater resources to the development, promotion, and sale of their products. They may also be in a position to devote greater resources to the development, promotion and sale of their products. Increased competition in the future could limit our ability to maintain or increase our market share or maintain our margins and could have a material adverse effect on our business, financial condition, or operating results.
New product offerings by competitors or new technologies could cause our services to become obsolete. We operate in an industry that is characterized by rapid and significant technological change, frequent new services, data content and coverage enhancements, and evolving industry standards. Without the timely introduction of new services and data content and coverage enhancements, our services could become technologically obsolete or inadequate over time, in which case our revenue and operating results would suffer. We expect our competitors to continue to improve the performance of their current services, to enhance data content and coverage and to introduce new services and technologies such as artificial intelligence (AI). These competitors may adapt more quickly to new technologies, changes in the industry and changes in customers’ requirements than we can. If we fail to adequately anticipate customers’ needs and technological trends accurately, we will be unable to introduce new services into the market and our ability to compete will be materially adversely impacted. Further, if we are unsuccessful at developing and introducing new services that are appealing to customers, with acceptable prices and terms, or if any such new services are not made available in a timely manner, our ability to compete would be materially adversely impacted. In both cases our ability to generate revenue could suffer and our business and operating results could be materially adversely affected. We will need to successfully enhance or add to current services to effectively expand into new geographic areas. We will need to successfully enhance or add to current services in order to effectively expand into new geographic areas. In addition, new services, data content and coverage that we may develop and introduce may not achieve market acceptance and would result in lower revenue.
We may need additional capital with which to implement our business plan, and there is no agreement with any third party to provide such capital. Implementing our business plan may require additional equity or debt financing. If we require additional funding or determine it appropriate to raise additional funding in the future, there is no assurance that adequate funding, whether through additional equity financing, debt financing, or other sources, will be available when needed or on terms acceptable to us. Further, any such funding may result in significant dilution to existing stockholders. The inability to obtain sufficient funds from operations and external sources when needed may have a material adverse effect on our business, results of operations, and financial condition.
We depend on key personnel and expect to hire additional personnel. Our performance substantially depends on the services of David M. Shworan, President and Chief Executive Officer of QuoteMedia, Ltd., a wholly owned subsidiary of our company. The loss of Mr. Shworan, or our other key employees, could have a material adverse effect on our business. Our future success will also depend in large part upon our ability to attract and retain highly skilled management, technical engineers, sales and marketing personnel, and finance and technical personnel. Competition for such personnel is intense and there can be no assurance that we will be able to attract and retain such personnel. The loss of the services of any key personnel, the inability to attract or retain qualified personnel in the future, or any delays in hiring required personnel, particularly technical engineers, and sales personnel, could have a material adverse effect on our business, results of operations, and financial condition.
We may need to spend significant amounts of money to protect against security breaches. A party who can circumvent our security measures could misappropriate proprietary information or cause interruptions in our Internet operations. A party who is able to circumvent our security measures could misappropriate proprietary information or cause interruptions in our Internet operations. We may be required to expend significant capital and resources to protect against the threat of such security breaches or to alleviate problems caused by such breaches. Consumer concern over Internet security has been, and could continue to be, a barrier to commercial activities requiring consumers to send their credit card information over the Internet. Computer viruses, break-ins, or other security problems could lead to misappropriation of proprietary information and interruptions, delays, or cessation in service to our customers. Moreover, until more comprehensive security technologies are developed, the security and privacy concerns of existing and potential customers may inhibit the growth of the Internet as a merchandising medium. Were these risks to occur, our business, results of operations, and financial condition could be materially adversely affected.
The success of our anticipated future growth depends upon our ability to successfully manage the growth of our proposed operations. We expect to experience growth in our number of employees and scope of operations. We expect to experience significant growth in our number of employees and scope of operations. Our future success will depend upon our ability to successfully manage the expansion of our operations. Our ability to manage and support our growth effectively will depend on our ability to implement adequate improvements to financial and management controls, reporting, order entry systems, and other procedures and hire sufficient numbers of financial, accounting, administrative, and management personnel. Our expansion and the resulting growth in the number of our employees will result in increased responsibility for both existing and new management personnel. There can be no assurance that we will be able to identify, attract, and retain experienced accounting and financial personnel. Our future operating results will depend on the ability of our management and other key employees to implement and improve our systems for operations, financial control, and information management and to recruit, train, and manage our employee base. There can be no assurance that we will be able to achieve or manage any such growth successfully or to implement and maintain adequate financial and management controls and procedures. Any inability to do so may have a material adverse effect on our business, results of operations, and financial condition. Our future success depends upon our ability to address potential market opportunities while managing our expenses to match our ability to finance operations. This need to manage our expenses may place a significant strain on our management and operational resources. If we are unable to manage our expenses effectively, our business, results of operations, and financial condition may be adversely affected.
Penny stock rules may make buying or selling our common stock difficult. Our common stock in the past has been, and from time to time in the future may be, subject to the “penny stock” rules as promulgated under the Securities Exchange Act of 1934. In the event that no exclusion from the definition of a “penny stock” under the Exchange Act is available, then any broker engaging in a transaction in our common stock will be required to provide each customer with:
The bid and offer quotation and compensation information must be provided prior to effecting the transaction and must be contained in the customer’s confirmation. Certain brokers are less willing to engage in transactions involving “penny stocks” because of the additional disclosure requirements described above, which may make it more difficult for holders of our common stock to dispose of their shares. Certain brokers are less willing to engage in transactions involving “penny stocks” as a result of the additional disclosure requirements described above, which may make it more difficult for holders of our common stock to dispose of their shares.
Investors should not expect to receive a dividend in the future. We have never paid any cash dividends on our common stock and do not currently anticipate that we will pay dividends in the foreseeable future. Instead, we intend to apply the earnings to the expansion and development of our business. Instead, we intend to apply earnings to the expansion and development of our business.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
None.
ITEM 1C. CYBERSECURITY
The Company’s information technology, communication networks, system applications, accounting and financial reporting platforms and related systems are
The Company’s cybersecurity strategy focuses on detection, protection, incident response, security risk management and mitigation, and resiliency of the cybersecurity infrastructure. The Company relies primarily on its qualified internal team, with
The Company’s employees identify and assess risks from cybersecurity threats by monitoring and evaluating the cybersecurity threat environment and the Company’s risk profile. The Company is not currently aware of any risks from cybersecurity threats, nor has the Company had a previous cybersecurity incident that in either case have
The Company’s Audit Committee holds oversight responsibility over the Company’s cybersecurity strategy and risk management. The Audit Committee engages in regular discussions with management and, if and when deemed appropriate by management or the Audit Committee, third party service providers, regarding the Company’s significant financial risk exposures and the measures implemented to monitor and control these risks, including those that may result from material cybersecurity threats. We have completed various security audits and certifications, including SOC 2 Type II.
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