10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

 (Mark one)

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

For the quarterly period ended June 30, 2012

OR

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

For the transition period _________ to _________                    

Commission File Number:   0-28599

QUOTEMEDIA, INC.

 (Exact name of registrant as specified in its charter)

Nevada	91-2008633
(State or Other Jurisdiction of Incorporation or Organization)	(IRS Employer Identification Number)

17100 East Shea Boulevard, Suite 230, Fountain Hills, AZ 85268

(Address of Principal Executive Offices)

(480) 905-7311

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes R   No £

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes R    No £

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  £	Accelerated filer  £
Non-accelerated filer £ (Do not check if a smaller reporting company)	Smaller reporting company R

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

The Registrant has 89,371,320 shares of common stock outstanding as at August 3, 2012.

QUOTEMEDIA, INC.

FORM 10-Q for the Quarter Ended June 30, 2012

INDEX

		Page
Part I.	Financial Information
Item 1.	Financial Statements (unaudited):	3
	Consolidated Balance Sheets at June 30, 2012 and December 31, 2011	3
	Consolidated Statements of Operations for the three and six months ended June 30, 2012 and 2011	4
	Consolidated Statements of Cash Flows for the six months ended June 30, 2012 and 2011	5
	Notes to Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 4.	Controls and Procedures	19
Part II.	Other Information
Item 6.	Exhibits	20
Signatures		20

PART I - FINANCIAL INFORMATION

Item 1.   Financial Statements

QUOTEMEDIA, INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	June 30, 2012			December 31, 2011
ASSETS
Current assets:
Cash	$	462,962		$	427,010
Accounts receivable, net		632,829			654,449
Prepaid expenses		73,770			247,165
Other current assets		517,447			200,925
Total current assets		1,687,008			1,529,549
Deposits		24,562			24,357
Property and equipment, net		1,259,388			1,238,811
Goodwill		110,000			110,000
Intangible assets		94,099			96,990
Total assets	$	3,175,057		$	2,999,707
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable and accrued liabilities	$	1,044,855		$	1,059,600
Deferred revenue		637,731			602,517
Total current liabilities		1,682,586			1,662,117
Long-term portion of amounts due to related parties		6,332,376			5,976,859
Stockholders’ deficit:
Preferred stock, nondesignated, 10,000,000 shares		-			-
authorized, none issued
Common stock, $0.001 par value, 150,000,000 shares
authorized, 89,371,320 shares issued and outstanding		89,372			89,372
Additional paid-in capital		8,916,930			8,912,132
Accumulated deficit		(13,846,207	)		(13,640,773	)
Total stockholders’ deficit		(4,839,905	)		(4,639,269	)
Total liabilities and stockholders’ deficit	$	3,175,057		$	2,999,707

See accompanying notes

3

QUOTEMEDIA, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Three months ended June 30,						Six months ended June 30,
	2012			2011			2012			2011
Revenue	$	2,476,556		$	2,203,107		$	5,041,000		$	4,232,890
Cost of revenue		1,226,439			1,029,011			2,402,144			2,002,385
Gross profit		1,250,117			1,174,096			2,638,856			2,230,505
Operating expenses
Sales and marketing		423,266			508,473			902,488			980,037
General and administrative		514,085			461,209			1,035,930			985,701
Software development		292,004			315,670			596,376			603,737
		1,229,355			1,285,352			2,534,794			2,569,475
Operating profit (loss)		20,762			(111,256	)		104,062			(338,970	)
Other income and (expense)
Foreign exchange gain (loss)		36,851			4,561			2,675			(40,639	)
Interest expense (related party)		(157,569	)		(134,682	)		(310,184	)		(260,161	)
		(120,718	)		(130,121	)		(307,509	)		(300,800	)
Loss before income taxes		(99,956	)		(241,377	)		(203,447	)		(639,770	)
Provision for income taxes		(491	)		(516	)		(1,987	)		(1,023	)
Net loss	$	(100,447	)	$	(241,893	)	$	(205,434	)	$	(640,793	)
Loss per share
Basic and diluted loss per share		(0.00	)		(0.00	)		(0.00	)		(0.01	)
Weighted average shares outstanding
Basic and diluted		89,371,320			89,371,320			89,371,320			89,371,320

See accompanying notes 

4

QUOTEMEDIA, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Six months ended June 30,
	2012			2011
Operating activities:
Net loss	$	(205,434	)	$	(640,793	)
Adjustments to reconcile net loss to net cash provided
by operating activities:
Depreciation and amortization		370,705			349,970
Bad debt expense		58,500			24,960
Stock-based compensation expense		4,798			35,959
Noncash barter revenue		(180,000	)		(180,000	)
Noncash barter advertising expense		96,000			180,000
Changes in assets and liabilities:
Accounts receivable		(36,880	)		(134,738	)
Prepaid expenses		(6,605	)		(32,804	)
Other current assets		(52,522	)		(35,064	)
Deposits		(205	)		(1,217	)
Accounts payable and amounts due to related parties		340,772			315,243
Deferred revenue		35,214			200,961
Net cash provided by operating activities		424,343			82,477
Investing activities:
Purchase of fixed assets		(16,299	)		(4,903	)
Capitalized application software		(372,092	)		(331,667	)
Net cash used in investing activities		(388,391	)		(336,570	)
Financing activities:
Loans from related parties		-			200,000
Net cash provided by financing activities		-			200,000
Net increase (decrease) in cash		35,952			(54,093	)
Cash and equivalents, beginning of period		427,010			510,018
Cash and equivalents, end of period	$	462,962		$	455,925

See accompanying notes

5

QUOTEMEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1.   BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared in accordance with the generally accepted accounting principles for interim financial statements and instructions for Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments considered necessary for a fair presentation, have been included. Operating results for any quarter are not necessarily indicative of the results for any other quarter or for a full year.  In connection with the preparation of the condensed financial statements, the Company evaluated subsequent events after the balance sheet date of June 30, 2012 through the filing of this report.

These financial statements should be read in conjunction with our financial statements and the notes thereto for the fiscal year ended December 31, 2011 contained in our Form 10-K filed with the Securities and Exchange Commission dated March 29, 2012.

2.   SIGNIFICANT ACCOUNTING POLICIES

a) Nature of operations

We are a software developer and distributor of financial market data and related services to a global marketplace. We specialize in the collection, aggregation, and delivery of both delayed and real-time financial data content via the Internet. We develop and license software components that deliver dynamic content to banks, brokerage firms, financial institutions, mutual fund companies, online information and financial portals, media outlets, public companies, and corporate intranets.

b) Basis of consolidation

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

c) Foreign currency translation and transactions

The U.S. dollar is the functional currency of all our company's operations. Foreign currency asset and liability amounts are remeasured into U.S. dollars at end-of-period exchange rates, except for equipment and intangible assets, which are remeasured at historical rates. Foreign currency income and expenses are remeasured at average exchange rates in effect during the period, except for expenses related to balance sheet amounts remeasured at historical exchange rates. Exchange gains and losses arising from remeasurement of foreign currency-denominated monetary assets and liabilities are included in income in the period in which they occur.

d) Barter revenue

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

6

QUOTEMEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
Barter revenue earned	$	90,000	$	90,000	$	180,000	$	180,000
Advertising credits expensed		6,000		90,000		96,000		180,000

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

e) Accounting Pronouncements

Recent Accounting Pronouncements

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

Other accounting standards that have been issued by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s consolidated financial statements upon adoption.

3.   FINANCIAL INSTRUMENTS

a) Fair value of financial instruments

FASB ASC 820, Fair Value Measurements and Disclosures establishes three levels of inputs that may be used to measure fair value: quoted prices in active markets for identical assets or liabilities (referred to as Level 1), observable inputs other than Level 1 that are observable for the asset or liability either directly or indirectly (referred to as Level 2), and unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities (referred to as Level 3).

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QUOTEMEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

From time to time we utilize forward contracts that are measured at fair market value on a recurring basis based on Level 2 inputs.  At June 30, 2012, the fair market value for forward contracts was a liability of $2,439 and was included in accrued liabilities. At December 31, 2011, the fair market value for forward contracts was an asset of $745 and was included in other current assets. 

b) Derivative instruments

A significant portion of our expenses are paid in Canadian dollars, therefore changes to the exchange rate between the U.S. and Canadian dollar affect our operating results.  To manage this exchange rate risk, from time to time we utilize forward contracts to purchase Canadian dollars.  Our Company policy limits contracts to maturities of one year or less from the date of issuance. We do not enter into foreign exchange forward contracts for trading purposes.

We account for derivatives and hedging activities in accordance with FASB ASC 815, Derivatives and Hedging, which requires that all derivative instruments be recorded on the balance sheet at their respective fair values. The accounting for changes in the fair value of a derivative instrument is dependent upon whether the derivative has been designated and qualifies as part of a hedging relationship and on the type of hedging relationship.

We have chosen not to elect hedge accounting for these forward contracts; therefore, changes in fair value for these instruments are immediately recognized in earnings and included in our foreign exchange gain (loss).  The fluctuations in the value of these forward contracts do, however, generally offset the impact of changes in the value of the underlying risk that they are intended to economically hedge.

The following table provides gross notional value of foreign currency derivative financial instruments and the related net asset or liability. The table presents the notional amount (at contract exchange rates) and the fair value of the derivatives in U.S. dollars:

	June 30, 2012					December 31, 2011
	Notional Amount		Net Asset (Liability)			Notional Amount		Net Asset (Liability)
Forward contracts	$	350,000	$	(2,439	)	$	100,000	$	745

We are required to maintain a margin deposit with a foreign exchange corporation based on the value of the forward contracts outstanding. Margin deposits totaling $18,000 related to forward contracts outstanding are included in other current assets at June 30, 2012. There were margin deposits totaling $5,000 included in other current assets at December 31, 2011.

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QUOTEMEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

4.   RELATED PARTIES

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

	June 30, 2012		December 31, 2011
Purchase of business unit	$	211,625	$	202,372
Computer hosting services		376,925		456,734
Office rent		887,727		865,601
Other		17,276		17,276
Loan		690,674		658,224
Lead generation services		904,933		860,977
Due to Management		3,243,216		2,915,675
	$	6,332,376	$	5,976,859

As a matter of policy, all related party transactions are subject to review and approval by the Company’s Board of Directors. All repayments of amounts due to related parties must be approved by our Board of Directors.  Repayments are subject to our company having sufficient cash on hand and are intended not to impair continuing business operations. All amounts due to related parties have been classified as non-current liabilities as we do not expect to make any repayments within a year of the June 30, 2012 balance sheet date.  Our related party creditors have agreed to these repayment terms.

5.   STOCK-BASED COMPENSATION

FASB ASC 718, Stock Compensation requires all share-based payments to employees, including grants of employee stock options, to be recognized as compensation expense over the service period (generally the vesting period) in the consolidated financial statements based on their fair values. The impact of forfeitures that may occur prior to vesting is also estimated and considered in the amount recognized.

Total estimated stock-based compensation expense, related to all of the Company’s stock-based awards, recognized for the three and six months ended June 30, 2012 and 2011 was comprised as follows:

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
Sales and marketing	$	2,001	$	24,576	$	4,002	$	26,421
General and administrative		318		3,239		796		3,788
Software development		-		5,750		-		5,750
Total stock-based compensation	$	2,319	$	33,565	$	4,798	$	35,959

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QUOTEMEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

At June 30, 2012 there was $48,098 of unrecognized compensation cost related to non-vested share-based payments which is expected to be recognized over a weighted-average period of 4.48 years.

We calculate the fair value of stock options granted under the provisions of FASB ASC 718 using the Black-Scholes valuation model with the following assumptions:

	Three months ended June 30,		Six months ended June 30,
	2012	2011	2012	2011
Expected dividend yield	-	-	-	-
Expected stock price volatility	276%	187%	276%	187%
Risk-free interest rate	4%	4%	4%	4%
Expected life of options	6.5 years	2.1 years	6.3 years	2.1 years
Weighted average fair value of options and warrants granted	$0.065	$0.03	$0.062	$0.03

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

			Weighted-
	Options and		Average
	Warrants		Exercise Price
Outstanding at December 31, 2011		13,707,803	$	0.05
Granted under company stock option plan		230,000	$	0.06
Outstanding at June 30, 2012		13,937,803	$	0.05

The following table summarizes our non-vested stock option and warrant activity for the six months ended June 30, 2012:

				Weighted-
	Options and			Average Grant
	Warrants			Date Fair Value
Non-vested stock options and warrants at
December 31, 2011		972,222		$	0.04
Granted during the period		230,000		$	0.06
Vested during the period		(183,334	)	$	0.04
Non-vested stock options and warrants at
June 30, 2012		1,018,888		$	0.04

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QUOTEMEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

				Options and Warrants
	Options and Warrants Outstanding			Exercisable
		Weighted
	Number	Average	Weighted	Number	Weighted
	Outstanding at	Remaining	Average	Exercisable at	Average
	June 30,	Contractual	Exercise	June 30,	Exercise
	2012	Life	Price	2012	Price
$0.05-0.10	13,437,803	3.66	$0.04	12,418,915	$0.04
$0.11-0.40	500,000	2.38	$0.40	500,000	$0.40

As at June 30, 2012 all stock options and warrants have been granted with exercise prices equal to or greater than the market value of the underlying common shares on the date of grant.

At June 30, 2012 the aggregate intrinsic value of options and warrants outstanding was $181,179.  The aggregate intrinsic value of options and warrants exercisable was $172,974.  The intrinsic value of stock options and warrants are calculated as the amount by which the market price of our common stock exceeds the exercise price of the option or warrant.

6.   LOSS PER SHARE

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

11

ITEM 2.    Management’s Discussion and Analysis

The following discussion should be read in conjunction with our financial statements and notes thereto included elsewhere in this report. We caution readers regarding certain forward looking statements in the following discussion, elsewhere in this report, and in any other statements, made by, or on behalf of our company, whether or not in future filings with the Securities and Exchange Commission. Forward-looking statements are statements not based on historical information and which relate to future operations, strategies, financial results, or other developments. Forward-looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, economic, and competitive uncertainties and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward looking statements made by, or on behalf of, our company. Uncertainties and contingencies that might cause such differences include those risk factors disclosed in our annual report on Form 10-K for the year ended December 31, 2011 and other reports filed from time to time with the SEC.

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

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

Overview

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

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

Our Data Feed Services consist of raw streaming real-time market data and request-based market data delivered over the Internet or via dedicated telecommunication lines, and supplemental fundamental, historical, and analytical data, keyed to the same symbology, which provides a complete market data solution to be offered to our customers.  Currently, QuoteMedia’s Data Feed services include complete coverage of North American exchanges and over 70 exchanges worldwide.

Our Interactive Content and Data Applications consist of a suite of software applications that provide publicly traded company and market information to corporate clients via the Internet.  Products include stock market quotes, fundamentals, historical and interactive charts, company news, filings, option chains, insider transactions, corporate financials, corporate profiles, screeners, market research information, investor relations provisions, level II, watch lists, and real-time quotes. All of our content solutions are completely customizable and embed directly into client Web pages for seamless integration with existing content.

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

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

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

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

Business environment and trends

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

Plan of operation

Our plan of operation for the remainder of 2012 will focus on marketing Quotestream for deployments by brokerage firms to their retail clients, and pursuing further expansion into the investment professional market with Quotestream Professional. Licensing Quotestream Wireless, both as a companion to the Quotestream desktop products, and as a stand-alone solution, will also continue to be a focal point. We will also look to continue the growth of our Data Feed Services client base, and to increase the sales of its Interactive Content and Data Applications, particularly in the context of large scale enterprise deployments encompassing solutions ranging across several product lines.

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  We have a plan in place to manage costs to ensure that our ongoing expenditures are balanced with our revenue growth rate.  We anticipate that based on product deployments that have been recently completed or are near completion, we will continue to see revenue growth for the remainder of 2012.

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

Our future performance will be subject to a number of business factors, including those beyond our control, such as a continuation of the economic downturn and evolving industry needs and preferences as well as the level of competition and our ability to continue to successfully market our products and technology.  There can be no assurance that we will be able to successfully implement our marketing strategy, continue our revenue growth, or achieve profitable operations.

Results of Operations

Revenue

	2012		2011		Change ($)		Change (%)
Three months ended June 30,
Licensing revenue	$	2,476,556	$	2,203,107	$	273,449		12	%
Six months ended June 30,
Licensing revenue	$	5,041,000	$	4,232,890	$	808,110		19	%

Licensing revenue has increased 12% and 19% when comparing the three and six months ended June 30, 2012 and 2011.  The increase is a result of sales growth from licensing both our Interactive Content and Data Applications and Portfolio Management Systems.

Interactive Content and Data Application revenue increased $127,438 (11%) and $283,300 (13%) when comparing the three and six month periods ended June 30, 2012 and 2011.  The increases are due to an increase in the number and average value of Interactive Content and Data Application client contracts, as we signed several large-scale contracts since the comparable periods – most notably new contracts with Toronto Stock Exchange and Stockhouse.com.

14

Our Portfolio Management System revenue increased by a total of $146,012 (14%) and $524,811 (26%) when comparing the three and six month periods ended June 30, 2012 and 2011.  Corporate Quotestream revenue increased $119,379 (16%) and $454,401 (34%) for the three and six months periods ended June 30, 2012 from the comparative periods in 2011.  The increase for the three and six months ended June 30, 2012 is due to new large-scale contracts signed since the comparable periods – most notably new contracts with the Toronto Stock Exchange and Stockhouse.com.

Individual Quotestream revenue increased $26,633 (8%) and $70,410 (11%) from the comparative periods in 2011, resulting from an increase in the number of subscribers and an increase in the average revenue per subscriber.  Included in Portfolio Management System revenue is revenue earned from licensing of one of our portfolio management applications in exchange for advertising services, referred to as “barter revenue,” whereby advertising credits were received for subscription services. This barter revenue amounted to $90,000 and $180,000 for the three and six month periods ended June 30, 2012 and 2011.  Our barter licensing agreement expired on June 30, 2012.  See discussion below under “Sales and Marketing”.

Cost of Revenue and Gross Profit Summary

	2012			2011			Change ($)		Change (%)
Three months ended June 30,
Cost of revenue	$	1,226,439		$	1,029,011		$	197,428		19	%
Gross profit	$	1,250,117		$	1,174,096		$	76,021		6	%
Gross margin %		50	%		53	%

Six months ended June 30,
Cost of revenue	$	2,402,144		$	2,002,385		$	399,759	20	%
Gross profit	$	2,638,856		$	2,230,505		$	408,351	18	%
Gross margin %		52	%		53	%

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

Cost of revenue increased 19% and 20% when comparing the three and six month periods ended June 30, 2012 and 2011. The increases are primarily due to increases in variable stock exchange, data feed, and bandwidth usage charges resulting from the growth in the number of Quotestream clients from the comparable periods. The increases are also due new and increased fees levied by a number of stock exchanges since the comparable periods and to the acquisition of new data content required to support the new products and features that we have recently developed.

Overall, the cost of revenue increased as a percentage of sales, as evidenced by our gross margin percentage which decreased to 50% and 52% for the three and six month periods ended June 30, 2012 from 53% in the respective comparative periods in 2011.  The gross margin attributed to Interactive Content and Data Application revenue is higher than Portfolio Management System revenue due to the stock exchange fees associated with Portfolio Management System revenue. The decreases in gross margins from the comparatives periods are therefore due to a change in our revenue mix, as a higher percentage of our revenue growth from the prior periods was from Portfolio Management System revenue.

15

Operating Expenses Summary

	2012		2011		Change ($)			Change (%)
Three months ended June 30,
Sales and marketing	$	423,266	$	508,473	$	(85,207	)		(17	)%
General and administrative		514,085		461,209		52,876			11	%
Software development		292,004		315,670		(23,666	)		(7	)%
Total operating expenses	$	1,229,355	$	1,285,352	$	(55,997	)		(4	)%

Six months ended June 30,
Sales and marketing	$	902,488	$	980,037	$	(77,549	)	(8	)%
General and administrative		1,035,930		985,701		50,229		5	%
Software development		596,376		603,737		(7,361	)	(1	)%
Total operating expenses	$	2,534,794	$	2,569,475	$	(34,681	)	(1	)%

Sales and Marketing

Sales and marketing consists primarily of sales and customer service salaries, investor relations, travel and advertising expenses. Sales and marketing expenses decreased $85,207 (17%) and $77,549 (8%) for the three and six month periods ended June 30, 2012 when compared to the same periods in 2011.

The decrease from the comparative periods is primarily due to a decrease in non-cash advertising costs.  Included in sales and marketing expense are $6,000 and $96,000 of non-cash advertising costs incurred in the three and six month periods ended June 30, 2012.  We incurred $90,000 and $180,000 of non-cash advertising costs in the respective 2011 comparative periods.

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

16

General and Administrative

General and administrative expenses consist primarily of salaries expense, office rent, insurance premiums, and professional fees.  General and administrative expenses increased $52,876 (11%) and $50,229 (5%) for the three and six month periods ended June 30, 2012 when compared to the same periods in 2011.  The increases are due to increased salary expense resulting from hiring additional administrative staff in 2012, as well as an increase in bad debt expense from the comparative periods in 2011.

Software Development

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

Software development expenses decreased $23,666 (7%) and $7,361 (1%) for the three and six month periods ended June 30, 2012 when compared to the same periods in 2011, primarily due to decreases in stock-based compensation expense.

We capitalized $191,712 and $372,092 of development costs for the three and six months ended June 30, 2012, compared to $154,360 and $331,667 for the same periods in 2011. These costs relate to the development of application software used by subscribers to access, manage, and analyze information in our databases. Capitalized costs associated with application software are amortized over their estimated economic life of three years.

Other Income and (Expense) Summary

	2012			2011
Three months ended June 30,
Foreign exchange gain (loss)	$	36,851		$	4,561
Interest expense		(157,569	)		(134,682	)
Total other income and (expenses)	$	(120,718	)	$	(130,121	)

Six months ended June 30,

Foreign exchange gain (loss)	$	2,675		$	(40,639	)
Interest expense		(310,184	)		(260,161	)
Total other income and (expenses)	$	(307,509	)	$	(300,800	)

Foreign Exchange Gain (Loss)

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

17

We recognized foreign exchange gain of $36,851 and $2,675 and for the three and six month periods ended June 30, 2012, compared to foreign exchange gain of $4,561 and loss of $40,639 for the same periods in 2011.  The foreign exchange gains for the three and six month periods ended June 30, 2012 are due to the gain arising from the re-measurement of Canadian dollar monetary assets and liabilities into U.S. dollars, as we have a net Canadian dollar liability and the U.S. dollar appreciated versus the Canadian dollar from December 31, 2011 to June 30, 2012.

Interest Expense

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

Provision for Income Taxes

For the three and six month periods ended June 30, 2012, the Company recorded Canadian income tax expense of $491 and $1,987, compared to $516 and $1,023 in the comparative periods in 2011.

Net Loss for the Period

As a result of the foregoing, net loss for the three months ended June 30, 2012 was $(100,447) or $(0.00) per share compared to a net loss of $(241,893) or $(0.00) per share for the three months ended June 30, 2011.  The net loss for the six months ended June 30, 2012 was $(205,434) or $(0.00) per share compared to a net loss of $(640,793) or $(0.01) per share for the six months ended June 30, 2011.

Liquidity and Capital Resources

Our cash totaled $462,962 at June 30, 2012, as compared with $427,010 at December 31, 2011, an increase of $35,952.  Net cash of $424,343 was provided by operations for the six months ended June 30, 2012, primarily due to the increase in amounts due to related parties and deferred revenue, offset by the net loss for the period adjusted for non-cash charges. Net cash used in investing activities for the six months ended June 30, 2012 was $388,391 resulting from capitalized application software costs and the purchase of new computer equipment. There were no financing activities for the six month period ended June 30, 2012.

For the six months ended June 30, 2012 we had a net loss of $205,434, and at June 30, 2012 we have a net working capital surplus of $4,422 which represented current assets minus current liabilities.

We have a plan in place for the next 12 months to ensure that our ongoing expenditures are balanced with our expected revenue growth rate.  We anticipate that based on product deployments that have recently been completed and are near completion, we will continue to see revenue growth for the next 12 months.  Our current liabilities include deferred revenue of $637,731. The costs expected to be incurred to realize the deferred revenue in the next 12 months are minimal. Our long-term liabilities include $6,332,376 due to related parties. All repayments of amounts due to related parties must be approved by our Board of Directors.  Repayments are subject to our company having sufficient cash on hand and are intended not to impair continuing business operations.

18

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

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

ITEM 4.    Controls and Procedures

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

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

19

PART II - OTHER INFORMATION

ITEM 6.                      EXHIBITS

Exhibit Number	Description of Exhibit
31.1	Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended.
31.2	Certification of Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended.
32.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	Interactive Data Files (Quarterly Report on Form 10-Q, for the quarterly period ended June 30, 2012, furnished in XBRL (eXtensible Business Reporting Language)).

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

QUOTEMEDIA, INC.
Dated: August 10, 2012
By:	/s/ R. Keith Guelpa
R. Keith Guelpa,
President and Chief Executive Officer
(Principal Executive Officer)
By:	/s/ Keith J. Randall
Keith J. Randall,
Chief Financial Officer
(Principal Accounting Officer)

20

EX-31.1

Exhibit 31.1

CERTIFICATION

I, R. Keith Guelpa, certify that:

1.           I have reviewed this Quarterly Report on Form 10-Q of Quotemedia, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:

a)           Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)           Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)           Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)           Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)           All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)           Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  August 10, 2012

By:   /s/ R. Keith Guelpa

R. Keith Guelpa

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Keith J. Randall, certify that:

1.           I have reviewed this Quarterly Report on Form 10-Q of Quotemedia, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:

a)           Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)           Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)           Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)           Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)           All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)           Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  August 10, 2012

By:   /s/ Keith J. Randall

Keith J. Randall

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Quotemedia, Inc. (the "Company") for the quarterly period ended June 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, R. Keith Guelpa, Chief Executive Officer of the Company, certify, to my best knowledge and belief, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)   The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and

(2)   The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:   /s/ R. Keith Guelpa

____________________

R. Keith Guelpa

Chief Executive Officer

August 10, 2012

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Quotemedia, Inc. (the "Company") for the quarterly period ended June 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Keith J. Randall, Chief Financial Officer of the Company, certify, to my best knowledge and belief, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)   The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and

(2)   The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:   /s/ Keith J. Randall

____________________

Keith J. Randall

Chief Financial Officer

August 10, 2012

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RELATED PARTIES

6 Months Ended

Jun. 30, 2012

Related Party Transactions [Abstract]

RELATED PARTIES

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

	June 30, 2012		December 31, 2011
Purchase of business unit	$	211,625	$	202,372
Computer hosting services		376,925		456,734
Office rent		887,727		865,601
Other		17,276		17,276
Loan		690,674		658,224
Lead generation services		904,933		860,977
Due to Management		3,243,216		2,915,675
	$	6,332,376	$	5,976,859

As a matter of policy, all related party transactions are subject to review and approval by the Company’s Board of Directors. All repayments of amounts due to related parties must be approved by our Board of Directors.  Repayments are subject to our company having sufficient cash on hand and are intended not to impair continuing business operations. All amounts due to related parties have been classified as non-current liabilities as we do not expect to make any repayments within a year of the June 30, 2012 balance sheet date.  Our related party creditors have agreed to these repayment terms.

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FINANCIAL INSTRUMENTS

6 Months Ended

Jun. 30, 2012

Investments, All Other Investments [Abstract]

FINANCIAL INSTRUMENTS

a) Fair value of financial instruments

FASB ASC 820, Fair Value Measurements and Disclosures establishes three levels of inputs that may be used to measure fair value: quoted prices in active markets for identical assets or liabilities (referred to as Level 1), observable inputs other than Level 1 that are observable for the asset or liability either directly or indirectly (referred to as Level 2), and unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities (referred to as Level 3).

From time to time we utilize forward contracts that are measured at fair market value on a recurring basis based on Level 2 inputs.  At June 30, 2012, the fair market value for forward contracts was a liability of $2,439 and was included in accrued liabilities. At December 31, 2011, the fair market value for forward contracts was an asset of $745 and was included in other current assets.

b) Derivative instruments

A significant portion of our expenses are paid in Canadian dollars, therefore changes to the exchange rate between the U.S. and Canadian dollar affect our operating results.  To manage this exchange rate risk, from time to time we utilize forward contracts to purchase Canadian dollars.  Our Company policy limits contracts to maturities of one year or less from the date of issuance. We do not enter into foreign exchange forward contracts for trading purposes.

We account for derivatives and hedging activities in accordance with FASB ASC 815, Derivatives and Hedging, which requires that all derivative instruments be recorded on the balance sheet at their respective fair values. The accounting for changes in the fair value of a derivative instrument is dependent upon whether the derivative has been designated and qualifies as part of a hedging relationship and on the type of hedging relationship.

We have chosen not to elect hedge accounting for these forward contracts; therefore, changes in fair value for these instruments are immediately recognized in earnings and included in our foreign exchange gain (loss).  The fluctuations in the value of these forward contracts do, however, generally offset the impact of changes in the value of the underlying risk that they are intended to economically hedge.

The following table provides gross notional value of foreign currency derivative financial instruments and the related net asset or liability. The table presents the notional amount (at contract exchange rates) and the fair value of the derivatives in U.S. dollars:

	June 30, 2012					December 31, 2011
	Notional Amount		Net Asset (Liability)			Notional Amount		Net Asset (Liability)
Forward contracts	$	350,000	$	(2,439	)	$	100,000	$	745

We are required to maintain a margin deposit with a foreign exchange corporation based on the value of the forward contracts outstanding. Margin deposits totaling $18,000 related to forward contracts outstanding are included in other current assets at June 30, 2012. There were margin deposits totaling $5,000 included in other current assets at December 31, 2011.

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Consolidated Balance Sheets (Unaudited) (USD $)	Jun. 30, 2012	Dec. 31, 2011
Current assets:
Cash	$ 462,962	$ 427,010
Accounts receivable, net	632,829	654,449
Prepaid expenses	73,770	247,165
Other current assets	517,447	200,925
Total current assets	1,687,008	1,529,549
Deposits	24,562	24,357
Property and equipment, net	1,259,388	1,238,811
Goodwill	110,000	110,000
Intangible assets	94,099	96,990
Total assets	3,175,057	2,999,707
Current liabilities:
Accounts payable and accrued liabilities	1,044,855	1,059,600
Deferred revenue	637,731	602,517
Total current liabilities	1,682,586	1,662,117
Long-term portion of amounts due to related parties	6,332,376	5,976,859
Stockholders’ deficit:
Preferred stock, nondesignated, 10,000,000 shares authorized, none issued
Common stock, $0.001 par value, 150,000,000 shares authorized, 89,371,320 shares issued and outstanding	89,372	89,372
Additional paid-in capital	8,916,930	8,912,132
Accumulated deficit	(13,846,207)	(13,640,773)
Total stockholders’ deficit	(4,839,905)	(4,639,269)
Total liabilities and stockholders’ deficit	$ 3,175,057	$ 2,999,707

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BASIS OF PRESENTATION

6 Months Ended

Jun. 30, 2012

Accounting Policies [Abstract]

BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared in accordance with the generally accepted accounting principles for interim financial statements and instructions for Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments considered necessary for a fair presentation, have been included. Operating results for any quarter are not necessarily indicative of the results for any other quarter or for a full year.  In connection with the preparation of the condensed financial statements, the Company evaluated subsequent events after the balance sheet date of June 30, 2012 through the filing of this report.

These financial statements should be read in conjunction with our financial statements and the notes thereto for the fiscal year ended December 31, 2011 contained in our Form 10-K filed with the Securities and Exchange Commission dated March 29, 2012.

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STOCK-BASED COMPENSATION (Details Narrative) (USD $)	Jun. 30, 2012
Notes to Financial Statements
Aggregate intrinsic value of options and warrants outstanding	$ 181,179
aggregate intrinsic value of options and warrants exercisable	$ 172,974

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SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2012

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 and license software components that deliver dynamic content to banks, brokerage firms, financial institutions, mutual fund companies, online information and financial portals, media outlets, public companies, and corporate intranets.

b) Basis of consolidation

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

c) Foreign currency translation and transactions

The U.S. dollar is the functional currency of all our company's operations. Foreign currency asset and liability amounts are remeasured into U.S. dollars at end-of-period exchange rates, except for equipment and intangible assets, which are remeasured at historical rates. Foreign currency income and expenses are remeasured at average exchange rates in effect during the period, except for expenses related to balance sheet amounts remeasured at historical exchange rates. Exchange gains and losses arising from remeasurement of foreign currency-denominated monetary assets and liabilities are included in income in the period in which they occur.

d) Barter revenue

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

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

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
Barter revenue earned	$	90,000	$	90,000	$	180,000	$	180,000
Advertising credits expensed		6,000		90,000		96,000		180,000

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

e) Accounting Pronouncements

Recent Accounting Pronouncements

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

Other accounting standards that have been issued by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s consolidated financial statements upon adoption.

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Consolidated Balance Sheets (Parenthetical) (USD $)	Jun. 30, 2012	Dec. 31, 2011
Statement of Financial Position [Abstract]
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	89,371,320	89,371,320
Common stock, shares outstanding	89,371,320	89,371,320

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SIGNIFICANT ACCOUNTING POLICIES - Barter Revenue Transactions (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Notes to Financial Statements
Barter revenue earned	$ 90,000	$ 90,000	$ 180,000	$ 180,000
Advertising credits expensed	$ 6,000	$ 90,000	$ 96,000	$ 180,000

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Document and Entity Information	6 Months Ended
	Jun. 30, 2012	Aug. 03, 2012
Document And Entity Information
Entity Registrant Name	QUOTEMEDIA INC
Entity Central Index Key	0001101433
Document Type	10-Q
Document Period End Date	Jun. 30, 2012
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	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		89,371,320
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2012

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SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $)	3 Months Ended
	Jun. 30, 2012	Jul. 31, 2012
Notes to Financial Statements
Prepaid Expenses	$ 180,000
Unused Advertising Credits	264,000
cash payment		264,000
advertising credits expense	$ (84,000)

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Consolidated Statements of Operations (Unaudited) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Income Statement [Abstract]
Revenue	$ 2,476,556	$ 2,203,107	$ 5,041,000	$ 4,232,890
Cost of revenue	1,226,439	1,029,011	2,402,144	2,002,385
Gross profit	1,250,117	1,174,096	2,638,856	2,230,505
Operating expenses
Sales and marketing	423,266	508,473	902,488	980,037
General and administrative	514,085	461,209	1,035,930	985,701
Software development	292,004	315,670	596,376	603,737
Total operating expenses	1,229,355	1,285,352	2,534,794	2,569,475
Operating profit (loss)	20,762	(111,256)	104,062	(338,970)
Other income and (expense)
Foreign exchange gain (loss)	36,851	4,561	2,675	(40,639)
Interest expense (related party)	(157,569)	(134,682)	(310,184)	(260,161)
Total other income and (expense)	(120,718)	(130,121)	(307,509)	(300,800)
Loss before income taxes	(99,956)	(241,377)	(203,447)	(639,770)
Provision for income taxes	(491)	(516)	(1,987)	(1,023)
Net loss	$ (100,447)	$ (241,893)	$ (205,434)	$ (640,793)
Loss per share
Basic and diluted loss per share	$ 0.00	$ 0.00	$ 0.00	$ (0.01)
Weighted average shares outstanding
Basic and diluted	89,371,320	89,371,320	89,371,320	89,371,320

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SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2012

Accounting Policies [Abstract]

a) Nature of operations

a) Nature of operations

We are a software developer and distributor of financial market data and related services to a global marketplace. We specialize in the collection, aggregation, and delivery of both delayed and real-time financial data content via the Internet. We develop and license software components that deliver dynamic content to banks, brokerage firms, financial institutions, mutual fund companies, online information and financial portals, media outlets, public companies, and corporate intranets.

b) Basis of consolidation

b) Basis of consolidation

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

c) Foreign currency translation and transactions

c) Foreign currency translation and transactions

The U.S. dollar is the functional currency of all our company's operations. Foreign currency asset and liability amounts are remeasured into U.S. dollars at end-of-period exchange rates, except for equipment and intangible assets, which are remeasured at historical rates. Foreign currency income and expenses are remeasured at average exchange rates in effect during the period, except for expenses related to balance sheet amounts remeasured at historical exchange rates. Exchange gains and losses arising from remeasurement of foreign currency-denominated monetary assets and liabilities are included in income in the period in which they occur.

d) Barter revenue

d) Barter revenue

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

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

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
Barter revenue earned	$	90,000	$	90,000	$	180,000	$	180,000
Advertising credits expensed		6,000		90,000		96,000		180,000

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

e) Accounting Pronouncements

e) Accounting Pronouncements

Recent Accounting Pronouncements

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

Other accounting standards that have been issued by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s consolidated financial statements upon adoption.

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LOSS PER SHARE

6 Months Ended

Jun. 30, 2012

Loss per share

LOSS PER SHARE

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

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LOSS PER SHARE (Details Narrative) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Notes to Financial Statements
Basic and diluted net loss per share	$ 0.00	$ 0.00	$ 0.00	$ (0.01)

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FINANCIAL INSTRUMENTS (Details Narrative) (USD $)	Jun. 30, 2012
Notes to Financial Statements
Accrued liabilities	$ 2,439
Margin deposits	$ 18,000

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RELATED PARTIES (Tables)

6 Months Ended

Jun. 30, 2012

Related Party Transactions [Abstract]

Amounts due to related parties

	June 30, 2012		December 31, 2011
Purchase of business unit	$	211,625	$	202,372
Computer hosting services		376,925		456,734
Office rent		887,727		865,601
Other		17,276		17,276
Loan		690,674		658,224
Lead generation services		904,933		860,977
Due to Management		3,243,216		2,915,675
	$	6,332,376	$	5,976,859

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SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Jun. 30, 2012

Accounting Policies [Abstract]

Barter Revenue Transactions

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
Barter revenue earned	$	90,000	$	90,000	$	180,000	$	180,000
Advertising credits expensed		6,000		90,000		96,000		180,000

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FINANCIAL INSTRUMENTS (Tables)

6 Months Ended

Jun. 30, 2012

Investments, All Other Investments [Abstract]

notional amount (at contract exchange rates) and the fair value of the derivatives

	June 30, 2012					December 31, 2011
	Notional Amount		Net Asset (Liability)			Notional Amount		Net Asset (Liability)
Forward contracts	$	350,000	$	(2,439	)	$	100,000	$	745

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STOCK-BASED COMPENSATION (Tables)

6 Months Ended

Jun. 30, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-based compensation expense

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
Sales and marketing	$	2,001	$	24,576	$	4,002	$	26,421
General and administrative		318		3,239		796		3,788
Software development		-		5,750		-		5,750
Total stock-based compensation	$	2,319	$	33,565	$	4,798	$	35,959

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STOCK-BASED COMPENSATION - Stock-based compensation expense (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Notes to Financial Statements
Sales and marketing	$ 2,001	$ 24,576	$ 4,002	$ 26,421
General and administrative	318	3,239	796	3,788
Software development		5,750		5,750
Total stock-based compensation	$ 2,319	$ 33,565	$ 4,798	$ 35,959

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Consolidated Statements of Cash Flows (Unaudited) (USD $)	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Operating activities:
Net loss	$ (205,434)	$ (640,793)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	370,705	349,970
Bad debt expense	58,500	24,960
Stock-based compensation expense	4,798	35,959
Noncash barter revenue	(180,000)	(180,000)
Noncash barter advertising expense	96,000	180,000
Changes in assets and liabilities:
Accounts receivable	(36,880)	(134,738)
Prepaid expenses	(6,605)	(32,804)
Other current assets	(52,522)	(35,064)
Deposits	(205)	(1,217)
Accounts payable and amounts due to related parties	340,772	315,243
Deferred revenue	35,214	200,961
Net cash provided by operating activities	424,343	82,477
Investing activities:
Purchase of fixed assets	(16,299)	(4,903)
Capitalized application software	(372,092)	(331,667)
Net cash used in investing activities	(388,391)	(336,570)
Financing activities:
Loans from related parties		200,000
Net cash provided by financing activities		200,000
Net increase (decrease) in cash	35,952	(54,093)
Cash and equivalents, beginning of period	427,010	510,018
Cash and equivalents, end of period	$ 462,962	$ 455,925

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STOCK-BASED COMPENSATION

6 Months Ended

Jun. 30, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK-BASED COMPENSATION

FASB ASC 718, Stock Compensation requires all share-based payments to employees, including grants of employee stock options, to be recognized as compensation expense over the service period (generally the vesting period) in the consolidated financial statements based on their fair values. The impact of forfeitures that may occur prior to vesting is also estimated and considered in the amount recognized.

Total estimated stock-based compensation expense, related to all of the Company’s stock-based awards, recognized for the three and six months ended June 30, 2012 and 2011 was comprised as follows:

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
Sales and marketing	$	2,001	$	24,576	$	4,002	$	26,421
General and administrative		318		3,239		796		3,788
Software development		-		5,750		-		5,750
Total stock-based compensation	$	2,319	$	33,565	$	4,798	$	35,959

At June 30, 2012 there was $48,098 of unrecognized compensation cost related to non-vested share-based payments which is expected to be recognized over a weighted-average period of 4.48 years.

We calculate the fair value of stock options granted under the provisions of FASB ASC 718 using the Black-Scholes valuation model with the following assumptions:

	Three months ended June 30,		Six months ended June 30,
	2012	2011	2012	2011
Expected dividend yield	-	-	-	-
Expected stock price volatility	276%	187%	276%	187%
Risk-free interest rate	4%	4%	4%	4%
Expected life of options	6.5 years	2.1 years	6.3 years	2.1 years
Weighted average fair value of options and warrants granted	$0.065	$0.03	$0.062	$0.03

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

			Weighted-
	Options and		Average
	Warrants		Exercise Price
Outstanding at December 31, 2011		13,707,803	$	0.05
Granted under company stock option plan		230,000	$	0.06
Outstanding at June 30, 2012		13,937,803	$	0.05

The following table summarizes our non-vested stock option and warrant activity for the six months ended June 30, 2012:

				Weighted-
	Options and			Average Grant
	Warrants			Date Fair Value
Non-vested stock options and warrants at
December 31, 2011		972,222		$	0.04
Granted during the period		230,000		$	0.06
Vested during the period		(183,334	)	$	0.04
Non-vested stock options and warrants at
June 30, 2012		1,018,888		$	0.04

				Options and Warrants
	Options and Warrants Outstanding			Exercisable
		Weighted
	Number	Average	Weighted	Number	Weighted
	Outstanding at	Remaining	Average	Exercisable at	Average
	June 30,	Contractual	Exercise	June 30,	Exercise
	2012	Life	Price	2012	Price
$0.05-0.10	13,437,803	3.66	$0.04	12,418,915	$0.04
$0.11-0.40	500,000	2.38	$0.40	500,000	$0.40

As at June 30, 2012 all stock options and warrants have been granted with exercise prices equal to or greater than the market value of the underlying common shares on the date of grant.

At June 30, 2012 the aggregate intrinsic value of options and warrants outstanding was $181,179.  The aggregate intrinsic value of options and warrants exercisable was $172,974.  The intrinsic value of stock options and warrants are calculated as the amount by which the market price of our common stock exceeds the exercise price of the option or warrant.

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RELATED PARTIES - Amounts due to related parties (Details) (USD $)	Jun. 30, 2012	Dec. 31, 2011
Notes to Financial Statements
Purchase of business unit	$ 211,625	$ 202,372
Computer hosting services	376,925	456,734
Office rent	887,727	865,601
Other	17,276	17,276
Loan	690,674	658,224
Lead generation services	904,933	860,977
Due to Management	3,243,216	2,915,675
Total Expense	$ 6,332,376	$ 5,976,859