UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10 – QSB

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2005

Commission File Number: 0-28599

QUOTEMEDIA, INC.

(Exact name of small business issuer as specified in its charter)

Nevada

(State or other jurisdiction of incorporation or organization)

91-2008633

(IRS Employer Identification Number)

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

(Address of principal executive offices)

85268

(Zip Code)

(480) 905-7311

(Issuer’s Telephone Number)

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

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes x    No ¨

On October 28, 2005, the Registrant had 61,089,172 shares of common stock outstanding.

QUOTEMEDIA , INC.

INDEX TO QUARTERLY REPORT

ON FORM 10-QSB

		Page
Part I. Financial Information
Item 1.	Consolidated Financial Statements	3
	Consolidated Balance Sheet	3
	Consolidated Statements of Operations	4
	Consolidated Statements of Cash Flows	5
	Notes to Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis	12
Item 3.	Controls and Procedures	17
Part II. Other Information
Item 1.	Legal Proceedings	18
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18
Item 3.	Defaults Upon Senior Securities	18
Item 4.	Submission of Matters to a Vote of Security Holders	18
Item 5.	Other Information	18
Item 6.	Exhibits	18
Signatures		19

2

QUOTEMEDIA, INC.

CONSOLIDATED BALANCE SHEET

(Unaudited)

	September 30, 2005
ASSETS
Current assets:
Cash	$	533,087
Accounts receivable, net		212,503
Prepaid Expenses		19,406
Deposits		40,266
Total current assets		805,262
Property and equipment, net		56,647
Intangible assets		37,242
Total assets	$	899,151
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable and accrued liabilities	$	165,303
Deferred revenue		174,699
Current portion of amounts due to related parties		30,000
Total current liabilities		370,002
Other long-term liabilities		9,819
Long-term portion of amounts due to related parties		1,203,495
Stockholders’ deficit:
Preferred stock, non designated, 10,000,000 shares authorized, none issued.		—
Common stock, $0.001 par value, 100,000,000 shares authorized, 61,089,172 shares issued and outstanding		61,090
Additional paid-in capital		6,437,442
Accumulated deficit		(7,182,697	)
Total stockholders’ deficit		(684,165	)
Total liabilities and stockholders’ deficit	$	899,151

See accompanying notes

3

QUOTEMEDIA, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three months ended September 30, 2005			Three months ended September 30, 2004			Nine months ended September 30, 2005			Nine months ended September 30, 2004
OPERATING REVENUE
Licensing revenue	$	667,148		$	267,315		$	1,665,176		$	646,282
Cost of revenue		184,024			109,093			494,232			350,096
Gross Profit		483,124			158,222			1,170,944			296,186
OPERATING EXPENSES
Sales and marketing		119,354			19,637			325,366			38,877
General and administrative		213,062			103,474			608,811			303,329
Software development		136,085			70,535			332,842			175,727
		468,501			193,646			1,267,019			517,933
OPERATING INCOME (LOSS)		14,623			(35,424	)		(96,075	)		(221,747	)
OTHER INCOME AND EXPENSES
Foreign exchange gain (loss)		519			(9,870	)		(61	)		(9,681	)
Interest expense		(12,162	)		(10,944	)		(29,520	)		(16,997	)
Loss on disposal of equipment		—			—			(2,587	)		(10,309	)
		(11,643	)		(20,814	)		(32,168	)		(36,987	)
NET INCOME (LOSS)		2,980			(56,238	)		(128,243	)		(258,734	)
INCOME (LOSS) PER SHARE
Basic and diluted	$	0.00		$	(0.00	)	$	(0.00	)	$	(0.00	)
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic		60,841,090			58,664,204			59,757,978			58,664,204
Diluted		94,216,794			58,664,204			59,757,978			58,664,204

See accompanying notes

4

QUOTEMEDIA, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine months ended September 30, 2005			Nine months ended September 30, 2004
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(128,243	)	$	(258,734	)
Adjustments to reconcile loss to net cash used in operating activities:
Depreciation		11,665			13,102
Loss on disposal of equipment		2,587			10,309
Bad debt expense		14,584			18,371
Stock based compensation expense		10,500			—
Changes in assets and liabilities:
Accounts receivable		(137,872	)		(78,376	)
Prepaid expenses		(10,816	)		(5,634	)
Deposits		(30,102	)		4,480
Accounts payable and amounts due to related parties		432,239			189,599
Deferred revenue		73,358			80,956
Net cash provided by (used in) operating activities		237,900			(25,927	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from disposal of equipment		—			3,133
Purchase of equipment and intangible assets		(29,328	)		(54,786	)
Net cash used in investing activities		(29,328	)		(51,653	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of loans from related parties		(56,750	)		(42,707	)
Loans from related parties		250,000			250,000
Repayment of note payable		—			(131,865	)
Net cash provided by financing activities		193,250			75,428
Net increase (decrease) in cash		401,822			(2,152	)
Cash, beginning of period		131,265			143,034
Cash, end of period	$	533,087		$	140,882

See supplementary information (note 5)

See accompanying notes

5

QUOTEMEDIA, INC.

NOTES TO CONSOLIDATED 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 – QSB. 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.

These financial statements should be read in conjunction with our financial statements and the notes thereto for the fiscal year ended December 31, 2004 contained in our Form 10-KSB filed with the Securities and Exchange Commission dated March 30, 2005.

2. SIGNIFICANT ACCOUNTING POLICIES

a) 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.

b) Property and Equipment

	Cost		Accumulated Depreciation		Net Book Value
As at September 30, 2005,
Computer equipment	$	81,064	$	36,018	$	45,046
Office Furniture and equipment		17,406		11,156		6,250
Leasehold improvements		6,020		669		5,351
	$	104,490	$	47,843	$	56,647

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

Computer equipment	5 years
Office Furniture and equipment	5 years
Leasehold improvements	Term of lease

6

QUOTEMEDIA, INC.

NOTES TO CONSOLIDATED STATEMENTS

(Unaudited)

Depreciation expense totaled $4,879 and $2,519 for the three months ended September 30, 2005 and 2004 respectively. Depreciation expense totaled $11,665 and $13,102 for the nine months ended September 30, 2005 and 2004 respectively.

In 2005, we changed from the declining balance to the straight-line method of depreciation for equipment. The change was made because management believes that the straight-line method more closely approximates the equipments’ useful lives than does the declining balance method. The effect of the change to prior periods was included in depreciation expense in the current period as the effect was insignificant and had no effect on Earnings per Share.

c) Stock based compensation

We have elected to account for employee stock options using the intrinsic value method described in Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees”, and related interpretations as allowed under FAS No. 123. The following pro forma disclosures are provided as required under SFAS No. 148, “Accounting for Stock-Based Compensation – Transition and Disclosure”.

As we grant all stock options with an exercise price equal to the market value of the underlying common shares on the date of the grant, no compensation expense has been recognized under APB 25. FAS No. 123 uses a fair value method of calculating the cost of stock option grants. Had compensation cost for our employee stock option plan been determined by this method, our net loss and loss per share would have been as follows:

	Three months ended September 30,						Nine months ended September 30,
	2005			2004			2005			2004
Net income (loss):
As reported	$	2,980		$	(56,238	)	$	(128,243	)	$	(258,734	)
Less: Total stock-based employee compensation expense determined under fair value based method for all awards		(869,149	)		(114,500	)		(926,687	)		(178,760	)
Pro forma		(866,169	)		(170,738	)		(1,054,930	)		(437,494	)
Basic and diluted income (loss) per share:
As reported	$	0.00		$	(0.00	)	$	(0.00	)	$	(0.00	)
Pro forma		(0.01	)		(0.00	)		(0.02	)		(0.00	)

7

QUOTEMEDIA, INC.

NOTES TO CONSOLIDATED STATEMENTS

(Unaudited)

For purposes of the pro forma disclosures, the estimated fair value of the stock options is amortized over the stock options’ vesting period. We have estimated the fair value of each option on the date of the grant using the Black-Scholes option-pricing model with the following assumptions:

	Three months ended September 30,						Nine months ended September 30,
	2005			2004			2005			2004
Expected dividend yield		—			—			—			—
Expected stock price volatility		96	%		68	%		96	%		132	%
Risk-free interest rate		4	%		4	%		4	%		4	%
Expected life of options		5.1 years			1 year			5.1 years			1 year
Weighted average fair value of options granted	$	0.34		$	0.11		$	0.34		$	0.12

d) Recent accounting pronouncements

In December 2004, the Financial Accounting Standards Board (“FASB”) issued revised Statement of Financial Accounting Standards No. 123 entitled “Share-Based Payment” (“FAS No. 123R”). This revised statement addresses accounting for stock-based compensation and results in the fair value of all stock-based compensation arrangements, including options, being recognized as an expense in a company’s financial statements. The revised Statement eliminates the ability to account for stock-based compensation transactions using APB Opinion No. 25 with supplemental disclosure in the notes to financial statements as previously allowed under FAS 123. FAS No. 123R is effective for public entities that file as small business issuers as of the beginning of the first interim or annual reporting period that begins after December 15, 2005. The Company is currently assessing the impact that FAS 123R will have on its financial statements.

e) Reclassification

Certain figures in the comparative period have been reclassified to conform to the current period’s presentation, with no effect on net loss.

8

QUOTEMEDIA, INC.

NOTES TO CONSOLIDATED STATEMENTS

(Unaudited)

3. RELATED PARTY TRANSACTIONS

In May 2004 we entered into a loan agreement with Bravenet Web Services, Inc. (“Bravenet”). We borrowed $250,000 from Bravenet with interest at 10% per annum. In September 2005 we borrowed an additional $250,000 from Bravenet under the same terms and conditions. It is anticipated that the loan will be repaid in 12 equal monthly installments beginning in the first quarter of 2007. The President and Chief Executive Officer of Quotemedia, Ltd., a wholly owned subsidiary, is a control person of Bravenet. At September 30, 2005, the loan balance due to Bravenet including accrued interest is $537,879.

In the first quarter of 2005 we entered into an agreement with Bravenet to provide customer promotion and lead generation services. For the three and nine months ended September 30, 2005, $100,400 and $279,451 in sales expenses payable to Bravenet were accrued respectively. Payment of amounts due to Bravenet are expected to commence in the first quarter of 2007. Interest is accrued at the prime bank rate minus 1%. At September 30, 2005, the balance due to Bravenet for service fees including accrued interest is $284,129.

At September 30, 2005, we owed a total of $239,783 to officers of the Company for amounts advanced to the company and for accrued unpaid salary. No interest is required to be accrued on these amounts. An additional $171,704 of unpaid salary is owed to an officer of the Company. This amount includes interest accrued at the prime bank rate minus 1%.

4. STOCKHOLDERS’ DEFICIT

a) Common stock

On August 23, 2005, we issued 500,000 shares of common stock to an officer of the Company pursuant to the exercise of warrants at $0.10. The officer surrendered 111,111 shares of previously held mature shares of our common stock to pay the $50,000 exercise price. The surrendered common stock was valued at $0.45 per share which was the closing price of our common stock on the date of the transaction. The surrendered common stock was subsequently cancelled.

On August 31, 2005, we issued 29,412 shares of common stock to an employee of the Company pursuant to the exercise of stock options. The employee exercised a total of 50,000 stock options at an average exercise price of $0.21. The Company repurchased 20,588 shares of common stock to pay the exercise price of $10,500. The repurchased common stock was valued at $0.51 per share which was the closing price of our common stock on the date of the transaction. Stock based compensation expense of $10,500 was recognized as a result of this transaction.

9

QUOTEMEDIA, INC.

NOTES TO CONSOLIDATED STATEMENTS

(Unaudited)

b) Stock based compensation

The following table sets forth certain stock option and warrant information:

	Options and Warrants		Weighted-Average Exercise Price
Outstanding at December 31, 2003	43,741,812		$	0.09
Granted under company stock option plan	2,625,000		$	0.40
Warrants granted	1,584,000		$	0.40
Expired	(150,000	)	$	1.06
Outstanding at December 31, 2004	47,800,812		$	0.12
Granted under company stock option plan	250,000		$	0.39
Warrants granted	2,400,000		$	0.47
Options exercised	(50,000	)	$	0.21
Warrants exercised	(3,080,000	)	$	0.10
Outstanding at September 30, 2005	47,320,812		$	0.13

	Options and Warrants Outstanding			Options and Warrants Exercisable
Range of Exercise Price	Number Outstanding at September 30, 2005	Weighted Average Remaining Contractual Life	Weighted Average Exercise Price	Number Exercisable at September 30, 2005	Weighted Average Exercise Price
$0.05-0.10	29,006,026	2.21	$0.05	29,006,026	$0.05
$0.11-0.30	11,405,786	1.01	$0.18	11,405,786	$0.18
$0.31-0.50	6,909,000	8.50	$0.42	5,027,125	$0.43

As at September 30, 2005 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 therefore no compensation expense has been recognized for grants of stock options and warrants in the statement of operations.

10

QUOTEMEDIA, INC.

NOTES TO CONSOLIDATED STATEMENTS

(Unaudited)

5. SUPPLEMENTARY CASH FLOW INFORMATION

	2005		2004
Nine months ended September 30,
Cash paid for Interest	$	1,165	$	—
Cash received for Interest		—		—
Cash paid for taxes		—		—
Exercise of stock options with mature shares of common stock		308,000		—
Exercise of stock options via net exercise		10,500		—

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, but are not limited to:

• lack of market acceptance of our products;

• dependence on third parties for data feeds for our products;

• failure to respond to evolving industry standards and technological changes;

• our inability to meet our future additional capital requirements;

• our inability to retain key technical personnel;

• conditions beyond our control such as war, terrorist attacks and economic recession.

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

This report should be read in conjunction with our Form 10-KSB for the fiscal year ended December 31, 2004 filed with the Securities and Exchange Commission.

Overview

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.

We have three product lines: Quotestream portfolio management and market analysis software; a broad array of Corporate Financial Data Products; and Packaged Market Data Feeds. Quotestream 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 is available to customers in both a desktop version accessible via personal computer, and a companion wireless version accessible via a wide variety of wireless handheld devices.

12

Our Financial Data Product line consists of a suite of software applications that provide company and market information to corporate clients via the Internet. These Financial Data Products include stock and market quotes, fundamentals, historical and interactive charts, company news, filings, option chains, insider transactions, corporate financials, corporate profiles, investor relations provisions, level II, watchlists, and real-time “snap” quotes.

Our Packaged Market Data Feed products consist of the delivery of XML or CSV delimited data sources for companies requiring simple formatted financial data for internal use, or use outside our standard product provision. Our Packaged Market Data Feeds consist of quote data, fundamentals, historical information, and options.

We generate recurring revenue from each product line by licensing products to financial institutions and websites. Contracts to license Quotestream to our corporate clients typically have a term of 2 to 3 years and are automatically renewed unless notice is given within 90 days. We also generate Quotestream revenue through individual end-user licenses on a monthly or annual subscription fee basis. Financial Data Products 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 1 to 2 years and are automatically renewed unless notice is given within 90 days

Results of Operations – Three and nine month periods ended September 30, 2005 and September 30, 2004

Revenue Summary

	2005		2004		Change ($)		Change (%)
For the three months ended September 30,
Licensing revenue	$	667,148	$	267,315	$	399,833	150	%
For the nine months ended September 30,
Licensing revenue	$	1,665,176	$	646,282	$	1,018,894	158	%

Licensing revenue has increased 150% and 158% when comparing the three and nine month periods respectively ended September 30, 2005 and 2004. The majority of the revenue growth was from increased sales of our Financial Data Products. We continued to expand our line of Corporate Financial Data Products and Market Data Feeds which helped to contribute to the revenue increase from the comparable period. The number of Quotestream subscribers and the average subscription revenue per user were higher than the comparable period, also contributing to the increase in revenue.

13

Cost of Revenue and Gross Profit Summary

	2005			2004			Change ($)		Change (%)
For the three months ended September 30,
Cost of revenue	$	184,024		$	109,093		$	74,931	69	%
Gross profit	$	483,124		$	158,222		$	324,902	205	%
Gross margin %		72	%		59	%
For the nine months ended September 30,
Cost of revenue	$	494,232		$	350,096		$	144,136	41	%
Gross profit	$	1,170,944		$	296,186		$	874,758	295	%
Gross margin %		70	%		46	%

Our cost of revenue consists of stock exchange fees, data feeds and bandwidth charges. Cost of revenue increased 69% and 41% when comparing the three and nine month periods ended September 30, 2005 and 2004 respectively. The increase is primarily due to the cost of the additional data feeds required for new products and features offered in 2005. The increase is also due to variable stock exchange, data feed, and bandwidth usage charges resulting from the growth in the number of clients from the comparable period. Overall, the cost of revenue has decreased as a percentage of sales, as evidenced by our gross margin percentage which has increased from 59% and 46% in the three and nine month periods ended September 30, 2004 to 72% and 70% for the three and nine months periods ended September 30, 2005 respectively.

Operating Expenses Summary

	2005		2004		Change ($)		Change (%)
For the three months ended September 30,
Total operating expenses	$	468,501	$	193,646	$	274,855	142	%
Breakdown:
Sales and marketing		119,354		19,637		99,717	508	%
General and administrative		213,062		103,474		109,588	106	%
Software development		136,085		70,535		65,550	93	%
For the nine months ended September 30,
Total operating expenses	$	1,267,019	$	517,933	$	749,086	145	%
Breakdown:
Sales and marketing		325,366		38,877		286,489	737	%
General and administrative		608,811		303,329		305,482	101	%
Software development		332,842		175,727		157,115	89	%

14

Sales and Marketing

Sales and marketing consists primarily of marketing, investor relations, travel, and printing expenses. Sales and marketing expenses increased $99,717 and $286,489 for the three and nine month periods respectively ended September 30, 2005 when compared with the same periods in fiscal 2004. The increase is due to the costs associated with initiating the service of a contracted customer promotion and lead generation agency in January 2005. We anticipate that sales and marketing expense will increase in the future as additional promotion and lead generation services will be required to maintain our sales growth.

General and Administrative

General and administrative expenses consist primarily of salaries expense, office rent, insurance premiums, and professional fees. General and administrative expenses increased $109,588 and $305,482 for the three and nine month periods respectively ended September 30, 2005 when compared with the same periods in fiscal 2004. The increase is primarily due to increased salary and director fee expenses. The increase is also due to increased insurance expenses resulting from added liability insurance coverage in 2005 and increased office rent expense resulting from Quotemedia, Ltd., our wholly owned subsidiary, moving into larger office premises in June 2005. We anticipate that general and administrative expense will increase in the future due mainly to overall expansion. We also anticipate that general and administrative expense will increase in the future as the company moves toward becoming SOX 404 compliant.

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 increased $65,550 and $157,115 for the three and nine month periods respectively ended September 30, 2005 when compared with the same periods in fiscal 2004. The increase is due to the cost of hiring of additional software development personnel. We anticipate that software development expenses will continue to increase in the future as additional new software developers will be required to maintain the growth of the Company.

Other Income and (Expense) Summary

	2005			2004
For the three months ended September 30,
Total operating expenses	$	(11,643	)	$	(20,814	)
Breakdown:
Foreign exchange gain (loss)		519			(9,870	)
Interest expense		(12,162	)		(10,944	)

15

For the nine months ended September 30,
Total operating expenses	$	(32,168	)	$	(36,987	)
Breakdown:
Foreign exchange gain (loss)		(61	)		(9,681	)
Interest expense		(29,520	)		(16,997	)
Loss on disposal of equipment		(2,587	)		(10,309	)

Foreign Exchange Adjustment

Exchange gains and losses arise from the remeasurement of Canadian dollar monetary assets and liabilities into U.S. dollars. Exchange gains and losses vary with the change in associated exchanges rates.

Interest expense

Interest is accrued on certain amounts owed to related parties. Interest is accrued at rates ranging from 10% per annum to the prime bank rate minus 1%.

Loss on Disposal of Equipment

In June 2005, Quotemedia, Ltd., our wholly owned subsidiary, moved into larger office premises. As a result of this move, we expensed $2,587 which represented the net book value of the leasehold improvements associated with the previous office premises. In June 2004, we sold obsolete computer equipment for proceeds of $3,133. The equipment had a net book value of $13,442 resulting in a loss on disposal of $10,309.

Net income (loss) for the period

As a result of the foregoing, net income for the three months ended September 30, 2005 was $2,980 or approximately $0.00 per share compared to a loss of $56,238 and $(0.00) per share for the three months ended September 30, 2004. We incurred a loss for the nine months ended September 30, 2005 of $128,243 or approximately $(0.00) per share compared to a loss of $258,734 and $(0.00) per share for the nine months ended September 30, 2004. We have achieved quarterly profitability for the first time in the company’s history. We expect these trends to continue into the foreseeable future, as the company’s revenues continue to build based on the rapidly expanding market acceptance of our products.

16

Liquidity and Capital Resources

Our cash totaled $533,087 at September 30, 2005, as compared with $131,265 at December 31, 2004, an increase of $401,822. Net cash of $237,900 was provided by operations for the nine months ended September 30, 2005, primarily resulting from an increase in accounts payable and other liabilities and deferred revenue, offset by our net loss for the period and an increase in accounts receivable. Net cash used in investing activities for the nine months ended September 30, 2005 was $29,328 resulting from the purchase of new property and equipment. Net cash provided by financing activities for the nine months ended September 30, 2005 was $193,250 resulting from additional loans from related parties, offset by the repayment of amounts due to related parties.

We are currently generating positive cash flow from operations. We believe this will continue for the next 12 months, as our revenue is recurring in nature based on client contracts which have one to three year terms.

Our current liabilities include $30,000 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. Deferred revenue of $174,699 is also included in our current liabilities. The costs incurred to realize the deferred revenue in the next 12 months are minimal.

Based on the factors discussed above, we believe that our cash on hand and cash generated from operations will be sufficient to fund our current operations for 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 3. Disclosure Controls and Procedures

We have evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures as of September 30, 2005. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have each concluded that our disclosure controls and procedures are effective to ensure that we record, process, summarize, and report information required to be disclosed by us in our quarterly reports filed under the Securities Exchange Act within the time periods specified by the Securities and Exchange Commission’s rules and forms. During the quarterly period covered by this report, there have not been any changes in our internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS – NONE

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS – NONE

ITEM 3. DEFAULTS UPON SENIOR SECURITIES – NONE

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS – NONE

ITEM 5. OTHER INFORMATION – NONE

ITEM 6. EXHIBITS

Exhibit Number	Description of Exhibit
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended.
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended.
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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SIGNATURES

Pursuant to the requirements of Section 12 of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

QUOTEMEDIA, INC.
Dated: November 9, 2005
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)

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