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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, 2007

Commission File Number: 0-28599

QUOTEMEDIA, INC.

(Exact Name of
Small Business Issuer 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

(Issuers Telephone Number, Including Area Code)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 ̈.

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

On October 31, 2007, the Registrant had 67,278,916 shares of common stock outstanding.



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##### Table of Contents

QUOTEMEDIA, INC.

INDEX TO QUARTERLY REPORT

ON FORM 10-QSB



|                              |  |                                                             |  |     
|----------------------------- |  | ----------------------------------------------------------- |  | ----
|                              |  |                                                             |  | Page
|Part I. Financial Information |  |                                                            
|                              |  |                                                            
|Item 1.                       |  | Consolidated Financial Statements (unaudited)               |  |     
|                              |  |                                                            
|                              |  | Consolidated Balance Sheet (unaudited)                      |  | 3   
|                              |  |                                                            
|                              |  | Consolidated Statements of Operations (unaudited)           |  | 4   
|                              |  |                                                            
|                              |  | Consolidated Statements of Cash Flows (unaudited)           |  | 5   
|                              |  |                                                            
|                              |  | Notes to Consolidated Financial Statements (unaudited)      |  | 6   
|                              |  |                                                            
|Item 2.                       |  | Managements Discussion and Analysis                        |  | 16  
|                              |  |                                                            
|Item 3.                       |  | Controls and Procedures                                     |  | 24  
|                              | 
|Part II. Other Information    |  |                                                            
|                              |  |                                                            
|Item 1.                       |  | Legal Proceedings                                           |  | 24  
|                              |  |                                                            
|Item 2.                       |  | Unregistered Sales of Equity Securities and Use of Proceeds |  | 24  
|                              |  |                                                            
|Item 3.                       |  | Defaults Upon Senior Securities                             |  | 24  
|                              |  |                                                            
|Item 4.                       |  | Submission of Matters to a Vote of Security Holders         |  | 24  
|                              |  |                                                            
|Item 5.                       |  | Other Information                                           |  | 24  
|                              |  |                                                            
|Item 6.                       |  | Exhibits                                                    |  | 24  
|                              | 
|Signatures                    |  | 25                                                         



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##### Table of Contents

QUOTEMEDIA, INC.

CONSOLIDATED BALANCE SHEET

(Unaudited)



|                                                                                                        |  |                    |            |  
|------------------------------------------------------------------------------------------------------- |  | ------------------ | ---------- | -
|                                                                                                        |  | September 30, 2007 |           
|ASSETS                                                                                                  |  |                    |            |  
|Current assets:                                                                                         |  |                    |            |  
|Cash                                                                                                    |  | $                  | 358,260    |  
|Accounts receivable, net                                                                                |  |                    | 365,458    |  
|Prepaid expenses                                                                                        |  |                    | 271,253    |  
|Deposits                                                                                                |  |                    | 8,975      |  
|                                                                                                        |  |                    |            |  
|Total current assets                                                                                    |  |                    | 1,003,946  |  
|Property and equipment, net                                                                             |  |                    | 664,250    |  
|Intangible assets                                                                                       |  |                    | 191,853    |  
|                                                                                                        |  |                    |            |  
|Total assets                                                                                            |  | $                  | 1,860,049  |  
|                                                                                                        |  |                    |            |  
|LIABILITIES AND STOCKHOLDERS DEFICIT                                                                   |  |                    |            |  
|Current liabilities:                                                                                    |  |                    |            |  
|Accounts payable and accrued liabilities                                                                |  | $                  | 416,130    |  
|Deferred revenue                                                                                        |  |                    | 438,763    |  
|Current portion of amounts due to related parties                                                       |  |                    | 428,347    |  
|                                                                                                        |  |                    |            |  
|Total current liabilities                                                                               |  |                    | 1,283,240  |  
|                                                                                                        |  |                    |            |  
|Long-term portion of amounts due to related parties                                                     |  |                    | 2,491,402  |  
|Stockholders deficit:                                                                                  |  |                    |            |  
|Preferred stock, non designated, 10,000,000 shares authorized, none issued                              |  |                    |           |  
|Common stock, $0.001 par value, 100,000,000 shares authorized, 67,278,916 shares issued and outstanding |  |                    | 67,280     |  
|Additional paid-in capital                                                                              |  |                    | 6,854,810  |  
|Accumulated deficit                                                                                     |  |                    | (8,836,683 | )
|                                                                                                        |  |                    |            |  
|Total stockholders deficit                                                                             |  |                    | (1,914,593 | )
|Total liabilities and stockholders deficit                                                             |  | $                  | 1,860,049  |  
|                                                                                                        |  |                    |            |  

See accompanying notes



3



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##### Table of Contents

QUOTEMEDIA, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)



|                                    |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|----------------------------------- |  | -------------------------------- | ---------- | - | ------------------------------- | - | ---------- | ---- |  | - | ---------- | - |  | - | ---------- | -
|                                    |  | Three months ended September 30, |            |   | Nine months ended September 30, |  
|                                    |  | 2007                             |            |   | 2006                            |   |            | 2007 |  |   | 2006       |  
|OPERATING REVENUE                   |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Licensing revenue                   |  | $                                | 1,501,097  |   |                                 | $ | 960,111    |      |  | $ | 3,993,202  |   |  | $ | 2,651,248  |  
|Cost of revenue                     |  |                                  | 627,023    |   |                                 |   | 378,116    |      |  |   | 1,739,882  |   |  |   | 990,013    |  
|                                    |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Gross Profit                        |  |                                  | 874,074    |   |                                 |   | 581,995    |      |  |   | 2,253,320  |   |  |   | 1,661,235  |  
|                                    |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|OPERATING EXPENSES                  |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Sales and marketing                 |  |                                  | 499,975    |   |                                 |   | 244,818    |      |  |   | 1,362,708  |   |  |   | 616,878    |  
|General and administrative          |  |                                  | 387,259    |   |                                 |   | 329,201    |      |  |   | 1,138,260  |   |  |   | 929,428    |  
|Software development                |  |                                  | 299,713    |   |                                 |   | 134,906    |      |  |   | 710,940    |   |  |   | 378,532    |  
|                                    |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|                                    |  |                                  | 1,186,947  |   |                                 |   | 708,925    |      |  |   | 3,211,908  |   |  |   | 1,924,838  |  
|                                    |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|OPERATING LOSS                      |  |                                  | (312,873   | ) |                                 |   | (126,930   | )    |  |   | (958,588   | ) |  |   | (263,603   | )
|OTHER INCOME AND EXPENSES           |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Foreign exchange loss               |  |                                  | (35,322    | ) |                                 |   | (9,224     | )    |  |   | (77,820    | ) |  |   | (13,600    | )
|Interest expense, net               |  |                                  | (67,141    | ) |                                 |   | (27,889    | )    |  |   | (175,915   | ) |  |   | (75,663    | )
|Loss on disposal of equipment       |  |                                  |           |   |                                 |   |           |      |  |   |           |   |  |   | (1,612     | )
|                                    |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|                                    |  |                                  | (102,463   | ) |                                 |   | (37,113    | )    |  |   | (253,735   | ) |  |   | (90,875    | )
|                                    |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|NET LOSS                            |  |                                  | (415,336   | ) |                                 |   | (164,043   | )    |  |   | (1,212,323 | ) |  |   | (354,478   | )
|                                    |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|LOSS PER SHARE                      |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Basic and diluted loss per share    |  | $                                | (0.01      | ) |                                 | $ | (0.00      | )    |  | $ | (0.02      | ) |  | $ | (0.01      | )
|                                    |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|WEIGHTED AVERAGE SHARES OUTSTANDING |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Basic and diluted                   |  |                                  | 66,907,945 |   |                                 |   | 63,156,154 |      |  |   | 66,286,926 |   |  |   | 62,142,679 |  
|                                    |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  

See accompanying notes



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QUOTEMEDIA, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



|                                                                                          |  |                                     |            |   |                                     |   |          |  
|----------------------------------------------------------------------------------------- |  | ----------------------------------- | ---------- | - | ----------------------------------- | - | -------- | -
|                                                                                          |  | Nine months endedSeptember 30, 2007 |            |   | Nine months endedSeptember 30, 2006 |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                     |  |                                     |            |   |                                     |   |          |  
|Net loss                                                                                  |  | $                                   | (1,212,323 | ) |                                     | $ | (354,478 | )
|Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |  |                                     |            |   |                                     |   |          |  
|Depreciation and amortization                                                             |  |                                     | 161,141    |   |                                     |   | 60,693   |  
|Loss on disposal of equipment                                                             |  |                                     |           |   |                                     |   | 1,612    |  
|Bad debt expense                                                                          |  |                                     | 72,454     |   |                                     |   | 39,239   |  
|Stock-based compensation expense                                                          |  |                                     | 196,980    |   |                                     |   | 123,987  |  
|Return of capital stock from vendor settlement                                            |  |                                     |           |   |                                     |   | (12,750  | )
|Non-cash barter revenue                                                                   |  |                                     | (90,000    | ) |                                     |   | (225,000 | )
|Non-cash barter advertising expense                                                       |  |                                     | 75,000     |   |                                     |   | 225,000  |  
|Changes in assets and liabilities:                                                        |  |                                     |            |   |                                     |   |          |  
|Accounts receivable                                                                       |  |                                     | (267,879   | ) |                                     |   | 6,497    |  
|Prepaid expenses                                                                          |  |                                     | (50,046    | ) |                                     |   | (30,843  | )
|Deposits                                                                                  |  |                                     | 2,584      |   |                                     |   | 1,227    |  
|Accounts payable and amounts due to related parties                                       |  |                                     | 378,577    |   |                                     |   | 711,781  |  
|Deferred revenue                                                                          |  |                                     | 74,978     |   |                                     |   | 130,975  |  
|                                                                                          |  |                                     |            |   |                                     |   |          |  
|Net cash provided by (used in) operating activities                                       |  |                                     | (658,534   | ) |                                     |   | 677,940  |  
|                                                                                          |  |                                     |            |   |                                     |   |          |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                     |  |                                     |            |   |                                     |   |          |  
|Fixed asset additions and capitalized application software                                |  |                                     | (341,679   | ) |                                     |   | (510,465 | )
|                                                                                          |  |                                     |            |   |                                     |   |          |  
|Net cash used in investing activities                                                     |  |                                     | (341,679   | ) |                                     |   | (510,465 | )
|                                                                                          |  |                                     |            |   |                                     |   |          |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                     |  |                                     |            |   |                                     |   |          |  
|Proceeds from exercise of stock options for cash                                          |  |                                     | 7,500      |   |                                     |   |         |  
|Repayment of amounts due to related parties                                               |  |                                     | (35,278    | ) |                                     |   | (30,000  | )
|Loans from related parties                                                                |  |                                     | 500,000    |   |                                     |   |         |  
|Issuance of capital stock for cash, net                                                   |  |                                     |           |   |                                     |   | 16,000   |  
|                                                                                          |  |                                     |            |   |                                     |   |          |  
|Net cash provided by (used in) financing activities                                       |  |                                     | 472,222    |   |                                     |   | (14,000  | )
|                                                                                          |  |                                     |            |   |                                     |   |          |  
|Net increase (decrease) in cash                                                           |  |                                     | (527,991   | ) |                                     |   | 153,475  |  
|Cash, beginning of period                                                                 |  |                                     | 886,251    |   |                                     |   | 670,078  |  
|                                                                                          |  |                                     |            |   |                                     |   |          |  
|Cash, end of period                                                                       |  | $                                   | 358,260    |   |                                     | $ | 823,553  |  
|                                                                                          |  |                                     |            |   |                                     |   |          |  

See supplementary information (note 6)

See accompanying notes



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QUOTEMEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2007

(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, 2006 contained in our Form 10-KSB filed with the Securities and Exchange Commission
dated March 30, 2007.



|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) Revenue recognition

Revenue is recognized over contractual periods as services are performed and when collection of the amount due is reasonably assured. Amounts recognized
as revenue are determined based upon contractually agreed upon fee schedules with our customers. The Company accounts for subscription revenues received in advance of service being performed by deferring such amounts until the related services are
performed. The Company considers the following factors when determining if collection of a fee is reasonably assured: customer credit-worthiness, past transaction history with the customer, current economic industry trends, and changes in customer
payment terms. If these factors do not indicate collection is reasonably assured, revenue is deferred until collection becomes reasonably assured, which is generally upon receipt of cash (also see description of barter revenue below).



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QUOTEMEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2007

(Unaudited)



d) Barter revenue

The Company licenses 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 is 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 does not exceed
the value of cash based revenue in any period. Unused advertising credits are reflected as prepaid expenses. As of September 30, 2007, $180,000 in unused advertising credits was included in prepaid expenses.

The following table summarizes our barter revenue transactions for the three and nine months ended September 30, 2007 and 2006:



|                        |  |                                 |        |                                |   |        |  |      |         |  |   |        
|----------------------- |  | ------------------------------- | ------ | ------------------------------ | - | ------ |  | ---- | ------- |  | - | -------
|                        |  | Three months endedSeptember 30, |        | Nine months endedSeptember 30,
|                        |  | 2007                            |        | 2006                           |   | 2007   |  | 2006
|Barter revenue earned   |  | $                               | 90,000 |                                | $ | 75,000 |  | $    | 270,000 |  | $ | 225,000
|Advertising credit used |  | $                               | 90,000 |                                | $ | 75,000 |  | $    | 240,000 |  | $ | 225,000

e) Property and equipment



|                                 |  |      |         |                         |   |               |  |   |        
|-------------------------------- |  | ---- | ------- | ----------------------- | - | ------------- |  | - | -------
|As of September 30, 2007:        |  | Cost |         | AccumulatedDepreciation |   | Net BookValue
|Computer equipment               |  | $    | 259,219 |                         | $ | 91,882        |  | $ | 167,337
|Office furniture and equipment   |  |      | 65,004  |                         |   | 23,919        |  |   | 41,085 
|Leasehold improvements           |  |      | 29,478  |                         |   | 10,683        |  |   | 18,795 
|Capitalized application software |  |      | 599,881 |                         |   | 162,848       |  |   | 437,033
|                                 |  |      |         |                         |   |               |  |   |        
|                                 |  | $    | 953,582 |                         | $ | 289,332       |  | $ | 664,250
|                                 |  |      |         |                         |   |               |  |   |        

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
|Capitalized application software |  | 3 years      



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QUOTEMEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2007

(Unaudited)



For the three and nine months ended September 30, 2007, the Company capitalized $89,864 and
$282,756 in costs respectively, related to the development of new software applications and enhancements made to existing software applications. Software applications are used by our subscribers to access, manage and analyze information in our
databases. For the three months ended September 30, 2007 and 2006, amortization expenses associated with the internally developed application software was $44,900 and $15,740 respectively. For the nine months ended September 30, 2007 and
2006, amortization expenses associated with the internally developed application software was $109,827 and $29,543 respectively. At September 30, 2007, the remaining book value of the application software was $437,033.

Depreciation expense for equipment and leaseholds for the three months ended September 30, 2007 and 2006 was $17,255 and $12,561 respectively.
Depreciation expense for the nine months ended September 30, 2007 and 2006 was $49,707 and $30,971 respectively.

f) Intangible
assets



|                                                   |  |      |         |                         |   |               |  |   |        
|-------------------------------------------------- |  | ---- | ------- | ----------------------- | - | ------------- |  | - | -------
|As at September 30, 2007:                          |  | Cost |         | AccumulatedAmortization |   | Net BookValue
|Amortized intangible assets:                       |  |      |         |                         |   |               |  |   |        
|Purchase option for office building                |  | $    | 10,000  |                         | $ | 2,321         |  | $ | 7,679  
|                                                   |  |      |         |                         |   |               |  |   |        
|Unamortized intangible assets:                     |  |      |         |                         |   |               |  |   |        
|Goodwill associated with purchase of business unit |  |      | 110,000 |                         |   |              |  |   | 110,000
|Perpetual software licenses                        |  |      | 63,522  |                         |   |              |  |   | 63,522 
|Domain names                                       |  |      | 10,652  |                         |   |              |  |   | 10,652 
|                                                   |  |      |         |                         |   |               |  |   |        
|                                                   |  |      | 184,174 |                         |   |              |  |   | 184,174
|                                                   |  |      |         |                         |   |               |  |   |        
|Total intangible assets                            |  | $    | 194,174 |                         | $ | 2,321         |  | $ | 191,853
|                                                   |  |      |         |                         |   |               |  |   |        

Amortization for amortized intangible assets is calculated on a straight-line basis over the
assets estimated useful lives. The useful life of the office building purchase option is 5 years which is the term of the option. For the three and nine months ended September 30, 2007, amortization expense for amortized intangible assets was
$(107) and $1,607 respectively. The Company had accrued $19,295 for the purchase of historical financial data in June 2007. This transaction and the associated accumulated amortization of $643 were reversed in July 2007 as the Company never took
possession of the data. This resulted in a net recovery of $107 in amortization expenses for the three month period ending September 30, 2007. Amortization expense for intangible assets was $179 for the three and nine month comparative periods.



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QUOTEMEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2007

(Unaudited)



The Company assesses potential impairments to its unamortized intangible assets when there is
evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recovered. An impairment loss is recognized when the carrying amount of the unamortized intangible asset is not recoverable and exceeds its
fair value. The carrying amount of an unamortized intangible asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Any required impairment loss is
measured as the amount by which the carrying amount of an unamortized intangible asset exceeds its fair value and is recorded as a reduction in the carrying value of the related asset and a charge to operating results.

g) Stock-based compensation

The
following table summarizes the classification of the stock-based compensation expense recognized in the Consolidated Statements of Operations as follows:



|                               |  |                                 |  |                                |  |         |  |        
|------------------------------ |  | ------------------------------- |  | ------------------------------ |  | ------- |  | -------
|                               |  | Three months endedSeptember 30, |  | Nine months endedSeptember 30,
|                               |  | 2007                            |  | 2006                           |  | 2007    |  | 2006   
|Sales and marketing            |  | 28,737                          |  | 7,974                          |  | 54,637  |  | 23,922 
|General and administrative     |  | 2,514                           |  | 2,061                          |  | 5,829   |  | 4,047  
|Software development           |  | 63,667                          |  | 35,190                         |  | 136,514 |  | 96,018 
|                               |  |                                 |  |                                |  |         |  |        
|Total stock-based compensation |  | 94,918                          |  | 45,225                         |  | 196,980 |  | 123,987
|                               |  |                                 |  |                                |  |         |  |        

As of September 30, 2007, there was $533,638 of total unrecognized compensation cost related
to non-vested stock-based compensation, which is to be recognized over a weighted average period of 2.24 years.

We calculate the fair value
of stock options granted under the provisions of FAS No. 123R using the Black-Scholes valuation model with the following assumptions:



|                                               |  |                                 |           |                                |      |     |      |   |           |      |  |   |            |  
|---------------------------------------------- |  | ------------------------------- | --------- | ------------------------------ | ---- | --- | ---- | - | --------- | ---- |  | - | ---------- | -
|                                               |  | Three months endedSeptember 30, |           | Nine months endedSeptember 30, |     
|                                               |  | 2007                            |           |                                | 2006 |     | 2007 |   |           | 2006 | 
|Expected dividend yield                        |  |                                 |          |                                |      | n/a |      |   |          |      |  |   |           |  
|Expected stock price volatility                |  |                                 | 93        | %                              |      | n/a |      |   | 93        | %    |  |   | 71         | %
|Risk-free interest rate                        |  |                                 | 4         | %                              |      | n/a |      |   | 4         | %    |  |   | 4          | %
|Expected life of options                       |  |                                 | 4.6 years |                                |      | n/a |      |   | 4.7 years |      |  |   | 6.25 years |  
|Weighted average fair value of options granted |  | $                               | 0.14      |                                |      | n/a |      | $ | 0.14      |      |  | $ | 0.21       |  



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QUOTEMEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2007

(Unaudited)



Expected volatility is based on the historical volatility of the Companys share price in the
period prior to option grant equivalent to the expected life of the options. The expected term is determined under the simplified method as allowed under the provisions of the Securities and Exchange Commissions Staff Accounting
Bulletin No. 107 and represents the period of time that options granted are expected to be outstanding. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the
time of grant.

h) Software development expenses

Software development costs incurred prior to establishing the technological feasibility of our software application products, and costs incurred to maintain existing products and services are expensed as incurred. The
Company expensed $299,713 and $134,906 in software development costs during the three months ended September 30, 2007 and 2006, respectively. The Company expensed $710,940 and $378,532 in software development costs during the nine months ended
September 30, 2007 and 2006, respectively

i) New accounting standards

Effective January 1, 2007, the Company adopted FASB Interpretation No. 48 entitled Accounting for Uncertainty in Income TaxesAn
Interpretation of FASB Statement No. 109 (FIN 48). This interpretation prescribes a recognition threshold and measurement method for the recognition of a tax position taken or expected to be taken in a tax return. FIN 48 also
provides guidance related to uncertain tax positions on the derecognition, measurement (according to the more likely than not criterion), classification, interest and penalties, accounting in interim periods and disclosure. We have evaluated all tax
positions in accordance with FIN 48, and have concluded that there is no impact to our consolidated financial statements. Refer to Note 5 for additional disclosure.

In February 2007, FASB issued SFAS No. 159 entitled The Fair Value Option for Financial Assets and Financial LiabilitiesIncluding an amendment of FASB Statement No. 115 (FAS
No. 159). FAS No. 159 permits companies to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value and establishes presentation and disclosure
requirements. Unrealized gains and losses on items for which the fair value option has been elected will be reported in earnings. FAS No. 159 is effective for fiscal years beginning after November 15, 2007. The impact, if any, that FAS
No. 159 will have on our consolidated financial statements is not yet determinable.

In September 2006, FASB issued SFAS No. 157
entitled Fair Value Measurements (FAS No. 157). This statement clarifies the definition of fair value to provide greater consistency and clarity on existing accounting pronouncements that require fair value measurements,
provides a framework for using fair value to measure assets and liabilities and expands disclosures about fair value measurements. FAS No. 157 is required to be applied for fiscal years beginning after November 15, 2007 and interim periods
within that year. We do not believe that the implementation of FAS No. 157 will impact our consolidated financial statements.



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QUOTEMEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2007

(Unaudited)



j) Reclassification

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



|3. | RELATED PARTIES
|-- | ---------------

In 2004 the Company entered into a
loan agreement with Bravenet Web Services, Inc. (Bravenet). On March 30, 2007, the Company borrowed an additional $500,000. As at September 30, 2007, the Company has borrowed a total of $1,000,000 from Bravenet with interest at
10% per annum. The President and Chief Executive Officer of Quotemedia, Ltd., a wholly owned subsidiary, is a control person of Bravenet. At September 30, 2007, the loan balance due to Bravenet including accrued interest is $1,181,949.

From January 1, 2005 to November 30, 2006, Bravenet provided the Company customer promotion and lead generation services. In
April 2007, the Company made a payment of $78,358 towards amounts due to Bravenet for accrued customer promotion and lead generation services. At September 30, 2007, all amounts due to Bravenet for customer promotion and lead generation
services have been accrued in amounts due to related parties, and total $563,873 including accrued interest at 10% per annum.

On
September 29, 2006, Quotemedia, Ltd. purchased the Bravenet business unit that was responsible for providing the Company customer promotion and lead generation services. The $110,000 purchase price due to Bravenet has been accrued in amounts
due to related parties, and remains unpaid as at September 30, 2007. At September 30, 2007, the balance due to Bravenet for the unpaid purchase price is $136,142, which includes interest accrued at 10%.

Commencing May 1, 2006, Bravenet began providing computer hosting and maintenance services to the Company for approximately $7,000 per month. In
April 2007, the Company paid Bravenet $102,820 which represented the total amount due to Bravenet, including interest, for services provided from May 1, 2006 to March 31, 2007. At September 30, 2007, the balance due to Bravenet for
unpaid computer hosting and maintenance services is $46,215. This amount includes interest accrued at 10%.

Commencing May 1, 2006, the
Company began leasing office space from Harrison Avenue Holdings Ltd. (Harrison) for approximately $10,000 per month. The President and Chief Executive Officer of Quotemedia, Ltd., a wholly owned subsidiary, is a control person of
Harrison. At September 30, 2007, all amounts due to Harrison related to the leased office space have been accrued in amounts due to related parties. As at September 30, 2007, the balance due to Harrison for unpaid office rent is $228,715.
This amount includes interest accrued at 10%.



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QUOTEMEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2007

(Unaudited)



At September 30, 2007, the Company owed $745,579 to an officer of the Company for accrued
salary. This amount includes interest accrued at 10%.

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.



|4. | STOCKHOLDERS DEFICIT
|-- | ---------------------

a) Preferred shares

We are authorized to issue up to 10,000,000 non-designated preferred shares at the Board of Directors discretion. As at
September 30, 2007 no preferred shares have been issued.

b) Common stock

During the three months ended September 30, 2007, we issued 324,625 shares of common stock to an officer of the Company pursuant to the exercise of
warrants at an exercise price of $0.09. The officer surrendered 132,801 shares of previously held mature shares of our common stock to pay the exercise cost of $29,216. The surrendered common stock was valued at $0.22 which was the closing price of
our common stock on the date of the transaction. The surrendered common stock was subsequently cancelled.

During the three months ended
September 30, 2007, we issued a total of 179,147 shares of common stock to an officer and a former consultant of the Company pursuant to the exercise of stock options and warrants. The officer and former employee exercised a total of 313,951
stock options and warrants at an exercise price of $0.09. The Company repurchased a total of 134,804 shares of common stock to pay the total exercise cost of $28,256. The repurchased common stock was valued at stock prices ranging from $0.20 to
$0.22 per share which were the closing prices of our common stock on the dates of the transactions. Pursuant to the terms of the option and warrant agreements, the Companys Board of Directors is required to approve the repurchase of the
shares. The average of the value of the shares repurchased and surrendered was $0.21 per share.

c) Stock option plan

We have stock option plans whereby shares of our common stock may be issued pursuant to the exercise of stock options granted to employees, officers,
directors, advisors, and our independent contractors. The exercise price of the common stock underlying an option will be determined by the Board of Directors or compensation committee and may be equal to, greater than, or less than the market value
of our common stock at the date of grant but in no event less than 50% of such market value. The options generally vest in one to four years unless, at the discretion of the Board of Directors, alternative vesting methods are allowed.



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QUOTEMEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2007

(Unaudited)



The term of each option is determined at the time of grant and may extend to a maximum of ten years. At September 30, 2006, we had reserved 12,500,000
options for issuance under the stock option plan. Options may also be granted outside our stock option plan. Options granted outside the plan generally contain terms that are more restrictive in nature and have a maximum expiration term of ten
years. We may grant an unlimited number of options outside our stock option plan at the discretion of the Board of Directors.

The
following table represents stock option and warrant activity for the nine months ended September 30, 2007:



|                                        |  |                     |   |  |                                |     
|--------------------------------------- |  | ------------------- | - |  | ------------------------------ | ----
|                                        |  | Options andWarrants |   |  | Weighted-AverageExercise Price
|Outstanding at December 31, 2006        |  | 39,969,357          |   |  | $                              | 0.10
|Granted under company stock option plan |  | 3,741,000           |   |  | $                              | 0.19
|Warrants granted                        |  | 3,202,803           |   |  | $                              | 0.19
|Stock options exercised                 |  | (725,000            | ) |  | $                              | 0.07
|Warrants exercised                      |  | (3,064,104          | ) |  | $                              | 0.14
|Forfeited/Expired                       |  | (6,925,803          | ) |  | $                              | 0.40
|                                        |  |                     |   |  |                                |     
|Outstanding at September 30, 2007       |  | 36,198,253          |   |  | $                              | 0.10
|                                        |  |                     |   |  |                                |     

The following table summarizes our non-vested stock option activity for the nine months ended
September 30, 2007:



|                                                            |  |                     |   |  |                                      |     
|----------------------------------------------------------- |  | ------------------- | - |  | ------------------------------------ | ----
|                                                            |  | Options andWarrants |   |  | Weighted-AverageGrant Date FairValue
|Non-vested stock options and warrants at December 31, 2006  |  | 2,601,000           |   |  | $                                    | 0.36
|Granted during the period                                   |  | 6,943,803           |   |  | $                                    | 0.19
|Vested during the period                                    |  | (2,575,250          | ) |  | $                                    | 0.24
|Forfeited during the period                                 |  | (1,801,875          | ) |  | $                                    | 0.35
|                                                            |  |                     |   |  |                                      |     
|Non-vested stock options and warrants at September 30, 2007 |  | 5,167,678           |   |  | $                                    | 0.20
|                                                            |  |                     |   |  |                                      |     



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QUOTEMEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2007

(Unaudited)



|                       |  |                                        |  |                                          |  |                              |      |                                         |            |                               |   |     
|---------------------- |  | -------------------------------------- |  | ---------------------------------------- |  | ---------------------------- | ---- | --------------------------------------- | ---------- | ----------------------------- | - | ----
|                       |  | Options and Warrants Outstanding       |  | Options and Warrants Exercisable        
|Range ofExercise Price |  | NumberOutstanding at September 30,2007 |  | WeightedAverageRemainingContractual Life |  | WeightedAverageExercisePrice |      | Number Exercisable at September 30,2007 |            | WeightedAverageExercise Price
|$0.05-0.10             |  | 27,567,450                             |  | 0.22                                     |  | $                            | 0.05 |                                         | 27,567,450 |                               | $ | 0.05
|$0.11-0.30             |  | 6,780,803                              |  | 7.76                                     |  | $                            | 0.19 |                                         | 1,828,125  |                               | $ | 0.19
|$0.31-0.50             |  | 1,850,000                              |  | 4.09                                     |  | $                            | 0.39 |                                         | 1,635,000  |                               | $ | 0.39

On September 12, 2007, the Companys Board of Directors and Compensation Committee
authorized a reduction of the exercise price of stock options and warrants granted to all employees and directors who held options or warrants with exercise prices greater than $0.24. The new exercise price for those options and warrants were fixed
at $0.19 per share, which was the market price of the Companys Common Stock at the time of the repricings. The vesting period and the expiry dates of the repriced options and warrants remained unchanged, except for fully vested warrants held
by certain officers and directors that were exchanged for warrants that vest in equal monthly installments over a two year period beginning September 12, 2007. The repricing of the options and warrants was accounted for as an exchange of the
original awards for new awards. The incremental increase in fair value of the new awards resulted in additional stock-based compensation expenses totaling $197,297 that will be recognized over the expected term of the new awards.

As at September 30, 2007 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 September 30, 2007 the aggregate intrinsic value of options and warrants outstanding
was $4,814,891 and the aggregate intrinsic value of options and warrants exercisable was $4,666,310. Total intrinsic value of options exercised during the nine months ended September 30, 2007 was $562,154. 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.

The Company is authorized to issue up to 100,000,000 common shares and 10,000,000 non-designated preferred shares. Until such time as the Company is able to increase its authorized number of shares of common stock, in the event that an
exercise of warrants or stock options would result in the number of issued common shares exceeding the authorized limit, the Company would designate the preferred shares with the same rights and preferences as the common shares to accommodate the
exercise of the options or warrants.



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QUOTEMEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2007

(Unaudited)



|5. | INCOME TAXES
|-- | ------------

On January 1, 2007, the Company
adopted the provisions of the Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes (FIN 48), an interpretation of Financial Accounting Standards Board No. 109, Accounting for
Income Taxes (FASB 109). FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken in a tax return. The Company must determine whether it is
more-likely-than-not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Once it is determined that a position
meets the more-likely-than-not recognition threshold, the position is measured to determine the amount of benefit to recognize in the financial statements. FIN 48 applies to all tax positions related to income taxes subject to FASB 109. Based
on the analysis performed, the Company did not record any unrecognized tax positions as of January 1, 2007 or September 30, 2007.

The Company is subject to income taxes in the United States and Canada. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. Tax years
ranging from 1999 to 2006 remain subject to examination in the United States and Canada. We recognize potential interest and penalties related to income taxes matters in income tax expense.



|6. | SUPPLEMENTARY CASH FLOW INFORMATION
|-- | -----------------------------------



|                                                             |  |      |         |      |   |        
|------------------------------------------------------------ |  | ---- | ------- | ---- | - | -------
|Nine months ended September 30,                              |  | 2007 |         | 2006
|Cash flow information:                                       |  |      |         |      |   |        
|Cash paid for Interest                                       |  | $    | 10,422  |      | $ | 1,426  
|Cash received for Interest                                   |  |      | 15,302  |      |   | 15,522 
|Cash paid for taxes                                          |  |      |        |      |   |       
|Exercise of stock options with mature shares of common stock |  |      | 345,085 |      |   | 312,961

During the nine months ended September 30, 2007, we issued a total of 2,430,420 shares of
common stock to an officer of the Company pursuant to the exercise of warrants and stock options. The officer surrendered a total of 1,222,005 shares of previously held mature shares of our common stock to pay the exercise cost of $345,085. We also
issued a total of 1,308,684 shares of common stock to employees and former consultants of the Company pursuant to the exercise of stock options. The Company repurchased a total of 511,916 shares of common stock to pay the total exercise cost of
$143,637.



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|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 of Form 10-KSB for the year ended December 31, 2006 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, 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, 2006 filed with the Securities and Exchange Commission.

Overview

We are a financial software developer and a distributor of market data and research
information to online brokerages, clearing firms, banks, media properties, public companies and financial service corporations world wide. 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 delivered over the Internet or via dedicated telecommunication lines, as well as supplemental fundamental, historical, and analytical data, keyed to the same symbology which provides a complete market data solution to
be offered to our customers.

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.



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All of our content solutions are completely customizable, and embed directly into client web pages for seamless integration with existing content, and
comprise only a single line of code for quick installation and fast loading efficiency.

Our Portfolio Management Systems consist of
Quotestream Desktop, Quotestream Wireless, and our Web Portfolio Management systems. 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 in a
wireless version accessible via a wide variety of wireless handheld devices. Quotestream Wireless and Quotestream Desktop are true companion products  any changes made to portfolios in either application are automatically
reflected in the other. We introduced Quotestream II to the market in limited release during the second quarter of 2007. Quotestream II is our next generation portfolio management system, with enhanced features and functionality compared to our
original Quotestream product  most notably tick-by-tick true streaming data, significantly enhanced charting features, and a broad range of additional research and analytical content and functionality. The Company also substantially completed
the development of Quotestream Professional in the third quarter of 2007. Where Quotestream II is geared towards providing a professional level experience to non-professional users, Quotestream Professional is designed specifically for use by
financial services professionals, offering unparalleled coverage and functionality at extremely aggressive pricing. We expect that Quotestream Professional and Quotestream II will be available for general release in the fourth quarter of 2007 and
the first quarter of 2008 respectively.

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 two to three 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. 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 two years and are automatically renewed unless notice is given within 90 days.

During the three and nine months ended September 30, 2007, we achieved significant revenue growth compared to the same periods in 2006. The growth
resulted from increased sales of our Interactive Content and Data Applications as we continued to expand our line of financial data products and the depth of our data offerings throughout the year. Increased subscriptions to Quotestream during the
year also contributed to our revenue growth. Based on revenue earned to date in 2007, and on existing revenue under contract as of the date of this report, we anticipate that our revenue for fiscal 2007 will be significantly greater than the revenue
earned in fiscal 2006. We expect revenue growth in 2008 to be primarily driven by our Interactive Content and Data Applications and our new Quotestream II and Quotestream Professional product offerings. We also anticipate growth as we expand our
product line to include international market data consisting of equity quotes from many of the major world exchanges as well as other additional new data sets. We also anticipate acquiring new customers for our Data Feed Services.



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Our comparative gross profit margin decreased resulting from the addition, over the course of 2006 and
continuing throughout the quarter just ended, of new fixed data costs to support the new products developed during the period, including Quotestream II and our new Market Data Feeds. Because a significant portion of these costs are fixed, we expect
higher gross margins as revenue increases in future quarters.

Our operating expenses were also significantly greater in the three and nine
months ended September 30, 2007 than in the comparative periods in 2006. This growth was as result of increasing our staffing and operating capacities during the past 18 months, to develop and support the new products we have recently launched,
and new products that we plan to introduce to the market in the third and fourth quarters of 2007

Our plan of operation for the remainder
of 2007 will focus on marketing Quotestream II for deployments by brokerage firms to their clients, and moving strongly into the investment professional market with Quotestream Professional. We also plan to release new international data sets and
market our Data Feed Services. We will continue to add new data content to expand our line of Interactive Content and Data Applications and to license our Quotestream Wireless applications.

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 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 economic downturns 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. In addition, because our company has had only limited operations to date, there can be no assurance that our estimates will prove to be accurate or that unforeseen events will
not occur.

Results of Operations  Three and Nine Months ended September 30, 2007 and September 30, 2006

Revenue



|                                 |  |      |           |      |   |            |  |            |           |  |    |  
|-------------------------------- |  | ---- | --------- | ---- | - | ---------- |  | ---------- | --------- |  | -- | -
|                                 |  | 2007 |           | 2006 |   | Change ($) |  | Change (%) |          
|Three months ended September 30, |  |      |           |      |   |            |  |            |           |  |    |  
|Licensing revenue                |  | $    | 1,501,097 |      | $ | 960,111    |  | $          | 540,986   |  | 56 | %
|Nine months ended September 30,  |  |      |           |      |   |            |  |            |           |  |    |  
|Licensing revenue                |  | $    | 3,993,202 |      | $ | 2,651,248  |  | $          | 1,341,954 |  | 51 | %



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Licensing revenue increased $540,986 (56%) and $1,341,954 (51%) when comparing the three and
nine month periods ended September 30, 2007 and 2006. This increase reflects sales growth for both our Interactive Content and Data Applications and our Quotestream Portfolio Management System.

We expanded our line of Interactive Content and Data Applications, which includes XML market data feeds, contributing to an increase from the comparative
periods of both the number of clients and the average per client revenue. This resulted in a $441,368 (74%) and $958,433 (58%) increase in Interactive Content and Data Application revenue when comparing the three and nine month periods
ended September 30, 2007 and 2006. The number of Quotestream subscribers and the average subscription revenue per user also increased during the three and nine month periods ended September 30, 2007, resulting in a $99,617 (27%) and
383,520 (39%) increase in Portfolio Management System revenue from the comparative periods. Portfolio Management System revenue includes revenue from licensing 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 nine month periods ended September 30, 2007, compared to
$75,000 and $150,000 earned in comparative periods.

Cost of Revenue and Gross Profit Summary



|                                 |  |      |           |   |      |   |           |            |  |            |         |  |    |  
|-------------------------------- |  | ---- | --------- | - | ---- | - | --------- | ---------- |  | ---------- | ------- |  | -- | -
|                                 |  | 2007 |           |   | 2006 |   |           | Change ($) |  | Change (%) |        
|Three months ended September 30, |  |      |           |   |      |   |           |            |  |            |         |  |    |  
|Cost of revenue                  |  | $    | 627,023   |   |      | $ | 378,116   |            |  | $          | 248,907 |  | 66 | %
|Gross profit                     |  | $    | 874,074   |   |      | $ | 581,995   |            |  | $          | 292,079 |  | 50 | %
|Gross margin %                   |  |      | 58        | % |      |   | 61        | %          |  |            |         |  |    |  
|Nine months ended September 30,  |  |      |           |   |      |   |           |            |  |            |         |  |    |  
|Cost of revenue                  |  | $    | 1,739,882 |   |      | $ | 990,013   |            |  | $          | 749,869 |  | 76 | %
|Gross profit                     |  | $    | 2,253,320 |   |      | $ | 1,661,235 |            |  | $          | 592,085 |  | 36 | %
|Gross margin %                   |  |      | 56        | % |      |   | 63        | %          |  |            |         |  |    |  

Our cost of revenue consists of fixed and variable stock exchange fees, data feed provisioning
costs and bandwidth charges. Cost of revenue increased $248,907 (66%) and $749,869 (76%) when comparing the three and nine month periods ended September 30, 2007 and 2006. The increase is primarily due to costs associated with
replacing our primary data feed which was completed in February 2006 to support our major technology expansion and reconfiguration program. The increase is also due to the acquisition of data content required to support the new products and features
that we have recently launched, and new products that we plan to introduce to the market in the fourth quarter of 2007 and the first quarter of 2008. We also incurred increases in variable stock exchange, data feed, and bandwidth usage charges
resulting from the growth in the number of clients from the comparable periods. This resulted in the cost of revenue increasing as a percentage of sales, as evidenced by our gross margin percentage which decreased to 58% and 56%



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for the three and nine month periods ended September 30, 2007, from 61% and 63% in the comparable periods. We do not anticipate that our primary data
feed costs will increase significantly in the foreseeable future, therefore we expect higher gross margins as our revenues increase to offset these costs in future quarters.

Operating Expenses Summary



|                                 |  |      |           |      |   |            |  |            |           |  |     |  
|-------------------------------- |  | ---- | --------- | ---- | - | ---------- |  | ---------- | --------- |  | --- | -
|                                 |  | 2007 |           | 2006 |   | Change ($) |  | Change (%) |          
|Three months ended September 30, |  |      |           |      |   |            |  |            |           |  |     |  
|Sales and marketing              |  | $    | 499,975   |      | $ | 244,818    |  | $          | 255,157   |  | 104 | %
|General and administrative       |  |      | 387,259   |      |   | 329,201    |  |            | 58,058    |  | 18  | %
|Software development             |  |      | 299,713   |      |   | 134,906    |  |            | 164,807   |  | 122 | %
|                                 |  |      |           |      |   |            |  |            |           |  |     |  
|Total operating expenses         |  | $    | 1,186,947 |      | $ | 708,925    |  | $          | 478,022   |  | 67  | %
|                                 |  |      |           |      |   |            |  |            |           |  |     |  
|Nine months ended September 30,  |  |      |           |      |   |            |  |            |           |  |     |  
|Sales and marketing              |  | $    | 1,362,708 |      | $ | 616,878    |  | $          | 745,830   |  | 121 | %
|General and administrative       |  |      | 1,138,260 |      |   | 929,428    |  |            | 208,832   |  | 22  | %
|Software development             |  |      | 710,940   |      |   | 378,532    |  |            | 332,408   |  | 88  | %
|                                 |  |      |           |      |   |            |  |            |           |  |     |  
|Total operating expenses         |  | $    | 3,211,908 |      | $ | 1,924,838  |  | $          | 1,287,070 |  | 67  | %
|                                 |  |      |           |      |   |            |  |            |           |  |     |  

Sales and Marketing

Sales and marketing consists primarily of sales salaries, investor relations, travel, and advertising expenses. Sales and marketing expenses increased
$255,157 (104%) and $745,830 (121%) when comparing the three and nine month periods ended September 30, 2007 and 2006. The increase is due primarily to the Company moving its lead generation services in house effective May 1,
2006. Quotemedia Ltd., a wholly owned subsidiary of Quotemedia, Inc., now performs sales functions for Quotemedia, Inc. Prior to May 2006, lead generation services were performed by Bravenet Web Services Inc. The increase is also due to additional
sales personnel hired since the comparative periods, and additional travel expense associated with marketing our new product lines.

Sales
and marketing expenses were also affected by the devalued U.S. dollar versus the Canadian dollar. A significant portion of our sales and marketing expenses are incurred in Canadian dollars and converted to U.S. dollars at the average exchange rate
during the period, therefore the weakening U.S. dollar contributed to cost increases from the comparative periods.

Included in sales and
marketing expense is $90,000 and $240,000 in non-cash advertising costs incurred in the three and nine month periods ended September 30, 2007. We receive advertising credits in exchange for subscription services. The advertising credits are
with a large



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national magazine and are part of a significant advertising campaign launched in 2006. The advertising credits are expensed as used, and unused advertising
credits are reflected as prepaid expenses. We used $75,000 and $225,000 in advertising credits during the comparative periods in 2006.

General and Administrative

General and administrative expenses consist primarily of salaries expense, office rent,
insurance premiums, and professional fees. General and administrative expenses increased $58,058 (18%) and $208,832 (22%) when comparing the three and nine month periods ended September 30, 2007 and 2006. Commencing May 2006,
Quotemedia Ltd. rented new office space for its lead generation personnel, resulting in increased office rent expense from the comparative periods, as well as increased costs incurred for computer hosting and maintenance services for the new office.

The increase in general and administrative expenses is also due to increased audit and accounting fees compared to same periods in 2006.
Depreciation expense also increased due to the purchase of new computer equipment and the amortization of capitalized software application costs.

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 increased $164,807
(122%) and $332,408 (88%) when comparing the three and nine month periods ended September 30, 2007 and 2006. Salary expense for software development personnel increased from the comparative periods, as we made competitive salary
adjustments for existing employees, and added new software development personnel. Additional software development personnel were required for our technology expansion and reconfiguration program. This program is being undertaken in preparation for
our entry into the raw financial data feed provisioning markets.

Software development costs were also affected by the devalued U.S. dollar
versus the Canadian dollar. The majority of our development expenses are incurred in Canadian dollars and converted to U.S. dollars at the average exchange rate during the period, therefore the weakening U.S. dollar contributed to cost increases
from the comparative periods.

The increase in software development expenses noted above was offset by software development costs
capitalized during the period. We capitalized $89,864 and $282,756 of development costs in the three and nine months ended September 30, 2007, compared to $78,162 and $196,599 in same periods in 2006. 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 three years which is their estimated economic life.



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Other Income and (Expense) Summary



|                                 |  |      |          |   |      |   |         |  
|-------------------------------- |  | ---- | -------- | - | ---- | - | ------- | -
|                                 |  | 2007 |          |   | 2006 |  
|Three months ended September 30, |  |      |          |   |      |   |         |  
|Foreign exchange loss            |  | $    | (35,322  | ) |      | $ | (9,224  | )
|Interest expense, net            |  |      | (67,141  | ) |      |   | (27,889 | )
|Loss of disposal of equipment    |  |      |         |   |      |   |        |  
|                                 |  |      |          |   |      |   |         |  
|Total other expenses             |  | $    | (102,463 | ) |      | $ | (37,113 | )
|                                 |  |      |          |   |      |   |         |  
|Nine months ended September 30,  |  |      |          |   |      |   |         |  
|Foreign exchange loss            |  | $    | (77,820  | ) |      | $ | (13,600 | )
|Interest expense, net            |  |      | (175,915 | ) |      |   | (75,663 | )
|Loss on disposal of equipment    |  |      |         |   |      |   | (1,612  | )
|                                 |  |      |          |   |      |   |         |  
|Total other expenses             |  | $    | (253,735 | ) |      | $ | (90,875 | )
|                                 |  |      |          |   |      |   |         |  

Foreign Exchange Loss

Exchange gains and losses arise from the re-measurement of Canadian dollar monetary assets and liabilities into U.S. dollars. Exchange gains and losses
vary with the change in associated exchanges rates. The increase in the foreign exchange loss from the comparative periods is due to the combination of a weakened U.S. dollar and increased Canadian dollar liabilities.

Interest Expense

Interest is accrued
on certain amounts owed to related parties. Interest expense increased for the three and nine month periods ended September 30, 2007 due to additional borrowings compared to same period in 2006. Interest is accrued at 10% per annum.
Interest income earned on cash balances is netted against interest income.

Loss on Disposal of Equipment

In April 2006 of the comparative period, we wrote off obsolete computer equipment that had a net book value of $1,612.

Net income (loss) for the period

As a result of the foregoing, the
net loss for the three months ended September 30, 2007 was $415,336 or $(0.01) per share compared to a loss of $164,043 or less than $(0.01) per share for the three months ended September 30, 2006. The net loss for the nine months ended
September 30, 2007 was $1,212,323 or $(0.02) per share compared to a loss of $354,478 or $(0.01) per share for the nine months ended September 30, 2006.



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Liquidity and Capital Resources

Our cash totaled $358,260 at September 30, 2007, as compared with $886,251 at December 31, 2006, a decrease of $527,991. Net cash of $658,534 was used in operations for the nine month period ended
September 30, 2007, primarily due to the net loss for the period and an increase in accounts receivable, offset by the increase in accounts payable and amounts due to related parties. Net cash used in investing activities for the nine month
period ended September 30, 2007 was $341,679 resulting from the purchase of new equipment and capitalized software development costs. Net cash provided by financing activities for the nine month period ended September 30, 2007 was $472,222
resulting from a $500,000 loan from a related party and the proceeds from the exercise of stock options, offset by the repayment of amounts due to related parties.

Our current liabilities include $428,347 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 $438,763 is also included in our current liabilities. The costs required to be 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 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.



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|ITEM 3. | 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, 2007. 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.

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
|------- | --------



|              |  |                                                                                                                                                           
|------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | 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

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: November 14, 2007By:

/s/ R. Keith GuelpaR. Keith Guelpa,President and Chief Executive Officer(Principal Executive Officer)By:

/s/ Keith J. RandallKeith J. Randall,Chief Financial Officer(Principal Accounting Officer)




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