##### Table of Contents

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



---



FORM 10  QSB



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



For the quarterly period ended June 30, 2004



Commission File Number: 0-28599



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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)



---



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 July 30, 2004, the Registrant had 58,664,204 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                   |  | 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                |  | 9   
|                              |  |            | 
|                              |  | Item 3.    |  | Controls and Procedures                             |  | 13  
|                              | 
|Part II. Other Information    |  |           
|                              |  |            | 
|                              |  | Item 1.    |  | Legal Proceedings                                   |  | 14  
|                              |  |            | 
|                              |  | Item 2.    |  | Changes in Securities                               |  | 14  
|                              |  |            | 
|                              |  | Item 3.    |  | Defaults Upon Senior Securities                     |  | 14  
|                              |  |            | 
|                              |  | Item 4.    |  | Submission of Matters to a Vote of Security Holders |  | 14  
|                              |  |            | 
|                              |  | Item 5.    |  | Other Information                                   |  | 14  
|                              |  |            | 
|                              |  | Item 6.    |  | Exhibits and Reports on Form 8-K                    |  | 14  
|                              |  |           
|                              |  | Signatures |  | 15                                                 



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##### Table of Contents

QUOTEMEDIA, INC.

CONSOLIDATED BALANCE SHEET

(Unaudited)



|                                                                                                        |  |               |             |  
|------------------------------------------------------------------------------------------------------- |  | ------------- | ----------- | -
|                                                                                                        |  | June 30, 2004 |            
|ASSETS                                                                                                  |  |               |             |  
|                                                                                                        | 
|Current assets:                                                                                         |  |               |             |  
|Cash                                                                                                    |  | $             | 109,977     |  
|Accounts receivable Prepaid expenses                                                                    |  |               | 62,8298,105 |  
|Deposits                                                                                                |  |               | 16,345      |  
|                                                                                                        |  |               |             |  
|Total current assets                                                                                    |  |               | 197,256     |  
|Equipment, net                                                                                          |  |               | 68,729      |  
|                                                                                                        |  |               |             |  
|Total assets                                                                                            |  | $             | 265,985     |  
|                                                                                                        |  |               |             |  
|                                                                                                        | 
|LIABILITIES AND STOCKHOLDERS DEFICIT                                                                   |  |               |             |  
|                                                                                                        | 
|Current liabilities:                                                                                    |  |               |             |  
|Accounts payable and accrued liabilities                                                                |  | $             | 166,353     |  
|Deferred revenue                                                                                        |  |               | 39,361      |  
|Current portion of amounts due to related parties                                                       |  |               | 296,200     |  
|                                                                                                        |  |               |             |  
|Total current liabilities                                                                               |  |               | 501,914     |  
|                                                                                                        |  |               |             |  
|                                                                                                        | 
|Other long-term liabilities                                                                             |  |               | 24,456      |  
|Long-term portion of amounts due to related parties                                                     |  |               | 211,112     |  
|                                                                                                        | 
|Stockholders deficit:                                                                                  |  |               |             |  
|Preferred stock, non designated, 10,000,000 shares authorized, none issued                              |  |               |            |  
|Common stock, $0.001 par value, 100,000,000 shares authorized, 58,664,204 shares issued and outstanding |  |               | 58,665      |  
|Additional paid-in capital                                                                              |  |               | 6,504,367   |  
|Accumulated deficit                                                                                     |  |               | (7,034,529  | )
|                                                                                                        |  |               |             |  
|Total stockholders deficit                                                                             |  |               | (471,497    | )
|                                                                                                        |  |               |             |  
|Total liabilities and stockholders deficit                                                             |  | $             | 265,985     |  
|                                                                                                        |  |               |             |  



SEE ACCOMPANYING NOTES



3



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##### Table of Contents

QUOTEMEDIA, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)



|                                    |  |                               |            |   |                               |   |            |                                 |  |   |                                 |   |  |   |            |  
|----------------------------------- |  | ----------------------------- | ---------- | - | ----------------------------- | - | ---------- | ------------------------------- |  | - | ------------------------------- | - |  | - | ---------- | -
|                                    |  | Six monthsended June 30, 2004 |            |   | Six monthsended June 30, 2003 |   |            | Three monthsended June 30, 2004 |  |   | Three monthsended June 30, 2003 |  
|OPERATING REVENUE                   |  |                               |            |   |                               |   |            |                                 |  |   |                                 |   |  |   |            |  
|Licensing fees                      |  | $                             | 378,967    |   |                               | $ | 73,927     |                                 |  | $ | 207,939                         |   |  | $ | 57,097     |  
|Advertising                         |  |                               |           |   |                               |   | 2,530      |                                 |  |   |                                |   |  |   | 1,200      |  
|                                    |  |                               |            |   |                               |   |            |                                 |  |   |                                 |   |  |   |            |  
|                                    |  |                               | 378,967    |   |                               |   | 76,457     |                                 |  |   | 207,939                         |   |  |   | 58,297     |  
|OPERATING EXPENSES                  |  |                               |            |   |                               |   |            |                                 |  |   |                                 |   |  |   |            |  
|Sales and Marketing                 |  |                               | 15,091     |   |                               |   | 10,026     |                                 |  |   | 10,612                          |   |  |   | 1,172      |  
|General and Administrative          |  |                               | 186,602    |   |                               |   | 215,936    |                                 |  |   | 98,452                          |   |  |   | 69,881     |  
|Professional fees                   |  |                               | 25,731     |   |                               |   | 22,992     |                                 |  |   | 15,169                          |   |  |   | 12,429     |  
|Research and development            |  |                               | 153,885    |   |                               |   | 179,745    |                                 |  |   | 80,404                          |   |  |   | 47,977     |  
|Financial data                      |  |                               | 189,845    |   |                               |   | 130,659    |                                 |  |   | 99,710                          |   |  |   | 64,003     |  
|                                    |  |                               |            |   |                               |   |            |                                 |  |   |                                 |   |  |   |            |  
|                                    |  |                               | 571,154    |   |                               |   | 559,358    |                                 |  |   | 304,347                         |   |  |   | 195,462    |  
|                                    |  |                               |            |   |                               |   |            |                                 |  |   |                                 |   |  |   |            |  
|OPERATING LOSS                      |  |                               | (192,187   | ) |                               |   | (482,901   | )                               |  |   | (96,408                         | ) |  |   | (137,165   | )
|OTHER INCOME AND EXPENSES           |  |                               |            |   |                               |   |            |                                 |  |   |                                 |   |  |   |            |  
|Loss on disposal of equipment       |  |                               | (10,309    | ) |                               |   |           |                                 |  |   | (10,309                         | ) |  |   |           |  
|                                    |  |                               |            |   |                               |   |            |                                 |  |   |                                 |   |  |   |            |  
|NET LOSS                            |  |                               | (202,496   | ) |                               |   | (482,901   | )                               |  |   | (106,717                        | ) |  |   | (137,165   | )
|                                    |  |                               |            |   |                               |   |            |                                 |  |   |                                 |   |  |   |            |  
|LOSS PER SHARE                      |  |                               |            |   |                               |   |            |                                 |  |   |                                 |   |  |   |            |  
|Basic and diluted loss per share    |  | $                             | (0.00      | ) |                               | $ | (0.01      | )                               |  | $ | (0.00                           | ) |  | $ | (0.00      | )
|                                    |  |                               |            |   |                               |   |            |                                 |  |   |                                 |   |  |   |            |  
|WEIGHTED AVERAGE SHARES OUTSTANDING |  |                               |            |   |                               |   |            |                                 |  |   |                                 |   |  |   |            |  
|Basic and diluted                   |  |                               | 58,664,204 |   |                               |   | 55,892,090 |                                 |  |   | 58,664,204                      |   |  |   | 56,986,704 |  
|                                    |  |                               |            |   |                               |   |            |                                 |  |   |                                 |   |  |   |            |  



SEE ACCOMPANYING NOTES



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##### Table of Contents

QUOTEMEDIA, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



|                                                                        |  |                               |          |   |                               |   |          |  
|----------------------------------------------------------------------- |  | ----------------------------- | -------- | - | ----------------------------- | - | -------- | -
|                                                                        |  | Six months endedJune 30, 2004 |          |   | Six months endedJune 30, 2003 |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                                   |  |                               |          |   |                               |   |          |  
|                                                                        |  |                              
|Net loss                                                                |  | $                             | (202,496 | ) |                               | $ | (345,736 | )
|                                                                        |  |                              
|Adjustments to reconcile loss to net cash used in operating activities: |  |                               |          |   |                               |   |          |  
|Depreciation expense                                                    |  |                               | 10,583   |   |                               |   | 3,429    |  
|Loss on disposal of equipment                                           |  |                               | 10,309   |   |                               |   |         |  
|Issuance of capital stock for services                                  |  |                               |         |   |                               |   | 213,738  |  
|Changes in assets and liabilities:                                      |  |                               |          |   |                               |   |          |  
|Accounts receivable                                                     |  |                               | (34,741  | ) |                               |   | (1,566   | )
|Prepaid expenses                                                        |  |                               | (8,105   | ) |                               |   |         |  
|Deposits                                                                |  |                               | 2,455    |   |                               |   | 87       |  
|Accounts payable, accrued and other liabilities                         |  |                               | 116,669  |   |                               |   | (48,072  | )
|Deferred revenue                                                        |  |                               | (672     | ) |                               |   | 1,390    |  
|                                                                        |  |                               |          |   |                               |   |          |  
|Net cash used in operating activities                                   |  |                               | (105,998 | ) |                               |   | (176,730 | )
|                                                                        |  |                               |          |   |                               |   |          |  
|                                                                        |  |                              
|CASH FLOWS FROM INVESTING ACTIVITIES:                                   |  |                               |          |   |                               |   |          |  
|Proceeds from disposal of equipment                                     |  |                               | 3,133    |   |                               |   |         |  
|Purchase of equipment                                                   |  |                               | (44,419  | ) |                               |   | (1,449   | )
|                                                                        |  |                               |          |   |                               |   |          |  
|Net cash used in investing activities                                   |  |                               | (41,286  | ) |                               |   | (1,449   | )
|                                                                        |  |                               |          |   |                               |   |          |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                   |  |                               |          |   |                               |   |          |  
|                                                                        |  |                              
|Repayment of amounts due to related parties                             |  |                               | (31,157  | ) |                               |   | (14,383  | )
|Increase in amounts due to related parties                              |  |                               | 277,249  |   |                               |   |         |  
|Repayment of note payable                                               |  |                               | (131,865 | ) |                               |   |         |  
|Issuance of common stock for cash, net                                  |  |                               |         |   |                               |   | 96,000   |  
|                                                                        |  |                               |          |   |                               |   |          |  
|Net cash provided by financing activities                               |  |                               | 114,227  |   |                               |   | 81,617   |  
|                                                                        |  |                               |          |   |                               |   |          |  
|                                                                        |  |                              
|Net decrease in cash                                                    |  |                               | (33,057  | ) |                               |   | (96,562  | )
|Cash, beginning of period                                               |  |                               | 143,034  |   |                               |   | 190,200  |  
|                                                                        |  |                               |          |   |                               |   |          |  
|Cash, end of period                                                     |  | $                             | 109,977  |   |                               | $ | 93,638   |  
|                                                                        |  |                               |          |   |                               |   |          |  



See supplementary information (note 3)



SEE ACCOMPANYING NOTES



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QUOTEMEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



|1. | BASIS OF PRESENTATION
|-- | ---------------------



The accompanying unaudited consolidated financial statements have been prepared in accordance with the generally accepted accounting principles for
interim financial statements and instructions for Form 10  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, 2003 contained in our Form 10-KSB filed with the Securities and Exchange Commission dated February 17, 2004.



|2. | SIGNIFICANT ACCOUNTING POLICIES
|-- | -------------------------------



These interim financial statements follow the same accounting policies and methods of application as our annual financial statements.



a) Stock based compensation



We have elected under FAS No. 123, Accounting for Stock-based
Compensation, to account for employee stock options using the intrinsic value method. This method is described in Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, and related
interpretations. 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 is required to be 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 month ended June 30, |          |   | Six month ended June 30, |  
|                                                                                                              |  | 2004                       |          |   | 2003                     |   |          | 2004 |  |   | 2003     |  
|Net loss:                                                                                                     |  |                            |          |   |                          |   |          |      |  |   |          |   |  |   |          |  
|As reported                                                                                                   |  | $                          | (106,717 | ) |                          | $ | (137,165 | )    |  | $ | (202,496 | ) |  | $ | (546,901 | )
|Less: Total stock-based employee compensation expense determined under fair value based method for all awards |  |                            | (20,116  | ) |                          |   | (206,931 | )    |  |   | (64,260  | ) |  |   | (441,104 | )
|                                                                                                              |  |                            |          |   |                          |   |          |      |  |   |          |   |  |   |          |  
|Pro forma                                                                                                     |  |                            | (126,833 | ) |                          |   | (344,096 | )    |  |   | (266,756 | ) |  |   | (988,005 | )
|Basic and diluted loss per share:                                                                             |  |                            |          |   |                          |   |          |      |  |   |          |   |  |   |          |  
|As reported                                                                                                   |  | $                          | (0.00    | ) |                          | $ | (0.00    | )    |  | $ | (0.00    | ) |  | $ | (0.01    | )
|Pro forma                                                                                                     |  |                            | (0.00    | ) |                          |   | (0.01    | )    |  |   | (0.00    | ) |  |   | (0.02    | )



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QUOTEMEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



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 June 30, |  | Six months endedJune 30, | 
|                                               |  | 2004                        |  | 2003                     |  | 2004 |        |   | 2003 |  
|Expected dividend yield                        |  | n/a                         |  | n/a                      |  |      |       |   |      |   |       |  
|Expected stock price volatility                |  | n/a                         |  | n/a                      |  |      | 132    | % |      |   | 110    | %
|Risk-free interest rate                        |  | n/a                         |  | n/a                      |  |      | 4      | % |      |   | 4      | %
|Expected life of options                       |  | n/a                         |  | n/a                      |  |      | 1 year |   |      |   | 1 year |  
|Weighted average fair value of options granted |  | n/a                         |  | n/a                      |  | $    | 0.18   |   |      | $ | 0.03   |  



b) Recent
accounting pronouncements



In December 2003, the Financial
Accounting Standards Board (FASB) issued FASB Statement No. 132 (revised 2003), Employers Disclosures about Pensions and Other Postretirement Benefits (FAS 132). This statement establishes standards that
require companies to provide more details about their plan assets, benefit obligations, cash flows, benefit costs and other relevant information. In addition to expanded annual disclosures, companies are required to report the various elements of
pension and other postretirement benefit costs on a quarterly basis. This statement is effective for fiscal years ending after December 15, 2003. We have adopted FAS 132, as revised in 2003, which had no effect on our consolidated financial
statements.



|3. | SUPPLEMENTARY CASH FLOW INFORMATION
|-- | -----------------------------------



|                          |  |       |  |     
|------------------------- |  | ----- |  | ----
|Six months ended June 30, |  | 2004  |  | 2003
|Cash paid for interest    |  | 5,606 |  |    
|Cash paid for taxes       |  |      |  |    



|4. | NOTE PAYABLE
|-- | ------------



In May 2004, we made a payment of $131,865 to retire in full an unsecured note payable.



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QUOTEMEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



|5. | 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
calculated at the rate of 10% per annum. The loan is to be repaid in equal monthly installments of $22,346 beginning in August 2004. Our Chief Executive Officer is a control person of Bravenet.



|6. | COMPARATIVE FIGURES
|-- | -------------------



Certain figures in the comparative periods have been reclassified to conform to the current periods presentation.



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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, but are not limited to:



| |  | lack of market acceptance of our products;
| | - | ------------------------------------------



| |  | dependence on third parties for data feeds for our products;
| | - | ------------------------------------------------------------



| |  | our inability to diversify our product offerings;
| | - | -------------------------------------------------



| |  | 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, 2003 filed with the Securities and Exchange
Commission.



Overview



We are a developer financial data services which we distribute to a global
marketplace. We license our software and data provisions to corporate and individual customers, including brokerage firms, financial institutions, mutual fund companies, online information and financial portals, media outlets, public companies,
corporate Intranets, brokers, financial advisors, and individual investors.



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We have two categories of product lines: Quotestream real-time portfolio management and market analysis
software, and secondly, a broad array of Corporate Financial Data Products. Quotestream is a Web-based streaming online portfolio management system that delivers real-time and delayed market data to both consumer and corporate markets. Our Financial
Data Product line consists of a suite of software applications that provide company and market information to corporate clients via the Web. 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, real-time snap quotes, and XML data feeds. We have also recently developed a
comprehensive application that provides streaming market data and online trading capabilities for wireless handheld platforms. We are currently in discussions with a number of wireless communication companies regarding the licensing and distribution
of our Quotestream Wireless application. We also recently entered into an agreement with the brokerage arm of a major international bank to license our financial data services and are actively engaged in negotiations with other international banks
and brokerage firms to license similar services.



We generate
recurring revenue from Quotestream by licensing it to financial institutions and Web portals for private branding. We also license Quotestream to individual investors for a monthly subscription fee. We generate recurring revenue from the Financial
Data Products line by licensing our components for a monthly, quarterly, or annual subscription fee.



Results of Operations



Revenue



Revenue consists of licensing fees generated from our
software applications. Revenue for the three month period ended June 30, 2004 was $207,939 compared to $58,297 for the three month period ended June 30, 2003. Revenue for the six month period ended June 30, 2004 was $378,967 compared to $76,457 for
the six month period ended June 30, 2003. The increase is due to the increased market acceptance of our existing real-time portfolio management and corporate financial data products, and the introduction of new financial data products.



Operating Expenses



Financial Data



Financial data expenses consist primarily of fees paid to our strategic partners for providing financial content such as news, stock quotes, charts,
company background data, and general information. Financial data expenses for the three month period ended June 30, 2004 were $99,710 compared with $64,003 for the three month period ending June 30, 2003. Financial data expenses for the six month
period ended June 30, 2004 were $189,845 compared with $130,659 for the six month period ending June 30, 2003. The increase is due primarily to increased stock exchange fees associated with an increase in the number of customers receiving real-time
financial information. The increase is also due to added financial content expenses associated with new financial data products launched in 2004.



10



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##### Table of Contents

Professional fees



Professional fees consist primarily of legal and accounting fees. Professional fees for the three month period ended June
30, 2004 were $15,169 compared with $12,429 for the three month period ending June 30, 2003. Professional fees for the six month period ended June 30, 2004 were $25,731 compared with $22,992 for the six month period ending June 30, 2003. The
increase is primarily due to accounting fees incurred to comply with additional auditing procedures required by the Sarbanes-Oxley Act.



Research and Development



Research and development expenses consist primarily of costs associated with the design, programming, and testing of our software applications. Research
and development expenses for the three month period ended June 30, 2004 were $80,404 compared with $47,977 for the three month period ended June 30, 2003. The increase for the three month period ended June 30, 2004 was due to the hiring of
additional web developers. Research and development expenses for the six month period ended June 30, 2004 were $153,885 compared to $179,745 for the six month period ended June 30, 2003. The decrease for the six month period ended June 30, 2004 is
due to $86,250 in non-recurring development costs incurred in the first quarter of 2003 resulting in the issuance of 1,125,000 shares of our common stock for development services, offset by the cost of hiring of additional web developers in 2004.



Sales and Marketing



Sales and marketing consists primarily of marketing, investor relations,
travel, and printing expenses. Sales and marketing expenses for the three month period ended June 30, 2004 were $10,612 compared to $1,172 for the three month period ended June 30, 2003. Sales and marketing expenses for the six month period ended
June 30, 2004 were $15,091 compared to $10,026 for the six month period ended June 30, 2003. The increase is due to an increase in travel expenses associated with the marketing of our financial data products.



General and Administrative



General and administrative expenses consist primarily of rent, computer
equipment leases, computer maintenance and storage and salary expenses. General and administration expenses for the three month period ended June 30, 2004 were $98,452 compared to $69,881 for the three month period ended June 30, 2003. The increase
for the three month period ended June 30, 2004 was due primarily to an increase in web server storage and bandwidth costs. General and administration expenses for the six month period ended June 30, 2004 were $186,602 compared to $215,936 for the
six month period ended June 30, 2003. The decrease for the six month period ended June 30, 2004 is due to $63,488 in non-recurring office expenses incurred in 2003 which resulted in the issuance of 793,600 shares of our common stock for services
provided to the Company, offset by increased web server and bandwidth costs incurred in 2004.



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Loss on disposal of equipment



During 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.



Loss for the period



As a result of the foregoing, we incurred a loss for the three months
ended June 30, 2004 of $106,717 or approximately $(0.00) per share compared to a loss of $137,165 and $(0.00) per share for the three months ended June 30, 2003. The Company incurred a loss for the six months ended June 30, 2004 of $202,496 or
approximately $(0.00) per share compared to a loss of $482,901 and $(0.01) per share for the six months ended June 30, 2003.



Liquidity and Capital Resources



Our cash totaled $109,977 at June 30, 2004, as compared with $143,034 at December 31, 2003, a decrease of $33,057. Net cash of $105,998 was used in operations for the six
months ended June 30, 2004, primarily resulting from our net loss for the period and an increase in accounts receivable, offset by an increase in accounts payable. Net cash used in investing activities for the six months ended June 30, 2004 was
$41,286 resulting from the purchase of fixed assets, offset by proceeds from the disposal of equipment. Net cash provided by financing activities for the six months ended June 30, 2004 was $114,227 resulting from the increase in amounts due to
related parties, offset by the repayment of a note payable and repayment of amounts due to related parties.



Based on current revenue trends, we anticipate that we will generate positive cash flow from operations in the third quarter of 2004 and onward. We believe that cash on hand will be sufficient to fund our current
operations through fiscal 2004. Current revenue trends may not continue, however, and we may require additional equity or debt financing in order to carry on our operations. Additional financings, which may come from future equity or debt offerings,
could result in dilution to our stockholders. Adequate working capital may not be available and the lack of such working capital could adversely affect our ability to continue business operations.



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. 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 June 30, 2004. 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 is 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. CHANGES IN SECURITIES -NONE



ITEM 3. DEFAULTS UPON SENIOR SECURITIES NONE



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



ITEM 5. OTHER INFORMATION NONE



ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K



(a) Exhibits



|              |  |                                                                                                                                                           
|------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------
|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.        



(b) Reports on Form
8-K - None



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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: July 30, 2004By:

/s/ David M. ShworanDavid M. Shworan,President(Principal Executive Officer)By:

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




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