---



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, 2003



| ̈ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
|- | ---------------------------------------------------------------



For the transition period from
 to



Commission File Number: 0-28599



QUOTEMEDIA, INC.

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



Nevada

(State or other jurisdiction of incorporation or organization)



91-2008633

(IRS Employer Identification Number)



17100 East Shea Boulevard

Suite 230

Fountain Hills, AZ

(Address of
principal executive offices)



85268

(Zip Code)



(480) 905-7311

(Issuers Telephone Number)



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 November 7, 2003, the Registrant had 58,664,204 shares of common stock outstanding.



---



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QUOTEMEDIA, INC.

INDEX TO QUARTERLY REPORT

ON FORM 10-QSB



|                              |  |                                                     |  | Page
|----------------------------- |  | --------------------------------------------------- |  | ----
|Part I. Financial Information |  |                                                    
|                              |  |                                                    
|Item 1.                       |  | Financial Statements                                |  | 3   
|                              |  |                                                    
|                              |  | Balance Sheet                                       |  | 3   
|                              |  |                                                    
|                              |  | Statements of Operations                            |  | 4   
|                              |  |                                                    
|                              |  | Statements of Cash Flows                            |  | 5   
|                              |  |                                                    
|                              |  | Notes to Financial Statements                       |  | 6   
|                              |  |                                                    
|Item 2.                       |  | Managements Discussion and Analysis                |  | 9   
|                              |  |                                                    
|Item 3.                       |  | Disclosure 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                    |  | 15  
|                              | 
|Signatures                    |  | 16                                                 





2



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QUOTEMEDIA, INC.

BALANCE SHEET

as at September 30, 2003

(Unaudited)



|                                                                                                        |  | September 30,2003 |           
|------------------------------------------------------------------------------------------------------- |  | ----------------- | ----------
|ASSETS                                                                                                  |  |                   |           
|                                                                                                        | 
|CURRENT ASSETS                                                                                          |  |                   |           
|Cash and cash equivalents                                                                               |  | $                 | 236,191   
|Accounts receivable                                                                                     |  |                   | 34,035    
|Deposits                                                                                                |  |                   | 18,729    
|                                                                                                        |  |                   |           
|Total current assets                                                                                    |  |                   | 288,955   
|                                                                                                        | 
|Fixed assets, net                                                                                       |  |                   | 37,901    
|                                                                                                        |  |                   |           
|                                                                                                        |  | $                 | 326,856   
|                                                                                                        |  |                   |           
|LIABILITIES AND STOCKHOLDERS DEFICIENCY                                                                |  |                   |           
|                                                                                                        | 
|CURRENT LIABILITIES                                                                                     |  |                   |           
|Accounts payable                                                                                        |  | $                 | 110,334   
|Note payable                                                                                            |  |                   | 122,517   
|Deferred revenue                                                                                        |  |                   | 33,031    
|Due to related parties, net                                                                             |  |                   | 228,652   
|                                                                                                        |  |                   |           
|                                                                                                        |  |                   | 494,534   
|                                                                                                        |  |                   |           
|STOCKHOLDERS DEFICIENCY                                                                                |  |                   |           
|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                                                                                     |  |                   | (6,730,710
|                                                                                                        |  |                   |           
|                                                                                                        |  |                   | (167,678  
|                                                                                                        |  |                   |           
|                                                                                                        |  | $                 | 326,856   
|                                                                                                        |  |                   |           



SEE ACCOMPANYING NOTES



3



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QUOTEMEDIA, INC.

STATEMENTS OF OPERATIONS

Nine and Three Months Ended September 30, 2003 and 2002

(Unaudited)



|                                    |  | Nine monthsendedSeptember 30,2003 |            |   | Nine monthsendedSeptember 30,2002 |   |            | Three monthsendedSeptember 30,2003 |  |   | Three monthsendedSeptember 30,2002 |  
|----------------------------------- |  | --------------------------------- | ---------- | - | --------------------------------- | - | ---------- | ---------------------------------- |  | - | ---------------------------------- | -
|OPERATING REVENUE                   |  |                                   |            |   |                                   |   |            |                                    |  |   |                                    |  
|Advertising                         |  | $                                 | 3,730      |   |                                   | $ | 8,097      |                                    |  | $ | 1,200                              |  
|Licensing fees                      |  |                                   | 162,815    |   |                                   |   | 16,412     |                                    |  |   | 88,888                             |  
|                                    |  |                                   |            |   |                                   |   |            |                                    |  |   |                                    |  
|                                    |  |                                   | 166,545    |   |                                   |   | 24,509     |                                    |  |   | 90,088                             |  
|                                    |  |                                   |            |  
|OPERATING EXPENSES                  |  |                                   |            |   |                                   |   |            |                                    |  |   |                                    |  
|Business development                |  |                                   | 37,920     |   |                                   |   | (126,782   | )                                  |  |   | 27,894                             |  
|Financing expense                   |  |                                   | 75,000     |   |                                   |   | 359,750    |                                    |  |   | 11,000                             |  
|Office                              |  |                                   | 309,974    |   |                                   |   | 372,801    |                                    |  |   | 93,941                             |  
|Professional fees                   |  |                                   | 23,879     |   |                                   |   | 3,889      |                                    |  |   | 887                                |  
|Research and development            |  |                                   | 219,205    |   |                                   |   | 157,569    |                                    |  |   | 39,460                             |  
|Financial content                   |  |                                   | 200,151    |   |                                   |   | 170,951    |                                    |  |   | 69,492                             |  
|                                    |  |                                   |            |   |                                   |   |            |                                    |  |   |                                    |  
|                                    |  |                                   | 866,129    |   |                                   |   | 938,178    |                                    |  |   | 242,674                            |  
|                                    |  |                                   |            |   |                                   |   |            |                                    |  |   |                                    |  
|OPERATING LOSS                      |  |                                   | (699,584   | ) |                                   |   | (913,669   | )                                  |  |   | (152,586                           | )
|                                    |  |                                   |            |  
|OTHER INCOME AND EXPENSES           |  |                                   |            |   |                                   |   |            |                                    |  |   |                                    |  
|Interest income                     |  |                                   | 97         |   |                                   |   | 122        |                                    |  |   |                                   |  
|                                    |  |                                   |            |   |                                   |   |            |                                    |  |   |                                    |  
|LOSS FOR PERIOD                     |  |                                   | (699,487   | ) |                                   |   | (913,547   | )                                  |  |   | (152,586                           | )
|                                    |  |                                   |            |   |                                   |   |            |                                    |  |   |                                    |  
|NET LOSS PER SHARE                  |  |                                   |            |   |                                   |   |            |                                    |  |   |                                    |  
|Basic and diluted                   |  | $                                 | (0.01      | ) |                                   | $ | (0.02      | )                                  |  | $ | (0.00                              | )
|                                    |  |                                   |            |   |                                   |   |            |                                    |  |   |                                    |  
|WEIGHTED AVERAGE SHARES OUTSTANDING |  |                                   |            |   |                                   |   |            |                                    |  |   |                                    |  
|Basic and diluted                   |  |                                   | 57,806,644 |   |                                   |   | 37,527,262 |                                    |  |   | 57,379,720                         |  
|                                    |  |                                   |            |   |                                   |   |            |                                    |  |   |                                    |  



SEE ACCOMPANYING NOTES



4



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QUOTEMEDIA, INC.

STATEMENTS OF CASH FLOWS

Nine months Ended September 30, 2003 and 2002

(Unaudited)



|                                                                        |  | Nine monthsendedSeptember 30,2003 |          |   | Nine monthsendedSeptember 30,2002 |  
|----------------------------------------------------------------------- |  | --------------------------------- | -------- | - | --------------------------------- | -
|CASH FLOWS FROM OPERATING ACTIVITIES:                                   |  |                                   |          |   |                                   |  
|                                                                        |  |                                  
|NET LOSS                                                                |  | $                                 | (699,487 | ) |                                   | $
|                                                                        |  |                                  
|Adjustments to reconcile loss to net cash used in operating activities: |  |                                   |          |   |                                   |  
|Depreciation expense                                                    |  |                                   | 10,509   |   |                                   |  
|Issuance of capital stock for services                                  |  |                                   | 246,988  |   |                                   |  
|                                                                        |  |                                  
|Changes in assets and liabilities:                                      |  |                                   |          |   |                                   |  
|Accounts receivable                                                     |  |                                   | (21,350  | ) |                                   |  
|Deposits                                                                |  |                                   | (2,783   | ) |                                   |  
|Accounts payable                                                        |  |                                   | (65,724  | ) |                                   |  
|Deferred revenue                                                        |  |                                   | 31,671   |   |                                   |  
|Due from related parties, net                                           |  |                                   | (9,422   | ) |                                   |  
|                                                                        |  |                                   |          |   |                                   |  
|Net cash used in operating activities                                   |  | $                                 | (509,598 | ) |                                   | $
|                                                                        |  |                                   |          |   |                                   |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                   |  |                                   |          |   |                                   |  
|Fixed assets                                                            |  |                                   | (3,411   | ) |                                   |  
|                                                                        |  |                                   |          |   |                                   |  
|Net cash used in investing activities                                   |  |                                   | (3,411   | ) |                                   |  
|                                                                        |  |                                   |          |   |                                   |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                   |  |                                   |          |   |                                   |  
|Share subscription receivable                                           |  |                                   |         |   |                                   |  
|Repayment of note payable                                               |  |                                   |         |   |                                   |  
|Issuance of capital stock for cash                                      |  |                                   | 559,000  |   |                                   |  
|                                                                        |  |                                   |          |   |                                   |  
|Net cash provided by financing activities                               |  |                                   | 559,000  |   |                                   |  
|                                                                        |  |                                   |          |   |                                   |  
|Net increase (decrease) in cash                                         |  |                                   | 45,991   |   |                                   |  
|                                                                        |  |                                  
|Cash, beginning of period                                               |  |                                   | 190,200  |   |                                   |  
|                                                                        |  |                                   |          |   |                                   |  
|Cash, end of period                                                     |  | $                                 | 236,191  |   |                                   | $
|                                                                        |  |                                   |          |   |                                   |  



See supplementary information (note 3)



SEE ACCOMPANYING NOTES



5



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QUOTEMEDIA, INC.

NOTES TO FINANCIAL STATEMENTS

Nine Month Period Ended September 30, 2003

(Unaudited)



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



The accompanying unaudited 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, 2002 contained in our Form 10-KSB filed with the Securities and Exchange Commission dated March 10, 2003.



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



These interim financial statements follow the same accounting policies and methods of application as our annual financial statements, except for 2(b).



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 September 30, |          |   | Nine month ended September 30, |  
|------------------------------------------------------------------------------------------------------------- |  | ------------------------------- | -------- | - | ------------------------------ | -
|                                                                                                              |  | 2003                            |          |   | 2002                           |  
|Net loss:                                                                                                     |  |                                 |          |   |                                |  
|                                                                                                              |  |                                 |          |  
|As reported                                                                                                   |  | $                               | (152,586 | ) |                                | $
|Less: Total stock-based employee compensation expense determined under fair value based method for all awards |  |                                 | (190,811 | ) |                                |  
|                                                                                                              |  |                                 |          |   |                                |  
|Pro forma                                                                                                     |  |                                 | (343,397 | ) |                                |  
|Basic and diluted loss per share:                                                                             |  |                                 |          |   |                                |  
|As reported                                                                                                   |  | $                               | (0.00    | ) |                                | $
|Pro forma                                                                                                     |  |                                 | (0.01    | ) |                                |  



6



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QUOTEMEDIA, INC.

NOTES TO FINANCIAL STATEMENTS

Nine Month Period Ended September 30, 2003

(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 monthsended September 30, |  |      | Nine months ended September 30, |  
|---------------------------------------------- |  | ------------------------------- |  | ---- | ------------------------------- | -
|                                               |  | 2003                            |  | 2002 |                                 |  
|Expected dividend yield                        |  | n/a                             |  |      |                                |  
|Expected stock price volatility                |  | n/a                             |  |      | 73                              | %
|Risk-free interest rate                        |  | n/a                             |  |      | 5                               | %
|Expected life of options                       |  | n/a                             |  |      | 1 year                          |  
|Weighted average fair value of options granted |  | n/a                             |  | $    | 0.06                            |  



b) Recent
accounting pronouncements



In November 2002, the Emerging
Issues Task Force (EITF) reached a consensus regarding EITF Issue 00-21. The consensus addresses not only when and how an arrangement involving multiple deliverables should be divided into separate elements of accounting, but also how
the arrangements consideration should be allocated among separate units. The pronouncement is effective for revenue arrangements entered into on or after July 1, 2003. We have adopted EITF Issue 00-21, which had no effect on our financial
statements.



In May 2003, the Financial Accounting
Standards Board (FASB) issued Statement of Financial Accounting Standards (FAS) No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity (FAS No. 150),
which establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. FAS No. 150 is effective for financial instruments entered into or modified after May 31, 2003.
We have adopted FAS No. 150, which had no effect on our financial statements.



In April 2003, the FASB issued FAS No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities (FAS No. 149), which amends and clarifies financial accounting and
reporting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities under FAS No. 133. FAS No.149 is to be applied prospectively for certain contracts entered into or modified after
June 30, 2003. We have adopted FAS No. 149, which had no effect on our financial statements.



7



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QUOTEMEDIA, INC.

NOTES TO FINANCIAL STATEMENTS

Nine Month Period Ended September 30, 2003

(Unaudited)



In January 2003, the FASB issued FASB Interpretation No. 46, Consolidation of Variable Interest
Entities (FIN 46), which requires the consolidation of a variable interest entity by the primary beneficiary. FIN 46 also requires additional disclosure by both the primary beneficiary and enterprises that hold a significant
variable interest in a variable interest entity. FIN 46 is applicable to variable interest entities created after January 31, 2003. Entities created prior to February 1, 2003 must be consolidated effective July 1, 2003. However, because we do not
have any variable interest entities, there is no impact on our financial statements.



In November 2002, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 45, Guarantors Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others (FIN 45). FIN 45 expands on previously issued accounting guidance and requires additional disclosure by a guarantor to recognize, at the inception of a guarantee, a liability for the fair value
of an obligation assumed by issuing a guarantee. The provision for initial recognition and measurement of the liability is applied on a prospective basis to guarantees issued or modified after December 31, 2002. The standard was adopted on January
1, 2003, and is not expected to have a material effect on the financial statements



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



|Nine months ended September 30, |  | 2003 |    | 2002
|------------------------------- |  | ---- | -- | ----
|                                |  |     
|Cash received for interest      |  | $    | 97 |     



|4. | COMPARATIVE FIGURES
|-- | -------------------



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



8



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|ITEM 2. |  | Managements Discussion and Analysis of Financial Conditions and Results of Operations
|------- |  | --------------------------------------------------------------------------------------



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, 2002 filed with the Securities and Exchange
Commission.



Overview



QuoteMedia, Inc. is a developer and distributor of Web-based financial data
services to a global marketplace. Our applications range from simple components that output current stock market information, to advanced streaming, real-time data delivery solutions for mass-market consumption.



QuoteMedia has developed a complete range of tools and services to cater to
an expanded market for data delivery over the Internet that includes brokerage firms, financial institutions, online information portals, media outlets, public companies, and corporate intranets. The flexibility and ease of deployment of QuoteMedia
data solutions make our products unique within the financial data services industry. In addition, our streaming wealth management software, Quotestream, is an advanced consumer and professional portfolio-based tracking software application that
affords our clients significant cost savings and offers multiple integration options to maximize efficiency on a per client basis.



9



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The majority of our revenue is derived from licensing fees from Quotestream and our financial tools.
Minimal revenue is also derived from banner advertising.



QuoteMedia has recently developed in 2003 a large variety of new, fully customizable Web-based software products, available on subscription, spanning our entire market, from small business clients to transnational corporations. Our
development team continues to develop technology to allow QuoteMedia to deliver this information more quickly, attractively, securely and robustly.



Results of Operations (Comparison of Three and Nine Month Periods Ended September 30, 2003 and 2002):



Revenue



Revenue consists primarily of licensing fees generated from our software applications. We also earn ancillary revenues
generated from sponsorship advertisements. Revenue for the third quarter of 2003 was $90,088 compared to $5,764 for the comparable period in 2002. Revenue for the nine month period ended September 30, 2003 was $166,545 compared to $24,509 for the
comparable period in 2002. The increase in the third quarter of 2003 and the nine month period ended September 2003 over the comparable period in 2002 is due to the increased market acceptance of our subscription based streaming products launched in
2002, and the introduction of new financial tools in 2003.



Operating
Expenses



Financial Content fees



Financial content fees 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 content fees for the third quarter of 2003 were $69,492 compared with $74,174 for the comparable period in 2002.
Financial content fees for the nine month period ended September 30, 2003 were $200,151 compared with $170,951 for the comparable period in 2002. The increase for the nine month period ended September 30, 2003 over the comparable period in 2002 is
due primarily to stock exchange fees associated with an increase in the number of customers receiving real-time financial information.



Professional fees



Professional fees consist primarily of legal and accounting fees. Professional fees for the third quarter of 2003 were $887 compared with ($3,436) for the
three month period ending September 30, 2002. Professional fees for the nine month period ended September 30, 2003 were $23,879 compared with $3,889 for the comparable period in 2002. The increase in the third quarter of 2003 and the nine month
period ended September 2003 over the comparable period in 2002 is primarily due to $10,626 in expenses that were recovered in the third quarter of 2002 resulting from the cancellation of 8,929 shares of our common stock previously issued for
professional services rendered. The increase in 2003 is also due to the legal costs associated with the Annual Meeting of Stockholders held in February 2003.



10



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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 third quarter of 2003 were $39,460 compared with $61,499 for the comparable period in 2002. The decrease is due primarily to stock bonuses given to our web developers in the third
quarter of 2002, which did not recur in the third quarter of 2003. Research and development expenses for the nine month period ended September 30, 2003 were $219,205 compared to $157,569 for the comparable period in 2002. The increase in 2003 is
primarily due to stock bonuses paid to developers.



Business
Development



Business development consists primarily of
marketing, investor relations, travel, and printing expenses. Business development expenses for the third quarter of 2003 were $27,894 compared to $(131,711) for the comparable period in 2002. Business development expenses for the nine month period
ended September 30, 2003 were $37,920 compared to $(126,782) for the comparable period in 2002. The increase in the third quarter of 2003 and the nine month period ended September 2003 over the comparable period in 2002 is due primarily to $276,750
in expenses that were recovered in the third quarter of 2002 resulting from the cancellation of 1,835,000 shares of our common stock previously issued for business development services rendered. The increase is also due to investor relation expenses
associated with the Annual Meeting of Stockholders held in February 2003 and increased travel expenses in the third quarter of 2003.



Office



Office expenses consist primarily of rent, computer equipment leases, computer maintenance and storage and salary expenses. Office and administration
expenses for the third quarter of 2003 were $93,941 compared to $49,973 for the comparable period in 2002. The increase is due primarily to increased salary expense due to added employees. Office and administration expenses for the nine month period
ended September 30, 2003 were $309,974 compared to $372,801 for the comparable period in 2002. The decrease is due primarily to non-recurring relocation expenses incurred in the first quarter of 2002.



Financing Expense



During the third quarter of 2003, we incurred $11,000 in financing expenses
associated with the sale of 400,000 shares of restricted common stock, compared to $19,500 in financing fees incurred for the comparable period in 2002. The financing fee in the third quarter of 2003 was paid by issuing 50,000 shares of restricted
common stock. During the nine months ended September 30, 2003, we incurred $75,000 in financing fees associated with the sale of a total of 2,900,000 shares of restricted common stock, compared to $359,750 in financing fees during the comparable
period in 2002. Financing fees for the nine month period ended September, 2003 were paid by issuing a total of 850,000 shares of restricted common stock.



11



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Interest income



Interest income consists of interest earned on cash and money market investments. No interest income was earned for the third quarter of 2003 compared to $8 for the
comparable period in 2002. Interest income for the nine months ended September 30, 2003 was $97 compared to $122 for the comparable period in 2002.



Loss for the period



As a result of the foregoing, we incurred a loss for the three months ended September 30, 2003 of $152,586 or approximately $(0.00) per share compared to a loss of $64,227 and $(0.00) per share for the comparable
period in 2002. The Company incurred a loss for the nine months ended September 30, 2003 of $699,487 or approximately $(0.01) per share compared to a loss of $913,547 and $(0.02) per share for comparable period in 2002.



Liquidity and Capital Resources



Our cash totaled $236,191 at September 30, 2003, as compared with $190,200 at December 31,
2002, an increase of $45,991. Net cash of $509,598 was used in operations for the nine months ended September 30, 2003, primarily resulting from our net loss for the period and a decrease in accounts payable offset by the issuance of capital stock
for services. Net cash used in investing activities for the nine months ended September 30, 2003 was $3,411 resulting from the purchase of fixed assets. Net cash provided by financing activities for the nine months ended September 30, 2003 was
$559,000 resulting from the issuance of common stock for cash.



We believe that
cash on hand will be sufficient to fund our current operations through June 2004. After that date, we may require additional financings, which may come from future equity or debt offerings that 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.



Recent accounting pronouncements



In November 2002, the Emerging Issues Task Force (EITF) reached a consensus regarding EITF Issue 00-21. The consensus addresses not only when and how an
arrangement involving multiple deliverables should be divided into separate elements of accounting, but also how the arrangements consideration should be allocated among separate units. The pronouncement is effective for revenue arrangements
entered into on or after July 1, 2003. We have adopted EITF Issue 00-21, which had no effect on our financial statements.



12



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In May 2003, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting
Standards (FAS) No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity (FAS No. 150), which establishes standards for how an issuer classifies and measures
certain financial instruments with characteristics of both liabilities and equity. FAS No. 150 is effective for financial instruments entered into or modified after May 31, 2003. We have adopted FAS No. 150, which had no effect on our financial
statements.



In April 2003, the FASB issued FAS No. 149, Amendment of
Statement 133 on Derivative Instruments and Hedging Activities (FAS No. 149), which amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities under FAS No. 133. FAS No.149 is to be applied prospectively for certain contracts entered into or modified after June 30, 2003. We have adopted FAS No. 149, which had no effect on our financial statements.



In January 2003, the FASB issued FASB Interpretation No. 46,
Consolidation of Variable Interest Entities (FIN 46), which requires the consolidation of a variable interest entity by the primary beneficiary. FIN 46 also requires additional disclosure by both the primary beneficiary and
enterprises that hold a significant variable interest in a variable interest entity. FIN 46 is applicable to variable interest entities created after January 31, 2003. Entities created prior to February 1, 2003 must be consolidated effective July 1,
2003. However, because we do not have any variable interest entities, there is no impact on our financial statements.



In November 2002, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 45, Guarantors Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others (FIN 45). FIN 45 expands on previously issued accounting guidance and requires additional disclosure by a guarantor to recognize, at the inception
of a guarantee, a liability for the fair value of an obligation assumed by issuing a guarantee. The provision for initial recognition and measurement of the liability is applied on a prospective basis to guarantees issued or modified after December
31, 2002. The standard was adopted on January 1, 2003, and is not expected to have a material effect on the financial statements



|ITEM 3. |  | Disclosure Controls and Procedures
|------- |  | ----------------------------------



We have evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures as of
September 30, 2003. 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
|------- |  | ---------------------



During July 2003 we issued 50,000 shares of restricted common stock resulting from the exercise of 50,000 stock options with an exercise price of $0.17 per share, for
total proceeds of $8,500. During July 2003, we issued 102,500 shares of restricted common stock at a price of $0.20 per share, or an aggregate offering price of $20,500 as part of a private equity financing. One accredited investor participated in
the offering. No commissions were associated with this offering. During July 2003, we issued 100,00 shares of restricted common stock at a price of $0.24 per share, or an aggregate price of $24,000 for services provided to the Company. We issued
these shares without registration under the Securities Act in reliance on the exemption provided by Section 4(2) of the Securities Act as a transaction by an issuer not involving a public offering.



During September 2003, we issued 1,000,000 shares of restricted common stock at a price of
$0.15 per share, or an aggregate offering price of $150,000 as part of a private equity financing. One accredited investor and 15 non-accredited investors participated in the offering. No commissions were associated with this offering. During
September 2003, we issued 400,000 shares of restricted common stock at a price of $0.25 per share, or an aggregate offering price of $100,000 as part of a private equity financing. One accredited investor participated in the offering. We issued
50,000 shares of restricted common stock at a price of $0.22, or an aggregate price of $11,000, for commissions associated with this offering. During September 2003, we issued 50,000 shares of restricted common stock at a price of $0.22 per share,
or an aggregate price of $11,000 for services provided to the Company. We issued these shares without registration under the Securities Act in reliance on the exemption provided by Section 4(2) of the Securities Act as a transaction by an issuer not
involving a public offering.



|ITEM 3. |  | DEFAULTS UPON SENIOR SECURITIES NONE
|------- |  | -------------------------------------



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



|ITEM 5. |  | OTHER INFORMATION NONE
|------- |  | -----------------------



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|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: November 7, 2003By:

/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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