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QuoteMedia (QMCI) grows Q2 2026 revenue 11% but stays unprofitable

Filing Impact
(High)
Filing Sentiment
(Neutral)
Form Type
10-Q

Rhea-AI Filing Summary

QuoteMedia, Inc. reported higher subscription-based revenue but remained unprofitable for the quarter and six months ended June 30, 2026. Total revenue was $5.45M for Q2 2026 and $10.98M for the first half of 2026, up 11% and 13% versus the prior-year periods, driven mainly by Corporate Quotestream and Interactive Content and Data APIs.

Gross profit improved to $2.74M in Q2 with gross margin rising to 50% from 46% a year earlier as revenue grew faster than cost of revenue. The Q2 net loss narrowed to $362K from $854K, and the six‑month net loss was $983K versus $1.35M in 2025. Operating cash flow for the six months was positive at $237K.

Liquidity remains tight: cash was $187K and the working capital deficit was $4.64M, alongside a stockholders’ deficit of $1.82M and significant deferred revenue of $1.57M. Management believes existing cash and cash generated from operations can support operations through June 2027 but acknowledges potential need for additional capital. Management also concluded disclosure controls and procedures were not effective due to material weaknesses in internal control over financial reporting.

Positive

  • Revenue growth was solid: Q2 2026 revenue rose to $5.45M, up 11%, and six‑month revenue to $10.98M, up 13% versus 2025, with gains in Corporate Quotestream and Interactive Content and Data APIs.
  • Profitability metrics improved: Q2 gross margin expanded to 50% (from 46%) and the quarterly net loss narrowed to $362K from $854K; six‑month net loss improved to $983K from $1.35M.
  • Operating cash flow for the six months ended June 30, 2026 was positive $236,568, showing the business generated cash from operations despite reporting an accounting loss.
  • The company benefits from recurring subscription revenue through multi‑year contracts and automatic renewals across Quotestream, Interactive Content and Data APIs, and Data Feed services.

Negative

  • Liquidity is tight: cash was only $186,986 at June 30, 2026, with a working capital deficit of $4,643,639 and total stockholders’ deficit of $1,823,401.
  • The company continues to be loss‑making, with a six‑month net loss of $983,059 and accumulated deficit increasing to $24,488,362.
  • Management concluded that disclosure controls and procedures were not effective due to material weaknesses in internal control over financial reporting.
  • There is significant potential equity dilution, with 25,772,803 common stock options and warrants outstanding, 10,306,671 shares underlying redeemable convertible preferred stock, and additional preferred stock warrants.
  • The business relies on concentration exposures: 37% of revenue comes from Canada and one customer (Customer A) represents 11% of revenue for both Q2 and the six‑month period.
  • There are notable related‑party payables, including lease and service fees and unpaid compensation owed to executives and entities they control, which are included in accounts payable and accrued liabilities.

Filing Explained

At June 30, 2026, no new common shares were issued, but 27,628,629 potential common shares remained excluded from loss-per-share calculations.

Form 10-Q is the unaudited quarterly report covering interim financial statements and updates to risks and liquidity. QuoteMedia reports 90,477,798 common shares outstanding as of July 31, 2026, with no common shares issued during the quarter or six-month period ended June 30, 2026. Thus, the filing does not disclose a completed increase in the common share count, although existing holders remain subject to securities that could later become common shares.

The company had 123,685 Series A redeemable convertible preferred shares outstanding at June 30, 2026. Each may convert into 83.33 common shares only after the common stock’s closing price exceeds $0.30 for 90 consecutive trading days and subject to available authorized shares; the filing reports no preferred shares issued or redeemed in the period. It also reports 25,772,803 fully vested common-stock options and warrants outstanding, with no grants or exercises during the period.

For loss-per-share purposes, 27,628,629 potential common shares were excluded because the company reported a net loss; that figure represents potential securities, not shares already issued. The filing also reports $101,010 owed to a related-party office lessor, $83,946 owed to Bravenet for marketing services, and $70,368 remaining on a $69,000 related-party advance that has no fixed repayment terms or interest.

The filing describes additional financing as a possibility rather than a completed financing, while noting that future equity financing could dilute existing holders. The conversion-price condition, any warrant or option exercise, and any resulting share issuance are the specific milestones that would change the current ownership mechanics.

Q2 2026 Revenue $5,450,127 Three-months ended June 30, 2026 total revenue, up 11% from Q2 2025
Six-month 2026 Revenue $10,980,399 Six-months ended June 30, 2026 total revenue, up 13% from 2025 period
Q2 2026 Net Loss $362,447 Net loss for the three-months ended June 30, 2026, improved from $853,582
Six-month 2026 Net Loss $983,059 Net loss for the six-months ended June 30, 2026 versus $1,353,393 in 2025
Q2 2026 Gross Margin 50% Gross margin for the three-months ended June 30, 2026, up from 46%
Cash Balance $186,986 Cash and cash equivalents as of June 30, 2026
Working Capital Deficit $4,643,639 Working capital deficit as of June 30, 2026, including $1,500,198 deferred revenue
Deferred Revenue $1,570,742 Total deferred revenue balance at June 30, 2026
deferred revenue financial
"Total deferred revenue was $1,570,742 as of June 30, 2026."
Cash a company has already received for goods or services it has promised but not yet delivered; it's recorded as a liability because the company still owes that product, service, or future revenue recognition. For investors, deferred revenue signals upcoming work or deliveries that will convert into reported sales over time and affects short-term obligations, cash flow quality, and how quickly a firm can grow recognized revenue—think of it like prepaid subscriptions or gift cards a business must honor later.
working capital deficit financial
"As of June 30, 2026, our working capital deficit was $4,643,639."
A working capital deficit occurs when a company's short-term obligations—like bills, supplier payments and near-term debt—are larger than its readily available short-term resources such as cash, money expected from customers, and inventory that can be sold. Like a household whose monthly bills exceed its checking account, it signals potential difficulty paying immediate expenses, which matters to investors because it raises the chance the company will need outside financing or cut operations, affecting risk and value.
material weaknesses financial
"Our disclosure controls and procedures were not effective due to material weaknesses in internal control."
Material weaknesses are significant flaws in a company’s systems for ensuring its financial reports are accurate and reliable. Like a broken lock on a safe, they increase the chance that financial statements contain big errors or omissions, which can mislead investors about performance and risk; discovering one often raises questions about management oversight, may lead to restated results, and can affect investor confidence and a company’s valuation.
redeemable convertible preferred stock financial
"550,000 shares designated as Series A Redeemable Convertible Preferred Stock."
A redeemable convertible preferred stock is a special class of company shares that combines three features: it pays priority dividends like a safer, higher-ranking share; it can be converted into regular common shares so holders can join in upside; and it can be redeemed, meaning the company can buy it back for cash. For investors this matters because it offers a mix of downside protection and potential upside, but can change ownership stakes (dilution) and cash obligations depending on whether it’s converted or redeemed.
right-of-use assets financial
"Operating lease right-of-use assets were $341,962 at June 30, 2026."
Right-of-use assets are the rights a company gains to use a physical space or equipment under a lease agreement. They are recorded as assets on the company's balance sheet, reflecting the value of future benefits from the leased item. For investors, these assets provide a clearer picture of a company's obligations and resources related to leasing arrangements, helping to assess its financial health and operational commitments.
capitalized internal-use software development costs financial
"Capitalized internal-use software development costs, net, totaled $2,507,935."
Revenue (Q2 2026) $5,450,127 Up 11% compared to $4,929,211 in Q2 2025
Revenue (Six-month 2026) $10,980,399 Up 13% compared to $9,753,567 in 2025
Net Loss (Q2 2026) $362,447 Improved from $853,582 net loss in Q2 2025
Net Loss (Six-month 2026) $983,059 Improved from $1,353,393 net loss in 2025
Gross Margin (Q2 2026) 50% Increased from 46% in Q2 2025
Guidance

The company expects similar revenue growth for the remainder of fiscal 2026 and anticipates bottom-line improvement as revenue grows and the impact of capitalized development costs diminishes.

FAQ

How did QuoteMedia (QMCI) perform financially in Q2 2026?
QuoteMedia reported Q2 2026 revenue of $5,450,127, up 11% year over year, with gross margin improving to 50%. The company posted a net loss of $362,447, narrower than the $853,582 loss in Q2 2025.

What were QuoteMedia (QMCI)’s results for the six months ended June 30, 2026?
For the first half of 2026, revenue was $10,980,399, up 13% from 2025, and gross profit was $5,260,753. Net loss improved to $983,059 from $1,353,393, while operating cash flow was positive at $236,568.

What is QuoteMedia (QMCI)’s liquidity position as of June 30, 2026?
As of June 30, 2026, QuoteMedia held $186,986 in cash and had a working capital deficit of $4,643,639, including $1,500,198 of current deferred revenue. Management believes cash and operating cash flows can fund operations through June 2027.

Did QuoteMedia (QMCI) identify any internal control issues in Q2 2026?
Yes. Management concluded that disclosure controls and procedures were not effective as of June 30, 2026 due to material weaknesses in internal control over financial reporting, although the financial statements were deemed fairly presented under U.S. GAAP.

How concentrated is QuoteMedia (QMCI)’s revenue by geography and customer?
For Q2 2026 and the six months ended June 30, 37% of revenue came from Canada. Customer A accounted for 11% of revenue in both the three‑ and six‑month periods, indicating meaningful customer and geographic concentration.

What are QuoteMedia (QMCI)’s main growth drivers in 2026?
Growth is driven by Corporate Quotestream and Interactive Content and Data APIs, with these lines posting double‑digit increases. Management expects similar revenue growth for the rest of 2026 based on contracts already in place and ongoing product and data expansion.

What potential dilution exists for QuoteMedia (QMCI) shareholders?
Potential dilution arises from 25,772,803 fully vested common stock options and warrants, 10,306,671 common shares issuable on conversion of redeemable convertible preferred stock, and 413,493 preferred stock warrants outstanding as of June 30, 2026.

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10-Q Quarterly Reports: What Changes Quarter to Quarter →

 

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 (Mark one)

☒

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

 

For the quarterly period ended June 30, 2026

OR

 

☐

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

 

For the transition period _________ to _________ 

 

Commission File Number: 0-28599

 

QuoteMedia, Inc.

(Exact name of registrant as specified in its charter)

 

Nevada

 

91-2008633

(State or Other Jurisdiction of

Incorporation or Organization)

 

(IRS Employer

Identification Number) 

 

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

(Address of Principal Executive Offices)

 

(602) 830-1443

(Registrant’s Telephone Number, Including Area Code)

 

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

 

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

 

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

 

Large accelerated filer  ☐

Accelerated filer  ☐

Non-accelerated filer ☐ (Do not check if a smaller reporting company)

Smaller reporting company ☒

 

Emerging growth company ☐

 

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

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. ☐

 

The Registrant has 90,477,798 shares of common stock outstanding as of July 31, 2026.

 

 

 

 

QUOTEMEDIA, INC.

 

FORM 10-Q for the Quarter Ended June 30, 2026

 

INDEX

 

 

 

 

Page

 

Part I.

Financial Information

 

 

 

 

 

 

 

 

Item 1.

Consolidated financial statements

 

3

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets at June 30, 2026 and December 31, 2025

 

3

 

 

 

 

 

 

 

Condensed Consolidated Statements of Operations for the three and six-months ended June 30, 2026 and 2025

 

4

 

 

 

 

 

 

 

Condensed Consolidated Statements of Changes in Series A Redeemable Convertible Preferred Stock and Stockholders’ Deficit for the three and six-months ended June 30, 2026

 

5

 

 

 

 

 

 

 

Condensed Consolidated Statements of Changes in Series A Redeemable Convertible Preferred Stock and Stockholders’ Deficit for the three and six-months ended June 30, 2025

 

6

 

 

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the six-months ended June 30, 2026 and 2025

 

7

 

 

 

 

 

 

 

Notes to Condensed Consolidated Financial Statements

 

8

 

 

 

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

16

 

 

 

 

 

 

Item 4.

Controls and Procedures

 

21

 

 

 

 

 

 

Part II.

Other Information

 

 

 

 

 

 

 

 

Item 6.

Exhibits

 

22

 

 

 

 

 

 

Signatures

 

 

23

 

 

 
2

Table of contents

 

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

QUOTEMEDIA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

June 30,

 

 

December 31,

 

 

 

2026

 

 

2025

 

ASSETS

 

(Unaudited)

 

 

(Audited)

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$186,986

 

 

$319,889

 

Accounts receivable, net

 

 

1,228,307

 

 

 

1,202,816

 

Prepaid expenses

 

 

134,310

 

 

 

78,494

 

Other current assets

 

 

265,184

 

 

 

242,280

 

Total current assets

 

 

1,814,787

 

 

 

1,843,479

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

9,707

 

 

 

29,200

 

Property and equipment, net

 

 

162,002

 

 

 

173,937

 

Capitalized internal-use software development costs, net

 

 

2,507,935

 

 

 

3,405,884

 

Goodwill

 

 

110,000

 

 

 

110,000

 

Intangible assets

 

 

35,803

 

 

 

40,995

 

Operating lease right-of-use assets (see note 5)

 

 

341,962

 

 

 

169,735

 

 

 

 

 

 

 

 

 

 

Total assets

 

$4,982,196

 

 

$5,773,230

 

 

 

 

 

 

 

 

 

 

LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS’ DEFICIT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$4,902,849

 

 

$4,569,306

 

Deferred revenue (see note 3)

 

 

1,500,198

 

 

 

1,589,900

 

Current portion of operating lease liabilities (see note 5)

 

 

55,379

 

 

 

53,757

 

Total current liabilities

 

 

6,458,426

 

 

 

6,212,963

 

 

 

 

 

 

 

 

 

 

Long-term liabilities:

 

 

 

 

 

 

 

 

Long-term portion of deferred revenue (see note 3)

 

 

70,544

 

 

 

282,756

 

Long-term portion of operating lease liabilities (see note 5)

 

 

276,627

 

 

 

117,853

 

Total long-term liabilities

 

 

347,171

 

 

 

400,609

 

 

 

 

 

 

 

 

 

 

Stockholders’ deficit:

 

 

 

 

 

 

 

 

Preferred stock, 10,000,000 shares authorized:

 

 

 

 

 

 

 

 

Series A Redeemable Convertible Preferred stock, $0.001 par value,

 

 

 

 

 

 

 

 

550,000 shares designated; shares issued and outstanding:

 

 

 

 

 

 

 

 

123,685 at June 30, 2026 and December 31, 2025 (see note 6)

 

 

2,983,857

 

 

 

2,983,857

 

Common stock, $0.001 par value, 150,000,000 shares authorized, shares issued and

 

 

 

 

 

 

 

 

outstanding: 90,477,798 at June 30, 2026 and December 31, 2025

 

 

90,479

 

 

 

90,479

 

Additional paid-in capital

 

 

19,590,625

 

 

 

19,590,625

 

Accumulated deficit

 

 

(24,488,362)

 

 

(23,505,303)

Total stockholders’ deficit

 

 

(1,823,401)

 

 

(840,342)

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders’ deficit

 

$4,982,196

 

 

$5,773,230

 

 

The accompanying notes are an integral part of these consolidated condensed interim financial statements.

 

 
3

Table of contents

 

QUOTEMEDIA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

 

 

Three-months ended June 30,

 

 

Six-months ended June 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUE (see note 3)

 

$5,450,127

 

 

$4,929,211

 

 

$10,980,399

 

 

$9,753,567

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COST OF REVENUE

 

 

2,707,441

 

 

 

2,646,096

 

 

 

5,719,646

 

 

 

5,361,951

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

 

2,742,686

 

 

 

2,283,115

 

 

 

5,260,753

 

 

 

4,391,616

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

847,611

 

 

 

878,569

 

 

 

1,711,901

 

 

 

1,700,433

 

General and administrative

 

 

755,087

 

 

 

841,215

 

 

 

1,581,824

 

 

 

1,545,709

 

Software development

 

 

1,516,056

 

 

 

1,292,898

 

 

 

2,967,982

 

 

 

2,312,276

 

Total operating expenses

 

 

3,118,754

 

 

 

3,012,682

 

 

 

6,261,707

 

 

 

5,558,418

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING LOSS

 

 

(376,068)

 

 

(729,567)

 

 

(1,000,954)

 

 

(1,166,802)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSES)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange gain (loss)

 

 

24,393

 

 

 

(107,865)

 

 

54,467

 

 

 

(101,903)

Interest expense

 

 

(10,797)

 

 

(13,380)

 

 

(36,043)

 

 

(15,767)

Total other income (expenses)

 

 

13,596

 

 

 

(121,245)

 

 

18,424

 

 

 

(117,670)

NET LOSS BEFORE INCOME TAXES

 

 

(362,472)

 

 

(850,812)

 

 

(982,530)

 

 

(1,284,472)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

25

 

 

 

(2,770)

 

 

(529)

 

 

(68,921)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

 

$(362,447)

 

$(853,582)

 

$(983,059)

 

$(1,353,393)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS PER SHARE (see note 7)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic loss per share – basic & diluted

 

$(0.00)

 

$(0.01)

 

$(0.01)

 

$(0.01)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES OUTSTANDING (see note 7)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basics & diluted

 

 

90,477,798

 

 

 

90,477,798

 

 

 

90,477,798

 

 

 

90,477,798

 

 

The accompanying notes are an integral part of these consolidated condensed interim financial statements.

 

 
4

Table of contents

 

QUOTEMEDIA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT

For the three and six-months ended June 30, 2026

 (UNAUDITED)

 

 

 

Series A Redeemable Convertible

Preferred Stock

 

 

Common Stock

 

 

Additional

 

 

 

 

 

Total

 

 

 

Number of

Shares

 

 

Amount

 

 

Number of

Shares

 

 

Amount

 

 

Paid-in

Capital

 

 

Accumulated Deficit

 

 

Stockholders’ Deficit

 

Balance, March 31, 2026

 

 

123,685

 

 

$2,983,857

 

 

 

90,477,798

 

 

$90,479

 

 

$19,590,625

 

 

$(24,125,915)

 

$(1,460,954)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(362,447)

 

 

(362,447)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, June 30, 2026

 

 

123,685

 

 

$2,983,857

 

 

 

90,477,798

 

 

$90,479

 

 

$19,590,625

 

 

$(24,488,362)

 

$(1,823,401)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Series A Redeemable Convertible

Preferred Stock

 

 

Common Stock

 

 

 

 

 

 

 

Total

 

 

 

Number of

Shares

 

 

Amount

 

 

Number of

Shares

 

 

Amount

 

 

Paid-in

Capital

 

 

Accumulated Deficit

 

 

Stockholders’ Deficit

 

Balance, December 31, 2025

 

 

123,685

 

 

$2,983,857

 

 

 

90,477,798

 

 

$90,479

 

 

$19,590,625

 

 

$(23,505,303)

 

$(840,342)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(983,059)

 

 

(983,059)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, June 30, 2026

 

 

123,685

 

 

$2,983,857

 

 

 

90,477,798

 

 

$90,479

 

 

$19,590,625

 

 

$(24,488,362)

 

$(1,823,401)

 

The accompanying notes are an integral part of these consolidated condensed interim financial statements.

 

 
5

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QUOTEMEDIA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT

For the three and six-months ended June 30, 2025

 (UNAUDITED)

 

 

 

Series A Redeemable Convertible

Preferred Stock

 

 

Common Stock

 

 

Additional

 

 

 

 

 

Total

 

Three-months ended June 30, 2025:

 

Number of

Shares

 

 

Amount

 

 

Number of

Shares

 

 

Amount

 

 

Paid-in

Capital

 

 

Accumulated Deficit

 

 

Stockholders’ Equity

 

Balance, March 31, 2025

 

 

123,685

 

 

$2,983,857

 

 

 

90,477,798

 

 

$90,479

 

 

$19,529,131

 

 

$(21,687,690)

 

$915,777

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

42,294

 

 

 

 

 

 

 

42,294

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(853,582)

 

 

(853,582)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, June 30, 2025

 

 

123,685

 

 

$2,983,857

 

 

 

90,477,798

 

 

$90,479

 

 

$19,571,425

 

 

$(22,541,272)

 

$104,489

 

 

 

 

Series A Redeemable Convertible

Preferred Stock

 

 

Common Stock

 

 

Additional

 

 

 

 

 

Total

 

Six-months ended June 30, 2025:

 

Number of

Shares

 

 

Amount

 

 

Number of

Shares

 

 

Amount

 

 

Paid-in

Capital

 

 

Accumulated Deficit

 

 

Stockholders’ Equity

 

Balance, December 31, 2024

 

 

123,685

 

 

$2,983,857

 

 

 

90,477,798

 

 

$90,479

 

 

$19,529,131

 

 

$(21,187,879)

 

$1,415,588

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

42,294

 

 

 

 

 

 

 

42,294

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,353,393)

 

 

(1,353,393)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, June 30, 2025

 

 

123,685

 

 

$2,983,857

 

 

 

90,477,798

 

 

$90,479

 

 

$19,571,425

 

 

$(22,541,272)

 

$104,489

 

 

The accompanying notes are an integral part of these consolidated condensed interim financial statements.

 

 
6

Table of contents

 

QUOTEMEDIA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

 

 

Six-months ended June 30,

 

 

 

2026

 

 

2025

 

 

 

 

 

 

 

 

OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$(983,059)

 

$(1,353,393)

 

 

 

 

 

 

 

 

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

1,284,547

 

 

 

1,591,898

 

Allowance for doubtful accounts

 

 

(143,928)

 

 

211,870

 

Stock-based compensation expense – common stock warrants

 

 

-

 

 

 

42,294

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

118,437

 

 

 

(272,513)

Prepaid expenses

 

 

(55,816)

 

 

3,571

 

Other current assets

 

 

(22,904)

 

 

(41,882)

Deposits

 

 

19,493

 

 

 

(573)

Accounts payable, accrued and other liabilities

 

 

321,712

 

 

 

487,991

 

Deferred revenue

 

 

(301,914)

 

 

24,794

 

Net cash provided by operating activities

 

 

236,568

 

 

 

694,057

 

 

 

 

 

 

 

 

 

 

INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchase of property and equipment

 

 

(33,092)

 

 

(27,115)

Capitalized application software

 

 

(336,379)

 

 

(838,117)

Net cash used in investing activities

 

 

(369,471)

 

 

(865,232)

 

 

 

 

 

 

 

 

 

Net decrease in cash

 

 

(132,903)

 

 

(171,175)

 

 

 

 

 

 

 

 

 

Cash and equivalents, beginning of period

 

 

319,889

 

 

 

585,319

 

 

 

 

 

 

 

 

 

 

Cash and equivalents, end of period

 

$186,986

 

 

$414,144

 

 

The accompanying notes are an integral part of these consolidated condensed interim financial statements.

 

 
7

Table of contents

 

QUOTEMEDIA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

1. BASIS OF PRESENTATION

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the generally accepted accounting principles for interim financial statements and instructions for Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments considered necessary for a fair presentation, have been included. Operating results for any quarter are not necessarily indicative of the results for any other quarter or for a full year. In connection with the preparation of the condensed consolidated financial statements, management evaluated subsequent events after the balance sheet date of June 30, 2026 through the filing of this report.

 

These consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto for the fiscal year ended December 31, 2025 contained in the Form 10-K filed with the Securities and Exchange Commission dated April 7, 2026.

 

Risks and Uncertainties

 

Adverse macroeconomic conditions, including inflation, slower growth or recession, and higher interest rates could materially adversely affect demand for the Company’s services.

 

2. SIGNIFICANT ACCOUNTING POLICIES

 

a) Nature of operations

 

Quotemedia, Inc. (the “Company”) is a software developer and distributor of financial market data and related services to a global marketplace. The Company specializes in the collection, aggregation, and delivery of both delayed and real-time financial data content via the Internet. The Company develops and licenses software components that deliver dynamic content to banks, brokerage firms, financial institutions, mutual fund companies, online information and financial portals, media outlets, public companies, and corporate intranets.

 

b) Basis of consolidation

 

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

 

c) Foreign currency remeasurement and transactions

 

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

 

d) Allowances for doubtful accounts

 

The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of the Company’s customers to make required payments. The Company believes that the historical loss information it has compiled is a reasonable base on which to determine expected credit losses for trade receivables held at June 30, 2026, because the composition of the trade receivables at that date is consistent with that used in developing the historical credit-loss percentages (i.e., the similar risk characteristics of its customers and its credit practices have not changed significantly over time). The allowance for doubtful accounts was $390,000 as of June 30, 2026 and $570,000 at December 31, 2025, respectively. Bad debt expenses were $37,008 and $102,558 for the three-months ended June 30, 2026 and 2025 and $36,072 and $111,870 for the six-months ended June 30, 2026 and 2025, respectively.

 

e) Revenue

 

The Company generates substantially all of its revenue from subscriptions for access to its software products and related support. The Company licenses financial market data information on a monthly, quarterly, or annual basis. The Company’s products and services are divided into two main categories:

 

 

 
8

Table of contents

 

QUOTEMEDIA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

Interactive Content and Data Applications

 

 

·

Proprietary financial software applications and streaming market data feeds

 

·

Subscriptions are typically sold for a fixed fee and revenue is recognized ratably over the term of the subscription.

 

Portfolio Management and Real-Time Quote Systems

 

 

1.

Corporate QuotestreamTM (Business-to-Business)

 

 

o

Web-delivered, embedded applications providing real-time, streaming market quotes and research information targeted to both professionals and non-professional users.

 

o

Revenue is typically earned based on customer usage.

 

 

2.

Individual Quotestream (Business-to-Consumer)

 

 

o

Web-delivered, embedded applications providing real-time, streaming market quotes and research information targeted to non-professional users.

 

o

Subscriptions are typically sold for a fixed fee and revenue is recognized ratably over the term of the subscription.

 

The Company does not provide its customers with the right to take possession of its software products at any time.

 

The Company determines revenue recognition through the following steps:

 

 

·

Identification of the contract, or contracts, with a customer

 

 

 

 

·

Identification of the performance obligations in the contract

 

 

 

 

·

Determination of the transaction price

 

 

 

 

·

Allocation of the transaction price to the performance obligations in the contract

 

 

 

 

·

Recognition of revenue when, or as, the Company satisfies a performance obligation

 

The Company executes a signed contract with the customer that specifies services to be provided, the payment amounts and terms, and the period of service, among other terms.

 

Contract Balances

 

The Company’s corporate customers are invoiced based on fee schedules that are agreed upon in each customer contract. Individual Quotestream customers are charged a subscription fee based on their subscription agreement. The Company recognizes revenue when performance obligations have been satisfied, which is the date the customer has access to the contracted market data. The timing of revenue recognition may differ from the timing of invoicing to customers. The Company records a receivable when revenue is recognized prior to invoicing, or deferred revenue when revenue is recognized subsequent to invoicing. Upfront set-up or development fees are deferred and recognized evenly from the date performance obligations have been met to the end of the service term of the contract, as set-up and development fees are not distinct from the market data service contracts to which they relate.

 

The Company considers the following factors when determining if collection of a fee is reasonably assured: customer creditworthiness, past transaction history with the customer, current economic industry trends, and changes in customer payment terms. If these factors do not indicate collection is reasonably assured, revenue is not recognized until collection becomes reasonably assured, which is generally upon receipt of cash.

 

Cost of revenue

 

Cost of revenue primarily consists of customer support personnel-related compensation expenses, including salaries, bonuses, benefits, payroll taxes, and stock-based compensation expense, as well as expenses related to third-party hosting costs, software license fees, amortization of capitalized software development costs, amortization of acquired technology intangible assets, and allocated overhead.

 

f) Accounting Pronouncements

 

Not Yet Adopted

 

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires improved disclosure of the nature and disaggregation of income statement expenses. The standard is effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027. The Company is currently evaluating the potential impact that this standard may have on its Consolidated Financial Statements.

 

 
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Table of contents

 

QUOTEMEDIA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

 

In September 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”), which modernizes the accounting for internal-use software. ASU 2025-06 removes all references to software development stages and requires capitalization of software costs when management has committed to the software project and it is probable the software will be completed and perform its intended use. ASU 2025-06 will be effective for the Company in its first quarter of 2028, and early adoption is permitted. The Company is currently evaluating the timing and method of its adoption of ASU 2025-06.

 

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements (“ASU 2025-11”). ASU 2025-11 clarifies the applicability of the interim reporting guidance, the types of interim reporting, and the form and content of interim financial statements in accordance with GAAP. The ASU is not intended to change the fundamental nature of interim reporting or expand or reduce current interim disclosure requirements but rather provide clarity and improve navigability of the existing interim reporting requirements. This guidance is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. We are evaluating the impact of this guidance on our interim disclosures.

 

In December 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-12, Codification Improvements. The guidance addresses suggestions received from stakeholders regarding the Accounting Standards Codification and makes other incremental improvements to U.S. GAAP. The update represents changes to the Codification that (1) clarify, (2) correct errors, or (3) make minor improvements. The amendments make the Codification easier to understand and apply. ASU 2025-12 is effective for fiscal years beginning after December 15, 2026 and interim periods within those fiscal years. We are currently evaluating the ASU to determine its impact on our disclosures; however, we do not expect there to be a material impact.

 

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

 

3. REVENUE

 

Disaggregated Revenue

 

The Company provides market data, financial web content solutions and cloud-based applications. Revenue by type of service consists of the following:

 

 

 

Three-months ended June 30,

 

 

Six-months ended June 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Portfolio Management Systems

 

 

 

 

 

 

 

 

 

 

 

 

Corporate Quotestream

 

$2,204,849

 

 

$2,024,826

 

 

$4,503,788

 

 

$3,997,292

 

Individual Quotestream

 

 

454,700

 

 

 

462,109

 

 

 

908,158

 

 

 

919,057

 

Interactive Content and Data APIs

 

 

2,790,578

 

 

 

2,442,276

 

 

 

5,568,453

 

 

 

4,837,218

 

Total revenue

 

$5,450,127

 

 

$4,929,211

 

 

$10,980,399

 

 

$9,753,567

 

 

Deferred Revenue

 

Changes in deferred revenue were as follows for the six-month periods ended June 30,

   

 

 

2026

 

 

2025

 

 

 

 

 

 

 

 

Beginning balance at Jan 1,

 

$1,872,656

 

 

$2,401,479

 

Revenue recognized in the current period from the amounts in the beginning balance

 

 

(1,217,421)

 

 

(1,183,912)

New deferrals, net of amounts recognized in the current period

 

 

911,234

 

 

 

1,219,437

 

Effects of foreign currency translation

 

 

4,273

 

 

 

(10,731)

Total deferred revenue

 

$1,570,742

 

 

$2,426,273

 

 

Current portion of deferred revenue

 

$1,500,198

 

 

$2,087,471

 

Long-term portion of deferred revenue

 

 

70,544

 

 

 

338,802

 

Total deferred revenue

 

$1,570,742

 

 

$2,426,273

 

 

For contracts greater than one year in duration, revenue allocated to remaining performance obligations, which includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods, was $322,103 as of June 30, 2026. We expect to recognize approximately 81% of our total remaining performance obligation revenue over the next 12 months and the remainder thereafter.

 

 

 
10

Table of contents

 

QUOTEMEDIA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

Practical Expedients

 

The Company applies a practical expedient and does not disclose the value of the remaining performance obligations for contracts that are less than one year in duration.

 

4. RELATED PARTIES

 

The Company entered into a five-year office lease with 410734 B.C. Ltd. effective May 1, 2021 for approximately $6,500 per month. David M. Shworan, CEO of Quotemedia Ltd., is a control person of 410734 B.C. Ltd. At June 30, 2026 $101,010 was due to 410734 B.C. Ltd. and at December 31, 2025 $62,883 was due to 410734 B.C. Ltd.

 

The Company pays a monthly marketing service fee of $3,000 to Bravenet Web Services, Inc. (“Bravenet”). At June 30, 2026 and December 31, 2025, there was $83,946 and $62,883 due to Bravenet related to this agreement, respectively. Also, on February 25, 2025, Bravenet advanced the Company $69,000. There are no fixed repayment terms and no interest charged on the advance. David M. Shworan is a control person of Bravenet. At June 30, 2026 and December 31, 2025, there was $70,368 and $72,924 due to Bravenet related to this advance.

 

At June 30, 2026 and December 31, 2025, $85,817 was owed to David M. Shworan related to an unpaid bonus earned in 2022.

 

At June 30, 2026 and December 31, 2025, there were $153,095 and $139,670 in unreimbursed expenses owed to Keith Randall, CEO of Quotemedia, Inc., respectively.

 

Amounts due to related parties are included in accounts payable and accrued liabilities. As a matter of policy all significant related party transactions are subject to review and approval by the Company’s Board of Directors.

 

5. LEASES

 

The Company has operating leases for corporate offices. The Company’s leases have remaining lease terms of 1 year to 5 years. Management determines if an arrangement is a lease at inception. Operating lease assets and liabilities are included in operating lease right-of-use assets and operating lease liabilities, respectively, on the Company’s consolidated balance sheets. Finance lease assets and liabilities are included in property and equipment and finance lease liabilities, respectively, on the Company’s consolidated balance sheets.

 

Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The Company elected the short-term lease exception and therefore only recognize right-of-use assets and lease liabilities for leases with a term greater than one year. When determining lease terms, the Company factors in options to extend or terminate leases when it is reasonably certain that the Company will exercise that option. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. For certain leases the Company accounts for the lease and non-lease components as a single lease component.

 

Supplemental balance sheet information related to leases was as follows:

 

 

 

June 30,

2026

 

 

December 31,

2025

 

Operating Leases

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating lease right-of-use assets

 

$341,962

 

 

$169,735

 

 

 

 

 

 

 

 

 

 

Current portion of operating lease liability

 

$55,379

 

 

$53,757

 

Long-term portion of operating lease liability

 

 

276,627

 

 

 

117,853

 

Total operating lease liability

 

$332,006

 

 

$171,610

 

 

 

 

June 30,

2026

 

 

December 31,

2025

 

 

 

 

 

 

 

 

Weighted Average Remaining Lease Term

 

 

 

 

 

 

Operating leases

 

4.3 years

 

 

4.0 years

 

Weighted Average Discount Rate

 

 

 

 

 

 

Operating leases

 

 

7.4%

 

 

7.6%

 

 
11

Table of contents

 

QUOTEMEDIA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

 

Maturities of lease liabilities were as follows:

 

Year ending December 31,

 

Operating

Leases

 

 

 

 

 

2026 (excluding the six-months ended June 30, 2026)

 

$37,626

 

2027

 

 

79,815

 

2028

 

 

86,735

 

2029

 

 

89,458

 

2030

 

 

83,631

 

2031

 

 

18,248

 

Total lease payments

 

 

395,513

 

Less imputed interest

 

 

(63,507)

Total

 

$332,006

 

 

The components of lease expense for the three and six-months ended June 30, 2026 and 2025 were as follows:

 

 

 

Three-months ended June 30,

 

 

Six-months ended June 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Operating lease costs:

 

 

 

 

 

 

 

 

 

 

 

 

Operating lease costs

 

$20,999

 

 

$54,704

 

 

$52,361

 

 

$109,042

 

Short-term lease costs

 

 

28,910

 

 

 

28,460

 

 

 

57,757

 

 

 

56,840

 

Total operating lease costs

 

$49,909

 

 

$83,164

 

 

$110,118

 

 

$165,882

 

 

Supplemental cash flow information for the six-months ended June 30, 2026 and 2025 related to leases was as follows:

 

 

 

2026

 

 

2025

 

Cash paid for amounts included in the measurement of lease liabilities:

 

 

 

 

 

 

Operating cash flows from operating leases

 

$49,603

 

 

$109,040

 

 

 

 

 

 

 

 

 

 

Right-of-use assets obtained in exchange for lease obligations:

 

 

 

 

 

 

 

 

Operating leases

 

$209,461

 

 

$-

 

 

6. REDEEMABLE CONVERTIBLE PREFERRED STOCK ANDSTOCKHOLDERS’ DEFICIT

 

a) Redeemable Convertible Preferred Stock

 

The Company is authorized to issue up to 10,000,000 non-designated preferred shares at the Board of Directors’ discretion.

 

A total of 550,000 shares of the Company’s preferred stock are designated as “Series A Redeemable Convertible Preferred Stock.” The Series A redeemable convertible preferred stock has no dividend or voting rights.

 

At June 30, 2026 and December 31, 2025, 123,685 shares of Series A redeemable convertible preferred stock were outstanding. No shares of Series A redeemable convertible preferred stock were issued or redeemed during the three and six-months ended June 30, 2026 and 2025.

 

Redemption Rights

 

Holders of Series A redeemable convertible preferred stock shall have the right to convert their shares into shares of common stock at the rate of 83.33 shares of common stock for one share of Series A redeemable convertible preferred stock, at any time following the date the closing price of a share of common stock on a securities exchange or actively traded over-the-counter market has exceeded $0.30 for ninety (90) consecutive trading days. The conversion rights are subject to the availability of authorized but unissued shares of common stock.

 

In the event of any liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary, before any distribution or payment is made to any holders of any shares of common stock, the holders of shares of Series A redeemable convertible preferred stock shall be entitled to be paid first out of the assets of the Company available for distribution to holders of the Company’s capital stock whether such assets are capital, surplus, or earnings, an amount equal to $25.00 per share of Series A redeemable convertible preferred stock.

 

 
12

Table of contents

 

QUOTEMEDIA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

 

b) Common stock

 

No shares of common stock were issued during the three and dix-months ended June 30, 2026 and 2025.

 

c) Stock Options and Warrants

 

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

 

Total stock-based compensation expense, related to all of the Company’s stock-based awards, recognized for the three and six-months ended June 30, 2026 and 2025 was comprised as follows:

 

 

 

Three-months ended June 30,

 

 

Six-months ended June 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

$-

 

 

$42,294

 

 

$-

 

 

$42,294

 

Total stock-based compensation expense

 

$-

 

 

$42,294

 

 

$-

 

 

$42,294

 

 

Common Stock Options and Warrants

 

There were 25,772,803 fully vested common stock warrants and options outstanding at June 30, 2026 and December 31, 2025 at a weighted-average grant date exercise price of $0.06. No stock options or warrants to purchase common stock were granted or exercised during the three and six-months ended June 30, 2026 and 2025. 

 

The following table summarizes the weighted average remaining contractual life and exercise price of common stock options and warrants outstanding and exercisable at June 30, 2026:

 

 

 

 

 

Weighted

 

 

 

 

 

 

 

Average

 

 

Weighted

 

 

 

 

 

Remaining

 

 

Average

 

 

 

Number

 

 

Contractual

 

 

Exercise

 

 

 

Outstanding

 

 

Life (Years)

 

 

Price

 

 

 

 

 

 

 

 

 

 

 

$0.03-0.11

 

 

25,772,803

 

 

 

5.79

 

 

$0.06

 

 

At June 30, 2026, there was no unrecognized compensation cost related to non-vested options and warrants granted to purchase common stock.

 

All stock options and warrants to purchase common stock have been granted with exercise prices equal to or greater than the market value of the underlying common shares on the date of grant. At June 30, 2026, the aggregate intrinsic value of options and warrants outstanding and exercisable was $2,374,654. The intrinsic value of stock options and warrants are calculated as the amount by which the market price of the Company’s common stock exceeds the exercise price of the option or warrant.

 

Preferred Stock Warrants

 

Pursuant to the December 28, 2017 Compensation Agreement with David M. Shworan, the President and Chief Executive Officer of QuoteMedia, Ltd., a wholly owned subsidiary of Quotemedia, Inc., the Company issued Mr. Shworan warrants to purchase shares of Series A redeemable convertible preferred stock (“compensation preferred stock warrants”) in lieu of a cash salary. From the period December 28, 2017 to December 31, 2019 the Company issued a total of 31,250 Compensation Preferred Stock Warrants at an exercise price equal to $1.00 per share.

 

Also pursuant to the Compensation Agreement with Mr. Shworan, on December 28, 2017 the Company issued Mr. Shworan warrants to purchase up to 382,243 shares of Series A redeemable convertible preferred Stock at an exercise price equal to $1.00 per share (“liquidity preferred stock warrant”). The liquidity preferred stock warrants only vest and become exercisable on the consummation of a liquidity event as defined in the Company’s Certificate of Designation of Series A Redeemable Convertible Preferred Stock. The probability of the liquidity event performance condition is not currently determinable or probable; therefore, no compensation expense has been recognized as of June 30, 2026. The probability is re-evaluated each reporting period. As of June 30, 2026, there was $7,480,496 in unrecognized stock-based compensation expense related to these liquidity preferred stock warrants. Since the liquidity preferred stock warrants only vest and become exercisable on the consummation of a liquidity event which is currently determined not to be probable, management is also unable to determine the weighted-average period over which the unrecognized compensation cost will be recognized.

 

 
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QUOTEMEDIA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

 

As of June 30, 2026, there were a total of 413,493 preferred stock warrants outstanding with a weighted average remaining contractual life of 21.8 years. As of June 30, 2026, 31,250 preferred stock warrants were exercisable. No preferred stock warrants were granted or exercised for the three and six-months ended June 30, 2026 and 2025.

 

7. LOSSPER SHARE

 

Basic net income (loss) per share is computed by dividing net income (loss) during the period by the weighted-average number of common shares outstanding, excluding the dilutive effects of common stock equivalents. Common stock equivalents include redeemable convertible preferred stock, stock options and warrants. Diluted net income per share is computed by dividing net income by the weighted-average number of dilutive common shares outstanding during the period. Diluted shares outstanding is calculated using the treasury stock method by adding to the weighted shares outstanding any potential shares of common stock from outstanding redeemable convertible preferred stock, stock options and warrants that are in-the-money. In periods when a net loss is reported, all common stock equivalents are excluded from the calculation because they would have an anti-dilutive effect, meaning the loss per share would be reduced. Therefore, in periods when a loss is reported, the calculation of basic and dilutive loss per share results in the same value. The calculations for basic and diluted net income per share for the three and six-months ended June 30, 2026 and 2025 are as follows:

 

 

 

Three-months ended June 30,

 

 

Six-months ended June 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$(362,447)

 

$(853,582)

 

$(983,059)

 

$(1,353,393)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares used to calculate net income per share

 

 

90,477,798

 

 

 

90,477,798

 

 

 

90,477,798

 

 

 

90,477,798

 

Warrants to purchase redeemable convertible preferred stock

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Redeemable convertible preferred stock

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Stock options and warrants to purchase common stock

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Weighted average common shares used to calculate diluted net income per share

 

 

90,477,798

 

 

 

90,477,798

 

 

 

90,477,798

 

 

 

90,477,798

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share – basic & diluted

 

$(0.00)

 

$(0.01)

 

$(0.01)

 

$(0.01)

 

The number of shares of potentially dilutive common stock related to options and warrants that were excluded from the calculation of dilutive shares since the inclusion of such shares would be anti-dilutive for the three and six-months ended June 30, 2026 and 2025 are shown below:

 

 

 

Three-months ended June 30,

 

 

Six-months ended June 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Warrants to purchase redeemable convertible preferred stock

 

$2,499,900

 

 

$2,499,900

 

 

$2,499,900

 

 

$2,499,900

 

Redeemable convertible preferred stock

 

 

10,306,671

 

 

 

10,306,671

 

 

 

10,306,671

 

 

 

10,306,671

 

Stock options and warrants to purchase common stock

 

 

14,822,058

 

 

 

14,952,385

 

 

 

14,545,870

 

 

 

15,198,906

 

Total potential common shares excluded

 

$27,628,629

 

 

$27,758,956

 

 

$27,352,441

 

 

$28,005,477

 

 

8. SEGMENT REPORTING

 

The Company operates in one operating segment and one reportable segment, distributor of financial market data. The Company specializes in the collection, aggregation, and delivery of both delayed and real-time financial data via the Internet. The Company develops software components that deliver dynamic content to banks, brokerage firms, financial institutions, mutual fund companies, online information and financial portals, media outlets, public companies, and corporate intranets. The Company derives revenue primarily in North America and manages the business activities on a consolidated basis. The technology used in customer arrangements is based on a single software platform that is deployed to and implemented by customers in a similar manner. The service term for the software arrangements is variable, with the median term being approximately one year.

 

 
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QUOTEMEDIA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

 

The accounting policies of the financial market data segment are the same as those described in the summary of accounting policies. The Chief Operating Decision Makers (CODM) are the CEOs of QuoteMedia, Inc. and its wholly owned subsidiary QuoteMedia Ltd. CODM assesses performance and decides how to allocate resources based on consolidated net loss that is also reported on the consolidated statements of operations as consolidated net loss. The measure of segment assets is reported on the consolidated balance sheets as total consolidated assets. The CODM also uses consolidated gross profit to evaluate income generated from segment assets (return on assets) in deciding whether to reinvest profits into the financial market data segment or into other parts of the entity, such as for acquisitions. Consolidated gross profit is reported on the consolidated statements of operations as gross profit. Consolidated net loss and gross profit are used to monitor budget versus actual results. The monitoring of budgeted versus actual results is used in assessing performance of the segment and in establishing management’s compensation.

 

All expense categories on the consolidated statements of operations are significant and there are no other significant segment expenses that would require disclosure or are regularly provided to the CODM. Assets provided to the CODM are consistent with those reported on the consolidated balance sheets with particular emphasis on the Company’s available liquidity, including its cash and cash equivalents.

 

9. REVENUE CONCENTRATION

 

A significant portion of the Company’s revenue has historically been derived from customers outside of the United States, primarily in Canada. For the three-months ended June 30, 2026 and 2025, revenue from Canada accounted for approximately 37% and 36%, respectively, of total revenue. For the six-months ended June 30, 2026 and 2025, revenue from Canada accounted for approximately 37% and 35%, respectively, of total revenue.

 

Customer Concentration

 

The following table summarizes customers comprising 10% or more of revenue for the three and six-months ended June 30,

 

 

 

Three-months ended June 30,

 

 

Six-months ended June 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer A

 

 

11%

 

 

12%

 

 

11%

 

 

11%

 

 
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ITEM 2. Management’s Discussion and Analysis

 

The following discussion should be read in conjunction with our consolidated financial statements and notes thereto included elsewhere in this report. We caution readers regarding certain forward looking statements in the following discussion, elsewhere in this report, and in any other statements, made by, or on behalf of our company, whether or not in future filings with the Securities and Exchange Commission. Forward-looking statements are statements not based on historical information and which relate to future operations, strategies, financial results, or other developments. Forward-looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, economic, and competitive uncertainties and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward looking statements made by, or on behalf of, our company. Uncertainties and contingencies that might cause such differences include those risk factors disclosed in our annual report on Form 10-K for the year ended December 31, 2025 and other reports filed from time to time with the SEC.

 

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

 

This report should be read in conjunction with our Form 10-K for the fiscal year ended December 31, 2025 filed with the Securities and Exchange Commission.

 

Overview

 

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

 

We have three general product lines: Interactive Content and Data APIs, Data Feed Services, and Portfolio Management Systems. For financial reporting purposes, our product categories share similar economic characteristics and share costs; therefore, they are combined into one reporting segment.

 

Our Interactive Content and Data APIs consist of a suite of software applications that provide publicly traded company and market information to corporate clients via the Internet. Products include stock market quotes, fundamentals, historical and interactive charts, company news, filings, option chains, insider transactions, corporate financials, corporate profiles, screeners, market research information, investor relations provisions, level II, watch lists, and real-time quotes. All our content solutions are completely customizable and embedded directly into client Web pages for seamless integration with existing content. We are continuing to develop and launch new modules of QMod, our new proprietary Web delivery system. QMod was created for secure market data provisioning as well as ease of integration and unlimited customization. Additionally, QMod delivers search engine optimized (SEO) ready responsive content designed to adapt on the fly when rendered on mobile devices or standard Web pages – automatically resizing and reformatting to fit the device on which it is displayed.

 

Our Data Feed Services consist of raw streaming real-time market data delivered over the Internet or via dedicated telecommunication lines. We provide supplemental fundamental, historical, and analytical data, keyed to the same symbology, which provides a complete market data solution offered to our customers. Currently, QuoteMedia’s Data Feed services include complete coverage of North American exchanges and over 70 exchanges worldwide. For financial reporting purposes, Data Feed Services revenue is included in the Interactive Content and Data APIs revenue totals.

 

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

 

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

 

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

 

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

 

Business Environment and Trends

 

While our licensed-based revenue is generally recurring in nature, the uncertainty caused by the recent market downturn and rising inflation may result in some clients delaying purchasing decisions, product and service implementations or cancel or reduce spending with us.

 

New tariffs proposed by the U.S. government could lead to a general slowdown in economic activity, which could negatively impact our business.

 

Events in the Middle East and Ukraine have continued to cause disruptions in the global financial markets. While we do not have any operations in the Middle East, Ukraine or Russia, we will continue to monitor the situation as a prolonged conflict could impact our business.

 

Approximately 37% of our revenue and 38% of our expenses are denominated in Canadian dollars and because our Canadian dollar revenue and expenses are evenly matched, exchange rate fluctuations have minimal impact on our net loss and cash flows.

 

Our revenue increased 11% in Q2 2026 versus the comparative 2025 quarter. Based on revenue already under contract we expect similar revenue growth for the remainder of fiscal 2026.

 

Our development cost expense significantly increased this quarter due to a higher percentage of development salaries being expensed rather than capitalized, as more development time was spent on system maintenance and other development activities that did not meet the criteria for capitalization. While this had no impact on our cash flow, it had a negative impact on our earnings as we are expensing development costs in the current period related to past capitalized development. We expect this trend to continue for the remainder of 2026, although its impact will diminish over time.

 

For the remainder of fiscal 2026 we expect our bottom line to improve as our revenue grows and the impact of capitalized development costs diminishes.

 

Plan of Operation

 

For the remainder of 2026 we plan to continue to expand our product lines and improve our infrastructure. We plan to continue to add more features and data to our existing products and release newer versions with improved performance and flexibility for client integration. We plan to continue to leverage artificial intelligence (AI) tools, where possible, to automate this process. This expansion is expected to result in both increased revenue and costs for the remainder of 2026.

 

We will maintain our focus on marketing Quotestream for deployments by brokerage firms to their retail clients and continue our expansion into the investment professional market with Quotestream Professional. We also plan to continue the growth of our Data Feed Services client base, particularly through the addition of major new international data feed coverage, as well as new data delivery products.

 

QuoteMedia will continue to focus on increasing the sales of its Interactive Content and Data APIs, particularly in the context of large-scale enterprise deployments encompassing solutions ranging across several product lines. QMod is a major component of this strategy, given the broad demand for mobile-ready, SEO-friendly Web content.

 

Important development projects for the remainder of 2026 include broad expansion of data and news coverage, including the addition of a wide array of international exchange data and news, video feeds, expansion of fixed-income coverage, and the introduction of several new and upgraded market information products.

 

New deployments of our trade integration capabilities, which allow our Quotestream applications to interact with our brokerage clients’ back-end trade execution and reporting platforms (enabling on-the-fly trade execution and tracking of holdings) are underway and will continue to be a priority for the remainder of the year.

 

 
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We are also creating new proprietary data sets, analytics, and scoring mechanisms. We are now aggregating data direct from the sources to produce data sets that are proprietary to QuoteMedia. This allows us to offer our clients new data products and lower our product cost structure as we replace some of our existing data providers with our own lower cost data.

 

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

 

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

 

Critical Accounting Policies and Estimates

 

In the 2025 Annual Report, we disclose our critical accounting policies and estimates upon which our consolidated financial statements are derived. There have been no material changes to these policies since December 31, 2025. Readers are encouraged to read the 2025 Annual Report in conjunction.

 

Results of Operations

 

Revenue

 

Three-months ended June 30,

 

2026

 

 

2025

 

 

Change ($)

 

 

Change (%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate Quotestream

 

$2,204,849

 

 

$2,024,826

 

 

$180,023

 

 

 

9%

Individual Quotestream

 

 

454,700

 

 

 

462,109

 

 

 

(7,409)

 

 

(2%)

Total Portfolio Management Systems

 

 

2,659,549

 

 

 

2,486,935

 

 

 

172,614

 

 

 

7%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interactive Content and Data APIs

 

 

2,790,578

 

 

 

2,442,276

 

 

 

348,302

 

 

 

14%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total subscription revenue

 

$5,450,127

 

 

$4,929,211

 

 

$520,916

 

 

 

11%

 

Six-months ended June 30,

 

2026

 

 

2025

 

 

Change ($)

 

 

Change (%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate Quotestream

 

$4,503,788

 

 

$3,997,292

 

 

$506,496

 

 

 

13%

Individual Quotestream

 

 

908,158

 

 

 

919,057

 

 

 

(10,899)

 

 

(1%)

Total Portfolio Management Systems

 

 

5,411,946

 

 

 

4,916,349

 

 

 

495,597

 

 

 

10%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interactive Content and Data APIs

 

 

5,568,453

 

 

 

4,837,218

 

 

 

731,235

 

 

 

15%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total subscription revenue

 

$10,980,399

 

 

$9,753,567

 

 

$1,226,832

 

 

 

13%

 

Total licensing revenue increased 11% and 13% for the three and six-months ended June 30, 2026 from the comparative 2025 periods.

 

Total Portfolio Management Systems revenue increased 7% and 10% for the three and six-months ended June 30, 2026 from the comparative 2025 periods.

 

Corporate Quotestream revenue increased 9% and 13% for the three and six-months ended June 30, 2026 from the comparative 2025 periods. The increases were due to increases in both the number of customers and the average revenue per customer from the comparative periods.

 

Individual Quotestream revenue was relatively flat, decreasing 2% and 1% for the three and six-months ended June 30, 2026 from the comparative 2025 periods.

 

Interactive Content and Data APIs revenue increased 14% and 15% for the three and six-months ended June 30, 2026 from the comparative 2025 periods due to increases in both the number of customers and the average revenue per customer from the comparative periods.

 

 
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Cost of Revenue and Gross Profit Summary

 

Three-months ended June 30,

 

2026

 

 

2025

 

 

Change ($)

 

 

Change (%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

$2,707,441

 

 

$2,646,096

 

 

$61,345

 

 

 

2%

Gross profit

 

$2,742,686

 

 

$2,283,115

 

 

$459,571

 

 

 

20%

Gross margin %

 

 

50%

 

 

46%

 

 

 

 

 

 

 

 

 

Six-months ended June 30,

 

2026

 

 

2025

 

 

Change ($)

 

 

Change (%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

$5,719,646

 

 

$5,361,951

 

 

$357,695

 

 

 

7%

Gross profit

 

$5,260,753

 

 

$4,391,616

 

 

$869,137

 

 

 

20%

Gross margin %

 

 

48%

 

 

45%

 

 

 

 

 

 

 

 

 

Our cost of revenue consists of fixed and variable stock exchange fees and data feed provisioning costs. Cost of revenue also includes amortization of capitalized internal-use software costs. We capitalize the costs associated with developing new products during the application development stage.

 

Our cost of revenue increased 2% for the three-months ended June 30, 2026 from the comparative period in 2025, mainly due to increased data storage fees related to our growth, offset by a decrease in amortization expenses related to development costs.

 

Our cost of revenue increased 7% for the six-months ended June 30, 2026 from the comparative period in 2025. This was mainly due to some one-time, non-recurring expenses in March 2026 related to data licensing, processing and delivery, that amounted to approximately $230,000 and increased data storage fees related to our growth. This was offset by a decrease in amortization expenses related to development costs.

 

Our cost of revenue decreased as a percentage of sales, as evidenced by our gross margin percentage that increased to 50% and 48% for the three and six-months ended June 30, 2026 from 46% and 45% in the comparative periods in 2025, respectively.

 

Operating Expenses Summary

 

Three-months ended June 30,

 

2026

 

 

2025

 

 

Change ($)

 

 

Change (%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

$847,611

 

 

$878,569

 

 

$(30,958)

 

 

(4%)

General and administrative

 

 

755,087

 

 

 

841,215

 

 

 

(86,128)

 

 

(10%)

Software development

 

 

1,516,056

 

 

 

1,292,898

 

 

 

223,158

 

 

 

17%

Total operating expenses

 

$3,118,754

 

 

$3,012,682

 

 

$106,072

 

 

 

4%

 

Six-months ended June 30,

 

2026

 

 

2025

 

 

Change ($)

 

 

Change (%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

$1,711,901

 

 

$1,700,433

 

 

$11,468

 

 

 

1%

General and administrative

 

 

1,581,824

 

 

 

1,545,709

 

 

 

36,115

 

 

 

2%

Software development

 

 

2,967,982

 

 

 

2,312,276

 

 

 

655,706

 

 

 

28%

Total operating expenses

 

$6,261,707

 

 

$5,558,418

 

 

$703,289

 

 

 

13%

 

Sales and Marketing

 

Sales and marketing consist primarily of sales and customer service salaries, investor relations, travel and advertising expenses. Sales and marketing expenses decreased 4% for the three-months ended June 30, 2026, compared to the same period in 2025. The decrease was mainly due to stock-based compensation expenses incurred in the comparative Q2 2025 period. Sales and marketing expenses for the six-months ended June 30, 2026 were relatively flat when compared to the same period in 2025, increasing by 1%.

 

General and Administrative

 

General and administrative expenses consist primarily of salaries expense, office rent, insurance premiums, and professional fees. General and administrative expenses decreased 10% for the three-months ended June 30, 2026 when compared to the same period in 2025. The decrease is mainly a result of a decreases in bad debt expense, office rent expense, and professional fees from the comparative period. We downsized our office space in Vancouver, Canada effective September 1, 2025 when our existing lease terminated, as our development staff now primarily work remotely. We also changed principal accountants effective Q1 2026 which lowered our professional fee expense during the quarter. The decreases were offset by an increase in fees related to artificial intelligence (AI) tools.

 

 
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General and administrative expenses increased 2% for the six-months ended June 30, 2026 when compared to the same period in 2025.  The increase is mainly due to increase in fees related to artificial intelligence (AI) tools and increased professional fees related to year end audit services performed by our previous principal accountants. These increases were offset by a decrease in bad debt and office rent expenses.

 

Software Development

 

Software development expenses consist primarily of costs associated with the design, programming, and testing of our software applications during the preliminary project stage. Software development expenses also include costs incurred to maintain our software applications.

 

Software development expenses increased 17% and 28% for the three and six-months ended June 30, 2026 when compared to the same periods in 2025, due to lower capitalization of development costs and therefore higher immediate expense recognition. We capitalized 8% of development costs for the three and six-months ended June 30, 206 versus 16% and 21% in the comparative 2025 periods.  

 

We capitalized $162,696 and $314,519 of development costs for the three-months periods ended June 30, 2026 and 2025, respectively. We capitalized $336,379 and $838,118 of development costs for the six-months periods ended June 30, 2026 and 2025, respectively. These costs relate to the development of application software used by subscribers to access, manage, and analyze information in our databases. Capitalized costs associated with application software are amortized over their estimated economic life of three years.

 

Other Income and (Expense) Summary

 

Three-months ended June 30,

 

2026

 

 

2025

 

 

 

 

 

 

 

 

Foreign exchange gain (loss)

 

$24,393

 

 

$(107,865)

Interest expense, net

 

 

(10,797)

 

 

(13,380)

Total other income (expense), net

 

$13,596

 

 

$(121,245)

 

Six-months ended June 30,

 

2026

 

 

2025

 

 

 

 

 

 

 

 

Foreign exchange gain (loss)

 

$54,467

 

 

$(101,903)

Interest expense, net

 

 

(36,043)

 

 

(15,767)

Total other income (expenses), net

 

$18,424

 

 

$(117,670)

 

Foreign Exchange Gain

 

We incurred foreign exchange gains of $24,393 and $54,467 for the three and six-months ended June 30, 2026. We incurred foreign exchange losses of $107,865 and $101,903 for the three and six-months ended June 30, 2025. Foreign exchange gains and losses arise from the re-measurement of Canadian dollar monetary assets and liabilities into U.S. dollars and from exchange rate fluctuations between transaction and settlement dates for foreign currency denominated transactions.

 

Interest Expense, Net

 

Interest expense is netted against interest earned on cash balances. Net interest expense of $10,797 and $36,043 were incurred for the three and six-months periods ended June 30, 2026. Net interest expense of $13,380 and $15,767 were incurred for the three and six-months periods ended June 30, 2026 The increase was due to increased vendor finance charges.

 

Provision for Income Taxes

 

For the three and six-months periods ended June 30, 2026, the Company recorded $(25) and $529 in income tax expense (recovery). For the three and six-months periods ended June 30, 2025, the Company recorded $2,770 and $68,921 in income tax expenses.

 

Net Loss for the Period

 

As a result of the foregoing, our net losses for the three-months periods ended June 30, 2026 and 2025 were $362,447 and $853,582, respectively. The basic and diluted loss per share was $(0.00) and $(0.01) for the three-months periods ended June 30, 2026 and 2025, respectively. Our net losses for the six-months periods ended June 30, 2026 and 2025 were $983,059 and $1,353,393, respectively. The basic and diluted loss per share was $(0.01) for the six-months periods ended June 30, 2026 and 2025, respectively.

 

 
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Liquidity and Capital Resources

 

Our cash totaled $186,986 at June 30, 2026, as compared with $319,889 at December 31, 2025, a decrease of $132,903. Net cash of $236,568 was provided by operations for the six-months ended June 30, 2026, primarily due to adjustments for non-cash charges and an increase in accounts payable and accrued liabilities and a decrease in accounts receivable. This was offset by our net loss and a decrease in deferred revenue. Net cash used in investing activities for the six-months ended June 30, 2026 was $369,471, due to capitalized application software costs and purchases of computer equipment.

 

We typically operate with a working capital deficit. As of June 30, 2026, our working capital deficit was $4,643,639, however current liabilities include $1,500,198 in deferred revenue. The expected costs necessary to realize the deferred revenue are minimal. If circumstances dictate, we have the flexibility to reduce development spending to maintain a strong liquidity position.

 

Based on the factors discussed above, we believe that our cash on hand and cash generated from operations will be sufficient to fund our current operations for at least the next 12 months through June 2027. However, implementing our business plan may require additional financing. Additional financing may come from future equity or debt offerings that could result in dilution to our stockholders. Further, current adverse capital and credit market conditions could limit our access to capital. We may be unable to raise capital or bear an unattractive cost of capital that could reduce our financial flexibility.

 

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.

 

Foreign Exchange Risk

 

Currently, approximately 37% of our consolidated revenue and 38% of our consolidated expenses are denominated in Canadian dollars. Since currently our Canadian dollar revenue and expenses are closely matched, our consolidated cashflows are not significantly impacted by foreign exchange fluctuations.

 

Off-Balance Sheet Arrangements

 

At June 30, 2026 and December 31, 2025, we did not have any unconsolidated entities or financial partnerships, or other off-balance sheet arrangements.

 

ITEM 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

Our management, with the participation and supervision of our Chairman of the Board and Chairman of the Audit Committee, Chief Executive Officer and Chief Financial Officer, have evaluated our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) to the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of June 30, 2026, and concluded that our disclosure controls and procedures were not effective due to material weaknesses in internal control over financial reporting. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on that evaluation, our management identified the following material weaknesses in our internal control over financial reporting, as described below.

 

Notwithstanding the material weaknesses described below our management has concluded that our consolidated financial statements for the periods covered by and included in this Quarterly Report are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and fairly present, in all material respects, our financial position, results of operations and cash flows for each of the periods presented herein.

 

The following material weaknesses were identified during the preparation and review of the current period financial statements:

 

 

·

There is a lack of segregation of duties in financial reporting.

 

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis.

 

Changes in Internal Control over Financial Reporting

 

There was no change in our internal control over financial reporting that occurred during the fiscal quarter ended June 30, 2026 covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

 
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PART II - OTHER INFORMATION

ITEM 6. EXHIBITS

 

Exhibit Number

 

Description of Exhibit

31.1

 

Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended.

31.2

 

Certification of Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended.

32.1

 

Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2

 

Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

 
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SIGNATURES

 

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

 

QUOTEMEDIA, INC.

 

By:

/s/ Keith J. Randall

 

 

Keith J. Randall

 

 

Chief Executive Officer and Chief Financial Officer

 

 

(Duly authorized officer and principal financial officer)

 

 

Dated: August 14, 2026

 

 
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Source: View Original Filing on SEC EDGAR