QUOTEMEDIA INC 10-Q

Item 1. Financial Statements QUOTEMEDIA, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) March 31, December 31, 2025 2024 ASSETS Current assets: Cash and cash equivalents $ 173,191 $ 585,319 Accounts receivable, net 1,054,667 1,016,915 Prepaid expenses 177,951 175,703 Other current assets 177,408 162,653 Total current assets 1,583,217 1,940,590 Deposits 17,222 16,619 Property and equipment, net 200,342 212,727 Capitalized internal-use software development costs, net 4,788,917 5,041,544 Goodwill 110,000 110,000 Intangible assets 48,782 51,378 Operating lease right-of-use assets (see note 4) 138,157 188,663 Total assets $ 6,886,637 $ 7,561,521 LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued liabilities $ 3,949,427 $ 3,564,546 Deferred revenue (see note 3) 1,533,393 1,704,743 Current portion of operating lease liabilities (see note 4) 119,474 147,663 Total current liabilities 5,602,294 5,416,952 Long-term liabilities: Long-term portion of deferred revenue (see note 3) 356,751 696,736 Long-term portion of operating lease liabilities (see note 4) 11,815 32,245 Total long-term liabilities 368,566 728,981 Stockholders’ equity: 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 March 31, 2025 and December 31, 2024 (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 March 31, 2025 and December 31, 2024 90,479 90,479 Additional paid-in capital 19,529,131 19,529,131 Accumulated deficit ( 21,687,690 ) ( 21,187,879 ) Total stockholders’ equity 915,777 1,415,588 Total liabilities and stockholders’ equity $ 6,886,637 $ 7,561,521 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 March 31, 2025 2024 REVENUE (see note 3) $ 4,824,356 $ 4,679,200 COST OF REVENUE 2,715,855 2,342,114 GROSS PROFIT 2,108,501 2,337,086 OPERATING EXPENSES Sales and marketing 821,864 777,202 General and administrative 704,494 808,354 Software development 1,019,378 803,322 2,545,736 2,388,878 OPERATING LOSS ( 437,235 ) ( 51,792 ) OTHER INCOME (EXPENSES), NET Foreign exchange income 5,962 25,307 Interest expense ( 2,387 ) ( 953 ) 3,575 24,354 NET LOSS BEFORE INCOME TAXES ( 433,660 ) ( 27,438 ) Income tax expense ( 66,151 ) ( 738 ) NET LOSS INCOME $ ( 499,811 ) $ ( 28,176 ) LOSS PER SHARE (see note 7) Basic loss per share $ ( 0.01 ) $ ( 0.00 ) Diluted loss per share $ ( 0.01 ) $ ( 0.00 ) WEIGHTED AVERAGE SHARES OUTSTANDING (see note 7) Basic 90,477,798 90,477,798 Diluted 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. CONSOLIDATED STATEMENTS OF CHANGES IN SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) For the three-months ended March 31, 2025 and 2024 (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’ Equity Balance, December 31, 2024 123,685 $ 2,983,857 90,477,798 $ 90,479 $ 19,529,131 $ ( 21,187,879 ) $ 1,415,588 Net loss - - - - - ( 499,811 ) ( 499,811 ) Balance, March 31, 2025 123,685 $ 2,983,857 90,477,798 $ 90,479 $ 19,529,131 $ ( 21,687,690 ) $ 915,777 Series A Redeemable Convertible Preferred Stock Common Stock Additional Total Stockholders’ Number of Shares Amount Number of Shares Amount Paid-in Capital Accumulated Deficit Equity (Deficit) Balance, December 31, 2023 123,685 $ 2,983,857 90,477,798 $ 90,479 $ 18,910,482 $ ( 19,860,842 ) $ ( 859,881 ) Net loss - - - - - ( 28,176 ) ( 28,176 ) Balance, March 31, 2024 123,685 $ 2,983,857 90,477,798 $ 90,479 $ 18,910,482 $ ( 19,889,018 ) $ ( 888,057 ) The accompanying notes are an integral part of these consolidated condensed interim financial statements. 5 Table of Contents QUOTEMEDIA, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Three-months ended March 31, 2025 2024 OPERATING ACTIVITIES: Net loss $ ( 499,811 ) $ ( 28,176 ) Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 805,504 728,678 Allowance for doubtful accounts 9,312 13,329 Changes in assets and liabilities: Accounts receivable ( 47,064 ) ( 145,151 ) Prepaid expenses ( 2,248 ) ( 84,721 ) Other current assets ( 14,755 ) ( 13,520 ) Deposits ( 603 ) 292 Accounts payable, accrued and other liabilities 386,768 306,622 Deferred revenue ( 511,335 ) ( 49,686 ) Net cash provided by operating activities 125,768 727,667 INVESTING ACTIVITIES: Purchase of property and equipment ( 14,297 ) ( 10,089 ) Capitalized application software ( 523,599 ) ( 815,315 ) Net cash used in investing activities ( 537,896 ) ( 825,404 ) Net decrease in cash ( 412,128 ) ( 97,737 ) Cash and equivalents, beginning of period 585,319 342,014 Cash and equivalents, end of period $ 173,191 $ 244,277 The accompanying notes are an integral part of these consolidated condensed interim financial statements. 6 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 March 31, 2025 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, 2024 contained in the Form 10-K filed with the Securities and Exchange Commission dated April 15, 2025. 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 translation 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 March 31, 2025, 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 $ 330,000 as of March 31, 2025 and December 31, 2024, respectively. Bad debt expenses were $ 9,312 and $ 13,329 for the three-months ended March 31, 2025 and 2024, 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: 7 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 Quotestream TM (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 FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40). The ASU requires disclosure, in the notes to financial statements, of specified information about certain costs and expenses, including purchases of inventory, employee compensation, depreciation, and intangible asset amortization included in each relevant expense caption. Additionally, the amendment requires a qualitative description of the amounts remaining in the relevant expense captions that are not separately disaggregated quantitatively, and to disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. For public business entities, the new guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. An entity may apply the amendments prospectively for reporting periods after the effective date or retrospectively to any or all prior periods presented in the financial statements. The Company does not expect that the adoption of ASU 2023-09 will have a significant impact on the Company’s consolidated financial statements. 8 Table of Contents QUOTEMEDIA, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosure (“ASU 2023-09”) . This standard provides transparency to income tax disclosures related to the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 for public entities with early adoption permitted. The amendments in ASU 2023-09 will be applied prospectively in the consolidated financial statements. The Company does not expect that the adoption of ASU 2023-09 will have a significant impact on the Company’s consolidated financial statements other than the additional disclosures. 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 March 31, 2025 2024 Portfolio Management Systems Corporate Quotestream $ 1,972,466 $ 1,781,685 Individual Quotestream 456,948 469,005 Interactive Content and Data APIs 2,394,942 2,428,510 Total revenue $ 4,824,356 $ 4,679,200 Deferred Revenue Changes in deferred revenue were as follows for the three-month periods ended March 31, 2025 2024 Beginning balance at Jan 1, $ 2,401,479 $ 1,831,949 Revenue recognized in the current period from the amounts in the beginning balance ( 726,755 ) ( 681,276 ) New deferrals, net of amounts recognized in the current period 448,981 624,920 Effects of foreign currency translation ( 913 ) 6,670 Total deferred revenue $ 2,122,792 $ 1,782,263 Current portion of deferred revenue $ 1,533,393 $ 1,505,807 Long-term portion of deferred revenue 356,751 276,456 Total deferred revenue $ 1,890,144 $ 1,782,263 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 $ 5.6 million as of March 31, 2025. We expect to recognize approximately 58 % of our total remaining performance obligation revenue over the next 12 months and the remainder thereafter. 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. 9 Table of Contents QUOTEMEDIA, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 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 March 31, 2025 $ 32,946 was due to 410734 B.C. Ltd. and at December 31, 2024 $ 13,367 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 March 31, 2025 and December 31, 2024, there was $ 37,484 and $ 28,483 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 March 31, 2025 and December 31, 2024, there were $ 210,885 and $ 185,002 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 3 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: March 31, 2025 December 31, 2024 Operating Leases Operating lease right-of-use assets $ 138,157 $ 188,663 Current portion of operating lease liability $ 119,474 $ 147,663 Long-term portion of operating lease liability 11,815 32,245 Total operating lease liability $ 131,289 $ 179,908 March 31, 2025 December 31, 2024 Weighted Average Remaining Lease Term Operating leases 0.9 years 1.1 years Weighted Average Discount Rate Operating leases 9.3 % 9.4 % 10 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 2025 (excluding the three-months ended March 31, 2025) $ 104,325 2026 32,850 Total lease payments 137,175 Less imputed interest ( 5,886 ) Total $ 131,289 The components of lease expense for the three-months ended March 31, 2025 and 2024 were as follows: Three-months ended March 31, 2025 2024 Operating lease costs: Operating lease costs $ 54,338 $ 59,041 Short-term lease costs 28,380 27,336 Total operating lease costs $ 82,718 $ 86,377 Supplemental cash flow information for the three-months ended March 31, 2025 and 2024 related to leases was as follows: 2025 2024 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 52,102 $ 57,814 There were no additional right of use assets obtained in exchange for lease obligations for the three-months ended March 31, 2025 and 2024. 6. REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ 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 March 31, 2025 and December 31, 2024, 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-months ended March 31, 2025 and 2024. 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. Reclassification of Redeemable Convertible Preferred Stock resulting from Amendment to Redemption Rights Prior to April 26, 2024, 1,000 Series A redeemable convertible preferred stock could be redeemed at the holder’s option at the liquidation value of $ 25 per share if the cash balance of the Company as reported at the end of each fiscal quarter exceeds $ 400,000 . In accordance with Accounting Standards Update (“ASU”) 480-10-S99, because a limited number of Series A redeemable convertible preferred stock could be redeemed at the holder’s option if the above criteria are met, it was classified as mezzanine equity and not permanent equity. 11 Table of Contents QUOTEMEDIA, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) On April 26, 2024, the Certificate of Designation of the Series A Redeemable Convertible Preferred Stock was amended removing the above redemption right, at no cost to the Company, resulting in a change in the classification of Series A redeemable preferred stock from mezzanine equity to permanent equity. In addition, the amendment resulted in a change to the classification of warrants to purchase shares of Series A redeemable convertible preferred stock (“preferred stock warrants”) from preferred stock warrant liability to additional paid-in capital. There was no impact on the consolidated statement of operations resulting from the amendment. b) Common stock No shares of common stock were issued during the three-months ended March 31, 2025 and 2024. 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. There were no stock-based compensation expenses related to the Company’s stock-based awards for the three-months ended March 31, 2025 and 2024. Common Stock Options and Warrants There were 25,772,803 fully vested common stock warrants and options outstanding at March 31, 2024 and December 31, 2023 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-months ended March 31, 2025 and 2024. The following table summarizes the weighted average remaining contractual life and exercise price of common stock options and warrants outstanding and exercisable at March 31, 2025: Weighted Average Weighted Remaining Average Number Contractual Exercise Outstanding Life (Years) Price $0.03-0.11 25,772,803 4.84 $ 0.06 At March 31, 2025, 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 March 31, 2025, the aggregate intrinsic value of options and warrants outstanding and exercisable was $ 2,890,110 . 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 March 31, 2025. The probability is re-evaluated each reporting period. As of March 31, 2025, 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. 12 Table of Contents QUOTEMEDIA, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) As of March 31, 2025, there were a total of 413,493 preferred stock warrants outstanding with a weighted average remaining contractual life of 22.8 years. As of March 31, 2025, 31,250 preferred stock warrants were exercisable. No preferred stock warrants were granted or exercised for the three-months ended March 31, 2025 and 2024. Reclassification of Preferred Stock Warrant Liability resulting from Amendment to Redemption Rights As discussed in note 6 a), the amendment to the redemption rights for the Series A redeemable convertible preferred stock resulted in a change to the classification of preferred stock warrants on April 26, 2024. The preferred stock warrant liability of $ 611,563 was reclassified to additional paid-in capital. There was no impact on the consolidated statement of operations resulting from the amendment. 7. LOSS PER 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-months ended March 31, 2025 and 2024 are as follows: Three-months ended March 31, 2025 2024 Net loss $ ( 499,811 ) $ ( 28,176 ) Weighted average common shares used to calculate net income per share 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 Net loss per share – basic $ ( 0.01 ) $ ( 0.00 ) Net loss per share – diluted $ ( 0.01 ) $ ( 0.00 ) 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-months ended March 31, 2025 and 2024 are shown below: Three-months ended March 31, 2025 2024 Warrants to purchase redeemable convertible preferred stock 2,499,900 2,499,900 Redeemable convertible preferred stock 10,306,671 10,306,671 Stock options and warrants to purchase common stock 15,428,228 16,720,641 Total potential common shares excluded 28,234,799 29,527,212 13 Table of Contents QUOTEMEDIA, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 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. The accounting policies of the financial market data segment are the same as those described in the summary of accounting policies. The 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. 14 Table of Contents