QUOTEMEDIA INC 10-Q

Item 1. Financial Statements QUOTEMEDIA, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) September 30, December 31, 2025 2024 ASSETS Current assets: Cash and cash equivalents $ 281,143 $ 585,319 Accounts receivable, net 1,116,484 1,016,915 Prepaid expenses 215,731 175,703 Other current assets 192,099 162,653 Total current assets 1,805,457 1,940,590 Deposits 17,843 16,619 Property and equipment, net 182,181 212,727 Capitalized internal-use software development costs, net 3,872,272 5,041,544 Goodwill 110,000 110,000 Intangible assets 43,591 51,378 Operating lease right-of-use assets (see note 5) 196,905 188,663 Total assets $ 6,228,249 $ 7,561,521 LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY Current liabilities: Accounts payable and accrued liabilities $ 4,142,558 $ 3,564,546 Deferred revenue (see note 3) 1,992,355 1,704,743 Current portion of operating lease liabilities (see note 5) 75,876 147,663 Total current liabilities 6,210,789 5,416,952 Long-term liabilities: Long-term portion of deferred revenue (see note 3) 160,888 696,736 Long-term portion of operating lease liabilities (see note 5) 119,275 32,245 Total long-term liabilities 280,163 728,981 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 as of September 30, 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 as of September 30, 2025 and December 31, 2024 90,479 90,479 Additional paid-in capital 19,571,425 19,529,131 Accumulated deficit ( 22,908,464 ) ( 21,187,879 ) Total stockholders’ (deficit) equity ( 262,703 ) 1,415,588 Total liabilities and stockholders’ (deficit) equity $ 6,228,249 $ 7,561,521 The accompanying notes are an integral part of these unaudited consolidated condensed interim financial statements. 3 Table of Contents QUOTEMEDIA, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED ) Three-months ended September 30, Nine-months ended September 30, 2025 2024 2025 2024 REVENUE (see note 3) $ 5,154,555 $ 4,695,845 $ 14,908,122 $ 14,050,991 COST OF REVENUE 2,656,171 2,515,081 8,018,122 7,288,655 GROSS PROFIT 2,498,384 2,180,764 6,890,000 6,762,336 OPERATING EXPENSES Sales and marketing 827,596 875,303 2,528,029 2,510,029 General and administrative 704,939 942,598 2,250,648 2,611,279 Software development 1,340,225 771,261 3,652,501 2,361,657 2,872,760 2,589,162 8,431,178 7,482,965 OPERATING LOSS ( 374,376 ) ( 408,398 ) ( 1,541,178 ) ( 720,629 ) OTHER INCOME (EXPENSES) Foreign exchange gain (loss) 25,449 ( 31,881 ) ( 76,454 ) 3,841 Interest expense ( 18,222 ) 76 ( 33,989 ) ( 1,296 ) 7,227 ( 31,805 ) ( 110,443 ) 2,545 NET LOSS BEFORE INCOME TAXES ( 367,149 ) ( 440,203 ) ( 1,651,621 ) ( 718,084 ) Income tax expense ( 43 ) ( 738 ) ( 68,964 ) ( 2,206 ) NET LOSS $ ( 367,192 ) $ ( 440,941 ) $ ( 1,720,585 ) $ ( 720,290 ) LOSS PER SHARE (see note 7) Basic loss per share – basic & diluted $ ( 0.00 ) $ ( 0.00 ) $ ( 0.02 ) $ ( 0.00 ) 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 unaudited consolidated condensed interim financial statements. 4 Table of Contents CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT For the three and nine-months ended September 30, 2025 (UNAUDITED) Series A Redeemable Convertible Preferred Stock Common Stock Additional Total Stockholders’ Three-months ended September 30, 2025: Number of Shares Amount Number of Shares Amount Paid-in Capital Accumulated Deficit Equity (Deficit) Balance, June 30, 2025 123,685 $ 2,983,857 90,477,798 $ 90,479 $ 19,571,425 $ ( 22,541,272 ) $ 104,489 Net loss - - - - - ( 367,192 ) ( 367,192 ) Balance, September 30, 2025 123,685 $ 2,983,857 90,477,798 $ 90,479 $ 19,571,425 $ ( 22,908,464 ) $ ( 262,703 ) Series A Redeemable Convertible Preferred Stock Common Stock Additional Total Stockholders’ Nine-months ended September 30, 2025: Number of Shares Amount Number of Shares Amount Paid-in Capital Accumulated Deficit Equity (Deficit) 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 - - - - - ( 1,720,585 ) ( 1,720,585 ) Balance, September 30, 2025 123,685 $ 2,983,857 90,477,798 $ 90,479 $ 19,571,425 $ ( 22,908,464 ) $ ( 262,703 ) The accompanying notes are an integral part of these unaudited consolidated condensed interim financial statements. 5 Table of Contents CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY For the three and nine-months ended September 30, 2024 (UNAUDITED) Series A Redeemable Convertible Preferred Stock Common Stock Additional Total Three-months ended September 30, 2024: Number of Shares Amount Number of Shares Amount Paid-in Capital Accumulated Deficit Stockholders’ Equity Balance, June 30, 2024 123,685 $ 2,983,857 90,477,798 $ 90,479 $ 19,523,795 $ ( 20,140,191 ) $ 2,457,940 Net loss - - - - - ( 440,941 ) ( 440,941 ) Balance, September 30, 2024 123,685 $ 2,983,857 90,477,798 $ 90,479 $ 19,523,795 $ ( 20,581,132 ) $ 2,016,999 Series A Redeemable Convertible Preferred Stock Common Stock Additional Total Stockholders’ Nine-months ended September 30, 2024: Number of Shares Amount Number of Shares Amount Paid-in Capital Accumulated Deficit Equity (Deficit) Balance, December 31, 2023 - $ - 90,477,798 $ 90,479 $ 18,910,482 $ ( 19,860,842 ) $ ( 859,881 ) Reclassification of preferred stock warrants - - - - 611,563 - 611,563 Reclassification of series A redeemable convertible preferred stock 123,685 2,983,857 - - - - 2,983,857 Stock-based compensation - - - - 1,750 - 1,750 Net loss - - - - - ( 720,290 ) ( 720,290 ) Balance, September 30, 2024 123,685 $ 2,983,857 90,477,798 $ 90,479 $ 19,523,795 $ ( 20,581,132 ) $ 2,016,999 The accompanying notes are an integral part of these unaudited consolidated condensed interim financial statements. 6 Table of Contents QUOTEMEDIA, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Nine-months ended September 30, 2025 2024 OPERATING ACTIVITIES: Net loss $ ( 1,720,585 ) $ ( 720,290 ) Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 2,343,936 2,255,707 Allowance for doubtful accounts 221,159 525,000 Stock-based compensation expense – common stock warrants 42,294 1,750 Changes in assets and liabilities: - Accounts receivable ( 320,728 ) ( 447,706 ) Prepaid expenses ( 16,396 ) ( 78,270 ) Other current assets ( 53,078 ) ( 46,814 ) Deposits ( 1,224 ) ( 689 ) Accounts payable, accrued and other liabilities 585,013 633,924 Deferred revenue ( 248,236 ) 452,715 Net cash provided by operating activities 832,155 2,575,327 INVESTING ACTIVITIES: Purchase of property and equipment ( 42,583 ) ( 34,374 ) Capitalized application software ( 1,093,748 ) ( 2,591,750 ) Net cash used in investing activities ( 1,136,331 ) ( 2,626,124 ) Net decrease in cash ( 304,176 ) ( 50,797 ) Cash and equivalents, beginning of period 585,319 342,014 Cash and equivalents, end of period $ 281,143 $ 291,217 The accompanying notes are an integral part of these unaudited 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 September 30, 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 September 30, 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 $ 430,000 as of September 30, 2025 and $ 330,000 at December 31, 2024. Bad debt expenses were $ 9,289 and $ 182,171 for the three-months ended September 30, 2025 and 2024, respectively. Bad debt expenses were $ 121,159 and $ 323,150 for the nine-months ended September 30, 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: 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. 9 Table of Contents QUOTEMEDIA, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) f) Accounting Pronouncements Not Yet Adopted In September 2025, the FASB issued ASU No. 2025-06, “ Intangibles--Goodwill and Other--Internal-Use Software ” (“ASU No. 2025-06”), which removes all references to sequential software development project stages and establishes new capitalization criteria. In order for capitalization to begin under the new guidance, management must authorize and commit to funding a project and meet a probable-to-complete recognition threshold. In evaluating whether the probable-to-complete recognition threshold has been met, management is required to consider whether there is a significant development uncertainty associated with the software project. The amendments in this ASU may be applied using (1) a prospective transition approach applying the guidance to new software costs incurred as of the beginning of the period of adoption for all projects, including in-process projects, (2) a retrospective transition approach by recasting comparative periods and recognizing a cumulative-effect adjustment to the opening balance of retained earnings, or (3) a modified transition approach applying the amendments on a prospective basis to new software costs incurred except for in-process projects that, as of the date of adoption the entity determines do not meet the capitalization requirements under the new guidance. ASU No. 2025-06 is effective for the Company in the first quarter of fiscal year 2029. Early adoption is permitted. The Company is currently assessing the impact that the adoption of ASU 2025-06 will have on the Company’s Consolidated Financial Statements. In September 2025, the FASB issued ASU No. 2025-07, “ Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606)”, which refines the scope of Topic 815 to clarify which contracts are subject to derivative accounting. The guidance also provides clarification under Topic 606 for share-based payments from a customer in a revenue contract. ASU No. 2025-07 is effective for the Company in the first quarter of fiscal year 2027. The amendments in this ASU must be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (2) modified retrospectively to any or all prior periods presented in the financial statements. Early adoption of the amendments is permitted. The Company is currently assessing the impact that the adoption of ASU No. 2025-07 will have on the Company’s Consolidated Financial Statements. In July 2025, the FASB issued Accounting Standards Update 2025-05, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (ASU 2025-05). This accounting standard provides a practical expedient allowing entities to assume that current conditions as of the balance sheet date remain unchanged over the remaining life of the asset when estimating expected credit losses. ASU 2025-05 is effective for annual reporting periods, including interim reporting periods within those annual periods, beginning after December 15, 2025, with early adoption permitted and should be applied prospectively. The Company is evaluating the impact of ASU 2025-05 and expects the standard will not have a material impact on the consolidated financial statements and related disclosures 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. 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 September 30, Nine-months ended September 30, 2025 2024 2025 2024 Portfolio Management Systems Corporate Quotestream $ 2,113,628 $ 1,792,966 $ 6,110,920 $ 5,357,477 Individual Quotestream 458,747 452,489 1,377,804 1,388,189 Interactive Content and Data APIs 2,582,180 2,450,390 7,419,398 7,305,325 Total revenue $ 5,154,555 $ 4,695,845 $ 14,908,122 $ 14,050,991 10 Table of Contents QUOTEMEDIA, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Deferred Revenue Changes in deferred revenue were as follows for the nine-month periods ended September 30, 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 ( 1,505,205 ) ( 1,374,128 ) New deferrals, net of amounts recognized in the current period 1,275,984 1,805,620 Effects of foreign currency translation ( 19,015 ) 21,223 Total deferred revenue $ 2,153,243 $ 2,284,664 Current portion of deferred revenue $ 1,992,355 $ 2,087,471 Long-term portion of deferred revenue 160,888 338,802 Total deferred revenue $ 2,153,243 $ 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 $ 4.5 million as of September 30, 2025. The Company expects to recognize approximately 82 % 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. 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 September 30, 2025 $ 41,053 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 September 30, 2025 and December 31, 2024, there was $ 55,483 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. As of September 30, 2025 and December 31, 2024, there were $ 138,760 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 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. The Company entered into a new lease for office space in Vancouver, Canada as of September 1, 2025 for 5 years resulting in a right of use asset and an offsetting lease liability of $ 141,903 . 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 recognizes 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. 11 Table of Contents QUOTEMEDIA, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Operating Leases Changes in right-of-use assets and operating lease liabilities were as follows for the nine-month periods ended September 30: Right-of-use Assets, net 2025 2024 Beginning balance at January 1, 188,663 393,472 Additions during the period 141,903 - Right-of-use credits for the period ( 133,661 ) ( 154,010 ) Right-of-use assets, net $ 196,905 $ 239,462 Operating Lease Liability Beginning balance at January 1, 184,655 391,803 Additions during the period 141,903 - Interest portion of lease payments made during the period 8,243 23,182 Lease payments made during the period ( 139,650 ) ( 174,790 ) Total operating lease liability $ 195,151 $ 240,195 Current portion of operating lease liability $ 75,876 $ 185,989 Long-term portion of operating lease liability 119,275 54,206 Total operating lease liability $ 195,151 $ 240,195 Supplemental information related to operating leases: September 30, 2025 December 31, 2024 Weighted Average Remaining Lease Term Operating leases 3.9 years 1.1 years Weighted Average Discount Rate Operating leases 7.8 % 9.4 % Maturities of lease liabilities were as follows: Year ending December 31, Operating Leases 2025 (excluding the nine-months ended September 30, 2025) $ 29,525 2026 63,225 2027 30,626 2028 36,179 2029 37,449 2030 29,990 Total lease payments 226,994 Less imputed interest ( 31,843 ) Total $ 195,151 12 Table of Contents QUOTEMEDIA, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) The components of lease expense for the three and nine-months ended September 30, 2025 and 2024 were as follows: Three-months ended September 30, Nine-months ended September 30, 2025 2024 2025 2024 Operating lease costs: Operating lease costs $ 32,898 $ 59,042 $ 141,940 $ 177,052 Short-term lease costs 28,589 27,450 85,429 82,125 Total operating lease costs $ 61,487 $ 86,492 $ 227,369 $ 259,177 Supplemental cash flow information for the nine-months ended September 30, 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 $ 140,329 $ 173,720 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 141,903 $ - 6. STOCKHOLDERS’ EQUITY 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. As of September 30, 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 and nine-months ended September 30, 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. 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. 13 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 nine-months ended September 30, 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. Total stock-based compensation expense, related to all of the Company’s stock-based awards, recognized for the three and nine-months ended September 30, 2025 and 2024 was comprised as follows: Three-months ended September 30, Nine-months ended September 30, 2025 2024 2025 2024 Sales and marketing $ - $ - $ 42,294 $ 1,750 Total stock-based compensation expense $ - $ - $ 42,294 $ 1,750 Common Stock Options and Warrants The following table summarizes the Company’s common stock option and warrant activity for the nine-months ended September 30, 2025: Common Stock Options and Warrants Weighted-Average Grant Date Exercise Price Outstanding at December 31, 2024 25,772,803 $ 0.06 Granted during the period 8,458,803 $ 0.04 Canceled during the period ( 8,458,803 ) $ 0.04 Outstanding at September 30, 2025 25,772,803 $ 0.06 On May 14, 2025, the Company canceled a total of 8,458,803 common stock options and warrants, granting 8,458,803 new options and warrants with expiry dates extended an additional five years. The stock-based compensation expense related to this extension was $ 42,294 . The following table summarizes the weighted average remaining contractual life and exercise price of common stock options and warrants outstanding and exercisable at September 30, 2025: Weighted Average Weighted Remaining Average Number Contractual Exercise Outstanding Life (Years) Price $0.03-0.11 25,772,803 5.98 $ 0.06 At September 30, 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 September 30, 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. 14 Table of Contents QUOTEMEDIA, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 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 September 30, 2025. The probability is re-evaluated each reporting period. As of September 30, 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. As of September 30, 2025, there were a total of 413,493 preferred stock warrants outstanding with a weighted average remaining contractual life of 22.3 years. As of September 30, 2025, 31,250 preferred stock warrants were exercisable. No preferred stock warrants were granted or exercised for the three and nine-months ended September 30, 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 and nine-months ended September 30, 2025 and 2024 are as follows: Three-months ended September 30, Nine-months ended September 30, 2025 2024 2025 2024 Net loss $ ( 367,192 ) $ ( 440,941 ) $ ( 1,720,585 ) $ ( 720,290 ) 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 ) $ ( 0.00 ) $ ( 0.02 ) $ ( 0.00 ) 15 Table of Contents QUOTEMEDIA, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 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 nine-months ended September 30, 2025 and 2024 are shown below: Three-months ended September 30, Nine-months ended September 30, 2025 2024 2025 2024 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 15,118,737 16,059,364 15,159,064 16,397,104 Total potential common shares excluded $ 27,925,308 $ 28,865,935 $ 27,965,635 $ 29,203,675 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. 16 Table of Contents